Exhibit 2.6
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
In re )
)
CRESCENT CITY CAPITAL ) Case No. 95-12735 (TMB)
DEVELOPMENT CORPORATION, )
) (Chapter 11)
Debtor. )
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
OF CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
BRONFIN & HELLER, LLC
Jan M. Hayden (La. Bar #6672)
Robyn J. Spalter (La. Bar #21116)
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6101
(504) 568-1888
Attorneys for Debtor
Dated: March 15, 1996
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
In re )
)
CRESCENT CITY CAPITAL ) Case No. 95-12735 (TMB)
DEVELOPMENT CORPORATION, )
) (Chapter 11)
Debtor. )
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
OF CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
The Debtor, Crescent City Capital Development Corporation
("Debtor" or "Crescent City") proposes the following plan of reorganization
pursuant to chapter 11 of the Bankruptcy Code. This plan amends and supersedes
all prior plans proposed by the Debtor in this case.
ARTICLE I
DEFINITIONS
A. Defined Terms. As used herein, all terms shall have the
meanings as defined in the United States Bankruptcy Code except as specifically
modified herein or if such meaning shall be wholly inconsistent with the use of
such term in this plan. The following terms shall have the respective meanings
specified below (such meaning to be equally applicable to both the singular and
the plural, and masculine and feminine forms of the terms defined):
1.1. Administrative Reserve means the reserve to be
established and maintained by Liquidating Trust in a segregated
interest-bearing account with a major money center bank into which
Liquidating Trust will, from time to time, deposit Cash to, among other
things, fund the operating expenses of Liquidating Trust, as provided
in Article VI(A) of the Plan.
1.2. Allowance Date means the date on which a Claim becomes an
Allowed Claim.
1.3. Amended By-Laws means the by-laws of Reorganized Crescent
City, as amended and restated as of the Effective Date, which shall be
a Plan Document.
1.4. Amended Certificate of Incorporation means the
certificate of incorporation of Reorganized Crescent City, as amended
and restated as of the Effective Date, which shall be a Plan Document.
1.5. Avoidance Action Recoveries means any recoveries by the
Debtor or Liquidating Trust of money, property, or other value of any
kind whatsoever (including reduction or disallowance of a claim
amount), on account of rights of recovery held by the Debtor under 11
U.S.C. Section 547 and applies to rights of recovery of transfers made
directly by any affiliates of the debtor, including but not limited to
River City Joint Venture.
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1.6. Avoidance Action Rights means any rights of recovery by
the Debtor or Liquidating Trust of money, property, or other value of
any kind whatsoever (including reduction or disallowance of a claim
amount), on account of rights of recovery, held by Debtor, under 11
U.S.C. Section 547 and applies to rights of recovery of preferential
transfers made directly by the debtor and by any affiliate of the
debtor, including but not limited to River City Joint Venture.
1.7. Bally & IGT Claims means all Claims of Bally Gaming, Inc.
and International Game Technology Corp. or their respective successors,
assigns, affiliates or agents arising in connection with the
acquisition by the Debtor of certain slot machines and other
coin-operated gaming devices to be operated on the Riverboat.
1.8. Bankruptcy Court means the United States Bankruptcy Court
for the Eastern District of Louisiana having jurisdiction over the
Reorganization Case and, to the extent of any reference made pursuant
to 28 U.S.C. ss. 157, the unit of such District Court pursuant to 28
U.S.C. ss. 151.
1.9. Bankruptcy Case means that case entitled In re Crescent
City Capital Development Corporation currently pending in the Eastern
District Court of Louisiana and bearing case no. 95-12735(TMB).
1.10. Bondholder means the holder of a Secured Note or, in the
alternative, the duly authorized agent of such holder.
1.11. Bondholder Claim means the claim filed by the Indenture
Trustee, on behalf of all Bondholders, for all amounts due under the
Debtor's guarantee of amounts due under the Indenture, which Claim
shall, upon the Effective Date, be deemed an Allowed Claim for $142
million.
1.12. Business Day means any day other than Saturday, Sunday
or "legal holiday" as such term is defined in Bankruptcy Rule 9006(a).
1.13. Cash means lawful currency of the United States of
America.
1.14. Cash Distribution Date means (a) the forty fifth (45th)
day after the Effective Date, and (b) the twentieth (20th) day after
the end of the first full fiscal quarter after the Effective Date and
the twentieth (20th) day after the end of each fiscal quarter
thereafter, subject, however, to the limitations set forth in Article
VIII(A)(4) and any other provisions of the Plan.
1.15. CGII means Capital Gaming International, Inc., a New
Jersey corporation and the Debtor's parent corporation.
1.16. CGII Claim means all Claims (other than DIP Financing
Claims or other Administrative Claims) against the Debtor held by CGII.
1.17. Closing means the closing of the transaction
contemplated by the Magic Agreement.
1.18. Commencement Date means July 26, 1995, the date on which
an involuntary Reorganization Case was commenced against the Debtor.
1.19. Confirmation Date means the date on which the Clerk of
the Bankruptcy Court enters the Confirmation Order on its docket.
1.20. Convenience Claim means any General Unsecured Claim
against the Debtor that is equal to or less than $5,000, or those
Claims in excess of $5,000 as to which the holder thereof elects, in
writing on its ballot to accept or reject the Plan or otherwise in
writing on or before the Effective Date, to reduce such Claim to $5,000
in accordance with Article III(E)(Class 3A)(4) concerning treatment of
General Unsecured Claims. For purposes of defining a Convenience Claim
and qualifying for the treatment afforded holders of Convenience
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Claims, all General Unsecured Claims of a single holder shall be
aggregated, deemed, and treated as a single Claim; provided, however,
those holders of General Unsecured Claims who acquired such General
Unsecured Claims from different entities shall have their General
Unsecured Claims aggregated only to the extent such Claims would have
been aggregated in the hands of the original holder.
1.21. Creditors' Committee means the Statutory Committee of
Unsecured Creditors appointed in the Bankruptcy Case pursuant to
Section 1102(a) of the Bankruptcy Code, as presently or hereafter
constituted.
1.22. Debtor means Crescent City Capital Development Corp., a
Louisiana corporation.
1.23. DIP Financing Claims means all Administrative Claims
arising in connection with money borrowed or credit incurred by the
Debtor under ss. 364 of the Bankruptcy Code from CGII, Purchaser,
Mirage or any other Person.
1.24. Disputed Claim means a Claim (or portion thereof) as to
which: (a) a proof of Claim has been filed, or deemed filed, under
applicable law or order of the Bankruptcy Court, with the Bankruptcy
Court; (b) an objection has been timely filed; and (c) such objection
has not been: (i) withdrawn, (ii) overruled or denied in whole by a
Final Order, or (iii) granted in whole or part by a Final Order:
provided, however, the Bankruptcy Court may estimate a Disputed Claim
for purposes of allowance pursuant to Section 502(c) of the Bankruptcy
Code; provided also however, that any claim expressly allowed under
this Plan cannot be a Disputed Claim or the subject of an objection.
For purposes of the Plan, a Claim shall be considered a Disputed Claim
to the extent it is disputed if: (x) before the time that an objection
has been or may be filed, the amount of the Claim specified in the
Proof of Claim exceeds the amount of any corresponding Claim scheduled
by the Debtor in the Schedules: (y) there is a dispute as to
classification of the Claim; or (z) the Claim is unliquidated.
1.25. Disputed Claims Reserve means the reserve established
pursuant to Article VI(B) in an amount equal to the sum of (i) the
aggregate of all Disputed Designated Administrative Claims, Disputed
Priority Claims, Disputed Priority Tax Claims, and Disputed Secured
Claims, (ii) the amount of Cash that would have been distributable,
from time to time, under the Plan on account of Disputed General
Unsecured Claims and Convenience Claims had such Claims been Allowed
Claims, and (iii) any net earnings in respect thereof.
1.26. Effective Date means the date that the Plan is
consummated which shall be simultaneous with the Closing.
1.27. Fee Request means any Administrative Claim for
compensation or reimbursement of expenses pursuant to Sections 327,
328, 329, 330, 331, or 503(b) of the Bankruptcy Code in connection with
an application made to the Bankruptcy Court in the Bankruptcy Case.
1.28. Final Order means an order or judgment of the Bankruptcy
Court or other court of competent jurisdiction which may hear appeals
from the Bankruptcy Court which having not been reversed, modified or
amended, and not being stayed, and the time to appeal from which or to
seek review or rehearing or petition for certiorari from which having
expired without an appeal or application for review or rehearing having
been filed, has become final and is in full force and effect.
1.29. General Unsecured Claim means any Allowed Claim against
the Debtor, other than a Bondholder Claim, Secured Claim,
Administrative Claim, Priority Claim, Priority Tax Claim, CGII Claim,
Subordinated Unsecured Claim or Convenience Claim.
1.30. Grand Palais means Grand Palais Riverboat, Inc., a
Louisiana corporation.
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1.31. Indenture means the Indenture governing the Secured
Notes, dated February 17, 1994, as amended, between CGII, as issuer,
the guarantors thereunder, and the Indenture Trustee.
1.32. Indenture Trustee means First Trust National
Association, as indenture trustee under the Indenture, and any
successor or assign thereof.
1.33. Institutional Note Holders' Steering Committee means
that committee consisting of Bondholders who hold a substantial
principal amount of the Secured Notes and have filed, in this case, a
statement pursuant to Bankruptcy Rule 2019(a).
1.34. Interest means, except as expressly otherwise specified
in the Plan, the interest or interest equivalent payable on any Claim
calculated as provided for in any agreement concerning such Claim which
contains an enforceable provision for the payment of interest, or, in
the absence of any such provision, at the Legal Rate.
1.35. Legal Rate means the rate of interest on outstanding
judgments of the courts of the State of Louisiana as prescribed by
Louisiana Civil Code article 2924.
1.36. License means the gaming license issued by the Louisiana
State Gaming Commission on or about April 4, 1994 in favor of the
Debtor.
1.37. Liquidating Trustees means the Persons selected by the
Creditors' Committee and approved by the Bankruptcy Court who shall be
the co-trustees of Liquidating Trust.
1.38. Liquidating Trust means Crescent City Liquidating Trust,
a New Jersey trust or trust of such state as the Debtor and the
Unsecured Creditors Committee shall select, which shall be established
as of the Effective Date, for the single purpose of implementing and
administering the Plan in accordance with Section 1142(a) of the
Bankruptcy Code.
1.39. Magic Agreement means the Agreement by and between CGII,
the Debtor, Casino Magic Corporation, Jefferson Casino Corporation and
C-M of Louisiana, Inc., dated February 21, 1996, pursuant to which
Casino Magic Corporation, through Jefferson Casino Corporation or
another of its wholly owned subsidiaries to which the Agreement is
assigned, has agreed to purchase the New Common Stock in conjunction
with the consummation of the Plan, a copy of which is attached hereto
as Exhibit "1".
1.40. Magic Cash Consideration, is estimated to be
$15,000,000.00, less the Magic Deferred Cash.
1.41. Magic Closing Cash means Magic Cash Consideration less
the balance of principal and interest due Magic at closing on the Magic
DIP Financing Claim, estimated at $1,000,000.00, and to be retained by
Magic from the Magic Cash Consideration and applied to pay its DIP
Financing Claim.
1.42. Magic Consideration means the Magic Cash Consideration,
the Magic Non-cash Consideration, and the Magic Deferred Cash.
1.43. Magic Deferred Cash means the Cash, in the amount of
$500,000.00, to be held in escrow, pursuant to the Magic Agreement, for
a period of one (1) year after Closing as security for the Debtor's and
CGII's indemnities under the Magic Agreement, and which, upon the
expiration of the one (1) year escrow period, the amount in the escrow,
if any, will be disbursed to CGII in accordance with Paragraph 3 of the
Magic Agreement and this Plan.
1.44. Magic DIP Financing Claim shall mean that Claim of
Purchaser arising out of money borrowed or credit incurred by Debtor
under ss.364 of the Bankruptcy Code.
1.45. Magic Non-Cash Consideration means all non-cash
consideration to be delivered to, or for the benefit of, the Debtor
pursuant to the Magic Agreement, including without limitation, Magic's
obligation to assume or otherwise satisfy the Bally and IGT Claims (up
to an aggregate total not to exceed $6,500,000.00) and the Magic Notes.
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1.46. Magic Notes means the $35,000,000.00 of notes which
shall be issued by Reorganized Crescent City and guaranteed by
Jefferson Casino Corporation and C-M of Louisiana, Inc., each a wholly
owned subsidiary of Casino Magic Corporation, under the Mirage
Indenture.
1.47. Mirage shall mean Mirage Resorts, Inc. or any of its
affiliates, subsidiaries, related entities, successors and assigns, and
their respective officers, directors and/or agents.
1.48. Mirage Agreement shall mean the Agreement among CGII,
the Debtor and Mirage pursuant to which Mirage was to purchase the New
Common Stock, and which Agreement formed the basis for Debtor's First
Amended Plan of Reorganization.
1.49. Mirage Claim means any and all claims which the Debtor
or debtor in possession may have, whether arising prior to or after the
filing of the petition for relief herein against Mirage, including but
not limited to any rights of setoff or defenses to the payments of any
claims asserted by Mirage against Debtor or its property.
1.50. Magic Indenture shall mean the Indenture governing the
Magic Notes, dated as of the Effective Date, between Reorganized
Crescent City, as issuer, and the guarantors, thereunder, in
substantially the same form as attached hereto as Exhibit "2".
1.51. Mirage Recovery shall mean any and all monies recovered,
paid, credited, set off or otherwise received by the Debtor,
debtor-in-possession or the Liquidating Trust on behalf of the Mirage
Claim.
1.52. Net Cash Proceeds means only those Net Proceeds received
in Cash.
1.53. Net Proceeds means all Cash and other property received
upon the sale, exchange or other disposition of any property, less all
direct and indirect costs incurred in connection with such disposition,
including, without limitation, fees, commissions, legal fees and
expenses.
1.54. New Common Stock means all authorized common stock of
Reorganized Crescent City to be issued on the Effective Date to the
Purchaser (which shall constitute all the outstanding equity interests
in Reorganized Crescent City), pursuant to the Restated Certificate of
Incorporation and Article V(A) and XV of the Plan.
1.55. Plan means this plan under chapter 11 of the Bankruptcy
Code, as the same may be altered, amended, or modified from time to
time.
1.56. Plan Document(s) means the document(s) that aid in
effecting the Plan and that are specifically identified herein as Plan
Documents or which, in the view of the Debtor, become necessary or
appropriate to effectuate the Plan, which documents, to the extent
feasible, shall be filed on or prior to the Confirmation Hearing.
1.57. Priority Claim means any Claim to the extent entitled to
priority in payment under Sections 507(a)(2)-(7) or 507(a)(9) of the
Bankruptcy Code.
1.58. Priority Tax Claim means any Claim to the extent
entitled to priority in payment under Section 507(a)(8) of the
Bankruptcy Code.
1.59. Pro Rata means a number (expressed as a percentage)
equal to the proportion that an Allowed Claim in a particular Class
bears to the aggregate amount of Allowed Claims in such Class as of the
date of determination. Solely for the purpose of calculating the amount
to be distributed to holders of Allowed General Unsecured Claims and
reserved for the holders of Disputed General Unsecured Claims on a Cash
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Distribution Date, Liquidating Trust shall treat each Disputed General
Unsecured Claim as an Allowed Claim in the amount of such Disputed
General Unsecured Claim unless such of Disputed General Unsecured
Claims have been estimated by the Bankruptcy Court.
1.60. Purchaser means Casino Magic Corporation, through
Jefferson Casino Corporation or another of its wholly owned
subsidiaries to which the Magic Agreement is assigned.
1.61. Reallocation Date means the tenth (10) Business Day
prior to any Cash Distribution Date.
1.62. Reorganized Crescent City means the Debtor from and
after the Effective Date.
1.63. Residual Property means all of the property of the
Debtor's estate immediately prior to Closing, other than the Riverboat
Assets. "Residual Property" includes, without limitation, the Debtor's
interest in the River City JV or property previously owned or held by
River City JV, all avoidance actions specified in Article V(G) and
other causes of action, claims of the Debtor against Grand Palais and
its affiliates, all contract rights of the Debtor including its rights
under the Magic Agreement, the Mirage Claim and the Mirage Recovery,
provided however, Residual Property does not include the Magic
Consideration, which shall be treated in accordance with the Plan.
1.64. Riverboat means the M/V Crescent City Queen, the
riverboat owned by the Debtor.
1.65. Riverboat Assets means, collectively, the Riverboat, the
License, certain slot machines and other coin-operated gaming devices
acquired by the Debtor from Bally Gaming, Inc. and International Game
Technology Corp., and such other items of personal property used in
connection with the operation of the Riverboat as may be agreed upon
between the Debtor and the Purchaser, and as evidenced on the inventory
list attached to the Magic Agreement as Exhibit "1", specifically
excepting (i) any equipment licensing or other agreements provided by
Gaming Systems International and (ii) the Crescent City Capital Escrow,
as hereinafter defined, all monies therein and all proceeds (in
whatever form) thereof.
1.66. River City JV means the River City Joint Venture, a
Louisiana general partnership, comprised of the Debtor and Grand
Palais, each as general partner.
1.67. Schedules means the schedules of assets and liabilities
filed by the Debtor with the Bankruptcy Court in accordance with
Section 521(1) of the Bankruptcy Code, as amended from time to time.
1.68. Secured Notes means, collectively, the 11 1/2 Secured
Notes due 2001, issued by CGII pursuant to the Indenture.
1.69. Settlement Amount means the difference, in Cash, between
the Magic Closing Cash and $6,750,000.00 plus the difference, in Magic
Notes, between the Magic Notes and $28,000,000 of Magic Notes; the
Settlement Amount is to be paid by the Indenture Trustee from the Magic
Consideration to the Liquidating Trust.
1.70. Subordinated Unsecured Claim means: (a) an unsecured
Claim against the Debtor, proof of which is tardily filed under Section
501(a) of the Bankruptcy Code; (b) any Claim against the Debtor whether
a Secured Claim or Unsecured Claim, for any fine, penalty or
forfeiture, or for multiple exemplary or punitive damages to the extent
such fine, penalty, forfeiture, or damages are not compensation for
actual pecuniary loss suffered by the holder of such Claim; (c) any
Claim against the Debtor arising from rescission of a purchase or sale
of a security of the Debtor or of an affiliate of the Debtor, for
damages arising from the purchase or sale of such security, or for
reimbursement or contribution allowed under Section 502 of the
Bankruptcy Code on account of such a Claim; and (d) any Claim against
the Debtor subordinated under Section 510 of the Bankruptcy Code or
under other applicable law to General Unsecured Claims by order of the
Bankruptcy Court.
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1.71. Total [ ] Claims means, with respect to a particular
Class of Claims, the aggregate dollar amount of (a) all Allowed Claims,
plus (b) the Face Amount of all Disputed Claims, in such Class.
1.72. Voting Deadline means the date by which holders of
impaired Claims receiving distributions under the Plan must vote to
accept or reject the Plan.
B. Other Terms. The words "herein," "hereof," "hereto,"
"hereunder," and others of similar inference refer to the Plan as a whole and
not to any particular section, subsection, or clause contained in the Plan
unless otherwise specified herein. A term used herein or elsewhere in the Plan
that is not defined herein shall have the meaning ascribed to that term, if any,
in the Bankruptcy Code or Bankruptcy Rules. The word "including" shall mean
including, without limitation. The headings in the Plan are only for convenience
of reference and shall not limit or otherwise affect the provisions of the Plan.
C. Exhibits. All exhibits to the Plan are incorporated into
and are a part of the Plan as if set forth in full herein.
ARTICLE II
GENERAL DESCRIPTION OF THE PLAN
A. The Plan Generally. Under the Plan, the Debtor will sell
the Riverboat Assets (by reissuing its common stock) to the Purchaser for the
Magic Consideration. The Magic Closing Cash and the Magic Notes will be paid to
the Indenture Trustee, on behalf of the Bondholders, who claims a perfected
security interest in such proceeds. Upon receipt of the Magic Closing Cash and
the Magic Notes, the Indenture Trustee shall pay the Settlement Amount to
Liquidating Trust in accordance with Article II(B)(1) below, to be distributed
as provided herein. In addition, all of the Residual Property will be
transferred to Liquidating Trust and liquidated or otherwise disposed of for the
benefit of Debtor's Class 3A Creditors in accordance with the terms of the Plan.
B. Payment of Settlement Amount.
1. Payment of Magic Closing Cash. Upon receipt of the Magic
Closing Cash, the Indenture Trustee, on behalf of the Bondholders, shall retain
the sum of $6,750,000.00 for distribution to Bondholders pursuant to the terms
of the Indenture and shall pay the remaining balance of the Magic Closing Cash
(estimated to be $6,750,000.00 less any amount by which the total balance of
principal and interest due to pay Magic's DIP Financing Claims and/or any other
DIP Financing Claims, excluding the DIP Financing Claim of Mirage, in full,
exceeds $1,000,000.00) to Liquidating Trust to be distributed and/or reserved
for Disputed Claims in accordance with the terms of this Plan.
2. Payment of Magic Notes. Upon receipt of the Magic Notes,
the Indenture Trustee, on behalf of the Bondholders, shall retain $28,000,000.00
of the Magic Notes, for distribution to the Bondholders in accord with the
Indenture and shall assign the remaining $7,000,000.00 of Magic Notes to the
Liquidating Trust in accordance with the terms of this Plan.
ARTICLE III
CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS
A. Summary. The categories of Claims and Equity Interests
listed below classify Claims and Equity Interests for all purposes, including
voting, confirmation, and distribution pursuant to the Plan.
CLASS STATUS
- - ----- ------
Class 1: Bondholder Claim Impaired - entitled to vote
Class 2: Secured Claims Impaired - entitled to vote
Class 3A: General Unsecured Claims Impaired - entitled to vote
Class 3B: Convenience Claims Impaired - entitled to vote
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Class 3C: CGII Claims Impaired - entitled to vote
Class 4: Subordinated Unsecured Claims Impaired - deemed to reject
Class 5: Common Stock Impaired - deemed to reject
Class 6: Mirage Administrative/
Secured Claim Unimpaired - not entitled to vote
B. Administrative Claims. Subject to the applicable bar date
provisions contained in Article X(B), each holder of an Allowed Administrative
Claim shall be paid on account of such Claim in full, in Cash, from the
Liquidating Trust, on the later of: (a) the Effective Date (or as soon
thereafter as practicable), or (b) the first Cash Distribution Date immediately
following the date on which such Administrative Claim becomes an Allowed Claim,
except to the extent that the holder of an Allowed Administrative Claim agrees
to a different treatment; provided, however, that Administrative Claims that are
Allowed Claims representing obligations incurred in the ordinary course of
business by the Debtor will be paid by Liquidating Trust when due in the
ordinary course of business; and, provided further, however, that Administrative
Claims for payment of compensation or reimbursement of expenses pursuant to
Sections 330, 331 and 503(b) of the Bankruptcy Code shall be paid within (3)
Business Days of the entry of an order by the Bankruptcy Court authorizing the
payment of such fees and expenses. Payments to the holders of the Administrative
Claims shall be made from the Net Cash Proceeds of one or more of the following
sources, in the following order of priority; the Settlement Amount and the
Residual Property.
C. Priority Claims. Each holder of an Allowed Priority Claim
shall be paid on account of such Claim in full, in Cash, from the Liquidating
Trust, on the later of (a) the Effective Date (or as soon thereafter as is
practicable), or (b) the first Cash Distribution Date immediately following the
date on which such Priority Claim becomes an Allowed Claim, or, alternatively,
upon such other terms as may be agreed upon by and between the holder of such
Claim and the Debtor or Liquidating Trust, as the case may be. Payments to the
holders of the Priority Claims shall be made from the Net Cash Proceeds of one
or more of the following sources, in the following order of priority; the
Settlement Amount and the Residual Property.
D. Priority Tax Claims. Each holder of an Allowed Priority Tax
Claim shall be paid on account of such Claim in full, in Cash, from the
Liquidating Trust, on the later of (a) the Effective Date (or as soon thereafter
as is practicable), or (b) the first Cash Distribution Date immediately
following the date on which such Priority Tax Claim becomes an Allowed Claim,
or, alternatively, upon such other terms as may be agreed upon by and between
the holder of such Claim and the Debtor or Liquidating Trust, as the case may
be. Payments to the holders of the Priority Tax Claims shall be made from the
Net Cash Proceeds of one or more of the following sources, in the following
order of priority, the Settlement Amount and the Residual Property.
E. Classification and Treatment. The Allowed Claims against,
and Equity Interests in, the Debtor, other than Administrative Claims, Priority
Claims, and Priority Tax Claims, shall be classified and receive the treatment
specified below.
Class 1:
1. Classification: Class 1 consists of the Bondholder Claim.
2. Allowance of Bondholder Claim: On the Effective Date, the
Bondholder Claim shall be deemed an Allowed Class 1 Claim in the amount of $142
million. The Bondholder Claim shall not, after the Effective Date, be subject
to, or the subject of, any objection, claim, counterclaim, set off, defense,
action or proceeding by the Debtor, Reorganized Crescent City, any statutory
committee, or any other party in interest, whether in law or equity. To the
extent any such objection, action or proceeding is pending on or after the
Effective Date, such action, objection or proceeding shall be deemed withdrawn
and the Bondholders may take such steps as they deem appropriate to cause the
Bankruptcy Court's records to reflect such withdrawal (including, without
limitation, seeking ex parte relief).
3. Treatment: As provided in Article II(B) of the Plan, upon
receipt of the Magic Closing Cash and the Magic Notes, the Indenture Trustee, on
behalf of the Bondholders, shall retain (i) Cash, in the amount of $6,750,000.00
and (ii) $28,000,000.00 of Magic Notes, all, and both, free and clear of any and
all liens, claims, privileges and encumbrances held or asserted by any person
other than the Indenture Trustee, for distribution to the Bondholders
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pursuant to the terms of the Indenture, and the Indenture Trustee shall
immediately (i) pay the remaining balance of the Magic Closing Cash (estimated
to be $6,750,000.00, less any amount by which the total balance of principal and
interest due to pay Magic's DIP Financing Claims in full exceeds $1,000,000.00)
and (ii) assign the remaining Magic Notes, in the amount of $7,000,000, to
Liquidating Trust for distribution and/or application in accordance with this
Plan. The Indenture Trustee shall retain the sum of $7,250,000.00 in Magic
Closing Cash and $28,000,000.00 in Magic Notes, to be paid to Class 1 Claimants
in accordance with the terms of the Indenture.
Additionally, any amounts to be paid to CGII from the Magic Deferred
Cash, as provided in this Plan, shall be subject to the security interest of the
Indenture Trustee. Any amounts to be paid to CGII from the Magic Deferred Cash,
shall be deposited by Purchaser in a segregated interest bearing account
designated by the Indenture Trustee at First Bank National Association, subject
in all respects to all of the first priority liens and security interests of the
Indenture Trustee, without any further action, and shall not be disbursed absent
the mutual consent of CGII and the Indenture Trustee, or by an order of a court
of competent jurisdiction.
Other than as set forth herein, the Class 1 claimants (including the
Indenture Trustee, the Bondholders, and anyone deriving or claiming rights under
the Secured Notes, the Indenture, or any security therefore), shall not be
entitled to participate as a Class 2, 3A or 3B Claimant under this Plan on
account of such claim.
4. Release of Defenses: As of the Effective Date, the Debtor,
Debtor in Possession, Liquidating Trust, all Creditors and equity security
holders of the Debtor shall release and waive: (i) all defenses to allowance of
the Bondholder Claim in the Bankruptcy Case, and (ii) all claims and causes of
action, if any, against the Bondholders or the Indenture Trustee based upon or
related to the Debtor's execution of its guarantee of CGII's obligations under
the Indenture, or based upon any payments made to the Indenture Trustee by the
Debtor.
Nothing herein shall constitute a waiver of any defenses to the
allowance of the claim of the Bondholders or the Indenture Trustee against CGII
in any other bankruptcy proceeding. Except with respect to the Debtor, nothing
in this Plan shall impair or otherwise affect any rights, liens, claims, or
interests of the Indenture Trustee or any Bondholder under the Notes, the
Indenture, or any related documents, including, but not limited to, any rights,
liens, claims or interests against CGII or any guarantor of CGII's obligations.
5. Voting: Class 1 is Impaired by the Plan and the holder of
Claims in Class 1 are entitled to vote to accept or reject the Plan.
Class 2: Secured Claims
1. Classification: Class 2 consists of secured claims.
2. Determination of Allowed Secured Claim: Prior to the
Effective Date, the Debtor may seek and obtain a determination of the Allowed
Secured Claim of any Creditor asserting a Secured Claim pursuant to the
Bankruptcy Code and the Bankruptcy Rules.
3. Treatment: Except as provided in Article V(A) of the Plan,
as to each Allowed Secured Claim and in complete satisfaction of such Claim, at
the Debtor's option, either:
(i) (A) any default, other than of the kind specified in
Section 365(b)(2) of the Bankruptcy Code, shall be cured, provided that
any accrued and unpaid interest, if any, which the Debtor may be
obligated to pay with respect to such default shall be simple interest
at the contract rate and not at any default rate of interest;
(B) the maturity of such Claim shall be reinstated as
the maturity existed before any default;
(C) the holder of such Claim shall be compensated for
any damage incurred as a result of any reasonable reliance by
the holder on any provision that entitled the holder to
accelerate maturity of such Claim; and
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(D) the other legal, equitable, or contractual rights
to which the Claim entitles the holder shall not otherwise be
altered; provided, however, that as to any Allowed Secured
Claim which is a nonrecourse claim and exceeds the value of
the collateral securing the Claim, the collateral may be sold
at a sale at which the holder of such Claim has an opportunity
to bid;
(ii) on the Effective Date or such other date as may be agreed
upon by the Debtor or Liquidating Trust, as the case may be, and the
holder of such Allowed Secured Claim, the Debtor or Liquidating Trust,
as the case may be, shall abandon the collateral securing such Claim to
the holder thereof in full satisfaction and release of such Claim. The
Claim held by Jones Casino Supplies, Inc. ("Jones") shall be partially
satisfied, based upon and in consideration of the sale free and clear
of all liens and other interests pursuant to 11 U.S.C. 363(f), to Jones
Casino Supplies, Inc., of the slot machines and other gaming equipment
manufactured by Sigma Games, Inc. ("Sigma"), and Advance Cart
Technology, Inc. ("ACT") for a total credit of $204,754.67 ($156,
387.20 for Sigma equipment and $48,367.47 for ACT equipment), to be
applied in reduction of the total Secured Claim of Jones Casino
Supplies, Inc. In the alternative, a partial credit shall be granted
following the abandonment of the slot machines and other equipment and
supplies manufactured by Sigma and ACT to Jones to allow it to
foreclose its security interest, and based upon the Court's
determination as to the amount of the secured portion of the Jones
Claims, and the security interest and liens held by Jones shall be
preserved and retained by Jones pending the Court's determination and
the foreclosure; or
(iii) the holder of such Claim shall be paid, on account of
such Allowed Secured Claim: (a) in full, in cash, after the later of
(i) the Effective Date or (ii) the first Cash Distribution Date after
the date such Secured Claim becomes an Allowed Claim; or, if
applicable, (b) upon such other terms as may be agreed to between the
Debtor or Liquidating Trust, as the case may be, and the holder of such
Allowed Secured Claim; provided, however, that as to the Bally & IGT
claims, upon such other terms as may be agreed to between Reorganized
Crescent City or the Purchaser, as the case may be, and the respective
holders of the Bally & IGT Claims. The security interest of Bally and
IGT shall survive confirmation until such claims are paid. The security
interests of any other secured claimant, shall be preserved and
retained, to survive confirmation, in either the specific collateral
itself, provided said collateral is not part of the Riverboat Assets,
or preserved and attaching to the proceeds that constitute the
Settlement Amount and/or the Residual Property, if the collateral is
sold free and clear of liens and interests, until paid.
(iv) Any Allowed Class 2 Claim found by Final Order to be
secured by a lien against any of the Riverboat Assets to be transferred
to Purchaser and to be senior to the lien securing the Class 1 Claims
affecting the Riverboat Property shall be paid in cash on the Effective
Date or at such later date as such determination is made by Final
Order. Payments to the holders of any such Class 2 Claims shall be made
from the Net Cash Proceeds of one or more of the following sources, in
the following order of priority; the Settlement Amount and the Residual
Property. Any creditor determined by final order to have an allowed
Class 2 Secured Claim shall be paid to the extent of the value of its
collateral, with the creditor retaining its security interest and lien,
either as to the specific collateral, provided said collateral is not
part of the Riverboat Assets, or preserved and attaching to the
proceeds only that constitute the Settlement Amount and the Residual
Property, until the court's determination and payment, and shall have
an unsecured claim for any deficiency which shall then be recognized,
and the creditor paid its pro-rata distribution or share of the
Settlement Amount as set forth below, for the Class 3 Allowed General
Unsecured Claims; provided however, that notwithstanding anything
contained in the Plan (including specifically, without limitation,
subsection 3(iii) and subsection 3(iv) hereof), the rights, if any, of
the Board of Commissioners of the Port of New Orleans (the "Board")
under that certain escrow agreement between the Board and the Debtor
and the lien or security interest, if any, in favor of the Board,
pursuant to the Escrow Agreement and/or Bert Infrastructure
Reimbursement Agreement (as amended) between the parties, including
without limitation, any valid, perfected and unavoidable lien or
security interest the Board has on or in that certain escrow account
numbered 785-1061190 at the First National Bank of Commerce,
denominated as "Crescent City Capital Escrow" and all monies therein
and all proceeds (in whatever form) thereof, shall survive
confirmation.
4. Voting: Class 2 is impaired by the Plan and each holder of
a Claim in Class 2 shall be entitled to vote to accept or reject the Plan.
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Class 3A: General Unsecured Claims
1. Classification: Class 3A consists of Allowed General
Unsecured Claims.
2. Treatment: Each holder of an Allowed General Unsecured
Claim shall receive its Pro Rata share of the remainder of the Net Cash Proceeds
of the Settlement Amount, on account of their beneficial interests in the
Liquidating Trust, after payment or reserve for all (i) Administrative Claims,
(ii) Priority Claims, (iii) Priority Tax Claims (iv) Allowed Class 3B Claims,
(v) Allowed Class 2 Claims found to be secured by a lien on any of the Riverboat
Assets and superior to the lien of the Class 1 Claimant, and (vi) establishment
of a reserve for payment of operating expenses of Liquidating Trust (which
initial reserve is not to exceed $1,000,000.00). In addition to distributions
from the Settlement Amount, Class 3A Claimants shall receive Pro Rata
distributions from all Net Cash Proceeds generated from the Residual Property.
However, there will be no distribution of the Net Cash Proceeds generated from
the Residual Property unless and until all payments and/or reserves required
under this paragraph have been made.
3. Voting: Class 3A is impaired and the holders of Claims in
Class 3A are entitled to vote to accept or reject the Plan.
4. Election To Be Treated As Holder Of Convenience Claim: On
or before the Voting Deadline, any holder of an Allowed General Unsecured Claim
may elect (by election on the ballot to be sent to all holders of Allowed
General Unsecured Claims, or thereafter until the Effective Date, by other
written election in form and substance satisfactory to the Debtor) to
voluntarily reduce its Claim to $5,000, and receive the same treatment as
holders of Claims in Class 3B.
