Document:

Exhibit 4.1

 

EXECUTION COPY

 

AON FINANCE N.S. 1, ULC,

Company

 

and

 

AON CORPORATION,

Guarantor

 

and

 

COMPUTERSHARE TRUST COMPANY OF CANADA,

Trustee

 

 

INDENTURE

 

 

Dated as of March 8, 2011

 

 

Senior Unsecured Debentures

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
ARTICLE 1
    	
1
    
	
DEFINITIONS
    	
1
    
	
1.01
    	
Definitions
    	
1
    
	
1.02
    	
Rules of Construction
    	
6
    
	
1.03
    	
Day Not a Business Day
    	
6
    
	
1.04
    	
Per Annum Calculations
    	
7
    
	
ARTICLE 2
    	
7
    
	
THE   DEBENTURES
    	
7
    
	
2.01
    	
Form and Dating
    	
7
    
	
2.02
    	
Restrictive Legends
    	
7
    
	
2.03
    	
Execution, Authentication   and Denominations
    	
8
    
	
2.04
    	
Registrar and Paying Agent
    	
9
    
	
2.05
    	
Paying Agent to Hold Money   in Trust
    	
9
    
	
2.06
    	
Transfer and Exchange
    	
10
    
	
2.07
    	
Book-Entry Provisions for   Global Debentures
    	
11
    
	
2.08
    	
Special Transfer Provisions
    	
12
    
	
2.09
    	
Replacement Debentures
    	
12
    
	
2.10
    	
Outstanding Debentures
    	
13
    
	
2.11
    	
Temporary Debentures
    	
13
    
	
2.12
    	
Cancellation
    	
14
    
	
2.13
    	
CUSIP Numbers
    	
14
    
	
2.14
    	
Issuance of Additional   Debentures
    	
14
    
	
ARTICLE 3
    	
14
    
	
REDEMPTION   OF THE DEBENTURES
    	
14
    
	
3.01
    	
Optional Redemption
    	
14
    
	
ARTICLE 4
    	
15
    
	
COVENANTS   OF THE COMPANY AND GUARANTOR
    	
15
    
	
4.01
    	
Payment of Debentures
    	
15
    
	
4.02
    	
Maintenance of Office or   Agency
    	
16
    
	
4.03
    	
Compliance Certificates
    	
16
    
	
4.04
    	
Existence
    	
16
    
	
4.05
    	
Rank
    	
16
    
	
4.06
    	
Repurchase upon Change of   Control of Guarantor
    	
16
    
	
4.07
    	
SEC Reporting
    	
18
    
	
ARTICLE 5
    	
19
    
	
SUCCESSOR   CORPORATION
    	
19
    
	
5.01
    	
When Company   May Merge, Etc.
    	
19
    
	
5.02
    	
Successor Substituted
    	
20
    
	
ARTICLE 6
    	
20
    
	
DEFAULT   AND REMEDIES
    	
20
    
	
6.01
    	
Events of Default
    	
20
    
	
6.02
    	
Acceleration
    	
21
    
	
6.03
    	
Other Remedies
    	
22
    
	
6.04
    	
Waiver of Past Defaults
    	
22
    

 

i

 

	
6.05
    	
Control by Majority
    	
22
    
	
6.06
    	
Payment of Securities on   Default; Suit Therefor
    	
22
    
	
6.07
    	
Limitation on Suits
    	
23
    
	
6.08
    	
Rights of Holders to Receive   Payment
    	
23
    
	
6.09
    	
Collection Suit by Trustee
    	
23
    
	
6.10
    	
Trustee May File Proofs   of Claim
    	
23
    
	
6.11
    	
Priorities
    	
24
    
	
6.12
    	
Restoration of Rights and   Remedies
    	
24
    
	
6.13
    	
Rights and Remedies   Cumulative
    	
25
    
	
6.14
    	
Delay or Omission Not Waiver
    	
25
    
	
ARTICLE 7
    	
25
    
	
TRUSTEE
    	
25
    
	
7.01
    	
General
    	
25
    
	
7.02
    	
Certain Rights of Trustee
    	
25
    
	
7.03
    	
Individual Rights of Trustee
    	
27
    
	
7.04
    	
Trustee’s Disclaimer
    	
27
    
	
7.05
    	
Notice of Default
    	
27
    
	
7.06
    	
Compensation and Indemnity
    	
27
    
	
7.07
    	
Replacement of Trustee
    	
29
    
	
7.08
    	
Successor Trustee by   Merger, Etc.
    	
30
    
	
7.09
    	
Eligibility
    	
30
    
	
7.10
    	
Money Held in Trust
    	
30
    
	
7.11
    	
Initial Appointment of   Trustee
    	
30
    
	
7.12
    	
Global Debentures
    	
30
    
	
7.13
    	
No Conflict of Interest
    	
31
    
	
7.14
    	
Privacy Laws
    	
31
    
	
7.15
    	
Anti-Money Laundering and   Anti-Terrorism Legislation Compliance
    	
31
    
	
7.16
    	
Third Party Interests
    	
32
    
	
7.17
    	
Force Majeure
    	
32
    
	
ARTICLE 8
    	
32
    
	
DISCHARGE   OF INDENTURE
    	
32
    
	
8.01
    	
Termination of Company’s   Obligations
    	
32
    
	
8.02
    	
Defeasance and Discharge of   Indenture
    	
33
    
	
8.03
    	
Defeasance of Certain   Obligations
    	
34
    
	
8.04
    	
Application of Trust Money
    	
35
    
	
8.05
    	
Repayment to Company
    	
35
    
	
8.06
    	
Reinstatement
    	
36
    
	
ARTICLE 9
    	
36
    
	
AMENDMENTS,   SUPPLEMENTS AND WAIVERS
    	
36
    
	
9.01
    	
Without Consent of Holders
    	
36
    
	
9.02
    	
With Consent of Holders
    	
37
    
	
9.03
    	
Action by Holders; Record   Dates
    	
38
    
	
9.04
    	
Revocation and Effect of   Consent
    	
38
    
	
9.05
    	
Notation on or Exchange of   Debentures
    	
39
    
	
9.06
    	
Trustee to Sign Amendments, Etc.
    	
39
    
	
ARTICLE 10
    	
39
    
	
MEETINGS   OF THE HOLDERS
    	
39
    
	
10.01
    	
Purposes of Meetings
    	
39
    

 

ii

 

	
10.02
    	
Call of Meetings by Trustee
    	
40
    
	
10.03
    	
Call of Meetings by Company   or Holders
    	
40
    
	
10.04
    	
Qualification for Voting
    	
40
    
	
10.05
    	
Regulations
    	
40
    
	
10.06
    	
Voting
    	
41
    
	
10.07
    	
Quorum
    	
41
    
	
10.08
    	
Power to Adjourn
    	
42
    
	
10.09
    	
Poll
    	
42
    
	
10.10
    	
Minutes
    	
42
    
	
10.11
    	
Instruments in Writing
    	
42
    
	
ARTICLE 11
    	
42
    
	
GUARANTEE
    	
42
    
	
11.01
    	
Guarantee
    	
42
    
	
ARTICLE 12
    	
43
    
	
MISCELLANEOUS
    	
43
    
	
12.01
    	
Notices
    	
43
    
	
12.02
    	
Certificate and Opinion as   to Conditions Precedent
    	
44
    
	
12.03
    	
Statements Required in   Certificate or Opinion
    	
45
    
	
12.04
    	
Rules by Trustee,   Paying Agent or Registrar
    	
45
    
	
12.05
    	
Payment Date Other Than a   Business Day
    	
45
    
	
12.06
    	
Governing Law
    	
45
    
	
12.07
    	
No Adverse Interpretation of   Other Agreements
    	
45
    
	
12.08
    	
No Recourse Against Others
    	
46
    
	
12.09
    	
Successors
    	
46
    
	
12.10
    	
Duplicate Originals
    	
46
    
	
12.11
    	
Separability
    	
46
    
	
12.12
    	
Table of Contents,   Headings, Etc.
    	
46
    
	
12.13
    	
Counterparts
    	
46
    
	
 
    	
 
    	
 
    
	
EXHIBIT A   Form of Debenture 
    	
A-1
    
	
 
    	
 
    
	
EXHIBIT B   Form of Guarantee 
    	
B-1
    

 

iii

 

 

THIS INDENTURE, dated as of March 8, 2011, among AON FINANCE N.S. 1, ULC, an unlimited company organized under the laws of the Province of Nova Scotia, Canada (the “Company”), AON CORPORATION, a Delaware corporation (the “Guarantor”) and COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company organized and existing pursuant to the laws of Canada, as trustee (the “Trustee”).

 

RECITALS

 

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of the Company’s Senior Unsecured Debentures (the “Debentures”) issuable as provided in this Indenture. The Guarantor has duly authorized the execution and delivery of this Indenture to provide for the guarantee (the “Guarantee”) of the Debentures. All things necessary have been taken: (i) to make this Indenture a valid agreement of the Company and the Guarantor, in accordance with its terms, (ii) to make the Debentures, when executed by the Company and authenticated and delivered by the Trustee hereunder and duly issued by the Company, valid obligations of the Company as hereinafter provided and (iii) to make the Guarantee, when executed and delivered by the Guarantor, a valid obligation of the Guarantor as hereinafter provided.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH

 

For and in consideration of the premises and the purchase of the Debentures by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders, as follows.

 

ARTICLE 1

DEFINITIONS

 

1.01                        Definitions.

 

“Administrative  Agent” means Computershare Trust Company of Canada, appointed pursuant to the Administrative Agreement dated as of March 8, 2011, between the Company and Computershare Trust Company of Canada.

 

“Affiliate” has the meaning set forth in the Canada Business Corporations Act.

 

“Agent” means any Registrar, co-Registrar, Paying Agent or authenticating agent.

 

“Agent Members” has the meaning provided in Section 2.07.

 

“Authorized Newspaper”, with respect to any jurisdiction, means a newspaper of general circulation in such jurisdiction. If it shall be impractical in the opinion of the Trustee to make any publication of any notice required hereby in an Authorized Newspaper, any publication or other notice in lieu thereof which is made or given with the approval of the Trustee shall constitute a sufficient publication of such notice.

 

“Board of Directors” means the board of directors of the Company or the Guarantor, as applicable, or any committee of such board of directors duly authorized to act under this Indenture.

 

 

“Board  Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or the Guarantor, as applicable, to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Book-Entry System” means the record entry securities transfer and pledge system which is administered by the Depository in accordance with the operating rules and procedures of the securities settlement service of the Depository for book-entry only securities in force from time to time or any successor system thereof.

 

“Business  Day” means any day which is not a Saturday, a Sunday or a statutory, bank or civic holiday in the City of Toronto.

 

“Canada Yield” has the meaning provided in Section 3.01. “Canada Yield Price” has the meaning provided in Section 3.01.

 

“Canadian  Dollar” or “$” or any similar reference shall mean Canadian dollars, except as may otherwise be provided for in this Indenture.

 

“Canadian Government Obligations” means securities which are (i) direct obligations of Canada, for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of Canada, the payment of which is unconditionally guaranteed as a full faith and credit obligation by Canada, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such Canadian Government Obligation or a specific payment of interest on or principal of any such Canadian Government Obligation held by such custodian for the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Canadian Government Obligation or the specific payment of interest on or principal of the Canadian Government Obligation evidenced by such depository receipt.

 

“Canadian Securities Laws” means the applicable securities laws of each province and territory of Canada and the respective regulations, rules, rulings and orders made thereunder and the applicable written policy statements issued by the securities commission or other similar regulatory authority of each province and territory of Canada, as the same may be modified by discretionary relief therefrom granted by such securities commission or regulatory authority.

 

“Change of Control” has the meaning provided in Section 4.06.

 

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Rating Event.

 

“Closing  Date” means March 8, 2011.

 

“Company” means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to Article 5 of this Indenture and thereafter means the successor.

 

“Company  Order” means a written request or order signed in the name of the Company (i) by its Chairman, its President, or a Vice President and (ii) by its Treasurer, its Secretary or an Assistant

 

2

 

Secretary and delivered to the Trustee; provided, however, that such written request or order may be signed by any two of the officers or directors listed in clause (i) above in lieu of being signed by one of such officers or directors listed in such clause (i) and one of the officers listed in clause (ii) above.

 

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Guarantor who (1) was a member of the Board of Directors of the Guarantor on the date the Debentures were initially issued or (2) was nominated for election, elected or appointed to the Board of Directors of the Guarantor with the approval of a majority of the Continuing Directors who were members of the Board of Directors of the Guarantor at the time of the nomination, election or appointment (either by a specific vote or by approval of the proxy statement of the Guarantor in which that member was named as a nominee for election as a director, without objection to the nomination).

 

“Corporate  Trust  Office” means the office of the Trustee in the Province of Ontario at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date of original execution of this Indenture, located at 100 University Avenue, 9th Floor, North Tower, Toronto, Ontario, M5J 2Y1.

 

“Debentures” means any of the securities, as defined in the first paragraph of the recitals hereof, that are authenticated and delivered under this Indenture. For all purposes of this Indenture, the term “Debentures” shall include the Debentures initially issued on the Closing Date and any other Debentures issued after the Closing Date under this Indenture. For purposes of this Indenture, all Debentures shall vote together as one series of Debentures under this Indenture.

 

“Default” means an event or condition the occurrence of which is, or with the lapse of time or giving of notice or both would be, an Event of Default.

 

“Depository” means CDS Clearing and Depository Services Inc. (“CDS”), its nominees, and their respective successors or such other Person as designated in writing by the Corporation to act as depository in respect of Debentures.

 

“Event of Default” has the meaning provided in Section 6.01.

 

“Global  Debentures” has the meaning provided in Section 2.01.

 

“Guarantee” means the guarantee of the Guarantor authenticated and delivered pursuant to this Indenture and shall include the Guarantee set forth in Article 11 of this Indenture and all other obligations and covenants of the Guarantor contained in this Indenture and the Debentures.

 

“Guarantor” means any party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to Article 5 of this Indenture and thereafter means the successor.

 

“Holder” or “Debentureholder” means the Person in whose name a Debenture is registered in the Security Register.

 

“Indenture” means this Indenture as originally executed or as it may be amended or supplemented from time to time by one or more indentures supplemental to this Indenture entered into pursuant to the applicable provisions of this Indenture.

 

3

 

“Interest Payment Date” means September 8 and March 8 of each year, commencing September 8, 2011, for purposes of the Debentures issued on the Closing Date or otherwise as set forth in any Debentures issued subsequent to the Closing Date pursuant to the terms of this Indenture.

 

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, and the equivalent investment grade credit rating from any replacement Rating Agency or Rating Agencies selected by the Guarantor.

 

“Maturity  Date” means March 8, 2018, for purposes of the Debentures issued on the Closing Date or otherwise as set forth in any Debentures issued subsequent to the Closing Date pursuant to the terms of this Indenture.

 

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

“Officer” means, with respect to the Company or the Guarantor, any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Secretary, any Assistant Secretary or any other duly authorized officer.

 

“Officer’s  Certificate” means a certificate signed by an Officer which is in form and substance satisfactory to the Trustee.

 

“Opinion  of Counsel” means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company or the Guarantor, that meets the requirements of Section 12.03 hereof.

 

“Paying  Agent” has the meaning provided in Section 2.04, except that, for the purposes of Article 8, the Paying Agent shall not be the Company, the Guarantor or a Subsidiary of the Company or the Guarantor or an Affiliate of any of them. The term “Paying Agent” includes the Administrative Agent and any additional Paying Agent.

 

“Person” means an individual, a corporation, a partnership, joint venture, a limited liability company, an unlimited company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

“Physical  Debentures” means the Debentures issued in the form of permanent certificated Debentures in registered form.

 

“principal” of a debt security, including the Debentures, means the principal amount due on the Stated Maturity as shown on such debt security.

 

“Private  Placement  Legend” means the legend set forth on the Debentures in the form set forth in Section 2.02.

 

“Rating Agencies” means each of Moody’s and S&P; provided, that if any of Moody’s or S&P ceases to provide rating services to issuers or investors, the Guarantor may appoint a replacement for such Rating Agency that is reasonably acceptable to the Trustee.

 

4

 

“Rating Event” means the rating on the Debentures is lowered by both the Rating Agencies and such Debentures are rated below an Investment Grade Rating by both the Rating Agencies, in any case on any day during the period (which period will be extended so long as the rating of such Debentures is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) beginning on the first public notice of the consummation of a Change of Control and ending 60 days following consummation of such Change of Control.

 

“Record  Date” in respect of the interest payable on any Interest Payment Date means the fifteenth calendar day (whether or not a Business Day) immediately preceding such Interest Payment Date.

 

“Redemption  Price” has the meaning provided in Section 3.01.

 

“Registrar” has the meaning provided in Section 2.04.

 

“S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc., and its successors.

 

“Security  Register” has the meaning provided in Section 2.04.

 

“Significant  Subsidiary” means a Subsidiary of the Guarantor (which includes, for greater certainty, a Subsidiary of the Company) which meets any of the following conditions:

 

(a)                                  the Guarantor’s and its other Subsidiaries’ investments in and advances to the Subsidiary exceed 10 percent of the total assets of the Guarantor and its Subsidiaries consolidated as of the end of the most recently completed fiscal year (for a proposed business combination to be accounted for as a pooling of interests, this condition is also met when the number of common shares exchanged by the Guarantor exceeds 10 percent of its total common shares outstanding at the date the combination is initiated); or

 

(b)                                 the Guarantor’s and its other Subsidiaries’ proportionate share of the total assets (after intercompany eliminations) of the Subsidiary exceeds 10 percent of the total assets of the Guarantor and its Subsidiaries consolidated as of the end of the most recently completed fiscal year; or

 

(c)                                  the Guarantor’s and its other Subsidiaries’ equity in the income from continuing operations before income taxes, extraordinary items and the cumulative effect of a change in accounting principle of the Subsidiary exceeds 10 percent of such income of the Guarantor and its Subsidiaries consolidated for the most recently completed fiscal year.

 

“Stated  Maturity” means a date specified herein or in the Debentures as the fixed date on which the principal amount thereof or any instalment of interest thereon is due and payable.

 

“Subsidiary” means, with respect to any Person, (i) any corporation of which at least a majority in interest of the outstanding shares having by the terms thereof voting power under ordinary circumstances to elect directors of such corporation, irrespective of whether or not at the time shares of any other class or classes of such corporation shall have or might have voting power by reason of the

 

5

 

happening of any contingency, is at the time, directly or indirectly, owned or controlled by such Person, or by one or more other corporations a majority in interest of such shares of which is similarly owned or controlled or by such Person and one or more other corporations a majority in interest of such shares of which is similarly owned or controlled, or (ii) any other Person (other than a corporation) in which such Person, directly or indirectly, at the date of determination thereof, has at least a majority equity ownership interest.

 

“Trustee” means the party named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the provisions of Article 7 of this Indenture and thereafter means such successor.

 

“Voting Stock” means, with respect to any Person as of any date, the capital stock of that Person that is at the time entitled to vote generally in the election of the board of directors of that Person.

 

“Written Request of the Company” and “Written Direction of the Company” means, respectively, a written request or direction signed in the name of the Company by any Officer of the Company or other authorized signatory of the Company, and may consist of one or more instruments so executed.

 

1.02                        Rules of Construction.

 

Except as otherwise expressly provided in or pursuant to this Indenture, unless the context otherwise requires for all purposes of this Indenture:

 

(i)                                     a term has the meaning assigned to it;

 

(ii)                                  an accounting term not otherwise defined has the meaning assigned to it in accordance with accounting principles generally accepted in the United States in effect on the date of this Indenture;

 

(iii)                               “or” is not exclusive;

 

(iv)                              words in the singular include the plural, and words in the plural include the singular;

 

(v)                                 provisions apply to successive events and transactions;

 

(vi)                              “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and

 

(vii)                           all references to Sections or Articles refer to Sections or Articles of this Indenture unless otherwise indicated.

 

1.03                        Day Not a Business Day.

 

Unless otherwise expressly provided in this Indenture; whenever any payment is to be made on a day other than a Business Day, the payment will be made on the next succeeding Business Day.  Unless otherwise expressly provided in this Indenture, whenever any action is to be taken or scheduled to be

 

6

 

taken on, or any period of time is stated or scheduled to commence or terminate on, a day other than a Business Day, the action will be taken or the period of time will commence or terminate, as the case may be, on the next succeeding Business Day.

 

1.04                        Per Annum Calculations.

 

For the purposes of the Interest Act (Canada), whenever interest to be paid under this Indenture is to be calculated on the basis of a year of a specified number of days, the yearly equivalent rate of interest to which the rate determined pursuant to such calculation is equivalent to is the rate so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained divided by such specified number of days.

 

ARTICLE 2

THE DEBENTURES

 

2.01                        Form and Dating.

 

The Debentures, and the Trustee’s certificate of authentication thereon and the Guarantee shall be substantially in the form annexed hereto as Exhibit A or Exhibit B, as applicable, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture. The Debentures may have notations, legends or endorsements required by law, or usage. The Company shall approve the form of the Debentures and any notation, legend or endorsement on the Debentures. Each Debenture shall be dated the date of its authentication.

 

The terms and provisions contained in the form of the Debentures annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a part of this Indenture. To the extent applicable, the Company, the Guarantor and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

 

The Debentures will be offered and sold by the Company in reliance on exemptions from the prospectus requirements of applicable Canadian Securities Laws, in each case, subject to the restrictions on transfer set forth herein, and shall be issued initially in the form of one or more permanent global Debentures in definitive, registered form, substantially in the form and bearing the restrictive legends set forth in Exhibit A (the “Global Debentures”), registered in the name of the nominee of the Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided. Subject to the terms of this Indenture, the aggregate principal amount of the Global Debentures may from time to time be increased or decreased by adjustments made on the records of the Trustee, or its nominee, in accordance with the instructions given by the Holder thereof, as hereinafter provided.

 

The definitive Debentures shall be typed, printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner, all as determined by the Officers executing such Debentures, as evidenced by their execution of such Debentures.

 

2.02                        Restrictive Legends.

 

Each Global Debenture, shall bear the following legend on the face thereof:

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO AON FINANCE N.S. 1, ULC (THE “ISSUER”)

 

7

 

OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE.

 

THIS DEBENTURE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS DEBENTURE IS HEREBY NOTIFIED THAT THE SELLER OF THIS DEBENTURE MAY BE RELYING ON AN EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT.

 

2.03                        Execution, Authentication and Denominations.

 

Subject to Article 8 and applicable law, the aggregate principal amount of Debentures which may be authenticated and delivered under this Indenture is unlimited. The Debentures shall be executed by two Officers of the Company. The signature of these Officers on the Debentures may be by facsimile or manual signature in the name and on behalf of the Company.

 

If an Officer whose signature is on a Debenture no longer holds that office at the time the Trustee authenticates the Debenture, the Debenture shall nevertheless be valid.

 

A Debenture shall not be valid until the Trustee manually signs the certificate of authentication on the Debenture. The signature shall be conclusive evidence that the Debenture has been authenticated under this Indenture.

 

At any time and from time to time after the execution of this Indenture, the Trustee shall upon receipt of a Company Order authenticate for original issue Debentures in the aggregate principal amount specified in such Company Order; provided that the Trustee shall be entitled to receive an Officer’s Certificate and an Opinion of Counsel of the Company in connection with such authentication of Debentures. Such Company Order shall specify the amount of Debentures to be authenticated and the date on which the original issue of Debentures is to be authenticated and, in case of an issuance of Debentures pursuant to Section 2.11, shall certify that such issuance is in compliance with this Article 2.

 

The Trustee may appoint an authenticating agent to authenticate Debentures. An authenticating agent may authenticate Debentures 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 Debentures shall be issuable only in registered form without coupons and only in denominations of $1,000  in principal amount and any integral multiple thereof.

 

8

 

2.04                        Registrar and Paying Agent.

 

The Company shall maintain an office or agency in Toronto where Debentures may be presented for registration of transfer or for exchange (the “Registrar”), an office or agency in Toronto where Debentures may be presented for payment (the “Paying Agent”) and an office or agency in Toronto where notices and demands to or upon the Company or Guarantor in respect of the Debentures and this Indenture may be served, which shall be in the Province of Ontario, City of Toronto. The Company shall cause the Registrar to keep a register of the Debentures and of their transfer and exchange (the “Security Register”). The Security Register shall be in written form or any other form capable of being converted into written form within a reasonable time. The Company may have one or more co-Registrars and one or more additional Paying Agents.

 

The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall give prompt written notice to the Trustee of the name and address of any such Agent and any change in the address of such Agent. If the Company fails to maintain a Registrar, Paying Agent and/or agent for service of notices and demands, the Trustee shall act as such Registrar, Paying Agent and/or agent for service of notices and demands. The Company may remove any Agent upon written notice to such Agent and the Trustee; provided that no such removal shall become effective until (i) the acceptance of an appointment by a successor Agent to such Agent as evidenced by an appropriate agency agreement entered into by the Company and such successor Agent is delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as such Agent until the appointment of a successor Agent in accordance with clause (i) of this proviso. Except in the case of a defeasance of the Company’s obligations in accordance with Article 8, the Company, any Subsidiary of the Company or any Affiliate of any of them may act as Paying Agent, Registrar or Co-Registrar, and/or agent for service of notice and demands.

 

The Company initially appoints the Trustee as Registrar, Paying Agent, Administrative Agent, authenticating agent and agent for service of notice and demands. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee as of each Record Date and at such other times as the Trustee may reasonably request the names and addresses of Holders as they appear in the Security Register, including the aggregate principal amount of Debentures held by each Holder.

 

2.05                        Paying Agent to Hold Money in Trust.

 

On or before 4:00 p.m. (Toronto time) on the Business Day immediately prior to each due date of any principal of or interest on any Debentures, the Company shall deposit with the Paying Agent money in immediately available funds sufficient to pay such principal and interest so becoming due. The Company shall require each Paying Agent other than the Trustee to agree in writing that such Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal of and interest on the Debentures (whether such money has been paid to it by the Company or any other obligor on the Debentures including the Guarantor), and such Paying Agent shall promptly notify the Trustee of any default by the Company (or any other obligor on the Debentures including the Guarantor) in making any such payment. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request

 

9

 

to a Paying Agent, require such Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent shall have no further liability for the money so paid over to the Trustee. If the Company or any Subsidiary of the Company or any Affiliate of any of them acts as Paying Agent, it will, on or before each due date of any principal of or interest on the Debentures, segregate and hold in a separate trust fund for the benefit of the Holders a sum of money sufficient to pay such principal or interest so becoming due until such sum of money shall be paid to such Holders or otherwise disposed of as provided in this Indenture, and will promptly notify the Trustee of its action or failure to act.

 

2.06                        Transfer and Exchange.

 

The Debentures are issuable only in registered form. A Holder may transfer a Debenture only by written application to the Registrar stating the name of the proposed transferee and otherwise complying with the terms of this Indenture and applicable Canadian Securities Laws. No such transfer shall be effected until, and such transferee shall succeed to the rights of a Holder only upon, final acceptance and registration of the transfer by the Registrar in the Security Register. Prior to the registration of any transfer by a Holder as provided herein, the Company, the Trustee and any agent of the Company shall treat the person in whose name the Debenture is registered as the owner thereof for all purposes whether or not the Debenture shall be overdue, and none of the Company, the Trustee or any such agent shall be affected by notice to the contrary. Furthermore, any Holder of a Global Debenture shall, by acceptance of such Global Debenture, agree that transfers of beneficial interests in such Global Debenture may be effected only through a book entry system maintained by the Holder of such Global Debenture (or its agent) and that ownership of a beneficial interest in the Debenture shall be required to be reflected in a book entry. When Debentures are presented to the Registrar or a Co-Registrar with a request to register the transfer or to exchange them for an equal principal amount of Debentures of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements for such transactions are met (including that such Debentures are duly endorsed or accompanied by a written instrument of transfer in form attached or in such other form satisfactory to the Trustee and Registrar duly executed by the Holder thereof or by an attorney who is authorized in writing to act on behalf of the Holder). To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Debentures at the Registrar’s request. No service charge shall be made for any registration of transfer or exchange of the Debentures, 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 other similar governmental charge payable upon exchanges pursuant to Section 2.11 or Section 9.05).

 

The Debentures are not intended to be sold to Persons who are not Canadian residents within the meaning of the Income Tax Act (Canada). Any withholding taxes required under applicable laws with respect to payments to Holders who are non-residents of Canada (as defined in the Income Tax Act (Canada)) shall be withheld by the Company and remitted to the applicable taxing authority without any gross-up or additional amount paid to such non-resident Holders.

 

The Trustee shall have no obligation to verify any payments under the Income Tax Act (Canada) or any provision of provincial, state, local or foreign tax law.  The Trustee shall at all times be indemnified and held harmless by the Company from and against any personal liabilities of the Trustee incurred in connection with the failure of the Company or its agents, to report, remit or withhold taxes as required by the Income Tax Act (Canada) or otherwise failing to comply with the Income Tax Act

 

10

 

 

(Canada).  This indemnification shall survive the resignation or removal of the Trustee and the termination of this Indenture.

 

2.07                        Book-Entry Provisions for Global Debentures.

 

The Company shall execute and the Trustee shall, in accordance with this Section 2.07, authenticate and deliver initially one or more Global Debentures, which initially shall (i) be registered in the name of the Depository for such Global Debentures or the nominee of such Depository, and (iii) bear legends as set forth in Section 2.02. The Global Debentures will be held pursuant to the Book-Entry System.

 

Participants in the Depository (“Agent  Members”) shall have no rights under this Indenture with respect to any Global Debenture held on their behalf by the Depository, or the Trustee, or under such Global Debenture, and the Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Debenture for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any Global Debenture.

 

(a)                                  Transfers of a Global Debenture shall be limited to transfers of such Global Debenture in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in Global Debentures may be transferred in accordance with the rules and procedures of the Depository and the provisions of Section 2.06. In addition, Physical Debentures shall be transferred to all beneficial owners in exchange for their beneficial interests in the Global Debentures if (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for the Global Debentures and a successor depository is not appointed by the Company within 90 days of such notice, (ii) an Event of Default has occurred and is continuing and the Registrar has received a request from the Depository or (iii) in accordance with the rules and procedures of the Depository and the provisions of Section 2.06.

 

(b)                                 In connection with any transfer of a portion of the beneficial interests in a Global Debenture to beneficial owners pursuant to paragraph (a) of this Section 2.07, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of such Global Debenture in an amount equal to the principal amount of the beneficial interest in such Global Debenture to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more Physical Debentures of like tenor and amount.

 

(c)                                  In connection with the transfer of the Global Debentures, in whole, to beneficial owners pursuant to paragraph (a) of this Section 2.07, the Global Debentures shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depository in exchange for its beneficial interest in the Global Debentures an equal aggregate principal amount of Physical Debentures of authorized denominations.

 

(d)                                 Any Physical Debenture delivered in exchange for an interest in the Global Debentures pursuant to paragraph (a), (b) or (c) of this Section 2.07 shall, except as otherwise

 

11

 

provided by Section 2.11, bear the legend regarding transfer restrictions applicable to the Physical Debenture set forth in Section 2.02.

 

(e)                                  The registered Holder of a Global Debenture may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Debentures.

 

Notwithstanding anything to the contrary set out herein, all physical Debenture Certificates issued to the Depository may be surrendered to the Trustee for an electronic position on the register of Holders to be maintained by the Trustee in accordance with this Section 2.07.  All Debentures maintained in such electronic position will be valid and binding obligations of the Company, entitling the registered Holders to the same benefits as those registered Holders who hold Debentures in physical form.  This Indenture and the provisions contained herein will apply, mutatis mutandis, to such Debentures held in such electronic position.

