As filed with the Securities and Exchange Commission on February 26, 2002
Registration No. 333-63780
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
POST-EFFECTIVE AMENDMENT NO. 1
FILED PURSUANT TO RULE 462(D) TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
PENN NATIONAL GAMING, INC.
(Exact Name of Registrant as Specified in Its Charter)
PENNSYLVANIA 23-2234473
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
825 BERKSHIRE BOULEVARD, SUITE 200
WYOMISSING, PENNSYLVANIA 19610
610-373-2400
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
ADDITIONAL SUBSIDIARY GUARANTOR REGISTRANTS LISTED ON THE FOLLOWING PAGE
--------------
PETER M. CARLINO
CHIEF EXECUTIVE OFFICER
PENN NATIONAL GAMING, INC.
825 BERKSHIRE BOULEVARD, SUITE 200
WYOMISSING, PENNSYLVANIA 19610
610-373-2400
(Name, Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent For Service)
--------------
COPIES OF ALL COMMUNICATIONS TO:
PETER S. SARTORIUS, ESQUIRE JONATHAN A. SCHAFFZIN, ESQUIRE
MORGAN, LEWIS & BOCKIUS LLP CAHILL GORDON & REINDEL
1701 MARKET STREET 80 PINE STREET
PHILADELPHIA, PA 19103 NEW YORK, NY 10005
215-963-5000 212-701-3000
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. /_/
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. /_/
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. /_/ _________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. /_/
================================================================================
ADDITIONAL REGISTRANTS
ADDRESS, INCLUDING ZIP CODE,
STATE OR OTHER AND TELEPHONE NUMBER,
JURISDICTION INCLUDING AREA CODE, OF
EXACT NAME OF REGISTRANT OF INCORPORATION OR I.R.S. EMPLOYER REGISTRANT'S PRINCIPAL
AS SPECIFIED IN ITS CHARTER ORGANIZATION IDENTIFICATION NO. EXECUTIVE OFFICE
--------------------------- ------------ ------------------ ----------------
BACKSIDE, INC. Pennsylvania 23-271347 1280 Highway 315
Wilkes-Barre, PA 18702
717-825-6681
BSL, INC. Mississippi 62-1807073 825 Berkshire Blvd., Suite 200
Wyomissing, PA 19610
610-373-2400
BTN, INC. Mississippi 62-1807074 825 Berkshire Blvd., Suite 200
Wyomissing, PA 19610
610-373-2400
CHC CASINOS CORP. Florida 65-0681528 3250 Mary Street, Suite 500
Miami, FL 33133
305-445-4290
CRC HOLDINGS, INC. Florida 65-0681528 3250 Mary Street, Suite 500
Miami, FL 33133
305-445-4290
THE DOWNS RACING, INC. Pennsylvania 23-2924948 1280 Highway 315
Wilkes-Barre, PA 18702
717-825-6681
EBETUSA.COM, INC. Delaware 51-0393062 300 Delaware Avenue
9th Floor
Wilmington, DE 19801
302-552-3137
LOUISIANA CASINO CRUISES, INC. Louisiana 72-1196619 1717 River Road North
Baton Rouge, LA 70802
225-709-7777
MILL CREEK LAND, INC. Pennsylvania 23-2312561 1280 Highway 315
Wilkes-Barre, PA 18702
717-825-6681
MOUNTAINVIEW Pennsylvania 25-1196820 R.D. #1, (P.O. Box 32)
THOROUGHBRED Exit 28 off Interstate 81
RACING ASSOCIATION Grantville, PA 17551
717-469-2910
NORTHEAST Pennsylvania 23-2493823 1280 Highway 315
CONCESSIONS, INC. Wilkes-Barre, PA 18702
717-825-6681
ADDRESS, INCLUDING ZIP CODE,
STATE OR OTHER AND TELEPHONE NUMBER,
JURISDICTION INCLUDING AREA CODE, OF
EXACT NAME OF REGISTRANT OF INCORPORATION OR I.R.S. EMPLOYER REGISTRANT'S PRINCIPAL
AS SPECIFIED IN ITS CHARTER ORGANIZATION IDENTIFICATION NO. EXECUTIVE OFFICE
--------------------------- ------------ ------------------ ----------------
PENN NATIONAL West Virginia 23-2839600 825 Berkshire Blvd., Suite 200
GAMING OF WEST Wyomissing, PA 19610
VIRGINIA, INC. 610-373-2400
PENN NATIONAL GSFR, Delaware 51-0392451 300 Delaware Avenue
INC. 9th Floor
Wilmington, DE 19801
302-552-3137
PENN NATIONAL HOLDING Delaware 51-0372406 300 Delaware Avenue
COMPANY 9th Floor
Wilmington, DE 19801
302-552-3137
PENN NATIONAL Pennsylvania 25-1759895 R.D. #1, (P.O. Box 32)
SPEEDWAY, INC. Exit 28 off Interstate 81
Grantville, PA 17551
717-469-2910
PENNSYLVANIA Pennsylvania 23-2346492 R.D. #1, (P.O. Box 32)
NATIONAL TURF Exit 28 off Interstate 81
CLUB, INC. Grantville, PA 17551
717-469-2910
PNGI CHARLES TOWN West Virginia 034-05460-001 (WVI) Flowing Springs Road
FOOD & BEVERAGE P.O. Box 551
LIMITED LIABILITY Charles Town, WV 25414
COMPANY 304-725-7001
PNGI CHARLES TOWN West Virginia 23-2839601 Flowing Springs Road
GAMING LIMITED P.O. Box 551
LIABILITY COMPANY Charles Town, WV 25414
304-725-7001
PNGI POCONO, INC. Delaware 52-2058610 300 Delaware Avenue
9th Floor
Wilmington, DE 19801
302-552-3137
STERLING AVIATION INC. Delaware 23-2818588 300 Delaware Avenue
9th Floor
Wilmington, DE 19801
302-552-3137
TENNESSEE DOWNS, INC. Tennessee 62-1711858 825 Berkshire Blvd., Suite 200
Wyomissing, PA 19610
610-373-2400
WILKES-BARRE DOWNS, Pennsylvania 23-3075023 1280 Highway 315
INC. Wilkes-Barre, PA 18702
717-825-6681
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to the Registration Statement on
Form S-3 (File No. 333-63780) as initially filed by Penn National Gaming, Inc.
on June 25, 2001, and as amended on July 10, 2001 and July 23, 2001, is filed
pursuant to Rule 462(d) solely to add certain exhibits not previously filed with
respect to the Registration Statement.
PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.2 * Form of Purchase Agreement.
4.3* Form of Indenture.
12.2* Statements re: computation of ratios.
* Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
PENN NATIONAL GAMING, INC.
By: /s/ Peter M. Carlino
----------------------------------------
Peter M. Carlino
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* Chairman of the Board and February 21, 2002
- ------------------------------------ Chief Executive Officer (Principal
Peter M. Carlino Executive Officer)
/s/ Kevin DeSanctis President and Chief Operating February 21, 2002
- ------------------------------------ Officer
Kevin DeSanctis
/s/ William Clifford Senior Vice President and Chief February 21, 2002
- ------------------------------------ Financial Officer (Principal
William Clifford Financial and Accounting Officer)
* Secretary and Treasurer February 21, 2002
- ------------------------------------
Robert S. Ippolito
* Director February 21, 2002
- ------------------------------------
William J. Bork
* Director February 21, 2002
- ------------------------------------
Harold Cramer
* Director February 21, 2002
- ------------------------------------
David A. Handler
* Director February 21, 2002
- ------------------------------------
John M. Jacquemin
* Director February 21, 2002
- ------------------------------------
Robert P. Levy
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
BACKSIDE, INC.
By: /s/ Richard E. Orbann
---------------------------------------
Richard E. Orbann
President, Secretary, Treasurer and Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ Richard E. Orbann President, Secretary, Treasurer February 21, 2002
- ------------------------------------ and Director (Principal Executive,
Richard E. Orbann Financial and Accounting Officer)
* Director February 21, 2002
- ------------------------------------
Peter M. Carlino
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
BSL, INC.
By: /s/ Robert S. Ippolito
------------------------------
Robert S. Ippolito
Secretary and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* Chief Executive Officer and February 21, 2002
- ------------------------------------ Director (Principal Executive
Peter M. Carlino Officer)
* Secretary and Treasurer (Principal February 21, 2002
- ------------------------------------ Financial and Accounting Officer)
Robert S. Ippolito
* President and Director February 21, 2002
- ------------------------------------
Kevin DeSanctis
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
BTN, INC.
By: /s/ Robert S. Ippolito
-----------------------------------
Robert S. Ippolito
Secretary and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* Chief Executive Officer and February 21, 2002
- ------------------------------------ Director (Principal Executive
Peter M. Carlino Officer)
* Secretary and Treasurer (Principal February 21, 2002
- ------------------------------------ Financial and Accounting Officer)
Robert S. Ippolito
* President and Director February 21, 2002
- ------------------------------------
Kevin DeSanctis
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
CHC CASINOS CORP.
By: /s/ Robert S. Ippolito
--------------------------------------
Robert S. Ippolito
Secretary, Treasurer and Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President and Chief Executive February 21, 2002
- ------------------------------------ Officer (Principal Executive
Peter M. Carlino Officer)
* Secretary, Treasurer and Director February 21, 2002
- ------------------------------------ (Principal Financial and
Robert S. Ippolito Accounting Officer)
* Vice President and Director February 21, 2002
- ------------------------------------
Joseph A. Lashinger, Jr.
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
CRC HOLDINGS, INC.
By: /s/ Robert S. Ippolito
-------------------------------------
Robert S. Ippolito
Secretary, Treasurer and Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President and Chief Executive February 21, 2002
- ------------------------------------ Officer (Principal Executive
Peter M. Carlino Officer)
* Secretary, Treasurer and Director February 21, 2002
- ------------------------------------ (Principal Financial and
Robert S. Ippolito Accounting Officer)
* Vice President and Director February 21, 2002
- ------------------------------------
Joseph A. Lashinger, Jr.
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
THE DOWNS RACING, INC.
By: /s/ Joseph A. Lashinger, Jr.
--------------------------------------
Joseph A. Lashinger, Jr.
President, Secretary and Treasurer and
Sole Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ Joseph A. Lashinger, Jr. President, Secretary, Treasurer February 21, 2002
- ------------------------------------ and Sole Director (Principal
Joseph A. Lashinger, Jr. Executive, Financial and
Accounting Officer)
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
EBETUSA.COM, INC.
By: /s/ Joseph A. Lashinger, Jr.
--------------------------------------
Joseph A. Lashinger, Jr.
President and Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ Joseph A. Lashinger, Jr. President and Director (Principal February 21, 2002
- ------------------------------------ Executive Officer)
Joseph A. Lashinger, Jr.
* Secretary, Treasurer and Director February 21, 2002
- ------------------------------------ (Principal Financial and
Robert S. Ippolito Accounting Officer)
* Director February 21, 2002
- ------------------------------------
Peter M. Carlino
* Vice President and Director February 21, 2002
- ------------------------------------
Kevin DeSanctis
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
LOUISIANA CASINO CRUISES, INC.
By: /s/ Robert S. Ippolito
--------------------------------------
Robert S. Ippolito
Secretary, Treasurer and Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President and Chief Executive February 21, 2002
- ------------------------------------ Officer (Principal Executive
Peter M. Carlino Officer)
* Secretary, Treasurer and Director February 21, 2002
- ------------------------------------ (Principal Financial and
Robert S. Ippolito Accounting Officer)
* Vice President and Director February 21, 2002
- ------------------------------------
Joseph A. Lashinger, Jr.
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
MILL CREEK LAND, INC.
By: /s/ Robert S. Ippolito
------------------------------------
Robert S. Ippolito
Secretary and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President and Director (Principal February 21, 2002
- ------------------------------------ Executive Officer)
Richard E. Orbann
* Secretary and Treasurer (Principal February 21, 2002
- ------------------------------------ Financial and Accounting Officer)
Robert S. Ippolito
* Director February 21, 2002
- ------------------------------------
Peter M. Carlino
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
MOUNTAINVIEW THOROUGHBRED RACING
ASSOCIATION
By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito
Secretary and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President and Director (Principal February 21, 2002
- ------------------------------------ Executive Officer)
Peter M. Carlino
* Secretary and Treasurer February 21, 2002
- ------------------------------------ (Principal Financial and
Robert S. Ippolito Accounting Officer)
* Director February 21, 2002
- ------------------------------------
Harold Cramer
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
NORTHEAST CONCESSIONS, INC.
By: /s/ Robert S. Ippolito
-----------------------------------
Robert S. Ippolito
Vice President and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President, Secretary and Director February 21, 2002
- ------------------------------------ (Principal Executive Officer)
Richard E. Orbann
* Vice President and Treasurer February 21, 2002
- ------------------------------------ (Principal Financial and
Robert S. Ippolito Accounting Officer)
* Director February 21, 2002
- ------------------------------------
Peter M. Carlino
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
PENN NATIONAL GAMING OF WEST VIRGINIA,
INC.
By: /s/ Robert S. Ippolito
-----------------------------------
Robert S. Ippolito
Secretary and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President and Director (Principal February 21, 2002
- ------------------------------------ Executive Officer)
Peter M. Carlino
* Secretary and Treasurer (Principal February 21, 2002
- ------------------------------------ Financial and Accounting Officer)
Robert S. Ippolito
* Director February 21, 2002
- ------------------------------------
Harold Cramer
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
PENN NATIONAL GSFR, INC.
By: /s/ Robert S. Ippolito
-------------------------------
Robert S. Ippolito
Secretary and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* Chairman of the Board and Chief February 21, 2002
- ------------------------------------ Executive Officer (Principal
Peter M. Carlino Executive Officer)
* Secretary and Treasurer (Principal February 21, 2002
- ------------------------------------ Financial and Accounting Officer)
Robert S. Ippolito
* President, Chief Operating Officer February 21, 2002
- ------------------------------------ and Director
Richard E. Orbann
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
PENN NATIONAL HOLDING COMPANY
By: /s/ Robert S. Ippolito
------------------------------------
Robert S. Ippolito
Secretary, Treasurer and Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* Chairman of the Board, President February 21, 2002
- ----------------------------------- and Chief Executive Officer
Peter M. Carlino (Principal Executive Officer)
* Secretary, Treasurer and Director February 21, 2002
- ------------------------------------ (Principal Financial and
Robert S. Ippolito Accounting Officer)
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
PENN NATIONAL SPEEDWAY, INC.
By: /s/ Richard M. Carlino
-------------------------------
Richard M. Carlino
Chief Executive Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* Chief Executive Officer (Principal February 21, 2002
- ------------------------------------ Executive, Financial and
Richard M. Carlino Accounting Officer)
* Director February 21, 2002
- ------------------------------------
Peter M. Carlino
* Director February 21, 2002
- ------------------------------------
Richard E. Orbann
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
PENNSYLVANIA NATIONAL TURF CLUB, INC.
By: /s/ Robert S. Ippolito
---------------------------------
Robert S. Ippolito
Secretary and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President and Director (Principal February 21, 2002
- ------------------------------------ Executive Officer)
Peter M. Carlino
* Secretary and Treasurer (Principal February 21, 2002
- ------------------------------------ Financial and Accounting Officer)
Robert S. Ippolito
* Director February 21, 2002
- ------------------------------------
Harold Cramer
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
PNGI CHARLES TOWN FOOD & BEVERAGE
LIMITED LIABILITY COMPANY
By: PNGI CHARLES TOWN GAMING LIMITED
LIABILITY COMPANY (its sole member)
By: PENN NATIONAL GAMING OF WEST
VIRGINIA, INC. (its sole managing member)
By: /s/ Peter M. Carlino
------------------------------------
Peter M. Carlino
President and Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* Sole Manager (Principal Executive, February 21, 2002
- ----------------------------------- Financial and Accounting Officer)
Richard L. Moore
By: Penn National Gaming of West
Virginia, Inc., in its capacity as sole
managing member of PNGI Charles Town
Gaming Limited Liability Company, in
its capacity as sole member of PNGI
Charles Town Food & Beverage LLC
* President and Director February 21, 2002
- -----------------------------------
Peter M. Carlino
By: Penn National Gaming of West
Virginia, Inc., in its capacity as sole
managing member of PNGI Charles Town
Gaming Limited Liability Company, in
its capacity as sole member of PNGI
Charles Town Food & Beverage LLC
*
- ----------------------------------- Director February 21, 2002
Harold Cramer
*By: /s/ Robert S. Ippolito
-------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
PNGI CHARLES TOWN GAMING LIMITED
LIABILITY COMPANY
By: PENN NATIONAL GAMING OF WEST
VIRGINIA, INC. (its managing sole member)
By: /s/ Robert S. Ippolito
-------------------------------------
Robert S. Ippolito
Secretary and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
By: Penn National Gaming of West
Virginia, Inc., in its capacity as
sole managing member of PNGI Charles
Town Gaming Limited Liability Company
* President and Director (Principal February 21, 2002
- ------------------------------------- Executive Officer)
Peter M. Carlino
By: Penn National Gaming of West
Virginia, Inc., in its capacity as
sole managing member of PNGI Charles
Town Gaming Limited Liability Company
* Secretary and Treasurer (Principal February 21, 2002
- ------------------------------------- Financial and Accounting Officer)
Robert S. Ippolito
By: Penn National Gaming of West
Virginia, Inc., in its capacity as
sole managing member of PNGI Charles
Town Gaming Limited Liability Company
*
- ------------------------------------- Director February 21, 2002
Harold Cramer
*By: /s/ Robert S. Ippolito
---------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
PNGI POCONO, INC.
By: /s/ Robert S. Ippolito
------------------------------
Robert S. Ippolito
Secretary and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President and Sole Director February 21, 2002
- ------------------------------------ (Principal Executive Officer)
Richard E. Orbann
* Secretary and Treasurer (Principal February 21, 2002
- ------------------------------------ Financial and Accounting Officer)
Robert S. Ippolito
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
STERLING AVIATION INC.
By: /s/ Robert S. Ippolito
-------------------------------
Robert S. Ippolito
Secretary and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President and Director (Principal February 21, 2002
- ------------------------------------ Executive Officer)
Peter M. Carlino
* Secretary and Treasurer (Principal February 21, 2002
- ------------------------------------ Financial and Accounting Officer)
Robert S. Ippolito
* Director February 21, 2002
- ------------------------------------
Harold Cramer
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
TENNESSEE DOWNS, INC.
By: /s/ Robert S. Ippolito
---------------------------------
Robert S. Ippolito
Secretary and Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
* President and Director (Principal February 21, 2002
- ------------------------------------ Executive, Financial and
Richard E. Orbann Accounting Officer)
* Director February 21, 2002
- ------------------------------------
Peter M. Carlino
* Secretary and Director February 21, 2002
- ------------------------------------
Robert S. Ippolito
* Vice President and Director February 21, 2002
- ------------------------------------
Joseph A. Lashinger, Jr.
*By: /s/ Robert S. Ippolito
--------------------------------
Robert S. Ippolito,
as Attorney-in-Fact and
Agent of the Undersigned
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wyomissing, Commonwealth of Pennsylvania on February
21, 2002.
WILKES BARRE DOWNS, INC.
By: /s/ Robert E. Abraham
-------------------------------
Robert E. Abraham
President, Secretary, Treasurer and
Sole Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ Robert E. Abraham President, Secretary, Treasurer February 21, 2002
- ------------------------------------ and Sole Director (Principal
Robert E. Abraham Executive, Financial and
Accounting Officer)
EXHIBIT 1.2
================================================================================
PENN NATIONAL GAMING, INC.
(a Pennsylvania corporation)
$175,000,000
8 7/8% Senior Subordinated Notes due 2010
PURCHASE AGREEMENT
Dated: February 21, 2002
================================================================================
TABLE OF CONTENTS
PAGE
PURCHASE AGREEMENT.........................................................1
SECTION 1. Representations and Warranties................................3
(a) Representations and Warranties by the Company.....................3
(i) Compliance with Registration Requirements..................3
(ii) Incorporated Documents.....................................4
(iii) Independent Accountants....................................4
(iv) Financial Statements.......................................5
(v) No Material Adverse Change in Business.....................5
(vi) Good Standing of the Company...............................5
(vii) Good Standing of Subsidiaries..............................6
(viii) Capitalization.............................................6
(ix) Authorization of Agreement.................................6
(x) Authorization of the Indenture.............................6
(xi) Authorization of the Notes and Guarantees..................7
(xii) Description of the Securities and the Indenture............7
(xiii) Absence of Defaults and Conflicts..........................7
(xiv) Absence of Labor Dispute...................................8
(xv) Absence of Proceedings.....................................8
(xvi) Accuracy of Exhibits.......................................9
(xvii) Possession of Intellectual Property........................9
(xviii) Absence of Further Requirements............................9
(xix) Possession of Licenses and Permits.........................9
(xx) Title to Property.........................................10
(xxi) Compliance with Cuba Act..................................10
(xxii) Investment Company Act....................................10
(xxiii) Environmental Laws........................................10
(xxiv) Registration..............................................11
(b) Officer's Certificates...........................................11
SECTION 2. Sale and Delivery to the Underwriters; Closing...............11
(a) Securities.......................................................11
(b) Payment..........................................................12
(c) Denominations; Registration......................................12
SECTION 3. Covenants of the Issuers.....................................12
(a) Compliance with Securities Regulations and Commission
Requests.....................................................12
(b) Filing of Amendments.............................................13
-i-
PAGE
(c) Delivery of Registration Statements..............................13
(d) Delivery of Prospectus...........................................13
(e) Continued Compliance with Securities Laws........................13
(f) Blue Sky Qualifications..........................................14
(g) Rule 158.........................................................14
(h) Use of Proceeds..................................................14
(i) DTC 14
(j) Restriction on Sale of Securities................................14
(k) Reporting Requirements...........................................15
SECTION 4. Payment of Expenses..........................................15
(a) Expenses.........................................................15
(b) Termination of Agreement.........................................15
SECTION 5. Conditions of the Underwriters' Obligations..................15
(a) Effectiveness of Registration Statement..........................15
(b) Opinion of Counsel for the Company...............................16
(c) Opinion of Counsel for the Underwriters..........................16
(d) Officers' Certificate............................................16
(e) Accountant's Comfort Letter......................................17
(f) Bring-down Comfort Letter........................................17
(g) Maintenance of Rating............................................17
(h) Receipt of Waivers or Commitments................................18
(j) DTC..............................................................18
(k) Additional Documents.............................................18
(l) Termination of Agreement.........................................18
SECTION 6. Indemnification..............................................18
(a) Indemnification of the Underwriters..............................18
(b) Indemnification of the Company, its Directors and
Officers and the Selling Shareholder.........................19
(c) Actions against Parties; Notification............................20
(d) Settlement without Consent if Failure to Reimburse...............20
SECTION 7. Contribution.................................................21
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery...................................................22
SECTION 9. Termination of Agreement.....................................22
(a) Termination; General.............................................22
(b) Liabilities......................................................23
SECTION 10. Default by One or More of the Underwriters...................23
-ii-
PAGE
SECTION 11. Default by the Issuers.......................................24
SECTION 12. Notices......................................................24
SECTION 13. Parties......................................................24
SECTION 14. GOVERNING LAW AND TIME.......................................24
SECTION 15. Effect of Headings...........................................25
SCHEDULES
Schedule A - List of Underwriters..............................Sch A-1
Schedule B - List of Subsidiaries..............................Sch B-1
Schedule C - Pricing Information...............................Sch C-1
Schedule D - Guarantors........................................Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel...................A-1
Exhibit B - Form of Opinion of Phelps Dunbar LLP:
Mississippi.......................................B-1
Exhibit C - Form of Opinion of Phelps Dunbar LLP: Louisiana.......C-1
Exhibit D - Form of Opinion of Bowles Rice McDavid Graffe &
Love PLLC: West Virginia.........................D-1
Exhibit E - Form of Opinion of Riker, Danzig, Scherer,
Hyland & Perretti LLP: New Jersey................E-1
Exhibit F - Form of Opinion of Blake, Cassels & Graydon LLP:
Canada............................................F-1
Exhibit G - Form of Opinion of Schnader Harrison Segal &
Lewis LLP: Pennslyvania...........................G-1
-iii-
PENN NATIONAL GAMING, INC.