5. Claims With Recourse to Insurance Coverage: To the extent
the holder of any General Unsecured Claim has recourse to any liability
insurance policy covering tort claims issued to or for the benefit of the
Debtor, the holder of such Claim must first, to the satisfaction of the
Liquidating Trustees, use its best efforts to collect its Allowed Claims from
the insurance carrier. Such collection will reduce the amount of such holder's
Allowed Claim by the amount of any payment received from such insurance carrier.
Any remaining unpaid portion of such Allowed General Unsecured Claim will be
treated under the other provisions applicable to Allowed General Unsecured
Claims. In the event the Liquidating Trustees determine that the holder of any
such Claim has not used its best efforts to collect the proceeds of such
insurance coverage, such Claim shall be treated as a Disputed Claim until the
Liquidating Trustees determine that such best efforts have been made.
Class 3B: Convenience Claims
1. Classification: Class 3B consists of Convenience Claims.
2. Treatment: Each holder of an Allowed Convenience Claim
shall be paid forty (40%) percent of the Allowed amount of such Claim, in Cash,
on the later of (a) the Effective Date (or as soon thereafter as is
practicable), or (b) the first Cash Distribution Date immediately following the
date on which such Convenience Claim becomes an Allowed Convenience Claim.
3. Voting: Class 3B is impaired and the holders of Claims in
Class 3B are entitled to vote to accept or reject the Plan.
Class 3C: CGII Claim
1. Classification: Class 3C consists of the CGII Claim.
2. Treatment: On the Effective Date, the Class 3C Claim shall
be allowed in the amount of $5,000,000 and the holder of the Class 3C Claim
shall receive on account of such Claim, the Magic Deferred Cash pursuant to the
Magic Agreement. The payment of the Magic Deferred Cash shall be subject to the
security interest of the Indenture Trustee. Any amounts of the Magic Deferred
Cash to be paid to CGII, pursuant to this Plan and the Magic Agreement, shall be
deposited by Purchaser in a segregated interest bearing account at First Bank
National Association, subject in all respects to all of the first priority liens
and interests of the Indenture Trustee, without any further action, and shall
not be disbursed absent the mutual consent of CGII and the Indenture Trustee, or
by an order of a court of competent jurisdiction.
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3. Voting: Class 3C is impaired and the Holder of Claims in
Class 3C is entitled to vote to accept or reject the Plan.
Class 4: Subordinated Unsecured Claims
1. Classification: Class 4 consists of Subordinated Unsecured
Claims.
2. Treatment: Holders of Subordinated Unsecured Claims shall
receive no distribution under the Plan. There shall be a presumption that
excusable neglect does not exist in respect of those Claims.
3. Voting: Class 4 is impaired and is deemed to reject the
Plan.
Class 5: Equity Interests
1. Classification: Class 5 consists of all Equity Interests.
2. Treatment: Holders of Equity Interests shall receive no
distribution under the Plan. All Equity Interests will be canceled and rendered
void and of no further force or effect on the Effective Date.
3. Voting: Class 5 is impaired and is deemed to reject the
Plan.
Class 6: Mirage Administrative/Secured Claim
1. Classification: Class 6 consists of the Mirage
Administrative/Secured Claim.
2. Treatment: Pending resolution of Debtor's objection to
Mirage's DIP Financing Claim, the entire sum of $2,000,000.00, plus the
estimated amount of accrued and/or accruing interest for a period of one (1)
year after Closing shall be reserved by the Liquidating Trust for the benefit of
Mirage. Upon entry of a Final Order allowing the claim of Mirage, a sum equal to
the Allowed Claim shall be distributed to Mirage. The balance, if any, shall
then be available for distribution to members of other classes of creditors,
other than Class 1. Upon entry of a Final Order disallowing the claim of Mirage
the entire sum reserved shall be available for distribution to members of other
classes of creditors, other than Class 1.
3. Voting: Class 6 is unimpaired and is deemed to have
accepted the Plan.
ARTICLE IV
ACCEPTANCE OR REJECTION OF THE PLAN
1. Voting Classes. Each holder of an Allowed Claim in Classes
1, 2, 3A, 3B and 3C shall be entitled to vote to accept or reject the Plan,
unless otherwise ordered by the Court.
2. Deemed Rejection of the Plan. Classes 4 and 5 shall receive
no distribution under the Plan and, therefore, are deemed to reject the Plan.
The Debtor hereby requests that the Court confirm the Plan over such rejections
in accordance with subsection 1129(b) of the Bankruptcy Code.
3. Deemed Acceptance of Plan. Class 6 is unimpaired under the
Plan, and, therefore, is deemed to accept the Plan, and thus, will not receive a
ballot to vote on the Plan.
4. Confirmability of the Plan. The confirmation requirements
of Section 1129 of the Bankruptcy Code must be satisfied with respect to the
Debtor and the Plan. If the Bankruptcy Court determines that any provisions
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of the Plan are prohibited by the Bankruptcy Code, or render the Plan
unconfirmable under Section 1129 of the Bankruptcy Code, the Debtor reserves the
right to sever such provisions from the Plan, and to request that the Plan, as
so modified, be confirmed.
5. Nonconsensual Confirmation. In the event that any of
Classes reject the Plan, the Debtor reserves the right to request that the Court
confirm the Plan over such rejection in accordance with Section 1129(b) of the
Bankruptcy Code.
6. Controversy Concerning Impairment. In the event of a
controversy as to whether any Class of Claims or Equity Interests is Impaired
under the Plan, the Bankruptcy Court will, after notice and a hearing
prior to the Confirmation Date, determine such controversy.
ARTICLE V
MEANS OF IMPLEMENTATION OF THE PLAN
A. Closing of the Magic Agreement. On the Effective Date,
Purchaser shall pay the Magic Closing Cash and Magic Notes to the Indenture
Trustee for the benefit of the Bondholders, and Purchaser shall receive in
exchange therefor 100% of the outstanding shares of New Common Stock of
Reorganized Crescent City, as of the Effective Date. Immediately upon receipt of
the Magic Closing Cash and Magic Notes, and after deducting the sum of
$7,250,000.00 from the Magic Closing Cash and $28,000,000.00 from the Magic
Notes, for distribution to Bondholders in accordance with the terms of the
Indenture, the Indenture Trustee shall pay the Settlement Amount to the
Liquidating Trust. At Closing, Purchaser or Reorganized Crescent City shall
assume or shall otherwise satisfy the Bally & IGT Claims, without any cost or
expense to the Debtor or Liquidating Trust.
B. Cancellation of Equity Interests. On and as of the
Effective Date, all Equity Interests, including, without limitation, unexercised
rights to acquire shares of stock of the Debtor by way of option, warrant or
other legal or contractual rights, shall be automatically canceled and deemed to
be void.
C. Liquidation of the Assets. On the Effective Date, (a) all
of the Residual Property shall be transferred to Liquidating Trust, (b) each
holder of an Allowed Claim, to the extent such Claim is not satisfied on the
Effective Date, shall receive from Liquidating Trust (or such other party
specifically identified) the distributions provided in Article III of the Plan,
and (c) Liquidating Trust shall be managed by the Liquidating Trustees in good
faith so as to maximize the value of Liquidating Trust's property through the
orderly liquidation of such property in a commercially reasonable manner under
the continuing supervision of the Bankruptcy Court, as provided by this Plan.
D. Corporate Governance and Management of Reorganized Crescent
City; Vesting of Assets and Discharge; Capitalization of Reorganized Crescent
City; Action Necessary for Riverboat Gaming Commission Approvals.
1. Corporate Governance of Reorganized Crescent City: On and
after the Effective Date, the Debtor shall continue in existence as Reorganized
Crescent City, a Louisiana corporation governed by the provisions of the Amended
Certificate of Incorporation, the Amended By-laws, and Louisiana General
Corporation Law.
2. Management of Reorganized Crescent City: On and after the
Effective Date, the operation of Reorganized Crescent City shall become the
responsibility of its board of directors and management.
3. Vesting of Assets and Discharge: On and after the Effective
Date, Reorganized Crescent City may operate its businesses and may use, acquire,
and dispose of its property without supervisions or approval by the Bankruptcy
Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules,
other than as expressly provided herein. The Riverboat Assets shall vest in
Reorganized Crescent City free and clear of the claims, liens, charges,
encumbrances and interests, except as otherwise provided herein. Except as
otherwise provided herein, including the Magic Agreement on and after the
Effective Date, Reorganized Crescent City shall not be liable for and shall be
discharged from any and all Claims against the Debtor, and all Equity Interests
in the Debtor shall be canceled.
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E. Establishment and Management of Liquidating Trust.
1. Upon confirmation hereof, and effective upon the Effective
Date, the three (3) persons identified by the Creditors' Committee prior to the
conclusion of the Confirmation Hearing, shall be appointed to act as
Co-Liquidating Trustees (the "Liquidating Trustees") of and to administer the
Liquidating Trust hereinafter created and to liquidate assets for the benefit of
the creditors of the Debtor's estate. The selections of the persons to serve as
Liquidating Trustees shall be subject to approval of the Bankruptcy Court.
Vacancies occurring after the original appointments shall be governed by the
Liquidating Trust documents. The Liquidating Trustees shall be deemed to be the
authorized representatives of the Estate for the purpose of and consummation of
the Plan pursuant to Sections 1103 and 1123(b)(3)(B) and other applicable
sections of the Bankruptcy Code.
2. The Liquidating Trustees shall manage and govern the
Liquidating Trust by majority rule.
3. The Debtor hereby declares and establishes a Liquidating
Trust, as defined by Treas. Reg. ss. 301.7701-4(d), (the "Liquidating Trust")
for the benefit of the creditors of the Debtor. The Liquidating Trust is
organized for the primary purpose of receiving, liquidating, and distributing
the cash, claims, and property transferred to the Liquidating Trust (the
"Liquidating Trust Property") in accordance with the provisions of this Plan as
promptly as is reasonably possible, with no objective to carry on or conduct a
for-profit trade or business. Upon transfer of the Liquidating Trust Property to
the Liquidating Trust, the Debtor shall retain no interest in the Liquidating
Trust Property.
4. The Liquidating Trust Property will be transferred to the
Liquidating Trust for the benefit of the creditors. The transfer shall be
treated as a transfer to creditors to the extent that the creditors are
beneficiaries of the Liquidating Trust. The transfer will be treated as a deemed
transfer by the beneficiary-creditors to the Liquidating Trust. The
beneficiaries-creditors of the Liquidating Trust will be treated as the grantors
and deemed owners of the Liquidating Trust.
5. The Liquidating Trust Property must be consistently valued
by the Liquidating Trustees and the beneficiary-creditors and said valuation
must be used for all federal income tax purposes.
6. The Liquidating Trustees must file returns for the
Liquidating Trust as a grantor trust pursuant to ss. 1.671-4(a) of the Income
Tax Regulations.
7. The Liquidating Trustees' powers shall be limited to
recovering, preserving and protecting the Liquidating Trust Property,
liquidating the Liquidating Trust Property as promptly as is reasonably possible
and distributing all income and proceeds from the liquidation of Liquidating
Trust Property in accordance with the terms of the Plan as promptly as is
reasonably possible. Except as otherwise inconsistent with the provisions of
this Plan, in the exercise of such powers, the Liquidating Trustees, on behalf
of the Liquidating Trust, shall be authorized to (i) avoid or recover transfers
(including fraudulent conveyances or preferential transfers) of the Debtor's
property as may be permitted by Sections 542 through 553 of the Bankruptcy Code
or applicable state law, (ii) pursue all claims and causes of action arising
from the prepetition activities of the Debtor, whether arising by statute or
common law and whether arising under the laws of the United States of America,
Louisiana, or any other state having jurisdiction over any claim or controversy
pertaining to the Debtor, and whether maintainable against third parties,
Affiliates or Insiders of the Debtor,(iii) defend claims, causes of action and
other litigation that may adversely affect or impact the Liquidating Trust
Property,(iv) contest Claims, (v) file, litigate to final judgment, settle, or
withdraw objections to Claims, and (vi) exercise offsets against Claims. All
activities of the Liquidating Trustees shall be reasonably necessary to, and
consistent with, the accomplishment of the purpose of the Liquidating Trust as
set forth in this Plan. The Liquidating Trustees shall make continuing efforts
to liquidate and distribute proceeds from the liquidation of Liquidating Trust
Property, shall make timely distributions pursuant to the provisions hereof, and
shall not unduly prolong the duration of the Liquidating Trust.
8. The Liquidating Trustees shall have full and complete
authority to do and perform all acts, to execute all documents and to make all
payments and disbursements of funds necessary to carry out the purpose of the
Liquidating Trust as set forth in this Plan. The Liquidating Trustees shall make
distributions of proceeds from the liquidation of Liquidating Trust Property and
income from investments in accordance with this Plan.
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9. Any party dealing with the Liquidating Trustees in relation
to the Liquidating Trust Property or any part thereof, including, but not
limited to, any party to whom Liquidating Trust Property or any part thereof
shall be conveyed or contracted to be sold by the Liquidating Trustees, shall
not be obligated in any way (i) to see to the application of any purchase money,
(ii) to see that the provisions of this Plan or the terms of the Liquidating
Trust have been complied with, or (iii) to inquire into any limitation or
restriction on the power or authority of the Liquidating Trustees. The power of
the Liquidating Trustees to act or otherwise deal with the Liquidating Trust
Property shall be absolute as to any party dealing with the Liquidating Trustees
in any manner whatsoever in relation to the Liquidating Trust Property.
10. All costs, expenses, and obligations incurred by the
Liquidating Trustees in administering this Liquidating Trust or in any manner
reasonably connected, incidental or related thereto shall be a charge against
the Liquidating Trust Property. The Liquidating Trustees may approve and direct
the payment thereof or the retention by the Liquidating Trustees of adequate
reserves for such payment prior to making distributions to creditors pursuant to
this Plan.
11. The Liquidating Trustees shall keep or cause to be kept
books containing a description of all property constituting Liquidating Trust
Property and an accounting of receipts and disbursements, which shall be open to
inspection by creditor-beneficiaries at reasonable times upon written request to
the Liquidating Trustees or their counsel. The Liquidating Trustees shall file
with the Bankruptcy Court semi-annually (or more often if deemed appropriate by
the Liquidating Trustees) a statement of receipts and disbursements for the
Liquidating Trust. The Liquidating Trustees shall establish and maintain
separate accounts (including bank accounts) for the receipt and expenditure of
funds derived from the Settlement Amount, the Administrative, Priority and
Disputed Claims Reserve and the Residual Property. The Liquidating Trustees, in
their discretion, may advance funds from the Settlement Amount Account for the
purpose of investigating, commencing litigation, or otherwise enhancing the
value of the claims and property to be deposited in the other accounts but such
advance(s) shall be considered loans and shall promptly be repaid from the first
available funds in such other accounts.
12. No recourse shall ever be had, directly or indirectly,
against the Liquidating Trustees or any Representatives of the Liquidating
Trustees (including without limitation, the employers of the Liquidating
Trustees), or against any employee of the Liquidating Trustees, whether by legal
or equitable proceedings, by virtue of any statute or otherwise, or by reason of
the creation of any indebtedness by the Liquidating Trustees under this
Liquidating Trust for any purpose authorized by this Liquidating Trust, it being
expressly understood and agreed that all liabilities, contracts and agreements
of the Liquidating Trustees, whether in writing or otherwise, under this
Liquidating Trust shall be enforceable only against and be satisfied only out of
the Liquidating Trust Property or shall be evidence only of a right of payment
out of the Liquidating Trust Property, as the case may be. Nothing herein shall
constitute a waiver of claims for intentional torts, embezzlement or other
fraudulent activity. Every undertaking, contract, covenant or agreement entered
into in writing by the Liquidating Trustees, their Representatives, shall
provide expressly against the personal liability of the Liquidating Trustees,
their Representatives and employees.
13. The Liquidating Trustees shall receive no compensation for
their services but shall be entitled to reimbursement for all expenses incurred
by them in the performance of their duties as trustees, which expenses shall be
a charge against and paid out of the Liquidating Trust Property, in accordance
with the terms of this Plan. The reimbursement of expenses to the Liquidating
Trustees and reimbursement of expenses and compensation of professionals
employed by the Liquidating Trustees shall constitute a first priority expense
of the Liquidating Trust.
14. The Liquidating Trustees shall be relieved of any and all
duties, restrictions or liabilities imposed upon Liquidating Trustees by
applicable laws of the governing state, including the provisions of the trust
laws of the governing state as in effect, in the governing state, on the
Effective Date and as it may thereafter be amended, so that the Liquidating
Trustees shall be liable only for acts of self-dealing or bad faith, or
intentionally adverse acts or reckless indifference to the interests of the
creditors of the Debtor. The fact that any act or failure to act of the
Liquidating Trustees was advised by an attorney acting as attorney for the
Liquidating Trust or the Liquidating Trustees shall be conclusive evidence of
the Liquidating Trustees' good faith in performing or failing to perform such
act.
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15. The Liquidating Trust shall be effective as of the
Effective Date and shall remain and continue in full force and effect until the
Liquidating Trust Property has been wholly converted to cash, all costs,
expenses and obligations incurred in administering this Liquidating Trust have
been fully paid and discharged and all remaining income, proceeds and assets of
the Liquidating Trust Property have been distributed as herein set forth.
Notwithstanding the above, the Liquidating Trust created herein shall terminate
within(3) years from the Effective Date or within such further time as is
reasonably necessary to accomplish full liquidation and disbursement; provided,
however, in no event shall this Liquidating Trust extend beyond five (5) years
from the Effective Date.
16. Subject to approval of the Bankruptcy Court, the
Liquidating Trustees may engage attorneys, accountants and agents to advise or
assist the Liquidating Trustees in the administration of the Liquidating Trust
and to represent the Liquidating Trustees in all matters relating to the
Liquidating Trust. The Liquidating Trustees shall pay the reasonable fees,
charges and expenses of such attorneys and accountants who provide services
after the Effective Date as a priority expense of the Liquidating Trust, in
accordance with the terms this Plan. Subject to the availability of sufficient
funds in the Administrative Reserve, the fees and expenses of such professionals
and agents shall be paid upon the monthly submission of bills to Liquidating
Trust. If no written objection to payment is received within five (5) Business
Days following delivery of any bill, the bill shall be paid by Liquidating
Trust. If there is a dispute as to the amount of any bill, such dispute shall be
submitted to the Bankruptcy Court for a determination of the reasonableness of
such bill. Subject to the availability of sufficient funds in the Administrative
Reserve, the uncontested portion of each bill shall be paid within ten (10)
Business Days after its delivery. As provided infra, to the extent funds are or
become available, fees and expenses of professionals and others involved in
investigating, recovering, or liquidating Residual Property shall be paid from
such recoveries. To the extent that contingent fee litigation is desirable or
necessary, the Liquidating Trustees are authorized to hire counsel to pursue
such litigation at a reasonable contingent fee. The Liquidating Trust, which
shall succeed to the Debtor's interest in the property transferred to it
pursuant to this Plan, shall constitute a successor in interest to the Debtor.
Accordingly, upon the Effective Date, the Liquidating Trustees, on behalf of the
Liquidating Trust, shall become the owner and holder, of all privileges
(including the attorney-client privilege) owned or held by the Debtor, whether
owned or held by the Debtor individually or jointly and whether concerning
pre-petition Date or post-petition Date matters.
17. This Liquidating Trust shall be administered and governed
by the laws of the State of New Jersey or such other state (the "governing
state") as the Debtor and the Creditors' Committee shall select, which shall be
established as of the Effective Date, and any questions arising hereunder shall
be resolved and determined in accordance with the laws of the governing state,
without regard to principles of conflicts of law.
18. On the Effective Date, (a) the filing by Liquidating Trust
of its Trust Articles which shall be a Plan Document shall be deemed authorized
and approved in all respects, and (b) the appointment of the Liquidating
Trustees by the Bankruptcy Court in the Confirmation Order, and the other
matters provided under the Plan concerning the structure of Liquidating Trust or
action by Liquidating Trust, shall be deemed to have occurred and shall be in
effect without any requirement of further action or order of the Bankruptcy
Court. On the Effective Date, (a) the filing by Reorganized Crescent City of the
Amended Certificate of Incorporation and the adoption of the Amended By-laws
shall be deemed authorized and approved in all respects, and (b) to the extent
identified by the Purchaser on such date, the appointment of the directors and
officers of Reorganized Crescent City, and the other matters provided under the
Plan concerning the corporate structure of Reorganized Crescent City, or
corporate action by Reorganized Crescent City or corporate action by Reorganized
Crescent City, shall be deemed to have occurred and shall be in effect from and
after the such time without any requirement of further action or order of the
Bankruptcy Court. The Directors and officers of the Debtors will be deemed to
have resigned as of the Effective Date.
F. Commission Approvals.
1. Corporate Governance of Reorganized Crescent City: On and after the
Effective Date, the Debtor shall continue in existence as Reorganized Crescent
City, a Louisiana corporation governed by the provisions of the Amended
Certificate of Incorporation, the Amended By-laws, and Louisiana General
Corporation Law.
2. Management of Reorganized Crescent City: On and after the
Effective Date, the operation of Reorganized Crescent City shall become the
responsibility of its Board of Directors and management.
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3. Vesting of Assets and Discharge: On and after the Effective Date,
Reorganized Crescent City may operate its businesses and may use, acquire, and
dispose of its property without supervisions or approval by the Bankruptcy Court
and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other
than as expressly provided herein. The Riverboat Assets shall vest in
Reorganized Crescent City free and clear of the claims, liens, charges,
encumbrances and interests, except as otherwise provided herein. Except as
otherwise provided herein, on and after the Effective Date, Reorganized Crescent
City shall not be liable for and shall be discharged from any and all Claims
against the Debtor, and all Equity Interests in the Debtor shall be canceled.
4. Action Necessary for Riverboat Gaming Commission Approvals: On and
after the Confirmation Date, Purchaser and the Debtor shall take all reasonable
steps necessary to obtain any and all authorizations, certifications and
operating authorities and any other like permits necessary for Reorganized
Crescent City to start operations on, or on the earliest date possible after the
Effective Date.
H. Assignment of Causes of Action. On the Effective Date,
except as otherwise provided herein, all rights, claims, and causes of action
pursuant to: (a) Sections 541, 542, 544, 545, 547, 548, 549, 550 and 553 of the
Bankruptcy Code; and (b) all other claims and causes of action of the Debtor
against any Person as of the Effective Date including but not limited to the
Mirage Claim and any right to the Mirage Recovery, shall be preserved and become
property of Liquidating Trust. On the Effective Date, Liquidating Trust shall be
deemed the representative of the Estate under Section 1123(b) of the Bankruptcy
Code and will be authorized and shall have the power to commence and prosecute
any and all causes of action which could have been asserted by the Estate.
Liquidating Trust may pursue such causes of action in the Bankruptcy Court and
may retain such counsel, accountants or other Persons as Liquidating Trust deems
necessary in connection therewith or in connection with liquidation of the
Residual Property or performance of the responsibilities of Liquidating Trust
and the Liquidating Agent. All recoveries, if any, received from or in respect
of the causes of action (whether by settlement, judgment or otherwise) shall
become the property of Liquidating Trust to be distributed pursuant to the terms
of the Plan. The costs and expenses, including legal fees and disbursements,
incurred in connection with the prosecution of such causes of action, shall be
paid by Liquidating Trust without necessity of approval by the Bankruptcy Court.
From and after the Effective Date, Liquidating Trust shall litigate any
avoidance or recovery actions and any other causes of action or rights to
payments of claims that belong to the Debtor that may be pending on the
Effective Date or instituted by Liquidating Trust after the Effective Date.
I. Waiver of Subordination. The distributions under the Plan
take into account the relative priorities of the Claims in each Class in
connection with any contractual subordination provisions relating thereto.
ARTICLE VI
ESTABLISHMENT OF RESERVES
A. Administrative Reserve.
1. Creation of Administrative Reserve: On the Effective Date,
Liquidating Trust shall establish an interest bearing account with a major money
center bank in an amount necessary to create and maintain the Administrative
Reserve, as same shall be determined by the Debtor at the Confirmation Hearing
and approved by the Bankruptcy Court. The money in the Administrative Reserve
shall be used to fund (i) the continuing administration of Liquidating Trust,
including the administration of Claims, and the filing and prosecutions of
objections thereto, (ii) the payment of taxes for which the Liquidating Trust is
liable, (iii) the maintenance of insurance policies, (iv) the enforcement and
prosecution of claims of or claims assigned to the Liquidating Trust in
conjunction with the marshaling of the Residual Property, (vi) the liquidation
by conversion to Cash or other methods of the remaining Residual Property, and
(vii) the payment of the actual fees and expenses incurred in connection with
all of the above-described activities. The Administrative Reserve shall not be
used to fund the operations or pay any expenses of Reorganized Crescent City.
2. Maintenance of the Administrative Reserve: Liquidating
Trust shall maintain sufficient Cash in the Administrative Reserve as it in good
faith deems necessary to ensure the continued funding of the activities
described in Subsection 1 of this Article VI(E) of the Plan.
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3. Investment of the Administrative Reserve: Liquidating Trust
shall be permitted, from time to time, to invest all or a portion of the Cash in
the Administrative Reserve in United States Treasury Bills, interest-bearing
certificates of deposit, tax exempt securities, or investments permitted by
Section 345 of the Bankruptcy Code, using prudent efforts to enhance the rates
of interest without inordinate credit risks or interest rate risks. All interest
earned on such Cash shall be held by Liquidating Trust and (i) kept in the
Administrative Reserve and utilized to fund the operation of Liquidating Trust,
and, to the extent of any excess, (ii) transferred to an available cash reserve
for distribution in accordance with the Plan.
4. Distribution of the Administrative Reserve: After
completion by Liquidating Trust of all tasks remaining to liquidate fully its
assets and distribute the proceeds therefrom in accordance with the Plan,
including the payment of all charges and taxes related thereto, any amounts
remaining in the Administrative Reserve will be distributed to Class 3A
Claimants.
B. The Disputed Claims Reserve.
1. Creation of the Disputed Claims Reserve: On or before the
first (1st) Cash Distribution Date, Liquidating Trust shall establish a
segregated interest-bearing account with a major money center bank. On the first
(1st) Cash Distribution Date and each subsequent Cash Distribution Date, from
the Settlement Amount or the Net Cash Proceeds attributable to the Residual
Property, as applicable, Liquidating Trust shall deposit into such account, or
otherwise reserve, an amount of Cash and/or Magic Notes sufficient to pay all
Disputed Administrative Claims, Disputed Priority Claims, Disputed Priority Tax
Claims, Disputed Secured Claims, Disputed Convenience Claims and Disputed
General Unsecured Claims that would have been distributable on account of such
Claims had such Claims been Allowed Claims on the relevant date. The reserve
shall be based upon the amount ordered by the Court in accordance with the
Court's authority to estimate contingent and/or unliquidated claims under 11
U.S.C. ss.502(c) or, if no estimate has been made, the amount of the Claims,
as filed.
2. Claims With Recourse to Insurance Coverage: All Allowed
General Unsecured Claims with recourse to insurance coverage policies of the
Debtor covering tort claims shall be deemed Disputed Claims in their Face Amount
or as otherwise ordered by the Court, and Cash and/or Magic Notes shall be set
aside in the Disputed Claims Reserve on the first (1st) Cash Distribution Date
to account for such Claims. Upon receipt of notice that any such Claim has been
satisfied in whole, or in part, by the Debtor's insurance policies, Liquidating
Trust will reduce the amount on deposit in the Disputed Claims Reserve by an
amount equal to the amount allocable to the Claim or portion thereof so
satisfied. Upon receipt of notice that a Claim entitled to coverage under an
insurance policy of the Debtor is not satisfied, in whole, or in part, under
such policy, within sixty (60) days of the Effective Date, and such Claim is not
disputed in whole or in part by Liquidating Trust, Liquidating Trust shall
distribute to the holder of such Claim, Cash set aside in the Disputed Claims
Reserve on account of that portion of such Claim that has not been satisfied by
coverage under an insurance policy.
3. Payment of Expenses of the Disputed Claims Reserve:
Liquidating Trust shall pay, or cause to be paid, out of the funds held in the
Disputed Claims Reserve, all expenses of the Disputed Claims Reserve, including
any tax imposed by any governmental unit on the income generated by the funds
held in the Disputed Claims Reserve. Liquidating Trust shall also file or cause
to be filed any tax or information returns related to the Disputed Claims
Reserve that are required by any governmental unit.
4. Investment of Disputed Claims Reserve: Liquidating Trust
shall be permitted, from time to time, to invest all or a portion of the Cash in
the Disputed Claims Reserve in United States Treasury Bills, interest-bearing
certificates of deposit, tax exempt securities, or investments permitted by
Section 345 of the Bankruptcy Code, using prudent efforts to enhance the rates
of interest without inordinate credit risks or interest rate risks. All interest
earned on such Cash shall be held by Liquidating Trust and, after satisfaction
of any expenses incurred in connection with the maintenance of the Disputed
Claims Reserve, distributed in accordance with the Plan.
5. Excess Funds: If, on any Reallocation Date, Liquidating
Trust determines there are excess funds on deposit in the Disputed Claims
Reserve, such excess funds (including any interest earned thereon) will be
released from the Disputed Claims Reserve and deposited in the Available Cash
Reserve and distributed to Class 3A Claimants in accordance with this Plan.
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ARTICLE VII
PROVISIONS FOR TREATMENT OF DISPUTED AND CONTINGENT CLAIMS
A. Objections to Claims. Unless another date is established by
the Bankruptcy Court, all objections to Claims that were filed prior to the
Effective Date shall be filed and served on the holders of such Claims by the
sixtieth (60th) after the Effective Date, or such date as extended by the Court.
If any objection has not been filed to a proof of Claim or a scheduled Claim by
the objection bar date, the Claim to which the proof of claim or scheduled Claim
relates shall be treated as an Allowed Claim if such Claim has not been Allowed
or Disallowed earlier. After the Effective Date, except as to objections to
claims filed by persons other than the Debtor, only the Liquidating Trustees
shall have the authority to prosecute, settle, compromise, withdraw or litigate
to judgment objections to Claims and counterclaims, all of which shall be
prosecuted in the Bankruptcy Court.
B. Payments and Distributions on Disputed Claims.
Notwithstanding any provision in the Plan to the contrary, no payments or
distributions will be made with respect to a Disputed Claim until the resolution
of such dispute by settlement or Final Order. On the first Cash Distribution
Date that is at least forty-five (45) days after a Disputed Claim becomes an
Allowed Claim, the holder of such Allowed Claim will receive all distributions,
including its share of the net earnings of the Disputed Claims Reserve, to which
such holder is then entitled under the Plan. Notwithstanding the foregoing, any
Person who holds both an Allowed Claim(s) and a Disputed Claim(s) will receive
the appropriate payment or distribution on the Allowed Claim(s), although no
payment or distribution will be made on the Disputed Claim(s) until such dispute
is resolved by settlement or Final Order.
C. Disputed General Unsecured Claims.
1. Estimation: For purposes of effectuating the reserve
provisions of Article VI of the Plan and the allocations and distributions to
holders of Allowed General Unsecured Claims, the Bankruptcy Court will, on or
prior to the Confirmation Date, pursuant to Section 502 of the Bankruptcy Code,
fix or liquidate the amount of any Contingent General Unsecured Claim not
otherwise treated in the Plan, in which event the amount so fixed or liquidated
will be deemed the Allowed amount of such Claim for purposes of this Plan, or,
in lieu thereof, the Bankruptcy Court will determine the maximum contingent
amount for such Claim, which amount will be the maximum amount in which such
Claim ultimately may be Allowed under this Plan, if such Claim is Allowed in
whole or in part. The right of a Creditor under Section 502(j) of the Bankruptcy
Code to obtain reconsideration of a Claim that has been estimated can only be
exercised within thirty (30) days after the Effective Date. Thereafter, no
Claims that have been estimated for the purpose of allowance may be
reconsidered.
2. Distributions Upon Allowance: To the extent a Disputed
General Unsecured Claim becomes an Allowed Claim, on the next succeeding Cash
Distribution Date that is at least forty-five (45) days after a Disputed Claim
becomes an Allowed Claim, there will be distributed to the holder of such
Allowed Claim out of the Disputed Claims Reserve, in accordance with the
applicable provisions of this Plan, the amount of Cash on deposit in the
Disputed Claims Reserve allocable to the Claim so Allowed, plus its share of the
net earnings of the Disputed Claims Reserve.
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ARTICLE VIII
DISTRIBUTIONS UNDER THE PLAN
A. Distributions.
1. On the Effective Date, or as soon thereafter as is
reasonably practicable, distributions of Cash shall be made by Liquidating Trust
in accordance with the relevant provisions of Article III hereof, on account of
Allowed Administrative Claims, Allowed Priority Claims, Allowed Priority Tax
Claims, and Allowed Secured Claims that are entitled to a Cash payment under the
Plan.
2. On the first (1st) Cash Distribution Date, or as soon
thereafter as is reasonably practicable, distributions of Cash shall be made by
Liquidating Trust in accordance with the relevant provisions of Article II
hereof, on account of Allowed Convenience Claims and Allowed General Unsecured
Claims; and
3. Subsequent distributions of (a) Net Cash Proceeds of the
Residual Property, and (b) previously undistributed Cash to the holders of
Allowed General Unsecured Claims, may be made if, on any Cash Distribution Date
(excluding the first (1st) Cash Distribution Date), the Liquidating Trustees, in
their discretion, determine that Liquidating Trust has accumulated sufficient
funds to justify a distribution.
4. On each Reallocation Date, the Liquidating Trustees will
determine the amount of Cash to be distributed on account of previously Allowed
Claims and Disputed Claims that have become, in whole or in part, Allowed
Claims. The Liquidating Trustees shall, if appropriate, make distributions from
the Disputed Claims Reserve on each Cash Distribution Date.
6. Fractional cents will not be distributed and shall revert
to Liquidating Trust.
B. Method of Payment. Payments to be made by Liquidating Trust
pursuant to the Plan will be made by check drawn on a domestic bank or, if in
excess of $1,000,000, by wire transfer of next day available funds.
C. Amendment of Plan. The Plan may be amended by the Debtor
before, and the Liquidating Trustees after, the Effective Date as provided in
Section 1127 of the Bankruptcy Code.
D. Implementation. The Debtor and Liquidating Trust, as the
case may be, will be authorized to take all necessary steps, and perform all
necessary acts, to consummate the terms and conditions of the Plan.
E. Method of Distributions Under the Plan. All distributions
of Cash and other property shall be made by the Liquidating Trustees pursuant to
the Plan on the Effective Date or applicable Cash Distribution Date, as the case
may be, or as soon thereafter as is practicable (a) at the addresses set forth
in the proofs of claim filed by such holders; (b) at the addresses set forth in
any written notices of address change delivered to the Debtor or Liquidating
Trust after the date on which any related proof of claim was filed; or (c) at
the address reflected in the Schedules if no proof of claim has been filed and
Liquidating Trust has not received a written notice of a change of address.
F. Undeliverable Distributions.
1. Distributions Held by Liquidating Trust: If the
distribution to any holder of an Allowed Claim is returned as undeliverable, no
further distributions shall be made to such holder unless and until the
Liquidating Trustees is notified in writing by such holder of the holder's
current address at which time all previously missed distributions shall be
mailed to such holder. Undeliverable distributions shall belong to Liquidating
Trust and be held in the account from which such distribution was made (e.g.,
the Settlement Amount account, the Residual Property account, etc.).