 

2.08                        Special Transfer Provisions.

 

(a)                                  General. By its acceptance of any Debenture bearing a restrictive legend, each Holder of such a Debenture acknowledges the restrictions on transfer of such Debenture set forth in this Indenture and in such restrictive legend and agrees that it will transfer such Debenture only as provided in this Indenture. The Registrar shall not register a transfer of any Debenture unless such transfer complies with the restrictions on transfer of such Debenture set forth in this Indenture. In connection with any transfer of Debentures, each Holder agrees by its acceptance of the Debentures to furnish the Registrar or the Company such certifications, legal opinions or other information as either of them may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or a transaction not subject to, the registration requirements of applicable Canadian Securities Laws; provided that the Registrar shall not be required to determine (but may rely on a determination made by the Company with respect to) the sufficiency of any such certifications, legal opinions or other information.

 

(b)                                 Retention by Registrar. The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.06 or this Section 2.08. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

 

2.09                        Replacement Debentures.

 

If a mutilated Debenture is surrendered to the Trustee or if the Holder claims that the Debenture has been lost, destroyed or wrongfully taken, then, in the absence of notice to the Company or the Trustee that such Debenture has been acquired by a bona fide purchaser, the Company shall issue and the Trustee shall authenticate a replacement Debenture of like tenor and principal amount and bearing a number not contemporaneously outstanding; provided that the requirements of this Section 2.09 are met. If required by the Trustee or the Company, a surety bond must be furnished that is sufficient in the judgment of both the Trustee and the Company to protect the Company, the Trustee or any Agent from any loss that any of them may suffer if a Debenture is replaced. The Company may charge such Holder for its expenses and the expenses of the Trustee in replacing a Debenture. In case

 

12

 

any such mutilated, lost, destroyed or wrongfully taken Debenture has become or is about to become due and payable, the Company in its discretion may pay such Debenture instead of issuing a new Debenture in replacement thereof.

 

Every replacement Debenture is an additional obligation of the Company (in replacement of the obligation of the Company under the Debenture being replaced) and shall be entitled to the benefits of this Indenture.

 

2.10                        Outstanding Debentures.

 

Debentures outstanding at any time are all Debentures that have been authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section 2.10 as not outstanding.

 

If a Debenture is replaced pursuant to Section 2.09, it ceases to be outstanding unless and until the Trustee and the Company receive proof satisfactory to them that the replaced Debenture is held by a bona fide purchaser.

 

If the Paying Agent (other than the Company or an Affiliate of the Company) holds on the Maturity Date money sufficient to pay Debentures payable on that date, then on and after that date such Debentures cease to be outstanding and interest on them shall cease to accrue.

 

A Debenture does not cease to be outstanding because the Company or one of its Affiliates holds such Debenture, provided, however, that in determining whether the Holders of the requisite principal amount of the outstanding Debentures have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Debentures owned by the Company or any other obligor upon the Debentures or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be outstanding; except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Debentures which the Trustee has actual knowledge to be so owned shall be so disregarded. Debentures so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Debentures and that the pledgee is not the Company or any other obligor upon the Debentures or any Affiliate of the Company or of such other obligor.

 

2.11                        Temporary Debentures.

 

Until definitive Debentures are ready for delivery, the Company may prepare and execute and the Trustee shall authenticate temporary Debentures. Temporary Debentures shall be substantially in the form of definitive Debentures but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officers executing the temporary Debentures, as evidenced by their execution of such temporary Debentures. If temporary Debentures are issued, the Company will cause definitive Debentures to be prepared without unreasonable delay. After the preparation of definitive Debentures, the temporary Debentures shall be exchangeable for definitive Debentures upon surrender of the temporary Debentures at the office or agency of the Company designated for such purpose pursuant to Section 4.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Debentures the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Debentures of authorized

 

13

 

denominations. Until so exchanged, the temporary Debentures shall be entitled to the same benefits under this Indenture as definitive Debentures.

 

2.12                        Cancellation.

 

The Company at any time shall deliver to the Trustee for cancellation any Debentures previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Debentures previously authenticated hereunder which the Company has not issued and sold. The Registrar and the Paying Agent shall forward to the Trustee any Debentures surrendered to them for transfer, exchange or payment. The Trustee shall cancel all Debentures surrendered for transfer, exchange, payment or cancellation and shall dispose of them in accordance with its normal procedure.

 

2.13                        CUSIP Numbers.

 

The Company in issuing the Debentures shall use “CUSIP” or “ISIN” numbers (if then generally in use), and the Company and the Trustee shall use CUSIP or ISIN numbers, as the case may be, in notices of exchange as a convenience to Holders; provided that any such notice shall state that no representation is made as to the correctness of such numbers either as printed on the Debentures or as contained in any notice of exchange and that reliance may be placed only on the other identification numbers printed on the Debentures. The Company shall promptly notify the Trustee of any change in “CUSIP” or “ISIN” numbers for the Debentures.

 

2.14                        Issuance of Additional Debentures.

 

The Company may, subject to this Article 2 of this Indenture and applicable law, issue additional Debentures under this Indenture. The Debentures issued on the Closing Date and any additional Debentures subsequently issued shall be treated as a single class for all purposes under this Indenture.

 

ARTICLE 3

REDEMPTION OF THE DEBENTURES

 

3.01                        Optional Redemption.

 

The Debentures will be redeemable in whole at any time or in part from time to time, at the option of the Company, at a redemption price (the “Redemption  Price”) equal to the greater of: (i) one hundred percent (100%) of the outstanding principal amount of the Debentures being redeemed or (ii) the Canada Yield Price calculated in respect of the Debentures being redeemed; plus, in either case, accrued and unpaid interest on the principal amount being redeemed to but excluding the redemption date. Notwithstanding the foregoing, installments of interest on Debentures that are due and payable on Interest Payment Dates falling on or prior to a redemption date will be payable on the Interest Payment Date to the Holders as of the close of business on the relevant Record Date. Notice of any redemption will be mailed by first class mail, postage prepaid, at least 30 days but no more than 60 days before the redemption date to each Holder of the Debentures (and to beneficial owners as required by applicable law) to be redeemed at such Holder’s address as it appears on the Registrar’s books (the “Redemption Notice”).  Unless the Company defaults in payment of the Redemption Price and accrued and unpaid interest, on and after the redemption date, interest will cease to accrue on the Debentures or portions thereof called for redemption. If fewer than all of the Debentures are to be redeemed, the

 

14

 

Company shall notify the Trustee not more than 60 days prior to the redemption date, as to the particular Debentures or portions thereof for redemption from the Debentures not previously called. The Debentures to be so redeemed shall be selected by the Company on a pro rata basis to the nearest multiple of $1,000 in accordance with the principal amount of the Debentures registered in the name of each Holder.  All Debentures redeemed under the provisions of this Article 3 shall be forthwith delivered to and cancelled by the Trustee, and no Debentures shall be issued in substitution thereof.

 

Prior to 4:00 p.m. (Toronto time) on the Business Day immediately preceding the Redemption Date, the Company shall deposit with the Trustee (or, if the Company acts as Paying Agent, shall segregate and hold in trust) an amount of money in immediately available funds sufficient to pay the Redemption Price payable upon redemption on the Debentures to be redeemed on that date, other than Debentures or portions thereof called for redemption on that date which have been delivered by the Company to the Trustee for cancellation or have been converted.  The Trustee shall as promptly as practicable return to the Company any funds not required for that purpose or, if such funds are then held by the Company in trust and are not required for such purpose, they shall be discharged from the trust.

 

“Canada Yield Price” means the price, calculated on the fifth Business Day preceding the date of redemption, equal to the net present value of all scheduled payments of interest (other than accrued and unpaid interest) and principal on the Debentures to be redeemed, using a discount rate equal to the sum of the Canada Yield (as defined below) and 43 basis points in the case of the Debentures issued on the Closing Date or otherwise as set forth in any Debentures issued subsequent to the Closing Date pursuant to the terms of this Indenture.

 

“Canada Yield” means, on any date, the yield to maturity on such date, compounded semi-annually, which a non-callable Government of Canada Bond would carry if issued, in Canadian dollars in Canada, at 100% of its principal amount on such date with a term to maturity approximately equal to the remaining term to maturity of the Debentures to be redeemed. The Canada Yield will be the average of the yields determined by two major Canadian investment dealers selected by the Company.

 

ARTICLE 4

COVENANTS OF THE COMPANY AND GUARANTOR

 

4.01                        Payment of Debentures.

 

The Company shall pay the principal of and interest and other amounts, if any, on the Debentures on the dates and in the manner provided in the Debentures and this Indenture. An installment of principal or interest shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company, the Guarantor, a Subsidiary of the Company or the Guarantor, as applicable, or any Affiliate of any of them) holds on that date money designated for and sufficient to pay the installment. If the Company, the Guarantor or any Subsidiary of the Company or the Guarantor or any Affiliate of any of them acts as Paying Agent, an installment of principal or interest shall be considered paid on the due date if the entity acting as Paying Agent complies with the last sentence of Section 2.05. As provided in Section 6.10, upon any bankruptcy or reorganization procedure relative to the Company or the Guarantor, the Trustee shall serve as the Paying Agent, if any, for the Debentures.

 

15

 

4.02                        Maintenance of Office or Agency.

 

So long as any of the Debentures shall remain outstanding, the Company will maintain in the Province of Ontario, City of Toronto an office or agency where Debentures may be surrendered for registration of transfer or exchange or for presentation for payment and where notices and demands to or upon the Company in respect of the Debentures and this Indenture may be served. The Company will 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 address of the Trustee set forth in Section 12.01.

 

The Company may also from time to time designate one or more other offices or agencies where the Debentures may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Province of Ontario, City of Toronto 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 initially designates the Corporate Trust Office of the Trustee as such office of the Company in accordance with Section 2.04.

 

4.03                        Compliance Certificates.

 

Each of the Company and the Guarantor shall deliver to the Trustee on or before a date not more than four months after the end of its respective fiscal year ending after the date hereof, an Officer’s Certificate stating whether or not the signers have knowledge of any Default or Event of Default. If the Officer of the Company or Guarantor signing such certificate has knowledge of such a Default or Event of Default, the Officer’s Certificate shall describe any such Default or Event of Default and the nature thereof.

 

4.04                        Existence.

 

Subject to Article 5, each of the Company and the Guarantor will do or cause to be done all things necessary to preserve and keep in full force and effect its existence and rights (charter and statutory); provided that it shall not be required to preserve any such right if it shall determine that the preservation thereof is no longer desirable in the conduct of its business and that the loss thereof is not disadvantageous in any material respect to the Holders.

 

4.05                        Rank

 

The obligations of the Company under the Debentures shall constitute direct, unconditional, unsubordinated and unsecured obligations of the Company and shall rank pari passu with all other present and future unsubordinated and unsecured obligations of the Company.

 

4.06                        Repurchase upon Change of Control of Guarantor

 

If a Change of Control Repurchase Event occurs with respect to the Debentures, unless the Company has exercised its option to redeem the Debentures by notifying the Holders thereof to that effect, the Company shall make an offer (a “Change of Control Repurchase Offer”) to each Holder to

 

16

 

repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess of $2,000) of that Holder’s Debentures on the terms set forth in this Indenture. In a Change of Control Offer, the Company shall offer payment in cash equal to 101% of the aggregate principal amount of the Debentures repurchased, plus accrued and unpaid interest, if any, on the Debentures repurchased to the date of repurchase (the “Change of Control Payment”).

 

Within 30 days following any Change of Control Repurchase Event or, at the option of the Company, prior to any Change of Control, but after public announcement of such pending Change of Control, the Company shall send, by first class mail, a notice to each Holder, with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. Such notice shall state, among other things, the purchase date, which date will be no earlier than 30 days and no later than 90 days from the date that notice is mailed, other than as may be required by law (a “Change of Control Payment Date”). The notice will, if mailed prior to the date of consummation of the Change of Control, state that the Change of Control Offer is conditioned on the Change of Control Repurchase Event occurring on or prior to the applicable Change of Control Payment Date.

 

Holders electing to have Debentures purchased pursuant to a Change of Control Offer will be required to surrender their Debentures, with the form entitled “Option of Holder to Elect Purchase” on the reverse side of the Debenture completed, to the Paying Agent at the address specified in the notice, or transfer their Debentures to the Paying Agent by book-entry transfer pursuant to the applicable procedures of the Depository and the Paying Agent, prior to the close of business on the  fifth Business Day prior to the Change of Control Payment Date.

 

On each Change of Control Payment Date, the Company will, to the extent lawful:

 

·                  accept for payment all applicable Debentures or portions of such Debentures properly tendered pursuant to the Change of Control Offer;

 

·                  deposit with the Paying Agent named in the Change of Control Offer an amount equal to the Change of Control Payment in respect of all applicable Debentures or portions of such Debentures properly tendered; and

 

·                  deliver or cause to be delivered to the Trustee the Debentures properly accepted together with an Officer’s Certificate stating the aggregate principal amount of such Debentures or portions of such Debentures being repurchased and that all conditions precedent provided for in this Indenture to the Change of Control Offer and to the repurchase by the Company of such Debentures pursuant to the Change of Control Offer have been complied with.

 

The Company will not be required to make a Change of Control Offer upon the occurrence of a Change of Control Repurchase Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for a Change of Control Offer and the third party repurchases all applicable Debentures properly tendered and not withdrawn under its offer.

 

The Company will comply with the requirements of the securities laws and regulations of the jurisdictions of Canada in which Holders reside to the extent those laws and regulations are applicable in connection with the repurchase of the applicable Debentures as a result of a Change of Control Repurchase Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions in this Indenture, the Company shall comply with those

 

17

 

securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control Offer provisions in this Indenture by virtue of any such conflict.

 

For purposes of the Change of Control Offer provisions in this Indenture, the following terms will be applicable:

 

“Change of Control” means the occurrence of any of the following: (1) the direct or indirect sale, lease, 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 assets of the Guarantor and the assets of its subsidiaries, taken as a whole, to any Person, other than to the Guarantor or one of its subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any Person becomes the beneficial owner, directly or indirectly, of more than 50% of the Guarantor’s outstanding Voting Stock or other Voting Stock into which the Voting Stock of the Guarantor is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares; (3) the Guarantor consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, the Guarantor, in any such event pursuant to a transaction in which any of the Guarantor’s outstanding Voting Stock or the Voting Stock of such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of the Guarantor’s Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving Person or any direct or indirect parent company of the surviving Person immediately after giving effect to such transaction; or (4) the first day on which a majority of the members of the board of directors of the Guarantor are not Continuing Directors. Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control under clause (2) above if (i) the Guarantor becomes a direct or indirect wholly-owned subsidiary of a holding company and (ii)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Voting Stock of the Guarantor immediately prior to that transaction or (B) the shares of the Voting Stock of the Guarantor outstanding immediately prior to such transaction are converted into or exchanged for, a majority of the Voting Stock of such holding company immediately after giving effect to such transaction.

 

4.07                        SEC Reporting

 

The Company confirms that as at the date of execution of this Indenture it does not have a class of securities registered pursuant to Section 12 of the US Securities Exchange Act or have a reporting obligation pursuant to Section 15(d) of the US Securities Exchange Act.  The Company covenants that in the event that (i) any class of its securities shall become registered pursuant to Section 12 of the US Securities Exchange Act or the Company shall incur a reporting obligation pursuant to Section 15(d) of the US Securities Exchange Act, or (ii) any such registration or reporting obligation shall be terminated by the Company in accordance with the US Securities Exchange Act, the Company shall promptly deliver to the Trustee an Officer’s Certificate (in a form provided by the Trustee) notifying the Trustee of such registration or termination and such other information as the Trustee may require at the time.  The Company acknowledges that the Trustee is relying upon the foregoing representation and covenants in order to meet certain Securities Exchange Commission obligations with respect to those clients who are filing with the Securities Exchange Commission.

 

18

 

ARTICLE 5

SUCCESSOR CORPORATION

 

5.01                        When Company May Merge, Etc.

 

So long as any Debentures shall be outstanding, neither the Company nor the Guarantor, as the case may be, shall consolidate or amalgamate with or merge into any other Person or sell, convey, transfer or lease its properties and assets substantially as an entirety to any Person unless:

 

(a)                                  the company or corporation, as the case may be, formed by such consolidation or amalgamation, or into which the Company or the Guarantor, as the case may be, is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company or the Guarantor, as the case may be, substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia or the European Union or any member state thereof, in the case of the Guarantor, or a company or corporation, as the case may be, organized and existing under the laws of Canada or any Province thereof, in the case of the Company, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, the due and punctual payment of the principal of and interest on the Debentures and the performance of every covenant , duty, liability and obligation on the part of the Company or the Guarantor, as the case may be, to be performed or observed under this Indenture and the Debentures;

 

(b)                                 immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or the Guarantor, as the case may be, as a result of such transaction as having been incurred by the Company or the Guarantor, as the case may be, at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing;

 

(c)                                  if, as a result of any such consolidation, amalgamation or merger or such sale, conveyance, transfer, lease or other disposition, properties or assets of the Company or the Guarantor, as the case may be, would become subject to a mortgage, pledge, lien, security interest or other encumbrance of any nature which would not be permitted by this Indenture, the Company or the Guarantor, as the case may be, or such successor corporation or company, or such Person, firm, company or corporation, as the case may be, shall take such steps as shall be necessary effectively to secure the Debentures (together with, if the Company or the Guarantor, as the case may be, so determines, any other indebtedness for money borrowed of the Company or the Guarantor, as the case may be, then existing or thereafter created which is not subordinate to the Debentures) equally and rateably with (or, at the option of the Company or the Guarantor, as the case may be, prior to) all indebtedness secured thereby; and

 

(d)                                 the Company or the Guarantor, as the case may be, has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger, sale, conveyance, transfer, lease or other disposition and, if a supplemental indenture is required in connection with such transaction, such

 

19

 

supplemental indenture comply with this Article 5 and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

5.02                        Successor Substituted.

 

Upon any consolidation, amalgamation or merger, or any sale, conveyance, transfer, lease or other disposition of all or substantially all of the property and assets of the Company or the Guarantor, as applicable, in accordance with Section 5.01 of this Indenture, the successor Person formed by such consolidation or amalgamation or into which the Company or the Guarantor, as applicable, is merged or to which such sale, conveyance, transfer, lease or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or the Guarantor, as applicable, under this Indenture with the same effect as if such successor Person had been named as the Company or the Guarantor, as applicable, herein; provided that the Company or the Guarantor, as applicable, shall not be released from its obligation to pay the principal of or interest on the Debentures in the case of a lease of all or substantially all of its property and assets unless any such successor has the same or better Standard & Poor’s long term issuer credit rating (or if unavailable, an equivalent credit rating of a similar rating service) than the published Standard & Poor’s long term issuer rating (or if unavailable, an equivalent rating of a similar rating service) of the Company or Guarantor.

 

ARTICLE 6

DEFAULT AND REMEDIES

 

6.01                        Events of Default.

 

Any of the following events shall constitute an “Event of Default” hereunder:

 

(a)                                  the Company defaults in the payment of the principal of any of the Debentures as and when the same shall become due and payable either at maturity, by declaration, by repurchase or otherwise; or

 

(b)                                 the Company defaults in the payment of any installment of interest on any of the Debentures as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or

 

(c)                                  failure on the part of the Company or the Guarantor duly to observe or perform any other of the covenants or agreements on the part of the Company or the Guarantor in this Indenture applicable to the Debentures for a period of 90 days after the date on which written notice of such failure, specifying such failure and requiring the Company or the Guarantor to remedy the same and stating that such notice is a “Notice of Default” hereunder, shall have been given to the Company or the Guarantor by the Trustee, or to the Company or the Guarantor and the Trustee by the Holders of at least 25% in aggregate principal amount of the Debentures at the time outstanding; or

 

(d)                                 a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or the Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or the Guarantor or for any substantial part of its property, or ordering the

 

20

 

 

winding-up or liquidation of its affairs and such decree or order shall remain unstayed and in effect for a period of 90 days; or

 

(e)                                  the Company or the Guarantor shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of any order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or similar official) of the Company or the Guarantor or for any substantial part of its property, or shall make any general assignment for the benefit of creditors.

 

6.02                        Acceleration.

 

If an Event of Default (other than an Event of Default specified in clause (d) or (e) of Section 6.01 that occurs with respect to the Company or the Guarantor) occurs and is continuing under this Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the Debentures then outstanding, by written notice to the Company or the Guarantor (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of and accrued and unpaid interest on all the Debentures to be immediately due and payable, any provision of this Indenture or the Debentures to the contrary notwithstanding. Upon a declaration of acceleration, such principal and accrued and unpaid interest shall be immediately due and payable. In the event of a declaration of acceleration because an Event of Default set forth in clause (c) of Section 6.01 has occurred and is continuing, such declaration of acceleration shall be automatically rescinded and annulled if the event of default triggering such Event of Default pursuant to clause (c) shall be remedied or cured by the Company or the Guarantor or waived by the Holders within 90 days after the declaration of acceleration with respect thereto. If an Event of Default specified in clause (d) or (e) of Section 6.01 occurs with respect to the Company or the Guarantor, the principal and accrued and unpaid interest on the Debentures then outstanding shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

 

At any time after such declaration of acceleration (except in the case of a declaration of acceleration in respect of an Event of Default set forth in clause (c) of Section 6.01 provided for in the immediately preceding paragraph), but before a judgment or decree for the payment of the money due has been obtained by the Trustee, the Holders of at least a majority in principal amount of the outstanding Debentures by written notice to the Company and to the Trustee, may waive all past Defaults and rescind and annul a declaration of acceleration and its consequences if (a) the Company or the Guarantor has paid or deposited with the Trustee a sum sufficient to pay (i) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, (ii) all overdue interest on all Debentures, and (iii) the principal of any Debentures that have become due otherwise than by such declaration or occurrence of acceleration and interest thereon at the rate prescribed therefor by such Debentures, (b) all existing Events of Default, other than the non-payment of the principal of and accrued and unpaid interest on the Debentures that have become due solely by such declaration of acceleration, have been cured or waived and (c) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction.

 

21

 

6.03                        Other Remedies.

 

If an Event of Default occurs and is continuing, the Trustee may, and at the direction of the Holders of at least a majority in principal amount of the outstanding Debentures shall, pursue any available remedy by proceeding at law or in equity to collect the payment of principal of or interest on the Debentures or to enforce the performance of any provision of the Debentures or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Debentures or does not produce any of them in the proceeding.

 

6.04                        Waiver of Past Defaults.

 

Subject to Sections 6.02, 6.08 and 9.02, the Holders of at least a majority in principal amount of the outstanding Debentures, by notice to the Trustee, may waive an existing Default or Event of Default and its consequences, except a Default in the payment of principal of or interest on any Debenture as specified in clause (a) or (b) of Section 6.01 or in respect of a covenant or provision of this Indenture which cannot be modified or amended without the consent of the Holder of each outstanding Debenture affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

 

6.05                        Control by Majority.

 

The Holders of at least a majority in aggregate principal amount of the outstanding Debentures may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee; provided that the Trustee may refuse to follow any direction if the Trustee, being advised by counsel, determines that the actions or proceedings so directed may not lawfully be taken or if the Trustee in good faith by its board of directors or executive committee or a trust committee of directors or trustees and/or responsible officers shall determine that the actions or proceedings so directed would involve the Trustee in personal liability; and provided further, that the Trustee may take any other action it deems proper that is not inconsistent with any such direction received from Holders of Debentures.

 

6.06                        Payment of Securities on Default; Suit Therefor.

 

The Company covenants that (a) in case default shall be made in the payment of any installment of interest on any of the Debentures, as and when the same shall become due and payable, and such default shall have continued for a period of 30 days, or (b) in case default shall be made in the payment of principal of any of the Debentures, as and when the same shall have become due and payable, whether upon maturity of the Debentures or upon declaration or otherwise, then upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the Holders, the whole amount that then shall have become due and payable on all of the Debentures, for principal or interest, if any, as the case may be, with interest upon the overdue principal and (to the extent that payment of such interest is enforceable under applicable law), upon overdue installments of interest, if any, at the same rate as the rate of interest specified in the Debentures; and, in addition thereto, such further amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other reasonable expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence, bad faith or willful misconduct.

 

22

 

6.07                        Limitation on Suits.

 

A Holder may not institute any proceeding, judicial or otherwise, with respect to this Indenture or the Debentures, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

(i)                                     the Holder has previously given the Trustee written notice of a continuing Event of Default;

 

(ii)                                the Holders of at least 25% in aggregate principal amount of outstanding Debentures shall have made a written request to the Trustee to pursue such remedy;

 

(iii)                            such Holder or Holders offer the Trustee indemnity satisfactory to the Trustee against any costs, liability or expense;

 

(iv)                             the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and

 

(v)                                during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Debentures do not give the Trustee a direction that is inconsistent with the request.

 

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over such other Holder.

 

6.08                        Rights of Holders to Receive Payment.

 

Notwithstanding any other provision of this Indenture, the right of any Holder of a Debenture to receive payment of the principal of or interest on such Debenture or to bring suit for the enforcement of any such payment, on or after the due date expressed in the Debentures, shall not be impaired or affected without the consent of such Holder.

 

6.09                        Collection Suit by Trustee.

 

If an Event of Default in payment of principal or interest specified in clause (a) or (b) of Section 6.01 occurs and is continuing, the Trustee may, upon receiving funding and being indemnified upon commercially reasonable terms against all reasonable costs, expenses and liabilities to be incurred, recover judgment in its own name and as trustee of an express trust against the Company or any other obligor of the Debentures for the whole amount of principal and accrued interest remaining unpaid, together with interest on overdue principal, 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.

 

6.10                        Trustee May File Proofs of Claim.

 

The Trustee may 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 any

 

23

 

other amounts due the Trustee under Section 7.06) and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor of the Debentures including the Guarantor), its creditors or its property and shall be entitled and empowered to collect and receive any monies, securities or other property payable or deliverable upon conversion or exchange of the Debentures or upon any such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06. Nothing herein contained shall be deemed to empower 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 Debentures or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

6.11                        Priorities.

 

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

 

First: to the payment of all reasonable costs and expenses applicable to such collection, reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other reasonable expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence, bad faith or willful misconduct;

 

Second: to Holders for amounts then due and unpaid for principal of and accrued and unpaid interest on the Debentures in respect of which or for the benefit of which such money has been collected, with interest upon the overdue installments of interest, to the extent lawful, at the same rate as the rate of interest on the Debentures, rateably, without preference or priority of any kind, according to the amounts due and payable on such Debentures for principal and interest, respectively; and

 

Third: to the Company or any other obligors of the Debentures including the Guarantor, as their interests may appear, or as a court of competent jurisdiction may direct.

 

The Trustee, upon prior written notice to the Company, may fix a record date and payment date for any payment to Holders pursuant to this Section 6.11.

 

6.12                       Restoration of Rights and Remedies.

 

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then, and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Company, Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

24

 

6.13                        Rights and Remedies Cumulative.

 

No right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

6.14                        Delay or Omission Not Waiver.

 

No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

ARTICLE 7

TRUSTEE

 

7.01                        General.

 

The duties and responsibilities of the Trustee shall be as set forth herein. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not herein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article 7.

 

7.02                        Certain Rights of Trustee.

 

In fulfilling its duties under this Indenture:

 

(i)                                  the Trustee may conclusively rely, and shall be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or 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, but may require reasonable evidence of the due execution of any such document;

 

(ii)                               before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel, which shall conform to Section 12.03. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion;

 

25

 

(iii)                             the Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any attorney or agent appointed with due care by it hereunder;

 

(iv)                             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 security or indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction;

 

(v)                               The Trustee may employ or retain such counsel, accountant, or other experts or advisors as it reasonably requires for the purpose of determining and discharging its duties and administering the trusts hereunder and may pay reasonable remuneration for all services so performed by any of them, without taxation of costs of any counsel or advisor, and shall not be responsible for any misconduct on the part of any of them (provided that nothing herein shall constitute a waiver by the Company of any right it may have to tax such costs).  Any reasonable remuneration so paid by the Trustee shall be repaid to the Trustee in accordance with Section 7.06.The Trustee may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant or other expert or advisor, whether retained or employed by the Company or by the Trustee, in relation to any matter arising in the administration of the trusts hereof;

 

(vi)                             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 its rights or powers, provided that the Trustee’s conduct does not constitute negligence, bad faith or willful misconduct;

 

(vii)                          whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officer’s Certificate;

 

(viii)                      the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company or Guarantor personally or by agent or attorney at a reasonable cost which shall be paid by the Company and shall incur no liability of any kind by reason of such inquiry or investigation;

 

(ix)                             the Trustee shall not be deemed to have notice of any Default or Event of Default unless written notice of any event which is in fact such a Default or

 

26

 

Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Debentures and this Indenture;

 

(x)                                 the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, including, without limitation as Paying Agent, Registrar and each agent, custodian and other Person employed to act hereunder;

 

(xi)                             the Trustee may request that the Company or the Guarantor deliver an Officer’s Certificate setting forth the names of individuals and/or titles of Officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any Person authorized to sign an Officer’s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded; and

 

(xii)                          the Trustee shall not be required to exercise any powers and shall not have any responsibilities except as expressly provided in this Indenture and shall have no obligation to recognize nor have any liability or responsibility arising under any other document or agreement to which the Trustee is not a party, notwithstanding that reference thereto may be made herein.

 

7.03                        Individual Rights of Trustee.

 

The Trustee, in its individual or any other capacity, may become the owner or pledgee of Debentures and may otherwise deal with the Company, the Guarantor or their respective Affiliates with the same rights it would have if it were not the Trustee. Any Agent may do the same with like rights.

 

7.04                        Trustee’s Disclaimer.

 

The Trustee (i) makes no representation as to the validity or adequacy of this Indenture or the Debentures, (ii) shall not be accountable for the Company’s use or application of the proceeds from the Debentures and (iii) shall not be responsible for any statement in the Debentures other than its certificate of authentication.

 

7.05                        Notice of Default.

 

If any Default or any Event of Default occurs and is continuing and if such Default or Event of Default is known to the Trustee, the Trustee shall mail to each Holder notice of the Default or Event of Default within 30 days after it occurs, unless such Default or Event of Default has been cured; provided, however, that, except in the case of a default in the payment of the principal of or interest on any Debenture, the Trustee shall be protected in withholding such notice if and so long as it in good faith determines that the withholding of such notice is in the interest of the Holders and so advises the Company or the Guarantor in writing.

 

7.06                        Compensation and Indemnity.

 

The Company shall pay to the Trustee such compensation as shall be agreed upon in writing for its services hereunder. The compensation of the Trustee shall not be limited by any law on

 

27

 

compensation of a trustee of an express trust. The Company shall reimburse the Trustee on demand of the Trustee’s request for reimbursement, for all reasonable disbursements, expenses and advances incurred or made by the Trustee in carrying out its duties in connection with the execution of the trusts hereby created without negligence, bad faith or willful misconduct on its part. Such expenses shall include the reasonable compensation and expenses of the Trustee’s agents and counsel.  Any amount due under this Section 7.06 and unpaid 30 days after request for such payment shall bear interest, from the expiration of such 30 days at 18% per annum calculated and compounded monthly (with such compounding resulting in an effective rate of 19.56% per annum), payable on demand.  After default, all amounts so payable and the interest thereon shall be payable out of any funds coming into the possession of the Trustee or its successors in the trusts hereunder in priority to any payment of the principal of or interest on the Debentures.  Such remuneration shall continue to be payable until the trusts hereof shall be finally wound up, whether or not the trusts of this Indenture shall be in course of administration by or under the direction of a court.  This obligation shall survive the removal or resignation of the Trustee hereunder, and the termination of this Indenture.

