Exhibit 4.7
- -------------------------------------------------------------------------------
CHUKCHANSI ECONOMIC DEVELOPMENT AUTHORITY
17.0% SUBORDINATED PAY-IN-KIND NOTES DUE 2009
WITH CONTINGENT INTEREST
---------------------
INDENTURE
Dated as of October 8, 2002
---------------------
U.S. BANK, N.A.
Trustee
---------------------
- -------------------------------------------------------------------------------
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)............................................. 7.09
(a)(2)........................................... 7.09
(a)(3)........................................... N.A.
(a)(4)........................................... N.A.
(a)(5)........................................... 7.09
(b).............................................. 7.09
(c).............................................. N.A.
311(a)................................................ 7.10
(b).............................................. 7.10
(c).............................................. N.A.
312(a)................................................ 2.05
(b).............................................. 13.03
(c).............................................. 13.03
313(a)................................................ N.A.
(b)(1)........................................... N.A.
(b)(2)........................................... 7.06
(c).............................................. 13.02
(d).............................................. N.A.
314(a)................................................ 13.05
(b).............................................. N.A.
(c)(1)........................................... 13.04
(c)(2)........................................... 13.04
(c)(3)........................................... N.A.
(d).............................................. N.A.
(e).............................................. 13.05
(f).............................................. N.A.
315(a)................................................ 7.01
(b).............................................. 7.05,13.02
(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)................................................ 13.01
(b).............................................. N.A.
(c).............................................. 13.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
i
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.......................................................................1
Section 1.02 Other Definitions................................................................23
Section 1.03 Incorporation by Reference of Trust Indenture Act................................24
Section 1.04 Rules of Construction............................................................24
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating..................................................................25
Section 2.02 Execution and Authentication.....................................................25
Section 2.03 Registrar and Paying Agent.......................................................25
Section 2.04 Paying Agent to Hold Money in Trust..............................................26
Section 2.05 Holder Lists.....................................................................26
Section 2.06 Transfer and Exchange............................................................26
Section 2.07 Replacement Notes................................................................28
Section 2.08 Outstanding Notes................................................................28
Section 2.09 Treasury Notes...................................................................29
Section 2.10 Temporary Notes..................................................................29
Section 2.11 Cancellation.....................................................................29
Section 2.12 Defaulted Interest...............................................................29
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee...............................................................30
Section 3.02 Selection of Notes to Be Redeemed or Purchased...................................30
Section 3.03 Notice of Redemption.............................................................30
Section 3.04 Effect of Notice of Redemption...................................................31
Section 3.05 Deposit of Redemption or Purchase Price..........................................31
Section 3.06 Notes Redeemed or Purchased in Part..............................................31
Section 3.07 Optional Redemption..............................................................32
Section 3.08 Mandatory Redemption.............................................................32
Section 3.09 Mandatory Disposition Pursuant to Gaming Laws....................................32
Section 3.10 Repurchase Offers................................................................33
ARTICLE 4.
COVENANTS OF THE AUTHORITY
Section 4.01 Payment of Notes.................................................................35
Section 4.02 Maintenance of Office or Agency..................................................35
Section 4.03 Reports..........................................................................36
Section 4.04 Compliance Certificate...........................................................36
Section 4.05 Taxes............................................................................37
Section 4.06 Stay, Extension and Usury Laws...................................................37
Section 4.07 Restricted Payments..............................................................37
Section 4.08 Limitation on Indebtedness.......................................................40
Section 4.09 Asset Sales......................................................................41
ii
Section 4.10 Liquidation, Dissolution, Consolidation, or Merger...............................42
Section 4.11 Transactions with Affiliates.....................................................43
Section 4.12 Liens............................................................................44
Section 4.13 Line of Business.................................................................44
Section 4.14 Governmental Existence...........................................................44
Section 4.15 Limitation on Sale and Leaseback Transactions....................................44
Section 4.16 Limitation on the Creation of Subsidiaries......................................44
Section 4.17 Limitation on Status as an Investment Company....................................44
Section 4.18 Gaming Licenses and Other Permits................................................45
Section 4.19 Modification or Transfer of Certain Agreements...................................45
Section 4.20 Ownership Interests in the Authority.............................................45
Section 4.21 United States Federal Income Tax Reporting.......................................45
Section 4.22 Payments for Consent.............................................................45
ARTICLE 5.
COVENANTS OF THE TRIBE
Section 5.01 Prohibited Activities............................................................46
Section 5.02 Permitted Amendments to Tribal Gaming Ordinance..................................47
Section 5.03 Further Assurances Regarding Authority; No Conveyance or Encumbrance of
Land.............................................................................47
Section 5.04 Incurrence of Obligations Affecting Authority....................................47
Section 5.05 Receipt of Prohibited Payments from the Authority................................47
Section 5.06 Payment In Full of Obligations to Holders of Notes Before Certain Payments
to the Tribe.....................................................................47
Section 5.07 Consents to Liens Securing Obligations...........................................48
Section 5.08 Limitation on Actions of Tribe...................................................48
Section 5.09 Bankruptcy Restrictions..........................................................48
Section 5.10 Exclusive Operation of Gaming Enterprise.........................................48
Section 5.11 Exclusion From Licensing Requirements of Compact.................................48
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default................................................................48
Section 6.02 Acceleration.....................................................................50
Section 6.03 Other Remedies...................................................................51
Section 6.04 Waiver of Past Defaults..........................................................51
Section 6.05 Control by Majority..............................................................51
Section 6.06 Limitation on Suits..............................................................52
Section 6.07 Rights of Holders of Notes to Receive Payment....................................52
Section 6.08 Collection Suit by Trustee.......................................................52
Section 6.09 Trustee May File Proofs of Claim.................................................52
Section 6.10 Priorities.......................................................................53
Section 6.11 Undertaking for Costs............................................................53
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee................................................................54
Section 7.02 Rights of Trustee................................................................55
Section 7.03 Individual Rights of Trustee.....................................................55
Section 7.04 Trustee's Disclaimer.............................................................55
Section 7.05 Notice of Defaults...............................................................55
iii
Section 7.06 Compensation and Indemnity.......................................................56
Section 7.07 Replacement of Trustee...........................................................56
Section 7.08 Successor Trustee by Merger, etc.................................................57
Section 7.09 Eligibility; Disqualification....................................................57
Section 7.10 Preferential Collection of Claims Against Authority..............................58
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.........................58
Section 8.02 Legal Defeasance and Discharge...................................................58
Section 8.03 Covenant Defeasance..............................................................58
Section 8.04 Conditions to Legal or Covenant Defeasance.......................................59
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions...................................................60
Section 8.06 Repayment to Authority...........................................................60
Section 8.07 Reinstatement....................................................................61
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes..............................................61
Section 9.02 With Consent of Holders of Notes.................................................62
Section 9.03 Compliance with Trust Indenture Act..............................................63
Section 9.04 Revocation and Effect of Consents................................................63
Section 9.05 Notation on or Exchange of Notes.................................................63
Section 9.06 Trustee to Sign Amendments, etc..................................................63
ARTICLE 10.
LIMITED WAIVER OF SOVEREIGN IMMUNITY; ARBITRATION; NON-IMPAIRMENT
Section 10.01 Irrevocable Waiver of Sovereign Immunity.........................................64
Section 10.02 Designation of Applicable Courts and Jurisdiction................................64
Section 10.03 Additional Waivers as to Tribal Courts...........................................65
Section 10.04 Agreement not to Contest.........................................................65
Section 10.05 Arbitration......................................................................65
Section 10.06 Non-Impairment...................................................................66
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.......................................................66
Section 11.02 Application of Trust Money.......................................................67
ARTICLE 12.
SPECIAL PROVISIONS REGARDING UNLICENSED AND NON-EXEMPT HOLDERS
Section 12.01 Special Provisions Regarding Unlicensed and Non-Exempt Holders...................68
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.....................................................68
Section 13.02 Notices..........................................................................68
Section 13.03 Communication by Holders of Notes with Other Holders of Notes....................70
Section 13.04 Certificate and Opinion as to Conditions Precedent...............................70
Section 13.05 Statements Required in Certificate or Opinion....................................70
iv
Section 13.06 Rules by Trustee and Agents......................................................70
Section 13.07 No Personal Liability............................................................70
Section 13.08 Governing Law....................................................................71
Section 13.09 No Adverse Interpretation of Other Agreements....................................71
Section 13.10 Successors.......................................................................71
Section 13.11 Severability.....................................................................71
Section 13.12 Counterpart Originals............................................................71
Section 13.13 Table of Contents, Headings, etc.................................................71
Section 13.14 Subordination....................................................................71
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
v
INDENTURE dated as of October 8, 2002 among the Chukchansi Economic
Development Authority (the "Authority"), a wholly-owned unincorporated
enterprise of the Picayune Rancheria of Chukchansi Indians, a sovereign tribe
recognized by the United States pursuant to 25 C.F.R. Part 83 (the "Tribe"),
the Tribe and U.S. Bank, N.A., a national banking association, as trustee (the
"Trustee").
The Authority, the Tribe and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 17.0% Subordinated Pay-in-Kind Notes due 2009 with Contingent
Interest (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"Adjustment Event" means any adjustment by the Internal Revenue
Service (or state or local tax authority) in respect of any income inclusion
arising from or attributable to the income described in clause (a) of the
definition of Minimum Tax Payment Amount which adjustment becomes a final
"determination" under section 1313 of the Code (or similar state or local tax
law).
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; provided, however, that beneficial
ownership of 10% or more of the voting securities of a Person shall be deemed
to be control. For purposes of this definition, the terms "controlling,"
"controlled by" and "under common control with" shall have correlative
meanings; provided, further, that the Manager, on the one hand, and the
Authority and the Tribe, on the other hand, shall not be deemed to be
Affiliates of each other.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Income Tax Rate" means an amount equal to the sum of (a)
the highest marginal Federal income tax rate applicable to an individual, plus
(b) an amount equal to the sum of the highest marginal state and local income
tax rates applicable to any individual resident in New York, New York
multiplied by a factor equal to 1 minus such highest marginal Federal income
tax rate.
"Asset Sale" means the sale, lease, conveyance or other disposition
of any assets or rights of the Authority; provided, that the sale, conveyance
or other disposition of all or substantially all of the assets of the
Authority shall be governed by Section 4.10 hereof and not by Section 4.09
hereof.
Notwithstanding the preceding, the following items shall not be
deemed to be Asset Sales:
(1) any single transaction or series of related transactions
that involves assets having a fair market value of less than $1.0
million;
(2) the sale or other disposition of cash or Cash Equivalents;
(3) the sale, conveyance, exchange or other disposition of
equipment, inventory, accounts receivable or other assets or rights
in the ordinary course of business, including, without limitation,
sales and exchanges of gaming equipment;
1
(4) sales, conveyances or other dispositions of property in the
ordinary course of business pursuant to an established program for
the maintenance and upgrading of such property;
(5) a Restricted Payment or Permitted Investment that is
permitted by Section 4.07 hereof;
(6) a surrender or waiver of contract rights or settlement,
release or surrender of contract, tort or other litigation claims in
the ordinary course of business;
(7) any sale or transfer of land to the U.S. federal government
to hold in trust for the Tribe; and
(8) the grant of Permitted Liens.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of
the lessee for net rental payments during the remaining term of the lease
included in such sale and leaseback transaction, including any period for
which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal
to the rate of interest implicit in such transaction, determined in accordance
with GAAP.
"Authority" has the meaning assigned to in the preamble to this
Indenture.
"Authority Assets" means all right, title and interest of the
Authority or the Tribe in and to the Chukchansi Gold Resort & Casino and all
assets, rights and revenues related to or arising therefrom, other than
Authority Assets permitted to be distributed to the Tribe under this Indenture
and the Collateral Documents.
"Authority Ordinance" means the ordinance adopted by the Tribal
Council creating the Authority, as amended through the date of this Indenture.
"Available Funds" means, with respect to any full fiscal quarter of
the Authority, the sum of:
(1) the Authority's Net Revenues for such period; plus
(2) depreciation, amortization (including amortization of
goodwill and other intangibles, but excluding amortization of prepaid
cash expenses that were paid in a prior period), accrued and unpaid
interest (other than contingent interest) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents
an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior
period) of the Authority for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted
in computing such Net Revenues; plus
(3) interest income on cash and Cash Equivalents received
during such period (other than cash or Cash Equivalents contained in
the Cash Accumulation Account, the Interest Reserve Account and the
Contingent Interest Account); plus
(4) decreases in Working Capital during such period; less
(5) all amounts payable pursuant to the Management Agreement
with respect to such period; less
2
(6) capital expenditures made by the Authority during such
period (only to the extent such amount is not paid from the Capital
Replacement Reserve Account) to maintain the condition of the
Chukchansi Gold Resort & Casino; less
(7) Contingent Interest paid in cash during such period on the
Notes, on the Senior Subordinated PIK Notes and on the Letter of
Credit Note, in each case, for such period to the extent that such
Contingent Interest was not deducted in computing Net Revenues; less
(8) increases in Working Capital during such period; less
(9) any prepayment of principal made during such period on
Indebtedness that was permitted to be incurred pursuant to Section
4.08 hereof other than any prepayment made with the proceeds from
Permitted Refinancing Indebtedness.
"Bankruptcy Law" means Title 11 of the United States Code or any
similar federal or state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in
Section 13(d)(3) of the Exchange Act), such "person" shall be deemed to have
beneficial ownership of all securities that such "person" has the right to
acquire by conversion or exercise of other securities, whether such right is
currently exercisable or is exercisable only upon the occurrence of a
subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned"
have a corresponding meaning.
"BIA" means the Bureau of Indian Affairs of the Department of the
Interior.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of
the corporation;
(2) with respect to a partnership, the board of directors of
the general partner of the partnership;
(3) with respect to the Authority, the Management Board; and
(4) with respect to any other Person, the board or committee of
such Person serving a similar function.
"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 that time be required to be capitalized on a balance sheet
prepared in accordance with GAAP.
"Capital Replacement Reserve Account" has the meaning ascribed
thereto in the Cash Collateral and Disbursement Agreement.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
3
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership
interests; and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Accumulation Account" means a cash accumulation account
maintained and held by an Eligible Institution into which Available Funds
shall be deposited by the Authority pursuant to Section 4.07 hereof.
"Cash Accumulation Account Contribution Agreement" means the Cash
Accumulation Account Contribution Agreement dated as of the date of this
Indenture, among the Authority, the Senior Notes Trustee, the Manager, the
Tribe and the Disbursement Agent, as in effect on the date of this Indenture
or as amended in accordance with the Senior Notes Indenture.
"Cash Collateral and Disbursement Agreement" means the Cash
Collateral and Disbursement Agreement dated as of the date of this Indenture,
among the Authority, the Senior Notes Trustee, the Tribe and the Disbursement
Agent, as in effect on the date of this Indenture or as amended in accordance
with the Senior Notes Indenture.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of
not more than one year from the date of acquisition;
(3) securities issued by any state of the United States of
America or any political subdivision thereof having the highest
rating obtainable from either Moody's Investors Service, Inc. or
Standard & Poor's Rating Services and having maturities of not more
than one year from the date of acquisition;
(4) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any domestic commercial bank having
capital and surplus in excess of $500.0 million and a Thomson Bank
Watch Rating of "B" or better;
(5) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2),
(3) and (4) above entered into with any financial institution meeting
the qualifications specified in clause (4) above;
(6) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Rating Services
and in each case maturing not more than one year after the date of
acquisition; and
4
(7) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1)
through (6) of this definition.
"Cash Flow" means, with respect to any specified Person for any
period, the Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person in connection with an Asset Sale, to the
extent such losses were deducted in computing such Net Income; plus
(2) the interest expense of such Person for such period,
whether paid or accrued and whether or not capitalized (excluding the
Commitment Fee, but including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect
of letter of credit or bankers' acceptance financings other than the
Commitment Fee, and net of the effect of all payments made or
received pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing such Net Income; plus
(3) any preopening expenses to the extent that such preopening
expenses were deducted in computing Net Income and determined in
accordance with GAAP; plus
(4) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense, other than
pre-opening expenses, that was paid in a prior period) of such Person
for such period, to the extent that such depreciation, amortization
and other non-cash expenses were deducted in computing such Net
Income; plus
(5) Management Fees to the extent that such Management Fees
were deducted in computing Net Income; minus
(6) non-cash items increasing such Net Income for such period
other than the accrual of revenue in the ordinary course of business,
in each case as determined in accordance with GAAP; plus
(7) taxes deducted for the purposes of determining Net Income.
"Chukchansi Gold Resort & Casino" means the project to design,
develop, construct, equip and operate a casino, hotel and related amenities on
the Tribe's Rancheria near Coarsehold, California, as generally described in
the Offering Memorandum.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Documents" has the meaning set forth in the Senior Notes
Indenture.
"Commitment Fee" has the meaning set forth in the Letter of Credit
Drawdown Agreement.
5
"Compact" means, the Tribal State Gaming Compact dated as of
September 10, 1999, between the Tribe and the State of California, as amended
from time to time.
"Constitution" means the Constitution of the Tribe duly and validly
adopted by the Tribe on November 7, 1988.
"Construction Period" has the meaning set forth in the Cash
Collateral and Disbursement Agreement.
"Construction Period Accounts" has the meaning set forth in the Cash
Collateral and Disbursement Agreement.
"Construction Schedule" has the meaning set forth in the Cash
Collateral and Disbursement Agreement.
"Contingent Interest" means:
(1) for the purpose of the First Accrual Period and any
Semiannual Period, the product of 11% multiplied by up
to $50 million of the Net Revenues of the Authority for
such First Accrual Period or Semiannual Period, as
applicable;
(2) for the purpose of any Interim Period beginning after
the First Accrual Period and ending after the date that
internal financial statements for the prior two fiscal
quarters completed immediately prior to the end of such
Interim Period are available, the product of (a) 11%
multiplied by up to $50 million of the Net Revenues of
the Authority for those two fiscal quarters and (b) a
fraction, the numerator of which is the number of days
from, but excluding, the end of the most recent
Semiannual Period to the date of payment and the
denominator of which is 180; and
(3) for the purpose of the Accrual Period that begins after
the Initial Operating Date that ends prior to the
completion of the First Accrual Period, the product of
(a) 11% multiplied by up to $50 million of the Net
Revenues of the Authority for all completed calendar
months during such period for which financial statements
are available and (b) a fraction, the numerator of which
is the number of days from, and including, the Initial
Operating Date to the date of payment and the
denominator of which is the aggregate number of days for
the two fiscal quarters ending on such payment date
included in such Accrual Period;
in each case, multiplied by a fraction, the numerator of which is the
principal amount of these Notes and the principal amount outstanding under the
Letter of Credit Note, in each case, outstanding on the close of business on
the Record Date (as defined in each such note) and the denominator of which is
$12 million, plus the principal amount outstanding under the Letter of Credit
Note on the close of business on the Record Date. Contingent Interest shall be
allocated to the Notes by multiplying the total Contingent Interest by a
fraction the numerator of which is the aggregate principal amount of the Notes
on the Record Date, and the denominator of which is the aggregate principal
amount of the Notes and the Letter of Credit Note on the Record Date.
Contingent Interest shall be allocated to the Letter of Credit Note by
multiplying the total Contingent Interest by a fraction the numerator of which
is the aggregate principal amount of the Letter of Credit Note on the Record
Date and the denominator of which is the aggregate principal amount of the
Notes and the Letter of Credit Note on the Record Date.