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2. After Distributions Become Deliverable: On each Cash
Distribution Date, Liquidating Trust shall make all distributions that have
become deliverable since the immediately prior Cash Distribution Date.
Distributions from the Disputed Claims Reserve shall be made in all instances as
soon as practicable after the same become deliverable.
3. Failure to Claim Undeliverable Distributions: Any holder of
an Allowed Claim that does not assert a claim pursuant to the Plan for an
undeliverable distribution within two (2) years after the Distribution Date
shall have its Claim for such undeliverable distribution discharged and shall be
forever barred from asserting any such claim for an undeliverable distribution.
In such case, any Cash held for distribution on account of such Claims for
undeliverable distributions shall be redeposited into the Administrative Reserve
for distribution to holders of Allowed Class 3A Claims on the next Cash
Distribution Date after such distributions become undeliverable pursuant to the
terms hereof. Nothing contained in the Plan shall require Liquidating Trust to
attempt to locate any holder of an Allowed Claim. Checks issued in respect of
distributions to the holders of Allowed Claims shall be null and void if not
cashed within 90 days of the date of issuance thereof. Requests for the
reissuance of any check shall be made directly to Liquidating Trust by the
holder of the Allowed Claim with respect to which such check was originally
issued. Any Claim in respect of such a check voided shall be made on or before
the sixth (6th) month anniversary of the issuance of such check. After such
date, all Claims in respect of a check voided pursuant to this Subsection shall
be discharged and forever barred.
ARTICLE IX
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
A. Rejection of Executory Contracts and Unexpired Leases. On
the Confirmation Date (but subject to the occurrence of the Effective Date), all
executory contracts or unexpired leases that exist between the Debtor and any
Person, that have not been assumed or rejected by order of the Bankruptcy Court
or which are not the subject of a motion to assume or reject pending on the
Confirmation Date, will be deemed rejected in accordance with the provisions and
requirements of Section 365 of the Bankruptcy Code. Entry of the Confirmation
Order by the Clerk of the Court shall constitute an order approving such
rejections pursuant to Section 365(a) of the Bankruptcy Code.
B. Claims Based on Rejection of Executory Contracts or
Unexpired Leases. All proofs of claim with respect to Claims arising from the
rejection of executory contracts or unexpired leases must be filed with the
Bankruptcy Court no later than twenty-five (25) days after the Confirmation
Date. Any Claims not filed within such time will be forever barred from
assertion against the Debtor, the Estate and its property, Liquidating Trust, or
the Disputed Claims Reserve. Unless otherwise ordered by the Bankruptcy Court,
all such Claims arising from the rejection of executory contracts or unexpired
leases will be, and will be treated as Class 3A, General Unsecured Claims or
Class 3B Convenience Claims or Class 4 Subordinated Claims as the case may be.
ARTICLE X
ADMINISTRATIVE PROVISIONS
A. Retention of Jurisdiction. The Bankruptcy Court will retain
and have exclusive jurisdiction on and after the Confirmation Date for the
following purposes:
1. to hear and determine objections to Administrative Claims
or Proofs of Claims whenever filed both before and after the
Confirmation Date, including any objections to the classification of
any Claim and to allow or disallow any Disputed Claim, in whole or in
part;
2. to hear and determine any and all motions to estimate
Claims regardless of whether the Claim is the subject of a pending
objection, a pending appeal or otherwise;
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3. to hear and determine any and all pending applications for
the rejection or assumption of executory contracts or unexpired leases
to which a Debtor is a party or with respect to which a Debtor may be
liable and to hear and determine, and, if need be, to liquidate, any
and all Claims arising therefrom;
4. to enforce the provisions of the Plan and to enforce any
proposed amendments thereto;
5. to ensure that distributions, if any, to holders of Allowed
Claims are accomplished as provided herein;
6. to determine any and all applications, adversary
proceedings and contested or litigated matters that may be pending on
the Effective Date or commenced thereafter;
7. to consider any modifications of the Plan, to cure any
defect or omission, or reconcile any inconsistency in any order of the
Bankruptcy Court, including, without limitation, the Confirmation
Order;
8. to hear and determine all controversies, suits and disputes
that may arise in connection with the interpretation, implementation or
enforcement of the Plan, the Estate's obligations, releases under the
Plan, or any Claim asserted against any representative of the Estate or
its agents;
9. to hear and determine all controversies concerning the
Magic Agreement.
10. to hear and determine all controversies concerning the
Mirage Agreement, the Mirage DIP Financing Claims and any other claims
and/or dispute asserted by or against Mirage;
11. to enter such orders in aid of execution of the Plan to
the extent authorized by Section 1142 of the Bankruptcy Code, including
such orders aiding or promoting the transfer of the economic or
ownership interest of the Debtor, but not to the extent that such
orders are in regard to matters within the sole jurisdiction of police
or regulatory authorities;
12. to determine such other matters as may be set forth in the
Confirmation Order or as may arise in connection with the Plan
(including, without limitation, Article XIII thereof) or the
Confirmation Order or their implementation;
13. to hear and determine all controversies, suits and
disputes that may arise with respect to the Residual Property;
14. to enforce all orders, judgments, injunctions and rulings
entered in connection with the Reorganization Case;
15. to determine any and all applications for allowance of
compensation and reimbursement of expenses and any other fees and
expenses authorized to be paid or reimbursed under the Bankruptcy
Code or the Plan;
16. to hear and determine all proceedings to recover all
assets of the Debtor and property of the estate, wherever located,
including any causes of action under Sections 544 through 551 and
553(b) of the Bankruptcy Code, and any other causes of action or rights
to payment of Claims, that belong to the Debtor, that may be pending on
the Confirmation Date or that may be instituted at any time by
Liquidating Trust thereafter;
17. to hear and determine any disputes between the Liquidating
Trustees and Liquidating Trust or with respect to either of them;
18. to hear and determine matters concerning state, local and
federal taxes in accordance with Sections 346, 505 and 1146 of the
Bankruptcy Code;
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19. to approve the retention of professionals by Liquidating
Trust and to approve all requests for payment of fees and expenses by
such professionals;
20. to hear any other matter as to which jurisdiction is not
inconsistent with the Bankruptcy Code; and
21. to enter a final decree or decrees closing the
Reorganization Case.
B. Bar Date For Filing Claims Pursuant to Section 503(b) of
the Bankruptcy Code.
1. Administrative Claims Generally: Subject to further order
of the Bankruptcy Court, all applications for payment of Administrative Claims
(other than Administrative Claims that constitute Fee Requests) pursuant to
Section 503(b) of the Bankruptcy Code shall be filed with the Bankruptcy Court
within five (5) Business Days after the Effective Date. Any requests for payment
of such Administrative Claims not so scheduled by the Debtor or filed within
such time period shall be discharged and forever barred except as otherwise may
be ordered by the Bankruptcy Court.
2. Fee Requests:
A. All Fee Requests must be filed with the Bankruptcy Court
within forty-five (45) days after the Effective Date. Objections to such Fee
Requests may be filed by any party in interest within the later of sixty (60)
days after the Effective Date and sixty (60) days after such Fee Request is
filed with the Bankruptcy Court.
B. On or prior to the Confirmation Date, each Person that has
sought or will seek to file a Fee Request shall deliver to the Debtor an
estimate of the aggregate fees and expenses through the Effective Date which
shall be requested by such Person (including, if applicable, any amount
previously requested and subject to holdback). Any such estimate shall be
binding on such Person and such Person shall not apply for fees and expenses
accruing during the Reorganization Case in excess of such estimate; provided,
however, that such estimate shall not be binding unless the Confirmation Order
is entered within ten (10) Business Days of the scheduled Confirmation hearing.
ARTICLE XI
CONDITIONS TO CONFIRMATION
AND EFFECTIVE DATE OF THE PLAN
A. Conditions to Entry of Confirmation Order. The Plan shall
not be confirmed unless the following conditions have been satisfied or waived
as specified in Article XI(C):
1. The Magic Closing Cash is estimated to be sufficient to pay
the Liquidating Trust the Settlement Amount of no less than $6,000,000.00;
B. Conditions to Effective Date. The Effective Date of the
Plan shall not occur unless and until the following conditions shall have been
satisfied:
1. Entry of Confirmation Order in a form and substance
satisfactory to the Debtor, Purchaser, the Institutional Note Holders' Steering
Committee and the Creditors' Committee;
2. At Closing, Purchaser has assumed or otherwise satisfied or
arranged to satisfy the Bally & IGT Claims as provided in V(A) of the Plan;
3. The Confirmation Order shall have been entered;
4. The Confirmation Order shall not be currently stayed; and
5 The Closing has occurred or will occur simultaneously.
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C. Waiver of Conditions.
1. Article XI(A)(1) may be waived by unanimous consent of the
Creditors' Committee, without regard to abstentions.
3. Article XI(B)(2) may be waived by the Creditors' Committee.
ARTICLE XII
EFFECTS OF CONFIRMATION
A. Binding Effect/Injunction.
1. Except as otherwise expressly provided in the Plan, on and
after the Effective Date, the terms of the Plan shall bind all holders of Claims
and Equity Interests, whether or not they accept the Plan.
2. Except as otherwise expressly provided in Section 1141 of
the Bankruptcy Code or this Plan, the distributions made pursuant to the Plan
will be in full and final satisfaction, settlement, release and discharge as
against the Debtor or any of its assets or properties, of any debt that arose
before the Confirmation Date and any debt of a kind specified in Sections
502(g), 502(h) or 502(i) of the Bankruptcy Code and all Claims and interests of
any nature, including, without limitation, any interest accrued thereon from and
after the Petition Date, whether or not (i) a proof of Claim or interest based
on such debt, obligation or interest is filed or deemed filed under Section 501
of the Bankruptcy Code, (ii) such Claim or interest is Allowed under Section 502
of the Bankruptcy Code, or (iii) the holder of such Claim or interest has
accepted the Plan.
3. Except as set forth herein, on and after the Effective
Date, every holder of a Claim or Equity Interest shall be precluded and
permanently enjoined from asserting against the Debtor, Liquidating Trust (in
connection with is organization, and operations), and the Liquidating Trustees
(in their capacity as such), and Reorganized Crescent City, their respective
officers, directors, professionals and agents or their respective assets or
properties, any further claim based on any document, instrument, judgment,
award, order, act, omission, transaction or other activity of any kind or nature
that occurred prior to the Confirmation Date. Said injunction shall not be
construed to enjoin any action by a Creditor or Bondholder against the Debtor,
Liquidating Trust, the Liquidating Trustees, Reorganized Crescent City, their
respective officers, directors, professionals and agents which is personal to
such person or entity, and which is not derivative of the rights of the Debtor.
Nothing contained herein shall prevent the Louisiana Department of Revenue and
Taxation ("LDRT") from pursuing any corporate officers/directors of the Debtor,
pursuant to LSA-R.S. 47:1561.1, but only with respect to claims filed in the
Bankruptcy Case.
B. Rights of Action. Any rights or causes of action accruing
to the Debtor shall become assets of Liquidating Trust. Liquidating Trust may
pursue those rights or causes of action as appropriate as set forth in Article
V(G) of the Plan, in accordance with what is in the best interests, and for the
benefit of, those Creditors that will receive distributions from the Residual
Property. It is expressly understood that the Liquidating Trustees may, in their
discretion and by majority vote, settle or resolve any avoidance action claim by
agreeing to permit the transferee to make an appropriate reduction in its
claim(s) so as to give credit for the amount otherwise recoverable from future
distributions pursuant to this Plan.
C. Committees. The Creditors' Committee shall continue in
existence until the Effective Date, to exercise those powers and perform those
duties specified in Section 1103 of the Bankruptcy Code, and shall perform such
other duties as it may have been assigned by the Bankruptcy Court. On the
Effective Date, the Creditors' Committee shall be dissolved and their members
shall be deemed released of all their duties, responsibilities and obligations
in connection with the Bankruptcy Case. Upon dissolution of the Creditors'
Committee, each member of the Creditors' Committee and its counsel shall be
deemed released from liability by the Debtor and any creditor entitled to
receive a distribution under this Plan, and shall be indemnified by Liquidating
Trust from any liability to any creditor, the debtor, purchaser, equity security
holder, the Reorganized Debtor or party in interest for any act taken in
furtherance of its duties as a member of the Creditors' Committee or its
counsel, as applicable.
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D. Full and Final Satisfaction. The payments and distributions
which are required to be made by the Debtor or Liquidating Trust under this Plan
shall be in full and final satisfaction, settlement, release and discharge of
all Claims against and Interests in the Debtor. A holder of an Allowed Claim may
not receive a distribution on account of such Allowed Claim equal to an amount
greater than the full amount (including interest to the extent provided in the
Plan) of such Allowed Claim.
E. Post-Confirmation Effect of Evidences of Claims or
Interests. Except as otherwise provided in the Plan, effective upon the
Effective Date, all notes, certificates and other evidences of Claims or
Interests shall represent only the right to participate in distributions under
the Plan.
F. Continuation of Injunctions and Stays. Unless otherwise
provided, all injunctions, liens or stays: (a) ordered in the Reorganization
Case pursuant to Sections 105 and 362 of the Bankruptcy Code or otherwise or in
existence on the Petition Date, and (b) extant immediately prior to the
Confirmation Date shall remain in full force and effect until the Effective
Date.
ARTICLE XIII
RELEASE AND EXCULPATION
A. Release. Except for the obligations created by the Plan,
for good and valuable consideration, including, without limitation, the benefits
of the Plan, the promises and obligations of the Debtor, Reorganized Crescent
City, the Bondholders, CGII and the Purchaser and the efforts and contributions
of the officers and directors of the Debtor in bringing about the confirmation
and consummation of the Plan, and to permit the effective and expeditious
reorganization of the Debtor, on the Effective Date, the Debtor, shall be deemed
to have unconditionally waived and released any and all rights, Claims,
liabilities and causes of action with respect to those matters directly relating
to Crescent City, against Reorganized Crescent City, the Bondholders, the
Indenture Trustee, CGII, the Institutional Note Holders' Steering Committee, the
Creditors' Committee, the Purchaser, and except with respect to CGII, their
respective members, officers, directors, agents and attorneys, as well as the
Debtor's officers, directors, agents and attorneys who served in such capacities
at any time during the Bankruptcy Case (collectively the "Releasees"); provided
however, that (a) Purchaser shall not be released from its obligations under the
Magic Agreement to pay the Magic Deferred Cash, and (b) the releases granted in
favor of the Committees shall release Committee members only in their capacity
as such and not in their capacity as individual creditors. Any claim or cause of
action a Creditor or Bondholder has against any Releasee which is personal to
such Releasee, and which is not derivative of the rights of the Debtor, shall
not be affected by the releases granted hereunder.
Except with respect to the Debtor, nothing in this Plan shall impair or
otherwise affect any rights, liens, claims, or interests of the Indenture
Trustee or any Bondholder under the Notes, the Indenture, or any related
documents, including, but not limited to, any rights, liens, claims or interests
against CGII or any guarantor of CGII's obligations.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
A. Payment Dates. Whenever any payment to be made or action to
be taken under the Plan is due to be made or taken on a day other than a
Business Day, such payment will instead be made (without Interest for such
delay) or action will instead be taken on the next Business Day.
B. Governing Law. Unless a rule or procedure is supplied by
federal law (including the Bankruptcy Code and Bankruptcy Rules), the laws of
the State of Louisiana shall govern the construction and implementation of the
Plan and any agreements, documents and instruments executed in connection with
the Plan.
C. Binding Effect. The rights, duties and obligations of any
person or entity named or referred to in the Plan shall be binding upon and
shall inure to the benefit of, such person or entity and their respective
successors and assigns.
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D. Filing or Execution of Additional Documents. Except as
otherwise provided in the Plan, on or before substantial consummation of the
Plan, the Debtor will file with the Bankruptcy Court or execute, as appropriate,
such agreements and other documents as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the Plan.
E. Payment of Statutory Fees. All fees payable pursuant to
Section 1930 of title 28, United States Codes, as determined by the Bankruptcy
Court at the hearing pursuant to Section 1128 of the Bankruptcy Code, shall be
paid on or before the Effective Date.
F. Revocation and Modification of Plan and Related Documents.
The Debtor reserves the right, in accordance with the Bankruptcy Code, to amend
or modify the Plan and related Plan Documents in any manner or revoke the Plan
in its entirety prior to the entry of the Confirmation Order. After entry of the
Confirmation Order, the Debtor may: (a) amend or modify the Plan and related
Plan Documents in accordance with, and to the extent permitted by, Section
1127(b) of the Bankruptcy Code; or (b) remedy any defect or omission or
reconcile any inconsistency in the Plan in such manner as may be necessary to
carry out the purpose and intent of the Plan. In the event the Plan is confirmed
but cannot be consummated, the Confirmation Order shall be revoked and upon such
revocation, the terms of the Plan shall not be binding on or enforceable by any
Person.
G. Notices. Any notice required or permitted under the Plan
shall be in writing and served either by (i) certified mail, return receipt
requested, postage pre-paid, (ii) hand delivery, or (iii) reputable overnight
delivery service, freight prepaid, addressed to the following parties:
If to the Debtor:
Crescent City Capital Development Corp.
Bayport One, Suite 250
8025 Black Horse Pike
W. Atlantic City, New Jersey 08232
Attn: President
with a copy to:
Bronfin & Heller, LLC
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130
Attn: Jan. M. Hayden, Esq.
If to Liquidating Trust:
with a copy to:
I. Construction. The rules of construction set forth in
Section 102 of the Bankruptcy Code shall apply to the construction of the Plan.
J. Section Headings. The section headings contained in the
Plan are for convenience and reference purposes only and will not affect in any
way the meaning or interpretation of the Plan.
K. Offer of Compromise. The Compromise embodied in this Plan
shall not be deemed to be an admission of liability of the Debtor, the
Debtor-in-Possession or Liquidating Trust, and shall not be admissible in any
proceeding or action, other than one to enforce the provisions of this Plan,
against the Debtor, as a debtor and debtor-in-possession, or the Indenture
Trustee or Bondholders.
-27-
ARTICLE XV
TRANSACTION WITH PURCHASER
A. Notwithstanding any provision to the contrary contained in the Plan,
the provisions of this Article shall govern the performance and effect of the
consummation of the Magic Agreement in lieu of any other provision in the Plan
which may conflict with this Article.
B. Upon the payment to the Indenture Trustee of the Magic Closing Cash
and the Magic Notes as provided in Article II(A), Purchaser shall be discharged
from any further liability to the Debtor for the payment of said sum, not
including the Magic Deferred Cash. The breach by the Indenture Trustee of any of
its obligations under the Plan including but not limited to making specified
disbursements shall not affect Purchaser in any manner, and Purchaser shall be
entitled to full performance (including specific performance) by the Debtor
under the Plan and the Magic Agreement.
C. The obligations to assume or satisfy the claims of Bally, IGT or any
other vendor as provided in Paragraph 4 of the Magic Agreement shall not exceed
an aggregate amount of $6,500,000.00.
D. All conditions to Closing as defined in Paragraph 5 of the Magic
Agreement must either be satisfied or waived in writing by Purchaser prior to
the Closing occurring.
E. All obligations of Purchaser under the Magic Agreement and the Plan
shall be governed by applicable federal law and the law of the State of
Louisiana.
F. The Liquidating Trust shall be responsible for all claims,
obligations, liabilities, liens or taxes which arise or accrue prior to the
Effective Date. Neither Purchaser nor the Reorganized Crescent City shall be
liable or in any manner responsible for those claims, obligations, liabilities,
liens or taxes which arise or accrue prior to the Effective Date. All parties
pursuant to section 1141 will be enjoined from asserting any such claims,
obligations, liabilities, liens or taxes against the Reorganized Crescent City
or the Purchaser, and the Reorganized Crescent City shall be discharged from all
such claims, obligations, liabilities, liens or taxes. Except as otherwise
provided herein, all Riverboat Assets of the Reorganized Crescent City shall be
revested in the Reorganized Crescent City free and clear of all liens and/or
encumbrances of any manner whatsoever.
G. Taxes and Section 338(h)(10) Election. All of the tax benefits and
tax obligations of Debtor arising prior to the Effective Date shall be for the
account of the Debtor and shall be satisfied, discharged or otherwise provided
for by the Liquidating Trust. The Liquidating Trust or CGII will be responsible
for filing all federal, state and local tax returns through all relevant time
periods until the Effective Date. Purchaser will co-operate with CGII and the
Liquidating Trust to file Form 8023, to effectuate the election by the Debtor
and CGII under section 338(g) and 338(h)(10) of the Internal Revenue Code.
1. With respect to the sale of the Shares, if so requested by the
Debtor upon notice to Purchaser prior to the Closing Date, Debtor and Purchaser
shall jointly make a Section 339(h)(10) Election (as hereinafter defined) in
accordance with applicable laws and under any comparable provision of state or
local law for which a separate election is permissible and as set forth herein.
The Purchaser shall take all necessary steps to properly make a Section 338(g)
Election (as hereinafter defined) in connection with the Section 338(h)(10)
Election in accordance with applicable laws and under any comparable provision
of state or local law for which a separate election is permissible. The
Purchaser and Debtor agree to cooperate in good faith with each other in the
preparation and timely filing of any tax returns required to be filed in
connection with the making of such an election, including the exchange of
information and the joint preparation and filing of Form 8023 and related
schedules.
2. The Debtor shall be responsible for the preparation and filing of
all Section 388 Forms (as hereinafter defined) in accordance with applicable tax
laws and the terms of this Agreement and shall deliver such Section 338 Forms to
Purchaser at least 30 days prior to the date such Section 338 Forms are required
to be filed. Purchaser shall execute and deliver to the Debtor such documents or
forms (including executed Section 338 Forms) as are requested and are required
by any laws in order to properly complete the Section 338 Forms at least 20 days
prior to the date such Section 338 Forms are required to be filed.
3. The Purchase Price, liabilities of the Companies and other relevant
items shall be allocated in accordance with Section 338(b)(5) of the Code and
the Treasury Regulations thereunder.
4. "Section 338 Forms" means all returns, documents, statements, and
other forms that are required to be submitted to any federal, state or local
taxing authority in connection with a Section 338(g) Election or a Section
-28-
338(h)(10) Election. Section 338 Forms shall include, without limitation, any
"statement of section 338 election" and IRS Form 8023 (together with any
schedules or attachments thereto) that are required pursuant to Treas. Regs.
Section 1.338- 1 or Treas. Regs. Section 1.338(h)(10)-1 or any successor
provisions.
5. "Section 338(g) Election" means an election described in Section
338(g) of the Code in connection with an election under Section 338(h)(10) of
the Code with respect to the acquisition of Shares pursuant to this Agreement.
Section 338(g) Election shall include any corresponding election under any other
relevant tax laws (e.g., state laws) for which a separate election is
permissible with respect to the Purchaser's acquisition of Shares pursuant to
this Agreement.
6. "Section 338(h)(10) Election" means an election described in Section
338(h)(10) of the Code with respect to the Purchaser's acquisition of Shares
pursuant to this Agreement. Section 338(h)(10) Election shall include any
corresponding election under any other relevant tax laws (e.g., state laws) for
which a separate election is permissible with respect to the Purchaser's
acquisition of Shares pursuant to this Agreement.
7. Purchaser acknowledges that, in the absence of an effective election under
Section 338(h)(10) of the Code, CGII will make any otherwise permitted election
under Treas. Reg. ss. 1.1502-20(g) with respect to the Debtor. Purchaser agrees
to cooperate with CGII in meeting the requirements of such election, including
causing the Debtor to comply with Treas. Regs. ss. 1.1502-20(g)(5).
Dated: New Orleans, Louisiana
March 15, 1996
CRESCENT CITY CAPITAL
DEVELOPMENT CORPORATION
By: /s/ Edward M. Tracy
--------------------------
Name: Edward M. Tracy
Title: President and CEO
BRONFIN & HELLER, LLC
Counsel to Debtor
By: /s/ Robyn J. Spalter
------------------------------------
Jan M. Hayden (Law Bar #6672)
Robyn J. Spalter (Law Bar #21116)
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6101
(504) 568-1888
-29-
LIST OF EXHIBITS TO THE SECOND AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF CRESCENT CITY CAPITAL DEVELOPMENT CORP.
1. Stock Purchase Agreement by and among Casino Management Corp.,
Jefferson Casino Corp., C-M of Louisiana, Inc., Capital Gaming
International, Inc. and Crescent City Development Corp., dated February 21,
1996 (included herein as Exhibit 2.7).
2. Form of Indenture Governing the $35 million of 11-1/2% Senior Secured Notes
due 1999 to be issued by Reorganized Crescent City.
Exhibit 2 to the
Second Amended Plan
of Reorganization
The Notes issued under this Indenture shall be secured, in part, by a mortgage
on certain real property. The land consists of approximately 20 contiguous acres
of unimproved real estate located in Bossier Parish, Louisiana. The parcel has
approximately 900 lineal feet of frontage on the Red River, has all utilities
available to it, is zoned to permit use as a casino resort and has ample street
access. The property is unencumbered, owned in fee by C-M of Louisiana, Inc., a
wholly owned subsidiary of Casino Magic Corp., and is situated adjacent to the
Isle of Capri Casino.
================================================================================
CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
Issuer
and
THE GUARANTORS NAMED HEREIN
and
___________________________________
Trustee
________________________
INDENTURE
Dated ________ __, 1996
________________________
$35,000,000
11 1/2% Senior Secured Notes due 1999
================================================================================
Reconciliation and Tie between Trust Indenture
Act of 1939 and Indenture dated as of ________ __, 1996
Trust Indenture Act Section Indenture Section
- - --------------------------- -----------------
S 310(a)(1)..................................................................................
(a)(2)..................................................................................
(a)(3)..................................................................................
(a)(4)..................................................................................
(a)(5)..................................................................................
(b).....................................................................................
(c).....................................................................................
S 311(a)
(b).....................................................................................
(c).....................................................................................
S 312(a)
(b).....................................................................................
(c).....................................................................................
S 313(a)
(b)(1)..................................................................................
(b)(2)..................................................................................
(c).....................................................................................
(d).....................................................................................
S 314(a)
(b).....................................................................................
(c)(1)..................................................................................
(c)(2)..................................................................................
(d).....................................................................................
(e).....................................................................................
(f).....................................................................................
S 315(a)
(b).....................................................................................
(c).....................................................................................
(d).....................................................................................
(e).....................................................................................
S 316(a)(last sentence)......................................................................
(a)(1)(A)...............................................................................
(a)(1)(B)...............................................................................
(a)(2)..................................................................................
(b).....................................................................................
(c).....................................................................................
S 317(a)(1)..................................................................................
(a)(2)..................................................................................
(b).....................................................................................
S 318(a)
- - -------------------
This Reconciliation and Tie shall not, for any purpose, be deemed to be a part
of the Indenture.
i
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions......................................................................................1
Section 1.2. Incorporation by Reference of TIA...............................................................19
Section 1.3. Rules of Construction...........................................................................19
ARTICLE II. THE NOTES
Section 2.1. Form and Dating.................................................................................20
Section 2.2. Execution and Authentication....................................................................20
Section 2.3. Registrar and Paying Agent......................................................................21
Section 2.4. Paying Agent to Hold Assets in Trust............................................................22
Section 2.5. Noteholder Lists................................................................................22
Section 2.6. Transfer and Exchange...........................................................................22
Section 2.7. Replacement Notes...............................................................................23
Section 2.8. Outstanding Notes...............................................................................23
Section 2.9. Treasury Notes..................................................................................24
Section 2.10. Temporary Notes.................................................................................24
Section 2.11. Cancellation....................................................................................24
Section 2.12. Defaulted Interest..............................................................................24
ARTICLE III. MANDATORY REDUCTION; REDEMPTION
Section 3.1. Mandatory Principal Reduction with Excess Cash Flow.............................................25
Section 3.2. Optional Redemption.............................................................................26
Section 3.3. Election to Redeem; Notices to Trustee..........................................................26
Section 3.4. Selection by Trustee of Notes to be Redeemed....................................................26
Section 3.5. Notice of Redemption............................................................................26
Section 3.6. Effect of Notice of Redemption..................................................................27
Section 3.7. Deposit of Redemption Price.....................................................................28
Section 3.8. Notes Redeemed in Part..........................................................................28
Section 3.9. Redemption Pursuant to Gaming Laws..............................................................28
ARTICLE IV. SECURITY
Section 4.1. Security Interest...............................................................................29
Section 4.2. Recording; Opinions of Counsel..................................................................29
Section 4.3. Disposition of Certain Collateral...............................................................30
Section 4.4. Substitution of Collateral......................................................................32
Section 4.5. Release Date; Releases of Collateral............................................................34
Section 4.6 Certain Other Releases of Collateral............................................................34
Section 4.7 Payment of Expenses.............................................................................34
Section 4.8 Suits to Protect the Collateral.................................................................35
Section 4.9 Trustee's Duties................................................................................35
ARTICLE V. COVENANTS
Section 5.1. Payment of Notes................................................................................35
ii
Section 5.2. Maintenance of Office or Agency.................................................................36
Section 5.3. Limitation on Restricted Payments...............................................................37
Section 5.4. Corporate Existence.............................................................................37
Section 5.5. Payment of Taxes and Other Claims...............................................................37
Section 5.6. Maintenance of Insurance........................................................................37
Section 5.7. Compliance Certificate: Notice of Default.......................................................38
Section 5.8. Reports ........................................................................................38
Section 5.9. Waiver of Stay, Extension or Usury Laws.........................................................39
Section 5.10. Limitation on Transactions with Affiliates......................................................39
Section 5.11. Limitation on Incurrence of Additional Indebtedness and Disqualified Capital Stock..............40
Section 5.12. Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries...................41
Section 5.13. Limitation on Liens.............................................................................41
Section 5.14. Limitation on Lines of Business.................................................................42
Section 5.15. Limitation on Status as Investment Company......................................................42
Section 5.16. Restrictions on Sale and Issuance of Stock. Prior to the Release Date:..........................42
Section 5.17. Restrictions on Subsidiaries....................................................................42
Section 5.18. Restrictions on Investments.....................................................................43
Section 5.19. Restrictions on Capital Expenditures............................................................43
Section 5.20. Limitation on Sales of Assets and Subsidiary Stock; Event of Loss...............................43
Section 5.21. Limitation on Merger, Sale or Consolidation.....................................................44
Section 5.22. Maintenance of Business.........................................................................44
ARTICLE VI. EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default...............................................................................45
Section 6.2. Rescission and Annulment........................................................................48
Section 6.3. Collection of Indebtedness and Suits for Enforcement by Trustee.................................49
Section 6.4. Trustee May File Proofs of Claim................................................................49
Section 6.5. Trustee May Enforce Claims Without Possession of Notes..........................................50
Section 6.6. Priorities......................................................................................50
Section 6.7. Limitation on Suits.............................................................................51
Section 6.8. Unconditional Right of Holders to Receive Principal, Premium and Interest.......................52
Section 6.9. Rights and Remedies Cumulative..................................................................52
Section 6.10. Delay or Omission Not Waiver....................................................................52
Section 6.11. Control by Holders..............................................................................52
Section 6.12. Waiver of Past Default..........................................................................53
Section 6.13. Undertaking for Costs...........................................................................53
Section 6.14. Restoration of Rights and Remedies..............................................................54
Section 6.15. Cash Proceeds from Collateral...................................................................54
ARTICLE VII. TRUSTEE
Section 7.1. Duties of Trustee...............................................................................54
Section 7.2. Rights of Trustee...............................................................................56
Section 7.3. Individual Rights of Trustee....................................................................57
Section 7.4. Trustee's Disclaimer............................................................................57
iii
Section 7.5. Notice of Default...............................................................................57
Section 7.6. Reports by Trustee to Holders...................................................................57
Section 7.7. Compensation and Indemnity......................................................................57
Section 7.8. Replacement of Trustee..........................................................................59
Section 7.9. Successor Trustee by Merger, Etc................................................................60
Section 7.10. Eligibility; Disqualification...................................................................60
Section 7.11. Preferential Collection of Claims Against Company...............................................60
ARTICLE VIII. TERMINATION AND DISCHARGE
Section 8.1. Termination of Obligations Upon Cancellation of the Notes.......................................60
Section 8.2. Survival of Certain Obligations.................................................................61
Section 8.3. Acknowledgment of Discharge by Trustee..........................................................61
Section 8.4. Reinstatement...................................................................................61
ARTICLE IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Supplemental Indentures Without Consent of Holders..............................................62
Section 9.2. Amendments, Supplemental Indentures and Waivers with Consent of Holders.........................62
Section 9.3. Compliance with TIA.............................................................................64
Section 9.4. Revocation and Effect of Consents...............................................................64
Section 9.5. Notation on or Exchange of Notes................................................................65
Section 9.6. Trustee to Sign Amendments, Etc.................................................................65
ARTICLE X. MEETINGS OF NOTEHOLDERS
Section 10.1. Purposes for Which Meetings May Be Called.......................................................65
Section 10.2. Manner of Calling Meetings......................................................................66
Section 10.3. Call of Meetings by Company or Holders..........................................................66
Section 10.4. Who May Attend and Vote at Meetings.............................................................67
Section 10.5. Regulations May Be Made by Trustee; Conduct of the Meeting; Voting Rights; Adjournment..........67
Section 10.6. Voting at the Meeting and Record to Be Kept.....................................................68
Section 10.7. Exercise of Rights of Trustee or Noteholders May Not Be Hindered or Delayed by Call of
Meeting...............................................................................68
ARTICLE XI. APPLICATION OF TRUST MONEYS
Section 11.1. "Trust Moneys" Defined..........................................................................69
Section 11.2. Withdrawals of Net Awards.......................................................................70
Section 11.3. Withdrawal of Boat Conveyance Proceeds For Purchase or Qualified Lessee Lease of
Substitute Boat......................................................................73
Section 11.4. Withdrawal of Boat Conveyance Proceeds For Construction of Qualified Substitute Boat or
for Capital Expenditures on such Qualified Substitute Boat...........................77
Section 11.5. Investment of Trust Moneys......................................................................83
iv
ARTICLE XII. GUARANTY
Section 12.1. Guaranty .......................................................................................83
Section 12.2. Certain Bankruptcy Events.......................................................................85
ARTICLE XIII. MISCELLANEOUS
Section 13.1. TIA Controls...................................................................................85
Section 13.2. Notices .......................................................................................85
Section 13.3. Communications by Holders with Other Holders...................................................86
Section 13.4. Certificate and Opinion as to Conditions Precedent.............................................86
Section 13.5. Statements Required in Certificate or Opinion..................................................87
Section 13.6. Rules by Trustee, Paying Agent, Registrar......................................................87
Section 13.7. Legal Holidays.................................................................................87
Section 13.8. Governing Law..................................................................................88
Section 13.9. No Adverse Interpretation of Other Agreements..................................................88
Section 13.10. No Recourse against Others.....................................................................88
Section 13.11. Successors.....................................................................................88
Section 13.12. Duplicate Originals............................................................................89
Section 13.13. Severability...................................................................................89
Section 13.14. Table of Contents, Headings, Etc...............................................................89
EXHIBITS
Exhibit A -- Form of Note
Exhibit B -- Form of Guaranty
v
INDENTURE, dated ________ __, 1996, between Crescent City Capital
Development Corporation, a Louisiana corporation (the "Company" or "CCCDC"), the
Guarantors referred to below and [ ], as Trustee.
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Company's 11 1/4%
Senior Secured Notes due 1999:
Article I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"Acceleration Notice" shall have the meaning specified in Section 6.1.
