EXECUTION COPY
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VENETIAN CASINO RESORT, LLC
LAS VEGAS SANDS, INC.
as Issuers
MALL INTERMEDIATE HOLDING COMPANY, LLC
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC
LIDO INTERMEDIATE HOLDING COMPANY, LLC
as Senior Subordinated Note Guarantors
$97,500,000
14 1/4% Senior Subordinated Notes due 2005
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INDENTURE
Dated as of November 14, 1997
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FIRST UNION NATIONAL BANK
as Senior Subordinated Note Trustee
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.............................................. 1
Section 1.02. Other Definitions........................................ 28
Section 1.03. Incorporation by Reference of Trust Indenture Act........ 29
Section 1.04. Rules of Construction.................................... 30
ARTICLE 2
THE SENIOR SUBORDINATED NOTES
Section 2.01. Form and Dating.......................................... 30
Section 2.02. Execution and Authentication............................. 31
Section 2.03. Registrar and Paying Agent............................... 32
Section 2.04. Paying Agent to Hold Money in Trust...................... 32
Section 2.05. Holder Lists............................................. 33
Section 2.06. Transfer and Exchange.................................... 33
Section 2.07. Replacement Senior Subordinated Notes.................... 44
Section 2.08. Outstanding Senior Subordinated Notes.................... 44
Section 2.09. Treasury Notes........................................... 45
Section 2.10. Temporary Notes.......................................... 45
Section 2.11. Cancellation............................................. 45
Section 2.12. Defaulted Interest....................................... 45
ARTICLE 3
OFFERS TO PURCHASE OR REDEMPTION
Section 3.01. Notices to Senior Subordinated Note Trustee.............. 46
Section 3.02. Selection of Senior Subordinated Notes to Be Purchased
or Redeemed ............................................ 46
Section 3.03. Notice of Redemption..................................... 47
Section 3.04. Effect of Notice of Redemption........................... 48
Section 3.05. Deposit of Purchase or Redemption Price.................. 48
Section 3.06. Senior Subordinated Notes Purchased or Redeemed in Part.. 48
Section 3.07. Optional Redemption...................................... 48
Section 3.08. Redemption Pursuant to Gaming Law........................ 49
Section 3.09. Mandatory Redemption..................................... 50
Section 3.10. Repurchase Offers........................................ 50
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ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Subordinated Notes..................... 51
Section 4.02. Maintenance of Office or Agency.......................... 52
Section 4.03. Reports.................................................. 52
Section 4.04. Compliance Certificate................................... 53
Section 4.05. Taxes.................................................... 54
Section 4.06. Stay, Extension and Usury Laws........................... 54
Section 4.07. Restricted Payments...................................... 54
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries............................................ 57
Section 4.09. Limitations on Incurrence of Indebtedness and Issuance
of Disqualified Stock................................... 58
Section 4.10. Asset Sales.............................................. 61
Section 4.11. Transactions with Affiliates............................. 62
Section 4.12. No Senior Subordinated Debt.............................. 64
Section 4.13. Liens.................................................... 64
Section 4.14. Line of Business......................................... 64
Section 4.15. Corporate Existence...................................... 64
Section 4.16. Offer to Repurchase Upon Change of Control............... 64
Section 4.17. Designation of Unrestricted Subsidiary................... 65
Section 4.18. Designation of Special Subsidiary........................ 65
Section 4.19. Gaming Licenses.......................................... 66
Section 4.20. Construction............................................. 66
Section 4.21. Limitation on Status as Investment Company............... 66
Section 4.22. Senior Subordinated Note Guaranties...................... 67
Section 4.23. Special Subsidiary Restricted Payments................... 67
Section 4.24. Ownership of Unrestricted Subsidiaries and Special
Subsidiaries............................................ 67
Section 4.25. Limitation on Phase II Construction...................... 68
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets................. 68
Section 5.02. Successor Corporation Substituted........................ 69
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default........................................ 69
Section 6.02. Acceleration............................................. 71
Section 6.03. Other Remedies........................................... 72
Section 6.04. Waiver of Past Defaults.................................. 72
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Section 6.05. Control by Majority...................................... 73
Section 6.06. Limitation on Suits...................................... 73
Section 6.07. Rights of Holders of Senior Subordinated Notes to Receive
Payment................................................. 74
Section 6.08. Collection Suit by Senior Subordinated Note Trustee...... 74
Section 6.09. Senior Subordinated Note Trustee May File Proofs of Claim 74
Section 6.10. Priorities............................................... 75
Section 6.11. Undertaking for Costs.................................... 75
ARTICLE 7
SENIOR SUBORDINATED NOTE TRUSTEE
Section 7.01. Duties of Senior Subordinated Note Trustee............... 75
Section 7.02. Rights of Senior Subordinated Note Trustee............... 76
Section 7.03. Individual Rights of Senior Subordinated Note Trustee.... 78
Section 7.04. Senior Subordinated Note Trustee's Disclaimer............ 78
Section 7.05. Notice of Defaults....................................... 78
Section 7.06. Reports by Senior Subordinated Note Trustee to Holders of
the Senior Subordinated Notes........................... 78
Section 7.07. Compensation and Indemnity............................... 79
Section 7.08. Replacement of Senior Subordinated Note Trustee.......... 80
Section 7.09. Successor Senior Subordinated Note Trustee by
Merger, etc. ........................................... 81
Section 7.10. Eligibility; Disqualification............................ 81
Section 7.11. Preferential Collection of Claims Against Issuers........ 82
Section 7.12. Authorization of Trustee to Take Other Actions........... 82
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. 83
Section 8.02. Legal Defeasance and Discharge........................... 83
Section 8.03. Covenant Defeasance...................................... 83
Section 8.04. Conditions to Legal or Covenant Defeasance............... 84
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions................... 85
Section 8.06. Repayment to the Issuers................................. 86
Section 8.07. Reinstatement............................................ 86
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Subordinated Notes.. 86
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Section 9.02. With Consent of Holders of Senior Subordinated Notes..... 87
Section 9.03. Compliance with Trust Indenture Act...................... 89
Section 9.04. Revocation and Effect of Consents........................ 89
Section 9.05. Notation on or Exchange of Senior Subordinated Notes..... 89
Section 9.06. Senior Subordinated Note Trustee to Sign Amendments, etc. 89
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate................................. 90
Section 10.02. Certain Definitions...................................... 90
Section 10.03. Liquidation; Dissolution; Bankruptcy..................... 90
Section 10.04. Default on Designated Senior Debt........................ 91
Section 10.05. Acceleration of Securities............................... 92
Section 10.06. When Distribution Must Be Paid Over...................... 92
Section 10.07. Notice by Company or Venetian............................ 92
Section 10.08. Subrogation.............................................. 92
Section 10.09. Relative Rights.......................................... 93
Section 10.10. Subordination May Not Be Impaired by Company or Venetian. 93
Section 10.11. Distribution or Notice to Representative................. 93
Section 10.12. Rights of Senior Subordinated Note Trustee and
Paying Agent............................................ 93
Section 10.13. Authorization to Effect Subordination.................... 94
Section 10.14. Amendments............................................... 94
ARTICLE 11
SENIOR SUBORDINATED NOTE GUARANTIES
Section 11.01. Senior Subordinated Note Guaranties...................... 94
Section 11.02. Additional Senior Subordinated Note Guaranties........... 96
Section 11.03. Limitation of Senior Subordinated Note Guarantor's
Liability............................................... 96
Section 11.04. Senior Subordinated Note Guarantors May Consolidate,
etc., on Certain Terms.................................. 97
Section 11.05. Releases of Senior Subordinated Note Guaranties.......... 98
Section 11.06. "Senior Subordinated Note Trustee" to Include Paying
Agent................................................... 98
Section 11.07. Subordination of Senior Subordinated Note Guaranties..... 98
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls............................. 98
Section 12.02. Notices.................................................. 99
Section 12.03. Communication by Holders of Senior Subordinated Notes
with Other Holders of Senior Subordinated Notes.........100
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Section 12.04. Certificate and Opinion as to Conditions Precedent.......100
Section 12.05. Statements Required in Certificate or Opinion............100
Section 12.06. Rules by Senior Subordinated Note Trustee and Agents.....100
Section 12.07. No Personal Liability of Directors, Officers, Employees
and Stockholders........................................101
Section 12.08. Governing Law............................................101
Section 12.09. No Adverse Interpretation of Other Agreements............101
Section 12.10. Successors...............................................101
Section 12.11. Severability.............................................101
Section 12.12. Counterpart Originals....................................101
Section 12.13. Table of Contents, Headings, etc.........................101
EXHIBITS
Exhibit A-1. Form of Senior Subordinated Note
Exhibit A-2. Form of Temporary Regulation S Note
Exhibit B Form of Certificate of Transfer
Exhibit C Form of Certificate of Exchange
Exhibit D Form of Certificate from Acquiring Institutional
Accredited Investor Exhibit E Form of Notation of Senior
Subordinated Note Guaranty Exhibit F Form of Supplemental
Indenture to be Delivered by Subsequent Senior
Subordinated Note Guarantors
Exhibit G Intercreditor Agreement
Exhibit H Mall Space Description
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1)................................................................7.10
(a)(2)................................................................7.10
(a)(3)................................................................N.A.
(a)(4)................................................................N.A.
(a)(5)................................................................7.10
(b)...................................................................7.10
(c)...................................................................N.A.
311 (a)...................................................................7.11
(b)...................................................................7.11
(c)...................................................................N.A.
312 (a)...................................................................2.05
(b)..................................................................12.03
(c)..................................................................12.03
313 (a)...................................................................7.06
(b)(1) ...............................................................10.03
(b)(2).................................................................7.07
(c.............................................................. 7.06;12.02
(d)....................................................................7.06
314 (a).............................................................4.03;12.05
(b)...................................................................10.02
(c)(1)................................................................11.04
(c)(2)................................................................11.04
(c)(3).................................................................N.A.
(d).......................................................10.03,10.04,10.05
(e).............................................................10.02;12.05
(f)....................................................................N.A.
315 (a)...................................................................7.01
(b)..............................................................7.05,12.02
(c)....................................................................7.01
(d)....................................................................7.01
(e)....................................................................6.11
316 (a)(last sentence)....................................................2.09
(a)(1)(A)..............................................................6.05
(a)(1)(B)..............................................................6.04
(a)(2).................................................................N.A.
(b)....................................................................6.07
(c)....................................................................2.12
317 (a)(1)................................................................6.08
(a)(2).................................................................6.09
(b)....................................................................2.04
318 (a)..................................................................12.01
(b)....................................................................N.A.
(c)...................................................................12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
v
INDENTURE dated as of November 14, 1997 among Venetian Casino Resort, LLC,
a Nevada limited liability company ("Venetian"), Las Vegas Sands, Inc., a Nevada
corporation (the "Company" and, together with Venetian, the "Issuers"), Mall
Intermediate Holding Company, LLC, a Delaware limited liability company ("Mall
Intermediate Holdings"), Grand Canal Shops Mall Construction, LLC, a Delaware
limited liability company ("Mall Construction Subsidiary"), and Lido
Intermediate Holding Company, LLC, a Delaware limited liability company ("Phase
II Intermediate Holdings" and, together with Mall Intermediate Holdings, Mall
Construction Subsidiary and all future Restricted Subsidiaries (as defined
below), the "Senior Subordinated Note Guarantors") and First Union National
Bank, as trustee (the "Senior Subordinated Note Trustee").
The Issuers, the Senior Subordinated Note Guarantors and the Senior
Subordinated Note Trustee agree as follows for the benefit of each other and for
the equal and ratable benefit of the Holders of the 14 1/4% Senior Subordinated
Notes due 2005 (the "Initial Senior Subordinated Notes") and the 14 1/4% Senior
Subordinated Notes due 2005 (the "Exchange Senior Subordinated Notes" and,
together with the Initial Senior Subordinated Notes, the "Senior Subordinated
Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global note in the form of Exhibit A-1 hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of, and registered in the name of, the Depositary or its
nominee that will be issued in a denomination equal to the outstanding principal
amount of the Senior Subordinated Notes sold in reliance on Rule 144A.
"Accreted Value" means as of any date of determination, the sum of (a) the
initial offering price of each Senior Subordinated Note and (b) the portion of
the excess of (i) the principal amount of each Senior Subordinated Note over
(ii) such initial offering price that shall have been amortized through such
date, such amount to be so amortized on a daily basis and compounded
semi-annually on each May 15 and November 15 from the Issuance Date of the
Senior Subordinated Notes through the date of determination (until the second
anniversary of the Issuance Date) to achieve during such period, an annual rate
of return on the principal amount of each Senior Subordinated Note equal to 14
1/4% assuming a current rate of return of 10% per annum on the principal amount
of each Senior Subordinated Note.
"Acquired Indebtedness" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Restricted Subsidiary of such specified Person,
including Indebtedness incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person and (ii) Indebtedness encumbering any asset acquired by such
specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person,
1
whether through the ownership of voting securities, by agreement or otherwise;
provided, however, that beneficial ownership of 20% or more of the voting
securities of a Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Applicable Tax Percentage" means the highest aggregate effective marginal
rate of federal, state and local income tax or, when applicable, alternative
minimum tax, to which any direct or indirect member or S corporation shareholder
of the Issuers subject to the highest marginal rate of tax would be subject in
the relevant year of determination (as certified to the Senior Subordinated Note
Trustee by a nationally recognized tax accounting firm), taking into account
only that member's or S corporation shareholder's share of income and deductions
attributable to its interest in the Issuers.
"Approved Equipment Funding Commitments" means, collectively, (a) the
General Electric Capital Corporation Commitment (as defined in the Disbursement
Agreement) and (b) any replacement of such commitment from an institutional or
other lender reasonably acceptable to the Bank Agent and the Mall Construction
Lender if (i) such commitment is in form and substance reasonably satisfactory
to the Bank Agent and the Mall Construction Lender; (ii) the collateral to
secure Indebtedness under each commitment does not include any Note Collateral;
and (iii) to the extent the lenders under the Bank Credit Facility deem it
appropriate in their sole discretion, the lender under such commitment executes
and delivers an intercreditor agreement in accordance with Section 7.12(c)
hereof.
"Asset Sale" means (i) the sale, conveyance, transfer or other disposition
(whether in a single transaction or a series of related transactions) of assets
or rights (including by way of a sale and leaseback) of the Issuers or any
Restricted Subsidiary (each referred to in this definition as a "disposition")
or (ii) the issuance or sale of Equity Interests of any Restricted Subsidiary
other than Venetian (whether in a single transaction or a series of related
transactions), in each case, other than (a) a disposition of inventory or goods
held in the ordinary course of business, (b) the disposition of all or
substantially all of the assets of either of the Issuers in a manner permitted
pursuant to Article 5 hereof or any disposition that constitutes a Change of
Control hereunder, (c) any disposition that is a Restricted Payment or that is a
dividend or distribution permitted under Section 4.07 hereof or any Investment
that is not prohibited thereunder or any disposition of cash or Cash
Equivalents, (d) any single disposition, or related series of dispositions, of
assets with an aggregate fair market value of less than $1.0 million, (e) any
Event of Loss (as defined in the Mortgage Note Indenture), provided, that any
additional proceeds remaining after the application of Net Loss Proceeds (as
defined in the Mortgage Note Indenture) in an Event of Loss Offer (as defined in
the Mortgage Note Indenture) shall be deemed to be Excess Proceeds for purposes
of Section 4.10 hereof; (f) any Lease Transaction or any grant of easement or
Permitted Liens, (g) any dedication permitted pursuant to Section 4.25 of the
Mortgage Note Indenture; (h) the transfer of the Mall Collateral to the Mall
Subsidiary, (i) the transfer of the Phase II Land to the Phase II Subsidiary,
(j) a transfer of assets by the Issuers to a Wholly Owned Restricted Subsidiary
of the Issuers or by a Wholly Owned Restricted Subsidiary of the Issuers to
another Wholly Owned Restricted Subsidiary of the Issuers, (k) an issuance of
Equity Interests by a Wholly Owned Restricted Subsidiary of the Issuers to the
Issuers or another Wholly Owned Restricted Subsidiary of the Issuers, (l) any
sale, conveyance, transfer or other disposition of property that secures
Non-Recourse Financing or any financing permitted under Section 4.09(p) that is
to or on behalf of the lender of such Non-Recourse Financing or other financing
or (m) any licensing of tradenames or trademarks in the ordinary course of
business by any of the Issuers or their Restricted Subsidiaries.
2
"Available Funds" shall have the meaning set forth in the Disbursement
Agreement.
"Bank Agent" means The Bank of Nova Scotia, in its capacity as
administrative agent under the Bank Credit Facility and its successors in such
capacity.
"Bank Credit Facility" means that certain Credit Agreement, dated as of
November 14, 1997, among the Company and Venetian, as borrowers, the lenders
listed therein, Goldman Sachs Credit Partners L.P., as arranger and syndication
agent and The Bank of Nova Scotia, as administrative agent, and any extension,
refinancing, renewal, replacement, substitution or refund thereof ("Bank Credit
Facility Refinancing"); provided, however that (i) the aggregate amount of such
Bank Credit Facility Refinancing shall not exceed the principal amount of
Indebtedness so extended, refinanced, renewed, replaced, substituted or refunded
(plus the amount of reasonable expenses incurred and any premium paid in
connection therewith) and (ii) such Bank Credit Facility Refinancing
Indebtedness shall have a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of the Indebtedness being extended,
refinanced, renewed, replaced, substituted or refunded.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Billboard Lease" means that certain Lease Agreement, dated as of November
14, 1997, by and between Venetian and Mall Subsidiary relating to certain space
that will be subleased by "Billboard Live!" as amended from time to time in
accordance with the terms thereof.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors of the Company.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized and reflected as a liability on the
balance sheet in accordance with GAAP.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock of such Person, including, without limitation, if such Person is
a partnership or limited liability company, partnership or membership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership or limited liability company.
"Cash Equivalents" means (a) United States dollars, (b)(i) direct
obligations of the United States of America (including obligations issued or
held in book-entry form on the books of the Department of the Treasury of the
United States of America) or obligations fully guaranteed by the United States
of America, (ii) obligations, debentures, notes or other evidence of
indebtedness issued or guaranteed by any other agency or instrumentality of the
United States, (iii) interest-bearing demand or time deposits (which may be
represented by certificates of deposit) issued by banks having general
obligations rated (on the date of acquisition thereof) at least "A" by Standard
& Poor's Corporation ("S&P") or "A2" by Moody's Investors Service, Inc.
("Moody's") (S&P and Moody's together with any other nationally recognized
credit rating agency if neither of such corporations is then currently rating
the pertinent obligations, a "Rating Agency") or the equivalent by another
Rating Agency, if applicable, or, if not so rated, secured at all times, in the
manner and to the extent provided by law, by collateral security in
3
clause (i) or (ii) of this definition, of a market value of no less than the
amount of monies so invested, (iv) commercial paper rated (on the date of
acquisition thereof) at least "A-1" or "P-1" or the equivalent by any Rating
Agency issued by any Person, (v) repurchase obligations for underlying
securities of the types described in clause (i) or (ii) above, entered into with
any commercial bank or any other financial institution having long-term
unsecured debt securities rated (on the date of acquisition thereof) at least
"A" or "A2" or the equivalent by any Rating Agency in connection with which such
underlying securities are held in trust or by a third-part custodian, (vi)
guaranteed investment contracts of any financial institution which has a
long-term debt rated (on the date of acquisition thereof) at least "A" or "A2"
or the equivalent by any Rating Agency, (vii) obligations (including both
taxable and nontaxable municipal securities) issued or guaranteed by, and any
other obligations the interest on which is excluded from income for Federal
income tax purposes issued by, any state of the United States of America or the
District of Columbia or the Commonwealth of Puerto Rico or any political
subdivision, agency, authority or instrumentality thereof, which issuer or
guarantor has (A) a short-term debt rated (on the date of acquisition thereof)
at least "A-1" or "P-1" or the equivalent by any Rating Agency and (B) a
long-term debt rated (on the date of acquisition thereof) at least "A" or "A2"
or the equivalent by any Rating Agency, (viii) investment contracts of any
financial institution either (A) fully secured by (1) direct obligations of the
United States, (2) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States or (3) securities or
receipts evidencing ownership interest in obligations or specified portions
thereof described in clause (1) or (2), in each case guaranteed as full faith
and credit obligations of the United States of America, having a market value at
least equal to 102% of the amount deposited thereunder, or (B) with long-term
debt rated (on the date of acquisition of such investment contract) at least "A"
or "A2" or the equivalent by any Rating Agency and short-term debt rated (on the
date of acquisition of such investment contract) at least "A-1" or "P-1" or the
equivalent by any Rating Agency, (ix) a contract or investment agreement with a
provider or guarantor (A) which provider or guarantor is rated (on the date of
acquisition of such contract or investment agreement) at least "A" or "A2" or
the equivalent by any Rating Agency (provided that if a guarantor is party to
the rating, the guaranty must be unconditional and must be confirmed in writing
prior to any assignment by the provider to another subsidiary of such
guarantor), (B) providing that monies invested shall be payable without
condition (other than notice) and without brokerage fee or other penalty, upon
not more than two Business Days' notice for application when and as required and
(C) stating that such contract or agreement is unconditional, expressly
disclaiming any right of setoff and providing for immediate termination in the
event of insolvency of the provider and termination upon demand of the Company
or any of its secured lenders or their agents after any payment or other
covenant default by the provider, or (x) any debt instruments of any Person
which instruments are rated (on the date of acquisition thereof) at least "A,"
"A2," "A-1" or "P-1" or the equivalent by any Rating Agency; provided that in
each case of clauses (i) through (x), such investments are denominated in United
States dollars and maturing not more than 13 months from the date of acquisition
thereof; (c) investments in any money market fund which is rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by any Rating
Agency; (d) investments in mutual funds sponsored by any securities
broker-dealer of recognized national standing having an investment policy that
requires substantially all the invested assets of such fund to be invested in
investments described in any one or more of the foregoing clauses and having a
rating of at least "A" or "A2" or the equivalent by any Rating Agency or (e)
investments in both taxable and nontaxable (i) periodic auction reset securities
which have final maturities between one and 30 years from the date of issuance
and are repriced through a dutch auction or other similar method every 35 days
or (ii) auction preferred shares which are senior securities of leveraged closed
end municipal bond funds and are repriced pursuant to a variety of rate reset
periods, in each case having a rating (on the date of acquisition thereof) of at
least "A" or "A2" or the equivalent by any Rating Agency.
4
"Casino Lease" means that certain lease between the Company and Venetian
dated as of the Closing Date with respect to the operation of the Casino for the
Project, as amended, revised or modified from time to time in accordance with
the terms thereof.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock of such Person, including, without limitation, if such Person is
a partnership, partnership interests (whether general or limited) and any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, such partnership.
"Cedel" means Cedel Bank, SA.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease or transfer, in one or a series of transactions, of all or
substantially all of the assets of the Issuers and their Restricted
Subsidiaries, taken as a whole (except in connection with an Event of Loss, as
defined in the Mortgage Note Indenture); (ii) either of the Issuers becomes
aware of (by way of a report or any other filing pursuant to Section 13(d) of
the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by
any person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2)
of the Exchange Act, or any successor provision), including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1) under the Exchange Act), other than the Sole Stockholder and
its Related Parties, in a single transaction or in a related series of
transactions, by way of merger, consolidation or other business combination or
purchase of beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act, or any successor provision) of 50% or more of the total voting
power of the Voting Stock of the Issuers; (iii) after an initial public offering
of the common stock of the Issuers, the consummation of any transaction or
series of transactions the result of which is that any person or group (as
defined above), other than the Sole Stockholder and its Related Parties, (1)
beneficially owns more of the voting power of the Voting Stock of the Issuers
than is beneficially owned, in the aggregate, by the Sole Stockholder and its
Related Parties and (2) beneficially owns more than 20% of the voting power of
the Voting Stock of either of the Issuers; (iv) the first day within any
two-year period on which a majority of the members of the Board of Directors of
the Company are not Continuing Directors; (v) the adoption of a plan relating to
liquidation or dissolution of either of the Issuers or any Senior Subordinated
Note Guarantor (except liquidation of (a) Venetian into the Company and (b) any
Senior Subordinated Note Guarantor into the Company, Venetian or another Senior
Subordinated Note Guarantor) or (vi) if any Person other than the Sole
Stockholder and Related Parties beneficially owns more than 50% of the voting
and non voting common stock of the Company.
"Code" means, the Internal Revenue Code of 1986, as amended (or any
successor statute thereto).
"Collateral Agent" means any person appointed by the Senior Subordinated
Note Trustee as a collateral agent hereunder.
"Collateral Documents" means, collectively, the Disbursement Agreement, the
Completion Guaranty, the Mortgage Notes Indenture Leasehold Deed of Trust, the
Mortgage Notes Indenture Fee Deed of Trust, the Mortgage Notes Indenture Mall
Parcel Fee Deed of Trust, the Mortgage Notes Indenture Environmental Indemnity
or any other agreements, instruments, financing statements or other documents
that evidence, set forth or limit the Lien of the Mortgage Note Trustee in the
Note Collateral.
"Common Stock" means the Common Stock, par value $0.10 per share, of the
Company.
5
"Company" means Las Vegas Sands, Inc., a Nevada corporation, or any
successor thereto permitted under this Indenture.
"Completed" or "Completion" has the meaning given to the term "Mall Release
Date" under the Disbursement Agreement.
"Completion Guaranty" means that certain Guaranty, dated as of November 14,
1997, executed by the Sole Stockholder in favor of the Bank Agent (acting on
behalf of the lenders under the Bank Credit Facility), the Mall Construction
Lender and the Mortgage Note Trustee (acting on behalf of the Holders) as
amended, revised or modified from time to time in accordance with the terms
thereof.
"Completion Guaranty Loan" means funds provided by the Sole Stockholder in
satisfaction of his obligations pursuant to the Completion Guaranty which are
treated by the Sole Stockholder and the Issuers as a subordinated loan to the
Issuers pursuant to the Completion Guaranty.
"Congress Center" means that certain meeting and conference center complex
of approximately 500,000 net leasable square feet more particularly described in
the Plans and Specifications.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (a) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing Consolidated
Net Income), plus (b) provision for taxes based upon net income or net profits
of such Person and its Restricted Subsidiaries to the extent such provision for
taxes was deducted in computing Consolidated Net Income, plus (c) Consolidated
Interest Expense of such Person for such period to the extent such expenses were
deducted in computing Consolidated Net Income (not including any gaming revenue
tax), plus (d) Consolidated Depreciation and Amortization Expense of such Person
for such period to the extent such expenses were deducted in computing
Consolidated Net Income, minus (e) non-cash items increasing such Consolidated
Net Income for such period, in each case, on a consolidated basis for such
Person and its Restricted Subsidiaries and determined in accordance with GAAP.
"Consolidated Depreciation and Amortization Expense" means with respect to
any Person for any period, the total amount of depreciation and amortization
expense and other noncash expenses (excluding any noncash expense that
represents an accrual, reserve or amortization of a cash expenditure for a past,
present or future period) of such Person and its Restricted Subsidiaries for
such period on a consolidated basis as defined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any period, the sum
of (a) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, to the extent such
expense was deducted in computing Consolidated Net Income (including original
issue discount and deferred financing fees, non-cash interest payments, the
interest component of Capital Lease Obligations, and net payments (if any)
pursuant to Hedging Obligations, but excluding amortization of debt issuance
costs and deferred financing fees), (b) commissions, discounts and other fees
and charges paid or accrued with respect to letters of credit and bankers'
acceptance financing and (c) to the extent not included above, the maximum
amount of interest which would have to be paid by such Person or its Restricted
Subsidiaries under a Guaranty of Indebtedness of any other Person if such
Guaranty were called upon.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided, however, that (i) the Net Income for such period of any
6
Person that is not a Subsidiary or that is accounted for by the equity method of
accounting, shall be included only to the extent of the amount of dividends or
distributions paid in cash (or to the extent converted into cash) to the
referent Person or a Wholly Owned Subsidiary thereof in respect of such period,
(ii) the Net Income of any Person acquired in a pooling of interests transaction
shall not be included for any period prior to the date of such acquisition,
(iii) the Net Income for such period of any Restricted Subsidiary that is not a
Senior Subordinated Note Guarantor shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of its Net Income is not at the date of determination permitted
without any prior governmental approval (which has not been obtained) or,
directly or indirectly, by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, unless
such restriction with respect to the payment of dividends or in similar
distributions has been legally waived, (iv) the cumulative effect of a change in
accounting principles shall be excluded and (v) no effect shall be given to any
minority or preferred interest in Venetian for purposes of computing
Consolidated Net Income.
"Consolidated Net Worth" means, with respect to any Person at any time, the
sum of the following items, as shown on the consolidated balance sheet of such
Person and its Restricted Subsidiaries as of such date (i) the common equity of
such Person and its Restricted Subsidiaries; (ii) (without duplication), (a) the
aggregate liquidation preference of Preferred Stock of such Person and its
Restricted Subsidiaries (other than Disqualified Stock), and (b) any increase in
depreciation and amortization resulting from any purchase accounting treatment
from an acquisition or related financing; (iii) less any goodwill incurred
subsequent to the Issuance Date; and (iv) less any write up of assets (in excess
of fair market value) after the Issuance Date, in each case on a consolidated
basis for such Person and its Restricted Subsidiaries, determined in accordance
with GAAP; provided, that in calculating Consolidated Net Worth, any gain or
loss from any Asset Sale shall be excluded; provided, however that in computing
"Consolidated Net Worth," no adjustment shall be made for any minority interest
in Venetian.
"Construction Consultant" means Tishman Construction Corporation of Nevada
or any other Person designated from time to time by the Bank Agent, the Mall
Construction Lender and the Senior Subordinated Note Trustee, in their sole
discretion acting pursuant to the Intercreditor Agreement, to serve as the
Construction Consultant under the Disbursement Agreement.
"Construction Management Agreement" means that certain Construction
Management Agreement, dated as of February 15, 1997, between the Company and
Lehrer McGovern Bovis, Inc., a New York corporation, as assigned by the Company
to Venetian and amended by that certain Assignment and Amendment of Construction
Management Agreement, dated as of November 14, 1997, among the Company, Venetian
and Lehrer McGovern Bovis, Inc., as amended, revised or modified from time to
time in accordance with its terms.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors who (i) was a member of such Board of Directors on the
Issuance Date, (ii) was nominated for election or elected to such Board of
Directors with, or whose election to such Board of Directors was approved by,
the affirmative vote of a majority of the Continuing Directors who were members
of such Board of Directors at the time of such nomination or election or (iii)
was appointed or elected to such Board of Directors by the Sole Stockholder or a
Related Party.
"Contracts" means, collectively, the contracts entered into, from time to
time, between the Company and any contractor for performance of services or sale
of goods in connection with the design, engineering, installation or
construction of the Project.
7
"Cooperation Agreement" means that certain Amended and Restated Reciprocal
Easement, Use and Operating Agreement, dated as of November 14, 1997, among the
Mall Construction Subsidiary, Venetian and Interface, as amended, revised or
modified from time to time in accordance with its terms.