(a Pennsylvania corporation)
$175,000,000
8 7/8% Senior Subordinated Notes due 2010
PURCHASE AGREEMENT
February 21, 2002
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CIBC WORLD MARKETS CORP.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Four World Financial Center
250 Vesey Street
New York, New York 10080
Ladies and Gentlemen:
Penn National Gaming, Inc., a Pennsylvania corporation (the
"COMPANY"), confirms its agreement with Bear, Stearns & Co. Inc. ("Bear
Stearns"), Merrill Lynch & Co., Merrill Lynch Pierce, Fenner & Smith
Incorporated ("MERRILL LYNCH") and CIBC World Markets Corp. ("CIBC")
(collectively, the "UNDERWRITERS," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), with respect to the
issue and sale by the Company, and the purchase by the Underwriters, acting
severally and not jointly, of the respective principal amounts set forth in
SCHEDULE A hereto of $175,000,000 aggregate principal amount of the Company's 8
7/8% Senior Subordinated Notes due 2010 (the "NOTES" and, together with the
Guarantees (as defined below), the "SECURITIES"). The Securities are to be
issued pursuant to an indenture to be dated as of February 28, 2002 (the
"INDENTURE") among the Company, the Guarantors (as defined below) and State
Street Bank and Trust Company, as trustee (the "TRUSTEE"). The Company's
obligations under the Notes will be unconditionally guaranteed (the
"GUARANTEES") on a senior subordinated basis by the guarantors listed on
SCHEDULE D hereto (collectively, the "GUARANTORS" and, together with the
Company, the "ISSUERS"). The Securities will be issued in book-entry form to
Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant to a
letter agreement, to be dated as of the Closing Time (as defined in Section
2(b)), among the Issuers, the Trustee and DTC.
-2-
The Issuers understand that the Underwriters propose to make a
public offering of the Securities as soon as the Underwriters deem advisable
after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement on Form S-3 (No. 333-63780) covering
the registration of the Securities under the Securities Act of 1933, as amended
(the "1933 ACT"), including a related prospectus, which has become effective.
The registration statement (including the exhibits thereto and schedules
thereto, if any) as amended at the time it became effective, or, if a
post-effective amendment has been filed with respect thereto, as amended by such
post-effective amendment at the time of its effectiveness (including in each
case the information (if any) deemed to be part of such registration statement
at the time of effectiveness pursuant to Rule 430A under the 1933 Act), is
hereinafter referred to as the "REGISTRATION STATEMENT." The term "EFFECTIVE
DATE" shall mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or become effective. The
term "BASE PROSPECTUS" shall mean the prospectus referred to in Section 1(a)(i)
hereof contained in the Registration Statement at the Effective Date.
"PRELIMINARY PROSPECTUS" means the preliminary prospectus supplement to the Base
Prospectus used prior to the filing of the Prospectus; the term "Prospectus"
means the prospectus supplement to the Base Prospectus first filed with the
Commission pursuant to Rule 424(b) under the Securities Act, together with the
Base Prospectus. Any registration statement filed pursuant to Rule 462(b) under
the 1933 Act is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "REGISTRATION STATEMENT" shall include the Rule
462(b) Registration Statement.
Any reference in this Agreement to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, as of the effective date of the Registration Statement or
the date of such Preliminary Prospectus or the Prospectus, as the case may be
(it being understood that the several specific references in this Agreement to
documents incorporated by reference in the Registration Statement or the
Prospectus are for clarifying purposes only and are not meant to limit the
inclusiveness of any other definition herein). For purposes of this Agreement,
all references to the Registration Statement, any Preliminary Prospectus, or the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System ("EDGAR"). All references in this
Agreement to financial statements and schedules and other information which is
"contained," "included" or "stated" in the Registration Statement, any
Preliminary Prospectus or the Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which is incorporated by reference in the Registration
Statement, any Preliminary Prospectus or the Prospectus, as the case may be.
-3-
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE ISSUERS. The Issuers
represent and warrant to each Underwriter as of the date hereof and agrees with
each Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets
the requirements for use of Form S-3 under the 1933 Act and has filed with
the Commission the Registration Statement on such Form, including a Base
Prospectus, for registration under the 1933 Act of the offering and sale
of the Securities, one or more amendments to such Registration Statement
may have been so filed, and the Company may have used a Preliminary
Prospectus. Such Registration Statement, as so amended, has become
effective. Although the Base Prospectus may not include all the
information with respect to the Securities and the offering thereof
required by the 1933 Act and the rules and regulations of the Commission
thereunder (the "1933 ACT REGULATIONS") to be included in the Prospectus,
the Base prospectus includes all such information required by the 1933 Act
and the 1933 Act Regulations to be included therein as of the Effective
Date. After the execution of this Agreement, the Company will file with
the Commission pursuant to Rules 415 and 424(b)(2) or (5) a final
supplement to the Base Prospectus included in such Registration Statement
relating to the Securities and the offering thereof, with such information
as is required or permitted by the 1933 Act and as has been provided to
and approved by the Underwriters prior to the date hereof or, to the
extent not completed at the date hereof, containing only such specific
additional information and other changes (beyond that contained in the
Base Prospectus and any Preliminary Prospectus) as the Company has advised
you, prior to the date hereof, will be included or made therein. The
Company may also file a Rule 462(b) Registration Statement with the
Commission for the purpose or registering certain additional Securities,
which registration shall be effective upon filing with the Commission.
The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus. When any Preliminary Prospectus was
filed with the Commission, it (x) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and (y) did not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (I) complied as to form
or will comply in all material respects with the requirements of the 1933
Act, the Securities Exchange Act of 1934, as amended (the "1934 ACT"), the
1933 Act Regulations and the rules and regulations of the Commission under
the 1934 Act (the "1934 ACT REGULATIONS") and (II) did not or
-4-
will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading. When the Prospectus or any amendment or
supplement to the Prospectus is filed with the Commission pursuant to Rule
424(b) (or, if the Prospectus or such amendment or supplement is not
required to be so filed, when the Registration Statement or the amendment
thereto containing the Prospectus or such amendment or supplement to the
Prospectus was or is declared effective) and at the Closing Time, the
Prospectus, as amended or supplemented at any such time, (A) complied as
to form or will comply in all material respects with the requirements of,
the 1933 Act, the 1934 Act, the 1933 Act Regulations and the 1934 Act
Regulations and (B) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. The foregoing provisions of this paragraph
do not apply to statements or omissions made in any Preliminary
Prospectus, the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Issuers by any
Underwriter specifically for use therein.
If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement is not effective, (x) the Company will file
a Rule 462(b) Registration Statement in compliance with, and that is
effective upon filing pursuant to, Rule 462(b) and (y) the Company will
give irrevocable instructions for transmission of the applicable filing
fee in connection with the filing of the Rule 462(b) Registration
Statement, in compliance with Rule 111 under the 1933 Act, or the
Commission has received payment of such filing fee.
The Company has not distributed and, prior to the later of (x) the
Closing Time and (y) the completion of the distribution of the Securities,
will not distribute any offering material in connection with the offering
of the Securities pursuant to this Agreement other than the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto.
(ii) INCORPORATED DOCUMENTS. Each document, if any, filed or to be
filed pursuant to the 1934 Act and incorporated by reference in either the
Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto) complied or will comply when so filed in all material respects
with the 1934 Act and the 1934 Act Regulations.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
-5-
(iv) FINANCIAL STATEMENTS. The financial statements of the Company
included in the Registration Statement and the Prospectus, together with
the related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement. The pro forma financial statements and the related
notes thereto included in the Registration Statement and the Prospectus,
if any, present fairly the information shown therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "MATERIAL ADVERSE EFFECT"), (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Pennsylvania and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
-6-
(vii) GOOD STANDING OF SUBSIDIARIES. Each "SIGNIFICANT SUBSIDIARY" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each
a "SUBSIDIARY" and, collectively, the "SUBSIDIARIES") has been duly
organized and is validly existing as a corporation, partnership or limited
liability company, as the case may be, in good standing under the laws of
the jurisdiction of its incorporation or organization, as the case may be,
has the power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation, partnership or limited liability
company, as the case may be, to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding equity interests
of each such Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable and are owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding equity
interests of any Subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such Subsidiary. The only
Subsidiaries of the Company are the subsidiaries listed on Schedule B of
this Agreement.
(viii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement, pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus). The
shares of issued and outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock of the Company was issued
in violation of the preemptive or other similar rights of any
securityholder of the Company.
(ix) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Issuers.
(x) AUTHORIZATION OF THE INDENTURE. The Indenture has been duly
authorized by each of the Issuers and, when executed and delivered by each
of the Issuers and the Trustee, will constitute valid and binding
agreements of the Issuers, enforceable against the Issuers in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a pro-
-7-
ceeding in equity or at law). At the Closing Time, the Indenture will be
qualified under the United States Trust Indenture Act of 1939, as amended
(the "1939 ACT"), and the rules and regulations of the Commission
applicable to an indenture that is qualified thereunder.
(xi) AUTHORIZATION OF THE NOTES AND GUARANTEES. (A) The Notes have
been duly authorized and, at the Closing Time, will have been duly
executed by the Company and, when authenticated, issued and delivered in
the manner provided for in the Indenture and delivered against payment of
the purchase price therefor as provided in this Agreement, will constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers) reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and will be in the form contemplated by, and entitled to the
benefits of, the Indenture;
(B) The Guarantees have been duly and validly authorized by the
Guarantors and, when the Notes are issued, authenticated and delivered by
the Company against payment by the Underwriters in accordance with the
terms of this Agreement and the Indenture, will be legal, valid and
binding obligations of the Guarantors, enforceable against each of them in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and will be in the form contemplated by, and entitled to the
benefits of, the Indenture.
(xii) DESCRIPTION OF THE SECURITIES AND THE INDENTURE. The Securities
and the Indenture will conform in all material respects to the respective
statements relating thereto contained in the Prospectus.
(xiii) ABSENCE OF DEFAULTS AND CONFLICTS. None of the Issuers nor any
of their subsidiaries is in violation of its charter, by-laws or limited
liability company agreement, as the case may be, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which any Issuer or any of their subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Issuers or any of
-8-
their subsidiaries is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated in this Agreement and in
the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Issuers with their obligations under this Agreement has
been duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the any
Issuer or any of their subsidiaries pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter, by-laws or limited liability company agreement, as the case
may be, of any Issuer or their subsidiaries or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court having jurisdiction over
any Issuer or any of their subsidiaries or any of their assets, properties
or operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by any Issuer or any of their subsidiaries.
(xiv) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees
of the Company or any of its subsidiaries exists or, to the knowledge of
the Issuers, is imminent, and the Issuers are not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xv) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body now pending, or, to the knowledge of the Issuers,
threatened, against or affecting the Company or any subsidiary, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Issuers of their obligations hereunder or thereunder;
the aggregate of all pending legal or governmental proceedings to which
the Company or any subsidiary is a party or of which any of their
re-
-9-
spective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental
to the business, would not reasonably be expected to result in a Material
Adverse Effect.
(xvi) ACCURACY OF EXHIBITS. There are no contracts or documents which
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required.
(xvii) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, domain names, trade names or other intellectual
property (collectively, "INTELLECTUAL PROPERTY") necessary to carry on the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would reasonably be expected to result in a Material Adverse
Effect.
(xviii) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Issuers of their
obligations hereunder, in connection with the offering, issuance or sale
of the Securities under this Agreement or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and state securities or blue sky laws.
(xix) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "GOVERNMENTAL LICENSES") issued by the
appropriate federal, state or local regulatory agencies or bodies
necessary to conduct the business now operated by them and the Company and
its subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to possess or
comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses possessed by the Company and its
Subsidiaries are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the fail-
-10-
ure of such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xx) TITLE TO PROPERTY. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties described in the Prospectus, are in full force and effect, and
neither the Company nor any subsidiary has any notice of any material
claim of any sort that has been asserted by anyone adverse to the rights
of the Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or
such subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxi) COMPLIANCE WITH CUBA ACT. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "CUBA ACT") or is exempt therefrom.
(xxii) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 ACT").
(xxiii) ENVIRONMENTAL LAWS. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, reasonably
be expected to result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal, state
or local statute, law, rule, regulation, ordinance, code, published policy
or rule of common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent, decree
or judgment, relating to pollution or protection of human health, the
environment (in-
-11-
cluding, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation,
laws and regulations relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials
(collectively, "ENVIRONMENTAL LAWS"), (B) the Company and its subsidiaries
have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the Issuers' knowledge,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) to the Issuers' knowledge,
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxiv) REGISTRATION. There are no persons with registration rights or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act, except as disclosed in the Registration Statement.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Underwriters or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS;
CLOSING.
(a) SECURITIES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Issuers agree to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Issuers, at
the price set forth in SCHEDULE B, the number of Securities set forth in
SCHEDULE A opposite the name of such Underwriter, plus any additional number of
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Cahill Gordon &
Reindel, 80 Pine Street, New York, New York 10005 or at such other place as
shall be agreed upon by Bear Stearns
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and the Company, at 9:00 A.M. (Eastern time) on the fifth business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by Bear Stearns and the Company (such time and date of payment and
delivery being herein called the "CLOSING TIME").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Underwriters for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. Bear Stearns, individually and not
as representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) DENOMINATIONS; REGISTRATION. Certificates for the Securities
shall be in such denominations and registered in such names as the Underwriters
may request in writing at least one full business day before the Closing Time.
The certificates for the Securities will be made available for examination and
packaging by the Underwriters in The City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
SECTION 3. COVENANTS OF THE ISSUERS. The Issuers covenant with each
Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Issuers, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify Bear Stearns immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Issuers will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
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(b) FILING OF AMENDMENTS. The Issuers will give Bear Stearns notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)) or any amendment, supplement or
revision to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, will furnish Bear Stearns with
copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which Bear Stearns or counsel for the Underwriters shall reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Issuers have furnished
or will deliver to the Underwriters and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Underwriters, without charge, conformed
copies of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(d) DELIVERY OF PROSPECTUS. The Issuers have delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Issuers hereby consent to the use
of such copies for purposes permitted by the 1933 Act. The Issuers will furnish
to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Issuers will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regula-
-14-
tions, the Issuers will promptly prepare and file with the Commission, subject
to Section 3(b), such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Issuers will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Issuers will use their reasonable
best efforts, in cooperation with the Underwriters, to qualify the Securities
for offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as Bear Stearns may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; PROVIDED, HOWEVER, that the Issuers shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which
they are not so qualified or to subject themselves to taxation in respect of
doing business in any jurisdiction in which they are not otherwise so subject.
In each jurisdiction in which the Securities have been so qualified, the Issuers
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) RULE 158. The Issuers will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earning statement for the purposes of,
and to provide the benefits contemplated by, the last paragraph of Section 11(a)
of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(i) DTC. The Company will assist the Underwriters in arranging for
the Securities to be eligible for clearance and settlement through The
Depository Trust Company ("DTC").
(j) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectus, the Company will not, without the prior written
consent of Bear Stearns and Merrill Lynch, directly or indirectly, issue, sell,
offer or contract to sell, grant any option for the sale of, or otherwise
transfer or dispose of, any debt securities of the Company.
(k) REPORTING REQUIREMENTS. The Issuers, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods and rules and regulations of the Commission
thereunder.
-15-
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to its
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any transfer
taxes and any stamp or other duties payable upon the sale and the issuance or
delivery of the Securities by the Company to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, and of the Prospectus and any amendment or supplement
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities and (ix) the
filing fees incident to, the review by the NASD of the terms of the sale of the
Securities.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the several Underwriters hereunder are subject to the accuracy of
the representations and warranties of the Issuers contained in Section 1 hereof
or in certificates of any officer of the Company or any subsidiary of the
Company delivered pursuant to the provisions hereof, to the performance by the
Issuers of their covenants and other obligations hereunder, and to the following
further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT; FILING OF PROSPECTUS
SUPPLEMENT. The Registration Statement, including any Rule 462(b)
Registration Statement, has become effective and at the Closing Time no
stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of
the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel for the Underwriters. The
Prospectus, as supplemented by the prospectus supplement relating to the
-16-
offering of the Securities shall have been filed with the Commission in
accordance with Rule 424(b) under the 1933 Act within the applicable
time period prescribed for such filing by the regulations promulgated
under the 1933 Act and in accordance with Section 3(a) hereof.
(b) OPINION OF COUNSEL FOR THE COMPANY. At the Closing Time, the
Underwriters shall have received the favorable opinions, dated as of the
Closing Time, of (i) Morgan, Lewis & Bockius LLP, counsel for the Company,
(ii) Phelps Dunbar LLP, Mississippi local counsel for the Company, (iii)
Phelps Dunbar LLP, Louisiana local counsel for the Company, (iv) Bowles
Rice McDavid Graff & Love PLLC, West Virginia local counsel for the
Company, (v) Riker, Danzig, Scherer Hyland & Perretti LLP, New Jersey
local counsel for the Company, (vi) Blake, Cassels & Graydon LLP, Canadian
Counsel for the Company and (vii) Schnader Harrison Segal & Lewis LLP,
Pennsylvania Racing counsel for the Company, all in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in EXHIBITS A, B, C, D, E, F AND G, respectively, hereto
and to such further effect as counsel for the Underwriters may reasonably
request.
(c) OPINION OF COUNSEL FOR THE UNDERWRITERS. At the Closing Time,
the Underwriters shall have received the favorable opinion, dated as of
the Closing Time, of Cahill Gordon & Reindel, counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters, in form and substance satisfactory to the
Underwriters. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
State of New York and the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its subsidiaries and certificates of public officials.
(d) OFFICERS' CERTIFICATE. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Underwriters shall have received a certificate of the Company, signed
by the Chief Executive Officer of the Company and by the chief financial
or chief accounting officer of the Company, dated as of the Closing Time,
to the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties in Section 1(a) hereof that are
qualified by materiality are true and correct and all other
representations and warranties in Section 1(a) hereof are true and
-17-
correct in all material respects with the same force and effect as
though expressly made at and as of the Closing Time, (iii) the Issuers
have complied in all material respects with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Time, and (iv) to their knowledge no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of
this Agreement, the Underwriters shall have received from BDO Seidman and
Arthur Andersen LLP, letters dated such date, in form and substance
satisfactory to the Underwriters, together with signed or reproduced
copies of such letters for each of the other Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus.
(f) BRING-DOWN COMFORT LETTER. At the Closing Time, the Underwriters
shall have received from BDO Seidman, LLP a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that
the specified date referred to shall be a date not more than five business
days prior to the Closing Time.
(g) MAINTENANCE OF RATING. At the Closing Time, the Securities shall
be rated at least B3 by Moody's Investor's Service Inc. and B- by Standard
& Poor's Ratings Group, a division of McGraw-Hill, Inc., and the Company
shall have delivered to the Underwriters a letter dated the Closing Time,
from each such rating agency, or other evidence satisfactory to the
Underwriters, confirming that the Securities have such ratings; and since
the date of this Agreement, there shall not have occurred a downgrading in
the rating assigned to the Securities or any of the Company's other
securities by any "nationally recognized statistical rating agency," as
that term is defined by the Commission for purposes of Rule 436(g)(2)
under the 1933 Act, and no such organization shall have publicly announced
that it has under surveillance or review its rating of the Securities or
any of the Company's other securities.
(h) RECEIPT OF WAIVERS OR COMMITMENTS. At or before the Closing
Time, the Company shall have received and provided to the Underwriters
copies thereof (i) all necessary waivers and/or amendments to the
Company's existing senior secured credit facility (the "Credit Facility")
to permit the issuance by the Company of the Notes or (ii) evidence of the
retirement of the Credit Facility and an executed credit agreement
providing for a $75.0 million revolving credit facility to the Company.
-18-
(i) DTC. At the Closing Time, the Securities shall be eligible for
clearance and settlement through DTC.
