ALADDIN GAMING HOLDINGS, LLC
ALADDIN CAPITAL CORP.
SERIES A AND SERIES B
13 1/2 % SENIOR DISCOUNT NOTES DUE 2010
INDENTURE
Dated as of February 26, 1998
STATE STREET BANK AND TRUST COMPANY
Trustee
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1)...............................................................................................7.10
(a)(2)...............................................................................................7.10
(a)(3)...............................................................................................N.A.
(a)(4)...............................................................................................N.A.
(a)(5)...............................................................................................7.10
(i)(b)...............................................................................................7.10
(ii)(c)..............................................................................................N.A.
311 (a)..................................................................................................7.11
(b)..................................................................................................7.11
(iii)(c).............................................................................................N.A.
312 (a)..................................................................................................2.05
(b)..................................................................................................13.03
(iv)(c)..............................................................................................13.03
313 (a)..................................................................................................7.06
(b)(2)...............................................................................................7.07
(v)(c)...............................................................................................7.06;
13.02
(vi)(d)..............................................................................................7.06
314 (a)..................................................................................................4.03;
13.02
(A)(b)...............................................................................................10.02
(c)(1)...............................................................................................13.04
(c)(2)...............................................................................................13.04
(c)(3)...............................................................................................N.A.
(vii)(e).............................................................................................13.05
(f)..................................................................................................N.A.
315 (a)..................................................................................................7.01
(b)..................................................................................................7.05,
13.02
(A)(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
(B)(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.
TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
Section 1.01. Definitions................................................................................1
Section 1.02. Other Definitions.........................................................................22
Section 1.03. Incorporation by Reference................................................................22
Section 1.04. Rules of Construction.....................................................................23
ARTICLE 2. THE NOTES.............................................................................................23
Section 2.01. Form and Dating...........................................................................23
Section 2.02. Execution and Authentication..............................................................24
Section 2.03. Registrar and Paying Agent................................................................29
Section 2.04. Paying Agent to Hold Money in Trust.......................................................29
Section 2.05. Holder Lists..............................................................................29
Section 2.06. Transfer and Exchange.....................................................................30
Section 2.07. Replacement Notes.........................................................................42
Section 2.08. Outstanding Notes.........................................................................42
Section 2.09. Treasury Notes............................................................................43
Section 2.10. Temporary Notes...........................................................................43
Section 2.11. Cancellation..............................................................................43
Section 2.12. Defaulted Interest........................................................................43
ARTICLE 3. REDEMPTION AND PREPAYMENT.............................................................................43
Section 3.01. Notices to Trustee........................................................................43
Section 3.02. Selection of Notes to Be Redeemed.........................................................44
Section 3.03. Notice of Redemption......................................................................44
Section 3.04. Effect of Notice of Redemption............................................................45
Section 3.05. Deposit of Redemption Price...............................................................45
Section 3.06. Notes Redeemed in Part....................................................................45
Section 3.07. Optional Redemption.......................................................................45
Section 3.08. Gaming Redemption.........................................................................46
Section 3.09. Mandatory Redemption......................................................................47
Section 3.10. Offer to Purchase by Application of Excess Proceeds.......................................47
ARTICLE 4. COVENANTS.............................................................................................48
Section 4.01. Payment of Notes..........................................................................48
Section 4.02. Maintenance of Office or Agency...........................................................48
Section 4.03. Reports...................................................................................49
Section 4.04. Compliance Certificate....................................................................49
Section 4.05. Taxes.....................................................................................50
Section 4.06. Stay, Extension and Usury Laws............................................................50
Section 4.07. Restricted Payments.......................................................................50
Section 4.08. Distribution and Other Payment Restrictions Affecting Restricted Subsidiaries.............54
Section 4.09. Limitations on Incurrence of Indebtedness and Issuance of Preferred Stock.................55
Section 4.10. Asset Sales...............................................................................58
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Section 4.11. Transactions with Affiliates..............................................................59
Section 4.12. Liens.....................................................................................60
Section 4.13. Line of Business..........................................................................60
Section 4.14. Corporate Existence.......................................................................60
Section 4.15. Offer to Repurchase Upon Change of Control................................................60
Section 4.16. Limitations on Issues and Sales of Capital Stock of Wholly Owned
Restricted Subsidiaries..................................................................61
Section 4.17. Insurance.................................................................................61
Section 4.18. Limitations on Status as Investment Company...............................................62
Section 4.19. Gaming Approvals..........................................................................62
Section 4.20. Construction..............................................................................62
Section 4.21. Limitation on Use of Proceeds.............................................................62
Section 4.22. Restrictions on Activities of Capital.....................................................63
Section 4.23. Series A Preferred Interests..............................................................63
ARTICLE 5. SUCCESSORS............................................................................................63
Section 5.01. Merger, Consolidation, or Sale of Assets..................................................63
Section 5.02. Successor Corporation Substituted.........................................................64
ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................64
Section 6.01. Events of Default.........................................................................64
Section 6.02. Acceleration..............................................................................66
Section 6.03. Other Remedies............................................................................67
Section 6.04. Waiver of Past Defaults...................................................................67
Section 6.05. Control by Majority.......................................................................67
Section 6.06. Limitation on Suits.......................................................................67
Section 6.07. Rights of Holders of Notes to Receive Payment.............................................68
Section 6.08. Collection Suit by Trustee................................................................68
Section 6.09. Trustee May File Proofs of Claim..........................................................68
Section 6.10. Priorities................................................................................69
Section 6.11. Undertaking for Costs.....................................................................69
ARTICLE 7. TRUSTEE...............................................................................................69
Section 7.01. Duties of Trustee.........................................................................69
Section 7.02. Rights of Trustee.........................................................................71
Section 7.03. Individual Rights of Trustee..............................................................71
Section 7.04. Trustee's Disclaimer......................................................................71
Section 7.05. Notice of Defaults........................................................................72
Section 7.06. Reports by Trustee to Holders of the Notes................................................72
Section 7.07. Compensation and Indemnity................................................................72
Section 7.08. Replacement of Trustee....................................................................73
Section 7.09. Successor Trustee by Merger, etc..........................................................74
Section 7.10. Eligibility; Disqualification.............................................................74
Section 7.11. Preferential Collection of Claims Against issuers.........................................74
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE..............................................................74
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance..................................74
Section 8.02. Legal Defeasance and Discharge............................................................74
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Section 8.03. Covenant Defeasance.......................................................................75
Section 8.04. Conditions to Legal or Covenant Defeasance................................................75
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions.................................................................76
Section 8.06. Repayment to Issuers......................................................................77
Section 8.07. Reinstatement.............................................................................77
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER......................................................................77
Section 9.01. Without Consent of Holders of Notes.......................................................77
Section 9.02. With Consent of Holders of Notes..........................................................78
Section 9.03. Compliance with Trust Indenture Act.......................................................79
Section 9.04. Revocation and Effect of Consents.........................................................80
Section 9.05. Notation on or Exchange of Notes..........................................................80
Section 9.06. Trustee to Sign Amendments, etc...........................................................80
ARTICLE 10. COLLATERAL AND SECURITY..............................................................................80
Section 10.01. Pledge Agreements........................................................................80
Section 10.02. Authorization of Receipt of Funds by the Trustee Under the Pledge Agreements.............81
Section 10.03. Termination of Security Interest.........................................................81
ARTICLE 11. JOINT AND SEVERAL LIABILITY..........................................................................81
Section 11.01. Joint and Several Liability..............................................................81
ARTICLE 12. INTERCREDITOR AGREEMENT WITH LENDERS UNDER THE BANK CREDIT FACILITY..................................82
Section 12.01. Non-Petition Covenant....................................................................82
Section 12.02. Subordination Upon Substantive Consolidation.............................................83
Section 12.03. When Distribution Must Be Paid Over......................................................83
Section 12.04. Notice by Issuers........................................................................84
Section 12.05. Subrogation..............................................................................84
Section 12.06. Relative Rights..........................................................................84
Section 12.07. Subordination May Not Be Impaired........................................................84
Section 12.08. Distribution or Notice to Credit Agent...................................................85
Section 12.09. Rights of Trustee and Paying Agent.......................................................85
Section 12.10. Authorization to Effect Subordination....................................................85
Section 12.11. Requirement of Certain Provision in Senior Debt..........................................86
ARTICLE 13. MISCELLANEOUS........................................................................................86
Section 13.01. Trust Indenture Act Controls.............................................................86
Section 13.02. Notices..................................................................................86
Section 13.03. Communication by Holders of Notes with Other Holders of Notes............................87
Section 13.04. Certificate and Opinion as to Conditions Precedent.......................................87
Section 13.05. Statements Required in Certificate or Opinion............................................87
Section 13.06. Rules by Trustee and Agents..............................................................88
Section 13.07. No Personal Liability of Directors, Managers, Officers, Employees,
Incorporators or Members................................................................88
Section 13.08. Governing Law............................................................................88
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Section 13.09. No Adverse Interpretation of Other Agreements............................................88
Section 13.10. Successors...............................................................................88
Section 13.11. Severability.............................................................................88
Section 13.12. Counterpart Originals....................................................................88
Section 13.13. Table of Contents, Headings, etc.........................................................89
Section 13.14. Contingent Guaranty......................................................................89
Section 13.15. Trustee's Execution of Other Agreements..................................................89
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EXHIBITS
Exhibit A-1 FORM OF GLOBAL NOTE
Exhibit A-2 FORM OF TEMPORARY REGULATION S GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF CONTINGENT GUARANTY OF PERFORMANCE AND COMPLETION
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INDENTURE dated as of February 26, 1998, among Aladdin Gaming
Holdings, LLC, a Nevada limited-liability company ("Holdings"), Aladdin Capital
Corp., a Nevada corporation and a wholly owned subsidiary of Holdings ("Capital"
and, together with Holdings, the "Issuers"), and State Street Bank and Trust
Company, as trustee (the "Trustee").
The Issuers and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the 13 1/2
% Series A Senior Discount Notes due 2010 (the "Series A Notes") and the 13 1/2
% Series B Senior Discount Notes due 2010 (the "Series B Notes" and, together
with the Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global note in the form of Exhibit
A-1 attached hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Accreted Value" means, (i) as of any date of determination
prior to March 1, 2003, with respect to any Note, the sum of (a) the initial
offering price (which shall be calculated by discounting the aggregate principal
amount at maturity of such Note at a rate of 13 1/2 % per annum, compounded
semi-annually on each March 1 and September 1 from March 1, 2003 to the date of
issuance) of such Note and (b) the portion of the excess of the principal amount
of such Note over such initial offering price which shall have been accreted
thereon through such date, such amount to be so accreted on a daily basis at a
rate of 13 1/2 % per annum of the initial offering price of such Note,
compounded semi-annually on each March 1 and September 1 from the date of
issuance of the Notes through the date of determination, computed on the basis
of a 360-day year of twelve 30-day months and (ii) as of any date of
determination on or after March 1, 2003, with respect to any Note, $1,000.
"Acquired Indebtedness" means, with respect to any specified
Person, (i) Indebtedness of any other Person existing at the time such other
Person merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness encumbering any asset
acquired by such specified Person.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
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.
"Agent" means any Registrar, Paying Agent or co-registrar.
"AHL" means Aladdin Holdings, LLC, a Delaware limited
liability company.
"Aladdin" means the pending project to develop, construct,
equip and operate the Aladdin Hotel & Casino, as described in the Offering
Memorandum of the Issuers dated February 18, 1998, relating to the Units.
"Aladdin Bazaar" means Aladdin Bazaar, LLC, a Nevada
limited-liability company.
"Aladdin Music" means Aladdin Music, LLC, a Nevada
limited-liability company and a joint venture between the Company and Planet
Hollywood International, Inc.
"Aladdin Music Operating Agreement" means the Operating
Agreement of Aladdin Music, as amended from time to time.
"Aladdin Site" means the approximately 18-acre parcel of
property located in Las Vegas, Nevada on which the Aladdin is to be constructed.
"AMH" means Aladdin Music Holdings, LLC, a Nevada
limited-liability company.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange.
"Approved Plans and Specifications" shall mean all plans,
specifications, design documents, schematic drawings and related items for the
design, architecture and construction of the Aladdin, as delivered to the
Trustee on the Issue Date, as the same may be (i) finalized in a manner that
reflects a natural evolution of their status on the date hereof and in a manner
consistent with the standards set forth in the Bank Credit Facility and (ii)
amended in accordance with the Bank Credit Facility.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) (provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of Holdings and its
Restricted Subsidiaries, taken as a whole, shall be governed by Sections 4.15
and/or 5.1 hereof and not by Section 4.10 hereof), (ii) an Event of Loss or
(iii) the issuance or sale by Holdings or any of its Restricted Subsidiaries of
Equity Interests of any of Holdings' Subsidiaries, in the case of either clause
(i) or (ii), whether in a single transaction or a series of related transactions
(a) that have a fair market value in excess of $5.0 million or (b) for net
proceeds in excess of $5.0 million. Notwithstanding the foregoing, none of the
following items shall be deemed to be an Asset Sale: (i) a transfer of assets by
Holdings to a Wholly Owned Subsidiary of Holdings or by a Wholly Owned
Subsidiary to Holdings or to another Wholly Owned Subsidiary of Holdings, (ii)
an issuance of Equity Interests by a Wholly Owned Subsidiary of Holdings to
Holdings or to another Wholly Owned Subsidiary of Holdings, (iii) a Restricted
Payment that is permitted by Section 4.7 hereof, (iv) the grant on or after the
Issue Date by the Company to Aladdin Bazaar of a ground lease on the Desert
Passage Site and, upon the subdivision of the Project Site, the transfer by the
Company to Aladdin Bazaar of the fee interest in the Desert Passage Site, (v)
the grant on or after the Issue Date of a ground lease on the Music Project Site
by the Company to AMH and, upon satisfaction of the Music Project Financing, an
Investment not to exceed $21.3 million plus the transfer of the Music Project
Site, in each case by the Company to AMH and by AMH to Aladdin Music, (vi) the
grant on or after the Issue Date of a ground lease relating to the Energy Plant
Site by the Company to the Energy Provider, (vii) the transactions contemplated
by the Theater Lease in effect on the Issue Date or as described in the Offering
Memorandum of the Issuers dated February 18,
2
1998, relating to the Units, (viii) any licensing of trade names or trademarks
in the ordinary course of business by Holdings or any of its Restricted
Subsidiaries, (ix) leases of space in the Aladdin, in the ordinary course of
business, and (x) (a) the transfer of the Aladdin Site and other assets of the
Company as a result of the exercise of remedies in respect of the Deed of Trust
or the other Lender security documents, including a foreclosure by the Lenders
pursuant to the terms of the Deed of Trust or the acceptance by the Lenders of a
transfer in lieu of foreclosure or other exercise of remedies and (b) the
transfer of the Common Membership Interests as a result of the exercise of
remedies by the Lenders in respect of the pledge of such Common Membership
Interests pursuant to the Lenders' security documents.
"Bank Completion Guaranty" means the Completion Guaranty dated
as of the Issue Date, executed by the Trust, London Clubs and Bazaar Holdings in
favor of the Administrative Agent and the Lenders.
"Bank Construction Disbursement Account" means one or more
accounts established pursuant to the Disbursement Agreement into which the
proceeds under the Bank Credit Facility are funded and in which the
Administrative Agent has a security interest.
"Bank Credit Facility" means the Credit Agreement dated as of
the Issue Date, among the Company and the lenders named therein for which The
Bank of Nova Scotia is acting as Administrative Agent, Merrill Lynch Capital
Corporation is acting as Syndication Agent, and Canadian Imperial Bank of
Commerce, is acting as Documentation Agent, as such agreement may be amended,
supplemented, extended, modified, renewed, replaced or refinanced, from time to
time, including any agreement to renew, extend, refinance or replace all or any
portion of such facility.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Bazaar Holdings" means Aladdin Bazaar Holdings, LLC, a Nevada
limited-liability company.
"Board of Managers" means (i) for so long as Holdings is a
limited-liability company, the Board of Managers appointed pursuant to the
Operating Agreement, or (ii) otherwise, the Board of Directors of Holdings.
"Business Day" means any day other than a Legal Holiday.
"Capital" has the meaning assigned to it in the preamble to
this Indenture.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited-liability
company, membership interests and (v) 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 (other than the Management
Fee).
3
"Cash Equivalents" means (i) United States Dollars, (ii)
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 six months from the date of acquisition, (iii)
certificates of deposit and eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any domestic commercial bank having capital and surplus in excess of $500
million and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Corporation and in each case
maturing within six months after the date of acquisition and (vi) money market
funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (i)-(v) of this definition.
"Cedel" means Cedel Bank, SA.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease or transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
transactions, of all or substantially all of the assets of Holdings and its
Subsidiaries, taken as a whole to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act) other than to either of Principals, any Related
Party or the IPO Entity, (ii) the adoption of a plan relating to the liquidation
or dissolution of Holdings, (iii) the liquidation or dissolution of Holdings,
(iv) prior to the consummation of a Qualified Public Offering, the consummation
of any transaction (including, without limitation, any merger or consolidation)
the result of which is that the Trust, or the beneficiaries of the Trust
(whether current or contingent) as of the date hereof which control AHL or
Sommer Enterprises, and London Clubs cease to individually or collectively
control, directly or indirectly, a majority of the voting power of Holdings, (v)
after the consummation of a Qualified Public Offering, the IPO Entity becomes
aware of (by way of a report or any other filing pursuant to Section 13(d) of
the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by
any person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2)
of the Exchange Act, or any successor provision, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1) under the Exchange Act) in a single transaction or in a
related series of transactions, by way of merger, consolidation or other
business combination or purchase of beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act, or any successor provision) of 35% or more of
the total voting power entitled to vote in the election of the Board of
Managers, and, at such time, the Trust and London Clubs shall fail to
collectively beneficially own, directly or indirectly, securities representing
greater than the combined voting power of Holdings' Capital Stock as is
beneficially owned by such person or group, (vi) the first day on which Holdings
fails to own 100% of the issued and outstanding Equity Interests of the Company
or Capital, or (vii) the first day on which a majority of the members of the
Board of Managers are not nominees of the Trust, or the beneficiaries of the
Trust (whether current or contingent) as of the date hereof which control AHL or
Sommer Enterprises, or London Clubs or any Subsidiary of the Trust, or the
beneficiaries of the Trust (whether current or contingent) as of the date hereof
which control AHL or Sommer Enterprises, or London Clubs which is a member of
Holdings.
"Collateral" has the meaning set forth in the Pledge
Agreements.
"Commission" means the Securities and Exchange Commission.
4
"Common Membership Interests" means the common membership
interests of the Company.
"Company" means Aladdin Gaming, LLC, a Nevada
limited-liability company, or any successor thereto.
"Complex" means the Complex to be constructed in Las Vegas,
Nevada, as described in the Offering Memorandum of the Issuers dated February
18, 1998, relating to the Units.
"Consolidated Cash Flow" means, with respect to any Person for
any period, the Consolidated Net Income of such Person for such period plus (i)
an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale (to the extent such losses were deducted in
computing Consolidated Net Income), plus (ii) provision for taxes based upon
consolidated net income or net profits of such Person and its Restricted
Subsidiaries for such period, to the extent such provision for taxes was
deducted in computing Consolidated Net Income, plus (iii) Consolidated Interest
Expense of such Person and its Restricted Subsidiaries for such period, to the
extent such expenses were deducted in computing Consolidated Net Income plus
(iv) Consolidated Depreciation and Amortization Expense of such Person for such
period, to the extent such expenses were deducted in computing Consolidated Net
Income plus (v) any other non-cash extraordinary and nonrecurring items
decreasing such Consolidated Net Income for such period, minus (vi) non-cash
items increasing such Consolidated Net Income for such period, in each case, on
a consolidated basis for such Person and its Restricted Subsidiaries and
determined in accordance with GAAP. Notwithstanding the foregoing, the provision
for taxes based on the income or profits of, and the depreciation and
amortization and other non-cash charges of, a Subsidiary of a Person shall be
added to Consolidated Net Income to compute Consolidated Cash Flow only to the
extent (and in the same proportion) that the Net Income of such Subsidiary was
included in calculating the Consolidated Net Income of such Person and only if a
corresponding amount would be permitted at the date of determination to be
dividended or distributed, as applicable, to Holdings by such Subsidiary without
prior approval (that has not been obtained), pursuant to the terms of its
charter and all agreements, instruments, judgments, decrees, orders, statutes,
rules and governmental regulations applicable to such Subsidiary or its
stockholders.
"Consolidated Depreciation and Amortization Expense" means
with respect to any Person for any period, the total amount of depreciation and
amortization expense and other non-cash expenses (excluding any non-cash expense
that represents an accrual, reserve or amortization of a cash expenditure for a
past, present or future period) of such Person and its Restricted Subsidiaries
for such period on a consolidated basis as defined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any
person for any period, the sum of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued,
to the extent such expense was deducted in computing Consolidated Net Income
(including amortization of debt issuance costs and original issue discount and
deferred financing fees, non-cash interest payments, the interest component of
Capital Lease Obligations, and net payments (if any) pursuant to Hedging
Obligations, excluding amortization of deferred financing fees), (ii)
commissions, discounts and other fees and charges paid or accrued with respect
to letters of credit and bankers' acceptance financing, (iii) the consolidated
interest expense of such person and its Restricted Subsidiaries that was
capitalized during such period and (iv) to the extent not included above, (a)
the maximum amount of interest which would have to be paid by such Person or its
Restricted Subsidiaries under a Guaranty of Indebtedness of any other Person if
such Guaranty were called upon and (b) payment to London Clubs on the Issue Date
of a fee equal to 1% of the amount of Indebtedness
5
supported and enhanced by the Keep-Well Agreement on the Issue Date and payment
of an annual fee equal to 1.5% of the annual average Indebtedness outstanding
under the Bank Credit Facility which is supported and enhanced by the Keep-Well
Agreement, in each case as set forth in the London Clubs Purchase Agreement as
in effect on the date of this Indenture.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided, that (i) the Net Income but not loss for such period of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends, if applicable, or distributions paid in cash to the referent
Person or a Wholly Owned Restricted Subsidiary thereof in respect of such
period, (ii) the Net Income of any Person acquired in a pooling of interests
transaction shall not be included for any period prior to the date of such
acquisition, (iii) the Net Income for such period of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of dividends, if
applicable, or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (which has not been obtained or waived in writing) or,
directly or indirectly, by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its equity, (iv) the
cumulative effect of a change in accounting principles shall be excluded, and
(v) the Net Income (but not loss) of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to Holdings or one of its Restricted
Subsidiaries.
"Consolidated Net Worth" means, with respect to any Person as
of any date, the sum of (i) the consolidated equity of the common equity holders
of such Person and its consolidated Restricted Subsidiaries as of such date plus
(ii) the respective amounts reported on such Person's balance sheet as of such
date with respect to any series of preferred equity (other than Disqualified
Stock), less (x) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going concern
business made within 12 months after the acquisition of such business)
subsequent to the Issue Date in the book value of any asset owned by such Person
or a consolidated Restricted Subsidiary of such Person, (y) all investments as
of such date in unconsolidated Subsidiaries and in Persons that are not
Subsidiaries (except, in each case, Permitted Investments) and (z) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"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 Issuers.
"Credit Agent" means, at any time, the then acting
administrative agent as defined in and under the Bank Credit Facility, which
initially shall be The Bank of Nova Scotia.
"Custodian" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"Deed of Trust" means the Deed of Trust to be executed by the
Company in favor of the Administrative Agent for the benefit of the Lenders.
"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.
6
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of Exhibit A-1 attached hereto except that such Note shall not bear the
Global Note Legend and shall not have the "Schedule of Exchanges of Interests in
the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Desert Passage" means the pending project by Aladdin Bazaar
to develop, construct and operate the Desert Passage, as described in the
Offering Memorandum of the Issuers dated February 18, 1998, relating to the
Units.
"Desert Passage Site" means the 12.42-acre portion of the
Project Site on which the Desert Passage is to be constructed.
"Disbursement Agent" means The Bank of Nova Scotia, as
disbursement agent under the Disbursement Agreement.
"Disbursement Agreement" means the Disbursement Agreement
among Holdings, the Company, The Bank of Nova Scotia, as Administrative Agent
under the Bank Credit Facility, the Disbursement Agent, the Investment
Intermediary and the Trustee.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the Holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature; provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require Holdings to repurchase or redeem such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that Holdings may
not repurchase or redeem any such Capital Stock pursuant to such provisions
prior to Holdings' compliance with Sections 4.10 or 4.15 hereof.
"Employment Agreements" means, collectively, (i) the
Employment & Consulting Agreement dated July 1, 1997, among Holdings, the
Company and Richard J. Goeglein, (ii) the Employment Agreement dated July 28,
1997, among Holdings, the Company and James H. McKennon, (iii) the Employment
Agreement dated July 28, 1997, among Holdings, the Company and Cornelius T.
Klerk, (iv) the Employment Agreement dated August 19, 1997, among Holdings, the
Company and Lee A. Galati (v) the Employment Agreement dated July 1, 1997, among
Holdings, the Company and Jose A. Rueda and (vi) the GAI Consulting Agreement.
"Energy Plant" means the pending project to develop, construct
and operate an energy plant to provide electricity, chilled water and hot water
to the Project.
"Energy Plant Site" means the 0.65-acre portion of the Project
Site on which the Energy Plant is to be constructed.
"Energy Provider" means Northwind Aladdin, LLC, a Nevada
limited-liability company.
7
"Enterprises" means Aladdin Gaming Enterprises, Inc., a Nevada
corporation.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Event of Loss" means, with respect to any property or asset
(tangible or intangible, real or personal) any of the following: (i) any loss,
destruction or damage of such property or assets; (ii) any institution of any
proceedings for the condemnation, seizure or taking of such property or asset or
for the exercise of any right of eminent domain; (iii) any actual condemnation,
seizure or taking by exercise of the power of eminent domain or otherwise of
such property or asset, or confiscation of such property or asset or the
requisition of the use of such property or asset; or (iv) any settlement in lieu
of clauses (ii) or (iii) above.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Note
Registration Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set
forth in the Note Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of Holdings and its
Restricted Subsidiaries in existence on the date of this Indenture, until such
amounts are repaid.
"FF&E" means any furniture, fixtures, equipment and other
personal property financed with the proceeds from the incurrence of Indebtedness
pursuant to clause (viii) of the second paragraph under Section 4.09 hereof.
"FF&E Financing" means the incurrence of Indebtedness, the
proceeds of which are utilized solely to finance or refinance the acquisition of
(or entry into a capital lease by Holdings or a Subsidiary of Holdings with
respect to) FF&E.
"Fixed Charge Coverage Ratio" means, with respect to any
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the referent Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees or redeems any Indebtedness (other than revolving credit
borrowings) or issues or redeems Preferred Stock subsequent to the commencement
of the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the event for which the calculation of the Fixed Charge Coverage Ratio
is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, Guaranty or
redemption of Indebtedness, or such issuance or redemption of Preferred Stock,
as if the same had occurred at the beginning of the applicable four-quarter
period. For purposes of making the computation referred to above, acquisitions,
dispositions and discontinued operations (as determined in accordance with GAAP)
that have been made by Holdings or any of its Restricted Subsidiaries, including
all mergers,
8
consolidations and dispositions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be calculated on a pro forma basis assuming that all such acquisitions,
dispositions, discontinued operations, mergers, consolidations (and the
reduction of any associated fixed charge obligations resulting therefrom) had
occurred on the first day of the four-quarter reference period.
"Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense of
such Person for such period and (ii) the consolidated interest of such Person
and its Restricted Subsidiaries that was capitalized during such period and
(iii) any interest expense on Indebtedness of another Person that is Guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries (whether or not such
Guaranty or Lien is called upon) and (iv) the product of (a) to the extent such
Person is not treated as (1) a pass-through entity or (2) a separate entity, in
either case for United States federal income tax purposes, all dividend
payments, whether or not in cash, on any series of Preferred Stock of such
Person or any of its Restricted Subsidiaries, other than dividend payments on
Equity Interests payable (x) solely in Equity Interests of Holdings (other than
Disqualified Stock) or (y) to Holdings or a Restricted Subsidiary of Holdings,
times (b) a fraction, the numerator of which is one and the denominator of which
is one minus the then current combined federal, state and local statutory income
tax rate of such Person, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP; provided, however, that dividends or
distributions paid on the Series A Preferred Interests shall not be counted to
the extent that interest payments on the Notes have been taken into account in
determining such Fixed Charges.
"Force Majeure Event" has the meaning ascribed thereto in the
Noteholder Completion Guaranty.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the Issue Date.
"GAI, LLC" means GAI, LLC, a Nevada limited-liability company.
"GAI Consulting Agreement" means the Consulting Agreement
dated as of July 1, 1997, between GAI, LLC and the Company.
"Gaming Approval" means every license, finding of suitability,
permit, authorization, registration or approval required to own, lease, operate
or otherwise conduct the gaming activities of the Company or any of its
Affiliates.
"Gaming Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, province or any city or
other political subdivision, whether now or hereafter existing, or any officer
or official thereof, including without limitation, the Nevada Gaming Commission,
the Nevada State Gaming Control Board, the Clark County Liquor and Gaming
Licensing Board and any other agency with authority to regulate any gaming
operation (or proposed gaming operation) owned, managed or operated by Holdings
or any of its Subsidiaries.
9
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A-1 or Exhibit A-2 attached hereto issued in accordance with Sections
2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof.
"Government Securities" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended), as custodian with respect to
any such Government Security or a specific payment of principal of or interest
on any such Government Security held by such custodian for the account of the
holder of such depository receipt; provided, that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Security or the specific payment of
principal of or interest on the Government Security evidenced by such depository
receipt.
"Guaranty" means a 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 Person, the
obligations of such Person under (i) currency exchange or interest rate swap
agreements, currency exchange or interest rate cap agreements and currency
exchange or interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in currency
exchange or interest rates.
"Holder" means a Person in whose name a Note is registered.
"Holdings" has the meaning assigned to it in the preamble to
this Indenture.
"Holdings Common Membership Interest" means the common
membership interests of Holdings.
"Holdings Series A Preferred Interests" means Holdings' Series
A Preferred Membership Interests issued to London Clubs, AHL or the Trust
pursuant to the Operating Agreement in exchange for any payments required
pursuant to the Keep-Well Agreement or the Bank Completion Guaranty where none
of such parties is responsible for a default leading to such payment.
"Holdings Series B Preferred Interests" means the Holdings'
Series B Preferred Membership Interests issued to London Clubs, AHL or the Trust
pursuant to the Operating Agreement in exchange for payments required pursuant
to the Keep-Well Agreement or the Bank Completion Guaranty where one of such
parties is responsible for a default leading to such payment.
"IAI Global Note" means the global Note in the form of Exhibit
A-1 attached hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of
10
and registered in the name of the Depositary or its nominee that will be issued
in a denomination equal to the outstanding principal amount of the Notes sold to
Institutional Accredited Investors.
"In Balance" shall have the meaning ascribed thereto in the
Noteholder Completion Guaranty.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all Indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
Indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guaranty by such Person of any indebtedness of any other Person.
Except as stated under the penultimate paragraph under Section 4.09 hereof, the
amount of any Indebtedness outstanding as of any date shall be (i) the accreted
value thereof, in the case of any Indebtedness issued with original issue
discount and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Independent Construction Consultant" means Rider Hunt (NV),
L.L.C. or any successor thereto acceptable to the Trustee.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the form
of direct or indirect loans (including guarantees of indebtedness or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If Holdings or any Subsidiary of Holdings sells or otherwise disposes of any
Equity Interests of any direct or indirect Subsidiary of Holdings such that,
after giving effect to any such sale or disposition, such Person is no longer a
subsidiary of Holdings, Holdings shall be deemed to have made an Investment on
the date of any such sale or disposition equal to the fair market value of the
Equity Interests of such Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07 hereof.