"Corporate Trust Office of the Senior Subordinated Note Trustee" shall be
at the address of the Senior Subordinated Note Trustee specified in Section
12.02 hereof or such other address as to which the Senior Subordinated Note
Trustee may give notice to the Issuers.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Definitive Note" means a certificated Senior Subordinated Note registered
in the name of the Holder thereof and issued in accordance with Section 2.06
hereof, in the form of Exhibit A-1 hereto except that such Senior Subordinated
Note shall not bear the Global Note Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Senior Subordinated Notes issuable
or issued in whole or in part in global form, the Person specified in Section
2.03 hereof as the Depositary with respect to the Senior Subordinated Notes, and
any and all successors thereto appointed as depositary hereunder and having
become such pursuant to the applicable provision of this Indenture.
"Direct Construction Guaranty" means that certain Guaranty of Performance
and Completion, dated as of November 14, 1997, executed by Bovis, Inc., a New
York corporation, in favor of the Company, as assigned by the Company to
Venetian by that certain Assignment Agreement, dated as of November 14, 1997, by
and among the Company, Venetian and Bovis, Inc., as amended, revised or modified
from time to time in accordance with its terms, as amended, revised or modified
from time to time in accordance with its terms.
"Disbursement Agent" means The Bank of Nova Scotia, in its capacity as the
disbursement agent under the Disbursement Agreement and its successors in such
capacity.
"Disbursement Agreement" means that certain Funding Agents' Disbursement
and Administration Agreement, dated as of November 14, 1997, among the Issuers,
Mall Construction Subsidiary, the Bank Agent, the Mortgage Note Trustee, the
Mall Construction Lender, the HVAC Provider and the Disbursement Agent, as
amended, revised or modified from time to time in accordance with its terms.
"Disqualified Stock" means any Capital Stock which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to November
15, 2005; provided, however, that any Capital Stock which would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require the Issuers to repurchase or redeem such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale occurring prior to the final
maturity of the Senior Subordinated Notes shall not constitute Disqualified
Stock if the change of control provisions, event of loss provisions, or asset
sale provisions, as the case may be, applicable to such Capital Stock
specifically provide that the Issuers will not repurchase or redeem any such
stock pursuant to such provisions prior to the Company's and Venetian's
compliance with the provisions of Sections 4.10 and 4.16.
8
"Equity Contribution" means the approximately $320.3 million of proceeds
received by Venetian from the Company, Interface Holding or the Sole Stockholder
(in the form of cash or property).
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Estimation Period" means the period for which a shareholder, partner or
member, who is an individual is required to estimate for federal income tax
purposes his allocation of taxable income from a Subchapter S corporation or a
partnership for federal income tax purposes in connection with determining his
estimated federal income tax liability for such period.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Senior Subordinated Notes" means the Senior Subordinated Notes
issued in the Exchange Offer pursuant to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Existing Indebtedness" means (i) up to $1.5 million in aggregate principal
amount of Indebtedness (other than Capital Lease Obligations) of the Issuers or
their Restricted Subsidiaries in existence on the Issuance Date, plus interest
accruing thereon, after application of the net proceeds of sale of the Senior
Subordinated Notes on the Issuance Date and (ii) any current or future
obligations under the HVAC Services Agreement as in effect on the Issuance Date.
"Expo Center" means the Sands Expo and Convention Center.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, guarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues
Preferred Stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, guarantee or redemption of Indebtedness and the
use of proceeds therefrom, or such issuance or redemption of Preferred Stock, as
if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above, acquisitions,
dispositions and discontinued operations (as determined in accordance with GAAP)
that have been made by the Company or any of its Restricted Subsidiaries,
including all mergers, consolidations and dispositions, during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date shall be calculated on a pro forma basis assuming that all such
acquisitions, dispositions, discontinued operations, mergers, consolidations
(and the reduction of any associated fixed charge obligations resulting
therefrom) had occurred on the first day of the four-quarter reference period.
9
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (a) Consolidated Interest Expense of such Person for
such period and (b) all capitalized interest of such Person and its Restricted
Subsidiaries and (c) the product of (i) to the extent such Person is not treated
as an S corporation, a partnership or a substantially similarly treated
pass-through entity for federal income tax purposes, all dividend payments,
whether or not in cash on any series of Preferred Stock of such Person or any of
its Subsidiaries, other than dividend payments on Equity Interests payable
solely in Equity Interests or dividends paid as an increase in liquidation
preference on Preferred Stock, times (ii) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined federal,
state and local statutory income tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issuance Date. For the purposes of this
Indenture, the term "consolidated" with respect to any Person shall mean such
Person consolidated with its Restricted Subsidiaries (without giving effect to
any minority or preferred interest of Venetian) and shall not include any
Unrestricted Subsidiary or Special Subsidiary.
"Gaming Authority" means any agency, authority, board, bureau, commission,
department, office or instrumentality of any nature whatsoever of the United
States or foreign government, any state, province or any city or other political
subdivision, whether now or hereafter existing, or any officer or official
thereof, including without limitation, the Nevada Gaming Commission, the Nevada
State Gaming Control Board, the Clark County Liquor and Gaming Licensing Board
and any other agency with authority to regulate any gaming operation (or
proposed gaming operation) owned, managed or operated by the Issuers or any of
their Subsidiaries.
"Gaming License" means every license, franchise or other authorization
required to own, lease, operate or otherwise conduct governing activities of the
Issuers or any of their Restricted Subsidiaries, including without limitation,
all such licenses granted under the Nevada Gaming Control Act, and the
regulations promulgated pursuant thereto, and other applicable federal, state,
foreign or local laws.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, in the form of Exhibits A-1 and
A-2 hereto issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or
2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Instrumentality" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau or entity, (including any zoning authority, the
Federal Deposit Insurance Corporation, the Comptroller of the Currency or the
Federal Reserve Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.
"Government Securities" means securities that are (a) direct obligations of
the United States of America for the timely payment of which its full faith and
credit is pledged or (b) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America
10
the timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended), as custodian with respect to any such
Government Security or a specific payment of principal of or interest on any
such Government Security held by such custodian for the account of the holder of
such depository receipt; provided, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Security or the specific payment of principal of or
interest on the Government Security evidenced by such depository receipt.
"Guaranty" means a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Harrah's Road Way Agreement" means an agreement between Venetian and
Harrah's Casino Resort as amended, revised, modified or restated, as
contemplated by the existing Letter of Intent, dated as of July 2, 1997, between
the parties with respect to the sharing of the common road way between the
parties and certain plans with respect to the improvements to be made thereto.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) currency exchange or interest rate swap agreements,
currency exchange or interest rate cap agreements and currency exchange or
interest rate collar agreements and (ii) other agreements or arrangements
designed to protect such Person against fluctuations in currency exchange or
interest rates.
"HVAC Provider" means Atlantic-Pacific, Las Vegas, LLC, a Delaware limited
liability company.
"HVAC Services Agreement" means, collectively (i) that certain Energy
Services Agreement, dated as of November 14, 1997, between Venetian and the HVAC
Provider, (ii) that certain Ground Lease between Venetian and the HVAC Provider,
(iii) that certain Construction Agency Agreement, dated as of November 14, 1997,
between Venetian and the HVAC Provider and (iv) that certain Energy Services
Agreement, dated as of November 14, 1997, between the Mall Subsidiary and the
HVAC Provider, in each case, as amended, revised or modified from time to time
in accordance with its terms.
"Holder" means a Person in whose name a Senior Subordinated Note is
registered.
"IAI Global Note" means the global Note in the form of Exhibit A-1 hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Senior Subordinated Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any Person, (a) any indebtedness of
such Person, whether or not contingent (i) in respect of borrowed money, (ii)
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof), (iii) representing the
balance deferred and unpaid of the purchase price of any property (including
Capital Lease Obligations), except any such balance that constitutes an accrued
expense or trade payable, or (iv) representing any Hedging Obligations, if and
to the extent any of the foregoing indebtedness (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of
such Person prepared in
11
accordance with GAAP, (b) to the extent not otherwise included, any obligation
by such Person to be liable for, or to pay, as obligor, guarantor or otherwise,
on the Indebtedness of another Person (other than by endorsement of negotiable
instruments for collection in the ordinary course of business) and (c) to the
extent not otherwise included, Indebtedness of another Person secured by a Lien
on any asset owned by such Person (whether or not such Indebtedness is assumed
by such Person). For purposes of this definition, the term "Indebtedness" shall
not include any amount of the liability in respect of an operating lease that at
such time would not be required to be capitalized and reflected as a liability
on the balance sheet in accordance with GAAP. The amount of any Indebtedness
outstanding as of any date shall be (i) the accreted value thereof, in the case
of any Indebtedness with original issue discount, and (ii) the principal amount
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent Financial Advisor" means an accounting, appraisal or
nvestment banking firm of nationally recognized standing that is, in the udgment
of the Company's Board of Directors, (i) qualified to perform the task for which
it has been engaged and (ii) disinterested and independent with respect to the
Issuers and their Subsidiaries, each Affiliate of the Issuers, and the Sole
Stockholder and its Related Parties.
"Indirect Construction Guaranty" means that certain Guaranty of
Performance dated as of November 14, 1997 executed by The Peninsular and riental
Steam Navigation Company, a corporation organized under the laws of England and
Wales, in favor of the Company, as assigned by the Company to Venetian by that
certain Assignment Agreement dated as of November 14, 1997 by and among the
Company, Venetian and The Peninsular and Oriental Steam Navigation Company, as
amended, revised, modified or restated from time to time in accordance with its
terms.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Institutional Accredited Investor" means an institution that is an
accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Intercreditor Agreement" means the Intercreditor Agreement, among The Bank
of Nova Scotia, as Bank Agent acting on behalf of the other lenders pursuant to
the Bank Credit Facility, the Senior Subordinated Note Trustee, acting on behalf
of the holders of the Senior Subordinated Notes, the Mall Construction Lender,
the Senior Subordinated Note Trustee, acting on behalf of the holders of the
Senior Subordinated Notes, and the Bank of Nova Scotia, as Intercreditor Agent,
as amended, revised, modified or restated from time to time in accordance with
its terms.
"Interface" means Interface Group-Nevada, Inc., a Nevada corporation and
wholly owned indirect subsidiary of the Sole Stockholder.
"Interface Holding" means Interface Group Holding Company, Inc., a Nevada
corporation and wholly owned direct subsidiary of the Sole Stockholder.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of loans (including
Guaranties), advances or capital contributions (excluding commission, travel and
similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity
12
Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Issuance Date" means the closing date for the sale and original issuance
of the Senior Subordinated Notes.
"Issuers" means the Company and Venetian, and any successor to any of them
permitted under this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lenders" means any of the lenders under the Bank Credit Facility, the Mall
Construction Lender and the Holders of the Senior Subordinated Notes.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Issuers and sent to all Holders of the Senior Subordinated Notes for use by
such Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Mall" means that certain enclosed retail, dining and entertainment complex
of approximately 500,000 net leasable square feet more particularly described in
the Plans and Specifications.
"Mall Collateral" means all of the Issuers, and their Subsidiaries, right,
title, and interest in and to (i) prior to the creation of the Mall I Parcel,
the leasehold estate created by the Mall Lease and, thereafter, the Mall I
Parcel; (ii) the leasehold estate created by the Billboard Lease; (iii) the Mall
and any related improvements and equipment thereto; (iv) any reserves
established by the Issuers, any of their Restricted Subsidiaries or any of their
Special Subsidiaries relating to the Mall; and (v) any and all security
agreements and an assignment of leases and rents creating a security interest in
any rents or other income derived from the Mall.
"Mall Construction Lender" means GMAC Commercial Mortgage Corporation, a
California corporation, and its permitted successors and assigns.
"Mall Construction Loan Agreement" means that certain Credit Agreement,
dated as of November 14, 1997, between the Issuers, Mall Construction Subsidiary
and Mall Construction Lender, as amended, revised or modified from time to time
in accordance with its terms.
13
"Mall Construction Loan Facility" means the credit facility described and
made available to the Issuers and Mall Construction Subsidiary pursuant to the
Mall Construction Loan Agreement and any extension, refinancing, renewal,
replacement, substitution or refunding thereof ("Mall Construction Loan Facility
Refinancing"); provided, however that (i) the aggregate amount of Indebtedness
under such Mall Construction Loan Facility Refinancing shall not exceed the
principal amount of Indebtedness so extended, refinanced, renewed, replaced,
substituted or refunded (plus the amount of reasonable expenses incurred and any
premium paid in connection therewith), (ii) such Mall Construction Loan Facility
Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of the Indebtedness being
extended, refinanced, renewed, replaced, substituted or refunded and (iii) to
the extent such Mall Construction Loan Facility Refinancing Indebtedness is not
supported by a guaranty of the Sole Stockholder on substantially similar terms
as the terms of the Sole Stockholder's guaranty of Tranche B (as defined in the
Mall Construction Loan Facility) of the Mall Construction Loan Facility, such
Mall Construction Loan Facility Refinancing Indebtedness shall contain a tranche
with a principal amount, relative payment priority and other terms which are
substantially similar to those required to be contained in the Substitute
Tranche B Loan.
"Mall Construction Subsidiary" means Grand Canal Shops Mall Construction,
LLC, a Delaware limited liability company.
"Mall Holdings" means Grand Canal Shops Mall Holding Company, LLC, a
Delaware limited liability company and a subsidiary of Mall Intermediate
Holdings.
"Mall Intermediate Holdings" means Mall Intermediate Holding Company, LLC,
a Delaware limited liability company, and a wholly owned subsidiary of Venetian.
"Mall I Parcel" means the Mall Space subdivided from the Project Site as a
legally separate parcel and recorded with the applicable Government
Instrumentalities.
"Mall Lease" means the Lease, dated as of November 14, 1997, by and between
Venetian and Mall Construction Subsidiary pursuant to which Mall Construction
Subsidiary will lease from Venetian the Mall Space, as amended, revised or
modified from time to time in accordance with its terms.
"Mall Management Agreement" means the Mall Management Agreement, dated as
of November 14, 1997, between Forest City Enterprises and the Mall Construction
Subsidiary, as amended, revised or modified.
"Mall Manager" means Grand Canal Shops Mall MM, Inc., a wholly owned
subsidiary of the Company.
"Mall Space" means that certain space upon which the Mall will be located
as more specifically described in Exhibit H hereto.
"Mall Subsidiary" means Grand Canal Shops Mall, LLC, a Delaware limited
liability company.
"Mortgage Note Indenture" means that certain Indenture, dated as of
November 14, 1997, by and among the Issuers, the Mortgage Note Guarantors and
the Mortgage Note Trustee, as amended, modified or supplemented from time to
time.
14
"Mortgage Notes" means the $425,000,000 million in aggregate principal
amount of the Issuers' 12 1/4% Mortgage Notes due 2005, and any series of
mortgage notes issued in exchange for such Mortgage Notes pursuant to the
Exchange Offer contemplated by the Registration Rights Agreement.
"Mortgage Note Guaranties" means, collectively, the unconditional
guaranties of the Mortgage Notes (i) on a senior, secured basis by the Mall
Construction Subsidiary and any future Restricted Subsidiary of the Issuers and
(ii) on a subordinated, unsecured basis by Mall Intermediate Holdings and Phase
II Intermediate Holdings.
"Mortgage Note Guarantors" means Phase II Intermediate Holdings, Mall
Intermediate Holdings, Mall Construction Subsidiary and all future Restricted
Subsidiaries of the Issuers, or any successor thereto.
"Mortgage Notes Indenture Environmental Indemnity" means that Environmental
Indemnity Agreement, dated as of November 14, 1997, among the Company, Venetian
and the Mortgage Note Trustee, as amended, revised or modified from time to time
in accordance with its terms.
"Mortgage Notes Indenture Fee Deed of Trust" means that certain Deed of
Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing,
dated as November 14, 1997 and made by the Company and Venetian, as trustor and
the trustee thereunder, for the benefit of the Mortgage Note Trustee, as
beneficiary, as amended, revised or modified from time to time in accordance
with its terms.
"Mortgage Notes Indenture Leasehold Deed of Trust" means that certain Deed
of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing,
dated as November 14, 1997 and made by the Mall Construction Subsidiary, as
trustor, to the trustee thereunder, for the benefit of the Mortgage Note
Trustee, as beneficiary, as amended, revised or modified from time to time in
accordance with its terms.
"Mortgage Notes Indenture Mall Parcel Fee Deed of Trust" means the deed of
trust in the form of Exhibit V-4 to the Disbursement Agreement to be executed by
Mall Construction Subsidiary for the benefit of the Mortgage Note Trustee in
accordance with the Disbursement Agreement, as amended, revised or modified from
time to time in accordance with its terms.
"Mortgage Notes Proceeds Account" means that certain Mortgage Notes
Proceeds Account into which the net proceeds from the sale of the Mortgage Notes
will be deposited in accordance with the Disbursement Agreement.
"Mortgage Note Trustee" means First Trust National Association in its
capacity as trustee under the Mortgage Note Indenture.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries, and (iii) excluding any
extraordinary gain (but not loss), together with any related provision for taxes
on such extraordinary gain (but not loss).
15
"Net Proceeds" means the aggregate cash proceeds received by the Issuers or
any of their Restricted Subsidiaries in respect of any Asset Sale, net of the
direct costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees and expenses, employee severance and
termination costs, any trade payables or similar liabilities related to the
assets sold and required to be paid by the seller as a result thereof and sales,
finder's or broker's commissions), and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (including, without
limitation, any taxes paid or payable by an owner of the Issuers or any
Restricted Subsidiary) (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets that are
the subject of such Asset Sale or amounts permitted by the terms of such
Indebtedness to be otherwise reinvested in the Project to the extent so
reinvested, all distributions and other payments required to be made to minority
interest holders in a subsidiary or joint venture as a result of the Asset Sale
and any reserve for adjustment in respect of the sale price of such asset or
assets or any liabilities associated with the asset disposed of in such Asset
Sale.
"Non-Recourse Financing" means Indebtedness incurred in connection with the
purchase or lease of personal or real property useful in the Principal Business
or to construct, develop or equip the Mall Space and (i) as to which the lender
upon default may seek recourse or payment against the Issuers or any Restricted
Subsidiary only through the return or sale of the property or the other
Specified FF&E or equipment or the other Specified FF&E so purchased or leased,
or in the case of any Indebtedness with respect to the Mall Space, only through
foreclosure upon the Mall Collateral and (ii) may not otherwise assert a valid
claim for payment on such Indebtedness against the Company or any Restricted
Subsidiary or any other property of the Issuers or any Restricted Subsidiary.
"Non-Recourse Indebtedness" means Indebtedness or Disqualified Stock, as
the case may be, or that portion of Indebtedness or Disqualified Stock, as the
case may be, (a) as to which neither the Issuers nor any of their Restricted
Subsidiaries (i) provides credit support pursuant to any undertaking, agreement
or instrument that would constitute Indebtedness or Disqualified Stock, as the
case may be, or (ii) is directly or indirectly liable, and (b) with respect to
Non-Recourse Indebtedness of an Unrestricted Subsidiary, no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness or
Disqualified Stock, as the case may be, of the Issuers or any of their
Restricted Subsidiaries to declare a default on such other Indebtedness or
Disqualified Stock, as the case may be, or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Collateral" means all assets, now owned or hereafter acquired, of the
Company, Venetian or any Mortgage Note Guarantor included in the collateral
securing the Mortgage Notes under the Collateral Documents, which will initially
include all real estate, improvements and all personal property owned by the
Issuers (including (i) the Project Assets, (ii) the Mall Collateral, until the
transfer and release thereof in accordance with the Sale and Contribution
Agreement and the Disbursement Agreement), as well as a pledge of any
intercompany notes held by either of the Issuers or the Mortgage Note
Guarantors. Notwithstanding the forgoing, "Note Collateral" shall not include:
(i) the assets of the Phase II Subsidiary and, after the release thereof, the
Mall Collateral; (ii) heating and air-conditioning related and other equipment
owned by the HVAC Provider, which provides thermal energy services to the
Issuers pursuant to the HVAC Services Agreement; (iii) the Specified FF&E; (iv)
any assets which if pledged, hypothecated or given as collateral security would
require the Issuers to seek approval of the Nevada Gaming Authorities of the
pledge, hypothecation or collateralization, or require the Mortgage
16
Note Trustee or a holder or beneficial holder of the Mortgage Notes to be
licensed, qualified or found suitable by an applicable Gaming Authority (other
than any approval required for the pledge, hypothecation or collateralization of
assets in connection with the Exchange Offer); (v) a pledge of the capital stock
of the Company or Venetian or any of the Issuers' Subsidiaries; and (vi) assets
financed with Indebtedness permitted to be incurred pursuant to clauses (g), (h)
or (p) of the Section 4.09 hereof and such Indebtedness is permitted to be
secured pursuant to Section 4.13 hereof.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the Offering by the Issuers of $97,500,000 in aggregate
principal amount of their 14 1/4% Senior Subordinated Notes due 2005.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Issuers
or a Senior Subordinated Note Guarantor, as the case may be, by two Officers (or
if a limited liability company, two Officers of the managing member of such
limited liability company) of the Issuers or a Senior Subordinated Note
Guarantor, as the case may be, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, Venetian (or managing its members) or a
Senior Subordinated Note Guarantor, as the case may be, that meets the
requirements set forth in this Indenture.
"Opinion of Counsel" means an opinion from legal counsel, that meets the
requirements of Section 12.05 hereof. The counsel may be an employee of or
counsel to the Issuers, any Subsidiary of the Issuers, any Senior Subordinated
Note Guarantor or the Senior Subordinated Note Trustee.
"Other Phase II Agreements" means any agreement entered into by the Issuers
or their Subsidiaries with a Person for construction, development and operation
of a hotel or casino on the Phase II Land (other than the Phase II Resort).
"Outside Completion Deadline" means April 21, 1999, as the same may from
time to time be extended pursuant to the Disbursement Agreement.
"Participant" means, with respect to the Depositary, Euroclear or Cedel, a
Person who has an account with the Depositary, Euroclear or Cedel, respectively
(and, with respect to The Depository Trust Company, shall include Euroclear and
Cedel).
"Participating Broker-Dealer" has the meaning set forth in the Registration
Rights Agreement.
"Permitted Construction Loan Refinancing" means (i) the incurrence of
indebtedness and/or the issuance of Capital Stock by the Mall Subsidiary the
proceeds of which are used to purchase the Mall Collateral pursuant to the Sale
and Contribution Agreement (including, without limitation, the Tranche A
Take-out Commitment and the Tranche B Take-out Commitment) and/or (ii) the
assumption of the Mall Construction Loan Facility and/or the Substitute Tranche
B Loan (or any permitted refinancing thereof) pursuant to the Sale and
Contribution Agreement.
17
"Permitted Investments" means (a) any Investments in the Issuers, any
Senior Subordinated Note Guarantor or in any Restricted Subsidiary that is not a
Senior Subordinated Note Guarantor if the Investments in such Restricted
Subsidiary that is not a Senior Subordinated Note Guarantor from the Issuers,
any Senior Subordinated Note Guarantor or any of the other Restricted
Subsidiaries aggregate less than $1.0 million; (b) any Investments in Cash
Equivalents; (c) Investments by the Issuers or any Restricted Subsidiary of the
Issuers in a Person, if as a result of such Investment (i) such Person becomes a
Senior Subordinated Note Guarantor or (ii) such Person is merged, consolidated
or amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, one of the Issuers or a Senior Subordinated
Note Guarantor; (d) any Restricted Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereof; (e) any acquisition of assets solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock) of
the Issuers; (f) receivables owing to the Issuers or any Restricted Subsidiary
if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however, that
such trade terms may include such concessionary trade terms as the Issuers or
any such Restricted Subsidiary deems reasonable under the circumstances; (g)
payroll, travel and similar advances to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (h) loans or
advances to employees of the Issuers or their Restricted Subsidiaries or Special
Subsidiaries (i) to fund the exercise price of options granted under the
employment agreements and the Issuers' stock option plans or agreements, in each
case, as in effect on the date of this Indenture or (ii) for any other purpose
not to exceed $2.0 million in the aggregate at any one time outstanding under
this clause (ii); (i) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Issuers and
any Restricted Subsidiary or in satisfaction of judgments; (j) other Investments
in any Person (other than in an Affiliate of the Issuers) having a fair market
value (measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (j) that are at the time outstanding,
not to exceed $5.0 million; (k) Investments in any person engaged in the
Principal Business which Investment is solely in the form of Equity Interests
(other than Disqualified Stock) of the Issuers and (l) the initial designation
on the Issuance Date of (i) Phase II Subsidiary, Phase II Holdings and Phase II
Manager as Unrestricted Subsidiaries and (ii) Mall Subsidiary, Mall Holdings and
Mall Manager as Special Subsidiaries; provided that in each case, no more than
$1,000 is invested in any such Person at the time of designation.
"Permitted Liens" means (a) Liens in favor of the Issuers and their Wholly
Owned Restricted Subsidiaries; (b) Liens on property of a Person existing at the
time such Person became a Restricted Subsidiary, is merged into or consolidated
with or into, or wound up into, one of the Issuers or any Restricted Subsidiary
of the Issuers; provided, that such Liens were in existence prior to the
contemplation of such acquisition, merger or consolidation or winding up and do
not extend to any other assets other than those of the Person acquired by,
merged into or consolidated with one of the Issuers or such Restricted
Subsidiary; (c) Liens on property existing at the time of acquisition thereof by
the Issuers or any Restricted Subsidiary of the Issuers; provided that such
Liens were in existence prior to the contemplation of such acquisition; (d)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business or in the construction of the Project and which
obligations are not expressly prohibited by this Indenture; provided, however,
that the Issuers have obtained a title insurance endorsement insuring against
losses arising therewith or if such Lien arises in the ordinary course of
business or in the construction of the Project, the Issuers have bonded within a
reasonable time after becoming aware of the existence of such Lien; (e) Liens
securing obligations in respect of this Indenture, the Mortgage Notes and any
Secured Mortgage Note Guaranty; (f) leases or other Liens, to the extent
permitted pursuant to Section 4.25 under the Mortgage Note Indenture; (g) (1)
Liens for taxes, assessments or governmental charges
18
or claims or (2) statutory Liens of landlords, and carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other similar Liens
arising in the ordinary course of business or in the construction of the
Project, in the case of each of (1) and (2), with respect to amounts that either
(A) are not yet delinquent or (B) are being contested in good faith by
appropriate proceedings as to which appropriate reserves or other provisions
have been made in accordance with GAAP; (h) easements, rights-of-way,
navigational servitudes, restrictions, minor defects or irregularities in title
and other similar charges or encumbrances which do not interfere in any material
respect with the ordinary conduct of business of the Issuers and their
Restricted Subsidiaries; (i) after Completion, Liens securing Indebtedness in an
aggregate amount not exceeding $25.0 million at any one time securing purchase
money or lease obligations otherwise permitted by this Indenture incurred or
assumed in connection with the acquisition, purchase or lease of real or
personal property to be used in the Principal Business of the Issuers or any of
their Restricted Subsidiaries within 180 days of such incurrence or assumption;
provided, that such Liens do not extend to any Note Collateral or to any
property or assets of the Issuers or any Restricted Subsidiary other than the
property or assets so purchased or leased and, at the time of incurrence, the
principal amount of such Indebtedness does not exceed 75% of the value of the
collateral securing such Indebtedness; (j) a leasehold mortgage in favor of a
party financing the lessee of space within the Project; provided that (i) the
lease affected by such leasehold mortgage is permitted pursuant to Section 4.25
under the Mortgage Note Indenture and (ii) neither the Issuers nor any
Restricted Subsidiary is liable for the payment of any principal of, or interest
or premium on, such financing; (k) Liens securing the Mall Construction Loan
Facility and any additional Indebtedness permitted to be incurred thereunder
pursuant to clause (n)(A) of Section 4.09 hereof; (l) Liens created or
contemplated by the Cooperation Agreement and the HVAC Services Agreement; (m)
Liens on real property of the Issuers arising pursuant to that certain Harrah's
Road Way Agreement; (n) Liens created by the Pre-development Agreement, as in
effect on the date of this Indenture; (o) Liens (1) to secure Indebtedness
permitted by clauses (g), (h) or (p) of Section 4.09, and extending only to
assets or Specified FF&E acquired in accordance with such clauses and to any
proceeds of such assets or Indebtedness and related collateral accounts in which
such proceeds are held, and (2) to secure Indebtedness permitted by clause (d)
of Section 4.09; provided that such Liens on the assets acquired are not
materially greater in extent than the Liens securing the Indebtedness so
refinanced; (p) Liens created by the Other Phase II Agreements; (q) Liens to
secure all Obligations under the Bank Credit Facility and any Guarantees
thereof, incurred pursuant to clause (a) of Section 4.09 hereof and any
additional Indebtedness permitted to be incurred thereunder pursuant to clause
(n)(A) of Section 4.09 hereof; (r) until Completion is achieved, Permitted Liens
(as defined in the Disbursement Agreement); (s) Liens incurred in connection
with the construction of a pedestrian bridge over or a pedestrian tunnel under
Las Vegas Boulevard and Sands Avenue; (t) Liens incurred in connection with the
traffic study relating to increased traffic on Las Vegas Boulevard as a result
of the Completion of the Project; (u) Liens incurred in connection with Hedging
Obligations incurred pursuant to clause (f) of Section 4.09 hereof; (v) licenses
of patents, trademarks and other intellectual property rights granted by the
Issuers or any Subsidiary of the Issuers in the ordinary course of business and
not interfering in any material respect with the ordinary conduct of the
business of such Issuer or such Subsidiary; (w) any judgment attachment or
judgment Lien not constituting an Event of Default; (x) Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods; (y) any Lien created
under the Sale and Contribution Agreement and (z) after Completion, Liens
securing (A) up to an aggregate of $20.0 million of Indebtedness permitted to be
incurred pursuant to clause (n)(B) of Section 4.09 hereof and (B) up to an
aggregate of $20.0 million of Indebtedness permitted to be incurred pursuant to
clause (o) of Section 4.09 hereof.
"Permitted Quarterly Tax Distributions" means quarterly distributions of
Tax Amounts determined on the basis of the estimated taxable income of the
Company or Venetian, as the case may be (in each case, including any such
taxable income attributable to such entity's ownership of interest in any other
pass-through entity for Federal income tax purposes) (except that if all or any
portion of the
19
Completion Guaranty Loan or the Substitute Tranche B Loan is outstanding and
held by the Sole Stockholder or a Related Party and is not paying current cash
interest, then such estimated taxable income shall be determined without giving
effect to any non-cash interest payments on such loans held by the Sole
Stockholder or the Related Parties to the extent such non-cash interest is
deductible), for the related Estimation Period, as in a statement filed with the
Senior Subordinated Note Trustee, provided; however, that (A) prior to any
distributions of Tax Amounts the Issuers shall deliver an officers' certificate
to the effect that, in the case of distributions to be made by Venetian,
Venetian qualifies as a partnership or a substantially similarly treated
pass-through entity for federal income tax purposes or that, in the case of
distributions to be made by the Company, the Company qualifies as a Subchapter S
corporation under the Code or a substantially similarly treated pass-through
entity for federal income tax purposes, as the case may be, and (B) at the time
of such distributions, the most recent audited financial statements of the
Company reflect that the Company was treated as a Subchapter S corporation under
the Code or a substantially similarly treated pass-through entity for federal
income tax purposes and Venetian was treated as a partnership or substantially
similarly treated pass-through entity for Federal income tax purposes for the
period covered by such financial statements; provided, further, that, for an
Estimation Period that includes a True-up Determination Date, (A) if the True-up
Amount is due to the members or shareholders, as the case may be, the Permitted
Quarterly Tax Distribution payable by the Company or Venetian, as the case may
be, for the Estimation Period shall be increased by such True-up Amount, and (B)
if the True-up Amount is due to the Company or Venetian, the Permitted Quarterly
Tax Distribution payable by the Company or Venetian, as the case may be, for the
Estimation Period shall be reduced by such True-up Amount and the excess, if
any, of the True-up Amount over such Permitted Quarterly Tax Distribution shall
be applied to reduce the immediately following Permitted Quarterly Tax
Distribution(s) until such True-up Amount is entirely offset. The amount of
Permitted Quarterly Tax Distribution relating to an Estimation Period including
a True-up Determination Date shall be determined by a Tax Amounts CPA, and the
amount of Permitted Quarterly Tax Distribution relating to all other Estimation
Periods shall be determined by the Company or Venetian, as the case may be.