(j) ADDITIONAL DOCUMENTS. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as
they may reasonably require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Issuers in connection with the issuance
and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
(k) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by the Underwriters by notice
to the Company at any time at or prior to the Closing Time and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE UNDERWRITERS. Each of the Issuers,
jointly and severally, agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue state-
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ment or omission, or any such alleged untrue statement or omission;
PROVIDED that (subject to Section 6(d) below) any such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Bear Stearns), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Issuers by any
Underwriter expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and PROVIDED, FURTHER, HOWEVER, that the Issuers shall not
be liable to any indemnified party with respect to any preliminary prospectus
(or supplement thereto) if the Prospectus corrected any such untrue statement or
omission, was delivered to such indemnified party and such indemnified party
failed to furnish a copy of the Prospectus at or prior to the written
confirmation of the sale of Securities to the applicable purchaser.
(b) INDEMNIFICATION OF THE ISSUERS AND THEIR DIRECTORS AND OFFICERS.
Each Underwriter severally agrees to indemnify and hold harmless the Issuers,
their directors, each of their officers who signed the Registration Statement,
and each person, if any, who controls each Issuer within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so
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notify an indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel for the indemnified
parties shall be selected by Merrill Lynch, and, in the case of parties
indemnified pursuant to Section 6(b) above, counsel for the indemnified parties
shall be selected by the Company. An indemnifying party may participate at its
own expense in the defense of any such action; PROVIDED, HOWEVER, that counsel
for the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel for the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement. Notwithstanding the immediately preceding sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel, an
indemnifying party shall not be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its consent if such
indemnifying party (i) reimburses the indemnified party in accordance with such
request to the extent it consider such request to be reasonable and (ii)
provides written notice to the indemnified party which fully explains the
indemnifying party's belief that any unpaid balance of such request is
unreasonable, in each case prior to the date of such settlement.
-21-
SECTION 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers on the one hand and the Underwriters on the other hand from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Issuers on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions,
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Issuers on the one hand and
the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Issuers and the total underwriting discount received by the Underwriters, in
each case as set forth on the cover of the Prospectus, or, if Rule 434 is used,
the corresponding location on the Term Sheet, bear to the aggregate initial
public offering price of the Securities as set forth on such cover.
The relative fault of the Issuers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Issuers or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Issuers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
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Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Issuers and each officer of the Issuer who signed the
Registration Statement, and each person, if any, who controls any Issuer within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the such Issuer. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Securities set forth opposite their respective names
in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Issuers, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Underwriters may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, any outbreak or escalation
of hostilities, acts of terrorism or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representatives, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or
materially limited by the Commission or the New York Stock Ex-
-23-
change, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States or (iv) if a banking moratorium has been declared by either
Federal or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or
more of the Underwriters shall fail at the Closing Time to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"DEFAULTED SECURITIES"), the Underwriters shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Underwriters shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Underwriters or the Company shall have
the right to postpone the Closing Time, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
-24-
SECTION 11. DEFAULT BY THE ISSUERS. If the Issuers shall fail at the
Closing Time to sell the number of Securities that they are obligated to sell
hereunder, then this agreement shall terminate without any liability on the part
of any non-defaulting party; PROVIDED, HOWEVER, that the provisions of Sections
1, 4, 6, 7 and 8 shall remain in full force and effect. No action taken pursuant
to this Section shall relieve the Issuers from liability, if any, in respect of
such default.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Bear, Stearns & Co. Inc., at 245 Park Avenue,
New York, New York 10167, attention of High Yield Capital Markets and to Merrill
Lynch at North Tower, World Financial Center, New York, New York 10281-1201,
attention of Todd Bernick and notices to the Issuers shall be directed to it at
825 Berkshire Boulevard, Suite 200, Wyomissing, Pennsylvania 19610, facsimile
no. (610) 376-2842, attention of Joseph A. Lashinger, Jr., with a copy to
Morgan, Lewis & Bockius, LLP, 1701 Market Street, Philadelphia, Pennsylvania,
19103, facsimile no. (215) 963-5299, attention of Steven M. Goodman.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit
of and be binding upon the Underwriters, the Issuers and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Issuers and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Issuers a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Issuers in accordance with its terms.
Very truly yours,
PENN NATIONAL GAMING, INC.
By:______________________________
Name:
Title:
THE DOWNS RACING, INC.
By:_______________________________
Name: Joseph A. Lashinger, Jr.
Title: Secretary and Treasurer
WILKES BARRE DOWNS, INC.
By:________________________________
Name: Robert E. Abraham
Title: President, Secretary and Treasurer
ALL OTHER GUARANTORS, LISTED ON SCHEDULE D
HERETO
By:______________________________
Name: Robert S. Ippolito
Title: Secretary and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CIBC WORLD MARKETS CORP.
By: BEAR, STEARNS & CO. INC.
By:________________________________________
Name: Lawrence B. Aletto
Title: Senior Managing Director
SCHEDULE A
Aggregate
Principal Amount
Name of Underwriter of Securities
- ------------------- ----------------
Bear, Stearns & Co. Inc............................... $ 58,334,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................. $ 58,334,000
CIBC World Markets Corp............................... $ 58,332,000
------------
Total................................................. $175,000,000
Schedule A-1
SCHEDULE B
Subsidiaries of Penn National Gaming, Inc.:
STATE OF
ORGANIZATION
NAME OR INCORPORATION
- ---- ----------------
Penn National Holding Company Delaware
CRC Holdings, Inc. Florida
Penn National Gaming of West Virginia, Inc. West Virginia
PNGI Pocono, Inc. Delaware
Penn National GSFR, Inc. Delaware
Louisiana Casino Cruises, Inc. Louisiana
BSL, Inc. Mississippi
BTN, Inc Mississippi
The Downs Racing, Inc. Pennsylvania
CHC Casinos Canada Limited Nova Scotia
Mountainview Thoroughbred Racing Association Pennsylvania
Pennsylvania National Turf Club, Inc. Pennsylvania
Schedule B-1
SCHEDULE C
PENN NATIONAL GAMING, INC.
$175,000,000
8 7/8% Senior Subordinated Notes due 2010
1. The initial public offering price of the Securities shall be
99.287% of the principal amount thereof, plus accrued interest, if any, from the
date of issuance.
2. The purchase price to be paid by the Underwriters for the
Securities shall be 97.75% of the principal amount.
Schedule C-1
SCHEDULE D
GUARANTORS
BACKSIDE, INC.
BSL, INC.
BTN, INC.
CHC CASINOS CORP.
CRC HOLDINGS, INC.
THE DOWNS RACING, INC.
EBETUSA.COM, INC.
LOUISIANA CASINO CRUISES, INC.
MILL CREEK LAND, INC.
MOUNTAINVIEW THOROUGHBRED
RACING ASSOCIATION
NORTHEAST CONCESSIONS, INC.
PENN NATIONAL GAMING OF WEST
VIRGINIA, INC.
PENN NATIONAL GSFR, INC.
PENN NATIONAL HOLDING COMPANY
PENN NATIONAL SPEEDWAY, INC.
PENNSYLVANIA NATIONAL TURF
CLUB, INC.
PNGI CHARLES TOWN FOOD &
BEVERAGE LIMITED LIABILITY
COMPANY
PNGI CHARLES TOWN GAMING
LIMITED LIABILITY COMPANY
PNGI POCONO, INC.
STERLING AVIATION INC.
TENNESSEE DOWNS, INC.
WILKES BARRE DOWNS, INC.
Schedule D-1
EXHIBIT A
FORM OF OPINION OF COUNSEL FOR THE COMPANY
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company is validly existing as a corporation in good
standing under the laws of the Commonwealth of Pennsylvania.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of Mississippi.
(iv) The authorized capital stock of the Company is as set forth in
the Prospectus under the caption "Capitalization."
(v) The issuance of the Notes is not subject to the preemptive or,
to our knowledge, other similar rights of any securityholder of the Company.
(vi) Each of Backside, Inc., a Pennsylvania corporation, CHC Casinos
Corp., a Florida corporation, CRC Holdings, Inc., a Florida corporation, The
Downs Racing, Inc., a Pennsylvania corporation, eBetUSA.com, Inc., a Delaware
corporation, Mill Creek Land, Inc., a Pennsylvania corporation, Mountainview
Thoroughbred Racing Association, a Pennsylvania corporation, Northeast
Concessions, Inc, a Pennsylvania corporation, Penn National GSFR, Inc., a
Delaware corporation, Penn National Holding Company, a Delaware corporation,
Penn National Speedway, Inc., a Pennsylvania corporation, Pennsylvania National
Turf Club, Inc., a Pennsylvania corporation, PNGI Pocono, Inc., a Delaware
corporation, Sterling Aviation Inc., a Delaware corporation and Wilkes Barre
Downs, Inc., a Pennsylvania corporation, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its organization, has the
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus; to the best of our knowledge, all of
the issued and outstanding equity interests of each Subsidiary are owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, except as
otherwise disclosed in the Registration Statement.
(vii) The Indenture has been duly authorized, executed and delivered
by the Company and the Guarantors and constitutes a valid and binding agreement
of the Company and the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms, except as such enforceability may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium and other similar laws relating to or affecting credi-
A-1
tors' rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(viii) The Notes have been duly authorized, executed and delivered
by the Company and authenticated by the Trustee and constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable in accordance with their terms, except as such enforceability may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(ix) The Guarantees have been duly authorized, executed, and
delivered by each of the Guarantors and constitute valid and binding obligations
of each of the Guarantors enforceable in accordance with their terms, except as
such enforceability may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(x) The Purchase Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors.
(xi) The Registration Statement is effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued , and no proceedings for that
purpose are pending or threatened by the Commission.
(xii) The Registration Statement and each amendment thereto, any
Rule 462(b) Registration Statement and the Prospectus (in each case, including
the documents incorporated by reference therein but not including the financial
statements and other financial information contained therein, as to which such
counsel need express no opinion) comply as to form in all material respects with
the applicable requirements of the 1933 Act, the 1934 Act, the 1933 Act
Regulations and the 1934 Act Regulations.
(xiii) To the best of our knowledge and except as disclosed in the
Registration Statement, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any subsidiary is
a party, or to which the property of the Company or any subsidiary is subject,
before or brought by any court or governmental agency or body which would
reasonably be expected to result in a Material Adverse Effect, or which would
reasonably be expected to materially and adversely affect the consummation of
the transactions contemplated in the Purchase Agreement or the performance by
the Company or the Guarantors of their respective obligations thereunder.
A-2
(xiv) The descriptions of the Indenture, the Notes and the
Guarantees contained in the Prospectus conform in all material respects to the
respective underlying documents.
(xv) The information in the Prospectus under "Description of Capital
Stock -- Common Stock," and "Description of Capital Stock -- Preferred Stock"
and in the Registration Statement under Item 15, to the extent that it
constitutes matters of law, summaries of legal matters, the Company's articles
of incorporation and bylaws, legal proceedings or legal conclusions, fairly
summarize the matters described therein.
(xvi) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto.
(xvii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (other than under the 1933 Act and the 1933 Act Regulations
and under the 1939 Act and the regulations thereunder, which have been obtained,
as may be required under the securities or blue sky laws of the various states,
as to which we need express no opinion, or under gaming and racing laws and
regulations, as to which we need express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of the Purchase
Agreement or for the offering, issuance, sale or delivery of the Securities.
(xviii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the Purchase
Agreement (including the issuance and sale of the Securities) and compliance by
the Company and the Guarantors with their respective obligations under the
Purchase Agreement do not and will not, whether with or without the giving of
notice or lapse of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(xiii) of the Purchase
Agreement) under or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances, if any, that would not have a Material Adverse Effect),
nor will such action result in any violation of the provisions of the charter or
by-laws of the Company or any Subsidiary identified in paragraph (vi) above, or
any applicable New York, Pennsylvania or federal law, statute, rule or
regulation (other than gaming and racing laws, statutes, rules or regulations,
as to which we express no opinion) or any judgment, order, writ or decree, known
to us, of any
A-3
government, government instrumentality or court having jurisdiction over the
Company or any subsidiary or any of their respective properties, assets or
operations.
(xix) To the best of our knowledge, there are no persons with
registration rights or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the Company
under the 1933 Act.
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
We have participated in conferences with officers and other
representatives of the Company, the independent auditors of the Company, the
Underwriters and counsel to the Underwriters, at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed. Based on our participation in the above-referenced conferences and
our review of the Registration Statement and Prospectus, we advise you that
nothing has come to our attention that caused us to believe that at the time the
Registration Statement became effective under the Act (but after giving effect
to any modifications incorporated therein pursuant to Rule 430A under the Act),
the Registration Statement contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that as of its date and the date
hereof, the Prospectus contained or contains, as the case may be, an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that in each such case we express no belief or statement with respect to the
financial statements, related notes and schedules, the pro forma financial
information, or the other financial, numerical or statistical data found in or
derivable from the internal accounting, financial or other records of the
Company and its subsidiaries set forth or referred to in the Prospectus).
In rendering such opinion, such counsel may rely as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials and as
to Guarantors organized under the laws of jurisdictions other than Delaware,
Florida and Pennsylvania may assume that the Purchase Agreement, the Indenture
and the Guarantees have been duly authorized, executed and delivered pursuant to
adequate corporate or company power. Such opinion shall not state that it is to
be governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
A-4
EXHIBIT B
FORM OF OPINION OF PHELPS DUNBAR LLP: MISSISSIPPI
(i) BSL has been duly incorporated, and is validly existing as a
corporation in good standing under the laws of Mississippi, and has all
corporate power and authority necessary to own and operate the Casino
Magic - Bay St. Louis gaming establishment;
(ii) BTN has been duly incorporated, and is validly existing as a
corporation in good standing under the laws of Mississippi, and has all
corporate power and authority necessary to own and operate the Boomtown -
Biloxi gaming establishment;
(iii) The Relevant Portion of the Prospectus and the Relevant
Portions of the Prospectus Supplement, to the extent that such sections
deal with Mississippi regulatory matters, are accurate in all material
respects;
(iv) The Company possesses all Mississippi Commission licenses,
findings of suitability, registrations and approvals necessary to own,
lease and operate the Casino Magic- Bay St. Louis gaming establishment and
the Boomtown - Biloxi gaming establishment (the "Mississippi Gaming
Licenses");
(v) All such Mississippi Gaming Licenses are in full force and
effect;
(vi) To the best of our knowledge, the Company is in compliance with
the terms and conditions of all such Mississippi Gaming Licenses, except
where the failure to comply would not, singly or in the aggregate, have a
material adverse effect on the Company;
(vii) To the best of our knowledge, no event has occurred (including,
without limitation, the receipt of any notice from the Mississippi
Commission) that allows, or after notice or lapse of time, or both, would
allow revocation, modification, suspension or termination of any such
Mississippi Gaming License or would result in any other material
impairment of the rights of the holder of any such Mississippi Gaming
License that, singly or in the aggregate, would result in a material
adverse effect on the Company; and
(viii) To the best of our knowledge, the Mississippi Commission is not
considering limiting, suspending or revoking any such Mississippi Gaming
License and is not investigating the Company or any of the Subsidiaries,
other than ordinary administrative reviews.
B-1
EXHIBIT C
FORM OF OPINION OF PHELPS DUNBAR LLP: LOUISIANA
(i) LCCI has been duly incorporated, and is validly existing as a
corporation in good standing under the laws of Louisiana;
(ii) The statements in the Relevant Portions of the Prospectus to
the extent such sections deal with Louisiana gaming regulatory matters are
accurate in all material respects;
(iii) LCCI possesses the license issued by the Louisiana Gaming
Control Board necessary to operate the Casino Rouge, Baton Rouge,
Louisiana conducting gaming activities as described in LSA-R.S. 27:65 et
seq. (the "Louisiana Gaming License");
(iv) The Louisiana Gaming License is in full force and effect;
(v) To the best of our knowledge, LCCI is in compliance with the
terms and conditions of the Louisiana Gaming License, except where the
failure to comply would not, singly or in the aggregate, have a material
adverse effect on LCCI or the Company;
(vi) To the best of our knowledge, no event has occurred (including,
without limitation, the receipt of any notice from any regulatory entity)
that allows, or after notice or lapse of time, or both, or would allow
revocation, modification, suspension or termination of the Louisiana
Gaming License or would result in any other material impairment of the
rights of the holder of the Louisiana Gaming License that, singly or in
the aggregate, would result in a material adverse effect on the Company or
LCCI; and
(vii) To the best of our knowledge, the Louisiana Gaming Control
Board is not considering limiting, suspending or revoking the Louisiana
Gaming License nor investigating the Company or LCCI, other than ordinary
routine administrative investigations and reviews which singly or in the
aggregate, would result in a material adverse effect on the Company or
LCCI or any ordinary review of the transactions contemplated in the
Prospectus.
C-1
EXHIBIT D
FORM OF OPINION OF BOWLES RICE MCDAVID GRAFFE & LOVE PLLC:
WEST VIRGINIA
(i) Penn-WV has been duly incorporated and is validly existing as a
corporation in good standing under the laws of West Virginia, and has all
corporate power and authority necessary to own or hold its properties in
West Virginia and conduct the businesses in which it is engaged in West
Virginia;
(ii) Each of Charles Town and Charles Town Food & Beverage has been
duly formed and is validly existing as a limited liability company under
the laws of West Virginia, and has all limited liability company power and
authority necessary to own or hold its properties in West Virginia and
conduct the businesses in which it is engaged in West Virginia;
(iii) The statements in the Prospectus Supplement dated February 21,
2002 under the caption "Risk Factors", to the extent such section deals
with West Virginia regulatory matters, and insofar as such statements as a
whole constitute a summary of the legal matters, documents and proceedings
referred to therein, fairly present in all material respects such legal
matters, documents and proceedings;
(iv) Each of Charles Town and Charles Town Food & Beverage
possesses, has obtained and caused to be issued to it all West Virginia
Government Licenses and has made all required filings with West Virginia
regulatory bodies necessary to own, lease and operate its properties in
West Virginia and to conduct the businesses now operated in the State of
West Virginia and all such West Virginia Governmental Licenses are in full
force and effect;
(v) To the knowledge of such counsel, upon reasonable inquiry,
Charles Town and Charles Town Food & Beverage are in compliance with the
terms and conditions of all required West Virginia Governmental Licenses,
except where the failure to comply could not, singly or in the aggregate,
have a Material Adverse Effect on Charles Town or Charles Town Food &
Beverage;
(vi) To the knowledge of such counsel, upon reasonable inquiry, no
event has occurred (including, without limitation, the receipt of any
notice from any West Virginia regulatory body) which allows, or after
notice or lapse of time, or both, would allow revocation, modification,
suspension or termination of any West Virginia Governmental License or
would result in any other material impairment of the rights of the holder
of any such West Virginia Governmental License which, singly or in the
aggre-
D-1
gate, would result in a Material Adverse Effect on Charles Town and
Charles Town Food & Beverage; and
(vii) To the knowledge of such counsel, upon reasonable inquiry, no
regulatory body is considering limiting, suspending or revoking any West
Virginia Government License or is investigating the Company or any of
Penn-WV, Charles Town and/or Charles Town Food & Beverage, other than
ordinary administrative reviews or any ordinary review of the transactions
contemplated hereby.
D-2
EXHIBIT E
FORM OF OPINION OF RIKER, DANZIG, SCHERER, HYLAND & PERRETTI LLP:
NEW JERSEY
(i) Each of GS Park Services, L.P., FR Park Services, L.P., GS Park
Racing, L.P. and FR Park Racing, L.P. (the "Limited Partnerships") is a
limited partnership, and is in good standing as a limited partnership
under the laws of the State of New Jersey. The foregoing is based solely
on the certificates of the New Jersey Department of the Treasury, Division
of Commercial Recording annexed hereto as Schedule I and is as of the
dates set forth in such certificates.
(ii) On January 19, 1999, we filed a petition before the Racing
Commission for approval of the Company's acquisition of an interest in
Freehold Raceway and the lease of Garden State Park pursuant to the Joint
Venture Agreement dated October 30, 1998, (the "Joint Venture Agreement"),
as amended by the First Amendment to the Joint Venture Agreement dated
January 28, 1999, by, between and among the Company and Greenwood New
Jersey, Inc., a New Jersey corporation, and its assignees FR Park Racing,
L.P., GS Park Racing, L.P.; FR Park Services, L.P.; and GS Park Services,
L.P.; each a New Jersey limited partnership. By Order dated May 20, 1999,
the Racing Commission approved (the "Approval"): (a) the acquisition by
the Company of 50% of the shares of Pennwood Racing, Inc. ("Pennwood"),
the .1% general partner of permitholder GS Park Racing, L.P. (thoroughbred
and harness permits) and permitholder FR Park Racing, L.P. (two harness
permits); and the .1% general partner of GS Park Services, L.P. and FR
Park Services, L.P.; and (b) the Company's acquisition of a 49.95% limited
partnership in the Limited Partnerships.
(iii) The Approval obtained by the Company is subject to five (5)
conditions, one of which incorporates any and all previously imposed
conditions upon the Limited Partnerships, their affiliates or related
persons, which include eight (8) conditions of the previous Commission
Order dated December 17, 1998 and superseded by the Commission Order dated
March 19, 1999. The Racing Commission later removed certain conditions
imposed on the Limited Partnerships by order dated May 11, 2000. The
Orders of the Racing Commission are set forth on Schedule II and attached
hereto. Based solely upon confirmation by Michael Vukcevich of the Racing
Commission and no further investigation, the Approval is in full force and
effect and has not been adversely modified or amended by the Racing
Commission as of the date hereof nor has the Approval been appealed to the
New Jersey Appellate Division. Garden State Park was sold in 2001 and
racing operations ceased on May 29, 2001. In sole reliance upon
conversations with Michael Vukcevich, and to the best of our actual
knowledge, FR Park Racing, L.P. has not failed to make all of the
requisite filings and secure approv-
E-1
als of the New Jersey regulatory entities necessary to maintain race track
operations at Freehold Raceway. In sole reliance upon conversations with
Michael Vukcevich, and to the best of our actual knowledge, GR Park
Racing, L.P. has not failed to make all of the requisite filings and
secure approvals of the New Jersey regulatory entities necessary to
maintain race track operations at Garden State Park prior to the cessation
of race track operations on May 29, 2001.