"IPO Entity" means Holdings, Enterprises or another entity
which controls the Company.
"Issue Date" means the date of this Indenture.
11
"Issuers" has the meaning assigned to it in the preamble to
this Indenture.
"Keep-Well Agreement" means the Keep-Well Agreement dated the
Issue Date, executed by AHL, London Clubs and Bazaar Holdings in favor of the
Administrative Agent under the Bank Credit Facility and the Lenders.
"LCNI" means London Clubs Nevada Inc., a Nevada corporation.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York, the City of Boston, Massachusetts
or the City of Las Vegas, Nevada 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.
"Lenders" means the Lenders as defined in the Bank Credit
Facility.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Issuers and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 2.5 of the Note Registration Rights Agreement.
"London Clubs" means London Clubs International, plc, a public
limited company organized under the laws of England and Wales.
"London Clubs Purchase Agreement" means the Purchase Agreement
dated September 24, 1997, among London Clubs, LCNI, AHL, Sommer Enterprises, the
Sommer Trust and the Company, as amended as of the date of this Indenture.
"Management Fee" means the fees payable by the Company to
London Clubs pursuant to the Salle Privee Management Agreement in consideration
for services to be provided by London Clubs to the Company.
"Minimum Aladdin Facilities" means, with respect to the
Aladdin, at least 2,465 operating slot machines, 91 operating table games, an
operating keno lounge, 1,870 restaurant seats, 1,750 usable parking spaces,
2,210 hotel rooms fit to receive guests, all banking, coin, security and other
ancillary equipment and facilities necessary to operate the Aladdin on a 24 hour
per day, seven days a week basis.
"Minimum Desert Passage Facilities" means, with respect to the
Desert Passage, at least 200,000 square feet of retail space, all necessary
common areas and all appropriate points of direct access from the Desert Passage
to the Aladdin and the exterior area surrounding the Aladdin.
12
"Mountain Spa" means the Mountain Spa development located in
Las Vegas, Nevada.
"Music Project" means the pending project by Aladdin Music to
develop, construct and operate the Music Project, as described in the Offering
Memorandum of the Issuers dated February 18, 1998, relating to the Units.
"Music Project Financing" means the incurrence by Aladdin
Music of Indebtedness, the proceeds of which are utilized solely to finance the
development, construction and operation of the Music Project.
"Music Project Site" means the 4.75-acre portion of the
Project Site on which the Music Project is to be constructed.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends or distributions, as
applicable, excluding, however, (i) any gain (but not loss), together with any
related provision for taxes on such gain (but not loss), realized in connection
with (a) any Asset Sale (including, without limitation, dispositions pursuant to
sale and leaseback transactions) or (b) the disposition of any securities, by,
or the extinguishment of any Indebtedness of, such Person or any of its
Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not
loss), together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by
Holdings or any of its Restricted Subsidiaries 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, investment banking fees and sales commissions, employee
severance and termination costs, any trade payables or similar liabilities
related to the assets sold and required to be paid by the seller as a result
thereof and sales, finder's or broker's commissions), and any relocation
expenses incurred as a result thereof, taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements), amounts required to be applied to the repayment of
Indebtedness secured by a Lien (other than the Bank Credit Facility) on the
asset or assets that are 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.
"Non-Recourse Debt" means Indebtedness (i) as to which neither
of the Issuers nor any of their Restricted Subsidiaries (a) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness), (b) is directly or indirectly liable (as a
guarantor or otherwise) or (c) constitutes the lender; and (ii) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes being offered hereby) of the Issuers or any of their Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Issuers or any of their
Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
13
"Note Construction Disbursement Account" means the
Disbursement Account to be maintained by the Disbursement Agent and pledged to
the Disbursement Agent for the benefit of the Trustee pursuant to the terms of
the Disbursement Agreement into which approximately $37 million of the net
proceeds of the Offering will be deposited.
"Note Custodian" means the Trustee, as custodian with respect
to the Notes in global form, or any successor entity thereto.
"Noteholder Completion Guaranty" means the Noteholder
Completion Guaranty dated as of the Issue Date, executed by the Trust, London
Clubs and Bazaar Holdings in favor of the Trustee.
"Note Registration Rights Agreement" means the Note
Registration Rights Agreement dated as of the Issue Date, among the Issuers and
the Initial Purchasers.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages, liquidated damages and other
liabilities payable under the documentation governing any Indebtedness.
"Offering" means the offering of the Units by the Issuers and
Enterprises.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf
of Holdings or Capital, as the case may be, by two Officers of Holdings or
Capital, one of whom must be the principal executive officer, the principal
financial officer, the treasurer or the principal accounting officer of Holdings
or Capital, that meets the requirements of Section 13.05 hereof.
"On Schedule Certificate" shall have the meaning ascribed
thereto in the Disbursement Agreement.
"Operating" means, (i) with respect to the Aladdin, the first
time that (a) all Gaming Approvals have been granted and are not then revoked or
suspended, (b) all Liens (other than Permitted Liens) related to the
development, construction, and equipping of the Aladdin have been paid or, if
payment is not yet due or if such payment is contested in good faith by
Holdings, either (1) sufficient funds remain in the Construction Disbursement
Account to discharge such Liens or (2) such Liens have been bonded, (c) the
Independent Construction Consultant, the general contractor and the architect of
the Aladdin shall have delivered one or more certificates to the Trustee each
certifying that the Aladdin is complete in all material respects in accordance
with the Approved Plans and Specifications therefor and all applicable building
laws, ordinances and regulations, (d) the Aladdin is in a condition (including
installation of furnishings, fixtures and equipment) to receive guests in the
ordinary course of business, (e) gaming and other operations in accordance with
applicable law are open to the general public and are being conducted at the
Aladdin with respect to at least the Minimum Aladdin Facilities, (f) a permanent
or temporary certificate of occupancy has been issued for the Aladdin by the
Clark County Building Department and (g) a notice of completion of the Aladdin
has been duly recorded; and (ii) with respect to the Desert Passage, the first
time that (a) the Desert Passage is in a condition (including installation of
all furnishings, fixtures and equipment) to receive customers in the ordinary
course of business, (b) retail
14
operations in accordance with applicable law are open to the general public and
are being conducted at the Desert Passage with respect to at least the Minimum
Desert Passage Facilities, (c) a temporary certificate of occupancy has been
issued for the Desert Passage by the Clark County Building Department and (d) a
notice of completion of the Desert Passage has been duly recorded.
"Operating Agreement" means the Operating Agreement of
Holdings, as amended from time to time.
"Operating Deadline" means the date which is 28 months after
the Issue Date; provided that, if a Force Majeure Event occurs, the Operating
Deadline shall be extended for the amount of time that such Force Majeure Event
exists but in no event shall the Operating Deadline be extended past the date
which is 40 months after the Issue Date.
"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 Issuers, any
Subsidiary of the Issuers or the Trustee.
"Parking Use Agreement" means the Common Parking Area Use
Agreement dated as of the Issue Date, between the Company and Bazaar.
"Participant" means, with respect to the Depositary, Euroclear
or Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and Cedel).
"Participating Broker-Dealer" has the meaning set forth in the
Note Registration Rights Agreement.
"Permitted Investments" means (i) any Investments in Holdings
or in a Wholly Owned Restricted Subsidiary of Holdings; (ii) any Investments in
Cash Equivalents; (iii) Investments by Holdings or any Restricted Subsidiary of
Holdings in a Person that is evidenced by Capital Stock if as a result of such
Investment (a) such Person becomes a Wholly Owned Restricted Subsidiary of
Holdings or (b) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is liquidated
into, Holdings or a Wholly Owned Restricted Subsidiary of Holdings; (iv) 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 4.10 hereof;
(v) any acquisition of assets solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of Holdings; (vi) Investments by
Holdings or any of its Restricted Subsidiaries in an amount not to exceed $5.0
million in any Person that is engaged in a line of business permitted under
Section 4.13 hereof; (vii) receivables owing to Holdings or any of its
Restricted Subsidiaries if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary trade
terms as Holdings or any such Restricted Subsidiary deems reasonable under the
circumstances; and (viii) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course of
business.
"Permitted Junior Securities" means securities of an Issuer
authorized by an order or decree of a court of competent jurisdiction in
connection with a reorganization that gave effect to (and states in such order
or decree that effect has been given to) the subordination of such securities to
all Senior Debt (and any debt securities issued in exchange for Senior Debt) to
substantially the same extent
15
as, or to a greater extent than, the Notes are subordinated to Senior Debt;
provided that all such Senior Debt is assumed by the reorganized entity and the
rights of the holders of any such Senior Debt are not, without the consent of
such holders, altered by such reorganization, which consent shall be deemed to
have been given if the holders of such Senior Debt, individually or as a class,
shall have approved such reorganization.
"Permitted Liens" means (i) Liens in favor of Holdings or any
of its Restricted Subsidiaries; (ii) Liens on property of a Person existing at
the time such Person became a Restricted Subsidiary, is merged into or
consolidated with or into Holdings or any Restricted Subsidiary of Holdings;
provided, that such Liens were in existence prior to the contemplation of such
acquisition, merger or consolidation and do not extend to any other assets other
than those of the Person acquired by, merged into or consolidated with Holdings
or any Restricted Subsidiary of Holdings; (iii) Liens on property existing at
the time of acquisition thereof by Holdings or any Restricted Subsidiary of
Holdings; provided that such Liens were in existence prior to the contemplation
of such acquisition; (iv) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business or in the construction
of the Aladdin; provided, however, that Holdings has obtained a title insurance
endorsement insuring against losses arising therewith or if such Lien arises
after completion of the Aladdin, Holdings has bonded within a reasonable time
after becoming aware of the existence of such Lien; (v) Liens securing
obligations in respect of this Indenture or the Notes; (vi) Liens existing on
the Issue Date; (vii) (a) Liens for taxes, assessments or governmental charges
or claims or (b) statutory Liens of landlords, and carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other similar Liens
arising in the ordinary course of business or in the construction of the
Aladdin, in the case of each of (a) and (b), with respect to amounts that either
(1) are not yet delinquent or (2) are being diligently contested in good faith
by appropriate proceedings, provided that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been made
therefor; (viii) easements, rights-of-way, navigational servitudes,
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances which do not interfere in any material respect with the ordinary
conduct of business of Holdings and its Restricted Subsidiaries; (ix) a
leasehold mortgage in favor of a party financing the lessee of space within the
Aladdin; provided that neither Holdings nor any of its Restricted Subsidiaries
is liable for the payment of any principal of, or interest or premium on, such
financing; (x) Liens created by the Reciprocal Easement Agreement; (xi) Liens
created by the Disbursement Agreement; (xii) Liens to secure all Obligations
under the Bank Credit Facility or the Rate Protection Agreement (as defined in
the Bank Credit Facility), as applicable, incurred pursuant to clauses (i),
(vii), (viii), (ix), (x) and (xvi) of the second paragraph of Section 4.09
hereof; (xiii) Liens to secure all Obligations under FF&E Financing incurred
pursuant to clause (viii) and (x) of the second paragraph of Section 4.09
hereof; (xiv) Liens to secure Indebtedness permitted by clause (vi) of the
second paragraph of Section 4.09 hereof; (xv) Liens incurred in connection with
Hedging Obligations incurred pursuant to clause (vii) of the second paragraph
under Section 4.09 hereof; (xvi) licenses of patents, trademarks and other
intellectual property rights granted by Holdings or any of its Restricted
Subsidiaries in the ordinary course of business; (xvii) any judgment attachment
or judgment Lien not constituting an Event of Default; and (xviii) Liens on
assets of Unrestricted Subsidiaries that secure Non-Recourse Debt of such
Unrestricted Subsidiaries.
"Permitted Refinancing Indebtedness" means any Indebtedness of
Holdings or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of Holdings or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the Accreted Value or
principal amount, as the case may be, of such Permitted Refinancing Indebtedness
does not exceed the Accreted Value or
16
principal amount, as the case may be, plus accrued interest on, the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable expenses incurred in connection therewith); (ii) such
Permitted Refinancing Indebtedness has a final maturity date 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; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinate 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 of the Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by Holdings
or by the Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership,
limited-liability company or partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity.
"Pledge Agreements" means, collectively, the L.L.C. Interest
Pledge and Security Agreement dated as of the Issue Date, to be executed by
Holdings in favor of the Trustee pursuant to which Holdings will pledge all
Series A Preferred Interests to the Trustee for the benefit of the holders of
the Notes and the Holdings Collateral Account Agreement dated as of the Issue
Date, to be executed by Holdings in favor of the Disbursement Agent, as agent
for the Trustee, pursuant to which Holdings will pledge all of the amounts in
the Note Construction Disbursement Account to the Disbursement Agent, as agent
for the Trustee, for the benefit of the holders of the Notes.
"Preferred Stock" means any Equity Interest with preferential
right of payment of dividends or distributions, as applicable, or upon
liquidation, dissolution, or winding up.
"Principals" means the Trust, or the beneficiaries of the
Trust (whether current or contingent) as of the date hereof which control AHL or
Sommer Enterprises, and London Clubs.
"Private Placement Legend" means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"Project Site" means the approximately 35-acre parcel of
property located in Las Vegas, Nevada on which the Complex is to be constructed.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Qualified Public Offering" means a public offering of common
stock of any IPO Entity which is registered under the Securities Act and results
in proceeds of at least $50.0 million; provided, that immediately prior to such
public offering, London Clubs, the Trust, or the beneficiaries of the Trust
(whether current or contingent) as of the date hereof which control AHL or
Sommer Enterprises, and holders of the Warrants and Warrant Shares each hold,
directly or indirectly, their respective equity interests in the IPO Entity;
provided, further, that London Clubs, the Trust, or the beneficiaries (whether
current or contingent) of the Trust as of the date hereof which control AHL or
Sommer Enterprises, and holders of the Warrants and Warrants Shares will use
their reasonable best efforts to effect such public offering such that the
holders of the Warrants and Warrant Shares (x) will not recognize income gain or
17
loss for federal income tax purposes (other than as a result of a sale of their
Warrant Shares in such public offering) and (y) will be subject to federal
income tax in the same manner and at the same times as would have been the case
if the Warrants were originally issued by the IPO Entity.
"Reciprocal Easement Agreement" means the Construction,
Operation and Reciprocal Easement Agreement dated as of the Issue Date, among
the Company, Bazaar, Aladdin Music, as such agreement may be amended,
supplemented, restated or otherwise modified from time to time.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means a Regulation S Temporary
Global Note or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global
Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global
Note in the form of Exhibit A-2 hereto bearing the Private Placement Legend and
the Regulation S Temporary Global Note Legend and deposited with or on behalf of
and registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"Related Party" means, with respect to any Principal, any
Subsidiary of such Principal.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Division 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 Definitive Note" means a Definitive Note bearing
the Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the
Private Placement Legend.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Period" means the one-year restricted period as
defined in Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Rule 903" means Rule 903 promulgated under the Securities
Act.
18
"Rule 904" means Rule 904 promulgated the Securities Act.
"Salle Privee Management Agreement" means the Salle Privee
Management Agreement dated the Issue Date, between the Company and London Clubs.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means (i) all Indebtedness outstanding on the
date hereof or hereafter incurred, assumed or guaranteed under the Bank Credit
Facility or any other arrangement with respect to the Bank Credit Facility with
any Lender (or any Affiliate of a Lender) and permitted under this Indenture,
including and together with any Hedging Obligations, and (ii) all Obligations
arising under any of the foregoing (including interest, whether or not allowable
in a bankruptcy, insolvency or similar proceeding, accruing on Indebtedness or
any other Obligation incurred pursuant to the Bank Credit Facility or any other
such arrangement after the filing of a petition initiating any proceeding under
any bankruptcy, insolvency or similar law or which would have accrued but for
such filing). Notwithstanding anything to the contrary in the foregoing, Senior
Debt shall specifically not include any Indebtedness that is incurred in
violation of this Indenture.
"Separation Date" means the earliest to occur of: (i)
September 1, 1998; (ii) the date on which a registration statement with respect
to the Notes or a registration statement with respect to the Warrants and the
Warrant Shares is filed with the Commission under the Securities Act; (iii) the
occurrence of a Change of Control or a sale or recapitalization of Enterprises,
Holdings or the Company occurs (a "Triggering Event"); (iv) 30 days after a
Qualified Public Offering; (v) the occurrence of an Event of Default; or (vi)
such earlier date as determined by Merrill Lynch & Co. in its sole discretion.
"Series A Notes" has the meaning assigned to it in the
preamble to this Indenture.
"Series A Preferred Interests" means the Company's Series A
Preferred Membership Interests.
"Series B Notes" has the meaning assigned to it in the
preamble to this Indenture.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Note Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary which would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Issue Date.
"Site Work Agreement" means the Site Work, Development and
Construction Agreement dated as of the Issue Date, among the Company, Aladdin
Bazaar and AHL.
"Sommer Enterprises" means Sommer Enterprises, LLC, a Nevada
limited-liability company.
"Stated Maturity" means, with respect to any installment of
interest or principal on any 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
19
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereto.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association, or other business entity (other than a partnership) of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of that Person (or a combination thereof) and
(ii) any partnership (including an entity which is not treated as a separate
entity for income tax purposes) (a) the sole general partner or the managing
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more Subsidiaries of such
Person (or any combination thereof).
"Tax Amount" means, with respect to any period, without
duplication, the increase in the cumulative United States federal, state and
local tax liability of holders of equity interests in Holdings or the Company
(or, if such holder is a pass-through entity for United States income tax
purposes, holders of its equity interests) in respect of their interests in
Holdings or the Company for such period plus any additional amounts payable to
such holders to cover taxes arising from ownership of such equity interests.
"Theater Lease" means the lease of the Theater of the
Performing Arts between the Company and Aladdin Music to be entered into prior
to the opening of the Music Project.
"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.
"Trust" means the Trust under Article Sixth u/w/o Sigmund
Sommer.
"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.
"Units" means the units issued by the Issuers and Enterprises
on the Issue Date, each consisting of $1,000 principal amount at maturity of
Series A Notes and 10 Warrants to purchase 10 shares of Class B non-voting
common stock, no par value, of Enterprises.
"Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"Unrestricted Global Note" means a permanent global Note in
the form of Exhibit A-1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary that is
designated by the Board of Managers as an Unrestricted Subsidiary pursuant to a
Board Resolution; but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement,
contract, arrangement or understanding with Holdings or any Restricted
Subsidiary of Holdings unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to Holdings or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who
20
are not Affiliates of Holdings; (c) is a Person with respect to which neither
Holdings nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of Holdings
or any of its Restricted Subsidiaries; and (e) has at least one director on its
Board of Managers or Board of Directors that is not a director or executive
officer of Holdings or any of its Restricted Subsidiaries and has at least one
executive officer that is not a director or executive officer of Holdings or any
of its Restricted Subsidiaries. Any such designation by the Board of Managers
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 4.07 hereof. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of Holdings
as of such date (and, if such Indebtedness is not permitted to be incurred as of
such date under Section 4.09 hereof, Holdings shall be in default of such
covenant). Notwithstanding the above, each of AMH and Aladdin Music shall be an
Unrestricted Subsidiary until such time as it is designated to be a Restricted
Subsidiary pursuant to the terms of the last sentence of this definition. The
Board of Managers may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of Holdings of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Indebtedness is permitted under Section 4.09
hereof, calculated on a pro forma basis as if such designation had occurred at
the beginning of the four-quarter reference period, and (ii) no Default or Event
of Default would be in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"Warrant Registration Rights Agreement" means the Warrant
Registration Rights Agreement dated as of the Issue Date, among Enterprises and
the Initial Purchasers.
"Warrants" means the warrants to purchase an aggregate of
2,215,000 shares of Class B non-voting common stock, no par value, of
Enterprises, issued on the Issue Date as part of the Units.
"Warrant Shares" means the shares of Class B non-voting common
stock, no par value, of Enterprises issuable upon exercise of the Warrants.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years (calculated to the nearest
one-twelfth) obtained by dividing (i) the sum of the products obtained by
multiplying (a) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment, by (ii) the then outstanding principal amount or liquidation
preference, as applicable, of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
21
Restricted Subsidiaries of such Person or by such Person and one or more Wholly
Owned Restricted Subsidiaries of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
"Working Capital Facility" means a credit facility pursuant to
any agreement or agreements for the making of loans or advances on a revolving
basis, the issuance of letters of credit and/or the creation of bankers'
acceptances to fund the Company's general corporate requirements and any
amendment, supplement, extension, modification, renewal, replacement or
refinancing from time to time, including any agreement to renew, extend,
refinance or replace all or any portion of such facility.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction" 4.11
"Asset Sale Offer" 4.10
"Authentication Order" 2.02
"Benefitted Party" 10.01
"Change of Control Offer" 4.15
"Change of Control Payment" 4.15
"Change of Control Payment Date" 4.15
"Covenant Defeasance" 8.03
"DTC" 2.03
"Event of Default" 6.01
"Excess Proceeds" 4.10
"incur" 4.09
"Legal Defeasance" 8.02
"Note Obligations" 10.01
"Offer Amount" 3.10
"Offer Period" 3.10
"Payment Default" 6.01
"Paying Agent" 2.03
"Purchase Date" 3.10
"Registrar" 2.03
"Trustee" 8.05
"Restricted Payments" 4.07
"Warrant Endorsement" 2.02
SECTION 1.03. INCORPORATION BY REFERENCE.
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:
22
"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 Issuers 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) provisions apply to successive
events and transactions; and
(6) references to sections of or rules under
the Securities Act shall be deemed to include
substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
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-1 or Exhibit A-2 attached
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 Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Issuers 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.
23
(b) Global Notes. Notes issued in global form shall be substantially in
the form of Exhibit A-1 or Exhibit A-2 attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A-1 attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate and in accordance with the practices and procedures of the
Depositary and the Trustee, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the aggregate principal amount of outstanding Notes represented thereby shall
be made by the Trustee or the Note Custodian, at the direction of the Trustee,
in accordance with instructions given by the Holder thereof as required by
Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S Temporary
Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Cedel Bank, duly executed by the Issuers and authenticated by the
Trustee as hereinafter provided. The Restricted Period shall be terminated upon
the receipt by the Trustee of (i) a written certificate from the Depositary,
together with copies of certificates from Euroclear and Cedel Bank certifying
that they have received certification of non-United States beneficial ownership
of 100% of the aggregate principal amount of the Regulation S Temporary Global
Note (except to the extent of any beneficial owners thereof who acquired an
interest therein during the Restricted Period pursuant to another exemption from
registration under the Securities Act and who will take delivery of a beneficial
ownership interest in a 144A Global Note or an IAI Global Note bearing a Private
Placement Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii)
an Officers' Certificate from the Issuers as required by Regulation S. Following
the termination of the Restricted Period, beneficial interests in the Regulation
S Temporary Global Note shall be exchanged for beneficial interests in
Regulation S Permanent Global Notes pursuant to the Applicable Procedures.
Simultaneously with the authentication of Regulation S Permanent Global Notes,
the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate
principal amount of the Regulation S Temporary Global Note and the Regulation S
Permanent Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
(d) Euroclear and Cedel Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers of each Issuer shall sign the Notes by manual or
facsimile signature. The seal of each of the Issuers may be reproduced on the
Notes and may be in facsimile form.
24
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 a written order of the Issuers signed
by two Officers of each Issuer (an "Authentication Order"), authenticate Notes
for original issue up to the aggregate principal amount stated in paragraph 4 of
the Notes. The aggregate principal amount of Notes outstanding at any time may
not exceed such amount except as provided in Section 2.06 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Issuers 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 Issuers.
All Notes issued prior to the separation described below shall
have printed or overprinted thereon the following (the "Warrant Endorsement").
THE NOTES EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE
SEPARATELY FROM THE WARRANTS ATTACHED HERETO ORIGINALLY SOLD AS A UNIT
WITH THE NOTES UNTIL THE EARLIEST TO OCCUR OF (I) SEPTEMBER 1, 1998;
(II) THE DATE ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO THE
NOTES OR A REGISTRATION STATEMENT WITH RESPECT TO THE WARRANTS AND THE
WARRANT SHARES IS FILED WITH THE COMMISSION UNDER THE SECURITIES ACT
(III) THE OCCURRENCE OF A CHANGE OF CONTROL OR A SALE OR
RECAPITALIZATION OF ENTERPRISES, HOLDINGS OR THE COMPANY OCCURS; (IV)
30 DAYS AFTER A QUALIFIED PUBLIC OFFERING; (V) THE OCCURRENCE OF AN
EVENT OF DEFAULT; OR (VI) SUCH EARLIER DATE AS DETERMINED BY MERRILL
LYNCH & CO. IN ITS SOLE DISCRETION (THE DATE OF OCCURRENCE OF AN EVENT
SPECIFIED IN CLAUSES (I) THROUGH (VI) BEING REFERRED TO AS THE
"SEPARATION DATE"). PRIOR TO SUCH DATE, THE NOTES EVIDENCED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY IN INTEGRAL MULTIPLES OF $1,000
PRINCIPAL AMOUNT OF NOTES AND ONLY WITH THE SIMULTANEOUS TRANSFER TO
THE TRANSFEREE OF 10 WARRANTS FOR EACH $1,000 PRINCIPAL AMOUNT SO
TRANSFERRED.
Under the terms of the warrant agreement relating to the Warrants (the "Warrant
Agreement"), the holder of this security may at any time on or after the
Separation Date, at its option, by notice to the Trustee elect to separate or
separately transfer the Notes and the Warrants represented hereby, in whole or
in part, and shall thereafter surrender this security to the Trustee for the
exchange of this security, in part, for such Warrant or Warrants and for a Note
or Notes of a like aggregate principal amount and of authorized denominations
not bearing this Warrant Endorsement; provided that no delay or failure on the
part of the Trustee or the Warrant Agent to exchange this security for such
Warrant or Warrants and Note or Notes shall affect the separation of such Notes
and Warrants represented hereby or their separate transferability. Until such
separation, the holder of this security is, for each $1,000 principal amount of
Notes, also the record owner of 10 Warrants expiring March 1, 2010, each Warrant
to purchase 1 share
25
of Class B non-voting Common Stock, no par value (the "Common Stock"), of
Enterprises (subject to adjustment). Enterprises has deposited with the Trustee,
as custodian for the Holder of the Notes bearing this Warrant Endorsement, a
certificate or certificates for such Warrants to purchase an aggregate of
2,215,000 shares of Common Stock (subject to adjustment). Prior to the
separation of the Notes and the Warrants as described above, record ownership of
such Warrants is transferable only by the transfer of this Note on the Note
register maintained by the Issuers pursuant to the Indenture. After such
separation, ownership of a Warrant is transferable only by the transfer of the
certificate representing such Warrant in accordance with the provisions of the
Warrant Agreement.
By accepting a security bearing this Warrant Endorsement, each holder of this
security shall be bound by all of the terms and provisions of the Warrant
Agreement (a copy of which is available on request to Enterprises or the Warrant
Agent); provided, however, that no provision in this Indenture or in the Warrant
Agreement shall impose any obligation on the Issuers with respect to the
Warrants or the Warrant Agreement or on Enterprises with respect to the Notes or
this Indenture.
Election to Exercise. On or after the Warrant Exercise Commencement Date (as
such term is defined in the Warrant Agreement), the Warrants may be exercised by
obtaining from the Warrant Agent the required forms of election to exercise,
declaration form and instructions for payment of the Exercise Price (as such
term is defined in the Warrant Agreement), tendering the Exercise Price in
accordance with the Warrant Agreement and complying with the other conditions to
exercise contained in the Warrant Agreement. Upon receiving the required forms
and payment of such Exercise Price, the Warrant Agent shall exercise such
Warrants subject to, and in accordance with, the provisions of the Warrant
Agreement.
Election of Exchange. The undersigned registered holder of the security
represented hereby irrevocably elects to separate its Notes and Warrants and to
exchange this security for a new Note in the principal amount hereof and a
Warrant certificate.
The undersigned hereby irrevocably instructs the Trustee (A) to issue in the
name of the undersigned registered holder a new Note not containing the above
Warrant Endorsement in the principal amount equal to the principal amount hereof
and (B) to deliver this security to the Warrant Agent pursuant to the provisions
of the Warrant Agreement with instructions to issue in the name of the
undersigned registered holder a Warrant certificate representing the number of
Warrants equal to the number of Warrants represented by this security and to
issue (1) a new Warrant certificate to replace the Warrant certificate held on
deposit by the Warrant Agent equal to the difference between (x) the number of
Warrants represented by the Warrant certificate so held on deposit and (y) the
number of Warrants represented by this Security.
26
Dated:
----------------------
Name of Holder of this security:
----------------------
Address:
----------------------
----------------------
Signature:
----------------------
Note: The above signature must correspond with the name as written upon the face
of this security in every particular, without alteration or enlargement whatever
and if the certificate representing any principal amount at maturity of this
security or the associated Warrants is to be registered in a name other than
that in which this security is registered.
Signature Guaranteed:
----------------------
Note: Signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
Until any Note and the Warrant with which it is initially
issued are separated or separately transferred pursuant to the terms of the
Warrant Endorsement, the Trustee shall hold such Warrant as custodian on behalf
of the Holder of such Note bearing such legends, and the Note and Warrant shall
be accompanied by a Unit certificate which shall have printed or overprinted
thereon the following.
THIS GLOBAL UNIT IS COMPRISED OF THE ATTACHED GLOBAL NOTE AND
GLOBAL WARRANT. THE GLOBAL UNIT, THE GLOBAL NOTE AND THE GLOBAL WARRANT ARE
COLLECTIVELY REFERRED TO HEREIN AS THE "SECURITIES."
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE
144A")), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR")
OR (C) IT IS A NON-U.S. PERSON AS DEFINED IN RULE 904 UNDER THE SECURITIES ACT,
(2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH ALADDIN GAMING HOLDINGS, LLC, ALADDIN CAPITAL CORP. OR
ALADDIN GAMING ENTERPRISES, INC. (COLLECTIVELY "THE ALADDIN PARTIES") OR ANY
AFFILIATE OF THE ALADDIN PARTIES WAS THE OWNER OF THE SECURITIES (OR ANY
PREDECESSOR OF THE SECURITIES) ONLY (A) TO THE ALADDIN PARTIES, (B) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
27
PURSUANT TO RULE 144A INSIDE THE UNITED STATES, TO A PERSON IT REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) INSIDE THE UNITED STATES
TO AN ACCREDITED INVESTOR THAT IS ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ALADDIN
PARTIES', THE TRUSTEE'S AND THE WARRANT AGENT'S RIGHTS PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER (I) PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THE GLOBAL NOTE
AND THE GLOBAL WARRANT ARE COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE.
THE SECURITIES ARE GLOBAL SECURITIES WITHIN THE MEANING OF THE
INDENTURE AND THE WARRANT AGREEMENT AND ARE REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THE
SECURITIES ARE NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND THE WARRANT AGREEMENT, AND NO
TRANSFER OF THE SECURITIES (OTHER THAN A TRANSFER OF THE SECURITIES AS A WHOLE
BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ALADDIN PARTIES OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE NOTES AND THE WARRANTS CONSTITUTING A PART OF THE UNITS
WILL NOT BE SEPARATELY TRANSFERABLE UNTIL THE EARLIEST OF (I) SEPTEMBER 1, 1998,
(II) THE DATE ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO THE NOTES OR A
REGISTRATION STATEMENT WITH RESPECT TO THE WARRANTS AND THE WARRANT SHARES IS
FILED WITH THE COMMISSION UNDER THE SECURITIES ACT, (III) THE OCCURRENCE OF A
CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE) OR A
28
SALE OR RECAPITALIZATION OF ENTERPRISES, ALADDIN GAMING HOLDINGS, LLC OR ALADDIN
GAMING, LLC, A NEVADA LIMITED-LIABILITY COMPANY, OCCURS, (IV) 30 DAYS AFTER A
QUALIFIED PUBLIC OFFERING (AS DEFINED IN THE INDENTURE) OCCURS, (V) THE
OCCURRENCE OF AN EVENT OF DEFAULT (AS DEFINED IN THE INDENTURE) OR (VI) SUCH
EARLIER DATE AS DETERMINED BY MERRILL LYNCH & CO. IN ITS SOLE DISCRETION.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Issuers 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 Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Issuers may change any
Paying Agent or Registrar without notice to any Holder. The Issuers shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Issuers or any of
their Subsidiaries may act as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will 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 Liquidated Damages, if any, or interest on the
Notes, and will notify the Trustee of any default by the Issuers 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 Issuers 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 Issuers or a
Subsidiary) shall have no further liability for the money. If the Issuers or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Issuers, the
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 Issuers 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 Issuers shall otherwise comply with TIA ss. 312(a).