"Person" means any individual, corporation, partnership, limited liability
company or partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Phase II Holdings" means Lido Casino Resort Holding Company, LLC, a
Delaware limited liability company and a subsidiary of Phase II Intermediate
Holdings, and any successor thereto permitted under this Indenture.
"Phase II Intermediate Holdings" means Lido Intermediate Holding Company,
LLC, a Delaware limited liability company, and a Wholly Owned Subsidiary of the
Company, and any successor thereto permitted under this Indenture.
"Phase II Land" means that portion of the Project Site designated as the
Phase II Land in the Collateral Documents, together with all improvements
thereon and all rights appurtenant thereto.
"Phase II Manager" means Lido Casino Resort MM, Inc., a special purpose
Wholly Owned Subsidiary of the Company.
"Phase II Resort" means the themed hotel and casino currently contemplated
to be constructed on the Phase II Land and which will be physically connected to
the Casino Resort.
"Phase II Subsidiary" means Lido Casino Resort, LLC, a Nevada limited
liability company and, at the Issuance Date, an Unrestricted Subsidiary of the
Issuers.
20
"Plans and Specifications" means the plans and specifications for the
construction of the Casino Resort listed in an exhibit to the Disbursement
Agreement, as the same may be modified from time to time in accordance with the
Disbursement Agreement.
"Pre-development Agreement" means the Sands Resort Hotel & Casino Agreement
dated February 18, 1997 by and between Clark County and the Company as amended,
revised, modified and restated.
"Preferred Stock" means any Equity Interest with preferential right of
payment of dividends or upon liquidation, dissolution, or winding up.
"Principal Business" means the casino gaming, hotel, retail and
entertainment mall and resort business and any activity or business incidental,
directly related or similar thereto (including owning interests in Subsidiaries,
operating the conference center and meeting facilities and owning and operating
a retail and entertainment mall (including the Mall prior to its transfer to the
Mall Subsidiary) and acting as a member of Venetian in the case of the Company),
or any business or activity that is a reasonable extension, development or
expansion thereof or ancillary thereto, including any hotel, entertainment,
recreation, convention, trade show, meeting, retail sales or other activity or
business designed to promote, market, support, develop, construct or enhance the
casino gaming, hotel, retail and entertainment mall and resort business operated
by the Company, Venetian and direct and indirect Restricted Subsidiaries
(including, without limitation, engaging in transactions with Affiliates and
incurring Indebtedness, providing guarantees or providing other credit support,
in each case to the extent permitted under this Indenture), owning and operating
joint ventures to supply materials or services for the construction or operation
of any resorts owned or operated by the Issuers and their Restricted
Subsidiaries and entering into casino leases or management agreements for any
casino situated on land owned by the Issuers or any of their Subsidiaries or
owned or operated by the Issuers or any Affiliate of the Issuers.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
to be placed on all Senior Subordinated Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"Project" means the Venetian-themed hotel, casino, retail, meeting and
entertainment complex, with related heating, ventilation and air conditioning
and power station facilities to be developed at the Project Site, all as more
particularly described in Exhibit T-1 to the Disbursement Agreement.
"Project Architect" means collectively, TSA of Nevada, LLP, and WAT&G, Inc.
Nevada.
"Project Assets" means, with respect to the Project at any time, all of the
assets then in use related to the Project including any real estate assets, any
buildings or improvements thereon, and all equipment, furnishings and fixtures,
but excluding: (i) the Phase II Land and/or the Mall Collateral and any
improvements thereon after their transfer to the Unrestricted Subsidiary or
Special Subsidiary as permitted by this Indenture; (ii) any obsolete personal
property determined by the Company's Board of Directors to be no longer useful
or necessary to the operations or support of the Project; (iii) the equipment
owned by the HVAC Provider (unless purchased by Venetian or Mall Construction
Subsidiary after the date hereof); and (iv) any equipment leased from a third
party in the ordinary course of business.
"Project Budget" means the Project Budget as in effect on the Issuance Date
and attached as an exhibit to the Disbursement Agreement, as amended, revised or
modified from time to time in accordance with the terms thereof.
21
"Project Documents" means the Construction Management Agreement, the Direct
Construction Guaranty, the Indirect Construction Guaranty, the Contracts, the
Approved Equipment Funding Commitments, the Cooperation Agreement, the HVAC
Services Agreement, the Mall Lease, the Sale and Contribution Agreement, the
Treadway Agreement, the operating agreement of each of Venetian, Mall
Intermediate Holdings, Mall Holdings and Mall Subsidiary and any other document
or agreement entered into relating to the development, construction, maintenance
or operation of the Project (other than the documents relating to the Tranche A
Take-out Commitment and the Tranche B Take-out Commitment) as the same may be
amended from time to time in accordance with the terms and conditions of the
Disbursement Agreement.
"Public Equity Offering" means a bona fide underwritten sale to the public
of common equity of the Company, Venetian or a Person holding more than 50% of
the common equity of the Company pursuant to a registration statement (other
than on Form S-8 or any other form relating to securities issuable under any
benefit plan of the Company) that is declared effective by the SEC and results
in gross aggregate proceeds to the Company or Venetian of at least $20.0
million.
"Quarterly Payment Period" means the period commencing on the tenth day and
ending on and including the twentieth day of each month in which federal
estimated tax payments are due (provided that payments in respect of estimated
state income taxes due in January may instead, at the option of the Issuers, be
paid during the last five days of the immediately preceding December).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of November 14, 1997, by and among the Issuers, the Initial Purchasers
and the other parties named on the signature pages thereof, as such agreement
may be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Senior
Subordinated Note in the form of Exhibit A-2 hereto bearing the Global Note
Legend and the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Regulation S
Temporary Global Note upon expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Senior
Subordinated Note in the form of Exhibit A-2 hereto bearing the Private
Placement Legend and the Regulation Temporary Global Note Legend set forth in
Section 2.06(g)(iii) and deposited with or on behalf of and registered in the
name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Senior Subordinated Notes initially sold in
reliance on Rule 903 of Regulation S.
"Related Parties" means (i) any spouse and any child, stepchild, sibling or
descendant of the Sole Stockholder, (ii) any estate of the Sole Stockholder or
any person under clause (i), (iii) any person who receives a beneficial interest
in the Company or Venetian from any estate under clause (ii) to the extent of
such interest, (iv) any executor, personal administrator or trustee who holds
such beneficial interest in the Company or Venetian for the benefit of, or as
fiduciary for, any person under clauses (i),
22
(ii) or (iii) to the extent of such interest, (v) any corporation, trust, or
similar entity owned or controlled by the Sole Stockholder or any person
referred to in clause (i), (ii), (iii) or (iv) or for the benefit of any person
referred to in clause (i) and (vi) the spouse or issue of one or more of the
individuals described in clause (i).
"Repurchase Offer" means an offer made by the Issuers to purchase all or
any portion of a Holder's Senior Subordinated Notes pursuant to Sections 4.10 or
4.16 hereof, respectively.
"Responsible Officer," when used with respect to the Senior Subordinated
Note Trustee, means any officer within the Corporate Trust Department of the
Senior Subordinated Note Trustee (or any successor group of the Senior
Subordinated Note Trustee) or any other officer of the Senior Subordinated Note
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Investment" means (i) an Investment other than a Permitted
Investment or (ii) any sale, conveyance, lease, transfer or other disposition of
assets at less than fair market value to an Unrestricted Subsidiary, provided
that the amount of such Restricted Investment under this clause (ii) shall be
such difference in value.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" means, at any time, any direct or indirect
Subsidiary of the Issuers that is not then an Unrestricted Subsidiary or a
Special Subsidiary; provided, however, that upon the occurrence of any
Unrestricted Subsidiary or Special Subsidiary ceasing to be an Unrestricted
Subsidiary or Special Subsidiary, such Subsidiary shall be included in the
definition of "Restricted Subsidiary."
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"Sale and Contribution Agreement" means that certain Sale and Contribution
Agreement among the Venetian, Mall Construction Subsidiary and Mall Subsidiary,
as such agreement may be amended, modified or renewed from time to time in
accordance with its terms.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Subordinated Note Custodian" means the Senior Subordinated Note
Trustee, when serving as custodian for the Depositary with respect to the Senior
Subordinated Notes in global form, or any successor entity thereto.
23
"Senior Subordinated Notes" has the meaning assigned to it in the preamble
to this Indenture.
"Senior Subordinated Note Guaranties" means the unconditional guaranties of
the Senior Subordinated Notes on a subordinated, unsecured basis by Mall
Intermediate Holdings and Phase II Intermediate Holdings.
"Senior Subordinated Note Guarantors" has the meaning assigned to it in the
preamable to this Indenture, and includes any successors thereto permitted under
this Indenture.
"Senior Subordinated Note Make-Whole Premium" means, with respect to a
Senior Subordinated Note, an amount equal to the greater of (i) (a) 14.25% of
the Accreted Value if prior to the second anniversary of the Issuance Date of
such Senior Subordinated Note or (b) 14.25% of the outstanding principal amount
of such Senior Subordinated Note if on or after the second anniversary of such
Issuance Date and (ii) the excess of (a) the present value of the remaining
interest, premium and principal payments due on such Senior Subordinated Note as
if such Senior Subordinated Note were redeemed on November 15, 2001, computed
using a discount rate equal to the Treasury Rate plus 50 basis points, over (b)
the outstanding principal amount of such Senior Subordinated Note.
"Senior Subordinated Note Trustee" means the party named as such in the
preamble hereto until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Services Agreement" means that Amended and Restated Services Agreement,
dated as of November 14, 1997, by and among the Company, Interface, Interface
Group Holding Company, Inc., a Nevada corporation, and the parties stated on the
signature page thereto, as amended from time to time in accordance with its
terms.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary which would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Act, as such Regulation is in effect on the Issuance Date.
"Sole Stockholder" means Sheldon G. Adelson.
"Sole Stockholder Intercreditor Agreement" means the Intercreditor
Agreement, among the Sole Stockholder, the Company, Venetian, Mall Construction
Subsidiary, The Bank of Nova Scotia, as Bank Agent acting on behalf of the other
lenders pursuant to the Bank Credit Facility, the Mortgage Note Trustee, acting
on behalf of the holders of the Mortgage Notes, the Mall Construction Lender,
the Senior Subordinated Note Trustee, acting on behalf of the holders of the
Senior Subordinated Notes, as amended, revised, modified or restated from time
to time in accordance with its terms.
"Special Subsidiary" means the Mall Subsidiary, Mall Holdings, Mall Manager
and any other Subsidiary so designated by the Board of Directors of the Company
in accordance with the terms of this Indenture.
"Special Subsidiary Permitted Investments" means with respect to any
Special Subsidiary (a) any Investments in a Wholly Owned Subsidiary of such
Special Subsidiary engaged in a Special Subsidiary Principal Business; (b) any
Investments in Cash Equivalents; (c) receivables owing to such Special
24
Subsidiary or any Wholly Owned Subsidiary of such Special Subsidiary if created
or acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that such trade terms
may include such concessionary trade terms as the Special Subsidiary deems
reasonable under the circumstances; (d) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (e) loans or advances to employees made in the ordinary
course of business of the Special Subsidiary; (f) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to Special Subsidiary or a Subsidiary or in satisfaction of
judgments and (g) other Investments in any Person (other than an Affiliate of
the Special Subsidiary) having a fair market value (measured on the date of each
such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other investments made pursuant to this
clause (g) that are at the time outstanding, not to exceed $5.0 million.
"Special Subsidiary Principal Business" means business limited to the
following: (i) to acquire, hold, own, manage, market and operate a retail,
restaurant and entertainment complex known as the Grand Canal Shops Mall (the
"Property"), located at 3355 Las Vegas Boulevard, South, Las Vegas, Nevada, (ii)
to engage in the retail, restaurant and entertainment business at the Property
and any activity and business incidental, directly related or similar thereto,
and (iii) to engage in any business or activity that is a reasonable extension,
development or expansion thereof or ancillary thereto including any retail,
restaurant, entertainment or other activity or business designed to promote,
market, support, develop, construct or enhance the retail, restaurant and
entertainment business operated by the Mall Subsidiary (including, without
limitation, owning and operating joint ventures to supply materials or services
for the construction or operation of the Property, engaging in transactions with
Affiliates to the extent permitted under this Indenture, and incurring
Indebtedness, providing guarantees or providing other credit support). Special
Subsidiary Principal Business does not mean any of the foregoing to the extent
engaged in on the Phase II Land.
"Special Subsidiary Restricted Investment" means (i) an Investment by a
Special Subsidiary or a Subsidiary of a Special Subsidiary other than a Special
Subsidiary Permitted Investment or (ii) any Investment by a Special Subsidiary
or a Subsidiary of a Special Subsidiary in the equity of the Issuers or any of
the Issuers' Restricted Subsidiaries.
"Specified FF&E" means any furniture, fixtures, equipment and other
personal property financed or refinanced with the proceeds from the incurrence
of Indebtedness pursuant to clauses (g), (h) or (p) of Section 4.09 hereof,
including (i) each and every item or unit of equipment acquired with proceeds
thereof, (ii) each and every item or unit of equipment acquired in substitution
or replacement thereof, (iii) all parts, components and other items pertaining
to such collateral, (iv) all documents (including without limitation all
warehouse receipts, dock receipts, bills of lading and the like), (v) all
licenses (other than gaming licenses), warranties, guaranties, service contracts
and related rights and interests covering all or any portion of such collateral,
(vi) to the extent not otherwise included, all proceeds (including insurance
proceeds) of any of the foregoing and all accessions to, substitutions and
replacements for, and the rents, profits and products of, each of the foregoing,
and (vii) so long as Indebtedness under the Bank Credit Facility is outstanding,
such other collateral reasonably determined by the lenders under the Bank Credit
Facility to be collateral for Indebtedness incurred in connection with the
purchase of Specified FF&E so long as the Lien securing Indebtedness incurred
under the Bank Credit Facility does not extend to such collateral.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
25
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness of the Issuers or any of
their Restricted Subsidiaries which is expressly by its terms subordinated in
right of payment to the Senior Subordinated Notes or any Senior Subordinated
Note Guaranty.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association, or other business entity (other than a partnership) of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time of determination owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person or a combination thereof and (ii) any partnership of
which more than 50% of the partnership's capital accounts, distribution rights
or general or limited partnership interests are owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"Substitute Tranche B Loan" means amounts drawn upon under the guarantee of
the Sole Stockholder of the Tranche B loan of the Mall Construction Loan
Facility, which amounts, when drawn upon may be treated as a subordinated loan
to the Issuers from the Sole Stockholder and Mall Subsidiary.
"Supplier Joint Venture" means any Person that supplies or provides
materials or services to the Issuers or the Construction Manager or any
contractor in the Project and in which the Issuers or one of their Restricted
Subsidiaries have Investments.
"Tax Amount" means, with respect to a Estimation Period or a taxable year,
as the case may be, an amount equal to (A) the product of (x) the taxable income
(including all separately stated items of income) of the Company or Venetian, as
the case may be, for such Estimation Period or a taxable year, as the case may
be, and (y) the Applicable Tax Percentage reduced by (B) to the extent not
previously taken into account, any income tax benefit attributable to the
Company or Venetian, as the case may be, which could be utilized (without regard
to the actual utilization) by its members or shareholders, as the case may be,
in the current or any prior taxable year, or portion thereof, commencing on or
after the Issuance Date (including any tax losses or tax credits), computed at
the Applicable Tax Percentage of the year that such benefit is taken into
account for purposes of this computation; provided, however, that, the
computation of Tax Amount shall also take into account (C) the deductibility of
state and local taxes for federal income tax purposes, and (D) any difference in
the Applicable Tax Percentage resulting from the nature of taxable income (such
as capital gain as opposed to ordinary income).
"Tax Amounts CPA" means a nationally recognized certified public accounting
firm.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Tranche A Take-out Commitment" means the commitment of Goldman Sachs
Mortgage Company, to enter into and make a loan in an aggregate of up to $105.0
million thereunder under the Permitted Mall Construction Refinancing or any
other commitment to make such a loan that replaces the commitment of Goldman
Sachs Mortgage Company in accordance with the Tri-Party Agreement.
26
"Tranche B Take-out Commitment" means the commitment of the Sole
Stockholder to enter into and fund a loan to Mall Subsidiary in an aggregate of
up to $35.0 million under the Permitted Mall Construction Refinancing or any
other commitment to make such a loan that replaces the commitment of the Sole
Stockholder in accordance with the Tri-Party Agreement.
"Treadway Agreement" means that certain Time and Materials Agreement
Between Owner and Contractor, dated as of February 10, 1997, by and between the
Company and Treadway Industries of Phoenix, Inc., an Arizona corporation, as
amended, modified or revised from time to time in accordance with its terms, as
amended, modified or revised from time to time in accordance with its terms.
"Treasury Rate" means the yield to maturity at the time of the computation
of the United States Treasury securities with a constant maturity (as compiled
by and published in the most recent Federal Reserve Statistical Release
H.15(519), which has become publicly available at least two Business Days prior
to the date fixed for prepayment (or, if such Statistical Release is no longer
published, any publicly available source of similar market data) most nearly
equal to the then remaining average life to November 15, 2001; provided,
however, that if the average life of such Senior Subordinated Note is not equal
to the constant maturity of the United States Treasury security for which weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the average life of such Senior Subordinated Notes is less
than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Tri-Party Agreement" means the agreement between Venetian, the Company,
the Sole Stockholder, the Mall Construction Subsidiary, the Mall Subsidiary, the
Mall Construction Lender and Goldman Sachs Mortgage Company (or any successor
provider of the Tranche A Take-out Commitment), as amended or replaced from time
to time in accordance with its terms.
"True-up Amount" means, in respect of a particular taxable year, an amount
determined by the Tax Amounts CPA equal to the difference between (i) the
aggregate Permitted Quarterly Tax Distributions actually distributed in respect
of such taxable year, without taking into account any adjustment to such
Permitted Quarterly Tax Distributions made with respect to any other taxable
year (including any adjustment to take into account a True-up Amount for the
immediately preceding taxable year) and (ii) the Tax Amount permitted to be
distributed in respect of such year as determined by reference to the Company's
Internal Revenue Service Form 1120-S or Venetian's IRS Form 1065 filed for such
year; provided, however, that if there is an audit or other adjustment with
respect to a return filed by the Company or Venetian (including a filing of an
amended return), upon a final determination or resolution of such audit or other
adjustment, the Tax Amounts CPA shall redetermine the True- up Amount for the
relevant taxable year. The amount equal to the excess, if any, of the amount
described in clause (i) above over the amount described in clause (ii) above
shall be referred to as the "True-up Amount due to the Company" or the "True-up
Amount due to Venetian," as the case may be, and the excess, if any, of the
amount described in clause (ii) over the amount described in clause (i) shall be
referred to as the "True-up Amount due to the shareholders or members."
"True-up Determination Date" means the date on which the Tax Amounts CPA
delivers a statement to the Senior Subordinated Note Trustee indicating the
True-up Amount; provided, however, that the True-up Determination Date shall not
be later than 30 days after the occurrence of an event requiring the
determination of the True-up Amount (including, the filing of the federal and
state tax returns or the final determination or resolution of an audit or other
adjustment, as the case may be).
27
"Unrestricted Subsidiary" means (i) each of Phase II Holdings, Phase II
Manager and Phase II Subsidiary; and (ii) any entity that would have been a
Restricted Subsidiary of the Issuers but for its designation as an "Unrestricted
Subsidiary" in accordance with the provisions of this Indenture and any
Subsidiary of such entity, so long as it remains an Unrestricted Subsidiary in
accordance with the terms of this Indenture.
"Unrestricted Global Note" means a permanent global Senior Subordinated
Note in the form of Exhibit A-1 attached hereto that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, and that is deposited with or on behalf of and registered in
the name of the Depositary, representing a series of Senior Subordinated Notes
that do not bear the Private Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Venetian" means, Venetian Casino Resort, LLC, a Nevada limited liability
company.
"Voting Stock" means, with respect to any Person that is a corporation, any
class or series of capital stock of such Person that is ordinarily entitled to
vote in the election of directors thereof at a meeting of stockholders called
for such purpose, without the occurrence of any additional event or contingency
and with respect to any other Person that is a limited liability company,
membership to manage the operations or business of the limited liability
company.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
or Disqualified Stock, as the case may be, at any date, the number of years
(calculated to the nearest one-twelfth) obtained by dividing (a) the sum of the
products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount or liquidation preference, as applicable, of such Indebtedness or
Disqualified Stock, as the case may be.
"Wholly Owned Restricted Subsidiary" is any Wholly Owned Subsidiary that is
a Restricted Subsidiary.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person and one or
more Wholly Owned Subsidiaries of such Person.
"Working Capital Facility" means the credit facility pursuant to any
agreement or agreements providing for the making of loans or advances on a
revolving basis, the issuance of letters of credit and/or the creation of
bankers' acceptances to fund the Issuers' or any of their Restricted
Subsidiaries' general corporate requirements and any amendment, supplement,
extension, modification, renewal, replacement or refinancing from time to time,
including any agreement to renew, extend, refinance or replace all or any
portion of such facility.
SECTION 1.02. OTHER DEFINITIONS.
28
Defined in
Term Section
"Affiliate Transaction"...................................................4.11
"Asset Sale Offer"........................................................4.10
"Authentication Order"....................................................2.02
"Benefitted Party".......................................................11.01
"Change of Control Offer".................................................4.16
"Change of Control Payment"...............................................4.16
"Change of Control Payment Date"..........................................4.16
"Covenant Defeasance".....................................................8.03
"Custodian"...............................................................6.01
"Designated Senior Debt".................................................10.02
"DTC".....................................................................2.03
"Employee Stock Buybacks".................................................4.07
"Event of Default"........................................................6.01
"Excess Proceeds".........................................................4.10
"incur"...................................................................4.09
"Legal Defeasance" .......................................................8.02
"Offer Amount"............................................................3.10
"Offer Period"............................................................3.10
"Paying Agent"............................................................2.03
"Payment Blockage Notice".............................................11.07(c)
"Payment Default".........................................................6.01
"Permitted Junior Securities"............................................10.02
"Purchase Date"...........................................................3.10
"Refinancing Indebtedness"................................................4.09
"Registrar"...............................................................2.03
"Repurchase Offer"........................................................3.10
"Restricted Payments".....................................................4.07
"Senior Debt"............................................................10.07
"Special Subsidiary Restricted Payments"..................................4.23
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Senior Subordinated Notes and the Senior
Subordinated Note Guaranties;
"indenture security Holder" means a Holder of a Senior Subordinated Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Senior
Subordinated Note Trustee;
29
"obligor" on the Senior Subordinated Notes means each of the Issuers, the
Senior Subordinated Note Guarantors, if any, and any successor obligor upon the
Senior Subordinated Notes or any Senior Subordinated Note Guaranty, as the case
may be.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include the
singular;
(5) provisions apply to successive events and transactions;
(6) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time;
(7) the term "redeem" and the correlative terms "redemption" and "redeemed"
shall not include any Repurchase Offer; and
(8) the term "consolidated" when used in the context of the Issuers and
their Restricted Subsidiaries shall exclude all assets, liabilities, revenue, or
expenses of Unrestricted Subsidiaries and Special Subsidiaries.
ARTICLE 2
THE SENIOR SUBORDINATED NOTES
SECTION 2.01. FORM AND DATING.
(a) General. The Senior Subordinated Notes and the Senior Subordinated Note
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A-1 or A-2 attached hereto. The Senior Subordinated Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Senior Subordinated Note shall be dated the date of its
authentication. The Senior Subordinated Notes shall be in denominations of
$1,000 and integral multiples thereof.
The terms and provisions contained in the Senior Subordinated Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Issuers, the Senior Subordinated Note Guarantors and the Senior Subordinated
Note Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby. However, to the extent any
provision of any Senior Subordinated Note conflicts with the express provisions
of this Indenture, the provisions of this Indenture shall govern and be
controlling.
30
(b) Global Notes. Senior Subordinated Notes issued in global form shall be
substantially in the form of Exhibits A-1 or A-2 attached hereto (including the
Global Note Legend thereon and the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Senior Subordinated Notes issued in definitive
form shall be substantially in the form of Exhibit A-1 attached hereto (but
without the Global Note Legend thereon and without the "Schedule of Exchanges of
Interests in the Global Note" attached thereto). Each Global Note shall
represent such of the outstanding Senior Subordinated Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
principal amount of outstanding Senior Subordinated Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Senior
Subordinated Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding Senior Subordinated Notes represented
thereby shall be made by the Senior Subordinated Note Trustee or the Senior
Subordinated Note Custodian, at the direction of the Senior Subordinated Note
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
(c) Temporary Global Notes. Senior Subordinated Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Senior Subordinated Notes represented thereby with the Senior Subordinated
Note Trustee, at its New York office, as custodian for the Depositary, and
registered in the name of the Depositary or the nominee of the Depositary for
the accounts of designated agents holding on behalf of Euroclear or Cedel Bank,
duly executed by the Issuers and authenticated by the Senior Subordinated Note
Trustee as hereinafter provided. The Restricted Period shall be terminated upon
the receipt by the Senior Subordinated Note Trustee of (i) a written certificate
from the Depositary, together with copies of certificates from Euroclear and
Cedel Bank certifying that they have received certification of non-United States
beneficial ownership of 100% of the aggregate principal amount of the Regulation
S Temporary Global Note (except to the extent of any beneficial owners thereof
who acquired an interest therein during the Restricted Period pursuant to
another exemption from registration under the Securities Act and who will take
delivery of a beneficial ownership interest in a 144A Global Note or an IAI
Global Note bearing a Private Placement Legend, all as contemplated by Section
2.06(a)(ii) hereof), and (ii) an Officers' Certificate from the Issuers.
Following the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in Regulation S Permanent Global Notes pursuant to the Applicable Procedures.
Simultaneously with the authentication of Regulation S Permanent Global Notes,
the Senior Subordinated Note Trustee shall cancel the Regulation S Temporary
Global Note. The aggregate principal amount of the Regulation S Temporary Global
Note and the Regulation S Permanent Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Senior
Subordinated Note Trustee and the Depositary or its nominee, as the case may be,
in connection with transfers of interest as hereinafter provided.
(d) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer of each Issuer shall sign the Senior Subordinated Notes for the
Issuers by manual or facsimile signature. Each Issuer's seal shall be reproduced
on the Senior Subordinated Notes and may be in facsimile form.
31
If an Officer whose signature is on a Senior Subordinated Note no longer
holds that office at the time a Senior Subordinated Note is authenticated, the
Senior Subordinated Note shall nevertheless be valid.
A Senior Subordinated Note shall not be valid until authenticated by the
manual signature of the Senior Subordinated Note Trustee. The signature shall be
conclusive evidence that the Senior Subordinated Note has been authenticated
under this Indenture.
The Senior Subordinated Note Trustee shall, upon a written order of the
Issuers signed by an Officer of each Issuer (an "Authentication Order"),
authenticate Senior Subordinated Notes for original issue up to the aggregate
principal amount stated in paragraph 4 of the Senior Subordinated Notes.
The Senior Subordinated Note Trustee may appoint an authenticating agent
acceptable to the Issuers to authenticate Senior Subordinated Notes. An
authenticating agent may authenticate Senior Subordinated Notes whenever the
Senior Subordinated Note Trustee may do so. Each reference in this Indenture to
authentication by the Senior Subordinated Note Trustee includes authentication
by such agent. An authenticating agent has the same rights as an Agent to deal
with Holders or an Affiliate of the Issuers.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Issuers shall maintain an office or agency where Senior Subordinated
Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Senior Subordinated Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Senior Subordinated Notes and of their transfer and exchange. The Issuers
may appoint one or more co-registrars and one or more additional paying agents.
The term "Registrar" includes any co-registrar and the term "Paying Agent"
includes any additional paying agent. The Issuers may change any Paying Agent or
Registrar without notice to any Holder. The Issuers shall notify the Senior
Subordinated Note Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Issuers fail to appoint or maintain another
entity as Registrar or Paying Agent, the Senior Subordinated Note Trustee shall
act as such. The Issuers or any of their Subsidiaries may act as Paying Agent or
Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
The Issuers initially appoint the Senior Subordinated Note Trustee to act
as the Registrar and Paying Agent and to act as Senior Subordinated Note
Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers shall require each Paying Agent other than the Senior
Subordinated Note Trustee to agree in writing that the Paying Agent will hold in
trust for the benefit of Holders or the Senior Subordinated Note Trustee all
money held by the Paying Agent for the payment of principal, premium or
Liquidated Damages, if any, or interest on the Senior Subordinated Notes, and
will notify the Senior Subordinated Note Trustee of any default by the Issuers
in making any such payment. While any such default continues, the Senior
Subordinated Note Trustee may require a Paying Agent to pay all money held by it
to the Senior Subordinated Note Trustee. The Issuers at any time may require a
Paying Agent to pay all money held by it to the Senior Subordinated Note
Trustee. Upon payment over to the Senior Subordinated Note Trustee, the Paying
Agent (if other than the Issuers or a Subsidiary) shall have no
32
further liability for the money. If the Issuers or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Issuers, the Senior Subordinated Note
Trustee shall serve as Paying Agent for the Senior Subordinated Notes.
SECTION 2.05. HOLDER LISTS.
The Senior Subordinated Note Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA ss. 312(a). If the
Senior Subordinated Note Trustee is not the Registrar, the Issuers shall furnish
to the Senior Subordinated Note Trustee at least seven Business Days before each
interest payment date and at such other times as the Senior Subordinated Note
Trustee may request in writing, a list in such form and as of such date as the
Senior Subordinated Note Trustee may reasonably require of the names and
addresses of the Holders of Senior Subordinated Notes and the Issuers shall
otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Issuers for Definitive Notes if (i) the Issuers deliver to the Senior
Subordinated Note Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Issuers within 120 days after the date of
such notice from the Depositary or (ii) the Issuers in their sole discretion
determine that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and deliver a written notice to such effect to the Senior
Subordinated Note Trustee; provided that in no event shall the Regulation S
Temporary Global Note be exchanged by the Issuers for Definitive Notes prior to
(x) the expiration of the Restricted Period and (y) the receipt by the Registrar
of any certificates required pursuant to Rule 903(c)(3)(ii)(B) under the
Securities Act. Upon the occurrence of either of the preceding events in (i) or
(ii) above, Definitive Notes shall be issued in such names as the Depositary
shall instruct the Senior Subordinated Note Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Senior Subordinated Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Senior Subordinated Note other than as provided in this
Section 2.06(a). However, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
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(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Temporary Regulation S Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person (other
than an Initial Purchaser). Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant's
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer
or exchange referred to in (1) above; provided that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial
interests in the Regulation S Temporary Global Note prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of
any certificates required pursuant to Rule 903 under the Securities Act.