 

The Company shall indemnify the Trustee, its employees, officers, directors, agents, successors, assigns and any predecessor trustee for, and hold them harmless against, any and all loss or liability or expense incurred by them without negligence, bad faith or willful misconduct on the part of the Trustee or any such representative thereof in connection with the acceptance or administration of this Indenture and its duties under this Indenture and the Debentures.  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, unless the Company is materially prejudiced thereby. In the event that the Trustee determines to defend a claim, it shall notify the Company and the Company may, at its election, defend the claim and the Trustee shall cooperate in the defense. In the event that the Company elects to defend the claim, counsel for the Company shall act for both the Company and the Trustee. The Trustee shall be responsible for the fees and expenses of any separate counsel retained by it, unless the counsel selected by the Company has a conflict of interest in acting for both the Company and the Trustee, in which event the Company shall indemnify the Trustee for the reasonable fees and expenses of such separate counsel for the Trustee. In no event shall a settlement of any claim be made by the Trustee to the prejudice of the Company and the Company need not pay for any settlement made without its consent.

 

To secure the Company’s payment obligations in this Section 7.06, the Trustee shall have a lien prior to the Debentures on all money or property held or collected by the Trustee, in its capacity as Trustee hereunder, including money or property held in trust to pay principal of and interest on particular Debentures.

 

Any amount due either (i) under the first paragraph of this Section 7.06 or (ii) determined by a court of competent jurisdiction in a final, non-appealable order to be due and unpaid thirty (30) days after written request for such payment shall bear interest from the expiration of such thirty (30) days at a rate per annum equal to the then rate provided for in the Debentures payable on demand. The said remuneration shall continue to be payable until the trusts hereof be finally wound up and whether or not the trusts of this Indenture shall be in the course of administration by or under the direction of a court of competent jurisdiction.

 

If the Trustee incurs expenses or renders services after the occurrence of an Event of Default specified in clause (d) or (e) of Section 6.01, the expenses and the compensation for the services will be

 

28

 

intended to constitute expenses of administration under any applicable Canadian federal or other law for the relief of debtors.

 

The provisions of this Section 7.06 shall survive the termination of this Indenture and the resignation and removal of the Trustee.

 

7.07                        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 or the appointment of a successor Trustee by a court of competent jurisdiction as provided in this Section 7.07.

 

The Trustee may resign at any time by so notifying the Company in writing at least 60 days prior to the date of the proposed resignation. The Holders of a majority in principal amount of the outstanding Debentures may at any time remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company may remove the Trustee if: (i) the Trustee is no longer eligible under Section 7.09; (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) 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 outstanding Debentures may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If the successor Trustee does not deliver its written acceptance required by the next succeeding paragraph of this Section 7.07 within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the outstanding Debentures may, at the expense of the Company, petition any court of competent jurisdiction for 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. Immediately after the delivery of such written acceptance, subject to the lien provided in Section 7.06, (i) the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee, (ii) the resignation or removal of the retiring Trustee shall become effective and (iii) the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Holder. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

 

If the Trustee is no longer eligible under Section 7.09, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 7.07, the Trustee shall resign immediately in the manner and with the effect provided in this Section.

 

The Company shall give notice of any resignation and any removal of the Trustee and each appointment of a successor Trustee to all Holders. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

 

Notwithstanding replacement of the Trustee pursuant to this Section 7.07, the Company’s obligation under Section 7.06 shall continue for the benefit of the retiring Trustee.

 

29

 

7.08                        Successor Trustee by Merger, Etc.

 

If the Trustee amalgamates with or transfers all or substantially all of its corporate trust business to, another trust company or financial institution, the resulting, surviving or transferee trust company or other financial institution without any further act shall be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee herein, provided such trust company or financial institution shall be otherwise qualified and eligible under this Article.

 

7.09                        Eligibility.

 

The Trustee shall have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition that is subject to the requirements of the Office of the Superintendent of Financial Institutions and any other applicable Canadian or provincial supervising or examining authority. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in this Article.

 

7.10                        Money Held in Trust.

 

The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree with the Company. Moneys held in trust by the Trustee need not be segregated from other funds except to the extent required by law and except for money held in trust under Article 8 of this Indenture.

 

7.11                        Initial Appointment of Trustee.

 

The Company hereby appoints Computershare Trust Company of Canada as the Trustee and the Trustee hereby accepts such appointment.

 

7.12                        Global Debentures

 

Debentures issued to a Depository in the form of a Global Debenture shall be subject to the following:

 

(a)                                  the Trustee may deal with such Depository as the authorized representative of the beneficial owners of such Debentures;

 

(b)                                 the rights of the beneficial owners of such Debentures shall be exercised only through such Depository and shall be limited to those established by law and by agreement between the beneficial owners of such Debentures and such Depository or direct participants of such Depository;

 

(c)                                  such Depository will make book-entry transfers among the direct participants of such Depository and will receive and transmit distributions of principal and interest on the Debentures to such direct participants; and

 

(d)                                 the direct participants of such Depository shall have no rights under this Indenture or under or with respect to any of the Debentures held on their behalf by such Depository, and such Depository may be treated by the Trustee and its agents, employees,

 

30

 

representatives, officers and directors as the absolute owner of the Debentures represented by such Global Debenture for all purposes whatsoever.

 

7.13                        No Conflict of Interest

 

The Trustee represents to the Company that at the date of the execution and delivery of this Indenture there exists no material conflict of interest in the Trustee’s role as a fiduciary hereunder.  If at any time a material conflict of interest exists in respect of the Trustee’s role as a fiduciary under this Indenture that is not eliminated within 90 days after the Trustee becomes aware that such a material conflict of interest exists, the Trustee shall resign from the trusts under this Indenture by giving notice in writing of such resignation and the nature of such conflict to the Company at least 21 days prior to the date upon which such resignation is to take effect, and shall on such date be discharged from all further duties and liabilities hereunder and the Company shall appoint a successor Trustee as provided in Section 7.07.  The validity and enforceability of this Indenture and any Debentures shall not be affected in any manner whatsoever by reason only of the existence of a material conflict of interest of the Trustee.

 

7.14                        Privacy Laws

 

The Parties acknowledge that federal and/or provincial legislation that addresses the protection of individuals’ personal information (collectively, “Privacy Laws”) applies to obligations and activities under this Indenture.  Despite any other provision of this Indenture, no party hereto shall take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws.  The Company shall, prior to transferring or causing to be transferred personal information to the Trustee, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or shall have determined that such consents either have previously been given upon which the parties hereto can rely or are not required under Privacy Laws.  The Trustee shall use commercially reasonable efforts to ensure that its services hereunder comply with Privacy Laws.  Specifically, the Trustee agrees: (a) to have a designated chief privacy officer; (b) to maintain policies and procedures to protect personal information and to receive and respond to any privacy complaint or inquiry; (c) to use personal information solely for the purposes of providing its services under or ancillary to this Indenture and not to use it for any other purpose except with the consent of or direction from the Company or the individual involved; (d) not to sell or otherwise improperly disclose personal information to any third party; and (e) to employ administrative, physical and technological safeguards to reasonably secure and protect personal information against loss, theft, or unauthorized access, use or modification.

 

7.15                        Anti-Money Laundering and Anti-Terrorism Legislation Compliance

 

The Trustee shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Trustee, in its sole judgment, determines that such act might cause it to be in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline.  Further, should the Trustee, in its sole judgment, determine at any time that its acting under this Indenture has resulted in its being in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to resign on 10 Business Days written notice to the Corporation, provided that (i) the Trustee’s written notice shall describe the circumstances of such non-compliance; and (ii) if such circumstances are rectified to the Trustee’s satisfaction within such 10 Business Day period, then such resignation shall

 

31

 

not be effective.  Upon any such resignation of the Trustee, the Company shall appoint a successor Trustee as provided in Section 7.07.

 

7.16                        Third Party Interests

 

The Company hereby represents to the Trustee that any account to be opened by, or interest to be held by, the Trustee in connection with this Indenture, for or to the credit of the Company, is not intended to be used by or on behalf of any third party.

 

7.17                        Force Majeure

 

Except for the payment obligations of the Company contained herein, no party hereto shall be liable to the other, or held in breach of this Indenture, if prevented, hindered, or delayed in the performance or observance of any provision contained herein by reason of an act of God, riots, terrorism, acts of war, epidemics, governmental action or judicial order, earthquakes, or any other similar causes (including, but not limited to, mechanical, electronic or communication interruptions, disruptions or failures).  Performance times under this Indenture shall be extended for a period of time equivalent to the time lost because of any delay that is excusable under this Section.

 

ARTICLE 8

DISCHARGE OF INDENTURE

 

8.01                        Termination of Company’s Obligations.

 

Except as otherwise provided in this Section 8.01, the Company may terminate its obligations under the Debentures and this Indenture if:

 

(i)                                  all Debentures previously authenticated and delivered (other than destroyed, lost or stolen Debentures that have been replaced or Debentures that are paid pursuant to Section 4.01 or Debentures for whose payment money or securities have theretofore been held in trust and thereafter repaid to the Company, as provided in Section 8.05) have been delivered to the Trustee for cancellation and the Company has paid all sums payable by it hereunder; or

 

(ii)                               (A) the Debentures mature within one year, (B) the Company or the Guarantor irrevocably deposits in trust with the Trustee during such one-year period, as trust funds solely for the benefit of the Holders for that purpose, money or Canadian Government Obligations sufficient (in the opinion of a nationally recognized firm of independent chartered accountants expressed in a written certification thereof delivered to the Trustee), without consideration of any reinvestment of any interest thereon, to pay principal and interest on the Debentures to maturity, and to pay all other sums payable by it hereunder, (C) no Default or Event of Default with respect to the Debentures shall have occurred and be continuing on the date of such deposit, (D) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound and (E) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein (other than Section 8.01(ii)(B)) relating

 

32

 

to the satisfaction and discharge of this Indenture have been complied with (provided that counsel delivering the Opinion of Counsel may reply, without knowledge to the contrary, solely upon an Officer’s Certificate for the purposes of confirming compliance with Sections 8.01(ii)(C) and (D)).

 

With respect to the foregoing clause (i), the Company’s obligations under Section 7.06 shall survive. With respect to the foregoing clause (ii), the Company’s obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 4.02, 4.06, 7.06, 7.07, 8.04, 8.05 and 8.06 shall survive until the Debentures are no longer outstanding. Thereafter, only the Company’s obligations in Sections 7.06, 8.04, 8.05 and 8.06 shall survive. After any such irrevocable deposit, the Trustee upon request shall acknowledge in writing: (i) the discharge of the Company’s obligations under the Debentures and this Indenture except for those surviving obligations specified above; and (ii) the discharge of the Guarantor’s obligations under the Guarantee and this Indenture other than with respect to its guarantee of the Company’s surviving obligations specified above.

 

8.02                        Defeasance and Discharge of Indenture.

 

The Company will be deemed to have paid and will be discharged from any and all obligations in respect of the Debentures on the 91st day after the date of the deposit referred to in clause (a) of this Section 8.02, and the provisions of this Indenture will no longer be in effect with respect to the Debentures, and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same if:

 

(a)                                  with reference to this Section 8.02, the Company or the Guarantor has irrevocably deposited or caused to be irrevocably deposited with the Trustee (or another trustee satisfying the requirements of Section 7.09) and conveyed all right, title and interest to the Trustee for the benefit of the Holders, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee as trust funds in trust, specifically pledged to the Trustee for the benefit of the Holders as security for payment of the principal of and interest, if any, on the Debentures, and dedicated solely to, the benefit of the Holders, in and to (1) money in an amount, (2) Canadian Government Obligations that, through the payment of interest and principal in respect thereof in accordance with their terms, will provide, not later than one day before the due date of any payment referred to in this clause (a), money in an amount or (3) a combination thereof in an amount sufficient, in the opinion of a nationally recognized firm of independent chartered accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, without consideration of the reinvestment of such interest and after payment of all federal, provincial and local taxes or other charges and assessments in respect thereof payable by the Trustee, the principal of and interest on the outstanding Debentures on the Stated Maturity of such principal or interest; provided that the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such Canadian Government Obligations to the payment of such principal and interest with respect to the Debentures;

 

(b)                                 the Company has delivered to the Trustee either (x) an Opinion of Counsel to the effect that Holders will not recognize income, gain or loss for Canadian federal income tax purposes solely as a result of the Company’s exercise of its option under this Section 8.02 and will be subject to Canadian federal income and other tax on the same amount

 

33

 

and in the same manner and at the same times as would have been the case if such option had not been exercised, which Opinion of Counsel shall be based upon (and accompanied by a copy of) a ruling of the Canada Revenue Agency to the same effect unless there has been a change in applicable Canadian federal income and other tax law after the Closing Date such that a ruling is no longer required or (y) a ruling directed to the Trustee received from the Canada Revenue Agency to the same effect as the aforementioned Opinion of Counsel;

 

(c)                                  immediately after giving effect to such deposit, on a pro forma basis, no Default or Event of Default shall have occurred and be continuing on the date of such deposit or, insofar as Sections 6.01(d) and 6.01(e) are concerned, at any time during the period ending on the 91st day after such date of such deposit; and

 

(d)                                 the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance contemplated by this Section 8.02 have been complied with.

 

Notwithstanding the foregoing, prior to the end of the 91-day period referred to in clause (c) of this Section 8.02, none of the Company’s obligations under this Indenture shall be discharged. Subsequent to the end of such 91-day period with respect to this Section 8.02, the Company’s obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 4.02, 4.05, 4.06, 8.04, 8.05, 8.06 and the rights, powers, trusts, duties and immunities of the Trustee hereunder shall survive until the Debentures are no longer outstanding. Thereafter, only the Company’s obligations in Sections 7.06, 8.04, 8.05 and 8.06 shall survive. If the Company exercises its defeasance option under this Section 8.02 with respect to the Debentures, the Guarantor shall be released from all its obligations with respect to the Guarantee, other than with respect to its guarantee of the Company’s surviving obligations specified above, after such 91-day period.

 

After any such irrevocable deposit, the Trustee upon request shall acknowledge in writing the discharge of the Company’s obligations under the Debentures and this Indenture except for those surviving obligations referred to in the immediately preceding paragraph.

 

8.03                        Defeasance of Certain Obligations.

 

The Company may omit to comply with any term, provision or condition set forth in Section 5.01 and clause (c) of Section 6.01 with respect to Section 5.01, and clause (c) of Section 6.01 shall be deemed not to be an Event of Default, in each case with respect to the outstanding Debentures if:

 

(i)            with reference to this Section 8.03, the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee (or another trustee satisfying the requirements of Section 7.09) and conveyed all right, title and interest to the Trustee for the benefit of the Holders, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee as trust funds in trust, specifically pledged to the Trustee for the benefit of the Holders as security for payment of the principal of and interest, if any, on the Debentures, and dedicated solely to, the benefit of the Holders, in and to (A) money in an amount, (B) Canadian Government Obligations that, through the payment of interest and principal in respect thereof in accordance with their terms, will provide, not later than one day before the due date of any payment

 

34

 

referred to in this clause (i), money in an amount or (C) a combination thereof in an amount sufficient, in the opinion of a nationally recognized firm of independent chartered accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, without consideration of the reinvestment of such interest and after payment of all federal, provincial and local taxes or other charges and assessments in respect thereof payable by the Trustee, the principal of and interest on the outstanding Debentures on the Stated Maturity of such principal or interest; provided that the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such Canadian Government Obligations to the payment of such principal and interest with respect to the Debentures;

 

(ii)           the Company has delivered to the Trustee either (x) an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Canadian federal income tax purposes as a result of such deposit and defeasance of the covenants and Events of Default aforesaid and will be subject to Canadian federal income and other tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred or (y) a ruling directed to the Trustee received from the Canada Revenue Agency to the same effect as the aforementioned Opinion of Counsel;

 

(iii)          immediately after giving effect to such deposit on a pro forma basis, no Default or Event of Default shall have occurred and be continuing on the date of such deposit or, insofar as Sections 6.01(d) and 6.01(e) are concerned, at any time during the period ending on the 91st day after such date of such deposit; and

 

(iv)          the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance contemplated by this Section 8.03 have been complied with.

 

If the Company exercises its defeasance option under this Section 8.03 with respect to the Debentures, the Guarantor shall be released from all its obligations with respect to its guarantee of such defeased obligations of the Company at the end of such 91-day period.

 

8.04                        Application of Trust Money.

 

Subject to Section 8.06, the Trustee or Paying Agent shall hold in trust money or Canadian Government Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be, and shall apply the deposited money and the money from Canadian Government Obligations in accordance with the Debentures and this Indenture to the payment of principal of and interest on the Debentures; but such money need not be segregated from other funds except to the extent required by law.

 

8.05                        Repayment to Company.

 

Subject to Sections 7.06, 8.01, 8.02 and 8.03, the Trustee and the Paying Agent (other than the Company or an Affiliate of the Company) shall promptly pay to the Company upon request set forth in

 

35

 

an Officer’s Certificate any excess money held by them at any time and thereupon shall be relieved from all liability with respect to such money. The Trustee and the Paying Agent (other than the Company or an Affiliate of the Company) shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years; provided that the Trustee or Paying Agent before being required to make any payment may cause to be published at the expense of the Company once in an Authorized Newspaper in the City of Toronto or mail to each Holder entitled to such money at such Holder’s address (as set forth in the Security Register) notice that such money remains unclaimed and that after a date specified therein (which shall be at least 30 days from the date of such publication or mailing) any unclaimed balance of such money then remaining will be repaid to the Company. After payment to the Company, Holders entitled to such money must look to the Company for payment as general creditors unless an applicable law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.

 

8.06                        Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any money or Canadian Government Obligations in accordance with Section 8.01, 8.02 or 8.03, as the case may be, 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 Guarantor’s obligations under this Indenture and the Debentures shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01, 8.02 or 8.03, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money or Canadian Government Obligations in accordance with Section 8.01, 8.02 or 8.01, as the case may be; provided that, if the Company or the Guarantor has made any payment of principal of or interest on any Debentures because of the reinstatement of its obligations, the Company or the Guarantor shall be subrogated to the rights of the Holders of such Debentures to receive such payment from the money or Canadian Government Obligations held by the Trustee or Paying Agent.

 

ARTICLE 9

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

9.01                        Without Consent of Holders.

 

Either the Company or the Guarantor, each when authorized by a resolution of its respective Board of Directors (as evidenced by a Board Resolution delivered to the Trustee), and the Trustee may amend or supplement this Indenture or the Debentures without notice to or the consent of any Holder:

 

(i)                                   to cure any ambiguity, defect or inconsistency in this Indenture provided such does not materially or adversely affect the rights of any Holder;

 

(ii)                                  to comply with Article 5;

 

(iii)                               to evidence and provide for the acceptance of appointment hereunder by a successor Trustee;

 

(iv)                              to provide for uncertificated Debentures in addition to or in place of certificated Debentures;

 

36

 

(v)                                 to add to the covenants of the Company for the protection of the Holders, to add any additional Events of Default with respect to the Debentures, or to surrender any right or power conferred upon the Company; or

 

(vi)                              to make any change that does not materially and adversely affect the rights of any Holder.

 

9.02                        With Consent of Holders.

 

Subject to Sections 6.04 and 6.08, either the Company or the Guarantor, each when authorized by its respective Board of Directors (as evidenced by a Board Resolution delivered to the Trustee), and the Trustee may amend this Indenture and the Debentures with the written consent of the Holders of at least a majority in aggregate principal amount of the Debentures then outstanding (which shall be calculated so as not include any Debentures then held by the Company or any of its Affiliates), and the Holders of at least a majority in aggregate principal amount of the Debentures then outstanding (not including the Company or any of its Affiliates) by written notice to the Trustee may waive future compliance by the Company with any provision of this Indenture or the Debentures.

 

Notwithstanding the provisions of this Section 9.02, without the consent of each Holder affected, an amendment or waiver, including a waiver pursuant to Section 6.04, may not:

 

(i)            change the Stated Maturity of the principal of, or any installment of interest on, any Debenture;

 

(ii)           reduce the principal amount of or interest on any Debenture;

 

(iii)          change any place or currency of payment of principal of or interest on any Debenture;

 

(iv)          impair the right to institute suit for the enforcement of any payment on or after the Stated Maturity on any Debenture;

 

(v)           reduce the percentage or principal amount of outstanding Debentures the consent of whose Holders is necessary to modify or amend this Indenture or to waive compliance with certain provisions of or certain Defaults under this Indenture;

 

(vi)          waive a default in the payment of principal of or interest on any Debenture;

 

(vii)         make any modification to the Guarantee or release the Guarantor that would adversely impact the Holders; or

 

(viii)        modify any of the provisions of this Section 9.02, except to increase any percentage required to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each outstanding Debenture affected thereby.

 

37

 

It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

 

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. The Company will mail supplemental indentures to Holders upon request. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

 

9.03                        Action by Holders; Record Dates.

 

Whenever in this Indenture it is provided that the Holders of a specified aggregate principal amount of the outstanding Debentures may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the Holders of such specified amount have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by such Holders in person or by agent or proxy appointed in writing, or (b) the record of the Holders voting in favor thereof at any meeting of the Holders duly called and held in accordance with the provisions of Article 10, or (c) any combination of such instrument or instruments and any such record of such a meeting of the Holders.

 

Subject to the provisions of Sections 7.02 and 10.05, proof of the execution of any instrument by a Holder or its agent or proxy shall be sufficient if the ownership of the Debentures shall be proved by (a) the Security Register or by a certificate of the Registrar; or (b) in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in any other manner which the Trustee may deem sufficient.

 

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then, notwithstanding the foregoing, those persons who were Holders at such record date (or their duly designated proxies) and only those persons shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date.

 

After an amendment, supplement or waiver becomes effective, it shall bind every Holder unless it is of the type described in the second paragraph of Section 9.02. In case of an amendment or waiver of the type described in the second paragraph of Section 9.02, the amendment or waiver shall bind each Holder who has consented to it and every subsequent Holder of a Debenture that evidences the same indebtedness as the Debenture of the consenting Holder.

 

9.04                        Revocation and Effect of Consent.

 

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Debenture or portion of a Debenture that evidences the same debt as the Debenture of the consenting Holder, even if notation of the consent is not made on any Debenture. However, any such Holder or subsequent Holder may revoke the consent as to its Debenture or portion of its Debenture. Such revocation shall be effective only if the

 

38

 

Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver shall become effective on receipt by the Trustee of written consents from the Holders of the requisite percentage in principal amount of the outstanding Debentures.

 

9.05                        Notation on or Exchange of Debentures.

 

If an amendment, supplement or waiver changes the terms of a Debenture, the Trustee may require the Holder to deliver such Debenture to the Trustee. At the Company’s expense, the Trustee may place an appropriate notation on the Debenture about the changed terms and return it to the Holder, and the Trustee may place an appropriate notation on any Debenture thereafter authenticated. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Debenture shall issue and the Trustee shall authenticate a new Debenture that reflects the changed terms. Failure to make the appropriate notation, or issue a new Debenture, shall not affect the validity and effect of such amendment, supplement or waiver.

 

9.06                        Trustee to Sign Amendments, Etc.

 

The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article 9 is authorized or permitted by this Indenture and that it will be valid and binding upon the Company. Subject to the preceding sentence, the Trustee shall sign such amendment, supplement or waiver if the same does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

ARTICLE 10

MEETINGS OF THE HOLDERS

 

10.01                 Purposes of Meetings.

 

A meeting of the Holders may be called at any time and from time to time pursuant to the provisions of this Article 10 for any of the following purposes:

 

(i)                                    to give any notice to the Company, the Guarantor or the Trustee, or to give any directions to the Trustee, or to waive any Default hereunder and its consequences, or to take any other action authorized to be taken by the Holders pursuant to any of the provisions of Article 6;

 

(ii)                                  to remove the Trustee and appoint a successor trustee pursuant to the provisions of Article 7;

 

(iii)                               to consent to any amendment, supplement or waiver pursuant to the provisions of Section 9.02; or

 

(iv)                             to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the outstanding Debentures under any other provision of this Indenture or under applicable law.

 

39

 

10.02                 Call of Meetings by Trustee.

 

The Trustee may at any time call a meeting of the Holders to take any action specified in Section 10.01, to be held at such time and at such place in the Province of Ontario, City of Toronto, as the Trustee shall determine. Notice of every meeting of the Holders, setting forth the time and place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given (a) to all Holders of Debentures then outstanding, by publication at least twice in an Authorized Newspaper with national circulation in the Province of Ontario, City of Toronto prior to the date fixed for the meeting, the first publication, in each case, to be not less than 20 nor more than 180 days prior to the date fixed for the meeting and the last publication to be not more than five days prior to the date fixed for the meeting and (b) to all Holders of Debentures then outstanding who have filed their names and addresses with the Trustee, by mailing such notice to such Holders at such addresses, not less than 20 nor more than 180 days prior to the date fixed for the meeting. Failure of any Holder or Holders to receive such notice or any defect therein shall in no case affect the validity of any action taken at such meeting. Any meeting of the Holders shall be valid without notice if the Holders of all Debentures then outstanding, the Company and the Trustee are present in person or by proxy or shall have waived notice thereof before or after the meeting.

 

10.03                 Call of Meetings by Company or Holders.

 

In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% in aggregate principal amount of the Debentures then outstanding, as the case may be, shall have requested the Trustee to call a meeting of the Holders to take any action authorized in Section 10.01, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed or published as provided in Section 10.02, the notice of such meeting within 30 days after receipt of such request, then the Company or such Holders of the amount above specified may determine the time and the place in the Province of Ontario, City of Toronto for such meeting and may call such meeting to take any action authorized in Section 10.01, by mailing or publishing notice thereof as provided in Section 10.02.

 

10.04                 Qualification for Voting.

 

To be entitled to vote at any meeting of the Holders, a person must be a Holder of Debentures or a person appointed by an instrument in writing as proxy by such Holder. The only persons who shall be entitled to be present or to speak at any meeting of the Holders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

 

10.05                 Regulations.

 

Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of the Holders, in regard to proof of the holding of Debentures and of the appointment of proxies, and in regard to the appointment and duties of scrutineers, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as the Trustee shall think fit.

 

The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by the Holders as provided in Section 10.03, in which case the Company or the Holders calling the meeting, as the case may be, shall in like

 

40

 

manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Holders of a majority in principal amount of the Debentures represented at the meeting and entitled to vote.

 

Subject to the provisions of Section 9.03, at any meeting of the Holders, each Holder or proxy shall be entitled to one vote for each $1,000 principal amount at maturity of outstanding Debentures held or represented by such Holder; provided, however, that no vote shall be cast or counted at any meeting in respect of any Debenture challenged as not outstanding and ruled by the chairman of the meeting not to be outstanding. The chairman of the meeting shall have no right to vote except as a Holder or proxy. Any meeting of the Holders duly called pursuant to the provisions of Section 10.02 or 10.03 may be adjourned from time to time, and the meeting may be held as so adjourned without further notice.

 

10.06                 Voting.

 

The vote upon any resolution submitted to any meeting of the Holders shall be by written ballot on which shall be subscribed the signatures of the Holders or proxies and on which shall be inscribed the identifying number or numbers or to which shall be attached a list of identifying numbers of the Debentures held or represented by them. The permanent chairman of the meeting shall appoint two scrutineers who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of the Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the scrutineers on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 10.02. The record shall be signed and verified by the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated.

 

10.07                 Quorum.

 

At any meeting of the Holders a quorum shall consist of Holders present in person or by proxy and representing at least 25% in principal amount of the outstanding Debentures.  If a quorum of the Holders shall not be present within 30 minutes from the time fixed for holding any meeting, the meeting, if summoned by the Holders or pursuant to a request of the Holders, shall be dissolved, but in any other case the meeting shall be adjourned to the same day in the next week (unless such day is not a Business Day in which case it shall be adjourned to the next following Business Day thereafter) at the same time and place and no notice shall be required to be given in respect of such adjourned meeting. At the adjourned meeting, the Holders present in person or by proxy shall constitute a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not represent 25% of the principal amount of the outstanding Debentures. Any business may be brought before or dealt with at an adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling the same. No business shall be transacted at any meeting unless the required quorum be present at the commencement of business.

 

41

 

10.08                 Power to Adjourn.

 

The chairman of any meeting at which a quorum of the Holders is present may, with the consent of the Holders of a majority in principal amount of the Debentures represented thereat, adjourn any such meeting and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.

 

10.09                 Poll.

 

On any question submitted to a meeting when demanded by the chairman or by one or more Holders or proxies for Holders, a poll shall be taken in such manner and either at once or after an adjournment as the chairman shall direct.

 

10.10                 Minutes.

 

Minutes of all resolutions and proceedings at every meeting as aforesaid shall be made and duly entered in books to be from time to time provided for that purpose by the Trustee at the expense of the Company, and any such minutes as aforesaid, if signed by the chairman of the meeting at which such resolutions were passed or proceedings had, or by the chairman of the next succeeding meeting of the Holders, shall be prima facie evidence of the matters therein stated and, until the contrary is proved, every such meeting, in respect of the proceedings of which minutes shall have been made, shall be deemed to have been duly held and convened, and all resolutions passed thereat or proceedings taken thereat to have been duly passed and taken.

 

10.11                 Instruments in Writing.

 

All actions which may be taken and all powers that may be exercised by the Holders at a meeting held as hereinbefore in this Article provided may also be taken and exercised by the Holders by an instrument in writing signed in one or more counterparts.

 

ARTICLE 11

GUARANTEE

 

11.01                 Guarantee.

 

The Guarantor hereby unconditionally and irrevocably guarantees to the Trustee for itself and on behalf of the Holders of the Debentures, the due and punctual payment by the Company of all principal, interest and all other amounts payable by the Company under the Debentures and the Indenture, when and as the same shall become due and payable, pursuant to the provisions set out in the Debentures and the Indenture. In case of the failure of the Company punctually to make any such payment or performance, the Guarantor hereby agrees to make such payment or such performance, or cause such payment or performance to be made, promptly upon demand. Such demand must be made by a Holder or by the Trustee on behalf of all Holders by the giving of written notice of such demand to the Guarantor at 200 East Randolph Street, Chicago, Illinois 60601, Attention: Treasurer; provided, however, that delay in making such demand shall in no event affect the Guarantor’s obligations under the Guarantee. The Guarantee shall remain in full force and effect or shall be reinstated (as the case may be) if at any time any payment guaranteed hereunder, in whole or in part, is rescinded or must otherwise be returned by the Holders upon the insolvency, bankruptcy or reorganization of the Company or otherwise, all as though such payment had not been made.

 

42

 

The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the invalidity, regularity or enforceability of the Debentures or the Indenture or any of the terms thereof; the absence of any action to enforce the same; the rendering of any judgment against the Company or any action to enforce the same; any amendment, supplement, renewal, replacement or refinancing of the Debentures or the Indenture or any other circumstances that might otherwise constitute a legal or equitable discharge of a guarantor or a defense of a guarantor. The Guarantor covenants that the Guarantee will not be discharged except by complete payment of the amounts payable under the Debentures and the Indenture. This Guarantee shall continue to be effective if the Company merges or consolidates with or into another entity, loses its separate legal identity or ceases to exist.

 

The Guarantor hereby waives the benefits of diligence, presentment, protest, notice of protest, acceleration and dishonor, filing of claims with any court in the event of insolvency or bankruptcy of the Company, all demands whatsoever, except as set forth in the Guarantee, and any right to require a proceeding first against the Company or to claim any right of set-off.

 

The Guarantor shall be subrogated to all of the rights of the Holders against the Company in respect of any amount paid by the Guarantor pursuant to this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such rights of subrogation until the principal of and premium, if any, and interest, if any, on, all Debentures issued under the Indenture shall have been paid in full.