29
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes.
A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes will be exchanged by the Issuers for Definitive
Notes if (i) the Issuers deliver to the Trustee notice from the Depositary that
it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either case,
a successor Depositary is not appointed by the Issuers within 120 days after the
date of such notice from the Depositary or (ii) the Issuers in their sole
discretion determine that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and deliver a written notice to such effect to
the Trustee; provided that in no event shall the Regulation S Temporary Global
Note be exchanged by the Issuers for Definitive Notes prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the Securities Act. Upon the
occurrence of either of the preceding events in (i) or (ii) above, Definitive
Notes shall be issued in such names as the Depositary shall instruct the
Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.06 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Sections 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b),(c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the
Global Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Temporary Regulation S
Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in
30
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to
be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information
regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above;
provided that in no event shall Definitive Notes be issued upon the
transfer or exchange of beneficial interests in the Regulation S
Temporary Global Note prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903 under the Securities Act. Upon
consummation of an Exchange Offer by the Issuers in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii)
shall be deemed to have been satisfied upon receipt by the Registrar of
the instructions contained in the Letter of Transmittal delivered by
the Holder of such beneficial interests in the Restricted Global Notes.
Upon satisfaction of all of the requirements for transfer or exchange
of beneficial interests in Global Notes contained in this Indenture and
the Notes or otherwise applicable under the Securities Act, the Trustee
shall adjust the principal amount of the relevant Global Note(s)
pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof.
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Temporary Global
Note or the Regulation S Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form
of a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications and certificates and
Opinion of Counsel required by item (3) thereof, if
applicable.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Note Registration
Rights Agreement and the holder of the beneficial
31
interest to be transferred, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Note
Registration Rights Agreement;
(C) such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Note Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar or the Issuers so request or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Registrar or the Issuers, as applicable, to the effect that such
exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance
with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been issued,
the Issuers shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
32
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred
to the Issuers or any of their Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Issuers shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or denominations
as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear
the Private Placement Legend and shall be subject to all restrictions
on transfer contained therein.
Without limiting, and in addition to the restrictions in, Sections
2.06(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S
Temporary Global Note may not be exchanged for a Definitive Note or
transferred to a Person who takes delivery thereof in the form of a
Definitive
33
Note prior to (x) the expiration of the Restricted Period and (y) the
receipt by the Registrar of any certificates required pursuant to Rule
903 under the Securities Act, except in the case of a transfer pursuant
to an exemption from the registration requirements of the Securities
Act other than Rule 903 or Rule 904.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Note Registration
Rights Agreement and the holder of such beneficial interest,
in the case of an exchange, or the transferee, in the case of
a transfer, certifies in the applicable Letter of Transmittal
that it is eligible to participate in the Exchange Offer and
is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Note
Registration Rights Agreement;
(C) such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Note Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar (although it will have no obligation to do so) or the Issuers
so request or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar or the Issuers,
as applicable, to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the
34
conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall
cause the aggregate principal amount of the applicable Global Note to
be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Issuers shall execute and the Trustee shall authenticate and deliver to
the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iii) shall
be registered in such name or names and in such authorized denomination
or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iii) shall not bear the
Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act,
a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Issuers or any of their Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
35
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Note, in the case
of clause (B) above, the 144A Global Note in the case of clause (C)
above, the Regulation S Global Note, and in all other cases, the IAI
Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Note Registration
Rights Agreement and the Holder, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is eligible to
participate in the Exchange Offer and is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Note
Registration Rights Agreement;
(C) such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Note Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c)
thereof; or
(2) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar (although it shall have no obligation to do so) or the
Issuers so request or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar or
the Issuers, as applicable, to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased in accordance
36
with its standard operating procedures and practices the aggregate
principal amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased in
accordance with its standard operating procedures and practices the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Issuers shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing. In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
37
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Note Registration
Rights Agreement and the Holder, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is eligible to
participate in the Exchange Offer and is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Issuers;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Note
Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Note Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof;
or
(2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar (although it shall have no obligation to do so) or Issuers so
requests, an Opinion of Counsel in a form reasonably acceptable to the
Registrar or Issuers, as applicable, to the effect that such exchange
or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Note Registration Rights Agreement, the Issuers shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02 and
an Officer's Certificate from the Issuers to the effect that an Exchange Offer
in accordance with the Note Registration Rights Agreement has occurred, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the
38
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that they are eligible to participate in the Exchange Offer and (x)
they are not broker-dealers, (y) they are not participating in a distribution of
the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of
the Issuers, and accepted for exchange in the Exchange Offer and (ii) Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly in accordance with the practices and procedures of the
Depositary and the Trustee, and the Issuers shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below,
each Global Note and each Definitive Note (and all Notes
issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION AS SET
FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7)
UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR"), (2) AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE WHICH
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A)
TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A INSIDE THE
UNITED STATES, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR
THAT IS ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE ISSUERS' AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSES (D),
39
(E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF
THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE ISSUERS."
(iii) Regulation S Temporary Global Note Legend. The
Regulation S Temporary Global Note shall bear a legend in substantially
the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR OTHER NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE
HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL
NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
(iv) Original Issue Discount Legend. Each Note shall bear a
legend in substantially the following form:
"FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH
ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS
SECURITY, THE ISSUE PRICE IS $519.40 THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT IS $480.60, THE ISSUE DATE IS FEBRUARY 26, 1998 AND THE YIELD
TO MATURITY IS 15.06 % PER ANNUM."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has
40
been redeemed, repurchased or canceled in whole and not in part, each such
Global Note shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11 hereof. At any time prior to such cancellation, if
any beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and an endorsement
shall be made on such Global Note or on the schedule maintained by the
Depositary in respect of such Global Note for such purposes, in accordance with
the Applicable Procedures, by the Trustee or by the Depositary at the direction
of the Trustee to reflect such reduction; and if the beneficial interest is
being exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note, such other Global Note
shall be increased accordingly and an endorsement or on the schedule maintained
by the Depositary in respect of such Global Note for such purposes, in
accordance with the Applicable Procedures, shall be made on such Global Note by
the Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Issuers shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Issuers' order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Issuers may
require payment of a sum sufficient to cover any documentary, stamp or
other transfer tax or similar governmental charge payable in connection
therewith (other than any such documentary, stamp or other transfer
taxes or similar governmental charge payable upon exchange or transfer
pursuant to Sections 2.10, 3.07, 3.10, 4.10, 4.15 and 9.05 hereof).
(iii) 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.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Issuers, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.
(v) The Issuers shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so 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.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Issuers 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
41
of and interest on such Notes and for all other purposes, and none of
the Trustee, any Agent or the Issuers shall be affected by notice to
the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile (provided that the original is mailed by first
class mail within two business days thereafter).
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the
Issuers and the Trustee (and the Issuers if they reasonably request) receive
evidence to their satisfaction of the destruction, loss or theft of any Note,
the Issuers 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 Issuers, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and the
Issuers to protect the Issuers, the Trustee, any Agent and any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Issuers may charge for their expenses in replacing a Note.
Every replacement Note is an obligation of the Issuers and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued and outstanding 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, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof and in accordance with
its standard operating procedures and practices, 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 Issuers or an Affiliate of the
Issuers holds the Note; however, Notes held by the Issuers or a Subsidiary of
the Issuers shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a 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 bona fide 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 Issuers, 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.
42
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 Issuers, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuers, shall
be considered as though not outstanding, except that for the purposes of
determining whether the 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 Issuers 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
Issuers considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Issuers 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 Issuers 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 Issuers. The Issuers 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 Issuers default in a payment of interest on the Notes,
they shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Issuers 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 Issuers shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Issuers (or, upon the written request of the Issuers, the Trustee in the name
and at the expense of the Issuers) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 37 days but not more than 60 days before a
43
redemption date, an Officers' Certificate setting forth (i) the clause of this
Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the Accreted Value of Notes to be redeemed, (iv) the redemption
price and (v) the amount of Liquidated Damages, if any.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed or purchased
at any time, selection of Notes for redemption or purchase will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed, provided that the Issuers shall
notify the Trustee or any listing of the Notes on any national securities
exchange or, if the Notes are not so listed, on a pro rata basis, by lot or by
such other method as the Trustee shall deem fair and appropriate; provided, that
no Notes of $1,000 or less shall be purchased or redeemed in part. Notices of
redemption or purchase shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date or purchase date (except in the
case of redemption required by any Gaming Authority, which may be less than 30
days) to each Holder of Notes to be redeemed or purchased at such Holder's
registered address. Notices of redemption may not be conditional. If any Note is
to be redeemed or purchased in part only, any notice of redemption or purchase
that relates to such Note shall state the portion of the principal amount
thereof to be redeemed or purchased. On and after the redemption or purchase
date, interest and Liquidated Damages, if any, shall cease to accrete or accrue
on Notes or portions thereof called for redemption or purchase.
The Trustee shall promptly notify the Issuers in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.10 hereof, at least 30
days but not more than 60 days before a redemption date, the Issuers shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the Accreted
Value of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in Accreted Value equal to the
unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
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(f) that, unless the Issuers default in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' names and at their expense; provided, however, that
the Issuers shall have 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. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to 10:00 a.m. (New York City time) on the
redemption date, the Issuers shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued interest on
all Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Issuers any money deposited with the Trustee or the
Paying Agent by the Issuers in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.
If the Issuers comply with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrete or
accrue on the Notes or the portions of Notes called for redemption. If a Note is
redeemed on or after a record date for the payment of interest 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 shall not be so
paid upon surrender for redemption because of the failure of the Issuers to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case at
the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Issuers
shall issue and, upon the Issuers' written request, the Trustee shall
authenticate for the Holder at the expense of the Issuers a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07 and in
Section 3.08 hereof, the Notes shall not be redeemable at the option of the
Issuers prior to March 1, 2003. Thereafter, the Notes shall be subject to
redemption at the option of the Issuers, in whole or in part, upon not less than
30 nor more
45
than 60 days' notice, at the redemption prices (expressed as percentages of
Accreted Value) set forth below, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable date of redemption, if redeemed
during the twelve-month period beginning on of the years indicated below:
Year Percentage
- ---- ----------
2003.............................................................. 106.75 %
2004.............................................................. 104.50 %
2005.............................................................. 102.25 %
2006 and thereafter............................................... 100.00 %
(b) Notwithstanding the provisions of clause (a) of this Section 3.07,
on or prior to March 1, 2001, the Issuers may redeem up to an aggregate of 35%
of the Accreted Value of the Notes at a redemption price of 113 1/2 % of the
Accreted Value thereof, plus Liquidated Damages, if any, thereon to the
redemption date, with the proceeds of a Qualified Public Offering (which
proceeds may be advanced or contributed to the Issuers by the IPO Entity);
provided that at least 65% of the Accreted Value remains outstanding immediately
after the occurrence of such redemption; and provided, further, that such
redemption shall occur within 60 days of the date of such Qualified Public
Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Sections 3.01 through 3.06 hereof.
SECTION 3.08. GAMING REDEMPTION.
(a) Notwithstanding any other provision of this Indenture, if any
Gaming Authority requires that a holder or beneficial owner of Notes must be
licensed, qualified or found suitable under any applicable gaming law and such
holder or beneficial owner fails to apply for a license, qualification or
finding of suitability within 30 days after being requested to do so by such
Gaming Authority (or such lesser period that may be required by such Gaming
Authority), or if such holder or beneficial owner is notified by such Gaming
Authority that such holder or beneficial owner will not be so licensed,
qualified or found suitable, the Issuers shall have the right, at their option,
(i) to require that such holder or beneficial owner dispose of such holder's or
beneficial owner's Notes within 30 days (or such earlier date as may be required
by the applicable Gaming Authority) of (a) the termination of the period
described above for such holder or beneficial owner to apply for a license,
qualification or finding of suitability or (b) receipt of the notice from such
Gaming Authority that such holder or beneficial owner will not be licensed,
qualified or found suitable by such Gaming Authority or (ii) to call for
redemption of the Notes of such holder or beneficial owner at a redemption price
equal to the lesser of the price at which such holder or beneficial owner
acquired such Notes and the Accreted Value thereof, together with, in either
case, accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of redemption or the date of the finding that such holder or beneficial
owner will not be licensed, qualified or found suitable, which may be less than
30 days following the notice of redemption, if so ordered by such Gaming
Authority or required by applicable gaming laws.
(b) In connection with any redemption pursuant to this Section 3.08,
and except as may be required by a Gaming Authority, the Issuers shall be
required to comply with Sections 3.01 through 3.06 hereof.
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SECTION 3.09. MANDATORY REDEMPTION.
Except as set forth under 4.10 and 4.15 hereof, the Issuers
shall not be required to make mandatory redemptions or sinking fund payments
prior to maturity with respect to the Notes.
SECTION 3.10. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the
Issuers shall be required to commence an Asset Sale Offer, they shall follow the
procedures specified below.
The Asset Sale Offer shall remain open for a period of not
less than 30 nor more than 60 days following its commencement and no longer,
except to the extent that a longer period is required by applicable law (the
"Offer Period"). Upon the termination of the Offer Period (the "Purchase Date"),
the Issuers shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale 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 Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Issuers
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 instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice,
which shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to Section 4.10
hereof and the length of time the Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrete or accrue interest;
(d) that, unless the Issuers default in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or
accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may only elect to have all of such Note purchased and may not elect
to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale 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 Issuers, a depositary, if appointed by
the Issuers, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
47
(g) that Holders shall be entitled to withdraw their election if the
Issuers, the depositary or the Paying Agent, as the case may be, receives, not
later than two Business Days prior to the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter duly executed by the Holder
setting forth the name of the Holder, the Accreted Value of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased;
(h) that, if the aggregate Accreted Value of Notes surrendered by
Holders exceeds the Offer Amount, the Issuers shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Issuers so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued replacement Notes equal in Accreted Value to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Issuers 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 properly tendered pursuant to the
Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes
properly tendered, and shall deliver to the Trustee an Officers' Certificate
stating that such Notes or portions thereof were accepted for payment by the
Issuers in accordance with the terms of this Section 3.10. The Issuers, 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 Issuers for purchase, and the Issuers shall
promptly issue a new Note, and the Trustee, upon written request from the
Issuers 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 Issuers to the
Holder thereof.
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
SECTION 4.01. PAYMENT OF NOTES.
The Issuers shall pay or cause to be paid the Accreted Value
of, premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Accreted Value, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Issuers
or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Issuers in immediately available funds and designated for
and sufficient to pay all Accreted Value, premium, if any, and interest then
due. The Issuers shall pay all Liquidated Damages, if any, in the same manner on
the dates and in the amounts set forth in the Note Registration Rights
Agreement.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain in the Borough of Manhattan, the
City of New York, an office or agency (which may be an office of the 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
48
demands to or upon the Issuers in respect of the Notes and this Indenture may be
served. The Issuers 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 Issuers shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Issuers 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 Issuers of their obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Issuers shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the
Trustee as one such office or agency of the Issuers in accordance with Section
2.03.
SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations of the Commission,
so long as any Notes are outstanding, the Issuers shall furnish to the Holders
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Issuers
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that describes the
financial condition and results of operations of Holdings and its consolidated
Subsidiaries (provided that, prior to the time that the Issuers file such
information with the Commission for public availability, showing in reasonable
detail, either on the face of the financial statements or in the footnotes
thereto and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, the financial condition and results of operations of
Holdings and its Restricted Subsidiaries separate from the financial condition
and results of operations of the Unrestricted Subsidiaries of Holdings and,
subsequent to such time, showing such reasonable detail as required by the
Commission) and, with respect to the annual information only, a report thereon
by the Issuers' certified independent accountants and (ii) all current reports
that would be required to be filed with the Commission on Form 8-K if the
Issuers were required to file such reports, in each case within the time periods
specified in the Commission's rules and regulations. In addition, following the
consummation of the exchange offer contemplated by the Note Registration Rights
Agreement, whether or not required by the rules and regulations of the
Commission, the Issuers shall file a copy of all such information and reports
with the Commission for public availability within the time periods specified in
the Commission's rules and regulations (unless the Commission will not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request. In addition, the Issuers shall, for so long
as any Notes remain outstanding, furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Issuers shall deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Issuers and their Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Issuers have kept, observed, performed and fulfilled
their obligations under this Indenture, and further stating, as to each such
Officer signing such certificate, that to the best of his or her
49
knowledge the Issuers have kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and are not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Issuers are taking or propose 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 Accreted Value of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Issuers are taking or propose to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Issuers' independent public accountants (who shall be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Issuers have violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Issuers shall, so long as any of the Notes are outstanding,
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 Issuers are taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES.
The Issuers shall pay, and shall cause each of their
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies of the Issuers or their Subsidiaries, as applicable, 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
Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Issuers covenant (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 Issuers (to
the extent that it may lawfully do so) hereby expressly waive 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) Prior to the date the Aladdin is Operating, except as permitted in
clauses (iv), (v), (vi), (vii), (viii), (xi), (xii), (xiv), (xv), (xix), (xx),
(xxi), (xxii) or (xxiv) of paragraph (c) below, Holdings shall not, and shall
not permit any of its Restricted Subsidiaries to, directly or indirectly: (i)
declare or pay any dividend, if applicable, or make any other payment or
distribution on account of Holdings' or any of its Restricted Subsidiaries'
Equity Interests (including, without limitation, any payment in connection with
any merger or consolidation involving either of the Issuers) or to the direct or
indirect
50
holders of Holdings' or any of its Restricted Subsidiaries' Equity Interests in
any capacity (other than dividends, if applicable, or distributions payable in
Equity Interests (other than Disqualified Stock) of Holdings (or accretions
thereon) or dividends, if applicable, or distributions payable to Holdings by a
Wholly Owned Subsidiary of Holdings); (ii) purchase, redeem or otherwise acquire
or retire for value (including, without limitation, in connection with any
merger or consolidation involving either of the Issuers) any Equity Interests of
Holdings or any Subsidiary of Holdings or any direct or indirect parent of
Holdings or other Affiliate of Holdings (other than any such Equity Interests
owned by Holdings or any Wholly Owned Subsidiary of Holdings); (iii) make any
payment on or with respect to, or purchase, redeem, defease or otherwise acquire
or retire for value any Indebtedness that is pari passu with or subordinated to
the Notes (other than the Notes), except a payment of interest or principal at
Stated Maturity; or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments").
(b) Following the date on which the Aladdin is Operating, subject to
paragraph (c) below, Holdings shall not and shall not permit any of its
Restricted Subsidiaries to make, directly or indirectly, any Restricted Payments
unless, at the time of and after giving effect to such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(ii) Holdings would, at the time of such Restricted Payment,
have a Fixed Charge Coverage Ratio for its most recently ended four
full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such Restricted
Payment is proposed to be made of at least 2.25 to 1.0, determined on a
pro forma basis after giving effect to such Restricted Payment as if it
had been made at the beginning of such four quarter period; and
(iii) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments (except as provided in the last
sentence of paragraph (c) below) made by Holdings and its Restricted
Subsidiaries after the Issue Date is less than the sum, without
duplication, of (A) 50% of (1) the Consolidated Net Income of Holdings
for the period (taken as one accounting period) from the beginning of
the first fiscal quarter commencing after the date on which the Aladdin
becomes Operating to the end of Holdings' most recently ended fiscal
quarter for which internal financial statements are available (or, if
such Consolidated Net Income for such period is a deficit, less 100% of
such deficit) less (2) the amount paid or to be paid in respect of such
period pursuant to clause (v) of paragraph (c) below, plus (B) 100% of
the aggregate net cash proceeds received by Holdings since the Issue
Date from capital contributions or the issue or sale of Equity
Interests of Holdings (other than Disqualified Stock) or Disqualified
Stock or debt securities of the Issuers that have been converted into
such Equity Interests (other than Equity Interests (or Disqualified
Stock or convertible debt securities) sold to a Subsidiary of the
Issuers and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock), in any
case other than (1) amounts received by Holdings pursuant to payments
being made by any party in connection with its obligations under the
Keep-Well Agreement or the Bank Completion Guaranty or (2) any amounts
received by Holdings or deemed received by Holdings from a Restricted
Subsidiary in connection with a conversion by Holdings to a corporation
(other than amounts received by Holdings from a new issuance of Equity
Interests of Holdings for cash), plus (C) to the extent not otherwise
included in Holdings' Consolidated Net Income, 100% of the cash
dividends, if applicable, or distributions or the amount of the cash
principal and interest payments received since the Issue Date by
Holdings or any Restricted Subsidiary from any Unrestricted Subsidiary
or in respect of
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any Restricted Investment (other than dividends, if applicable, or
distributions to pay obligations of or with respect to such
Unrestricted Subsidiary such as income taxes) until the entire amount
of the Investment in such Unrestricted Subsidiary has been received or
the entire amount of such Restricted Investment has been returned, as
the case may be, and 50% of such amounts thereafter. In the event that
the Issuers convert an Unrestricted Subsidiary to a Restricted
Subsidiary, the Issuers may add back to this clause (iii) the aggregate
amount of any Investment in such Subsidiary that was a Restricted
Payment at the time of such Investment.
(c) The provisions set forth in paragraph (b) above shall not prohibit
(i) the payment of any dividend, if applicable, or distribution within 60 days
after the date of declaration thereof, if at the date of declaration such
payment would have complied with the provisions of this Indenture; (ii) the
redemption, repurchase, retirement, defeasance or other acquisition of any pari
passu or subordinated indebtedness of Holdings or Equity Interests of Holdings
in exchange for, or out of the net cash proceeds of, the substantially
concurrent sale (other than to a Restricted Subsidiary of Holdings) of, other
Equity Interests of Holdings (other than any Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall be
excluded from clause (b)(iii) of the preceding paragraph; (iii) the defeasance,
redemption, repurchase, retirement or other acquisition of any pari passu or
subordinated indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness; (iv) any redemption required pursuant to
Section 3.08 hereof; (v) for so long as Holdings or the Company is treated as a
pass-through entity, or the Company is not treated as a separate entity, for
United States federal income tax purposes (as evidenced by an opinion of
counsel, subject to usual qualifications and in reliance on customary
representations, at least annually), distributions to equity holders of Holdings
or the Company, as applicable, in an amount not to exceed the Tax Amount for
such period; provided, however, that (A) prior to any distributions of Tax
Amounts, Holdings or the Company, as applicable, shall deliver an officers'
certificate to the Trustee to the effect that Holdings or the Company, as
applicable, is a limited-liability company taxable as a partnership or other
substantially similarly treated pass-through entity, or the Company is not
treated as a separate entity, for federal income tax purposes and (B) at the
time of such distributions, the most recent audited financial statements of
Holdings and the Company reflect that Holdings and the Company were each treated
as a limited-liability company taxable as a partnership or other substantially
similarly treated pass-through entity for federal income tax purposes for the
period covered by such financial statements; (vi) the grant on or after the
Issue Date by the Company to Aladdin Bazaar of a ground lease on the Desert
Passage Site and, upon the subdivision of the Project Site, the transfer by the
Company to Aladdin Bazaar of the fee interest in the Desert Passage Site; (vii)
the grant on or after the Issue Date of a ground lease relating to the Energy
Plant Site by the Company to the Energy Provider; (viii) the grant on or after
the Issue Date of a ground lease on the Music Project Site by the Company to AMH
and, upon consummation of the Music Project Financing, an Investment not to
exceed $21.3 million plus the transfer of the Music Project Site, in each case
by the Company to AMH and by AMH to Aladdin Music in exchange for preferred
membership interests in Aladdin Music pursuant to the Aladdin Music Operating
Agreement as in effect on the Issue Date; (ix) on and after September 1, 2003,
payments of cash distributions on the Series A Preferred Interests by the
Company to Holdings in an amount sufficient to enable Holdings to make payments
required to be made in respect of the Notes in an amount not to exceed the
amount payable thereunder in accordance with the terms thereof in effect on the
Issue Date; (x) payment to London Clubs of the Management Fee pursuant to the
Salle Privee Management Agreement as in effect on the Issue Date; (xi) payment
to London Clubs on the Issue Date of a fee equal to 1% of the amount of
Indebtedness supported and enhanced by the Keep-Well Agreement on the Issue Date
and payment of an annual fee equal to 1.5% of the annual average Indebtedness
outstanding under the Bank Credit Facility which is supported and enhanced by
the Keep-Well Agreement, in each case as set forth in the London Clubs Purchase
Agreement as in effect on the date hereof; (xii) payments or
52
distributions by the Company to Holdings to effect redemptions of the Series A
Preferred Interests so long as Holdings utilizes the proceeds of such payments
to make an offer to purchase the Notes as required under this Indenture or to
redeem the Notes as permitted under this Indenture; (xiii) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of Holdings or any of its Restricted Subsidiaries held by any member of
Holdings' or any of its Restricted Subsidiaries' management pursuant to any
management equity subscription agreement or stock option agreement, including,
without limitation, pursuant to the exercise of puts of common membership
interests of Holdings by employees of Holdings as set forth in any Employment
Agreement; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests shall not exceed $2.0 million in
the aggregate prior to the maturity of the Notes in any twelve-month period;
(xiv) the payment of salary, bonus and other benefits payable pursuant to the
Employment Agreements as amended from time to time; provided that any amendment
to any Employment Agreement has been determined by the Management Committee to
have been made in the ordinary course of business on terms customary in the
hotel/casino business; (xv) the issuance of Holdings Series A Preferred
Interests or Holdings Series B Preferred Interests and dividends, if applicable,
and distributions thereon made pursuant to the Operating Agreement as in effect
on the Issue Date in exchange for any payments required pursuant to the
Keep-Well Agreement or the Bank Completion Guaranty; (xvi) intercompany payments
between Holdings and its Wholly Owned Restricted Subsidiaries, including without
limitation, debt repayments between or among Holdings and its Wholly Owned
Restricted Subsidiaries; (xvii) following a Qualified Public Offering, dividends
or common stock buybacks in an aggregate amount in any calendar year not to
exceed 6% of the aggregate net proceeds received by the IPO Entity in connection
with such Qualified Public Offering; (xviii) repurchases of Capital Stock of
Holdings deemed to occur upon exercise of options to acquire Capital Stock of
Holdings if such repurchased Capital Stock represents a portion of the exercise
price of such options; (xix) payments by the Company to Holdings to enable
Holdings to pay any Liquidated Damages on the Notes so long as Holdings utilizes
the proceeds of such payments for the payment of such Liquidated Damages; (xx)
retainer payments made pursuant to Section 4(a) of the GAI Consulting Agreement;
(xxi) the payment of up to $3.0 million to the Trust to reimburse the Trust for
development costs incurred by the Trust on behalf of the Company prior to the
Issue Date and the payment of up to $0.9 million to reimburse the Trust for
development costs incurred by the Trust on behalf of the Company after the Issue
Date; (xxii) distributions to Holdings or Enterprises in an amount not to exceed
the fees and expenses incurred in connection with the obligation to file and
cause to become effective registration statements as required by the Note
Registration Rights Agreement and the Warrant Registration Rights Agreement;
(xxiii) the repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of Holdings held by employees of Holdings or the Company
pursuant to any stock ownership or option plan in effect from time to time;
provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $2.0 million in any
twelve-month period; and (xxiv) cancellations or redemptions of Holdings Common
Membership Interests held by GAI, LLC or any member of Holdings' management
pursuant to adjustments to be made under the Operating Agreement as in effect on
the Issue Date as a result of the exercise of Warrants; provided that no
payments permitted by clauses (i)-(ix) and (xi)-(xxiv) above shall be made if a
Default or an Event of Default shall have occurred and be continuing as a
consequence thereof. Any payments made pursuant to clauses (ii), (iii), (v),
(vi), (vii), (viii), (ix), (xi), (xii), (xiv), (xv), (xvi), (xviii), (xx),
(xxi), (xxii) and (xxiv) of this paragraph shall not be taken into account for
purposes of calculating the amount of Restricted Payments in clause (b)(iii)
above and all payments made pursuant to the remaining clauses of this paragraph
and under the definition of "Permitted Investments" shall be taken into account
for purposes of such clause (b)(iii) above.
53
(d) The Board of Managers may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by Holdings
and its Restricted Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated will be deemed to be Restricted Payments at the time of
such designation and will reduce the amount available for Restricted Payments
under paragraph (b) above. All such outstanding Investments will be deemed to
constitute Investments in an amount equal to the fair market value of such
Investments at the time of such designation. Such designation will only be
permitted if such Restricted Payment would be permitted at such time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
(e) The amount of all Restricted Payments (other than cash and those
Restricted Payments set forth in clauses (vi), (vii), (viii) and (xxiv) of
paragraph (c) of this Section 4.07) shall be the fair market value on the date
of the Restricted Payment of the assets or securities proposed to be transferred
or issued by Holdings or such Restricted Subsidiary, as the case may be,
pursuant to the Restricted Payment. The fair market value of any non-cash
Restricted Payment shall be determined by the Board of Managers whose resolution
with respect thereto shall be delivered to the Trustee. Not later than the date
of making any Restricted Payment, Holdings 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.
SECTION 4.08. DISTRIBUTION AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Restricted Subsidiary to (i) (a) pay dividends, if applicable, or make any
other distributions to Holdings or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits or (b) pay any Indebtedness owed to Holdings or any of
its Restricted Subsidiaries, (ii) make loans or advances to Holdings or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
Holdings or any of its Restricted Subsidiaries, except, in each case, for such
encumbrances or restrictions existing under or by reason of (a) the Bank Credit
Facility, as in effect as of the Issue Date, and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings, are no more restrictive with respect to such dividend, if
applicable, and other payment restrictions than those contained in the Bank
Credit Facility as in effect on the Issue Date, (b) this Indenture and the
Notes, (c) any instrument governing Indebtedness or Capital Stock of a Person
acquired by Holdings or any of its Restricted Subsidiaries as in effect at the
time of such acquisition (except to the extent such Indebtedness was incurred in
connection with or in contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired, provided that in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Indenture to be incurred, provided, further, that
any amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of any such instrument are no more
restrictive, taken as a whole, than those contained in such instrument, (d)
customary non-assignment provisions in leases entered into in the ordinary
course of business, (e) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature discussed in
clause (iii) above on the property so acquired, (f) any agreement for the sale
of a Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale, (g) applicable law or any applicable rule or order
of any Gaming Authority, (h) Permitted Liens, (i) Permitted Refinancing
54
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive, taken
as a whole, than those contained in the agreements governing the Indebtedness
being refinanced, (j) secured Indebtedness otherwise permitted to be incurred
pursuant to Section 4.12 hereof that limits or restricts the right of the debtor
to dispose of the assets securing such Indebtedness, (k) provisions with respect
to the disposition or distribution of assets or property in joint venture
agreements and other similar agreements entered into in the ordinary course of
business, (l) rights of first refusal substantially of the type set forth in the
Operating Agreement, (m) contractual restrictions in effect on the Issue Date
and (n) any encumbrances or restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in clauses (b) and (d) through (n) above, provided, that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of the
Board of Managers, no more restrictive with respect to such dividend, if
applicable, and other payment restrictions than those contained in the dividend,
if applicable, or other payment restrictions prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding, replacement
or refinancing.