"Adjusted Rent Obligations" means the obligations of the Company to the
lessor under a Qualified Lessee Lease which would be in the nature of "basic
rent" or "fixed rent" under a "triple net" lease of Property, which obligations
in any event shall not include any amount attributable to the operating expenses
of or payment of taxes or insurance on such Substitute Boat subject to such
lease.
"Adverse State Action" means any administrative, regulatory or judicial
act or action of a Governmental Authority of the State of Louisiana the effect
of which is to prohibit, or to upon effectiveness prohibit, or to restrict, or
to upon effectiveness restrict, the ability of the Company to conduct the
business of operating a riverboat casino in Bossier City, Louisiana.
"Affiliate" means (i) any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, any
of the Guarantors or any of their respective Subsidiaries, (ii) any spouse,
immediate family member, or other relative who has the same principal residence
of any person described in clause (i) above, and (iii) any trust in which any
person described in clause (i) or (ii) above has a beneficial interest. For
purposes of this definition, the term "control" means (a) the power to direct
the management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, or (b) the beneficial ownership of 10% or more of any class of
voting Capital Stock of a person (on a fully diluted basis) or of warrants or
other rights to acquire such class of Capital Stock (whether or not presently
exercisable).
"Affiliate Conveyance" shall have the meaning specified in Section
5.10.
1
"Affiliate Transaction" shall have the meaning specified in Section
5.10.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Aggregate Excess Cash Flow" has the meaning set forth in Section 3.1
hereof.
"Architect's Certificate" means a certificate of an independent,
reputable architect or engineer, licensed in the state in which the applicable
Property is located and experienced in the design, construction and operation of
the type of the applicable Property.
"Asset Sale" shall have the meaning specified in Section 5.20.
"Average Life" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of the
products of the number of years from the date of determination to the dates of
each successive scheduled principal (or redemption) payment of such security or
instrument multiplied by the amount of such principal (or redemption) payment by
(ii) the sum of all such principal (or redemption) payments.
"Basic Sub-Account" shall have the meaning provided in Section 11.1.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such person.
"Boat Conveyance Proceeds" means Cash received by the Company (i) as
consideration for the sale by the Company of the Crescent City Queen Casino, or
(ii) on or prior to the Release Date, as rents, profits, or any other proceeds
of a Qualified Lessor Lease.
"Boat Conveyance Proceeds Sub-Account" shall have the meaning provided
in Section 11.1.
"Board Resolution" means, with respect to any person, a duly adopted
resolution of the Board of Directors of such person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
2
"Capital Expenditures" means all expenditures, except interest
capitalized during construction, which, in accordance with GAAP, are required to
be included in Property, plant and equipment or similar fixed asset account.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests (however designated) in stock issued by that
corporation.
"Capitalized Lease Obligation" means obligations under a lease, entered
into on or after the Issue Date, that are required to be capitalized for
financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented as such obligations shall be the capitalized amount of
such obligations, as determined in accordance with GAAP.
"Cash" means U.S. Legal Tender or U.S. Government Obligations.
"Cash Equivalent" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that good full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit of banks doing business in the State of Louisiana which
are not Affiliated with the Company, (iii) time deposits and certificates of
deposit of banks, and commercial paper issued by the parent corporation of any
domestic commercial bank, of recognized standing having capital and surplus in
excess of $500,000,000, and commercial paper issued by others rated at least A-2
or the equivalent thereof by Standard & Poor's Corporation or at least P-2 or
the equivalent thereof by Moody's Investors Service, Inc. and in each case
maturing within one year after the date of acquisition and (iv) investments in
money market funds substantially all of whose assets comprise securities of the
types described in clauses (i) and (ii) above.
"CMLI" means C-M of Louisiana, Inc., a Louisiana corporation.
"CMLI Real Property" means the real Property owned by CMLI in Bossier
Parish, Louisiana, described in Exhibit D hereto, and all improvements to such
real Property existing on or after the Issue Date.
"Collateral" means, subject to Section 4.5 hereof, the Property and
assets of the Company and the Property and assets of the Guarantors which are
subject to the Liens created by the Collateral Documents, including, but not
limited to, the Crescent City Queen Casino, any Qualified Substitute Boat or
Substitute Boat, in each case owned by the Company, each Qualified Lessor Lease
3
and Qualified Lessee Lease, the Boat Conveyance Proceeds, all other Property of
the Company owned as of the Issue Date or thereafter acquired (other than
certain Cash of the Company received by the Company other than through the sale
of assets (except Cash arising from the gaming operations (or operations
incidental or ancillary thereto) of the Company conducted in the ordinary course
of business, including, without limitation, the sale of inventory and provision
of services in the ordinary course of the Company's gaming business), and other
than furniture, fixtures and equipment (except furniture, fixtures and equipment
which the Company acquires after the Issue Date (other than that acquired
pursuant to Permitted FF&E Financing))), the CMLI Real Property, all the issued
Capital Stock of the Company and all other real and personal Property of the
Guarantors owned as of the Issue Date or thereafter acquired.
"Collateral Account" shall have the meaning provided in Section 11.1.
"Collateral Documents" means, collectively, the Security Agreement, the
Mortgage, any Other Boat Mortgage, all agreements relating to the Collateral
Account, and all other security agreements, mortgages, deeds of trust,
assignments of leases and rents, pledges, collateral assignments or any other
instruments evidencing or creating any security interest in favor of the Trustee
for the benefit of the Holders in all or any portion of the Property of the
Company or any Guarantor, as the same may be modified, amended or supplemented
from time to time.
"Commencement Date" means the earlier of (i) the date that is 180 days
after the Issue Date and (ii) the date on which the Company opens a riverboat
casino for public gaming play in Bossier City, Louisiana.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means such
successor.
"Company Cash Flow" means, for any period, the Net Income of the
Company for such period adjusted to add thereto, without duplication, the sum of
(i) Depreciation and Amortization of the Company for such period, (ii) Fixed
Charges, which reduced Net Income, of the Company for such period, and (iii) all
Cash Income Tax Credit of the Company for such period, and adjusted to subtract
therefrom, all Cash Income Tax Expense of the Company for such period.
"Company Collateral Sub-Account" shall have the meaning provided in
Section 11.1.
"Company Order" means a written order or request signed in the name of
the Company [or either Guarantor, as the case may be,] by its President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"Company Payment Sub-Account" shall have the meaning provided in
Section 11.1.
"Consulting Professional" means a construction manager or consultant
experienced in the gaming business, engaged by the Trustee at the instruction of
Holders holding a majority in principal amount of the Notes outstanding at the
time of selection.
"Crescent City Queen Casino" means the New Orleans Riverboat Casino
known as the M/V Crescent City Queen with respect to which [the Company] has a
Louisiana Gaming Operator's License.
4
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Definitive Gaming Operator's License" means a Louisiana Gaming
Operator's License issued to the Company and with respect to which no condition
or other requirement of any Gaming Law or Gaming Authority to the validity or
effectiveness of such license or to the ability of the Company to conduct gaming
operations on and operate the New Orleans Riverboat, remains unfulfilled.
"Depreciation and Amortization" for any person means the total
depreciation and amortization for such person and its Subsidiaries, as
determined in accordance with GAAP.
"Disqualified Capital Stock" means, with respect to any person, any
Capital Stock other than any common stock with no special rights and no
preference, privilege or redemption or repayment provisions.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"Estimate" [has the meaning assigned to such term in the Mortgage].
"Event of Default" shall have the meaning specified in Section 7.1.
"Event of Loss" means, with respect to any Property or asset, any (i)
loss, destruction or damage of such Property or asset, or (ii) any actual
condemnation, seizure or taking, by exercise of the power of eminent domain or
5
otherwise, of such Property or asset, or confiscation or requisition of the use
of such Property or asset.
"Excess Cash Flow" means for any fiscal quarter or portion thereof, the
amount of the sum of (x) Company Cash Flow (if greater than zero) for such
period plus (but not reduced by) (y) Guarantor Cash Flow for such period less
the sum of (i) the Cash interest expense of the Company for such period (but
only to the extent such expense was not funded by Collateral), (ii) regularly
scheduled principal payments on the Notes (but not payments of Excess Cash Flow)
during such period, (iii) scheduled principal payments on assumed Existing FF&E
Indebtedness and (iv) the cash interest expense of the Guarantors in respect of
Indebtedness, all of the proceeds of which have been used to make Permitted
Capital Expenditures in respect of the CMLI Real Property (but only to the
extent such expense was not funded by Collateral), for such period, to the
extent such sum exceeds the sum of (a) Permitted Capital Expenditures other than
Capital Expenditures funded with Collateral or with a Parent Equity Contribution
(but only to the extent of such Collateral or Parent Equity Contribution), and
(b) an amount which for any fiscal quarter shall be in the sole discretion of
the Company but which may not for all fiscal quarters of the Company exceed $5
million (less the aggregate amount of any indemnity or other liabilities arising
out of a Qualified Sale or Qualified Lessor Lease which have been claimed during
or prior to such period under such Qualified Sale or Qualified Lessor Lease, but
only to the extent such indemnity or liability has reduced Net Income) in the
aggregate.
"Excess Cash Redemption Amount" for any Interest Payment Date means the
amount of the Aggregate Excess Cash Flow to be paid to the Holders on such
Interest Payment Date in reduction of the outstanding principal amount of the
Notes pursuant to Section 3.1 hereof times a fraction, the numerator of which is
100 and the denominator of which is the sum of (i) 100 plus (ii) the Excess Cash
Redemption Premium for such Interest Payment Date.
"Excess Cash Redemption Premium" means (i) on any Interest Payment Date
occurring on or before the first anniversary of the Commencement Date, zero,
(ii) on any Interest Payment Date occurring on or after the first anniversary of
the Commencement Date but on or before the second anniversary of the
Commencement Date, ten percent (10%) times a fraction, the numerator of which is
the amount of calendar days having elapsed from and including the day after the
first anniversary of the Commencement Date to and including such Interest
Payment Date, and the denominator of which is three hundred and sixty-five
(365), and (iii) on any Interest Payment Date occurring after the second
anniversary of the Commencement Date but before the third anniversary of the
Commencement Date, twenty percent (20%) times a fraction, the numerator of which
6
is the amount of calendar days having elapsed from and including the day after
the second anniversary of the Commencement Date to and including such Interest
Payment Date, and the denominator of which is three hundred and sixty-four
(364).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Existing FF&E Indebtedness" means all Indebtedness arising out of the
assumption of all claims of Bally Gaming, Inc. and International Game Technology
Corp. or their respective successors, assigns, affiliates or agents pursuant to
the [Plan].
"Fixed Charges" of any person means, for any period, the aggregate
amount (without duplication) of (a) interest expensed or capitalized, paid,
accrued, or scheduled to be paid or accrued in accordance with GAAP (including,
in accordance with the following sentence, interest attributable to Capitalized
Lease Obligations) during such period in respect of all Indebtedness of such
person and its Subsidiaries, including (i) original issue discount and non-cash
interest payments or accruals on any Indebtedness other than with respect to the
Notes, (ii) the interest portion of all deferred payment obligations, calculated
in accordance with GAAP, (iii) all commissions, discounts and other fees and
charges owed with respect to bankers' acceptance financings and currency and
Interest Swap Obligations, in each case to the extent attributable to such
period and determined on a consolidated basis in accordance with GAAP, and (b)
the rental expense for such period attributable to operating leases of such
person and its Subsidiaries. For purposes of this definition, (x) interest on a
Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP and (y) interest expense
attributable to any Indebtedness represented by the guaranty by such person or a
Subsidiary of such person of an obligation of another person shall be deemed to
be the interest expense attributable to the Indebtedness guaranteed.
"GAAP" means United States generally accepted accounting principles as
in effect on the Issue Date.
"Gaming Authority" means any Governmental Authority with the power to
regulate gaming in any Gaming Jurisdiction, and the corresponding Governmental
Authorities with responsibility to interpret and enforce the laws and
regulations application to gaming in any Gaming Jurisdiction.
"Gaming Jurisdiction" means any Federal, state, tribal or local
jurisdiction or sovereign nation in which any entity in which the Company has a
direct or indirect beneficial, legal or voting interest conducts or intends to
7
conduct casino gaming (including the rendering of management services in respect
thereof pursuant to a Native American Casino Management Contract or otherwise).
"Gaming Law" means any law, rule, regulation or ordinance governing
gaming activities, including the Louisiana Economic Development and Riverboat
Gaming Control Act and the Indian Gaming Regulatory Act, 25 U.S.C. S 2701 et
seq., any administrative rules or regulations promulgated thereunder, and any of
the corresponding statutes, rules and regulations in each Gaming Jurisdiction.
"Gaming Licenses" means every material license, material franchise or
other material authorization on the date of the Indenture or thereafter required
to own, lease, operate or otherwise conduct or manage riverboat, dockside or
land-based gaming in any Gaming Jurisdiction, and applicable liquor licenses.
"Governmental Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or a tribal or foreign government, any sovereign nation where
the Company or any Guarantor conducts business (including the rendering of
management services in respect thereof pursuant to a Native American Casino
Management Contract or otherwise), 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, and any maritime authority.
"Guarantors" means JCC and CMLI.
"Guarantor Cash Flow" means, for any period, sixty percent (60%) of the
amount of the Net Income for such period, or forty percent (40%) of the amount
of the Net Loss for such period, of the Guarantors from the CMLI Real Property
adjusted to add to such Net Income, without duplication, the sum of (i)
Depreciation and Amortization expense and (ii) Fixed Charges.
"Guarantor Collateral Sub-Account" shall have the meaning provided in
Section 11.1.
"Guaranty" shall have the meaning provided in Section 12.1(a).
"Holder" or "Noteholder" means the person in whose name a Note is
registered on the Registrar's books.
"Income Tax Credit" of the Company means the total net income tax
credits of the Company [as determined under the Tax Sharing Treaty] [state and
local taxes]
8
"Income Tax Expense" of the Company means the total net income tax
expenses of the Company [as determined under the Tax Sharing Treaty] [state and
local taxes]
"incur" shall have the meaning specified in Section 5.11.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any Property or services,
except such as would constitute trade payables to trade creditors in the
ordinary course of business; provided that trade payables that are more than
thirty (30) days past their original due date shall constitute Indebtedness if
the aggregate amount thereof at any time exceeds $100,000, (iv) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (v) for
the payment of money relating to a Capitalized Lease Obligation, or (vi)
evidenced by a letter of credit or a reimbursement obligation of such person
with respect to any letter of credit; (b) all net obligations of such person
under Interest Swap Obligations and foreign currency hedges; (c) all liabilities
of others of the kind described in the preceding clause (a) or (b) that such
person has guaranteed or that is otherwise its legal liability and all
obligations to purchase, redeem or acquire any Capital Stock; (d) all
obligations secured by a Lien to which the Property or assets (including,
without limitation, leasehold interests and any other tangible or intangible
Property rights) of such person are subject, whether or not the obligation
secured thereby shall have been assumed by or shall otherwise be such person's
legal liability, provided, that the amount of such obligation shall be limited
to the lesser of the fair market value of the assets or Property to which such
Lien attaches and the amount of the obligation so secured; and (e) any and all
deferrals, renewals, extensions, refinancings and refundings (whether direct or
indirect) of, or amendments, modifications or supplements to, any liability of
the kind described in any of the preceding clauses (a), (b), (c), or (d) or this
clause (e), whether or not between or among the same parties.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Indenture Obligations" means the obligations of the Company and the
Guarantors pursuant to this Indenture and the Notes (and any other obligor
hereunder or under the Notes) now or hereafter existing, to pay principal of and
premium, if any, and interest on the Notes when due and payable, whether on the
Maturity Date or an Interest Payment Date, by acceleration, call for redemption,
9
or otherwise, and interest on the overdue principal and premium, if any, of, and
(to the extent lawful) interest, if any, on, the Notes and all other amounts due
or to become due in connection with this Indenture, the Notes and the Security
Agreement and the Mortgage, including any and all extensions, renewals or other
modifications thereof, in whole or in part, and the performance of all other
obligations of the Company (and any other obligor hereunder or under the Notes)
and the Guarantors, including all costs and expenses incurred by the Trustee or
the Holders in the collection or enforcement of any such obligations or
realization upon the Collateral or the security of any Mortgage.
"Insurance Proceeds" means the Company's and the Guarantors' interest
in and to (a) all proceeds which now or hereafter may be paid under any
insurance policies now or hereafter obtained by or on behalf of the Company or
any of the Guarantors in connection with the conversion of the Property subject
to the Mortgage or the Security Agreement into Cash or liquidated claims,
together with the interest payable thereon and the right to collect and receive
the same, including, but without limiting the generality of the foregoing,
proceeds of casualty insurance, title insurance, business interruption insurance
and any other insurance now or hereafter maintained with respect to such
Property and (b) all amounts attributable to Events of Loss.
"Interest Payment Date" means any of the following dates: ____________,
199__, ____________, 199__, ____________, 199__, ____________, 199__,
____________, 199__, ____________, 199__, ____________, 199__, ____________,
199__, ____________, 199__, ____________, 199__, ____________, 199__,
____________, 199__, ____________, 199__ (but only if such date is on or before
the third anniversary of the Commencement Date), and ____________, 199__ (but
only if such date is on or before the third anniversary of the Commencement
Date).
"Interest Swap Obligation" means, when used with reference to any
person, the obligations of such person pursuant to any arrangement with any
other person whereby, directly or indirectly, such person is entitled to receive
from time to time periodic payments calculated by applying either a floating or
a fixed rate of interest on a stated notional amount in exchange for periodic
payments made by such person calculated by applying a fixed or a floating rate
of interest on the same notional amount.
"Investment" by any person in any other person means (without
duplication) (a) the acquisition by such person (whether for cash, Property,
services, securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other person or any agreement to make any such
acquisition; (b) the making by such person of any deposit with, or advance, loan
or other extension of credit to, such other person (including the purchase of
10
Property from another person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such other person) or any
commitment to make any such advance, loan or extension (but excluding accounts
receivable arising in the ordinary course of business; provided that receivables
that are more than thirty (30) days past their original due date shall
constitute Investments if the aggregate amount thereof at any time exceeds
$100,000); (c) other than the Guaranties of the Notes, the entering into by such
person of any guarantee of, or other credit support or contingent obligation
with respect to, Indebtedness or other liability of such other person; or (d)
the making of any capital contribution by such person to such other person.
"Issue Date" means the date of first issuance of the Notes under the
Indenture.
"JCC" means Jefferson Casino Corporation, a Louisiana corporation.
"Legal Holiday" shall have the meaning provided in Section 12.7.
"Licenses" means the [Certificate of Preliminary Approval, Certificate
of Final Approval and] Conditional or, as applicable, Definitive Gaming
Operator's License.
"Lien" means any mortgage, lien, pledge, charge, security interest, or
other encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement and any lease deemed to constitute a security interest, and
any option or other agreement to give any security interest).
"Louisiana Gaming Operator's License" means one of the Gaming Licenses
to conduct riverboat gaming activities (limited in number to fifteen as of the
Issue Date) permitted to be issued pursuant to the provisions of the Louisiana
Riverboat Economic Development and Gaming Control Act and Title 42, Part XIII,
Chapters 17 and 21 of the Louisiana Administrative Code, and any amendment
thereto.
"Maturity Date," when used with respect to any Note, means the date on
which the principal of such Note becomes due and payable as therein or herein
provided, whether at Stated Maturity, a Redemption Date or by declaration of
acceleration, call for redemption or otherwise.
"Mortgage" means the Ship Mortgage dated as of the Issue Date by and
between the Company and the Trustee, as the same may be amended from time to
time.
"Net Award" [has the meaning assigned to such term in the Collateral
Documents]
11
"Net Award Sub-Account" has the meaning set forth in Section 11.1
hereof.
"Net Income" of any person or in respect of any asset, for any period,
means the total of all gain and loss for such person or in respect of such
asset, as determined in accordance with GAAP, excluding from the computation
thereof (a) all gain and loss arising from the sale, damage, destruction,
condemnation, exchange, or distribution of any or all assets (other than current
assets), (b) all revenue and expense from (i) all changes in accounting
principles, (ii) all discontinued operations or dispositions thereof, (iii)
extraordinary transactions, or (iv) all Qualified Lessor Leases and Qualified
Lessee Leases, and (c) expenses to the extent funded from Collateral.
"Net Loss" shall mean, for any period, Net Income to the extent Net
Income as computed for such period is less than zero.
"Net Proceeds" [has the meaning assigned to such term in the Collateral
Documents.]
"Non-recourse Indebtedness" means Indebtedness of a person to the
extent that under the terms thereof or pursuant to applicable law (i) no
personal recourse shall be had against such person for the payment of the
principal of or interest or premium on such Indebtedness, and (ii) enforcement
of obligations on such Indebtedness is limited only to recourse against
interests in Property and assets purchased with the proceeds of the incurrence
of such Indebtedness and as to which neither the Company nor any Guarantor
provides any credit support or is liable.
"Noteholder" See "Holder."
"Notes" means the 11 1/2% Senior Secured Notes due 1999, as amended and
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Officer" means, with respect to the Company or any Guarantor, the
Chairman of the Board, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller, or the Secretary or Assistant Secretary
of the Company or such Guarantor.
"Officers' Certificate" means, with respect to the Company or any
Guarantor, a certificate signed by two Officers of the Company or such Guarantor
and otherwise complying with the requirements of Sections 13.4 and 13.5.
"Opinion of Counsel" means a written opinion from legal counsel to the
Company complying with the requirements of Sections 13.4 and 13.5. Unless
otherwise required by this Indenture, the counsel may be in-house counsel to the
Company.
12
"Other Boat Mortgage" means collectively the mortgages, instruments and
agreements delivered by the Company pursuant to Section 4.4(a) and 11.3
sufficient to grant to the Trustee for the benefit of the Holders a valid first
priority Lien on any Substitute Boat.
"Parent Equity Contribution" means Cash payments from JCC for Capital
Stock (other than Disqualified Capital Stock).
"Paying Agent" shall have the meaning specified in Section 2.3.
"Permitted Capital Expenditures" means any of the following:
(i) Capital Expenditures of the Company or the Guarantor to the extent
funded with the proceeds of a Parent Equity Contribution (a) in an amount of up
to 25% of the purchase price of furniture, fixtures and equipment the remainder
of the purchase price of which is financed with Permitted FF&E Financing
pursuant to Section 5.11(b) hereof, or (b) in all other cases, only so long as
the Liens of the Trustee under the Collateral Documents attach to the Property
acquired or constructed with such Capital Expenditures with the same validity,
priority and perfection as the Liens of the Trustee in the Collateral;
(ii) Capital Expenditures to the extent funded with Cash which is not
Collateral (a) in an amount of up to 25% of the purchase price of furniture,
fixtures and equipment the remainder of the purchase price of which is financed
with Permitted FF&E Financing incurred pursuant to Section 5.11(b) hereof, or
(b) in all other cases, only so long as the Liens of the Trustee under the
Collateral Documents attach to the Property acquired or constructed with such
Capital Expenditures with the same validity, priority and perfection as the
Liens of the Trustee in the Collateral;
(iii) Capital Expenditures (other than to purchase furniture, fixtures
and equipment the purchase price of which is financed in part with Permitted
FF&E Financing incurred pursuant to Section 5.11(b) hereof) to the extent funded
with Cash from the Company Collateral Sub-Account, but only in an aggregate
amount from the Issue Date which, when added to the aggregate amount from the
Issue Date of Capital Expenditures permitted under clause (iv) below, does not
exceed $1,000,000; provided, however, that the Liens of the Trustee attach to
the Property acquired or constructed with such Capital Expenditures with the
same validity, priority and perfection as the Liens of the Trustee in the
Collateral used to fund such Capital Expenditures;
(iv) Capital Expenditures to the extent funded with Cash from the
Company Collateral Sub-Account, in each case in an amount of up to 25% of the
purchase price of furniture, fixtures and equipment the remainder of the
purchase price of which is financed with Permitted FF&E Financing incurred
13
pursuant to Section 5.11(b) hereof, but only in an aggregate amount from the
Issue Date which, when added to the aggregate amount from the Issue Date of
Capital Expenditures permitted under clause (iii) above, does not exceed
$1,000,000;
(v) Capital Expenditures to the extent funded with Boat Conveyance
Proceeds; provided, however, that the Liens of the Trustee attach to such
Capital Expenditures with the same validity, priority and perfection as the
Liens of the Trustee in the Collateral used to fund such Capital Expenditures;
provided, further, the Company complies in all respects with the provisions of
Section 11.4 hereof in making any Capital Expenditures funded with Boat
Conveyance Proceeds; and
(vi) Capital Expenditures to the extent funded with Net Awards;
provided, however, that the Liens of the Trustee attach to such Capital
Expenditures with the same validity, priority and perfection as the Liens of the
Trustee in the Collateral used to fund such Capital Expenditures; provided,
further, the Company complies in all respects with the provisions of Section
11.2 hereof in making any Capital Expenditures funded with Net Awards; and
(vii) after the Release Date, Capital Expenditures to the extent funded
with Cash which is not Collateral.
"Permitted FF&E Financing" means Indebtedness which is Non-recourse
Indebtedness to the Company or any of its properties (other than as provided in
this definition) that is incurred to finance the acquisition or lease after the
Issue Date of newly acquired or leased furniture, fixtures or equipment ("FF&E")
used directly in the operation of casinos and secured by an exclusive (except in
favor of the Notes) first priority Lien on such FF&E which Lien, subject to (i)
Liens permitted under Section 5.13 hereof, [and (ii) a Lien in favor of the
Notes, but only to the extent permitted by the Mortgagee with respect to such
FF&E financing,] shall be the only Lien with respect to such FF&E and may be an
exclusive Lien or senior, pari passu or junior to the rights of the Trustee
under the Mortgage.
"person" means any individual, limited liability company, corporation,
partnership, joint venture, association, joint-venture company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Plans and Specifications" means all drawings, plans and specifications
prepared by or on behalf of the Company or any of its Subsidiaries, as the same
may be amended or supplemented from time to time in good faith by the Board of
Directors of the Company or such Guarantor, and, if required by applicable law,
submitted to and approved by the building or other relevant department, which
14
describe and show the Crescent City Queen Casino, or, if applicable, another
casino and the labor and materials necessary for construction thereof.
"principal" of any Indebtedness (including the Notes) means the
principal of such Indebtedness plus any applicable premium, if any, on such
Indebtedness.
"Property" or Property means any right or interest in or to Property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible, intangible, contingent, indirect or direct.
"Qualified Lessee Lease" means a lease agreement (which in all respects
shall be subject to the provisions of Section 11.3 hereof) pursuant to which the
Company is the Lessee of a Substitute Boat or a Qualified Substitute Boat;
provided, however, that such lease stipulates that the Company's use and quiet
enjoyment of such Substitute Boat or Qualified Substitute Boat during the term
of such lease shall not be disturbed so long as the Company does not default
under its payment obligations to the lessor and its successors and assigns under
such lease.
"Qualified Lessor Lease" means a lease by the Company of the Crescent
City Queen Casino or a Qualified Substitute Boat owned by the Company pursuant
to the terms of which the contract rights, agreements and instruments evidencing
the Company's rights and interests with respect to the lease transaction are not
subject to any negative pledge or other impairment as to assignability.
"Qualified Sale" means a sale, transfer or other conveyance of all of
the Company's right, title and interest in the Crescent City Casino Queen
pursuant to the terms of which (i) there is no post-closing escrow, retainage or
other hold-back of the consideration to be paid to the Company, (ii) the
contract rights, agreements and instruments evidencing the Company's rights and
interests with respect to the sale are not subject to any negative pledge or
other impairment as to assignability, and (iii) the Company shall have no
post-closing indemnification or other liabilities to or for the benefit of the
purchaser other than liabilities that are not recourse to the Collateral.
"Qualified Substitute Boat" means a vessel qualifying under the
Louisiana Riverboat Economic and Control Act as a riverboat substantially
similar in quality and size to any riverboat casinos used and competitive in
Bossier City or Shrieveport, Louisiana.
"Record Date" means a Record Date specified in the Notes whether or not
such Record Date is a Business Day.
"Redemption Date" when used with respect to any Note to be redeemed
means the date fixed for such redemption by or pursuant to this Indenture.
15
"Redemption Premium" means (i) on any Redemption Date occurring on or
before the first anniversary of the Commencement Date, zero, (ii) on any
Redemption Date occurring on or after the first anniversary of the Commencement
Date but on or before the second anniversary of the Commencement Date, ten
percent (10%) times a fraction, the numerator of which is the amount of calendar
days having elapsed from and including the day after the first anniversary of
the Commencement Date to and including such Redemption Date, and the denominator
of which is three hundred and sixty-five (365), and (iii) on any Redemption Date
occurring after the second anniversary of the Commencement Date but before the
third anniversary of the Commencement Date, twenty percent (20%) times a
fraction, the numerator of which is the amount of calendar days having elapsed
from and including the day after the second anniversary of the Commencement Date
to and including such Redemption Date, and the denominator of which is three
hundred and sixty-four (364).
"Redemption Price" when used with respect to any Note to be redeemed,
means the principal face amount of such Note plus the Redemption Premium as of
the Redemption Date for such Note.
"Refinancing Indebtedness" means Indebtedness (a) issued in exchange
for, or the proceeds from the issuance and sale of which are used substantially
concurrently to repay, redeem, defease, refund, refinance, discharge or
otherwise retire for value, in whole or in part, or (b) constituting an
amendment, modification or supplement to, or a deferral or renewal of ((a) and
(b) above are, collectively, a "Refinancing"), any Indebtedness in a principal
amount not to exceed (after deduction of reasonable and customary fees and
expenses incurred in connection with the Refinancing) the lesser of (i) the
principal amount of the Indebtedness so Refinanced and (ii) if such Indebtedness
being Refinanced was issued with an original issue discount, the accreted value
thereof (as determined in accordance with GAAP) at the time of such Refinancing;
provided, that (A) Refinancing Indebtedness of any Guarantor of the Company
shall only be used to refinance outstanding Indebtedness of such Guarantor, (b)
Refinancing Indebtedness shall (x) not have an Average Life shorter than the
Indebtedness to be so Refinanced at the time of such refinancing and (y) in all
respects, be no less subordinated, if applicable, to the rights of holders
pursuant to the Notes than was the Indebtedness to be refinanced and (C) such
Refinancing Indebtedness shall have no installment of principal (or redemption)
scheduled to come due earlier than the scheduled maturity of any installment of
principal of the Indebtedness to be so refinanced which was scheduled to come
due prior to the Stated Maturity.
"Registrar" shall have the meaning specified in Section 2.3.
"Related Business" means the gaming business conducted (or proposed to
be conducted) by the Company and its Subsidiaries as of the Issue Date and any
16
and all materially related businesses in support of and ancillary to the gaming
business.
"Release Date" means the first date on which the aggregate principal
amount of Notes outstanding is equal to or less than $17,500,000.00.
"Required Regulatory Redemption" means a redemption by the Company of
any of a Note or Notes pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License, or to the extent necessary in the reasonable, good faith
judgment of the Board of Directors of the Company to prevent the loss, failure
to obtain or material impairment or to secure the reinstatement of, any material
Gaming License, wherein any such case such redemption or acquisition is required
because the Holder or beneficial owner of such Note is required to be found
suitable or to otherwise qualify under any Gaming Laws and is not found suitable
or so qualified within a reasonable period of time.
"Restoration" [shall have the meaning specified in the Mortgage].
"Restricted Investment" means, in one or a series of related
transactions, any Investment other than in Cash Equivalents; provided, that the
extension of credit to customers of Company-owned or operated casinos consistent
with industry practice and in the ordinary course of business shall not be a
Restricted Investment.
"Restricted Payment" means, with respect to any person, (a) the
declaration or payment of any dividend or other distribution in respect of
Capital Stock of such person, or (b) any payment on account of the purchase,
redemption or other acquisition or retirement for value of Capital Stock of such
person or any Affiliate of such person; provided, however, that the term
"Restricted Payment" does not include any dividend, distribution or other
payment to any of the Guarantors by any other Guarantor; provided that any
payment from a Subsidiary of the Guarantor (other than the Company) shall not be
a Restricted Payment for purposes of clause (a) or (b) above.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Security Agreement" means the Security Agreement, dated the date
hereof, by and among the Company, the Guarantors, and the Trustee for the
benefit of the Holders, as the same may be amended from time to time in
accordance with the terms thereof.
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"Stated Maturity," when used with respect to any Note, means the third
anniversary of the Commencement Date.
"Subsidiary," with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such person,
by such person and one or more Subsidiaries of such person or by one or more
Subsidiaries of such person or (ii) any other person (other than a corporation)
in which such person, one or more Subsidiaries of such person, or such person
and one or more Subsidiaries of such person, directly or indirectly, at the date
of determination thereof has at least majority ownership interest.
["Substitute Boat" means a vessel qualifying under the Louisiana
Riverboat Economic and Control Act as a riverboat.]
"Tax Sharing Treaty" means the [Tax Sharing Treaty substantially in the
form of Exhibit C hereto].
"Third Party" means a person which is not an Affiliate of the Company
or any Guarantor.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
S S 77aaa-7bbbb) as in effect on the date of the execution of this Indenture.
"Trust Moneys" shall have the meaning specified in Section 11.1.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer within the corporate trust department
(or any successor group) of the Trustee including any vice president, assistant
vice president, secretary, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust officer any other officer of
the corporate trust department (or any successor group) of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"U.S. Government Obligations" means direct non-callable obligations of,
or non-callable obligations guaranteed by, the United States of America for the
payment of which obligations or guarantee the full faith and credit of the
United States of America is pledged.
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"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Waiting Period" means the initial 90 day period from and after the
consummation of the transactions contemplated by the transfer of the Crescent
City Queen Casino pursuant to Section 4.4 hereof.
"wholly owned" with respect to a Subsidiary of any person means (i)
with respect to a Subsidiary that is a limited liability company or similar
entity, a Subsidiary whose capital stock is 99% or greater beneficially owned by
such person and (ii) with respect to a Subsidiary that is other than a limited
liability company or similar entity, a Subsidiary whose capital stock or other
equity interest is 100% beneficially owned by such person.
Section 1.2. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securityholder" means a Holder or a Noteholder.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
Section 1.3. Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in
the plural include the singular;
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(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(vii) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless stated otherwise.
Article II.
THE NOTES
Section 2.1. Form and Dating.
The Notes and the Trustee's certificate of authentication, in respect
thereof, shall be substantially in the form of Exhibit A hereto, which is part
of this Indenture. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage. The Company shall approve the
form of the Notes and any notation, legend or endorsement on them. Any such
notations, legends or endorsements not contained in the form of Note attached as
Exhibit A hereto shall be delivered in writing to the Trustee. Each Note shall
be dated the date of its authentication.
The terms and provisions contained in the form of Notes shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Section 2.2. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Notes for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted, or reproduced on the
Notes and may be in facsimile form.
If an Officer whose signature is on a Note was an Officer at the time
of such execution but no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless and the Company
shall nevertheless be bound by the terms of the Notes and this Indenture.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note, but such signature
shall be conclusive evidence that the Note has been authenticated pursuant to
the term of this Indenture.
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The Trustee shall authenticate Notes for original issue in the
aggregate principal amount of up to $35,000,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate shall
specify the amount of Notes to be authenticated and the date on which the Notes
are to be authenticated. The aggregate principal amount of Notes outstanding at
any time may not exceed $35,000,000, except as provided in Section 2.7. Upon the
written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate Notes in substitution of Notes originally issued to
reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company, any Affiliate of the Company or any of their
respective Subsidiaries.