 

ARTICLE 12

MISCELLANEOUS

 

12.01                 Notices.

 

Any notice or communication shall be sufficiently given if in writing and delivered in person, mailed by first-class mail or sent by telecopier transmission addressed as follows:

 

if to the Company or the Guarantor:

 

Aon Corporation

200 East Randolph Street

Chicago, Illinois 60601

 

Telecopier No.:                     (312) 381-6060

Attention:                              Treasurer

 

with a copy, which shall not constitute notice, to:

 

Aon Corporation

200 East Randolph Street

Chicago, Illinois 60601

 

Telecopier No.:                     (312) 381-6165

Attention:                              Chief Counsel - Corporate

 

43

 

if to the Trustee:

 

Computershare Trust Company of Canada

100 University Avenue

9th Floor, North Tower

Toronto, Ontario

M5J 2Y1

 

Telecopier No.:                     (416) 981-9777

Attention:                              Manager, Corporate Trust

 

The Company or Guarantor or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

 

Any notice or communication mailed to a Holder shall be mailed to it at its address as it appears on the Security Register by first-class mail and shall be sufficiently given if so mailed within the time prescribed. Copies of any such communication or notice to a Holder shall also be mailed to the Trustee and each Agent at the same time.

 

Failure to mail a notice or communication to a Holder as provided herein or any defect in any such notice or communication shall not affect its sufficiency with respect to other Holders. Except for a notice to the Trustee, which is deemed given only when received, and except as otherwise provided in this Indenture, if a notice or communication is mailed in the manner provided in this Section 12.01, it is duly given, whether or not the addressee receives it.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

12.02                 Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Company or the Guarantor to the Trustee to take any action under this Indenture which is conditional upon the satisfaction of conditions precedent, the Company or the Guarantor, as the case may be, shall furnish to the Trustee:

 

(i)                                     an Officer’s Certificate stating that, in the opinion of the signers, all such conditions precedent provided for in this Indenture relating to the proposed action have been complied with; and

 

(ii)                                  an Opinion of Counsel stating that, in the opinion of such Counsel, all such conditions precedent have been complied with.

 

44

 

12.03                 Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(i)                                     a statement that each person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

 

(ii)                                  a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based;

 

(iii)                               a statement that, in the opinion of each such person, such person has made such examination or investigation as is necessary to enable such person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(iv)                              a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with; provided, however, that, with respect to matters of fact, an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.

 

12.04                 Rules by Trustee, Paying Agent or Registrar.

 

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Paying Agent or Registrar may make reasonable rules for its functions.

 

12.05                 Payment Date Other Than a Business Day.

 

If any Interest Payment Date or a Maturity Date shall not be a Business Day, then payment of principal of or interest on the Debentures will be made on the next succeeding Business Day with the same force and effect as if made on the date such payment was due, and no interest will accrue on such payment for the period from and after such Interest Payment Date or a Maturity Date to the date of such payment on the next succeeding Business Day.

 

12.06                 Governing Law.

 

This Indenture and the Debentures shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

 

12.07                 No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company, the Guarantor or any of their respective Subsidiaries. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

45

 

12.08                 No Recourse Against Others.

 

No recourse for the payment of the principal of or interest on any of the Debentures, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company or the Guarantor contained in this Indenture or in any of the Debentures, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator or against any past, present or future partner, shareholder, other equityholder, officer, director, employee or controlling person, as such, of the Company or the Guarantor or of any successor Person of either of them, either directly or through the Company or the Guarantor or any successor Person of either of them, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Debentures.

 

12.09                 Successors.

 

All agreements of the Company and the Guarantor in this Indenture, the Debentures and the Guarantee shall bind their respective successors and permitted assigns. All agreements of the Trustee in this Indenture shall bind its successor and permitted assigns.

 

12.10                 Duplicate 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.

 

12.11                 Separability.

 

In case any provision in this Indenture or in the Debentures 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.

 

12.12                 Table of Contents, Headings, Etc.

 

The Table of Contents 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 hereof and shall in no way modify or restrict any of the terms and provisions hereof.

 

12.13                 Counterparts.

 

This Indenture may be executed in any number of counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

46

 

SIGNATURES

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the date first written above.

 

	
 
    	
AON FINANCE N.S. 1, ULC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Christopher S. Fawcus
    
	
 
    	
 
    	
Name: Christopher S. Fawcus
    
	
 
    	
 
    	
Title: President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AON CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Christa Davies
    
	
 
    	
 
    	
Name: Christa Davies
    
	
 
    	
 
    	
Title: Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
COMPUTERSHARE TRUST COMPANY OF   CANADA
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kemi Atawo
    
	
 
    	
 
    	
Name: Kemi Atawo
    
	
 
    	
 
    	
Title: Corporate Trust Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mohanie Shivprasad
    
	
 
    	
 
    	
Name: Mohanie Shivprasad
    
	
 
    	
 
    	
Title: Associate Trust Officer
    

 

 

EXHIBIT A

 

FORM OF DEBENTURE

 

[Each Global Debenture shall bear the following legends.]

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO AON FINANCE N.S. 1, ULC (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE.

 

THIS DEBENTURE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS DEBENTURE IS HEREBY NOTIFIED THAT THE SELLER OF THIS DEBENTURE MAY BE RELYING ON AN EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT.

 

[FACE OF DEBENTURE]

 

AON FINANCE N.S. 1, ULC

 

4.76% Senior Unsecured Debenture due March 8, 2018

 

ISIN# CA03739YAB35

CUSIP# 03739YAB3

 

	
No. 001
    	
Principal Amount Cdn. $375,000,000
    

 

AON FINANCE N.S. 1, ULC, a Nova Scotia unlimited company (the “Company”, which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to CDS & Co., or its registered assigns, the principal sum of Three Hundred and Seventy-Five Million Canadian dollars Cdn. $375,000,000) on March 8, 2018.

 

Interest Payment Dates: March 8 and September 8 of each year, commencing September 8, 2011.

 

Record Dates: The fifteenth calendar day, whether or not a Business Day, immediately preceding each Interest Payment Date.

 

 

Reference is hereby made to the further provisions of this Debenture set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Additional provisions of this Debenture are set forth on the other side of this Debenture.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the Company has caused this Debenture to be signed manually or by facsimile by its duly authorized officers.

 

 

	
 
    	
AON   FINANCE N.S. 1, ULC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the 4.76% Senior Unsecured Debentures due March 8, 2018 described in the within-mentioned Indenture.

 

Date: March 8, 2011

 

	
 
    	
COMPUTERSHARE TRUST COMPANY OF   CANADA
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

 

[REVERSE SIDE OF DEBENTURE]

 

AON FINANCE N.S. 1, ULC

 

4.76% Senior Unsecured Debenture due March 8, 2018

 

1.                                      Principal and Interest.

 

The Company will pay the principal of this Debenture on March 8, 2018.

 

The Company promises to pay interest on the principal amount of this Debenture on each Interest Payment Date, as set forth below, at the rate per annum shown above, subject to adjustment as described below.

 

Interest will be payable in equal semi-annual payments in arrears (to the Holders of record of the Debentures at the close of business on the fifteenth calendar day, whether or not a Business Day, immediately preceding the relevant Interest Payment Date) on each Interest Payment Date of each year, commencing September 8, 2011.

 

Interest on the Debentures will accrue from, and including, March 8, 2011 to, and excluding, the first Interest Payment Date and then from, and including, the immediately preceding Interest Payment Date to which interest has been paid or duly provided for to, but excluding, the next Interest Payment Date or the Maturity Date, as the case may be; provided that, if there is no existing default in the payment of interest and this Debenture is authenticated between a Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such Interest Payment Date.

 

For the purposes of the Interest Act (Canada), whenever interest to be paid under this Debenture is to be calculated on the basis of a year of a specified number of days, the yearly equivalent rate of interest to which the rate determined pursuant to such calculation is equivalent to is the rate so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained divided by such specified number of days.

 

2.                                      Method of Payment.

 

The Company will pay interest on the principal amount of the Debentures as provided above on each March 8 and September 8, commencing September 8, 2011, to the persons who are Holders (as reflected in the Security Register as of the close of business on the fifteenth calendar day, whether or not a Business Day, immediately preceding the Interest Payment Date), in each case, even if the Debenture is cancelled on registration of transfer or registration of exchange after such Record Date; provided that, with respect to the payment of principal, the Company will make payment to the Holder that surrenders this Debenture to a Paying Agent on or after the Maturity Date.

 

Not later than 4:00 p.m. (Toronto time) on the Business Day immediately prior to each due date of any principal of or interest on the Debentures, the Company shall deposit with the Paying Agent money in immediately available funds sufficient to pay such principal and interest so becoming due.  The Company shall require each Paying Agent other than the Trustee to agree in writing that such Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent  for the payment of principal of and interest on the Debentures (whether such money has been paid to it

 

 

by the Company or any other obligor on the Debentures including the Guarantor), and such Paying Agent shall promptly notify the Trustee of any default by the Company (or any other obligor on the Debentures including the Guarantor) in making any such payment. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request to a Paying Agent, require such Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed.

 

So long as the Debentures are represented by one or more Global Debenture registered in the name of the Depository or its nominee, all interest payments on the Debentures shall be made by the Paying Agent (if different from the Trustee) by wire transfer of immediately available funds in Canadian dollars to an account designated by the Depository. In the event any Debentures cease to be so represented by a Global Debenture, the Registrar (if different from the Trustee) shall furnish to the Trustee as of each Record Date and at such other times as the Trustee may reasonably request the names and addresses of Holders as they appear in the Security Register, including the aggregate principal amount of Debentures held by each Holder, and the Trustee shall direct the Paying Agent to pay principal and interest by wire transfer to each Holder or by cheque sent by mail to such Holder’s registered address (as reflected in the Security Register).

 

If the Company or any Subsidiary of the Company or any Affiliate of any of them acts as Paying Agent, it will, on or before each due date of any principal of or interest on the Debentures, segregate and hold in a separate trust fund for the benefit of the Holders a sum of money sufficient to pay such principal or interest so becoming due until such sum of money shall be paid to such Holders or otherwise disposed of as provided in this Indenture, and will promptly notify the Trustee of its action or failure to act.

 

If any Interest Payment Date or the Maturity Date falls on a day that is not a Business Day, the payment of principal and interest will be made on the next succeeding Business Day as if made on the date such payment was due, and no interest will accrue on such payment for the period from and after the Interest Payment Date or the Maturity Date to the date of such payment on the next succeeding Business Day.

 

The Debentures are not intended to be sold to Persons who are not Canadian residents within the meaning of the Income Tax Act (Canada). Any withholding taxes required under applicable laws with respect to payments to Holders who are non-residents of Canada (as defined in the Income Tax Act (Canada)) shall be withheld by the Company and remitted to the applicable taxing authority without any gross-up or additional amount paid to such non-resident Holders.

 

3.                                      Paying Agent and Registrar.

 

Initially, the Trustee will act as authenticating agent, Paying Agent and Registrar. The Company may change any authenticating agent, Paying Agent or Registrar without notice. The Company, the Guarantor, any Subsidiary of the Company or the Guarantor or any Affiliate of any of them may act as Paying Agent, Registrar or Co-Registrar.

 

4.                                      Indenture; Limitations.

 

The Company issued the Debentures under an Indenture, dated as of March 8, 2011 (the “Indenture”), between the Company, Aon Corporation (the “Guarantor”) and Computershare Trust

 

 

Company of Canada, as trustee (the “Trustee”). Capitalized terms herein are used as defined in the Indenture unless otherwise indicated. The terms of the Debentures include those stated in the Indenture. The Debentures are subject to all such terms, and Holders are referred to the Indenture. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Debenture and the terms of the Indenture, the terms of the Indenture shall control.

 

The Debentures are general unsecured obligations of the Company.

 

The Company may, subject to Article 4 of the Indenture and applicable law, issue additional Debentures under the Indenture.

 

5.                                      Optional Redemption.

 

The Debentures will be redeemable as a whole at any time or in part from time to time, at the option of the Company, at a redemption price equal to the greater of: (i) one hundred percent (100%) of the outstanding principal amount of the Debentures being redeemed or (ii) the Canada Yield Price calculated in respect of the Debentures being redeemed; plus, in either case, accrued and unpaid interest on the principal amount being redeemed to but excluding the redemption date.

 

6.                                      Notice of Redemption.

 

Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Debentures to be redeemed at the Holder’s registered address. Debentures in denominations larger than $1,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Debentures (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Debentures (or such portion thereof) called for redemption.

 

7.                                      Guarantee.

 

The payment by the Company of all principal, interest and all other amounts on the Debentures is fully and unconditionally guaranteed by the Guarantor, when and as the same shall become due and payable, pursuant to the provisions set out in the Indenture.

 

8.                                      Denominations; Transfer; Exchange.

 

The Debentures are in registered form without coupons in denominations of $1,000 of principal amount and multiples of $1,000 in excess thereof. A Holder may register the transfer or exchange of Debentures in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer or exchange of any Debentures selected for redemption (except, in the case of a Debenture to be redeemed in part, the portion of the Debenture not to be redeemed) or any Debentures for a period of fifteen (15) days before a selection of Debentures to be redeemed.

 

9.                                      Persons Deemed Owners.

 

A Holder shall be treated as the legal owner of a Debenture for all purposes.

 

 

10.                               Unclaimed Money.

 

If money for the payment of principal or interest remains unclaimed for two years, the Trustee and the Paying Agent will pay the money back to the Company at its request. After that, Holders entitled to the money must look to the Company for payment, unless applicable law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease. In no event will interest accrue on any unclaimed monies.

 

11.                               Discharge Prior to Maturity.

 

If the Company deposits with the Trustee money or Canadian Government Obligations sufficient to pay the then outstanding principal of and accrued and unpaid interest on the Debentures (a) to redemption or maturity, as the case may be, the Company will be discharged from the Indenture and the Debentures, except in certain circumstances for certain provisions thereof, and (b) to the Stated Maturity, the Company will be discharged from certain covenants set forth in the Indenture.

 

12.                               Amendment; Supplement; Waiver.

 

Subject to certain exceptions set forth in the Indenture for which the consent of each Holder shall be required, (a) the Indenture or the Debentures may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Debentures then outstanding and (b) any existing default or compliance with any provision may be waived with the consent of the Holders of at least a majority in principal amount of the Debentures then outstanding. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture or the Debentures to, among other things, cure any ambiguity, defect or inconsistency and make any change that does not materially and adversely affect the rights of any Holder.

 

13.                               Restrictive Covenants and Change of Control Provisions

 

The Indenture imposes certain limitations on the ability of the Company and the Guarantor, among other things, to (a) merge, consolidate, amalgamate or transfer or lease substantially all of its assets or (b) cease to preserve and keep in full force and effect its existence and rights. On or before a date not more than four months after the end of each fiscal year, the Company and the Guarantor shall deliver to the Trustee an Officer’s Certificate stating whether or not the signers thereof know of any Default or Event of Default, including a Default or Event of Default under such restrictive covenants.

 

The Indenture also provides for the Company to offer to repurchase the Debentures upon a change of control of the Guarantor by making a cash payment equal to 101% of the aggregate principal amount of the Debentures to be repurchased, plus accrued and unpaid interest thereon to the date of repurchase.

 

14.                              Successor Persons.

 

When a successor Person or other entity assumes all the obligations of its predecessor under the Debentures and the Indenture, the predecessor person will be released from those obligations subject to the terms of the Indenture.

 

 

15.                               Defaults and Remedies.

 

Any of the following events constitutes an “Event of Default” under the Indenture:

 

(a)                                  default in the payment of the principal of any of the Debentures as and when the same shall become due and payable either at maturity, by declaration, by repurchase or otherwise; or

 

(b)                                 default in the payment of any installment of interest on any of the Debentures as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or

 

(c)                                  failure on the part of the Company or the Guarantor duly to observe or perform any other of the covenants or agreements on the part of the Company or the Guarantor in the Indenture applicable to the Debentures for a period of 90 days after the date on which written notice of such failure, specifying such failure and requiring the Company or the Guarantor to remedy the same and stating that such notice is a “Notice of Default” hereunder, shall have been given to the Company or the Guarantor by the Trustee, or to the Company or the Guarantor and the Trustee by the Holders of at least 25% in aggregate principal amount of the Debentures at the time outstanding; or

 

(d)                                 a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or the Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or the Guarantor or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs and such decree or order shall remain unstayed and in effect for a period of 90 days; or

 

(e)                                  the Company or the Guarantor shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of any order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or similar official) of the Company or the Guarantor or for any substantial part of its property, or shall make any general assignment for the benefit of creditors.

 

If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee may, and at the direction of the Holders of at least 25% in aggregate principal amount of the Debentures then outstanding shall, declare all the Debentures to be due and payable. If a bankruptcy or insolvency default with respect to the Company occurs and is continuing, the Debentures automatically become due and payable. Holders may not enforce the Indenture or the Debentures except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Debentures. Subject to certain limitations, Holders of at least a majority in principal amount of the Debentures then outstanding may direct the Trustee in its exercise of any trust or power.

 

 

16.                               Trustee Dealings with the Company.

 

The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Company or its Affiliates and may otherwise deal with the Company or its Affiliates as if it were not the Trustee.

 

17.                               No Recourse Against Others.

 

No incorporator or any past, present or future partner, stockholder, other equityholder, officer, director, employee or controlling person, as such, of the Company or the Guarantor or of any successor Person shall have any liability for any obligations of the Company under the Debentures 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 Debenture waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Debentures.

 

18.                               Authentication.

 

This Debenture shall not be valid until the Trustee or authenticating agent signs the certificate of authentication on the other side of this Debenture.

 

19.                               Governing Law.

 

This Debenture shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

 

The Company and the Guarantor will furnish a copy of the Indenture to any Holder upon written request and without charge. Requests may be made to the Company or the Guarantor as follows: Aon Corporation, 200 East Randolph Street, Chicago, Illinois 60601; Attention: Treasurer.

 

 

ASSIGNMENT FORM

 

	
I or we assign and transfer this Debenture   to:
    	
 
    

 

Insert social insurance number or other identifying number of assignee

 

 

 

Print or type name, address and postal code of assignee

 

 

 

and irrevocably appoint                                                   , as agent, to transfer this Debenture on the books of the Company.

 

The agent may substitute another to act for him.

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
Signed
    	
 
    
	
 
    	
 
    	
(Sign exactly as name appears on the other   side of this Debenture)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Signature Guarantee*:
    
	
 
    	
 
    
	
 
    	
 
    

 

*              The signature(s) to this assignment must correspond with the name(s) as written upon the face of this Debenture in every particular without alteration or any change whatsoever.  The signature(s) on this form must be guaranteed by one of the following methods:

 

Canada and the USA: A Medallion Signature Guarantee obtained from a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMPT, MSP).  Many commercial banks, savings banks, credit unions, and all broker dealers participate in a Medallion Signature Guarantee Program.  The Guarantee must affix a stamp bearing the actual words “Medallion Guaranteed”.

 

Canada:  A Signature Guarantee obtained from a major Canadian Schedule I chartered bank.  The Guarantor must affix a stamp bearing the actual words “Signature Guaranteed”.  Signature Guarantees are not accepted from Treasury Branches, Credit Unions or Caisses Populaires unless they are members of a Medallion Signature Guarantee Program.

 

Outside North America: For Holders located outside North America, present the certificate(s) and/or document(s) that require a guarantee to a local financial institution that has a corresponding Canadian or American affiliate which is a member of an acceptable Medallion Signature Guarantee Program.  The corresponding affiliate will arrange for the signature to be over-guaranteed.

 

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Debenture purchased by the Company pursuant to Change of Control Offer, check the box:

 

	
 
    	
 
    	
 
    
	
o  
    	
 
    	
 
    
	
Change of Control
    	
 
    	
 
    

 

If you want to elect to have only part of this Debenture purchased by the Company pursuant to a Change of Control Offer, state the principal amount (in denominations of $2,000 and integral multiples of $1,000):

 

$                          

 

	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    	
 
    
	
(Sign exactly as   your name appears on the other side of the Debenture)
    

 

	
Signature Guarantee
    	
 
    	
 
    

 

*              The signature(s) to this option must correspond with the name(s) as written upon the face of this Debenture in every particular without alteration or any change whatsoever.  The signature(s) on this form must be guaranteed by one of the following methods:

 

Canada and the USA: A Medallion Signature Guarantee obtained from a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMPT, MSP).  Many commercial banks, savings banks, credit unions, and all broker dealers participate in a Medallion Signature Guarantee Program.  The Guarantee must affix a stamp bearing the actual words “Medallion Guaranteed”.

 

Canada:  A Signature Guarantee obtained from a major Canadian Schedule I chartered bank.  The Guarantor must affix a stamp bearing the actual words “Signature Guaranteed”.  Signature Guarantees are not accepted from Treasury Branches, Credit Unions or Caisses Populaires unless they are members of a Medallion Signature Guarantee Program.

 

Outside North America: For Holders located outside North America, present the certificate(s) and/or document(s) that require a guarantee to a local financial institution that has a corresponding Canadian or American affiliate which is a member of an acceptable Medallion Signature Guarantee Program.  The corresponding affiliate will arrange for the signature to be over-guaranteed.

 

 

EXHIBIT B

 

FORM OF GUARANTEE

 

THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON AN EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT.

 

FOR VALUE RECEIVED, receipt of which is hereby acknowledged, Aon Corporation, a corporation duly organized and existing under the laws of the State of Delaware (the “Guarantor”), hereby unconditionally and irrevocably guarantees (the “Guarantee”) to Computershare Trust Company of Canada, as trustee (including any successor pursuant to the terms of the Indenture (as defined below), the “Trustee”) for itself and on behalf of the holders (the “Holders”) of the debentures (the “Debentures”) issued by Aon Finance N.S. 1, ULC, a Nova Scotia unlimited company (the “Company”), under the terms of the Indenture dated March 8, 2011 (as the same may be amended or supplemented in accordance with the terms thereof, the “Indenture”), among the Company, the Guarantor and the Trustee, the due and punctual payment by the Company of all principal, interest and all other amounts payable by the Company under the Debentures and the Indenture, when and as the same shall become due and payable, pursuant to the provisions set out in the Debentures and the Indenture. In case of the failure of the Company punctually to make any such payment or performance, the Guarantor hereby agrees to make such payment or such performance, or cause such payment or performance to be made, promptly upon demand; such demand must be made by a Holder or by the Trustee on behalf of all Holders by the giving of written notice of such demand to the Guarantor at 200 East Randolph Street, Chicago, Illinois 60601, Attention: Treasurer; provided, however, that delay in making such demand shall in no event affect the Guarantor’s obligations under this Guarantee. This Guarantee shall remain in full force and effect or shall be reinstated (as the case may be) if at any time any payment guaranteed hereunder, in whole or in part, is rescinded or must otherwise be returned by the Holders upon the insolvency, bankruptcy or reorganization of the Company or otherwise, all as though such payment had not been made.

 

The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the invalidity, regularity or enforceability of the Debentures or the Indenture or any of the terms thereof; the absence of any action to enforce the same; the rendering of any judgment against the Company or any action to enforce the same; any amendment, supplement, renewal, replacement or refinancing of the Debentures or the Indenture or any other circumstances that might otherwise constitute a legal or equitable discharge of a guarantor or a defense of a guarantor. The Guarantor covenants that this Guarantee will not be discharged except by complete payment of the amounts payable under the Debentures and the Indenture. This Guarantee shall continue to be effective if the Company merges or consolidates with or into another entity, loses its separate legal identity or ceases to exist.

 

The Guarantor hereby waives the benefits of diligence, presentment, protest, notice of protest, acceleration and dishonor, filing of claims with any court in the event of insolvency or bankruptcy of the

 

 

Company, all demands whatsoever, except as noted in the first paragraph of this Guarantee, and any right to require a proceeding first against the Company or to claim any right of set-off.

 

The Guarantor hereby certifies and warrants that this Guarantee constitutes the valid obligation of the Guarantor and complies with all applicable laws.

 

The Guarantor shall be subrogated to all of the rights of the Holders against the Company in respect of any amount paid by the Guarantor pursuant to this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such rights of subrogation until the principal of and premium, if any, and interest, if any, on, all Debentures issued under the Indenture shall have been paid in full.

 

The obligations of the Guarantor under this Guarantee are unconditional and irrevocable obligations of the Guarantor ranking pari passu with all other present and future unsecured and unsubordinated obligations of the Guarantor.

 

This Guarantee shall not be valid or become obligatory for any purpose with respect to any Debenture until such Debenture shall have been authenticated on behalf of the Trustee as provided in the Indenture.

 

This Guarantee shall be governed by, and construed in accordance with, the laws of the Province of Ontario.

 

Capitalized terms used herein and not defined herein shall have the meanings given to them in the Indenture.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed in its corporate name by its duly authorized representative on this 8th day of March, 2011.

 

 

	
 
    	
AON CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:EXHIBIT 4.1

 

 

ISLE OF CAPRI CASINOS, INC.

 

AND

 

EACH OF THE GUARANTORS PARTY HERETO

 

7.750% SENIOR NOTES DUE 2019

 

 

INDENTURE

 

Dated as of March 7, 2011

 

 

U.S. BANK NATIONAL ASSOCIATION

 

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)(2)
    	
 
    	
7.06; 7.07
    
	
(c)
    	
 
    	
7.06; 12.02
    
	
(d)
    	
 
    	
7.06
    
	
314(a)
    	
 
    	
4.03; 6.01; 12.02; 12.05
    
	
(c)(1)
    	
 
    	
N.A.
    
	
(c)(2)
    	
 
    	
N.A.
    
	
(c)(3)
    	
 
    	
N.A.
    
	
(e)
    	
 
    	
12.05
    
	
(f)
    	
 
    	
N.A.
    
	
315(a)
    	
 
    	
N.A.
    
	
(b)
    	
 
    	
N.A.
    
	
(c)
    	
 
    	
N.A.
    
	
(d)
    	
 
    	
N.A.
    
	
(e)
    	
 
    	
N.A.
    
	
316(a) (last   sentence)
    	
 
    	
N.A.
    
	
(a)(1)(A)
    	
 
    	
N.A.
    
	
(a)(1)(B)
    	
 
    	
N.A.
    
	
(a)(2)
    	
 
    	
N.A.
    
	
(b)
    	
 
    	
N.A.
    
	
(c)
    	
 
    	
N.A.
    
	
317(a)(1)
    	
 
    	
N.A.
    
	
(a)(2)
    	
 
    	
N.A.
    
	
(b)
    	
 
    	
N.A.
    
	
318(a)
    	
 
    	
N.A.
    
	
(b)
    	
 
    	
N.A.
    
	
(c)
    	
 
    	
12.01
    

 

N.A. means not applicable.

*  This Cross Reference Table is not part of this Indenture.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    
	
ARTICLE 1
    
	
DEFINITIONS AND INCORPORATION
    
	
BY REFERENCE
    
	
 
    
	
Section 1.01
    	
Definitions
    	
 
    	
1
    
	
Section 1.02
    	
Other Definitions
    	
 
    	
25
    
	
Section 1.03
    	
Incorporation by Reference of Trust Indenture Act
    	
 
    	
26
    
	
Section 1.04
    	
Rules of Construction
    	
 
    	
26
    
	
 
    
	
ARTICLE 2
    
	
THE NOTES
    
	
 
    
	
Section 2.01
    	
Form and Dating
    	
 
    	
26
    
	
Section 2.02
    	
Execution and Authentication
    	
 
    	
27
    
	
Section 2.03
    	
Registrar and Paying Agent
    	
 
    	
27
    
	
Section 2.04
    	
Paying Agent to Hold Money in Trust
    	
 
    	
28
    
	
Section 2.05
    	
Holder Lists
    	
 
    	
28
    
	
Section 2.06
    	
Transfer and Exchange
    	
 
    	
28
    
	
Section 2.07
    	
Replacement Notes
    	
 
    	
40
    
	
Section 2.08
    	
Outstanding Notes
    	
 
    	
40
    
	
Section 2.09
    	
Treasury Notes
    	
 
    	
40
    
	
Section 2.10
    	
Temporary Notes
    	
 
    	
40
    
	
Section 2.11
    	
Cancellation
    	
 
    	
41
    
	
Section 2.12
    	
Defaulted Interest
    	
 
    	
41
    
	
 
    
	
ARTICLE 3
    
	
REDEMPTION   AND PREPAYMENT
    
	
 
    
	
Section 3.01
    	
Notices to Trustee
    	
 
    	
41
    
	
Section 3.02
    	
Selection of Notes to Be Redeemed or Purchased
    	
 
    	
41
    
	
Section 3.03
    	
Notice of Redemption
    	
 
    	
42
    
	
Section 3.04
    	
Effect of Notice of Redemption
    	
 
    	
43
    
	
Section 3.05
    	
Deposit of Redemption or Purchase Price
    	
 
    	
43
    
	
Section 3.06
    	
Notes Redeemed or Purchased in Part
    	
 
    	
43
    
	
Section 3.07
    	
Optional Redemption
    	
 
    	
43
    
	
Section 3.08
    	
Mandatory Redemption
    	
 
    	
44
    
	
Section 3.09
    	
Gaming Redemption
    	
 
    	
44
    
	
Section 3.10
    	
Offer to Purchase by Application of Excess Proceeds
    	
 
    	
45
    
	
 
    
	
ARTICLE 4
    
	
COVENANTS
    
	
 
    
	
Section 4.01
    	
Payment of Notes
    	
 
    	
47
    
	
Section 4.02
    	
Maintenance of Office or Agency
    	
 
    	
47
    
	
Section 4.03
    	
Reports
    	
 
    	
47
    
	
Section 4.04
    	
Compliance Certificate
    	
 
    	
48
    
	
Section 4.05
    	
Taxes
    	
 
    	
49
    
	
Section 4.06
    	
Stay, Extension and Usury Laws
    	
 
    	
49
    
	
Section 4.07
    	
Restricted Payments
    	
 
    	
49
    
	
Section 4.08
    	
Dividend and Other Payment Restrictions Affecting   Restricted Subsidiaries
    	
 
    	
53
    
	
Section 4.09
    	
Incurrence of Indebtedness and Issuance of Preferred Stock
    	
 
    	
54
    

 

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    
	
Section 4.10
    	
Asset Sales
    	
 
    	
58
    
	
Section 4.11
    	
Events of Loss
    	
 
    	
60
    
	
Section 4.12
    	
Transactions with Affiliates
    	
 
    	
61
    
	
Section 4.13
    	
Liens
    	
 
    	
63
    
	
Section 4.14
    	
Business Activities
    	
 
    	
63
    
	
Section 4.15
    	
Corporate Existence
    	
 
    	
63
    
	
Section 4.16
    	
Offer to Repurchase Upon Change of Control
    	
 
    	
63
    
	
Section 4.17
    	
Payments for Consent
    	
 
    	
64
    
	
Section 4.18
    	
Additional Note Guarantees
    	
 
    	
65
    
	
Section 4.19
    	
Designation of Restricted and Unrestricted Subsidiaries
    	
 
    	
65
    
	
Section 4.20
    	
No Amendment to Subordination Provisions
    	
 
    	
65
    
	
 
    
	
ARTICLE 5
    
	
SUCCESSORS
    
	
 
    
	
Section 5.01
    	
Merger, Consolidation or Sale of Assets
    	
 
    	
66
    
	
Section 5.02
    	
Successor Corporation Substituted
    	
 
    	
67
    
	
 
    
	
ARTICLE 6
    
	
DEFAULTS   AND REMEDIES
    
	
 
    
	
Section 6.01
    	
Events of Default
    	
 
    	
67
    
	
Section 6.02
    	
Acceleration
    	
 
    	
70
    
	
Section 6.03
    	
Other Remedies
    	
 
    	
70
    
	
Section 6.04
    	
Waiver of Past Defaults
    	
 
    	
70
    
	
Section 6.05
    	
Control by Majority
    	
 
    	
70
    
	
Section 6.06
    	
Limitation on Suits
    	
 
    	
71
    
	
Section 6.07
    	
Rights of Holders of Notes to Receive Payment
    	
 
    	
71
    
	
Section 6.08
    	
Collection Suit by Trustee
    	
 
    	
71
    
	
Section 6.09
    	
Trustee May File Proofs of Claim
    	
 
    	
71
    
	
Section 6.10
    	
Priorities
    	
 
    	
72
    
	
Section 6.11
    	
Undertaking for Costs
    	
 
    	
72
    
	
 
    
	
ARTICLE 7
    
	
TRUSTEE
    
	
 
    
	
Section 7.01
    	
Duties of Trustee
    	
 
    	
72
    
	
Section 7.02
    	
Rights of Trustee
    	
 
    	
73
    
	
Section 7.03
    	
Individual Rights of Trustee
    	
 
    	
74
    
	
Section 7.04
    	
Trustee’s Disclaimer
    	
 
    	
74
    
	
Section 7.05
    	
Notice of Defaults
    	
 
    	
74
    
	
Section 7.06
    	
Reports by Trustee to Holders of the Notes
    	
 
    	
74
    
	
Section 7.07
    	
Compensation and Indemnity
    	
 
    	
75
    
	
Section 7.08
    	
Replacement of Trustee
    	
 
    	
75
    
	
Section 7.09
    	
Successor Trustee by Merger, etc.
    	