SECTION 4.09. LIMITATIONS ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK.
Except as provided in the following paragraph, Holdings shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable, contingently or otherwise, with respect to (collectively,
"incur" and correlatively, an "incurrence" of) any Indebtedness (including
Acquired Indebtedness) or issue any shares of Disqualified Stock, and that
Holdings shall not permit any of its Restricted Subsidiaries to issue any shares
of Preferred Stock.
Holdings and its Restricted Subsidiaries may incur the
following Indebtedness or issue the following shares of Disqualified Stock:
(i) the Company may incur Indebtedness under the Bank Credit
Facility; provided that the aggregate principal amount of all
Indebtedness outstanding under the Bank Credit Facility after giving
effect to each such incurrence, including all Indebtedness incurred to
refinance or replace any Indebtedness incurred pursuant to this clause
(i), does not exceed $430.0 million less (a) the aggregate amount of
all permanent principal repayments, optional or mandatory, made from
time to time after the date hereof with respect to such Indebtedness
(other than repayments made in connection with a refinancing thereof)
and (b) permanent reductions in the available term Indebtedness under
the Bank Credit Facility resulting from the application of Asset Sales
proceeds; provided, further, that the maximum principal amount of
Indebtedness that may be outstanding under the Bank Credit Facility
pursuant to this clause (i) may be increased pursuant to the incurrence
of Indebtedness thereunder for the purposes and subject to the maximum
amounts and other limitations set forth in clauses (vii), (viii), (ix)
and (xvi) of this paragraph; provided that for any amount of such
Indebtedness incurred under this clause (i), the amount of Indebtedness
permitted to be incurred under such other clause shall be
correspondingly decreased;
(ii) Holdings or any of its Restricted Subsidiaries may incur
any Existing Indebtedness, including any Permitted Refinancing
Indebtedness incurred to refinance or replace any such Indebtedness;
55
(iii) the Issuers may incur Indebtedness represented by the
Notes;
(iv) the Company may issue the Series A Preferred Interests to
Holdings, which shall pledge such interests to the Trustee for the
benefit of the Holders, and the Company may issue other shares of
Preferred Stock so long as such Preferred Stock is junior to the Series
A Preferred Interests, including any Preferred Stock issued in exchange
therefor with terms no less favorable to the holders of the Notes than
the Series A Preferred Interests;
(v) Holdings may issue Holdings Series A Preferred Interests
or Holdings Series B Preferred Interests pursuant to the terms of the
Operating Agreement as in effect on the date hereof made in
consideration of payments under the Keep-Well Agreement or the Bank
Completion Guaranty;
(vi) Holdings and its Restricted Subsidiaries may incur
Indebtedness represented by Capital Lease Obligations incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment used in the
business of Holdings or such Restricted Subsidiary, in an aggregate
principal amount, including any Permitted Refinancing Indebtedness
incurred to refinance or replace any Indebtedness incurred pursuant to
this clause (vi), not to exceed $10.0 million at any time outstanding;
(vii) Holdings and its Restricted Subsidiaries may incur
Hedging Obligations that are incurred (a) for the purpose of fixing or
hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding or (b) for the purpose of fixing or hedging currency
exchange rate risk with respect to any currency exchange; provided,
however, that the notional principal amount of any such Hedging
Obligation does not exceed the principal amount of Indebtedness to
which such Hedging Obligations relate;
(viii) Holdings and the Company may incur the FF&E Financing;
provided, however, that (a) the principal amount of such Indebtedness
does not exceed the cost (including sales and excise taxes,
installation and delivery charges and other direct costs of, and other
direct expenses paid or charged in connection with, such purchase) of
the FF&E purchased or leased with the proceeds thereof and (b) the
aggregate principal amount of such Indebtedness, including any
Permitted Refinancing Indebtedness incurred to refinance or replace any
Indebtedness incurred pursuant to this clause (viii), does not exceed
$80.0 million (including obligations characterized as operating leases
or other off-balance sheet financing arrangements) outstanding at any
time;
(ix) to the extent that such incurrence does not result in
incurrence by Holdings or any of its Restricted Subsidiaries of any
obligation for the payment of borrowed money of others, Holdings or any
of its Restricted Subsidiaries may incur Indebtedness solely in respect
of performance bonds, standby letters of credit, bankers' acceptances
or completion guarantees, provided, that such Indebtedness was incurred
in the ordinary course of business of Holdings or any of its Restricted
Subsidiaries and in an aggregate principal amount outstanding under
this clause (ix) at any one time of not more than $10.0 million;
(x) the incurrence by Holdings or any Restricted Subsidiary of
(a) at any time prior to the Operating Deadline, additional
Indebtedness under clause (i) or (viii) of this paragraph in an
aggregate amount not to exceed $40.0 million, plus (b) after a default
of the "In Balance" requirements of this Indenture and at any time
prior to the Operating Deadline, additional Indebtedness under clause
(i) or (viii) in an aggregate amount not to exceed $50.0 million
56
(provided that Indebtedness incurred pursuant to this clause (x)(b) is
matched, dollar for dollar, by additional equity investments by the
Principals or any Related Party);
(xi) after the Aladdin is Operating, Holdings may incur
Indebtedness (including Acquired Indebtedness) or issue shares of
Disqualified Stock if (a) the Fixed Charge Coverage Ratio for Holdings'
most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.25 to 1.0, determined on a
pro forma basis (including a pro forma application of the net proceeds
therefrom) as if the additional Indebtedness had been incurred or the
Disqualified Stock had been issued, as the case may be, at the
beginning of such four-quarter period;
(xii) after the Aladdin is Operating, any Restricted
Subsidiary of Holdings may incur Indebtedness (including Acquired
Indebtedness) if the Fixed Charge Coverage Ratio for such Restricted
Subsidiary'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 has been issued at the beginning of such four-quarter
period;
(xiii) Holdings and its Restricted Subsidiaries may incur
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, substitute or
refund Indebtedness that was permitted to be incurred under clauses
(ii), (v), (vii), (xi), (xii) and (xiii) of this Section 4.09;
(xiv) after the Aladdin is Operating, intercompany
Indebtedness between or among Holdings and any of its Wholly Owned
Restricted Subsidiaries will be permitted; provided, however, that (a)
if Holdings is the obligor on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all
obligations with respect to the Notes and (b)(1) any subsequent
issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than Holdings or a Wholly
Owned Restricted Subsidiary thereof and (2) any sale or other transfer
of any such Indebtedness to a Person that is neither Holdings nor a
Wholly Owned Restricted Subsidiary thereof shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by Holdings or
such Restricted Subsidiary, as the case may be, that was not permitted
by this clause (xiv);
(xv) after the Aladdin is Operating, the guaranty by Holdings
or any Restricted Subsidiary of Indebtedness of Holdings or a
Restricted Subsidiary that was permitted to be incurred by another
provision of this Section 4.09 shall be permitted;
(xvi) after the Aladdin is Operating, the Company may incur
Indebtedness under any Working Capital Facility in an aggregate amount
at any time outstanding not to exceed $20.0 million; and
(xvii) Holdings and its Restricted Subsidiaries may incur
Indebtedness in an aggregate principal amount outstanding not to exceed
$10.0 million.
For purposes of determining compliance with this Section 4.09,
in the event that an item of Indebtedness meets the criteria of more than one of
the categories of Indebtedness permitted in clauses
57
of the second or third paragraph of this Section 4.09, the Issuers shall, in
their sole discretion, classify such item of Indebtedness in any manner that
complies with this Section 4.09 and such item of Indebtedness will be treated as
having been incurred pursuant to only such clause or clauses. Accrual of
interest, the accretion of the accreted value or principal and the payment of
interest in the form of additional Indebtedness will not be deemed to be an
incurrence of Indebtedness for purposes of this Section 4.09.
Holdings shall not incur any Indebtedness that is
contractually subordinated in right of payment to any other Indebtedness of
Holdings unless such Indebtedness is also contractually subordinated in right of
payment to Notes on substantially identical terms; provided, however, that no
Indebtedness of Holdings shall be deemed to be contractually subordinated in
right of payment to any other Indebtedness of Holdings solely by virtue of being
unsecured.
SECTION 4.10. ASSET SALES
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale prior to the date the Aladdin is
Operating. After the date the Aladdin is Operating, Holdings shall not and shall
not permit any of its Restricted Subsidiaries to consummate an Asset Sale,
unless (i) no Default or Event of Default exists or is continuing immediately
prior to or after giving effect to such Asset Sale, (ii) Holdings or the
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Managers or the Board of Directors, as the case may
be, and set forth in an Officers' Certificate delivered to the Trustee) of the
assets sold or otherwise disposed of and (iii) at least 75% of the consideration
therefor received by Holdings or such Restricted Subsidiary is in the form of
cash or Cash Equivalents; provided, however, that the amount of (a) any
liabilities (as shown on Holdings' or such Restricted Subsidiary's most recent
balance sheet (or the notes thereto)) of Holdings or such Restricted Subsidiary
(other than contingent liabilities and liabilities that are by their terms
expressly subordinated to the Notes or any guarantee thereof) that are assumed
by the transferee of any such assets pursuant to a customary novation agreement
that releases Holdings and such Restricted Subsidiary, as the case may be, from
further liability and (b) any securities, notes or other obligations received by
Holdings or such Restricted Subsidiary from such transferee that are within 20
days thereof converted by Holdings or such Restricted Subsidiary into cash (to
the extent of the cash received), shall be deemed to be cash for purposes of
this provision.
Within 180 days after the receipt of any Net Proceeds of any
Asset Sale, Holdings or such Restricted Subsidiary, as the case may be, may
apply such Net Proceeds (i) to the making of a capital expenditure or the
acquisition of long-term tangible assets of Holdings or such Restricted
Subsidiary used by or useful to Holdings or such Restricted Subsidiary in the
line of business in which Holdings or such Restricted Subsidiary is permitted to
be engaged pursuant to Section 4.13 hereof; or (ii) following the date on which
the Aladdin is Operating, to a repayment of, or permanent reduction of
commitments under Indebtedness of any Restricted Subsidiary, including without
limitation, amounts available under the Bank Credit Facility. Pending the final
application of any such Net Proceeds, Holdings or such Restricted Subsidiary may
temporarily reduce revolving credit borrowings or invest in Cash Equivalents.
Any Net Proceeds from Asset Sales that are not invested or applied as provided
in the first sentence of this paragraph will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million,
Holdings will be required to make an offer to all Holders (an "Asset Sale
Offer") to purchase the maximum Accreted Value of Notes that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to 100%
of the Accreted Value thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the
58
date of purchase, which date shall be no less than 30 nor more than 60 days
after the date of the Asset Sale Offer, in accordance with the procedures set
forth in this Indenture; provided, however, that if any Restricted Subsidiary of
Holdings receives proceeds from such Asset Sale, such Restricted Subsidiary
shall redeem, or make available to the Company such Excess Proceeds so that the
Company may redeem, an amount of Series A Preferred Interests sufficient for
Holdings to utilize the proceeds from such redemption to make the Asset Sale
Offer required by this provision. To the extent that the aggregate amount of
Notes tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds,
Holdings or the Restricted Subsidiary, as the case may be, may, subject to the
provisions of this Indenture use any remaining Excess Proceeds for general
corporate purposes. If the aggregate Accreted Value of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased in the manner described under Section 3.02 hereof.
Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds
shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate Transaction is
on terms that are no less favorable to Holdings or such Restricted Subsidiary
than those that would have been obtained in a comparable transaction by Holdings
or such Restricted Subsidiary with an unrelated Person and (ii) Holdings
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, an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above, (b) with respect to any Affiliate
Transaction or series of Affiliate Transactions involving aggregate
consideration in excess of $5.0 million, a resolution of the Management
Committee set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved unanimously by the Management Committee and (c) with respect
to any Affiliate Transaction involving aggregate consideration in excess of
$10.0 million, an opinion as to the fairness to Holders of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing. The foregoing provisions will not
apply to any payments, transfers or dispositions pursuant to the following: (i)
any employment, indemnification, noncompetition or confidentiality agreement
entered into by Holdings or any of its Restricted Subsidiaries in the ordinary
course of business on terms customary in the hotel/casino business; (ii)
transactions between or among Holdings and any of its Restricted Subsidiaries;
(iii) Restricted Payments permitted by Section 4.07 hereof; (iv) the Noteholder
Completion Guaranty; (v) the Keep-Well Agreement; (vi) the Salle Privee
Management Agreement; (vii) the Reciprocal Easement Agreement as in effect on
the Issue Date; (viii) the Parking Use Agreement as in effect on the Issue Date;
(ix) any amendments, modifications, restatements, renewals, supplements and
replacements to the Reciprocal Easement Agreement or the Parking Use Agreement;
provided, that the Board of Managers determines in good faith that any such
amendment is not materially adverse to the Holders; (x) the Theater Lease; (xi)
the payment by Aladdin Bazaar to the Company of up to $14.2 million pursuant to
Section 4.5(a) of the Site Work Agreement, (xii) loans or advances to employees
of Holdings or its Restricted Subsidiaries to fund the exercise price of options
granted under employment agreements or stock option plans or agreements of
Holdings or its Restricted Subsidiaries, in each case, as in effect on the Issue
Date, not to exceed $0.5 million outstanding at any one time; and (xiii) the
payment of reasonable fees to members of the Board of Managers or the Board of
Directors, as the case may be, of Holdings or any of its Restricted Subsidiaries
who are not employees of Holdings or any of its Restricted Subsidiaries.
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SECTION 4.12. LIENS.
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist
any Lien on any asset owned as of the Issue Date or thereafter acquired, or any
proceeds, income or profits therefrom, or assign or convey any right to receive
income therefrom, unless the Notes are equally and ratably secured (except that
Liens securing Indebtedness which is subordinated to the Notes shall not be
permitted in any circumstances), except for (a) Liens securing the Notes; (b)
Liens securing Indebtedness which is incurred to refinance Indebtedness which
has been secured by a Lien permitted under this Indenture and which has been
incurred in accordance with the provisions of this Indenture; provided, however,
that such Liens do not extend to or cover any property or assets of Holdings or
any of its Restricted Subsidiaries not securing the Indebtedness so refinanced;
and (c) Permitted Liens.
SECTION 4.13. LINE OF BUSINESS.
For so long as any Notes are outstanding, Holdings shall not,
and shall not permit any of its Restricted Subsidiaries to, engage in any
business or activity other (i) than the gaming and hotel resort businesses and
such business activities as are incidental or related thereto or a reasonable
extension, development or expansion thereof or ancillary thereto, including,
without limitation, any entertainment, recreation, convention, trade show,
meeting, retail or other activity or business designed to promote, market,
support, develop, construct or enhance such business and (ii) the management of
gaming activities at Mountain Spa. In addition, until the Aladdin is Operating,
Holdings shall not, and shall not permit any of its Restricted Subsidiaries to,
engage in any business, development or investment activity other than (i) at or
in conjunction with the Complex and (ii) the management of gaming activities at
Mountain Spa.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Issuers shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
their limited-liability company or corporate existence, as applicable, and the
corporate, limited-liability company, partnership or other existence of each of
their Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Issuers or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Issuers and their Subsidiaries; provided, however, that the Issuers shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of their Subsidiaries, if the
Board of Managers in good faith shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Issuers and their
Subsidiaries, taken as a whole.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each Holder will
have the right to require the Issuers to purchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the
offer described below (the "Change of Control Offer") at a price in cash equal
to 101% of the Accreted Value thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase (the "Change of
Control Payment"). Within ten days following any Change of Control, the Issuers
will mail a notice to each Holder describing the transaction or transactions
that constitute the Change of Control and offering to purchase Notes on the date
specified in such notice, which date shall be no earlier than 30 days nor later
than 60 days from the date such notice is mailed (the
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"Change of Control Payment Date"), pursuant to the procedures required by this
Indenture and described in such notice. The Issuers shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws or regulations are applicable
in connection with the purchase of the Notes as a result of a Change of Control.
On the Change of Control Payment Date, the Issuers shall, to
the extent permitted by law, (i) accept for payment all Notes or portions
thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit
with the paying agent an amount equal to the aggregate Change of Control Payment
in respect of all Notes or portions thereof so tendered and (iii) deliver, or
cause to be delivered, to the Trustee for cancellation the Notes so accepted
together with an Officers' Certificate stating that such Notes or portions
thereof have been tendered to and purchased by the Issuers. The paying agent
will promptly mail to each Holder of Notes so tendered the Change of Control
Payment for such Notes, and the Trustee will promptly authenticate and mail to
each Holder (or cause to be transferred by book entry) a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any;
provided, that each such new Note will be in a principal amount of $1,000 or an
integral multiple thereof.
The Change of Control provisions described above will be
applicable whether or not any other provisions of this Indenture are applicable.
Except as described above with respect to a Change of Control, this Indenture
does not contain provisions that permit the Holders to require that the Issuers
purchase or redeem the Notes in the event of a takeover, recapitalization or
similar transaction.
The Issuers shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Issuers and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.
SECTION 4.16. LIMITATIONS ON ISSUES AND SALES OF CAPITAL STOCK OF WHOLLY
OWNED RESTRICTED SUBSIDIARIES.
Holdings (i) shall not, and shall not permit any of its Wholly
Owned Restricted Subsidiaries to, transfer, convey, sell, lease or otherwise
dispose of any Capital Stock of any Wholly Owned Restricted Subsidiary of
Holdings (other than the transfer of Common Membership Interests as a result of
the exercise of remedies by the Lenders in respect of the pledge of such Common
Membership Interests pursuant to the Lenders' security documents) to any Person
(other than Holdings or a Wholly Owned Restricted Subsidiary of Holdings),
unless (a) such transfer, conveyance, sale, lease or other disposition is of all
the Capital Stock of such Wholly Owned Restricted Subsidiary and (b) the cash
Net Proceeds from such transfer, conveyance, sale, lease or other disposition
are applied in accordance with Section 4.10 hereof and (ii) shall not permit any
of its Wholly Owned Restricted Subsidiaries to issue any of its Equity Interests
(other than, if necessary, shares of its Capital Stock constituting directors'
or managers', as applicable, qualifying shares) to any Person other than to
Holdings or a Wholly Owned Restricted Subsidiary of Holdings.
SECTION 4.17. INSURANCE.
Until the Notes have been paid in full, Holdings shall, and
shall cause its Restricted Subsidiaries to, maintain insurance with responsible
carriers against such risks and in such amounts as is customarily carried by
similar businesses with such deductibles, retentions, self insured amounts and
coinsurance provisions as are customarily carried by similar businesses of
similar size, including,
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without limitation, property and casualty, and shall have provided insurance
certificates evidencing such insurance to the Trustee prior to the Issue Date
and shall thereafter provide such certificates prior to the anniversary or
renewal date of each such policy, which certificate shall expressly state the
expiration date for each policy listed.
SECTION 4.18. LIMITATIONS ON STATUS AS INVESTMENT COMPANY.
Neither the Issuers nor their Restricted Subsidiaries shall
become subject to registration as an "investment company" (as that term is
defined in the Investment Company Act of 1940, as amended), or from otherwise
becoming subject to regulation under the Investment Company Act of 1940, as
amended.
SECTION 4.19. GAMING APPROVALS.
Holdings shall, and shall cause its Subsidiaries to, use their
best efforts to obtain and retain in full force and effect at all times all
Gaming Approvals necessary for the operation of the Aladdin and the Music
Project.
SECTION 4.20. CONSTRUCTION.
Holdings shall cause the Company to (i) (a) prosecute the
construction of the Aladdin with due diligence and continuity, in an expeditious
and first-class workmanlike manner, (b) until the Minimum Aladdin Facilities are
completed, cause the Aladdin to be constructed, equipped and completed in
compliance with the Approved Plans and Specifications in all material respects
and (c) until the Minimum Aladdin Facilities are completed, correct or cause to
be corrected as soon as possible any material departure or variation from the
Approved Plans and Specifications not approved in writing by the Independent
Construction Consultant, (ii) provide the expertise necessary to supervise
performance of construction of the Aladdin at no cost to the Trustee, (iii)
submit monthly requests for disbursements from the Noteholder Construction
Disbursement Account and the Bank Construction Disbursement Account at the times
and in the amounts necessary so that such amounts, together with all other
sources for the funding of the Aladdin, are sufficient to cause the Minimum
Aladdin Facilities to be completed by the Operating Deadline and (iv) until the
Minimum Aladdin Facilities are completed, maintain the "In Balance" requirements
of this Indenture.
SECTION 4.21. LIMITATION ON USE OF PROCEEDS.
Holdings shall (i) contribute on the Issue Date $115.0 million
in cash to the Company in exchange for Series A Preferred Interests with an
initial liquidation preference of $115.0 million, and shall cause the Company to
deposit approximately $37 million of such proceeds in the Note Construction
Disbursement Account disbursed only in accordance with the Disbursement
Agreement and (ii) cause such amounts to be used to pay the costs incurred in
connection with developing, financing, constructing, equipping or opening the
Aladdin.
In addition, if the Music Project Financing has not been
consummated by February 28, 1999, Holdings shall cause the Company to expend up
to $8.0 million to remodel the Theater.
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SECTION 4.22. RESTRICTIONS ON ACTIVITIES OF CAPITAL.
Capital may not hold any material assets, become liable for
any obligations or engage in any business activities; provided that Capital may
be a co-obligor of the Notes pursuant to the terms of this Indenture and may
engage in any activities directly related thereto or necessary in connection
therewith.
SECTION 4.23. SERIES A PREFERRED INTERESTS.
Holdings shall not permit the Company to amend the provisions
of the Series A Preferred Interests in any manner that would be adverse to the
Holders of the Notes. In addition, Holdings shall not permit the Company to
authorize, create (by way of reclassification or otherwise) or issue any class
or series of, or any obligation or security convertible or exchangeable into or
evidencing a right to purchase shares of any class of, Capital Stock of the
Company ranking senior to or on a parity with the Series A Preferred Interests.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
Neither of the Issuers shall and Holdings shall not permit the
Company to, consolidate or merge with or into (whether or not such entity is the
surviving entity), or sell, assign, transfer, lease, convey or otherwise dispose
of all or substantially all of its properties or assets in one or more related
transactions (other than (i) the transfer of the Aladdin Site and other assets
of the Company as a result of the exercise of remedies in respect of the Deed of
Trust and other Lender security documents, including a foreclosure by the
Lenders pursuant to the terms of the Deed of Trust or the acceptance by the
Lenders of a transfer in lieu of foreclosure or other exercise of remedies and
(ii) the transfer of the Common Membership Interests as a result of the exercise
of remedies by the Lenders in respect of the pledge of such Common Membership
Interests pursuant to the Lenders' security documents) to, any Person unless (i)
such Issuer or the Company is the surviving Person or the Person formed by or
surviving any such consolidation or merger (if other than such Issuer or the
Company) or to which such sale, assignment, transfer, lease, conveyance or other
disposition will have been made is a Person organized or existing under the laws
of the United States, any state thereof, or the District of Columbia; (ii) the
Person formed by or surviving any such consolidation or merger (if other than
such Issuer or the Company) or the Person to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been made assumes all
the obligations of such Issuer (but not the Company), under the Note
Registration Rights Agreement, the Notes, this Indenture and the Pledge
Agreements in form reasonably satisfactory to the Trustee; (iii) immediately
after such transaction no Default or Event of Default exists; (iv) such
transaction will not result in the loss or suspension or material impairment of
any material Gaming Approval; (v) except in the case of a merger of such Issuer
or the Company with or into a Wholly Owned Restricted Subsidiary of such Issuer,
such Issuer or any Person formed by or surviving any such consolidation or
merger (if other than such Issuer or the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition will have been made
(a) will have Consolidated Net Worth immediately after the transaction equal to
or greater than the Consolidated Net Worth of such Issuer or the Company, as the
case may be, immediately preceding the transaction and (b) will, at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to (A)
in the case of a merger of either of the Issuers, the Fixed Charge Coverage
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Ratio test described above in clause (xi) of the second paragraph under Section
4.09 hereof and (B) in the case of a merger of the Company, the Fixed Charge
Coverage Ratio test described above in clause (xii) of the second paragraph
pursuant to Section 4.09 hereof; and (vi) such transaction would not require any
Holder or beneficial owner of Notes (other than any Person acquiring such Issuer
or the Company or its assets and any Affiliate thereof) to obtain a gaming
license or be qualified or found suitable under the law of any applicable gaming
jurisdiction; provided that such Holder or beneficial owner would not have been
required to obtain a gaming license or be qualified or found suitable under the
laws of any applicable gaming jurisdiction in the absence of such transaction.
Notwithstanding the above, neither of the Issuers may consolidate or merge into
the other prior to and in connection with a Qualified Public Offering.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Issuers in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Issuers are
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Issuers" shall
refer instead to the successor corporation and not to the Issuers), and may
exercise every right and power of the Issuers under this Indenture with the same
effect as if such successor Person had been named as the Issuers herein;
provided, however, that the predecessor Issuers shall not be relieved from the
obligation to pay the Accreted Value of and interest on the Notes except in the
case of a sale of all of the Issuers' assets that meets the requirements of
Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Issuers default for 30 days or more in the payment
when due of interest on, or Liquidated Damages, if any, with respect to, the
Notes;
(b) the Issuers default in payment when due of the Accreted
Value 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;
(c) the Issuers fail to comply with any of the provisions of
Sections 4.07, 4.09, 4.10, 4.15, 4.21, 4.22 or 5.01 hereof;
(d) the Issuers fail for 30 days after written notice by the
Trustee or the Holders of at least 25% in aggregate Accreted Value of the Notes
then outstanding voting as a single class to comply with any of their other
agreements in this Indenture or the Notes;
(e) 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 Holdings or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by Holdings or
any of its Restricted Subsidiaries), whether such Indebtedness now exists or is
created after the Issue Date,
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which default (a) is caused by a failure to pay when due principal of or
premium, if any, or interest on such Indebtedness (other than the Bank Credit
Facility) prior to the later of (1) 60 days after such default and (2) the
expiration of the grace period provided in such Indebtedness (a "Payment
Default") which Payment Default, together with all other Payment Defaults,
exceeds $1.0 million or (b) results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $15.0 million or more;
(f) Holdings or any of its Restricted Subsidiaries fail to pay
final judgments aggregating in excess of $10.0 million, which judgments remain
unpaid, undischarged and unstayed for a period of more than 60 days;
(g) Holdings or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a trustee in
bankruptcy of it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of
its creditors,
(v) generally is not able to pay its debts as they
become due;
(h) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(i) is for relief against Holdings or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an involuntary
case;
(ii) appoints trustee in bankruptcy of Holdings or
any of its Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary or for all
or substantially all of the property of Holdings or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of Holdings or any of
its Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in
effect for 60 consecutive days;
(i) a default occurs by each of the Trust, London Clubs and
Bazaar Holdings in the performance of their material obligations set forth in
the Keep-Well Agreement, which default remains uncured for 180 days, or a
default occurs by AHL, London Clubs and Bazaar Holdings in the
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performance of their material obligations set forth in the Noteholder Completion
Guaranty or there is a repudiation by each of them of their respective
obligations under the Keep-Well Agreement, which has not been ratified and
reaffirmed within 180 days, or the Noteholder Completion Guaranty;
(j) Holdings breaches any material representation or warranty
set forth in either of the Pledge Agreements or a default occurs by Holdings in
the performance of any material covenant set forth in either of such agreements
or there is repudiation by Holdings of its obligations under either of such
agreements or the unenforceability of either of such agreements against Holdings
for any reason;
(k) a termination occurs of the Bank Credit Facility (other
than pursuant to a refinancing thereof in accordance with its terms and with the
terms of clause (i) under the second paragraph under Section 4.09 hereof) or
there is a repudiation of the Lenders obligations thereunder, including without
limitation, the withdrawal of the proceeds of the Term B Loans and Term C Loans
from the Bank Construction Disbursement Account, in each case prior to the date
the Aladdin is Operating (except for disbursements in accordance with the
Disbursement Agreement);
(l) (i) the Desert Passage fails to be Operating on or prior
to 90 days after the date the Aladdin becomes Operating and (ii) at any time
thereafter and prior to the date on which the Desert Passage becomes Operating,
the Company's Fixed Charge Coverage Ratio for its most recently ended four full
fiscal quarters (or such lesser number of quarters as have ended after the
Aladdin became Operating) for which internal financial statements are available
is not at least 1.75 to 1.0;
(m) after the Aladdin becomes Operating, there is a
revocation, termination, suspension or other cessation of effectiveness of any
Gaming Approval, which results in the cessation or suspension of gaming
operations at the Aladdin for a period of more than 90 days;
(n) the Aladdin fails to be Operating by the Operating
Deadline;
(o) there is a transfer of the Aladdin Site as a result of the
exercise of remedies in respect of the Deed of Trust, including a foreclosure by
the Lenders pursuant to the terms of the Deed of Trust or the acceptance by the
Lenders of a deed in lieu of foreclosure; and
(p) there is a transfer of the Common Membership Interests as
a result of the exercise of remedies by the Lenders in respect of the pledge of
such Common Membership Interests pursuant to the Lender's security documents.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default
specified in clause (g) or (h) of Section 6.01 hereof with respect to either of
the Issuers, any Significant Subsidiary of either of the Issuers or any group of
Significant Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary) occurs and is continuing, the Trustee (upon receipt of actual
knowledge thereof) or the Holders of at least 25% in Accreted Value of the then
outstanding Notes may declare the Accreted Value of Notes (together with all
amounts outstanding thereunder) to be due and payable immediately. Upon any such
declaration, the Accreted Value of the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof occurs with respect to either of the
Issuers, any Significant Subsidiary of the Issuers or any group of Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary, all
outstanding Notes shall be due and payable immediately without further action or
notice. The Holders of a majority in aggregate
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Accreted Value 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 on or after March 1, 2006 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Issuers with the intention of avoiding payment of the premium that the
Issuers would have had to pay if the Issuers then had elected to redeem the
Notes pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes, this Indenture or, subject to the provisions thereof, the Pledge
Agreements and the Noteholder Completion Guaranty.
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 any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate Accreted
Value 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, premium and Liquidated Damages, if any, or
interest on, the Notes held by a non-consenting Holder (including in connection
with an offer to purchase) (provided, however, that the Holders of a majority in
Accreted Value 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 of the aggregate Accreted Value 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.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture, the Pledge Agreements or the Notes only if:
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(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in Accreted Value of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) 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;
(d) 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
(e) during such 60-day period the Holders of a majority in
Accreted Value 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, the
right of any Holder of a Note to receive payment of principal, premium and
Liquidated Damages, if any, 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.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Issuers for the whole
amount of principal of, premium and Liquidated Damages, if any, 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 and take such actions (including sitting on a
committee of creditors) 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
the Holders of the Notes allowed in any judicial proceedings relative to the
Issuers (or any other obligor upon the Notes), their creditors or their property
and shall be entitled and empowered to collect, receive and distribute any money
or other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the 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 7.07 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 7.07 hereof out
of the estate in any
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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, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for Accreted Value, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for Accreted Value, premium and Liquidated Damages,
if any and interest, respectively; and
Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The 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 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 Accreted Value of the then outstanding Notes.
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 man would
exercise or use under the circumstances in the conduct of his own affairs.
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(b) Except during the continuance of an Event of Default:
(i) 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
(ii) 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:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) 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
(iii) 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 Sections 6.04 or 6.05 hereof.