6
"Contingent Interest Account" means the Contingent Interest account
to be maintained by the Authority pursuant to the Cash Collateral and
Disbursement Agreement containing all unpaid Contingent Interest on the Notes,
the Subordinated PIK Note and the Letter of Credit Note, the payment of which
is deferred until the Release Conditions are met.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 13.02 hereof or such other address as to
which the Trustee may give notice to the Authority.
"Current Assets" means all amounts (other than cash and Cash
Equivalents) which would, in conformity with GAAP, be set forth opposite the
caption "total current assets" (or any like caption) on a consolidated balance
sheet of the Authority.
"Current Liabilities" means all amounts that would, in conformity
with GAAP, be set forth opposite the caption "total current liabilities" (or
any like caption) on a consolidated balance sheet of the Authority.
"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 Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A-1.
"Deposit Account Control Agreement" has the meaning set forth in the
Cash Collateral and Disbursement Agreement.
"Development Agreement" means the Amended and Restated Development
Agreement, dated June 15, 2001, among the Authority, the Tribe and the
Manager, as amended from time to time in accordance with the Senior Notes
Indenture.
"Disbursement Agent" means U.S. Bank, N.A. or the then acting
Disbursement Agent under the Cash Collateral and Disbursement Agreement.
"Eligible Institution" means a domestic commercial banking
institution that has combined capital and surplus of not less than $500
million, and whose debt is rated "A" or higher by Standard & Poor's Rating
Service or Moody's Investors Service, Inc. at the time any investment or
rollover therein is made.
"Equity Interests" of any Person means any shares, interests,
participations or other equivalents (however designated) in such Person's
equity, and shall in any event include any Capital Stock (but excluding any
debt security that is convertible into, or exchangeable for, Capital Stock)
issued by, or partnership, participation or membership interests in, such
Person.
"Excess Cash Flow" means, at any time, any amounts of Available
Funds remaining after all payments required pursuant to Section 4.07(c) hereof
have been made.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Financial Source" means any Person extending financing, directly or
indirectly, to any gaming facility or gaming operation of the Tribe within the
meaning of the Compact.
"First Accrual Period" means the period beginning on the Initial
Operating Date through and including the next June 30 or December 31, as
applicable.
7
"Fixed Charge Coverage Ratio" means with respect to any Person for
any period, the ratio of the Cash Flow of such Person for such period to the
Fixed Charges of such Person for such period. In the event that the Authority
incurs, assumes, Guarantees, repays, repurchases or redeems or otherwise
retires any Indebtedness (other than ordinary working capital borrowings)
subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated and on or prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made
(the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, Guarantee,
repayment, repurchase, redemption or retirement of Indebtedness and the use of
the proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the Authority,
including through mergers or consolidations and including any related
financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the
Calculation Date shall be given pro forma effect as if they had
occurred on the first day of the four-quarter reference period and
Cash Flow for such reference period shall be calculated on a pro
forma basis in accordance with Regulation S-X under the Securities
Act;
(2) the Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of on or prior to the Calculation Date, shall be excluded;
and
(3) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of on or prior to the Calculation Date, shall be excluded,
but only to the extent that the obligations giving rise to such Fixed
Charges shall not be obligations of the Authority following the
Calculation Date.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense (excluding interest and
contingent interest, if any, whether paid or accrued, on the Notes,
the Subordinated PIK Notes or the Letter of Credit Note) of such
Person for such period, whether paid or accrued, including, without
limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers'
acceptance financings (excluding the Commitment Fee), and net of the
effect of all payments made or received pursuant to Hedging
Obligations; plus
(2) the consolidated interest of such Person that was
capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that
is Guaranteed by such Person or secured by a Lien on assets of such
Person, whether or not such Guarantee or Lien is called upon.
"Fixed Interest" means all amounts of fixed interest payable on the
Notes pursuant to the Notes.
8
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.
"Gaming" means any and all activities defined as class II and class
III Gaming (as defined in IGRA).
"Gaming Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States federal government, any foreign government, any applicable
tribal government, any state, province or city or other political subdivision
or otherwise, whether now or hereafter in existence, or any officer or
official thereof, including, without limitation, the NIGC and the BIA, any
division of the Tribe or any other agency, in each case, with authority to
regulate any gaming operation (or proposed gaming operation) owned, managed or
operated by the Authority or the Tribe.
"Gaming Enterprise" means any commercial enterprise of the
Authority, including without limitation, any gaming operation, hotel or resort
operation, restaurant or other entertainment or commercial enterprise.
"Gaming Law" means the provisions of the Compact and gaming laws or
regulations of any jurisdiction or jurisdictions to which the Authority or the
Tribe is, or may at any time after the date of this Indenture, be subject.
"Gaming License" means any license, permit, franchise or other
authorization required to own, lease, or operate or otherwise conduct gaming
activities of the Authority or the Tribe, other than gaming device licenses.
"Government Securities" means securities that are:
(1) direct obligations of the United States of America, the
timely payment of which its full faith and credit is pledged; or
(2) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of
America 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 also includes 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.
"Governmental Action" means any resolution, ordinance, statute,
regulation, order or decision regardless of how constituted having the force
of law or legal authorization of the Tribe, the Authority or any
instrumentality or agency of the Tribe.
9
"Gross Gaming Revenue (Win)" means the net win from Gaming which is
the difference between Gaming wins and losses before deducting costs and
expenses.
"Gross Revenues" means all revenues of any nature derived directly or
indirectly from the Chukchansi Gold Resort & Casino including, without
limitation, Gross Gaming Revenue (Win), food and beverage sales, and other
rental payments or other receipts from lessees, sublessees, licensees and
concessionaires, (but not the gross receipts of such lessees, sublessees,
licensees or concessionaires, provided that such lessees, sublessees,
licensees and concessionaires are not subsidiaries or Affiliates of the
Manager), and revenue recorded for Promotional Allowances, but excluding any
taxes the Tribe is allowed to assess pursuant to Section 7 of the Management
Agreement.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any specified Person,
the net obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Holdings" means Cascade Holdings, LLC, a Delaware limited liability
company.
"IGRA" means the Indian Gaming Regulatory Act of 1988, PL 100-497, 25
U.S.C. 2701 et seq., as amended from time to time.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) obligations evidenced by bonds, notes, debentures or
similar instruments or letters of credit (or reimbursement agreements
in respect thereof);
(3) banker's acceptances;
(4) Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of
any property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) any net obligations under Hedging Obligations;
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of
the specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
10
assets of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount; and
(2) 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 Construction Consultant" means Professional Associates
Construction Services, Inc., a California corporation, and its successors or
replacements as provided in the Cash Collateral and Disbursement Agreement.
"Initial Operating Date" means, with respect to the Chukchansi Gold
Resort & Casino, the first time that:
(1) all Gaming Licenses have been granted and have not been
revoked or suspended;
(2) all Liens (other than Permitted Liens), if any, related to
the development, construction and equipping of, and beginning
operations at, the Chukchansi Gold Resort & Casino have been
discharged or, if payment is not yet due or if such payment is
contested in good faith by the Authority, sufficient funds remain in
the Construction Period Account to discharge such Liens;
(3) the Independent Construction Consultant shall have
delivered a certificate to the Trustee certifying that the Chukchansi
Gold Resort & Casino is substantially complete in all material
respects in accordance with the Plans and all applicable building
laws, ordinances and regulations;
(4) the Chukchansi Gold Resort & Casino is in a condition
(including the installation of furnishings, fixtures and equipment)
to receive customers in the ordinary course of business;
(5) the Chukchansi Gold Resort & Casino is open to the general
public and operating with the Minimum Facilities;
(6) the Chukchansi Gold Resort & Casino is open to the general
public and operating in accordance with applicable law in all
material respects; and
(7) a permanent or temporary certificate of occupancy has been
issued for the Chukchansi Gold Resort & Casino by the appropriate
governmental authorities.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of the date of this Indenture among the Trustee, the Senior Notes Trustee, the
Senior Subordinated PIK Notes Trustee, the L/C Provider, the Manager, the
Authority and the Tribe, as in effect on the date of this Indenture or as
amended in accordance with the Senior Notes Indenture.
11
"Interest" means Fixed Interest and Contingent Interest, if any.
"Interest Reserve Account" means the interest reserve account to be
maintained by and pledged to the Senior Notes Trustee pursuant to the Cash
Collateral and Disbursement Agreement into which an amount, together with
interest earned on such amount, sufficient to pay the first three interest
payments on the Senior Notes shall be deposited on the date of the Senior
Notes Indenture.
"Interim Period" means any period, other than the First Accrual
Period, that begins on any January 1 and ends before the next June 30 and any
period that begins on any July 1 and ends before the next December 31.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guarantees or other obligations), advances or
capital contributions (excluding commission, travel and advances to directors,
officers and employees and prepayments of expenses, in each case, made in the
ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP. The acquisition by the Authority of a
Person that holds an Investment in a third Person shall be deemed to be an
Investment by the Authority in such third Person in an amount equal to the
fair market value of the Investment held by the acquired Person in such third
Person in an amount determined as provided in the final paragraph of Section
4.07 hereof, without duplication.
"Key Project Assets" means (1) any tribal gaming land or land
necessary for access to or the operation of the Chukchansi Gold Resort &
Casino and (2) any improvements (including buildings, but excluding personal
property and fixtures and improvements determined by the Authority to no
longer be useful or necessary to the operations or support of the Chukchansi
Gold Resort & Casino) on any tribal gaming land or land necessary for the
Chukchansi Gold Resort & Casino.
"L/C Provider" means Credit Provider Group, LLC, a Delaware limited
liability company.
"L/C Provider Tax Amounts" means an amount equal to the excess of (x)
the Minimum Tax Payment Amount (as defined in Exhibit B of the Letter of
Credit Drawdown Agreement) with respect to the Letter of Credit Note over (y)
the cumulative amount of interest payments previously made with respect to the
Letter of Credit Note, to be paid to the holder of the Letter of Credit Note.
"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
on such payment for the intervening period.
"Letter of Credit" means the irrevocable $15.0 million letter of
credit provided by the L/C Provider to the Authority in accordance with the
Letter of Credit Drawdown Agreement and any replacement thereof pursuant to
the provisions of the Letter of Credit Drawdown Agreement; provided, that any
such replacement does not have a drawdown limit in excess of $15.0 million.
"Letter of Credit Drawdown Agreement" means the Letter of Credit
Drawdown Agreement dated as of the date of this Indenture, among the L/C
Provider, the Authority, the Manager, the Tribe and the
12
Senior Notes Trustee, as in effect on the date of this Indenture or as amended
in accordance with the Senior Notes Indenture.
"Letter of Credit Note" means the Promissory Note executed by the
Authority in favor of the L/C Provider pursuant to the terms of the Letter of
Credit Drawdown Agreement.
"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.
"Management Agreement" means the Second Amended and Restated
Management Agreement, dated July 16, 2002, among the Authority, the Tribe and
the Manager, as amended from time to time in accordance with the Senior Notes
Indenture.
"Management Board" means the Board of Directors created under the
tribal ordinance establishing the Authority.
"Management Fees" means any fees payable by the Authority to the
Manager pursuant to the Management Agreement.
"Manager" means Cascade Entertainment Group, LLC, a California
limited liability company, or any Permitted Replacement Manager in its
capacity as manager of the Chukchansi Gold Resort & Casino.
"Manager Agreement" means the Manager Agreement as in effect on the
date of this Indenture by and between the Manager and the Senior Notes
Trustee.
"Manager Repayment Note" means the Promissory Note executed by the
Authority in favor of the Manager pursuant to the terms of the Cash
Accumulation Account Contribution Agreement.
"Manager Repayment Note Tax Amounts" means an amount equal to the
excess of (x) the Minimum Tax Payment Amount (as defined in Exhibit E of the
Cash Accumulation Account Contribution Agreement) over (y) the cumulative
amount of interest payments previously made with respect to the Manager
Repayment Note, to be paid to the holder of the Manager Repayment Note.
"Manager Tax Amounts" means an amount equal to the excess of (x) the
Manager Minimum Tax Payment Amount (as defined in the Cash Accumulation
Account Contribution Agreement) over (y) the cumulative amount of cash
payments previously made pursuant to Section 3.1 of the Cash Accumulation
Account Contribution Agreement.
"Mandatory Operating Period" means, as of any date of determination,
the four consecutive fiscal quarters of the Authority ended immediately prior
thereto; provided, that such period shall not commence prior to the Initial
Operating Date.
"Minimum Facilities" means a casino which has in operation at least
1,500 slot machines, 25 table games, a hotel with at least 180 rooms,
restaurants with seating for at least 734 people and parking area for at least
1,700 vehicles.
13
"Minimum Monthly Guaranteed Payment" means a guaranteed monthly
payment to the Tribe as required by Section 2711(b)(3) of IGRA, which shall be
$100,000 per month as set forth in the Management Agreement as in effect on
the date of this Indenture.
"Minimum Tax Payment Amount" means, as determined by the Tax Amounts
CPA, an amount equal to the product of (A) the cumulative amount of taxable
income arising from or attributable to these Notes for the period commencing
with the date hereof and continuing to and including the applicable Quarterly
Payment Date (taking into account any True-up Amounts) and (B) the Applicable
Income Tax Rate. For purposes of calculating "Minimum Tax Payment Amount," the
taxable income described in clause (A) of the immediately preceding sentence
that is attributable to any particular taxable year shall be multiplied by the
Applicable Income Tax Rate prevailing for such year.
"Net Income" means, with respect to any specified 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:
(1) any gain (but not loss) realized in connection with (a) any
Asset Sale; or (b) the disposition of any securities by such Person
or the extinguishment of any Indebtedness of such Person; and
(2) any extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Authority in respect of any Asset Sale (including, without limitation, any
cash received upon the sale or other disposition of any non-cash consideration
received in any Asset Sale), net of the direct costs relating to such Asset
Sale, including, without limitation, legal, accounting and investment banking
fees, sales commissions, relocation expenses incurred as a result thereof and,
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), Minimum
Tax Payment Amount paid or payable as a result thereof and amounts required to
be applied to the repayment of Indebtedness secured by a Lien on the asset or
assets that were the subject of such Asset Sale and any reserve for adjustment
in respect of the sale price of such asset or assets established in accordance
with GAAP.
"Net Revenues" means the sum of Net Revenues (Gaming) and Net
Revenues (Other).
"Net Revenues (Gaming)" means Gross Gaming Revenue (Win) of the
Authority from Gaming, less all Gaming related operating expenses (including
interest expense, depreciation, amortization and the other operating expenses
set forth in the Management Agreement), excluding the Management Fee, and less
the retail value of any Promotional Allowances, and less the following
revenues actually received by the Authority and included in Gross Revenues:
(1) any gratuities or service charges added to a customer's
bill;
(2) any credits or refunds made to customers, guests or
patrons;
(3) any sums and credits received by the Authority for lost or
damaged merchandise;
(4) any sales taxes, excise taxes, gross receipt taxes,
admission taxes, entertainment taxes, tourist taxes or charges
received from patrons and passed on to a governmental or quasi
governmental entity;
14
(5) any proceeds from the sale or other disposition of
furnishings and equipment or other capital assets;
(6) any fire and extended coverage insurance proceeds other
than for business interruption;
(7) any condemnation awards other than for temporary
condemnation;
(8) any proceeds of financing or refinancing; and
(9) any interest on bank account(s).
It is intended that this definition be consistent with 25 U.S.C.
ss.2703(9).
"Net Revenues (Other)" means all Gross Revenues of the Authority from
all other sources in support of Gaming not included in Net Revenues (Gaming),
such as food and beverage, entertainment and retail, less all other non-Gaming
related operating expenses (including interest expense, depreciation,
amortization and other operating expenses set forth in the Management
Agreement), excluding the Management Fee, and less the retail value of
Promotional Allowances, if any, and less the following revenues actually
received by the Authority and included in Gross Revenues:
(1) any gratuities or service charges added to a customer's
bill;
(2) any credits or refunds made to customers, guests or
patrons;
(3) any sums and credits received by the Authority for lost or
damaged merchandise;
(4) any sales taxes, excise taxes, gross receipt taxes,
admission taxes, entertainment taxes, tourist taxes or charges
received from patrons and passed on to a governmental or quasi
governmental entity;
(5) any proceeds from the sale or other disposition of
furnishings and equipment or other capital assets;
(6) any fire and extended coverage insurance proceeds other
than for business interruption;
(7) any condemnation awards other than for temporary
condemnation;
(8) any proceeds of financing or refinancing; and
(9) any interest on bank account(s).
It is intended that this definition be consistent with 25 U.S.C.
ss.2703(9).
"NIGC" means the National Indian Gaming Commission.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
15
"Offering Memorandum" means the Offering Memorandum dated September
24, 2002, relating to the offering of the Senior Notes.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chairperson, the
Vice-Chairperson, 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
Authority by two Officers of the Authority, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Authority, that meets the requirements of
Section 13.05 hereof.
"Operating" means that:
(1) no Gaming License has been revoked or suspended;
(2) all Liens (other than Permitted Liens), if any, related to
the development, construction and equipping of, and beginning
operations at, the Chukchansi Gold Resort & Casino have been
discharged or, if payment is not yet due or if such payment is
contested in good faith by the Authority, sufficient funds remain in
the Construction Period Accounts to discharge such Liens;
(3) the Chukchansi Gold Resort & Casino is in a condition
(including the installation of furnishings, fixtures and equipment)
to receive customers in the ordinary course of business;
(4) the Chukchansi Gold Resort & Casino is open to the general
public and operating with the Minimum Facilities in accordance with
applicable law; and
(5) the Chukchansi Gold Resort & Casino is open to the general
public and operating in accordance with applicable law in all
material respects.
"Operating Deadline" means 21 months from the date of this Indenture.
"Operating Expenses" means the current expenses of operation,
maintenance and repair of the Chukchansi Gold Resort & Casino. "Operating
Expenses" shall include wages, salaries, benefits and bonuses to personnel,
the cost of materials and supplies used for current operation and maintenance,
security costs, utility expenses, trash removal, cost of goods sold and
advertising and marketing expenses and insurance premiums. "Operating
Expenses" shall not include any of the following: interest expense or any
other payment in respect of any Indebtedness, capital lease payments
(excluding capital lease payments with respect to gaming devices and other
equipment required for the regular operations of the Chukchansi Gold Resort &
Casino), any allowance for depreciation, renewals or replacement of capital
assets and any other non-cash charges.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Authority,
the Manager or the Trustee.
"Permitted Business" means Gaming at or in connection with the
Chukchansi Gold Resort & Casino and any other businesses, necessary for,
incident to, connected with, arising out of, that is a reasonable extension of
or developed or operated to permit, facilitate or enhance the conduct or
pursuit of
16
such activities, including, but not limited to lodging, entertainment and
related transportation; provided that the Authority shall not conduct any
gaming operations other than at the Chukchansi Gold Resort & Casino.
"Permitted Claims" means any claim, demand, dispute, action or cause
of action or defense arising under or in any way connected with or related or
incidental to this Indenture, the Notes, the Senior Notes or the Collateral
Documents, as the same may be amended or modified from time to time, whether
now existing or hereafter arising and whether sounding in tort, contract or
otherwise that is asserted by any party to this Indenture, the Notes, the
Senior Notes or the Collateral Documents, and their successors and assigns.