Upon consummation of an Exchange Offer by the Issuers in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall
be deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the Holder
of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the
Senior Subordinated Notes or otherwise applicable under the Securities Act,
the Senior Subordinated Note Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial
interest in the 144A Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a beneficial
interest in the Regulation S Temporary Global Note or the Regulation S
Global Note, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (2) thereof;
and
34
(C) if the transferee will take delivery in the form of a beneficial
interest in the IAI Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
holder of the beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Senior Subordinated Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Issuers
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Senior Subordinated Note Trustee shall authenticate one
or more Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
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Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities
Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Issuers or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Senior Subordinated Note Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Issuers shall execute and the Senior
Subordinated Note Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate principal
amount. Any Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar through
36
instructions from the Depositary and the Participant or Indirect Participant.
The Senior Subordinated Note Trustee shall deliver such Definitive Notes to the
Persons in whose names such Senior Subordinated Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein.
Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial
interest in the Regulation S Temporary Global Note may not be exchanged for a
Definitive Note or transferred to a Person who takes delivery thereof in the
form of a Definitive Note prior to (x) the expiration of the Restricted Period
and (y) the receipt by the Registrar of any certificates required pursuant to
Rule 903(c)(3)(ii)(B) under the Securities Act, except in the case of a transfer
pursuant to an exemption from the registration requirements of the Securities
Act other than Rule 903 or Rule 904.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global Note
may exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the holder
of such beneficial interest, in the case of an exchange, or the transferee,
in the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend, a certificate
from such holder in the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a Definitive Note that does
not bear the Private Placement Legend, a certificate from such holder
in the form of Exhibit B hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial
37
interest for a Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the
Senior Subordinated Note Trustee shall cause the aggregate principal amount of
the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Issuers shall execute and the Senior Subordinated Note Trustee
shall authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii)
shall be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Senior Subordinated Note Trustee shall deliver such
Definitive Notes to the Persons in whose names such Senior Subordinated Notes
are so registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iii) shall not bear the Private
Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to
exchange such Senior Subordinated Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Senior Subordinated Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Note is being transferred pursuant
to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144 under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed
in subparagraphs (B) through (D) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to the
Issuers or any of their Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
38
(G) if such Restricted Definitive Note is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Senior Subordinated Note Trustee shall cancel the Restricted Definitive
Note, increase or cause to be increased the aggregate principal amount of,
in the case of clause (A) above, the appropriate Restricted Global Note, in
the case of clause (B) above, the 144A Global Note, in the case of clause
(C) above, the Regulation S Global Note, and in all other cases, the IAI
Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Senior Subordinated Note for a beneficial interest in an
Unrestricted Global Note or transfer such Restricted Definitive Note to a
Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to exchange
such Senior Subordinated Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to transfer
such Senior Subordinated Notes to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Senior Subordinated Note Trustee shall cancel the
Definitive Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of an Unrestricted Definitive Note may exchange such
Senior Subordinated Note for a
39
beneficial interest in an Unrestricted Global Note or transfer such Definitive
Notes to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note at any time. Upon receipt of a request
for such an exchange or transfer, the Senior Subordinated Note Trustee shall
cancel the applicable Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Unrestricted Global
Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Issuers
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Senior Subordinated Note Trustee shall authenticate one
or more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name of
Persons who take delivery thereof in the form of a Restricted Definitive Note
if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then
the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption from
the registration requirements of the Securities Act, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Issuers;
40
(B) any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes proposes to
exchange such Senior Subordinated Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes proposes to
transfer such Senior Subordinated Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably acceptable
to the Issuers to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Senior Subordinated
Notes to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Issuers shall issue
and, upon receipt of an Authentication Order in accordance with Section
2.02, the Senior Subordinated Note Trustee shall authenticate (i) one or
more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not broker-dealers, (y) they are not
participating in a distribution of the Exchange Notes and (z) they are not
affiliates (as defined in Rule 144) of the Issuers, and accepted for
exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer. Concurrently with the
issuance of such Senior Subordinated Notes, the Senior Subordinated Note
Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly, and the Issuers shall
execute and the Senior Subordinated Note Trustee shall authenticate and
deliver to the Persons designated by the Holders of Definitive Notes so
accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this
Indenture.
(i) Private Placement Legend.
41
(A) Except as permitted by subparagraph (B) below, each Global Note
and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following
form:
"THE SENIOR SUBORDINATED NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER
THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT (INCLUDING RULE 144 THEREUNDER (IF
AVAILABLE)), (5) TO LAS VEGAS SANDS, INC. OR VENETIAN CASINO RESORT, LLC
OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (B) IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS."
(B) Notwithstanding the foregoing, any Global Note or Definitive Note
issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Senior
Subordinated Notes issued in exchange therefor or substitution thereof)
shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS SENIOR SUBORDINATED NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY
BE DELIVERED TO THE MORTGAGE NOTE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED
TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS."
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the
following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE
AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR
THE BENEFICIAL OWNERS OF THIS
42
REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE
PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Senior Subordinated Note Trustee in accordance
with Section 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note shall be reduced accordingly and an endorsement shall be
made on such Global Note by the Senior Subordinated Note Trustee or by the
Depositary at the direction of the Senior Subordinated Note Trustee to reflect
such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note by
the Senior Subordinated Note Trustee or by the Depositary at the direction of
the Senior Subordinated Note Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Issuers shall
execute and the Senior Subordinated Note Trustee shall authenticate Global
Notes and Definitive Notes upon the Issuers' order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial interest
in a Global Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Issuers may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10,
4.16 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of or
exchange any Senior Subordinated Note selected for redemption in whole or in
part, except the unredeemed portion of any Senior Subordinated Note being
redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any registration
of transfer or exchange of Global Notes or Definitive Notes shall be the valid
obligations of the Issuers, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.
(v) The Issuers shall not be required (A) to issue, to register the
transfer of or to exchange any Senior Subordinated Notes during a period
beginning at the opening of business 15 days before the day of any selection
of Notes for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Senior Subordinated Note so selected for redemption in whole or
in part, except the unredeemed portion of any Senior Subordinated Note being
redeemed in part or (C) to register the transfer of or to exchange a Senior
Subordinated Note between a record date and the next succeeding Interest
Payment Date.
(vi) Prior to due presentment for the registration of a transfer of any
Senior Subordinated Note, the Senior Subordinated Note Trustee, any Agent and
the Issuers may deem and treat the Person in
43
whose name any Senior Subordinated Note is registered as the absolute owner of
such Senior Subordinated Note for the purpose of receiving payment of
principal of and interest on such Senior Subordinated Notes and for all other
purposes, and none of the Senior Subordinated Note Trustee, any Agent or the
Issuers shall be affected by notice to the contrary.
(vii) The Senior Subordinated Note Trustee shall authenticate Global
Notes and Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of Counsel required
to be submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.
SECTION 2.07. REPLACEMENT SENIOR SUBORDINATED NOTES.
If any mutilated Senior Subordinated Note is surrendered to the Senior
Subordinated Note Trustee or the Issuers and the Senior Subordinated Note
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Senior Subordinated Note, the Issuers shall issue and the Senior
Subordinated Note Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Note if the Senior Subordinated Note Trustee's
requirements are met. If required by the Senior Subordinated Note Trustee or the
Issuers, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Senior Subordinated Note Trustee and the Issuers to protect
the Issuers, the Senior Subordinated Note Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Senior
Subordinated Note is replaced. The Issuers may charge for their expenses in
replacing a Senior Subordinated Note.
Every replacement Senior Subordinated Note is an additional obligation of
the Issuers and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Senior Subordinated Notes duly issued
hereunder.
SECTION 2.08. OUTSTANDING SENIOR SUBORDINATED NOTES.
The Senior Subordinated Notes outstanding at any time are all the Senior
Subordinated Notes authenticated by the Senior Subordinated Note Trustee except
for (i) those cancelled by it, (ii) those delivered to it for cancellation,
(iii) those reductions in the interest in a Global Note effected by the Senior
Subordinated Note Trustee in accordance with the provisions hereof, and (iv)
those described in this Section as not outstanding. Except as set forth in
Section 2.09 hereof, a Senior Subordinated Note does not cease to be outstanding
because the Issuer or an Affiliate of the Issuer holds the Senior Subordinated
Note; however, Notes held by the Issuers or a Subsidiary of the Issuers shall
not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
If a Senior Subordinated Note is replaced pursuant to Section 2.07 hereof,
it ceases to be outstanding unless the Senior Subordinated Note Trustee receives
proof satisfactory to it that the replaced Senior Subordinated Note is held by a
bona fide purchaser.
If the principal amount of any Senior Subordinated Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases
to accrue.
If the Paying Agent (other than the Issuers, a Subsidiary or an Affiliate
of any of the foregoing) holds, on a redemption date or maturity date, money
sufficient to pay Senior Subordinated Notes payable
44
on that date, then on and after that date such Senior Subordinated Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Senior Subordinated Notes have concurred in any direction, waiver or consent,
Senior Subordinated Notes owned by the Issuers, or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Issuers, shall be considered as though not outstanding, except
that for the purposes of determining whether the Senior Subordinated Note
Trustee shall be protected in relying on any such direction, waiver or consent,
only Senior Subordinated Notes that the Senior Subordinated Note Trustee knows
are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Senior Subordinated Notes are ready for
delivery, the Issuers may prepare and the Senior Subordinated Note Trustee, upon
receipt of an Authentication Order, shall authenticate temporary Senior
Subordinated Notes. Temporary Senior Subordinated Notes shall be substantially
in the form of certificated Senior Subordinated Notes but may have variations
that the Issuers consider appropriate for temporary Senior Subordinated Notes
and as shall be reasonably acceptable to the Senior Subordinated Note Trustee.
Without unreasonable delay, the Issuers shall prepare and the Senior
Subordinated Note Trustee shall authenticate definitive Senior Subordinated
Notes in exchange for temporary Senior Subordinated Notes.
Holders of temporary Senior Subordinated Notes shall be entitled to all of
the benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Issuers at any time may deliver Senior Subordinated Notes to the Senior
Subordinated Note Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Senior Subordinated Note Trustee any Senior Subordinated Notes
surrendered to them for registration of transfer, exchange or payment. The
Senior Subordinated Note Trustee and no one else shall cancel all Senior
Subordinated Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall destroy cancelled Senior Subordinated
Notes (subject to the record retention requirement of the Exchange Act).
Certification of the destruction of all cancelled Senior Subordinated Notes
shall be delivered to the Issuers. The Issuers may not issue new Senior
Subordinated Notes to replace Senior Subordinated Notes that they have paid or
that have been delivered to the Senior Subordinated Note Trustee for
cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Issuers default in a payment of interest on the Senior Subordinated
Notes, they shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Senior Subordinated Notes and in Section 4.01 hereof. The
Issuers shall notify the Senior Subordinated Note Trustee in writing of the
amount of defaulted interest proposed to be paid on each Senior Subordinated
Note and the date of the proposed payment. The Issuers shall fix or cause to be
fixed each such special record date and payment date; provided that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted interest. At least 15 days before the special record date,
the Issuers (or, upon the written request of the Issuers, the Senior
Subordinated
45
Note Trustee in the name and at the expense of the Issuers) shall mail or cause
to be mailed to Holders a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
ARTICLE 3
OFFERS TO PURCHASE OR REDEMPTION
SECTION 3.01. NOTICES TO SENIOR SUBORDINATED NOTE TRUSTEE.
If the Issuers elect to redeem Senior Subordinated Notes pursuant to the
optional redemption provisions of Section 3.07 hereof, they shall furnish to the
Senior Subordinated Note Trustee, at least 45 days (or such shorter period as
may be acceptable to the Senior Subordinated Note Trustee) but not more than 60
days before a redemption date, an Officers' Certificate setting forth (i) the
Section of this Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Senior Subordinated Notes to be
redeemed and (iv) the redemption price.
If the Issuers are required to make an offer to purchase Senior
Subordinated Notes pursuant to the provisions of Section 4.10 or 4.16 they shall
furnish to the Senior Subordinated Note Trustee, at least 45 days (or such
shorter period as may be acceptable to the Senior Subordinated Note Trustee) but
not more than 60 days before the scheduled purchase date, an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the offer to purchase shall occur, (ii) the offer's terms, (iii) the purchase
price, (iv) the principal amount of the Senior Subordinated Notes to be
purchased, and (v) further setting forth a statement to the effect that (a) one
of the Issuers or one of their Restricted Subsidiaries has made an Asset Sale
and there are Excess Proceeds aggregating more than $10.0 million, (b) the
Issuers or one of their Restricted Subsidiaries has suffered an Event of Loss
and there are Excess Loss Proceeds aggregating more than $10.0 million or (b) a
Change of Control has occurred, as applicable.
SECTION 3.02. SELECTION OF SENIOR SUBORDINATED NOTES TO BE PURCHASED OR
REDEEMED.
If less than all of the Senior Subordinated Notes are to be purchased in an
Asset Sale Offer or redeemed at any time, the Senior Subordinated Note Trustee
shall select the Senior Subordinated Notes to be purchased or redeemed among the
Holders of the Senior Subordinated Notes in compliance with the requirements of
the principal national securities exchange, if any, on which the Senior
Subordinated Notes are listed or, if the Senior Subordinated Notes are not so
listed, on a pro rata basis, by lot or in accordance with any other method the
Senior Subordinated Note Trustee considers fair and appropriate (and in such
manner as complies with applicable law). In the event of partial purchase or
partial redemption in the manner provided above, the particular Senior
Subordinated Notes to be purchased or redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
purchase or redemption date by the Senior Subordinated Note Trustee from the
outstanding Senior Subordinated Notes not previously purchased or called for
redemption. In the event that less than all of the Senior Subordinated Notes
properly tendered in an Asset Sale Offer are to be purchased, the particular
Senior Subordinated Notes to be purchased shall be selected promptly upon the
expiration of such Asset Sale Offer.
The Senior Subordinated Note Trustee shall promptly notify the Issuers in
writing of the Senior Subordinated Notes selected for purchase or redemption
and, in the case of any Senior Subordinated Note selected for partial purchase
or redemption, the principal amount thereof to be purchased or redeemed.
46
Senior Subordinated Notes and portions of Senior Subordinated Notes selected
shall be in amounts of $1,000 or whole multiples of $1,000; except that if all
of the Senior Subordinated Notes of a Holder are to be purchased or redeemed,
the entire outstanding amount of Senior Subordinated Notes held by such Holder,
even if not a multiple of $1,000, shall be purchased or redeemed. Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Senior Subordinated Notes purchased or called for redemption also apply to
portions of Senior Subordinated Notes purchased or called for redemption.
In the event the Issuers are required to make an Asset Sale Offer pursuant
to Section 4.10 hereof, respectively, and the amount of Excess Proceeds to be
applied to such purchase would result in the purchase of a principal amount of
Senior Subordinated Notes which is not evenly divisible by $1,000, the Senior
Subordinated Note Trustee shall promptly refund to the Issuers the amount of
Excess Proceeds that is not necessary to purchase the immediately lesser
principal amount of Senior Subordinated Notes that is so divisible.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.10 hereof, at least 30 days but not
more than 60 days before a redemption date, the Issuers shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Senior Subordinated Notes are to be redeemed at its registered address.
The notice shall identify the Senior Subordinated Notes to be redeemed and
shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Subordinated Note is being redeemed in part, the portion
of the principal amount of such Senior Subordinated Note to be redeemed and
that, after the redemption date upon surrender of such Senior Subordinated
Note, a new Senior Subordinated Note or Senior Subordinated Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Senior Subordinated Note;
(d) the name and address of the Paying Agent;
(e) that Senior Subordinated Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Issuers defaults in making such redemption payment,
interest on Senior Subordinated Notes called for redemption ceases to
accrue on and after the redemption date;
(g) the paragraph of the Senior Subordinated Notes and/or Section of this
Indenture pursuant to which the Senior Subordinated Notes called for
redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Senior
Subordinated Notes.
At the Issuers' request, the Senior Subordinated Note Trustee shall give
the notice of redemption in the Issuers' name and at its expense; provided,
however, that the Issuers shall have delivered to the Senior Subordinated Note
Trustee, at least 45 days (or such shorter period as may be acceptable to the
47
Senior Subordinated Note Trustee) than 60 days prior to the redemption date, an
Officers' Certificate requesting that the Senior Subordinated Note Trustee give
such notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Senior Subordinated Notes called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
SECTION 3.05. DEPOSIT OF PURCHASE OR REDEMPTION PRICE.
On or prior to any purchase date with respect to an offer to purchase the
Senior Subordinated Notes required hereunder or any redemption date, the Issuers
shall deposit with the Senior Subordinated Note Trustee or with the Paying Agent
money sufficient to pay the purchase or redemption price of, and accrued and
unpaid interest and Liquidated Damages, if any, on all Senior Subordinated Notes
to be purchased or redeemed on that date. The Senior Subordinated Note Trustee
or the Paying Agent shall promptly return to the Issuers any money deposited
with the Senior Subordinated Note Trustee or the Paying Agent by the Issuers in
excess of the amounts necessary to pay the purchase or redemption price of, and
accrued and unpaid interest and Liquidated Damages, if any, on, all Senior
Subordinated Notes to be purchased or redeemed.
If the Issuers comply with the provisions of the preceding paragraph, on
and after the purchase or redemption date, interest shall cease to accrue on the
Senior Subordinated Notes or the portions of Senior Subordinated Notes purchased
or called for redemption. If a Senior Subordinated Note is purchased or redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest and Liquidated Damages shall
be paid to the Person in whose name such Senior Subordinated Note was registered
at the close of business on such record date. If any Senior Subordinated Note
tendered for purchase or called for redemption shall not be so paid upon
surrender for such tender or redemption because of the failure of the Issuers to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the purchase or redemption date until such principal is paid,
and to the extent lawful on any interest not paid on such unpaid principal, in
each case at the rate provided in the Senior Subordinated Notes and in Section
4.01 hereof.
SECTION 3.06. SENIOR SUBORDINATED NOTES PURCHASED OR REDEEMED IN PART.
Upon surrender of a Senior Subordinated Note that is purchased or redeemed
in part, the Issuers shall issue and, upon the Issuers' written request, the
Senior Subordinated Note Trustee shall authenticate for the Holder at the
expense of the Issuers a new Senior Subordinated Note equal in principal amount
to the unpurchased or unredeemed portion of the Senior Subordinated Note
surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) On or after November 15, 2001, the Senior Subordinated Notes shall be
redeemable at the option of the Issuers, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on November 15, of
the years indicated below:
48
Percentage
of Principal
Year Amount
2001................................... 107.125%
2002................................... 103.563%
2003 and thereafter.....................100.000%
(b) On or prior to November 15, 2000, the Issuers may on any one or more
occasions redeem up to 100% of the aggregate principal amount of Senior
Subordinated Notes originally issued at a redemption price equal to (i) 114.25%
of the Accreted Value of the Senior Subordinated Notes so redeemed (determined
at the date of redemption) if prior to the second anniversary of the issuance
date or (ii) 114.25% of the principal amount thereof if on or after the second
anniversary of the issuance date, in each case, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon, to the redemption date, with the
proceeds of one or more Public Equity Offerings; provided that such redemption
shall occur within 60 days of the date of such Public Equity Offering.
(c) At any time prior to November 15, 2001, the Issuers may, at their
option, redeem the Senior Subordinated Notes, in whole or in part, at a
redemption price equal to (i) 100% of the Accreted Value of the Senior
Subordinated Notes so redeemed (determined at the date of redemption) if prior
to the second anniversary of the issuance date or (ii) 100% of the principal
amount of the Senior Subordinated Notes so redeemed if on or after the second
anniversary of the issuance date, in each case plus the Senior Subordinated Note
Make-Whole Premium, plus, to the extent not included in the Senior Subordinated
Note Make-Whole Premium, accrued and unpaid interest and Liquidated Damages, if
any, to the date of redemption.
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. REDEMPTION PURSUANT TO GAMING LAW.
(a) Notwithstanding any other provisions of this Article 3, if any Gaming
Authority requires that a Holder or beneficial owner of the Senior Subordinated
Notes must be licensed, qualified or found suitable under any applicable gaming
laws in order to maintain any gaming license or franchise of the Issuers or any
Restricted Subsidiary under any applicable gaming laws, and the Holder or
beneficial owner fails to apply for a license, qualification or finding of
suitability within 30 days after being requested to do so by such Gaming
Authority (or such lesser period that may be required by such Gaming Authority)
or if such Holder or beneficial owner is not so licensed, qualified or found
suitable, the Issuers shall have the right, at their option, (i) to require such
Holder or beneficial owner to dispose of such Holder's or beneficial owner's
Senior Subordinated Notes within 30 days of receipt of such finding by the
applicable Gaming Authority (or such earlier date as may be required by the
applicable Gaming Authority) or (ii) to call for redemption of the Senior
Subordinated Notes of such Holder or beneficial owner at a redemption price
equal to the lesser of the principal amount thereof or the price at which such
Holder or beneficial owner acquired the Senior Subordinated Notes, together
with, in either case, accrued and unpaid interest and Liquidated Damages, if
any, to the earlier of the date of redemption or, the date of the finding of
unsuitability by such Gaming Authority, which may be less than 30 days following
the notice of redemption if so ordered by such Gaming Authority.
(b) In connection with any redemption pursuant to this Section 3.08, and
except as may be required by a Gaming Authority, the Issuers shall be required
to comply with Sections 3.01 through 3.06 hereof.
49
(c) The Issuers shall not be required to pay or reimburse any Holder or
beneficial owner of Senior Subordinated Notes who is required to apply for any
such license, qualification or finding of suitability for the costs of the
licensure or investigation for such qualification or finding of suitability.
Such expenses shall be the obligation of such Holder or beneficial owner.
SECTION 3.09. MANDATORY REDEMPTION.
The Issuers shall not be required to make mandatory redemption or sinking
fund payments prior to maturity with respect to the Senior Subordinated Notes.
SECTION 3.10. REPURCHASE OFFERS.
In the event that, pursuant to Section 4.10 or 4.16 hereof, the Issuers
shall be required to commence an offer to all Holders to purchase Senior
Subordinated Notes (a "Repurchase Offer"), it shall follow the procedures
specified below.
The Repurchase Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Issuers shall purchase at the Purchase Price (as determined in accordance
with Section 4.10 or 4.16 hereof, as the case may be) the principal amount of
Senior Subordinated Notes required to be purchased pursuant to Section 4.10 or
4.16 hereof, as the case may be (the "Offer Amount"), or, if less than the Offer
Amount has been tendered, all Senior Subordinated Notes tendered in response to
the Repurchase Offer. Payment for any Senior Subordinated Notes so purchased
shall be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Senior
Subordinated Note is registered at the close of business on such record date,
and no additional interest shall be payable to Holders who tender Senior
Subordinated Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Issuers shall send, by
first class mail, a notice to the Senior Subordinated Note Trustee and each of
the Holders. The notice shall contain all instructions and materials necessary
to enable such Holders to tender Senior Subordinated Notes pursuant to the
Repurchase Offer. The Repurchase Offer shall be made to all Holders. The notice,
which shall govern the terms of the Repurchase Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this Section 3.10
and Section 4.10 or 4.16 hereof, as the case may be, and the length of time the
Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Senior Subordinated Note not tendered or accepted for payment
shall continue to accrue interest and Liquidated Damages, if any;
(d) that, unless the Issuers default in making such payment, any Senior
Subordinated Note accepted for payment pursuant to the Repurchase Offer shall
cease to accrue interest and Liquidated Damages, if any, after the Purchase
Date;
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(e) that Holders electing to have a Senior Subordinated Note purchased
pursuant to an y Repurchase Offer shall be required to surrender the Senior
Subordinated Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Senior Subordinated Note completed, to the Issuers, a
depositary, if appointed by the Issuers, or a Paying Agent at the address
specified in the notice at least three Business Days before the Purchase Date;
(f) that Holders shall be entitled to withdraw their election if the
Issuers, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Senior Subordinated Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Senior
Subordinated Note purchased; and
(g) that, if the aggregate principal amount of Senior Subordinated Notes
surrendered by Holders exceeds the Offer Amount, the Senior Subordinated Notes
shall be selected for purchase pursuant to the terms of Section 3.02 hereof, and
that Holders whose Senior Subordinated Notes were purchased only in part shall
be issued new Senior Subordinated Notes equal in principal amount to the
unpurchased portion of the Senior Subordinated Notes surrendered.
On or before the Purchase Date, the Issuers shall, to the extent lawful,
accept for payment, pursuant to the terms of Section 3.02 hereof, the Offer
Amount of Senior Subordinated Notes or portions thereof tendered pursuant to the
Repurchase Offer, or if less than the Offer Amount has been tendered, all Senior
Subordinated Notes tendered, and shall deliver to the Senior Subordinated Note
Trustee an Officers' Certificate stating that such Senior Subordinated Notes or
portions thereof were accepted for payment by the Issuers in accordance with the
terms of this Section 3.10. The Issuers, the Depository or the Paying Agent, as
the case may be, shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Senior Subordinated Notes tendered by such Holder and
accepted by the Issuers for purchase, and the Issuers shall promptly issue a new
Senior Subordinated Note, and the Senior Subordinated Note Trustee, upon written
request from the Issuers shall authenticate and mail or deliver such new Senior
Subordinated Note to such Holder, in a principal amount equal to any unpurchased
portion of the Senior Subordinated Note surrendered. Any Senior Subordinated
Note not so accepted shall be promptly mailed or delivered by the Issuers to the
Holder thereof. The Issuers shall publicly announce the results of the
Repurchase Offer on the Purchase Date.
The Issuers shall comply with the requirements of Rule 14e-1 under the
Exchange Act, and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Senior Subordinated Notes pursuant to a Repurchase Offer.
Other than as specifically provided in this Section 3.10, any purchase
pursuant to this Section 3.10 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof to the extent applicable.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SENIOR SUBORDINATED NOTES.
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The Issuers shall pay or cause to be paid the principal of, premium, if
any, and interest on the Senior Subordinated Notes on the dates and in the
manner provided in the Senior Subordinated Notes. Principal, premium, if any,
and interest shall be considered paid on the date due if the Paying Agent, if
other than the Issuers or a Subsidiary thereof, holds as of 10:00 a.m. Eastern
Time on the due date, money deposited by the Issuers in immediately available
funds and designated for and sufficient to pay all principal, premium, if any,
and interest then due. The Issuers shall pay all Liquidated Damages, if any, in
the same manner on the dates and in the amounts set forth in the Registration
Rights Agreement.
The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Senior
Subordinated Notes to the extent lawful; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Senior Subordinated
Note Trustee or an affiliate of the Senior Subordinated Note Trustee, Registrar
or co-registrar) where Senior Subordinated Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Issuers or the Senior Subordinated Note Guarantors in respect of the
Senior Subordinated Notes and this Indenture may be served. The Issuers shall
give prompt written notice to the Senior Subordinated Note Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Issuers shall fail to maintain any such required office or agency or
shall fail to furnish the Senior Subordinated Note Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Senior Subordinated Note Trustee.
The Issuers may also from time to time designate one or more other offices
or agencies where the Senior Subordinated 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 Issuers of their obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York for such purposes. The
Issuers shall give prompt written notice to the Senior Subordinated Note Trustee
of any such designation or rescission and of any change in the location of any
such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the Senior
Subordinated Note Trustee as one such office or agency of the Issuers in
accordance with Section 2.03.
SECTION 4.03. REPORTS.
The Company shall file with the Senior Subordinated Note Trustee and
provide Holders of Senior Subordinated Notes, within 15 days after it files them
with the SEC, copies of its annual report and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC may
by rule or regulation prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. Notwithstanding that
the Company may not be required to remain subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and
quarterly basis on forms provided for such annual and quarterly reporting
pursuant to rules and regulations promulgated by the SEC, the Company shall
continue to file with the SEC and provide the Senior Subordinated Note Trustee
and each Holder with, without cost to each Holder, (a) within 90 days after the
end of each fiscal year, annual reports on Form 10-K (or any
52
successor form) containing the information required to be contained therein (or
required in such successor form); (b) within 45 days after the end of each of
the first three fiscal quarters of each fiscal year, reports on Form 10-Q (or
any successor form); and (c) promptly from time to time after the occurrence of
an event required to be therein reported, such other reports on Form 8-K (or any
successor form) containing the information required to be contained therein (or
required in any successor form); provided, however, that the Company shall not
be so obligated to file such reports with the SEC if the SEC does not permit
such filings. Notwithstanding the foregoing, if any Person that, directly or
indirectly, owns more than 50% of the common equity of the Company is subject to
the periodic reporting and the informational requirements of the Exchange Act,
the Company shall not be required to file the reports specified in the preceding
sentence so long as it provides annual and quarterly financial statements of the
Company (which will include summarized financial information concerning
Venetian) to the Holders of the Senior Subordinated Notes. The Company shall in
all cases, without cost to each recipient, provide copies of such information to
the Holders of the Senior Subordinated Notes and, if it is not permitted to file
such reports with the SEC, shall make available such information to prospective
purchasers and to securities analysts and broker-dealers upon their request. In
addition, the Company shall, for so long as any Senior Subordinated Notes remain
outstanding, furnish to the Holders of Senior Subordinated Notes and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act. Notwithstanding anything to the contrary herein, the Trustee
shall have no duty to review such document for purposes of determining
compliance with any provisions of this Indenture.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Issuers shall deliver to the Senior Subordinated Note Trustee,
within 90 days after the end of each fiscal year, an Officers' Certificate
stating that a review of the activities of the Issuers and their Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers of the Issuers with a view to determining whether the Issuers
and each obligor on the Senior Subordinated Notes and this Indenture is in
compliance with this Indenture and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Issuers
and each such obligor is in compliance with each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall exist, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Issuers or such
obligor, as the case may be, is taking or proposes to take with respect thereto)
and that to the best of his or her knowledge no event has occurred that remains
in existence by reason of which payments on account of the principal of or
interest, if any, on the Senior Subordinated Notes is prohibited or if such
event exists, a description of the event and what action the Issuers or such
obligor, as the case may be, is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Issuers' independent public accountants (who shall be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Issuers are in
violation of any provisions of Article 4 or Article 5 hereof or, if any such
violation exists, specifying the nature and period of existence thereof, it
being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
53
(c) The Issuers shall, so long as any of the Senior Subordinated Notes are
outstanding, deliver to the Senior Subordinated Note Trustee, within five
Business Days upon any Officer becoming aware of any Default or Event of Default
or any event of default under any document, instrument or agreement representing
Indebtedness of the Issuers, an Officers' Certificate specifying such Default,
Event of Default or event of default and what action the Issuers are taking or
propose to take with respect thereto.
(d) Immediately upon Completion, the Issuers shall deliver promptly to the
Senior Subordinated Note Trustee an Officers' Certificate which shall state that
(i) Completion has been achieved and (ii) the date on which Completion was
achieved.
SECTION 4.05. TAXES.