(iv) the Trustee shall not be charged with notice or knowledge
of any event or matter (including the occurrence of a default or event of
default) the occurrence of which would require it to take action or omit to take
action hereunder unless such event or matter is actually known to a Responsible
Officer of the Trustee or unless written notice thereof (making reference to
this Indenture or the Notes) has been received by the Trustee at its Corporate
Trust Office.
(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.
(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 shall have 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 Issuers. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) Unless otherwise expressly provided, the Trustee shall not have any
responsibility for the contents of reports referred to in Section 4.03.
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SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document reasonably
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 and without negligence or wilful misconduct.
(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; provided that the Trustee's conduct
does not constitute wilful misconduct, negligence or bad faith.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Issuers shall be sufficient if
signed by an Officer of the Issuers.
(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 shall 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 Issuers or any
Affiliate of the Issuers 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 7.10 and 7.11 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 Issuers' use of the proceeds from the Notes or
any money paid to the Issuers or upon the Issuers' direction under any provision
of this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the 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.
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SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and
if it is known to a Responsible Officer of 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, if any, or 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. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Issuers and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA ss. 313(d).
The Issuers shall promptly notify the Trustee if the Notes are listed on any
stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Issuers 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 Issuers 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.
The Issuers shall indemnify the Trustee, its officers,
directors, employees and agents against any and all losses, liabilities or
expenses incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Issuers (including this Section
7.07) and defending itself against any claim (whether asserted by the Issuers or
any Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee shall notify the Issuers promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Issuers shall not
relieve the Issuers of their obligations hereunder, except to the extent the
Issuers are prejudiced by such failure. The Issuers shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Issuers shall pay the reasonable fees and expenses of such
counsel. The Issuers need not pay for any settlement made without their consent,
which consent shall not be unreasonably withheld. The Issuers need not reimburse
any expense or indemnify against any loss or liability incurred by the Trustee
through negligence or bad faith.
The obligations of the Issuers under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
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To secure the Issuers' payment obligations in this Section,
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.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) 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.
The Trustee shall comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
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.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Issuers. The
Holders of Notes of a majority in Accreted Value of the then outstanding Notes
may remove the Trustee by so notifying the Trustee and the Issuers in writing.
The Issuers may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) 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;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Issuers shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in Accreted Value of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Issuers.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuers, or the Holders of Notes of at least 10% in Accreted Value of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. 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
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Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. 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
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuers' obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. 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 7.10. 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 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).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS.
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 Issuers may, at the option of their Board of Managers or
Board of Directors, as the case may be, evidenced by a resolution set forth in
an Officers' Certificate, at any time, elect to have either Sections 8.02 or
8.03 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Issuers' exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Issuers shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from their 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 Issuers
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 (a) and (b) below, and to have satisfied all their
other obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Issuers, shall execute proper instruments
acknowledging
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the same), except for the following provisions which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the Accreted Value of, premium and Liquidated Damages, if any, and interest on
such Notes when such payments are due, (b) the Issuers' obligations with respect
to such Notes under Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Issuers'
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Issuers may exercise their option under
this Section 8.02 notwithstanding the prior exercise of their option under
Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Issuers' exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Issuers shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from their obligations under the covenants contained in Sections 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 4.22,
4.23 and 5.01 hereof with respect to the outstanding Notes on and after the date
the conditions set forth in Section 8.04 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 Issuers 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 Issuers' exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(c) through 6.01(f) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Sections 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Issuers must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the Accreted Value of, premium, Liquidated Damages, if any,
and interest on the outstanding Notes on the stated maturity date or on the
applicable redemption date, as the case may be, and must specify whether the
Notes are being defeased to maturity or to a particular redemption date;
(b) in the case of an election under 8.02 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Issuers have
received from, or there has been published by, the United States Internal
Revenue Service a ruling or (B) since the Issue Date, there has been a change in
the applicable U.S.
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federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel in the United States shall confirm that the Holders of
the outstanding Notes shall not recognize income, gain or loss for U.S. federal
income tax purposes as a result of such Legal Defeasance and will be subject to
U.S. federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under 8.03 hereof, the Issuers
shall have delivered 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 U.S. federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to such 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;
(d) 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) or insofar
as Section 6.1(g) or 6.1(h) hereof is concerned, at any time in the period
ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Issuers or any
of their Subsidiaries is a party or by which the Issuers or any of their
Subsidiaries is bound;
(f) after the passage of 91 days following the deposit (or,
with respect to any deposit transferred for the benefit of any person who may be
deemed to be an "insider" of the Issuers under 11 U.S.C. ss. 101(31), after the
passage of one year following such transfer), such deposit will not be subject
to avoidance under 11 U.S.C. ss. 547 if the Issuers were subsequently to become
the subject of a case under title 11 of the United States Bankruptcy Code;
(g) the Issuers shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Issuers with
the intent of defeating, hindering, delaying or defrauding any creditors of the
Issuers or others; and
(h) the Issuers shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel (which opinion may be subject to
customary exclusions, qualifications and assumptions) in the United States each
stating that all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
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 Issuers 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, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
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The Issuers 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 or required to be deducted or paid on
behalf of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Issuers from time to
time upon the request of the Issuers any money or non-callable Government
Securities held by it as provided in Section 8.04 hereof which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO ISSUERS.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Issuers, in trust for the payment of the principal of, premium,
if any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Issuers on their request or (if then held by the Issuers) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Issuers for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of Issuers 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 and option of the Issuers cause
to be published once, in the New York Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Issuers.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Sections
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Issuers' obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Sections 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 Sections
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Issuers
make any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Issuers 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 Issuers
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
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(a) to cure any ambiguity, defect or inconsistency;
(b) 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;
(c) to provide for the assumption of the Issuers' obligations to the
Holders of the Notes by a successor to the Issuers pursuant to Article 5 hereof;
(d) 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
(e) to comply with requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the TIA;
Upon the request of the Issuers accompanied by a resolution of
their Board of Managers or Board of Directors, as the case may be, authorizing
the execution of any such amended or supplemental Indenture, and upon receipt by
the Trustee of any documents described in Section 7.02 hereof and requested
pursuant thereto, the Trustee shall join with the Issuers 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.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Issuers and
the Trustee may amend or supplement this Indenture (including Sections 3.10,
4.10 and 4.15 hereof) and the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in Accreted Value of the Notes
then outstanding voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
Accreted Value of, premium and Liquidated Damages, if any, 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 Accreted Value of the
then outstanding Notes voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes). Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
Upon the request of the Issuers accompanied by a resolution of
their Board of Managers or Board of Directors, as applicable, 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 any documents
described in Section 7.02 hereof and required pursuant thereto, the Trustee
shall join with the Issuers 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.
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It shall 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 shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Issuers shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Issuers to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate Accreted Value of the Notes then outstanding
voting as a single class may waive compliance in a particular instance by the
Issuers 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):
(a) reduce the Accreted Value of Notes whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the Accreted Value 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, 4.10 and 4.15
hereof or amend or modify the calculation of the Accreted Value so as to reduce
the amount of the Accreted Value of the Notes;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of Accreted
Value of, premium and Liquidated Damages, if any, or interest on the Notes
(except a rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate Accreted Value of the then outstanding Notes and a waiver
of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) 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 Accreted Value of or premium and Liquidated Damages, if any, or interest on
the Notes;
(g) waive a redemption payment with respect to any Note (except a
payment required by Sections 4.10 and 4.15 hereof; or
(h) make any change in Sections 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.
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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
Issuers 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 Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Issuers may not sign an amendment or supplemental Indenture until their
Board of Managers or Board of Directors, as the case may be, 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
Officer's Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental indenture is authorized or permitted by this
Indenture.
ARTICLE 10.
COLLATERAL AND SECURITY
SECTION 10.01. PLEDGE AGREEMENTS.
The due and punctual payment of the Accreted Value of, premium
and interest and Liquidated Damages, if any, on the Notes when and as the same
shall be due and payable, whether on an interest payment date, at maturity, by
acceleration, repurchase, redemption or otherwise, and interest on any overdue
Accreted Value of, premium and interest and Liquidated Damages, if any (to the
extent permitted by law), on the Notes and performance of all other obligations
of the Issuers to the Holders or the Trustee under this Indenture and the Notes,
according to the terms hereunder or thereunder, shall be secured as provided in
the Pledge Agreements which Holdings has entered into simultaneously with the
execution of this Indenture. Each Holder of Notes, by its acceptance thereof,
consents and agrees to the terms of the Pledge Agreements (including, without
limitation, the provisions providing for foreclosure) as the same may be in
effect or may be amended from time to time in accordance with their terms and
authorizes and directs the Trustee or the Disbursement Agent, as the case may
be, to enter into the Pledge Agreements and to perform their respective
obligations and exercise their respective rights thereunder in accordance
therewith.
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SECTION 10.02. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE
PLEDGE AGREEMENTS.
The Trustee is authorized to receive any funds for the benefit
of the Holders of Notes distributed under the Pledge Agreements, and to make
further distributions of such funds to the Holders of Notes according to the
provisions of this Indenture.
SECTION 10.03. TERMINATION OF SECURITY INTEREST.
Upon the payment in full of all Obligations of the Issuers
under this Indenture and the Notes, or upon Legal Defeasance, the Trustee shall,
at the request of the Issuers, deliver a certificate to the Disbursement Agent
stating that such Obligations have been paid in full, and release and instruct
the Disbursement Agent to release the Liens pursuant to this Indenture and the
Pledge Agreements.
ARTICLE 11.
JOINT AND SEVERAL LIABILITY
SECTION 11.01. JOINT AND SEVERAL LIABILITY.
(a) Notwithstanding any contrary provision contained in this Indenture
or the Notes, the representations, warranties, covenants, agreements and
obligations of the Issuers, and either of them, contained in the Indenture and
the Notes shall be deemed joint and several. Any waiver including, without
limitation, any suretyship waiver, made by either Issuer in this Indenture or
the Notes shall be deemed to be made also by the other Issuer and references in
any such waiver to either Issuer shall be deemed to include the other Issuer and
each of them.
(b) Notwithstanding any contrary provision contained in this Indenture
or the Notes, this Indenture and the Notes shall be deemed to include, without
limitation, the following waivers:
Until all obligations of the Issuers to the Holders under or
in respect of the Notes are paid in full and discharged, each of the Issuers
hereby waives and relinquishes all rights and remedies accorded by applicable
law specifically to sureties or guarantors with respect to the joint and several
liabilities of the Issuers hereunder and agrees not to assert or take advantage
of any such rights or remedies, including, without limitation, (a) any right to
require the Trustee or any of the Holders (each a "Benefited Party") to proceed
against either of the Issuers or any other Person or to proceed against or
exhaust any security held by a Benefited Party at any time or to pursue any
other remedy in the power of a Benefited Party before proceeding against such
Issuer or other Person, (b) any defense based upon an election of remedies by a
Benefited Party, including, without limitation, an election to proceed by
non-judicial rather than judicial foreclosure, which destroys or otherwise
impairs the subrogation rights of either Issuer, the right of either Issuer to
proceed against the other Issuer or any other Person for reimbursement, or both,
(c) any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal, (d) any duty on the part of a
Benefited Party to disclose to either Issuer any facts a Benefited Party may now
or hereafter know about either of the Issuers or any other Person, regardless of
whether a Benefited Party has reason to believe that any such facts materially
increase the risk beyond that which such Issuer intends to assume, or has reason
to believe that such facts are unknown to such Issuer, or has a reasonable
opportunity to communicate such facts to the either Issuer, because each Issuer
acknowledges that each Issuer is fully responsible for being and keeping
informed of the financial condition of each of the Issuers or any other Person
and of all circumstances bearing on the risk of non-
81
payment of any Note Obligations, (e) any defense based upon any borrowing or
grant of a security interest by the other Issuer under Section 364 of the
Bankruptcy Law and (f) any claim or other rights which it may now or
hereafter acquire against the other Issuer or any other Person that arises
from the existence of performance of each Issuer of its obligations under
this Indenture or the Notes, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy by a Benefited Party against the
other Issuer or any collateral which a Benefited Party now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, by any payment made hereunder or
otherwise, including, without limitation, the right to take or receive from
either of the Issuers or any other Person, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other rights. No failure or delay on the Trustee's
part in exercising any power, right or privilege under this Indenture shall
impair or waive one such power, right or privilege. Each of the Issuers
acknowledges and agrees that any nonrecourse or exculpation provided for in
this Indenture or the Notes, or any other provision of this Indenture or the
Notes, limiting the Benefited Parties' recourse to specific collateral, or
limiting the Benefited Parties' right to enforce a deficiency judgment
against the Issuers, shall have absolutely no application to the Issuers'
liability under this Indenture or the Notes.
(c) In the event of any inconsistency between the provisions of this
Section 11 and the corresponding provisions of this Indenture or the Notes, the
provisions of this Indenture shall govern.
ARTICLE 12.
INTERCREDITOR AGREEMENT WITH LENDERS UNDER THE BANK CREDIT FACILITY
SECTION 12.01. NON-PETITION COVENANT.
Each Holder, by accepting the Note or Notes issued to it,
covenants and agrees that, prior to the payment in full in cash of all
outstanding amounts under the Bank Credit Facility, neither it nor the Trustee
shall (a) institute against, or join any other Person in instituting against,
the Company any involuntary bankruptcy, reorganization, arrangement, insolvency
or liquidation case under the laws of the United States or any state of the
United States or (b) in any voluntary or involuntary bankruptcy case of the
Company, seek a substantive consolidation of the estate of the Company with the
estates of Holdings and/or Capital.
Notwithstanding the preceding paragraph, each Holder shall be
entitled in any such consolidated case arising without violation of the
preceding paragraph by such Holder or by Holders of at least 25% of the Accreted
Value of the then outstanding Notes, to exercise all rights available to such
Holder, as creditors or otherwise, and the Lenders under the Bank Credit
Facility, and any agent on their behalf, by accepting the benefits of this
Article 12 agree that they shall be prohibited from contesting any action of the
Holders in any such case which is not in violation of this Article 12 and from
seeking an equitable subordination of the Holders' claims.
The foregoing restrictions shall not restrict or limit in any
manner the exercise of any rights and remedies the Holders or the Trustee may
have against Holdings whether or not the estate of Holdings is substantively
consolidated with the estate of the Company in a bankruptcy case.
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SECTION 12.02. SUBORDINATION UPON SUBSTANTIVE CONSOLIDATION.
Notwithstanding Section 12.01 hereof (and without limitation
of any other rights or remedies of any holder of Senior Debt), upon any
substantive consolidation of the estate of the Company with the estates of
Holdings and/or Capital in any bankruptcy, reorganization, insolvency,
receivership or similar case relating to the Company or its property, the
Company agrees, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by the Notes and all Obligations with respect thereto,
including recission claims, are subordinated in right of payment, to the extent
and in the manner provided in this Article 12, to the prior payment in full in
cash of all Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Debt. In the event of any such substantive
consolidation of the estate of the Company with the estates of Holdings and/or
Capital:
(1) holders of Senior Debt shall be entitled to receive
payment in full in cash of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Debt) before Holders of the Notes shall be
entitled to receive any payment with respect to the Notes or any Obligations
with respect thereto, including recission claims (except that Holders may
receive (i) Permitted Junior Securities and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof);
(2) until all Obligations with respect to Senior Debt (as
provided in subsection (1) above) are paid in full in cash, any distribution to
which Holders would be entitled but for this Article 12 shall be made to holders
of Senior Debt (except that Holders of Notes may receive (i) Permitted Junior
Securities and (ii) payments and other distributions made from any defeasance
trust created pursuant to Section 8.01 hereof), as their interests may appear.
SECTION 12.03. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any
payment of any Obligations with respect to the Notes, including recission
claims, at a time when the Trustee or such Holder, as applicable, has actual
knowledge that such payment is prohibited by Section 12.02 hereof, such payment
shall be held by the Trustee or such Holder, in trust for the benefit of, and
shall be paid forthwith over and delivered, upon written request, to, the
holders of Senior Debt as their interests may appear or the Credit Agent under
the Bank Credit Facility or other agreement (if any) pursuant to which Senior
Debt may have been issued, as their respective interests may appear, for
application to the payment of all Obligations with respect to Senior Debt
remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution in cash to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 12, except if such
payment is made as a result of the willful misconduct or negligence of the
Trustee.
83
SECTION 12.04. NOTICE BY ISSUERS.
The Issuers shall promptly (and the Credit Agent or other
representative of the Senior Debt may) notify the Trustee and the Paying
Agent of any facts known to the Issuers (or known to the Credit Agent or
other representative of the Senior Debt), as applicable, that would cause a
payment of any Obligations with respect to the Notes to violate this Article
12, but failure to give such notice shall not affect the subordination of the
Notes to the Senior Debt as provided in this Article 12.
SECTION 12.05. SUBROGATION.
After all Senior Debt is paid in full in cash and until the
Notes are paid in full, the Holders shall be subrogated (equally and ratably
with all other Indebtedness of the substantively consolidated entity pari passu
with the Notes) to the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions otherwise payable to
the Holders have been applied to the payment of Senior Debt. A distribution made
under this Article 12 to holders of Senior Debt that otherwise would have been
made to Holders of Notes is not, as between the Issuers and Holders, a payment
by the Issuers on the Notes.
SECTION 12.06. RELATIVE RIGHTS.
This Article 12 defines the relative rights of Holders and
holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Issuers and the Holders, the
obligation of the Issuers, which is absolute and unconditional, to pay Accreted
Value of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of the Holders and creditors of
the Issuers other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of Notes.
If the Issuers fail because of this Article 12 to pay the
Accreted Value of or interest on a Note on the due date, such failure is still a
Default or Event of Default.
SECTION 12.07. SUBORDINATION MAY NOT BE IMPAIRED.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Issuers or any Holder or any act by any holder
of such Senior Debt taken in good faith and not in violation of the provisions
of this Indenture or by the failure of the Issuers or any Holder to comply with
this Indenture.
Except as set forth in Section 10.22 of the Bank Credit
Facility, the holders of Senior Debt may extend, renew, modify or amend the
terms of the Senior Debt or any security therefor and release, sell or exchange
such security and otherwise deal freely with the Issuers, all without affecting
the liabilities and obligations of the parties to this Indenture or the Holders.
The subordination provisions of this Article 12 are solely for the benefit of
the holders from time to time of Senior Debt and may not be rescinded, canceled,
amended or modified in any way other than any amendment or modification that
84
would not adversely affect the rights of any holder of Senior Debt or any
amendment or modification that is consented to by each holder of Senior Debt
that would be adversely affected thereby. The subordination provisions of this
Article 12 shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Senior Debt is, pursuant to
applicable law, avoided, recovered or rescinded or must otherwise be restored or
returned by any holder of Senior Debt, whether as a "voidable preference,"
"fraudulent conveyance," "fraudulent transfer," or otherwise, all as though such
payment or performance had not been made.
SECTION 12.08. DISTRIBUTION OR NOTICE TO CREDIT AGENT.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to the
Credit Agent.
Upon any payment or distribution of assets of the Issuers or
any substantively consolidated entity referred to in this Article 12, the
Trustee and the Holders shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction or upon any certificate of such Credit
Agent or of the liquidating trustee or agent or other Person making any
distribution to the Trustee or to the Holders for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Debt and other Indebtedness of the Issuers, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 12.
SECTION 12.09. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 12 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 12. Only the Issuers or the
Credit Agent may give the notice. Nothing in this Article 12 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
SECTION 12.10. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 12, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, the Credit Agent (or other representative of the Senior
Debt) is hereby authorized to file an appropriate claim for and on behalf of the
Holders of the Notes.
85
SECTION 12.11. REQUIREMENT OF CERTAIN PROVISION IN SENIOR DEBT.
Notwithstanding any other provision of Article 12 hereof, the
provisions of this Article 12 shall apply only for the benefit of Senior Debt
which contains a provision that is substantially similar to Section 10.22 of the
Bank Credit Facility.
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 Issuers 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 as follows:
If to the Issuers:
Aladdin Gaming Holdings, LLC
Aladdin Capital Corp.
c/o: Aladdin Gaming, LLC
3667 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Telecopier No.: (702) 736-7107
Attention: Chief Executive Officer
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates
919 Third Avenue
New York, New York 10022
Telecopier No. (212) 735-3000
Attention: Wallace L. Schwartz, Esq.
If to the Trustee:
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Telecopier No.: (617) 664-5371
Attention: Corporate Trust Department
The Issuers or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.
86
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.
If the Issuers mail a notice or communication to Holders, they
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
Issuers, 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 Issuers to the Trustee
to take any action under this Indenture, the Issuers shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall 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
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall 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)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
87
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 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 OF DIRECTORS, MANAGERS, OFFICERS,
EMPLOYEES, INCORPORATORS OR MEMBERS.
No director, manager, officer, employee, incorporator or
member of the Issuers shall have any liability for any obligations of the
Issuers under the Notes or this Indenture 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 issuance of the Notes.
SECTION 13.08. GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT REGARD TO THE CHOICE OF
LAW RULES THEREOF.
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 Issuers or their Subsidiaries 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 Issuers in this Indenture and the Notes
shall bind their 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 shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 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.
88
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. CONTINGENT GUARANTY
Notwithstanding any other provision of this Indenture, the
Company shall not be prevented from entering into a Contingent Guaranty of
Performance and Completion substantially in the form of Exhibit E hereto.
SECTION 13.15. TRUSTEE'S EXECUTION OF OTHER AGREEMENTS
On the Issue Date, the Trustee shall execute and deliver the
Disbursement Agreement and the Engagement Letter with Rider Hunt (NV) LLC.
Dated as of February 26, 1998 ALADDIN GAMING HOLDINGS, LLC
By: /s/ Richard Goeglein
-------------------------
Name: Richard Goeglein
Title: Chief Executive Officer/
President
Dated as of February 26, 1998 ALADDIN CAPITAL CORP.
By: /s/ Richard Goeglein
-------------------------
Name: Richard Goeglein
Title: Chief Executive Officer/
President
Dated as of February 26, 1998 STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Ruth A. Smith
-------------------------
Name: Ruth A. Smith
Title: Vice President
89
EXHIBIT A-1
(Face of Note)
FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT;
FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE IS $519.40,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $480.60, THE ISSUE DATE IS FEBRUARY 26,
1998 AND THE YIELD TO MATURITY IS 15.06 % PER ANNUM.
13 1/2% [Series A] [Series B] Senior Discount Notes due 2010
No. ____
Cusip No. ____ $ ___
ALADDIN GAMING HOLDINGS, LLC AND
ALADDIN CAPITAL CORP.
promises to pay to
or registered assigns,
the principal sum of
Dollars on March 1, 2010
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
Dated: __________, ____
ALADDIN GAMING HOLDINGS, LLC
By:
----------------------
Name:
Title:
ALADDIN CAPITAL CORP.
By:
-----------------------
Name:
Title:
This is one of the [Global] Notes
referred to in the within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:_____________________________________
A-1-1
(Back of Note)
13 1/2% [Series A] [Series B] Senior Discount Notes due 2010
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a)
OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE ISSUERS.]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") OR (B) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) (1),
(2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR"), (2)
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO
THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A INSIDE THE UNITED
STATES, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) INSIDE THE UNITED
STATES TO AN ACCREDITED INVESTOR THAT IS ACQUIRING THE SECURITIES FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
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ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE ISSUERS' AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSES (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE.]
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Aladdin Gaming Holdings, LLC, a Nevada limited-liability
company ("Holdings"), and Aladdin Capital Corp., a Nevada corporation ("Capital"
and, together with Holdings, the "Issuers"), promise to pay interest on the
Accreted Value of this Note at the rate and times and in the manner specified
below and shall pay the Liquidated Damages payable pursuant to Section 2.5 of
the Note Registration Rights Agreement referred to below. No interest will
accrue on the Notes until March 1, 2003, but the Accreted Value will increase
(representing amortization of original issue discount) between the date of
original issuance and March 1, 2003, on a semi-annual bond equivalent basis
using a 360-day year comprised of twelve 30-day months, such that the Accreted
Value will be equal to the full principal amount at maturity of the Notes on
March 1, 2003. Beginning on March 1, 2003, cash interest on the Notes will
accrue at the rate of 13 1/2% per annum until maturity. The Issuers will pay
cash interest and Liquidated Damages semi-annually on March 1 and September 1 of
each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Cash interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from March 1, 2003. The Issuers shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, in accordance with the Indenture; they
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time at the same
rate to the extent lawful in accordance with the Indenture. Cash interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Issuers will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the February 15 or August 15 next
preceding the 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 will
be payable as to Accreted Value, premium and Liquidated Damages, if any, and
interest at the office or agency of the Issuers maintained for such purpose
within or without the City and State of New York, or, at the option of the
Issuers, payment of interest and Liquidated Damages may be made by check mailed
to the Holders at their addresses set forth in the register of Holders; provided
that all payments with respect to at least $1.0 million in aggregate principal
amount at maturity of Notes, the Holders of which have given wire transfer
instructions to Holdings, will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof.
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.
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3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without notice
to any Holder. The Issuers or any of their Subsidiaries may act in any such
capacity.
4. INDENTURE. The Issuers issued the Notes under an Indenture dated as of
February 26, 1998 (the "Indenture"), between the Issuers 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 Sections 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of 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 general obligations of the Issuers limited to $221.5
million in aggregate principal amount at maturity, plus amounts, if any, issued
to pay Liquidated Damages on outstanding Notes as set forth in Paragraph 2
hereof.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5 and
Paragraph 6 thereof, the Notes shall not be redeemable at the option of the
Issuers prior to March 1, 2003. Thereafter, the Notes shall be subject to
redemption at the option of the Issuers, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of Accreted Value) set forth below, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the applicable date of redemption, if
redeemed during the twelve-month period beginning on March 1 of the years
indicated below:
Year Percentage
- ---- ----------
2003 ....................... 106.75%
2004 ....................... 104.50%
2005 ....................... 102.25%
2006 and thereafter ........ 100.00%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5,
on or prior to March 1, 2001, the Issuers may redeem up to an aggregate of 35%
of the Accreted Value of the Notes at a redemption price of 113 1/2% of the
Accreted Value thereof, plus Liquidated Damages, if any, thereon to the
redemption date, with the proceeds of a Qualified Public Offering (which
proceeds may be advanced or contributed to the Issuers by the IPO Entity);
provided that at least 65% of the Accreted Value remains outstanding immediately
after the occurrence of such redemption; and provided, further, that such
redemption shall occur within 60 days of the date of such Qualified Public
Offering.
6. GAMING REDEMPTION. Notwithstanding the provisions of subparagraph (a) of
Paragraph 5 above, if any Gaming Authority requires that a holder or beneficial
owner of Notes must be licensed, qualified or found suitable under any
applicable gaming law and such holder or beneficial owner fails to apply for a
license, qualification or finding of suitability within 30 days after being
requested to do so by such Gaming Authority (or such lesser period that may be
required by such Gaming Authority), or if such holder or beneficial owner is
notified by such Gaming Authority that such holder or beneficial owner will not
be so licensed, qualified or found suitable, the Issuers shall have the right,
at their option, (i) to require that such holder or beneficial owner dispose of
such holder's or beneficial owner's Notes within 30 days (or such earlier date
as may be required by the applicable
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Gaming Authority) of (a) the termination of the period described above for such
holder or beneficial owner to apply for a license, qualification or finding of
suitability or (b) receipt of the notice from such Gaming Authority that such
holder or beneficial owner will not be licensed, qualified or found suitable by
such Gaming Authority or (ii) to call for redemption of the Notes of such holder
or beneficial owner at a redemption price equal to the lesser of the price at
which such holder or beneficial owner acquired such Notes and the Accreted Value
thereof, together with, in either case, accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of redemption or the date of the
finding that such holder or beneficial owner will not be licensed, qualified or
found suitable, which may be less than 30 days following the notice of
redemption, if so ordered by such Gaming Authority or required by applicable
gaming laws.
7. MANDATORY REDEMPTION. Except as set forth in Paragraph 8 below, the
Issuers, the Issuers shall not be required to make mandatory redemptions or
sinking fund payments prior to maturity with respect to the Notes.
8. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder will have the
right to require the Issuers to purchase all or any part (equal to $1,000 or an
integral multiple thereof) of each Holder's Notes at a price in cash equal to
101% of the Accreted Value thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase. Within 10 days
following any Change of Control, the Issuers shall mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.
(b) If Holdings or a Restricted Subsidiary consummates any Asset Sales,
when the aggregate amount of Excess Proceeds exceeds $10.0 million, Holdings
shall commence an offer to all Holders (an "Asset Sale Offer") pursuant to
Section 4.10 of the Indenture to purchase the maximum Accreted Value of Notes
that may be purchased out of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the Accreted Value thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon 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 tendered pursuant to
an Asset Sale Offer is less than the Excess Proceeds, Holdings or the Restricted
Subsidiary, as the case may be, may, subject to the provisions of the Indenture,
use any remaining Excess Proceeds for general corporate purposes. If the
aggregate Accreted Value of Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes to be purchased in
accordance with Section 3.02 of the Indenture. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from Holdings
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.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee
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may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and the Issuers may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Issuers 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 Issuers 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.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in Accreted Value of the Notes then outstanding
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 Accreted Value of the then outstanding Notes voting as
a single class. 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 provide for the assumption of the Issuers' obligations to
Holders of the Notes in case of a merger or consolidation, 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 the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages, if any, with
respect to, the Notes; (ii) default in payment when due of the Accreted Value of
or premium, if any, on the Notes, (iii) failure by the Issuers to comply with
Section 4.07, 4.09, 4.10, 4.15, 4.21, 4.22, or 5.01 of the Indenture; (iv)
failure by the Issuers for 30 days after written notice to comply with any of
their agreements in the Indenture or the Notes; (v) default under certain other
agreements relating to Indebtedness of the Issuers which default (a) is caused
by failure to pay when due principal of or premium, if any, or interest on such
Indebtedness (other than the Bank Credit Facility) prior to the later of (1) 60
days after such default and (2) the expriation of the grace period provided in
such Indebtedness (a "Payment Default") which Payment Default, together with all
other Payment Defaults, exceeds $1.0 million or (b) results in the acceleration
of such Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $15.0 million or more;
(vi) certain final judgments for the payment of money aggregating in excess of
$10.0 million that remain undischarged for a period of 60 days; (vii) certain
events of bankruptcy or insolvency with respect to Holdings or any of its
Significant Subsidiaries; (viii) a default by each of the Trust, London Clubs
and Bazaar Holdings in the performance of their material obligations set forth
in the Keep-Well Agreement, which default remains uncured for 180 days, or
default by AHL, London Clubs and Bazaar Holdings in the performance of their
material obligations set forth in the Noteholder Completion Guaranty or
repudiation by each of them of their respective obligations under the Keep-Well
Agreement, which has not been ratified and reaffirmed within 180 days, or the
Noteholder Completion Guaranty; (ix) Holdings breaches any material
representation or warranty set forth in either of the Pledge Agreements or
default by Holdings in the performance of any material covenant set forth in
either of such agreements or repudiation by Holdings of its obligations under
either of such agreements or the unenforceability of either of such agreements
against Holdings for any reason; (x) the termination of the
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Bank Credit Facility (other than pursuant to a refinancing thereof in accordance
with its terms and with the terms of clause (i) under the second paragraph under
Section 4.09 of the Indenture or the repudiation of the Lenders obligations
thereunder, including without limitation, the withdrawal of the proceeds of the
Term B Loans and Term C Loans from the Bank Construction Disbursement Account,
in each case prior to the date the Aladdin is Operating (except for
disbursements in accordance with the Disbursement Agreement); (xi) (a) a failure
of the Desert Passage to be Operating on or prior to 90 days after the date the
Aladdin becomes Operating and (b) at any time thereafter and prior to the date
on which the Desert Passage becomes Operating, the Company's Fixed Charge
Coverage Ratio for its most recently ended four full fiscal quarters (or such
lesser number of quarters as have ended after the Aladdin became Operating) for
which internal financial statements are available is not at least 1.75 to 1.0;
(xii) after the Aladdin becomes Operating, revocation, termination, suspension
or other cessation of effectiveness of any Gaming Approval, which results in the
cessation or suspension of gaming operations for a period of more than 90 days
at the Aladdin; (xiii) the failure of the Aladdin to be Operating by the
Operating Deadline; (xiv) the transfer of the Aladdin Site as a result of the
exercise of remedies in respect of the Deed of Trust, including a foreclosure by
the Lenders pursuant to the terms of the Deed of Trust or the acceptance by the
Lenders of a deed in lieu of foreclosure; and (xv) the transfer of the Common
Membership Interests as a result of the exercise of remedies by the Lenders in
respect of the pledge of such Common Membership Interests pursuant to the
Lender's security documents. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in Accreted Value of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in Accreted Value 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 Accreted Value 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 Issuers are required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Issuers are 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.