"Permitted Investments" means:
(1) any Investment in Cash Equivalents, other than with respect
to funds held in the Interest Reserve Account, which shall be
invested solely in non-callable Government Securities that mature
prior to April 1, 2004;
(2) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.09 hereof;
(3) any Investment made in settlement of gambling debts
incurred by patrons or obligations to trade creditors of the
Chukchansi Gold Resort & Casino which settlements have been entered
into in the ordinary course of business;
(4) if permitted pursuant to Gaming Laws, the extension of
credit to customers of the Chukchansi Gold Resort & Casino consistent
with industry practice in the ordinary course of business;
(5) Investments in the Notes; and
(6) accounts and notes receivable if created or acquired in the
ordinary course of business and which are payable or dischargeable in
accordance with customary trade terms.
"Permitted Liens" means:
(1) Liens on the assets of the Authority created by the Senior
Notes Indenture and the Senior Notes Collateral Documents;
(2) Liens in favor of the Authority;
(3) Liens existing on the date of this Indenture;
(4) Liens on property existing at the time of acquisition
thereof by the Authority; provided, however, that such Liens were not
incurred in contemplation of such acquisition;
(5) 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;
(6) Liens to secure Indebtedness permitted by clause (3) of
Section 4.08(b) hereof covering only the assets acquired with such
Indebtedness and any refinancings thereof; provided,
17
that any Liens incurred to secure such refinancing debt are no
broader than the Liens incurred to secure the Indebtedness being
refinanced;
(7) Liens for taxes, assessments or governmental charges,
claims or judgments that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided that any reserve or
other appropriate provision as shall be required in conformity with
GAAP shall have been made therefore;
(8) easements, rights of way, zoning, similar restrictions and
other similar encumbrances or title defects incurred in the ordinary
course of business, consistent with industry practices that do not in
any case materially detract from the value of the property subject
thereto (as such property is used by the Authority) or interfere with
the ordinary conduct of the business of the Authority;
(9) Liens arising by operation of law in connection with
judgments, only to the extent, for an amount and for a period not
resulting in an Event of Default with respect thereto;
(10) leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the
conduct of the business of the Authority or materially detracting
from the value of the relative assets of the Authority;
(11) Liens in favor of carriers, warehousemen, mechanics,
materialmen, repairmen, contractors or landlords or other similar
Liens arising in the ordinary course of business that are not yet
delinquent or that are being contested in good faith by appropriate
proceedings; and
(12) title to any land (or structures thereon) held in trust in
the name of the United States federal government for the benefit of
the Tribe.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Authority issued in exchange for, or the net proceeds of which are used to
extend, refinance, renew, replace, defease or refund other Indebtedness of the
Authority; provided, however, that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus
all accrued interest thereon and the amount of all expenses and
premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date equal to or later than the final maturity date of, and
has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is
subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and
(4) such Indebtedness is incurred by the Authority.
18
"Permitted Replacement Manager" means (1) a Person that (a) has
equity securities listed on the New York Stock Exchange, the American Stock
Exchange or quoted on the Nasdaq National Market, (b) has a market
capitalization of at least $250.0 million and (c) derived at least $100.0
million of operating income (as defined by GAAP but excluding depreciation and
amortization) for each of its last four fiscal quarters from activities
relating to the gaming business, other than Internet gaming, or (2) a
privately held entity that (a) derived at least $100.0 million of operating
income (as defined by GAAP but excluding depreciation and amortization) for
each of its last four fiscal quarters from activities relating to the gaming
business, other than Internet gaming, and (b) is actively engaged in the
management of one or more casinos located in the United States; provided, that
a Person meeting the requirements of clauses (1) or (2) above shall not be
deemed to be a Permitted Replacement Manager unless and until such Person (x)
is licensed, qualified and found suitable by all appropriate Gaming
Authorities and (y) has assumed all of the Manager's obligations under the
Development Agreement, Management Agreement, Intercreditor Agreement and Cash
Accumulation Account Contribution Agreement.
"Permitted Tax Distributions" means, in the case of the Notes and the
Senior Subordinated PIK Notes, with respect to any taxable year, the product
of (A) the taxable income arising from or attributable to the Notes or the
Senior Subordinated PIK Notes, as applicable, for such year and (B) the
Applicable Income Tax Rate. For purposes of calculating "Permitted Tax
Distributions," the taxable income described in clause (A) of the immediately
preceding sentence that is attributable to any particular taxable year shall
be multiplied by the Applicable Income Tax Rate prevailing for such year. For
purposes of this definition of "Permitted Tax Distributions," the calculation
of taxable income shall (i) take into account any applicable True-up Amounts
and (ii) amounts of taxable income shall be determined by the Tax Amounts CPA.
Estimated tax distributions are permitted to be made within five days
following each Quarterly Payment Date based upon an estimate of the excess of
(x) the Permitted Tax Distributions that would be payable for the period
beginning on January 1 of such year (or the date of the indenture in the first
year) and ending on March 31, May 31, August 31 and December 31 if such period
were a taxable year over (y) distributions attributable to all prior periods
during such taxable year.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or any agency or political subdivision
thereof or any other entity.
"Plans" means the Final Plans (as defined in the Cash Collateral and
Disbursement Agreement).
"Private Placement Legend" means the legend set forth in Section
2.06(b)(1) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Promotional Allowances" means the retail value of complimentary
food, beverages, merchandise and tokens for gaming provided to patrons as
promotional items.
"Purchase Money Indebtedness" means Indebtedness of the Authority
incurred for the purpose of financing all or any part of the purchase price or
cost of the installation, construction or improvement of any property.
"Qualified Gaming Company" means either (A) a company that (1) has
equity securities listed on the New York Stock Exchange, the American Stock
Exchange or quoted on the Nasdaq National Market, (2) has a market
capitalization of at least $250.0 million and (3) derived at least $100.0
million of operating income (as defined by GAAP, but excluding depreciation
and amortization) for each of its last four fiscal quarters from activities
relating to the gaming business, other than Internet gaming, or (B) a
privately held entity that derived at least $100.0 million of operating income
(as defined by GAAP, but excluding depreciation and amortization) for each of
its last four fiscal quarters from activities relating to the gaming business,
other than Internet gaming.
19
"Quarterly Payment Date" means each March 31, May 31, August 31 and
December 15.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of the Senior Notes Indenture, among the
Authority, the Tribe and the initial purchasers of the Senior Notes set forth
on the signature pages thereto.
"Release Conditions" shall mean, as of any date of determination,
that: (1) the Chukchansi Gold Resort & Casino is Operating, (2) the
Authority's Fixed Charge Coverage Ratio was at least 2.5 to 1.0 during the
Mandatory Operating Period and, if the Chukchansi Gold Resort & Casino was
closed for an aggregate of more than five days during the Mandatory Operating
Period, the Authority's Fixed Charge Coverage Ratio was at least 2.5 to 1.0
for the last full fiscal quarter of the Mandatory Operating Period, (3) the
aggregate amount of cash and Cash Equivalents in the Cash Accumulation Account
is at least equal to the Required Accumulation Amount, (4) no amounts are
outstanding under the Manager Repayment Note, (5) no default or event of
default has occurred and is continuing under the Senior Notes Indenture or the
Senior Subordinated PIK Notes Indenture and (6) the Chukchansi Gold Resort &
Casino has not ceased Operating for more than five days during the Stub
Period.
"Required Accumulation Amount" means at the time of determination (1)
an amount in cash equal to $3.0 million, multiplied by the number of completed
full fiscal quarters since the Initial Operating Date, less (2) any amounts
contained in the Cash Accumulation Account that are used to prepay the Senior
Notes in accordance with the terms of the Cash Accumulation Account
Contribution Agreement.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Funds" means any Available Funds that are not
distributable (i) to the Tribe pursuant to clauses (4), (5) and (6) of Section
4.07(b) hereto, (ii) required to be deposited into the Cash Accumulation
Account and (iii) used to purchase Senior Notes is connection with an Optional
Excess Cash Offer or a Mandatory Excess Cash Offer (both as defined in the
Senior Notes Indenture), as adjusted in accordance with the last two sentences
of Section 3.10(a) of the Senior Notes Indenture.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Semiannual Period" means each period following the First Accrual
Period that begins on January 1 and ends on the next June 30 or each period
that begins on July 1 and ends on the next December 31, as applicable.
"Senior Debt" means:
20
(1) the Senior Notes;
(2) any other Indebtedness of the Authority permitted to be
incurred under the terms of this Indenture, unless the instrument
under which such Indebtedness is incurred expressly provides that it
is on parity with or subordinated in right of payment to the Notes;
(3) all obligations with respect to the items listed in the
preceding clauses (1) and (2).
"Senior Notes" means the $153.0 million aggregate principal amount of
Senior Notes due 2009 of the Authority issued on the date of the Senior Notes
Indenture pursuant to the terms of the Senior Notes Indenture and the notes to
be issued in exchange therefor pursuant to the Registration Rights Agreement.
"Senior Notes Indenture" means the Indenture dated as of the date
hereof between the Authority and U.S. Bank, N.A., as the Senior Notes Trustee.
"Senior Notes Trustee" means the then acting trustee under the Senior
Notes Indenture.
"Senior Subordinated PIK Notes" means the Senior Subordinated
Pay-in-Kind Notes due 2009 with Contingent Interest issued on the date of this
Indenture by the Authority, as in effect on the date of this Indenture.
"Senior Subordinated PIK Notes Indenture" means the indenture with
respect to the Senior Subordinated PIK Notes, dated as of the date of this
Indenture, among the Authority, the Tribe and U.S. Bank, N.A., as trustee, as
in effect on the date of this Indenture.
"Senior Subordinated PIK Notes Trustee" means the then acting trustee
under the Senior Subordinated PIK Notes Indenture.
"Site" means each parcel of land on which all or any portion of the
Chukchansi Gold Resort & Casino is to be located from time to time.
"State Bond Regulation" means Regulation CGCC-2 of the California
Gambling Control Commission, as the same may be amended, supplemented,
restated or replaced from time to time.
"State Gaming Agency" shall have the meaning ascribed thereto in the
Compact.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any such interest or principal prior to the
date originally scheduled for the payment thereof.
"Stub Period" shall mean, on any date of determination, the period
from the end of the Mandatory Operating Period through and including such date
of determination.
"Subsidiary" means:
(1) any instrumentality, subdivision or subunit of the
Authority that has a separate legal existence or status; or
(2) with respect to any specified Person:
21
(a) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time
owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person (or a combination
thereof); and
(b) any partnership (1) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (2) the only general partners of which are that Person
or one or more Subsidiaries of such Person (or any combination
thereof).
"Tax Amounts" means (1) Manager Tax Amounts, (2) Manager Repayment
Note Tax Amounts, (3) L/C Provider Tax Amounts and (4) Permitted Tax
Distributions.
"Tax Amounts CPA" means any nationally recognized independent
accounting firm jointly selected by the Manager and the Authority.
"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.
"Tribal Council" means the governing body of the Tribe established
pursuant to Article IV Section 2 of the Constitution.
"Tribal Gaming Commission" means the Tribal Gaming Commission
established pursuant to Section 4 of the Tribal Gaming Ordinance.
"Tribal Gaming Ordinance" means the duly and validly adopted Tribal
Gaming Ordinance of the Tribe adopted by the Tribal Council on October 5,
2001, as amended on December 27, 2001 and approved by the NIGC on February 15,
2002, as required by IGRA.
"Tribe" has the meaning assigned to it in the preamble to this
Indenture.
"True-up Amount" means, in respect of a particular taxable year, an
amount determined by the Tax Amounts CPA equal to the difference between (1)
the amount described in Section 4.01(b) hereof actually distributed in respect
of such taxable year for the note in respect of which the True-up Amount is
being determined and (2) the Minimum Tax Payment Amount permitted to be
distributed in respect of such year for the note in respect of which the
True-up Amount is being determined; provided, however, that if there is an
Adjustment Event, clause (1) shall mean the amount described in Section 4.01
(b) hereof, as adjusted by the aggregate True-up Amounts and clause (2) shall
mean the Minimum Tax Payment Amount, as adjusted to take into account the
results of the Adjustment Event.
Within 45 days following the immediately preceding calendar year or
within ten days of an Adjustment Event, the Tax Amounts CPA shall file with
the Trustee a written statement indicating in reasonable detail the
calculation of the True-up Amount. In the case of a True-up Amount due to a
Holder the Minimum Tax Payment Amount payable on the immediately following
Quarterly Payment Date after payment of any accrued and unpaid Interest on the
Notes shall be increased by such True-up Amount. If the available cash is not
sufficient to pay the Minimum Tax Payment Amount payable on the Quarterly
Payment Date, the amount unpaid shall be carried over and increase the Minimum
Tax Payment Amount payable on the following Quarterly Payment Date. In the
case of a True-up Amount due to the Authority, the amounts payable on the
immediately following Quarterly Payment Date shall be reduced by such True-up
Amount and the excess, if any, of the True-up Amount over such Minimum Tax
22
Payment Amount shall be applied to reduce the immediately following Minimum
Tax Payment Amount until such True-up Amount is entirely offset.
"True-up Amount due to the Authority" means an amount equal to the
excess, if any, of the amount described in clause (1) of the definition of
True-up Amount over the amount described in clause (2) of the definition of
True-up Amount.
"True-up Amount due to a Holder" means an amount equal to the excess,
if any, of the amount described in clause (2) of the definition of True-up
Amount over the amount described in clause (1) of the definition of True-up
Amount.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the
board of directors or management committee of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (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 shall elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Working Capital" means, on any date, the excess of Current Assets on
such date less Current Liabilities on such date.
Section 1.02 Other Definitions.
Defined in
Term Section
---- --------
"AAA"................................................... 10.05
"Affiliate Transaction"................................. 4.11
"Applicable Courts"..................................... 10.02
"Authentication Order".................................. 2.02
"Contingent Debt Regulations" .......................... 4.21
"Covenant Defeasance"................................... 8.03
"Event of Default"...................................... 6.01
"Excess Proceeds"....................................... 4.09
"incur"................................................. 4.08
"Legal Defeasance"...................................... 8.02
"Offer Amount".......................................... 3.10
"Offer Period".......................................... 3.10
"Paying Agent".......................................... 2.03
"Payment Default"....................................... 6.01
"Permitted Debt"........................................ 4.08
"Purchase Date"......................................... 3.10
23
Defined in
Term Section
---- --------
"Registrar"............................................. 2.03
"Repurchase Offer"...................................... 3.10
"Restricted Payments"................................... 4.07
"Tax Amount Recipients" ................................ 4.07
"Tribal Party" ......................................... 10.01
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Authority and any successor obligor
upon the Notes.
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) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act
will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
24
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Authority and the
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 Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
Section 2.02 Execution and Authentication.
Two Officers must sign the Notes for the Authority by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon receipt of a written order of the Authority
signed by two Officers (an "Authentication Order"), authenticate Notes for
original issue up to the aggregate principal amount stated in paragraph 5 of
the Notes. The aggregate principal amount of Notes outstanding at any time may
not exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Authority to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or
an Affiliate of the Authority.
Section 2.03 Registrar and Paying Agent.
The Authority shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Authority 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 Authority
may change any Paying Agent or Registrar without notice to any Holder. The
Authority shall notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Authority fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Authority may act as Paying Agent or Registrar.
The Authority initially appoints the Trustee to act as the Registrar
and Paying Agent.
25
Section 2.04 Paying Agent to Hold Money in Trust.
The Authority shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all money held by the Paying Agent for the payment
of principal, premium or Interest on the Notes, and shall notify the Trustee
of any default by the Authority in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Authority at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon payment over to the
Trustee, the Paying Agent (if other than the Authority) shall have no further
liability for the money. If the Authority 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 Authority, the Trustee shall serve as Paying Agent
for the Notes.
Section 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Authority shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Authority shall otherwise comply with TIA ss. 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Notes. Upon request by a Holder of Notes
and such Holder's compliance with the provisions of this Section 2.06(a), the
Registrar shall register the transfer or exchange of Notes. Prior to such
registration of transfer or exchange, the requesting Holder must present or
surrender to the Registrar the Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by its attorney, duly authorized in writing.
(b) Legends. The following legends shall appear on the face of all
Notes issued under this Indenture unless specifically stated otherwise in the
applicable provisions of this Indenture.
(1) Private Placement Legend. Each Note (and all Notes issued
in exchange therefor or substitution thereof) shall bear the legend
in substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN EXEMPTION
THEREFROM UNDER THE SECURITIES ACT, THE RULES AND REGULATIONS THEREUNDER AND
APPLICABLE STATE LAWS. THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY SUBSEQUENT PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY,
THAT UNLESS SUCH PERSON IS LICENSED AS A LENDER PURSUANT TO THE PICAYUNE
RANCHERIA OF CHUKCHANSI INDIANS' TRIBAL-STATE GAMING COMPACT OR IS EXEMPT FROM
SUCH LICENSING REQUIREMENTS, SUCH PURCHASER WILL NOT BE ABLE TO RECEIVE
PAYMENTS ON THE NOTES AFTER AN ACCELERATION AND WILL NOT BE ABLE TO ENFORCE
THE NOTES OR THE INDENTURE AGAINST THE ISSUER."
26
(2) Subordination Legend. Each Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE, THE INDENTURE AND THE RIGHTS OF THE TRUSTEE AND THE HOLDERS OF
THIS NOTE ARE SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT (AS DEFINED
IN THE INDENTURE GOVERNING THIS NOTE) PURSUANT TO WHICH THE INDENTURE, THIS
NOTE AND SUCH RIGHTS ARE MADE EXPRESSLY SUBORDINATE TO THE RIGHTS OF THE
SENIOR NOTES TRUSTEE, THE SENIOR NOTE HOLDERS (EACH AS DEFINED THEREIN) AND
CERTAIN OTHER PERSONS. EACH HOLDER OF THIS NOTE, BY ACCEPTANCE HEREOF, AGREES
TO BE SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT."
(3) Tax Legend. Each Note (and all Notes issued in exchange
therefore or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL
INCOME TAX PURPOSES. UPON THE REQUEST OF THE HOLDER OF THIS NOTE, THE
AUTHORITY SHALL MAKE AVAILABLE TO THE HOLDER OF THIS NOTE, (I) THE ISSUE PRICE
OF THE NOTE, (II) THE AMOUNT OF ORIGINAL ISSUED DISCOUNT IN RESPECT THEREOF,
(III) THE ISSUE DATE OF THE NOTE, AND (IV) THE YIELD TO MATURITY OF THE NOTE,
IN EACH CASE AS DETERMINED UNDER THE ORIGINAL ISSUE DISCOUNT RULES OF THE U.S.
INTERNAL REVENUE CODE. PLEASE CONTACT THE CHIEF FINANCIAL OFFICER OF THE
MANAGER AT 916-387-6317."
(c) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the
Authority shall execute and the Trustee shall authenticate Notes upon
receipt of an Authentication Order in accordance with Section 2.02 or
at the Registrar's request.
(2) No service charge shall be made to a Holder of a Note for
any registration of transfer or exchange, but the Authority 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, 3.10, 4.09
and 9.05 hereof).
(3) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in
part.
(4) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Authority,
evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Notes surrendered upon such registration of
transfer or exchange.
(5) The Authority shall not be required:
(A) to issue, to register the transfer of or to exchange
any 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;
27
(B) to register the transfer of or to exchange any Note
selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment
date.
(6) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Authority may deem and
treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal
of and interest on such Notes and for all other purposes, and none of
the Trustee, any Agent or the Authority shall be affected by notice
to the contrary.
(7) The Trustee shall authenticate Notes in accordance with the
provisions of Section 2.02 hereof.
(8) All documentation 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 Notes.