Notes shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
Section 2.3. Registrar and Paying Agent.
The Company shall maintain an office or agency in the borough of
Manhattan, The City of New York, where Notes may be presented for registration
of transfer or for exchange ("Registrar") and an office or agency in the Borough
of Manhattan, The City of New York where Notes may be presented for payment
("Paying Agent") and an office or agency where notices and demands to or upon
the Company in respect of the Notes may be served. The Company may act as its
own Registrar or Paying Agent, except that, for the purposes of Articles III and
VII, neither the Company nor any Affiliate of the Company shall act as Paying
Agent. The Registrar shall keep a register of the Notes, their respective
outstanding principal amounts, and their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional Paying Agents. The
term "Paying Agent" includes any additional Paying Agent. The Company hereby
initially appoints the Trustee as Registrar and Paying Agent, and the Trustee
hereby initially agrees so to act.
The Company shall enter into an appropriate written agency agreement
with any Agent not a party to this Indenture, which agreement shall implement
the provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such.
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Section 2.4. Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and shall
notify the Trustee in writing of any Default by the Company (or any other
obligor on the Notes) in making any such payment. If the Company or a Subsidiary
of the Company acts as Paying Agent, it shall segregate such assets and hold
them as a separate trust fund for the benefit of the Holders or the Trustee. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and the account for any assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent (if other than the Company) shall
have no further liability for such assets.
Section 2.5. Noteholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before the third Business Day preceding each Interest Payment Date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee reasonably may require of the names and
addresses of Holders. The Trustee, the Registrar and the Company shall provide a
current securityholder list to any Gaming Authority upon demand.
Section 2.6. Transfer and Exchange.
When Notes are presented to the Registrar or a co-Registrar with a
request to register the transfer of such Notes or to exchange such Notes for an
equal principal amount of Notes of other authorized denominations, the Registrar
or co-Registrar shall register the transfer or make the exchange as met;
provided, however, that the Notes surrendered for transfer or exchange shall be
duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Registrar or Co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Notes at the Registrar's or co-Registrar's
request. No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax, assessments, or similar governmental charge payable in connection
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therewith (other than any such transfer taxes, assessments, or similar
governmental charge payable upon exchanges or transfers pursuant to Sections
2.2, 2.10, 3.6, or 9.5). Except for a Required Regulatory Redemption pursuant to
Section 3.2 of this Indenture or an order of any Gaming Authority, the Registrar
or co-Registrar shall not be required to register the transfer of or exchange of
(a) any Note selected for redemption in whole or in part pursuant to being
redeemed in part, or (b) any Note for a period of 15 Business Days before the
mailing of a notice of an offer to redeem Notes pursuant to Article III hereof
and ending on the close of business of the day of such mailing.
Section 2.7. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims and submits an affidavit or other evidence, satisfactory to the
Trustee, to the Trustee to the effect that the Note has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. The Company may charge such Holder for its
reasonable, out-of-pocket expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company.
Section 2.8. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those canceled by it, those delivered to it
for cancellation and those described in this Section 2.8 as not outstanding. A
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note, except as provided in Section 2.9.
If a Note is replaced pursuant to Section 2.7 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or an Affiliate of the Company) holds U.S. Legal Tender or U.S.
Government Obligations sufficient to pay all of the principal and interest due
on the Notes payable on that date and payment of the securities called for
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redemption is not otherwise prohibited, then on and after that date such Notes
cease to be outstanding and interest on them ceases to accrue.
Section 2.9. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, amendment, supplement, waiver or consent,
Notes owned by the Company, any Guarantor and Affiliates of the Company or of
any Guarantor shall be disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such direction,
amendment, supplement, waiver or consent, only Notes that the Trustee knows or
has reason to know are so owned shall be disregarded.
Section 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare,
the Guarantor shall endorse and the Trustee shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company reasonably and in good faith considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare, the Guarantor shall endorse and the Trustee shall authenticate
definitive Notes in exchange for temporary Notes. Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as permanent Notes authenticated and delivered hereunder.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee, or
at the direction of the Trustee, the Registrar or the Paying Agent (other than
the Company or an Affiliate of the Company), and no one else, shall cancel and,
at the written direction of the Company, shall dispose of all Notes surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.7, the
Company may not issue new Notes to replace Notes it has paid or delivered to the
Trustee for cancellation. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section 2.11, except as
expressly permitted in the form of Notes and as permitted in this Indenture.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest, plus (to the extent lawful) interest on the
defaulted interest, to the persons who are Holders on a Record Date (or at its
option a subsequent special record date) which date shall be the fifteenth day
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next preceding the date fixed by the Company for the payment of defaulted
interest, whether or not such day is a Business Day, unless the Trustee fixes
another record date. At least 15 days before the subsequent special record date,
the Company shall mail to each Holder with a copy to the Trustee a notice that
states the subsequent special record date, the payment date and the amount of
defaulted interest, and interest payable on such defaulted interest, if any, to
be paid.
Article III.
MANDATORY REDUCTION; REDEMPTION
Section 3.1. Mandatory Principal Reduction with Excess Cash Flow.
On each Interest Payment Date [commencing _____________, 199__, and
ending with the second Interest Payment Date after the occurrence of the Release
Date], the Company will unconditionally pay to the Trustee for the benefit of
the Holders the Excess Cash Flow for the fiscal quarter of the Company and the
Guarantors ending on the Interest Payment Date immediately preceding such
Interest Payment Date; provided, however, that the Company will pay to the
Trustee for the benefit of the Holders the Excess Cash Flow for the last fiscal
quarter of a fiscal year of the Company and the Guarantors on the second
Interest Payment Date following the last date of such last fiscal quarter of the
fiscal year. The Trustee shall hold all such Excess Cash Flow in the Company
Payment Sub-Account (the "Aggregate Excess Cash Flow") in anticipation of
distribution in accordance with this Section 3.1; provided, however, that
interest earned on Aggregate Excess Cash Flow while in the Company Payment
Sub-Account during any fiscal quarter shall be remitted to the Company on the
last day of such fiscal quarter.
On each Interest Payment Date [commencing _____________, 199__, and
ending with the second Interest Payment Date after the occurrence of the Release
Date] on which the Aggregate Excess Cash Flow then held by the Trustee exceeds
$100,000, the Trustee will distribute to each Holder such Holder's pro rata
share of the Aggregate Excess Cash Flow in reduction of the then outstanding
principal amount of the Note by an amount equal to such Holder's pro rata share
of the Excess Cash Redemption Amount, in addition to any regularly scheduled
principal payment due on such Interest Payment Date (if any).
After the Release Date or the date of an Adverse State Action, as the
case may be, Aggregate Excess Cash Flow distributions made on an Interest
Payment Date pursuant to this Section 3.1 will be applied to installments of
principal on the Notes in inverse order of maturity.
The obligations of the Company under this Section 3.1 shall continue
notwithstanding an Adverse State Action.
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Section 3.2. Optional Redemption.
The Notes may be redeemed at any time, in whole or in part, at the
election of the Company at the Redemption Price then applicable for the
Redemption Date for such redemption and subject to the conditions set forth
herein and in the form of Note set forth in Exhibit A hereto.
Any redemption pursuant to this Section 3.2 shall be made, to the
extent applicable, pursuant to the provisions of Section 3.3 through 3.8 hereof.
Section 3.3. Election to Redeem; Notices to Trustee.
If the Company elects to redeem Notes pursuant to Section 3.2 hereof,
at least 30 days but not more than 60 days prior to the date of the notice of
redemption described in Section 3.5, the Company shall notify the Trustee in
writing of the Redemption Date and deliver to the Trustee an Officers'
Certificate stating that such redemption will comply with the conditions
contained in Section [3.2] hereof, as appropriate.
If the Company elects, and is permitted by the terms hereof, to credit
against any such redemption Notes not previously delivered to the Trustee for
cancellation, it shall deliver such Notes with the notice.
Section 3.4. Selection by Trustee of Notes to be Redeemed.
In the event that less than all of the Notes are to be redeemed, the
Trustee shall select the Notes to be redeemed, if the Notes are listed on a
national securities exchange, in accordance with the rules of such exchange or,
if the Notes are not so listed, on either a pro rata basis or by lot, or such
other method as it shall deem fair and equitable. The Trustee shall promptly
notify the Company of the Notes selected for redemption and, in the case of any
Notes selected for partial redemption, the principal amount thereof to be
redeemed. The Trustee may select for redemption portions of the principal of the
Notes that have denominations larger than $1,000. Notes and portions of them the
Trustee selects shall be in amounts of $1,000 or whole multiples of $1,000. For
all purposes of this Indenture unless the context otherwise requires, provisions
of this Indenture that apply to Notes called for redemption also apply to
portion of Notes called for redemption.
Section 3.5. Notice of Redemption.
At least 30 days, and no more than 45 days, before the Redemption Date
fixed by the Company, the Company shall mail, or cause to be mailed, a notice of
redemption by first-class mail to each Holder of Notes to be redeemed at his or
26
her last address as the same appears on the registry books maintained by the
Registrar pursuant to Section 2.3 hereof.
The notice shall identify the notes to be redeemed (including the CUSIP
numbers thereof) and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date and upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the Reduction Price;
(6) that unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on
and after the Redemption Date;
(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) the aggregate principal amount of Notes that are being
redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's sole expense.
Section 3.6. Effect of Notice of Redemption.
Once the notice of redemption described in Section 3.5 is mailed, Notes
called for redemption become due and payable on the Redemption Date and at the
Redemption Price, including any Redemption Premium, plus interest accrued to the
Redemption Date. Upon surrender to the Paying Agent, such Notes shall be paid at
the Redemption Price, including any Redemption Premium, plus interest accrued to
the Redemption Date, provided, however, that if the Redemption Date is after a
regular interest payment record date and on or prior to the interest payment
date, the accrued interest shall be payable to the Holder of the redeemed Notes
registered on the relevant record date, and provided, further, that if a
Redemption Date is a Legal Holiday, payment shall be made on the next succeeding
Business Day and no interest shall accrue for the period from such Redemption
Date to such succeeding Business Day.
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Section 3.7. Deposit of Redemption Price.
On or prior to 10:00 A.M., New York City time, on each Redemption Date,
the Company shall deposit with the Paying Agent in immediately available funds
moneys sufficient to pay the Redemption Price of and accrued interest on all
Notes to be redeemed on that date other than Notes or portions thereof called
for redemption on that date which have been delivered by the Company to the
Trustee for cancellation.
On and after any Redemption Date, if money sufficient to pay the
Redemption Price of and accrued interest on Notes called for redemption shall
have been made available in accordance with the preceding paragraph, the Notes
called for redemption will cease to bear interest and the only right of the
Holders of such Notes will be to receive payment of the Redemption Price of and,
subject to the proviso in Section 3.6, accrued and unpaid interest on such
Notes. If any Note called for redemption shall not be so paid, interest will be
paid, from the Redemption Date until such redemption payment is made, on the
unpaid principal of the Note and any interest no paid on such unpaid principal,
in each case, at the rate and in the manner provided in the Notes.
Section 3.8. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for a Holder a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
Section 3.9. Redemption Pursuant to Gaming Laws.
Notwithstanding any other provision of this Indenture, the Notes shall
also be redeemable at any time pursuant to, and in accordance with, a Required
Regulatory Redemption. If the Company requires the redemption of any Note
pursuant to this Section 3.9, then the redemption price shall be the principal
amount thereof, plus accrued interest to the date of redemption. The Company
shall tender the redemption price (together with any accrued and unpaid
interest) to the Trustee no later than 30 and no more than 60 days after the
Company gives the Holder or owner of a beneficial or voting interest written
notice of redemption or such earlier date as may be ordered by an Gaming
Authority. The Company shall notify the Trustee of any disposition or redemption
required under this Section 3.9, and upon receipt of such notice, the Trustee
shall not accord any rights or privileges under this Indenture or any Note or
any Holder or owner of a beneficial or voting interest who is required to
dispose of any Note or tender it for redemption, except to pay the redemption
price (together with any accrued but unpaid interest) upon tender of such Note.
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Article IV.
SECURITY
Section 4.1. Security Interest.
(a) In order to secure the prompt and complete payment and performance
in full of Indenture Obligations, the Company, the Guarantors and the Trustee
have entered into this Indenture, the Security Agreement and the Mortgage. Each
Holder, by accepting a Note, agrees to all of the terms and provisions of this
Indenture and the Collateral Documents, and the Trustee agrees to all of the
terms and provisions of the Indenture and the Collateral Documents as this
Indenture or any of the Collateral Documents may be amended from time to time
pursuant to the provisions thereof and hereof.
(b) The Collateral as now or hereafter constituted shall be held for
the equal and ratable benefit of the Holders without preference, priority or
distinction of any thereof over any other by reason of difference in time of
issuance, sale or otherwise, as security for the Indenture Obligations.
(c) The provisions of TIA Section 314(d), and the provisions of TIA
Section 314(c)(3) to the extent applicable by specific reference in this Article
IV, are hereby incorporated by reference herein as if set forth in their
entirety and to the same extent as if the Indenture were qualified under the
TIA.
Section 4.2. Recording; Opinions of Counsel.
(a) Each of the Company and the Guarantors represents that it has
caused to be executed and delivered, filed and recorded and covenants that it
will promptly cause to be executed and delivered, filed and recorded, all
instruments and documents, and have done and will do or will cause to be done
all such acts and other things, at the Company's expense, as are necessary to
effect and maintain valid and perfected security interests in the Collateral.
Each of the Company and the Guarantors shall, as promptly as practicable, cause
to be executed and delivered, filed and recorded all instruments and do all acts
and other things as may be required by law to perfect, maintain and protect the
security interests under the Collateral Documents and herein. The Company and
the Guarantors shall promptly obtain title insurance insuring the Trustee as an
insured for the benefit of the Holders in the aggregate amount equal to the
estimated fair market value of the Crescent City Queen Casino and all other
Property that is real Property subject to the Mortgage, with such endorsements
as are reasonably requested by the Trustee, subject only to those exceptions
which are reasonably acceptable to the Trustee.
(b) The Company shall furnish to the Trustee, promptly after the
execution and delivery of this Indenture, the Security Agreement and the
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Mortgage and promptly after the execution and delivery of any amendment thereto
or any other instrument of further assurance and Opinion(s) of Counsel stating
that, in the opinion of such counsel, subject to customary exclusions and
exceptions reasonably acceptable to the Trustee, either (i) this Indenture, the
Security Agreement, the Mortgage, any such amendment and all other instruments
of further assurance have been properly recorded, registered and filed and all
such other action has been taken to the extent necessary to make effective valid
security interests and to perfect the security interests intended to be created
by the Indenture, the Security Agreement and the Mortgage, and reciting the
details of such action, or (ii) no such action is necessary to maintain the
validity and perfection of the security interests under the Security Agreement,
the Mortgage and hereunder.
(c) The Company shall furnish to the Trustee, within 60 days after
[________ ___] in each year commencing 1997, an Opinion(s) of Counsel, dated as
of such date, stating that, in the opinion of such counsel, subject to customary
exclusions and exceptions, either (A) all such action has been taken with
respect to the recording, registering, filing, rerecording and refiling of the
Indenture, all supplemental indentures, the Security Agreement, the Mortgage,
financing statements, continuation statements and all other instruments of
further assurance or other Collateral Documents as is necessary to maintain the
security interests under the Collateral Documents and hereunder in full force
and effect and reciting the details of such action, and stating that all
financing statements and continuation statements have been executed and filed
and such other actions taken that are necessary fully to preserve and protect
the rights of the Holders and the Trustee hereunder and under the Collateral
Documents or (B) no such action is necessary to maintain the security interests
in full force and effect.
Section 4.3. Disposition of Certain Collateral.
(a) The Company and the Guarantors may, without consent of the Trustee,
but otherwise subject to the requirements of this Indenture:
(i) sell, assign, transfer, license or otherwise dispose of,
free from the security interests under the Collateral Documents and
hereunder, any machinery, equipment, or other personal Property
constituting Collateral that has become worn out, obsolete, or
unserviceable or is being upgraded, upon replacing the same with or
substituting for the same, machinery, equipment or other Property
constituting Collateral not necessarily of the same character but being
of at least equal fair value and at least equal utility to the Company
as the Property so disposed of, which Property shall without further
action become Collateral subject to the security interests under the
Collateral Documents and hereunder;
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(ii) (A) sell, assign, transfer, license or otherwise dispose
of, free from the security interests under the Collateral Documents and
hereunder, inventory held for resale that is at any time part of the
Collateral in the ordinary course of the Company's business, consistent
with industry practices, (B) collect, liquidate, sell, factor or
otherwise dispose of, free from the security interests under the
Collateral Documents and hereunder, accounts receivable or notes
receivable that are part of the Collateral in the ordinary course of
the Company's business, consistent with industry practices, or (C) make
Cash payments out of the Guarantor Collateral Sub-Account to fund
operating expenses of the CMLI Real Property or Capital Expenditures in
respect of the CMLI Real Property, provided, however, that the Liens of
the Trustee under the Collateral Documents attach to the Property
acquired or constructed with such Capital Expenditures with the same
validity, priority and perfection as the Liens of the Trustee in the
CMLI Real Property;
(iii) so long as no Default or Event of Default hereunder
shall have occurred and be continuing, sell, assign, transfer, license
or otherwise dispose of Collateral of the Company for the purpose of
making Capital Expenditures permitted to the Company under clauses
(iii), (iv), (v) and (vi) of the definition of Permitted Capital
Expenditures; and
(iv) abandon, sell, assign, transfer, license or otherwise
dispose of any personal Property the use of which is no longer
necessary or desirable in the proper conduct of the business of the
Company and the maintenance of its earnings and is not material to the
conduct of the business of the Company.
(b) In the event that the Company or any Guarantors has sold,
exchanged, or otherwise disposed of or proposes to sell, exchange or otherwise
dispose of any portion of the Collateral which under the provisions of this
Section 4.3 may be sold, exchanged or otherwise disposed of by the Company and
the Guarantors without consent of the Trustee, and the Company and the
Guarantors request the Trustee to furnish a written disclaimer, release or
quitclaim of any interest in such Property under the Collateral Documents, the
Trustee shall execute such an instrument upon delivery to the Trustee of an
Officers' Certificate by the Company and the Guarantors reciting the sale,
exchange or other disposition made or proposed to be made and describing in
reasonable detail the Property affected thereby, and stating and demonstrating
that such Property is Property which by the provisions of this Section 4.3 may
be sold, exchanged or otherwise disposed of or dealt with by the Company and the
Guarantors without any release or consent of the Trustee.
(d) Any disposition of Collateral made in compliance with the
provisions of this Section 4.3 shall be deemed not to impair the security
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interests under the Collateral Documents and hereunder in contravention of the
provisions of this Indenture.
Section 4.4. Substitution of Collateral.
(a)(i) So long as no Default or Event of Default hereunder shall have
occurred and be continuing, the Company may, without the consent of the Trustee,
but otherwise subject to the requirements of this Indenture, consummate a
Qualified Sale to a Third Party, free and clear of the Liens of the Mortgage and
the Security Agreement, in exchange for Cash or for a Qualified Substitute Boat
or a combination thereof; provided, however, that any Qualified Sale
constituting an Affiliate Conveyance shall meet the requirements of Section 5.10
hereof in all respects. In such event, the Company immediately shall file and
record all instruments and documents, and immediately will do or will cause to
be done all such acts and other things, at the Company's expense, as are
necessary to effect and maintain exclusive, valid and perfected security
interests in the Boat Conveyance Proceeds and the Qualified Substitute Boat, as
the case may be, and all agreements and contract rights arising under or
evidencing such Qualified Sale, in favor of the Trustee for the benefit of the
Holders, including, but not limited to, the deposit of Boat Conveyance Proceeds
in the Boat Conveyance Proceeds Sub-Account.
(ii) So long as no Default or Event of Default hereunder shall have
occurred and be continuing, the Company may, without the consent of the Trustee,
but otherwise subject to the requirements of this Indenture, enter into a
Qualified Lessor Lease, subject to the Liens of the Mortgage or the Other Boat
Mortgage, as the case may be, and the other Collateral Documents; provided,
however, that any such Qualified Lessor Lease constituting an Affiliate
Conveyance shall meet the requirements of Section 5.10 hereof in all respects.
In such event, the Company immediately shall file and record all instruments and
documents, and immediately will do or will cause to be done all such acts and
other things, at the Company's expense, as are necessary to effect and maintain
exclusive, valid and perfected security interests in the Boat Conveyance
Proceeds arising under such Qualified Lessor Lease, and in all of the Company's
right, title and interest in such Qualified Lessor Lease and all rents, profits
and proceeds therefrom and contract rights arising thereunder, in favor of the
Trustee for the benefit of the Holders, including, but not limited to, the
deposit of Boat Conveyance Proceeds in the Boat Conveyance Proceeds Sub-Account.
(b) Boat Conveyance Proceeds shall remain in the Boat Conveyance
Proceeds Sub-Account with the Trustee subject to the Liens of the Trustee and,
so long as no Default or Event of Default shall have occurred and be continuing,
shall be released from the Boat Conveyance Proceeds Sub-Account by the Trustee
only as follows:
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(i) During the Waiting Period, Boat Conveyance Proceeds will be
released by the Trustee to the Company, first, (A) for the consummation by the
Company of the purchase of a Qualified Substitute Boat pursuant to the
provisions of Section 11.3 hereof or for the financing or the servicing of the
financing of such purchase from time to time, or (B) for the payment of the
Adjusted Rent Obligations of the Company under a Qualified Lessee Lease under
the provisions of Section 11.3 hereof, and thereafter until the end of the
Waiting Period for Capital Expenditures permitted pursuant to the provisions of
Section 5.19 hereof;
(ii) If during the Waiting Period the Company has entered into a
binding contract with a Third Party for the construction of a Qualified
Substitute Boat [and has delivered all certificates, documents, instruments,
contracts and agreements precedent to the first release of Boat Conveyance
Proceeds under the provisions of Section 11.4 hereof], then until the date that
is fifteen (15) months after the last day of the Waiting Period, the Trustee
shall release Boat Conveyance Proceeds to the Company solely (A) to fund
obligations under such contract for the construction of the Qualified Substitute
Boat, provided, however, that the Trustee shall maintain at all times a valid
and perfected first priority Lien on and security interest in the Qualified
Substitute Boat, whether under the Other Boat Mortgage or otherwise, subject
only to Liens permitted pursuant to Section 5.13 hereof; (B) for the financing
or the servicing of the financing from time to time by the Company of the
purchase of a Qualified Substitute Boat pursuant to the provisions of Section
11.3 hereof; or (C) for the payment of the Adjusted Rent Obligations of the
Company under a Qualified Lessee Lease under the provisions of Section 11.3
hereof;
(iii) If on or before the last day of the Waiting Period the Company
has neither consummated the purchase of a Qualified Substitute Boat, [entered
into a Qualified Lessee Lease of a Substitute Boat,] nor [delivered all
certificates, documents, instruments, contracts and agreements precedent to the
first release of Boat Conveyance Proceeds under the provisions of Section 11.4
hereof] for the construction of a Qualified Substitute Boat, then all Boat
Conveyance Proceeds remaining in the Boat Conveyance Proceeds Sub-Account with
the Trustee on the last day of the Waiting Period shall be deemed to constitute
Excess Cash Flow of the Company for the fiscal quarter in which the Waiting
Period expires and shall be used to redeem Notes on the Interest Payment Date
that is the last day of the fiscal quarter of the Company immediately following
the fiscal quarter in which the Waiting Period expires pursuant to the
provisions of Article III hereof; and
(iv) Notwithstanding any other provisions of this clause (c), all Boat
Conveyance Proceeds in the Boat Conveyance Proceeds Sub-Account on the last date
of the fifteenth month after the date of the last day of the Waiting Period or
33
at any time thereafter shall be deemed to solely constitute Collateral securing
the Indenture Obligations, and the Company shall have no right to request or
demand, and the Trustee shall have no obligation to release, Boat Conveyance
Proceeds prior to the payment in full of the Indenture Obligations.
The Trustee shall release Liens on Boat Conveyance Proceeds pursuant to
this Section 4.4 in accordance with the provisions of Article XI, the Collateral
Documents and the TIA.
Section 4.5. Release Date; Releases of Collateral.
So long as no Default or Event of Default shall have occurred and be
continuing, then provided the Trustee shall have received notice from the
Company fifteen (15) days before the Release Date of the Release Date, the
Trustee shall on the Release Date (or, in the case of failure of the Company to
timely notify the Trustee in accordance with this Section 4.5, fifteen (15) days
from the date of actual receipt by the Trustee of such notice of the Release
Date) release or cause to be released all Liens securing Indenture Obligations
other than (i) those Liens granted to the Trustee under the Mortgage or the
Other Boat Mortgage, as the case may be, (ii) those Liens granted to the Trustee
in respect of a lease by the Company of the Crescent City Queen Casino pursuant
to Section 4.4(b) hereof, and (iii) those Liens securing proceeds from the
foregoing. The Trustee shall release such Liens pursuant to this Section 4.5 in
accordance with the provisions of Article XI, the Collateral Documents and the
TIA.
Section 4.6 Certain Other Releases of Collateral.
Subject to applicable law, the release of any Collateral from Liens
created by the Security Agreement or the Mortgage or the release of, in whole or
in part, the Liens created by the Security Agreement or the Mortgage, will not
be deemed to impair the Security Agreement or the Mortgage, as the case may be,
in contravention of the provisions of this Indenture if and to the extent the
Collateral or Liens are released pursuant to, and in accordance with, the terms
hereof. To the extent applicable, without limitation, the Company and each
obligor on the Notes shall cause TIA Section 314(d) relating to the release of
Property or securities from the Liens of the Security Agreement or the Mortgage
to be complied with. Any certificate or opinion required by TIA Section 314(d)
may be made by one Officer prior to the qualification of the Indenture under the
TIA and by two Officers after such qualification, except in cases which TIA
Section 314(d) requires that such certificate or opinion be made by an
independent person.
Section 4.7 Payment of Expenses.
On demand of the Trustee, the Company forthwith shall pay or
satisfactorily provide for all reasonable expenditures incurred by the Trustee
34
under this Article IV, including the reasonable fees and expenses of counsel and
all such sums shall be a Lien upon the Collateral and shall be secured thereby.
Section 4.8 Suits to Protect the Collateral.
Subject to Section 4.1 of this Indenture and to the provisions of the
Security Agreement and the Mortgage, the Trustee shall have power to institute
and to maintain such suits and proceedings as it may deem expedient to prevent
any impairment of the Collateral by any acts which may be unlawful or in
violation of the Security Agreement, the Mortgage or this Indenture, including
the power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid or if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interests in contravention of this Indenture or be
prejudicial to the interests of the Holders or of the Trustee. The Trustee shall
give notice to the Company promptly following the institution of any such suit
or proceeding.
Section 4.9 Trustee's Duties.
The powers and duties conferred upon the Trustee by this Article IV are
solely to protect the security interests created hereby and shall not impose any
duty upon the Trustee to exercise any such powers and duties, except as
expressly provided in this Indenture. The Trustee shall be under no duty to the
Company or any Guarantor whatsoever to make or give any presentment, demand for
performance, notice of nonperformance, protest, notice of protest, notice of
dishonor, or other notice or demand in connection with any Collateral, or to
take any steps necessary to preserve any rights against prior parties except as
expressly provided in this Indenture. The Trustee shall not be liable to the
Company or the Guarantors for failure to collect or realize upon any or all of
the Collateral, or for any delay in so doing, nor shall the Trustee be under any
duty to the Company or the Guarantors to take any action whatsoever with regard
thereto. The Trustee shall have no duty to the Company or the Guarantors to
comply with any recording, filing, or other legal requirements necessary to
establish or maintain the validity, priority or enforceability of the security
interests in, or the Trustee's rights in or to, any of the Collateral.
Article V.
COVENANTS
Section 5.1. Payment of Notes
The Company shall pay the principal of (including Excess Cash Flow to
be paid by the Company on an Interest Payment Date pursuant to the provisions of
35
Section 3.1 hereof) and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal of
(including Excess Cash Flow to be paid by the Company on an Interest Payment
Date pursuant to the provisions of Section 3.1 hereof) or interest on the Notes
shall be considered paid on the date it is due if the Trustee or Paying Agent
(other than the Company or an Affiliate of the Company) holds for the benefit of
the Holders, on or before 10:00 a.m. New York City time on that date, U.S. Legal
Tender deposited and designated for and sufficient to pay the installment.
Together with any installments of principal the Company will deliver to the
Trustee a sufficient number of stickers, in form satisfactory to the Trustee,
setting forth the outstanding principal amount of each Note after having given
effect to such current principal payments, for delivery by the Trustee to the
Holders for the purpose of affixing such stickers to their respective Notes.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Notes compounded
semi-annually, to the extent lawful.
Section 5.2. Maintenance of Office or Agency.
The Company and the Guarantors shall maintain in the Borough of
Manhattan, The City of New York, an office or agency where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer and exchange and where notices and demands to or upon
the Company and the Guarantors in respect of the Notes and this Indenture may be
served. The Company and the Guarantors shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company and the Guarantors shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 13.2
The Company and the Guarantors may also from time to time designate one
or more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company and the Guarantors of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York,
for such purposes. The Company and the Guarantors shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency. The Company and the Guarantors
hereby initially designate the corporate trust office of the Trustee as such
office.
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Section 5.3. Limitation on Restricted Payments.
The Company and the Guarantors will not, and none will permit any of
its Subsidiaries to, directly or indirectly, make any Restricted Payment.
Section 5.4. Corporate Existence.
The Company and the Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect their corporate
existence and the corporate or other existence of each of their Subsidiaries in
accordance with the respective organizational documents of each of them and the
rights (charter and statutory) and corporate franchises of the Company and the
Guarantors and each of their Subsidiaries; provided, however, that neither the
Company nor any of the Guarantors shall be required to preserve, with respect to
itself, any right or franchise if (a) the Board of Directors of the Company
shall determine reasonably and in good faith that the preservation thereof is no
longer desirable in the conduct of the business of the Company and (b) the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 5.5. Payment of Taxes and Other Claims.
The Company and the Guarantors shall, and shall cause each of their
Subsidiaries to, pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (i) all taxes, assessments and governmental
charges (including withholding taxes and any penalties, interest and additions
to taxes) levied or imposed upon the Company, any Guarantor or any of their
Subsidiaries or properties and assets of the Company, any Guarantor, or any of
their Subsidiaries and (ii) all lawful claims, whether for labor, materials,
supplies, services or anything else, which have become due and payable and which
by law have or may become a Lien upon the Property and assets of the Company,
any Guarantor or any of their Subsidiaries; provided however, that neither the
Company nor any Guarantor shall be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claim the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves have
been established in accordance with GAAP.
Section 5.6. Maintenance of Insurance.
From and at all times after the Issue Date, the Company and each of the
Guarantors and each of their respective Subsidiaries shall have in effect
customary comprehensive general liability insurance and (as applicable)
brownwater coverage, shall use their best efforts to have completion,
performance or similar bonds in place for any Substitute Boat not yet completed,
and shall cause the builder of any Substitute Boat to maintain builder's risk
coverage insurance, in each case on terms and in an amount reasonably sufficient
37
(taking into account, among other factors, the creditworthiness of the insurer)
to avoid a material adverse change in the financial condition or results of
operation of the Company and the Guarantors taken as a whole.
Section 5.7. Compliance Certificate: Notice of Default.
The Company shall deliver to the Trustee within 90 days after the end
of its fiscal year an Officers' Certificate complying (whether or not required)
with Section 314(a)(4) of the TIA and stating that a review of its activities
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture and
further stating, as to each such Officer signing such certificate, whether or
not the signer knows of any failure of the Company, any Guarantor or any
Subsidiary of the Company or any Guarantor to comply with any conditions or
covenants in this Indenture and, if such signer does know of such a failure to
comply, the certificate shall describe such failure with particularity. The
Officers' Certificate shall also notify the Trustee should the relevant fiscal
year end on any date other than the current fiscal year end date.
The Company shall, so long as any of the Notes are outstanding, deliver
to the Trustee, immediately upon becoming aware of any Default or Event of
Default under this Indenture, an Officers' Certificate specifying such Default
or Event of Default and what action the Company is taking or proposing to take
with respect thereto. The Trustee shall not be deemed to have knowledge of a
Default or an Event of Default unless one of its trust officers receives notice
of the Default giving rise thereto from the Company or any of the Holders.
Section 5.8. Reports.
Whether or not the Company or any Guarantor is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company and each
Guarantor shall deliver to the Trustee and to each Holder, within 15 days after
it is or would have been required to file such with the SEC, annual and
quarterly consolidated financial statements substantially equivalent to
financial statements that would have been included in reports filed with the SEC
if the Company were subject to the requirements of Section 13 or 15(d) of the
Exchange Act including, with respect to annual information only, a report
thereon by the Company's independent public accountants as such would be so
required, together with a management's discussion and analysis of financial
condition and results of operations which would be so required.
38
Section 5.9. Waiver of Stay, Extension or Usury Laws.
The Company and each Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law wherever enacted which would
prohibit or forgive the Company or any Guarantor from paying all or any portion
of the principal of or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that they may
lawfully do so) the Company and each Guarantor hereby expressly waives all
benefit or advantage of any such law insofar as such law applies to the Notes,
and covenants that it shall not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.10. Limitation on Transactions with Affiliates.
None of the Company, any Guarantor, or any of their Subsidiaries shall
enter into any transaction, including any contract, agreement, understanding,
loan, advance or guarantee and including any series of related transactions,
with or for the benefit of any Affiliate (an "Affiliate Transaction") except for
(i) employment arrangements in the ordinary course with officers and employees
of the Company who are not also officers, directors, or employees of any
Affiliate of the Company, (ii) [the Tax Sharing Treaty], (iii) Parent Equity
Contributions and any equity contributions to JCC, and (iv) the conveyance,
sale, lease, transfer, assignment or other disposition of the Crescent City
Queen Casino or a Qualified Substitute Boat by the Company to an Affiliate (an
"Affiliate Conveyance"); provided, however, that with respect to any such
Affiliate Conveyance described in clause (iv) of this Section 5.10, the Company
shall obtain, prior to the consummation of such Affiliate Transaction, a written
opinion addressed to the Trustee from an independent investment banking firm of
national reputation with experience in the gaming business conducted by the
Company that such Affiliate Conveyance is as favorable to the Company from a
financial point of view as if made on an arm's length basis with a Third Party.
Such investment banking firm shall be promptly selected by the Company and
agreed to by the Holders of a majority in aggregate principal amount of then
outstanding Notes; provided, however, that if the Holders of a majority in
aggregate principal amount of then outstanding Notes do not agree to such
investment banking firm, each of the Company and the Holders of a majority in
aggregate principal amount of then outstanding Notes shall then promptly select
one such investment banking firm, and the two firms so chosen shall select a
third investment banking firm to provide such opinion.
39
Section 5.11. Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock.