(iv) The Approval obtained by the Company indicates that the Racing
Commission conducted an investigation into the qualifications of the
Company and its affiliates. The Racing Commission was advised on March 12,
1999 that upon completion of the proposed acquisition by the Company of an
interest in the four limited partnerships, the Company would transfer its
interest to its holding company, Penn National Holding, Inc., which would
own 50 percent of the interest in Pennwood. The Racing Commission was
advised that Penn National Holding, Inc. is a Delaware holding company
that is wholly owned by the Company. In addition, the Racing Commission
was advised that the Company would form a Delaware "C" corporation known
as Penn National GSFR, Inc. to maintain the 49.95 percent limited
partnership interest in FR Park Racing, L.P. and GS Park Racing, L.P. The
Racing Commission was advised that this new corporation would be wholly
owned by Penn National Holding, Inc. The Racing Commission was also
apprised that the Company's 49.95 percent interest in the service
companies, FR Park Services, L.P. and GS Park Services, L.P., would be
held by Pennsylvania National Turf Club, Inc., a Pennsylvania corporation
wholly owned by the Company. A copy of our March 12, 1999 letter to the
Racing Commission is set forth as Schedule III and attached hereto.
(v) On August 30, 1999, the Company filed an application as a
holding company affiliated with GS Park Racing, L.P. and FR Park Racing,
L.P. in connection with a non-gaming casino service industry license with
the New Jersey Casino Control Commission in order to conduct simulcasting
into the New Jersey casinos. That application is pending before the Casino
Control Commission. In the interim, Freehold Raceway and Garden State Park
were authorized to conduct simulcasting into the New Jersey casinos
pursuant to an order of the Casino Control Commission issued on December
16, 1998. The Order of the Casino Control Commission is set forth on
Schedule IV and attached hereto. Simulcasting at Garden State Park ceased
on May 29, 2001.
(vi) In sole reliance upon conversations with Michael Vukcevich, and
to the best of our actual knowledge, the Company is in compliance with the
terms and conditions of the Approval referred to in paragraph (ii) above,
except where the failure to comply would not, singly or in the aggregate,
have a material adverse effect on the Company.
E-2
(vii) In sole reliance upon conversations with Michael Vukcevich, and
to the best of our actual knowledge, and, except as set forth in Paragraph
7 below, no event has occurred (including, without limitation, the receipt
of any notice from any regulatory entity) which allows, or after notice or
lapse of time, or both, would allow revocation, modification, suspension
or termination of the Approval referred to in paragraph (ii) above or
would result in any other material impairment of the rights of the holder
of the Approval referred to in paragraph (ii) above which, singly or in
the aggregate, would result in a material adverse effect on the Company.
(viii) Except as set forth herein, in sole reliance upon conversations
with Michael Vukcevich, and to the best of our actual knowledge, no
regulatory entity in the State of New Jersey is considering, as of the
date of this letter, limiting, suspending or revoking the Approval
referred to in paragraph (ii) above. We have been advised by the Racing
Commission that it recently has conducted an investigation of the
phone/internet wagering account practices of one of the Company's
affiliates, eBetUSA.com, Inc. ("eBet"). The investigators allege that eBet
does not act with due diligence in verifying all account information given
them by prospective customers. eBet has been fully cooperative and is in
the process of resolving this matter with the Racing Commission.
E-3
EXHIBIT F
FORM OF OPINION OF BLAKE, CASSELS & GRAYDON LLP: CANADA
(i) No consents or approvals are required and no authorizations or
approvals of, and no filings with, any Canadian governmental or regulatory
authority or agency or other similar entity having jurisdiction are
necessary for the issuance and sale of the Notes by the Corporation; and
(ii) The issuance and sale of Notes by the Corporation will not
result in the revocation or suspension of CHC Casinos' registration with
the Alcohol and Gaming Commission of Ontario under the GAMING CONTROL ACT.
F-1
EXHIBIT G
FORM OF OPINION OF SCHNADER HARRISON SEGAL & LEWIS LLP:
PENNSLYVANIA
(i) Mountainview Thoroughbred Racing Association and Pennsylvania
National Turf Club, Inc. each holds a valid and existing license under the
Act to conduct thoroughbred horse racing with pari-mutuel wagering at Penn
National Race Track (the "Penn National Licenses") and The Downs Racing,
Inc. holds a valid and existing license under the Act to conduct harness
racing with pari-mutuel wagering at Pocono Downs Race Track (the "Pocono
Downs License"). To our knowledge, neither of the Commissions is
considering modifying, suspending, revoking or not granting renewal of any
of the Penn National Licenses or the Pocono Downs License, and to our
knowledge, neither of the Commissions nor any other governmental agency is
investigating PNGI or any of the Subsidiaries or related parties or any
director or executive officer of PNGI or any of the Subsidiaries with
respect to their Pennsylvania Racing Activities, other than taking
ordinary course administrative actions; and to our knowledge, no change in
any Pennsylvania laws or regulations has been introduced and is pending
which if adopted, could reasonably be expected to materially limit the
Pennsylvania Racing Activities currently conducted by the Subsidiaries, or
which, individually or in the aggregate with all such changes, would have
a material adverse effect on PNGI and the Subsidiaries taken as a whole.
To our knowledge, the Subsidiaries are the only direct or indirect
subsidiaries of PNGI who conduct Racing Activities in or from the
Commonwealth of Pennsylvania and over whom the Commissions have regulatory
jurisdiction.
(ii) The Horse Racing Commission approved six non-primary locations
in the Commonwealth of Pennsylvania at which PNGI (or a Subsidiary
thereof) is authorized to conduct pari-mutuel wagering. The Harness
Commission approved five non-primary locations in the Commonwealth of
Pennsylvania at which The Downs Racing, Inc. (or a Subsidiary thereof) is
authorized to conduct pari-mutuel wagering. To our knowledge (i) such
approvals are in full force and effect, and (ii) no action has been taken
or threatened in writing by the Horse Racing Commission or the Harness
Commission to modify, revoke or suspend any of the Penn National Licenses
or the Pocono Downs License, or to disallow PNGI or a Subsidiary which is
a licensed corporation from continuing to operate their respective race
tracks and non-primary locations substantially in the manner as they have
been operated during the past two years (or during such shorter period as
they have actually been operated).
(iii) No order, consent, approval, license, authorization, or
validation of, or prefiling, recording, or registration with, or exemption
by, the Horse Racing Commission or the Harness Commission ("Commission
Action") is required pursuant to the
G-1
Act or the Regulations to authorize, or is required in connection with the
execution, delivery, and performance of the Purchase Agreement Documents
by PNGI. The legality, validity and binding effect of the Purchase
Agreement Documents does not depend upon any further Commission Action.
The Commissions have requested that a copy of the Purchase Agreement be
filed with the Commissions after the Closing.
(iv) Neither the execution, delivery, nor performance by PNGI or any
of the Subsidiaries of any of the Purchase Agreement Documents to which it
is a party, nor compliance by it with the terms and provisions thereof
will contravene any provision of the Act, the Regulations or of any of the
Penn National Licenses or the Pocono Downs License. Ownership of the
capital stock of the entities holding the Penn National Licenses or the
Pocono Downs License does not violate Section 205 of the Act.
(v) The Underwriters are not required to be licensed or approved by
the Harness Commission or the Horse Racing Commission as a result of the
execution and performance of the Purchase Agreement.
(vi) To our knowledge, neither PNGI nor any of its Subsidiaries is
in material breach of the Act or the Regulations.
G-2
EXHIBIT 4.3
================================================================================
8 7/8% SENIOR SUBORDINATED NOTES DUE 2010
-----------------------------
INDENTURE
DATED AS OF FEBRUARY 28, 2002
-----------------------------
PENN NATIONAL GAMING, INC.,
EACH OF THE GUARANTORS NAMED HEREIN
AND
STATE STREET BANK AND TRUST COMPANY,
AS 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
(b)....................................................... 7.10
(c)....................................................... N.A.
311 (a)....................................................... 7.11
(b)....................................................... 7.11
(c)....................................................... N.A.
312 (a)....................................................... 2.05
(b)....................................................... 12.03
(c)....................................................... 12.03
313 (a)....................................................... 7.06
(b)(1).................................................... 10.02
(b)(2).................................................... 7.07
(c)....................................................... 7.06;12.02
(d)....................................................... 7.06
314 (a)....................................................... 4.03;12.02
(c)(1).................................................... 12.04
(c)(2).................................................... 12.04
(c)(3).................................................... N.A.
(e)....................................................... 12.05
(f)....................................................... N.A.
315 (a)....................................................... 7.01
(b)....................................................... 7.05,12.02
(c)....................................................... 7.01
(d)....................................................... 7.01
(e)....................................................... 6.11
316 (a) (last sentence)....................................... 2.09
(a)(1)(A)................................................. 6.05
(a)(1)(B)................................................. 6.04
(a)(2).................................................... N.A.
(b)....................................................... 6.07
(c)....................................................... 2.12
317 (a)(1).................................................... 6.08
(a)(2).................................................... 6.09
(b)....................................................... 2.04
318 (a)....................................................... 12.01
(b)....................................................... N.A.
(c)....................................................... 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
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ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.............................................................................1
SECTION 1.02. Other Definitions......................................................................18
SECTION 1.03. Incorporation by Reference of Trust Indenture Act......................................19
SECTION 1.04. Rules of Construction..................................................................19
ARTICLE II.
THE NOTES
SECTION 2.01. Form and Dating........................................................................20
SECTION 2.02. Execution and Authentication...........................................................20
SECTION 2.03. Registrar and Paying Agent.............................................................21
SECTION 2.04. Paying Agent to Hold Money in Trust....................................................21
SECTION 2.05. Holder Lists...........................................................................22
SECTION 2.06. Transfer and Exchange..................................................................22
SECTION 2.07. Replacement Notes......................................................................34
SECTION 2.08. Outstanding Notes......................................................................35
SECTION 2.09. Treasury Notes.........................................................................35
SECTION 2.10. Temporary Notes........................................................................35
SECTION 2.11. Cancellation...........................................................................36
SECTION 2.12. Defaulted Interest.....................................................................36
SECTION 2.13. Issuance of Additional Notes...........................................................36
SECTION 2.14. Designation............................................................................37
ARTICLE III.
REDEMPTION AND PREPAYMENT
SECTION 3.01. Notices to Trustee.....................................................................37
SECTION 3.02. Selection of Notes to Be Redeemed......................................................37
SECTION 3.03. Notice of Redemption...................................................................38
SECTION 3.04. Effect of Notice of Redemption.........................................................38
SECTION 3.05. Deposit of Redemption Price............................................................39
SECTION 3.06. Notes Redeemed in Part.................................................................39
SECTION 3.07. Optional Redemption....................................................................39
SECTION 3.08. Mandatory Redemption...................................................................40
SECTION 3.09. Offer to Purchase by Application of Excess Proceeds....................................40
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ARTICLE IV.
COVENANTS
SECTION 4.01. Payment of Notes.......................................................................42
SECTION 4.02. Maintenance of Office or Agency........................................................42
SECTION 4.03. Reports................................................................................43
SECTION 4.04. Compliance Certificate.................................................................44
SECTION 4.05. Taxes..................................................................................45
SECTION 4.06. Stay, Extension and Usury Laws.........................................................45
SECTION 4.07. Restricted Payments....................................................................45
SECTION 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.........................47
SECTION 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.............................48
SECTION 4.10. Asset Sales............................................................................51
SECTION 4.11. Transactions with Affiliates...........................................................53
SECTION 4.12. Liens..................................................................................54
SECTION 4.13. Corporate Existence....................................................................54
SECTION 4.14. Offer to Repurchase Upon Change of Control.............................................54
SECTION 4.15. No Senior Subordinated Debt............................................................55
SECTION 4.16. Payments for Consent...................................................................56
SECTION 4.17. Additional Subsidiary Guarantees.......................................................56
SECTION 4.18. Designation of Restricted and Unrestricted Subsidiaries................................56
SECTION 4.19. Business Activities....................................................................56
SECTION 4.20. Payment of Additional Interest.........................................................56
ARTICLE V.
SUCCESSORS
SECTION 5.01. Merger, Consolidation, or Sale of Assets...............................................57
SECTION 5.02. Successor Corporation Substituted......................................................58
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default......................................................................58
SECTION 6.02. Acceleration...........................................................................59
SECTION 6.03. Other Remedies.........................................................................60
SECTION 6.04. Waiver of Past Defaults................................................................61
SECTION 6.05. Control by Majority....................................................................61
SECTION 6.06. Limitation on Suits....................................................................61
SECTION 6.07. Rights of Holders of Notes to Receive Payment..........................................62
SECTION 6.08. Collection Suit by Trustee.............................................................62
SECTION 6.09. Trustee May File Proofs of Claim.......................................................62
SECTION 6.10. Priorities.............................................................................62
SECTION 6.11. Undertaking for Costs..................................................................63
-ii-
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ARTICLE VII.
TRUSTEE
SECTION 7.01. Duties of Trustee......................................................................63
SECTION 7.02. Rights of Trustee......................................................................64
SECTION 7.03. Individual Rights of Trustee...........................................................65
SECTION 7.04. Trustee's Disclaimer...................................................................65
SECTION 7.05. Notice of Defaults.....................................................................65
SECTION 7.06. Reports by Trustee to Holders of the Notes.............................................65
SECTION 7.07. Compensation and Indemnity.............................................................66
SECTION 7.08. Replacement of Trustee.................................................................67
SECTION 7.09. Successor Trustee by Merger, etc.......................................................68
SECTION 7.10. Eligibility; Disqualification..........................................................68
SECTION 7.11. Preferential Collection of Claims Against Company......................................68
ARTICLE VIII.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance...............................68
SECTION 8.02. Legal Defeasance and Discharge.........................................................68
SECTION 8.03. Covenant Defeasance....................................................................69
SECTION 8.04. Conditions to Legal or Covenant Defeasance.............................................69
SECTION 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.......................................................71
SECTION 8.06. Repayment to Company...................................................................71
SECTION 8.07. Reinstatement..........................................................................71
ARTICLE IX.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. Without Consent of Holders of Notes....................................................72
SECTION 9.02. With Consent of Holders of Notes.......................................................73
SECTION 9.03. Compliance with Trust Indenture Act....................................................74
SECTION 9.04. Revocation and Effect of Consents......................................................74
SECTION 9.05. Notation on or Exchange of Notes.......................................................75
SECTION 9.06. Trustee to Sign Amendments, etc........................................................75
ARTICLE X.
SUBORDINATION
SECTION 10.01. Agreement to Subordinate...............................................................75
SECTION 10.02. Liquidation; Dissolution; Bankruptcy...................................................75
SECTION 10.03. Default on Designated Senior Debt......................................................76
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SECTION 10.04. Acceleration of Securities.............................................................77
SECTION 10.05. When Distribution Must Be Paid Over....................................................77
SECTION 10.06. Notice by Company......................................................................77
SECTION 10.07. Subrogation............................................................................77
SECTION 10.08. Relative Rights........................................................................78
SECTION 10.09. Subordination May Not Be Impaired by Company...........................................78
SECTION 10.10. Distribution or Notice to Representative...............................................78
SECTION 10.11. Rights of Trustee and Paying Agent.....................................................78
SECTION 10.12. Authorization to Effect Subordination..................................................79
SECTION 10.13. Amendments.............................................................................79
ARTICLE XI.
SUBSIDIARY GUARANTEES
SECTION 11.01. Guarantee..............................................................................79
SECTION 11.02. Subordination of Subsidiary Guarantee..................................................80
SECTION 11.03. Limitation on Guarantor Liability......................................................80
SECTION 11.04. Execution and Delivery of Subsidiary Guarantee.........................................81
SECTION 11.05. Guarantors May Consolidate, etc., on Certain Terms.....................................81
SECTION 11.06. Releases Following Sale................................................................82
ARTICLE XII.
SATISFACTION AND DISCHARGE
SECTION 12.01. Satisfaction and Discharge.............................................................83
SECTION 12.02. Application of Trust Money.............................................................84
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls...........................................................84
SECTION 13.02. Notices................................................................................84
SECTION 13.03. Communication by Holders of Notes with Other Holders of Notes..........................85
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.....................................86
SECTION 13.05. Statements Required in Certificate or Opinion..........................................86
SECTION 13.06. Rules by Trustee and Agents............................................................86
SECTION 13.07. No Personal Liability of Directors, Officers, Employees and Stockholders...............86
SECTION 13.08. Governing Law..........................................................................87
SECTION 13.09. No Adverse Interpretation of Other Agreements..........................................87
SECTION 13.10. Successors.............................................................................87
SECTION 13.11. Severability...........................................................................87
SECTION 13.12. Counterpart Originals..................................................................87
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SECTION 13.13. Table of Contents, Headings, etc.......................................................87
EXHIBITS
Exhibit A FORM OF 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 SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
-v-
INDENTURE dated as of February 28, 2002 between PENN NATIONAL GAMING,
INC., a Pennsylvania corporation (the "COMPANY"), each of the Guarantors named
herein and STATE STREET BANK AND TRUST COMPANY, as trustee (the "TRUSTEE").
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of $175,000,000 aggregate principal amount
of the Company's 8 7/8% Senior Subordinated Notes due 2010 in the form of
Initial Notes (as defined below), and, if and when issued, such Additional Notes
(as defined below) that the Company may from time to time choose to issue
pursuant to this Indenture, in each case issuable as provided in this Indenture.
References herein to the "Notes" shall include the Initial Notes and the
Additional Notes. All things necessary to make this Indenture a valid and
legally binding agreement of the Company, in accordance with its terms, have
been done, and the Company has done all things necessary to make the Notes, when
executed by the Company, and authenticated and delivered by the Trustee
hereunder and duly issued by the Company, valid and legally binding obligations
of the Company.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A GLOBAL NOTE" means a global note substantially in the form of
EXHIBIT A 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 Additional Notes, if any, sold in reliance on
Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person (1)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and (2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"ADDITIONAL NOTES" means, subject to the Company's compliance with
Sections 2.13 and 4.09, 8 7/8% Senior Subordinated Notes due 2010 substantially
in the form of EXHIBIT A and, if required, containing the Private Placement
Legend, issued from time to time after the Issue Date under the terms of this
Indenture (other than issuances pursuant to Section 2.06, 2.07, 2.10, 3.06, 4.14
or 9.05 of this Indenture) and any Exchange Notes issued in respect thereof.
"AFFILIATE" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of
voting securities, by agreement or otherwise; PROVIDED that beneficial
ownership of 10% or more of the Voting Stock of a Person will be deemed to be
control. For purposes of this definition, the terms "controlling,"
"controlled by" and "under common control with" have correlative meanings.
-2-
"AGENT" means any Registrar, Paying Agent or co-registrar.
"APPLICABLE PROCEDURES" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"BOARD OF DIRECTORS" means (1) with respect to a corporation, the board
of directors of the corporation; (2) with respect to a partnership, the Board of
Directors of the general partner of the partnership; and (3) with respect to any
other Person, the board or committee of such Person serving a similar function.
"BROKER-DEALER" has the meaning set forth in any Registration Rights
Agreement.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"CAPITAL STOCK" means (1) in the case of a corporation, corporate
stock; (2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and (4) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"CASH EQUIVALENTS" means (1) United States dollars; (2) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States government
(PROVIDED that the full faith and credit of the United States is pledged in
support of those securities) having maturities of not more than six months from
the date of acquisition; (3) 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 lender party to the Senior Credit Facilities or
with any domestic commercial bank having capital and surplus in excess of $500
million and a Thomson Bank Watch Rating of "B" or better; (4) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (2) and (3) above entered into with any financial
institution meeting
-3-
the qualifications specified in clause (3) above; (5) commercial paper having
the highest rating obtainable from Moody's Investors Service, Inc. or Standard &
Poor's Rating Services and in each case maturing within six months after the
date of acquisition; and (6) money market funds substantially all of the assets
of which constitute Cash Equivalents of the kinds described in clauses (1)
through (5) of this definition.
"CHANGE OF CONTROL" means the occurrence of any of the following (1)
the direct or indirect sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Company and its Restricted Subsidiaries taken as a whole to any "person" (as
that term is used in Section 13(d)(3) of the Exchange Act) other than a
Principal or a Related Party of a Principal; (2) the adoption by shareholders of
a plan relating to the liquidation or dissolution of the Company; (3) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined below),
other than the Principals and their Related Parties, becomes the Beneficial
Owner, directly or indirectly, of more than 50% of the Voting Stock of the
Company, measured by voting power rather than number of shares; (4) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that the Principals and their Related
Parties (or any one of them) becomes the Beneficial Owner, directly or
indirectly, of more than 66 2/3% of the Voting Stock of the Company, measured by
voting power rather than number of shares; or (5) the first day on which a
majority of the members of the Board of Directors of the Company are not
Continuing Directors.
"CLEARSTREAM" means Clearstream Banking.
"COMPANY" means Penn National Gaming, Inc., and any and all successors
thereto.
"COMPANY ORDER" means a written request or order signed in the name of
the Company by officers who sign an Officers' Certificate.
"CONSOLIDATED CASH FLOW" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period PLUS:
(1) an amount equal to any extraordinary loss plus any net loss realized by such
Person or any of its Restricted Subsidiaries in connection with an Asset Sale,
to the extent such losses were deducted in computing such Consolidated Net
Income; PLUS (2) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income; PLUS
(3) consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued and whether or not capitalized
(including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received pursuant to
Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; PLUS (4) depreciation, amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash expenses (excluding any such non-cash
-4-
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income; MINUS (5)
non-cash items increasing such Consolidated Net Income for such period, other
than the accrual of revenue in the ordinary course of business, in each case, on
a consolidated basis and determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; PROVIDED that: (1) the Net Income (but not loss) 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 or distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person; (2) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, other than limitations imposed by
Gaming Laws generally applicable to all Persons operating business similar to
that of such Restricted Subsidiary; and (3) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded; and (4) the cumulative effect of a change
in accounting principles shall be excluded; and (5) the Net Income (and loss) of
any Unrestricted Subsidiary shall be excluded, whether or not distributed to the
specified Person or one of its Subsidiaries.