14. TRUSTEE DEALINGS WITH ISSUERS. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Issuers or their Affiliates, and may otherwise deal with the Issuers or
their Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, manager, officer, employee,
incorporator or member of the Issuers, as such, shall not have any liability for
any obligations of the Issuers under the Notes or the Indenture 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.
16. SECURITY. The due and punctual payment of the Accreted Value of,
premium and interest and Liquidated Damages, if any, on the Notes when and as
the same shall be due and payable, whether on an interest payment date, at
maturity, by acceleration, repurchase, redemption or otherwise, and interest on
any overdue Accreted Value of, premium and interest and Liquidated Damages, if
any (to the extent permitted by law), on the Notes and performance of all other
obligations
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of the Issuers to the Holders or the Trustee under this Indenture and the Notes,
according to the terms hereunder or thereunder, shall be secured as provided in
the Pledge Agreements which Holdings has entered into simultaneously with the
execution of this Indenture. Each Holder of Notes, by its acceptance thereof,
consents and agrees to the terms of the Pledge Agreements (including, without
limitation, the provisions providing for foreclosure) as the same may be in
effect or may be amended from time to time in accordance with their terms and
authorizes and directs the Trustee or the Disbursement Agent, as the case may
be, to enter into the Pledge Agreements and to perform their respective
obligations and exercise their respective rights thereunder in accordance
therewith.
17. INTERCREDITOR AGREEMENT. The Holders, while free to exercise their
rights and remedies against Holdings, are prohibited, for so long as any portion
of the Bank Credit Facility is outstanding, from initiating or intervening in an
insolvency proceeding of the Company and from seeking a substantive
consolidation of Holdings, the Company and/or Capital. In addition, in the event
of a substantive consolidation of Holdings, the Company and/or Capital, the
Holders (i) will not be entitled to receive any cash or other payments (other
than securities subordinated to the prior payment in full of the Bank Credit
Facility to the same extent of the Notes) in respect of the Notes until the Bank
Credit Facility has been indefeasibly paid in full in cash and (ii) will be
required to turn over to the Lenders under the Bank Credit Facility any payments
received in violation of such provisions.
18. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
19. 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).
20. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Note Registration Rights
Agreement dated as of February 26, 1998, between the Issuers and the parties
named on the signature pages thereof (the "Note Registration Rights Agreement").
21. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
22. WARRANT ENDORSEMENT.
THE NOTES EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE SEPARATELY
FROM THE WARRANTS ATTACHED HERETO ORIGINALLY SOLD AS A UNIT WITH THE NOTES
UNTIL THE EARLIEST TO OCCUR OF (I) SEPTEMBER 1, 1998; (II) THE DATE ON
WHICH A REGISTRATION STATEMENT WITH RESPECT TO THE NOTES OR A REGISTRATION
STATEMENT WITH RESPECT TO THE WARRANTS AND THE WARRANT SHARES IS FILED WITH
THE COMMISSION UNDER THE SECURITIES ACT;
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(III) THE OCCURRENCE OF A CHANGE OF CONTROL OR A SALE OR RECAPITALIZATION
OF ENTERPRISES, HOLDINGS OR THE COMPANY OCCURS; (IV) 30 DAYS AFTER A
QUALIFIED PUBLIC OFFERING; (V) THE OCCURRENCE OF AN EVENT OF DEFAULT; OR
(VI) SUCH EARLIER DATE AS DETERMINED BY MERRILL LYNCH & CO. IN ITS SOLE
DISCRETION (THE DATE OF OCCURRENCE OF AN EVENT SPECIFIED IN CLAUSES (I)
THROUGH (VI) BEING REFERRED TO AS THE "SEPARATION DATE"). PRIOR TO SUCH
DATE, THE NOTES EVIDENCED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
INTEGRAL MULTIPLES OF $1,000 PRINCIPAL AMOUNT OF NOTES AND ONLY WITH THE
SIMULTANEOUS TRANSFER TO THE TRANSFEREE OF 10 WARRANTS FOR EACH $1,000
PRINCIPAL AMOUNT SO TRANSFERRED.
Under the terms of the warrant agreement relating to the Warrants (the "Warrant
Agreement"), the holder of this security may at any time on or after the
Separation Date, at its option, by notice to the Trustee elect to separate or
separately transfer the Notes and the Warrants represented hereby, in whole or
in part, and shall thereafter surrender this security to the Trustee for the
exchange of this security, in part, for such Warrant or Warrants and for a Note
or Notes of a like aggregate principal amount and of authorized denominations
not bearing this Warrant Endorsement; provided that no delay or failure on the
part of the Trustee or the Warrant Agent to exchange this security for such
Warrant or Warrants and Note or Notes shall affect the separation of such Notes
and Warrants represented hereby or their separate transferability. Until such
separation, the holder of this security is, for each $1,000 principal amount of
Notes, also the record owner of 10 Warrants expiring March 1, 2010, each Warrant
to purchase 1 share of Class B non-voting Common Stock, no par value (the
"Common Stock"), of Enterprises (subject to adjustment). Enterprises has
deposited with the Trustee, as custodian for the Holder of the Notes bearing
this Warrant Endorsement, a certificate or certificates for such Warrants to
purchase an aggregate of 2,215,000 shares of Common Stock (subject to
adjustment). Prior to the separation of the Notes and the Warrants as described
above, record ownership of such Warrants is transferable only by the transfer of
this Note on the Note register maintained by the Issuers pursuant to the
Indenture. After such separation, ownership of a Warrant is transferable only by
the transfer of the certificate representing such Warrant in accordance with the
provisions of the Warrant Agreement.
By accepting a security bearing this Warrant Endorsement, each holder of this
security is bound by all of the terms and provisions of the Warrant Agreement (a
copy of which is available on request to Enterprises or the Warrant Agent).
Election to Exercise. On or after the Warrant Exercise Commencement Date (as
such term is defined in the Warrant Agreement), the Warrants may be exercised by
obtaining from the Warrant Agent the required forms of election to exercise,
declaration form and instructions for payment of the Exercise Price (as such
term is defined in the Warrant Agreement). Upon receiving the required forms and
payment of such Exercise Price, the Warrant Agent shall exercise such Warrants
in accordance with the provisions of the Warrant Agreement.
Election of Exchange. The undersigned registered holder of the security
represented hereby irrevocably elects to separate its Notes and Warrants and to
exchange this security for a new Note in the principal amount hereof and a
Warrant certificate.
The undersigned hereby irrevocably instructs the Trustee (A) to issue in the
name of the undersigned registered holder a new Note not containing the above
Warrant Endorsement in the principal amount
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equal to the principal amount hereof and (B) to deliver this security to the
Warrant Agent pursuant to the provisions of the Warrant Agreement with
instructions to issue in the name of the undersigned registered holder a Warrant
certificate representing the number of Warrants equal to the number of Warrants
represented by this security and to issue (1) a new Warrant certificate to
replace the Warrant certificate held on deposit by the Warrant Agent equal to
the difference between (x) the number of Warrants represented by the Warrant
certificate so held on deposit and (y) the number of Warrants represented by
this Security.
Dated: ______________________
Name of Holder of this security: ______________________
Address: ______________________
______________________
Signature: ______________________
Note: The above signature must correspond with the name as written upon the face
of this security in every particular, without alteration or enlargement whatever
and if the certificate representing any principal amount at maturity of this
security or the associated Warrants is to be registered in a name other than
that in which this security is registered.
Signature Guaranteed: ______________________
Note: Signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
The Issuers will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Note Registration Rights Agreement.
Requests may be made to:
Aladdin Gaming Holdings, LLC
Aladdin Capital Corp.
c/o Aladdin Gaming Holdings, LLC
3667 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: Corporate Secretary
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- ------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________________________
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
- -----------------------------------------------------------------------------
Date:
-------------
Your Signature:
---------------------------------------
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee.
Note: Signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or 4.15 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased: $________
Date: Your Signature:
------------- ------------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No:
-----------------------
Signature Guarantee.
Note: Signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
Amount of Accreted Value of
decrease in Amount of increase this Global Note Signature of
Accreted Value in Accreted Value following such authorized officer
of of decrease (or of Trustee or Note
Date of Exchange this Global Note this Global Note increase) Custodian
---------------- ---------------- ------------------ ----------------- ------------------
- -----------------
1 This should be included only if the Note is issued in global form.
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EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT;
FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE IS $519.40,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $480.60, THE ISSUE DATE IS FEBRUARY 26,
1998 AND THE YIELD TO MATURITY IS 15.06 % PER ANNUM.
13 1/2% [Series A] [Series B] Senior Discount Notes due 2010
No. ____
Cusip No. ____ $__________
ALADDIN GAMING HOLDINGS, LLC AND
ALADDIN CAPITAL CORP.
promises to pay to
or registered assigns,
the principal sum of
Dollars on March 1, 2010
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
Dated: __________, ____
ALADDIN GAMING HOLDINGS, LLC
By:________________________
Name:
Title:
ALADDIN CAPITAL CORP.
By:_________________________
Name:
Title:
This is one of the [Global] Notes
referred to in the within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:___________________________________
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(Back of Regulation S Temporary Global Note)
13 1/2% [Series A] [Series B] Senior Discount Notes due 2010
[Insert the Regulation S Temporary Global Note Legend, if applicable pursuant
to the provisions of the Indenture
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR OTHER NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.]
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a)
OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE ISSUERS.]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR"), (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH SECURITY PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY
AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF THIS SECURITY) ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
INSIDE THE UNITED STATES, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED
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INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT
IS ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS'
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I)
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.]
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Aladdin Gaming Holdings, LLC, a Nevada limited-liability
company ("Holdings"), and Aladdin Capital Corp., a Nevada corporation ("Capital"
and, together with Holdings, the "Issuers"), promise to pay interest on the
Accreted Value of this Note at the rate and times and in the manner specified
below and shall pay the Liquidated Damages payable pursuant to Section 2.5 of
the Note Registration Rights Agreement referred to below. No interest will
accrue on the Notes until March 1, 2003, but the Accreted Value will increase
(representing amortization of original issue discount) between the date of
original issuance and March 1, 2003, on a semi-annual bond equivalent basis
using a 360-day year comprised of twelve 30-day months, such that the Accreted
Value will be equal to the full principal amount at maturity of the Notes on
March 1, 2003. Beginning on March 1, 2003, cash interest on the Notes will
accrue at the rate of 13 1/2% per annum until maturity. The Issuers will pay
cash interest and Liquidated Damages semi-annually on March 1 and September 1 of
each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Cash interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from March 1, 2003. [The Issuers shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, in accordance with the Indenture; they
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time at the same
rate to the extent lawful in accordance with the Indenture. Cash interest will
be computed on the basis of a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for one or more
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon; until so exchanged in full, this Regulation
S Temporary Global Note shall in all other respects be entitled to the same
benefits as other Notes under the Indenture.
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2. METHOD OF PAYMENT. The Issuers will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the February 15 or August 15 next
preceding the 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 will
be payable as to Accreted Value, premium and Liquidated Damages, if any, and
interest at the office or agency of the Issuers maintained for such purpose
within or without the City and State of New York, or, at the option of the
Issuers, payment of interest and Liquidated Damages may be made by check mailed
to the Holders at their addresses set forth in the register of Holders; provided
that all payments with respect to at least $1.0 million in aggregate principal
amount at maturity of Notes, the Holders of which have given wire transfer
instructions to Holdings, will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof.
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. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without notice
to any Holder. The Issuers or any of their Subsidiaries may act in any such
capacity.
4. INDENTURE. The Issuers issued the Notes under an Indenture dated as of
February 26, 1998 (the "Indenture"), between the Issuers 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 Sections 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of 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 general obligations of the Issuers limited to $221.5
million in aggregate principal amount at maturity, plus amounts, if any, issued
to pay Liquidated Damages on outstanding Notes as set forth in Paragraph 2
hereof.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5 and
Paragraph 6 thereof, the Notes shall not be redeemable at the option of the
Issuers prior to March 1, 2003. Thereafter, the Notes shall be subject to
redemption at the option of the Issuers, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of Accreted Value) set forth below, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the applicable date of redemption, if
redeemed during the twelve-month period beginning on March 1 of the years
indicated below:
Year Percentage
---- ----------
2003........................................................ 106.75%
2004........................................................ 104.50%
2005........................................................ 102.25%
2006 and thereafter......................................... 100.00%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5,
on or prior to March 1, 2001, the Issuers may redeem up to an aggregate of 35%
of the Accreted Value of
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the Notes at a redemption price of 113 1/2% of the Accreted Value thereof, plus
Liquidated Damages, if any, thereon to the redemption date, with the proceeds of
a Qualified Public Offering (which proceeds may be advanced or contributed to
the Issuers by the IPO Entity); provided that at least 65% of the Accreted Value
remains outstanding immediately after the occurrence of such redemption; and
provided, further, that such redemption shall occur within 60 days of the date
of such Qualified Public Offering.
6. GAMING REDEMPTION. Notwithstanding the provisions of subparagraph (a) of
Paragraph 5 above, if any Gaming Authority requires that a holder or beneficial
owner of Notes must be licensed, qualified or found suitable under any
applicable gaming law and such holder or beneficial owner fails to apply for a
license, qualification or finding of suitability within 30 days after being
requested to do so by such Gaming Authority (or such lesser period that may be
required by such Gaming Authority), or if such holder or beneficial owner is
notified by such Gaming Authority that such holder or beneficial owner will not
be so licensed, qualified or found suitable, the Issuers shall have the right,
at their option, (i) to require that such holder or beneficial owner dispose of
such holder's or beneficial owner's Notes within 30 days (or such earlier date
as may be required by the applicable Gaming Authority) of (a) the termination of
the period described above for such holder or beneficial owner to apply for a
license, qualification or finding of suitability or (b) receipt of the notice
from such Gaming Authority that such holder or beneficial owner will not be
licensed, qualified or found suitable by such Gaming Authority or (ii) to call
for redemption of the Notes of such holder or beneficial owner at a redemption
price equal to the lesser of the price at which such holder or beneficial owner
acquired such Notes and the Accreted Value thereof, together with, in either
case, accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of redemption or the date of the finding that such holder or beneficial
owner will not be licensed, qualified or found suitable, which may be less than
30 days following the notice of redemption, if so ordered by such Gaming
Authority or required by applicable gaming laws.
7. MANDATORY REDEMPTION. Except as set forth in Paragraph 8 below, the
Issuers, the Issuers shall not be required to make mandatory redemptions or
sinking fund payments prior to maturity with respect to the Notes.
8. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder will have the
right to require the Issuers to purchase all or any part (equal to $1,000 or an
integral multiple thereof) of each Holder's Notes at a price in cash equal to
101% of the Accreted Value thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase. Within 10 days
following any Change of Control, the Issuers shall mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.
(b) If Holdings or a Restricted Subsidiary consummates any Asset Sales,
when the aggregate amount of Excess Proceeds exceeds $10.0 million, Holdings
shall commence an offer to all Holders (an "Asset Sale Offer") pursuant to
Section 4.10 of the Indenture to purchase the maximum Accreted Value of Notes
that may be purchased out of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the Accreted Value thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon 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 tendered pursuant to
an Asset Sale Offer is less than the Excess Proceeds, Holdings or the Restricted
Subsidiary, as the case may be, may, subject to the provisions of the Indenture,
use any remaining Excess Proceeds for general corporate purposes. If the
aggregate Accreted Value of Notes surrendered by Holders thereof exceeds
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the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased in accordance with Section 3.02 of the Indenture. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale Offer
from Holdings 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.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as 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
Issuers may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Issuers 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 Issuers
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.
This Regulation S Temporary Global Note is exchangeable in whole or in part
for one or more Global Notes only (i) on or after the termination of the
one-year period (as defined in Regulation S) and (ii) upon presentation of
certificates (accompanied by an Opinion of Counsel, if applicable) required by
Article 2 of the Indenture. Upon exchange of this Regulation S Temporary Global
Note for one or more Global Notes, the Trustee shall cancel this Regulation S
Temporary Global Note.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in Accreted Value of the Notes then outstanding
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 Accreted Value of the then outstanding Notes voting as
a single class. 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 provide for the assumption of the Issuers' obligations to
Holders of the Notes in case of a merger or consolidation, 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 the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages, if any,
with respect to, the Notes; (ii) default in payment when due of the Accreted
Value of or premium, if any, on the Notes, (iii) failure by the Issuers to
comply with Section 4.07, 4.09, 4.10, 4.15, 4.21, 4.22, or 5.01 of the
Indenture; (iv) failure
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by the Issuers for 30 days after written notice to comply with any of their
agreements in the Indenture or the Notes; (v) default under certain other
agreements relating to Indebtedness of the Issuers which default (a) is
caused by failure to pay when due principal of or premium, if any, or
interest on such Indebtedness (other than the Bank Credit Facility) prior to
the later of (1) 60 days after such default and (2) the expriation of the
grace period provided in such Indebtedness (a "Payment Default") which
Payment Default, together with all other Payment Defaults, exceeds $1.0
million or (b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $15.0 million or more; (vi) certain
final judgments for the payment of money aggregating in excess of $10.0
million that remain undischarged for a period of 60 days; (vii) certain
events of bankruptcy or insolvency with respect to Holdings or any of its
Significant Subsidiaries; (viii) a default by each of the Trust, London Clubs
and Bazaar Holdings in the performance of their material obligations set
forth in the Keep-Well Agreement, which default remains uncured for 180 days,
or default by AHL, London Clubs and Bazaar Holdings in the performance of
their material obligations set forth in the Noteholder Completion Guaranty or
repudiation by each of them of their respective obligations under the
Keep-Well Agreement, which has not been ratified and reaffirmed within 180
days, or the Noteholder Completion Guaranty; (ix) Holdings breaches any
material representation or warranty set forth in either of the Pledge
Agreements or default by Holdings in the performance of any material covenant
set forth in either of such agreements or repudiation by Holdings of its
obligations under either of such agreements or the unenforceability of either
of such agreements against Holdings for any reason; (x) the termination of
the Bank Credit Facility (other than pursuant to a refinancing thereof in
accordance with its terms and with the terms of clause (i) under the second
paragraph under Section 4.09 of the Indenture or the repudiation of the
Lenders obligations thereunder, including without limitation, the withdrawal
of the proceeds of the Term B Loans and Term C Loans from the Bank
Construction Disbursement Account, in each case prior to the date the Aladdin
is Operating (except for disbursements in accordance with the Disbursement
Agreement); (xi) (a) a failure of the Desert Passage to be Operating on or
prior to 90 days after the date the Aladdin becomes Operating and (b) at any
time thereafter and prior to the date on which the Desert Passage becomes
Operating, the Company's Fixed Charge Coverage Ratio for its most recently
ended four full fiscal quarters (or such lesser number of quarters as have
ended after the Aladdin became Operating) for which internal financial
statements are available is not at least 1.75 to 1.0; (xii) after the Aladdin
becomes Operating, revocation, termination, suspension or other cessation of
effectiveness of any Gaming Approval, which results in the cessation or
suspension of gaming operations for a period of more than 90 days at the
Aladdin; (xiii) the failure of the Aladdin to be Operating by the Operating
Deadline; (xiv) the transfer of the Aladdin Site as a result of the exercise
of remedies in respect of the Deed of Trust, including a foreclosure by the
Lenders pursuant to the terms of the Deed of Trust or the acceptance by the
Lenders of a deed in lieu of foreclosure; and (xv) the transfer of the Common
Membership Interests as a result of the exercise of remedies by the Lenders
in respect of the pledge of such Common Membership Interests pursuant to the
Lender's security documents. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in Accreted Value of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all outstanding Notes will
become due and payable without further action or notice. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in Accreted Value 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 Accreted Value of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the
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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 Issuers are required to deliver
to the Trustee annually a statement regarding compliance with the Indenture, and
the Issuers are 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.
14. TRUSTEE DEALINGS WITH ISSUERS. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Issuers or their Affiliates, and may otherwise deal with the Issuers or
their Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, manager, officer, employee,
incorporator or member of the Issuers, as such, shall not have any liability for
any obligations of the Issuers under the Notes or the Indenture 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.
16. SECURITY. The due and punctual payment of the Accreted Value of,
premium and interest and Liquidated Damages, if any, on the Notes when and as
the same shall be due and payable, whether on an interest payment date, at
maturity, by acceleration, repurchase, redemption or otherwise, and interest on
any overdue Accreted Value of, premium and interest and Liquidated Damages, if
any (to the extent permitted by law), on the Notes and performance of all other
obligations of the Issuers to the Holders or the Trustee under this Indenture
and the Notes, according to the terms hereunder or thereunder, shall be secured
as provided in the Pledge Agreements which Holdings has entered into
simultaneously with the execution of this Indenture. Each Holder of Notes, by
its acceptance thereof, consents and agrees to the terms of the Pledge
Agreements (including, without limitation, the provisions providing for
foreclosure) as the same may be in effect or may be amended from time to time in
accordance with their terms and authorizes and directs the Trustee or the
Disbursement Agent, as the case may be, to enter into the Pledge Agreements and
to perform their respective obligations and exercise their respective rights
thereunder in accordance therewith.
17. INTERCREDITOR AGREEMENT. The Holders, while free to exercise their
rights and remedies against Holdings, are prohibited, for so long as any portion
of the Bank Credit Facility is outstanding, from initiating or intervening in an
insolvency proceeding of the Company and from seeking a substantive
consolidation of Holdings, the Company and/or Capital. In addition, in the event
of a substantive consolidation of Holdings, the Company and/or Capital, the
Holders (i) will not be entitled to receive any cash or other payments (other
than securities subordinated to the prior payment in full of the Bank Credit
Facility to the same extent of the Notes) in respect of the Notes until the Bank
Credit Facility has been indefeasibly paid in full in cash and (ii) will be
required to turn over to the Lenders under the Bank Credit Facility any payments
received in violation of such provisions.
18. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
19. 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).
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20. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Note Registration Rights
Agreement dated as of February 26, 1998, between the Issuers and the parties
named on the signature pages thereof (the "Note Registration Rights Agreement").
21. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
22. WARRANT ENDORSEMENT.
THE NOTES EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE SEPARATELY
FROM THE WARRANTS ATTACHED HERETO ORIGINALLY SOLD AS A UNIT WITH THE NOTES
UNTIL THE EARLIEST TO OCCUR OF (I) SEPTEMBER 1, 1998; (II) THE DATE ON
WHICH A REGISTRATION STATEMENT WITH RESPECT TO THE NOTES OR A REGISTRATION
STATEMENT WITH RESPECT TO THE WARRANTS AND THE WARRANT SHARES IS FILED WITH
THE COMMISSION UNDER THE SECURITIES ACT (III) THE OCCURRENCE OF A CHANGE OF
CONTROL OR A SALE OR RECAPITALIZATION OF ENTERPRISES, HOLDINGS OR THE
COMPANY OCCURS; (IV) 30 DAYS AFTER A QUALIFIED PUBLIC OFFERING; (V) THE
OCCURRENCE OF AN EVENT OF DEFAULT; OR (VI) SUCH EARLIER DATE AS DETERMINED
BY MERRILL LYNCH & CO. IN ITS SOLE DISCRETION (THE DATE OF OCCURRENCE OF AN
EVENT SPECIFIED IN CLAUSES (I) THROUGH (VI) BEING REFERRED TO AS THE
"SEPARATION DATE"). PRIOR TO SUCH DATE, THE NOTES EVIDENCED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY IN INTEGRAL MULTIPLES OF $1,000
PRINCIPAL AMOUNT OF NOTES AND ONLY WITH THE SIMULTANEOUS TRANSFER TO THE
TRANSFEREE OF 10 WARRANTS FOR EACH $1,000 PRINCIPAL AMOUNT SO TRANSFERRED.
Under the terms of the warrant agreement relating to the Warrants (the "Warrant
Agreement"), the holder of this security may at any time on or after the
Separation Date, at its option, by notice to the Trustee elect to separate or
separately transfer the Notes and the Warrants represented hereby, in whole or
in part, and shall thereafter surrender this security to the Trustee for the
exchange of this security, in part, for such Warrant or Warrants and for a Note
or Notes of a like aggregate principal amount and of authorized denominations
not bearing this Warrant Endorsement; provided that no delay or failure on the
part of the Trustee or the Warrant Agent to exchange this security for such
Warrant or Warrants and Note or Notes shall affect the separation of such Notes
and Warrants represented hereby or their separate transferability. Until such
separation, the holder of this security is, for each $1,000 principal amount of
Notes, also the record owner of 10 Warrants expiring March 1, 2010, each Warrant
to purchase 1 share of Class B non-voting Common Stock, no par value (the
"Common Stock"), of Enterprises (subject to adjustment). Enterprises has
deposited with the Trustee, as custodian for the Holder of the Notes bearing
this Warrant Endorsement, a certificate or certificates for such Warrants to
purchase an aggregate of 2,215,000 shares of Common Stock (subject to
adjustment). Prior to the separation of the Notes and the
A-2-9
Warrants as described above, record ownership of such Warrants is transferable
only by the transfer of this Note on the Note register maintained by the Issuers
pursuant to the Indenture. After such separation, ownership of a Warrant is
transferable only by the transfer of the certificate representing such Warrant
in accordance with the provisions of the Warrant Agreement.
By accepting a security bearing this Warrant Endorsement, each holder of this
security is bound by all of the terms and provisions of the Warrant Agreement (a
copy of which is available on request to Enterprises or the Warrant Agent).
Election to Exercise. On or after the Warrant Exercise Commencement Date (as
such term is defined in the Warrant Agreement), the Warrants may be exercised by
obtaining from the Warrant Agent the required forms of election to exercise,
declaration form and instructions for payment of the Exercise Price (as such
term is defined in the Warrant Agreement). Upon receiving the required forms and
payment of such Exercise Price, the Warrant Agent shall exercise such Warrants
in accordance with the provisions of the Warrant Agreement.
Election of Exchange. The undersigned registered holder of the security
represented hereby irrevocably elects to separate its Notes and Warrants and to
exchange this security for a new Note in the principal amount hereof and a
Warrant certificate.
The undersigned hereby irrevocably instructs the Trustee (A) to issue in the
name of the undersigned registered holder a new Note not containing the above
Warrant Endorsement in the principal amount equal to the principal amount hereof
and (B) to deliver this security to the Warrant Agent pursuant to the provisions
of the Warrant Agreement with instructions to issue in the name of the
undersigned registered holder a Warrant certificate representing the number of
Warrants equal to the number of Warrants represented by this security and to
issue (1) a new Warrant certificate to replace the Warrant certificate held on
deposit by the Warrant Agent equal to the difference between (x) the number of
Warrants represented by the Warrant certificate so held on deposit and (y) the
number of Warrants represented by this Security.
Dated: ______________________
Name of Holder of this security: ______________________
Address: ______________________
______________________
Signature: ______________________
Note: The above signature must correspond with the name as written upon the face
of this security in every particular, without alteration or enlargement whatever
and if the certificate representing any principal amount at maturity of this
security or the associated Warrants is to be registered in a name other than
that in which this security is registered.
Signature Guaranteed: ______________________
Note: Signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
A-2-10
The Issuers will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Note Registration Rights Agreement.
Requests may be made to:
Aladdin Gaming Holdings, LLC
Aladdin Capital Corp.
c/o Aladdin Gaming Holdings, LLC
3667 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: Corporate Secretary
A-2-11
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________________________
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
- ------------------------------------------------------------------------------
Date:
-------------------
Your Signature:
------------------------------------------
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee.
Note: Signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
A-2-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or 4.15 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased: $________
Date: Your Signature:
------------- -------------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No:
------------------------
Signature Guarantee.
Note: Signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
A-2-13
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note or for a Definitive Note, or
exchanges of a part of another Global Note or Definitive Note for an interest in
this Regulation S Temporary Global Note, have been made:
Amount of Accreted Value of
decrease in Amount of increase this Global Note Signature of
Accreted Value in Accreted Value following such authorized officer
of of decrease (or of Trustee or Note
Date of Exchange this Global Note this Global Note increase) Custodian
---------------- ---------------- ------------------ ----------------- ------------------
A-2-14
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Aladdin Gaming Holdings, LLC
Aladdin Capital Corp.
c/o: Aladdin Gaming, LLC
3667 Las Vegas Boulevard South
Las Vegas, Nevada 89109
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Attn: Corporate Trust Division
Re: ___% Senior Discount Notes due 2010
Reference is hereby made to the Indenture, dated as of February __, 1998
(the "Indenture"), between Aladdin Gaming Holdings, LLC and Aladdin Capital
Corp., as issuers (the "Issuers"), and State Street Bank and Trust Company, as
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 Accreted
Value of $___________ in such Note[s] or interests (the "Transfer"), to
__________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / Check if Transferee will take delivery of a beneficial interest in
the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
United States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer" within
the meaning of Rule 144A in a transaction meeting the requirements of Rule
144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the 144A Global Note and/or the Definitive Note and in the Indenture and
the Securities Act.
2. / / Check if Transferee will take delivery of a beneficial interest in
the Temporary Regulation S Global Note, the Regulation S Global Note or a
Definitive Note pursuant to Regulation S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities
Act and, accordingly, the Transferor hereby further certifies that (i) the
Transfer is not being made to a person in the United States and (x) at the
time the buy order was originated, the
B-1
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note, the Temporary
Regulation S Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.
3. / / Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Note or a Definitive Note pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act
and any applicable blue sky securities laws of any state of the United
States, and accordingly the Transferor hereby further certifies that (check
one):
(a) / / such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Issuers or a subsidiary
thereof;
or
(c) / / such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) / / such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of
the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the
Transferor hereby further certifies that it has not engaged in any general
solicitation within the meaning of Regulation D under the Securities Act and
the Transfer complies with the transfer restrictions applicable to beneficial
interests in a Restricted Global Note or Restricted Definitive Notes and the
requirements of the exemption claimed, which certification is supported by
(1) a certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount of
Notes at the time of transfer of less than $250,000, an Opinion of Counsel
provided by the Transferor or the Transferee (a copy of which the Transferor
has attached to this certification), to the effect that such Transfer is in
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 will be subject to the restrictions on
transfer enumerated in the
B-2
Private Placement Legend printed on the IAI Global Note and/or the Definitive
Notes and in the Indenture and the Securities Act.
4. / / Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) / / Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under 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 will no longer be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes and in
the Indenture.
(b) / / Check if Transfer is Pursuant to Regulation S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904
under 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 will no longer be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes and in
the Indenture.