The Issuers shall pay, and shall cause each of their Restricted
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment would not
have any material adverse effect on the Holders of the Senior Subordinated
Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
Each of the Issuers and the Senior Subordinated Note Guarantors covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and each of the Issuers and the Senior Subordinated Note Guarantors
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Senior Subordinated Note Trustee, but shall suffer and permit the execution
of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Issuers will not, and will not permit any of their Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any distribution on account of either of the Issuers' or any of their Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving either of the Issuers) or
to the direct or indirect holders of either of the Issuers' Equity Interests in
their capacity as such (other than (1) dividends or distributions by the Issuers
payable in Equity Interests (other than Disqualified Stock) of the Issuers (or
accretions thereon); or (2) dividends or distributions paid to the Issuers or a
Wholly Owned Restricted Subsidiary of the Issuers); (ii) purchase, redeem or
otherwise acquire or retire for value (including, without limitation, in
connection with any merger or consolidation involving either of the Issuers) any
Equity Interests of the Issuers or any of its Restricted Subsidiaries, or any
other Affiliate of the Issuers (other than any such Equity Interests owned by
the Issuers or any Wholly Owned Restricted Subsidiary of the Issuers); (iii)
make any payment on or with respect to or purchase, redeem, defease or otherwise
acquire or retire for value any Subordinated Indebtedness of the Issuers or any
of their Restricted Subsidiaries (other than, in each case, scheduled interest
and principal payments with respect to any such Subordinated Indebtedness); (iv)
make any payment in respect of repayment or reimbursement of amounts advanced
under any obligation under the Completion Guaranty; or (v) make any Restricted
Investment (all such payments and other actions set forth in clauses (i) through
(v) above being collectively referred to as "Restricted Payments"), unless, at
the time of such Restricted Payment:
54
(a) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;
(b) the Issuers would, after giving pro forma effect to such Restricted
Payment as if such Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of Section 4.09 hereof;
and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Issuers and their Restricted Subsidiaries
after the Issuance Date (excluding Restricted Payments permitted by clauses
(ii), (iii), (v), (vi), (vii), (viii), (ix) (but only to the extent necessary
under clause (ix) to pay the fees and expenses of any lenders or agents under
the Tranche A Take-out Commitment), (x), (xiii), (xiv), (xv), (xvii) and (xviii)
of the next succeeding paragraph and including the other Restricted Payments
permitted by the next paragraph), is less than the sum of (X) 50% of (1) the
Consolidated Net Income of the Company for the period (taken as one accounting
period) from the first day after the Project is Completed to the end of the
Company's most recently ended fiscal quarter for which internal financial
statements are available (or, in the case such Consolidated Net Income for such
period is a deficit, minus 100% of such deficit) less (2) the amount paid or to
be paid in respect of such period pursuant to clause (v) of the next following
paragraph to shareholders or members other than the Issuers, plus (Y) without
duplication, 100% of the aggregate net cash proceeds received by the Issuers
since the Issuance Date from capital contributions or the issue or sale of
Equity Interests (other than Disqualified Stock) or debt securities of the
Issuers that have been converted into or exchanged for such Equity Interests of
the Issuers (other than Equity Interests or such debt securities of the Issuers
sold to a Restricted Subsidiary of the Issuers and other than Disqualified Stock
or debt securities that have been converted into or exchanged for Disqualified
Stock), plus (Z) to the extent not otherwise included in the Company's
Consolidated Net Income, 100% of the cash dividends or distributions or the
amount of the cash principal and interest payments received since the Issuance
Date by the Issuers or any Restricted Subsidiary from any Unrestricted
Subsidiary or Special Subsidiary or in respect of any Restricted Investment
(other than dividends or distributions to pay obligations of or with respect to
such Unrestricted Subsidiary or Special Subsidiary such as income taxes) until
the entire amount of the Investment in such Unrestricted Subsidiary or Special
Subsidiary has been received or the entire amount of such Restricted Investment
has been returned, as the case may be, and 50% of such amounts thereafter. In
the event that the Issuers convert an Unrestricted Subsidiary or Special
Subsidiary to a Restricted Subsidiary, the Issuers may add back to this clause
(c) the aggregate amount of any Investment in such Subsidiary that was a
Restricted Payment at the time of such Investment.
The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at the date of
declaration such payment would have complied with the provisions of this
Indenture; (ii) (a) an Investment in Phase II Subsidiary, Phase II Manager,
Phase II Holdings or any Special Subsidiary or (b) the redemption, repurchase,
retirement or other acquisition of any Equity Interests of the Issuers or any
Restricted Subsidiary, in each case, in exchange for, or out of the proceeds of,
the substantially concurrent sale or issuance (other than to a Restricted
Subsidiary of the Issuers) of Equity Interests of the Issuers (other than any
Disqualified Stock); provided that the amount of any net cash proceeds from the
sale of such Equity Interests shall be excluded from clause (c)(Y) of the
preceding paragraph; (iii) the defeasance, redemption, repurchase, retirement or
other acquisition of any Subordinated Indebtedness of the Issuers or any
Restricted Subsidiary in exchange for, or out of the proceeds of, the
substantially concurrent sale or issuance (other than to a Restricted Subsidiary
of the Issuers) of Subordinated Indebtedness (other than any Subordinated
Indebtedness issued in respect of the Completion Guaranty) of the Issuers or
such Restricted Subsidiary or Equity Interests of the Issuers (other than
Disqualified Stock); provided, however, that (1) the principal amount of such
Subordinated
55
Indebtedness incurred pursuant to this clause (iii) shall not exceed the
principal amount of the Subordinated Indebtedness so redeemed, repurchased,
retired or otherwise acquired (plus the amount of reasonable expenses incurred
and any premium paid in connection therewith), (2) such Subordinated
Indebtedness shall have a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of the Subordinated Indebtedness
being redeemed, repurchased, retired or otherwise acquired, (3) such
Subordinated Indebtedness shall be pari passu with or subordinate in right of
payment to the Senior Subordinated Notes and any Senior Subordinated Note
Guaranty on terms at least as favorable to the Holders of the Senior
Subordinated Notes or the Senior Subordinated Note Guaranties as those contained
in the documentation governing the Subordinated Indebtedness being redeemed,
repurchased, retired or otherwise acquired and (4) the net cash proceeds from
the sale of any Equity Interests issued pursuant to this clause (iii) shall be
excluded from clause (c)(Y) of the preceding paragraph; (iv) any redemption or
purchase by the Issuers or any Restricted Subsidiary of Equity Interests or
Subordinated Indebtedness of either of the Issuers required by a Gaming
Authority in order to preserve a material Gaming License; provided, that so long
as such efforts do not jeopardize any material Gaming License, the Issuers or
such Restricted Subsidiary shall have diligently tried to find a third-party
purchaser for such Equity Interests or Subordinated Indebtedness and no
third-party purchaser acceptable to the applicable Gaming Authority was willing
to purchase such Equity Interests or Subordinated Indebtedness within a time
period acceptable to such Gaming Authority; (v) (a) for so long as the Company
is a corporation under Subchapter S of the Code or a substantially similarly
treated pass-through entity or Venetian is a limited liability company that is
treated as a partnership or a substantially similarly treated pass-through
entity, in each case, for Federal income tax purposes (as evidenced by an
opinion of counsel at least annually), the Issuers may each make cash
distributions to their shareholders or members, during each Quarterly Payment
Period, in an aggregate amount not to exceed the Permitted Quarterly Tax
Distribution in respect of the related Estimation Period, and if any portion of
the Permitted Quarterly Tax Distribution is not distributed during such
Quarterly Payment Period, the Permitted Quarterly Tax Distribution payable
during the immediately following four quarter period shall be increased by such
undistributed portion and (b) distributions by non-Wholly Owned Subsidiaries of
either of the Issuers or any Restricted Subsidiary of the Issuers but only to
the extent required to pay any tax liability of such non-Wholly Owned
Subsidiary; (vi) the transfer of the Mall Collateral to the Mall Subsidiary in
accordance with the Sale and Contribution Agreement and the Disbursement
Agreement and the transfer of 1% managing members interests in Mall Subsidiary
and Mall Holdings to Mall Manager; (vii) the transfer of the Phase II Land to
the Phase II Subsidiary and the transfer of 1% managing members interests in
Phase II Subsidiary and Phase II Holdings to Phase II Manager; (viii)
Investments by the Issuers in Supplier Joint Ventures in an amount not to exceed
$10.0 million in the aggregate; (ix) Investments in any Special Subsidiary in an
amount not to exceed $2.0 million in the aggregate (plus amounts necessary to
fund the fees and expenses of the lenders or agents under the Tranche A Take-out
Commitment), excluding for purposes of this clause (ix) the value of any
Restricted Payments under clauses (ii), (vii) or (xiv); (x) intercompany
payments, including without limitation, debt repayments, between or among the
Issuers and their Wholly Owned Restricted Subsidiaries; (xi) the repurchase of
shares of, or options to purchase, common stock of either of the Issuers from
employees, former employees, directors or former directors of either of the
Issuers (or permitted transferees of such individuals), pursuant to the terms of
the agreements (including employment agreements) or plans (or amendments
thereto), in each case, as in effect on the date of this Indenture and as
approved by the board of directors of the Company under which such individuals
purchase or sell, or are granted the option to purchase or sell, shares of such
common stock (the "Employee Stock Buybacks"); (xii) following an initial Public
Equity Offering, dividends or common stock buybacks in an aggregate amount in
any calendar year not to exceed 6% of the aggregate Net Proceeds received by
either of the Issuers in connection with such initial Public Equity Offering and
any subsequent Public Equity Offering; (xiii) repurchases of Capital Stock of
either of the Issuers deemed to occur upon exercise of stock options if such
Capital Stock represents a portion of the exercise price of such options; (xiv)
cash contributions to
56
a Special Subsidiary which are funded through a contribution (that does not
constitute Disqualified Stock) by the Sole Stockholder or any of his Affiliates
to either of the Issuers and any related Investment in any Special Subsidiary by
either of the Issuers or any Restricted Subsidiary; provided that the amount of
such contributions shall be excluded from clause (c)(Y) of the proceeding
paragraph; (xv) contributions of cash, real property or other property to the
Phase II Subsidiary, Phase II Holdings or Phase II Manager by the Sole
Stockholder or any of his Affiliates through a contribution to either of the
Issuers and any related Investment in the Phase II Subsidiary, Phase II Holdings
or Phase II Manager by either of the Issuers or any Restricted Subsidiary;
provided that the amount of such contributions shall be excluded from clause
(c)(Y) of the proceeding paragraph; (xvi) the repayment of all or a portion of
the Completion Guaranty Loan with Available Funds to the extent permitted by the
terms of the Disbursement Agreement and the Completion Guaranty or, after
Completion, with funds received by the Company as a result of judgments or
settlements of claims under the Project Documents (including insurance policies
and the Construction Management Agreement); (xvii) on the Final Completion Date
(as defined in the Disbursement Agreement), payments on the Completion Guaranty
Loan from amounts which are returned to Mall Construction Subsidiary from funds
in the Mall Retainage/Punchlist Account (as defined in the Disbursement
Agreement) in accordance with the Mall Escrow Agreement (as defined in the
Disbursement Agreement); provided that such payments shall not be greater than
all amounts previously deposited into the Mall Retainage/Punchlist Account from
Guaranty Deposit Account (as defined in the Disbursement Agreement); and (xviii)
the repayment of the Substitute Tranche B Loan with the proceeds of the
Permitted Construction Loan Refinancing or the assumption of the Substitute
Tranche B Loan by the Mall Subsidiary; provided, that at the time of, and after
giving effect to, any Restricted Payment permitted under clauses (ii) (b) (to
the extent that any Equity Interests are redeemed, retired or acquired from the
cash proceeds from the sale or issuance of Equity Interests), (iii) (to the
extent that any Subordinated Indebtedness is defeased, redeemed, retired,
repurchased or otherwise acquired from the cash proceeds from the sale or
issuance of other Subordinated Indebtedness or Equity Interests), (viii), (ix),
(xii), and (xvi), no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof.
For purposes of determining the amount of Restricted Investments
outstanding at any time, all Restricted Investments shall be valued at their
fair market value at the time made (as determined in good faith by the Company's
Board of Directors), and no adjustments will be made for subsequent changes in
fair market value.
Not later than the date of filing any quarterly or annual report, the
Issuers shall deliver to the Senior Subordinated Note Trustee an Officers'
Certificate stating that each Restricted Payment made in the prior fiscal
quarter was permitted and setting forth the basis upon which the calculations
required by this Section 4.07 were computed, which calculations may be based
upon the Issuers' latest available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any such Restricted Subsidiary (other than Venetian) to (a)
(i) pay dividends or make any other distributions to the Issuers or any of their
Restricted Subsidiaries (A) on their Capital Stock or (B) with respect to any
other interest or participation in, or measured by, its profits, or (ii) pay any
Indebtedness owed to the Issuers or any of their Restricted Subsidiaries (other
than in respect of the subordination of such Indebtedness to the Senior
Subordinated Notes, the Senior Subordinated Note Guaranties or any other
Indebtedness incurred pursuant to the terms of this Indenture, as the case may
be), (b) make loans or advances to the Issuers or any of their Restricted
Subsidiaries or
57
(c) sell, lease, or transfer any of their properties or assets to the Issuers or
any of their Restricted Subsidiaries, except (in each case) for such
encumbrances or restrictions existing under or by reason of (1) contractual
encumbrances or restrictions in effect on the Issuance Date, (2) the Bank Credit
Facility (and any related security agreements) and any Guaranties thereof, this
Indenture, the Senior Subordinated Notes, the Mall Construction Loan Facility
(and any related security agreements), any Senior Subordinated Note Guaranties,
the Collateral Documents, indebtedness incurred pursuant to clause (g), (h),
(j), (l), (n) or (o) of Section 4.09 hereof and any related security agreements,
(3) the Senior Subordinated Note Indenture, the Senior Subordinated Notes and
the Senior Subordinated Note Guaranties, (4) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any
Restricted Subsidiary as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that the Consolidated
Cash Flow of such Person is not taken into account in determining whether such
acquisition was permitted by the terms of this Indenture, (5) by reason of
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices and any leases permitted
by Section 4.25 under the Mortgage Note Indenture, (6) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature discussed in clause (c) above on the property so
acquired, (6) applicable law or any applicable rule or order of any Gaming
Authority, (7) Permitted Liens, (8) customary restrictions imposed by asset sale
or stock purchase agreements relating to the sale of assets or stock by the
Issuers or any Restricted Subsidiary, or (9) any encumbrances or restrictions
imposed by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (1) through (8) above,
provided, that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are, in the
good faith judgment of the Company's Board of Directors, no more restrictive
with respect to such dividend and other payment restrictions than those
contained in the dividend or other payment restrictions prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding, replacement
or refinancing.
SECTION 4.09. LIMITATIONS ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
DISQUALIFIED STOCK.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to (collectively,
"incur" and correlatively, an "incurrence" of) any Indebtedness (including
Acquired Indebtedness) or any shares of Disqualified Stock; provided, however,
that the Issuers and their Restricted Subsidiaries may incur Indebtedness or
issue shares of Disqualified Stock if (i) the Project is Completed and (ii) the
Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date of such incurrence would have been at least 2.0
to 1.0 determined on a pro forma basis (including a pro forma application of the
net proceeds therefrom), as if the additional Indebtedness had been incurred or
the Disqualified Stock had been issued, as the case may be, and application of
proceeds had occurred at the beginning of such four-quarter period.
The foregoing limitations will not apply to:
(a) the incurrence by the Issuers or any of their Restricted Subsidiaries
of Indebtedness under the Bank Credit Facility and any Guaranties thereof in an
aggregate principal amount not to exceed at any one time $170.0 million, less
(i) the aggregate amount of all principal repayments and mandatory prepayments
(other than repayments made under a revolving loan facility prior to maturity or
in
58
connection with a refinancing permitted under this Indenture) actually made from
time to time after the date of this Indenture with respect to such Indebtedness,
and (ii) permanent reductions resulting from the application of Asset Sale
proceeds;
(b) the incurrence by the Issuers or any of their Restricted Subsidiaries
of any Existing Indebtedness;
(c) the incurrence by the Issuers or any of their Restricted Subsidiaries
of Indebtedness represented by the Mortgage Notes, the Mortgage Note Guaranties,
the Senior Subordinated Notes, the Senior Subordinated Note Guaranties and
obligations arising under the Collateral Documents to the extent that such
obligations would constitute Indebtedness;
(d) the incurrence by the Issuers or any of their Restricted Subsidiaries
of Indebtedness (the "Refinancing Indebtedness") issued in exchange for, or the
proceeds of which are used to extend, refinance, renew, replace, substitute or
refund Indebtedness referred to in the first paragraph of this covenant or in
clauses (b), (c), this clause (d), (g), (h), (j) or (l); provided, however, that
(1) the principal amount of such Refinancing Indebtedness shall not exceed the
principal amount of Indebtedness (or, in the case of Indebtedness with original
issue discount, the accreted value of such Indebtedness) so extended,
refinanced, renewed, replaced, substituted or refunded (plus the amount of
reasonable expenses incurred and any premium paid in connection therewith), (2)
if the Indebtedness being extended, refinanced, renewed, replaced, substituted
or refunded is subordinate in right of payment to the Senior Subordinated Notes,
such Refinancing Indebtedness shall be subordinate in right and priority of
payment to the Senior Subordinated Notes and any Senior Subordinated Note
Guaranty on terms at least as favorable to the Holders of Senior Subordinated
Notes and the Senior Subordinated Note Guaranties as those contained in the
documentation governing any subordinated Indebtedness being extended,
refinanced, renewed, replaced, substituted or refunded, and (3) the Refinancing
Indebtedness shall have a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of the Indebtedness being extended,
refinanced, renewed, replaced, substituted or refunded;
(e) intercompany Indebtedness between or among the Issuers, any Senior
Subordinated Note Guarantor and any Wholly Owned Restricted Subsidiary of the
Issuers; provided, however, the obligations to pay principal, interest or other
amounts under such intercompany Indebtedness is subordinated to the payment in
full of the Senior Subordinated Notes and any Senior Subordinated Note
Guaranties;
(f) Hedging Obligations that are incurred (1) for the purpose of fixing or
hedging interest rate risk with respect to any floating rate Indebtedness that
is permitted by the terms of this Indenture to be outstanding or (2) for the
purpose of fixing or hedging currency exchange rate risk with respect to any
currency exchanges;
(g) the incurrence by the Issuers or any of their Restricted Subsidiaries
of Indebtedness (which may include Capital Lease Obligations or purchase money
obligations), incurred for the purpose of financing all or any part of the
purchase or lease of personal property or equipment, including the Specified
FF&E, used in the business of the Issuers or such Restricted Subsidiary, in an
aggregate principal amount pursuant to this clause (g) (including any
refinancings thereof pursuant to clause (d) above) not to exceed $100.0 million
(plus accrued interest thereon and the amount of reasonable expenses incurred
and premium paid in connection with any refinancing pursuant to clause (d)
above) outstanding at any time;
(h) the incurrence by the Issuers or any of their Restricted Subsidiaries
of Non-Recourse Financing used to finance the purchase or lease of personal or
real property used in the business of the
59
Issuers or such Restricted Subsidiary; provided, that (i) such Non-Recourse
Financing represents at least 75% of the purchase price of such personal or real
property; (ii) the Indebtedness incurred pursuant to this clause (h) (including
any refinancings thereof pursuant to clause (d) above) shall not exceed $50.0
million (plus the amount of reasonable expenses incurred and premium paid in
connection with any refinancing pursuant to clause (d) above) outstanding at any
time; and (iii) no such Indebtedness may be incurred pursuant to this clause (h)
unless the Project is Completed and the Company shall have generated at least
$10.0 million of Consolidated Cash Flow in one fiscal quarter;
(i) to the extent that such incurrence does not result in the incurrence by
the Issuers or any of their Restricted Subsidiaries of any obligation for the
payment of borrowed money of others, Indebtedness incurred solely in respect of
performance bonds, completion guarantees, standby letters of credit or bankers'
acceptances; provided, that such Indebtedness was incurred in the ordinary
course of business of the Issuers or any of their Restricted Subsidiaries and in
an aggregate principal amount outstanding under this clause (i) at any one time
of less than $20.0 million;
(j) the incurrence by the Issuers or any of their Restricted Subsidiaries
of Subordinated Indebtedness to the Sole Stockholder pursuant to an advance
under the Completion Guaranty in an aggregate amount not to exceed $25.0 million
plus accrued interest thereon; provided that such Subordinated Indebtedness has
a Weighted Average Life to Maturity greater than the Senior Subordinated Notes
and is by its terms subordinated to the Senior Subordinated Notes and the Senior
Subordinated Notes;
(k) the incurrence by the Issuers of up to $140.0 million of Indebtedness
represented by the Mall Construction Loan Facility;
(l) the incurrence by the Issuers of Indebtedness represented by the
Substitute Tranche B Loan plus accrued interest thereon; provided that such
Indebtedness has a Weighted Average Life to Maturity at least one day later than
the Senior Subordinated Notes and is by its terms subordinated to the Senior
Subordinated Notes;
(m) the incurrence by the Issuers of unsecured Indebtedness (subordinated
in right of payment to the Senior Subordinated Notes) issued in connection with
the Employee Stock Buybacks permitted under clause (xi) of Section 4.07 hereof;
(n) the incurrence by the Issuers or any Restricted Subsidiary of (A)(i) at
any time prior to Completion, additional Indebtedness under clause (a) or (k) in
an aggregate amount not to exceed $20.0 million, plus (ii) after a default under
the Disbursement Agreement and at any time prior to Completion, additional
Indebtedness under clause (a) or (k) in an aggregate amount not to exceed $30.0
million (provided that Indebtedness incurred pursuant to this clause (n)(A)(ii)
is matched, dollar for dollar, by additional equity investments by the Sole
Stockholder or an Affiliate of the Sole Stockholder), in the case of each of
clause (A)(i) and (A)(ii), incurred in accordance with the Intercreditor
Agreement and (B) after Completion, additional Indebtedness in an aggregate
amount at any time outstanding not to exceed $25.0 million (less any amounts
incurred pursuant to clause (n)(A) above that remain outstanding after
Completion);
(o) after Completion, the incurrence by the Issuers or any of their
Restricted Subsidiaries of Indebtedness under any Working Capital Facility in an
aggregate amount at any time outstanding not to exceed $20.0 million;
60
(p) the incurrence by the Issuers of Indebtedness incurred for the purpose
of financing all or any part of the purchase or lease of gaming equipment to be
used in connection with the casino located at the casino resort to be owned by
Phase II Subsidiary or any casino operated pursuant to an Other Phase II
Agreement in an aggregate amount at any time outstanding not to exceed $10.0
million; provided, that upon default under such Indebtedness, the lender under
such Indebtedness may seek recourse or payment against the Issuers only through
the return or sale of the property or equipment so purchased or leased and may
not otherwise assert a valid claim for payment on such Indebtedness against the
Issuers or any other property of the Issuers; and
(q) the guaranty by the Issuers or any Restricted Subsidiary of
Indebtedness of the Issuers or a Restricted Subsidiary that was permitted to be
incurred by another provision of this covenant.
The Issuers shall not permit any of their Unrestricted Subsidiaries or
Special Subsidiaries to incur any Indebtedness (including Acquired Indebtedness)
or issue any shares of Disqualified Stock, other than Non-Recourse Indebtedness;
provided, however, that if any such Unrestricted Subsidiary or Special
Subsidiary ceases to remain an Unrestricted Subsidiary or Special Subsidiary,
such event shall be deemed to constitute the incurrence of the Indebtedness in
such Subsidiary by a Restricted Subsidiary.
For purposes of determining compliance with this Section 4.09, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Indebtedness permitted in clauses (a) through (q) above or is
entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Issuers shall, in their sole discretion, classify such item of Indebtedness
in any manner that complies with this Section 4.09 and such item of Indebtedness
will be treated as having been incurred pursuant to only such clause or clauses
or pursuant to the first paragraph hereof. Accrual of interest, the accretion of
accreted value or principal and the payment of interest in the form of
additional Indebtedness will not be deemed to be an incurrence of Indebtedness
for purposes of this Section 4.09.
SECTION 4.10. ASSET SALES.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, consummate an Asset Sale, unless (w) no Default or Event of
Default exists or is continuing immediately prior to or after giving effect to
such Asset Sale, (x) the Issuers, or their Restricted Subsidiaries, as the case
may be, receive consideration at the time of such Asset Sale at least equal to
the fair market value (as determined by the Board of Directors and set forth in
an Officers' Certificate delivered to the Senior Subordinated Note Trustee) of
the assets sold or otherwise disposed of and (y) at least 85% of the
consideration therefor received by either of the Issuers or any Restricted
Subsidiary, as the case may be, is in the form of cash or Cash Equivalents;
provided, however, that the amount of (A) any liabilities (as shown on such
Issuers', or such Restricted Subsidiary's, as the case may be, most recent
balance sheet or in the notes thereto) of the Issuers, or such Restricted
Subsidiary, as the case may be (other than liabilities that are by their terms
expressly subordinated to the Senior Subordinated Notes or any Senior
Subordinated Note Guaranty), that are assumed by the transferee of any such
assets and (B) any notes or other obligations received by the Issuers, or any
Restricted Subsidiary, as the case may be, from such transferee that are
converted by the Issuers, or such Restricted Subsidiary, as the case may be,
into cash (to the extent of the cash received) within 20 Business Days following
the closing of such Asset Sale, shall be deemed to be cash only for purposes of
satisfying clause (y) of this Section 4.10 and for no other purpose.
Within the later of (i) 180 days after any such Issuer's or any Restricted
Subsidiary's receipt of the Net Proceeds of any Asset Sale and (ii) if
applicable, the consummation of any required repurchase of the Mortgage Notes
pursuant to an Asset Sale Offer under the terms of the Mortgage Note Indenture,
61
(the "Reinvestment Period"), any such Issuer or such Restricted Subsidiary may
apply the Net Proceeds from such Asset Sale (i) to permanently reduce Senior
Debt (including by way of an Asset Sale Offer pursuant to the Mortgage Note
Indenture) or other Indebtedness that is not Subordinated Indebtedness, (ii) in
an investment in any one or more business, capital expenditure or other tangible
asset of the Issuers or any Restricted Subsidiary, in each case, engaged, used
or useful in the Principal Business, or (iii) for working capital purposes in an
aggregate amount not to exceed $20.0 million, in each case, with no concurrent
obligation to make an offer to purchase any Senior Subordinated Notes. Pending
the final application of any such Net Proceeds, such Issuer or such Restricted
Subsidiary may temporarily reduce Senior Debt, if any, or otherwise invest such
Net Proceeds in Cash Equivalents. Any Net Proceeds from the Asset Sale that are
not invested or used to repay Indebtedness or as working capital (including by
way of an Asset Sale Offer under the terms of the Mortgage Note Indenture)
within the Reinvestment Period as provided in the first sentence of this
paragraph shall be deemed to constitute "Excess Proceeds." When the aggregate
amount of Excess Proceeds exceeds $10.0 million, the Issuers shall, subject to
any repayment obligations owed to the lenders under the Bank Credit Facility and
the Mall Construction Lender as well as the holders of the Mortgage Notes, make
an offer to all Holders of Senior Subordinated Notes (an "Asset Sale Offer") to
purchase the maximum principal amount of Senior Subordinated Notes, that is an
integral multiple of $1,000, that may be purchased out of the Excess Proceeds at
an offer price in cash in an amount equal to (i) 101% of the Accreted Value
(determined at the date of the redemption) if prior to the second anniversary of
the issuance date or (ii) 101% of the aggregate principal amount thereof if on
or after the second anniversary of the issuance date, in each case, plus accrued
and unpaid interest and Liquidated Damages, if any, to the date fixed for the
closing of such offer, in accordance with the procedures set forth in Section
3.10 hereof. To the extent that the aggregate amount of Senior Subordinated
Notes tendered pursuant to an Asset Sale Offer is less than the applicable
Excess Proceeds, the Issuers may use any remaining Excess Proceeds for general
corporate purposes or to offer to redeem Senior Subordinated Notes pursuant to
the provisions of Section 3.10 of the Senior Subordinated Note Indenture. If the
aggregate principal amount of Senior Subordinated Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Senior Subordinated Note
Trustee shall select the Senior Subordinated Notes to be purchased in accordance
with Sections 3.02 and 3.02 hereof. Upon completion of any such Asset Sale
Offer, the amount of Excess Proceeds shall be deemed reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries or Special Subsidiaries to, sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into any contract, agreement, understanding, loan, advance
or guaranty with, or for the benefit of, any Affiliate (each of the foregoing,
an "Affiliate Transaction"), unless (a) such Affiliate Transaction is on terms
that are no less favorable to the Company or the relevant Restricted Subsidiary
or Special Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary or Special Subsidiary
with an unrelated Person and (b) the Company delivers to the Senior Subordinated
Note Trustee (i) with respect to any Affiliate Transaction involving aggregate
payments in excess of (A) $500,000, an Officers' Certificate certifying that
such Affiliate Transaction complies with clause (a) above, or (B) $1.0 million,
a resolution adopted by a majority of the disinterested non-employee directors
of the Board of Directors approving such Affiliate Transaction and set forth in
an Officers' Certificate certifying that such Affiliate Transaction complies
with clause (a) above and (ii) with respect to any Affiliate Transaction that is
a loan transaction involving a principal amount in excess of $10.0 million or
any other type of Affiliate Transaction involving aggregate payments in excess
of $10.0 million, an opinion as to the fairness to the Company or such
Restricted Subsidiary or Special Subsidiary from a financial point of view
issued by an Independent Financial Advisor. The foregoing provisions shall not
apply to the following: (f) rental payments from Mall Subsidiary to Venetian
under the Billboard Lease, as in effect on the date of this
62
Indenture; (g) the lease agreement relating to a restaurant to be operated by
Wolfgang Puck and currently contemplated to be known as "Oba Chine" on terms
that are no less favorable to the Company or the relevant Restricted Subsidiary
or Special Subsidiary than those that would have been obtained with an unrelated
Person; (h) the Services Agreement, as in effect on the date of this Indenture;
(i) the Other Phase II Agreements on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary or Special Subsidiary than those
that would have been obtained with an unrelated Person; (j) purchases of
materials or services from a Joint Venture Supplier by the Issuers or any of
their Restricted Subsidiaries or Special Subsidiaries in the ordinary course of
business on arm's length terms; (k) any employment, indemnification,
noncompetition or confidentiality agreement entered into by either of the
Issuers or any of their Restricted Subsidiaries or Special Subsidiaries with
their employees or directors in the ordinary course of business (other than an
employment agreement with the Sole Stockholder); (l) loans or advances to
employees of the Issuers or their Restricted Subsidiaries or Special
Subsidiaries (i) to fund the exercise price of options granted under employment
agreements or the Issuers' stock option plans, in each case, as in effect on the
date of this Indenture or (ii) for any other purpose not to exceed $2.0 million
in the aggregate outstanding at any one time under this clause (ii); (m) the
payment of reasonable fees to directors of the Issuers and their Restricted
Subsidiaries and Special Subsidiaries who are not employees of the Issuers or
their Restricted Subsidiaries or Special Subsidiaries; (n) the grant of stock
options or similar rights to employees and directors of either of the Issuers
pursuant to agreements or plans approved by the Board of Directors of the
Company or the managing member of Venetian and any repurchases of stock options
of the Issuers from such employees to the extent provided for in such plans or
agreements or permitted under clause (xi) of Section 4.07 hereof; (o)
transactions between or among the Issuers and/or any of their Restricted
Subsidiaries or transactions between or among the Special Subsidiaries and/or
any Wholly-Owned Subsidiary of Special Subsidiaries; (p) with respect to the
Issuers and any Restricted Subsidiary, Restricted Payments permitted under
Section 4.07 hereof and with respect to any Special Subsidiary, Special
Subsidiary Restricted Payments permitted under Section 4.23; (q) purchases of
Equity Interests of the Issuers (other than Disqualified Stock) by any
stockholder or member of the Issuers (or an Affiliate of a stockholder or member
of the Issuers); (r) the Completion Guaranty and related Completion Guaranty
Loan; (s) the transactions contemplated by the Cooperation Agreement, the Mall
Lease, the Sale and Contribution Agreement and the HVAC Services Agreement, in
each case, as in effect on the Issuance Date; (t) the use of the Congress Center
by an Affiliate of the Issuers; provided that Venetian receives fair market
value for the use of such property, as determined in the reasonable discretion
of the Board of Directors of the Company; (u) the transactions contemplated in
Offering Circular relating to the Offering under the caption "Certain
Transactions--Temporary Lease," "--Retirement Plan" and "--Airplane Expenses";
(v) transactions relating to the Permitted Construction Loan Refinancing,
including the Tranche B Take-out Commitment and the guaranty by the Sole
Stockholder of the loan to be made under the Tranche A Take-out Commitment; (w)
transactions relating to the guaranty of Tranche B Loan of the Mall Construction
Loan Facility by the Sole Stockholder, including the making of the Substitute
Tranche B Loan; (x) the transfer of the Phase II Land to the Phase II Subsidiary
and, upon Completion and in accordance with the Sale and Construction Agreement,
the transfer of the Mall Collateral to the Mall Subsidiary; and (y) the Company
or Venetian may enter into and perform their obligations under a gaming
operations lease or management agreement with Phase II Subsidiary relating to
the casino to be operated in the casino resort owned by the Phase II Subsidiary
on terms substantially similar to those of the Casino Lease except that (i) the
rent payable to the Phase II Subsidiary under such lease shall be equal to all
revenue derived from such casino minus the sum of (1) the operating costs
related to such casino (including an allocated portion (based on gaming revenue)
of the Company's or Venetian's, as the case may be, administrative costs related
to its gaming operations) and (2) the lesser of $250,000 or 1.0% of such
casino's operating income (or zero if there is an operating loss) (determined in
accordance with generally accepted accounting principles), (ii) the Company or
Venetian, as the case may be, may agree that they shall operate the casino in
the resort owned by the Phase II Subsidiary and the Casino in the Project in
substantially similar manners and (iii) the Company
63
or Venetian, as the case may be, may agree to have common gaming and
surveillance operations in such casinos (based on equal allocations of revenues
and operating costs).