If any mutilated Note is surrendered to the Trustee or the Authority
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Authority shall issue and the Trustee, upon receipt
of an Authentication Order, shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Authority,
an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Authority to protect the Authority, the
Trustee, any Agent and any authenticating agent from any loss that any of them
may suffer if a Note is replaced. The Authority may charge for its expenses in
replacing a Note.
Every replacement Note is an additional obligation of the Authority
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, and those described in this Section as not outstanding. Except
as set forth in Section 2.09 hereof, a Note does not cease to be outstanding
because the Authority or an Affiliate of the Authority holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Authority, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
28
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by
the Authority, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Authority,
shall be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Authority may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of certificated Notes but may have variations that
the Authority considers appropriate for temporary Notes and as may be
reasonably acceptable to the Trustee. Without unreasonable delay, the
Authority shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
Section 2.11 Cancellation.
The Authority at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall destroy canceled Notes (subject to the record retention requirement of
the Exchange Act). Certification of the destruction of all canceled Notes
shall be delivered to the Authority. The Authority may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12 Defaulted Interest.
If the Authority defaults in a payment of interest on the Notes,
subject to the second sentence of Section 12.01 hereof, it shall pay the
defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Authority shall notify the Trustee in writing
of the amount of defaulted interest proposed to be paid on each Note and the
date of the proposed payment. The Authority shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date may 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
Authority (or, upon the written request of the Authority, the Trustee in the
name and at the expense of the Authority) 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 and advises Holders of the
restrictions on payments contained in Article 12 hereof.
29
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Authority elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least ten days before a redemption date, an Officers' Certificate setting
forth:
(1) the clause of this Indenture pursuant to which the
redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
The Notes shall not be listed on any national securities exchange. If
less than all of the Notes are to be redeemed or purchased in an offer to
purchase at any time, the Trustee shall select Notes for redemption or
purchase on a pro rata basis among those Holders whose Notes are permitted to
be redeemed by Article 12 hereof.
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase and which are permitted to be redeemed by Article
12 hereof.
The Trustee shall promptly notify the Authority in writing of the
Notes selected for redemption or purchase and, in the case of any Note
selected for partial redemption or purchase, the principal amount thereof to
be redeemed or purchased. If all of the Notes of a Holder are to be redeemed
or purchased, the entire outstanding amount of Notes held by such Holder shall
be redeemed or purchased. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption or
purchase also apply to portions of Notes called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.10 hereof, at least ten days
before a redemption date, the Authority shall mail or cause to be mailed, by
first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address, except that redemption notices may be
mailed more than 60 days prior to a redemption date if the notice is issued in
connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture pursuant to Articles 8 or 11 of this Indenture.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
30
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) the Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Authority defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date; and
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed.
At the Authority's request, the Trustee shall give the notice of
redemption in the Authority's name and at its expense; provided, however, that
the Authority has delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price, subject to Article 12 hereof. A
notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
One Business Day prior to the redemption or purchase price date, the
Authority shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption or purchase price of and accrued Interest on
all Notes to be redeemed or purchased on that date. The Trustee or the Paying
Agent shall promptly return to the Authority any money deposited with the
Trustee or the Paying Agent by the Authority in excess of the amounts
necessary to pay the redemption or purchase price of, and accrued Interest on,
all Notes to be redeemed or purchased.
If the Authority complies with the provisions of the preceding
paragraph, on and after the redemption or purchase date, interest shall cease
to accrue on the Notes or the portions of Notes called for redemption or
purchase. If a Note is redeemed or purchased on or after an interest record
date but on or prior to the related interest payment date, then any accrued
and unpaid interest shall be paid to the Person in whose name such Note was
registered at the close of business on such record date. If any Note called
for redemption or purchase is not so paid upon surrender for redemption or
purchase because of the failure of the Authority to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
or purchase date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided
in the Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Authority shall issue and, upon receipt of an Authentication Order, the
Trustee shall authenticate for the Holder at the expense of
31
the Authority a new Note equal in principal amount to the unredeemed or
unpurchased portion of the Note surrendered.
Section 3.07 Optional Redemption.
(a) The Notes are not redeemable at the Authority's option prior to
October 1, 2006.
(b) At any time on or after October 1, 2006, the Authority may,
subject to the second sentence of Section 12.01 hereof, redeem all or part of
the Notes, upon not less than ten days notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued
and unpaid Interest thereon and the premium, if any, on the Notes redeemed, in
each case, through and including the applicable redemption date, if redeemed
during the twelve-month period beginning on or after October 1 of the years
indicated below:
Year Percentage
2006.............................................. 108.500%
2007.............................................. 104.250%
2008 and thereafter............................... 100.000%
provided, that as long as the Senior Notes are outstanding, after any such
payment there is at least the Required Accumulation Amount in cash and Cash
Equivalents remaining in the Authority's Cash Accumulation Account and all
amounts due and payable with respect to the Senior Notes and the Senior
Subordinated PIK Notes have been paid in full and no amount is outstanding
under the Manager Repayment Note.
(c) 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 Mandatory Redemption.
The Authority is not required to make mandatory redemptions with
respect to the Notes.
Section 3.09 Mandatory Disposition Pursuant to Gaming Laws.
(a) Notwithstanding any other provisions of this Article 3, each
Holder, by accepting a Note, shall be deemed to have agreed that if any Gaming
Authority determines, and a Holder or the Beneficial Owner of the Notes is
notified, that (i) such Holder or Beneficial Owner must obtain a license,
qualification or finding of suitability under any applicable Gaming Law and
the Holder or Beneficial Owner does not apply for that license, qualification
or finding of suitability within 30 days after being requested to do so by
such Gaming Authority, or any shorter period as may be required by such Gaming
Authority, or (ii) such Holder or Beneficial Owner shall not be licensed,
qualified or found suitable under an applicable Gaming Law, or any license,
qualification or finding of suitability is not renewed upon its expiration or
is revoked, or (iii) such Holder or Beneficial Owner has been found to be
unsuitable for licensing, then the Authority, at its option, may (A) require
such Holder or Beneficial Owner to dispose of such Holder's or Beneficial
Owner's Notes within 30 days, or any earlier date as may be required by the
Gaming Authority, of (1) the termination of the 30-day period or any shorter
period as may be required by a Gaming Authority, in each case as described
above, for the Holder or Beneficial Owner to apply for a license,
qualification or finding of suitability or (2) the receipt of the notice from
the Gaming Authority that the Holder or Beneficial Owner shall not be
licensed, qualified or found suitable or (B) subject to the second sentence of
Section 12.01 hereof, redeem the Notes of such Holder or Beneficial Owner at a
price equal to the least of (1) 100% of the principal amount thereof, (2) the
price at which such Holder or
32
Beneficial Owner acquired the Notes and (3) the fair market value of the
Notes, together with, in each case, to the extent permitted by the Compact,
accrued and unpaid Interest thereon to the earlier of the date of redemption
or such earlier date as may be required by the Gaming Authority 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) Immediately upon a determination that a Holder or Beneficial
Owner shall not be licensed, qualified or found suitable, or that such
license, qualification or finding of suitability has been revoked or shall not
be renewed, the Holder or Beneficial Owner shall have no further rights (i) to
exercise any right conferred by the Notes, directly or indirectly, through any
trustee, nominee or any other Person or entity, or (ii) to receive any
interest, dividends, economic interests or other distributions or payments
with respect to the Notes or any remuneration in any form from the Authority
for services rendered or otherwise, except the redemption price of the Notes.
(c) Any Holder or Beneficial Owner of Notes that is required to apply
for a license, qualification or a finding of suitability may be required to
pay all costs of the licenses or investigation for the qualification or
finding of suitability by the applicable Gaming Authorities. The Authority is
not required to pay or reimburse any Holder or Beneficial Owner of Notes who
is required to apply for any license, qualification or finding of suitability.
(d) The Authority shall notify the Trustee in writing of any
disposition pursuant to this Section 3.09 as soon as is practicable. The
Trustee shall be required to report the names of the record holders of Notes
to any Gaming Authority when required by law.
Section 3.10 Repurchase Offers.
In the event that, pursuant to Section 4.09 hereof, the Authority is
required to commence an offer to all Holders to purchase Notes (a "Repurchase
Offer"), it shall follow the procedures specified below and in any such event
this Section 3.10 shall be subject to the second sentence of Section 12.01
hereof.
The Repurchase Offer shall be made to all Holders and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to
purchase or redeem with the proceeds of sales of assets (in the case of a
Repurchase Offer pursuant to Section 4.09). The Repurchase Offer shall remain
open for a period of at least 20 Business Days following its commencement and
not more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than three Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Authority shall apply all Excess Proceeds (in the case of a Repurchase Offer
pursuant to Section 4.09) (the "Offer Amount") to the purchase of Notes and
such other pari passu Indebtedness (on a pro rata basis, if applicable) or, if
less than the Offer Amount has been tendered, all Notes and other Indebtedness
tendered in response to the Repurchase Offer. Payment for any Notes so
purchased shall be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid Interest
shall be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional Interest shall be payable to
Holders who tender Notes pursuant to the Repurchase Offer.
Upon the commencement of an Repurchase Offer, the Authority shall
send, by first class mail, a notice to the Trustee and each of the Holders,
with a copy to the Trustee. The notice shall contain all
33
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Repurchase Offer. The notice, which shall govern the terms of
the Repurchase Offer, shall state:
(1) that the Repurchase Offer is being made pursuant to this
Section 3.10 and Section 4.09 hereof, as applicable, and the length
of time the Repurchase Offer shall remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment shall
continue to accrue Interest;
(4) that, unless the Authority defaults in making such payment,
any Note accepted for payment pursuant to the Repurchase Offer shall
cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to
any Repurchase Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Note completed, or transfer by book-entry transfer, to the
Authority, a Depositary, if appointed by the Authority, or a Paying
Agent at the address specified in the notice at least three days
before the Purchase Date;
(6) that Holders shall be entitled to withdraw their election
if the Authority, 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 Note the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(7) that, if the aggregate principal amount of Notes and other
pari passu Indebtedness surrendered by Holders exceeds the Offer
Amount, the Authority shall select the Notes and other pari passu
Indebtedness to be purchased on a pro rata basis based on the
principal amount of Notes and such other pari passu Indebtedness
surrendered; and
(8) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Authority shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Repurchase
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Authority in
accordance with the terms of this Section 3.10. The Authority, the Depositary
or the Paying Agent, as the case may be, shall promptly (but in any case not
later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes tendered
by such Holder and accepted by the Authority for purchase, and the Authority
shall promptly issue a new Note, and the Trustee, upon written request from
the Authority shall authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Authority to the Holder thereof.
Any Repurchase Offer shall be in compliance with all applicable laws,
rules and regulations, including, if applicable, Regulation 14E under the
Exchange Act and the rules and regulations thereunder, all other applicable
Federal and state securities laws and the restrictions contained in the Senior
Notes Indenture and the Senior Subordinated PIK Notes Indenture. To the extent
that the provisions of any
34
securities laws or regulations or the Senior Notes Indenture or Senior
Subordinated PIK Notes Indenture conflict with the provisions of this Section
3.10, the Authority shall comply with the applicable securities laws and
regulations and the Senior Notes Indenture and Senior Subordinated PIK Notes
Indenture and shall not be deemed to have breached its obligations under this
Section 3.10 by virtue of such conflict.
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.
ARTICLE 4.
COVENANTS OF THE AUTHORITY
Section 4.01 Payment of Notes.
(a) The Authority shall pay or cause to be paid the principal of,
premium, if any, and Interest on the Notes on the dates and in the manner
provided in the Notes. If Interest payable on the Notes includes Contingent
Interest, the Authority shall provide a calculation of such Contingent
Interest in reasonable detail to the Trustee in the form of an Officer's
Certificate at the time of payment thereof. Principal, premium, if any, and
Interest and shall be considered paid on the date due if the Paying Agent, if
other than the Authority, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Authority in immediately available funds and designated
for and sufficient to pay all principal, premium, if any, and Interest then
due.
(b) Notwithstanding anything to the contrary herein, within five days
following each Quarterly Payment Date, the Authority shall make a cash payment
to the Holders of the Notes, in an amount equal to the excess of (A) the
Minimum Tax Payment Amount over (B) the sum of (x) the cumulative amount of
cash payments previously made with respect to Fixed Interest or Contingent
Interest and (y) the cumulative amount of cash payments previously made
pursuant to this Section 4.01. Any payments made pursuant to this subsection
(b) shall be treated as payments of accrued Interest and shall reduce, as
applicable, the accrued Fixed Interest and Contingent Interest with respect to
the Notes.
Section 4.02 Maintenance of Office or Agency.
The Authority shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Authority in respect of the Notes and this Indenture
may be served. The Authority shall give prompt written notice to the Trustee
of the location, and any change in the location, of such office or agency. If
at any time the Authority fails to maintain any such required office or agency
or fails to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Authority may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Authority of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Authority
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
The Authority hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Authority in accordance with
Section 2.03 hereof.
35
Section 4.03 Reports.
(a) Whether or not required by the SEC, so long as any Notes are
outstanding, the Authority shall have its annual financial statements audited,
and its interim financial statements reviewed, by a nationally recognized firm
of independent accountants and shall furnish to the Holders, within the time
periods specified in the SEC's rules and regulations for such filings:
(1) all quarterly and annual financial information of the
Authority and the Manager that would be required to be contained in a
filing with the SEC on Forms 10-Q and 10-K, as applicable, whether or
not the Authority is required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information
only, a report thereon by the Authority's certified independent
accountants; and
(2) all current reports that would be required to be filed by
the Authority and the Manager with the SEC on Form 8-K if the
Authority were required to file such reports.
(b) On or prior to the fifth Business Day of each calendar month
during the Construction Period, beginning November 1, 2002, the Authority
shall issue a press release generally describing the progress of construction
on the Chukchansi Gold Resort & Casino and whether, during the prior month,
the construction had proceeded substantially in accordance with the
Construction Schedule.
Section 4.04 Compliance Certificate.
(a) The Authority shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Authority during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining
whether the Authority has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the
Authority has kept, observed, performed and fulfilled 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 has occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Authority is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
Interest or premium, if any, on the Notes is prohibited or if such event has
occurred, a description of the event and what action the Authority is taking
or proposes to take with respect thereto.
(b) So long as any of the Notes are outstanding, the Authority shall
deliver to the Trustee, forthwith upon any Officer becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default
or Event of Default and what action the Authority is taking or proposes to
take with respect thereto.
(c) Promptly after the Initial Operating Date, the Authority shall
deliver to the Trustee an Officers' Certificate which shall state (i) that the
Chukchansi Gold Resort & Casino is Operating and (ii) the Initial Operating
Date.
36
Section 4.05 Taxes.
The Authority shall pay, prior to delinquency, all material taxes,
assessments, and governmental levies, except such as are contested in good
faith and by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Authority.
Section 4.06 Stay, Extension and Usury Laws.
The Authority covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Authority (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.07 Restricted Payments.
(a) Subject to the Intercreditor Agreement and except as set forth in
subsections (b) and (c) below, the Authority shall not, directly or
indirectly:
(1) make any payment or distribution to the Tribe, any agency,
instrumentality or political subunit of the Tribe, any member of the
Tribe (other than customary salaries, benefits, loans, commissions,
fees, expense reimbursements and travel and other advances, in each
case, made in the ordinary course of business), Holdings, any direct
or indirect holders of Holdings' Equity Interests in their capacity
as such, the Manager, any direct or indirect holder of the Manager's
Equity Interests in their capacity as such, the L/C Provider, any
Affiliate of the Tribe, any Affiliate of a member of the Tribe (other
than payments made in the ordinary course of business at customary
rates with respect to goods or services provided to the Authority) or
any Affiliate of the Manager, other than payments to the Manager of
amounts due under the Management Agreement, the Development
Agreement, the Manager Agreement and the Cash Accumulation Account
Contribution Agreement, and payments to the L/C Provider of the
Commitment Fee; provided, however, that this provision shall not
prohibit, within five days following each applicable Quarterly
Payment Date, if on such date the Authority's Fixed Charge Coverage
Ratio is at least 1.5 to 1.0, the payment of Tax Amounts to holders
of the Notes, the Senior Subordinated PIK Notes, the Manager
Repayment Note, the Cash Accumulation Account Contribution Agreement
or the Letter of Credit Note (collectively, the "Tax Amount
Recipients"), as the case may be, with respect to any period
beginning on or after the date of this Indenture; provided, further,
that Tax Amounts that are permitted to be paid to Tax Amount
Recipients during any particular taxable year shall be the lesser of
(i) Tax Amounts that are required to be paid to such recipients
pursuant to the terms of the Notes, the Senior Subordinated PIK
Notes, the Manager Repayment Note, the Cash Accumulation Account
Contribution Agreement and the Letter of Credit Note as the case may
be and (ii) $2.1 million per year;
(2) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is expressly subordinated to the Notes, except a
payment of interest or principal at the Stated Maturity thereof; or
(3) make any Restricted Investment (all such payments and other
actions set forth in these clauses (1) through (3) being collectively
referred to as "Restricted Payments");
37
provided, however, that if (i) no Default or Event of Default has occurred and
is continuing and (ii) no amounts are outstanding under the Manager Repayment
Note, the Authority may, within two Business Days after the completion of any
Optional Excess Cash Offer (as defined in the Senior Notes Indenture) made
pursuant to Section 3.10 of the Senior Notes Indenture, make Restricted
Payments with any Excess Cash Flow not utilized to make payments on the Senior
Notes in connection with such Optional Excess Cash Offer.
(b) So long as no Default has occurred and is continuing or would be
caused thereby, the provisions of Section 4.07(a) shall not prohibit:
(1) the making of a Restricted Payment described in clauses (1)
through (3) of Section 4.07(a) if, at the time thereof, (i) the
Chukchansi Gold Resort & Casino is Operating, (ii) the Authority's
Fixed Charge Coverage Ratio was at least 2.5 to 1.0 during the
Mandatory Operating Period and, if the Chukchansi Gold Resort &
Casino was closed for an aggregate of more than five days during the
Mandatory Operating Period, the Authority's Fixed Charge Coverage
Ratio was at least 2.5 to 1.0 for the last full fiscal quarter of the
Mandatory Operating Period, (iii) as long as the Senior Notes are
outstanding, the aggregate amount of cash and Cash Equivalents in the
Cash Accumulation Account is at least equal to the Required
Accumulation Amount, and (iv) the Chukchansi Gold Resort & Casino
shall not have ceased Operating for more than five days during the
Stub Period;
(2) the making of any payment pursuant to and consistent with
the terms of any development agreement between the Authority and the
Manager executed after the date of the Senior Note Indenture which
agreement: (i) relates to the expansion of the Chukchansi Gold Resort
& Casino or any additions thereto; (ii) provides for payments and/or
fees to the Manager that are consistent with the Development
Agreement, relative to the size of the proposed expansion or addition
to the Chukchansi Gold Resort & Casino as measured by projected
gaming positions; and (iii) is on terms that are, on the whole, no
less favorable to the Authority than the terms of the Development
Agreement; provided, that (A) the Authority delivers to the Senior
Notes Trustee a resolution of the Management Board set forth in an
Officers' Certificate certifying that the terms of such agreement are
no less favorable to the Authority than the terms of the Development
Agreement and that the agreement has been approved by a majority of
the disinterested members of the Management Board and (B) if such
agreement provides for payments and/or fees to the Manager in excess
of $5.0 million, the Authority delivers to the Senior Notes Trustee
an opinion as to the fairness to the Authority of such agreement from
a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing; and
(3) the making of any payments to Holdings, any direct or
indirect holders of Holdings' Equity Interests in their capacity as
such, the Manager, any direct or indirect holder of the Manager's
Equity Interests in their capacity as such, the L/C Provider, or any
Affiliate of the Manager if such payments are made in the ordinary
course of business at customary rates with respect to goods or
services provided to the Authority.