Except as set forth below, from and after the Issue Date the Company
and the Guarantors will not, and none will permit any of its Subsidiaries to,
directly or indirectly, issue, assume, guaranty, incur, become directly or
indirectly liable with respect to (including as a result of an acquisition,
merger or consolidation), extend the maturity of, or otherwise become
responsible for, contingently or otherwise (individually and collectively, to
"incur," or, as appropriate, an "incurrence"), any Indebtedness or any
Disqualified Capital Stock. Notwithstanding the foregoing:
(a) the Company and the Guarantors may incur Indebtedness evidenced by
the Notes and other obligations pursuant to the Indenture up to the amounts
specified herein as of the Issue Date;
(b) so long as no Default or Event of Default shall have occurred and
be continuing at the time, the Company or any Guarantor may incur Permitted FF&E
Financing; provided, that (i) the aggregate amount of Indebtedness incurred
pursuant to this paragraph (b) (including any Indebtedness issued to refinance,
replace or refund such Indebtedness) shall not constitute more than 100% of the
cost (reportable on the balance sheet (including all appropriate notes thereto)
of such entity in accordance with GAAP) to the Company and the Guarantors of the
FF&E so purchased or leased and (ii) prior to the Release Date, the aggregate
principal amount of such Permitted FF&E Financing in respect of FF&E funded with
all or any portion of Cash of the Company (other than Cash from a Parent Equity
Contribution) does not exceed the sum (the "FF&E Basket") of (x) the excess of
$6.5 million over the principal amount of all Existing FF&E Indebtedness on the
Issue Date and (y) $1 million, at any time, and (iii) in all other cases prior
to the Release Date, Permitted FF&E Financing does not at any time exceed $10
million plus the FF&E Basket, less the amount of any such financing described in
clause (ii) above then outstanding, at any time;
(c) the Company and any of the Guarantors may incur Indebtedness
constituting a bond or surety obligation (or an indemnity or similar obligation)
in order to prevent the impairment or loss of or to obtain a Gaming License, but
only to the extent required by applicable law and consistent in character and
amount with customary industry practice;
(d) the Company may incur Indebtedness the proceeds of which are used
to pay all or a part of the purchase price of a Qualified Substitute Boat;
provided, however, that such Indebtedness and the Liens securing such
Indebtedness shall be subordinate and junior, in all respects, to the Indenture
Obligations and the Liens of the Trustee securing the Indenture Obligations;
40
(e) the Company may suffer to exist Existing FF&E Financing;
(f) the Company and any of the Guarantors may incur Refinancing
Indebtedness with respect to any Indebtedness described in clauses (a),(b), (c),
(d) and (e) of this covenant so long as, in the case of Indebtedness used to
refinance, refund, or replace Indebtedness in clauses (b) and (d), such
Refinancing Indebtedness satisfies the applicable requirements of such clauses;
and
(g) after the Release Date, the Company may incur any Indebtedness, so
long as no Default or Event of Default shall have occurred and be continuing at
the time.
Section 5.12. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
None of the Guarantors will, and none will permit any of its
Subsidiaries other than the Company to, directly or indirectly, create, assume
or suffer to exist any consensual encumbrance or restriction on the ability of
any such Subsidiary to pay dividends or make other distributions to, or to pay
any obligation to, or to otherwise transfer assets or make or pay loans or
advances to, any of the Guarantors, except (a) restrictions imposed by the Notes
or the Indenture and (b) restrictions imposed by applicable law.
Section 5.13. Limitation on Liens.
Neither the Company nor any of the Guarantors will, and none will
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Lien in or on any right, title or interest to any of
their respective Cash other than the Liens of the Trustee for the benefit of the
Holders. Neither the Company nor any of the Guarantors will, and none will
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Lien in or on any right, title or interest to any of
their respective properties or assets, other than Cash, owned by the Company or
the Guarantors, as the case may be, on the Issue Date except (a) the Liens of
the Trustee for the benefit of the Holders, and (b) Liens existing on the Issue
Date and identified on a Schedule to be delivered to the Trustee no later than
ten (10) days prior to the Issue Date. Neither the Company nor any of the
Guarantors will, and none will permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or suffer to exist any Lien in or on any
right, title or interest to any of their respective properties or assets, other
than Cash, acquired after the Issue Date except (u) Permitted Liens [e.g., prior
to the Release Date, Liens customarily permitted by both bank first mortgagees
and [bank construction lenders and, thereafter, statutory type Liens], (v) the
Liens of the Trustee for the benefit of the Holders, (w) Liens incurred pursuant
41
to Permitted FF&E Financing incurred in accordance with the provisions of
paragraph (b) of Section 5.11, which Liens may be exclusive Liens on such
Permitted FF&E, (x) Liens in respect of Existing FF&E Financing, (y) Liens
incurred in connection with the incurrence of Refinancing Indebtedness in
accordance with the provisions of paragraph (e) of Section 5.11, provided,
however, that such Liens are not more adverse to the interests of the Holders of
the Notes than the Liens replaced or extended thereby, provided, further, that
such Liens replaced or extended are permitted hereby, and (z) only with respect
to real Property acquired by the Guarantors after the Issue Date, minor title
defects and survey exceptions which do not materially detract from the value of
the real Property subject thereto (as such Property is used by such Guarantor).
Anything in this Section 5.13 to the contrary notwithstanding, after the Release
Date, the Company and the Guarantors may incur Liens on any and all their
respective Property or assets other than the Collateral, so long as no Default
or Event of Default shall have occurred and be continuing at the time.
Section 5.14. Limitation on Lines of Business.
None of the Company, any Guarantor and any of their respective
Subsidiaries will directly or indirectly engage in any line or lines of business
activity other than in a Related Business.
Section 5.15. Limitation on Status as Investment Company.
None of the Company, any Guarantor, or any of their respective
Subsidiaries shall become "investment companies" (as that term is defined in the
Investment Company Act of 1940, as amended), or otherwise become subject to
regulation under the Investment Company Act.
Section 5.16. Restrictions on Sale and Issuance of Stock. Prior to the
Release Date:
(a) The Company and each Guarantor shall not issue or sell, and shall
not permit any of their respective Subsidiaries to issue or sell, any Capital
Stock of any Subsidiary to any person other than the Company or a Guarantor of
the Company.
(b) The Company shall not sell or issue Capital Stock (other than
Disqualified Capital Stock) unless the same becomes subject to the Lien of this
Indenture.
Section 5.17. Restrictions on Subsidiaries.
Prior to the Release Date, neither the Company nor any Guarantor shall
create, acquire or suffer to exist any Subsidiary which was not a direct or
indirect subsidiary of the Company or such Guarantor, as the case may be, on the
Issue Date.
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Section 5.18. Restrictions on Investments.
The Company and each Guarantor shall not make any Restricted
Investments except, in the case of JCC, its equity interests in the Company.
Section 5.19. Restrictions on Capital Expenditures.
The Company and each Guarantor shall not incur any Capital Expenditures
except for Permitted Capital Expenditures.
Section 5.20. Limitation on Sales of Assets and Subsidiary Stock; Event
of Loss.
Neither the Company nor any of the Guarantors will, and none will
permit any of its Subsidiaries to, in one or a series of related transactions,
convey, sell, lease, transfer, assign or otherwise dispose of, directly or
indirectly, any of its Property, business or assets, including without
limitation upon any sale or other transfer or issuance of any Capital Stock of
any Subsidiary or through the issuance, sale or transfer of Capital Stock of a
Subsidiary (an "Asset Sale"). Notwithstanding the foregoing;
(a) so long as no Default or Event of Default shall have occurred and
be continuing at the time or, or would occur after giving effect, on a pro forma
basis, to, such Asset Sale, the Company may sell, lease, transfer, assign or
otherwise dispose of the Crescent City Queen Casino or any Qualified Substitute
Boat or other Substitute Boat in accordance with the provisions of Section 4.4
or Section 5.10 hereof, and further subject to the applicable provisions of
Article XI hereof;
(b) the Company and the Guarantors may sell, lease, transfer, assign or
otherwise dispose of any machinery, equipment, or other personal Property that
has become worn out, obsolete, or unserviceable or is being upgraded upon
replacing the same with or substituting for the same, machinery, equipment or
other personal Property not necessarily of the same character but being of at
least equal fair value and at least equal utility to the Company as the Property
so disposed of;
(c) the Company and the Guarantors may (A) sell, assign, transfer,
license or otherwise dispose of inventory held for resale in the ordinary course
of the Company's business, consistent with industry practices and (B) collect,
liquidate, sell, factor or otherwise dispose of accounts receivable or notes
receivable in the ordinary course of the Company's business, consistent with
industry practices; and
(d) the Company and the Guarantors may abandon, sell, assign, transfer,
license or otherwise dispose of any personal Property the use of which is no
longer necessary or desirable in the proper conduct of the business of the
43
Company and the maintenance of its earnings and is not material to the conduct
of the business of the Company; and
(e) prior to the Release Date and so long as no Default or Event of
Default shall have occurred and be continuing, the Company and the Guarantors
may convey, sell, lease, transfer, assign or otherwise dispose of their
respective Property or assets other than Collateral.
Section 5.21. Limitation on Merger, Sale or Consolidation.
Neither the Company nor any of the Guarantors will consolidate with or
merge with or into another person.
Section 5.22. Maintenance of Business.
At all times from and after the Commencement Date, the Company will
operate a riverboat casino in Bossier City, Louisiana.
Section 5.23. Commencement Date; Release Date; Adverse State Action.
(a) The Company shall give the Trustee notice, at the addresses and in
the manner set forth in Section 13.2 hereof, of:
(i) the Commencement Date, as soon as the occurrence of such date is
ascertained by the Company but in no event later than five (5) days after the
occurrence thereof;
(ii) the Release Date, as soon as the occurrence of such date is
ascertained by the Company but in no event later than five (5) days after the
occurrence thereof;
(iii) the occurrence of an Adverse State Action, in no event later than
one (1) day after the Company receives actual notice of the occurrence thereof;
and
(iv) the date an Adverse State Action is to take effect, at least [60]
days prior to such date.
(b) No later than ten (10) days after the Release Date, the Company
will deliver to the Trustee an amortization schedule setting forth the
amortization of the remaining outstanding principal amount of the Notes in eight
(8) equal installments payable on each of the eight (8) Interest Payment Dates
immediately following the Release Date (or, if there shall be fewer than eight
Interest Payment Dates remaining after the Release Date but before or including
the third anniversary of the Commencement Date, in equal installments numbering
the amount of remaining Interest Payment Date).
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(c) No later than ten (10) days after the date of the occurrence of an
Adverse State Action, the Company will deliver to the Trustee an amortization
schedule setting forth the amortization of the remaining outstanding principal
amount of the Notes in equal installments payable on each of the Interest
Payment Dates immediately following the date of the occurrence of the Adverse
State Action to and including the date on which the Adverse State Action is to
take effect against the Company.
Article VI.
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) the failure by the Company to pay any installment of
interest on the Notes as and when due and payable and the continuance
of any such failure for 10 days;
(2) the failure by the Company to pay all or any part of the
principal, or premium, if any, on the Notes when and as the same become
due and payable at maturity, redemption, by acceleration or otherwise;
provided that, in respect of a payment of Excess Cash Flow, if the
amount thereof, in respect of any period, is greater than the amount
originally determined by the Company for purposes of making such
payment (but no more than 5% of such originally determined amount),
such greater amount, less the payment already made, shall be deemed to
be due and payable 5 days after such greater amount is finally
determined;
(3) except as provided in clauses (1) or (2) of this Section
6.1, failure of the Company or any Guarantor to comply with any
provision of Section 5.10, 5.14, 5.21, 5.22, 11.3 or 11.4 which failure
continues for 30 days;
(4) failure of the Company or any Guarantor to comply with any
provision of Section 4.4 hereof;
(5) except as otherwise provided herein, the failure by the
Company or any Guarantor to observe or perform any other covenant or
agreement contained in the Notes or the Indenture and the continuance
of such failure for a period of 30 days after written notice is given
45
to the Company by the Trustee or to the Company and Trustee by the
Holders of at least 25% in aggregate principal amount of the Notes
outstanding;
(6) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudging the Company or any
Guarantor as bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization of the Company or such Guarantor under
any bankruptcy or similar law, and such decree or order shall have
continued undischarged and unstayed for a period of 60 days; or a
decree or order of a court of competent jurisdiction over the
appointment of a receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency of the Company or such Guarantor, or of the
Property of any such person, or for the winding up or liquidation of
the affairs of any such person, shall have been entered, and such
decree, judgment, or order shall have remained in force undischarged
and unstayed for a period of 60 days;
(7) the Company or any Guarantor shall institute proceedings
to be adjudicated a voluntary bankrupt, or shall consent to the filing
of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization under any bankruptcy or
similar law or similar statute, or shall consent to the filing of any
such petition, or shall consent to the appointment of a Custodian,
receiver, liquidator, trustee, or assignee in bankruptcy or insolvency
of it or any of its assets or Property, or shall make a general
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due, or shall,
within the meaning of any Bankruptcy Law, become insolvent, fail
generally to pay their debts as they become due, or take any corporate
action in furtherance of or to facilitate, conditionally or otherwise,
any of the foregoing;
(8) a default in the payment of principal, premium or interest
when due which extends beyond any stated period of grace applicable
thereto or an acceleration for any other reason of maturity of any
Indebtedness of the Company, any Guarantor or any of their respective
Subsidiaries with an aggregate principal amount in excess of
$[__________];
(9) final unsatisfied judgments not covered by insurance
aggregating in excess of $[__________], at any one time rendered
against the Company, any Guarantor or any of their respective
Subsidiaries and not stayed, bonded or discharged within 60 days;
(10) the closing (other than for repair or maintenance) of a
substantial portion of the Crescent City Queen Casino or, if
46
applicable, the casino on a Qualified Substitute Boat for more than
[45] consecutive days;
(11) the loss of the legal right to operate the Crescent City
Queen Casino or, if applicable, the casino on a Qualified Substitute
Boat and such loss is continuing for more than [90] consecutive days;
(12) an event of default specified in any of the Collateral
Documents; or
(13) any of the Collateral Documents fails to become or ceases
to be in full force and effect in accordance with the terms of this
Indenture, or ceases (once effective) to create in favor of the
Trustee, with respect to any material amount of Collateral, a valid and
perfected first priority Lien on the Collateral to be covered thereby
(unless a prior or exclusive Lien is specifically permitted by this
Indenture).
If a Default occurs and is continuing, the Trustee must, within 90 days
after the occurrence of such default, give to the Holders notice of such default
in accordance with Section 7.5 hereof; provided, however, that, except in the
case of a Default or an Event of Default in payment of principal (or premium, if
any) of, or interest on, any Note (including the payment of the Redemption Price
on the Redemption Date), the Trustee may withhold the notice if and so long as a
Trust Officer in good faith determines that withholding the notice is in the
interest of the Holders.
If an Event of Default occurs and is continuing (other than an Event of
Default specified in clauses (6) or (7), above, relating to the Company or any
Guarantor), then in every such case, unless the principal of all of the Notes
shall have already become due and payable, either the Trustee or the Holders of
25% in aggregate principal amount of the Notes then outstanding, by notice in
writing to the Company, and to the Trustee if given by Holders (an "Acceleration
Notice"), may declare all principal and accrued interest thereon to be due and
payable immediately. If an Event of Default specified in clauses (6) or (7),
above, relating to the Company or any Guarantor occurs, all principal and
accrued interest thereon and any then applicable Redemption Premium will be
immediately due and payable on all outstanding Notes without any declaration or
other act on the part of Trustee or the Holders. The Holders of no less than a
majority in aggregate principal amount of Notes generally are authorized to
rescind such acceleration if all existing Events of Default, other than the
non-payment of the principal of, premium, if any, and interest on the Notes
which have become due solely by such acceleration, have been cured or waived.
47
Prior to the declaration of acceleration of the maturity of the Notes,
the Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may waive on behalf of all the Holders any default, except a default
in the payment of principal of or interest on any Note not yet cured, or a
default with respect to any covenant or provision which cannot be modified or
amended without the consent of the Holder of each outstanding Note affected.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, the Trustee will be under no obligation to exercise any of its rights
or powers under the Indenture at the request, order or direction of any of the
Holders, unless such Holders have offered to the Trustee reasonable security or
indemnity. Subject to all provisions of the Indenture and applicable law, the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee.
Section 6.2. Rescission and Annulment.
Prior to any judgment or decree for payment of any money due being
obtained by the Trustee as hereinafter provided in this Article VI, the Holders
of a majority in aggregate principal amount of then outstanding Notes, by
written notice to the Company and the Trustee, may waive, on behalf of all
Holders, an Event of Default or Default if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Notes,
(B) the principal of (and premium, if any, applicable
to) any Notes which would become due otherwise than by such
declaration of acceleration, and interest thereon at the rate
borne by the Notes,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by
the Notes,
(D) all sums paid or advanced by the Trustee
hereunder and the compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and
(2) all Events of Default, other than the non-payment of
amounts which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.13.
48
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective for any Event of Default or Default with respect to any covenant or
provision which cannot be modified or amended without the consent of the Holder
of each outstanding Note, unless all such affected Holders agree, in writing, to
waive such Event of Default or Default. No such waiver shall cure or waive any
subsequent default or impair any right consequent thereon.
Section 6.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if an Event of Default in payment of
principal, premium, or interest specified in Section 6.1(1) and (2) occurs and
is continuing, the Company shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Notes, the whole amount then due and payable on
such Notes for principal, premium (if any) and interest, and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal (and premium, if any) and on any overdue interest, at the rate borne
by the Notes, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including compensation
to, and expenses, disbursements and advances of the Trustee, its agents and
counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the Property of the Company or any other obligor upon the Notes,
wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
or the Property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment
49
of overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise to take any and all actions under
the TIA, including
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Notes and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel) and
of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other Property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 6.5. Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust in favor of the Holders, and any recovery of judgment shall,
after provision for the payment of compensation to, and expenses, disbursements
and advances of the Trustee, its agents and counsel, be for the ratable benefit
of the Holders of the Notes in respect of which such judgment has been
recovered.
50
Section 6.6. Priorities.
Any money collected by the Trustee pursuant to this Article VI shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium (if
any) or interest, upon presentation of the Notes and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any) and interest on, the Notes in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Notes for principal, premium (if any) and interest,
respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the remainder,
if any.
Section 6.7. Limitation on Suits.
No Holder of any Note shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice of the
Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in principal amount of
then outstanding Notes shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities to be incurred or reasonably probable to be incurred in
compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(E) no direction inconsistent with such written request has
51
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
Section 6.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision of this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of, and premium (if any) and interest on, such Note on
the Maturity Dates of such payments as expressed in such Note (in the case of
redemption, the Redemption Price on the applicable Redemption Date, and in the
case of Section 3.1, Excess Cash Flow on the applicable date specified in
Section 3.1) and to institute suit for the enforcement of any such payment, and
such rights shall not be impaired without the consent of such Holder.
Section 6.9. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the placement or payment
of mutilated, destroyed, lost or stolen Notes in Section 2.7, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.10. Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Note to
exercise any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such Event of
Default. Every right and remedy given by this Article VI or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
52
Section 6.11. Control by Holders.
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Notes shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, provided, that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders not taking part
in such direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 6.12. Waiver of Past Default.
Subject to Section 6.8, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Notes may, by written
notice to the Trustee on behalf of all Holders, prior to the declaration of the
maturity of the Notes, waive any past default hereunder and its consequences,
except a default
(A) in the payment of the principal of, premium, if
any, or interest on, any Note as specified in clauses (1) and
(2) of Section 6.1, or
(B) in respect of a covenant or provision hereof
which, under Article IX, cannot be modified or amended without
the consent of the Holder of each outstanding Note affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
Section 6.13. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted to be taken by it as Trustee, the filing by any party
53
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith on the claims or defenses made by such party litigant;
but the provisions of this Section 6.13 shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the outstanding Notes, or to any suit instituted
by any Holder for enforcement of the payment of principal of, or premium (if
any) or interest on, any Note on or after the Maturity Date of such Note.
Section 6.14. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantor, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
Section 6.15. Cash Proceeds from Collateral.
The Cash proceeds of any Collateral obtained and/or disposed of
pursuant to the terms of the Collateral Documents shall be held by the Trustee
in the Boat Conveyance Proceeds Sub-Account for the equal and ratable benefit of
the Holders without preference, priority or distinction of any thereof by reason
of difference in time of issuance, sale or otherwise.
Article VII.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
Section 7.1. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
54
(1) The Trustee need perform only those duties as
are specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this
Indenture which are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture, including certificates or opinions of the Consulting
Professional and the Construction Manager. However, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section 7.1.
(2) The Trustee shall comply with any order or directive of a
Gaming Authority that the Trustee submit an application for any
license, finding of suitability or other approval pursuant to any
Gaming Law and will cooperate fully and completely in any proceeding
related to such application.
(3) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(4) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith (i) in accordance with a
direction received by it pursuant to Section 6.12, or (ii) in reliance
upon actions, statements, judgments or representations taken or made by
the Consulting Professional or the Construction Manager in accordance
with Section 11.4 hereof.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this indenture or at the request, order or direction of the Holders or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
55
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets received
by it except as the Trustee may agree in writing with the Company. Assets held
in trust by the Trustee need not be segregated from other assets except to the
extent required by law.
Section 7.2. Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 13.4 and 13.5. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent (including the
Consulting Professional) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Except with respect to Section 5.1, the Trustee shall have no duty
to inquire as to the performance of the Company's covenants in Article V hereof.
In addition, the Trustee shall not be deemed to have knowledge of any Default or
56
Event of Default except (i) any Event of Default occurring pursuant to Sections
6.1(1), 6.1(2) and 5.1, or (ii) any Default or Event of Default of which the
Trustee shall have received written notification or obtained actual knowledge.
(h) The Trustee may rely on the accuracy of any amortization schedule
delivered to it by the Company pursuant to Section 5.24 hereof.
Section 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Guarantor, any of their respective Subsidiaries, or their respective Affiliates
with the same rights it would have if it were not Trustee. Any agent may do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
Section 7.4. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, and it shall not be responsible for any statement
in the Notes, other than the Trustee's certificate of authentication, or the use
or application of any funds received by a Paying Agent other than the Trustee.
Section 7.5. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Noteholder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal (or premium, if any) of, or interest on, any Note
(including the payment of the Redemption Price on the Redemption Date), the
Trustee may withhold the notice if and so long as a Trust Officer in good faith
determines that withholding the notice is in the interest of the Holders.
Section 7.6. Reports by Trustee to Holders.
If required by law, within 60 days after each May 15 beginning with the
May 15 following the date of this Indenture, the Trustee shall mail to each
Noteholder a brief report dated as of such May 15 that complies with TIA Section
313(a). If required by law, the Trustee also shall comply with TIA Section
313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the Notes
become listed on any stock exchange or automatic quotation system.
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A copy of each report at the time of its mailing to Noteholders shall
be mailed to the Company and filed with the SEC and each stock exchange, if any,
on which the Notes are listed.
Section 7.7. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and counsel.
The Company shall indemnify the Trustee (in its capacity as Trustee)
and each of its officers, directors, attorneys-in-fact and agents for, and hold
it harmless against, any claim, demand, expense (including but not limited to
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel), loss or liability incurred by them without negligence or bad faith on
its part, arising out of or in connection with the administration of this trust
and their rights or duties hereunder including the reasonable costs and expenses
of defending themselves against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall provide reasonable cooperation at the Company's expense in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel; provided, that the Company will not be
required to pay such fees and expenses if it assumes the Trustee's defense and
there is no conflict of interest between the Company and the Trustee in
connection with such defense. The Company need not pay for any settlement made
without its written consent. The Company need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all assets held or collected by
the Trustee, in its capacity as Trustee, except assets held in trust to pay
principal and premium, if any, of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
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The Company's obligations under this Section 7.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Company's obligations pursuant to Article VIII of this Indenture and any
rejection or termination of this Indenture under any Bankruptcy Law.
Section 7.8. Replacement of Trustee.
The Trustee may resign by notifying the Company in writing. The Holder
or Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Company and the Trustee in writing and may
appoint a successor trustee with the Company's consent. The Company may remove
the Trustee if:
(1) the Trustee fails to comply with Section 7.1(d) or 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver, Custodian, or other public officer takes
charge of the Trustee or its Property; or
(4) the Trustee become incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder or
Holders of a majority in principal amount of the Notes may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the Trustee provided for in Section 7.7 have
been paid, the retiring Trustee shall transfer all Property held by it as
Trustee to the successor Trustee, subject to the lien provided in Section 7.7,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holder or Holders of at least 10% in principal amount of the outstanding Notes
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may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
Section 7.9. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA Section
310(a)(1) and TIA Section 310(a)(5). The Trustee shall have a combined capital
and surplus of at least $25,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
Article VIII.
TERMINATION AND DISCHARGE
Section 8.1. Termination of Obligations Upon Cancellation of the Notes.
The Company and the Guarantors may terminate all of their obligations
under this Indenture (subject to Section 8.2) when:
(1) all Notes theretofore authenticated and delivered (other
than Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.7) have been delivered
to the Trustee for cancellation;
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(2) the Company or a Guarantor has paid or caused to be paid
all sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel (who may be outside counsel to
the Company, but not in-house counsel to the Company or any of its
Subsidiaries), each stating that all conditions precedent specified
herein relating to the satisfaction and discharge of this Indenture
have been complied with and that such satisfaction and discharge will
not result in a breach or violation of, or constitute a Default under,
this Indenture or any other instrument to which the Company, any
Guarantor or any of their Subsidiaries is a party or by which it or
their Property is bound.
Section 8.2. Survival of Certain Obligations.
Notwithstanding the termination of this Indenture and of the Notes
referred to in Section 8.1 , the respective obligations of the Company, the
Guarantors and the Trustee under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.11,
2.12, Article III, Article IV, 5.1, 5.2, 5.4, 5.6, 5.15, 6.7, 6.8, 7.7, 7.8,
8.4, 13.1, 13.2, 13.4, 13.5, 13.7, 13.8, 13.11 and this Section 8.2 shall
survive until the Notes are no longer outstanding, and thereafter the
obligations of the Company and the Trustee under Sections 6.8, 7.7, 7.8, 8.4,
13.11 and this Section 8.2 shall survive. Nothing contained in this Article VIII
shall abrogate any of the obligations or duties of the Trustee under this
Indenture.
Section 8.3. Acknowledgment of Discharge by Trustee.
After (i) the conditions of Section 8.1 have been satisfied, (ii) the
Company or a Guarantor has paid or caused to be paid all other sums payable
hereunder by the Company and (iii) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent referred to in clause (i), above, relating to the
satisfaction and discharge of this Indenture have been complied with, the
Trustee upon request shall acknowledge in writing the discharge of the Company's
and the Guarantors' obligations under this Indenture except for those surviving
obligations specified in Section 8.2.
Section 8.4. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender
or U.S. Government Obligations in accordance with Section 8.1 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
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be revived and reinstated as though no deposit had occurred pursuant to Section
8.1 until such time as the Trustee or Paying Agent is permitted to apply all
such U.S. Legal Tender or U.S. Government Obligations in accordance with Section
8.1 ; provided, however, that if the Company or a Guarantor has made any payment
of principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Company or such Guarantor shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the U.S. Legal Tender or U.S. Government Obligations held by the Trustee or
Paying Agent.
Article IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company or any Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, or may amend,
modify or supplement the Collateral Documents, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or to
make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided such action pursuant to this
clause (1) shall not adversely affect the interests of any Holder in
any respect;
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company or to make any other change that does not adversely affect
the rights of any Holder; provided, that the Company has delivered to
the Trustee an Opinion of Counsel stating that such change does not
adversely affect the rights of any Holder;
(3) to provide for additional Collateral for or additional
Guarantors of the Notes;
(4) to provide for uncertificated Notes in addition to or in
place of certificated Notes in compliance with this Indenture; or
(5) to comply with the TIA.
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Section 9.2. Amendments, Supplemental Indentures and Waivers with
Consent of Holders.
Subject to Section 6.8 and the last sentence of this paragraph, with
the consent of the Holders of a majority in aggregate principal amount of then
outstanding Notes by written act of said Holders delivered to the Company and
the Trustee, the Company and any Guarantor, when authorized by Board
Resolutions, and the Trustee may amend or supplement the Mortgage, this
Indenture or the Notes or enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Mortgage, this Indenture or the Notes
or of modifying in any manner the rights of the Holders under the Collateral
Documents, this Indenture or the Notes. Subject to Section 6.8 and the last
sentence of this paragraph, the Holder or Holders of a majority in aggregate
principal amount of then outstanding Notes not held by Affiliates of the Issuer
may waive compliance by the Company or any Guarantor with any provision of the
Collateral Documents, this Indenture or the Notes. Notwithstanding the foregoing
provisions of this Section 9.2, no such amendment, supplemental indenture or
waiver shall, without the consent of the Holders of at least 66 2/3% of the
aggregate principal amount of outstanding Notes not held by Affiliates of the
Issuer, change any provision of Article IV, Article XII or (except for the
Stated Maturity, which is governed by clause (4) (below) extend any Maturity
Date of any Note, and no such amendment, supplemental indenture or waiver shall,
without the consent of the Holder of each outstanding Note affected thereby:
(1) change the percentage of principal amount of Notes whose
Holders must consent to an amendment, supplement or waiver of any
provision of this indenture or the securities;
(2) reduce the rate or extend the time for payment of interest
on any Note;
(3) reduce the principal amount of any Note;
(4) change the Stated Maturity of any Note;
(5) alter the redemption provisions of Article III in a manner
adverse to any Holder;
(6) make any changes in the provisions concerning waivers of
Defaults or Events of Default by Holders of the Notes or the rights of
Holders to recover the principal or premium of, interest on, or
redemption payment with respect to, any Note;
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(7) make any changes in Section 6.4, 6.7 or this third
sentence of this Section 9.2;
(8) make the principal of, or the interest on, any Note
payable with anything or in any manner other than as provided for in
this Indenture and the Notes as in effect on the date hereof; or
(9) make the Notes subordinated in right of payment to any
extent or under any circumstances to any other indebtedness.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
After an amendment, supplement or waiver under this Section 9.2 or 9.4
becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
Section 9.3. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder may revoke the consent as to
his Note or portion of his Note by written notice to the Company or the person
designated by the Company as the person to whom consents should be sent if such
revocation is received by the Company or such person before the date on which
the Trustee receives an Officers' Certificate Certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.
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The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those persons who were Holders at such record date, and only those persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Noteholder, unless it makes a change described in any of clauses (1)
through (8) of Section 9.2, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided, however, that any such waiver shall not
impair or affect the right of any Holder to receive payment of principal and
premium and interest on a Note, on or after the respective dates set for such
amounts to become due and payable expressed in such Note, or to bring suit for
the enforcement of any such payment on or after such respective dates.
Section 9.5. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee or
require the Holder to put an appropriate notation on the Note. The Trustee may
place an appropriate notation on the Note about the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue, the Guarantors shall endorse and
the Trustee shall authenticate a new Note that reflects the changed terms. Any
failure to make the appropriate notation or to issue a new Note shall not affect
the validity of such amendment, supplement or waiver.
Section 9.6. Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX, provided, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture.
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Article X.
MEETINGS OF NOTEHOLDERS
Section 10.1. Purposes for Which Meetings May Be Called.
A meeting of Noteholders may be called at any time and from time to
time pursuant to the provisions of this Article X for any of the following
purposes:
(a) to give any notice to the Company, any Guarantor or to the Trustee,
or to give any directions to the Trustee, or to waive or to consent to the
waiving of any Default or Event of Default hereunder and its consequences, or to
take any other action authorized to be taken by Noteholders pursuant to any of
the provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant to
the provisions of Article VI;
(c) to consent to a waiver pursuant to the provisions of Section 9.2;
or
(d) to take any other action (i) authorized to be taken by or on behalf
of the Holder or Holders of any specified aggregate principal amount of the
Notes under any other provision of this Indenture (including the selection of
the Consulting Professional), or authorized or permitted by law or (ii) which
the Trustee deems necessary or appropriate in connection with the administration
of this Indenture.
Section 10.2. Manner of Calling Meetings.
The Trustee may at any time call a meeting of Noteholders to take any
action specified in Section 10.1, to be held at such time and at such place in
The City of New York, State of New York or elsewhere as the Trustee shall
determine. Notice of every meeting of Noteholders, setting forth the time and
place of such meeting and in general terms the action proposed to be taken at
such meeting, shall be mailed by the Trustee, first-class postage prepaid, to
the Company, the Guarantors and to the Holders at their last addresses as they
shall appear on the registration books of the Registrar, not less than 10 nor
more than 60 days prior to the date fixed for a meeting. The Company shall pay
the costs and expenses of preparing and mailing such notice.
Any meeting of Noteholders shall be valid without notice if the Holders
of all Notes then outstanding are present in person or by proxy, or if notice is
waived before or after the meeting by the Holders of all Notes outstanding, and
66
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.3. Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a Board Resolution, or the
Holders of not less than 10% in aggregate principal amount of the securities
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders to take any action specified in Section 10.1, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have mailed the notice of such meeting within
20 days after receipt of such request, then the Company or the Holders of Notes
in the amount above specified may determine the time and place in The City of
New York, State of New York or elsewhere for such meeting and may call such
meeting for the purpose of taking such action, by mailing or causing to be
mailed notice thereof as provided in Section 10.2, or by causing notice thereof
to be published at least once in each of two successive calendar weeks (on any
Business Day during such week) in a newspaper or newspapers printed in the
English language, customarily published at least five days a week of a general
circulation in The City of New York, State of New York, the first such
publication to be not less than 10 nor more than 60 days prior to the date fixed
for the meeting.
Section 10.4. Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Noteholders, a person shall
(a) be a registered Holder of one or more Notes, or (b) be a person appointed by
an instrument in writing as proxy for the registered Holder or Holders of Notes.
The only persons who shall be entitled to be present or to speak at any meeting
of Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company, the Guarantors and their counsel.
Section 10.5. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment.
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any action by or
any meeting of Noteholders, in regard to proof of the holding of Notes and of
the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, and submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think appropriate. Such regulations may fix a
record date and time for determining the Holders of record of Notes entitled to
vote at such meeting, in which case those and only those persons who are Holders
of securities at the record date and time so fixed, or their proxies, shall be
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entitled to vote at such meeting whether or not they shall be such Holders at
the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote.
At any meeting each Noteholder or proxy shall be entitled to one vote
for each $1,000 principal amount of Notes held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Notes challenged as not outstanding and ruled by the chairman of the meeting to
be not then outstanding. The chairman of the meeting shall have no right to vote
other than by virtue of Notes held by him or instruments in writing as aforesaid
duly designating him as the proxy to vote on behalf of other Noteholders. Any
meeting of Noteholders duly called pursuant to the provisions of Section 10.2 or
Section 10.3 may be adjourned from time to time by vote of the Holder or Holders
of a majority in aggregate principal amount of the Notes represented at the
meeting and entitled to vote, and the meeting may be held as so adjourned
without further notice.
Section 10.6. Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of Noteholders
shall be by written ballots on which shall be subscribed the signatures of the
Holders of Notes or of their representatives by proxy and the principal amount
of the Notes voted by the ballot. The permanent chairman of the meeting shall
appoint two inspectors of votes, who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Noteholders
shall be prepared by the secretary of the meeting and there shall be attached to
such record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more persons having knowledge of
the facts, setting forth a copy of the notice of the meeting and showing that
such notice was mailed as provided in Section 10.2 or published as provided in
Section 10.3. The record shall be signed and verified by the affidavits of the
permanent chairman and the secretary of the meeting and one of the duplicates
shall be delivered to the Company and the other to the Trustee to be preserved
by the Trustee, the latter to have attached thereto the ballots voted at the
meeting.
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Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7. Exercise of Rights of Trustee or Noteholders May Not Be
Hindered or Delayed by Call of Meeting.
Nothing contained in this Article X shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Noteholders or any
rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Noteholders under any of the provisions of
this Indenture or of the Notes.