SECTION 4.12. NO SENIOR SUBORDINATED DEBT
Subject to the provisions of the Intercreditor Agreement, the Issuers shall
not incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to any Senior
Debt and senior in any respect in right of payment to the Senior Subordinated
Notes.
SECTION 4.13. LIENS.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist
any Lien on any asset owned as of the Issuance Date or thereafter acquired by
the Issuers or any such Restricted Subsidiary, or any income or profits
therefrom, or assign or convey any right to receive income therefrom, except, in
each case, Permitted Liens.
SECTION 4.14. LINE OF BUSINESS.
For so long as any Senior Subordinated Notes are outstanding, the Issuers
shall not, and shall not permit any of their Restricted Subsidiaries or Special
Subsidiaries to, engage in any business or activity other than, (i) with respect
to the Issuers and their Restricted Subsidiaries, the Principal Business, and
(ii) with respect to any Special Subsidiary, the Special Subsidiary Principal
Business, except, in each case, to such extent as would not be material to (a)
the Issuers and their Subsidiaries taken as a whole or (b) the Special
Subsidiary, respectively.
SECTION 4.15. CORPORATE EXISTENCE.
Subject to Article 5 and Article 11 hereof, as the case may be, each of the
Issuers and each of the Senior Subordinated Note Guarantors shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate or limited liability company existence, and the corporate, limited
liability company, partnership or other existence of each of its Subsidiaries,
in accordance with the respective organizational documents (as the same may be
amended from time to time) of the Issuers, any such Senior Subordinated Note
Guarantor or any such Subsidiary and (ii) the material rights (charter and
statutory), licenses and franchises of the Issuers, the Senior Subordinated Note
Guarantors and their respective Subsidiaries; provided, however, that the
Issuers and the Senior Subordinated Note Guarantors shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of their respective Subsidiaries, if the Board of
Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Issuers, the Senior
Subordinated Note Guarantors and their Subsidiaries, taken as a whole, and that
the loss thereof would not have a material adverse effect on the Holders of
Senior Subordinated Notes.
SECTION 4.16. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control and subsequent to the
consummation of any required repurchase of the Mortgage Notes pursuant to a
Change of Control Offer in accordance with the terms of the Mortgage Note
Indenture, the Issuers shall make an offer to purchase to each Holder of Senior
Subordinated Notes to purchase all or any part (equal to $1,000 or an integral
multiple thereof)
64
of the Senior Subordinated Notes held by each such Holder pursuant to the offer
described below (the "Change of Control Offer") at a price in cash (the "Change
of Control Payment") equal to (i) 101% of the Accreted Value (determined at the
date of redemption), if prior to the second anniversary of the Issuance Date or
(ii) 101% of the aggregate principal amount thereof, if on or after the second
anniversary of the Issuance Date, in each case, plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase. Such Change of Control
Offer shall be made in accordance with the procedures set forth in Article 3
hereof. The Issuers shall commence such Change of Control Offer by mailing the
notice set forth in Section 3.10 hereof to Holders of Senior Subordinated Notes.
SECTION 4.17. DESIGNATION OF UNRESTRICTED SUBSIDIARY
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary; provided, that: (i) at the time of
designation, the Investment by either of the Issuers and any of their Restricted
Subsidiaries in such Subsidiary (other than Permitted Investments) shall be
deemed a Restricted Investment (to the extent not previously included as a
Restricted Investment) made on the date of such designation in the amount of the
fair market value of such Investment as determined in good faith by the Board of
Directors and, in the case of Investments in excess of $5.0 million, supported
by a fairness opinion issued by an accounting, appraisal or investment banking
firm of national standing, (ii) since the Issuance Date, such Unrestricted
Subsidiary has not acquired any assets from the Issuers or any Restricted
Subsidiary other than as permitted by the provisions of this Indenture,
including Sections 4.07 and 4.10 hereof; (iii) at the time of designation, no
Default or Event of Default has occurred and is continuing or results
immediately after such designation or as a result of any Restricted Investment
made in such Subsidiary at the time of such designation; (iv) at the time of
designation, such Subsidiary has no Indebtedness other than Non-Recourse
Indebtedness of such Subsidiary; (v) such Subsidiary does not own any Equity
Interests in a Restricted Subsidiary; and (vi) such Subsidiary does not own or
operate or possess any material license, franchise or right used in connection
with the ownership or operation of any part of the Project Assets of the Project
or any material portion of the Project Assets of the Project.
A Subsidiary shall cease to be an Unrestricted Subsidiary and shall become
a Restricted Subsidiary if either (i) at any time while it is a Subsidiary of
the Issuers (1) such Subsidiary acquires any assets from the Issuers or any
Restricted Subsidiary other than as permitted by this Indenture, including
Sections 4.07 and 4.10 hereof; (2) such Subsidiary has any Indebtedness other
than Non-Recourse Indebtedness of such Subsidiary; (3) such Subsidiary owns any
Equity Interests in a Restricted Subsidiary of the Issuers; or (4) such
Subsidiary owns or operates or possesses any material license, franchise or
right used in connection with the ownership or operation of any part of the
Project Assets of the Project or (ii) the Board of Directors of the Company
designates such Unrestricted Subsidiary to be a Restricted Subsidiary and no
Default or Event of Default occurs or is continuing immediately after such
designation.
As of the Issuance Date, each of Phase II Subsidiary, Phase II Manager and
Phase II Holdings is designated an Unrestricted Subsidiary. Any future
designation by the Board of Directors of the Company shall be evidenced to the
Senior Subordinated Note Trustee by filing with the Senior Subordinated Note
Trustee a certified copy of the resolutions of the Board of Directors of the
Company giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions.
After the transfer of the Phase II Land to the Phase II Subsidiary, the
Phase II Land shall not be sold, leased or transferred to an Affiliate of the
Issuers other than an Issuer, any Restricted Subsidiary or any Unrestricted
Subsidiary that is a Subsidiary of Phase II Intermediate Holdings and which
Person the Sole Stockholder does not own any Equity Interest, directly or
indirectly, except through the Issuers.
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SECTION 4.18. DESIGNATION OF SPECIAL SUBSIDIARY
The Board of Directors of the Company may designate any Restricted
Subsidiary to be any Restricted Subsidiary to be a Special Subsidiary; provided,
that: (i) at the time of designation, the Investment by either of the Issuers
and any of their Restricted Subsidiaries in such Subsidiary (other than
Permitted Investments) shall be deemed a Restricted Investment (to the extent
not previously included as a Restricted Investment) made on the date of such
designation in the amount of the fair market value of such Investment as
determined in good faith by the Board of Directors of the Company and, in the
case of Investments in excess of $5.0 million, supported by a fairness opinion
issued by an accounting, appraisal or investment banking firm of national
standing; (ii) since the Issuance Date, such Special Subsidiary has not acquired
any assets from the Issuers or any Restricted Subsidiary other than as permitted
by the Indenture, including Sections 4.07 and 4.10 hereof; (iii) at the time of
designation, no Default or Event of Default has occurred and is continuing or
results immediately after such designation or as a result of any Restricted
Investment made in such Subsidiary at the time of such designation; (iv) at the
time of designation, such Subsidiary has no Indebtedness other than Non-Recourse
Indebtedness of such Subsidiary; (v) such Subsidiary does not own any Equity
Interests in a Restricted Subsidiary; and (vi) such Subsidiary does not own or
operate or possess any material license, franchise or right used in connection
with the ownership or operation of any part of the Project Assets of the Project
or any material portion of the Project Assets of the Project.
A Subsidiary shall cease to be a Special Subsidiary and shall become a
Restricted Subsidiary if either (i) at any time while it is a Subsidiary of the
Issuers (1) such Subsidiary acquires any assets from the Issuers or any
Restricted Subsidiary other than as permitted by the provisions of this
Indenture, including Section 4.07 and 4.10 hereof; (2) such Subsidiary has any
Indebtedness other than Non-Recourse Indebtedness of such Subsidiary; (3) such
Subsidiary owns any Equity Interests in a Restricted Subsidiary of the Issuers;
or (4) such Subsidiary owns or operates or possesses any material license,
franchise or right used in connection with the ownership or operation of any
part of the Project Assets of the Project or (ii) the Issuers designate such
Special Subsidiary to be a Restricted Subsidiary and no Default or Event of
Default occurs or is continuing immediately after such designation.
As of the Issuance Date, each of Mall Subsidiary, Mall Holdings and Mall
Manager is designated a Special Subsidiary. Any future designation by the Board
of Directors of the Company shall be evidenced to the Senior Subordinated Note
Trustee by filing with the Senior Subordinated Note Trustee a certified copy of
the resolution of the Board of Directors of the Company giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
SECTION 4.19. GAMING LICENSES.
The Issuers shall use their best efforts to obtain and retain in full force
and effect at all times all Gaming Licenses necessary for the operation of the
Project.
SECTION 4.20. CONSTRUCTION.
The Issuers shall cause construction of the Project, including the
furnishing, fixturing and equipping thereof, to be prosecuted with diligence and
continuity in a good and workerlike manner substantially in accordance with the
Plans and Specifications within the Project Budget.
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SECTION 4.21. LIMITATION ON STATUS AS INVESTMENT COMPANY.
None of the Issuers and their Restricted Subsidiaries shall become an
Investment Company subject to registration as an "investment company" (as that
term is defined in the Investment Company Act of 1940, as amended).
SECTION 4.22. SENIOR SUBORDINATED NOTE GUARANTIES.
The Issuers shall, and shall cause each of their Restricted Subsidiaries,
to comply with Section 11.02 hereof.
SECTION 4.23. SPECIAL SUBSIDIARY RESTRICTED PAYMENTS.
Any Special Subsidiary shall not and shall not permit any of its
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any distribution on account of its Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving
such Special Subsidiary or its Subsidiaries) (other than (1) dividends or
distributions paid or made pro rata to all holders of Equity Interests of such
Special Subsidiary or its Subsidiaries; (2) dividends or distributions by such
Special Subsidiary payable in Equity Interests (other than Disqualified Stock)
of such Special Subsidiary (or accretions thereon); or (3) dividends or
distributions paid to such Special Subsidiary or a Wholly Owned Subsidiary of
such Special Subsidiary by a Subsidiary of such Special Subsidiary); (ii)
purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation involving any Special
Subsidiary or its Subsidiaries) any Equity Interests of any Special Subsidiary
or any Subsidiary of any Special Subsidiary; or (iii) make any Special
Subsidiary Restricted Investment (all such payments and other actions set forth
in clauses (i) through (iii) above being collectively referred to as "Special
Subsidiary Restricted Payments").
The foregoing provisions will not prohibit (i) the redemption, repurchase,
retirement or other acquisition of any Equity Interests of any Special
Subsidiary in exchange for, or out of the proceeds of, the substantially
concurrent sale or issuance (other than to the Issuers or any Restricted
Subsidiary of the Issuers) of Equity Interests of such Special Subsidiary and
(ii) the payment to or declaration or payment of any distribution or dividend to
the Issuers and any of their Restricted Subsidiaries or the redemption,
repurchase, retirement or other acquisition of any Equity Interests of any
Special Subsidiary held by the Issuers or any Wholly Owned Restricted
Subsidiary.
For purposes of determining the amount of Special Subsidiary Restricted
Investments outstanding at any time, all Special Subsidiary Restricted
Investments will be valued at their fair market value at the time made (as
determined in good faith by the Company's Board of Directors), and no
adjustments will be made for subsequent changes in fair market value.
After the transfer of the Mall Collateral to the Mall Subsidiary, the
assets comprising the Mall Collateral may not be sold, leased or transferred to
an Affiliate of the Issuers other than an Issuer, any Restricted Subsidiary or
any Special Subsidiary that is a Subsidiary of Mall Intermediate Holdings and
which the Sole Stockholder does not own any Equity Interests, directly or
indirectly, except through the Issuers.
SECTION 4.24. OWNERSHIP OF UNRESTRICTED SUBSIDIARIES AND SPECIAL SUBSIDIARIES.
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At all times from the Issuance Date until all of the Capital Stock of the
Phase II Subsidiary or the Mall Subsidiary is sold or otherwise disposed of to
any Person other than an Affiliate of the Issuers, one of the Issuers will
directly or indirectly own (i) at least a majority of the issued and outstanding
Capital Stock of Phase II Subsidiary (which is an Unrestricted Subsidiary) and
(ii) at least 80% of the issued and outstanding Capital Stock of Mall Subsidiary
(which is a Special Subsidiary); provided that the Sole Stockholder or any of
his Affiliates (other than the Issuers or any of their Wholly-Owned Restricted
Subsidiaries) will not purchase or otherwise acquire, directly or indirectly,
any of the Capital Stock of the Phase II Subsidiary, Mall Subsidiary or any of
their respective Subsidiaries.
SECTION 4.25. LIMITATION ON PHASE II CONSTRUCTION.
The Issuers shall not, and shall not permit any of their Subsidiaries
(including Unrestricted Subsidiaries and Special Subsidiaries), at any time
prior to receipt by the Issuers or any such Subsidiary of a temporary
certificate of occupancy from Clark County, Nevada with respect to the Project
(as defined on the Issuance Date) (a) to construct, develop or improve the Phase
II Land or any building on the Phase II Land (including any excavation or site
work and excluding the proposed Phase II parking garage), (b) enter into any
contract or agreement for such construction, development or improvement, or for
any materials, supplies or labor necessary in connection with such construction
development or improvement (other than a contract or agreement that is
conditional upon satisfaction of the above condition), or (c) incur any
Indebtedness the proceeds of which are expected to be used for the construction,
development or improvement of the Phase II Land or any building on the Phase II
Land, except (i) any construction, development or improvement on the Phase II
Land or any temporary building on the Phase II Land in connection with the
Project in accordance with the Plans and Specifications and included in the
Project Budget; and (ii) any design, architectural, engineering or development
work not involving actual construction on the Phase II Land.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
Neither of the Issuers shall consolidate or merge with or into or wind up
into (whether or not such entity is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, any Person unless
(i) the Company or Venetian, as the case may be, is the surviving Person or the
Person formed by or surviving any such consolidation or merger (if other than
the Company or Venetian) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a Person organized or
existing under the laws of the United States, any state thereof, the District of
Columbia, or any territory thereof; (ii) the Person formed by or surviving any
such consolidation or merger (if other than the Company or Venetian) or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Issuers
under this Indenture pursuant to a supplemental indenture or other documents or
instruments in form reasonably satisfactory to the Senior Subordinated Note
Trustee under the Senior Subordinated Notes and this Indenture; (iii)
immediately after such transaction no Default or Event of Default exists; (iv)
such transaction will not result in the loss or suspension or material
impairment of any material Gaming License; (v) the Company or Venetian or any
Person formed by or surviving any such consolidation or merger, or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made (A) shall have Consolidated Net Worth (immediately after the
transaction but prior to any purchase
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accounting adjustments resulting from the transaction) equal to or greater than
the Consolidated Net Worth of the Company or Venetian immediately preceding the
transaction and (B) shall, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.09 hereof; and (vi) such transactions
would not require any Holder of Senior Subordinated Notes (other than any Person
acquiring the Company or Venetian or their assets or any Affiliate thereof) to
obtain a gaming license or be qualified under the laws of any applicable gaming
jurisdiction; provided that such Holder would not have been required to obtain a
gaming license or be qualified under the laws of any applicable gaming
jurisdiction in the absence of such transactions. Notwithstanding the foregoing,
the Issuers may consolidate or merge with or wind up into each other without
meeting the requirements set forth in clause (v) above.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Issuers in accordance with Section 5.01 hereof, the successor corporation formed
by such consolidation or into or with which one of the Issuers is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" or "Venetian", as the
case may be, shall refer instead to the successor corporation and not to the
Company or Venetian, as the case may be), and may exercise every right and power
of an Issuer under this Indenture with the same effect as if such successor
Person had been named as an Issuer herein; provided, however, that the surviving
entity or acquiring corporation shall (i) assume all of the obligations of the
acquired Person incurred under this Indenture and the Senior Subordinated Notes,
(ii) acquire and own and operate, directly or through Wholly Owned Subsidiaries,
all or substantially all of the properties and assets then constituting the
assets of the Company or Venetian, as the case may be, or any of their
Subsidiaries, as the case may be, (iii) have been issued, or have a consolidated
Subsidiary which has been issued, Gaming Licenses to operate the acquired casino
operations and entities substantially in the manner and scope operated prior to
such transaction, which Gaming Licenses are in full force and effect, and (iv)
be in compliance fully with Section 5.01 hereof and (v) the Issuers have
delivered to the Senior Subordinated Note Trustee an Officers' Certificate and
Opinion of Counsel, subject to customary assumptions and exclusions, stating
that the proposed transaction complies with this Indenture; provided further,
however, that the predecessor Person shall not be relieved from the obligation
to pay the principal of and interest on the Senior Subordinated Notes except in
the case of a sale of all of one of the Issuers' assets that meets the
requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Issuers or any Senior Subordinated Note Guarantor defaults
in payment when due and payable, upon redemption or otherwise, of
principal or premium, if any, on the Senior Subordinated Notes or under
any Senior Subordinated Note Guaranty;
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(b) one of the Issuers or any Senior Subordinated Note Guarantor
defaults for 30 days or more in the payment when due of interest on, or
Liquidated Damages, if any, with respect to the Senior Subordinated Notes
or under any Senior Subordinated Note Guaranty;
(c) failure by the Issuers or any Senior Subordinated Note Guarantor
to offer to purchase or to purchase the Senior Subordinated Notes, in each
case, when required under an offer made pursuant Section 3.10 hereof;
(d) failure by (i) the Issuers or any Senior Subordinated Note
Guarantor to comply with Sections 4.07 or 4.09 hereof or (ii) any Special
Subsidiary to comply with Section 4.23 hereof;
(e) failure by any of the Issuers or any Senior Subordinated Note
Guarantor for 45 days after receipt of written notice from the Senior
Subordinated Note Trustee to comply with any of their other agreements
under this Indenture, the Senior Subordinated Notes or the Senior
Subordinated Note Guaranties;
(f) default under any mortgage, indenture or instrument under which
there is issued or by which there is secured or evidenced any Indebtedness
for money borrowed by any of the Issuers, any of their Restricted
Subsidiaries or any Special Subsidiary or the payment of which is
guaranteed by the Issuers, any of their Restricted Subsidiaries or any
Special Subsidiary, whether such Indebtedness or Guaranty now exists or is
created after the Issuance Date, which default (a) in the case of any of
the Issuers or any of their Restricted Subsidiaries only, is caused by a
failure to pay when due at final maturity (giving effect to any grace
period or waiver related thereto) the principal of such Indebtedness (a
"Payment Default") or (b) results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of
any such Indebtedness, together with the principal amount of any other
such Indebtedness under which a Payment Default then exists or with
respect to which the maturity thereof has been so accelerated or which has
not been paid at maturity, aggregates $10 million or more;
(g) failure by any of the Issuers or any of their Restricted
Subsidiaries to pay final judgments aggregating in excess of $10 million,
which final judgments remain unpaid, undischarged and unstayed for a
period of more than 60 days;
(h) the repudiation by any of the Issuers or any of their
Subsidiaries of their obligations under, or any judgment or decree by a
court or governmental agency of competent jurisdiction declaring the
unenforceability of, any Senior Subordinated Note Guaranty for any reason
that, in each case, would materially and adversely impair the benefits to
the Senior Subordinated Note Trustee or the holders of the Senior
Subordinated Notes thereunder;
(i) any of the Issuers, any Special Subsidiary or any Senior
Subordinated Note Guarantor that is a Significant Subsidiary or any group
of Senior Subordinated Note Guarantors that would together constitute a
Significant Subsidiary of any Issuer pursuant to or within the meaning of
Bankruptcy Law:
(i)commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
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(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying, or shall admit in writing its
inability to pay its debts as they become due and, in each case, a
period of 30 days shall have elapsed; or
(j) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against any of the Issuers or a Senior
Subordinated Note Guarantor that is a Significant Subsidiary or any
group of Senior Subordinated Note Guarantors that would together
constitute a Significant Subsidiary of any Issuer in an involuntary
case;
(ii) appoints a Custodian of any of the Issuers or a Senior
Subordinated Note Guarantor that is a Significant Subsidiary or any
group of Senior Subordinated Note Guarantors that would together
constitute a Significant Subsidiary of the Issuers or for all or
substantially all of the property of any of the Issuers or a Senior
Subordinated Note Guarantor that is a Significant Subsidiary or any
group Issuers of Senior Subordinated Note Guarantors that would
together constitute a Significant Subsidiary of any Issuer; or
(iii) orders the liquidation of any Issuer or a Senior
Subordinated Note Guarantor that is a Significant Subsidiary of any
Issuers or any group of Senior Subordinated Note Guarantors that
would together constitute a Significant Subsidiary of any Issuer;
and the order or decree remains unstayed and in effect for 60 consecutive
days;
(k) after the Project becomes Completed, revocation, termination,
suspension or other cessation of effectiveness of any Gaming License,
which results in the cessation or suspension of gaming operations for a
period of more than 90 consecutive days at the Project;
(l) the Project is not Completed by the Outside Completion Deadline
and continues to be not Completed; or
(m) failure by Interface to comply with its obligations under the
Cooperation Agreement with respect to a change of control of Interface or
a sale, transfer or other disposition by Interface of its interest in the
Expo Center or the incurrence by Interface of Indebtedness.
The term "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
SECTION 6.02. ACCELERATION.
(a) Subject to the provisions of clause (b) of this Section 6.02, if any
Event of Default (other than an Event of Default specified in clause (i) or (j)
of Section 6.01 hereof with respect to the Issuers or any Senior Subordinated
Note Guarantor that is a Significant Subsidiary or any group of Senior
Subordinated Note Guarantors that would together constitute a Significant
Subsidiary), occurs and is continuing, the Senior Subordinated Note Trustee or
the Holders of at least 25% in principal amount of the then outstanding Senior
Subordinated Notes may declare the principal, premium and Liquidated
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Damages, if any, interest and any other monetary obligations on all of the
Senior Subordinated Notes to be due and payable immediately. Notwithstanding the
foregoing, if an Event of Default specified in clause (i) or (j) of Section 6.01
hereof occurs with respect to the Issuers or any Senior Subordinated Note
Guarantor that is a Significant Subsidiary or any group of Senior Subordinated
Note Guarantors that would together constitute a Significant Subsidiary of the
Issuers, the principal, premium and Liquidated Damages, if any, interest any
other monetary obligations on all of the outstanding Senior Subordinated Notes
shall be due and payable immediately without further action or notice. The
Holders of a majority in aggregate principal amount of the then outstanding
Senior Subordinated Notes by written notice to the Senior Subordinated Note
Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium or Liquidated Damages that has become due solely because of the
acceleration) have been cured or waived.
Notwithstanding the foregoing, the Senior Subordinated Note Trustee shall
have no obligation to accelerate the Senior Subordinated Notes if in the best
judgment of the Senior Subordinated Note Trustee acceleration is not in the best
interest of the Holders of the Senior Subordinated Notes.
If an Event of Default occurs by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Issuers with the intention of
avoiding payment of the premium that the Issuers would have had to pay if the
Issuers then had elected to redeem the Senior Subordinated Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Senior Subordinated Notes,
an equivalent premium shall also become and be immediately due and payable, to
the extent permitted by law, anything in this Indenture or in the Senior
Subordinated Notes to the contrary notwithstanding.
(b) The provisions of the TIA shall govern this Senior Subordinated Note
Indenture whether or not this Senior Subordinated Note Indenture is qualified
under the TIA. Subject to the mandatory provisions of the TIA, the rights of the
Senior Subordinated Note Trustee and the Holders to accelerate obligations under
the Senior Subordinated Notes, rescind such acceleration, or to exercise rights
and remedies under, or to enforce the terms of, this Indenture shall be limited
as provided in the terms of the Intercreditor Agreement. To the extent
permissible under the TIA, the terms of the Intercreditor Agreement or the Sole
Stockholder Intercreditor Agreement shall not be interpreted as impairing or
affecting, in violation of Section 316(b) of the TIA, the right of any Holder to
receive payment of principal of and interest on the Senior Subordinated Notes on
or after the respective due dates expressed in the Senior Subordinated Notes or
to institute suit for the enforcement of any such payment on or after such
respective dates.
SECTION 6.03. OTHER REMEDIES.
Subject to the terms of the Intercreditor Agreement, if an Event of Default
occurs and is continuing, the Senior Subordinated Note Trustee may pursue any
available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and interest on the Senior Subordinated Notes or to enforce the
performance of any provision of the Senior Subordinated Notes or this Indenture.
The Senior Subordinated Note Trustee may maintain a proceeding even if it
does not possess any of the Senior Subordinated Notes or does not produce any of
them in the proceeding. A delay or omission by the Senior Subordinated Note
Trustee or any Holder of a Senior Subordinated Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
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SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Senior Subordinated Notes by notice to the Senior Subordinated
Note Trustee may on behalf of the Holders of all of the Senior Subordinated
Notes waive an existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of the
principal of, premium and Liquidated Damages, if any, or interest on, the Senior
Subordinated Notes (including in connection with an offer to purchase)
(provided, however, that the Holders of a majority in aggregate principal amount
of the then outstanding Senior Subordinated Notes may rescind an acceleration
and its consequences, including any related payment default that resulted from
such acceleration). Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Subject to the terms of the Intercreditor Agreement, Holders of a majority
in principal amount of the then outstanding Senior Subordinated Notes may direct
the time, method and place of conducting any proceeding for exercising any
remedy available to the Senior Subordinated Note Trustee or exercising any trust
or power conferred on it, including the exercise of any remedy under the
Intercreditor Agreement. However, the Senior Subordinated Note Trustee may
refuse to follow any direction that conflicts with law, this Indenture or the
Intercreditor Agreement that the Senior Subordinated Note Trustee determines may
be unduly prejudicial to the rights of other Holders of Senior Subordinated
Notes or that may involve the Senior Subordinated Note Trustee in personal
liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Senior Subordinated Note may pursue a remedy with respect to
this Indenture or the Senior Subordinated Notes (except as provided in Sections
6.06 and 6.07) only if:
(a) the Holder of a Senior Subordinated Note gives to the Senior
Subordinated Note Trustee written notice of a continuing Event of Default
or the Senior Subordinated Note Trustee receives such notice from the
Issuers;
(b) the Holders of at least 25% in principal amount of the then
outstanding Senior Subordinated Notes make a written request to the Senior
Subordinated Note Trustee to pursue the remedy;
(c) such Holder of a Senior Subordinated Note or Holders of Senior
Subordinated Notes offer and, if requested, provide to the Senior
Subordinated Note Trustee indemnity satisfactory to the Senior
Subordinated Note Trustee against any loss, liability or expense;
(d) the Senior Subordinated Note Trustee does not comply with the
request within 60 days after receipt of the request and the offer and, if
requested, the provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Senior Subordinated Notes do not give the
Senior Subordinated Note Trustee a direction inconsistent with the
request; provided, however, that such provision does not effect the right
of a Holder to sue for enforcement of any overdue payment thereon.
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A Holder of a Senior Subordinated Note may not use this Indenture to prejudice
the rights of another Holder of a Senior Subordinated Note or to obtain a
preference or priority over another Holder of a Senior Subordinated Note or to
take any action in violation of the provisions of the Intercreditor Agreement.
SECTION 6.07. RIGHTS OF HOLDERS OF SENIOR SUBORDINATED NOTES TO RECEIVE
PAYMENT.
Notwithstanding any other provision of this Indenture, but subject to the
provisions of the Intercreditor Agreement the right of any Holder of a Senior
Subordinated Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Senior Subordinated Note, on or after the
respective due dates expressed in the Senior Subordinated Note, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY SENIOR SUBORDINATED NOTE TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, subject to the terms of the Intercreditor Agreement, the Senior
Subordinated Note Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Issuers or any Senior Subordinated
Note Guarantor for the whole amount of principal of, premium and Liquidated
Damages, if any, and interest remaining unpaid on the Senior Subordinated Notes
and interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Senior Subordinated Note Trustee, its agents and counsel.
SECTION 6.09. SENIOR SUBORDINATED NOTE TRUSTEE MAY FILE PROOFS OF CLAIM.
Subject to Section 6.02(b) hereof and the terms of the Intercreditor
Agreement, the Senior Subordinated Note Trustee is authorized to file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Senior Subordinated Note Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Senior Subordinated Note Trustee, its agents and counsel) and the Holders
of the Senior Subordinated Notes allowed in any judicial proceedings relative to
the Issuers (or any other obligor upon the Senior Subordinated Notes, including
the Senior Subordinated Note Guarantors), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Senior Subordinated Note Trustee, and in the event that the
Senior Subordinated Note Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Senior Subordinated Note Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Senior Subordinated Note Trustee, its agents and counsel, and
any other amounts due the Senior Subordinated Note Trustee under Section 7.07
hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Senior Subordinated Note Trustee, its agents
and counsel, and any other amounts due the Senior Subordinated Note Trustee
under Section 7.07 hereof out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Senior Subordinated Note 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 Senior Subordinated Notes or the rights
of any
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Holder, or to authorize the Senior Subordinated Note Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Senior Subordinated Note Trustee collects any money pursuant to this
Article, it shall, subject to the terms of the Intercreditor Agreement, pay out
the money in the following order:
First: to the Senior Subordinated Note Trustee, its agents and attorneys
for amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by the
Senior Subordinated Note Trustee and the costs and expenses of collection;
Second: to Holders of Senior Subordinated Notes for amounts due and unpaid
on the Senior Subordinated Notes for principal, premium and Liquidated Damages,
if any, and interest ratably, without preference or priority of any kind,
according to the amounts due and payable on the Senior Subordinated Notes for
principal, premium and Liquidated Damages, if any, and interest, respectively;
and
Third: to the Issuers or to such party as a court of competent jurisdiction
shall direct.