For purposes of calculating Consolidated Net Income, any non-recurring
charges or expenses of an acquired company or business incurred in connection
with the purchase or acquisition of such acquired company or business by such
Person shall be added to the Net Income of such Person, to the extent any such
charges or expenses were deducted in computing such Net Income of such Person.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who: (1) was a member of such
Board of Directors on the date of this Indenture; or (2) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"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 Company.
"CREDIT FACILITIES" means one or more debt facilities or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as
-5-
amended, restated, modified, renewed, refunded, replaced, restructured or
refinanced in whole or in part from time to time.
"CUSTODIAN" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"DEFAULT" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of EXHIBIT A 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.
"DESIGNATED SENIOR DEBT" means (1) any Indebtedness outstanding under
the Senior Credit Facilities; and (2) after payment in full of all Obligations
under the Senior Credit Facilities, any other Senior Debt permitted under this
Indenture the principal amount of which is $25 million or more and that has been
designated by the Company as "DESIGNATED SENIOR DEBT."
"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, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase 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 the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof.
"DOMESTIC SUBSIDIARY" means any Restricted Subsidiary of the Company
that was formed under the laws of the United States or any state of the United
States or the District of Columbia or that guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.
"DTC" means The Depositary Trust Company in New York, New York.
"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).
-6-
"EQUITY OFFERING" means an offering of the Equity Interests (other than
Disqualified Stock) of the Company that results in net proceeds to the Company
of at least $25 million.
"EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"EVENT OF DEFAULT" means an event described under Article VI hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE NOTES" means the Notes issued in the Exchange Offer.
"EXCHANGE OFFER" shall have the meaning set forth in any Registration
Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall have the meaning set
forth in any Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means the existing Guarantees of the Company
with respect to the Indebtedness of Pennwood, the Company's 11 1/8% Senior
Subordinated Notes due 2008 in the aggregate principal amount of $200,000,000
and up to $500,000 in aggregate principal amount of other Indebtedness of the
Company and its Subsidiaries (other than Indebtedness under the Senior Credit
Facilities) in existence on the date of this Indenture, until such amounts are
repaid.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any specified
Person and its Restricted Subsidiaries for any period, the ratio of the
Consolidated Cash Flow of such Person and its Restricted Subsidiaries for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"CALCULATION DATE"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio: (1) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to
the Calculation Date shall be given pro forma effect as if they had occurred
on the first day of the four-quarter reference period and Consolidated Cash
Flow for such reference period shall be calculated on a pro forma basis in
accordance with Regulation S-X under the Securities Act, but without giving
effect to clause (3) of the proviso set forth in the definition of
Consolidated Net Income; (2) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation Date, shall be
excluded; and (3) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, shall be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges shall not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
-7-
"FIXED CHARGES" means, with respect to any specified Person and its
Restricted Subsidiaries for any period, the sum, without duplication, of (1) the
consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued, including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations; PLUS
(2) the consolidated interest of such Person and its Restricted Subsidiaries
that was capitalized during such period; PLUS (3) any interest expense on
Indebtedness of another Person that is Guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is called
upon (provided that interest expense on the Pennwood Debt shall not be counted
pursuant to this clause (3) except to the extent that the Company or any of its
Restricted Subsidiaries actually makes payments on such Pennwood Debt); PLUS (4)
the product of (a) all dividends, whether paid or accrued and whether or not in
cash, on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely in Equity
Interests of the Company (other than Disqualified Stock) or to the Company or a
Restricted Subsidiary of the Company, times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Company that (1) is
not organized under the laws of the United States, any state thereof or the
District of Columbia, and (2) conducts substantially all of its business
operations outside the United States of America.
"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 date of this Indenture.
"GAMING APPROVAL" means any governmental approval relating to any
gaming business (including pari-mutuel betting) or enterprise.
"GAMING AUTHORITY" means any governmental authority with regulatory
oversight of, authority to regulate or jurisdiction over any gaming
businesses or enterprises, including the Mississippi Gaming Commission, the
Pennsylvania State Horse Racing Commission, the Pennsylvania State Harness
Racing Commission, the West Virginia Racing Commission, the West Virginia
Lottery Commission, the New Jersey Racing Commission, the New Jersey Casino
Control Commission, the Louisiana Gaming Control Board, the Ontario Lottery
and Gaming Corporation and the Ontario Alcohol and Gaming Commission, with
regulatory oversight of, authority to regulate or jurisdiction over any
racing or gaming operation (or proposed gaming operation) owned, managed or
operated by the Company or any Guarantor.
-8-
"GAMING LAWS" means all applicable provisions of all: (1)
constitutions, treaties, statutes or laws governing gaming operations (including
without limitation card club casinos and pari mutuel race tracks) and rules,
regulations and ordinances of any Gaming Authority, (2) Gaming Approvals and (3)
orders, decisions, judgments, awards and decrees of any Gaming Authority.
"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, substantially in the
form of EXHIBIT A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"GUARANTEE" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"GUARANTOR" means each of (1) all Subsidiaries of the Company on the
date of this Indenture; and (2) any other Subsidiary that executes a Subsidiary
Guarantee in accordance with the provisions of this Indenture; and their
respective successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any specified Person, the
obligations of such Person under (1) interest rate swap agreements, currency
swap agreements, interest rate cap agreements and interest rate collar
agreements; and (2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.
"HOLDER" means a Person in whose name a Note is registered.
"IAI GLOBAL NOTE" means the global Note substantially in the form of
EXHIBIT A 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 shall be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent (1) in respect of
borrowed money; (2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof); (3) in respect of banker's acceptances; (4) representing Capital
Lease Obligations; (5) representing the balance deferred and unpaid of the
purchase price of any property, except any such balance that constitutes an
accrued expense or trade payable; or (6) representing any Hedging
Obligations, if and to the extent any of the preceding items (other than
letters of credit and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "INDEBTEDNESS" includes all Indebtedness of others secured
by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person) and, to the extent not
otherwise included, the Guarantee by the specified Person of any indebtedness
of any other Person.
-9-
The amount of any Indebtedness outstanding as of any date shall be (1)
the accreted value of the Indebtedness, in the case of any Indebtedness issued
with original issue discount; and (2) the principal amount of the Indebtedness,
together with any interest on the Indebtedness 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.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"INITIAL NOTES" means $175,000,000 aggregate principal amount of 8 7/8%
Senior Subordinated Notes due 2010 issued on the Issue Date, substantially in
the form of EXHIBIT A.
"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.
"INTEREST PAYMENT DATE" has the meaning set forth in paragraph 1 of
EXHIBIT A.
"INVESTMENTS" means with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and 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, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company 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 Restricted Subsidiary not sold
or disposed of in an amount determined as provided in the final paragraph of
Section 4.07 hereof. The acquisition by the Company or any Restricted Subsidiary
of the Company of a Person that holds an Investment in a third Person shall be
deemed to be an Investment by the Company or such Restricted Subsidiary in such
third Person in an amount equal to the fair market value of the Investment held
by the acquired Person in such third Person in an amount determined as provided
in the final paragraph of Section 4.07 hereof.
"ISSUE DATE" means February 28, 2002.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is
a Legal Holiday at a place of payment, payment may be made at that place on
the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.
-10-
"LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Additional Notes for use by such
Holders in connection with an 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 liquidated damages payable to Holders of
Additional Notes following the occurrence of a Registration Default on the
principal amount of Transfer Restricted Securities held by such Holders, as
described under any Registration Rights Agreement.
"MISSISSIPPI REVENUE BONDS" means the Mississippi Business Finance
Corporation Industrial Revenue Bonds, Series 2001 (Bay St. Louis Project),
issued pursuant to the Trust Indenture dated February 20, 2001 between the
Mississippi Business Finance Corporation and The Peoples Bank, Biloxi,
Mississippi, as Trustee.
"NET INCOME" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (1) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with: (a) any Asset Sale; or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and (2) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company 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 and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness, other than
Indebtedness pursuant to the Senior Credit Facilities, secured by a Lien on the
asset or assets that were the subject of such Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
-11-
"NON-RECOURSE DEBT" means Indebtedness (1) as to which neither the
Company nor any of its 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; (2) no default with respect to which
(including any rights that the holders of the Indebtedness 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) of the Company or any of its Restricted Subsidiaries to declare a default
on such other Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its stated maturity; and (3) as to which the
lenders have been notified in writing that they shall not have any recourse to
the stock or assets of the Company or any of its Restricted Subsidiaries.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"NOTES" has the meaning assigned to it in the preamble to this
Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities and obligations
payable under the documentation governing any Indebtedness, including, without
limitation, interest after the commencement of any bankruptcy proceeding at the
rate specified in the applicable instrument governing or evidencing Senior Debt.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.
"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 Company or any
Subsidiary of the Company.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"PENNWOOD" collectively, means Pennwood Racing, Inc., a Delaware
corporation, and its subsidiaries, including, without limitation, GS Park
Services, L.P., FR Park Services, L.P., GS Park Racing, L.P. and FR Park Racing,
L.P.
"PENNWOOD DEBT" means the existing Indebtedness of Pennwood Racing,
Inc. pursuant to that certain Term Loan and Security Agreement dated July 29,
1999, by and among FR Park Racing, L.P., GS Park Racing, L.P. and Commerce Bank,
N.A., that is guaranteed by the Company.
-12-
"PERMITTED BUSINESS" means any business in which the Company and its
Restricted Subsidiaries are engaged on the date of this Indenture or any
business reasonably related, incidental or ancillary thereto.
"PERMITTED INVESTMENTS" means: (1) any Investment in the Company or in
a Restricted Subsidiary of the Company that is a Guarantor; (2) any Investment
in Cash Equivalents; (3) any Investment by the Company or any Subsidiary of the
Company in a Person, if as a result of such Investment, (a) such Person becomes
a Restricted Subsidiary of the Company and also is a Guarantor, or (b) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or a Restricted Subsidiary of the Company that is a Guarantor; (4) 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;
(5) any Investment solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Company or made with the proceeds of a
substantially concurrent sale of such Equity Interests made for such purpose;
(6) any Investments received in compromise of obligations of such persons
incurred in the ordinary course of trade creditors or customers that were
incurred in the ordinary course of business, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of any
trade creditor or customer; (7) Hedging Obligations; (8) the extension of credit
to customers of the Company or its Restricted Subsidiaries consistent with
gaming industry practice in the ordinary course of business; (9) loans and
advances to officers, directors and employees for business-related travel
expenses, moving or relocation expenses and other similar expenses, in each
case, incurred in the ordinary course of business; (10) loans and advances to
officers, directors and employees other than incurred pursuant to clause (9) of
this definition in an aggregate amount not to exceed $250,000 extended during
any one fiscal year or $1 million outstanding at any time; (11) Guarantees that
constitute Permitted Debt; (12) investments in Pennwood arising from any payment
in respect of the Existing Indebtedness related to Pennwood; (13) Investments of
any Person (other than Indebtedness of such Person) in existence at the time
such Person becomes a Subsidiary of the Company provided such Investment was not
made in connection with or anticipation of such Person becoming a Subsidiary of
the Company; (14) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (14) since the date of this
Indenture that remain outstanding not to exceed $20 million; (15) the Notes and
Indebtedness under the Senior Credit Facilities; and (16) any Investment by the
Company or any Guarantor from time to time in the Mississippi Revenue Bonds in
an aggregate principal amount of up to $30 million, the proceeds of which are
loaned by the Mississippi Business Finance Corporation to BSL, Inc. for the
acquisition, construction, installation and equipping of a hotel and related
facilities adjacent to the Casino Magic Bay St. Louis casino and to pay
customary costs and expenses associated with the issuance of the Mississippi
Revenue Bonds and the construction of such hotel.
"PERMITTED JUNIOR SECURITIES" means (1) Equity Interests in the Company
or any Guarantor; or (2) debt securities of the Company or any Guarantor that
are subordinated to all Senior Debt and any debt securities issued in exchange
for Senior Debt to substantially the same extent as, or to a greater extent
than, the Notes and the Subsidiary Guarantees are subordinated to Senior Debt
under this Indenture.
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"PERMITTED LIENS" means (1) Liens of the Company and any Guarantor
securing Indebtedness and other Obligations under Credit Facilities that were
securing Senior Debt that was permitted by the terms of this Indenture to be
incurred; (2) Liens in favor of the Company or the Guarantors; (3) Liens on
property of a Person existing at the time such Person is merged with or into or
consolidated with the Company or any Subsidiary of the Company or otherwise
becomes a Subsidiary of the Company; PROVIDED that such Liens were not granted
in connection with, or in anticipation of, such merger or consolidation or
acquisition and do not extend to any assets other than those of such Person
merged into or consolidated with the Company or the Subsidiary; (4) Liens on
property existing at the time of acquisition of the property by the Company or
any Subsidiary of the Company; PROVIDED that such Liens were in existence prior
to the contemplation of such acquisition; (5) Liens to secure the performance of
statutory obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business; (6)
Liens to secure Indebtedness (including Capital Lease Obligations) permitted by
clause (iv) of the second paragraph of Section 4.09 hereof covering only the
assets acquired with such Indebtedness; (7) Liens existing on the date of this
Indenture; (8) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded; PROVIDED
that any reserve or other appropriate provision as is required in conformity
with GAAP has been made therefor; (9) judgment Liens not giving rise to an Event
of Default so long as such Lien is adequately bonded and any appropriate legal
proceedings which may have been initiated for the review of such judgment shall
not have been fully terminated or the period within such proceedings may be
initiated shall not have expired; (10) Liens incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, including any Lien
securing letters of credit issued in the ordinary course of business in
connection therewith; (11) Liens incurred in the ordinary course of business of
the Company or any Subsidiary of the Company with respect to obligations that do
not exceed $5 million at any one time outstanding; and (12) Liens on assets of
Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted
Subsidiaries.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company 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 the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); PROVIDED that (1) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount (or accreted value, if applicable) of the
Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus
all accrued interest on the Indebtedness and the amount of all expenses and
premiums incurred in connection therewith); (2) 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; (3) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (4) such Indebtedness is incurred either by the
Company
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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, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"PRINCIPAL PROPERTY" means any and all rights, title and interest in
the property, assets, accounts, and operations of Pocono Downs in Wilkes-Barre,
Pennsylvania, the Charles Town Entertainment Complex in Charles Town, West
Virginia, Casino Magic Bay St. Louis in Bay St. Louis, Mississippi, Boomtown
Biloxi in Biloxi, Mississippi, Penn National Race Course in Harrisburg,
Pennsylvania, and Casino Rouge in Baton Rouge, Louisiana, and the Development
and Operating Agreement among the Ontario Lottery and Gaming Corporation, the
Chippewas of Rama First Nation and certain of their affiliates, and CRC Holdings
Inc. and certain of its affiliates, dated March 18, 1996, as amended on April
15, 1996 and June 12, 2000.
"PRINCIPALS" means Peter D. Carlino, Peter M. Carlino, Richard T.
Carlino, Harold Cramer and The Carlino Family Trust.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(i) to be placed on all Additional Notes issued under this Indenture sold
without registration under the Securities Act, except where otherwise permitted
by the provisions of this Indenture.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the Company or any
of its Restricted Subsidiaries incurred for the purpose of financing all or any
part of the purchase price or cost of installation, construction or improvement
of any property.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"REGISTRATION DEFAULT" means Registration Default as defined in the
Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means a registration rights agreement,
if any, entered into in connection with the issuance of Additional Notes.
"REGULATION S" means Regulation S promulgated under the Securities Act.
"REGULATION S GLOBAL NOTE" means a global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of Additional Notes
initially sold in reliance on Rule 903 of Regulation S.
"RELATED PARTY" means (1) any controlling stockholder, 80% (or more)
owned Subsidiary, or immediate family member (in the case of an individual) of
any Principal; or (2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
-15-
holding an 80% or more controlling interest of which consist of any one or more
Principals and/or such other Persons referred to in the immediately preceding
clause (1).
"REPRESENTATIVE" means this Indenture trustee or other trustee, agent
or representative for any Senior Debt.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
officer within the Corporate Trust Office 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, with respect to any Additional
Notes, a Definitive Note bearing the Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means, with respect to any Additional Notes, a
Global Note bearing the Private Placement Legend. "RESTRICTED NOTES"
means Restricted Definitive Notes and Restricted Global Notes.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of such 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.
"RULE 904" means Rule 904 promulgated under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR CREDIT FACILITIES" means the Credit Agreement dated as of
August 8, 2000 between the Company, as borrower, the several lenders from time
to time party thereto and Lehman Brothers Inc., as Lead Arranger and
Book-Running Manager, CIBC World Markets Corp., as Co-Lead Arranger and Co-Book
Running Manager, Lehman Commercial Paper Inc., as Syndication Agent, Canadian
Imperial Bank of Commerce, as Administrative Agent, and the CIT Group/Equipment
Financing Inc., First Union National Bank and Wells Fargo Bank, N.A., as
Documentation Agents, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, restructured, replaced or
-16-
refinanced from time to time including increases in principal amount (whether
the same are provided by the original agents and lenders under such Senior
Credit Facilities or other agents or other lenders).
"SENIOR DEBT" means, with respect to the Company or any Guarantor, as
applicable: (1) any Indebtedness of the Company or such Guarantor, as the case
may be, under the Credit Facilities or otherwise permitted to be incurred under
the terms of this Indenture unless the instrument under which such Indebtedness
is incurred expressly provides that it shall not be senior in right of payment
to any Indebtedness of the Company or such Guarantor, as the case may be; and
(2) all Obligations with respect to the items listed in the preceding clause
(1). Notwithstanding anything to the contrary in the preceding, Senior Debt will
not include: (1) any liability for federal, state, local or other taxes owed or
owing by the Company; (2) any Indebtedness of the Company to any of its
Subsidiaries or other Affiliates; (3) any trade payables; or (4) the portion of
any Indebtedness that is incurred in violation of this Indenture.
"SENIOR GUARANTEES" means the Guarantees by the Guarantors of
Obligations under the Senior Credit Facilities.
"SHELF REGISTRATION STATEMENT" shall have the meaning set forth in any
Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation S-X is in effect
on the date hereof.
"STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any specified Person, (1) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees of the corporation, association or other business entity is at the time
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and (2) any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or
any combination thereof).
"SUBSIDIARY GUARANTEES" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and on the Notes, executed
pursuant to the provisions of this Indenture.
"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.
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"TRANSFER RESTRICTED SECURITIES" means Transfer Restricted Securities
as defined in any Registration Rights Agreement.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"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 substantially
in the form of EXHIBIT A 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 the Initial Notes or a series of Additional
Notes that do not bear the Private Placement Legend.
"UNRESTRICTED NOTES" means Unrestricted Definitive Notes and
Unrestricted Global Notes.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company (other
than a Subsidiary that is an owner of a Principal Property) that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary (1) has, or shall have
after giving effect to such designation, no Indebtedness other than Non-Recourse
Debt; (2) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the terms of
any such agreement, contract, arrangement or understanding are no less favorable
to the Company or such Restricted Subsidiary than those that might be obtained
at the time from Persons who are not Affiliates of the Company; (3) is a Person
with respect to which neither the Company nor any of its Restricted Subsidiaries
has any direct or indirect obligation (a) to subscribe for additional Equity
Interests or (b) to maintain or preserve such Person's financial condition or to
cause such Person to achieve any specified levels of operating results; (4) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries; and (5)
has at least one director on its Board of Directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries and has
at least one executive officer that is not a director or executive officer of
the Company or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary 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
preceding conditions and was permitted by the covenant described in Section 4.07
hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
preceding 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 the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09 hereof, the Company
shall be in default of such covenant. The Board of Directors of the Company may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
PROVIDED that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted
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Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such Indebtedness
is permitted under Section 4.07 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period; and (2) 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.
"VOTING STOCK" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (1) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness,
by (b) the number of years (calculated to the nearest one-twelfth) that shall
elapse between such date and the making of such payment; by (2) the then
outstanding principal amount of such Indebtedness.
"WHOLLY OWNED DOMESTIC SUBSIDIARY" of any specified Person means a
Domestic Subsidiary of such Person all of the outstanding Capital Stock and
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
Domestic Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"AFFILIATE TRANSACTION".................................... 4.11
"ASSET SALE"............................................... 4.10
"ASSET SALE OFFER"......................................... 3.09
"AUTHENTICATION ORDER"..................................... 2.02
"CHANGE OF CONTROL OFFER".................................. 4.14
"CHANGE OF CONTROL PAYMENT"................................ 4.14
"CHANGE OF CONTROL PAYMENT DATE"........................... 4.14
"COVENANT DEFEASANCE"...................................... 8.03
"EXCESS PROCEEDS".......................................... 4.10
"INCUR".................................................... 4.09
"LEGAL DEFEASANCE"......................................... 8.02
"OFFER AMOUNT"............................................. 3.09
"OFFER PERIOD"............................................. 3.09
"PAYING AGENT"............................................. 2.03
"PERMITTED DEBT"........................................... 4.09
"PURCHASE DATE"............................................ 3.09
"REGISTRAR"................................................ 2.03
"RESTRICTED PAYMENTS"...................................... 4.07
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SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee; and
"OBLIGOR" on the Notes means the Company and the Guarantors,
respectively, 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:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the
plural include the singular;
(e) provisions apply to successive events and transactions;
and
(f) 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.
-20-
ARTICLE II.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of EXHIBIT A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The 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 Company, the
Guarantors 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.
(b) GLOBAL NOTES. Notes issued in global form shall be substantially in
the form of EXHIBIT A 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 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, 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
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
(c) EUROCLEAR AND CLEARSTREAM 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 Clearstream
Banking" and "Customer Handbook" of Clearstream shall be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearstream.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
The Notes shall be executed by an Officer or an authorized signatory as
identified in an Officers' Certificate (pursuant to a power of attorney or other
similar instrument). The signature of any such Officer (or authorized signatory)
on the Notes shall be by manual or facsimile signature in the name and on behalf
of the Company.