Article XI.
APPLICATION OF TRUST MONEYS
Section 11.1. "Trust Moneys" Defined.
All Cash or Cash Equivalents received by the Trustee:
(a) as Boat Conveyance Proceeds; or
(b) upon the release of Property from the Lien of any Collateral
Document; or
(c) as proceeds of insurance upon any, all or part of the Collateral
(other than any liability insurance proceeds payable to the Trustee for any
loss, liability or expense incurred by it) including proceeds of any insurance
received pursuant to Section ___ of the Mortgage or pursuant to the
corresponding provisions of the Other Boat Mortgage; or
(d) as proceeds of any other sale or other disposition of all or any
part of the Collateral by or on behalf of the Trustee (including any proceeds
received pursuant to Section ___ of the Mortgage or the corresponding provisions
of the Other Boat Mortgage) or any collection, recovery, receipt, appropriation
or other realization of or from all or any part of the Collateral pursuant to
the Collateral Documents or otherwise; or
(e) for application under this Article XI as elsewhere provided in this
Indenture or the Collateral Documents, or whose disposition is not elsewhere
otherwise specifically provided for herein or in the Collateral Documents;
(all such moneys being herein sometimes called "Trust Moneys"; provided,
however, that Trust Moneys shall not include any Property deposited with the
Trustee pursuant to Section 3.7 or Article VIII or delivered to or received by
the Trustee for application in accordance with Section 6.6 hereof) shall be
subject to a Lien and security interest in favor of the Trustee and shall be
held by the Trustee for the benefit of the Holders as a part of the Collateral
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and, upon any entry upon or sale or other disposition of the Collateral or any
part thereof pursuant to the Collateral Documents, said Trust Moneys shall be
applied in accordance with Section 6.6; but, prior to any such entry, sale or
other disposition, all or any part of the Trust Moneys may be withdrawn, and
shall be released, paid or applied by the Trustee, from time to time as provided
in this Article XI.
On the Issue Date there shall be established and, at all times
hereafter until this Indenture shall have terminated, there shall be maintained
by the Trustee , an account which shall be entitled the "Collateral Account"
which shall be established and maintained by the Trustee at its offices in the
Borough of Manhattan, The City of New York. The Collateral Account shall
initially contain the following "Basic Sub-Accounts" established by and with the
Trustee:
(i) the Boat Conveyance Proceeds Sub-Account;
(ii) the Net Awards Collateral Sub-Account;
(iii) the Guarantor Collateral Sub-Account;
(iv) the Company Collateral Sub-Account; and
(v) the Company Payment Sub-Account.
All Trust Moneys which are received by the Trustee shall be deposited
in the Collateral Account as follows:
(A) all Boat Conveyance Proceeds shall be deposited into the
Boat Conveyance Proceeds Sub-Account;
(B) all Net Awards shall be deposited into the Net Awards
Sub-Account
(C) all Cash proceeds of Collateral owned by the Guarantors
shall be deposited into the Guarantor Collateral Sub-Account;
(C) all Trust Moneys paid to the Trustee for the purpose and
in anticipation of the distribution of same to the Holders pursuant to
any redemption or principal amortization shall be deposited in the
Company Payment Sub-Account; and
(D) all other Trust Moneys shall be deposited in the Company
Collateral Sub-Account.
Trust Moneys thereafter shall be held, applied and/or disbursed by the Trustee
in accordance with the terms of this Indenture. The Trustee shall have a Lien on
and security interest in the Collateral Account and the Basic Sub-Accounts and
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all Cash and Cash Equivalents therein from time to time for the benefit of the
Holders as part of the Collateral.
Section 11.2. Withdrawals of Net Awards.
To the extent that any Trust Moneys consist of a Net Award received by
the Trustee pursuant to the provisions of Article __ of the Mortgage or the
corresponding provisions of the Other Boat Mortgage (which Net Award is required
to be applied, or may be applied by the applicable mortgagor or pledgor, to
effect a restoration to the affected Collateral), such Trust Moneys may be
withdrawn by the Company and shall be paid by the Trustee upon a request by a
Company Order to reimburse the Company to repair, rebuild or replace the
Property destroyed, damaged or taken, upon receipt by the Trustee of the
following:
(a) an Officers' Certificate of the Company dated not more than 30 days
prior to the date of the application for the withdrawal and payment of such
Trust Moneys:
(i) that expenditures have been made, or costs incurred, by
the Company in a specified amount for the purpose of making certain
repairs, rebuildings and replacements of the Collateral, which shall be
briefly described, and stating the fair value thereof to the Company at
the date of the expenditure or incurrence thereof by the Company;
(ii) that no part of such expenditures or costs has been or is
being made the basis for the withdrawal of any Trust Moneys in any
previous or then pending application pursuant to this Section 11.2;
(iii) that there is no outstanding Indebtedness, other than
costs for which payment is being requested and customary retainage not
to exceed ten per cent (10%);
(iv) that the Property to be repaired, rebuilt or replaced is
necessary or desirable in the conduct of the business of the Company;
(v) whether any part of such repairs, rebuildings or
replacements within six months before the date of acquisition thereof
by the Company has been used or operated by others than the Company in
a business similar to that in which such Property has been or is to be
used or operated by the Company and whether the fair value to the
Company at the date of such acquisition, of such part of such repairs,
rebuildings or replacements is at least the greater of $25,000 and 1%
of the aggregate principal amount of the outstanding Notes;
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(vi) that no Default or Event of Default shall have occurred
and be continuing; and
(vii) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with;
(b) all documentation required under Section 314(d) of the TIA;
(c) an Architect's Certificate stating:
(i) that all Restoration work to which such request relates
has been done in compliance with the approved plans and specifications
and in accordance with all provisions of law;
(ii) the sums requested are required to reimburse the Company
for payments by the Company to, or are due to, the contractors,
subcontractors, materialmen, laborers, engineers, architects or other
persons rendering services or materials for the restoration, and that,
when added to the sums, if any, previously paid out by Trustee, such
sums do not exceed the cost of the restoration to the date of such
Architect's Certificate;
(iii) whether or not the Estimate continues to be accurate,
and if not, what the entire cost of such restoration is then estimated
to be; and
(iv) that the amount of the Net Award plus any amount received
by the Trustee under a surety, guaranty, letter of credit or commitment
remaining after giving effect to such payment will be sufficient on
completion of the restoration to pay for the same in full (including,
in detail, an estimate by trade of the remaining costs of completion);
(d) an Opinion of Counsel (who shall be outside counsel to the Company)
substantially stating:
(i) that the instruments that have been or are therewith
delivered to the Trustee conform to the requirements of this Indenture
and the Collateral Documents, and that, upon the basis of such requests
of the Company and the accompanying documents specified in this Section
11.2, all conditions precedent herein provided for relating to such
withdrawal and payment have been complied with, and the Trust Moneys
whose withdrawal is then requested may be lawfully paid over under this
Section 11.2;
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(ii) that the Collateral Documents create a valid and
perfected Lien on such repairs, rebuildings and replacements, that the
same and every part thereof are subject to no Liens prior to the Lien
of the Collateral Documents, except Liens of the type permitted under
the Collateral Documents to which the Property so destroyed or damaged
shall have been subject at the time of such destruction or damage; and
(iii) that all of the right, title and interest in and to said
repairs, rebuildings or replacements, or combination thereof, of the
Company are then subject to the Lien of the Collateral Documents;
(e) each such request shall be accompanied by:
(i) an Opinion of Counsel or a title insurance policy, binder
or endorsement satisfactory to the Trustee confirming that there has
not been filed with respect to all or any part of the mortgaged
Property any Lien which could have priority over the Lien of the
Mortgage or the Other Boat Mortgage, as the case may be other than
those Liens which will be satisfied with the proceeds being advanced;
and
(ii) an Officer's Certificate stating that all certificates,
permits, licenses, waivers, other documents, or any combination of the
foregoing required by law in connection with or as a result of such
Restoration to the extent then completed have been obtained.
Upon compliance with the foregoing provisions of this Section 11.2, the
Trustee shall pay on the written request of the Company an amount of Trust
Moneys of the character aforesaid equal to the amount of the expenditures or
costs stated in the Officers' Certificate required by clause (i) of subsection
(a) of this Section 11.2, or the fair value to the Company of such repairs,
rebuildings and replacements stated in such Officers' Certificate (or in such
independent appraiser's or independent financial advisor's certificate, if
required by the TIA), whichever is less; provided, however, that notwithstanding
the above, so long as no Default or Event of Default shall have occurred and be
continuing, in the case that any insurance proceeds or award for such Property
or proceeds of such sale does not exceed the lesser of $25,000 or 1% of the
principal amount of the then outstanding Notes, and, in the good faith estimate
of the Company, such destruction or damage resulting in such insurance proceeds
does not detrimentally affect the value or use of the applicable Collateral in
any material respect, upon delivery to the Trustee of an Officers' Certificate
of the Company to such effect, the Trustee shall release to the Company such
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insurance proceeds or condemnation award for such Property or proceeds of such
sale, free of the Lien hereof and of the Collateral Documents.
Section 11.3. Withdrawal of Boat Conveyance Proceeds For Purchase or
Qualified Lessee Lease of Substitute Boat.
To the extent that any Trust Moneys consist of Boat Conveyance Proceeds
received by the Trustee pursuant to the provisions of Section 4.4, and the
Company intends to use such Boat Conveyance Proceeds pursuant to the provisions
of Section 4.4(b), such Boat Conveyance Proceeds may be withdrawn by the Company
and shall be paid by the Trustee to the Company (or as otherwise directed by the
Company) upon a Company Order to the Trustee and upon receipt by the Trustee of
the following:
(a) A notice (each, a "Boat Conveyance Proceeds Release Notice"), which
shall (i) refer to this Section 11.3, (ii) describe with particularity the use
to be made by the Company (including, without limitation, (A) the amount of the
purchase price of such Qualified Substitute Boat and, if such withdrawal is for
the payment of interest on or a principal installment of the financing of such
purchase price, the amount of such current payment and the outstanding principal
amount of such financing, (B) the amount and nature of any Capital Expenditures,
and (C) the calculation of Adjusted Rent Obligations for which such Company
Order is made) with respect to the released Boat Conveyance Proceeds in
accordance with Section 4.4(b) and (iii) be accompanied by a counterpart of the
instruments proposed to give effect to the release fully executed and
acknowledged (if applicable) by all parties thereto other than the Trustee;
(b) An Officers' Certificate certifying that (i) the release of the
Boat Conveyance Proceeds complies with the terms and conditions of Section 4.4
of this Indenture, (ii) there is no Default or Event of Default in effect or
continuing on the date thereof (both before and after giving effect to the
proposed use of the Boat Conveyance Proceeds), (iii) the release of the Boat
Conveyance Proceeds will not result in a Default or Event of Default hereunder
and (iv) all conditions precedent to such release have been complied with;
(c) All documentation required under Section 314(d) of the TIA;
(d) If the Boat Conveyance Proceeds are to be used for in whole or in
part for the purchase price of a Qualified Substitute Boat or the financing
thereof or the servicing and amortization of such financing from time to time,
the Company shall also deliver to the Trustee:
(i) an Other Boat Mortgage and other agreements or instruments
in recordable form sufficient to grant to the Trustee, for the benefit
of the Holders, a valid perfected first priority Lien on (i) such
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Qualified Substitute Boat, and (ii) all contracts, agreements and other
purchase documentation, and all other indemnification and other
contract rights, of the Company arising out of or related to its
purchase of such Qualified Substitute Boat, subject only to Liens
permitted pursuant to Section 5.13 hereof;
(ii) a policy of title insurance issued by a nationally
recognized title insurance company and approved by the Trustee, which
approval shall not be unreasonably withheld (or an endorsement to the
title insurance policy issued to the trustee on the Issue Date or a
commitment to issue a policy of title insurance or an endorsement),
insuring that the Lien of this Indenture and the Collateral Documents
constitutes a valid and perfected first priority Lien on such Qualified
Substitute Boat in an aggregate amount equal to the fair value of the
Qualified Substitute Boat, together with an Officers' Certificate
stating that any specific exceptions to such title insurance are Liens
permitted pursuant to Section 5.13 hereof and containing such
endorsements and other assurances of the type included in the title
insurance policy delivered to the Trustee on the Issue Date with
respect to the Mortgage [this may be required to be a legal opinion
because of admiralty]; and
(iii) evidence of payment or a closing statement indicating
payment of all title premiums, recording charges, transfer taxes and
other costs and expenses, including reasonable legal fees and
disbursements of counsel for each of the Trustee (and any local
counsel), that may be incurred to validly and effectively subject the
Qualified Substitute Boat to the Lien of any applicable Collateral
Document and to perfect such Lien;
provided, however, that if the deliveries required under clauses (d)(i), (ii),
and (iii) above have been previously made to the Trustee under the provisions of
this clause (d), the Company shall be required only to deliver an Officer's
Certificate certifying that the documents, agreements and instruments delivered
under clauses (d)(i), (ii) and (iii) above are in full force and effect;
(e) If the Boat Conveyance Proceeds are to be used in whole or in part
for the payment of the Adjusted Rent Obligations of the Company pursuant to a
Qualified Lessee Lease, the Company shall also deliver to the Trustee:
(i) a leasehold boat mortgage or other instruments in
recordable form sufficient to grant to the Trustee, for the benefit of
the Holders, a valid first priority Lien on all right, title and
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interest of the Company in the Qualified Lessee Lease; provided,
however, that if the deliveries required under this clause (i) have
been previously made to the Trustee under the provisions of this clause
(e), the Company shall be required only to deliver an Officer's
Certificate certifying that the documents, agreements and instruments
delivered under this clause(i) are in full force and effect;
(ii) an Opinion of Counsel and a title insurance policy,
binder or endorsement satisfactory to the Trustee, in each case
confirming that there has not been filed with respect to all or any
part of the Substitute Boat which is the subject of the Qualified
Lessee Lease any Lien which could have priority over the Lien of the
leasehold boat mortgage of the Trustee; and
(iii) an Officer's Certificate certifying that (A) such
Qualified Lessee Lease permits the interest of the Company to be
encumbered by such leasehold boat mortgage or other instruments
evidencing the Liens of the Trustee, (B) the Company's interest in such
Qualified Lessee Lease is assignable to the Trustee or its designee
upon notice to, but without the consent of, the lessor thereunder, and,
in the event that it is so assigned, is further assignable by the
Trustee or its designee and their successors and assigns upon notice
to, but without a need to obtain the consent of, such lessor, and upon
such assignment the assignee shall be fully released from all liability
thereunder; (C) such Qualified Lessee Lease is in full force and effect
and no default has occurred under such lease, nor is there any existing
condition which, but for the passage of time or the giving of notice,
would result in a default under the terms of such lease; (D) such
Qualified Lessee Lease requires the lessor thereunder to give notice of
any default by the Lessee to the Trustee, and such Qualified Lessee
Lease further provides that no notice of termination given under such
lease shall be effective against the Trustee unless a copy has been
delivered to the Trustee in the manner described in such lease; (E) a
mortgagee is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of the
Lessee under such lease) to cure any default under such Qualified
Lessee Lease, which is curable after the receipt of notice of any such
default before the lessor thereunder may terminate such lease, and if
such Qualified Lessee Lease is terminated, the lessor thereunder shall
at the option of the Trustee enter into a new lease on exactly the
terms of the Qualified Lessee Lease; (F) such Qualified Lessee Lease
76
does not impose any restrictions on subletting which would be viewed as
commercially unreasonable by prudent ship lending institutions, and
such Qualified Lessee Lease contains a covenant that the lessor
thereunder is not permitted, in the absence of any uncured default, to
disturb the possession, interest or quiet enjoyment of any Lessee in
the relevant portion of the Property subject to such lease for any
reason, or in any manner, which would adversely affect the security
provided by the related leasehold boat mortgage; (G) all amounts
requested under the Company Order are to pay Adjusted Rent Obligations
of the Company; and (H) the Lessee's interest in the Substitute Boat
which is subject to such Qualified Lessee Lease is not subject to any
Lien other than the Qualified Lessee Lease and any Lien for taxes not
due and payable.
(f) An Opinion of Counsel stating that the documents that have been or
are therewith delivered to the Trustee conform to the requirements of this
Indenture and that all conditions precedent herein provided for (including,
without limitation, the conditions specified in clauses (d) and (e) of this
Section 11.3) relating to such application of Boat Conveyance Proceeds have been
complied with.
Upon compliance with the foregoing provisions of this Indenture, the
Trustee shall apply the Boat Conveyance Proceeds as directed and specified by
the Company
Section 11.4. Withdrawal of Boat Conveyance Proceeds For Construction
of Qualified Substitute Boat or for Capital Expenditures on such Qualified
Substitute Boat.
To the extent that any Trust Moneys consist of Boat Conveyance Proceeds
received by the Trustee pursuant to the provisions of Section 4.4, and the
Company intends to use such Boat Conveyance Proceeds for the construction of a
Qualified Substitute Boat pursuant to the provisions of Section 4.4(b), or for
Permitted Capital Expenditures, such Boat Conveyance Proceeds may be withdrawn
by the Company and shall be paid by the Trustee to the Company (or as otherwise
directed by the Company) upon a Company Order to the Trustee and upon the
following terms and conditions:
(a) The Qualified Substitute Boat shall be constructed and equipped,
and the Permitted Capital Expenditures shall be made, pursuant to plans and
specifications prepared by independent, licensed architects and engineers
(collectively, the "Plans"), a construction agreement and construction schedule
(collectively the "Construction Agreement") and a budget (the "Budget") which
shall have been approved in writing by the Consulting Professional, in its best
professional opinion, and a certificate of the Consulting Professional to that
effect shall have been delivered to the Trustee.
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(b) Disbursements for costs of constructing and equipping the Qualified
Substitute Boat or the Permitted Capital Expenditures included in the Budget,
shall be made as such costs are incurred, but not more often than monthly; the
amount of the costs which have been incurred shall be as is set forth and
approved, from time to time, in a certificate of the Consulting Professional and
such other evidence as may be reasonably required by the Trustee, less a
retention of 10% of such costs until the Qualified Substitute Boat or the
Permitted Capital Expenditures have been fully completed and equipped.
[(c) If at any time the Consulting Professional determines that the
unfunded cost of completing the construction and equipping of the Qualified
Substitute Boat or the Permitted Capital Expenditures exceeds the amount of the
Boat Conveyance Proceeds remaining in the Boat Conveyance Proceeds Sub-Account,
the Company shall deposit with the Trustee in the Boat Conveyance Proceeds
Sub-Account additional funds from some other source in an amount equal to such
excess, and such funds shall be used first to complete the construction and the
equipping of the Qualified Substitute Boat or the Permitted Capital
Expenditures.]
(d) Amounts shall be disbursed from the Boat Conveyance Proceeds
Sub-Account only for payment of costs specified in the Budget.
(e) The Qualified Substitute Boat, if constructed in accordance with
the Plans, will comply with all legal requirements, as evidenced by an opinion
of outside counsel for the Company satisfactory to the Consulting Professional.
(f) Upon demand of the Consulting Professional, the Company, at its
sole cost and expense, shall correct promptly any defect in the Qualified
Substitute Boat, any material departure from the Plans and any failure to comply
with applicable legal requirements, all to the satisfaction of the Consulting
Professional.
(g) The Company, without the prior written consent of the Consulting
Professional, shall not make (a) any single change to the Plans that would
require the Company to incur greater than $25,000 in additional costs or (b) any
changes to the Plans that would in the aggregate, require the Company to incur
greater than $100,000 in additional costs. Furthermore, the Company shall
provide copies of all change orders, change bulletins and other revisions of the
Plans and the Construction Agreement to the Consulting Professional prior to the
commencement of any work reflecting such changes or revisions, regardless of
whether the Consulting Professional's prior approval is required.
(h) The Company shall pay or reimburse the Trustee and the Consulting
Professional for all expenses incurred by the Trustee and the Consulting
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Professional with respect to any and all transactions and matters contemplated
hereby including, without limitation, the fees of the Consulting Professional.
(i) The Trustee shall have received a certificate from the Consulting
Professional certifying that:
(i) it is satisfied that all past and current (if then due and
payable) taxes and assessments applicable to the Qualified Substitute
Boat, the Permitted Capital Expenditure, or the Property on which the
Permitted Capital Expenditure is to be constructed (the "Improved
Property"), or payable by the Company have been paid;
(ii) if the Qualified Substitute Boat or the Permitted Capital
Expenditure is constructed as planned, the Qualified Substitute Boat or
the Permitted Capital Expenditure, as the case may be, shall be
suitable for its intended purpose and will be capable of being put into
service without the need for additional expenditures except as set
forth in the approved Budget;
(iii) it is satisfied that, and it has received an opinion of
counsel addressed to the Trustee for the benefit of the Holders, that
the Trustee has a valid perfected security interest in the Qualified
Substitute Boat, the Permitted Capital Expenditure and the Improved
Property and all furniture, fixtures, equipment thereon or forming a
part thereof or for which advances hereunder have been made free and
clear of all other Liens, claims and encumbrances other than Liens
permitted pursuant to Section 5.13 hereof;
(iv) the Contractor shall have entered into an agreement with
the Consulting Professional on behalf of the Trustee in form and
substance satisfactory to the Trustee pursuant to which the Contractor
shall agree that it shall not make any changes to the Plans or execute
any change orders except as expressly permitted hereby and that in the
event of a default of the Company under the Construction Contract or
the bankruptcy of the Company the Contractor shall, at the election of
the Trustee and the Consulting Professional continue to perform the
Construction Contract on its then executory terms for the benefit of
the Trustee;
(v) the Contractor has delivered to the Consulting
Professional a list of its subcontractors which is current as of the
date of the certificate;
(vi) it has received certified copies of duly executed
counterparts of the Construction Agreement and the requisite permits,
licenses and authorizations;
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(vii) it has received a copy of the Plans, satisfactory in
form and content to the Trustee and the Consulting Professional.
(viii) it has received the Budget, together with a cost
breakdown and schedule for construction of the Qualified Substitute
Boat or the Permitted Capital Expenditures setting forth all items of
costs and expenses and estimating the construction trade schedules
required to complete the construction and equipping of the Qualified
Substitute Boat or the Permitted Capital Expenditures.
(ix) it has received a critical path method schedule for
completion of the construction and equipping of the Qualified
Substitute Boat or the Permitted Capital Expenditures, which schedule
shall be in form and substance satisfactory to the Consulting
Professional; and
(x) it has received an Officers' Certificate from the Company
certifying that (A) the release of the Boat Conveyance Proceeds for the
construction of the Qualified Substitute Boat or the Permitted Capital
Expenditures complies with the terms and conditions of Section 4.4 of
this Indenture, (B) there is no Default or Event of Default in effect
or continuing on the date thereof (both before and after giving effect
to the proposed use of the Boat Conveyance Proceeds), (C) the release
of the Boat Conveyance Proceeds pursuant to the Company Order will not
result in a Default or Event of Default hereunder, (D) the
representations and warranties which are contained in the Indenture or
any certificate, document or financial or other statement furnished
under or in connection with the Indenture are correct on and as of the
date of the advance as if made on and as of such date, (E) all utility
services and facilities necessary for the construction of Permitted
Capital Improvements without impediment or delay will be available at
or within the boundaries of the Improved Property, and all utility
services and facilities necessary for the operation of Permitted
Capital Improvements for its intended purposes will be available at or
within the boundaries of the Improved Property when needed, (F) all
required permits, authorizations, licenses and certificates for the
construction of the Qualified Substitute Boat or the Permitted Capital
Improvements have been obtained and are in full force and effect on and
as of such date, (G) expenditures have been made, or costs incurred, by
the Company in a specified amount for the construction of the Qualified
Substitute Boat or the Permitted Capital Expenditures, which shall be
briefly described, and stating the fair value thereof to the Company at
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the date of the expenditure or incurrence thereof by the Company; (H)
no part of such expenditures or costs has been or is being made the
basis for the withdrawal of any Boat Conveyance Proceeds in any
previous or then pending application pursuant to this Section 11.4; (I)
there is no outstanding Indebtedness, other than costs for which
payment is being requested and customary retainage not to exceed ten
per cent (10%); (J) the Qualified Substitute Boat or Permitted Capital
Expenditures is necessary or desirable in the conduct of the business
of the Company; (K) the Qualified Substitute Boat, if constructed in
accordance with the Plans, will comply with all legal requirements; and
(L) all conditions precedent to such release have been complied with.
(j) All of the foregoing items and all other documents and legal
matters in connection with the transactions contemplated by this Indenture shall
be satisfactory in form and substance to the Trustee.
(k) The Collateral Documents shall constitute a valid lien on the
Collateral (including the Improved Property, unincorporated work and materials)
for the full amount of the Boat Conveyance Proceeds advanced to and including
such date. The Company shall deliver to the Trustee a title insurance policy,
binder or endorsement on the date of each Company Order confirming that there
has not been filed with respect to all or any part of the Improved Property any
Lien which has not been discharged of record, other than as disclosed by surveys
resulting from the prosecution of work pursuant to the approved Plans.
(l) All materials and fixtures incorporated in the construction of the
Qualified Substitute Boat or the Permitted Capital Expenditures shall have been
purchased so that their absolute ownership shall have vested in the Company
prior to the Trustee making advances of the Boat Conveyance Proceeds, the
proceeds of which are used to purchase such materials and fixtures, and the
Company shall have produced and furnished, if required by the Trustee, the
contracts, bills of sale or other agreements under which title to such materials
and fixtures is claimed.
(m) The Consulting Professional and the Trustee shall have received a
statement of the Company, in form and substance satisfactory to the Trustee,
setting forth the names, addresses and amounts due or to become due as well as
the amounts previously paid to every contractor, subcontractor, and supplier
furnishing materials for or performing labor on the construction of any part of
the Qualified Substitute Boat.
(n) The Trustee shall have received and approved (i) an inspection
report of the Consulting Professional covering the progress of construction,
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conformity of the work with the Plans, quality of work completed and percentage
of work completed prepared in a professional manner in accordance with industry
norms and (ii) an Officer's Certificate requesting such disbursement,
satisfactory in form and substance to the Consulting Professional, with
appropriate insertions, accompanied by true copies of unpaid invoices, receipted
bills and lien waivers, and such other supporting information as the Consulting
Professional may reasonably request.
(o) All instruments relating to each advance and all actions taken on
or prior to each advance shall be reasonably satisfactory to the Trustee, and
the Trustee shall have been furnished with such documents, reports,
certificates, affidavits and other information, in form and substance reasonably
satisfactory to the Trustee, as the Trustee may require to evidence compliance
with all of the provisions of the Indenture
(p) The Company shall have furnished to the Trustee lien waivers and
subordination agreements in form and substance reasonably satisfactory to the
Consulting Professional from such contractors, subcontractors, suppliers and
materialmen as the Consulting Professional may require, evidencing that they
have been paid in full (less retainage) for all work performed or materials
supplied to the date of the Company's request for such advance.
(q) The Qualified Substitute Boat or the Permitted Capital Expenditures
shall not have been materially damaged by fire or other casualty unless there
shall have been received, by the Trustee or a person approved by the Trustee,
insurance proceeds sufficient in the reasonable judgment of the Trustee after
consultation with the Consulting Professional, to effect satisfactory
restoration and completion of the Qualified Substitute Boat on or before the
date that is fifteen months from the last day of the Waiting Period.
(r) The Qualified Substitute Boat or the Permitted Capital Expenditures
shall not be deemed completed for purposes of this Indenture until all of the
conditions set forth in this subsection shall have been satisfied.
(i) The Qualified Substitute Boat shall have been completed
substantially in accordance with the Plans and accepted by the Company
subject to completion of any minor "punch list" items having an
aggregate cost to complete or repair not to exceed $100,000; and
(ii) The Trustee shall have received the following, in each
case in form and substance satisfactory to the Trustee:
(A) evidence of the approval by all appropriate
Governmental Authorities of the Qualified Substitute Boat as
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being complete as to construction including, without
limitation, a copy of a certificate of occupancy, if
applicable, or other permits, certificates or authorizations
as the Consulting Professional deems appropriate
(B) the certification of (1) the Architect and (2)
the Contractor that to the best of their knowledge the
Qualified Substitute Boat has been completed substantially in
accordance with the Plans, that connection has been made to
all appropriate utility facilities and that the Qualified
Substitute Boat is ready for occupancy.
(s) All other documentation required under Section 314(d) of the TIA
and not described above shall be delivered to the Trustee with any Company Order
delivered pursuant to the terms of this Section 11.4.
Section 11.1. Investment of Trust Moneys.
All or any part of any Trust Moneys held by the Trustee shall from time
to time be invested or reinvested by the Trustee in any Cash Equivalents
pursuant to the written direction of the Company, which shall specify the Cash
Equivalents in which Trust Moneys shall be invested. Unless an Event of Default
occurs and is continuing, any interest on such Cash Equivalents (in excess of
any accrued interest paid at the time of purchase) that may be received by the
Trustee shall be forthwith paid to the Company. Such Cash Equivalents shall be
held by the Trustee as a part of the Collateral, subject to the same provisions
hereof as the cash used by it to purchase such Cash Equivalents.
The Trustee shall not be liable or responsible for any loss resulting
from such investments or sales except only for its own grossly negligent action,
its own grossly negligent failure to act or its own willful misconduct in
complying with this Section 11.5.
Article XII.
GUARANTY
Section 12.1. Guaranty.
(a) In consideration of good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, each of the Guarantors hereby
irrevocably and unconditionally guarantees (the "Guaranty") to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Company under this Indenture or
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the Notes, that: (w) the principal and premium (if any) of and interest on the
Notes will be paid in full when due, whether at the maturity or interest payment
date, by acceleration, call for redemption, or otherwise; (x) all other
obligations of the Company to the Holders or the Trustee under this Indenture or
the Notes will be promptly paid in full or performed, all in accordance with the
terms of this Indenture and the Notes; and (y) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, they will
be paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at maturity, by acceleration, call for redemption
or otherwise. Failing payment when due of any amount so guaranteed for whatever
reason, each Guarantor shall be obligated to pay the same before failure so to
pay becomes an Event of Default.
(b) Each Guarantor hereby agrees that its obligations with regard to
this Guaranty shall be unconditional, irrespective of the validity, regularity
or enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any delays in obtaining or realizing upon or failures to
obtain or realize upon collateral, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company or right to require
the prior disposition of the assets of the Company to meet its obligations,
protest, notice and all demands whatsoever and covenants that this Guaranty will
not be discharged except by complete performance of the obligations contained in
the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to either the Company or any Guarantor, or any Custodian, Trustee, or
similar official acting in relation to either the Company or such Guarantor, any
amount paid by either the Company or such Guarantor to the Trustee or such
Holder, this Guaranty, to the extent theretofore discharged, shall be reinstated
in full force and effect. Each Guarantor agrees that it will not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between such
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 6.1 for the purposes of this Guaranty, notwithstanding any
stay, injunction or other prohibition preventing such acceleration as to the
Company of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.1,
84
those obligations (whether or not due and payable) will forthwith become due and
payable by each of the Guarantors for the purpose of this Guaranty.
(d) It is the intention of each Guarantor and the Company that the
obligations of each Guarantor hereunder shall be in, but not in excess of, the
maximum amount permitted by applicable law. Accordingly, if the obligations in
respect of the Guaranty would be annulled, avoided or subordinated to the
creditors of any Guarantor by a court of competent jurisdiction in a proceeding
actually pending before such court as a result of a determination both that such
Guaranty was made without fair consideration and, immediately after giving
effect thereto, such Guarantor was insolvent or unable to pay its debts as they
mature or left with an unreasonably small capital, then the obligations of such
Guarantor under such Guaranty shall be reduced by such court if such reduction
would result in the avoidance of such annulment, avoidance or subordination;
provided, however, that any reduction pursuant to this paragraph shall be made
in the smallest amount as is strictly necessary to reach such result. For
purposes of this paragraph, "fair consideration", "insolvency", "unable to pay
its debts as they mature", "unreasonably small capital" and the effective times
of reduction, if any, required by this paragraph shall be determined in
accordance with applicable law.
Section 12.2. Certain Bankruptcy Events.
Each Guarantor hereby covenants and agrees that in the event of the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, such Guarantor shall not file (or join in any filing of), or otherwise
seek to participate in the filing of, any motion or request seeking to stay or
to prohibit (even temporarily) execution on the Guaranty and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the United States Bankruptcy Code or otherwise.
Article XIII.
MISCELLANEOUS
Section 13.1. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
Section 13.2. Notices.
Any notices or other communications to the Company, the Guarantors or
the Trustee required or permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand delivery, by telex, by telecopier or
85
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company or any Guarantor:
Crescent City Capital Development Corporation
1400 Annunciation Street
New Orleans, Louisiana 70131
Attention: Chief Financial Officer
with a copy to:
Casino Magic Corp.
711 Casino Magic Drive
Bay St. Louis. MS 39520
if to the Trustee:
with a copy to:
The Company, the Guarantors or the Trustee by notice to each other
party may designate additional or different addresses as shall be furnished in
writing by such party. Any notice or communication to the Company, the
Guarantors or the Trustee shall be deemed to have been given or made as of the
date so delivered, if personally delivered; when answered back, if telexed, when
receipt if acknowledged, if telecopied; and 5 Business Days after mailing if
sent by registered or certified mail, postage prepaid (except that a notice of
change of address shall not be deemed to have been given until actually received
by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
86
Section 13.3. Communications by Holders with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Guarantors, the Trustee, the Registrar and any other person shall
have the protection of TIA Section 312(c).
Section 13.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 13.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each
such person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an Opinion of
87
Counsel may rely on an Officers' Certificate or certificates of public
officials.
Section 13.6. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Noteholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
Section 13.7. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment is
a Saturday, a Sunday or a day on which banking institutions in New York, New
York are not required to be open. If a payment date is a Legal Holiday in New
York, New York, payment may be made at such place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.
Section 13.8. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. THE COMPANY AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMIT TO
THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS INDENTURE AND THE NOTES, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OR THE AFORESAID COURTS. THE COMPANY AND EACH GUARANTOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
TRIAL BY JURY AND ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
Section 13.9. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of any of the Company, the Guarantors or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used in
interpret this Indenture.
88
Section 13.10. No Recourse against Others.
A director, officer, employee, stockholder or incorporator, as such, of
the Company or the Guarantors shall not have any liability for any obligations
of the Company or the Guarantors under the Notes or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
reactions. Each Noteholder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
Section 13.11. Successors.
All agreements of the Company and the Guarantors in this Indenture and
the Notes shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successor.
Section 13.12. Duplicate Originals.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.
Section 13.13. Severability.
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected
or impaired thereby, it being intended that all of the provisions hereof shall
be enforceable to the full extent permitted by law.
Section 13.14. Table of Contents, Headings, Etc.
The Table of Contents, Reconciliation and Tie Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
89
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
CRESCENT CITY CAPITAL DEVELOPMENT
CORPORATION
By: _______________________________
Name:
Title:
Attest: __________________
[ ], as Trustee
By: _______________________________
Name:
Title:
Attest: ___________________
GUARANTORS:
Exhibit A
[FORM OF NOTE]
CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
11 1/2 SENIOR SECURED NOTES
DUE 1999
No. $
Crescent City Capital Development Corporation a Louisiana corporation
(hereinafter called the "Company," which term includes any successor under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to ______, or registered assigns, the principal sum of ________ Dollars, on
____________ __, 1999.
Interest Payment Dates: [March 31, June 30, September 30 and
December 31]
Record Dates:
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
Dated: ____________ __, 1996
CRESCENT CITY CAPITAL DEVELOPMENT
CORPORATION
By: _____________________________
Attest:
__________________________
Secretary
A-1
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within mentioned
Indenture.