The Senior Subordinated Note Trustee may fix a record date and payment date
for any payment to Holders of Senior Subordinated Notes pursuant to this Section
6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Senior Subordinated Note Trustee for any action taken
or omitted by it as a Senior Subordinated Note Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Senior Subordinated Note Trustee, a suit by a Holder of a Senior
Subordinated Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Senior Subordinated Notes.
ARTICLE 7
SENIOR SUBORDINATED NOTE TRUSTEE
SECTION 7.01. DUTIES OF SENIOR SUBORDINATED NOTE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Senior
Subordinated Note 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 its 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 an Event of Default:
(i) the duties of the Senior Subordinated Note Trustee shall be
determined solely by the express provisions of this Indenture and the
Intercreditor Agreement and the Senior Subordinated
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Note Trustee need perform only those duties that are specifically set
forth in this Indenture and the Intercreditor Agreement and no others, and
no implied covenants or obligations shall be read into this Indenture
against the Senior Subordinated Note Trustee; and
(ii) in the absence of bad faith on its part, the Senior
Subordinated Note 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 Senior Subordinated Note Trustee
and conforming in all material respects to the requirements of this
Indenture and the Intercreditor Agreement. However, the Senior
Subordinated Note Trustee shall examine the certificates and opinions to
determine whether or not they conform in all material respects to the
requirements of this Indenture.
(c) The Senior Subordinated Note Trustee may not be relieved from
liabilities for its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that:
(i) this paragraph (c) does not limit the effect of paragraph (b) of
this Section;
(ii) the Senior Subordinated Note Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer, unless
it is proved that the Senior Subordinated Note Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Senior Subordinated Note Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.05
hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Senior Subordinated Note
Trustee is subject to paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Senior
Subordinated Note Trustee to expend or risk its own funds or incur any
liability. The Senior Subordinated Note Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture
before or following the occurrence of any Event of Default at the request
of any Holders, unless such Holder shall have offered to the Senior
Subordinated Note Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
(f) The Senior Subordinated Note Trustee shall not be liable for
interest on any money received by it except as the Senior Subordinated
Note Trustee may agree in writing with the Issuers or the Senior
Subordinated Note Guarantors. Money held in trust by the Senior
Subordinated Note Trustee need not be segregated from other funds except
to the extent required by law.
SECTION 7.02. RIGHTS OF SENIOR SUBORDINATED NOTE TRUSTEE.
(a) The Senior Subordinated Note Trustee may conclusively rely upon
any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Senior Subordinated Note Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Senior Subordinated Note Trustee acts or refrains
from acting, it may require an Officers' Certificate or an Opinion of
Counsel or both. The Senior Subordinated Note Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel. The Senior Subordinated Note
Trustee may consult with counsel and the written
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advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Senior Subordinated Note Trustee may act through its
attorneys and agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) The Senior Subordinated Note Trustee shall not be liable for any
action it takes or omits to take in good faith that it believes to be
authorized or within the rights or powers conferred upon it by this
Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Issuers or any Senior
Subordinated Note Guarantor shall be sufficient if signed by an Officer of
the Issuers or such Senior Subordinated Note Guarantor.
(f) The Senior Subordinated Note Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders unless such
Holders shall have requested such action in accordance with this Indenture
and have offered to the Senior Subordinated Note Trustee reasonable
security or indemnity against the costs, expenses and liabilities that
might be incurred by it in compliance with such request or direction.
(g) Except with respect to Section 4.01 hereof, the Senior
Subordinated Note Trustee shall have no duty to inquire as to the
performance of the Issuers' covenants in Article 4 hereof. In addition,
the Senior Subordinated Note Trustee shall not be deemed to have knowledge
of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Section 6.01(a) or 6.01(b) or (ii) any Default of
Event of Default of which the Senior Subordinated Note Trustee shall have
received written notification or obtained actual knowledge.
(h) The Senior Subordinated Notes Trustee may construe any of the
provisions of this Senior Subordinated Notes Indenture insofar as the same
may appear to be ambiguous or inconsistent with any other provision
hereof, and any construction of such provisions hereof by the Senior
Subordinated Note Trustee in good faith shall be binding upon the Holders
and the Issuers, provided such construction is not contrary to law.
(i) The permissive right of the Senior Subordinated Notes Senior
Subordinated Notes Trustee to do things enumerated in this Senior
Subordinated Notes Indenture shall not be construed as a duty.
(j) Except as may be required by an applicable law or regulation
that may not be waived or varied by the terms of this Senior Subordinated
Notes Indenture, the Senior Subordinated Notes Trustee shall not be
required to give any bond or surety in respect to the execution of the
said trusts and powers or otherwise in respect of the premises.
(k) The Senior Subordinated Notes Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, coupon or other paper or
document but the Senior Subordinated Notes Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as
it may see fit, and, if the Senior Subordinated Notes Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books and records of the Issuers, personally or by
agent or attorney.
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(l) The Senior Subordinated Note Trustee shall be entitled to rely
on an Officers' Certificate with respect to any calculations relating to
the determination of Accreted Value, Senior Subordinated Note Make-Whole
Premium and Liquidated Damages.
SECTION 7.03. INDIVIDUAL RIGHTS OF SENIOR SUBORDINATED NOTE TRUSTEE.
The Senior Subordinated Note Trustee in its individual or any other
capacity may become the owner or pledgee of Senior Subordinated Notes and may
otherwise deal with the Issuers and the Senior Subordinated Note Guarantors with
the same rights it would have if it were not Senior Subordinated Note Trustee.
However, in the event that the Senior Subordinated Note Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Senior Subordinated Note Trustee is also
subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. SENIOR SUBORDINATED NOTE TRUSTEE'S DISCLAIMER.
The Senior Subordinated Note Trustee shall not be responsible for and makes
no representation as to the validity or adequacy of this Indenture, the
Intercreditor Agreement, the Sole Stockholder Intercreditor Agreement, the
Senior Subordinated Notes or any Senior Subordinated Note Guaranty, it shall not
be accountable for the Issuers' use of the proceeds from the Senior Subordinated
Notes or any money paid to the Issuers or upon the Issuers' direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Senior
Subordinated Note Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Senior Subordinated Notes or any other
document in connection with the sale of the Senior Subordinated Notes or
pursuant to this Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Senior Subordinated Note Trustee, the Senior Subordinated Note
Trustee shall mail to Holders of Senior Subordinated Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium and
Liquidated Damages, if any, or interest on any Senior Subordinated Note, the
Senior Subordinated Note Trustee may withhold the notice if and so long as the
Senior Subordinated Note Trustee in good faith determines that withholding the
notice is in the interests of the Holders of the Senior Subordinated Notes.
SECTION 7.06. REPORTS BY SENIOR SUBORDINATED NOTE TRUSTEE TO HOLDERS OF THE
SENIOR SUBORDINATED NOTES.
Within 60 days of each May 15th beginning with the May 15th following the
date of this Indenture, and for so long as Senior Subordinated Notes remain
outstanding, the Senior Subordinated Note Trustee shall mail to the Holders of
the Senior Subordinated Notes a brief report dated as of such reporting date
that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a)
has occurred within the twelve months preceding the reporting date, no report
need be transmitted). The Senior Subordinated Note Trustee also shall comply
with TIA ss. 313(b)(2). The Senior Subordinated Note Trustee shall also transmit
by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of Senior
Subordinated Notes shall be mailed to the Issuers and filed with the SEC and
each stock exchange on which the Senior
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Subordinated Notes are listed in accordance with TIA ss. 313(d). The Issuers
shall promptly notify the Senior Subordinated Note Trustee when the Senior
Subordinated Notes are listed on any stock exchange.
At the expense of the Issuers, the Senior Subordinated Note Trustee or, if
the Senior Subordinated Note Trustee is not the Registrar, the Registrar, shall
report the names of record holders of the Senior Subordinated Notes to any
Gaming Authority when requested to do so by the Issuers.
At the express direction of the Issuers and at the Issuers' expense, the
Senior Subordinated Note Trustee will provide any Gaming Authority with:
(i) copies of all notices, reports and other written communications
which the Senior Subordinated Note Trustee gives to Holders;
(ii) a list of all of the Holders promptly after the original issuance of
the Senior Subordinated Notes and periodically thereafter if the
Issuers so direct;
(iii) notice of any Default under this Indenture, any acceleration of the
Indebtedness evidenced hereby, the institution of any legal actions
or proceedings before any court or governmental authority in respect
of a Default or Event of Default hereunder;
(iv) notice of the removal or resignation of the Senior Subordinated Note
Trustee within five Business Days of the effectiveness thereof;
(v) notice of any transfer or assignment of rights under this Indenture
or the Senior Subordinated Note Guaranties known to the Senior
Subordinated Note Trustee within five Business Days thereof; and
(vi) a copy of any amendment to the Senior Subordinated Notes or this
Indenture within five Business Days of the effectiveness thereof.
To the extent requested by the Issuers and at the Issuers' expense, the
Senior Subordinated Note Trustee shall cooperate with any Gaming Authority in
order to provide such Gaming Authority with the information and documentation
requested and as otherwise required by applicable law.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Issuers and the Senior Subordinated Note Guarantors shall pay to the
Senior Subordinated Note Trustee from time to time reasonable compensation for
its acceptance of this Indenture and services hereunder in accordance with a
written schedule provided by the Senior Subordinated Note Trustee to the
Issuers. The Senior Subordinated Note Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuers
and the Senior Subordinated Note Guarantors shall reimburse the Senior
Subordinated Note Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Senior Subordinated Note
Trustee's agents and counsel.
The Issuers and the Senior Subordinated Note Guarantors shall indemnify the
Senior Subordinated Note Trustee against any and all losses, liabilities or
expenses incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Issuers (including this Section
7.07) and
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defending itself against any claim (whether asserted by the Issuers or any
Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence, willful
misconduct or bad faith. The Senior Subordinated Note Trustee shall notify the
Issuers promptly of any claim for which it may seek indemnity. Failure by the
Senior Subordinated Note Trustee to so notify the Issuers shall not relieve the
Issuers or any Senior Subordinated Note Guarantor of its obligations hereunder.
The Issuers shall defend the claim and the Senior Subordinated Note Trustee
shall cooperate in the defense. To the extent there exists a conflict or
potential conflict of interest, the Senior Subordinated Note Trustee may have
separate counsel and the Issuers and the Senior Subordinated Note Guarantors
shall pay the reasonable fees and expenses of such counsel. Neither the Issuers
nor any Senior Subordinated Note Guarantor need pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Issuers and the Senior Subordinated Note Guarantors
under this Section 7.07 shall survive the satisfaction and discharge of this
Indenture.
When the Senior Subordinated Note Trustee incurs expenses or renders
services after an Event of Default specified in Section 6.01(i) or (j) hereof
occurs, the expenses and the compensation for the services (including the
reasonable fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under any Bankruptcy Law.
The Senior Subordinated Note Trustee shall comply with the provisions of
TIA ss. 313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF SENIOR SUBORDINATED NOTE TRUSTEE.
A resignation or removal of the Senior Subordinated Note Trustee and
appointment of a successor Senior Subordinated Note Trustee shall become
effective only upon the successor Senior Subordinated Note Trustee's acceptance
of appointment and taking of office as provided in this Section.
The Senior Subordinated Note Trustee may resign in writing at any time and
be discharged from the trust hereby created by so notifying the Issuers. The
Holders of Senior Subordinated Notes of a majority in principal amount of the
then outstanding Senior Subordinated Notes may remove the Senior Subordinated
Note Trustee by so notifying the Senior Subordinated Note Trustee and the
Issuers in writing. The Issuers may remove the Senior Subordinated Note Trustee
if:
(a) the Senior Subordinated Note Trustee fails to comply with
Section 7.10 hereof;
(b) the Senior Subordinated Note Trustee is adjudged a bankrupt or
an insolvent or an order for relief is entered with respect to the Senior
Subordinated Note Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Senior
Subordinated Note Trustee or its property; or
(d) the Senior Subordinated Note Trustee becomes incapable of
acting.
If the Senior Subordinated Note Trustee resigns or is removed or if a
vacancy exists in the office of Senior Subordinated Note Trustee for any reason,
the Issuers shall promptly appoint a successor Senior Subordinated Note Trustee.
For up to one year after the successor Senior Subordinated Note
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Trustee takes office, the Holders of a majority in principal amount of the then
outstanding Senior Subordinated Notes may by written action appoint a successor
Senior Subordinated Note Trustee to replace the successor Senior Subordinated
Note Trustee appointed by the Issuers.
If any Gaming Authority requires a Senior Subordinated Note Trustee to be
approved, licensed or qualified and the Senior Subordinated Note Trustee fails
or declines to do so, such approval, license or qualification shall be obtained
upon the request of, and at the expense of, the Issuers unless the Senior
Subordinated Note Trustee declines to do so, or, if the Senior Subordinated Note
Trustee's relationship with either the Issuers or the Senior Subordinated Note
Guarantors may, in the Issuers' discretion, jeopardize any material gaming
license or franchise or right or approval granted thereto, the Senior
Subordinated Note Trustee shall resign, and, in addition, the Senior
Subordinated Note Trustee may at its option resign if the Senior Subordinated
Note Trustee in its sole discretion determines not to be so approved, licensed
or qualified.
If a successor Senior Subordinated Note Trustee does not take office
within 60 days after the retiring Senior Subordinated Note Trustee resigns or is
removed, the retiring Senior Subordinated Note Trustee, the Issuers, any Senior
Subordinated Note Guarantor or the Holders of Senior Subordinated Notes of at
least 10% in principal amount of the then outstanding Senior Subordinated Notes
may petition any court of competent jurisdiction for the appointment of a
successor Senior Subordinated Note Trustee.
If the Senior Subordinated Note Trustee, after written request by any
Holder of a Senior Subordinated Note who has been a Holder of a Senior
Subordinated Note for at least six months, fails to comply with Section 7.10,
such Holder of a Senior Subordinated Note may petition any court of competent
jurisdiction for the removal of the Senior Subordinated Note Trustee and the
appointment of a successor Senior Subordinated Note Trustee.
A successor Senior Subordinated Note Trustee shall deliver a written
acceptance of its appointment to the retiring Senior Subordinated Note Trustee
and to the Issuers. Thereupon, the resignation or removal of the retiring Senior
Subordinated Note Trustee shall become effective, and the successor Senior
Subordinated Note Trustee shall have all the rights, powers and duties of the
Senior Subordinated Note Trustee under this Indenture. The successor Senior
Subordinated Note Trustee shall mail a notice of its succession to Holders of
the Senior Subordinated Notes. The retiring Senior Subordinated Note Trustee
shall promptly transfer all property held by it as Senior Subordinated Note
Trustee to the successor Senior Subordinated Note Trustee, provided all sums
owing to the Senior Subordinated Note Trustee hereunder have been paid and
subject to the Lien provided for in Section 7.07 hereof. Notwithstanding
replacement of the Senior Subordinated Note Trustee pursuant to this Section
7.08, the Issuers' and the Senior Subordinated Note Guarantors' obligations
under Section 7.07 hereof shall continue for the benefit of the retiring Senior
Subordinated Note Trustee.
SECTION 7.09. SUCCESSOR SENIOR SUBORDINATED NOTE TRUSTEE BY MERGER, ETC.
If the Senior Subordinated Note Trustee consolidates, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Senior Subordinated Note Trustee; provided such corporation shall
be otherwise eligible and qualified under this Article.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Senior Subordinated Note Trustee hereunder
that is a corporation or banking association organized and doing business under
the laws of the United States of America or
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of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Senior Subordinated Note Trustee who
satisfies the requirements of TIA ss. 310(a)(1), (2) and (5). The Senior
Subordinated Note Trustee is subject to TIA ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS.
The Senior Subordinated Note Trustee is subject to TIA ss. 311(a),
excluding any creditor relationship listed in TIA ss. 311(b). A Senior
Subordinated Note Trustee who has resigned or been removed shall be subject to
TIA ss. 311(a) to the extent indicated therein.
SECTION 7.12. AUTHORIZATION OF TRUSTEE TO TAKE OTHER ACTIONS.
(a) The Senior Subordinated Note Trustee is hereby authorized to enter
into and take any actions or deliver such consents required by or requested
under the Intercreditor Agreement and the Sole Stockholder Intercreditor
Agreement and such other documents as directed by the Holders of a majority of
outstanding aggregate principal amount of the Senior Subordinated Notes. If at
any time any action by or the consent of the Senior Subordinated Note Trustee is
required under the Intercreditor Agreement and the Sole Stockholder
Intercreditor Agreement or any other document entered into by the Senior
Subordinated Note Trustee at the direction of a majority of the Holders of
outstanding aggregate principal amount of the Senior Subordinated Notes, such
action or consent shall be taken or given by the Senior Subordinated Note
Trustee upon the consent to such action by the Holders of a majority of
outstanding aggregate principal amount of the Senior Subordinated Notes.
(b) Upon any refinancing or replacement of the Bank Credit Facility or the
Mall Construction Loan Facility with a lender that does not become a party to
the Intercreditor Agreement or the Sole Stockholder Intercreditor Agreement, the
Senior Subordinated Note Trustee shall enter into an intercreditor agreement
with such lender, at such lender's request, with terms that are substantially as
favorable to the Senior Subordinated Note Trustee or the Holders of Senior
Subordinated Notes as those contained in the Intercreditor Agreement or the Sole
Stockholder Intercreditor Agreement, as applicable. The Senior Subordinated Note
Trustee shall also enter into such amendments or supplements to the
Intercreditor Agreement and the Sole Stockholder Intercreditor Agreement to
provide for additional parties to be bound by the terms thereof.
(c) Each Holder of Senior Subordinated Notes, by its acceptance thereof,
consents and agrees to the terms of the Intercreditor Agreement (including,
without limitation, the provisions providing for foreclosure and release of Note
Collateral as well as any additional intercreditor arrangements entered into by
the Senior Subordinated Note Trustee pursuant to this Section 7.12) and the Sole
Stockholder Intercreditor Agreement as the same may be in effect or may be
amended from time to time in accordance with its terms and authorizes and
directs the Subordinated Note Trustee to enter into the Intercreditor Agreement
and the Sole Stockholder Intercreditor Agreement and to perform its obligations
and exercise its rights thereunder in accordance therewith. The Issuers and the
Senior Subordinated Note Guarantors shall deliver to the Senior Subordinated
Note Trustee copies of all documents executed pursuant to this Indenture, the
Intercreditor Agreement and the Sole Stockholder Intercreditor Agreement and
shall do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Intercreditor Agreement
and/or the Sole Stockholder Intercreditor Agreement.
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Issuers may, at the option of the Board of Directors of the Company
evidenced by a resolution set forth in an Officers' Certificate delivered to the
Senior Subordinated Note Trustee, at any time, elect to have either Section 8.02
or 8.03 hereof be applied to all outstanding Senior Subordinated Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers and the Senior Subordinated Note
Guarantors shall, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, be deemed to have been discharged from their respective
obligations with respect to all outstanding Senior Subordinated Notes and any
Senior Subordinated Note Guaranties on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Issuers shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Senior Subordinated Notes
and cured all existing Events of Default, which Senior Subordinated Notes shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.05
hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Senior
Subordinated Notes, and this Indenture (and the Senior Subordinated Note
Trustee, on demand of and at the expense of the Issuers, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Senior Subordinated Notes to receive solely from the
trust fund described in Section 8.04 hereof, and as more fully set forth in such
Section, payments in respect of the principal of, premium and Liquidated
Damages, if any, and interest on such Senior Subordinated Notes when such
payments are due, (b) the Issuers' and the Senior Subordinated Note Guarantors'
obligations with respect to such Senior Subordinated Notes under Article 2 and
Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of
the Senior Subordinated Note Trustee hereunder and the Issuers' and the Senior
Subordinated Note Guarantors' obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Issuers may exercise
their option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers and the Senior Subordinated Note
Guarantors shall, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, be released from their obligations under the covenants
contained in Sections 4.03, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.13, 4.14,
4.15, 4.16, 4.17, 4.18, 4.20, 4.21, 4.22, 4.23 and 4.24 and Articles 5 and 11
hereof with respect to the outstanding Senior Subordinated Notes and Senior
Subordinated Note Guaranties on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Senior
Subordinated Notes shall thereafter be deemed not "outstanding" for the purposes
of any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Senior Subordinated Notes shall not be deemed outstanding
for accounting purposes). For this purpose,
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Covenant Defeasance means that, with respect to the outstanding Senior
Subordinated Notes, the Issuers and the Senior Subordinated Note Guarantors may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Senior Subordinated Notes and
Senior Subordinated Note Guaranties shall be unaffected thereby. In addition,
upon the Issuers' exercise under Section 8.01 hereof of the option applicable to
this Section 8.03 hereof, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, Sections 6.01(c) through 6.01(g) and 6.01(k)
through 6.01(m) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Senior Subordinated Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuers must irrevocably deposit with the Senior
Subordinated Note Trustee, in trust, for the benefit of the Holders, cash
in United States dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of independent public accountants as
evidenced by a certificate delivered to the Senior Subordinated Note
Trustee, to pay the Accreted Value thereof (determined at the date of
redemption) if prior to the second anniversary of the issuance date or the
principal amount thereof, premium and Liquidated Damages, if any, and
interest on the outstanding Senior Subordinated Notes on the stated
maturity date or on an applicable redemption date, as the case may be, of
such principal of, premium and Liquidated Damages, if any, or interest on
the outstanding Senior Subordinated Notes;
(b) in the case of an election under Section 8.02 hereof, the
Issuers shall have delivered to the Senior Subordinated Note Trustee an
Opinion of Counsel in the United States reasonably acceptable to the
Senior Subordinated Note Trustee confirming that, subject to customary
assumptions and exclusions, (A) the Issuers have received from, or there
has been published by, the United States Internal Revenue Service a ruling
or (B) since the Issuance Date, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel in the United States shall confirm that,
subject to customary assumptions and exclusions, the Holders of the
outstanding Senior Subordinated Notes will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such Legal
Defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Issuers shall have delivered to the Senior Subordinated Note Trustee an
Opinion of Counsel in the United States reasonably acceptable to the
Senior Subordinated Note Trustee confirming that, subject to customary
assumptions and exclusions, the Holders of the outstanding Senior
Subordinated Notes will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such Covenant Defeasance and
will be subject to U.S. federal income tax on the same
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amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing pursuant to Section 6.01(a), 6.01(b), 6.01(i) or 6.01(j) hereof
on the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Issuers
or any of their Subsidiaries is a party or by which the Issuers or any of
their Subsidiaries is bound;
(f) the Issuers shall have delivered to the Senior Subordinated Note
Trustee an Opinion of Counsel in the United States to the effect that, as
of the date of such opinion and subject to customary assumptions and
exclusions, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally under any applicable United States,
state law and that the Senior Subordinated Note Trustee has a perfected
security interest in such trust for the ratable benefit of the Holders of
Senior Subordinated Notes;
(g) the Issuers shall have delivered to the Senior Subordinated Note
Trustee an Officers' Certificate stating that the deposit was not made by
the Issuers with the intent of defeating, hindering, delaying or
defrauding any creditors of the Issuers or others; and
(h) the Issuers shall have delivered to the Senior Subordinated Note
Trustee an Officers' Certificate and an Opinion of Counsel in the United
States, which Opinion of Counsel may be subject to customary assumptions
and exclusions, each stating that all conditions precedent provided for or
relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Senior
Subordinated Note Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the "Senior Subordinated Note Trustee") pursuant
to Section 8.04 hereof in respect of the outstanding Senior Subordinated Notes
shall be held in trust and applied by the Senior Subordinated Note Trustee, in
accordance with the provisions of such Senior Subordinated Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Issuers acting as Paying Agent) as the Senior Subordinated Note
Trustee may determine, to the Holders of such Senior Subordinated Notes of all
sums due and to become due thereon in respect of principal, premium and
Liquidated Damages, if any, and interest but such money need not be segregated
from other funds except to the extent required by law.
The Issuers and the Senior Subordinated Note Guarantors shall pay and
indemnify the Senior Subordinated Note Trustee against any tax, fee or other
charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Senior
Subordinated Notes.
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Anything in this Article 8 to the contrary notwithstanding, the Senior
Subordinated Note Trustee shall deliver or pay to the Issuers from time to time
upon the request of the Issuers any money or non-callable Government Securities
held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Senior Subordinated Note Trustee
(which may be the opinion delivered under Section 8.04(a) hereof), are in excess
of the amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO THE ISSUERS.
Any money deposited with the Senior Subordinated Note Trustee or any
Paying Agent, or then held by the Issuers, in trust for the payment of the
principal of, premium and Liquidated Damages, if any, or interest on any Senior
Subordinated Note and remaining unclaimed for two years after such principal,
premium and Liquidated Damages, if any, or interest has become due and payable
shall be paid to the Issuers on its request or (if then held by the Issuers)
shall be discharged from such trust; and the Holder of such Senior Subordinated
Note shall thereafter, as a secured creditor, look only to the Issuers for
payment thereof, and all liability of the Senior Subordinated Note Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Issuers as trustee thereof, shall thereupon cease; provided, however, that the
Senior Subordinated Note Trustee or such Paying Agent, before being required to
make any such repayment, may at the expense of the Issuers cause to be published
once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Issuers.
SECTION 8.07. REINSTATEMENT.
If the Senior Subordinated Note Trustee or Paying Agent is unable to apply
any United States dollars or non-callable Government Securities in accordance
with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Issuers' and the Senior
Subordinated Note Guarantors' obligations under this Indenture and the Senior
Subordinated Notes and Senior Subordinated Note Guaranties shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Senior Subordinated Note Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Issuers and the
Senior Subordinated Note Guarantors make any payment of principal of, premium
and Liquidated Damages, if any, or interest on any Senior Subordinated Note
following the reinstatement of its obligations, the Issuers and the Senior
Subordinated Note Guarantors shall be subrogated to the rights of the Holders of
such Senior Subordinated Notes to receive such payment from the money held by
the Senior Subordinated Note Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF SENIOR SUBORDINATED NOTES.
Notwithstanding Section 9.02 of this Indenture, the Issuers, the Senior
Subordinated Note Guarantors and the Senior Subordinated Note Trustee may amend
or supplement this Indenture, the
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Senior Subordinated Notes, the Senior Subordinated Note Guaranties, the
Intercreditor Agreement or the Sole Stockholder Intercreditor Agreement without
the consent of any Holder of a Senior Subordinated Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article 5 or Article 11 hereof;
(c) to provide for uncertificated Senior Subordinated Notes in
addition to or in place of certificated Senior Subordinated Notes;
(d) to provide for the assumption of the Issuers' or the Senior
Subordinated Note Guarantors' obligations to the Holders of the Senior
Subordinated Notes in the case of a merger or consolidation pursuant to
Articles 5 or 11 hereof, as the case may be;
(e) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Subordinated Notes (including
providing for additional Senior Subordinated Note Guaranties pursuant to
Section 11.02 hereof) or that does not adversely affect the legal rights
hereunder or under the Intercreditor Agreement or Sole Stockholder
Intercreditor Agreement, of any Holder of a Senior Subordinated Note; or
(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Issuers accompanied by a resolution of the Board
of Directors of the Issuers and the Senior Subordinated Note Guarantors (or
their managing members) authorizing the execution of any such amended or
supplemental Indenture, Senior Subordinated Notes or Senior Subordinated Note
Guaranties, and upon receipt by the Senior Subordinated Note Trustee of the
documents described in Section 7.02 hereof, the Senior Subordinated Note Trustee
shall join with the Issuers and the Senior Subordinated Note Guarantors in the
execution of any amended or supplemental Indenture, Senior Subordinated Notes or
Senior Subordinated Note Guaranties authorized or permitted by the terms of this
Indenture, but the Senior Subordinated Note Trustee shall not be obligated to
enter into such amended or supplemental Indenture, Senior Subordinated Notes or
Senior Subordinated Note Guaranties that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF SENIOR SUBORDINATED NOTES.
Except as provided below in this Section 9.02 or elsewhere in this
Indenture, the Issuers and the Senior Subordinated Note Trustee may amend or
supplement this Indenture, the Senior Subordinated Notes, the Senior
Subordinated Note Guaranties, the Intercreditor Agreement or the Sole
Stockholder Intercreditor Agreement with the consent of the Holders of at least
a majority in principal amount of the Senior Subordinated Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for the Senior Subordinated Notes), and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of the principal of, premium and Liquidated Damages,
if any, or interest on the Senior Subordinated Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture, the Senior Subordinated Notes, the Senior
Subordinated Note Guaranties, the Intercreditor Agreement or the Sole
Stockholder Intercreditor Agreement may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Senior
Subordinated Notes
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(including consents obtained in connection with a tender offer or exchange offer
for the Senior Subordinated Notes).
Upon the request of the Issuers accompanied by a resolution of the Board
of Directors of the Company and the Senior Subordinated Note Guarantors
authorizing the execution of any such amended or supplemental Indenture, Senior
Subordinated Notes, the Senior Subordinated Note Guaranties or the Intercreditor
Agreement and upon the filing with the Senior Subordinated Note Trustee of
evidence reasonably satisfactory to the Senior Subordinated Note Trustee of the
consent of the Holders of Senior Subordinated Notes as aforesaid, and upon
receipt by the Senior Subordinated Note Trustee of the documents described in
Section 7.02 hereof, the Senior Subordinated Note Trustee shall join with the
Issuers and the Senior Subordinated Note Guarantors in the execution of such
amended or supplemental Indenture, Senior Subordinated Notes, Senior
Subordinated Note Guaranties, Intercreditor Agreement or Sole Stockholder
Intercreditor Agreement, unless such amended or supplemental Indenture, Senior
Subordinated Notes, Senior Subordinated Note Guaranties, Intercreditor Agreement
or Sole Stockholder Intercreditor Agreement affects the Senior Subordinated Note
Trustee's own rights, duties or immunities under this Indenture, the Senior
Subordinated Notes or the Senior Subordinated Note Guaranties, the Intercreditor
Agreement, the Sole Stockholder Intercreditor Agreement or otherwise, in which
case the Senior Subordinated Note Trustee may in its discretion, but shall not
be obligated to, enter into such amended or supplemental Indenture, Senior
Subordinated Notes, Senior Subordinated Note Guaranties, Intercreditor Agreement
or Sole Stockholder Intercreditor Agreement.
It shall not be necessary for the consent of the Holders of Senior
Subordinated Notes under this Section 9.02 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Issuers shall mail to the Holders of Senior Subordinated Notes
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Issuers to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such amended
or supplemental Indenture, Senior Subordinated Notes, Senior Subordinated Note
Guaranties, Intercreditor Agreement or Sole Stockholder Intercreditor Agreement
waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Senior Subordinated Notes then outstanding may
waive compliance in a particular instance with any provision of this Indenture,
the Senior Subordinated Notes, the Senior Subordinated Note Guaranties, the
Intercreditor Agreement or the Sole Stockholder Intercreditor Agreement.