 
    	
76
    
	
Section 7.10
    	
Eligibility; Disqualification
    	
 
    	
76
    
	
Section 7.11
    	
Preferential Collection of Claims Against Company
    	
 
    	
77
    
	
 
    
	
ARTICLE 8
    
	
LEGAL DEFEASANCE   AND COVENANT DEFEASANCE
    
	
 
    
	
Section 8.01
    	
Option to Effect Legal Defeasance or Covenant Defeasance
    	
 
    	
77
    
	
Section 8.02
    	
Legal Defeasance and Discharge
    	
 
    	
77
    
	
Section 8.03
    	
Covenant Defeasance
    	
 
    	
77
    
	
Section 8.04
    	
Conditions to Legal or Covenant Defeasance
    	
 
    	
78
    

 

ii

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    
	
Section 8.05
    	
Deposited Money and Government Securities to be Held in   Trust; Other Miscellaneous Provisions
    	
 
    	
79
    
	
Section 8.06
    	
Repayment to Company
    	
 
    	
80
    
	
Section 8.07
    	
Reinstatement
    	
 
    	
80
    
	
 
    
	
ARTICLE 9
    
	
AMENDMENT,   SUPPLEMENT AND WAIVER
    
	
 
    
	
Section 9.01
    	
Without Consent of Holders of Notes
    	
 
    	
80
    
	
Section 9.02
    	
With Consent of Holders of Notes
    	
 
    	
81
    
	
Section 9.03
    	
Compliance with Trust Indenture Act
    	
 
    	
82
    
	
Section 9.04
    	
Revocation and Effect of Consents
    	
 
    	
83
    
	
Section 9.05
    	
Notation on or Exchange of Notes
    	
 
    	
83
    
	
Section 9.06
    	
Trustee to Sign Amendments, etc.
    	
 
    	
83
    
	
 
    
	
ARTICLE 10
    
	
NOTE   GUARANTEES
    
	
 
    
	
Section 10.01.
    	
Guarantee
    	
 
    	
83
    
	
Section 10.02.
    	
Limitation on Guarantor Liability
    	
 
    	
84
    
	
Section 10.03.
    	
Execution and Delivery of Note Guarantee
    	
 
    	
85
    
	
Section 10.04.
    	
Guarantors May Consolidate, etc., on Certain   Terms
    	
 
    	
85
    
	
Section 10.05.
    	
Releases
    	
 
    	
86
    
	
 
    
	
ARTICLE 11
    
	
SATISFACTION   AND DISCHARGE
    
	
 
    
	
Section 11.01
    	
Satisfaction and Discharge
    	
 
    	
87
    
	
Section 11.02
    	
Application of Trust Money
    	
 
    	
88
    
	
 
    
	
ARTICLE 12
    
	
MISCELLANEOUS
    
	
 
    
	
Section 12.01
    	
Trust Indenture Act Controls
    	
 
    	
88
    
	
Section 12.02
    	
Notices
    	
 
    	
88
    
	
Section 12.03
    	
Communication by Holders of Notes with Other Holders of   Notes
    	
 
    	
89
    
	
Section 12.04
    	
Certificate and Opinion as to Conditions Precedent
    	
 
    	
89
    
	
Section 12.05
    	
Statements Required in Certificate or Opinion
    	
 
    	
90
    
	
Section 12.06
    	
Rules by Trustee and Agents
    	
 
    	
90
    
	
Section 12.07
    	
No Personal Liability of Directors, Officers, Employees and   Stockholders
    	
 
    	
90
    
	
Section 12.08
    	
Governing Law
    	
 
    	
90
    
	
Section 12.09
    	
No Adverse Interpretation of Other Agreements
    	
 
    	
90
    
	
Section 12.10
    	
Successors
    	
 
    	
91
    
	
Section 12.11
    	
Severability
    	
 
    	
91
    
	
Section 12.12
    	
Counterpart Originals
    	
 
    	
91
    
	
Section 12.13
    	
Table of Contents, Headings, etc.
    	
 
    	
91
    
	
 
    	
 
    	
 
    	
 
    
	
EXHIBITS
    
	
 
    	
 
    	
 
    	
 
    
	
Exhibit A
    	
FORM OF   NOTE
    	
 
    	
 
    
	
Exhibit B
    	
FORM OF   CERTIFICATE OF TRANSFER
    	
 
    	
 
    
	
Exhibit C
    	
FORM OF   CERTIFICATE OF EXCHANGE
    	
 
    	
 
    
	
Exhibit D
    	
FORM OF   NOTATION OF GUARANTEE
    	
 
    	
 
    
	
Exhibit E
    	
FORM OF   SUPPLEMENTAL INDENTURE
    	
 
    	
 
    
					

 

iii

 

INDENTURE dated as of March 7, 2011 among Isle of Capri Casinos, Inc., a Delaware corporation, the Guarantors (as defined) and U.S. Bank National Association, as trustee.

 

The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the  7.750% Senior Notes due 2019 (the “Notes”):

 

ARTICLE 1
 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 the Notes sold in reliance on Rule 144A.

 

“2014 Notes” means the 7.00% Senior Subordinated Notes due 2014 issued by the Company.

 

“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 became 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 Restricted Subsidiary of, such specified Person; and

 

(2)                                  Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

 

“Additional Notes” means additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes.

 

“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.

 

“Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.

 

“Airplane” means the Citation 5 airplane owned by the Company as of the date hereof.

 

“Applicable Premium” means, with respect to any Note on any redemption date, the greater of:

 

(1)                                  1.0% of the principal amount of the Note; or

 

(2)                                  the excess of: (a) the present value at such redemption date of (i) the redemption price of the Note at March 15, 2015, (such redemption price being set forth in the table appearing

 

1

 

in Section 3.07 hereof) plus (ii) all required interest payments due on the Note through March 15, 2015, (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (b) the principal amount of the Note.

 

”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.

 

“Asset Sale” means:

 

(1)                                  the sale, lease, conveyance or other disposition of any assets or rights by the Company or any of the Restricted Subsidiaries; provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by Section 4.16 and/or Section 5.01 hereof and not by Section 4.10 hereof; and

 

(2)                                  the issuance of Equity Interests by any of the Restricted Subsidiaries or the sale by the Company or any of the Restricted Subsidiaries of Equity Interests in any of the Subsidiaries.

 

Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:

 

(A)                              any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $20.0 million;

 

(B)                                a transfer of assets between or among the Company and its Restricted Subsidiaries;

 

(C)                                an issuance of Equity Interests by a Restricted Subsidiary of the Company to the Company or to a Restricted Subsidiary of the Company;

 

(D)                               the sale, lease or other transfer of products, services or accounts receivable in the ordinary course of business and any sale, abandonment or other disposition of damaged, worn-out or obsolete assets, including intellectual property, that is, in the reasonable judgment of the Company, no longer economically practicable to maintain or useful in the conduct of the business of the Company and its Restricted Subsidiaries taken as whole;

 

(E)                                 licenses and sublicenses by the Company or any of its Restricted Subsidiaries of software or intellectual property in the ordinary course of business;

 

(F)                                 any surrender or waiver of contract rights or settlement, release, recovery on or surrender of contract, tort or other claims in the ordinary course of business;

 

(G)                                the granting of Liens not prohibited under Section 4.13 hereof;

 

(H)                               the sale or other disposition of Assets Held for Sale or Development;

 

(I)                                    the sale or other disposition of any Excess Land;

 

2

 

(J)                                   the sale or other disposition of cash or Cash Equivalents;

 

(K)                               a Restricted Payment that does not violate Section 4.07 hereof or a Permitted Investment;

 

(L)                                 the disposition of receivables in connection with the compromise, settlement or collection thereof;

 

(M)                            leases (as lessor or sublessor) of real or personal property and guaranties of any such lease in the ordinary course of business; and

 

(N)                               any exchange of like property pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, for use in a Permitted Business.

 

“Assets Held for Sale or Development” means:

 

(1)                                  the Airplane;

 

(2)                                  the Real Estate Options; and

 

(3)                                  the Cripple Creek Land.

 

“Bank Credit Facility” means that certain Credit Agreement, dated as of July 26, 2007, by and among the Company, the lenders named therein and Credit Suisse, Cayman Islands Branch, as administrative agent, issuing bank and swing line lender, providing for up to $1.35 billion of revolving credit and term loan borrowings, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

 

“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, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time.  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 or any committee thereof duly authorized to act on behalf of such board;

 

(2)                                  with respect to a partnership, the board of directors of the general partner of the partnership;

 

(3)                                  with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and

 

3

 

(4)                                  with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Broker-Dealer” means any broker or dealer registered under the Exchange Act.

 

“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 prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

 

“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 interests (whether general or limited) or membership interests; and

 

(4)                                  any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

 

“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 twelve months from the date of acquisition;

 

(3)                                  certificates of deposit and Eurodollar time deposits with maturities of twelve months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding twelve months and overnight bank deposits, in each case, with any lender party to the Bank Credit Facility or with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of B or better;

 

(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 the qualifications specified in clause (3) above;

 

(5)                                  commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and, in each case, maturing within twelve months after the date of acquisition; and

 

4

 

(6)                                  money market funds and mutual funds at least 90% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition.

 

“Casino” means a gaming establishment owned by the Company or a Restricted Subsidiary and containing at least 400 slot machines and 10,000 square feet of space dedicated to the operation of games of chance.

 

“Casino Hotel” means any hotel or similar hospitality facility with at least 100 rooms owned by the Company or a Restricted Subsidiary and serving a Casino.

 

“Casino Related Facility” means any building, restaurant, theater, amusement park or other entertainment facility, parking or recreational vehicle facilities or retail shops located at or adjacent to, and directly ancillary to, a Casino and used or to be used in connection with such Casino other than a Casino Hotel.

 

“Change of Control” means an event or series of events by which:

 

(1)                                  any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) (other than the Permitted Equity Holders) is or becomes the Beneficial Owner, directly or indirectly, of securities representing 50% or more of the combined voting power of the Company’s outstanding Voting Stock, but excluding in each case from the percentage of voting power held by any group, the voting power of shares owned by the Permitted Equity Holders who are deemed to be members of the group provided that (A) such Permitted Equity Holders beneficially own a majority of the voting power of the Voting Stock held by such group and (B) at such time the Permitted Equity Holders together shall fail to Beneficially Own, directly or indirectly, securities representing at least the same percentage of voting power of such Voting Stock as the percentage Beneficially Owned by such person or group; or

 

(2)                                  during any period of 24 consecutive months, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new or replacement directors whose election by the Board of Directors of the Company, or whose nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors then in office; or

 

(3)                                  the Company consolidates with or merges with or into any Person or sells, leases, transfers, conveys or otherwise disposes of, directly or indirectly, all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person, pursuant to a transaction in which the outstanding Voting Stock of the Company is changed into or exchanged for cash, securities or other property (other than any such transaction where the outstanding Voting Stock of the Company is (A) changed only to the extent necessary to reflect a change in the jurisdiction of incorporation of the Company or (B) is exchanged for (i) Voting Stock of the surviving corporation which is not Disqualified Stock or (ii) cash, securities and other property (other than Capital Stock of the surviving corporation) in an amount which could be paid by the Company as a Restricted Payment under Section 4.07 hereof (and such amount shall be treated as a Restricted Payment)) and no person or group, other than Permitted Equity Holders (including any Permitted Equity Holders who are part of a group where such Permitted Equity Holders beneficially own a majority of the voting power of the Voting Stock held by such group), owns immediately after such transaction, directly or indirectly, more than 50% of the combined voting power of the outstanding Voting Stock of the surviving corporation; or

 

5

 

(4)                                  the Company is liquidated or dissolved or adopts a plan of liquidation or dissolution.

 

“Clearstream” means Clearstream Banking, S.A.

 

“Company” means Isle of Capri Casinos, Inc., and any and all successors thereto.

 

“Completion Guarantee and Keep-Well Agreement” means:

 

(1)                                  the guarantee by the Company or a Guarantor of the completion of the development, construction and opening of a new Casino, Casino Hotel or Casino Related Facility by one or more Unrestricted Subsidiaries of the Company;

 

(2)                                  any Indebtedness of an Unrestricted Subsidiary guaranteed by the Company or any Guarantor pursuant to a Completion Guarantee and Keep-Well Agreement, prior to the time the Company or such Guarantor makes any principal, interest or comparable debt service payment with respect to such guaranteed Indebtedness;

 

(3)                                  the agreement by the Company or a Guarantor to advance funds, property or services on behalf of one or more Unrestricted Subsidiaries of the Company in order to maintain the financial condition of such Unrestricted Subsidiary in connection with the development, construction, opening and operation of a new Casino, Casino Hotel or Casino Related Facility by such Unrestricted Subsidiary; or

 

(4)                                  any agreement, guarantee or Indebtedness of similar nature and effect entered into in the ordinary course of business and consistent with past practice, provided that such agreement, guarantee or Indebtedness is entered into or incurred, as the case may be, in connection with obtaining financing for, developing, constructing or opening and operating such Casino, Casino Hotel or Casino Related Facility or is required by a Gaming Authority.

 

“Completion Guarantee/Keep-Well Indebtedness” of the Company or any Guarantor means (1) any Indebtedness incurred for money borrowed by the Company or any Guarantor in connection with the performance of any Completion Guarantee and Keep-Well Agreement or (2) any Indebtedness of one or more Unrestricted Subsidiaries of the Company that is guaranteed by the Company or a Guarantor pursuant to a Completion Guarantee and Keep-Well Agreement, in the case of guaranteed Indebtedness under this clause (2), on and after the time the Company or such Guarantor makes any principal, interest or comparable debt service payment with respect to such guaranteed Indebtedness.

 

“Consolidated EBITDA” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:

 

(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 (including franchise taxes imposed in lieu of or as additional income tax), to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus

 

6

 

(3)                                  the Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus

 

(4)                                  the Transaction Costs for such period, to the extent that such Transaction Costs were deducted in computing such Consolidated Net Income; plus

 

(5)                                  any foreign currency translation losses (including losses related to currency remeasurements of Indebtedness) of such Person and its Restricted Subsidiaries for such period, to the extent that such losses were taken into account in computing such Consolidated Net Income; plus

 

(6)                                  depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash charges and expenses (including non-cash expenses associated with the granting of stock options or other equity compensation, but excluding any such non-cash charge or expense to the extent that it represents an accrual of or reserve for cash charges or expenses in any future period or amortization of a prepaid cash charge or 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 charges or expenses were deducted in computing such Consolidated Net Income; plus

 

(7)                                  pre-opening expenses; plus

 

(8)                                  any prepayment premiums associated with the prepayment of the Company’s 2014 Notes or the Notes; minus

 

(9)                                  interest income; minus

 

(10)                            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 for the Company and its Restricted Subsidiaries and determined in accordance with GAAP.

 

“Consolidated Net Income” means, for any period, the net income (loss) of the Company and its Restricted Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in accordance with GAAP and without any reduction in respect of preferred stock dividends; provided that there shall be excluded (1) the income (loss) of any Person accrued prior to the date it becomes a Restricted Subsidiary of the Company or is merged into or consolidated with the Company or any of its Restricted Subsidiaries or that Person’s assets are acquired by the Company or any of its Restricted Subsidiaries, and (2) the income of any Restricted Subsidiary of the Company to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that income is not at the time permitted 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.  There shall be excluded from Consolidated Net Income the income (loss) of any Person that is not a Restricted Subsidiary except to the extent of the amount of management fees and dividends or other distributions actually paid to the Company or a Restricted Subsidiary during such period (other than any such dividends or distributions made for the purposes of paying any taxes arising from any equity ownership interests in such Persons).

 

7

 

“Consolidated Net Tangible Assets” of any Person as of any date means the total assets of such Person and its Restricted Subsidiaries as of the most recent fiscal quarter end for which a consolidated balance sheet of such Person and its Restricted Subsidiaries is available, minus total goodwill and other intangible assets of such Person and its Restricted Subsidiaries reflected on such balance sheet, all calculated on a consolidated basis in accordance with GAAP.

 

“continuing” means, with respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.

 

“Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in Section 12.02 hereof or such other address as to which the Trustee may give notice to the Company.

 

“Credit Facilities” means, one or more debt facilities (including, without limitation, the Bank Credit Facility) or commercial paper facilities or indentures, in each case, with banks or other institutional lenders or a trustee 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, or issuances of debt securities, in each case, as amended, restated, modified, renewed, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced in whole or in part from time to time.

 

“Cripple Creek Land” means the real estate owned or leased by the Company in Cripple Creek, Colorado.

 

“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.

 

“Development Services” means, with respect to any Qualified Facility, the provision (through retained professionals or otherwise) of development, design or construction services with respect to such Qualified Facility.

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock or other similar ownership or profit interest 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

 

8

 

occurrence of a change of control or an asset sale  will 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.  The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Indenture will be the maximum amount that the Company and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.

 

“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.

 

“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).

 

“Equity Offering” means a public or private sale of Equity Interests of the Company by the Company (other than Disqualified Stock and other than to a Subsidiary of the Company).

 

“Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.

 

“Event of Loss” means with respect to any property or asset (tangible or intangible, real or personal) that has a Fair Market Value of $20.0 million or more, any of the following:

 

(1)                                  any loss, destruction or damage of such property or asset;

 

(2)                                  any institution of any proceedings for the condemnation or seizure of such property or asset or for the exercise of any right of eminent domain or navigational servitude; or

 

(3)                                  any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property or asset, or confiscation of such property or asset or the requisition of the use of such property or asset.

 

“Excess Land”  means (i) the approximately three acres in the aggregate of real property owned in fee by the Company or its Restricted Subsidiaries as of the date of this Indenture, located north of U.S. 90 in Biloxi, Mississippi and (ii) the approximately 150 acres of real property owned in fee by the Company or its Restricted Subsidiaries as of the date of this Indenture adjacent to the Company’s Casino and Casino Related Facility in Pompano Beach, Florida.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exchange Notes” means the Notes issued in the Exchange Offer pursuant to Section 2.06(f) hereof.

 

“Exchange Offer” has the meaning set forth in the Registration Rights Agreement.

 

“Exchange Offer Registration Statement” has the meaning set forth in the Registration Rights Agreement.

 

“Existing Indebtedness” means all Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the Bank Credit Facility) in existence on the date of this Indenture, until such amounts are repaid.

 

9

 

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the Company (unless otherwise provided in this Indenture).

 

“FF&E” means furniture, fixtures and equipment used in the ordinary course of business in the operation of a Permitted Business.

 

“FF&E Financing” means Indebtedness, the proceeds of which will be used solely to finance or refinance the acquisition or lease by the Company or a Restricted Subsidiary of FF&E.

 

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated EBITDA of such Person 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, redeems, defeases or otherwise discharges 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 will be calculated giving pro forma effect (in accordance with Regulation S-X under the Securities Act) to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge 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, or any Person or any of its Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including all related financing transactions and including increases in ownership of Restricted Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, or that are to be made on the Calculation Date, will be given pro forma effect (in accordance with Regulation S-X under the Securities Act) as if they had occurred on the first day of the four-quarter reference period;

 

(2)                                  the Consolidated EBITDA attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;

 

(3)                                  the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;

 

(4)                                  any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period;

 

(5)                                  any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and

 

10

 

(6)                                  if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months).

 

“Fixed Charges” means, with respect to any specified Person 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 in respect of interest rates; plus

 

(2)                                  the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus

 

(3)                                  any interest 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 (excluding any Completion Guarantee and Keep-Well Agreement, but including any interest expense or interest component of any comparable debt service payments with respect to any Completion Guarantee/Keep-Well Indebtedness to the extent such Completion Guarantee/Keep-Well Indebtedness is actually being serviced by such Person or any Restricted Subsidiary of such Person); plus

 

(4)                                  the product of (A) all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified 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, determined on a consolidated basis in accordance with GAAP.

 

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time.

 

“Gaming Authority” means any agency, authority, board, bureau, commission, department, office or instrumentality of any nature whatsoever of the United States federal or any foreign government, any state, province or any city or other political subdivision or otherwise and whether now or hereafter in existence, or any officer or official thereof, with authority to regulate any gaming operation (or proposed gaming operation) owned, managed, or operated by the Company or any of its Subsidiaries.

 

“Gaming Laws” means all applicable provisions of all:

 

11

 

(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)                                  governmental approvals, licenses, permits, registrations, qualifications or findings of suitability relating to any gaming business, operation or enterprise; 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)(2) hereof, 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 deposited with or on behalf of and registered in the name of the Depository or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 2.01, 2.02, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.

 

“Government Securities” means securities that are marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by any agency or instrumentality thereof for the timely payment of which its full faith and credit are pledged.

 

“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 (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).

 

“Guarantors” means any Subsidiary of the Company that executes a Note Guarantee in accordance with the provisions of this Indenture, and its respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of this Indenture.

 

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:

 

(1)                                  interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements;

 

(2)                                  other agreements or arrangements designed to manage interest rates or interest rate risk; and

 

(3)                                  other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.

 

“Holder” means a Person in whose name a Note is registered.

 

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:

 

12

 

(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 or services except any such balance that constitutes an accrued expense or trade payable;

 

(6)                                  representing any Hedging Obligations;

 

(7)                                  representing the maximum fixed redemption or repurchase price of Disqualified Stock of such Person,

 

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, provided that, so long as such Indebtedness is Non-Recourse Debt as to the specified Person (other than to the assets securing such Indebtedness), the amount of such Indebtedness shall be equal to the lesser of (i) the amount of such Indebtedness or (ii) the Fair Market Value of the assets securing such Indebtedness on the date of determination and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without giving effect to the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.

 

Notwithstanding the foregoing, (i) a Completion Guarantee and Keep-Well Agreement shall not constitute Indebtedness, and (ii) Completion Guarantee/Keep-Well Agreement Indebtedness shall constitute 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 the first $300.0 million aggregate principal amount of Notes issued under this Indenture on the date hereof.

 

“Initial Purchasers” means Credit Suisse Securities (USA) LLC, Wells Fargo Securities, LLC, Deutsche Bank Securities Inc., Commerz Markets LLC and U.S. Bancorp Investments, Inc.

 

“Investments” means, with respect to any Person, (1) 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), (2) purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, (3) the making by such Person or any Subsidiary of such Person of any payment pursuant to any Completion Guarantee and Keep-Well

 

13

 

Agreement (but not the entering into any Completion Guarantee and Keep-Well Agreement) or in respect of any Completion Guarantee/Keep-Well Indebtedness and (4) all other 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 will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Company’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided under Section 4.07(b) hereof.  The acquisition by the Company or any Restricted Subsidiary of the Company of a Person that holds an Investment in a third Person will 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 Investments held by the acquired Person in such third Person in an amount determined as provided under Section 4.07(b) hereof.  Except as otherwise provided in this Indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.

 

”Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.  If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.

 

“Letter of Transmittal” means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.

 

“Lien” means, with respect to any asset, any mortgage, lien (statutory or other), 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.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Net Loss Proceeds” means the aggregate cash proceeds and Cash Equivalents received by the Company or any of its Restricted Subsidiaries in respect of any Event of Loss (including, without limitation, insurance proceeds from condemnation awards or damages awarded by any judgment), net of:

 

(1)                                  the direct costs in recovery of such Net Loss Proceeds, including, without limitation, legal, accounting, appraisal and insurance adjuster fees and any relocation expenses incurred as a result thereof;

 

(2)                                  amounts required to be applied to the repayment of Indebtedness, other than intercompany Indebtedness, secured by a Lien on the asset or assets that were the subject of such Event of Loss; and

 

(3)                                  any taxes paid or payable as a result of the receipt of such cash proceeds, in each case taking into account any available tax credits or deductions and any tax sharing arrangements.

 

“Net Proceeds” means the aggregate cash proceeds and Cash Equivalents received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation,

 

14

 

any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of:

 

(1)                                  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;

 

(2)                                  amounts required to be applied to the repayment of Indebtedness, other than intercompany Indebtedness, secured by a Lien on the asset or assets that were the subject of such Asset Sale;

 

(3)                                  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

 

(4)                                  any reserve for adjustment or indemnification obligations in respect of the sale price of such asset or assets established in accordance with GAAP.

 

“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) or (b) is directly or indirectly liable as a guarantor or otherwise; and

 

(2)                                  as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries (other than the Equity Interests of an Unrestricted Subsidiary).

 

The foregoing notwithstanding, if the Company or a Restricted Subsidiary (x) makes a loan to an Unrestricted Subsidiary that is permitted under Section 4.07 hereof or is a Permitted Investment and is otherwise permitted to be incurred under this Indenture or (y) executes a Completion Guarantee and Keep-Well Agreement for the benefit of an Unrestricted Subsidiary for the purpose of developing, constructing, opening and operating a new Casino, Casino Hotel or Casino Related Facility or Completion Guarantee/Keep-Well Indebtedness, such actions referred to in the foregoing clauses (x) and (y) shall not prevent this Indebtedness of an Unrestricted Subsidiary to which such actions relate from being considered Non-Recourse Debt.

 

“Non-U.S. Person” means a Person who is not a U.S. Person.

 

“Note Guarantee” means the Guarantee by each Guarantor of the Company’s obligations under this Indenture and the Notes, executed pursuant to the provisions of this Indenture.

 

“Notes” has the meaning assigned to it in the preamble to this Indenture.  The Initial Notes and the Additional Notes, including without limitation, the Exchange Notes issued in the exchange therefor, shall be treated as a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes and the Exchange Notes issued in the exchange therefor.

 

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

 

15

 

“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 12.05 hereof.

 

“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.  The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee.

 

“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).

 

“Permitted Business” means, with respect to any Person as of the date of this Indenture, any casino gaming or pari-mutuel wagering business of such Person or any business that is related to, ancillary to or supportive of, connected with or arising out of the casino gaming or pari-mutuel wagering business of such Person (including, without limitation, developing and operating lodging, dining, amusement, sports or entertainment facilities, transportation services or other related activities or enterprises and any additions or improvements thereto).

 

“Permitted Equity Holders” means Irene Goldstein and the lineal descendants of Bernard Goldstein and Irene Goldstein (including adopted children and their lineal descendents) and any entity a majority of the Equity Interests of which are owned by such persons or which was established for the exclusive benefit of, or the estate of, any of the foregoing.

 

“Permitted Investments” means:

 

(1)                                  any Investment in the Company or in a Restricted Subsidiary of the Company;

 

(2)                                  any Investment in Cash Equivalents;

 

(3)                                  any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment:

 

(a)          such Person becomes a Restricted Subsidiary of the Company; 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;

 

(4)                                  any Investment made as a result of the receipt of non-cash consideration from an Asset Sale or an Event of Loss Offer that was made pursuant to and in compliance with Sections 4.10 and 4.11 hereof, respectively;

 

(5)                                  any Investment made solely in exchange for, or out of or with the net cash proceeds of a substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity

 

16

 

Interests (other than Disqualified Stock) of the Company; provided such net cash proceeds from such sale of Equity Interest are excluded from Section 4.07(a)(z)(B) hereof;

 

(6)                                  any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of the Company or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (B) litigation, arbitration or other disputes;

 

(7)                                  Investments represented by Hedging Obligations;

 

(8)                                  loans or advances to employees made in the ordinary course of business of the Company or any Restricted Subsidiary of the Company in an aggregate principal amount not to exceed $250,000 in any fiscal year of the Company and $1.0 million in the aggregate at any one time outstanding;

 

(9)                                  repurchases of the Notes;

 

(10)                            any guarantee of Indebtedness permitted to be incurred under Section 4.09 hereof other than a guarantee of Indebtedness of an Affiliate of the Company that is not a Restricted Subsidiary of the Company;

 

(11)                            any Investment existing on, or made pursuant to binding commitments existing on, the date of this Indenture and any Investment consisting of an extension, modification or renewal of any Investment existing on, or made pursuant to a binding commitment existing on, the date of this Indenture; provided that the amount of any such Investment may be increased (a) as required by the terms of such Investment as in existence on the date of this Indenture or (b) as otherwise permitted under this Indenture;

 

(12)                            Investments acquired after the date of this Indenture as a result of the acquisition by the Company or any Restricted Subsidiary of the Company of another Person, including by way of a merger, amalgamation or consolidation with or into the Company or any of its Restricted Subsidiaries in a transaction that is not prohibited under Section 5.01 hereof after the date of this Indenture to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

 

(13)                            Investments in Capri Insurance Corporation; and

 

(14)                            Qualified Equity Investments in an aggregate principal amount not to exceed $65.0 million.