(c) Beginning with the end of the Authority's first full fiscal
quarter commencing after the Initial Operating Date (provided, that solely for
purposes of this 4.07(c), Minimum Facilities shall not include the hotel,
restaurants or parking area), the Authority shall, to the extent available,
distribute all Available Funds in cash within 40 days after the end of each of
its full fiscal quarters (except with respect to the Minimum Monthly
Guaranteed Payment to the Tribe, which shall be paid in monthly installments
as and when required by the terms of the Management Agreement) as follows:
38
(1) first, the Authority shall distribute the Minimum Monthly
Guaranteed Payment (in an amount equal to $100,000 per month) to the
Tribe;
(2) second, the Authority shall deposit 100% of the remaining
Available Funds for such fiscal quarter or other cash held by the
Authority into the Capital Replacement Reserve Account until the
amount in the Capital Replacement Reserve Account equals the amount
required to be on deposit in the Capital Replacement Reserve (as
defined in the Management Agreement) if the Manager, as of such date,
had fully complied with its obligations under the Management
Agreement with respect to the Capital Replacement Reserve;
(3) third, the Authority shall deposit 100% of the remaining
Available Funds for such fiscal quarter or other cash held by the
Authority into the Cash Accumulation Account until the amount in the
Cash Accumulation Account equals the Required Accumulation Amount,
excluding the fiscal quarter with respect to which such distribution
is being made;
(4) fourth, the Authority shall distribute 25% of the remaining
Available Funds for such fiscal quarter to the Tribe and deposit 75%
of such funds into the Cash Accumulation Account until the amount in
the Cash Accumulation Account equals the Required Accumulation
Amount;
(5) fifth, of the next $3.0 million of Available Funds for such
fiscal quarter, the Authority shall distribute 50% to the Tribe; and
(6) sixth, of any remaining Available Funds for such fiscal
quarter, the Authority shall distribute 75% to the Tribe.
Notwithstanding the foregoing, (i) if any Default or Event of Default has
occurred and is continuing, (ii) if the Authority is not able to incur $1.00
of additional Indebtedness pursuant to Section 4.08(a) hereof at the time the
Available Funds are required to be distributed with respect to any fiscal
quarter under this Section 4.07(c) or (iii) if at the time of such
distribution there is any amount outstanding under the Manager Repayment Note,
no Restricted Payment may be made to the Tribe pursuant to clauses (4) through
(6) of this Section 4.07(c); provided, however, that in the event the
Authority would be permitted to make a distribution under any of clauses (4)
through (6) of this Section 4.07(c) but for the existence of amounts
outstanding under the Manager Repayment Note, the Authority shall be permitted
to repay the Manager Repayment Note from the Available Funds that would have
otherwise been distributed to the Tribe pursuant to clauses (4) through (6) of
this Section 4.07(c); provided, further, that any Available Funds used to
repay such Manager Repayment Note shall be deemed to have been distributed to
the Tribe pursuant to this 4.07(c).
(d) The Authority may use the Restricted Funds for any purpose not
otherwise prohibited by the Senior Notes Indenture.
(e) Funds in the Cash Accumulation Account may be invested only in
Cash Equivalents. Funds in the Cash Accumulation Account may be used by the
Authority to make payments on the Notes in accordance with the Cash
Accumulation Account Contribution Agreement. Distributions to the Tribe shall
be deposited by the Authority in a Tribal bank account designated by the
Authority. IN NO EVENT SHALL THE MINIMUM MONTHLY GUARANTEED PAYMENT BE
RESTRICTED BY THIS SECTION 4.07.
(f) The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Authority
pursuant to the Restricted Payment. The fair market value of any assets or
securities that
39
are required to be valued by this Section 4.07 shall be determined by the
Management Board whose resolution with respect thereto shall be delivered to
the Trustee. The Management Board's determination must be based upon an
opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing if the fair market value exceeds $5.0 million. Not
later than the date of making any Restricted Payment in excess of $5.0
million, the Authority shall deliver to the Trustee an Officers' Certificate
stating that such Restricted Payment is permitted and setting forth the basis
upon which the calculations required by this Section 4.07 were computed,
together with a copy of any fairness opinion or appraisal required by this
Indenture.
Section 4.08 Limitation on Indebtedness.
(a) The Authority shall not, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness; provided, however, that the Authority may incur Indebtedness if:
(1) the Fixed Charge Coverage Ratio for the Authority's most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred would have been at least 2.5 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 at the beginning of such four-quarter
period; and
(2) the Indebtedness is expressly pari passu or subordinated in
right of payment to the Notes; provided, however, that this clause
(2) shall apply only to Indebtedness to be incurred under this
Section 4.08(a) to the extent that such incurrence shall cause the
aggregate amount of Indebtedness incurred and still outstanding under
this Section 4.08(a) immediately after such incurrence to be in
excess of $25.0 million; and
(3) the Weighted Average Life to Maturity of the Indebtedness
is greater than the remaining Weighted Average Life to Maturity of
the Notes.
(b) The provisions of Section 4.08(a) shall not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(1) the incurrence by the Authority of (a) Indebtedness
represented by (i) the Notes (ii) the Senior Notes and the notes to
be issued in exchange for the Senior Notes pursuant to the
Registration Rights Agreement and (iii) the Senior Subordinated PIK
Notes, (b) its obligations arising under the Collateral Documents to
the extent such obligations would represent Indebtedness and (c)
Indebtedness incurred from time to time pursuant to the Manager
Repayment Note, the Manager Agreement or the Letter of Credit Note;
(2) the incurrence by the Authority of letters of credit and
related reimbursement agreements, bankers acceptances and performance
completion bonds (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the
Authority under the related reimbursement or other similar agreement)
in an aggregate principal amount not to exceed $2.0 million at any
one time outstanding under this clause (2);
(3) the incurrence by the Authority of Indebtedness represented
by Purchase Money Indebtedness or Capital Lease Obligations incurred
in connection with the purchase or capital lease of furniture,
fixtures and equipment in an aggregate principal amount or accreted
value, as applicable, including all Permitted Refinancing
Indebtedness incurred to extend, refinance,
40
renew, replace, defease or refund any Indebtedness incurred pursuant
to this clause (3), not to exceed $25.0 million at any time
outstanding under this clause (3); provided, that such incurrence
does not cause the aggregate amount of Indebtedness outstanding
pursuant to this clause (3) and clause (4) of this Section 4.08(b) to
exceed $25.0 million;
(4) the incurrence by the Authority of any Indebtedness in an
aggregate principal amount, or accreted value, as applicable,
including all Permitted Refinancing Indebtedness incurred to extend,
refinance, renew, replace, defease or refund any Indebtedness
incurred pursuant to this clause (4), not to exceed $5.0 million at
any time outstanding under this clause (4); provided, that such
incurrence does not cause the aggregate amount of Indebtedness
outstanding pursuant to this clause (4) and clause (3) of this
Section 4.08(b) to exceed $25.0 million;
(5) the incurrence by the Authority of Permitted Refinancing
Indebtedness in exchange for, or the net proceeds of which are used
to extend, refinance, renew, replace, defease or refund Indebtedness
that was permitted to be incurred under Section 4.08(a) hereof,
clause (1), (3) or (4) of this Section 4.08(b) or this clause (5);
and
(6) the incurrence by the Authority of Indebtedness represented
by loans from Holdings (other than the Notes); provided, that (A) the
payment of principal, interest and premium, if any, on such
Indebtedness is expressly subordinate in right of payment to the
Senior Notes, the Senior Subordinated PIK Notes and the Manager
Repayment Note, (B) the maturity date of such Indebtedness occurs
after December 15, 2009 and (C) Holdings is not entitled to receive
any payment on such Indebtedness until all of the Authority's
obligations to the holders of the Senior Notes, the Senior
Subordinated PIK Notes and under the Manager Repayment Note shall
have been paid in full.
For purposes of determining compliance with this Section 4.08, in the
event that an item of proposed Indebtedness meets the criteria of more than
one of the categories of Permitted Debt described in clauses (1) through (6)
of Section 4.08(b) hereof, or is entitled to be incurred pursuant to Section
4.08(a) hereof, the Authority shall be permitted to classify such item of
Indebtedness on the date of its incurrence, or later reclassify all or a
portion of such item of Indebtedness, in any manner that complies with this
Section 4.08.
Section 4.09 Asset Sales.
(a) The Authority shall not consummate an Asset Sale unless:
(1) the Chukchansi Gold Resort & Casino is Operating;
(2) the Authority receives consideration at the time of such
Asset Sale at least equal to the fair market value of the assets sold
or otherwise disposed of;
(3) such fair market value is determined by the Management
Board and evidenced by a resolution of that Management Board set
forth in an Officers' Certificate delivered to the Trustee; and
(4) at least 85% of the consideration therefor received by the
Authority is in the form of cash. For purposes of this Section 4.09
and not for purposes of the definition of "Net Proceeds" (except to
the extent set forth in that definition with respect to the
conversion of non-cash proceeds to cash), each of the following shall
be deemed to be cash:
41
(A) any liabilities (as shown on the Authority's most
recent balance sheet) of the Authority (other than contingent
liabilities and liabilities that are by their terms
subordinated to the Notes) that are assumed by the transferee
of any such assets pursuant to a customary agreement that
unconditionally releases the Authority from further liability
with respect thereto;
(B) any securities, notes or other obligations received
by the Authority from such transferee that are (subject to
ordinary settlement periods) converted by the Authority into
cash (to the extent of the cash received in that conversion)
within 30 days of the receipt thereof; and
(C) any assets the Authority would be permitted to
acquire with the Net Proceeds of an Asset Sale pursuant to the
terms of this Section 4.09.
In addition, the Authority may not consummate an Asset Sale with
respect to any Key Project Assets.
(b) Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Authority may apply such Net Proceeds, at its option to (i)
repay the Senior Notes or the Senior Subordinated PIK Notes; (ii) make a
capital expenditure with respect to the Chukchansi Gold Resort & Casino; or
(iii) acquire assets used or useful in connection with the operation of the
Chukchansi Gold Resort & Casino in accordance with the terms of the Senior
Notes Indenture and the Collateral Documents. Pending the final application of
any such Net Proceeds, the Authority shall invest such Net Proceeds in Cash
Equivalents.
(c) Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the preceding paragraph shall constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5.0 million,
the Authority shall, subject to the second sentence of Section 12.01 hereof
and subject to the restrictions contained in the Senior Notes Indenture and
the Senior Subordinated PIK Notes Indenture, make a Repurchase Offer to all
Holders and all holders of other Indebtedness that is pari passu with the
Notes containing provisions similar to those set forth in this Indenture with
respect to offers to purchase or redeem such other Indebtedness with the
proceeds of sales of assets in accordance with Section 3.10 hereof, to
purchase the maximum principal amount of the Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Repurchase Offer pursuant to this Section 4.09 shall be equal to 100%
of principal amount plus accrued and unpaid Interest to the date of purchase,
and shall be payable in cash. If any Excess Proceeds remain after consummation
of an Asset Sale Offer, the Authority may use those Excess Proceeds for any
purposes not otherwise prohibited by this Indenture and the Collateral
Documents. If the aggregate principal amount of the Notes and such other pari
passu Indebtedness tendered into such Repurchase Offer exceeds the amount of
Excess Proceeds, the Trustee shall purchase the Notes and such other pari
passu Indebtedness on a pro rata basis. Upon completion of each Repurchase
Offer, pursuant to this Section 4.09, the amount of Excess Proceeds shall be
reset at zero.
Section 4.10 Liquidation, Dissolution, Consolidation, or Merger.
The Authority shall not sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in
one or more transactions. The Authority shall not consolidate or merge with or
into any other Person.
42
Section 4.11 Transactions with Affiliates.
(a) The Authority shall not make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, the Tribe, any agency, instrumentality or
political subunit of the Tribe, any member of the Tribe, Holdings or any
direct holder or Beneficial Owner of five percent or more of Holdings' Equity
Interests (other than with respect to the Notes), the Manager or any direct
holder or Beneficial Owner of five percent or more of any of the Manager's
Equity Interests, the L/C Provider or any Affiliate of the Tribe, any
Affiliate of any member of the Tribe, any Affiliate of the Manager or any
Affiliate of the L/C Provider (each, an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less
favorable to the Authority than those that would have been obtained
in a comparable transaction by the Authority with an unrelated
Person; and
(2) the Authority delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a resolution of the
Management Board set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the
Management Board; provided, that if there are no disinterested
members of the Management Board, such Affiliate Transaction
must be approved unanimously by the members of the Management
Board; and
(B) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million, an opinion as to the
fairness to the Authority of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
(b) The following items shall not be deemed to be Affiliate
Transactions and, therefore, shall not be subject to the provisions of Section
4.11(a):
(1) entering into customary employee compensation arrangements
that are approved by a majority of disinterested members of the
Management Board; provided, that if there are no disinterested
members of the Management Board, such compensation arrangements must
be approved unanimously by the members of the Management Board;
(2) the execution of, or taking actions or making payments
contemplated by, the Notes, the Senior Notes, the Collateral
Documents, the Senior Notes Indenture, the Senior Subordinated PIK
Notes, the Senior Subordinated PIK Notes Indenture, the Registration
Rights Agreement, the Development Agreement, the Manager Agreement or
the Management Agreement;
(3) Permitted Investments and Restricted Payments that are not
prohibited by Section 4.07; and
(4) the making of any payments to Holdings or any direct or
indirect holders of Holdings' Equity Interests, the Manager or any
direct or indirect holder of the Manager's Equity Interests, the L/C
Provider, or any Affiliate of the Manager if such payments are made
in the
43
ordinary course of business at customary rates with respect to
goods or services provided to the Authority.
Section 4.12 Liens.
The Authority shall not, directly or indirectly, create, incur,
assume or suffer to exist any Lien of any kind securing Indebtedness on any
assets now owned or hereafter acquired by the Authority, or any proceeds,
income or profits therefrom or collaterally assign or convey any right to
receive income therefrom, except Permitted Liens.
Section 4.13 Line of Business.
The Authority shall not engage in any business, development or
investment activity, other than a Permitted Business.
Section 4.14 Governmental Existence.
The Authority shall do or cause to be done all things necessary to
preserve and keep in full force and effect (1) its existence in accordance
with the respective organizational, statutory, constitutional or legal
documents, in each case as amended from time to time, of the Authority and the
Tribe and (2) all material rights (charter and statutory), licenses and
franchises of the Authority.
Section 4.15 Limitation on Sale and Leaseback Transactions.
The Authority shall not enter into any sale and leaseback transaction
unless:
(1) the Authority could have (i) incurred Indebtedness in an
amount equal to the Attributable Debt relating to such sale and
leaseback transaction under the Fixed Charge Coverage Ratio test in
Section 4.08 (a) hereof and (ii) incurred a Lien to secure such
Indebtedness pursuant to the provisions of Section 4.12 hereof;
(2) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the fair market value, as
determined in good faith by the Management Board and set forth in an
Officers' Certificate delivered to the Trustee, of the property that
is the subject of such sale and leaseback transaction; and
(3) the transfer of assets in such sale and leaseback
transaction is permitted by, and the Authority applies the proceeds
of such transaction in compliance with, Section 4.09 hereof.
Section 4.16 Limitation on the Creation of Subsidiaries.
The Authority shall not create any instrumentality, subdivision or
subunit. The Authority shall not form, acquire or own any Subsidiary.
Section 4.17 Limitation on Status as an Investment Company.
The Authority shall not become an investment company (as that term is
defined in the Investment Company Act, or otherwise become subject to
regulation under the Investment Company Act.
44
Section 4.18 Gaming Licenses and Other Permits.
The Authority shall use its best efforts to obtain and retain in full
force and effect at all times all Gaming Licenses and all other
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits or registrations from or with any governmental authority
that are necessary for the operation of the Chukchansi Gold Resort & Casino;
provided, that if in the course of the exercise of its governmental or
regulatory functions the Tribal Gaming Commission is required to suspend or
revoke any consent, permit or license or close or suspend any operation of any
part of the Chukchansi Gold Resort & Casino as a result of any noncompliance
with law, the Authority shall use its best efforts to promptly and diligently
correct such noncompliance or replace any personnel causing such noncompliance
so that the Chukchansi Gold Resort & Casino shall be opened and Operating as
promptly as practicable.
The Authority shall provide the Trustee, promptly after receipt by
the Authority, with any notice of non-compliance, violation, temporary closure
order or assessment of civil fines from the NIGC (pursuant to IGRA) or any
notice of non-compliance or violation of any Gaming Laws by any other Gaming
Authority, including the State Gaming Agency and the Tribal Gaming Commission.
Section 4.19 Modification or Transfer of Certain Agreements.
The Authority shall not amend, waive or modify, or take or refrain
from taking any action that has the effect of amending, waiving or modifying,
any provision of the Development Agreement or the Management Agreement;
provided, however, that either agreement may be amended or modified so long as
the payments to be made to the Manager thereunder as so amended or modified
are no greater in the aggregate than the payments provided for the Manager
pursuant to the terms of such agreements on the date of this Indenture.
Section 4.20 Ownership Interests in the Authority.
The Authority shall not permit any Person other than the Tribe to
acquire any right to elect or appoint any members of the Management Board or
any executive officer of the Authority.
Section 4.21 United States Federal Income Tax Reporting.
Holders, by accepting the Notes, shall be deemed to have agreed that
the Holders shall (1) treat the Notes as indebtedness subject to the
regulations governing contingent payment debt instruments set forth in
Treasury Regulation section 1.12775-4 (the "Contingent Debt Regulations"), (2)
report interest on the Notes in accordance with the Authority's determination
of both the "comparable yield" and the "projected payment schedule" and (3) be
bound by the Authority's application of the Contingent Debt Regulations. For
this purpose, the "comparable yield" and the "projected payment schedule may
be obtained by contacting the Authority at the address set forth in Section
13.02.
Section 4.22 Payments for Consent.
The Authority shall not, directly or indirectly, pay or cause to be
paid any consideration to or for the benefit of any Holder of the Notes for or
as an inducement to any consent, waiver or amendment of any of the terms of
provisions of this Indenture, the Notes or any Collateral Document unless such
consideration is offered to be paid and is paid to all Holders that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
45
ARTICLE 5.
COVENANTS OF THE TRIBE
Section 5.01 Prohibited Activities.