However, without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Senior Subordinated Notes held by a non-consenting
Holder):
(a) reduce the principal amount of Senior Subordinated Notes whose
Holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Senior Subordinated Note or alter or waive any of the provisions with
respect to the optional or mandatory redemption provisions of the Senior
Subordinated Notes (provided, however, that the term "redemption" does not
apply to any provision with respect to any Repurchase Offer);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Senior Subordinated Note;
(d) waive a Default or Event of Default in the payment of principal
of or premium and Liquidated Damages, if any, or interest on the Senior
Subordinated Notes (except a rescission
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of acceleration of the Senior Subordinated Notes by the Holders of at
least a majority in aggregate principal amount of the then outstanding
Senior Subordinated Notes and a waiver of the payment default that
resulted from such acceleration);
(e) make any Senior Subordinated Note payable in money other than
that stated in the Senior Subordinated Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Senior Subordinated
Notes to receive payments of principal of or premium and Liquidated
Damages, if any, or interest on the Senior Subordinated Notes; or
(g) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Senior Subordinated
Notes and the Senior Subordinated Note Guaranties shall be set forth in a
amended or supplemental Indenture that complies with the TIA as then in effect,
if applicable. This Indenture shall be construed to comply in every respect with
the TIA.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Senior Subordinated Note is a continuing consent by the
Holder of a Senior Subordinated Note and every subsequent Holder of a Senior
Subordinated Note or portion of a Senior Subordinated Note that evidences the
same debt as the consenting Holder's Senior Subordinated Note, even if notation
of the consent is not made on any Senior Subordinated Note. However, any such
Holder of a Senior Subordinated Note or subsequent Holder of a Senior
Subordinated Note may revoke the consent as to its Senior Subordinated Note if
the Senior Subordinated Note Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR SUBORDINATED NOTES.
The Senior Subordinated Note Trustee may place an appropriate notation
about an amendment, supplement or waiver on any Senior Subordinated Note
thereafter authenticated. The Issuers in exchange for all Senior Subordinated
Notes may issue and the Senior Subordinated Note Trustee shall authenticate new
Senior Subordinated Notes (accompanied by a notation of the Senior Subordinated
Note Guaranties duly endorsed by the Senior Subordinated Note Guarantors) that
reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior
Subordinated Note shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06. SENIOR SUBORDINATED NOTE TRUSTEE TO SIGN AMENDMENTS, ETC.
The Senior Subordinated Note Trustee shall sign any amended or
supplemental indenture, Senior Subordinated Note or Senior Subordinated Note
Guaranty, if necessary, authorized pursuant to this Article 9 if the amendment
or supplement does not adversely affect the rights, duties, liabilities or
immunities
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of the Senior Subordinated Note Trustee. The Issuers or any Senior Subordinated
Note Guarantor may not sign an amendment or supplemental Indenture, Senior
Subordinated Note or Senior Subordinated Note Guaranty until the Board of
Directors approves it. In executing any amended or supplemental indenture,
Senior Subordinated Note or Senior Subordinated Note Guaranty, if necessary, the
Senior Subordinated Note Trustee shall be entitled to receive and (subject to
Section 7.01) shall be fully protected in relying upon, an Officer's Certificate
and an Opinion of Counsel, which Opinion of Counsel may be subject to customary
assumptions and exclusions, stating that the execution of such amended or
supplemental indenture, Senior Subordinated Note or Senior Subordinated Note
Guaranty is authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company and Venetian agree, and each Holder by accepting a Senior
Subordinated Note agrees, that the Indebtedness evidenced by the Senior
Subordinated Notes is subordinated in right of payment, to the extent and in the
manner provided in this Article 10, to the prior payment in full of all Senior
Debt (whether outstanding on the date hereof or hereafter incurred), and that
the subordination is for the benefit of the holders of Senior Debt.
SECTION 10.02. CERTAIN DEFINITIONS.
"Designated Senior Debt" means (i) any Indebtedness outstanding under the
Bank Credit Facility and (ii) any other Senior Debt permitted under this
Indenture, the principal amount of which is $20.0 million or more and that has
been designated by the Issuers as "Designated Senior Debt"; provided, however,
that the FF&E Financing does not constitute Designated Senior Debt. The Issuers
hereby designate all Obligations under the Mortgage Notes and the Mall
Construction Loan Facility as Designated Senior Debt hereunder.
"Permitted Junior Securities" means Equity Interests in the Company or
Venetian or debt securities that are subordinated to all Senior Debt (and any
debt securities issued in exchange for Senior Debt) to substantially the same
extent as, or to a greater extent than, the Senior Subordinated Notes are
subordinated to Senior Debt pursuant to Article 10 of this Indenture.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
"Senior Debt" means (i) all Indebtedness outstanding under Bank Credit
Facility, any Guarantees thereof and all Hedging Obligations with respect
thereto, (ii) Indebtedness represented by the Mortgage Notes and the Mortgage
Note Guaranties, (iii) any other Indebtedness permitted to be incurred by the
Issuers under the terms of this Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Senior Subordinated Notes and (iv) all
Obligations with respect to the foregoing. Notwithstanding anything to the
contrary in the foregoing, Senior Debt will not include (w) any liability for
federal, state, local or other taxes owed or owing by the Company or Venetian,
(x) any Indebtedness of the Company or Venetian to any of their Subsidiaries or
other Affiliates, (y) any trade payables or (z) any Indebtedness that is
incurred in violation of this Indenture.
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A distribution may consist of cash, securities or other property, by
set-off or otherwise.
SECTION 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company or Venetian in a
liquidation or dissolution of the Company or Venetian or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or either of their property, in an assignment for the benefit of
creditors or any marshalling of the Company's or Venetian's assets and
liabilities:
(1) holders of Senior Debt shall be entitled to receive payment in
full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Debt whether or not an allowed claim)
before Holders of the Senior Subordinated Notes shall be entitled to
receive any payment with respect to the Senior Subordinated Notes (except
that Holders may receive (i) Permitted Junior Securities and (ii) payments
and other distributions made from any defeasance trust created pursuant to
Section 8.01 hereof); and
(2) until all Obligations with respect to Senior Debt (as provided
in subsection (1) above) are paid in full, any distribution to which
Holders would be entitled but for this Article 10 shall be made to holders
of Senior Debt (except that Holders of Senior Subordinated Notes may
receive (i) Permitted Junior Securities and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section
8.01 hereof), as their interests may appear.
SECTION 10.04. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company and Venetian may not make any payment or distribution to the
Senior Subordinated Note Trustee or any Holder in respect of Obligations with
respect to the Senior Subordinated Notes and may not acquire from the Senior
Subordinated Note Trustee or any Holder any Senior Subordinated Notes for cash
or property (other than (i) Permitted Junior Securities and (ii) payments and
other distributions made from any defeasance trust created pursuant to Section
8.01 hereof) until all principal and other Obligations with respect to the
Senior Debt have been paid in full if:
(i) a default in the payment of the principal of, premium, if any,
or interest on Designated Senior Debt occurs and is continuing beyond any
applicable grace period in the agreement, indenture or other document
governing such Designated Senior Debt; or
(ii) a default, other than a payment default, on Designated Senior
Debt occurs and is continuing that then permits holders of the Designated
Senior Debt to accelerate its maturity and the Senior Subordinated Note
Trustee receives a notice of the default (a "Payment Blockage Notice")
from a Representative of Designated Senior Debt. If the Senior
Subordinated Note Trustee receives any such Payment Blockage Notice, no
subsequent Payment Blockage Notice shall be effective for purposes of this
Section unless and until (i) at least 360 days shall have elapsed since
the effectiveness of the immediately prior Payment Blockage Notice and
(ii) all scheduled payments of principal, premium, if any, and interest on
the Securities that have come due have been paid in full in cash. No
nonpayment default that existed or was continuing on the date of delivery
of any Payment Blockage Notice to the Senior Subordinated Note Trustee
shall be, or be made, the basis for a subsequent Payment Blockage Notice
unless such default shall have been waived for a period of not less than
180 days.
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The Company and Venetian may and shall resume payments on and
distributions in respect of the Senior Subordinated Notes and may acquire them
upon the earlier of:
(1) the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section 10.04(ii) hereof, 179
days pass after notice is received if the maturity of such Designated Senior
Debt has not been accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
SECTION 10.05. ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event of
Default, the Company and Venetian shall promptly notify holders of Senior Debt
of the acceleration.
SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Senior Subordinated Note Trustee or any Holder
receives any payment of any Obligations with respect to the Senior Subordinated
Notes at a time when the Senior Subordinated Note Trustee or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Section
10.04 hereof, such payment shall be held by the Senior Subordinated Note Trustee
or such Holder, in trust for the benefit of, and shall be paid forthwith over
and delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Senior Subordinated Note
Trustee undertakes to perform only such obligations on the part of the Senior
Subordinated Note Trustee as are specifically set forth in this Article 10, and
no implied covenants or obligations with respect to the holders of Senior Debt
shall be read into this Indenture against the Senior Subordinated Note Trustee.
The Senior Subordinated Note Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt, and shall not be liable to any such holders
if the Senior Subordinated Note Trustee shall pay over or distribute to or on
behalf of Holders or the Company or Venetian or any other Person money or assets
to which any holders of Senior Debt shall be entitled by virtue of this Article
10, except if such payment is made as a result of the willful misconduct or
gross negligence of the Senior Subordinated Note Trustee.
SECTION 10.07. NOTICE BY COMPANY OR VENETIAN.
The Company and Venetian shall promptly notify the Senior Subordinated
Note Trustee and the Paying Agent of any facts known to the Company or Venetian
that would cause a payment of any Obligations with respect to the Senior
Subordinated Notes to violate this Article 10, but failure to give such notice
shall not affect the subordination of the Senior Subordinated Notes to the
Senior Debt as provided in this Article 10.
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SECTION 10.08. SUBROGATION.
After all Senior Debt is paid in full and until the Senior Subordinated
Notes are paid in full, Holders of Senior Subordinated Notes shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the Senior
Subordinated Notes) to the rights of holders of Senior Debt to receive
distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of Senior Subordinated Notes have been applied
to the payment of Senior Debt. A distribution made under this Article 10 to
holders of Senior Debt that otherwise would have been made to Holders of Senior
Subordinated Notes is not, as between the Company, Venetian and Holders, a
payment by the Company and Venetian on the Senior Subordinated Notes.
SECTION 10.09. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Senior
Subordinated Notes and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company, Venetian and Holders of Senior
Subordinated Notes, the obligation of the Company and Venetian, which is
absolute and unconditional, to pay principal of and interest on the Senior
Subordinated Notes in accordance with their terms;
(2) affect the relative rights of Holders of Senior Subordinated Notes
and creditors of the Company or Venetian other than their rights in relation
to holders of Senior Debt; or
(3) prevent the Senior Subordinated Note Trustee or any Holder of Senior
Subordinated Notes from exercising its available remedies upon a Default or
Event of Default, subject to the rights of holders and owners of Senior Debt
to receive distributions and payments otherwise payable to Holders of Senior
Subordinated Notes.
If the Company or Venetian fails because of this Article 10 to pay
principal of or interest on a Senior Subordinated Note on the due date, the
failure is still a Default or Event of Default.
SECTION 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY OR VENETIAN.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Senior Subordinated Notes shall be impaired by
any act or failure to act by the Company, Venetian or any Holder or by the
failure of the Company or any Holder to comply with this Indenture.
SECTION 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company and Venetian
referred to in this Article 10, the Senior Subordinated Note Trustee and the
Holders of Senior Subordinated Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction or upon any certificate of
such Representative or of the liquidating trustee or agent or other Person
making any distribution to the Senior Subordinated Note Trustee or to the
Holders of Senior Subordinated Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Company or Venetian, the amount thereof or payable
thereon,
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the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
SECTION 10.12. RIGHTS OF SENIOR SUBORDINATED NOTE TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other provision
of this Indenture, the Senior Subordinated Note Trustee shall not be charged
with knowledge of the existence of any facts that would prohibit the making of
any payment or distribution by the Senior Subordinated Note Trustee, and the
Senior Subordinated Note Trustee and the Paying Agent may continue to make
payments on the Senior Subordinated Notes, unless the Senior Subordinated Note
Trustee shall have received at its Corporate Trust Office at least five Business
Days prior to the date of such payment written notice of facts that would cause
the payment of any Obligations with respect to the Senior Subordinated Notes to
violate this Article 10. Only the Company, Venetian or a Representative may give
the notice. Nothing in this Article 10 shall impair the claims of, or payments
to, the Senior Subordinated Note Trustee under or pursuant to Section 7.07
hereof.
The Senior Subordinated Note Trustee in its individual or any other
capacity may hold Senior Debt with the same rights it would have if it were not
Senior Subordinated Note Trustee. Any Agent may do the same with like rights.
SECTION 10.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Senior Subordinated Notes, by the Holder's acceptance
thereof, authorizes and directs the Senior Subordinated Note Trustee on such
Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 10, and appoints the
Senior Subordinated Note Trustee to act as such Holder's attorney-in-fact for
any and all such purposes. If the Senior Subordinated Note Trustee does not file
a proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, a Representative of Designated Senior Debt is hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Senior Subordinated Notes.
SECTION 10.14. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE 11
SENIOR SUBORDINATED NOTE GUARANTIES
SECTION 11.01. SENIOR SUBORDINATED NOTE GUARANTIES.
The Senior Subordinated Notes are hereby jointly, severally and
unconditionally guaranteed by the Senior Subordinated Note Guarantors. The
Senior Subordinated Note Guarantors hereby guarantee to each Holder of a Senior
Subordinated Note authenticated and delivered by the Senior Subordinated Note
Trustee irrespective of the validity or enforceability of this Indenture, the
Senior Subordinated Notes or the obligations of the Issuers under this Indenture
or the Senior Subordinated Notes, that: (i) the principal of, premium and
Liquidated Damages, if any, and interest on the Senior Subordinated Notes will
be paid in full when due, whether at the maturity or interest payment or
mandatory redemption date, by acceleration, call for redemption or otherwise,
and interest on the overdue principal and interest, if
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any, of the Senior Subordinated Notes and all other obligations of the Issuers
to the Holders or the Senior Subordinated Note Trustee under this Indenture or
the Senior Subordinated Notes will be promptly paid in full or performed, all in
accordance with the terms of this Indenture and the Senior Subordinated Notes;
and (ii) in case of any extension of time of payment or renewal of any Senior
Subordinated 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 stated maturity, by acceleration, prepayment, declaration, demand or
otherwise. Failing payment when due of any amount so guaranteed for whatever
reason, each Senior Subordinated Note Guarantor will be obligated to pay the
same whether or not such failure to pay has become an Event of Default which
could cause acceleration pursuant to Section 6.02 hereof. Each Senior
Subordinated Note Guarantor agrees that this is a guarantee of payment not a
guarantee of collection.
Each Senior Subordinated Note Guarantor hereby agrees that its
obligations with regard to this Senior Subordinated Note Guaranty shall be joint
and several, unconditional, irrespective of the validity or enforceability of
the Senior Subordinated Notes or the obligations of the Issuers under this
Indenture, the absence of any action to enforce the same, the recovery of any
judgment against the Issuers or any other obligor with respect to this
Indenture, the Senior Subordinated Notes or the Obligations of the Issuers under
this Indenture or the Senior Subordinated Notes, any action to enforce the same
or any other circumstances (other than complete performance) which might
otherwise constitute a legal or equitable discharge or defense of a Senior
Subordinated Note Guarantor. Each Senior Subordinated Note Guarantor further, to
the extent permitted by law, waives and relinquishes all claims, rights and
remedies accorded by applicable law to guarantors and agrees not to assert or
take advantage of any such claims, rights or remedies, including but not limited
to: (a) any right to require any of the Senior Subordinated Note Trustee, the
Holders or the Issuers (each a "Benefitted Party"), as a condition of payment or
performance by such Senior Subordinated Note Guarantor, to (i) proceed against
the Issuers, any other guarantor (including any other Senior Subordinated Note
Guarantor) of the Obligations under the Senior Subordinated Note Guaranties or
any other Person, (ii) proceed against or exhaust any security held from the
Issuers, any such other guarantor or any other Person, (iii) proceed against or
have resort to any balance of any deposit account or credit on the books of any
Benefitted Party in favor of the Issuers or any other Person, or (iv) pursue any
other remedy in the power of any Benefitted Party whatsoever; (b) any defense
arising by reason of the incapacity, lack of authority or any disability or
other defense of the Issuers including any defense based on or arising out of
the lack of validity or the unenforceability of the Obligations under the Senior
Subordinated Note Guaranties or any agreement or instrument relating thereto or
by reason of the cessation of the liability of the Issuers from any cause other
than payment in full of the Obligations under the Senior Subordinated Note
Guaranties; (c) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; (d) any defense based upon
any Benefitted Party's errors or omissions in the administration of the
Obligations under the Senior Subordinated Note Guaranties, except behavior which
amounts to bad faith; (e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of the Senior
Subordinated Note Guaranties and any legal or equitable discharge of such Senior
Subordinated Note Guarantor's obligations hereunder, (ii) the benefit of any
statute of limitations affecting such Senior Subordinated Note Guarantor's
liability hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Benefitted Party protect, secure, perfect or insure any
security interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance of the Senior Subordinated Note
Guaranties, notices of default under the Senior Subordinated Notes or any
agreement or instrument related thereto, notices of any renewal, extension or
modification of the Obligations under the Senior Subordinated Note Guaranties or
any agreement related thereto, and notices of any extension of credit to the
Issuers and any right to consent
95
to any thereof; (g) to the extent permitted under Section 40.495 of the Nevada
Revised Statutes, the benefits of the "One Action" rule under Section 40.430 of
the Nevada Revised Statutes and (h) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of the Senior Subordinated Note
Guaranties. Each Senior Subordinated Note Guarantor hereby covenants that its
Senior Subordinated Note Guaranty will not be discharged except by complete
performance of the obligations contained in its Senior Subordinated Note
Guaranty and this Indenture.
If any Holder or the Senior Subordinated Note Trustee is required by any
court or otherwise to return to either the Issuers or any Senior Subordinated
Note Guarantor, or any custodian, trustee, or similar official acting in
relation to either the Issuers or such Senior Subordinated Note Guarantor, any
amount paid by the Issuers or such Senior Subordinated Note Guarantor to the
Senior Subordinated Note Trustee or such Holder, the applicable Senior
Subordinated Note Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Senior Subordinated Note 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 Senior Subordinated Note Guarantor further agrees that, as between
such Senior Subordinated Note Guarantor, on the one hand, and the Holders and
the Senior Subordinated Note Trustee, on the other hand, (i) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Section 6.02
hereof for the purposes of this Senior Subordinated Note Guaranty,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration as to the Issuers or any other obligor on the Senior Subordinated
Notes of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.02
hereof, those obligations (whether or not due and payable) will forthwith become
due and payable by such Senior Subordinated Note Guarantor for the purpose of
this Senior Subordinated Note Guaranty.
SECTION 11.02. ADDITIONAL SENIOR SUBORDINATED NOTE GUARANTIES.
If (a) the Issuers or any Restricted Subsidiary transfers or causes to
be transferred, in one or a series of related transactions (other than a
transaction or series of related transactions constituting a Restricted Payment
permitted pursuant to the provisions of Section 4.07 hereof), property or assets
having a fair market value exceeding $1.0 million to any Restricted Subsidiary
of the Issuers (other than a Senior Subordinated Note Guarantor), (b) any
Restricted Subsidiary that is not a Senior Subordinated Note Guarantor shall
have a net worth, annual revenues or net income in excess of $1.0 million
(including by reason of acquisition, consolidation or merger) or shall own any
material license, franchise or right used in the operation of any of the Project
Assets of the Project or (c) an Unrestricted Subsidiary or Special Subsidiary
ceases to be an Unrestricted Subsidiary pursuant to the terms of this Indenture
or is designated by the Board of Directors of the Company to be a Restricted
Subsidiary pursuant to the terms of this Indenture and, in each case such
Restricted Subsidiary shall have a net worth, annual revenues or net income in
excess of $1.0 million (including by reason of acquisition, consolidation or
merger) or shall own any material license, franchise or right used in the
operation of any of the Project Assets of the Project, the Issuers shall cause
such Restricted Subsidiary to (i) execute and deliver to the Senior Subordinated
Note Trustee a supplemental indenture in form reasonably satisfactory to the
Senior Subordinated Note Trustee pursuant to which such Restricted Subsidiary
shall unconditionally guarantee, on a subordinated basis, all of the Issuers'
obligations under the Senior Subordinated Notes and this Indenture on the terms
set forth in this Indenture and (ii) deliver to the Senior Subordinated Note
Trustee an opinion of counsel that, subject to customary assumptions and
exclusions, such supplemental indenture have been duly executed and delivered by
such Restricted Subsidiary.
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SECTION 11.03. LIMITATION OF SENIOR SUBORDINATED NOTE GUARANTOR'S LIABILITY.
Each Senior Subordinated Note Guarantor and by its acceptance hereof,
each beneficiary hereof, hereby confirms that it is its intention that the
Senior Subordinated Note Guaranty by such Senior Subordinated Note Guarantor not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law to the extent applicable to any Senior
Subordinated Note Guaranties. To effectuate the foregoing intention, each such
person hereby irrevocably agrees that the obligation of such Senior Subordinated
Note Guarantor under its Senior Subordinated Note Guaranty under this Article 11
shall be limited to the maximum amount as will, after giving effect to such
maximum amount and all other (contingent or otherwise) liabilities of such
Senior Subordinated Note Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Senior Subordinated Note Guarantor in
respect of the obligations of such other Senior Subordinated Note Guarantor
under this Article 11, result in the obligations of such Senior Subordinated
Note Guarantor in respect of such maximum amount not constituting a fraudulent
conveyance. Each beneficiary under the Senior Subordinated Note Guaranties, by
accepting the benefits hereof, confirms its intention that, in the event of a
bankruptcy, reorganization or other similar proceeding of the Issuers or any
Senior Subordinated Note Guarantor in which concurrent claims are made upon such
Senior Subordinated Note Guarantor hereunder, to the extent such claims will not
be fully satisfied, each such claimant with a valid claim against the Issuers
shall be entitled to a ratable share of all payments by such Senior Subordinated
Note Guarantor in respect of such concurrent claims.
SECTION 11.04. SENIOR SUBORDINATED NOTE GUARANTORS MAY CONSOLIDATE, ETC., ON
CERTAIN TERMS.
(a) No Senior Subordinated Note Guarantor shall consolidate with or merge
with or into (whether or not such Senior Subordinated Note Guarantor is the
surviving Person), another Person whether or not it is affiliated with such
Senior Subordinated Note Guarantor unless (i) subject to the provisions of the
following paragraph and Section 11.05, the Person formed by or surviving any
such consolidation or merger (if other than such Senior Subordinated Note
Guarantor) assumes all the obligations of such Senior Subordinated Note
Guarantor pursuant to a supplemental indenture in a form reasonably satisfactory
to the Senior Subordinated Note Trustee pursuant to which such Person shall
unconditionally guarantee, on subordinated basis, all of such Senior
Subordinated Note Guarantor's obligations under such Senior Subordinated Note
Guarantor's Senior Subordinated Note Guaranty and this Indenture on the terms
set forth in this Indenture, (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists, (iii) such transaction will
not result in the loss or suspension or material impairment of any material
gaming license; (iv) such Senior Subordinated Note Guarantor, or any Person
formed by or surviving any such consolidation or merger, (A) shall have
Consolidated Net Worth (immediately after giving effect to such transaction),
equal to or greater than the Consolidated Net Worth of such Senior Subordinated
Note Guarantor immediately preceding the transaction and (B) will be permitted
by virtue of the Issuers' pro forma Fixed Charge Coverage Ratio to incur,
immediately after giving effect to such transaction, at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09 hereof; and (v) such transactions would not require any
Holder of Senior Subordinated Notes (other than any Person acquiring the Company
or Venetian or their assets or an Affiliate thereof) to obtain a gaming license
or be qualified under the laws of any applicable gaming jurisdiction, provided
that such Holder would not have been required to obtain a gaming license or be
qualified under the laws of any applicable gaming jurisdiction in the absence of
such transactions. In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Senior Subordinated Note Trustee
97
and reasonably satisfactory in form to the Senior Subordinated Note Trustee, of
the Senior Subordinated Note Guaranty in this Indenture and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Senior Subordinated Note Guarantor, such
successor corporation shall succeed to and be substituted for the Senior
Subordinated Note Guarantor with the same effect as if it had been named herein
as a Senior Subordinated Note Guarantor.
Notwithstanding the foregoing, (A) a Senior Subordinated Note Guarantor
may consolidate with or merge with or into, or sell or otherwise dispose of all
or substantially all of its assets to, the Issuers, provided, that the surviving
corporation (if other than the Issuers) shall expressly assume by supplemental
indenture complying with the requirements of this Indenture, the due and
punctual payment of the principal of, premium and Liquidated Damages, if any,
and interest on all of the Senior Subordinated Notes, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture
to be performed by the Issuers and (B) a Senior Subordinated Note Guarantor may
consolidate with or merge with or into, or sell or otherwise dispose of all or
substantially all of its assets to, any other Senior Subordinated Note
Guarantor.
SECTION 11.05. RELEASES OF SENIOR SUBORDINATED NOTE GUARANTIES.
Upon (i) a sale or other disposition of all or substantially all of the
assets of any Senior Subordinated Note Guarantor, by way of merger,
consolidation or otherwise, (ii) a Restricted Subsidiary becoming an
Unrestricted Subsidiary pursuant to the terms of this Indenture or (iii) a sale
or other disposition of all of the capital stock of any Senior Subordinated Note
Guarantor, then such Senior Subordinated Note Guarantor (in the event of a sale
or other disposition, by way of such a merger, consolidation or otherwise, of
all of the capital stock of such Senior Subordinated Note Guarantor or the
Restricted Subsidiary becomes an Unrestricted Subsidiary pursuant to the terms
of this Indenture) or the corporation acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Senior Subordinated Note Guarantor) shall be released and relieved of its
obligations under its Senior Subordinated Note Guaranty; provided that (i)
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof and (ii) the Net Proceeds of such sale or other disposition are applied
in accordance with Section 4.10 hereof.
SECTION 11.06. "SENIOR SUBORDINATED NOTE TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Senior Subordinated
Note Trustee shall have been appointed by the Issuers and be then acting
hereunder, the term "Senior Subordinated Note Trustee" as used in this Article
11 shall in such case (unless the context shall otherwise require) be construed
as extending to and including such Paying Agent within its meaning as fully and
for all intents and purposes as if such Paying Agent were named in this Article
11 in place of the Senior Subordinated Note Trustee.
SECTION 11.07 SUBORDINATION OF SENIOR SUBORDINATED NOTE GUARANTIES.
The Obligations of each Senior Subordinated Note Guarantor under its
Senior Subordinated Note Guaranty pursuant to this Article 11 shall be junior
and subordinated to the Senior Debt of such Senior Subordinated Note Guarantor
(including such Senior Subordinated Note Guarantor's guaranty of the Bank Credit
Facility) to the same extent as the Senior Subordinated Notes are junior and
subordinated to Senior Debt of the Company and Venetian. For the purposes of the
foregoing sentence, the Trustee and the Holders shall have the right to receive
and/or retain payments by any of the Senior Subordinated Note
98
Guarantors only at such times as they may receive and/or retain payments in
respect of the Senior Subordinated Notes pursuant to this Indenture, including
Article 10 hereof.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Issuers, any Senior Subordinated Note
Guarantor or the Senior Subordinated Note Trustee to the others is duly given if
in writing and delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the others' address:
If to the Issuers or the Senior Subordinated Note Guarantors:
3335 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Telecopier No.: (702) 733-5499
Attention: General Counsel
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopier No.: (212) 757-3990
Attention: James Purcell, Esq.
If to the Senior Subordinated Note Trustee:
First Union National Bank
999 Peachtree Street, N.E.
Suite 1100
Atlanta, Georgia 30309
Telecopier No.: (404) 827-7347
Attention: Corporate Trust Department
The Issuers, the Senior Subordinated Note Guarantors or the Senior
Subordinated Note Trustee, by notice to the others may designate additional or
different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being
99
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Issuers or a Senior Subordinated Note Guarantor mails a notice or
communication to Holders, it shall mail a copy to the Senior Subordinated Note
Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF SENIOR SUBORDINATED NOTES WITH OTHER
HOLDERS OF SENIOR SUBORDINATED NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Senior Subordinated
Notes. The Issuers, the Senior Subordinated Note Guarantors, the Senior
Subordinated Note Trustee and the Registrar shall have the protection of TIA ss.
312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuers or the Senior
Subordinated Note Guarantors to the Senior Subordinated Note Trustee to take any
action under this Indenture, the Issuers or the Senior Subordinated Note
Guarantors shall furnish to the Senior Subordinated Note Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Senior Subordinated Note Trustee (which shall include
the statements set forth in Section 12.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been
satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Senior Subordinated Note Trustee (which shall include the statements
set forth in Section 12.05 hereof) stating that, subject to customary
assumptions and exclusions, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
100
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 12.06. RULES BY SENIOR SUBORDINATED NOTE TRUSTEE AND AGENTS.
The Senior Subordinated Note Trustee may make reasonable rules for
action by or at a meeting of Holders. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No officer, employee, incorporator or stockholder of the Issuers or the
Senior Subordinated Note Guarantors, as such, shall have any liability for any
obligations of the Issuers or the Senior Subordinated Note Guarantors under the
Senior Subordinated Notes, any Senior Subordinated Note Guaranties or this
Indenture, as applicable, or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Senior
Subordinated Note and the Senior Subordinated Note Guaranties waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Senior Subordinated Notes.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE SENIOR SUBORDINATED NOTES AND THE SENIOR
SUBORDINATED NOTE GUARANTIES, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY
PROVISIONS OF NEVADA LAW, INCLUDING THE GAMING CONTROL ACT AND THE REGULATIONS
PROMULGATED THEREUNDER.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Issuers or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Issuers and the Senior Subordinated Note
Guarantors in this Indenture, the Senior Subordinated Notes and the Senior
Subordinated Note Guaranties, as applicable, shall bind their respective
successors. All agreements of the Senior Subordinated Note Trustee in this
Indenture shall bind its successors.
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SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture, in the Senior Subordinated
Notes or in the Senior Subordinated Note Guaranties shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
102
SIGNATURES
Dated as of November 14, 1997 LAS VEGAS SANDS, INC.
By: /s/ W.P. Weidner
----------------------------------------
Name: William P. Weidner
Title: President
VENETIAN CASINO RESORT, LLC
By: Las Vegas Sands, Inc.
----------------------------------------
As Managing Member
By: /s/ W.P. Weidner
----------------------------------
Name: William P. Weidner
Title: President
MALL INTERMEDIATE HOLDING COMPANY, LLC
By: Venetian Casino Resort, LLC
----------------------------------------
As Sole Member
By: Las Vegas Sands, Inc.
-----------------------------------
As Managing Member
By: /s/ W.P. Weidner
-----------------------------
Name: William P. Weidner
Title: President
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC
By: Venetian Casino Resort, LLC
-----------------------------------------
As Sole Member
By: Las Vegas Sands, Inc.
------------------------------------
As Managing Member
By: /s/ W.P. Weidner
-----------------------------
Name: William P. Weidner
Title: President
LIDO INTERMEDIATE HOLDING COMPANY, LLC
By: Venetian Casino Resort, LLC
----------------------------------------
As Managing Member
By: Las Vegas Sands, Inc.
------------------------------------
As Managing Member
By: /s/ WP Weidner
-----------------------------
Name: William P. Weidner
Title: President
Dated as of November 14, 1997 FIRST UNION NATIONAL BANK
as Senior Subordinated Note Trustee
By: /s/ Emily E. Katt
----------------------------------------
Name: Emily E. Katt
Title: Vice President