_________________________________
[ ],
as Trustee
By: ____________________________
Authorized Signatory
Dated:
A-2
CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
11 1/2% Senior Secured Notes
due 1999
1. Principal
Crescent City Capital Development Corporation, a Louisiana corporation
(the "Company"), promises to pay the principal amount of this Note to the Holder
hereof on the date that is the third anniversary of the earlier of the following
dates: (i) 180 days after the Issue Date, and (ii) the first date the a
riverboat casino is opened by the Company for public gaming play in Bossier
City, Louisiana (the "Commencement Date").
Notwithstanding the foregoing, from and after the first date on which
the aggregate principal amount of Notes issued and outstanding under the
Indenture is equal to or less than $17,500,000 (the "Release Date"), the
principal amount of the Note, together with interest accrued thereon at a rate
of 11 1/2% per annum, shall be paid by the Company to the Holder hereof
quarterly in equal installments commencing on the first Interest Payment Date
(as defined below) after the Release Date and ending on the last Interest
Payment Date prior to the Commencement Date.
Notwithstanding all of the foregoing, from and after the date of the
occurrence of an Adverse State Action (as such term is defined in the Indenture
(the "Adverse State Action Date"), the principal amount of the Note, together
with interest accrued thereon at a rate of 11 1/2% per annum, shall be paid by
the Company to the Holder hereof quarterly in equal installments commencing on
the first Interest Payment Date (as defined below) after the Adverse State
Action Date and ending on the first Interest Payment Date immediately subsequent
to the date that the Adverse State Action takes effect.
In addition to the foregoing, on each Interest Payment Date commencing
_____________, 199__, and ending with the second Interest Payment Date after the
Release Date occurs, the Company will unconditionally pay to each Holder such
Holder's pro rata share of the Excess Cash Flow (as defined in the Indenture)
for the fiscal quarter of the Company and the Guarantors ending on the Interest
Payment Date immediately preceding such Interest Payment Date in reduction of
the then outstanding principal amount of the Note by an amount equal to such
Holder's pro rata share of the Excess Cash Redemption Amount (as defined below),
in addition to any regularly scheduled principal payment due on such Interest
Payment Date (if any); provided, however, that the Company will pay to each
Holder such Holder's pro rata share of the Excess Cash Flow for the last fiscal
quarter of a fiscal year of the Company and the Guarantors on the second
Interest Payment Date following the last date of such last fiscal quarter of the
fiscal year. The obligations of the Company under this paragraph shall continue
notwithstanding an Adverse State Action.
A-3
"Excess Cash Redemption Amount" for any Interest Payment Date means the
amount of the Aggregate Excess Cash Flow to be paid to the Holders on such
Interest Payment Date in reduction of the outstanding principal amount of the
Notes times a fraction, the numerator of which is 100 and the denominator of
which is (100 plus the Excess Cash Redemption Premium for such Interest Payment
Date).
"Excess Cash Redemption Premium" means (i) on any Interest Payment Date
occurring on or before the first anniversary of the Commencement Date, zero,
(ii) on any Interest Payment Date occurring on or after the first anniversary of
the Commencement Date but on or before the second anniversary of the
Commencement Date, ten percent (10%) times a fraction, the numerator of which is
the amount of calendar days having elapsed from and including the day after the
first anniversary of the Commencement Date to and including such Interest
Payment Date, and the denominator of which is three hundred and sixty-five
(365), and (iii) on any Interest Payment Date occurring after the second
anniversary of the Commencement Date but before the third anniversary of the
Commencement Date, twenty percent (20%) times a fraction, the numerator of which
is the amount of calendar days having elapsed from and including the day after
the second anniversary of the Commencement Date to and including such Interest
Payment Date, and the denominator of which is three hundred and sixty-four
(364).
2. Interest
Crescent City Capital Development Corporation, a Louisiana corporation
(the "Company"), promises to pay interest from the Issue Date on the principal
amount of this Note at a rate of 11 1/2% per annum. To the extent it is lawful,
the Company promises to pay interest on any interest payment due but unpaid on
such principal amount at a rate of 1 1/2% per annum compounded semi-annually.
The Company will pay interest quarterly on [March 31, June 30,
September 30 and December 31] of each year (each, an "Interest Payment Date"),
commencing ________, 1996. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from _______ __, 1996. Interest will be computed on the basis of a 360-day year
consisting of twelve 30 day months.
2. Method of Payment.
The Company shall pay principal of and interest on the Notes (except
defaulted interest) to the persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date.
Except as provided below, the Company shall pay principal and interest in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for payment of public and private debts ("U.S. Legal Tender").
A-4
However, the Company may pay principal and interest by wire transfer of Federal
funds, or interest by its check payable in such U.S. Legal Tender. The Company
may deliver any such interest payment to a Holder at the Holder's registered
address.
Together with any installments of principal the Company will deliver to
the Paying Agent or the Trustee a sufficient number of stickers, in form
satisfactory to the Trustee, setting forth the outstanding principal amount of
each Note after having given effect to such current principal payments, for
delivery by the Trustee to the Holders for the purpose of affixing such stickers
to their respective Notes. Upon delivery to the Paying Agent or the Trustee of
this Note, the registered Holder hereof should receive a sticker together with
such principal payment, which sticker will be affixed by the Paying Agent or the
Trustee to the top of the front page of this Note atop all such previous
stickers and which sticker will set forth the outstanding principal amount of
this Note after having given effect to the current principal payment.
Notwithstanding the foregoing, the Registrar will maintain a record of the
outstanding principal amount of all outstanding Notes. Failure by the Trustee to
affix such stickers shall in no way affect the legality, validity, or
transferability of this Note; provided, however, that in the event of any
discrepancy between the principal amount of this Note on its face and on the
records of the Registrar, the records of the Registrar will govern absent
manifest error.
3. Paying Agent and Registrar.
Initially, _______________ (the "Trustee") will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or Co-registrar
without notice to the Holders. The Company or any of its Subsidiaries may,
subject to certain exceptions, act as Paying Agent, Registrar or Co-registrar.
4. Indenture
The Company issued the Notes under an Indenture, dated ________ __,
1996 (the "Indenture"), between the Company, the Guarantors named therein and
the Trustee. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act, as in effect on the date of the Indenture. The Notes are subject
to all such terms, and Holders of Notes are referred to the Indenture and said
Act for a statement of them. The Notes are senior, secured obligations of the
Company limited in aggregate principal amount to $35,000,000.
5. Redemption.
The Notes may be redeemed at any time, in whole or in part, at the
election of the Company at the Redemption Price applicable for such Redemption
A-5
Date. The Redemption Price of this Note if so optionally redeemed is the amount
equal to the principal face amount of this Note plus the Redemption Premium as
of the Redemption Date of this Note.
"Redemption Premium" when used with respect to this Note when redeemed
or prepaid, in whole or in part, means (i) on any Redemption Date occurring on
or before the first anniversary of the Issue Date, zero, (ii) on any Redemption
Date occurring on or after the first anniversary of the Issue Date but on or
before the second anniversary of the Issue Date, ten percent (10%) times a
fraction the numerator of which is the amount of calendar days having elapsed
from and including the day after the first anniversary of the Issue Date to and
including such Redemption Date and the denominator of which is three hundred and
sixty-five (365), and (iii) on any Redemption Date occurring after the second
anniversary of the Issue Date and before the third anniversary of the Issue
Date, twenty percent (20%) times a fraction the numerator of which is the amount
of calendar days having elapsed from and including the day after the second
anniversary of the Issue Date to and including such Redemption Date and the
denominator of which is three hundred and sixty-four (364).
This Note may also be redeemed at any time pursuant to, and in
accordance with, any order of any Gaming Authority with appropriate jurisdiction
and authority relating to a Gaming License, or to the extent necessary in the
reasonable, good faith judgment of the Board of Directors of the Company to
prevent the loss, failure to obtain or material impairment or to secure the
reinstatement, of any material Gaming License, where in any such case such
redemption or acquisition is required to be found suitable or so qualified
within a reasonable period of time.
Any redemption of the Notes shall comply with Article III of the
Indenture.
6. Notice of Redemption.
Notice of redemption will be mailed by first class mail at least 30
days but not more than 45 days before the Redemption Date to each Holder of
Notes to be redeemed at his registered address. Notes in denominations larger
than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Notes called for redemption shall have
been deposited with the Paying Agent on such Redemption Date, the Notes called
for redemption will cease to bear interest and only right of the Holders of such
Notes will be to receive payment of the Reduction Price, including any accrued
and unpaid interest to the Redemption Date.
A-6
7. Denominations; Transfer; Exchange.
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer of,
or exchange Notes in accordance with, the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any Notes
selected for redemption.
8. Persons Deemed Owners.
The Registered Holder of a Note may be treated as the owner of it for
all purposes.
9. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee and the Paying Agent(s) will pay the money back to the
Company at its written request. After that, all liability of the Trustee and
such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits into an irrevocable trust with the
Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to pay the
principal of and interest on the Notes to redemption or maturity and complies
with the other provisions of the Indenture relating thereto, the Company will be
discharged from certain provisions of the Indenture and the Notes (including the
financial covenants, but excluding its obligation to pay the principal of and
interest on the Notes).
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the written consent of the Holders of a majority,
and in certain cases at least two-thirds, in aggregate principal amount of the
Notes then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, provide for Notes, or make any other change that does not
adversely affect the rights of any Holder of a Note.
A-7
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Company
and its Subsidiaries to, among other things, incur additional Indebtedness and
Disqualified Capital Stock, make payments in respect of its Capital Stock, enter
into transactions with Affiliates, incur Liens, sell assets, merge or
consolidate with any other person and sell, lease, transfer or otherwise dispose
of substantially all of its properties or assets. The limitations are subject to
a number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such limitations.
13. Security.
In order to secure the obligations under the Indenture, the Company,
the Guarantors and the Trustee have entered into certain security agreements in
order to create security interests in certain assets and properties of the
Company and the Guarantors.
14. Gaming Laws.
The rights of the Holder of this Note and any owner of any beneficial
interest in this Note are subject to the Gaming Laws and the jurisdiction and
requirements of the Gaming Authorities and the further limitations and
requirements set forth in the Indenture.
15. Successors.
When a successor assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor will be released from those
obligations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Notes then outstanding
may declare all the Notes to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture of the
Notes. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Notes then outstanding may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of Notes
notice of any continuing Default or Event of Default (except a Default in
payment of principal or interest), if it determines that withholding notice is
in their interest.
A-8
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such,
past, present or future, of the Company or any successor corporation shall have
any liability for any obligation of the Company under the Notes or the
Indenture. Each Holder of a Note by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Notes.
19. Authentication.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Note
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not, as
tenants in common), CUST (=Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
A-9
[FORM OF ASSIGNMENT]
I or we assign this Note to
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_________ and irrevocably appoint ________ agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
Date: __________ Signed: ______________________________________
_________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
A-10
EXHIBIT B
FORM OF GUARANTY
For value received, ________________, a _______________ corporation,
hereby unconditionally guarantees to the Holder of the Note upon which this
Guaranty is endorsed the due and punctual payment, as set forth in the Indenture
pursuant to which such Note and this Guaranty were issued, of the principal of,
premium (if any) and interest on such Note when and as the same shall become due
and payable for any reason according to the terms of such Note and which this
Guaranty is endorsed will not become effective until the Trustee signs the
certificate of authentication on such Note.
__________________________________
By: _____________________________
Attest: __________________________
B-1
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA
IN RE: NO. 95-12735-TMB
CRESCENT CITY CAPITAL CHAPTER 11
DEVELOPMENT CORPORATION
A REORGANIZATION CASE
DEBTOR UNDER CHAPTER 11 OF THE
BANKRUPTCY CODE
FIRST IMMATERIAL MODIFICATION TO
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
OF CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
NOW INTO COURT, through undersigned counsel, comes Crescent City
Capital Development Corporation ("Debtor" or "Crescent City") and respectfully
files this Second Immaterial Modification to Second Amended Chapter 11 Plan of
Reorganization of Crescent City Capital Development Corporation (hereinafter
referred to as "Immaterial Modification").
I.
Pursuant to 11 USC ss.1127 the proponent of a plan of reorganization
may modify such plan at any time prior to confirmation, but may not modify such
plan so that such plan as modified fails to meet the requirements of ss.1122 and
ss.1123 of the Bankruptcy Code.
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II.
The proponent of plan need not resolicit acceptances or rejection of
the plan of reorganization and any modifications, provided, however, said
modifications are immaterial.
III.
The Debtor asserts that the modifications proposed herein are
immaterial in that they do not adversely affect any creditor or party at
interest who has accepted the Plan of Reorganization.
The following are the Debtor's immaterial modifications:
IV.
The following modifications are to be made to reflect the agreements
reached between the Debtor and Mirage in connection with the payment of the
Mirage's DIP Financing Claim. Article 1.23 is amended to read as follows:
DIP Financing Claims means all Administrative Claims arising in
connection with money borrowed or credit incurred by the Debtor under
ss. 364 of the Bankruptcy Code from CGII, Purchaser or any other person
exclusive of the Mirage Administrative Claim.
Article 1.48 is amended to read as follows:
Mirage Agreement shall mean that certain Stock Purchase Agreement among
Mirage, CGII and Debtor dated July 24, 1995 as amended by Amendment no.
1 Stock Purchase Agreement dated December ____, 1995.
A new definition is added as Article 1.49.1, as follows:
Mirage Administrative Claim shall mean the administrative claim and
security interest of Mirage as recognized and allowed in the Agreed
Order Recognizing and Directing Payment of Administrative Claim of
Mirage dated April 29, 1996.
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Article 1.49 is amended to read as follows:
Mirage Claim means any and all claims which the Debtor or debtor in
possession may have, whether arising prior to or after the filing of
the petition for relief herein against Mirage under the Mirage
Agreement except for any defenses to payment of the Mirage
Administrative Claim as provided in the Agreed Order Recognizing and
Directing Payment of Administrative Claim of Mirage dated April 29,
1996, including but not limited to any rights of setoff or defenses to
the payments of any claims asserted by Mirage against Debtor or its
property.
The portion of Article III addressing the treatment of the Class 6 claim is
amended to read as follows:
Class 6: Mirage Administrative Claim:
1. Classification: Class 6 consists of the Mirage Administrative Claim.
2. Treatment: The Mirage Administrative Claim shall be paid in full and
in immediately available funds on or before the Effective Date in accordance
with the Agreed Order Recognizing and Directing Payment of Administrative Claim
of Mirage dated April 29, 1996. Furthermore, the claims of Debtor against
Mirage, specifically including the Mirage Claim, are preserved, including to the
extent that any such claims may constitute compulsory counterclaims pursuant to
Bankruptcy Rule 7013 and/or Federal Rules of Civil Procedure 13. This
reservation excludes defenses to the Mirage Administration Claim which has been
recognized as being a liquidated and undisputed indebtedness of the Debtor.
Article X(A)(10) is amended to read as follows:
to hear and determine all controversies concerning the Mirage
Agreement, the Mirage Administrative Claim, provided however, this
retained jurisdiction of the Bankruptcy Court shall not be exclusive,
and this provision shall not expand or extend the jurisdiction of the
Bankruptcy Court beyond that jurisdiction existing on the Effective
Date.
V.
Article 1.46 is amended to cure a clerical error. Article 1.46 is
amended to read as follows:
Magic Notes means the $35,000,000.00 of notes which shall be issued by
Reorganized Crescent City and guaranteed by Jefferson Casino
Corporation and C-M of Louisiana, Inc., each a wholly owned subsidiary
of Casino Magic Corporation, under the Magic Indenture.
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VI.
Article II(A) is amended to correct a typographical error. The second
sentence of article II(A) is amended to read as follows:
The Magic Closing Cash and the Magic Notes will be paid to the
Indenture Trustee, on behalf of the Bondholders, who claim a perfected
security interest in such proceeds.
VII.
To cure a typographical error, and to make Article III(E), Class 1(3)
Treatment consistent within itself and with Article II(B) regarding the amount
of cash to be retained by the Indenture Trustee for the benefit of the
Bondholders, the last sentence of Article III(E), Class 1(3) Treatment is
modified to read as follows:
The Indenture Trustee shall retain the sum of $6,750,000 in Magic
Closing Cash and $28,000,000.00 in Magic Notes, to be paid to Class 1
Claimants in accordance with the terms of the Indenture.
Additionally, to cure a typographical error, and to make Article V(A) consistent
with Article III(E) and with Article II(B) regarding the amount of cash to be
retained by the Indenture Trustee for the benefit of the Bondholders, the second
sentence of Article V(A) is modified to read as follows:
Immediately upon receipt of the Magic Closing Cash and Magic Notes, and
after deducting the sum of $6,750,000 from the Magic Closing Cash
and $28,000,000.00 from the Magic Notes, for distribution to
Bondholders in accordance with the terms of the Indenture, the
Indenture Trustee shall pay the Settlement Amount to the Liquidating
Trust.
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VIII.
To clarify that the holders of Class 1 Claims shall not receive
anything, in any matter, on behalf of their claims other than the treatment
specifically set forth in Article II(E), the last paragraph of Article II(E)(3)
is amended to read as follows:
Other than as set forth herein, the Class 1 claimants (including the
Indenture Trustee, the Bondholders, and anyone deriving or claiming
rights under the Secured Notes, the Indenture, or any security
therefore), shall not be entitled to participate as a Class 2, 3A, 3B,
4, 5 or 6 Claimant under this Plan nor to otherwise receive any
distribution or payment from the Debtor or the Liquidating Trust, on
account of such claim.
IX.
Article II(E), Class 2(3) is amended to reflect that after the
Effective Date, the treatment options to be afforded to Class 2 Creditors may be
made by the Liquidating Trust. Article II(E), Class 2(3) is amended to read as
follows:
Treatment: Except as provided in Article V(A) of the Plan, as to each
Allowed Secured Claim and in complete satisfaction of such Claim, at
the Debtor's or, subsequent to the Effective Date, Liquidating Trust's
option, either:
X.
To clarify the treatment options for Secured Creditors, Article III(E),
Class 2(3)(v) is amended to read as follows and Article III(E), Class 2(3)(v)
is added as follows:
(iv) Any Allowed Class 2 Claim found by Final Order to be secured by a
lien against any of the Riverboat Assets to be transferred to Purchaser
and to be senior to the lien securing the Class 1 Claims affecting the
Riverboat Property shall be paid in cash on the Effective Date or at
such later date as such determination is made by Final Order. Payments
to the holders of any such Class 2 Claims shall be made from the Net
Cash Proceeds of one or more of the following sources, in the following
order of priority; the Settlement Amount and the Residual Property.
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(v) Any creditor determined by final order to have an allowed Class 2
Secured Claim secured by property other than the Riverboat Assets shall
be paid to the extent of the value of its collateral, with the creditor
retaining its security interest and lien, either as to the specific
collateral, provided said collateral is not part of the Riverboat
Assets, or preserved and attaching to the proceeds only that constitute
the Settlement Amount and the Residual Property, until the court's
determination and payment. Such creditor shall have an unsecured claim
for any deficiency which shall then be recognized, and the creditor
paid its pro-rata distribution or share of the Settlement Amount as set
forth below for the Class 3 Allowed General Unsecured Claims.
Article III(E), Class 2(3)(ii) is amended by adding the following sentence at
the end:
Said creditors shall have an unsecured claim for any deficiency which
shall then be recognized, and the creditor paid its pro-rata
distribution or share of the Settlement Amount as set forth below for
the Class 3 Allowed General Unsecured Claims.
XII.
Article III(E), Class 3C is amended to make it clear that the treatment
afforded holders of Class 3B and 3C Claims is limited to the treatment set forth
therein, and these holders shall not be entitled to participate as a member of
any other class. At the end of the paragraph entitled "Treatment" with respect
to Class 3B and 3C, the following sentences shall be added, respectively:
Other than as set forth herein, the Class 3B claimants (including any
assignee of a Class 3B Claim or any other party asserting any right or
interest in a Class 3B Claim), shall not be entitled to participate as
a Class 1, 2, 3A, 3C, 4, 5 or 6 Claimant under this Plan nor to
otherwise receive any distribution or payment from the Debtor or the
Liquidating Trust, on account of such claim.
Other than as set forth herein, the Class 3C claimant (including any
assignee of the CGII Claim or any other party asserting any right or
interest in the CGII Claim), shall not be entitled to participate as a
Class 1,2, 3A, 3B, 4, 5 or 6 Claimant under this Plan nor to otherwise
receive any distribution or payment from the Debtor or the Liquidating
Trust, on account of such claim.
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XIII.
Article IV(E)(7) is amended to clarify that the Liquidating Trustees
will be authorized to pursue both prepetition and postpetition activities of the
Debtor. Accordingly, the second sentence of Article IV(E)(7) is amended to read
as follows:
Except as otherwise inconsistent with the provisions of this Plan, in
the exercise of such powers, the Liquidating Trustees, on behalf of the
Liquidating Trust, shall be authorized to (I) avoid or recover
transfers (including fraudulent conveyances or preferential transfers)
of the Debtor's property as may be permitted by Sections 542 through
553 of the Bankruptcy Code or applicable state law, (ii) pursue all
claims and causes of action arising from the prepetition or
postpetition activities of the Debtor, whether arising by statute or
common law and whether arising under the laws of the United States of
America, Louisiana, or any other state having jurisdiction over any
claim or controversy pertaining to the Debtor, and whether maintainable
against third parties, Affiliates or Insiders of the Debtor,(iii)
defend claims, causes of action and other litigation that may adversely
affect or impact the Liquidating Trust Property,(iv) contest Claims,
(v) file, litigate to final judgment, settle, or withdraw objections to
Claims, and (vi) exercise offsets against Claims. All activities of the
Liquidating Trustees shall be reasonably necessary to, and consistent
with, the accomplishment of the purpose of the Liquidating Trust as set
forth in this Plan.
XIV.
In order to clarify that funds need not be reserved for claims with
recourse to insurance coverage, to the extent that Debtor's insurance coverage
is sufficient to cover said claims, the first sentence of Article VI(B)(2) is
amended to read as follows:
All Allowed General Unsecured Claims with recourse to insurance
coverage policies of the Debtor covering tort claims shall be deemed
Disputed Claims in their Face Amount or as otherwise ordered by the
Court, and, except to the extent that the Liquidating Trustees have
verified that there is adequate insurance coverage for such claims,
Cash and/or Magic Notes shall be set aside in the Disputed Claims
Reserve on the first (1st) Cash Distribution Date to account for such
Claims.
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XV.
Because this Plan will not be consummated until the Closing Date, which
date is equivalent to the Effective Date, certain provisions of the Plan
erroneously reference the Confirmation Date, and not the Effective Date, as the
date by which certain events must take place. Therefore, the following
modifications are to be made:
The first sentence of Article VII(C)(1) shall be amended to read as
follows:
For purposes of effectuating the reserve provisions of Article VI of
the Plan and the allocations and distributions to holders of Allowed
General Unsecured Claims, the Bankruptcy Court will, on or prior to the
Effective Date, pursuant to Section 502 of the Bankruptcy Code, fix or
liquidate the amount of any Contingent General Unsecured Claim not
otherwise treated in the Plan, in which event the amount so fixed or
liquidated will be deemed the Allowed amount of such Claim for purposes
of this Plan, or, in lieu thereof, the Bankruptcy Court will determine
the maximum contingent amount for such Claim, which amount will be the
maximum amount in which such Claim ultimately may be Allowed under this
Plan, if such Claim is Allowed in whole or in part.
The first sentence of Article X(B)(2)(B) shall be amended to read as
follows:
On or prior to the Effective Date, each Person that has sought or will
seek to file a Fee Request shall deliver to the Debtor an estimate of
the aggregate fees and expenses through the Effective Date which shall
be requested by such Person (including, if applicable, any amount
previously requested and subject to holdback).
XVI.
Article XIV(B) addressing Governing Law requires amendment to ensure
that this provision is not in contrast to, nor does it negate the provisions of
Article V(E)(17) dealing with the law governing the Liquidating Trust. As such,
the following sentence is added to the end of Article XIV(B):
Notwithstanding the foregoing, Liquidating Trust shall be governed by
the laws of the state of New Jersey or such other state laws under
which the Liquidating Trust may be organized.
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XVII.
Article XIV(G) shall be amended to provide that names and addresses of
the parties to receive notices on behalf of the Liquidating Trust are as
follows:
If to Liquidating Trust:
Jim Hingle
Grimaldi/C.R. Pittman
P. O. Box 8370
New Orleans, Louisiana 70182
Rudy J. Cerone, Esq.
McGlinchey, Stafford
643 Magazine Street
New Orleans, Louisiana 70130
with a copy to:
William E. Steffes, Esq.
Steffes & Macmurdo, LLP
2237 S. Acadian Thruway
Suite 600
Baton Rouge, Louisiana 70808
Ms. Lisa Futrell
Jones, Walker
50th Floor, Place St. Charles
201 St. Charles Avenue
New Orleans, Louisiana 70170
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XVIII.
To modify section article 1.65 to reflect the turnover of the money in
the Dock Board Escrow Account following the granting of the Dock Board's Motion
for Limited Relief from Stay. Article 1.65 is amended to read as follows:
Riverboat Assets means, collectively, the Riverboat, the License,
certain slot machines and other coin-operated gaming devices acquired
by the Debtor from Bally Gaming, Inc. and International Game Technology
Corp., and such other items of personal property used in connection
with the operation of the Riverboat as may be agreed upon between the
Debtor and the Purchaser, and as evidenced on the inventory list
attached to the Magic Agreement as Exhibit "1", specifically excepting
any equipment licensing or other agreements provided by Gaming Systems
International.
New Orleans, Louisiana, this 29th day of April, 1996.
Respectfully submitted,
/s/ Robyn J. Spalter
--------------------------------
JAN M. HAYDEN (La. Bar #6672)
ROBYN J. SPALTER (La. Bar #21116)
BRONFIN & HELLER, LLC
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6101
Telephone: (504) 568-1888
ATTORNEYS FOR CRESCENT CITY
CAPITAL DEVELOPMENT CORPORATION
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C E R T I F I C A T E
I certify that a copy of the foregoing pleading was served on counsel listed
below by U. S. Mail, postage prepaid and properly addressed on the 29 of
April, 1996.
Charles L. Stern, Jr., Esq. William S. Papazian, Esq.
Steeg & O'Connor Vice President & General Counsel
201 St. Charles Ave., Ste. 3021 Capital Gaming International, Inc.
New Orleans, LA 70170 Bayport One, Suite 250
Attorney for New Orleans 2000 Partnership 8025 Black Horse Pike
W. Atlantic City, NJ 08232
Barry N. Seidel, Esq.
Joshua M. Levine, Esq. Evan P. Howell, III
Willkie Farr & Gallagher 3500 N. Causeway Blvd.
One Citicorp Center Suite 715
153 East 53rd Street Metairie, LA 70002
New York, NY 10022-4699 Attorney for Communicore, Inc.
Allan Kanner, Esq. Gerard G. Metzger, Esq.
A. Kanner & Associates, P.C. 144 Elk Place, Suite 1710
636 Carondelet Street New Orleans, LA 70112
New Orleans, LA 70130 Attorney for Int'l Electronic Protection, Ltd.
Attorney for New Orleans 2000 Partnership
Hugh R. Ray, Esq.
Stephen L. Williamson, Esq. Andrews & Kirth LLP
Montgomery Barnett et al 600 Travis, 4200 Texas Comm Tower
3200 Energy Centre Houston, TX 77002
1100 Poydras Street Attorney for Capital Gaming Int'l Noteholders
New Orleans, LA 70163 Steering Committee
Attorney for First Trust National Assoc.
Paul N. Silverstein, Esq.
R. Patrick Vance Andrews & Kirth LLP
Ms. Elizabeth Futrell 425 Lexington Ave.
201 St. Charles Ave., 50th Fl. New York 10017
New Orleans, LA 70170 Attorney for Capital Gaming Int'l Noteholders
Attorneys for Grimaldi/C.R. Pittman Steering Committee
U.S. Trustee's Office
400 Poydras Street
Suite 2110
New Orleans, LA 70130
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Alan H. Goodman Mr. David S. Rubin
James C. Butler Kantrow, Spaht, Weaver & Blitzer
LEMLE & HELLEHER, LLP 445 N. Blvd., Ste. 300 (70802)
601 Poydras St., #2100 P.O. Box 2997
New Orleans, LA 70130 Baton Rouge, LA 70821-2997
Attorneys for Shawmut Bank Connecticut Attorney for State of La., Riverboat Gaming
National Association Enforcement Div., State Police
Philip K. Jones, Jr. Howard Elliott, Esq.
Liskow & Lewis General Counsel
50th Floor P.O. Box 66614
One Shell Square Baton Rouge, LA 70896
New Orleans, LA 70139 Attorney for State of La., Riverboat Gaming
Attorney for Mirage Resorts, Inc. Enforcement Div., State Police
Fred S. Herman, Esq. Joseph E. Friend, Esq.
701 Poydras Street, Suite 4110 Breazeale, Sachse & Wilson, LLP
New Orleans, LA 70130 909 Poydras St., Ste. 2400 LL&E Tower
Attorney for Grimaldi/C.R. Pittman New Orleans, LA 70112
Attorney for New Orleans 2000 Partnership
GDC, Inc.
c/o T. Randolph Richardson Phillip K. Wallace, Esq.
One Shell Square, Suite 4110 201 Evans Road, Suite 401
New Orleans, LA 70139 New Orleans, LA 70123
Attorney for GDC, Inc. Attorney for Bagby Elevator Co., Inc.
Thomas J. Lutkewitte Victor E. Stilwell, Jr., Esq.
Favret Demarest Russo & Lutkewitte Deutsch, Kerrigan & Stiles, LLP
1515 Poydras Street, Suite 1400 755 Magazine St.
New Orleans, LA 70112 New Orleans, LA 70130
Attorney for Jones Casino Supplies, Inc. Attorney for Lyons & Hudson Architects, Ltd.
Daniel A. Smith, Esq. Mark C. Landry, Esq.
Michael W. Boleware, Esq. Newman, Mathis, Brady, Wakefield
Deutsch, Kerrigan & Stiles, LLP & Spedale, PLC
755 Magazine St. 212 Veterans Blvd.
New Orleans, LA 70130-3672 Metairie, LA 70005
Attorneys for Broadmoor Corporation Attorney for Bally Gaming, Inc.
A. Morgan Brian, Jr., Esq. Mark Wielga, Esq.
700 Camp Street Jackquelyn Kilmer, Esq.
New Orleans, LA 70130-3702 Ballard, Spahr, Andrews & Ingersoll
Attorney for Raymond Group 1225 17th St., Suite 2300
Denver, CO 80202-5596
D. Michael Dendy, Esq. Attorney for Capital Associates Intn'l, Inc.
901 Derbigny Street
Gretna, LA 70053
Attorney for Tomba Communications
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Bruce D. Meyer, Esq.
Gibson, Dunn & Crutcher S. Ault Hootsell III
333 South Grand Ave. Brent B. Barriere, Esq.
Los Angeles, CA 90071 Phelps Dunbar
Attorneys for Players River City and 400 Poydras St., 28th Floor
SDI Securities 11, Inc., A Joint Venture New Orleans, LA 70130-3245
Attorneys for First NBC
Charles R. Moyer, Esq. & Board of Commissioners of the Port of N.O.
Senior Attorney
Unisys Corporation John M. Duck, Esq.
P.O. Box 500 M/S C1SW19 Kenneth F. Tamplain, Jr.
Blue Bell, PA 19424 Adams and Reese
Attorneys for Unisys Corporation 4500 One Shell Square
New Orleans, LA 70139
Omer F. Kubel III Attorneys for Players River City and
Drpaer & Culpepper SDI Securities 11, Inc., A Joint Venture
909 Poydras St., Ste. 2630
New Orleans, LA 70112 Ms. Jenifer Schaye, Asst. Atty Gen'l
Attorney for Grand Palais Riverboat, Inc. Thomas A. Warner, III
Dept. of Justice
Cary A. Des Roches P.O. Box 4307
Fraser & Des Roches Baton Rouge, LA 70804
530 Natchez St., Ste. 200 State of La. Through The Dept. of Public Safety
New Orleans, LA 70130 and Corrections, Riverboat Gaming Comm..
Attorney for Boland Marine & Manf. Co.
Jonathan M. Landers, Esq.
Hugh R. Ray, Esq. Gibson Dunn & Crutcher
Andrews & Kirth LLP One Montgomery St., Telesis Tower
600 Travis, 4200 Texas Comm Tower San Francisco, CA 94101
Houston, TX 77002 Attorney for Players River City and SDI
Attorney for Turnberry Capital, Elliott Assoc.
SunAmerica, Inc., Fidelity Investments Kermit L. Roux, III
Lowe, Stein, Hoffman, Allweiss
William H. Patrick, III & Hauver, LLP,
10636 Linkwood Court 701 Poydras St., Ste. 3600
Baton Rouge, LA 70810 New Orleans, LA 70139-3600
Hugh R. Ray, Esq. Attorney for Accent Annex Enterprises, Inc.
Attorney for Official Committee of
Unsecured Creditors David J. Motter, Esq.
Jack M. Capella Law Firm
Martha Villar-Posada 3445 N. Causeway Blvd., Ste. 1001
Dept. of Revenue & Taxation Metairie, LA 70002
P.O. Box 66658 Attorney for Imperial Trading Co., and
Baton Rouge, LA 70896 Delta Diversions, Inc. d/b/a Delta Gaming Co.
Attorney for Dept. of Revenue & Taxation
Gaming Systems International
Thomas W. Papazoglakis, Gen'l Mgr. c/o Mary Catherine Cali
Marrero, Couvillion & Assoc., Inc. Shows, Cohn & Cali
1035 Executive Park Ave. P.O. Drawer 4425
Baton Rouge, LA 70806 Baton Rouge, LA 70821
Attorneys for Gaming Systems Int'l
- 13 -
F Otway Denny, III Raymond J. Salassi, Jr.
Porteous, Hainkel, Johnson & Sarpy Stanhope B. Denegre, Esq.
704 Carondelet St. Jones, Walker, et al.
New Orleans, LA 70130 201 St. Charles Ave., 49th Floor
Attorney for Cummins-Allison Corp. New Orleans, LA 70170
Attorneys for City of New Orleans-Public Belt
Peter A. Feringa, Jr. Railraod Commission of N.O.
Chaffe, McCall, et al.
1100 Poydras St., Ste. 2300 Clayton J. Swak, III
New Orleans, LA 70163-2300 1419 Hwy. 190, Suite 216
Attorney for Grinnell Fire Protection Systems Covington, LA 70433
Attorney for Gramildi/CR Pittman Re: FNBC
Richard J. Tomeny, Jr.
F. Joseph Drolla, Jr. Mark S. Goldstein, Esq.
212 Veterans Blvd., Ste. 201 Alicia M. Bendana
Metairie, LA 70005 Lowe Stein et al
Attorneys for Rust Scaffold Rental & Erection, 701 Poydras St., Ste. 3600
Inc. New Orleans, LA 70139
Attorney for WARN Claimants
Mark G. Rabogliatti
Oppenheimer, Wilff & Donnelly
45 So. 7th Street, Ste. 3400
Minneapolis, MN 55402
/s/ Mark G. Rabogliatti
------------------------------
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