 

“Permitted Liens” means:

 

(1)                                  Liens on assets of the Company or any of its Restricted Subsidiaries securing Indebtedness and other Obligations under Credit Facilities that were permitted by the terms of this Indenture to be incurred under Section 4.09(b)(1) hereof or by Section 2.1A of the Bank Credit Facility and/or securing Hedging Obligations related thereto and/or securing Obligations with regard to Treasury Management Arrangements;

 

(2)                                  Liens in favor of the Company or the Guarantors;

 

17

 

(3)                                  Liens on property of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company or is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such Person becoming a Restricted Subsidiary of the Company or such merger or consolidation and do not extend to any assets other than those of the Person that becomes a Restricted Subsidiary of the Company or is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company;

 

(4)                                  Liens on property (including Capital Stock) 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 such acquisition and not incurred in contemplation of such acquisition;

 

(5)                                  Liens to secure the performance of statutory obligations, insurance, surety or appeal bonds, workers compensation obligations, performance bonds or other obligations of a like nature incurred in the ordinary course of business (including Liens to secure letters of credit issued to assure payment of such obligations);

 

(6)                                  Liens to secure Indebtedness (including Capital Lease Obligations and FF&E Financing) permitted under Section 4.09(b)(4) hereof covering only the assets acquired with or financed by 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)                                  Liens imposed by law, such as carriers’, warehousemen’s, landlord’s and mechanics’ Liens, in each case, incurred in the ordinary course of business;

 

(10)                            survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, navigational servitudes, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

 

(11)                            Liens created for the benefit of (or to secure) the Notes (or the Note Guarantees);

 

(12)                            Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under this Indenture; provided, however, that:

 

(a)          the new Lien is limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and

 

(b)         the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such

 

18

 

Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including interest and premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;

 

(13)                            Liens on insurance policies and proceeds thereof, or other deposits, to secure insurance premium financings;

 

(14)                            any interest or title of a lessor in property subject to any Capital Lease Obligations or an operating lease or leases or subleases granted to others not interfering in any material respect with the business of the Company or any Restricted Subsidiary;

 

(15)                            filing of Uniform Commercial Code financing statements as a precautionary measure in connection with leases;

 

(16)                            bankers’ Liens, rights of setoff, Liens arising out of judgments or awards not constituting an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

 

(17)                            Liens on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge or redemption of Indebtedness;

 

(18)                            Liens on specific items of inventory or other goods (and the proceeds thereof) of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created in the ordinary course of business for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

(19)                            grants of software and other technology licenses in the ordinary course of business;

 

(20)                            any charter of a Vessel, provided that (a) in the good faith judgment of the Board of Directors of the Company such Vessel is not necessary for the conduct of the business of the Company or any of its Restricted Subsidiaries as conducted immediately prior thereto, (b) the terms of the charter are commercially reasonable and represent the Fair Market Value of the charter, and (c) the Person chartering the assets agrees to maintain the Vessel and evidences such agreement by delivering such an undertaking to the trustee;

 

(21)                            Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

 

(22)                            Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed $10.0 million at any one time outstanding;

 

(23)                            Liens (including extensions and renewals thereof) upon real or tangible personal property acquired by any Person after the date of this Indenture; provided that

 

(a)          any such Lien is created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, all costs (including the cost of construction, installation or improvement) of the item of property subject thereto,

 

19

 

(b)         the principal amount of the Indebtedness secured by that Lien does not exceed 100% of that cost,

 

(c)          that Lien does not extend to or cover any other property other than that item of property and any improvements on that item, and

 

(d)         the incurrence of that Indebtedness is permitted Section 4.09 hereof;

 

(24)                            Liens encumbering property or assets of that Person under construction arising from progress or partial payments by that Person or one of its Subsidiaries relating to that property or assets;

 

(25)                            Liens encumbering customary initial deposits and margin accounts, and other Liens incurred in the ordinary course of business and which are within the general parameters customary in the gaming industry; and

 

(26)                            Permitted Vessel Liens.

 

“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 renew, refund, refinance, replace, defease or discharge 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 renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including 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 that is (a) equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged or (b) more than 90 days after the final maturity date of the Notes;

 

(3)                                  if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged constitutes Subordinated Indebtedness with respect to the Notes, such Permitted Refinancing Indebtedness 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 renewed, refunded, refinanced, replaced, defeased or discharged; and

 

(4)                                  such Indebtedness is incurred either by the Company, a Guarantor or by the Restricted Subsidiary of the Company that was the obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged and is guaranteed only by Persons who were obligors on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.

 

“Permitted Vessel Liens” means maritime Liens on ships, barges or other vessels for damages arising out of a maritime tort, wages of a stevedore, when employed directly by a person listed in 46 U.S.C. Section 31341, crew’s wages, salvage and general average, whether now existing or hereafter  

 

20

 

arising and other maritime Liens which arise by operation of law during normal operations of such ships, barges or other vessels.

 

”Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

 

“Private Placement Legend” means the legend set forth in Section 2.06(g)(1) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

 

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

“Qualified Equity Investment” means an Investment by the Company or any of its Restricted Subsidiaries, in the form of either a direct Investment or the making of payments pursuant to any Completion Guarantee and Keep-Well Agreement, in any entity primarily engaged or preparing to engage in a Permitted Business; provided that the Company or any of its Restricted Subsidiaries at the time of the Investment (a) owns in the aggregate at least 35% of the outstanding Voting Stock of such entity, or (b)(i) controls the day-to-day gaming operations of such entity pursuant to a written agreement and (ii) provides or has provided Development Services with respect to the applicable Qualified Facility.

 

“Qualified Facility” means a facility that (a) is located in a jurisdiction in which the conduct of gaming using electronic gaming devices is permitted pursuant to applicable law and (b) conducts or will conduct a Permitted Business.

 

“Qualifying Equity Interests” means Equity Interests of the Company other than Disqualified Stock.

 

“Real Estate Options” means (1) all options held by the Company or its Restricted Subsidiaries, directly or indirectly, as of the date of this Indenture for an amount, in each case not exceeding $1.0 million to purchase or lease land, and (2) all options acquired by the Company, directly or indirectly, after the date of this Indenture for an amount, in each case, not exceeding $2.0 million, to purchase or lease land.

 

“Refinancing Date” means the earliest to occur of (i) the date on which all Indebtedness under the Bank Credit Facility is no longer outstanding and all unused commitments thereunder have been cancelled or expired, (ii) the date on which the Bank Credit Facility has been refinanced, or has been amended and restated, or has been amended to increase the outstanding obligations or commitments thereunder and (iii) the date on which the Company has obtained any waiver, consent or amendment with respect to Section 7.2 of the Bank Credit Facility as in effect on the date hereof.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of March 7, 2011, among the Company, the Guarantors and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time  and, with respect to any Additional Notes, one or more registration rights agreements among the Company, the Guarantors and the other parties thereto, as such agreement(s) may be amended, modified or supplemented from time to time, relating to rights given by the Company to the purchasers of Additional Notes to register such Additional Notes under the Securities Act.

 

“Regulation S” means Regulation S promulgated under the Securities Act.

 

21

 

“Regulation S Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend, the Private Placement Legend and the Regulation S Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 903 of Regulation S.

 

“Regulation S Legend” means the legend set forth in Section 2.06(g)(3) hereof, which is required to be placed on all Regulation S Global Notes issued under this Indenture.

 

“Responsible Officer,” when used with respect to the Trustee, means any officer within the Corporate Trust Services of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

 

“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

 

“Restricted Global Note” means a Global Note bearing the Private Placement Legend.

 

“Restricted Investment” means an Investment other than a Permitted Investment.

 

“Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.

 

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

 

“Rule 144” means Rule 144 promulgated under the Securities Act.

 

“Rule 144A” means Rule 144A promulgated under the Securities Act.

 

“Rule 903” means Rule 903 promulgated under the Securities Act.

 

“Rule 904” means Rule 904 promulgated under the Securities Act.

 

“S&P” means Standard & Poor’s Ratings Group.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Shelf Registration Statement” means the Shelf Registration Statement as defined in the Registration Rights Agreement.

 

“Significant Restricted Subsidiary” means any Restricted Subsidiary that is (i) a guarantor of the Company’s Obligations under the Bank Credit Facility or any other Credit Facility and (ii) is not prohibited from guaranteeing the Notes under any applicable Gaming Laws or by any Gaming Authority.

 

“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture.

 

22

 

“Special Interest” has the meaning assigned to that term pursuant to the Registration Rights Agreement.

 

“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 documentation governing such Indebtedness as of the date of this Indenture, and will 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.

 

“Subordinated Indebtedness” means the 2014 Notes and any other Indebtedness that is subordinated in right of payment to the Notes or a Note Guarantee; provided, however, that no Indebtedness will be deemed to be subordinated in right of payment to the Notes or any Note Guarantee solely by virtue of being unsecured or by virtue of being secured on a junior priority basis or by virtue of not having the benefit of any guarantee.

 

“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 and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) 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 or limited liability company of which (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

 

“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).

 

“Transaction Costs” means the fees, costs and expenses payable by the Company in connection with any Indebtedness or refinancing of Indebtedness permitted to be incurred or refinanced under Section 4.09 hereof or by Section 7.1 of the Bank Credit Facility.

 

“Treasury Management Arrangement” means any agreement or other arrangement governing the provision of treasury or cash management services, including deposit accounts, overdraft, credit or debit card, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.

 

“Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to March 15, 2015; provided, however, that if the period from the redemption date to March 15,

 

23

 

2015, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

”Trustee” means U.S. Bank National Association, 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 a Definitive Note that does not bear and is not required to bear the Private Placement Legend.

 

“Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.

 

“Unrestricted Subsidiary” means

 

(1)                                  initially the following Subsidiaries of the Company: IOC – Nevada, LLC; ASMI Management, Inc.; Capri Air, Inc.; Capri Insurance Corporation; Casino America, Inc.; IOC Mississippi, Inc.; IOC – City of St. Louis, LLC; IOC – Coahoma, Inc.; IOC – PA, L.L.C.; Isle of Capri – St. Louis County, Inc.; IOC Development Company, LLC; IOC Manufacturing, Inc.; Isle Singapore, Inc.; IOC Pittsburgh, Inc.; Isle of Capri Casino Colorado, Inc; The Isle Casinos Limited and its subsidiaries; Isle of Capri of Jefferson County, Inc.; Isle of Capri of Michigan LLC; Isle of Capri UK Holdings, Inc.; Isle Rosemont, Inc.; JPLA Pelican, LLC; Lady Luck Gaming Corporation and its subsidiaries; Lady Luck Gulfport, Inc.; Lady Luck Vicksburg, Inc.; Tri – C Development, Inc.; Riverboat Corporation of Mississippi – Vicksburg; Pompano Park Holdings, L.L.C.; IOC – Cameron, LLC; CSNO, L.L.C.; LRGP Holdings, L.L.C.; Isle of Capri Bahamas Holdings, Inc. and its subsidiaries; and

 

(2)                                  any Subsidiary of the Company that is designated by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:

 

(a)          has no Indebtedness other than Non-Recourse Debt;

 

(b)         except as permitted Section 4.12 hereof, 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;

 

(c)          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; and

 

(d)         has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries;

 

provided, however, that the Company or any of its Guarantors may enter into a Completion Guarantee and Keep-Well Agreement for the benefit of an Unrestricted Subsidiary, or may incur Completion Guarantee/ Keep-Well Indebtedness, for the purpose of such Unrestricted Subsidiary developing, constructing, opening and operating a new Casino, Casino Hotel or Casino Related Facility, and the execution and performance (if such performance is permitted under Section 4.07 hereof) of such Completion Guarantee

 

24

 

and Keep-Well Agreement or Completion Guarantee/Keep-Well Indebtedness shall not prevent a Subsidiary from becoming or remaining an Unrestricted Subsidiary.

 

”U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.

 

“Vessel” means any riverboat or barge, whether owned or acquired by the Company or any Restricted Subsidiary on or after the date of this Indenture, useful for gaming, administrative, entertainment or any other purpose whatsoever.

 

“Voting Stock” of any specified 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 will elapse between such date and the making of such payment; by

 

(2)                                  the then outstanding principal amount of such Indebtedness.

 

Section 1.02        Other Definitions.

 

	
 
    	
 
    	
Defined in
    
	
Term
    	
 
    	
Section
    
	
“Affiliate   Transaction”
    	
 
    	
4.12
    
	
“Asset   Sale Offer”
    	
 
    	
4.10
    
	
“Authentication   Order”
    	
 
    	
2.02
    
	
“Change   of Control Offer”
    	
 
    	
4.16
    
	
“Change   of Control Payment”
    	
 
    	
4.16
    
	
“Change   of Control Payment Date”
    	
 
    	
4.16
    
	
“Covenant   Defeasance”
    	
 
    	
8.03
    
	
“DTC”
    	
 
    	
2.03
    
	
“Event   of Default”
    	
 
    	
6.01
    
	
“Event   of Loss Offer”
    	
 
    	
4.11
    
	
“Excess   Proceeds”
    	
 
    	
4.10
    
	
“Excess   Proceeds Offer”
    	
 
    	
3.10
    
	
“incur”
    	
 
    	
4.09
    
	
“Legal   Defeasance”
    	
 
    	
8.02
    
	
“Offer   Amount”
    	
 
    	
3.10
    
	
“Offer   Period”
    	
 
    	
3.10
    
	
“Paying   Agent”
    	
 
    	
2.03
    
	
“Permitted   Debt”
    	
 
    	
4.09
    
	
“Payment   Default”
    	
 
    	
6.01
    
	
“Purchase   Date”
    	
 
    	
3.10
    
	
“Registrar”
    	
 
    	
2.03
    
	
“Restricted   Payments”
    	
 
    	
4.07
    

 

25

 

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 and the Note Guarantees means the Company and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively.

 

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

 

Section 1.04        Rules of Construction.

 

Unless the context otherwise requires:

 

(1)                                  a term has the meaning assigned to it;

 

(2)                                  an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(3)                                  “or” is not exclusive;

 

(4)                                  words in the singular include the plural, and in the plural include the singular;

 

(5)                                  “will” shall be interpreted to express a command;

 

(6)                                  provisions apply to successive events and transactions; and

 

(7)                                  references to sections of or rules under the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time.

 

ARTICLE 2
 THE NOTES

 

Section 2.01        Form and Dating.

 

(a)                                  General.  The Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibits A hereto.  The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage.  Each Note will be dated the date of its authentication.  The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

26

 

The terms and provisions contained in the Notes will 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 will be substantially in the form of Exhibit A 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 will be substantially in the form of Exhibit A 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 will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents 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 will 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 will be applicable to transfers of beneficial interests in the Regulation S Global Note that are held by Participants through Euroclear or Clearstream.

 

Section 2.02        Execution and Authentication.

 

At least one Officer must sign the Notes for the Company by manual or facsimile signature.

 

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.

 

A Note will not be valid until authenticated by the manual signature of the Trustee.  The signature will be conclusive evidence that the Note has been authenticated under this Indenture.

 

The Trustee will, upon receipt of a written order of the Company signed by at least one Officer (an “Authentication Order”), authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes.  The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Company pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.

 

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes.  An authenticating agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company.

 

Section 2.03        Registrar and Paying Agent.

 

The Company will 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 will keep a register of the Notes and of their transfer and exchange.  The

 

27

 

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 will 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 The Depository Trust Company (“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 will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium on, if any, interest or Special Interest, if any, 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) will have no further liability for the money.  If the Company or a Subsidiary acts as Paying Agent, it will 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 will serve as Paying Agent for the Notes.

 

Section 2.05        Holder Lists.

 

The Trustee will 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 §312(a).  If the Trustee is not the Registrar, the Company will 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 §312(a).

 

Section 2.06        Transfer and Exchange.

 

(a)                                  Transfer and Exchange of Global Notes.  A Global Note may not be transferred except as a whole 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:

 

(1)                                  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;

 

28

 

(2)                                  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; or

 

(3)                                  there has occurred and is continuing a Default or Event of Default with respect to the Notes.

 

Upon the occurrence of either of the preceding events in (1) or (2) 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 will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures.  Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act.  Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

 

(1)                                  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).  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)(1).

 

(2)                                  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)(1) above, the transferor of such beneficial interest must deliver to the Registrar either:

 

(A)                              both:

 

(i)                                     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

 

(ii)                                  instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or

 

29

 

(B)                                both:

 

(i)                                     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

 

(ii)                                  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)(2) 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.

 

(3)                                  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)(2) above and the Registrar receives the following:

 

(A)                              if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; and

 

(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

 

(4)                                  Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note.  A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2) above and:

 

(A)                              such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) 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 the Registration Rights Agreement;

 

(C)                                such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

 

30

 

(D)                               the Registrar receives the following:

 

(i)                                     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

 

(ii)                                  if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the 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.

 

(1)                                  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, 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, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

 

31

 

(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, 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 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

 

(F)                                 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)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

 

(2)                                  Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes.  A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:

 

(A)                              such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) 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 the Registration Rights Agreement;

 

(C)                                such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

 

(D)                               the Registrar receives the following:

 

(i)                                     if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

 

32

 

(ii)                                  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 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 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.

 

(3)                                  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)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company will execute and the Trustee will 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)(3) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant.  The Trustee will 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)(3) will not bear the Private Placement Legend.

 

(d)                                 Transfer and Exchange of Definitive Notes for Beneficial Interests.

 

(1)                                  Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes.  If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

 

(A)                              if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

 

(B)                                if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, 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, 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

 

33

 

Rule 144, 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 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

 

(F)                                 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 will 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 and in the case of clause (C) above, the Regulation S Global Note.

 

(2)                                  Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

 

(A)                              such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the 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 (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) 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 the Registration Rights Agreement;

 

(C)                                such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

 

(D)                               the Registrar receives the following:

 

(i)                                     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

 

(ii)                                  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

 

34

 

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)(2), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

 

(3)                                  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 will 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 (2)(B), (2)(D) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will 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 will register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or exchange, the requesting Holder must 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 must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).

 

(1)                                  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, 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.

 

(2)                                  Restricted Definitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or

 

35

 

transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

 

(A)                              such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) 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 the Registration Rights Agreement;

 

(C)                                any such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

 

(D)                               the Registrar receives the following:

 

(i)                                     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

 

(ii)                                  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 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.

 

(3)                                  Unrestricted Definitive Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note.  Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

 

(f)                                    Exchange Offer.  Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate:

 

(1)                                  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 accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of the Company; and

 

36

 

(2)                                  Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of the Company.

 

Concurrently with the issuance of such Notes, the Trustee will cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company will execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount.

 

(g)                                 Legends.  The following legends will 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.

 

(1)                                  Private Placement Legend.

 

(A)                              Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

 

“THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY REPRESENTED BY THIS GLOBAL CERTIFICATE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM AND UNLESS IN ACCORDANCE WITH THE INDENTURE REFERRED TO HEREINAFTER, COPIES OF WHICH ARE AVAILABLE AT THE CORPORATE TRUST OFFICE OF THE TRUSTEE.  EACH PURCHASER OF THE SECURITIES REPRESENTED HEREBY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER (TOGETHER WITH ANY SUCCESSOR PROVISION, AND AS SUCH RULE MAY HEREAFTER BE AMENDED FROM TIME TO TIME, “RULE 144A”).

 

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM 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, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ALL OTHER APPLICABLE JURISDICTIONS, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.”

 

(B)                                Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f)

 

37

 

of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) will not bear the Private Placement Legend.

 

(2)                                  Global Note Legend.  Each Global Note will 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 (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

 

(3)                                  Regulation S Legend.  Each Regulation S Global Note will bear a legend in substantially the following form:

 

“THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.”

 

(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 will 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

 

38

 

Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will 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 will be increased accordingly and an endorsement will 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.

 

(1)                                  To permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

 

(2)                                  No service charge will 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, 3.10, 4.10, 4.16 and 9.05 hereof).

 

(3)                                  The Registrar will not be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

 

(4)                                  All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will 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.

 

(5)                                  Neither the Registrar nor the Company will 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 selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or

 

(C)                                to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.

 

(6)                                  Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the 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.

 

(7)                                  The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.

 

39

 

(8)                                  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 will issue and the Trustee, upon receipt of an Authentication Order, will 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 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 will 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 2.08 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(a) 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 protected purchaser.

 

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

 

If the Paying Agent (other than the 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 will be deemed to be no longer outstanding and will 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 any Guarantor or any of their respective Affiliates, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned will 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, will authenticate temporary Notes.  Temporary Notes

 

40

 

will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee.  Without unreasonable delay, the Company will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.

 

Holders of temporary Notes will 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 will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will destroy canceled Notes (subject to the record retention requirement of the Exchange Act).  Certification of the destruction of all canceled Notes will 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 will 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 will 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 will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest.  At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

 

ARTICLE 3

REDEMPTION AND PREPAYMENT

 

Section 3.01                                Notices to Trustee.

 

If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers’ Certificate setting forth:

 

(1)                                  the clause of this Indenture pursuant to which the redemption shall occur;

 

(2)                                  the redemption date;

 

(3)                                  the principal amount of Notes to be redeemed; and

 

(4)                                  the redemption price.

 

Section 3.02                                Selection of Notes to Be Redeemed or Purchased.

 

If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee will select Notes for redemption or purchase on a pro rata basis (or, in the case of Notes

 

41

 

issued in global form pursuant to Article 2 hereof, based on a method that most nearly approximates a pro rata selection as the Trustee deems fair and appropriate) unless otherwise required by law or applicable stock exchange or depositary requirements.

 

In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased will be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption or purchase date by the Trustee from the outstanding Notes not previously called for redemption or purchase.

 

The Trustee will promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased.  Notes and portions of Notes selected will be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder shall be redeemed or purchased.  Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

 

Section 3.03                                Notice of Redemption.

 

Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company will mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Articles 8 or 11 hereof.

 

The notice will identify the Notes to be redeemed and will state:

 

(1)                                  the redemption date;

 

(2)                                  the redemption price;

 

(3)                                  if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note;

 

(4)                                  the name and address of the Paying Agent;

 

(5)                                  that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

 

(6)                                  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;

 

(7)                                  the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and

 

(8)                                  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.

 

42

 

At the Company’s request, the Trustee will give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company has delivered to the Trustee, at least 45 days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

 

Section 3.04                                Effect of Notice of Redemption.

 

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price.  A notice of redemption may not be conditional.

 

Section 3.05                                Deposit of Redemption or Purchase Price.

 

One Business Day prior to the redemption or purchase date, the Company will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of, accrued interest and Special Interest, if any, on all Notes to be redeemed or purchased on that date.  The Trustee or the Paying Agent will 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 or purchase price of, accrued interest and Special Interest, if any, on all Notes to be redeemed or purchased.

 

If the Company complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or purchase.  If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date.  If any Note called for redemption or purchase is not so paid upon surrender for redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

 

Section 3.06                                Notes Redeemed or Purchased in Part.

 

Upon surrender of a Note that is redeemed or purchased in part, the Company will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.

 

Section 3.07                                Optional Redemption.

 

(a)                                  At any time prior to March 15, 2014, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under this Indenture, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 107.750% of the principal amount of the Notes redeemed, plus accrued and unpaid interest and Special Interest, if any, to the date of redemption (subject to the rights of Holders of Notes on the relevant record date to receive interest on the relevant interest payment date), with the net cash proceeds of an Equity Offering by the Company; provided that:

 

(1)                                  at least 65% of the aggregate principal amount of Notes originally issued under this Indenture (excluding Notes held by the Company and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and

 

43

 

(2)                                  the redemption occurs within 90 days of the date of the closing of such Equity Offering.

 

(b)                                 At any time prior to March 15, 2015, the Company may on any one or more occasions redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest and Special Interest, if any, to the date of redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date.

 

(c)                                  Except pursuant to the preceding paragraphs, the Notes will not be redeemable at the Company’s option prior to March 15, 2015.

 

(d)                                 On or after March 15, 2015, the Company may on any one or more occasions 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 Special Interest, if any, on the Notes redeemed, to the applicable date of redemption, if redeemed during the twelve-month period beginning on March 15 of the years indicated below, subject to the rights of Holders of Notes on the relevant record date to receive interest on the relevant interest payment date:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
2015 
    	
 
    	
103.875
    	
%
    
	
2016 
    	
 
    	
101.938
    	
%
    
	
2017 and thereafter 
    	
 
    	
100.000
    	
%
    

 

Unless the Company defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.

 

(e)                                  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.

 

Other than as set forth in Section 3.09 and in Sections 3.10, 4.10, 4.11 and 4.16 hereof, the Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

Section 3.09                                Gaming Redemption

 

Notwithstanding any other provision hereof, if any Gaming Authority requires that a Holder or Beneficial Owner of Notes must be licensed, qualified or found suitable under any applicable Gaming Law and such Holder or Beneficial Owner (i) fails to apply for a license, qualification or a finding of suitability within 30 days after being required to do so (or such lesser period as required by the Gaming Authority) by the Gaming Authority or by the Company pursuant to an order of the Gaming Authority, or (ii) if such Holder or such Beneficial Owner is not so licensed, qualified or found suitable, the Company will have the right, at its option:

 

(a)                                  to require such Holder or Beneficial Owner to dispose of such Holder’s or Beneficial Owner’s Notes within 30 days of receipt of such notice or such finding by the applicable Gaming Authority or such earlier date as may be ordered by such Gaming Authority; or

 

44

 

(b)                                 to redeem the Notes of such Holder or Beneficial Owner at a redemption price equal to the lesser of:

 

(1)                                  the principal amount thereof, and

 

(2)                                  the price at which such Holder or Beneficial Owner acquired the new Notes,

 

together with, in either case, accrued and unpaid interest, if any, to the earlier of the date of redemption or the date of the finding of unsuitability, if any, by such Gaming Authority, which may be less than 30 days following the notice of redemption, if so ordered by such Gaming Authority.

 

The Company shall notify the Trustee in writing of any such redemption as soon as practicable.  The Holder or Beneficial Owner of Notes applying for a license, qualification or a finding of suitability is obligated to pay all costs of the licensure or investigation for such qualification or finding of suitability.

 

Section 3.10                                Offer to Purchase by Application of Excess Proceeds.

 

In the event that, pursuant to Section 4.10 or Section 4.11 hereof, the Company is required to commence an Asset Sale Offer or an Event of Loss Offer, respectively (each Asset Sale Offer or Event of Loss Offer is referred to in this Section 3.10 as an “Excess Proceeds Offer”), it will follow the procedures specified below.

 

The Excess Proceeds Offer shall be made to all Holders and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase, prepay or redeem with the proceeds of sales of assets.  The Excess Proceeds Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the “Offer Period”).  No later than three Business Days after the termination of the Offer Period (the “Purchase Date”), the Company will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered, if applicable) or, if less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in response to the Excess Proceeds Offer.  Payment for any Notes so purchased will be made in the same manner as interest payments are made.

 

If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Special Interest, if any, will 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 will be payable to Holders who tender Notes pursuant to the Excess Proceeds Offer.

 

Upon the commencement of an Excess Proceeds Offer, the Company will send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee.  The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Excess Proceeds Offer.  The notice, which will govern the terms of the Excess Proceeds Offer, will state:

 

(1)                                  that the Excess Proceeds Offer is being made pursuant to this Section 3.10 and Section 4.10 or 4.11 hereof, as the case may be, and the length of time the Excess Proceeds Offer will remain open;

 

(2)                                  the Offer Amount, the purchase price and the Purchase Date;

 

45

 

(3)                                  that any Note not tendered or accepted for payment will continue to accrue interest;

 

(4)                                  that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Excess Proceeds Offer will cease to accrue interest after the Purchase Date;

 

(5)                                  that Holders electing to have a Note purchased pursuant to an Excess Proceeds Offer may elect to have Notes purchased in denominations of $2,000 or an integral multiple of $1,000 in excess thereof;

 

(6)                                  that Holders electing to have Notes purchased pursuant to any Excess Proceeds Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes 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;

 

(7)                                  that Holders will 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;

 

(8)                                  that, if the aggregate principal amount of Notes and other pari passu Indebtedness surrendered by holders thereof exceeds the Offer Amount, the Trustee will select the Notes and other pari passu Indebtedness to be purchased on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased); and

 

(9)                                  that Holders whose Notes were purchased only in part will 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 will, 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 Excess Proceeds Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together with 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 3.10.  The Company, the Depositary or the Paying Agent, as the case may be, will 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 will promptly issue a new Note, and the Trustee, upon written request from the Company, will authenticate and mail or deliver (or cause to be transferred by book entry) 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 will publicly announce the results of the Excess Proceeds Offer on the Purchase Date.

 

Other than as specifically provided in this Section 3.10, any purchase pursuant to this Section 3.10 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

 

46

 

ARTICLE 4

COVENANTS

 

Section 4.01                                Payment of Notes.

 

The Company will pay or cause to be paid the principal of, premium on, if any, interest and Special Interest, if any, on, the Notes on the dates and in the manner provided in the Notes.  Principal, premium, if any, interest and Special Interest, if any, will 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, if any, then due.  The Company will pay all Special Interest, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement.

 

The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at a rate that is 1% higher than the then applicable interest rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Special Interest, 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 will 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 will 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 fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

 

The 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 will 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 will 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 office of the Trustee at 100 Wall Street, 16th Floor, New York, NY 10005, as one such office or agency of the Company in accordance with Section 2.03 hereof.

 

Section 4.03                                Reports.

 

(a)                                  Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company will furnish to the Holders of Notes or cause the Trustee to furnish to the Holders of Notes (or file with the SEC for public availability), within the time periods specified in the SEC’s rules and regulations:

 

(1)                                  all quarterly and annual financial information that would be required to be filed with the SEC on Forms 10-Q and 10-K if the Company were required to file such reports, including a Management’s Discussion and Analysis of Financial Condition and Results of

 

47

 

Operations that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries (provided that such information shall show in reasonable detail, either on the face of the financial statements or in the footnotes thereto, the financial condition and results of operations of the Company and the Guarantors separate from the financial condition and results of operations of the Subsidiaries of the Company that are not Guarantors with such reasonable detail as required by the SEC or as would be required by the SEC if the Company was subject to the periodic reporting requirements of the Exchange Act) and, with respect to the annual information only, a report thereon by the Company’s certified independent accountants; and

 

(2)                                  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.

 

The Company will file a copy of the information and reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing) and will post the reports on its website within those time periods. The Company will at all times comply with TIA §314(a).

 

(b)                                 For so long as any Notes remain outstanding, if at any time they are not required to file with the SEC the reports required by paragraph (a) of this Section 4.03, the Company and the Guarantors will furnish to the Holders of Notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

(c)                                  Notwithstanding anything to the contrary in Sections 4.03(a) and 4.03(b) above, the Company will be deemed to have furnished the reports required by this Section 4.03 to the Trustee and the Holders of the Notes if the Company has filed such reports with the SEC via the EDGAR filing system and such reports are publicly available.

 

Section 4.04                                Compliance Certificate.

 

(a)                                  The Company and each Guarantor shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the 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 has 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, premium on, if any, interest or Special 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 any of the Notes are outstanding, the Company will 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.

 

48

 

Section 4.05                                Taxes.

 

The Company will pay, and will 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 will 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 will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

 

Section 4.07                                Restricted Payments.

 

(a)                                  The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(1)                                  declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment 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 and other than dividends or distributions payable to the Company or a Restricted Subsidiary of the Company);

 

(2)                                  purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company;

 

(3)                                  make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness of the Company or any Guarantor (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except (x) a payment of interest or principal at the Stated Maturity thereof and (y) with respect to the 2014 Notes, a payment of interest or principal at the Stated Maturity or within 15 months prior to the Stated Maturity thereof; or

 

(4)                                  make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”),

 

unless, at the time of and after giving effect to such Restricted Payment:

 

(x)                                   no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;

 

49

 

(y)                                 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 Section 4.09(a) hereof; and

 

(z)                                   such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries since the date of this Indenture (excluding Restricted Payments permitted by clauses (2), (4), (6), (7), (8) and (10) of paragraph (b) of this Section 4.07), is less than the sum, without duplication, of:

 

(A)                              50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the fiscal quarter commencing immediately prior to 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

 

(B)                                100% of the aggregate net cash proceeds received by the Company from any Person (other than from a Subsidiary of the Company) since the beginning of the fiscal quarter commencing immediately prior to the date of this Indenture as a contribution to its common equity capital or from the issue or sale of Qualifying Equity Interests of the Company or the amount by which Indebtedness of the Company or any Restricted Subsidiary is reduced on the Company’s balance sheet upon the conversion or exchange after the date of this Indenture of such Indebtedness into or for Qualifying Equity Interests of the Company; plus

 

(C)                                the amount equal to the net reduction in Investments that were treated as Restricted Investments subsequent to the date of this Indenture resulting from:

 

(i)                                     the sale or liquidation of such Investment, the payment of dividends or interest, repayments of principal loans or advances or other distributions or transfers of assets to the Company or any of its Restricted Subsidiaries or the termination, cancellation, satisfaction or reduction (other than by means of payments by the Company or any of its Restricted Subsidiaries) of obligations of other Persons which have been Guaranteed by the Company or any of its Restricted Subsidiaries;

 

(ii)                                  the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries;

 

(iii)                               a Person in which the Company or any Restricted Subsidiary had made a Restricted Investment becomes a Restricted Subsidiary,

 

in each case such net reduction in Investments being (x) valued as provided in the last paragraph of this Section 4.07; (y) an amount not to exceed the aggregate amount of Investments previously made by the Company or any of its Restricted Subsidiaries which were treated as a Restricted Payment when made; and (z) included in this clause (C) only to the extent not included in the Consolidated Net Income of the Company; plus

 

50

 

(D)                               to the extent not included in the Consolidated Net Income of the Company, and after the entire amount of the Restricted Investment in any Unrestricted Subsidiary or any other Investment has been returned, received or reduced pursuant to the immediately preceding clause (C), 50% of the amount of dividends, distributions and payments of principal and interest received by the Company or any Restricted Subsidiary since the date of this Indenture from or in respect of such Unrestricted Subsidiary or such other Investment.