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If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee or an authenticating agent shall, upon receipt of a Company
Order, authenticate Initial Notes for original issue in an aggregate principal
amount of $175,000,000. The aggregate principal amount of the Initial Notes
shall not exceed $175,000,000 except as provided in Section 2.07.
The Trustee or an authorized agent, shall upon receipt of a Company
Order and an Officers' Certificate and Opinion of Counsel pursuant to Section
13.04 authenticate Additional Notes for original issue in an aggregate principal
amount set forth in the Company Order.
The Trustee may appoint an authenticating agent 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 authenticating agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
The Notes shall be issuable only in registered form without coupons and
only in minimum denominations of $1,000 in principal amount and any integral
multiples of $1,000 in excess thereof.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company 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 Company 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 Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints DTC to act as Depositary with respect to
the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company 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
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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
Company 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 Company 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 Company or a Subsidiary) shall have no further liability for the money.
If the Company 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
Company, 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 Company 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 Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers 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
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee. 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 2.07 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
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
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
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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 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 or underwriter, as the
case may be). Beneficial interests in any Unrestricted Global Note may
be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders
or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS
IN GLOBAL NOTES. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures
containing information regarding the Participant 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. Upon consummation of an Exchange
Offer by the Company 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:
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(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 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 any Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3)
a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with any Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with any 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;
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and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company 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:
(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
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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 Company or any of its Subsidiaries, a certificate to
the effect set forth in EXHIBIT B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
EXHIBIT B hereto, including the certifications in item (3)(c)
thereof,
the 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 Company 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.
(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 any Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with any Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with any Registration Rights Agreement; or
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(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of EXHIBIT
C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in
the form of EXHIBIT B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the 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 Company 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:
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(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 Company or any of its Subsidiaries, a
certificate to the effect set forth in EXHIBIT B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such 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 any Registration Rights
Agreement and the Holder, in the case of
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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 Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with any Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with any 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 so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note
may exchange such 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 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
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Global Note has not yet been issued, the Company 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 its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of EXHIBIT B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of EXHIBIT B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of EXHIBIT B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with any Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with any
Registration Rights Agreement;
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(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with any 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 so requests, an Opinion of Counsel in form
reasonably acceptable to the Company 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 a Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
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, and
the Company 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.
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(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph (B) below,
each Restricted Global Note and each Restricted Definitive
Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially
the following form:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN ACCORDANCE WITH AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH
EVIDENCE, IF ANY, REQUIRED UNDER THE INDENTURE
PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR
ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE
HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR
THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)
(A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), AS LONG AS THE REGISTRAR RECEIVES A
CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF
COUNSEL THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (2) TO THE COMPANY OR (3) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTION SET FORTH IN (A) ABOVE."
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(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 2.07 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE 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 PENN NATIONAL GAMING, INC."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
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 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 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
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
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(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 Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.14
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 Company, 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 Company 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 Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company 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.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company 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 Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect
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the Company, the Trustee, any Agent and any authenticating agent from any loss
that any of them may suffer if a Note is replaced. The Company may charge for
its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, 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 Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company 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 Company, 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.
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
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, 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 a Responsible Officer of the Trustee knows are so owned shall be
so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery, the
Company 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 Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.
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Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Company 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 Company. The Company 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 Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company 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 Company 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 Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) 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.
SECTION 2.13. ISSUANCE OF ADDITIONAL NOTES.
The Company shall be entitled to issue Additional Notes under this
Indenture that shall have identical terms as the Initial Notes, other than with
respect to the date of issuance, issue price, and amount of interest payable on
the first Interest Payment Date applicable thereto (and, if such Additional
Notes shall be issued in the form of Restricted Notes, other than with respect
to transfer restrictions, a Registration Rights Agreement and Liquidated Damages
with respect thereto); PROVIDED that such issuance is not prohibited by Section
4.09. The Initial Notes and any Additional Notes shall be treated as a single
class for all purposes under this Indenture.
With respect to any Additional Notes, the Company shall set forth in or
pursuant to a resolution of its Board of Directors and in a Company Order, a
copy of each of which shall be delivered to the Trustee, the following
information:
(1) the aggregate principal amount of such Additional Notes to
be authenticated and delivered pursuant to this Indenture;
(2) the issue price, the issue date, the CUSIP number of such
Additional Notes, the first Interest Payment Date and the amount of
interest payable on such first Interest Payment Date applicable thereto
and the date from which interest shall accrue; PROVIDED, HOW-
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EVER, that no Additional Notes may be issued at a price that would
cause such Additional Notes to have "original issue discount" within
the meaning of Section 1273 of the Internal Revenue Code of 1986, as
amended; and
(3) whether such Additional Notes shall be Restricted Notes or
shall be Unrestricted Notes.
SECTION 2.14. DESIGNATION.
Any Additional Notes issued under this Indenture will rank PARI PASSU
in right of payment with the Initial Notes.
ARTICLE III.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a 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 principal
amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes to be redeemed
or purchased among the Holders of the Notes in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a PRO RATA basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company 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.
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SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture.
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
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(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;
(f) that, unless the Company defaults 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 Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company 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.
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SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company 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 Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company 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 Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) At any time prior to March 15, 2005, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
originally issued under this Indenture at a redemption price of 108.875% of the
principal amount, plus accrued and unpaid interest and Liquidated Damages, if
any, to the redemption date, with the net cash proceeds of one or more Equity
Offerings; PROVIDED that at least 65% of the aggregate principal amount of Notes
issued under this Indenture remains outstanding immediately after the occurrence
of such redemption (excluding Notes held by the Company and its Subsidiaries);
and the redemption occurs within 90 days of the date of the closing of such
Equity Offering.
(b) Except as described in clause (a) of this Section 3.07, the Notes
shall not be redeemable at the Company's option prior to March 1, 2005. On and
after March 15, 2006, the Company may redeem all or a part of the Notes upon not
less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest on the Notes redeemed, to the applicable redemption date, if redeemed
during the twelve-month period beginning on March 1 of the years indicated
below:
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YEAR PERCENTAGE
---- ----------
2006.................................................. 104.438%
2007.................................................. 102.958%
2008.................................................. 101.479%
2009 and thereafter................................... 100.000%
In addition to the foregoing, if any Gaming Authority requires that a
holder or beneficial owner of Notes must be licensed, qualified or found
suitable under any applicable Gaming Laws and such holder or beneficial owner
(i) fails to apply for a license, qualification or a finding of suitability
within 30 days (or such shorter period as may be required by the applicable
Gaming Authority) after being requested to do so by the Gaming Authority, or
(ii) is denied such license or qualification or not found suitable, the Company
shall have the right, at its option (i) to require any such holder or beneficial
owner to dispose of its Notes within 30 days (or such earlier date as may be
required by the applicable Gaming Authority) of receipt of such notice or
finding by such Gaming Authority, or (ii) to call for the redemption of the
Notes of such holder or beneficial owner at a redemption price equal to the
least of (A) the principal amount thereof, together with accrued interest to the
earlier of the date of redemption or the date of the denial of license or
qualification or of the finding of unsuitability by such Gaming Authority, (B)
the price at which such holder or beneficial owner acquired the Notes, together
with accrued interest to the earlier of the date of redemption or the date of
the denial of license or qualification or of the finding of unsuitability by
such Gaming Authority, or (C) such other lesser amount as may be required by any
Gaming Authority.
The Company shall notify the Trustee in writing of any such redemption
as soon as practicable. The holder or beneficial owner applying for license,
qualification or a finding of suitability must pay all costs of the licensure or
investigation for such qualification or finding of suitability.
(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. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an offer to all Holders to purchase Notes (an "ASSET
SALE OFFER"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "OFFER PERIOD"). No later
than five Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company 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.
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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 Company 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 this
Section 3.09 and 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 Company defaults 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 elect to have Notes purchased in integral
multiples of $1,000 only;
(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 Company,
a depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three days before the Purchase
Date;
(g) that Holders shall be entitled to withdraw their election
if the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Company shall
select the Notes to be purchased on a PRO RATA basis (with such
adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000, or integral multiples thereof, shall
be purchased); and
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(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a PRO RATA basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, 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 Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company, 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 Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE IV.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in any Registration Rights Agreement.
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The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages, if any (without regard to any applicable grace period) at
the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
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 Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the SEC, so long as any Notes are
outstanding, the Company shall furnish to the Trustee for mailing to the Holders
of Notes, within 15 days after the time periods specified in the SEC's rules and
regulations, (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report on the annual financial statements by
the Company's certified independent accountants; and (ii) all current reports
that would be required to be filed with the SEC on Form 8-K if the Company were
required to file such reports. In addition, following the consummation of the
exchange offer contemplated by any Registration Rights Agreement, whether or not
required by the SEC, the Company shall file a copy of all of the information and
reports referred to in clauses (i) and (ii) above with the SEC for public
availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing, in which event the
Company shall make such information available to securities analysts and
prospective investors upon request). In addition, the Company and the
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Guarantors have agreed that, for so long as any Notes remain outstanding, they
shall furnish to the Persons entitled thereto, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(b) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding paragraph will include a reasonably detailed
presentation, 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, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 105
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's 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 Company has violated
any provisions of Article IV or Article V 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 Company 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 Company is taking or proposes to
take with respect thereto.
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SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment from
funds or property of the Company or any of its Restricted Subsidiaries in
connection with any merger or consolidation involving the Company or any of its
Restricted Subsidiaries) or to the direct or indirect holders of the Company's
or any of its Restricted Subsidiaries' Equity Interests in their capacity as
such (other than dividends or distributions payable in Equity Interests (other
than Disqualified Stock) of the Company or to the Company or a Restricted
Subsidiary of the Company); (ii) purchase, redeem or otherwise acquire or retire
for value (including, without limitation, any payment from funds or property of
the Company or any of its Restricted Subsidiaries in connection with any merger
or consolidation involving the Company) any Equity Interests of the Company or
any direct or indirect parent of the Company; (iii) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness that is subordinated to the Notes or the Subsidiary
Guarantees, except a payment of interest or principal at the Stated Maturity
thereof; or (iv) make any Restricted Investment (all such payments and other
actions set forth in these clauses (i) through (iv) above being collectively
referred to as "RESTRICTED PAYMENTS"), unless, at the time of and after giving
effect to such Restricted Payment:
(a) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted Payment;
and
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09 hereof, and
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(c) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (ii), (iii) and (iv) of the
next succeeding paragraph), is less than the sum, without duplication,
of: (i) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the date of this Indenture to the end
of the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), PLUS (ii) 100% of the aggregate
net cash proceeds received by the Company since the date of this
Indenture as a contribution to its common equity capital or from the
issue or sale of Equity Interests of the Company (other than
Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt
securities of the Company that have been converted into or exchanged
for such Equity Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Subsidiary of the Company), PLUS
(iii) to the extent that any Restricted Investment that was made after
the date of this Indenture is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (A) the cash return of capital with
respect to such Restricted Investment (less the cost of disposition, if
any) and (B) the initial amount of such Restricted Investment, PLUS
(iv) to the extent that any Unrestricted Subsidiary of the Company is
redesignated as a Restricted Subsidiary in compliance with Section 4.18
hereof after the Issue Date, the lesser of (A) the fair market value of
the Company's Investment in such Subsidiary as of the date of such
redesignation or (B) such fair market value as of the date on which
such Subsidiary was originally designated as an Unrestricted
Subsidiary.
The preceding provisions will not prohibit (i) the payment of any
dividend or the consummation of any irrevocable redemption within 60 days after
the date of declaration of the dividend or giving of the redemption notice, as
applicable, if at the date of declaration or giving of the redemption notice, as
the case may be, the dividend or redemption payment would have complied with the
provisions of this Indenture; (ii) the redemption, repurchase, retirement,
defeasance or other acquisition of any subordinated Indebtedness of the Company
or any Guarantor or of any Equity Interests of the Company in exchange for, or
out of the net cash proceeds of the substantially concurrent sale (other than to
a Restricted Subsidiary of the Company) of, Equity Interests of the Company
(other than 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 (c)(ii) of the
preceding paragraph; (iii) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the Company or any Guarantor with
the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(iv) the payment of any dividend by a Restricted Subsidiary of the Company to
the holders of its Equity Interests on a PRO RATA basis; (v) redemptions,
repurchases or repayments to the extent required by any Gaming Authority having
jurisdiction over the Company or any Restricted Subsidiary or deemed necessary
by the Board of Directors of the Company in order to avoid the suspension,
revocation or denial of a gaming license by any Gaming Authority; (vi) the
repurchase, redemption or other acquisition or retirement for value of any
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Equity Interests of the Company or any Restricted Subsidiary of the Company held
by any member of the Company's (or any of its Restricted Subsidiaries')
management pursuant to any management equity subscription agreement, stock
option agreement or similar agreement; PROVIDED that the aggregate price paid
for all such repurchased, redeemed, acquired or retired Equity Interests may not
exceed $750,000 in any 12-month period; (vii) other Restricted Payments not to
exceed $5 million in the aggregate since the Issue Date; (viii) the declaration
and payment of dividends to holders of the Company's Disqualified Stock or the
preferred stock of a Guarantor, in each case issued in accordance with Section
4.09 hereof; and/or (ix) repurchases of Equity Interests deemed to occur upon
exercise of stock options if such Equity Interests represent a portion of the
exercise price of such options.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant shall be determined by the Board of Directors whose resolution with
respect thereto shall be delivered to the Trustee. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $5 million. Not later than 30 days after the date of
making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed, together with a copy of any fairness opinion or appraisal
required by this Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on
its Capital Stock to the Company or any of its Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its profits,
or pay any indebtedness owed to the Company or any of its Restricted
Subsidiaries; (ii) make loans or advances to the Company or any of its
Restricted Subsidiaries; or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries.
However, the preceding restrictions shall not apply to encumbrances or
restrictions existing under or by reason of (i) agreements governing Existing
Indebtedness and Credit Facilities as in effect on the date of this Indenture
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, restructurings, replacements or refinancings of those
agreements; PROVIDED that the amendments, modifications, restatements, renewals,
increases, supplements, refundings, restructurings, replacements or refinancings
are no more restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in those agreements on the date
of this Indenture; (ii) this Indenture, the Notes and the Subsidiary Guarantees;
(iii) applicable law or requirements of any Gaming Authority; (iv) any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness or Capital Stock was
incurred in connection with
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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; (v) customary non-assignment provisions in any
purchase money financing contracts or leases entered into in the ordinary course
of business and consistent with past practices; (vi) purchase money obligations
for property acquired in the ordinary course of business that impose
restrictions on that property of the nature described in clause (iii) of the
preceding paragraph; (vii) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition; (viii) Permitted Refinancing
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; (ix) Liens securing Indebtedness otherwise permitted to be
incurred under the provisions of Section 4.12 hereof that limit the right of the
debtor to dispose of the assets subject to such Liens; (x) provisions with
respect to the disposition or distribution of assets or property in joint
venture agreements, assets sale agreements, stock sale agreements and other
similar agreements entered into in the ordinary course of business; (xi)
restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business; (xii) Senior Debt,
provided that the restrictions contained in the agreements governing such Senior
Debt are no more restrictive, taken as a whole, than those contained in the
Senior Credit Facilities; (xiii) Indebtedness and related Guarantees by the
Guarantors that ranks PARI PASSU with the Notes and the guarantees of the Notes
by the Guarantors; PROVIDED that the restrictions contained in the agreements
governing such indebtedness and related Guarantees are no more restrictive,
taken as a whole, than those contained in this Indenture; and (xiv) Indebtedness
incurred, or preferred stock issued, by Foreign Subsidiaries; PROVIDED that the
restrictions contained in the agreements or instruments governing such
Indebtedness or preferred stock: (A) apply only in the event of a payment
default or a default with respect to a financial covenant contained in the terms
of such Indebtedness or preferred stock or shall not materially affect the
Company's ability to make principal or interest payments on the Notes as
determined by the Board of Directors of the Company, whose determination shall
be conclusive; and (B) are not materially more disadvantageous to holders of the
Notes than is customary in comparable financings as determined in good faith by
the Board of Directors, whose determination shall be conclusive.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its 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") any Indebtedness (including Acquired Debt), and the
Company shall not issue any Disqualified Stock and shall not permit any of its
Subsidiaries to issue any shares of preferred stock; PROVIDED, HOWEVER, that the
Company may incur Indebtedness (including Acquired Debt) or issue Disqualified
Stock, and the Guarantors may incur Indebtedness or issue preferred stock, if
the Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock or preferred stock is issued would have been at least
2.0 to 1.0 determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been incurred
or the
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preferred stock or Disqualified Stock had been issued, as the case may be, at
the beginning of such four-quarter period.
The first paragraph of this covenant shall not prohibit the incurrence
of any of the following items of Indebtedness (collectively, "PERMITTED DEBT"):
(i) the incurrence by the Company and/or any of the
Guarantors of Indebtedness and letters of credit pursuant to the Credit
Facilities; PROVIDED that the aggregate principal amount of all
Indebtedness then classified as having been incurred in reliance upon
this clause (i) that remains outstanding under Credit Facilities after
giving effect to such incurrence does not exceed $350 million less the
aggregate amount of all Net Proceeds of Asset Sales that have been
applied by the Company or any of its Restricted Subsidiaries since the
date of this Indenture to repay any Indebtedness under a Credit
Facility (and to reduce commitments with respect thereto in the case of
any such Indebtedness that is revolving credit Indebtedness) pursuant
to Section 4.10 hereof; PROVIDED, HOWEVER, that the maximum amount
permitted to be outstanding under this clause (i) shall not be deemed
to limit additional Indebtedness under the Credit Facilities to the
extent the incurrence of such additional Indebtedness is permitted
pursuant to any of the other provisions under this Section 4.09;
(ii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Initial Notes in the aggregate
principal amount of $175,000,000 issued on the Issue Date and the
related Subsidiary Guarantees;
(iv) the incurrence by the Company or any of the Guarantors of
Indebtedness represented by Purchase Money Indebtedness and Capital
Lease Obligations incurred in connection with the purchase or capital
lease of video gaming machines, slot machines or other gaming equipment
in an aggregate principal amount or accreted value, as applicable,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(iv), not to exceed $20 million at any time outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness that was permitted by this Indenture to be incurred under
the first paragraph of this Section 4.09 or clause (ii), (iii), (iv),
or (xii) of this paragraph;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; PROVIDED, however, that: (A) if
the Company or any Guarantor is the obligor on such Indebtedness, such
Indebtedness must be expressly subordinated to the prior payment in
full in cash of all Obligations with respect to the Notes, in the case
of the Company, or the Subsidiary Guarantee, in the case of a
Guarantor; and (B) (1) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary of the Company and
(2) any sale or other transfer of any such Indebtedness to a Person
that is not either the Company or a Restricted Subsidiary of the
Company shall be deemed, in each case, to constitute an incurrence of
such Indebtedness by the Company or such Subsidiary, as the case may
be, that was not permitted by this clause (vi);
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(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose
of fixing or hedging interest rate risk or currency exchange risk with
respect to any floating rate Indebtedness or non-U.S.
dollar-denominated Indebtedness that is permitted by the terms of this
Indenture to be outstanding;
(viii) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.09;
(ix) the incurrence by the Company's Unrestricted Subsidiaries
of Non-Recourse Debt; PROVIDED, HOWEVER, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (ix);
(x) Indebtedness incurred by the Company or any of its
Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business,
including without limitation to letters of credit in respect to
workers' compensation claims or self-insurance, or other Indebtedness
with respect to reimbursement type obligations regarding workers'
compensation claims; PROVIDED, HOWEVER, that upon the drawing of such
letters of credit or the incurrence of such Indebtedness, such
obligations are reimbursed within 30 days following such drawing or
incurrence;
(xi) obligations in respect of performance and surety bonds
and completion guarantees provided by the Company or any Restricted
Subsidiary in the ordinary course of business;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; PROVIDED,
HOWEVER, that such Indebtedness is extinguished within two business
days of incurrence;
(xiii) incurrence of Indebtedness by the Company or any of its
Restricted Subsidiaries (in addition to Existing Indebtedness)
consisting of Guarantees of Indebtedness of Pennwood in an aggregate
principal amount at any time outstanding not to exceed $20 million;
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(xiv) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any other Indebtedness incurred pursuant to this
clause (xiv), not to exceed $20 million; and
(xv) the borrowing from time to time by the Company or any
Guarantor of up to $30 million under that certain Loan Agreement dated
February 20, 2001 between Mississippi Business Finance Corporation and
BSL, Inc. where such loan is pledged by Mississippi Business Finance
Corporation to secure the Mississippi Revenue Bonds held by the Company
or any of its Restricted Subsidiaries and the net proceeds of the loan
are used for the acquisition, construction, installation and equipping
of a hotel and related facilities adjacent to the Casino Magic Bay St.
Louis casino and to pay customary costs and expenses associated with
the issuance of the Mississippi Revenue Bonds and the construction of
such hotel.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (i) through (xv) above
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company shall be permitted to classify such item of Indebtedness on
the date of its incurrence in any manner that complies with this Section 4.09.
In addition, the Company may, at any time, change the classification of an item
of Indebtedness (or any portion thereof) to any other clause or to the first
paragraph of this covenant provided that the Company would be permitted to incur
such item of Indebtedness (or portion thereof) pursuant to such other clause or
the first paragraph of this Section 4.09, as the case may be, at such time of
reclassification. Indebtedness under the Senior Credit Facilities outstanding on
the date on which Notes are first issued and authenticated under this Indenture
shall be deemed to have been incurred on such date in reliance on the exception
provided by clause (i) of the definition of Permitted Debt.