(a) Except as required by federal, state or local law, the Tribe
shall not, and shall not permit any of its representatives, political subunits
or councils, agencies or instrumentalities, to, directly or indirectly:
(1) increase or impose any tax, levy or other similar monetary
payment or reimbursement obligation on the Authority or on any
patrons of the Chukchansi Gold Resort & Casino or on any activity at
the Chukchansi Gold Resort & Casino (gaming or otherwise), other
than:
(a) any payments due under any agreement in effect on
the date of this Indenture or any such payments that are not
materially adverse to the economic interests of Holders
pursuant to the Notes or the ability of the Authority to timely
perform in full all of its obligations under this Indenture or
the Notes; or
(b) those which are reasonable nondiscriminatory charges
for utilities or other governmental services supplied by the
Tribe and used by the Authority in an amount not to exceed the
reasonable cost of such services and a reasonable allowance for
administrative costs;
(2) subject to clauses (b) and (c) of this Section 5.01 and to
Section 5.02, amend the Tribal Gaming Ordinance, the Authority
Ordinance, the arbitration code or uniform commercial code in effect
on the date of this Indenture in any manner that would be materially
adverse to the interests or rights of Holders under the Notes,
restrict or eliminate the exclusive right of the Authority to conduct
gaming operations on behalf of the Tribe, conduct or permit any other
entity to conduct gaming operations on any property owned, directly
or beneficially, or controlled by the Tribe or materially and
adversely alter, modify or amend any regulation relating to a
Holder's rights under the Notes;
(3) take any other action, enter into any agreement, amend its
Constitution or enact any ordinance, law, rule or regulation that
would adversely prejudice or have a material adverse effect on any of
the rights of the Holders under this Indenture or the Notes;
(4) assert that any waiver of the Authority or the Tribe, any
choice of judicial forum, designation of governing law or any remedy
expressly authorized in this Indenture or the Notes is void or
unenforceable; or
(5) fail to timely pay or cause to be paid any tax, imposition,
judgment, award or charge of any nature which, if not paid, would
permit enforcement of a lien on the Site or the Chukchansi Gold
Resort & Casino, other than any such payment that is being contested
in good faith and, during the time such payment is being contested,
does not create any risk of foreclosure or forfeiture of the Site or
the Chukchansi Gold Resort & Casino.
In addition, except as specifically provided in this Indenture, the
Tribe shall not, and shall not permit the Authority or any of the Tribe's
representatives, political subunits, councils, agencies or instrumentalities
to, directly or indirectly impose, levy, tax or otherwise make any charge on
this Indenture, the Notes or any payments or deposits to be made thereunder,
including without limitation upon the payment of any principal, premium or
Interest. Notwithstanding the foregoing, or any other provision of this
Indenture, the Tribal Gaming Commission shall be permitted to reasonably
exercise in
46
good faith its governmental and regulatory functions authorized or required
under the Compact or the Tribal Gaming Ordinance.
Any action taken by the Tribe to comply with federal or state law
that would otherwise violate this Section 5.01 shall be taken only after prior
written notice to Trustee accompanied with an Officers' Certificate and
Opinion of Counsel that such action is required by federal or state law.
Section 5.02 Permitted Amendments to Tribal Gaming Ordinance.
The Tribe agrees that any amendments made to the Tribal Gaming
Ordinance shall be a legitimate effort to comply with the Compact or IGRA or
to ensure that the Authority conducts its gaming operations in a manner that
adequately protects the environment, the public health and safety or the
integrity of the Authority or operation of the Chukchansi Gold Resort & Casino
and not with the purpose of delaying or hindering the repayment of any Senior
Debt. The Tribe and the Authority agree that any licensure or investigation of
any Holder, in its capacity as such Holder or otherwise, shall be conducted in
good faith and with a reasonable basis therefore.
Section 5.03 Further Assurances Regarding Authority; No Conveyance or
Encumbrance of Land.
To the extent within its lawful power, the Tribe shall take all such
action and shall refrain from taking such action as is necessary to cause the
Authority at all times to be a wholly-owned or wholly-controlled entity
created under the laws of the Tribe, permitted under all other applicable
laws, including IGRA, to have access to the Site and to operate the business
of the Authority (including such gaming as permitted under IGRA and the
Compact) and to timely perform all of the Authority's obligations under this
Indenture and the Notes. The Tribe shall not convey or encumber, or permit to
be conveyed or encumbered, any interest in land constituting all or a portion
of the Site, other than a transfer of fee title in the land to the U.S.
government to be held in trust for the benefit of the Tribe, and except for
the creation of Permitted Liens.
Section 5.04 Incurrence of Obligations Affecting Authority.
The Tribe shall not permit or incur any consensual liability of the
Tribe (or of any other instrumentality or subunit of the Tribe) that is a
legal obligation of the Authority, or for which the Authority's assets may be
bound, other than a liability that the Authority is permitted or not
prohibited from incurring on its own behalf under this Indenture.
Section 5.05 Receipt of Prohibited Payments from the Authority.
In the event that the Tribe receives any payment from the Authority
at a time when such payment is prohibited by the terms of this Indenture, such
payment shall be held by the Tribe in trust for the benefit of, and shall be
paid forthwith over and delivered to, the Authority promptly, and in any event
immediately upon receipt of a written request from the Trustee or the
Authority.
Section 5.06 Payment In Full of Obligations to Holders of Notes Before Certain
Payments to the Tribe.
The Tribe agrees that upon any payment or distribution of assets upon
any liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets or any bankruptcy, insolvency or
similar proceedings of the Authority or the Chukchansi Gold Resort & Casino,
the Holders shall be entitled to receive payment in full with respect to all
principal, premium or
47
Interest and other amounts owing in respect of each of the Notes (subject to
the prior payment of the Senior Debt) before any payment or any distribution
to the Tribe.
Section 5.07 Consents to Liens Securing Obligations
The Tribe hereby consents, agrees and acknowledges to the creation of
the Liens securing the Obligation under the Senior Notes, the Senior Notes
Indenture and the Collateral Documents created under the Senior Notes, the
Senior Notes Indenture and the Collateral Documents.
Section 5.08 Limitation on Actions of Tribe.
The Tribe shall not, and shall not permit the Authority or any of the
Tribe's representatives, political subunits, councils, agencies or
instrumentalities to, exercise any power of eminent domain over any property
that is used or useful in connection with the operations of the Chukchansi
Gold Resort & Casino. Except as required by federal or state law, the Tribe
shall not enact any statute, law, ordinance or rule that would have a material
adverse effect on the rights of the Holders under this Indenture.
Section 5.09 Bankruptcy Restrictions.
(a) The Tribe shall not, pursuant to or within the meaning of any
Bankruptcy Law, appoint or consent to the appointment of a custodian of the
Authority or for all or substantially all of the property of the Authority.
(b) The Tribe agrees that it shall not enact any Bankruptcy Law or
similar law for the relief of debtors that would impair, limit, restrict,
delay or otherwise adversely affect any of the rights and remedies of the
Holders provided for in this Indenture.
Section 5.10 Exclusive Operation of Gaming Enterprise.
The Tribe agrees that the Authority shall have sole and exclusive
jurisdiction to operate any Gaming Enterprise on behalf of the Tribe or any
political subunit thereof and the Tribe shall not permit any Person other than
the Tribe to acquire any right to elect or appoint any members of the
Management Board or any executive office of the Authority.
Section 5.11 Exclusion From Licensing Requirements of Compact.
The Tribal Gaming Commission shall at all times provide a complete
exclusion from the licensing requirements of Section 6.4.6 of the Compact for
(i) all federally-regulated or state-regulated banks, savings and loans or
other federally- or state- regulated lending institutions, (ii) any agency or
federal, state or local government or (iii) any investor, who, alone or in
conjunction with another, holds less than 10% of any outstanding Indebtedness
evidenced by bonds issued by the Tribe or the Authority.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
48
(1) the Authority defaults in the payment when due of Interest
on the Notes (including amounts due under Section 4.01(b) and such
default continues for a period of 30 days, whether or not prohibited
by the Intercreditor Agreement;
(2) the Authority defaults in the payment when due of principal
of, or premium, if any, on the Notes when the same becomes due and
payable at maturity, upon redemption or otherwise, whether or not
prohibited by the Intercreditor Agreement;
(3) the Authority fails to comply with any of the provisions of
Section 4.09, 4.10, and 4.14 hereof;
(4) the Authority fails, to perform or comply with the
provisions or any of the covenants set forth in the Collateral
Documents, for 30 days after notice to the Authority by the Trustee
or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, voting as a single class;
(5) the Authority or the Tribe (with respect to its obligations
under this Indenture) fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the
Notes not set forth in clauses (3) or (4) above for 60 days after
notice to the Authority by the Trustee or the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding, voting
as a single class;
(6) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the
Authority (or the payment of which is guaranteed by the Authority),
whether such Indebtedness or guarantee now exists, or is created
after the date of this Indenture (other than a default under the
Senior Subordinated PIK Notes, the Manager Repayment Note or the
Letter of Credit Note resulting from the Authority's failure to make
a change of control offer or an asset sale offer, as applicable, to
the holders of such Senior Subordinated PIK Notes, the Manager
Repayment Note or the Letter of Credit Note), if that default:
(A) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on
the date of such default (a "Payment Default"); or
(B) results in the acceleration of such Indebtedness
prior to its express maturity,
and, in each case, the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness
with respect to which a Payment Default has occurred or the maturity
of which has been so accelerated, as applicable, aggregates to $5.0
million or more;
(7) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Authority, which judgment or judgments are not paid,
discharged or stayed for a period of 60 days; provided that the
aggregate of all such undischarged judgments exceeds $5.0 million;
(8) default by the L/C Provider in the performance of its
obligations set forth in, or repudiation of its obligations under,
the Letter of Credit Drawdown Agreement and such default is not cured
within 30 days;
49
(9) an Event of Default occurs and is continuing under the
Intercreditor Agreement (as defined in such agreement);
(10) the Initial Operating Date does not occur by the Operating
Deadline or any Gaming License is lost, revoked or suspended and, as
a result, the Chukchansi Gold Resort & Casino ceases Operating for a
period of more than 90 consecutive days;
(11) the Authority, pursuant to or within the meaning of
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents to the appointment of a custodian of it or
for all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
(E) generally is not paying its debts as they become
due; or
(12) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Authority in an
involuntary case;
(B) appoints a custodian of the Authority for all or
substantially all of the property of the Authority; or
(C) orders the liquidation of the Authority;
and the order or decree remains unstayed and in effect for 60
consecutive days.
Section 6.02 Acceleration.
In the case of an Event of Default under clauses (11) or (12) of
Section 6.01 above, all amounts outstanding under the Notes shall be due and
payable immediately without further action or notice, subject to the second
sentence of Section 12.01 hereof. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may, subject to the second sentence of Section
12.01 hereof, declare all the Notes to be due and payable immediately. The
Holders of a majority in aggregate principal amount of the then outstanding
Notes by written notice to the 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 that has become due
solely because of the acceleration) have been cured or waived.
If an Event of Default occurs prior to October 1, 2006, by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Authority with the intention of avoiding the prohibition on redemption of the
Notes prior to October 1, 2006, then the premium set forth in Section 3.07
shall also become and be immediately due and payable, to the extent permitted
by law upon acceleration of the Notes, subject to the second sentence of
Section 12.01. In the case of any Event of Default occurring by reason of any
willful action or inaction taken or not taken by or on behalf of the
50
Authority with the intention of avoiding payment of the premium that the
Authority would have had to pay if the Authority then had elected to prepay
the Notes pursuant to Section 3.07 hereof, an equivalent premium shall also
become and be immediately due upon the acceleration of the Notes, subject to
the second sentence of Section 12.01.
As promptly as practicable following any acceleration of the Notes,
the Trustee shall send a written notice to all Holders advising the Holders of
the following:
(1) an acceleration of the Notes has occurred; and
(2) under the terms of this Indenture and the Notes, neither
the Trustee nor the Authority may make any payments of principal or
interest on the Notes (i) as a result of any enforcement action
commenced by or on behalf of the Trustee or any Holder, or (ii) after
payment of the Notes has been accelerated because of a default under
this Indenture, except, in each case to a Holder that is licensed or
exempted from licensing by the Tribal Gaming Commission in accordance
with the Compact.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee, or
Holders of a majority in aggregate principal amount of the then outstanding
Notes, may pursue any available remedy to collect the payment of principal,
premium and Interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or Holders of a majority in aggregate principal amount
of the then outstanding Notes in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of the principal of, and premium, if any, or Interest on, the
Notes (including in connection with an offer to purchase); provided, however,
that the Holders of a majority in aggregate principal amount of the then
outstanding Notes may rescind an acceleration and its consequences, including
any related payment default that resulted from such acceleration. Upon any
such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Notes or that may involve
the Trustee in personal liability.
51
Section 6.06 Limitation on Suits.
Subject to Section 6.07 and the second sentence of Section 12.01
hereof, a Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(1) the Holder of a Note gives to the Trustee written notice of
a continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, but subject to
the second sentence of Section 12.01 hereof, the right of any Holder of a Note
to receive payment of principal, premium and Interest on the Note, on or after
the respective due dates expressed in the Note (including in connection with
an offer to purchase), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder; provided that a Holder shall not have the
right to institute any such suit for the enforcement of payment if and to the
extent that the institution or prosecution thereof or the entry of judgment
therein would, under applicable law, result in the surrender, impairment,
waiver or loss of the Lien of this Indenture upon any property subject to such
Lien.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, subject to the second sentence of Section 12.01 hereof, the
Trustee is authorized to recover judgment in its own name and as trustee of an
express trust against the Authority for the whole amount of principal of,
premium and Interest remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The 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 Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
and, subject to the second sentence of Section 12.01 hereof, the Holders of
the Notes allowed in any judicial proceedings relative to the Authority (or
any other obligor upon the Notes), its creditors or its property
52
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 Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.06 hereof. To the extent that
the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.06 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 Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.06 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
Second: subject to the second sentence of Section 12.01 hereof,
to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes for principal, premium and Interest, respectively; and
Third: to the Authority or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes 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 Trustee for any action taken or omitted
by it as a Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by
a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Notes.
53
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture
and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.04 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder has offered to the
Trustee security and indemnity satisfactory to it against any loss, liability
or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Authority.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
54
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights
or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Authority shall be sufficient if
signed by an Officer of the Authority.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might
be incurred by it in compliance with such request or direction.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Authority or any
Affiliate of the Authority with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.09 and 7.10
hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Authority's use of the proceeds from the Notes or any
money paid to the Authority or upon the Authority's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of
the Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Notes a notice
of the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium or
55
Interest on any Note, the Trustee may withhold the notice if and so long as
a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
Section 7.06 Compensation and Indemnity.
(a) The Authority shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Authority shall reimburse
the Trustee promptly upon request for all reasonable disbursements, advances
and expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
(b) The Authority shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the
Authority (including this Section 7.06) and defending itself against any claim
(whether asserted by the Authority or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder, except to the extent any such loss, liability or expense
may be attributable to its negligence or bad faith. The Trustee shall notify
the Authority promptly of any claim for which it may seek indemnity. Failure
by the Trustee to so notify the Authority shall not relieve the Authority of
its obligations hereunder. The Authority shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel
and the Authority shall pay the reasonable fees and expenses of such counsel.
The Authority is not required to pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
(c) The obligations of the Authority under this Section 7.06 shall
survive the satisfaction and discharge of this Indenture.
(d) To secure the Authority's payment obligations in this Section
7.06, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(11) or (12) hereof occurs, the
expenses and the compensation for the services (including the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
(f) The Trustee shall comply with the provisions of TIAss. 313(b)(2)
to the extent applicable.
Section 7.07 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.07.
(b) The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Authority. The Holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Authority in writing. The
Authority may remove the Trustee if:
56
(1) the Trustee fails to comply with Section 7.09 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Authority shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes
may appoint a successor Trustee to replace the successor Trustee appointed by
the Authority.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the
Authority, or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been
a Holder for at least six months, fails to comply with Section 7.09, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Authority. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.06 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.07, the Authority's obligations under Section 7.06
hereof shall continue for the benefit of the retiring Trustee.
Section 7.08 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.09 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or
state authorities and that has a combined capital and surplus of at least
$100.0 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
57
Section 7.10 Preferential Collection of Claims Against Authority.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Authority may, at the option of its Management Board evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Authority's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Authority shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, Legal Defeasance means that the
Authority shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to
have satisfied all its other obligations under such Notes and this Indenture
(and the Trustee, on demand of and at the expense of the Authority, shall
execute proper instruments acknowledging the same), except for the following
provisions which shall survive until otherwise terminated or discharged
hereunder:
(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or Interest or premium on
such Notes when such payments are due from the trust referred to in
Section 8.04 hereof;
(2) the Authority's obligations with respect to such Notes
under Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Authority's obligations in connection
therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Authority may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Authority's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Authority shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under the covenants contained in Sections 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21
and 4.22 hereof and Section 5.01(a), Section 5.01(5) and the last paragraph of
Section 5.01 and Sections 5.04, 5.05, 5.06 and 5.10 hereof with respect to the
58
outstanding Notes on and after the date the conditions set forth in Section
8.04 hereof are satisfied (hereinafter, "Covenant Defeasance"), and the Notes
shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, the Authority may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Authority's exercise under Section 8.01 hereof of the option applicable to
this Section 8.03 hereof, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(6) hereof shall
not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03 hereof:
(1) the Authority must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of Notes, cash in United States
dollars, non-callable Government Securities, or a combination
thereof, in such amounts as shall be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, Interest and premium on the outstanding Notes on
the stated date for payment thereof or on the applicable redemption
date, as the case may be, and the Authority must specify whether the
Notes are being defeased to maturity or to a particular redemption
date;
(2) in the case of an election under Section 8.02 hereof, the
Authority has delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that:
(A) the Authority has received from, or there has been
published by, the Internal Revenue Service a ruling; or
(B) since the date of this Indenture, there has been a
change in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes
shall not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and shall be subject to
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had
not occurred;
(3) in the case of an election under Section 8.03 hereof, the
Authority must deliver to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that
the Holders of the outstanding Notes shall not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant
Defeasance and shall be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
59
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to
such deposit);
(5) 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 Authority is a party or by which the Authority is bound;
(6) the Authority must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Authority
with the intent of preferring the Holders of Notes over the other
creditors of the Authority with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Authority or
others; and
(7) the Authority must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with, and an Opinion of
Counsel stating that the conditions set forth in clauses (1) (with
respect to validity and perfection of the security interest), (2),
(3) and (5) have been satisfied.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly
or through any Paying Agent (including the Authority acting as Paying Agent)
as the Trustee may determine, to the Holders of such Notes of all sums due and
to become due thereon in respect of principal, premium and Interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Authority shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the
outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the
Trustee shall deliver or pay to the Authority from time to time upon the
request of the Authority any money or non-callable Government Securities held
by it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(1) 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 Authority.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Authority, in trust for the payment of the principal of, premium
or Interest on any Note and remaining unclaimed for two years after such
principal, premium or Interest has become due and payable shall be paid to the
Authority on its request or (if then held by the Authority) shall be
discharged from such trust; and the Holder of such Note shall thereafter be
permitted to look only to the Authority for payment thereof, and
60
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Authority as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Authority 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 shall be repaid to the Authority.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Authority's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that,
if the Authority makes any payment of principal of, premium or Interest on any
Note following the reinstatement of its obligations, the Authority shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Authority and the
Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes or to alter the provisions of Article 2
hereof (including the related definitions) in a manner that does not
materially adversely affect any Holder;
(3) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely
affect the legal rights hereunder of any Holder of the Note; or
(4) to comply with all applicable rules and regulations of the
NIGC, the BIA or any governmental authority.
Upon the request of the Authority accompanied by a resolution of its
Management Board authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Authority and the Tribe
in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee
shall not be obligated to enter into such amended or supplemental Indenture
that affects its own rights, duties or immunities under this Indenture or
otherwise.
61
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Authority and the
Trustee may amend or supplement this Indenture (including, without limitation,
Sections 3.10 and 4.09 hereof), the Notes with the consent of the Holders of a
majority in principal amount of the Notes then outstanding voting as a single
class (including, without limitation, consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes), and, subject
to Sections 6.03 and 6.06 hereof, any existing Default or Event of Default
(other than a Default or Event of Default in the payment of the principal of,
premium or Interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes voting as a single
class (including, without limitation, consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes).