 

(b)                                 The provisions of Section 4.07(a) hereof will not prohibit:

 

(1)                                  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 the case may be, if at the date of declaration or notice, the dividend or redemption payment would have complied with the provisions of this Indenture;

 

(2)                                  the making of any Restricted Payment in exchange for, or out of or with the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to the Company; provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will not be considered to be net proceeds of Qualifying Equity Interests for purposes of Section 4.07(a)(z)(B);

 

(3)                                  so long as no Default or Event of Default has occurred and is continuing, the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;

 

(4)                                  the repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Indebtedness of the Company or any Guarantor in exchange for, or with the net cash proceeds from a substantially concurrent incurrence of, subordinated Permitted Refinancing Indebtedness;

 

(5)                                  so long as no Default or Event of Default has occurred and is continuing, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former officer, director or employee of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period with unused amounts in any twelve-month period permitted to be carried forward to the next succeeding twelve-month period until used;

 

(6)                                  the payment of any amounts in respect of Equity Interests by any Restricted Subsidiary organized as a partnership or a limited liability company or other pass-through entity:

 

(A)                              to the extent of capital contributions made to such Restricted Subsidiary (other than capital contributions made to such Restricted Subsidiary by the Company or any Restricted Subsidiary),

 

(B)                                to the extent required by applicable law, or

 

51

 

(C)                                to the extent necessary for holders thereof to pay taxes with respect to the net income of such Restricted Subsidiary, the payment of which amounts under this clause (C) is required by the terms of the relevant partnership agreement, limited liability company operating agreement or other governing document;

 

provided that, except in the case of clauses (B) and (C) of this Section 4.07(b)(6), no Default or Event of Default has occurred and is continuing at the time of such Restricted Payment or would result therefrom, and provided  further that, except in the case of clauses (B) and (C), such distributions are made pro rata in accordance with the respective Equity Interests contemporaneously with the distributions paid to the Company or a Restricted Subsidiary or their Affiliates holding an interest in such Equity Interests;

 

(7)                                  the repurchase of Equity Interests deemed to occur upon the exercise of stock options or warrants to the extent such Equity Interests represent a portion of the exercise price of those stock options or warrants or the repurchase of Equity Interests upon the vesting of restricted stock, restricted stock units or performance share units to the extent necessary to satisfy tax withholding obligations attributable to such vesting;

 

(8)                                  so long as no Default or Event of Default has occurred and is continuing, the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any preferred stock of any Restricted Subsidiary of the Company issued on or after the date of this Indenture in accordance with Section 4.09 hereof;

 

(9)                                  so long as no Default or Event of Default has occurred and is continuing, the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to provisions similar to Sections 3.10, 4.10, 4.11 and 4.16 hereof; provided that all Notes tendered by Holders in connection with a Change of Control Offer, an Asset Sale Offer or an Event of Loss Offer, as applicable, have been repurchased, redeemed or acquired for value;

 

(10)                            payments of cash, dividends, distributions, advances or other Restricted Payments by the Company or any of its Restricted Subsidiaries to allow the payment of cash in lieu of the issuance of fractional shares upon (i) the exercise of options or warrants or (ii) the conversion or exchange of Capital Stock of any such Person;

 

(11)                            the redemption, repurchase or repayment of any Capital Stock or Indebtedness of the Company or any Restricted Subsidiary, if required by any Gaming Authority or if determined, in the good faith judgment of the Board of Directors, to be necessary to prevent the loss or to secure the grant or reinstatement of any gaming license or other right to conduct lawful gaming operations; and

 

(12)                            so long as no Default or Event of Default has occurred and is continuing, other Restricted Payments in an aggregate amount not to exceed $85.0 million since the date of this Indenture.

 

The amount of all Restricted Payments (other than cash) will 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 Restricted 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 Section 4.07 will be determined by the Board of Directors of the Company whose resolution with respect thereto will be

 

52

 

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 $10.0 million.

 

Section 4.08                                Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.

 

(a)                                  The Company will not, and will 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:

 

(1)                                  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;

 

(2)                                  make loans or advances to the Company or any of its Restricted Subsidiaries; or

 

(3)                                  sell, lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.

 

(b)                                 The restrictions of Section 4.08(a) hereof will not apply to encumbrances or restrictions existing under or by reason of:

 

(1)                                  agreements governing Existing Indebtedness, including the Bank Credit Facility as in effect on the date of this Indenture,  and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements; provided that, in the determination of the Board of Directors made in good faith (which determination shall be conclusive and binding absent manifest error), the amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings are not materially 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;

 

(2)                                  this Indenture, the Notes and the Note Guarantees;

 

(3)                                  agreements governing other Indebtedness permitted to be incurred under Section 4.09 hereof and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements; provided that the restrictions therein are not materially more restrictive, taken as a whole, than those contained in this Indenture, the Notes and the Note Guarantees as determined by the Board of Directors of the Company in good faith, which determination shall be conclusive and binding absent manifest error;

 

(4)                                  applicable law, rule, regulation or order, including any Gaming Law, or as otherwise required by any Gaming Authority;

 

(5)                                  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 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

 

53

 

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;

 

(6)                                  customary restrictions on subletting or assignment in contracts, leases and licenses entered into in the ordinary course of business;

 

(7)                                  purchase money obligations for property acquired in the ordinary course of business and FF&E Financings or Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3) of Section 4.08(a) hereof;

 

(8)                                  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;

 

(9)                                  any restriction or encumbrance contained in contracts for the sale of assets to be consummated in accordance with this Indenture solely in respect of the assets to be sold pursuant to such contract;

 

(10)                            Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced as determined by the Board of Directors of the Company in good faith, which determination shall be conclusive and binding absent manifest error;

 

(11)                            Liens permitted to be incurred under the provisions of Section 4.13 hereof that limit the right of the debtor to dispose of the assets subject to such Liens;

 

(12)                            provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements (including agreements entered into in connection with a Restricted Investment) entered into with the approval of the Board of Directors of the Company, which limitation is applicable only to the assets that are the subject of such agreements;

 

(13)                            restrictions on cash or other deposits or net worth imposed by customers, vendors or lessors under contracts entered into in the ordinary course of business;

 

(14)                            agreements in existence with respect to a Restricted Subsidiary at the time it becomes a Restricted Subsidiary, provided, however that such agreements are not entered into in anticipation or contemplation thereof;

 

(15)                            restrictions imposed by Indebtedness incurred under Credit Facilities; provided that, in the determination of the Board of Directors made in good faith (which determination shall be conclusive and binding absent manifest error), such restrictions are no more restrictive taken as a whole than those imposed by the Bank Credit Facility as of the date of this Indenture; and

 

(16)                            replacements of restrictions imposed pursuant to clauses (1) through (15) of this Section 4.08(b) that are no more restrictive than those being replaced.

 

Section 4.09                                Incurrence of Indebtedness and Issuance of Preferred Stock.

 

(a)                                  The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable,

 

54

 

contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted 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 (including Acquired Debt) 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 such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma, consolidated basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.

 

(b)                                 The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):

 

(1)                                  the incurrence by the Company and any Guarantor of additional Indebtedness pursuant to the Bank Credit Facility or other Indebtedness constituting senior Indebtedness; provided that the aggregate principal amount of all such Indebtedness outstanding under this clause (1) as of any date of incurrence (after giving pro forma effect to the application of the proceeds of such incurrence), including all Permitted Refinancing Indebtedness incurred to repay, redeem, extend, refinance, renew, replace, defease or refund any Indebtedness incurred pursuant to this clause (1), shall not exceed the greater of (x) $825.0 million and (y) 3.5 times the Company’s Consolidated EBITDA for the period of four fiscal quarters most recently ended prior to such date for which internal financial reports are available, ended not more than 135 days prior to such date (using the pro forma calculation conventions for Consolidated EBITDA referenced in the definition of Fixed Charge Coverage Ratio), in each case, to be reduced dollar-for-dollar by the amount of the aggregate amount of all Net Proceeds of Asset Sales applied to permanently prepay or repay Indebtedness under the Bank Credit Facility or any other Indebtedness constituting senior Indebtedness under Sections 3.10, 4.10 and 4.11 hereof;

 

(2)                                  the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;

 

(3)                                  the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;

 

(4)                                  the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, FF&E Financing, mortgage financings or purchase money obligations, in each case, to acquire or refinance furniture, fixtures and equipment incident to and useful in the operation of Casinos, Casino Hotels or any Casino Related Facility, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the sum of (x) the product of (i) $10.0 million and (ii) each new Casino acquired or built by the Company after the date of this Indenture, and (y) the product of (i) $7.5 million and (ii) each new Casino Hotel or Casino Related Facility acquired or built by the Company after the date of this Indenture;

 

(5)                                  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 renew,

 

55

 

refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (1), (2), (3), (4), (5), (11) or (13) of this Section 4.09(b);

 

(6)                                  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 and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and

 

(B)                                (i) 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 (ii) 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,

 

will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);

 

(7)                                  the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its  Restricted Subsidiaries of shares of preferred stock; provided, however, that:

 

(A)                              any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and

 

(B)                                any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company,

 

will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);

 

(8)                                  the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations entered into in the ordinary course of business and not as speculative Investments, but as hedging transactions designed to protect the Company and its Restricted Subsidiaries against fluctuations in interest rates in connection with Indebtedness otherwise permitted under this Indenture or against exchange rate risk or commodity pricing risk;

 

(9)                                  the guarantee by any of the Guarantors of Indebtedness of the Company or of any other Guarantor, or the guarantee by a Restricted Subsidiary of Indebtedness of the Company or any other Restricted Subsidiary, to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee may only be incurred by a Guarantor and must be subordinated to, or pari passu with, as applicable, the Notes to the same extent as the Indebtedness guaranteed;

 

(10)                            the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, performance

 

56

 

bonds, surety and appeal bonds and other similar arrangements and letters of credit provided by the Company and its Restricted Subsidiaries incurred in the ordinary course of business (including to support the Company’s and its Restricted Subsidiaries’ application for gaming licenses or such workers’ compensation claims, self-insurance obligations, bonds or guarantees) and in amounts customary in the industry in which the Company and its Restricted Subsidiaries operate; provided, however, that upon drawing of such letters of credit or the incurrence of any such Indebtedness for borrowed money, any reimbursement obligations with respect to such Indebtedness are reimbursed within 30 days following such incurrence;

 

(11)                            Indebtedness arising in connection with the endorsement of instruments for deposit in the ordinary course of business;

 

(12)                            Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary for the purpose of financing that acquisition; provided that:

 

(A)                              such Indebtedness is not reflected at the time of such incurrence or assumption on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (A)); and

 

(B)                                in the case of a disposition, the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds, including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value), actually received by the Company and/or that Restricted Subsidiary in connection with that disposition;

 

(13)                            Acquired Debt and any other Indebtedness incurred to finance a merger, consolidation or other acquisition; provided that (x) immediately after giving effect to the incurrence of such Acquired Debt and such other Indebtedness, as the case may be, on a pro forma basis as if such incurrence (and the related merger, consolidation or other acquisition) had occurred at the beginning of the applicable four-quarter period, the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be greater than the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries immediately prior to such merger, consolidation or other acquisition and (y)(i) in the case of Acquired Debt, has a Weighted Average Life to Maturity equal to or greater than three years and (ii) in the case of any such other Indebtedness, has a final maturity date at least 91 days after the Stated Maturity of the Notes and has a Weighted Average Life to Maturity greater than the Weighted Average Life to Maturity of the Notes; and

 

(14)                            the incurrence by the Company or any Restricted Subsidiary of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding under this clause (14), including all Permitted Refinancing Indebtedness incurred to repay, redeem, extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (14), not to exceed the greater of (i) $30.0 million and (ii) 2.5% of Consolidated Net Tangible Assets.

 

57

 

The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is subordinated in right of payment to any other Indebtedness of the Company or such Guarantor unless such Indebtedness is also Subordinated Indebtedness that is subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a junior priority basis or by virtue of not having the benefit of any guarantee.

 

For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness or any portion thereof meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) above, or is entitled to be incurred pursuant Section 4.09(a), the Company will be permitted to classify such item of Indebtedness or any portion thereof on the date of its incurrence, and may later reclassify all or any portion of such item of Indebtedness, in any manner that complies with this Section 4.09 hereof.  Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture, including the Bank Credit Facility, will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt.  The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued.  For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred.  Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.

 

The amount of any Indebtedness outstanding as of any date will be:

 

(1)                                  the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;

 

(2)                                  the principal amount of the Indebtedness, in the case of any other Indebtedness; and

 

(3)                                  in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

 

(A)                              the Fair Market Value of such assets at the date of determination; and

 

(B)                                the amount of the Indebtedness of the other Person.

 

Section 4.10                                Asset Sales.

 

The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

 

58

 

(1)                                  no Default or Event of Default has occurred and is continuing or would occur at the time of or after giving pro forma effect to such Asset Sale;

 

(2)                                  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 (measured as of the date of the definitive agreement with respect to such Asset Sale) of the assets or Equity Interests issued or sold or otherwise disposed of; and

 

(3)                                  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 will be deemed to be cash:

 

(A)                              any liabilities, as shown on the Company’s most recent consolidated balance sheet, of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation or indemnity agreement that releases the Company or such Restricted Subsidiary from or indemnifies against further liability;

 

(B)                                any securities, notes or other Obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents with 180 days after consummation of such Asset Sale, to the extent of the cash and Cash Equivalents received in that conversion; and

 

(C)                                any stock or assets of the kind referred to in clauses (2) or (4) of the next paragraph of this Section 4.10.

 

Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company (or the applicable Restricted Subsidiary, as the case may be) must apply such Net Proceeds:

 

(1)                                  to prepay, repay, redeem or purchase (and reduce the commitments under) any senior secured Indebtedness, including Indebtedness under the Bank Credit Facility, and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly permanently reduce commitments with respect thereto;

 

(2)                                  to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Company;

 

(3)                                  to make a capital expenditure; or

 

(4)                                  to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business;

 

provided, however, that if the Company or any Restricted Subsidiary contractually commits within such 360-day period to apply such Net Proceeds within 180 days of such contractual commitment in accordance with clause (2), (3) or (4) above, and such Net Proceeds are subsequently applied as contemplated in such contractual commitment, then the requirement for application of Net Proceeds set forth in this paragraph shall be considered satisfied.

 

59

 

Pending the final application of any Net Proceeds, the Company (or the applicable Restricted Subsidiary) may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by this Indenture.

 

Any Net Proceeds from Asset Sales that are not applied or invested as provided in the second paragraph of this Section 4.10 will constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds exceeds $20.0 million, within five days thereof, the Company will make an offer (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, prepay or redeem with the proceeds of sales of assets to purchase, prepay or redeem the maximum principal amount of Notes and such other pari passu Indebtedness (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out of the Excess Proceeds.  The offer price in any Asset Sale Offer will be equal to 100% of the principal amount, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase, prepayment or redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date, and will 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 in (or required to be prepaid or redeemed in connection with) such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis, based on the amounts tendered or required to be prepaid or redeemed (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased). Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.

 

Section 4.11                                Events of Loss

 

Within 360 days after the receipt of any Net Proceeds from an Event of Loss, the Company (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds:

 

(1)                                  to prepay, repay, redeem or purchase (and reduce the commitments under) any senior secured Indebtedness, including Indebtedness under the Bank Credit Facility, and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly permanently reduce commitments with respect thereto;

 

(2)                                  to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Company;

 

(3)                                  to make a capital expenditure; or

 

(4)                                  to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business;

 

provided, however, that if the Company or any Restricted Subsidiary contractually commits within such 360-day period to apply such Net Proceeds within 180 days of such contractual commitment in accordance with clause (2), (3) or (4) above, and such Net Proceeds are subsequently applied as contemplated in such contractual commitment, then the requirement for application of Net Proceeds set forth in this paragraph shall be considered satisfied.

 

60

 

Any Net Proceeds from an Event of Loss that are not applied or invested as provided in the first paragraph of this Section 4.11 will constitute “Excess Loss Proceeds.”  When the aggregate amount of Excess Loss Proceeds exceeds $20.0 million, within five days thereof, the Company will make an offer (an “Event of Loss 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, prepay or redeem with the proceeds of sales of assets to purchase, prepay or redeem the maximum principal amount of Notes and such other pari passu Indebtedness (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out of the Excess Loss Proceeds.  The offer price in any Event of Loss Offer will be equal to 100% of the principal amount, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase, prepayment or redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date, and will be payable in cash.  If any Excess Loss Proceeds remain after consummation of an Event of Loss Offer, the Company may use those Excess Loss Proceeds for any purpose not otherwise prohibited by this Indenture.  If the aggregate principal amount of Notes and other pari passu Indebtedness tendered in (or required to be prepaid or redeemed in connection with) such Event of Loss Offer exceeds the amount of Excess Loss Proceeds, the Trustee will select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis, based on the amounts tendered or required to be prepaid or redeemed (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased).  Upon completion of each Event of Loss Offer, the amount of Excess Loss Proceeds will be reset at zero.

 

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to a Change of Control Offer, an Asset Sale Offer or an Event of Loss Offer.  To the extent that the provisions of any securities laws or regulations conflict with Sections 3.10, 4.10 or 4.16 hereof or this Section 4.11, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Sections 3.10, 4.10 or 4.16 hereof or this Section 4.11 by virtue of such compliance.

 

Section 4.12           Transactions with Affiliates.

 

(a)           The Company will not, and will 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 of the Company (each, an “Affiliate Transaction”), unless:

 

(1)           the Affiliate Transaction is set forth in writing and entered into in good faith 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, or, if in the reasonable opinion of a majority of the disinterested directors of the Company, such standard is inapplicable to the subject Affiliate Transaction, then such Affiliate Transaction is fair to the Company or the relevant Restricted Subsidiary, as the case may be (or to the stockholders as a group in the case of a pro rata dividend or other distribution to stockholders permitted under Section 4.07 hereof), from a financial point of view; and

 

(2)           the Company delivers to the Trustee:

 

61

 

(A)          with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5.0 million, a resolution of the Board of Directors of the Company set forth in an officers’ certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.12(a) and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of the Company; and

 

(B)           with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15.0 million, an opinion as to the fairness to the Company or such Subsidiary 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 will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 4.12(a) hereof:

 

(1)           any employment agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto;

 

(2)           transactions between or among the Company and/or its Restricted Subsidiaries;

 

(3)           management agreements (including tax management arrangements arising out of, or related to, the filing of a consolidated tax return) entered into, consistent with past practice, by the Company or any Restricted Subsidiary, on the one hand, and an Unrestricted Subsidiary or other entity, on the other hand, pursuant to which the Company or such Restricted Subsidiary controls the day-to-day gaming operations of such entity;

 

(4)           transactions with a Person (other than an Unrestricted Subsidiary of the Company) that is an Affiliate of the Company solely because the Company owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;

 

(5)           payment of reasonable and customary fees and reimbursements of expenses (pursuant to indemnity arrangements or otherwise) of officers, directors, employees or consultants of the Company or any of its Restricted Subsidiaries;

 

(6)           any issuance of Equity Interests (other than Disqualified Stock) of the Company to Affiliates of the Company;

 

(7)           Restricted Payments that do not violate Section 4.07 hereof and any Permitted Investment;

 

(8)           reasonable and customary compensation and indemnification of directors, officers and employees; and

 

(9)           transactions pursuant to agreements existing on the date of this Indenture or any amendment thereto or any transaction contemplated thereby (including pursuant to any amendment thereto) or by any replacement agreement thereto so long as any such amendment or replacement agreement is not more disadvantageous to the Holders in any material respect than the original agreement as in effect on the date of this Indenture as determined in good faith by the

 

62

 

Board of Directors of the Company, which determination shall be conclusive and binding absent manifest error.

 

Section 4.13           Liens.

 

(a)           From and after the Refinancing Date, the Company will not and will 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 (other than Permitted Liens) securing Indebtedness 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.

 

(b)           If the Company seeks any waiver, consent or amendment to the Bank Credit Facility which requires the agreement, approval or consent of lenders holding at least a majority of the loans and unused commitments thereunder, the Company shall include in such proposed waiver, consent or amendment a proposal to amend Section 7.2C of the Bank Credit Facility to either delete such section or to provide that the Notes and this Indenture constitute a named exception thereunder and shall in good faith use its commercially reasonable efforts to effect such amendment to Section 7.2C.

 

Section 4.14           Business Activities.

 

The Company will not, and will not permit any of its Restricted Subsidiaries 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 4.15           Corporate Existence.

 

Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect:

 

(1)           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

 

(2)           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 4.16           Offer to Repurchase Upon Change of Control.

 

(a)           Upon the occurrence of a Change of Control, the Company will make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest and Special Interest, if any, on the Notes repurchased to the date of purchase, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date (the “Change of Control Payment”).  Within 30 days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering

 

63

 

to repurchase Notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by this Indenture and described in such notice.

 

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.16, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.16 by virtue of such compliance.

 

(b)           On the Change of Control Payment Date, the Company will, to the extent lawful:

 

(1)           accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;

 

(2)           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

 

(3)           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 will promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee will 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.  The Company will 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 4.16, the Company will not be required to make a Change of Control Offer upon a Change of Control if (1) 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 4.16 and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to Section 3.07 hereof, unless and until there is a default in payment of the applicable redemption price.

 

(d)           Notwithstanding anything to the contrary contained herein, a Change of Control Offer may be made in advance of a Change of Control, conditioned upon the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.

 

Section 4.17           Payments for Consent.

 

The Company will not, and will 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.

 

64

 

Section 4.18           Additional Note Guarantees.

 

If the Company or any of its Restricted Subsidiaries acquires or creates another Domestic Subsidiary after the date of this Indenture (other than a Subsidiary of an Unrestricted Subsidiary) that becomes a Significant Restricted Subsidiary or any Restricted Subsidiary of the Company that was not initially a Significant Restricted Subsidiary becomes a Significant Restricted Subsidiary, then that Significant Restricted Subsidiary will become a Guarantor and execute a supplemental indenture and deliver an opinion of counsel satisfactory to the Trustee within 10 Business Days of the date on which it became a Significant Restricted Subsidiary.  The form of such supplemental indenture is attached as Exhibit E hereto.

 

Section 4.19           Designation of Restricted and Unrestricted Subsidiaries.

 

The Board of Directors of the Company may designate any Restricted Subsidiary 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 designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under Section 4.07 hereof or under one or more clauses of the definition of Permitted Investments, as determined by the Company.  That designation will 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 of the Company may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation would not cause a Default.

 

Other than the Subsidiaries of the Company that are designated as Unrestricted Subsidiaries on the date of this Indenture as set forth in the definition of “Unrestricted Subsidiary,” any designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07 hereof.  If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will 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 will 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 of the Company; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the applicable reference period; and (2) no Default or Event of Default would be in existence following such designation.

 

Section 4.20           No Amendment to Subordination Provisions

 

Without the consent of the Holders of at least two-thirds in aggregate principal amount of the Notes then outstanding, the Company will not amend, modify or alter the terms of any Subordinated Indebtedness, including the indenture governing the Company’s existing 2014 Notes, in any way that will:

 

65

 

(1)           increase the rate of or advance the time for payment of interest on any such Subordinated Indebtedness;

 

(2)           increase the principal of, advance the final maturity date of or shorten the Weighted Average Life to Maturity of any such Subordinated Indebtedness;

 

(3)           alter the redemption provisions or increase the redemption price or terms at which the Company is required to offer to purchase any such Subordinated Indebtedness; or

 

(4)           amend any other subordination provisions of any documents, instruments or agreements governing any such Subordinated Indebtedness, including Article 14 of the indenture governing the 2014 Notes, in any manner that is adverse to the interests of the Holders of the Notes in any material respect.

 

ARTICLE 5
 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:

 

(1)           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 an entity organized or existing under the laws of the United States, any state of the United States or the District of Columbia; and, if such entity is not a corporation, a co-obligor of the Notes is a corporation organized or existing under any such laws;

 

(2)           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 the Registration Rights Agreement pursuant to agreements reasonably satisfactory to the Trustee;

 

(3)           immediately after such transaction, no Default or Event of Default exists;

 

(4)           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 would, 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 (i) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof; or (ii) have a Fixed Charge Coverage Ratio equal to or greater than the Company’s Fixed Charge Coverage Ratio immediately prior to such transaction or series of transactions; and

 

66

 

(5)           such transaction will not result in the loss or impairment of any gaming or other license necessary for the continued conduct of operations of the Company or any Restricted Subsidiary as conducted immediately prior to such transaction.

 

In addition, the Company will not, directly or indirectly, lease all or substantially all of the properties and assets of it and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to any other Person.

 

This Section 5.01 will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the Company and its Restricted Subsidiaries.  Clauses (3) and (4) of this Section 5.01 will not apply to (1) any merger or consolidation of the Company with or into one of its Restricted Subsidiaries for any purpose or (2) with or into an Affiliate solely for the purpose of reincorporating the Company in another jurisdiction.

 

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 properties or assets of the Company in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the successor Person 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, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the “Company” shall refer instead to the successor Person 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, premium on, if any, interest and Special Interest, if any, on, the Notes except in the case of a sale of all of the Company’s assets in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof.

 

ARTICLE 6
 DEFAULTS AND REMEDIES

 

Section 6.01           Events of Default.

 

Each of the following is an “Event of Default”:

 

(1)           default for 30 days in the payment when due of interest and Special Interest, if any, on, the Notes;

 

(2)           default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the Notes;

 

(3)           prior to the Refinancing Date, failure by the Company or any of its Restricted Subsidiaries to comply with Section 7.2 of the Bank Credit Facility 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;

 

(4)           failure by the Company or any of its Restricted Subsidiaries to comply with the provisions of Sections 3.10, 4.10, 4.11, 4.16 or 5.01 hereof;

 

67

 

(5)           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 aggregate principal amount of the Notes then outstanding voting as a single class to comply with any of the other agreements in this Indenture;

 

(6)           default 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:

 

(A)          is caused by a failure to pay principal of, premium on, if any, or interest on, if any, such Indebtedness after the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or

 

(B)           results in the acceleration of such Indebtedness prior to its express maturity,

 

and, in each case, the principal amount of 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 $25.0 million or more;

 

(7)           failure by the Company or any of its Restricted Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction in an uninsured aggregate amount in excess of $25.0 million, which judgments are not paid, discharged or stayed, for a period of 60 days;

 

(8)           except as permitted by this Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee;

 

(9)           the revocation, termination, suspension or cessation to be effective of any gaming license or other right to conduct lawful gaming operations at one or more Casinos of the Company or any Restricted Subsidiary which shall continue for more than 90 consecutive days and which Casinos, taken together, contribute more than 5% of the Company’s Consolidated EBITDA; provided that the voluntary relinquishment of any such gaming license or right will not constitute an Event of Default if, in the reasonable opinion of the Company (as evidenced by an officers’ certificate) such relinquishment (a) is in the best interest of the Company and its Subsidiaries, taken as a whole, (b) does not adversely affect the Holders of the Notes in any material respect and (c) is not reasonably expected to have, nor are the reasons therefor reasonably expected to have, any material adverse effect on the effectiveness of any gaming license or similar right, or any right to renewal thereof, or on the prospective receipt of any such license or right, in each case, in any jurisdiction in which the Company or any of its Subsidiaries is located or operates;

 

(10)         the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:

 

68

 

(A)          commences a voluntary case,

 

(B)           consents to the entry of an order for relief against it in an involuntary case,

 

(C)           consents to the appointment of a custodian of it or for all or substantially all of its property,

 

(D)          makes a general assignment for the benefit of its creditors, or

 

(E)           generally is not paying its debts as they become due; and

 

(11)         a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)          is for relief against the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary in an involuntary case;

 

(B)           appoints a custodian of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary; or

 

(C)           orders the liquidation of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary;

 

and the order or decree remains unstayed and in effect for 60 consecutive days.

 

Notwithstanding clause (5) of the first paragraph of this Section 6.01 or any other provision of this Indenture, any failure to perform, or breach of, any covenant or agreement pursuant to Section 4.03 hereof, including any failure to comply with TIA §314(a), shall not constitute a Default or an Event of Default until 365 days after the Company has received the notice referred to in clause (5) of the first paragraph of this Section 6.01 (at which point, unless cured or waived, such failure to perform or breach shall constitute an Event of Default).  Prior to such 365th day, remedies against the Company for any such failure or breach will be limited exclusively to the right to receive Special Interest on the principal amount of the Notes at a rate equal to 0.50% per annum.  The Special Interest will be payable in the same manner and subject to the same terms as other interest payable under this Indenture.  The Special Interest will accrue on all outstanding Notes from and including the date on which such failure to comply with or breach of the reporting obligations under Section 4.03 hereof first occurs to but excluding the 365th day thereafter (or such earlier date on which such failure to comply or breach is cured or waived).  If the failure to comply with or breach of the reporting obligations under Section 4.03 is continuing on such 365th day, such Special Interest will cease to accrue and the Notes will have the benefit of all other remedies for a Default or Event of Default provided for under the terms of this Indenture.

 

69

 

Section 6.02           Acceleration.

 

In the case of an Event of Default specified in clause (10) or (11) of Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary of the Company that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice.  If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate 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 become due and payable immediately.

 

The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of all of the Holders of all the Notes, rescind an acceleration and its consequences hereunder, if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal of, premium on, if any, interest or Special Interest, if any, on the Notes that has become due solely because of the acceleration) have been cured or waived.

 

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 of, premium on, if any, interest or Special Interest, if any, 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.

 

Section 6.04           Waiver of Past Defaults.

 

The Holders of a majority in aggregate principal amount of the then outstanding Notes by written 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 hereunder, except a continuing Default or Event of Default in the payment of principal of, premium on, if any, interest or Special Interest, if any, 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 aggregate 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.

 

70

 

Section 6.06           Limitation on Suits.

 

No Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

 

(1)           such Holder has previously given to the Trustee written notice that an Event of Default is continuing;

 

(2)           Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

 

(3)           such Holder or Holders offer and, if requested, provide to the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;

 

(4)           the Trustee does not comply with such request within 60 days after receipt of the request and the offer of security or indemnity; and

 

(5)           during such 60-day period, Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with such request.

 

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

 

Section 6.07           Rights of Holders of Notes to Receive Payment.

 

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of, premium on, if any, interest or Special Interest, if any, 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(1) or (2) hereof 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 on, if any, interest and Special Interest, if any, 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

 

71

 

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 6, it shall pay out the money in the following order:

 

First:      to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses 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, if any, interest and Special Interest, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, interest and Special Interest, if any, 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 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.

 

ARTICLE 7
 TRUSTEE

 

Section 7.01           Duties of Trustee.

 

(a)           If an Event of Default has occurred and is continuing, the Trustee will 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.

 

72

 

(b)           Except during the continuance of an Event of Default:

 

(1)           the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(2)           in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture.  However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

 

(c)           The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(1)           this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

 

(2)           the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

(3)           the Trustee will 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 7.01.

 

(e)           No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability.  The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

 

(f)            The Trustee will 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 will 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 will 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.