(c) / / Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 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 will not be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Notes or Restricted Definitive Notes and in the
Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
---------------------------------------
[Insert Name of Transferor]
By:____________________________________
Name:
Title:
Dated: __________,____
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP ), or
(ii) / / Regulation S Global Note (CUSIP ), or
(iii) / / IAI Global Note (CUSIP ); or
(b) / / a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP ), or
(ii) / / Regulation S Global Note (CUSIP ), or
(iii) / / IAI Global Note (CUSIP ); or
(iv) / / Unrestricted Global Note (CUSIP ); or
(b) / / a Restricted Definitive Note; or
(c) / / an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Aladdin Gaming Holdings, LLC and
Aladdin Capital Corp.
c/o: Aladdin Gaming, LLC
3667 Las Vegas Boulevard South
Las Vegas, Nevada 89109
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Re: ___% Senior Discount Notes due 2010
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of February __, 1998
(the "Indenture"), between Aladdin Gaming Holdings, LLC and Aladdin Capital
Corp., as issuers (the "Issuers"), and State Street Bank and Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
____________, (the "Owner") owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the Accreted Value of
$____________ in such Note[s] or interests (the "Exchange").
In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) / / Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In
connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Note for a beneficial interest in an Unrestricted Global
Note in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Notes and pursuant to and in
accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) 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 and (iv) the beneficial interest
in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) / / Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange
of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive
Note is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with
C-1
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) / / Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in
an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) 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 and (iv) the beneficial interest
is being acquired in compliance with any applicable blue sky securities laws
of any state of the United States.
(d) / / Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired for
the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) 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 and (iv) the Unrestricted Definitive Note
is being acquired in compliance with any applicable blue sky securities laws
of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes
(a) / / Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies
that the Restricted Definitive Note is being acquired for the Owner's own
account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Definitive Note and
in the Indenture and the Securities Act.
(b) / / Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest
in the [CHECK ONE] / / 144A Global Note, / / Regulation S Global Note,
/ / IAI Global Note with an equal principal amount, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer and (ii) such Exchange has been effected in compliance with
the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, and in compliance with
any applicable blue sky securities laws of any state of the United States.
Upon consummation of the proposed Exchange in accordance with the terms of
the Indenture, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the relevant Restricted Global Note and in the Indenture and the
Securities Act.
C-2
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
-----------------------------------
[Insert Name of Owner]
By: _______________________________
Name:
Title:
Dated: __________, ____
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Aladdin Gaming Holdings, LLC and
Aladdin Capital Corp.
c/o: Aladdin Gaming, LLC
3667 Las Vegas Boulevard South
Las Vegas, Nevada 89109
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Attn: Corporate Trust Division
Re: 13 1/2% Senior Discount Notes due 2010
Reference is hereby made to the Indenture, dated as of February 26, 1998
(the "Indenture"), between Aladdin Gaming Holdings, LLC and Aladdin Capital
Corp., as issuers (the "Issuers"), and State Street Bank and Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the United States Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Issuers or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (c) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has
D-1
furnished on its behalf by a U.S. broker-dealer) to you and to the Issuers a
signed letter substantially in the form of this letter and, if such transfer is
in respect of a principal amount of Notes, at the time of transfer of less than
$250,000, an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such transfer is in compliance with the Securities Act, (D)
outside the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the provisions of Rule 144(k) under the
Securities Act or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing the
Definitive Note or beneficial interest in a Global Note from us in a transaction
meeting the requirements of clauses (A) through (E) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Issuers such
certifications, legal opinions and other information as you and the Issuers may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect. We further understand that any subsequent
transfer by us of the Notes or beneficial interest therein acquired by us must
be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
------------------------------------------
[Insert Name of Accredited Investor]
By: _______________________________
Name:
Title:
Dated: ___________, ____
D-2
EXHIBIT E
FORM OF CONTINGENT GUARANTY OF PERFORMANCE AND COMPLETION
CONTINGENT GUARANTY OF PERFORMANCE AND COMPLETION
THIS CONTINGENT GUARANTY OF PERFORMANCE AND COMPLETION, dated as of
__________, 1998 is made by LONDON CLUBS INTERNATIONAL PLC, a company
registered in England and Wales under company number 2862479 ("London
Clubs"), THE TRUST UNDER ARTICLE SIXTH U/W/O SIGMUND SOMMER or, in the event
of the dissolution thereof, the remaindermen thereof (the "Trust") and
ALADDIN BAZAAR HOLDINGS, LLC, a Nevada limited liability company ("ABH"; ABH,
the Trust and London Clubs are individually called a "Guarantor" and
collectively called the "Guarantors"), in favor of ___________ as Agent (the
"Agent") for [the parties set forth on Schedule A-1 hereto (the ___________
Contingent Guarantors")] (the "Agent").
WITNESSETH:
WHEREAS, Fleet Bank, NA has agreed to lend to Aladdin Bazaar, LLC ("Aladdin
Bazaar") sufficient funds to permit the construction of the Dessert Passage and
carpark (the "Mall Project") adjacent to the improvements (the "Fleet Loan") and
the Trust will act as a guarantor of the Fleet Loan; and
WHEREAS, the Contingent Guarantors have agreed to provide a limited
guaranty of certain of the Trust's obligations under the Fleet Loan (the
"Additional Guaranty") which Additional Guaranty requires the Contingent
Guarantors to make payments in the event, among others, that the Improvements
are no completed on a timely basis;
WHEREAS, it is in the best interest of the Guarantors to promote and induce
Aladdin Bazaar to construct the Mall Project adjacent to the Improvements and
(ii) the Contingent Guarantors to provide the Additional Guaranty, in connection
therewith; and
WHEREAS, pursuant to that certain credit agreement, dated February 26, 1998
(together with all amendments and other modifications, if any, from time to time
thereafter made thereto, the "Credit Agreement"), among Aladdin Gaming, LLC, a
Nevada limited liability company (the "Borrower"), the various lending
institutions (individually a "Lender" and collectively the "Lenders") as are, or
may from time to time become, parties thereto and The Bank of Nova Scotia
("Scotiabank") as the Administrative Agent for the Lenders, Merrill Lynch
Capital Corporation ("Merrill Lynch") as the Syndication Agent for the Lenders,
Canadian Imperial Bank of Commerce as the Documentation Agent for the Lenders,
and Scotiabank and Merrill Lynch as Arrangers, the Lenders have extended
Commitments to make Loans to the Borrower and to issue Letters of Credit for the
account of the Borrower; and
WHEREAS, pursuant to that certain indenture, dated February 26, 1998 (the
"Indenture") among the State Street bank and Trust Company (the "Discount Note
Indenture Trustee"), Aladdin Gaming Holdings, LLC ("Holdings") and Aladdin
Capital Corp., the Discount Notes were issued and the proceeds thereof, together
with the proceeds the Loans under the Credit Agreement were advanced
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to the Borrower pursuant to the terms of that certain Disbursement Agreement
dated February 26, 1998 (together with all amendments and other modifications,
if any, from time to time thereafter made thereto, the "Disbursement Agreement")
among the Borrower, Holdings, Scotiabank, as the Administrative Agent, the
Discount Note Indenture Trustee and Scotiabank, as the Disbursement Agent, and
initial Securities Intermediary; and
WHEREAS, as a condition precedent to the effectiveness of the Credit
Agreement, the Guarantors delivered a Guaranty of Performance and Completion
dated February 26, 1998 (the "Completion Guaranty") in favor of each of the
Administrative Agent and the Lenders and certain subsidiaries of London Clubs
(the "Subsidiary Guarantors") agreed to guarantee fully and unconditionally the
payment of London Clubs' obligations under the Completion Guaranty pursuant to a
separate guaranty agreement of even date herewith (the "Subsidiary Bank
Guaranty"; together with the Completion Guaranty, collectively, the "Bank
Guaranty"); and
WHEREAS, as a condition precedent to the effectiveness of the Indenture and
the issuance of the Discount Notes, the Guarantors delivered a Guaranty of
Performance and Completion dated February 26, 1998 (the "Guaranty of Performance
and Completion") and the Subsidiary Guarantors agreed to guarantee fully and
unconditionally the payment of London Clubs' obligations under the Guaranty of
Performance and Completion pursuant to a separate guaranty agreement dated
February 26,1998 (the "Subsidiary Guaranty"; together with the Guaranty of
Performance and Completion, the "Noteholder Completion Guaranty"); and
WHEREAS, as a condition precedent to the effectiveness of the Additional
Guaranty, the Guarantors are required to execute and deliver a Guaranty of
Performance and Completion the "Contingent Guaranty of Performance and
Completion" and the Subsidiary Guarantors have agreed to guarantee fully and
unconditionally the payment of London Clubs' obligations under the Contingent
Guaranty of Performance and Completion pursuant to a separate guaranty agreement
of even date herewith (the "Contingent Subsidiary Guaranty"; together with this
Contingent Guaranty of Performance and Completion, the "Contingent Completion
Guaranty"); and
WHEREAS, the Guarantors have duly authorized the execution, delivery and
performance of this Contingent Guaranty of Performance and Completion and the
Subsidiary Guarantors have duly authorized the execution, delivery and
performance of the Contingent Subsidiary Guaranty; and
WHEREAS, it is in the best interests of the Guarantors to execute this
Contingent Guaranty of Performance and Completion and the Subsidiary Guarantors
to execute the Contingent Subsidiary Guaranty inasmuch as the Guarantors and the
Subsidiary Guarantors will derive substantial direct and indirect benefits from
the proceeds of the Additional Guaranty.
NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, and in order to induce the Agent to enter into the
Additional Guaranty, the Guarantors agree, for the benefit of theAgent and the
Contingent Guarantors, as follows:
1. Definitions. Capitalized terms not otherwise defined in this Contingent
Completion Guaranty shall have the meanings set forth in Appendix A hereto. As
used herein, the following terms shall have the meanings set forth below.
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"Accreted Value" shall have the meaning ascribed to it in the Indenture.
"Additional Amounts" is defined in Section 15(a)(iii).
"Additional Guaranty" is defined in the second recital.
"Agent" is defined in the preamble.
"Bank Guaranty" is defined in the seventh recital.
"Bankruptcy Code" shall mean Title 11 of the United States Code as amended from
time to time.
"Change Order" shall have the meaning ascribed to it in the Credit Agreement as
in effect on the Effective Date.
"Commitment" shall have the meaning ascribed to it in the Credit Agreement as
in effect on the Effective Date.
"Completion" shall have the meaning ascribed to it in the Credit Agreement as in
effect on the Effective Date.
"Consolidated Intangibles" means, at a particular date, all assets of a
Guarantor and its consolidated Subsidiaries, determined on a consolidated basis,
that would, in conformity with GAAP, as applicable, be classified as intangible
assets, including, without limitation, unamortized debt discount and expense,
unamortized organization and reorganization expense, costs in excess of the fair
market value of acquired companies, patents, trade or service marks, franchises,
trade names, goodwill and, from and after March 30, 1997, the amount of all
write-ups in the book value of assets resulting from any revaluation thereof.
"Consolidated Tangible Assets" means, at a particular date, the amount equal to
(a) the amount which would be included as assets on the consolidated balance
sheet of a Guarantor and its consolidated Subsidiaries as at such date in
accordance with GAAP, minus (b) Consolidated Intangibles.
"Construction Benchmark Schedule" means the schedule attached hereto as Schedule
7.
"Contingent Completion Guaranty" is defined in the eighth recital.
"Contingent Guarantor" is defined in the preamble.
"Contingent Subsidiary Guaranty" is defined in the eighth recital.
"Credit Agreement" is defined in the fourth recital.
"Discount Notes" means the 13 1/2% Senior Discount Notes due 2010 issued
pursuant to the Indenture.
"Dormant Subsidiary" means any Subsidiary of a Guarantor which has no operating
assets or property and conducts no business.
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"Enforcement Costs" means all reasonable out-of-pocket costs and expenses of the
Agent in connection with the enforcement of the rights and remedies of the Agent
under this Contingent Completion Guaranty and any amendment, waiver or consent
relating hereto including, without limitation, reasonable attorneys' fees and
costs and expenses, court costs and filing fees in addition to all other amounts
due hereunder whether or not such Enforcement Costs are incurred in one or more
proceedings.
"Failure to Enforce" is defined in Section 3(a).
"Fleet Loan" is defined in the third recital.
"GAAP" means the generally accepted accounting principles as in effect from time
to time in the United Kingdom with respect to London Clubs and in the United
States with respect to the other Guarantors, as the case may be.
"Guaranteed Obligations" means the obligations of the Guarantors under Section
2.
"Guarantor" is defined in the preamble.
"Guaranty Deposit Account" is defined in Section 4(a).
"Imposition" shall have the meaning ascribed to it in the Credit Agreement as in
effect on the Effective Date.
"Improvement" shall have the meaning ascribed to it in the Credit Agreement as
in effect on the Effective Date.
"In Balance" shall have the meaning ascribed to it in the Credit Agreement as in
effect on the Effective Date.
"Indenture" is defined in the third recital.
"Insolvency Proceeding" means any case or proceeding, voluntary or involuntary,
under the Bankruptcy Code, or any similar existing or future law of any
jurisdiction, foreign, state or federal, relating to bankruptcy, insolvency,
reorganization or relief of debtors.
"Leases" means, collectively, all agreements relating to the use, occupancy and
possession of space with respect to the Main Project entered into by the
Borrower and a tenant from time to time.
"Material" means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of a Guarantor and its
Subsidiaries taken as a whole.
"Material Subsidiary" means each of the Subsidiaries of London Clubs that are
party to that certain Subsidiary Guaranty dated as of June 30, 1997 guaranteeing
the obligations of London Clubs under the Note Agreements. Each Material
Subsidiary of London Clubs as of the date hereof is listed on Schedule 1 hereof.
"Minimum Aladdin Facilities" has the meaning ascribed to it in the Indenture as
in effect on February 26, 1998.
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"Note Agreements" means the several identical Note Purchase Agreements dated as
of June 30, 1997 among London Clubs and the purchasers named therein relating to
London Clubs' $50,000,000 aggregate principal amount of 7.74% Guaranteed Senior
Notes due 2004 and as the same may be modified by amendments that would not, in
the aggregate, have the effect of making London Clubs' obligations thereunder
materially more onerous (it being understood and agreed that any amendment,
supplement or modification that increases the amount of the obligations of
London Clubs thereunder shall be deemed material).
"Noteholder Completion Guaranty" is defined in seventh recital
"Noteholders" means the holders of the Discount Notes.
"NRS" is defined in Section 4(a).
"Subsidiary Bank Guaranty" is defined in the sixth recital.
"Subsidiary Guarantors" is defined in the sixth recital.
"Subsidiary Guaranty" is defined in the seventh recital.
"Taxes" is defined in Section 15(a).
"Tax Refund" is defined in Section 15(c).
"Tenant Improvements" means (i) the portion of the Work to be performed by or on
behalf of the Borrower in the interior of the Casino pursuant to a Lease to
adapt the same for the initial use and occupancy by the tenant under such Lease
or (ii) if a tenant under a Lease undertakes to complete the work to the portion
of the Main Project covered by such Lease, any allowances or payments advanced
to such Person by the Borrower.
"Work" means the demolition work and the rehabilitation and/or construction,
equipping and completion of the Main Project to be performed by the Borrower in
accordance with the Plans and Specifications, the Reciprocal Easement Agreement
and the Site Work Agreement.
2. Guaranty of Completion and Performance. The Guarantors, jointly and
severally, absolutely, unconditionally and irrevocably, on the terms and subject
to the conditions set forth herein, covenant and guarantee to the Agent (for the
benefit of the Contingent Guarantors) and covenants and agrees to make any and
all payments to or on behalf of the Borrower as may be necessary in order to
permit and assure that:
(i) the Borrower shall (A) prosecute the Work and the construction of the
Improvements and the Tenant Improvements to Completion with due diligence and
continuity, in an expeditious and first-class workmanlike manner, (B) cause the
Work to be performed and the Improvements and the Tenant Improvements to be
constructed, equipped and completed in compliance with the Plans and
Specifications in all material respects and in compliance in all material
respects with the provisions of the Reciprocal Easement Agreement, the Site Work
Agreement, all Environmental Laws and all Legal Requirements, and (C) correct or
cause to be corrected as soon as possible any material defect in the
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Work, the Improvements and/or the Tenant Improvements (including, without
limitation, any material defect in workmanship or quality of construction or
materials) or any material departure or variation from the Plans and
Specifications, the requirements of the Reciprocal Easement Agreement and/or the
Site Work Agreement not made pursuant to Change Orders approved in writing by
the Construction Consultant and the Administrative Agent in accordance with the
Credit Agreement and the Disbursement Agreement; and
(ii) the Borrower shall punctually pay, discharge and/or contribute, as
appropriate, (A) any and all costs, expenses and liabilities incurred by the
Borrower for or in connection with the performance of the Work and the
Completion of the Improvements and the Tenant Improvements in accordance with
the Plans and Specifications, (B) all claims and demands for labor, materials
and services incurred by the Borrower for or in connection with the performance
of the Work and the Completion of the Improvements and the Tenant Improvements
and in connection with cost overruns of any type, in each case which are or may
become due and payable, or, if unpaid, are or may become Liens on the portion of
the Site owned by the Borrower, (C) all payments to be made or Work to be
performed by the Borrower under Leases for Tenant Improvements or under the
Reciprocal Easement Agreement or the Site Work Agreement, (D) Impositions and
premiums for insurance prior to the Completion of the Improvements and the
Tenant Improvements, (E) all amounts which the Borrower may be required to pay
from time to time in order to keep the Main Project Budget In Balance, and (F)
all amounts needed to cause the Work to be performed within the Construction
Benchmark Schedule; and
(iii) the Borrower shall perform the Work and complete construction of the
required Minimum Aladdin Facilities on schedule and in accordance with the Plans
and Specifications Lien-free other than Permitted Liens and the portion of the
Site owned by the Borrower shall be and remain free and clear of all Liens
arising from the furnishing of materials, labor or services for or in connection
with the performance of the Work and the Completion of the Improvements and the
Tenant Improvements; and
(iv) the Borrower shall provide the expertise necessary to supervise performance
of the Work and Completion of the Improvements and the Tenant Improvements at no
cost to the Agent, and
(v) in the event the Guarantors hereunder shall fail or refuse to pay and/or
perform the Guaranteed Obligations under this Contingent Completion Guaranty,
theAgent (in addition to any other rights and remedies afforded by applicable
law) may pay and/or perform the Guaranteed Obligations on behalf of the
Guarantors hereunder in which case the Guarantors, upon demand by the Agent,
shall pay any and all costs, expenses and liabilities for such costs and
expenses in connection with the performance of the Work and Completion of the
Improvements and the Tenant Improvements, or cause any Lien in connection with
the performance of the Work or the Completion of the Improvements and/or Tenant
Improvements or any claim or demand for the payment of the cost of the
performance of the Work and Completion of the Improvements and the Tenant
Improvements to be bonded, discharged, released or paid, and shall reimburse the
Agent for all sums paid and all costs, expenses or liabilities incurred by the
Agent in connection therewith; and
(vi) the Guarantors shall pay the Enforcement Costs.
3. Restrictions on Exercise of Rights and Remedies by the Agent.
(a) Except as expressly set forth in this Section 3(a), the Guarantors
shall have no obligation to pay and/or perform any of the Guaranteed Obligations
and the Agent covenants and agrees not to
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demand payment and/or performance of any of the Guaranteed Obligations or
exercise any rights, remedies or options under this Contingent Completion
Guaranty or commence any enforcement proceedings hereunder during any period
that the Bank Guaranty or Noteholder Completion Guaranty is in effect and the
Guarantors have not been released in writing by the Lenders or the Discount Note
Indenture Trustee, respectively; provided, however, the Agent shall be permitted
to demand payment and/or performance of the Guaranteed Obligations and exercise
all rights, remedies and options and commence enforcement proceedings under this
Contingent Completion Guaranty pursuant to this Section 3(a):
(i) at any time prior to Completion and from and after the date on which
all of the indebtedness evidenced by the Indenture and the Discount :Notes has
been indefeasibly paid in full and the Discount Note Indenture Trustee has
released the Guarantors in writing from their obligations under this Noteholder
Completion Guaranty;
(ii) at any time after the date on which all of the following events have
occurred and are continuing:
(A) the Contingent Guarantors fully funded their obligations under the
Additional Guaranty; and
(B) the Guarantors have defaulted in their Guaranteed Obligations owing to
the Discount Note Indenture Trustee and the Noteholders under the Noteholder
Completion Guaranty, and the Discount Note Indenture Trustee (or in accordance
with the terms of the Indenture, Noteholders holding at last 25% of the
aggregate Accreted Value of the Discount Notes) has or have failed to actively
enforce the Noteholder Completion Guaranty and to use reasonable efforts to
pursue their remedies under the Noteholder Completion Guaranty (a "Failure to
Enforce") and such Failure to Enforce has continued for 180 calendar days in the
aggregate (which shall be extended for the number of days during which a Force
Majeure Event and/or an Insolvency Proceeding of the Borrower which impairs the
Discount Note Indenture Trustee or the Noteholders directly from enforcing the
Noteholder Completion Guaranty has occurred and is continuing, which such
extension shall terminate upon the filing by the Discount Note Indenture Trustee
or the requisite Noteholders of any action against the Guarantors under the
Noteholder Completion Guaranty to enforce the obligations of the Guarantors
thereunder which are susceptible of performance notwithstanding such Insolvency
Proceeding); and
(C) the Work which has been substantially completed in accordance with the
Plans and Specifications on the date in question has not progressed to the stage
of completion set forth for such date (subject to any extensions based upon
Force Majeure Events or an Insolvency Proceeding of the Borrower which impairs
the Discount Note Indenture Trustee or the Noteholders directly or indirectly
from enforcing the Noteholder Completion Guaranty, which such extension shall
terminate upon the filing by the Discount Note Indenture Trustee or the
requisite Noteholders of any action against the Guarantors under the Noteholder
Completion Guaranty to enforce the obligations of the Guarantors thereunder
which are susceptible of performance notwithstanding such Insolvency Proceeding)
in the Construction Benchmark Schedule. The Discount Note Indenture Trustee and
the Noteholders shall be third party beneficiaries of this Section 3 (b) and
shall have all rights at law and equity to the enforcement thereof.
(b) Notwithstanding anything to the contrary in this Contingent Completion
Guaranty, performance in all material respects of the obligations of the
Guarantors under Section 2 of the Bank Guaranty or the
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Noteholder Completion Guaranty shall be deemed to be performance of the
Guaranteed Obligations hereunder and performance in all material respects of the
Guaranteed Obligations of the Guarantors hereunder shall be deemed to be
performance of the corresponding obligations under the Bank Guaranty or the
Noteholder Completion Guaranty.
(c) As a material inducement to the Lenders and the Discount Note Indenture
Trustee to consent to the delivery of this Contingent Completion Guaranty by the
Guarantors, the Agent covenants and agrees that (i) the right of the Agent to
demand payment and/or performance of the Guaranteed Obligations, to exercise any
rights, remedies and options and/or to commence enforcement proceedings under
this Contingent Completion Guaranty shall be subject in all events to the
delivery of a written notice to the Administrative Agent and Discount Note
Indenture Trustee no later than 10 Business Days prior to the making of such
demand for payment and/or performance, exercise of rights, remedies and options,
or commencement of enforcement proceedings, as applicable, (ii) the Lenders and
the Discount Note Indenture Trustee shall have all rights at law and equity
including, without limitation, the right to seek an injunction or other
extraordinary remedy to prevent or prohibit the making of any demand for payment
and/or performance, exercise of rights, remedies and options, or commencement of
enforcement proceedings by the Agent which is in contravention of Section 3(a),
and (iii) this Contingent Completion Guaranty shall not be amended, modified,
and/or amended and restated without the prior written consent of the
Administrative Agent and Discount Note Indenture Trustee in Administrative Agent
in their sole discretion provided that the consent of the Administrative Agent
and Discount Note Indenture Trustee shall not be required in connection with
corrective amendments required to be made to this Contingent Completion Guaranty
as and when corresponding amendments are made to the Bank Guaranty or the
Noteholder Completion Guaranty. The Administrative Agent and the Discount Note
Indenture Trustee (on behalf of the Noteholders shall be third party
beneficiaries of this Section 3(c) and shall have all rights at law and equity
to the enforcement hereof.
4. Payment Provisions. Subject to Nevada Gaming Laws (once the Borrower has been
licensed), all payments required to be made by the Guarantors pursuant to
Section 2 hereof shall be deemed to be capital contributions to the Borrower and
shall be made subject to the following terms:
(a) The Guarantors shall make cash payments in the amounts required under
Section 2 hereof into an interest-bearing deposit account designated and
controlled exclusively by the Agent (the "Guaranty Deposit Account") in which
the Agent is hereby granted a security interest. The Guaranty Deposit Account is
intended to be a "deposit account" for the purposes of Nevada Revised Statutes
("NRS") 40.430.4(g) and Section 9301(g) of the California Uniform Commercial
Code. Such funds shall be held in the Guaranty Deposit Account as collateral for
the Guaranteed Obligations of the Guarantors under this Contingent Completion
Guaranty and shall be applied to payment of the Guaranteed Obligations.
(b) The cash payments into the Guaranty Deposit Account and the funds
therein for the purpose of paying the Guaranteed Obligations under this
Contingent Completion Guaranty shall be free and clear of any third party claims
thereto, including any claims by the Borrower or Holding as a third party
beneficiary under this Contingent Completion Guaranty. The Guarantors and the
Agent specifically agree that the Borrower and Holdings are not intended third
party beneficiaries to this Contingent Completion Guaranty and that neither the
Borrower, Holdings, nor any other Person which is not party to this Contingent
Completion Guaranty (other than successors and assigns of each of the Agent)
shall have any rights under this Contingent Completion Guaranty.
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5. Continuation of Guaranty. In the event that the Trust is in default
under the Additional Guaranty this Contingent Completion Guaranty shall remain
in full force and effect. Subject to the provisions of Section 11 hereof, upon
the indefeasible payment and performance of the Guaranteed Obligations by the
Guarantors, this Contingent Completion Guaranty shall terminate.
6. Proof of Damages. If the Guarantors shall at any time or from time to time
fail to perform or comply with any of the Guaranteed Obligations contained
herein, then in each such case (i) it shall be assumed conclusively without
necessity of proof that such failure by the Guarantors was the sole and direct
cause of the Agent failing to receive such payment when due (to the extent of
the failure of the Guarantors to perform the Guaranteed Obligations contained
herein) irrespective of any other contributing or intervening cause whatsoever,
and (ii) the Guarantors further irrevocably waive to the fullest extent
permitted by law any right or defense the Guarantors may have to cause the Agent
to prove the cause or amount of such damages or to mitigate the same.
7. Rights of the Agent. To the extent permitted by the Nevada Gaming Laws, each
Guarantor authorizes the Agent in its sole discretion to perform any or all of
the following acts during such time as the Agent has the right to demand payment
and performance of the Guaranteed Obligations, all without notice to the
Guarantors (but with notice being given to the Administrative Agent and Discount
Note Indenture Trustee as required by Section 3(c) of this Contingent Completion
Guaranty) and without affecting the payment and performance of the Guaranteed
Obligations by the Guarantors:
(a) The Agent may take and hold security for the Guaranteed Obligations and
for the Trust's obligations under the Additional Guaranty, accept additional or
substituted security for any of the foregoing, and subordinate, exchange,
enforce, waive, release, compromise, fail to perfect and sell or otherwise
dispose of any such security.
(b) The Agent may direct the order and manner of any sale of all or any
part of any security now or later to be held for this Contingent Completion
Guaranty and may also bid at any such sale.
(c) The Agent may substitute, add or release any one or more Guarantors or
endorsers.
(d) The Agent may release the Trust of their liability for its obligations
under the Additional Guaranty.
(e) The Agent may extend other credit to the Trust, their Affiliates and
any of the Guarantors or their respective Affiliates and may take and hold
security for the credit so extended, all without affecting the Guarantors'
liability under this Contingent Completion Guaranty.
(f) The Agent may advance additional funds to Trust, the Guarantors and
their respective Affiliates for any purpose.
8. Contingent Completion Guaranty to be Absolute. The Guarantors expressly agree
that for as long as the obligations of the Guarantors under the Bank Guaranty,
the Noteholder Completion Guaranty and the Guaranteed Obligations hereunder
remain unperformed, the Guarantors shall not be released from the Guaranteed
Obligations hereunder by or because of:
(a) Any act or event which might otherwise discharge, reduce, limit or
modify the Guaranteed Obligations;
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(b) Any waiver, extension, modification, forbearance, delay or other act or
omission of the Agent, or any failure to proceed promptly or otherwise as
against the Trust, any Guarantor or any security; or
(c) Any action, omission or circumstance which might increase the
likelihood that the Guarantors may be called upon to perform under this
Contingent Completion Guaranty or which might affect the rights or remedies of
the Guarantors as against the Trust in its capacity as obligor under the
Additional Guaranty or any Guarantor; or
(d) Any dealings occurring at any time between the Borrower, the Trust, the
Lenders, the Discount Note Indenture Trustee, the Agent, the Noteholders or the
Guarantors with respect to amendments to the Bank Guaranty, the Credit
Agreement, the other Loan Documents, the Loans, the Noteholder Completion
Guaranty, the Indenture, the Discount Notes, the Additional Guaranty or
otherwise, as the case may be.
The Guarantors hereby expressly waive and surrender any defense to their
liability under this Contingent Completion Guaranty based upon any of the
foregoing acts, omissions, agreements, waivers or matters.
9. Guarantors' Waivers. The Guarantors waive:
(a) All statutes of limitations as a defense to any action or proceeding
brought against the Guarantors by the Agent, to the fullest extent permitted by
law;
(b) Any right they may have to require the Agent to proceed against the
Trust or to pursue any other remedy in their power to pursue;
(c) Any defense based on any claim that the Guaranteed Obligations exceed
or are more burdensome than those of the Trust under the Additional Guaranty;
(d) Any defense based on: (i) any legal disability of the Trust, (ii) any
discharge, modification, impairment or limitation of the liability of the Trust
under the Additional Guaranty or the Guarantors under the Additional Guaranty
from any cause, whether consented to by the Agent or arising by operation of law
or from any Insolvency Proceeding, (iii) the Guarantors' rights under NRS
104.3605, the Guarantors specifically agreeing that this clause (iii) shall
constitute a waiver of discharge under NRS 104.3605;
(e) Any defense based on any action taken or omitted (other than gross
negligence or willful misconduct) by the Agent in any Insolvency Proceeding
involving the Trust, including any election to have a claim allowed as being
secured, partially secured or unsecured, any extension of credit by the Agent to
the Trust in any Insolvency Proceeding, and the taking and holding by the Agent
of any security for any such extension of credit;
(f) All presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, notices of acceptance of this
Contingent Completion Guaranty and of the existence, creation, or incurring of
new or additional indebtedness, and demands and notices of every kind;
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(g) Any defense based on or arising out of any defense that the Trust may
have to the payment or performance of their obligations under the Additional
Guaranty or any portion of such obligations; and
(h) Any defense or benefit based on NRS 40.430 and judicial decisions
relating thereto and NRS 40.451 et seq. and judicial decisions relating thereto,
the Guarantors agreeing that the waiver in this clause (h) is intended to take
advantage of the two (2) waivers permitted by NRS 40.495 (1) and (2) to the
maximum extent permitted.
10. Waivers of Subrogation and Other Rights.
(a) Upon the occurrence of any event of default hereunder, the Agent in its
sole discretion, without prior notice to or consent of the Guarantors, may elect
to: (i) foreclose either judicially or nonjudicially against any real or
personal property security, if any, for the obligations under the Additional
Guaranty, in the case of the Trust, (ii) accept a transfer of any such security
in lieu of foreclosure, (iii) make any accommodation with the Trust or any
Guarantor, or (iv) exercise any other remedy against the Trust or any Guarantor
or any security. No such action by the Agent shall release or limit the
liability of the Guarantors, who shall remain liable under this Contingent
Completion Guaranty after the action, even if the effect of the action is to
deprive the Guarantors of any subrogation rights, rights of indemnity, or other
rights to collect reimbursement for any sums paid to the Agent, whether
contractual or arising by operation of law or otherwise. The Guarantors
expressly waive any defenses or benefits that may be derived from NRS Section
40.451, et seq. and judicial decisions relating thereto, or comparable
provisions of Nevada law which are comparable to California Civil Procedure
Sections 580a, 580b, 580d, or 726 or comparable provisions of the laws of any
other jurisdiction, and all other suretyship defenses they otherwise might or
would have under Nevada law or other applicable law. The Guarantors expressly
agree that under no circumstances shall they be deemed to have any right, title,
interest or claim in or to any real or personal property, if any, to be held by
the Agent or any third party after any foreclosure or transfer in lieu of
foreclosure of any security for the Guaranteed Obligations or the obligations
under the Additional Guaranty. For purposes of this Section 10, references to
the Trust are made with respect to the Trust in its capacity as obligor under
the Additional Guaranty.