SECTION 4.10. ASSET SALES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to: (1) sell, lease, convey or otherwise dispose of any assets or
rights; PROVIDED that the sale, conveyance or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole shall be governed by the provisions of Section 4.14 and/or Section 5.01
hereof and not by the provisions of Section 4.10 hereof; or (2) issue Equity
Interests in any of the Company's Restricted Subsidiaries or permit the sale of
Equity Interests in any of its Subsidiaries (each of the foregoing, an "ASSET
SALE"), unless: (i) the Company (or the Restricted Subsidiary, as the case may
be) receives consideration at the time of the Asset Sale at least equal to the
fair market value of the assets or Equity Interests issued or sold or otherwise
disposed of; (ii) the fair market value is determined by the Company's Board of
Directors and evidenced by a resolution of the Board of Directors set forth in
an Officers' Certificate delivered to the Trustee; and (iii) at least 75% of the
consideration received in the Asset Sale by the Company or such Restricted
Subsidiary is in the form of cash or Cash Equivalents. For purposes of this
provision, each of the following shall be deemed to be cash: (A) any
liabilities, as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet, of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their
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terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by
the transferee of any such assets pursuant to a customary novation agreement
that releases the Company or such Restricted Subsidiary from further liability;
and (B) any securities, notes or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that are contemporaneously,
subject to ordinary settlement periods, converted by the Company or such
Restricted Subsidiary into cash or Cash Equivalents, to the extent of the cash
or Cash Equivalents received in that conversion. Notwithstanding the preceding,
the following items shall not be deemed to be Asset Sales: (1) any single
transaction or series of related transactions that involves assets having a fair
market value of less than $2 million; (2) a transfer of assets between or among
the Company and its Restricted Subsidiaries; (3) an issuance of Equity Interests
by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;
(4) the sale or lease of equipment, inventory, accounts receivable or other
assets in the ordinary course of business; (5) the sale or other disposition of
cash or Cash Equivalents; and (6) a Restricted Payment or Permitted Investment
that is permitted by Section 4.07 hereof
(b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply those Net Proceeds at its option: (i) to repay
Senior Debt and, if the Senior Debt repaid is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto; (ii) to acquire all or
substantially all of the assets of, or a majority of the Voting Stock of,
another Permitted Business; (iii) to make capital expenditures; or (iv) to
acquire other long-term assets that are used or useful in a Permitted Business.
Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
(c) Any Net Proceeds from Asset Sales that are not applied or invested
as provided in the preceding paragraph shall constitute "EXCESS PROCEEDS." When
the aggregate amount of Excess Proceeds exceeds $5 million, the Company shall
make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is PARI PASSU with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount of
Notes and such other PARI PASSU Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer shall be equal to 100%
of principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, and shall be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and other PARI PASSU
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and such other PARI PASSU
Indebtedness to be purchased on a PRO RATA basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(d) Notwithstanding the foregoing, the Company or a Restricted
Subsidiary shall be permitted to consummate an Asset Sale without complying
with the foregoing provisions if: (i) the Company or its Restricted
Subsidiary receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or other property sold, issued
or otherwise disposed of (as evidenced by a resolution of the Board of the
Company) as set forth in an Officers' Certificate delivered to the Trustee,
(ii) the transaction constitutes a "like-kind exchange" of the type
contemplated by Section 1031 of the Internal Revenue Code, and (iii) the
consideration for such Asset Sale constitutes assets that the Board of
Directors in its good faith judgment at the time of the sale determines shall
be used or useful in a Permitted Business; PROVIDED that any non-cash
consideration not constituting assets that the Board of Directors in its good
faith judgment at the time of the sale determines shall be used or useful in
a Permitted Business received by the Company or a Restricted Subsidiary in
connection with such Asset Sale that is converted into or sold or otherwise
disposed of for cash or Cash Equivalents at any time within 360 days after
such Asset Sale and any cash or Cash Equivalents received by the Company or a
Restricted Subsidiary in connection with such Asset Sale shall constitute Net
Proceeds subject to the provisions set forth above.
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SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "AFFILIATE TRANSACTION"), unless: (i) the Affiliate
Transaction is on terms that are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person; and (ii) the Company delivers to the Trustee: (A) with respect
to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $2 million, a resolution of the
Board of Directors set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with this covenant and that such Affiliate
Transaction has been approved by a majority of the disinterested members of the
Board of Directors; and (B) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$5 million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
(b) The following items shall not be deemed to be Affiliate
Transactions and, therefore, shall not be subject to the provisions of Section
4.11(a): (i) any employment agreements or arrangements and benefit plans or
arrangements, and any transactions contemplated by any of the foregoing relating
to the compensation and employee benefits matters, in each case in respect of
employees, officers or directors entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and consistent with
the past practice of the Company or such Restricted Subsidiary; (ii)
transactions between or among the Company and/or its Restricted Subsidiaries;
(iii) transactions with a Person that is an Affiliate of the Company solely
because the Company owns an Equity Interest in such Person; (iv) payment of
reasonable directors fees and indemnity provided on behalf of officers,
directors or employees of the Company or any of its Restricted Subsidiaries; (v)
sales of Equity Interests (other than Disqualified Stock) to Affiliates of the
Company; (vi) Restricted Payments that are permitted by Section 4.07 hereof.
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SECTION 4.12. LIENS.
The Company shall not and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind securing Indebtedness or trade payables
(other than Permitted Liens) upon any of their property or assets, now owned or
hereafter acquired, unless all payments due under this Indenture and the Notes
are secured on an equal and ratable basis with the obligations so secured until
such time as such obligations are no longer secured by a Lien.
SECTION 4.13. CORPORATE EXISTENCE.
Subject to Article V hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; PROVIDED, HOWEVER, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall make
an offer (a "CHANGE OF CONTROL OFFER") to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase, the "CHANGE OF CONTROL PAYMENT"). Subject to the last paragraph in
subsection (b) herein, within 30 days following any Change of Control, the
Company shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control pursuant to this Section 4.14
and stating: (1) that the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Notes tendered will be accepted for payment; (2) the
purchase price and the purchase date, which shall be no earlier than 30 Business
Days and no later than 60 Business Days from the date such notice is mailed (the
"CHANGE OF CONTROL PAYMENT DATE"); (3) that any Note not tendered will continue
to accrue interest; (4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of Control
Payment Date; (5) that Holders electing to have any Notes purchased pursuant to
a Change of Control Offer will be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; (6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes delivered for purchase, and a
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statement that such Holder is withdrawing his election to have the Notes
purchased; and (7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company 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 and regulations are
applicable in connection with the repurchase of Notes in connection with a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.14, the Company shall
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations of this Section 4.14 by virtue of such
conflict.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer; (ii) deposit with the paying
agent an amount equal to the Change of Control Payment in respect of all Notes
or portions of Notes properly tendered; and (iii) deliver or cause to be
delivered to the Trustee the Notes properly accepted together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions of Notes
being purchased by the Company.
The paying agent shall promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; PROVIDED that each new note shall be in a
principal amount of $1,000 or an integral multiple of $1,000.
Prior to complying with any of the provisions of this Section 4.14, but
in any event within 90 days following a Change of Control, the Company shall
either repay all outstanding Senior Debt in cash or Cash Equivalents or obtain
the requisite consents, if any, under all agreements governing outstanding
Senior Debt to permit the repurchase of Notes required by this covenant. The
Company shall publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.14, the
Company 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
Section 4.14 and Section 3.09 hereof and all other provisions of this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.
SECTION 4.15. NO SENIOR SUBORDINATED DEBT.
The Company shall not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of the Company and senior in any respect in
right of payment to the Notes. No Guarantor shall incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in
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right of payment to the Senior Debt of such Guarantor and senior in any respect
in right of payment to such Guarantor's Subsidiary Guarantee.
SECTION 4.16. PAYMENTS FOR CONSENT.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
SECTION 4.17. ADDITIONAL SUBSIDIARY GUARANTEES.
If the Company or any of its Restricted Subsidiaries that is a
Guarantor acquires or creates another Wholly Owned Domestic Subsidiary after the
date of this Indenture that has assets with a book value in excess of $1
million, then, subject to applicable Gaming Laws, that newly acquired or created
Wholly Owned Domestic Subsidiary shall become a Guarantor and execute a
supplemental indenture and deliver an Opinion of Counsel pursuant to Section
9.06 and 13.04 hereof within 30 Business Days of the date on which it was
acquired or created (except if that Wholly Owned Domestic Subsidiary has been
properly designated as an Unrestricted Subsidiary in accordance with this
Indenture for so long as it continues to constitute an Unrestricted Subsidiary).
SECTION 4.18. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors may designate any Restricted Subsidiary (other
than an owner of a Principal Property) to be an Unrestricted Subsidiary if that
designation would not cause a Default. If a Restricted Subsidiary is designated
as an Unrestricted Subsidiary, the aggregate fair market value of all
outstanding Investments owned by the Company and its Restricted Subsidiaries in
the Subsidiary properly designated shall be deemed to be an Investment made as
of the time of the designation and shall constitute Restricted Investments under
the first paragraph of Section 4.07 hereof or, if eligible, Permitted
Investments, as determined by the Company. That designation shall only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
SECTION 4.19. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than Permitted Businesses, except to such
extent as would not be material to the Company and its Restricted Subsidiaries
taken as a whole.
SECTION 4.20. PAYMENT OF ADDITIONAL INTEREST.
If Liquidated Damages in the form of additional interest is payable due
to the occurrence of a Registration Default as described in any Registration
Rights Agreement, the Company shall deliver to
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the Trustee a certificate to that effect stating (1) the amount of such
additional interest that is payable and (2) the date on which such interest is
payable. Unless and until a Responsible Officer of the Trustee receives at the
Corporate Trust Office of the Trustee such a certificate, the Trustee may assume
without inquiry that no such interest is payable. If the Company has paid
additional interest directly to the person entitled to it, the Company shall
deliver to the Trustee a certificate setting forth the particulars of such
payment.
ARTICLE V.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person unless: (i) either: (A) the Company is the surviving
corporation; or (B) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment, transfer,
conveyance or other disposition has been made is a corporation organized or
existing under the laws of the United States, any state of the United States or
the District of Columbia; (ii) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to which such
sale, assignment, transfer, conveyance or other disposition has been made
assumes all the obligations of the Company under the Notes, this Indenture and
any Registration Rights Agreement pursuant to agreements reasonably satisfactory
to the Trustee; (iii) immediately after such transaction no Default or Event of
Default exists; (iv) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition has been made shall, on
the date of such transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at the beginning of
the applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.09 hereof; and (v) the Company or the
successor entity shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such transaction
have been satisfied. In addition, the Company may not, directly or indirectly,
lease all or substantially all of its properties or assets, in one or more
related transactions, to any other Person. This Section 5.01 shall not apply to
a sale, assignment, transfer, conveyance or other disposition of assets between
or among the Company and any of its Wholly Owned Restricted Subsidiaries.
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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
Company's or its Restricted Subsidiaries' assets, taken as a whole, in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; PROVIDED, HOWEVER, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale, assignment,
transfer, conveyance or other disposition of all of the Company's or its
Restricted Subsidiaries' assets, taken as a whole, that meets the requirements
of Section 5.01 hereof.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest
on, or Liquidated Damages with respect to, the Notes and such default
continues for a period of 30 days whether or not prohibited by the
subordination provisions of Article X;
(b) the Company defaults in the payment when due of principal
of or premium, if any, on the Notes when the same becomes due and
payable at maturity, upon redemption (including in connection with an
offer to purchase) or otherwise, whether or not prohibited by the
subordination provisions of Article X;
(c) the Company or any of its Restricted Subsidiaries fails to
comply with any of the provisions of Section 4.07, 4.09, 4.10, 4.14 or
5.01 hereof;
(d) the Company or any of its Restricted Subsidiaries fails to
observe or perform any other covenant, representation, warranty or
other agreement in this Indenture or the Notes for 60 days after notice
to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding voting as a
single class;
(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 the Company
or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after
the date of this Indenture, if that default: (i) is caused by a
failure to pay principal on such Indebtedness at final maturity (a
"PAYMENT DEFAULT"); or (ii) 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 $5 million or more;
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(f) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary and such judgment or judgments remain undischarged for a
period (during which execution shall not be effectively stayed) of 60
days; PROVIDED that the aggregate of all such undischarged judgments
exceeds $5 million;
(g) except as permitted by this Indenture, any Subsidiary
Guarantee of any Significant Subsidiary shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor shall deny or disaffirm
its obligations under its Subsidiary Guarantee;
(h) the Company 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 custodian of it or for all or substantially all of
its property, (iv) makes a general assignment for the benefit of its
creditors, or (v) generally is not paying its debts as they become due;
or
(i) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (i) is for relief against the
Company 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 a custodian of the
Company 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 the
Company 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 the Company 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.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (h) or (i) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Significant Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Upon any such declaration, the Notes shall
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become due and payable immediately. Notwithstanding the foregoing, if an Event
of Default specified in clause (h) or (i) of Section 6.01 hereof occurs with
respect to the Company, any of its Significant Subsidiaries 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 principal amount of the
then outstanding Notes by written notice to the Trustee may on behalf of all of
the Holders rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if the Trustee shall have received
an Officers' Certificate that 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 15, 2006 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company 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. If an Event of Default occurs prior to March 15, 2006
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable in an amount, for each of the years beginning on March 15 of the years
set forth below, as set forth below (expressed as a percentage of the principal
amount of the Notes on the date of payment that would otherwise be due but for
the provisions of this sentence):
YEAR PERCENTAGE
---- ----------
2002 .................................... 108.875%
2003 .................................... 107.766%
2004 .................................... 106.657%
2005 .................................... 105.547%
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 and Liquidated
Damages, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or 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.
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SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding 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 (including in connection with an offer to purchase) (PROVIDED,
HOWEVER, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(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 principal amount 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
principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
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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 Company 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 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 Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the 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 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:
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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 principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Liquidated Damages, if any, and interest, respectively; and
THIRD: to the Company 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
principal amount of the then outstanding Notes.
ARTICLE VII.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(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
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(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 Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(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 Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
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(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(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 Company or any
Affiliate of the Company 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 Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, 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).
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A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company 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 Company 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 Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company 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 Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's 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.
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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 Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company 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 Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
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 Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee; PROVIDED all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
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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 COMPANY.
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 VIII.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article VIII.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, Legal Defeasance means that the Company 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 its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
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until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive payments in respect of the principal of, or
interest or premium and Liquidated Damages, if any, on such Notes when such
payments are due from the trust referred to below, (b) the Company's obligations
with respect to the Notes concerning issuing temporary Notes, registration of
Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an
office or agency for payment and money for security payments held in trust, (c)
the rights, powers, trusts, duties and immunities of the Trustee, and the
Company's and the Guarantor's obligations in connection therewith and (d) this
Article VIII. Subject to compliance with this Article VIII, the Company may
exercise its option under this Section 8.02 notwithstanding the prior exercise
of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.03, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18 and 4.19 hereof and clause
(iv) of Section 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 Company 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
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(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
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination of cash
in U.S. dollars and non-callable Government Securities, in amounts as
shall be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, or interest
and premium and Liquidated Damages, if any, on the outstanding Notes on
the stated maturity or on the applicable redemption date, as the
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case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company has delivered to the Trustee an Opinion of Counsel confirming
that (i) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (ii) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the outstanding Notes
shall not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and shall be subject to
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company has delivered to the Trustee an Opinion of Counsel confirming
that the Holders of the outstanding Notes shall not recognize income,
gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and shall be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
(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 incurrence of Indebtedness all or a
portion of the proceeds of which will be used to defease the Notes
pursuant to this Article VIII concurrently with such incurrence) or
insofar as Sections 6.01(h) or 6.01(i) 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 Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company; and
(g) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with.
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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 Company 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.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company 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 COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, 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 Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as Trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise
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prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; PROVIDED, HOWEVER, that, if the Company
makes any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Company 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 IX.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the
Subsidiary Guarantees or the Notes without the consent of any Holder of a Note:
(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 II
hereof (including the related definitions) in a manner that does not
materially adversely affect any Holder;
(c) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to
the Company pursuant to Article V hereof;
(d) to comply with the rules of any applicable securities
depositary;
(e) 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;
(f) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA; or
(g) to allow any Guarantor to execute a supplemental indenture
and/or a Subsidiary Guarantee with respect to the Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors 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
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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 Company and the
Trustee may amend or supplement this Indenture (including Sections 3.09, 4.10
and 4.14 hereof) and the Notes with the consent of the Holders of at least a
majority in principal amount 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 principal of, premium, 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 principal amount 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).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.
It 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 Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver.
Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Notes then outstanding, voting as a single
class, may waive compliance in a particular instance by the Company 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:
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
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(b) reduce the principal of or change the fixed maturity of
any note or alter the provisions with respect to the redemption of the
Notes (other than provisions relating to the covenants described under
Sections 3.09, 4.10 and 4.14 hereof);
(c) reduce the rate of or change the time for payment of
interest on any note;
(d) waive a Default or Event of Default in the payment of
principal of, or interest or premium, or Liquidated Damages, if any, on
the Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the
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 principal of, or interest or premium or
Liquidated Damages, if any, on the Notes;
(g) waive a redemption payment with respect to any note (other
than a payment required by one of the covenants described under
Sections 4.10 and 4.14 hereof);
(h) release any Guarantor from any of its obligations under
its Subsidiary Guarantee or this Indenture, except in accordance with
the terms of this Indenture; or
(i) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
In addition, any amendment to, or waiver of, Article X of this
Indenture that adversely affects the rights of the Holders of the Notes shall
require the consent of the Holders of at least 75% in principal amount 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).
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
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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 Company 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 IX if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
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 X.
Subordination
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article X, to the prior payment in
full 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.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:
(i) holders of Senior Debt shall be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt) and all outstanding
letters of credits under Credit Facilities shall either have been
terminated or cash collateralized in accordance with the terms thereof,
before Holders of the Notes shall be entitled to receive any
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payment on, or distribution with respect to the Notes (except that
Holders of the Notes may receive and retain (A) Permitted Junior
Securities and (B) payments made from any defeasance trust created
pursuant to Section 8.01 hereof), and
(ii) until all Obligations with respect to Senior Debt (as
provided in clause (i) above) are paid in full, any distribution to
which Holders would be entitled but for this Article X shall be made to
holders of Senior Debt (except that Holders of Notes may receive (A)
Permitted Junior Securities and (B) payments and other distributions
made from any defeasance trust created pursuant to Section 8.01
hereof), as their interests may appear.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) The Company may not make any payment on or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes
(except (A) Permitted Junior Securities and (B) payments and other distributions
made from any defeasance trust created pursuant to Section 8.01 hereof) until
all principal and other Obligations with respect to the Senior Debt have been
paid in full if:
(i) a payment default of any principal or other Obligations
with respect to Designated Senior Debt occurs and is continuing beyond
any applicable grace period in the agreement, indenture or other
document governing such Designated Senior Debt; or
(ii) any other default on Designated Senior Debt occurs and is
continuing that then permits holders of the Designated Senior Debt to
accelerate its maturity and the Trustee receives a notice of the
default (a "PAYMENT BLOCKAGE NOTICE") from the Credit Agent, the
Company or any holder of any Designated Debt. If the Trustee receives
any such Payment Blockage Notice, no subsequent Payment Blockage Notice
shall be effective for purposes of this Section unless and until (A) at
least 360 days shall have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice and (B) all scheduled
payments of principal, premium, if any, and interest on the Securities
that have come due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Payment Blockage Notice unless such default shall have
been cured or waived for a period of not less than 90 consecutive days.
(b) The Company may and shall resume payments on and distributions in
respect of the Notes:
(i) in the case of a payment default, upon the date on which
such default is cured or waived; and
(ii) in the case of a nonpayment default, upon the earlier of
the date on which such nonpayment default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is
received,
unless the maturity of any Designated Senior Debt has been accelerated.
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Notwithstanding the foregoing, the Company shall be permitted to
repurchase, redeem, repay or prepay any or all of the Notes to the extent
required to do so by any Gaming Authority, as described under Section 3.07
hereof.
SECTION 10.04. ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
SECTION 10.05. 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 at a time when a Responsible Officer of
the Trustee or such Holder, as applicable, has actual knowledge that such
payment is prohibited by Section 10.03 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 to, the holders of Senior Debt as their interests may appear
or their Representative under this Indenture or other agreement (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article X, 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 X, except if such payment is made as a result
of the willful misconduct or gross negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article X, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article X.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of Notes shall be subrogated (equally and ratably with all other
Indebtedness 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 of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article X to holders of
Senior Debt that otherwise would have been made
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to Holders of Notes is not, as between the Company and Holders, a payment by the
Company on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article X defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(i) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(ii) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders
of Senior Debt; or
(iii) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article X to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
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 Company or any Holder or by the failure of the Company or any
Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article X, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article X.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article X 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 X. Only
the Company or a Representative may give the notice. Nothing in this Article
X shall impair the claims of, or payments to, the Trustee under or pursuant
to Section 7.07 hereof.
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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 10.12. 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 X, 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 Representatives are hereby authorized to file an appropriate claim
for and on behalf of the Holders of the Notes.
SECTION 10.13. AMENDMENTS.
The provisions of this Article X shall not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE XI.
SUBSIDIARY GUARANTEES
SECTION 11.01. GUARANTEE.
Subject to this Article XI, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that: (a) the principal
of and interest on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
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The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VI
hereof for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article VI hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Guarantee.
SECTION 11.02. SUBORDINATION OF SUBSIDIARY GUARANTEE.
The Obligations of each Guarantor under its Subsidiary Guarantee
pursuant to this Article XI shall be junior and subordinated to the Senior
Guarantee of such Guarantor on the same basis as the Notes are junior and
subordinated to Senior Debt of the Company. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by any of the Guarantors only at such times as they may receive
and/or retain payments in respect of the Notes pursuant to this Indenture,
including Article XI hereof.
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will, after giving effect to such
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maximum amount and all other contingent and fixed liabilities of such Guarantor
that are relevant under such laws, and after giving effect to any collections
from, rights to receive contribution from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
this Article XI, result in the obligations of such Guarantor under its
Subsidiary Guarantee not constituting a fraudulent transfer or conveyance.
SECTION 11.04. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in EXHIBIT E shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by its
President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this Indenture, if required by Section 4.17 hereof,
the Company shall cause such Subsidiaries to execute supplemental indentures to
this Indenture and Subsidiary Guarantees in accordance with Section 4.17 hereof
and this Article XI, to the extent applicable.
SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 11.06, no Guarantor may
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person whether or not affiliated with such Guarantor
unless:
(a) subject to Section 11.06 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a Guarantor
or the Company) unconditionally assumes all the obligations of such
Guarantor, pursuant to a supplemental indenture in form and substance
reasonably satisfactory to the Trustee, under the Notes, the Indenture
and the Subsidiary Guarantee on the terms set forth herein or therein;
and
(b) immediately after giving effect to such transaction, no
Default or Event of Default exists.
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In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles IV and V hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
SECTION 11.06. RELEASES FOLLOWING SALE.
In the event (i) of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, (ii) of a sale or
other disposition of all to the capital stock of any Guarantor, in each case to
a Person that is not (either before or after giving effect to such transactions)
a Restricted Subsidiary of the Company or (iii) that the Company properly
designates any Restricted Subsidiary that is a Guarantor as an Unrestricted
Subsidiary in accordance with this Indenture, then such Guarantor (in the event
of a sale or other disposition, by way of merger, consolidation or otherwise, of
all of the capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) will be released and relieved of any
obligations under its Subsidiary Guarantee; PROVIDED that the Net Proceeds of
such sale or other disposition are applied in accordance with the applicable
provisions of this Indenture, including without limitation Section 4.10 hereof.
Upon delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made by
the Company in accordance with the provisions of this Indenture, including
without limitation Section 4.10 hereof, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article XI.
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ARTICLE XII.
satisfaction and discharge
SECTION 12.01. SATISFACTION AND DISCHARGE.
This Indenture shall be discharged and shall cease to be of further
effect as to all Notes issued thereunder, when:
(1) either:
(a) all Notes that have been authenticated, except lost,
stolen or destroyed Notes that have been replaced or
paid and Notes for whose payment money has been
deposited in trust and, if provided for in this
Indenture, thereafter repaid to the Company, have
been delivered to the Trustee for cancellation; or
(b) all Notes that have not been delivered to the Trustee
for cancellation have become due and payable by
reason of the mailing of a notice of redemption or
otherwise or shall become due and payable within one
year and the Company or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee
as trust funds in trust solely for the benefit of the
Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in
U.S. dollars and non-callable Government Securities,
in amounts as shall be sufficient without
consideration of any reinvestment of interest, to pay
and discharge the entire indebtedness on the Notes
not delivered to the Trustee for cancellation for
principal, premium and Liquidated Damages, if any,
and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default has occurred and is
continuing on the date of the deposit or shall occur as a result of the
deposit and the deposit shall not result in a breach or violation of,
or constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be paid
all other sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the case
may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money shall have been deposited with the Trustee pursuant to subclause (b) of
clause (1) of this Section, the provisions of Section 12.02 and Section 8.06
shall survive.
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SECTION 12.02. APPLICATION OF TRUST MONEY.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 11.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.01; PROVIDED that if the Company has made any payment of principal
of, premium, if any, or interest on any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.
ARTICLE XIII.
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 Company, any Guarantor 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:
If to the Company and/or any Guarantor:
Penn National Gaming, Inc.
Wyomissing Professional Center
825 Berkshire Boulevard, Suite 200
Wyomissing, PA 19610
Telecopier No.: (610) 376-2842
Attention: Robert S. Ippolito
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With a copy to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103-2921
Telecopier No.: (215) 963-5299
Attention: Peter S. Sartorius, Esq.
If to the Trustee:
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Telecopier No.: (860) 244-1897
Attention: Corporate Trust Department
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being 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 Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 13.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
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SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(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;
(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, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or the Guarantors under the Notes, this Indenture, or the
Subsidiary Guarantees, or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a note
waives and
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releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
SECTION 13.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
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 Company or its 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 Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors. All agreements of each Guarantor 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.
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.
[Signatures on following page]
-88-
IN WITNESS WHEREOF, the parties have executed this Indenture as of the
date first written above.
PENN NATIONAL GAMING, INC.
By:
---------------------------------------------------
Name: Peter M. Carlino
Title: Chief Executive Officer
MOUNTAINVIEW THOROUGHBRED RACING ASSOCIATION
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
PENNSYLVANIA NATIONAL TURF CLUB, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
PENN NATIONAL SPEEDWAY, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary
STERLING AVIATION INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
-89-
PENN NATIONAL HOLDING COMPANY
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
EBETUSA.COM, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
PENN NATIONAL GAMING OF WEST VIRGINIA, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
PNGI POCONO, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
TENNESSEE DOWNS, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
-90-
PENN NATIONAL GSFR, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
BSL, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
BTN, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
PNGI CHARLES TOWN GAMING LIMITED LIABILITY COMPANY
By: Penn National Gaming of West Virginia, Inc.,
Managing Member
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
THE DOWNS RACING, INC.
By:
---------------------------------------------------
Name: Joseph A. Lashinger
Title: Secretary/Treasurer
-91-
WILKES BARRE DOWNS, INC.
By:
---------------------------------------------------
Name: Robert E. Abraham
Title: President, Secretary & Treasurer
BACKSIDE, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
MILL CREEK LAND, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Assistant Secretary
NORTHEAST CONCESSIONS, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Treasurer/Vice President
PNGI CHARLES TOWN FOOD & BEVERAGE LIMITED LIABILITY
COMPANY
By: PNGI Charles Town Gaming Limited Liability
Company, Member
By: Penn National Gaming of West Virginia, Inc.
Managing Member
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
-92-
CRC HOLDINGS, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
LOUISIANA CASINO CRUISES, INC.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
CHC CASINOS CORP.
By:
---------------------------------------------------
Name: Robert S. Ippolito
Title: Secretary/Treasurer
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
---------------------------------------------------
Name: Philip G. Kane, Jr.
Title: Vice President
EXHIBIT A
[Face of Note]
================================================================================
CUSIP/CINS ____________
8 7/8% Senior Subordinated Notes due 2010
No. ___ $____________
PENN NATIONAL GAMING, INC.
promises to pay to
-------------------------------------------------------------
or registered assigns,
the principal sum of
-----------------------------------------------------------
Dollars on March 15, 2010.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Dated: _______________, ____
PENN NATIONAL GAMING, INC.
By:
--------------------------------
Name:
Title:
(SEAL)
This is one of the Notes referred to
in the within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
--------------------------------------------
Authorized Signatory
================================================================================
A-1
[Back of Note]
8 7/8 % Senior Subordinated Notes due 2010
[INSERT THE GLOBAL NOTE LEGEND, IF APPLICABLE, PURSUANT TO THE PROVISIONS OF THE
INDENTURE]
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
1. INTEREST. Penn National Gaming, Inc., a Pennsylvania corporation
(the "COMPANY"), promises to pay interest on the principal amount of this Note
at 8 7/8 % per annum from February 28, 2002 until maturity and shall pay
Liquidated Damages, if any, applicable to this Note. The Company shall pay
interest and such Liquidated Damages semi-annually in arrears on March 15 and
September 15 of each year, or, if any such day is not a Business Day, on the
next succeeding Business Day (each an "INTEREST PAYMENT DATE"). 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 the date of issuance; PROVIDED that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; PROVIDED, FURTHER, that the first Interest
Payment Date shall be September 15, 2002. The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate
that is 1% per annum in excess of the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages, if any (without regard
to any applicable grace periods) from time to time on demand at the same rate to
the extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on March 1 and September 1 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
principal, premium and Liquidated Damages, if any, and interest at the office or
agency of the Company maintained for such purpose within The City and State of
New York, or, at the option of the Company, payment of interest and Liquidated
Damages, if any, may be made by check mailed to the Holders at their addresses
set forth in the register of Holders, and PROVIDED that payment by wire transfer
of immediately available funds will be required with respect to principal of,
and interest, premium and Liquidated Damages, if any, on, all Global Notes and
all other Notes the Holders of which hold at least $1,000,000 in principal
amount of the Notes and shall have provided wire transfer instructions to the
Company or the Paying Agent. Such payment shall be in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of February 28, 2002 ("INDENTURE") between the Company and the Trustee. The
terms of the Notes include those
A-2
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
this Indenture shall govern and be controlling.
5. OPTIONAL REDEMPTION.
(a) At any time prior to March 15, 2005, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
originally issued under this Indenture at a redemption price of 108.875 % of the
principal amount, plus accrued and unpaid interest and Liquidated Damages, if
any, to the redemption date, with the net cash proceeds of one or more Equity
Offerings; PROVIDED that at least 65% of the aggregate principal amount of Notes
issued under this Indenture remains outstanding immediately after the occurrence
of such redemption (excluding Notes held by the Company and its Subsidiaries);
and the redemption occurs within 90 days of the date of the closing of such
Equity Offering.
(b) Except as described above, the Notes shall not be redeemable at the
Company's option prior to March 15, 2006. On and after March 15, 2006, the
Company may redeem all or a part of the Notes upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, on the Notes redeemed, to the applicable redemption
date, if redeemed during the twelve-month period beginning on March 15 of the
years indicated below:
YEAR PERCENTAGE
---- ----------
2006 ............................................ 104.438%
2007 ............................................ 102.958%
2008 ............................................ 101.479%
2009 and thereafter ............................. 100.000%
In addition to the foregoing, if any Gaming Authority requires that a
holder or beneficial owner of Notes must be licensed, qualified or found
suitable under any applicable Gaming Laws and such holder or beneficial owner
(i) fails to apply for a license, qualification or a finding of suitability
within 30 days (or such shorter period as may be required by the applicable
Gaming Authority) after being requested to do so by the Gaming Authority, or
(ii) is denied such license or qualification or not found suitable, the Company
shall have the right, at its option (i) to require any such holder or beneficial
owner to dispose of its Notes within 30 days (or such earlier date as may be
required by the applicable Gaming Authority) of receipt of such notice or
finding by such Gaming Authority, or (ii) to call for the redemption of the
Notes of such holder or beneficial owner at a redemption price equal to the
least of (A) the principal amount thereof, together with accrued interest and
Liquidated Damages, if any, to the earlier of the date of redemption or the date
of the denial of license or qualification or of the finding of unsuitability by
such Gaming Authority, (B) the price at which such holder or beneficial owner
acquired the Notes, together with accrued interest and Liquidated Damages, if
any, to the earlier of the date of redemption or the date of the denial of
license or qualification or of the finding of unsuitability by such Gaming
Authority, or (C) such other lesser amount as may be required by any Gaming
Authority.
A-3
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company will be required to
make an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "CHANGE OF CONTROL PAYMENT"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, within
five days of each date on which the aggregate amount of Excess Proceeds exceeds
$5 million, the Company will commence an offer to all Holders of Notes (as
"ASSET SALE OFFER") pursuant to Section 3.09 of the Indenture to purchase the
maximum principal amount 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 principal
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company (or such Subsidiary) may use such deficiency for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee will select
the Notes to be purchased on a PRO RATA basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company 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.
8. 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.
9. 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
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company 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 Company
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.
A-4
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. 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 principal amount of the then outstanding
Notes voting as a single class, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes voting
as a single class. Without the consent of any Holder of a Note, the Indenture,
the Subsidiary Guarantees 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 Company's or Guarantor's 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 SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act, or to allow any Guarantor to execute a
supplemental indenture to the Indenture and/or a Subsidiary Guarantee with
respect to the Notes.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest or Liquidated Damages on the Notes;
(ii) default in payment when due of principal of or premium, if any, on the
Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company or any of its Restricted Subsidiaries to comply with Section
4.07, 4.09, 4.10, 4.14 or 5.01 of the Indenture; (iv) failure by the Company or
any of its Restricted Subsidiaries for 60 days after notice to the Company by
the Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding voting as a single class to comply with certain other agreements in
the Indenture or the Notes; (v) default under certain other agreements relating
to Indebtedness of the Company which default results in the acceleration of such
Indebtedness prior to its express maturity; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 60 days; (vii) certain
events of bankruptcy or insolvency with respect to the Company or any of its
Material Subsidiaries; and (viii) except as permitted by this Indenture, any
Subsidiary Guarantee of any Significant Subsidiary shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Guarantor shall deny or disaffirm its obligations
under its Subsidiary Guarantee. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may 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 shall 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 principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal, interest or Liquidated Damages) if it determines that withholding
notice is in their interest. The Holders of a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest or Liquidated Damages on, or the principal
of, the Notes. The Company is required to deliver to the Trustee annually a
statement regarding
A-5
compliance with the Indenture, and the Company is required, upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for, the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company 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.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. 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).
17. 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 any Registration Rights
Agreement between the Company and the parties named on the signature pages
thereof (the "REGISTRATION RIGHTS AGREEMENT").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has 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.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Penn National Gaming, Inc.
Wyomissing Professional Center
825 Berkshire Boulevard, Suite 200
Wyomissing, PA 19610
Attention: Robert S. Ippolito
A-6
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
--------------------------------
(Insert assignee's legal name)
- --------------------------------------------------------------------------------
(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 Company. 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*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box
below:
|_| Section 4.10 |_| Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:
$
----------------
Date: _______________
Your Signature:
----------------------------------
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:
--------------------------
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-8
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
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:
Principal Amount Signature of
Amount of decrease Amount of increase in of this Global Note Responsible Officer
in Principal Amount Principal Amount of following such of Trustee or Note
Date of Exchange of this Global Note decrease (or Custodian
this Global Note increase)
- ------------------- ------------------- ------------------- -------------- ------------------
- ----------
* THIS SCHEDULE SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.
A-9
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Penn National Gaming, Inc.
Wyomissing Professional Center
825 Berkshire Boulevard, Suite 200
Wyomissing, PA 19610
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Re: 8 7/8 % Senior Subordinated Notes due 2010
Reference is hereby made to the Indenture, dated as of February 28,
2002 (the "INDENTURE"), between Penn National Gaming, Inc., as issuer (the
"COMPANY"), 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
principal amount 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 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
B-1
States and (x) at the time the buy order was originated, the 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 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
Company 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 the Company so requests, 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
B-2
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 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 Company.
------------------------------------------
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
B-3
Dated: _______________________
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(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-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Penn National Gaming, Inc.
Wyomissing Professional Center
825 Berkshire Boulevard, Suite 200
Wyomissing, PA 19610
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Re: 8 7/8 % Senior Subordinated Notes due 2010
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of February 28,
2002 (the "INDENTURE"), between Penn National Gaming, Inc., as issuer (the
"COMPANY"), 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 principal
amount 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 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-1
(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 Company.
------------------------------------------
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
Dated: ______________________
C-3
EXHIBIT D
FORM OF CERTIFICATE OF
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Penn National Gaming, Inc.
Wyomissing Professional Center
825 Berkshire Boulevard, Suite 200
Wyomissing, PA 19610
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Re: 8 7/8 % Senior Subordinated Notes due 2010
Reference is hereby made to the Indenture, dated as of February 28,
2002 (the "INDENTURE"), between Penn National Gaming, Inc., as issuer (the
"COMPANY"), 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 Company 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 furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if the Company so requests, 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
D-1
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
Company such certifications, legal opinions and other information as you and the
Company 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.
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 Company 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 SUBSIDIARY GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of February 28, 2002 (the "INDENTURE")
among Penn National Gaming, Inc. (the "COMPANY"), the Guarantors and State
Street Bank and Trust Company, as trustee (the "TRUSTEE"), (a) the due and
punctual payment of the principal of, premium, if any, and interest on the Notes
(as defined in the Indenture), whether at maturity, by acceleration, redemption
or otherwise, the due and punctual payment of interest on overdue principal and
premium, and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth in Article XI of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Subsidiary
Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Trustee, on behalf
of such Holder, to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and (c) appoints the
Trustee attorney-in-fact of such Holder for such purpose; PROVIDED, HOWEVER,
that the Indebtedness evidenced by this Subsidiary Guarantee shall cease to be
so subordinated and subject in right of payment upon any defeasance of this Note
in accordance with the provisions of the Indenture.
[NAME OF GUARANTOR(S)]
By:
-------------------------------
Name:
Title:
E-1
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of
________________, among __________________ (the "GUARANTEEING SUBSIDIARY"), a
subsidiary of Penn National Gaming, Inc. (or its permitted successor), a
Pennsylvania corporation (the "COMPANY"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and State Street Bank and Trust
Company, as trustee under this Indenture referred to below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "INDENTURE"), dated as of February 28, 2002 providing
for the issuance of an unlimited amount of 8 7/8 % Senior Subordinated Notes due
2010 (the "NOTES");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "SUBSIDIARY GUARANTEE"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee, on a senior subordinated basis, to
each Holder of a Note authenticated and delivered by the Trustee and to
the Trustee and its successors and assigns, the Notes or the
obligations of the Company hereunder or thereunder, that:
(i) the principal of and interest on the Notes will
be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the
terms hereof and thereof; and
F-1
(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that
same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors
shall be jointly and severally obligated to pay the same
immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes
or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any
provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of
a guarantor.
(c) The following is hereby waived: diligence presentment,
demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except
by complete performance of the obligations contained in the Notes and
the Indenture, and the Guaranteeing Subsidiary accepts all obligations
of a Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to
either the Company or the Guarantors, any amount paid by either to the
Trustee or such Holder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any
right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article
VI of the Indenture for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and
(y) in the event of any declaration of acceleration of such obligations
as provided in Article VI of the Indenture, such obligations (whether
or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Guarantee.
(i) Pursuant to Section 11.03 of the Indenture, after giving
effect to any maximum amount and any other contingent and fixed
liabilities that are relevant under any applicable Bankruptcy or
fraudulent conveyance laws, and after giving effect to any collections
from, any rights to receive contribution from, or any payments made by
or on behalf of, any other Guarantor in respect of the obligations of
such other Guarantor under Article XI of the Indenture, this new
Subsidiary Guarantee shall be limited to the maximum amount
permissible such that the obligations of such Guarantor under this
Subsidiary Guarantee will not constitute a fraudulent transfer or
conveyance.
F-2
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the
Subsidiary Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY mAY CONSOLIDATE, eTC. ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not consolidate with or
merge with or into (whether or not such Guarantor is the surviving
Person) another corporation, Person or entity whether or not affiliated
with such Guarantor unless:
(i) subject to Sections 11.05 and 11.06 of the
Indenture, the Person formed by or surviving any such
consolidation or merger (if other than a Guarantor or the
Company) unconditionally assumes all the obligations of such
Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the
Notes, the Indenture and the Subsidiary Guarantee on the terms
set forth herein or therein; and
(ii) immediately after giving effect to such
transaction, no Default or Event of Default exists.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the Subsidiary Guarantee
endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of the Indenture to be performed by the
Guarantor, such successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor. Such successor corporation thereupon may
cause to be signed any or all of the Subsidiary Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee.
All the Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under the Indenture as the Subsidiary
Guarantees theretofore and thereafter issued in accordance with the
terms of the Indenture as though all of such Subsidiary Guarantees had
been issued at the date of the execution hereof.
(c) Except as set forth in Articles IV and V and Section 11.06
of Article XI of the Indenture, and notwithstanding clauses (a) and (b)
above, nothing contained in the Indenture or in any of the Notes shall
prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance
of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
F-3
5. RELEASES.
(a) In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise,
or a sale or other disposition of all the capital stock of any
Guarantor, in each case to a Person that is not (either before or after
giving effect to such transaction) a Restricted Subsidiary of the
Company, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of
the capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and
relieved of any obligations under its Subsidiary Guarantee; PROVIDED
that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture, including
without limitation Section 4.10 of the Indenture. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of
Counsel to the effect that such sale or other disposition was made by
the Company in accordance with the provisions of the Indenture,
including without limitation Section 4.10 of the Indenture, the Trustee
shall execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Subsidiary
Guarantee.
(b) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations of
any Guarantor under the Indenture as provided in Article XI of the
Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
F-4
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, ____
[GUARANTEEING SUBSIDIARY]
By:
-----------------------------------------
Name:
Title:
PENN NATIONAL GAMING, INC.
By:
-----------------------------------------
Name:
Title:
[EXISTING GUARANTORS]
By:
-----------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
-----------------------------------------
Authorized Signatory
F-5
Schedule I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Indenture as of
the Issue Date:
MOUNTAINVIEW THOROUGHBRED RACING ASSOCIATION
PENNSYLVANIA NATIONAL TURF CLUB, INC.
PENN NATIONAL SPEEDWAY, INC.
STERLING AVIATION INC.
PENN NATIONAL HOLDING COMPANY
EBETUSA.COM, INC.
PENN NATIONAL GAMING OF WEST VIRGINIA, INC.
PNGI POCONO, INC.
TENNESSEE DOWNS, INC.
PENN NATIONAL GSFR, INC.
BSL, INC.
BTN, INC.
PNGI CHARLES TOWN GAMING LIMITED LIABILITY COMPANY
THE DOWNS RACING, INC.
WILKES BARRE DOWNS, INC.
BACKSIDE, INC.
MILL CREEK LAND, INC.
NORTHEAST CONCESSIONS, INC.
PNGI CHARLES TOWN FOOD & BEVERAGE LIMITED LIABILITY COMPANY
CRC HOLDINGS, INC.
LOUISIANA CASINO CRUISES, INC.
CHC CASINOS CORP.
F-6
EXHIBIT 12.2
PENN NATIONAL GAMING, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIO)
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30
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1996 1997 1998 1999 2000 2000 2001
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Earnings, as defined:
Income from continuing operations
before provision for income taxes $ 9,304 $ 6,077 $12,022 $10,510 $28,712 $24,840 $ 68,169
Add:
Interest expense 506 4,591 8,374 8,667 22,843 11,004 32,461
Estimate of interest included in
rental expense 334 269 390 432 1,178 380 335
Amortization of capitalized debt
costs and premium on debt 34 296 430 946 1,555 898 1,774
Earnings, as defined $10,178 $11,233 $21,216 $20,555 $54,288 $37,122 $102,739
Fixed Charges:
Interest expense $ 506 $ 4,591 $ 8,374 $ 8,667 $22,843 $11,004 $ 32,461
Estimate of interest included in
rental expense 334 269 390 432 1,178 380 335
Amortization of capitalized debt costs
an premium on debt 34 296 430 946 1,555 898 1,774
Capitalized interest -- -- -- -- 229 58 216
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Total Fixed charges $ 874 $ 5,156 $ 9,194 $10,045 $25,805 $12,340 $ 34,786
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Ratio of earnings to fixed charges 11.7 2.2 2.3 2.1 2.1 3.0 3.0