Notwithstanding any other provision of this Indenture, any amendment
to, or waiver of, Section 4.12 hereof shall require the consent of the Holders
of at least 66 2/3% in aggregate principal amount of the Notes then
outstanding.
Upon the request of the Authority accompanied by a resolution of its
Management Board authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to
the Trustee of the consent of the Holders of Notes as aforesaid, and upon
receipt by the Trustee of the documents described in Section 7.02 hereof, the
Trustee shall join with the Authority and the Tribe in the execution of such
amended or supplemental Indenture unless such amended or supplemental
Indenture directly affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Authority shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Authority to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.03 and 6.06 hereof,
the Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Authority with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any
Note or alter or waive any of the provisions with respect to the
redemption of the Notes except as provided above with respect to
Sections 3.10 and 4.09 hereof;
(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
62
(4) waive a Default or Event of Default in the payment of
principal of, Interest or premium on the Notes (except a rescission
of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes and a waiver
of the payment default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in
the Notes;
(6) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of
Notes to receive payments of principal of, or Interest or premium on
the Notes;
(7) waive a redemption payment with respect to any Note (other
than a payment required by Sections 3.10 and 4.09 hereof); or
(8) make any change in Section 6.03 or 6.06 hereof or in the
foregoing amendment and waiver provisions.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note
and every subsequent Holder of a Note or portion of a Note that evidences the
same debt as the consenting Holder's Note, even if notation of the consent is
not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Authority in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Authority may not sign an amendment or supplemental Indenture until the
Management Board approves it. In executing any amended or supplemental
Indenture, the Trustee shall be entitled to receive and (subject to Section
7.01 hereof) shall be fully protected in relying upon, in addition to the
documents required by Section 13.04 hereof, an Officers' Certificate and an
Opinion of Counsel stating
63
that the execution of such amended or supplemental Indenture is authorized
or permitted by this Indenture.
ARTICLE 10.
LIMITED WAIVER OF SOVEREIGN IMMUNITY; Arbitration; non-impairment
Section 10.01 Irrevocable Waiver of Sovereign Immunity.
Each of the Authority and the Tribe (each a "Tribal Party") agree to
unconditionally and irrevocably waive its sovereign immunity, and any and all
defenses based thereon, with respect to any Permitted Claims. This waiver
shall permit (a) the interpretation, enforcement and the seeking of legal or
equitable relief and remedies (whether through an award or granting of
specific performance, injunction, mandamus, damages or otherwise) through
arbitration proceedings as described below in Section 10.05, and (b) judicial
actions to compel, enter judgment upon, enforce, modify or vacate any award or
interim injunctive relief related to the arbitration proceedings in any of the
Applicable Courts described below.
In connection with the foregoing waiver of sovereign immunity by any
Tribal Party:
(a) Duration. The duration of this waiver shall commence on the date
hereof and continue until one year after all obligations of each Tribal Party
under this Indenture, the Notes and the Collateral Documents have been
completely performed and amounts, if any, owed hereunder from the Authority
have been indefeasibly paid in full;
(b) Grantees. The grantee(s) of the waiver are the Trustee and the
Holders, together with their successors and assigns hereunder;
(c) Scope. The scope of the waiver applies to all Permitted Claims;
(d) Property and Funds. The only property, assets or rights against
which any award, judgment or other order for relief arising from this waiver
may be enforced are Authority Assets as defined in the Chukchansi Authority
Ordinance whether held in the name of the Authority, the Tribe or any branch,
department, agency, instrumentality, division, subsidiary, authority,
enterprise, corporation, business or other entity directly or indirectly owned
or controlled in whole or in part by either the Authority or the Tribe.
Notwithstanding the foregoing, any revenues or other property transferred by
the Authority to any other Tribal Party in compliance with this Indenture and
the Collateral Documents shall upon such transfer no longer constitute
Authority Assets;
(e) Jurisdictions. The courts with jurisdiction with respect to the
Permitted Claims are the Applicable Courts (subject to the obligation each
Tribal Party to submit to arbitration as provided herein); and
(f) Governing Law. The law applicable to the waiver and the Permitted
Claims shall be the internal laws of the State of New York.
Section 10.02 Designation of Applicable Courts and Jurisdiction.
Each Tribal Party hereby irrevocably consents to the following
courts, jurisdictions and venues for the judicial actions described in Section
10.01 above (each, an "Applicable Court"): (i) the United States District
Court for the Southern District of New York, and all courts to which any
appeal therefrom
64
may be available; (ii) any court of the State of New York, and all courts to
which any appeal therefrom may be available; (iii) if none of the foregoing
courts shall have or accept jurisdiction, then any other federal or state
court, and all courts to which any appeal therefrom may be available, (iv) if
none of the foregoing courts shall have or accept jurisdiction, then any court
of the Tribe (in the case of any Permitted Claim to which the Tribe or the
Authority is a party).
Section 10.03 Additional Waivers as to Tribal Courts.
Each of the Authority and the Tribe hereby unconditionally and
irrevocably waives the jurisdiction of any tribal courts or other tribal
forums for the resolution of disputes now or hereafter existing or created
with respect to any Permitted Claim, except as provided below in connection
with the enforcement of an arbitration award. Each of the Authority and the
Tribe unconditionally and irrevocably waives the application of any judicial
rule or doctrine relating to exhaustion of tribal remedies, abstebntion or
comity that might otherwise require a Permitted Claim be heard in a tribal
court.
Section 10.04 Agreement not to Contest.
In connection with any Permitted Claim, each of the Tribal Parties
agrees it shall not dispute before or in any court, arbitration panel or other
forum, the validity and binding effect of its waiver of sovereign immunity,
consent to arbitration proceedings, consent to judicial proceedings, or
waivers of the right to assert application of any rules or doctrines of
exhaustion of tribal remedies or comity with respect to tribal court, all to
the extent contained herein.
Section 10.05 Arbitration.
All Permitted Claims must be resolved by binding arbitration under
the commercial arbitration rules of the American Arbitration Association (the
"AAA"), as modified by this Section 10.05. Notwithstanding any other provision
of this Article 10, an arbitrator shall not have the power to compel, negate,
usurp or in any manner affect any Governmental Action unless any Governmental
Action or failure to take any Governmental Action constitutes a breach of this
Indenture by the Tribe or the Authority.
(a) Commencement of Proceedings. Any party for whom the Authority or
the Tribe has waived its sovereign immunity pursuant to this Article 10 may
commence an arbitration proceeding by the filing of a Statement of Claim
(within the meaning of the AAA rules) with the AAA and serving a copy thereof
on the other parties affected by the Permitted Claim. A single arbitrator
shall hear the Permitted Claim, and shall be selected in accordance with the
rules of the AAA.
(b) Qualification of Arbitrators. No person shall be eligible to
serve as an arbitrator if the person is related to, affiliated with or has
represented in a legal capacity any party to the arbitration proceeding or any
party to this Indenture. The arbitrator shall be an attorney admitted to
practice and in good standing before the highest court of a state, who is
experienced in advising clients in connection with commercial borrowings or
the issuance of debt securities.
(c) Discovery. Any party shall be permitted to engage in any
discovery permitted under the rules of the AAA, but all discovery must be
completed within 90 days following the initial filing of the Statement of
Claim.
(d) Hearing. The hearing on the arbitration shall be held in the City
of Los Angeles, California, and commence and be completed no more than 30 days
after the close of discovery, and the arbitrator shall render an award in
writing within 30 days of the completion of the hearing, which shall contain
65
findings of facts and conclusions of law. The parties hereto further agree
that any arbitrator appointed hereunder may award interim injunctive relief
before the final arbitration award. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrator.
(e) Enforcement. Proceedings to enter judgment upon, enforce, modify
or vacate any award or interim injunctive relief may be commenced in any
Applicable Court. Such proceedings shall be governed (i) by the Federal
Arbitration Act, if the matter is heard in federal court, (ii) the trial
arbitration code adopted by Resolution No. 2001-34 of the Tribal Council, as
amended by an amendment thereto adopted on July 30, 2002 by Tribal Council
Resolution No. 2002-39, provided that the standards of review of the award in
all cases shall be consistent with the Federal Arbitration Act, (iii) by the
applicable state arbitration laws, if the matter is heard in state court, and
(iv) by the arbitration code of the Tribe, if the matter is heard in a tribal
court, provided that the standards of review of the award in all cases shall
be consistent with the Federal Arbitration Act.
(f) Prohibition on Punitive Damages. Each party hereto agrees that
each party has equal bargaining power and that each has freely entered into
this Indenture after such consultation with its attorneys as it has deemed
advisable, and that notwithstanding any other provision herein, no arbitrator
shall have the power to award punitive damages and any such award shall be
null and void and of no effect.
(g) Validity of Arbitration Provisions. Each party hereto agrees that
these arbitration provisions are valid, binding and enforceable, and, to the
extent permitted by law, waives any defense or claim to the contrary.
(h) Full Faith and Credit. The Tribal Parties and the tribal courts
of the Tribe now or hereafter existing shall give full faith and credit to any
award, order or decree rendered in any arbitration or by any federal or state
court in accordance with this Section 10.05, and, to the extent reasonably
necessary, shall issue such orders and exercise such legal powers as may
reasonably be necessary to effectuate the same. The Tribe shall cause the
police powers of the Tribe to be available to secure and support any such
enforcement efforts with respect to the Tribe or the Authority, and all police
or other law enforcement officials of the Tribe to carry out any orders that
may be entered by the Tribe or its tribal court pursuant to this Section
10.05.
Section 10.06 Non-Impairment.
No Tribal Party or any of its respective Affiliates shall: (i) adopt,
enact, promulgate or otherwise place into effect any law or legal requirement
that impairs or interferes, or could impair or interfere, in any manner, with
any right or remedy of another party hereunder or their successors and assigns
(it being understood and agreed that any such law or legal requirement that is
adopted, enacted, promulgated or otherwise placed into effect without the
prior written consent of any affected party, successor or assign shall be void
and of no effect); or (ii) demand, impose or receive any tax, charge,
assessment, fee or other imposition or impose any regulatory or licensing
requirement against a party, their successors or assigns, except in connection
with licensing required by the Compact.
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture shall be discharged and shall cease to be of further
effect as to all Notes issued hereunder, when:
66
(1) either:
(a) all Notes that have been authenticated (except lost,
stolen or destroyed Notes that have been replaced or paid and
Notes for whose payment money has theretofore been deposited in
trust and thereafter repaid to the Authority) have been
delivered to the Trustee for cancellation; or
(b) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason
of the making of a notice of redemption or otherwise or shall
become due and payable within one year and the Authority has
irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust solely for the benefit of the
Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as shall
be sufficient without consideration of any reinvestment of
interest, to pay and discharge the entire indebtedness on the
Notes not delivered to the Trustee for cancellation for
principal, premium and accrued Interest to the date of maturity
or redemption;
(2) no Default or Event of Default has occurred and is
continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit shall not result in a breach or
violation of, or constitute a default under, any other instrument to
which the Authority is a party or by which the Authority is bound;
(3) the Authority has paid or caused to be paid all sums
payable by it under this Indenture; and
(4) the Authority has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the case
may be.
In addition, the Authority must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section, the provisions of Section 11.02 and Section 8.06 shall
survive. In addition, nothing in this Section 11.01 shall be deemed to
discharge those provisions of Section 7.06 hereof, that, by their terms,
survive the satisfaction and discharge of this Indenture.
Section 11.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with
the Trustee pursuant to Section 11.01 shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Authority
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and Interest for
whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
the Authority's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
11.01; provided that if the Authority has made any payment
67
of principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Authority shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
Notwithstanding anything in this Article 11 to the contrary, the
Trustee shall deliver or pay to the Authority from time to time upon the
request of the Authority any money or non-callable Government Securities held
by it as provided in Section 11.01 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof that would then be required to be deposited to effect a
satisfaction and discharge.
ARTICLE 12.
SPECIAL PROVISIONS REGARDING UNLICENSED AND NON-EXEMPT HOLDERS
Section 12.01 Special Provisions Regarding Unlicensed and Non-Exempt Holders.
If any Notes are transferred to a Holder (or Beneficial Owner) that
is not licensed or exempted from licensing by the Tribal Gaming Commission in
accordance with the Compact, then neither the transferee Holder (or Beneficial
Owner) nor any person acting on behalf of that transferee Holder (or
Beneficial Owner), including the Trustee, shall have any right to enforce any
payment obligation relating to the Notes against any revenues, property or
rights of the Authority or the Tribe, or any branch, department, agency,
instrumentality, division, subsidiary, enterprise, authority or wholly-owned
corporation or business of the Tribe (whether through the exercise of voting
rights or otherwise), until such time as the transferee holder is licensed or
exempted from licensing by the Tribal Gaming Commission in accordance with the
Compact. Notwithstanding any other provision of this Indenture, the Trustee,
the Authority and the Tribe are prohibited from making any payment on the
Notes (1) as a result of any enforcement action commenced by or on behalf of
the Trustee or any Holder or (2) after payment of the Notes has been
accelerated because of a default under this Indenture, except in each case to
a Holder that is licensed or exempted from licensing by the Tribal Gaming
Commission in accordance with the Compact.
The foregoing provisions of this Section 12.01 shall not apply to any
Person who is not licensed as a Financial Source (or exempted from such
requirement) to the extent the Compact or the State Bond Regulation is ever
amended to not require such Person to be licensed as a Financial Source.
ARTICLE 13.
MISCELLANEOUS
Section 13.01 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 13.02 Notices.
Any notice or communication by the Authority, the Tribe or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, to the others' address:
68
If to the Authority:
Chukchansi Economic Development Authority
46575 Road 417
Coarsegold, California 93614
Telecopier No.: (559) 642-4075
Attention: Chief Financial Officer
With a copy to:
Monteau & Peebles LLP
1001 Second Street
Sacramento, California 95814-3201
Telecopier No.: (916) 441-2067
Attention: John Peebles
If to the Tribe:
Picayune Rancheria of Chukchansi Indians
46575 Road 417
Coarsegold, California 93614
Telecopier No.: (559) 642-4075
Attention: Chairperson
If to the Trustee:
U.S. Bank, N.A. 180 East 5th Street St. Paul, MN 55101
Telecopier No.: (651) 244-0711
Attention: Corporate Trust Department
The Authority or the Trustee, by notice to the other 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 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.
69
If the Authority mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Authority,
the Tribe, the Trustee, the Registrar and anyone else shall have the
protection of TIA ss. 312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Authority to the Trustee to
take any action under this Indenture, the Authority shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 13.05 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
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 13.05 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)) must comply with the provisions of TIA
ss. 314(e) and must include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07 No Personal Liability.
None of the Tribe or any past, present or future officer or office
holder, employee, agent, representative, member of the Authority or the Tribe,
as such, shall have any liability for any obligations
70
of the Authority under the Notes or for any claim based on, in respect of, or
by reason of, such obligations or their creation. By accepting the Notes,
Holder waive and release all such liability. The waiver and release are part
of the consideration for issuance of the Notes.
Section 13.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK, INCLUDING, WITHOUT
LIMITATION SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL GOVERN
AND BE USED TO CONSTRUE THESE NOTES.
Section 13.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Authority or of any other Person. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
Section 13.10 Successors.
All agreements of the Authority in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
Section 13.11 Severability.
In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 13.12 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 13.13 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.
Section 13.14 Subordination
The Trustee, each Holder, this Indenture, the rights of the Holder of
each Note under such Note, and the right of the Trustee and the Holders
hereunder, are subject to the terms of the Intercreditor Agreement pursuant to
which this Indenture, each Note and such rights are made expressly subordinate
to the rights of the Senior Notes Trustee and the holders of the Senior Notes.
[Signatures on following page]
71
SIGNATURES
Dated as of October 8, 2002
Chukchansi Economic Development Authority
By: /s/ Dixie Jackson
----------------------------------
Name: Dixie Jackson
Title: Chairperson
Picayune Rancheria of Chukchansi Indians
By: /s/ Dixie Jackson
----------------------------------
Name: Dixie Jackson
Title: Chairperson
U.S. Bank, N.A.
By: /s/ Frank P. Leslie III
----------------------------------
Name: Frank P. Leslie III
Title: Vice-President
72
[Face of Note]
- -------------------------------------------------------------------------------
17.0% Subordinated Pay-in-Kind Notes due 2009 with Contingent Interest
No. ___ $____________
CHUKCHANSI ECONOMIC DEVELOPMENT AUTHORITY
promises to pay to _____________________
or registered assigns,
the principal sum of _________________________________________________________
Dollars on September 15, 2009.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: _______________, 2002
EXHIBIT A
IN WITNESS WHEREOF, the Authority has caused this instrument to be
duly executed.
CHUKCHANSI ECONOMIC DEVELOPMENT AUTHORITY
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture:
U.S. Bank, N.A., as
Trustee
By:
-----------------------------------
Authorized Signatory
Dated: ___________________
A-1
[Back of Note]
17.0% Subordinated Pay-in-Kind Notes due 2009 with Contingent Interest
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
THIS NOTE, THE INDENTURE AND THE RIGHTS OF THE TRUSTEE AND THE HOLDERS OF THIS
NOTE ARE SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT (AS DEFINED IN
THE INDENTURE GOVERNING THIS NOTE) PURSUANT TO WHICH THE INDENTURE, THIS NOTE
AND SUCH RIGHTS ARE MADE EXPRESSLY SUBORDINATE TO THE RIGHTS OF THE SENIOR
NOTES TRUSTEE, THE SENIOR NOTE HOLDERS (EACH AS DEFINED THEREIN) AND CERTAIN
OTHER PERSONS. EACH HOLDER OF THIS NOTE, BY ACCEPTANCE HEREOF, AGREES TO BE
SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME
TAX PURPOSES. UPON THE REQUEST OF THE HOLDER OF THIS NOTE, THE AUTHORITY SHALL
MAKE AVAILABLE TO THE HOLDER OF THIS NOTE, (I) THE ISSUE PRICE OF THE NOTE,
(II) THE AMOUNT OF ORIGINAL ISSUED DISCOUNT IN RESPECT THEREOF, (III) THE
ISSUE DATE OF THE NOTE, AND (IV) THE YIELD TO MATURITY OF THE NOTE, IN EACH
CASE AS DETERMINED UNDER THE ORIGINAL ISSUE DISCOUNT RULES OF THE U.S.
INTERNAL REVENUE CODE. PLEASE CONTACT THE CHIEF FINANCIAL OFFICER OF THE
MANAGER AT 916-387-6317.
Capitalized terms used herein have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
(1) INTEREST. The Chukchansi Economic Development Authority
(the "Authority"), a wholly owned unincorporated enterprise of the
Picayune Rancheria of Chukchansi Indians, a sovereign tribe
recognized by the United States pursuant to 25 C.F.R. Part 83 (the
"Tribe"), promises to pay interest on the principal amount of this
Note at 17.0% per annum from October 8, 2002 until maturity
(a) Fixed Interest. Fixed Interest on the unpaid
principal amount hereof outstanding from time to time shall accrue at
a rate of 17.0% per annum from, and including, the date hereof until,
and including, September 15, 2009 but, except as set forth in this
clause (a) and Section 3 hereof, shall not be payable until September
15, 2009. On each Interest Payment Date (as defined below):
(i) if the Authority has not satisfied the Release
Conditions and the Authority has not paid such Fixed
Interest in cash, the outstanding principal amount
hereof shall increase on each such Interest Payment Date
by an amount equal to the Fixed Interest accrued thereon
from, but excluding, the immediately preceding Interest
Payment Date, or, if an Interest Payment Date has not
yet occurred, from, and including, the date of the
Notes, to, but not including, such Interest Payment
Date; and
(ii) if, the Authority has satisfied the Release
Conditions, the Authority shall pay, in cash, the Fixed
Interest that has accrued on the Notes from and
including the immediately preceding Interest Payment
Date to, but excluding, such Interest Payment Date, in
arrears in compliance with Section
A-2
4.01 of the Indenture; provided, however, that the
Authority shall not make any payments on an Interest
Payment Date unless all amounts due and payable with
respect to the Senior Notes on such Interest Payment
Date and all prior Interest Payment Dates have been paid
in full in cash..