(b) Regardless of whether the Guarantors may have made any payments to the
Agent under this Contingent Completion Guaranty, the Guarantors hereby waive:
(i) all rights of subrogation, all rights of indemnity, and any other rights to
collect reimbursement from the Trust for any sums paid to the Agent, whether
contractual or arising by operation of law (including the Bankruptcy Code) or
otherwise, (ii) all rights to enforce any remedy that the Agent may have against
the Trust or any other Person, and (iii) all rights to participate in any
security now or later to be held by the Agent for the obligations under the
Additional Guaranty. The waivers given in this Section 10(b) shall be effective
until the obligations under the Additional Guaranty have been indefeasibly paid
and performed in full.
(c) The Guarantors understand and acknowledge that if the Agent forecloses
judicially or nonjudicially against any real property or personal security, if
any, for the Guaranteed Obligations or the obligations under the Additional
Guaranty, that foreclosure could impair or destroy any ability that the
Guarantors may have to seek reimbursement, contribution or indemnification from
the Borrower, Holdings or the Trust or others based on any right the Guarantors
may have of subrogation, reimbursement, contribution or indemnification for any
amounts paid by the Guarantors under this Contingent Completion Guaranty. The
Guarantors further understand and acknowledge that in the absence of this
Section 10, such potential impairment or destruction of the Guarantors' rights,
if any,
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may entitle the Guarantors to assert a defense to this Contingent Completion
Guaranty. By executing this Contingent Completion Guaranty, the Guarantors
freely, irrevocably and unconditionally: (i) waive and relinquish that defense
and agree that the Guarantors will be fully liable under this Contingent
Completion Guaranty even though the Agent may foreclose judicially or
nonjudicially against any real property security, if any, for the obligations
under the Additional Guaranty; (ii) agree that the Guarantors will not assert
that defense in any action or proceeding which the Agent may commence to enforce
this Contingent Completion Guaranty; and (iii) acknowledge and agree that this
waiver is a material part of the consideration which they are receiving for
entering into the transactions contemplated hereby.
11. Revival and Reinstatement. If the Agent is required to pay, return or
restore to any of the Guarantors any amounts previously paid with respect to the
Guaranteed Obligations because of any Insolvency Proceeding of any of the
Guarantors, any stop notice or any other reason, the Guaranteed Obligations
shall be reinstated and revived and the rights of the Agent shall continue with
regard to such amounts, as though they had never been paid.
12. Representations and Warranties. Each Guarantor hereby represents and
warrants unto the Agent as follows:
(a) The most recent audited consolidated balance sheet of London Clubs and
ABH and their respective consolidated Subsidiaries (in the case of ABH, as of
December 31, 1996 and in the case of London Clubs, as of March 30, 1997) and the
related consolidated statements of earnings and stockholders' equity (or profit
and loss in the case of London Clubs) and of cash flows for the fiscal year
ended on such date, reported on by such Guarantor's independent public
accountants, copies of which have heretofore been furnished to the Agent, are
complete and correct and present fairly (or give a true and fair view of in the
case of London Clubs) the consolidated financial condition of such Guarantor and
its consolidated Subsidiaries as at such date, and the results of their
operations (or consolidated profit and loss in the case of London Clubs) and
their consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of such Guarantor and its consolidated Subsidiaries
as at September 30, 1997 and the related unaudited consolidated statements of
earnings and of cash flows for the nine-month period (or, in the case of London
Clubs, six month period) ended on such date, certified by a Authorized
Representative of such Guarantor, are complete and correct and present fairly
(or give a true and fair view of in the case of London Clubs) the consolidated
financial condition of such Guarantor and its consolidated Subsidiaries as at
such date, and the consolidated results of their operations and their
consolidated cash flows for the nine-month period (or, in the case of London
Clubs, six-month period) then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP or UK GAAP, as
applicable, applied consistently throughout the periods involved (except as
approved by such accountants or Authorized Representative, as the case may be,
and as disclosed therein).
(b) Since December 31, 1996, in the case of ABH and since March 30, 1997 in
the case of the Trust, there has been no development or event which has had or
could reasonably be expected to have a Material Adverse Effect.
(c) Each of such Guarantor and its Subsidiaries (a) is duly organized, and,
to the extent applicable, validly existing and in good standing under the laws
of the jurisdiction of its organization, (b) has the corporate or other power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (c) to the extent applicable, is duly qualified as a foreign
corporation or company or trust and in good standing,
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under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification and (d) by
Opening Date, is in compliance with all material Legal Requirements except where
failure to comply with any of the foregoing could not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect.
(d) Each of such Guarantors has the corporate or other power and authority,
and the legal right, to make, deliver and perform this Contingent Completion
Guaranty and to provide the undertakings hereunder and has taken all necessary
corporate or other action to authorize the execution, delivery and performance
of this Contingent Completion Guaranty. No consent or authorization of, filing
with or other act by or in respect of, any Governmental Instrumentality or any
other Person is required to be obtained or made, as the case may be, by such
Guarantor in connection with this Contingent Completion Guaranty or with the
execution, delivery, performance, validity or enforceability of this Contingent
Completion Guaranty by or against such Guarantor, except as has been obtained
and remains in full force and effect on the date hereof, other than certain
Nevada Gaming Laws approvals, as applicable. This Contingent Completion Guaranty
has been duly executed and delivered on behalf of such Guarantor. This
Contingent Completion Guaranty constitutes a legal, valid and binding obligation
of such Guarantor enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(e) Each Subsidiary Guarantor has the corporate power and authority, and
the legal right, to make, deliver and perform the Contingent Subsidiary Guaranty
and to provide the undertakings thereunder and has taken all necessary corporate
action to authorize the execution, delivery and performance of the Contingent
Subsidiary Guaranty. No consent or authorization of, filing with or other act by
or in respect of, any Governmental Instrumentality or any other Person is
required to be obtained or made, as the case may be, by such Subsidiary
Guarantor in connection with the Contingent Subsidiary Guaranty or with the
execution, delivery, performance, validity or enforceability of the Contingent
Subsidiary Guaranty by or against such Subsidiary Guarantor, except as has been
obtained and remains in full force and effect on the date hereof, other than
certain Nevada Gaming Laws approvals, as applicable. The Contingent Subsidiary
Guaranty has been duly executed and delivered on behalf of each Subsidiary
Guarantor. The Contingent Subsidiary Guaranty constitutes a legal, valid and
binding obligation of each Subsidiary Guarantor enforceable against it in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
(f) The execution, delivery and performance of this Contingent Completion
Guaranty by the Guarantors and the execution, delivery and performance by the
Subsidiary Guarantors of the Contingent Subsidiary Guaranty will not (i) violate
any Legal Requirement or obligation of such Guarantor or Subsidiary Guarantor,
(ii) result in, or require, the creation or imposition of any Lien on any of its
properties or revenues pursuant to any such Legal Requirement or obligation or
(iii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree or ruling of any court, arbitrator or
Governmental Instrumentality applicable to such Guarantor or Subsidiary
Guarantor.
(g) Schedule 2 contains (except as noted therein) complete and correct
lists of each of London Clubs' and ABH's Subsidiaries (other than Dormant
Subsidiaries), showing, as to each
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Subsidiary, the correct name thereof, the jurisdiction of its organization, and
the percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by such Guarantor and each other Subsidiary of such
Guarantor. All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 2 as being owned by such
Guarantor and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by such Guarantor or another Subsidiary free and
clear of any Lien (except as otherwise disclosed in Schedule 2). Each Subsidiary
identified in Schedule 2 is a corporation or other legal entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal
entity and is in good standing in each jurisdiction in which such qualification
is required by law, other than those jurisdictions as to which the failure to be
so qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the business,
assets, debt service capacity, property or financial condition, operations or
prospects of such Subsidiary. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the business it transacts and proposes to
transact. No Subsidiary identified in Schedule 2 is a party to, or otherwise
subject to any legal restriction or any agreement (other than this Contingent
Completion Guaranty, the agreements listed on Schedule 2, restrictions imposed
by and approvals required under the Nevada gaming Laws and customary limitations
imposed by corporate law statutes) restricting the ability of such Subsidiary to
pay dividends out of profits or make any other similar distributions of profits
to its Guarantor parent or any of such Guarantor's Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such
Subsidiary.
(h) Except as disclosed in Schedule 3 there are no actions, suits or
proceedings pending or, to the knowledge of any Guarantor, threatened against or
affecting such Guarantor or any Subsidiary or any property of such Guarantor or
any Subsidiary in any court or before any arbitrator of any kind or before or by
any Governmental Instrumentality that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither any Guarantor
nor any Subsidiary is in default under any term of any agreement or instrument
to which it is a party or by which it is bound, or any order, judgment, decree
or ruling of any court, arbitrator or Governmental Instrumentality or is in
violation of any applicable law, ordinance, rule or regulation (including
without limitation Environmental Laws) of any Governmental Instrumentality,
which default or violation, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(i) Each Guarantor and its Subsidiaries have filed all material tax returns
that are required to have been filed in any jurisdiction, and have paid all
material taxes shown to be due and payable on such returns and all other
material taxes and assessments levied upon them or their properties, assets,
income or franchises, to the extent such taxes and assessments have become due
and payable and before they have become delinquent, except for any taxes and
assessments (i) the non-payment of which could not reasonably be expected to
have a Material Adverse Effect or (ii) the amount, applicability or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which such Guarantor or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. Each Guarantor knows of
no basis for any other tax or assessment that could reasonably be expected to
have a Material Adverse Effect. The charges, accruals and reserves on the books
of each Guarantor and its Subsidiaries in respect of governmental or other taxes
for all fiscal periods are adequate.
(j) Each Guarantor and its Subsidiaries have adequate and appropriate
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such
E-14
types, on such terms and in such amounts (including deductibles, co-insurance
and self-insurance) to the extent this is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated, except where the failure to so maintain insurance, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(k) Each of London Clubs, ABH and its Subsidiaries have good and sufficient
title to their respective properties that individually or in the aggregate are
Material, including all such properties reflected in the most recent audited
balance sheet referred to in clause (a) hereof or purported to have been
acquired by such Guarantor or any Subsidiary after said date (except as sold or
otherwise disposed of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Contingent Completion Guaranty. All leases
that individually or in the aggregate are material are valid and subsisting and
are in full force and effect in all material respects.
(l) Except as disclosed in Schedule 4,
(i) each Guarantor and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are material, without known conflict with the rights of others;
(ii) to the best knowledge of each Guarantor, no product or such
Guarantor infringes in any material respect on any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or other
right owned by any other Person; and
(iii) to the best knowledge of each Guarantor, there is no material
violation by any Person of any right of such Guarantor or any of its
Subsidiaries with respect to any patent, copyright, service mark, trademark,
trade name or other right owned or used by such Guarantor or any of its
Subsidiaries.
(m) Except as described therein, Schedule 5 sets forth a complete and
correct list of all outstanding Indebtedness of each of London Clubs and ABH and
its Subsidiaries as of September 30, 1997, since which date there has been no
material changes in the amounts, interest rates, sinking funds, installment
payments or maturities of the Indebtedness of such Guarantor or its
Subsidiaries. Neither any such Guarantor nor any Subsidiary is in default and no
waiver of default is currently in effect, in the payment of any principal or
interest on any Indebtedness of such Guarantor or such Subsidiary and no event
or condition exists with respect to any Indebtedness of any such Guarantor or
any Subsidiary in an aggregate principal amount in excess of $1,500,000 that
would permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Indebtedness to become due and payable before
its stated maturity or before its regularly scheduled dates of payment. Except
as disclosed in Schedule 5, neither any such Guarantor nor any Subsidiary has
agreed or consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by Section 14(a), as applicable.
(n) Neither any Guarantor nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, or the Federal Power Act, as amended.
E-15
(o) Neither any Guarantor nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against such Guarantor or any of its Subsidiaries or any of
their respective real properties now or formerly owned, leased or operated by
any of them or other assets, alleging any damage to the environment or violation
of any Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect.
(p) Each Guarantor's ownership interest in the Borrower as of the date
hereof is set forth on Schedule 6.
(q) London Clubs has delivered to the Administrative Agent and Discount
Note Indenture Trustee true, correct and complete copies of all material
documents, instruments, opinions and certificates with respect to the Existing
Senior Debt.
13. Affirmative Covenants. Until all of the Guaranteed Obligations have been
indefeasibly paid and performed, each Guarantor (other than London Clubs) agrees
as follows:
(a) (i) ABH shall furnish to the Agent:
(A) as soon as available, but in any event within 120 days after the
end of each fiscal year of ABH, a copy of the consolidated and consolidating
balance sheet of ABH and its consolidated Subsidiaries as at the end of such
year and the related consolidated and consolidating statements of earnings and
stockholders' equity and of cash flows for such year, setting forth in each case
in comparative form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by independent certified public accountants of
nationally recognized standing; and
(B) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal year
of ABH, (x) the unaudited consolidated and consolidating balance sheet of ABH
and its consolidated Subsidiaries as at the end of such quarter and in
comparative form the figures for the end of the previous fiscal year, (y) the
unaudited consolidated and consolidating statement of earnings of ABH and its
consolidated Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter, and in comparative form the figures for the
previous year and (z) the consolidated and consolidating statement of cash flows
of ABH and its consolidated Subsidiaries for the portion of the fiscal year
through the end of such quarter, and in comparative form the figures for the
previous year, certified by an Authorized Representative of ABH as being fairly
stated in all material respects when considered in relation to the consolidated
and consolidating financial statements of ABH and its consolidated Subsidiaries
(subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
(ii) The Trust shall furnish the Agent all financial information that the Trust
is providing to any other creditor in connection with the Main Project, the Mall
Project, and/or the Music Project.
E-16
(b) Each Guarantor shall furnish to the Agent, within thirty days after the
same are sent, copies of all financial statements and reports which such
Guarantor sends to its stockholders, and, within thirty days after the same are
filed, copies of all financial statements and reports which such Guarantor may
make to, or file with, the Securities and Exchange Commission or any successor
or analogous Governmental Instrumentality. Each Guarantor shall furnish to the
Agent with reasonable promptness such additional financial and other information
as the Agent may from time to time reasonably request.
(c) ABH shall keep true and correct books of records and account in
conformity with GAAP and all Legal Requirements and permit the Agent:
(i) No Event of Default - if no event of default under this Contingent
Completion Guaranty, the Noteholder Completion Guaranty or the Bank Guaranty
then exists, at the expense of the Agent and upon reasonable prior notice to
such Guarantor, to visit the principal executive office of such Guarantor and to
discuss the affairs, finances and accounts of such Guarantor and its
Subsidiaries with such Guarantor's officers, all at such reasonable times and as
often as may be reasonably requested in writing; and
(ii) Event of Default - if an event of default under this Contingent
Completion Guaranty, the Noteholder Completion Guaranty or the Bank Guaranty
then exists, at the expense of such Guarantor to visit and inspect any of the
offices of properties of such Guarantor or any Subsidiary, to examine their
respective books and records and to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants, all at such reasonable times and as
often as may be requested.
A Guarantor shall not be under any obligation under this Contingent Completion
Guaranty to provide information pursuant to the last sentence of Section 13(b)
or pursuant to this Section 13(c) if disclosure of such information, on the
written advice of such Guarantor's counsel provided to such Guarantor, would be
prohibited by law or by decree of any Governmental Instrumentality or arbitral
body or by the terms of any obligation of confidentiality contained in any
agreement binding upon such Guarantor and not entered into in contemplation of
this Section 13(c).
(d) ABH shall promptly give notice to the Agent of:
(i) any breach by ABH of any of the Guaranteed Obligations;
(ii) any (a) default or event of default under any material obligation
of ABH or any of its Subsidiaries or (b) litigation, investigation or proceeding
which may exist at any time between ABH or any of its Subsidiaries and any
Governmental Instrumentality, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a Material
Adverse Effect;
(iii) any material litigation or proceeding affecting ABH or any of
its Subsidiaries; and
(iv) any development or other event which could reasonably be expected
to have a Material Adverse Effect.
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Each notice pursuant to this clause (d) shall be accompanied by a statement of
an Authorized Representative of ABH setting forth details of the occurrence
referred to therein and stating what action ABH or any of its Subsidiaries
proposes to take with respect thereto.
(e) ABH will cause each of its Subsidiaries to comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, Environmental Laws, and will obtain and
maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(f) Each Guarantor will and will cause each of its Subsidiaries to
maintain, with institutions it reasonably believes to be financially sound
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or similar business and
similarly situated.
(g) Each Guarantor will and will cause each of its Subsidiaries to maintain
and keep, or cause to be maintained and kept, their respective properties in
reasonably good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent a
Guarantor from discontinuing the operation and maintenance of or the liquidation
of any Dormant Subsidiary and shall not prevent a Guarantor or any Subsidiary
from discontinuing the operation and the maintenance of any of its properties if
such discontinuance is desirable in the conduct of its business and such
Guarantor has concluded that such discontinuance could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(h) Each Guarantor will and will cause each of its Subsidiaries to file all
material tax returns required to be filed in any jurisdiction and to pay and
discharge all material taxes, assessments, governmental charges, or levies shown
to be due and payable on such returns and all other taxes imposed on them or any
of their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of such Guarantor or any Subsidiary,
provided that neither a Guarantor nor any Subsidiary need to pay any such tax or
assessment or claims if (i) the amount, applicability or validity thereof is
contested by such Guarantor or such Subsidiary on a timely basis in good faith
in appropriate proceedings and such Guarantor or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of such
Guarantor or such Subsidiary or (ii) the nonpayment of all such taxes and
assessments in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
(i) Each Guarantor will at all times preserve and keep in full force and
effect its corporate or other existence. ABH will at all times preserve and keep
in full force and effect the corporate existence of each of its Subsidiaries
(other than Dormant Subsidiaries or unless merged into ABH or a Subsidiary) and
all licenses, consents, certificates and authorizations of ABH and its
Subsidiaries unless, in the good-faith judgment of ABH, the termination of or
failure to preserve and keep in full force and effect
E-18
such corporate existence, licenses, consents, certificates and authorizations
could not, individually or in the aggregate, have a Material Adverse Effect.
(j) Each Guarantor will, and will cause each of its Subsidiaries to, keep
proper books of record and account in accordance with GAAP as applied in the
jurisdiction of its incorporation as such Guarantor may deem appropriate from
time to time.
(k) Neither ABH nor any of its Subsidiaries will engage in any business if,
as a result, the general nature of the business, taken on a consolidated basis,
which would then be engaged in by ABH and its Subsidiaries would be materially
changed from the general nature of the business engaged in by ABH and its
Subsidiaries as of the date hereof.
14. Negative Covenants. At all times prior to indefeasible payment and
performance of the Guaranteed Obligations by the Guarantors hereunder:
(a) ABH will not, and will not permit any of its Subsidiaries to, directly
or indirectly create, incur, assume or permit to exist (upon the happening of a
contingency or otherwise) any Lien on or with respect to any property or asset
except:
(i) any Lien arising by operation of law (except for real property
taxes) which secures amounts not more than 45 days overdue or, if so overdue,
are being contested on a timely basis in good faith and in appropriate
proceedings;
(ii) any Lien imposed on ABH or any of its Subsidiaries in relation to
its purchase of goods, products or supplies in the ordinary course of business;
(iii) any rights of set-off in the normal course of trading or of any
bank or financial institution or combination of accounts arising in favor of
such bank or financial institution as a result of the day-to-day operation of
banking arrangements, including, without limitation, rights of set-off granted
to such bank or financial institution in respect of the issuance of letters of
credit, or as a result of any currency or interest rate hedging operations
carried out in the ordinary course of business, in each case, provided that
there is no agreement to confer a security interest;
(iv) statutory Liens of landlords, Liens over goods or documents of
title arising in the ordinary course of documentary credit transactions and
Liens of carriers, warehousemen, mechanics, materialmen and other similar Liens,
in each case, incurred in the ordinary course of business;
(v) Liens for taxes, assessments or other governmental charges which
are not yet due and payable;
(vi) Liens incurred or deposits made in the ordinary course of
business (A) in connection with workers' compensation, unemployment insurance
and other types of social security or retirement benefits, or (B) to secure (or
to obtain letters of credit that secure) the performance of tenders, statutory
obligations, surety bonds, appeal bonds, bids, leases (other than capital
leases), performance bonds, purchase, construction or sales contracts and other
similar obligations, in each case not incurred or made in connection with the
borrowing of money, the obtaining of advances or credit or the payment of the
deferred purchase price of property;
E-19
(vii) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to, and not interfering with, the ordinary conduct of business of ABH and its
Subsidiaries, provided that such Liens do not, in the aggregate, materially
detract from the value of such property;
(viii) any Lien not otherwise permitted by clauses (i) through (vii)
above, provided that on the date any Indebtedness secured by any such Lien, is
created, incurred, assumed or guaranteed by ABH or any of its Subsidiaries, and
immediately after giving effect thereto and to the concurrent retirement of any
other Indebtedness, the sum of (A) the aggregate principal amount of all
Indebtedness secured by Liens pursuant to this clause (viii) plus (B) all
unsecured Indebtedness of ABH and its Subsidiaries that is senior in any respect
in right of payment to the obligations of ABH hereunder, does not exceed 25% of
the Consolidated Tangible Assets of ABH as of such date.
(b) ABH will not, and will not permit any of its Subsidiaries to, directly
or indirectly create, incur, assume or suffer to exist any secured or unsecured
Indebtedness that is senior in any respect in right of payment to the Guaranteed
Obligations of ABH hereunder (excluding any Indebtedness secured by Liens
pursuant to clauses (i) through (vii) of Section 14(a) hereof but including any
Indebtedness secured by Liens pursuant to clause (viii) of Section 14(a) hereof)
if the aggregate amount of all such senior Indebtedness described in this clause
(b) would exceed 25% of the Consolidated Tangible Assets of ABH as of such date.
15. Payments Free and Clear of Taxes, etc. Each Guarantor hereby agrees that:
(a) All payments by such Guarantor hereunder shall be made free and clear
of and without deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, but excluding franchise
taxes and taxes imposed on or measured by the Agent's net income or receipts
(such non-excluded items being called "Taxes"). In the event that any
withholding or deduction from any payment to be made by a Guarantor hereunder is
required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then such Guarantor will
(i) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
(ii) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(iii) pay to the Agent such additional amount or amounts ("Additional
Amounts") as are necessary to ensure that the net amount actually received will
equal the full amount that would have been received had no such withholding or
deduction been required.
Moreover, if any Taxes are directly asserted against the Borrower or the Agent
with respect to any payment received hereunder, the Agent may pay such Taxes and
the Guarantor will promptly pay such Additional Amounts (including any
penalties, interest or expenses ) as are necessary in order that the net amount
received after the payment of such Taxes (including any Taxes on such Additional
Amounts) shall equal the amount that would have been received had no such Taxes
been asserted.
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(b) If the Guarantor fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Guarantor shall indemnify the Borrower, the
Agent for any incremental Taxes, interest or penalties that may become payable
by the Borrower, the Agent as a result of any such failure.
(c) In the event that an Additional Amount is paid by a Guarantor for the
account of the Agent and the Agent is entitled to a refund of the Tax (a "Tax
Refund") to which such payment is attributable, then the Agent shall take all
reasonable steps which are necessary to obtain such Tax Refund, including
filings such forms, certificates, documents, applications or returns as may be
required to obtain such Tax Refund. If the Agent subsequently receives such a
Tax Refund, then the Agent shall reimburse such amount.
(d) Without prejudice to the survival of any other agreement of the
Guarantors hereunder, the agreements and obligations of the Guarantors contained
in this Section 15 shall survive the payment in full of the obligations under
the Additional Guaranty.
16. Judgment. Each Guarantor hereby agrees that:
(a) If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in United States Dollars into another
currency, such Guarantor agrees, to the fullest extent permitted by law, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase United States Dollars with such
other currency on the Business Day preceding that on which final judgment is
given.
(b) The obligation of each Guarantor in respect of any sum due from it
hereunder shall, notwithstanding any judgment in a currency other than United
States Dollars, be discharged only to the extent that on the Business Day
following receipt by the Agent of any sum adjudged to be so due in such other
currency the Agent may, in accordance with normal banking procedures, purchase
United States Dollars with such other currency; in the event that the United
States Dollars so purchased are less that the sum originally due to the Agent in
United States Dollars, the Guarantor, as a separate obligation and
notwithstanding any such judgment, shall indemnify and hold harmless the Agent
and such holder against such loss, and if the United States Dollars so purchased
exceed the sum originally due to the Agent in United States Dollars, the Agent
shall remit to such Guarantor such excess.
17. Breaches by Any Guarantor. If, at any time that the Agent has the right to
demand payment and performance of the Guaranteed Obligations in accordance with
Section 3(a) of this Contingent Completion Guaranty and, prior to the
indefeasible payment and performance thereof, any of the Guarantors breaches the
Guaranteed Obligations (after the expiration of applicable grace, notice and/or
cure periods), then, at the option of the Agent, an event of default shall exist
under this Contingent Completion Guaranty and the Agent, without any further
notice to any of the Guarantors or any other Person, shall be entitled to
exercise all rights and remedies available hereunder but only to the extent
permitted under Section 3(a) hereof, and at law and equity.
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18. Miscellaneous Provisions.
(a) This Contingent Completion Guaranty shall be binding upon the
Guarantors and their permitted successors, transferees and assigns and shall
inure to the benefit of and be enforceable by the Agent and its respective
successors, transferees and assigns; provided, however, that the Guarantors
may not assign any of their Guaranteed Obligations hereunder without the
prior written consent of the Agent, and the Agent may not assign this
Contingent Completion Guaranty or any of its rights, remedies or options
hereunder without the prior written consent of the Administrative Agent and
Discount Note Indenture Trustee in their sole discretion. The Lenders and the
Discount Note Indenture Trustee shall be third party beneficiaries of this
Section 18(a) and shall have all rights at law and equity to the enforcement
hereof.
(b) No amendment to or waiver of any provision of this Contingent
Completion Guaranty, nor consent to any departure by any Guarantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Agent and, with respect to amendments, consented to by the Administrative
Agent and Discount Note Indenture Trustee in their sole discretion, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
(c) All notices and other communications hereunder to the Guarantors shall
be in writing (including telefacsimile) and mailed or telecopied or delivered to
them, addressed to them at the address set forth below their signatures hereto
or at such other addresses as shall be designated by such Guarantor in a written
notice to the Agent at the address set forth below their signatures hereto
complying as to delivery with the terms of this Section. All such notices and
other communications shall, when mailed or telecopied, respectively, be
effective when deposited in the mails or transmitted, addressed as aforesaid.
All notices to the Administrative Agent under this Contingent Completion
Guaranty shall be addressed to The Bank of Nova Scotia, One Liberty Plaza, New
York, New York 10006, Attention: ________________, Facsimile No. (212) 225-5090.
All Notices to the Discount Note Indenture Trustee shall be addressed to
State Street Bank and Trust Company, Corporate Trust Division, Two
International Place, Boston, Massachusetts 02110, Attn: Aladdin Notes.
(d) No failure on the part of the Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
(e) Section captions used in this Contingent Completion Guaranty are for
convenience of reference only, and shall not affect the construction of this
Contingent Completion Guaranty.
(f) Wherever possible each provision of this Contingent Completion Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Contingent Completion Guaranty
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Contingent Completion Guaranty.
(g) THIS CONTINGENT COMPLETION GUARANTY SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. THIS CONTINGENT
COMPLETION GUARANTY, AND THE ADDITIONAL GUARANTY (IF APPLICABLE) CONSTITUTE THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF.
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(h) ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS CONTINGENT COMPLETION GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT OR THE
GUARANTORS SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF NEW YORK IN THE CITY OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT THE OPTION OF THE AGENT, IN
THE COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY, IF ANY, MAY BE FOUND. THE
GUARANTORS HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK IN THE CITY OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE GUARANTORS FURTHER
IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE
GUARANTORS HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT THE GUARANTORS HAVE OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO THEMSELVES OR THEIR PROPERTY, THE
GUARANTORS HEREBY IRREVOCABLY WAIVE SUCH IMMUNITY IN RESPECT OF THE GUARANTEED
OBLIGATIONS UNDER THIS CONTINGENT COMPLETION GUARANTY, AND THE ADDITIONAL
GUARANTY.
(i) THE GUARANTORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS CONTINGENT
COMPLETION GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT OR THE GUARANTORS. THE
GUARANTORS ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE AGENT TO ENTER INTO THE ADDITIONAL GUARANTY.
(j) Limitation on Liability. Notwithstanding anything to the contrary in
this Contingent Completion Guaranty, it is understood that no claim shall be
made by the Agent or any of its affiliates against the Guarantors or any of
their affiliates, directors, employees, attorneys or agents for any special,
indirect, consequential or punitive damages in respect of any breach or wrongful
conduct (whether or not the claim therefor is based on contract, tort or duty
imposed by law), in connection with, arising out of or in any way related to the
transactions contemplated by this Contingent Completion Guarantee or any act or
omission or event occurring in connection therewith.
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(k) No Restriction on Rights and Remedies of Administrative Agent, Lenders
and Discount Note Indenture Trustee. Notwithstanding anything to the contrary in
this Contingent Completion Guaranty, the Agent on its own behalf covenants and
agrees that this Contingent Completion Guaranty and the rights, remedies and
options of the Agent hereunder in no way restrict the rights and remedies of the
(i) Administrative Agent and the Lenders under the Credit Agreement and the
other Loan Documents including, without limitation, the right to commence and
prosecute to completion of enforcement of any or all of the Loan Documents, (ii)
the Discount Note Indenture Trustee under the Indenture. The Agent on its own
behalf agrees that no Person shall have any right whatsoever to interpose a
right of offset, defense, claim or counterclaim with respect to any enforcement
of one or more of the Loan Documents based upon a claim that the Agent has the
right to performance of the Guaranteed Obligations before such enforcement can
be commenced or prosecuted or judgment thereon can be executed by or on behalf
of the Lenders or the Discount Note Indenture Trustee. The Lenders and the
Discount Note Indenture Trustee shall be third party beneficiaries of this
Section 18(k) and shall have all rights at law and equity to the enforcement
hereof.
(I) Notwithstanding anything to the contrary in this contingent completion
Guaranty, in the event that the Trust has been indefeasibly released from its
obligations under the Additional Guaranty, all rights of the Agent, as agent for
the Contingent Guarantors, any have hereunder will terminate.
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IN WITNESS WHEREOF, the Guarantors have caused this Contingent
Completion Guaranty to be duly executed and delivered by their officers
thereunto duly authorized as of the date first above written.
ALADDIN BAZAAR HOLDINGS, LLC
By:
Title:
Address:
Attention:
Telecopy:
THE TRUST UNDER ARTICLE SIXTH UNDER THE
WILL OF SIGMUND SOMMER
By:
Title:
Address:
Attention:
Telecopy:
LONDON CLUBS INTERNATIONAL PLC
By:
Title:
Address: 10 Brick Street
London WI Y 8HQ
England
Attention:
Telecopy:
[Agent]
By:
Title:
Address:
Attention:
Telecopy:
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