Fixed Interest on the Notes shall be payable or shall accrue, as the
case may be, semiannually in arrears on April 1 and October 1 of each year
beginning on April 1, 2003, or if any such day is not a Business Day, on the
following Business Day (each an "Interest Payment Date") to the Holders of
record on each March 15 and September 15 immediately preceding the applicable
Interest Payment Date (each, a "Record Date"), and, if payable in cash, such
Fixed Interest shall be paid in the manner and at the place provided in
Section 4.01 of the Indenture. The Authority shall pay, in cash, interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of Fixed Interest (without regard to any applicable
grace periods) from time to time on demand at the rate of Fixed Interest as
set forth in this Note, to the extent lawful. Fixed Interest shall be computed
on the basis of a 360-day year of twelve 30-day months.
(b) Contingent Interest. Contingent Interest shall accrue on the
unpaid principal amount hereof on and after the Initial Operating Date.
Contingent Interest shall be calculated to accrue (each an "Accrual Period")
as follows:
(i) in the case of the First Accrual Period, from, and
including, the Initial Operating Date to, and including:
(a) the end of the First Accrual Period if the principal
amount of these Notes has not become due and payable; or
(b) the date of payment if the principal amount of these
Notes has become due and payable, whether at stated maturity,
upon acceleration, upon any mandatory or optional redemption or
otherwise;
(ii) in the case of each Semiannual Period following the First
Accrual Period from, but excluding, the end of the First Accrual
Period or the end of the immediately preceding Semiannual Period, as
applicable, to, and including, the end of each such Semiannual Period
if the principal amount of these Notes has not become due and payable
during such period; and
(iii) in the case of any Interim Period following the First
Accrual Period from, but excluding, the end of the First Accrual
Period or most recent Semiannual Period, as applicable, to, and
including, the date of payment if the principal amount of these Notes
has become due and payable, whether at stated maturity, upon
acceleration, upon any mandatory or optional redemption or otherwise.
On each Interest Payment Date after the First Accrual Period,
Contingent Interest with respect to the Accrual Period completed immediately
prior to that Interest Payment Date shall be payable to the Holders on the
Record Date immediately preceding the Interest Payment Date in cash; provided,
however, that, except as set forth in Section 3 hereof, Contingent Interest
shall be deferred and shall not be paid unless and until the Authority has
satisfied the Release
A-3
Conditions on such Interest Payment Date; provided, however, that the
Authority shall not make any payments on an Interest Payment Date unless all
amounts due and payable with respect to the Senior Notes and the Senior
Subordinated PIK Notes on such Interest Payment Date and all prior Interest
Payment Dates have been paid in full in cash. If, on any Interest Payment Date
after the First Accrual Period, the Authority has not satisfied the Release
Conditions and has not paid such Contingent Interest in cash, the Contingent
Interest which otherwise would have been payable on such Interest Payment Date
shall be deferred and shall earn interest on such deferred amount from the
date of such deferral to the date such Contingent Interest is paid, at an
interest rate of 3.0% per annum. If the Release Conditions have been met on
any Interest Payment Date, the Authority shall pay to the Holders on the
Record Date immediately preceding the Interest Payment Date, in addition to
the Contingent Interest otherwise payable on such Interest Payment Date, all
deferred Contingent Interest (together with interest on such Contingent
Interest as provided in this Note); provided, however, that to the extent any
amounts loaned from the Contingent Interest Account to the Manager under the
Management Fees Note (as defined in the Cash Accumulation Account and
Contribution Agreement) are outstanding, such deferred Contingent Interest
amounts shall continue to be deferred and shall not be payable until such time
the Management Fees Note is repaid in full. If any amounts remain outstanding
under the Management Fees Note on the maturity date of this Note, the
corresponding amount of Contingent Interest will be cancelled.
(2) METHOD OF PAYMENT. The Authority shall pay Interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the March 15 or September 15 next preceding the
applicable Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes
shall be payable as to principal, premium and Interest at the office or agency
of the Authority maintained for such purpose within or without the City and
State of New York, or, at the option of the Authority, payment of Interest may
be made by check mailed to the Holders at their addresses set forth in the
register of Holders; provided, that payment by wire transfer of immediately
available funds shall be required with respect to principal of, and Interest
and premium on, all Notes, the Holders of which shall have provided wire
transfer instructions to the Authority or the Paying Agent. Such payment shall
be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
(3) PAYMENT FOR TAXES. Notwithstanding anything to the contrary
herein, within five days following each Quarterly Payment Date, the Authority
shall make a cash payment to the Holders of these Notes, in an amount equal to
the excess of (A) the Minimum Tax Payment Amount over (B) the sum of (x) the
cumulative amount of cash payments previously made with respect to Fixed
Interest or Contingent Interest pursuant to Section 1 hereof and (y) the
cumulative amount of cash payments previously made pursuant to this Section 3.
Any payments made pursuant to this Section 3 shall be treated as payments of
accrued Interest and shall reduce, as applicable, the accrued Fixed Interest
and Contingent Interest with respect to these Notes.
(4) PAYING AGENT AND REGISTRAR. Initially, U.S. Bank, N.A., the
Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Authority may change any Paying Agent or Registrar without notice to any
Holder. The Authority may act in any such capacity.
(5) INDENTURE. The Authority issued the Notes under an Indenture
dated as of October 8, 2002 (the "Indenture"), among the Authority, the Tribe
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act
of 1939, as amended (15 U.S. Code ss. 77aaa-77bbbb). The Notes are subject
to all such terms, and Holders are referred to the Indenture and such Act for
a statement of
A-4
such terms. To the extent any provision of this Note conflicts with the
express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are unsecured obligations of the
Authority limited to $12.0 million in aggregate principal amount.
(6) OPTIONAL REDEMPTION.
The Notes are not redeemable at the Authority's option prior to
October 1, 2006.
At any time on or after October 1, 2006, the Authority shall have the
option to redeem these Notes, in whole or in part, upon not less than ten days
notice, at the prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid Interest thereon and the premium, if any, in
each case through and including the applicable redemption date if redeemed
during the twelve month period beginning on or after October 1 of the years
indicated below:
Year Percentage
---- ----------
2006................................................. 108.500%
2007................................................. 104.250%
2008 and thereafter.................................. 100.000%
provided, that as long as the Senior Notes are outstanding after any
such payment there is at least the Required Accumulation Amount in cash and
Cash Equivalents remaining in the Authority's Cash Accumulation Account and
all amounts due and payable with respect to the Senior Notes and the Senior
Subordinated PIK Notes have been paid in full and no amount is outstanding
under the Manager Repayment Note. Any redemption pursuant to this Section 6
shall be made pursuant to the provisions of Section 3.01 through 3.06 of the
Indenture.
(7) MANDATORY REDEMPTION.
The Authority is not required to make mandatory redemption payments
with respect to these Notes.
(8) MANDATORY DISPOSITION PURSUANT TO GAMING LAWS.
(a) If any Gaming Authority determines, and a Holder or Beneficial
Owner of the Notes is notified, that such Holder or Beneficial Owner must
obtain a license, qualification or finding of suitability under any applicable
Gaming Law and the Holder or Beneficial Owner does not apply for that 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 shall not be
licensed, qualified or found suitable under applicable Gaming Law, or any
license, qualification or finding of suitability is not renewed upon its
expiration or is revoked, or the Holder or Beneficial Owner has been found to
be unsuitable for licensing, then the Authority, at its option, may (i)
require such Holder or Beneficial Owner to dispose of such Holder's or
Beneficial Owner's Notes within 30 days, or any shorter period as may be
required by the Gaming Authority, of (A) the termination of the 30-day period
described above for the Holder or Beneficial Owner to apply for a license,
qualification or finding of suitability or (B) the receipt of the notice from
the Gaming Authority that the Holder or Beneficial Owner shall not be
licensed, qualified or found suitable or (ii) subject to the second sentence
of Section 16 hereof, redeem the Notes of such Holder or Beneficial Owner at a
price equal to the least of (A) 100% of the principal amount thereof, (B) the
price at which such Holder or Beneficial Owner acquired the Notes and (C) the
fair market value of the Notes, together with, in each case, to the extent
permitted by the Compact, accrued
A-5
and unpaid Interest thereon to the earlier of the date of redemption or such
earlier date as may be required by the Gaming Authority 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) Immediately upon a determination that a Holder or Beneficial
Owner shall not be licensed, qualified or found suitable, or that such
license, qualification or finding of suitability has been revoked or shall not
be renewed, the Holder or Beneficial Owner shall have no further rights (1) to
exercise any right conferred by the Notes, directly or indirectly, through any
trustee, nominee or any other Person or entity, or (2) to receive any interest
or other distribution or payment with respect to the Notes or any remuneration
in any form from the Authority for services rendered or otherwise, except the
redemption price of the Notes.
(c) Any Holder or Beneficial Owner of Notes that is required to apply
for a license, qualification or a finding of suitability may be required to
pay all costs of the licenses or investigation for the qualification or
finding of suitability by the applicable Gaming Authorities. The Authority is
not required to pay or reimburse any Holder or Beneficial Owner of Notes who
is required to apply for any license, qualification or finding of suitability.
(d) The Authority shall notify the Trustee in writing of any
disposition pursuant to this Section 8 as soon as is practicable. The Trustee
shall be required to report the names of the record holders of Notes to any
Gaming Authority when required by law.
(9) REPURCHASE AT OPTION OF HOLDER. If the Authority consummates any
Asset Sales, within five days of each date on which the aggregate amount of
Excess Proceeds exceeds $5.0 million, the Authority shall, subject to the
second sentence of Section 16 hereof, commence an offer to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in the Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets or of an
event of loss (a "Repurchase Offer"), as applicable, pursuant to Section 3.10
of the Indenture to purchase the maximum principal amount of Notes and other
pari passu Indebtedness that may be purchased out of the Excess Proceeds, at
an offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid Interest thereon, if any, to the date fixed
for the closing of such offer, in accordance with the procedures set forth in
the Indenture. To the extent that the aggregate amount of Notes and other pari
passu Indebtedness tendered pursuant to a Repurchase Offer is less than the
Excess Proceeds, the Authority may use such deficiency for any purpose not
otherwise prohibited by the Indenture and the Collateral Documents. If the
aggregate principal amount of Notes and other pari passu Indebtedness
surrendered by holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and other pari passu Indebtedness to be
purchased on a pro rata basis. Holders of Notes that are the subject of an
offer to purchase shall receive a Repurchase Offer from the Authority prior to
any related purchase date and may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes.
(10) NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least ten days before the redemption date to each Holder whose Notes are to be
redeemed at its registered address. On and after the redemption date Interest
ceases to accrue on Notes or portions thereof called for redemption.
(11) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons. The transfer of Notes may be registered and Notes may be
exchanged as
A-6
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Authority may require a Holder to pay any taxes and fees required by
law or permitted by the Indenture. The Authority need not exchange or register
the transfer of any Note or portion of a Note selected for redemption, except
for the unredeemed portion of any Note being redeemed in part. Also, the
Authority need not exchange or register the transfer of any Notes for a period
of 15 days before a selection of Notes to be redeemed or during the period
between a record date and the corresponding Interest Payment Date.
(12) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
(13) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Notes or the Collateral Documents may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes voting as a single class, and
any existing default or compliance with any provision of the Indenture or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes voting as a single class. Any amendment
to, or waiver of, the provisions of any of Section 4.12 of the Indenture shall
require the consent of the Holders of at least 66-2/3% in principal amount of
the Notes then outstanding. Without the consent of any Holder of a Note, the
Indenture or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to
comply with all applicable rules and regulations of the NIGC, the BIA or any
governmental authority or to comply with the provisions of the Trustee with
respect to the provisions of the Indenture or the Notes relating to the
transfers and exchange of Notes or beneficial interests therein.
(14) DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest on, or Liquidated Damages with
respect to, the Notes; (ii) default in payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase)
or otherwise, (iii) failure by the Authority to comply with Section 4.09, 4.10
and 4.14 of the Indenture; (iv) failure by the Authority to perform or comply
with the provisions or any of the covenants set forth in the Collateral
Documents for 30 days after notice to the Authority by the Trustee or the
Holders of at least 25% in principal amount of the Notes then outstanding
voting as a single class; (v) failure by the Authority or the Tribe (with
respect to its obligations under the Indenture) for 60 days after notice to
the Authority by the Trustee or the Holders of at least 25% in principal
amount of the Notes then outstanding voting as a single class to comply with
or observe certain other covenants, representations, warranties or agreements
in the Indenture; (vi) default under certain other agreements relating to
Indebtedness of the Authority (or the payment of which is guaranteed by the
Authority), whether such Indebtedness or guarantee exists now or is created
after the date of the Indenture (other than a default under the Senior
Subordinated PIK Notes, the Manager Repayment Note or the Letter of Credit
Note resulting from the Authority's failure to make a change of control offer
or asset sale offer to the holders of such notes) which default is caused by
the failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of any grace period provided in such
Indebtedness or results in the acceleration of such Indebtedness prior to its
express maturity; (vii) certain final judgments for the payment of money
aggregating in excess of $5.0 million that remain undischarged for a period of
60 days; (viii) the L/C Provider defaults in the performance of its
obligations set forth
A-7
in, or repudiates its obligations under, the Letter of Credit Drawdown
Agreement, and such default remains uncured for 30 days; (ix) an Event of
Default occurs and is continuing under the Intercreditor Agreement; (x) the
Initial Operating Date does not occur by the Operating Deadline or any Gaming
License is lost, revoked or suspended and, as a result, the Chukchansi Gold
Resort & Casino ceases Operating for a period of more than 90 consecutive
days; and (xi) certain events of bankruptcy or insolvency with respect to the
Authority. If any Event of Default occurs and is continuing, all amounts
outstanding under the Notes to be due and payable subject to the second
sentence of Section 16 hereof. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may, on behalf of the Holders of all of
the Notes, waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of Interest on, or the principal of, the Notes. The Authority is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Authority is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.
If an Event of Default occurs prior to October 1, 2006, by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Authority with the intention of avoiding the prohibition on redemption of the
Notes prior to October 1, 2006, then the premium set forth in Section 6 hereof
shall also become and be immediately due and payable, to the extent permitted
by law upon acceleration of the Notes, subject to the second sentence of
Section 16 hereof. In the case of any Event of Default occurring by reason of
any willful action or inaction taken or not taken by or on behalf of the
Authority with the intention of avoiding payment of the premium that the
Authority would have had to pay if the Authority then had elected to prepay
the Notes pursuant to Section 6 hereof, an equivalent premium specified in the
Indenture shall also become immediately due and payable to the extent
permitted by law upon the acceleration of the Notes, subject to the second
sentence of Section 16 hereof.
(15) TRUSTEE DEALINGS WITH AUTHORITY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Authority, and may otherwise deal with the Authority, as if
it were not the Trustee.
(16) SPECIAL PROVISIONS REGARDING UNLICENSED AND NON-EXEMPT HOLDERS.
If this Note is transferred to a Holder (or Beneficial Owner) that is not
licensed or exempted from licensing by the Tribal Gaming Commission in
accordance with the Compact, the neither that transferee Holder (or Beneficial
Owner) nor any Person acting on behalf of that transferee Holder (or
Beneficial Owner), including the Trustee, shall have any right to enforce any
payment obligation relating to the Notes against any revenues, property or
rights of the Authority or the Tribe, or any branch, department, agency,
instrumentality, division, subsidiary, enterprise, authority or wholly-owned
corporation or business of the Tribe (whether through the exercise of voting
rights or otherwise) until such time as the transferee Holder is licensed or
exempted from licensing by the Tribal Gaming Commission in accordance with the
Compact. The Trustee, the Authority and the Tribe are prohibited from making
any payment on the Notes (1) as a result of any enforcement action commenced
by or on behalf of the Trustee or any Holder or (2) after payment of the Notes
has been accelerated because of a default under the Indenture, except in each
case to a Holder that is licensed or exempted from licensing by the Tribal
Gaming Commission in accordance with the Compact.
A-8
(17) NO RECOURSE AGAINST OTHERS. Neither the Tribe nor any director,
officer, officeholder, employee, agent, representative or member of the
Authority or the Tribe, as such, shall have any liability for any obligations
of the Authority under the Notes, the Indenture, the Collateral Documents or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
(18) AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(19) ASSIGNMENT. Neither the Authority nor Holdings may sell, assign
or transfer any of its rights or obligations under the Notes, except that the
Authority may sell, assign or transfer its rights and obligations under the
Notes if such sale, assignment or transfer is consummated in accordance with
Section 4.11 of the Senior Notes Indenture.
(20) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
(21) WAIVER OF SOVEREIGN IMMUNITY; WAIVER OF TRIBAL COURTS AND
FORUMS; CONSENT TO JURISDICTIONS; APPLICABLE LAW; MANDATORY ARBITRATION OF
PERMITTED CLAIMS; PERMITTED COURT ACTIONS. All provisions of the Indenture
relating to the Tribe's and the Authority's waivers of sovereign immunity and
rights to resolve disputes by arbitration, as well as consents and agreements
of the Tribe and the Authority to applicable laws and jurisdictions for the
resolution of disputes and the agreements of the Tribe and the Authority to
arbitrate certain permitted claims, are hereby incorporated herein with the
same force and effect as though set forth at length herein.
The Authority shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Chukchansi Economic Development Authority
46575 Road 417
Coarsegold, California 93614
Telephone: (559) 683-6633
Telecopy: (559) 642-4075
Attention: Chairperson
A-9
Option of Holder to Elect Purchase
By signing this form, you are electing to have this Note purchased by
the Authority pursuant to Section 4.09 of the Indenture.
If you want to elect to have only part of the Note purchased by the
Authority pursuant to Section 4.09 of the Indenture, state the amount you
elect to have purchased:
$_______________
Date: _______________
Your Signature:
---------------------------
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No.:___________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-10
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Chukchansi Economic Development Authority
46575 Road 417
Coarsegold, California 93614
Telephone: (559) 683-6633
Telecopy: (559) 642-4075
Attention: Chairperson
U.S. Bank, N.A.
_________________
_________________
Telephone: ________
Telecopy: _________
Attention: _________
Re: [__]%Subordinated Pay-in-Kind Notes Due 2009
Reference is hereby made to the Indenture, dated as of ________, 2002
(the "Indenture"), among the Chukchansi Economic Development Authority, a
wholly owned unincorporated enterprise of the Picayune Rancheria of Chukchansi
Indians (the "Tribe"), as issuer (the "Authority"), the Tribe and U.S. Bank,
N.A., as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to ___________________________ (the "Transferee"). In connection
with the Transfer, the Transferor hereby certifies that:
The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act and in
compliance with the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any State of the United States and (ii)
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note [shall] [shall not] be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Notes and in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Authority.
________________________________
[Insert Name of Transferor]
By:
----------------------------
Name:
Title:
Dated: _______________________
B-1