 

73

 

(c)           The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d)           The Trustee will 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 will be sufficient if signed by an Officer of the Company.

 

(f)            The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security satisfactory to it against the losses, liabilities and expenses 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 (if this Indenture has been qualified under the TIA) 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 will 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 will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will 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 will 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 on, if any, interest or Special Interest, if any, 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.

 

(a)           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 will mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA §313(a) (but if no event described in TIA §313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted).  The Trustee also will comply with TIA §313(b)(2).  The Trustee will also transmit by mail all reports as required by TIA §313(c).

 

74

 

(b)           A copy of each report at the time of its mailing to the Holders of Notes will be mailed by the Trustee to the Company and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA §313(d).  The Company will promptly notify the Trustee when the Notes are listed on any stock exchange.

 

Section 7.07           Compensation and Indemnity.

 

(a)           The Company will pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder.  The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust.  The Company will 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 will include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

(b)           The Company and the Guarantors will 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 and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Company, the Guarantors, 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 will notify the Company promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the Company will not relieve the Company or any of the Guarantors of their obligations hereunder.  The Company or such Guarantor will defend the claim and the Trustee will cooperate in the defense.  The Trustee may have separate counsel and the Company will pay the reasonable fees and expenses of such counsel.  Neither the Company nor any Guarantor need pay for any settlement made without its consent, which consent will not be unreasonably withheld.

 

(c)           The obligations of the Company and the Guarantors under this Section 7.07 will survive the satisfaction and discharge of this Indenture.

 

(d)           To secure the Company’s and the Guarantors’ payment obligations in this Section 7.07, the Trustee will 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 of, premium on, if any, interest or Special Interest, if any, on, particular Notes.  Such Lien will survive the satisfaction and discharge of this Indenture.

 

(e)           When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(10) or (11) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

 

(f)            The Trustee will comply with the provisions of TIA §313(b)(2) to the extent applicable.

 

Section 7.08           Replacement of Trustee.

 

(a)           A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

(b)           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 aggregate principal amount of the

 

75

 

then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing.  The Company may remove the Trustee if:

 

(1)           the Trustee fails to comply with Section 7.10 hereof;

 

(2)           the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

(3)           a custodian or public officer takes charge of the Trustee or its property; or

 

(4)           the Trustee becomes incapable of acting.

 

(c)           If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee.  Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

 

(d)           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 aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

(e)           If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(f)            A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company.  Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee will mail a notice of its succession to Holders.  The retiring Trustee will 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 will continue for the benefit of the retiring Trustee.

 

Section 7.09           Successor Trustee by Merger, etc.

 

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.

 

Section 7.10           Eligibility; Disqualification.

 

There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.

 

This Indenture will always have a Trustee who satisfies the requirements of TIA §310(a)(1), (2) and (5).  The Trustee is subject to TIA §310(b).

 

76

 

Section 7.11           Preferential Collection of Claims Against Company.

 

The Trustee is subject to TIA §311(a), excluding any creditor relationship listed in TIA §311(b).  A Trustee who has resigned or been removed shall be subject to TIA §311(a) to the extent indicated therein.

 

ARTICLE 8
 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.01           Option to Effect Legal Defeasance or Covenant Defeasance.

 

The Company may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.

 

Section 8.02           Legal Defeasance and Discharge.

 

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means that the Company and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other obligations under such Notes, the Note Guarantees 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 will survive until otherwise terminated or discharged hereunder:

 

(1)           the rights of Holders of outstanding Notes to receive payments in respect of the principal of, premium on, if any, interest or Special Interest, if any, on, such Notes when such payments are due from the trust referred to in Section 8.04 hereof;

 

(2)           the Company’s obligations with respect to such Notes under Article 2 and Section 4.02 hereof;

 

(3)           the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s and the Guarantors’ obligations in connection therewith; and

 

(4)           this Article 8.

 

Subject to compliance with this Article 8, 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 and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their obligations under the covenants contained in Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20 hereof and

 

77

 

clause (4) of Section 5.01 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will 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 will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes).  For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Company and the Guarantors may omit to comply with and will 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 will 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 and Note Guarantees will be unaffected thereby.  In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3), (4), (5), (6), (7), (8) and (9) hereof will not constitute Events of Default.

 

Section 8.04           Conditions to Legal or Covenant Defeasance.

 

In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03 hereof:

 

(1)           the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm, or firm of independent public accountants, to pay the principal of, premium on, if any, interest and Special Interest, if any, on, the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date;

 

(2)           in the case of an election under Section 8.02 hereof, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:

 

(A)          the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

 

(B)           since the date of this Indenture, there has been a change in the applicable federal income tax law,

 

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(3)           in the case of an election under Section 8.03 hereof, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the

 

78

 

same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

(4)           no Default or Event of Default shall have occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit (and any similar concurrent deposit relating to other Indebtedness), and the granting of Liens to secure such borrowings);

 

(5)           such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture and the agreements governing any other Indebtedness being defeased, discharged or replaced) to which the Company or any of the Guarantors is a party or by which the Company or any of the Guarantors is bound;

 

(6)           the Company must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and

 

(7)           the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

Section 8.05           Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.

 

Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Notes will 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, interest and Special Interest, if any, but such money need not be segregated from other funds except to the extent required by law.

 

The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

 

Notwithstanding anything in this Article 8 to the contrary, the Trustee will 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(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

79

 

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 on, if any, interest or Special Interest, if any, on, any Note and remaining unclaimed for two years after such principal, premium, if any, interest or Special Interest, if any, has become due and payable shall be paid to the Company on its request or (if then held by the Company) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to 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, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the 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 will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.

 

Section 8.07           Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s and the Guarantors’ obligations under this Indenture and the Notes and the Note Guarantees will 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 on, if any, interest or Special Interest, if any, on, any Note following the reinstatement of its obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

 

ARTICLE 9
 AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01           Without Consent of Holders of Notes.

 

Notwithstanding Section 9.02 of this Indenture, without the consent of any Holder of Notes, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Notes or the Note Guarantees:

 

(1)           to cure any ambiguity, defect or inconsistency;

 

(2)           to provide for uncertificated Notes in addition to or in place of certificated Notes;

 

(3)           to provide for the assumption of the Company’s or a Guarantor’s obligations to the Holders of the Notes and Note Guarantees by a successor to the Company or such Guarantor pursuant to Article 5 or Article 10 hereof;

 

(4)           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;

 

(5)           to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;

 

80

 

(6)           to conform the text of this Indenture, the Notes or the Note Guarantees to any provision of the “Description of Notes” section of the Company’s Offering Circular dated March 2, 2011, relating to the initial offering of the Notes, to the extent that such provision in that “Description of Notes” was intended to be a verbatim recitation of a provision of this Indenture, the Notes or the Note Guarantees, which intent may be evidenced by an Officers’ Certificate to that effect;

 

(7)           to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the date hereof;

 

(8)           to comply with the requirements of applicable Gaming Laws or to provide for requirements imposed by applicable Gaming Authorities; or

 

(9)           to allow any Guarantor to execute a supplemental indenture and/or a Note 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 and Section 9.06 hereof, the Trustee will 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 be therein contained, but the Trustee will 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, without limitation, Section 3.10, 4.10, 4.11 and 4.16 hereof) and the Notes and the Note Guarantees with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 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 on, if any, interest or Special Interest, if any, 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 or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes).  Section 2.08 hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 9.02.

 

Upon the request of the 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 and Section 9.06, the Trustee will join with the Company and the Guarantors 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 will not be obligated to, enter into such amended or supplemental Indenture.

 

81

 

It is not necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.

 

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company will 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, will 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, the Notes or the Note Guarantees.  However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

 

(1)           reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

 

(2)           reduce the principal of or change the fixed maturity of any Note or alter or waive any of the provisions with respect to the redemption of the Notes (except as provided above with respect to Sections 3.10, 4.10, 4.11 and 4.16 hereof);

 

(3)           reduce the rate of or change the time for payment of interest, including default interest, on any Note;

 

(4)           waive a Default or Event of Default in the payment of principal of, premium on, if any, interest or Special Interest, 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 then outstanding Notes and a waiver of the payment default that resulted from such acceleration);

 

(5)           make any Note payable in money other than that stated in the Notes;

 

(6)           make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, premium on, if any, interest or Special Interest, if any, on, the Notes;

 

(7)           waive a redemption payment with respect to any Note (other than a payment required by Sections 3.10, 4.10, 4.11 or 4.16 hereof);

 

(8)           release any Guarantor from any of its obligations under its Note Guarantee or this Indenture, except in accordance with the terms of this Indenture; or

 

(9)           make any change in the preceding amendment and waiver provisions.

 

Section 9.03           Compliance with Trust Indenture Act.

 

Every amendment or supplement to this Indenture or the Notes will be set forth in a amended or supplemental indenture that complies with the TIA as then in effect.

 

82

 

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 amendment, supplement or waiver becomes effective.  An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

 

Section 9.05           Notation on or Exchange of Notes.

 

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated.  The 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 will not affect the validity and effect of such amendment, supplement or waiver.

 

Section 9.06           Trustee to Sign Amendments, etc.

 

The Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  The Company may not sign an amended or supplemental indenture until the Board of Directors of the Company approves it.  In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.

 

ARTICLE 10
 NOTE GUARANTEES

 

Section 10.01.      Guarantee.

 

(a)           Subject to this Article 10, 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:

 

(1)           the principal of, premium on, if any, interest and Special Interest, if any, 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, premium on, if any, interest and Special Interest, if any, on, the Notes, 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

 

(2)           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

 

83

 

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 will 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.

 

(b)           The Guarantors hereby agree that their obligations hereunder are 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 Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

 

(c)           If any Holder or the Trustee is required by any court or otherwise to return to 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 Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

 

(d)           Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.  Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee.  The Guarantors will 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 Note Guarantee.

 

Section 10.02.      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 Note 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 Note Guarantee.  To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such 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 10, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance.

 

84

 

Section 10.03.      Execution and Delivery of Note Guarantee.

 

To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached as Exhibit D hereto will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture will be executed on behalf of such Guarantor by one of its Officers.

 

Each Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 hereof will remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.

 

If an Officer whose signature is on this Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid nevertheless.

 

The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors.

 

In the event that the Company or any of its Restricted Subsidiaries creates or acquires any Domestic Subsidiary after the date of this Indenture, if required by Section 4.18 hereof, the Company will cause such Domestic Subsidiary to comply with the provisions of Section 4.18 hereof and this Article 10, to the extent applicable.

 

Section 10.04.      Guarantors May Consolidate, etc., on Certain Terms.

 

Except as otherwise provided in Section 10.05 hereof, no Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than the Company or another Guarantor, unless:

 

(1)           immediately after giving effect to such transaction, no Default or Event of Default exists; and

 

(2)           either:

 

(a)  subject to Section 10.05 hereof, the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger unconditionally assumes all the obligations of that Guarantor under its Note Guarantee, this Indenture and the Registration Rights Agreement on the terms set forth herein or therein, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee; or

 

(b)  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.

 

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 Note 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 will 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 Note 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 Note Guarantees so issued will in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees

 

85

 

theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof.

 

Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses 2(a) and (b) above, nothing contained in this Indenture or in any of the Notes will prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or will 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 10.05.      Releases.

 

(a)           In the event of any sale or other disposition of all or substantially all of the assets of any Guarantor, by way of merger, consolidation or otherwise, to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, then the corporation acquiring the property will be released and relieved of any obligations under the Note Guarantee;

 

(b)           In the event of any sale or other disposition of Capital Stock of any Guarantor to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company and such Guarantor ceases to be a Restricted Subsidiary of the Company as a result of the sale or other disposition, then such Guarantor will be released and relieved of any obligations under its Note Guarantee;

 

provided, in both cases, 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 will execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Note Guarantee.

 

(c)           Upon designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Indenture, such Guarantor will be released and relieved of any obligations under its Note Guarantee.

 

(d)           Upon Legal Defeasance or Covenant Defeasance in accordance with Article 8 hereof or satisfaction and discharge of this Indenture in accordance with Article 11 hereof, each Guarantor will be released and relieved of any obligations under its Note Guarantee.

 

(e)           If a Guarantor ceases to be a Significant Restricted Subsidiary, such Guarantor will be released and relieved of any obligations under its Note Guarantee, but if and only if at that time such Guarantor is not a Guarantor under any Credit Facility.

 

Any Guarantor not released from its obligations under its Note Guarantee as provided in this Section 10.05 will remain liable for the full amount of principal of, premium on, if any, interest and Special Interest, if any, on, the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 10.

 

86

 

ARTICLE 11
 SATISFACTION AND DISCHARGE

 

Section 11.01         Satisfaction and Discharge.

 

This Indenture will be discharged and will cease to be of further effect as to all Notes issued hereunder, 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 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 will 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 thereof, in such amounts as will 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, if any, interest and Special Interest, if any, to the date of maturity or redemption;

 

(2)           in respect of subclause (b) of clause (1) of this Section 11.01, no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and any similar deposit relating to other Indebtedness and, in each case, the granting of Liens to secure such borrowings) and the deposit will 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 (other than with respect to the borrowing of funds to be applied concurrently to make the deposit required to effect such satisfaction and discharge and any similar concurrent deposit relating to other Indebtedness, and in each case the granting of Liens to secure such borrowings);

 

(3)           the Company or any Guarantor has paid or caused to be paid all 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 on 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 has been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive.  In addition, nothing in this Section 11.01 will be deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the satisfaction and discharge of this Indenture.

 

87

 

Section 11.02         Application of Trust Money.

 

Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof 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, premium, if any, interest and Special Interest, if any, 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 hereof 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 hereof; provided that if the Company has made any payment of principal of, premium on, if any, interest or Special Interest, if any, 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 12
 MISCELLANEOUS

 

Section 12.01         Trust Indenture Act Controls.

 

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA §318(c), the imposed duties will control.

 

Section 12.02         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 by first class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery, to the others’ address:

 

If to the Company and/or any Guarantor:

 

Isle of Capri Casinos, Inc.
 600 Emerson Road, Suite 300
 St. Louis, Missouri 63141
 Attention: General Counsel

 

With a copy, which shall not constitute notice, to:

 

Mayer Brown LLP
 71 S. Wacker Drive
 Chicago, IL 60606

Facsimile No.: (312) 701-7711
 Attention: Paul W. Theiss

 

88

 

If to the Trustee:

 

U.S. Bank National Association
 Corporate Trust Services

225 Asylum Street, 23rd Floor

Hartford, CT 06103
 Facsimile No.: (860) 241-6881
 Attention: Cauna M. Silva

 

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) will 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 receipt acknowledged, if transmitted by facsimile; 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 will 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 will also be so mailed to any Person described in TIA §313(c), to the extent required by the TIA.  Failure to mail a notice or communication to a Holder or any defect in it will 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 will mail a copy to the Trustee and each Agent at the same time.

 

Section 12.03         Communication by Holders of Notes with Other Holders of Notes.

 

Holders may communicate pursuant to TIA §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 §312(c).

 

Section 12.04         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:

 

(1)           an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

 

(2)           an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

89

 

Section 12.05         Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA §314(a)(4)) must comply with the provisions of TIA §314(e) and must include:

 

(1)           a statement that the Person making such certificate or opinion has read such covenant or condition;

 

(2)           a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(3)           a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

 

(4)           a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

 

Section 12.06         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 12.07         No Personal Liability of Directors, Officers, Employees and Stockholders.

 

No director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, this Indenture, the Note 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 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 12.08         Governing Law.

 

THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES 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 12.09         No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person.  Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

90

 

Section 12.10         Successors.

 

All agreements of the Company in this Indenture and the Notes will bind its successors.  All agreements of the Trustee in this Indenture will bind its successors.  All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.05 hereof.

 

Section 12.11         Severability.

 

In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

 

Section 12.12         Counterpart Originals.

 

The parties may sign any number of copies of this Indenture.  Each signed copy will be an original, but all of them together represent the same agreement.

 

Section 12.13         Table of Contents, Headings, etc.

 

The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.

 

[Signatures on following page]

 

91

SIGNATURES

 

	
Dated   as of March 7, 2011
    	
 
    
	
 
    	
 
    
	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
ISLE   OF CAPRI CASINOS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Virginia M. McDowell
    
	
 
    	
Name:
    	
Virginia   M. McDowell
    
	
 
    	
Title:
    	
President   and Chief Operating Officer
    
	
 
    	
 
    	
 
    
	
 
    	
[Signatures   continue on following page]
    
				

 

 

[Signature Page to Indenture — Company]

 

 

	
 
    	
GUARANTORS:
    
	
 
    	
BLACK   HAWK HOLDINGS, L.L.C.
    
	
 
    	
CASINO   AMERICA OF COLORADO, INC.
    
	
 
    	
CCSC/BLACKHAWK, INC.
    
	
 
    	
GRAND   PALAIS RIVERBOAT, INC.
    
	
 
    	
IC   HOLDINGS COLORADO, INC.
    
	
 
    	
IOC-BLACK   HAWK DISTRIBUTION COMPANY, LLC
    
	
 
    	
IOC-BOONVILLE, INC.
    
	
 
    	
IOC-CAPE   GIRARDEAU LLC
    
	
 
    	
IOC-CARUTHERSVILLE,   L.L.C.
    
	
 
    	
IOC   DAVENPORT, INC.
    
	
 
    	
IOC-KANSAS   CITY, INC.
    
	
 
    	
IOC-LULA, INC.
    
	
 
    	
IOC-NATCHEZ, INC.
    
	
 
    	
IOC   BLACK HAWK COUNTY, INC.
    
	
 
    	
IOC   HOLDINGS, L.L.C.
    
	
 
    	
IOC   SERVICES, L.L.C.
    
	
 
    	
IOC-VICKSBURG, INC.
    
	
 
    	
IOC-VICKSBURG,   L.L.C.
    
	
 
    	
ISLE   OF CAPRI BETTENDORF MARINA CORPORATION
    
	
 
    	
ISLE   OF CAPRI BETTENDORF, L.C.
    
	
 
    	
ISLE   OF CAPRI BLACK HAWK CAPITAL CORP.
    
	
 
    	
ISLE   OF CAPRI BLACK HAWK, L.L.C.
    
	
 
    	
ISLE   OF CAPRI MARQUETTE, INC.
    
	
 
    	
PPI, INC.
    
	
 
    	
RAINBOW   CASINO-VICKSBURG PARTNERSHIP, L.P.
    
	
 
    	
RIVERBOAT   CORPORATION OF MISSISSIPPI
    
	
 
    	
RIVERBOAT   SERVICES, INC.
    
	
 
    	
ST.   CHARLES GAMING COMPANY, INC.
    
	
 
    	
 
    
	
 
    	
[Signature   page for the Guarantors follows]
    
			

 

 

[Signature Page to Indenture — Guarantors]

 

 

	
 
    	
By:
    	
/s/   Virginia M. McDowell
    
	
 
    	
Name:
    	
Virginia   M. McDowell
    
	
 
    	
Title:
    	
President   and Chief Operating Officer of each of the foregoing entities
    
				

 

 

[Signature Page to Indenture — Guarantors]

 

 

	
 
    	
TRUSTEE
    
	
 
    	
 
    
	
 
    	
U.S.   BANK NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Cauna M. Silva
    
	
 
    	
 
    	
Name:
    	
Cauna   M. Silva
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

 

[Signature Page to Indenture — Trustee]

 

 

EXHIBIT A

 

[Face of Note]

 

	
CUSIP/ISIN
    	
                     
    

 

7.750% Senior Notes due 2019

 

	
No.
    	
$
    	
                     
    

 

ISLE OF CAPRI CASINOS, INC.

 

promises to pay to                  or registered assigns,

 

the principal sum of                                          DOLLARS on March 15, 2019.

 

Interest Payment Dates: March 15 and September 15

 

Record Dates: March 1 and September 1

 

Dated:                                , 20     

 

	
 
    	
ISLE OF CAPRI CASINOS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
This   is one of the Notes referred to 
   in the within-mentioned Indenture:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
U.S.   BANK NATIONAL ASSOCIATION, 
     as Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Authorized Signatory
    	
 
    	
 
    
					

 

A-1

 

[Back of Note]

7.750% Senior Notes due 2019

 

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

 

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

 

[Insert the Regulation S Legend, if applicable pursuant to the provisions of the Indenture]

 

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

(1)           INTEREST.  Isle of Capri Casinos, Inc., a Delaware corporation (the “Company”), promises to pay or cause to be paid interest on the principal amount of this Note at 7.750% per annum from                                 ,        until maturity and shall pay the Special Interest, if any, payable pursuant to the Registration Rights Agreement referred to below.  The Company will pay interest and Special Interest, if any, 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 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                           ,           .  The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at a rate that is 1% higher than the then applicable interest rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Special Interest, if any (without regard to any applicable grace period), at the same rate to the extent lawful.

 

Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

(2)           METHOD OF PAYMENT.  The Company will pay interest on the Notes (except defaulted interest) and Special Interest, if any, to the Persons who are registered Holders of Notes at the close of business on the March 1 or September 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium, if any, interest and Special Interest, if any, at the office or agency of the Paying Agent and Registrar within the City and State of New York, or, at the option of the Company, payment of interest and Special Interest, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of, premium on, if any, interest and Special Interest, if any, on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Company or the Paying Agent.  Such payment will 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, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar.  The Company may change

 

A-2

 

the Paying Agent or Registrar without prior notice to the Holders of the Notes.  The Company or any of its Subsidiaries may act as Paying Agent or Registrar.

 

(4)           INDENTURE.  The Company issued the Notes under an Indenture dated as of March 7, 2011 (the “Indenture”) among the Company, the Guarantors and the Trustee.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the TIA.  The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms.  To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.  The Notes are unsecured obligations of the Company.  The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.

 

(5)           OPTIONAL REDEMPTION.

 

(a)           At any time prior to March 15, 2014, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 107.750% of the principal amount of the Notes redeemed, plus accrued and unpaid interest and Special Interest, if any, to the date of redemption (subject to the rights of Holders of Notes on the relevant record date to receive interest on the relevant Interest Payment Date) with the net cash proceeds of an Equity Offering by the Company; provided that:

 

(A)          at least 65% of the aggregate principal amount of Notes originally issued under the Indenture (excluding Notes held by the Company and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and

 

(B)           the redemption occurs within 90 days of the date of the closing of such Equity Offering.

 

(b)           At any time prior to March 15, 2015, the Company may on any one or more occasions redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest and Special Interest, if any, to the applicable date of redemption, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date.

 

(c)           Except pursuant to the preceding paragraphs, the Notes will not be redeemable at the Company’s option prior to March 15, 2015.

 

(d)           On or after March 15, 2015, the Company may on any one or more occasions 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 Special Interest, 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, subject to the rights of Holders on the relevant record date to receive interest on the relevant Interest Payment Date:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
2015 
    	
 
    	
103.875
    	
%
    
	
2016 
    	
 
    	
101.938
    	
%
    
	
2017 and thereafter 
    	
 
    	
100.000
    	
%
    

 

A-3

 

Unless the Company defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.

 

(6)           MANDATORY REDEMPTION.  The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

(7)           GAMING REDEMPTION.  Notwithstanding any other provision of the Indenture, if any Gaming Authority requires that a Holder or Beneficial Owner of Notes must be licensed, qualified or found suitable under any applicable Gaming Law and such Holder or Beneficial Owner (i) fails to apply for a license, qualification or a finding of suitability within 30 days after being required to do so (or such lesser period as required by the Gaming Authority) by the Gaming Authority or by the Company pursuant to an order of the Gaming Authority, or (ii) if such Holder or Beneficial Owner is not so licensed, qualified or found suitable, the Company will have the right, at its option: (A) to require such Holder or Beneficial Owner to dispose of such Holder’s or Beneficial Owner’s Notes within 30 days of receipt of such notice or such finding by the applicable Gaming Authority or such earlier date as may be ordered by such Gaming Authority; or (B) to redeem the Notes of such Holder or Beneficial Owner at a redemption price equal to the lesser of (x) the principal amount thereof, and (y) the price at which such Holder or Beneficial Owner acquired the new Notes, together with, in either case, accrued and unpaid interest, if any, to the earlier of the date of redemption or the date of the finding of unsuitability, if any, by such Gaming Authority, which may be less than 30 days following the notice of redemption, if so ordered by such Gaming Authority.  The Company shall notify the Trustee in writing of any such redemption as soon as practicable.  The Holder or Beneficial Owner of Notes applying for a license, qualification or a finding of suitability is obligated to pay all costs of the licensure or investigation for such qualification or finding of suitability.

 

(8)           REPURCHASE AT THE 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 each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Special Interest, if any, thereon to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date (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 Restricted Subsidiary of the Company consummates any Asset Sales, within five days of each date on which the aggregate amount of Excess Proceeds exceeds $20.0 million, the Company will 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 the Indenture with respect to offers to purchase, prepay or redeem with the proceeds of sales of assets in accordance with the Indenture to purchase, prepay or redeem the maximum principal amount of Notes and such other pari passu Indebtedness (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out of the Excess Proceeds.  The offer price in any Asset Sale Offer will be equal to 100% of the principal amount, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase, prepayment or redemption, subject to the rights of Holders of Notes on the relevant record date to receive

 

A-4

 

interest due on the relevant interest payment date, and will 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 the Indenture.  If the aggregate principal amount of Notes and other pari passu Indebtedness tendered in (or required to be prepaid or redeemed in connection with) such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis, based on the amounts tendered or required to be prepaid or redeemed.  Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.  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” attached to the Notes.

 

(c)           If, following any Event of Loss, within five days of each date on which the aggregate amount of Excess Loss Proceeds exceeds $20.0 million, the Company will make an Event of Loss Offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase, prepay or redeem with the proceeds of sales of assets in accordance with the Indenture to purchase, prepay or redeem the maximum principal amount of Notes and such other pari passu Indebtedness (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out of the Excess Loss Proceeds.  The offer price in any Event of Loss Offer will be equal to 100% of the principal amount, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase, prepayment or redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date, and will be payable in cash.  If any Excess Loss Proceeds remain after consummation of an Event of Loss Offer, the Company may use those Excess Loss Proceeds for any purpose not otherwise prohibited by the Indenture.  If the aggregate principal amount of Notes and other pari passu Indebtedness tendered in (or required to be prepaid or redeemed in connection with) such Event of Loss Offer exceeds the amount of Excess Loss Proceeds, the Trustee will select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis, based on the amounts tendered or required to be prepaid or redeemed.  Upon completion of each Event of Loss Offer, the amount of Excess Loss Proceeds will be reset at zero.  Holders of Notes that are the subject of an offer to purchase will receive an Event of Loss 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” attached to the Notes.

 

(9)           NOTICE OF REDEMPTION.  At least 30 days but not more than 60 days before a redemption date, the Company will 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 the Indenture pursuant to Articles 8 or 11 thereof.  Notes and portions of Notes selected will be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder shall be redeemed or purchased

 

(10)         DENOMINATIONS, TRANSFER, EXCHANGE.  The Notes are in registered form in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  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

 

A-5

 

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 next succeeding Interest Payment Date.

 

(11)         PERSONS DEEMED OWNERS.  The registered Holder of a Note may be treated as the owner of it for all purposes. Only registered Holders have rights under the Indenture.

 

(12)         AMENDMENT, SUPPLEMENT AND WAIVER.  Subject to certain exceptions, the Indenture, the Notes or the Note Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, voting as a single class, and any existing Default or Event of Default or compliance with any provision of the Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, voting as a single class.  Without the consent of any Holder of Notes, the Indenture, the Notes or the Note Guarantees 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 a Guarantor’s obligations to Holders of the Notes and Note Guarantees by a successor to the Company or such Guarantor pursuant to the Indenture, 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 Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, to conform the text of the Indenture, the Notes or the Note Guarantees to any provision of the “Description of Notes” section of the Company’s Offering Circular dated March 2, 2011, relating to the initial offering of the Notes, to the extent that such provision in that “Description of Notes” was intended to be a verbatim recitation of a provision of the Indenture, the Notes or the Note Guarantees, which intent may be evidenced by an Officers’ Certificate to that effect, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to comply with the requirements of applicable Gaming Laws or to provide for requirements imposed by applicable Gaming Authorities or to allow any Guarantor to execute a supplemental indenture to the Indenture and/or a Note Guarantee with respect to the Notes.

 

(13)         DEFAULTS AND REMEDIES.  Events of Default include:  (i) default for 30 days in the payment when due of interest and Special Interest, if any, on, the Notes; (ii) default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium on, if any, the Notes; (iii) prior to the Refinancing Date, failure by the Company or any of its Restricted Subsidiaries to comply with Section 7.2 of the Bank Credit Facility 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; (iv) failure by the Company or any of its Restricted Subsidiaries to comply with the provisions of Sections 3.10, 4.10, 4.11, 4.16 or 5.01 of the Indenture; (v) 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 aggregate principal amount of the Notes then outstanding voting as a single class to comply with any of the other agreements in the Indenture; (vi) default under certain other agreements relating to Indebtedness of the Company which default is a Payment Default or results in the acceleration of such Indebtedness prior to its express maturity; (vii) failure by the Company or any of its Restricted Subsidiaries to pay certain final judgments in an uninsured aggregate amount in excess of $25.0 million, which judgments are not paid, discharged or stayed, for a period of 60 days; (viii) except

 

A-6

 

as permitted by the Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee; (ix) the revocation, termination, suspension or cessation to be effective of any gaming license or other right to conduct lawful gaming operations at one or more Casinos of the Company or any Restricted Subsidiary which shall continue for more than 90 consecutive days and which Casinos, taken together, contribute more than 5% of the Company’s Consolidated EBITDA; provided that voluntary relinquishment of any such gaming license or right will not constitute an Event of Default if, in the reasonable opinion of the Company (as evidenced by an Officers’ Certificate) such relinquishment (a) as in the best interests of the Company and its Subsidiaries, taken as a whole, (b) does not adversely affect the Holders of the Notes in any material respect and (c) is not reasonably expected to have, nor are the reasons therefore reasonably expected to have, any material adverse effect on the effectiveness of any gaming license or similar right, or any right to renewal thereof, or on the prospective receipt of any such license or right, in each case, in any jurisdiction in which the Company or any of its Subsidiaries is located or operates; and (x) certain events of bankruptcy or insolvency with respect to the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary.  In the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company, any Restricted Subsidiary of the Company that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice.  If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.  Holders may not enforce the Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, Holders of a majority in aggregate 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.  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, premium, if any, interest or Special Interest, if any,) if it determines that withholding notice is in their interest.  The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of all the Holders, rescind an acceleration or waive an existing Default or Event of Default and its respective consequences under the Indenture except a continuing Default or Event of Default in the payment of principal of, premium on, if any, interest or Special Interest, if any, on, the Notes (including in connection with an offer to purchase).  The Company is required to deliver to the Trustee annually a statement regarding 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.

 

Notwithstanding clause (v) of the paragraph above or any other provision of the Indenture, any failure to perform, or breach of, any covenant or agreement pursuant to Section 4.03 of the Indenture, including any failure to comply with TIA §314(a), shall not constitute a Default or an Event of Default until 365 days after the Company has received the notice referred to in clause (v) of the paragraph above (at which point, unless cured or waived, such failure to perform or breach shall constitute an Event of Default).  Prior to such 365th day, remedies against the Company for any such failure or breach will be limited exclusively to the right to receive Special Interest on the principal amount of the Notes at a rate equal to 0.50% per annum.  The Special Interest will be payable in the same manner and subject to the same terms as other interest payable under the Indenture.  The Special Interest will accrue on all outstanding Notes from and

 

A-7

 

including the date on which such failure to comply with or breach of the reporting obligations under Section 4.03 of the Indenture first occurs to but excluding the 365th day thereafter (or such earlier date on which such failure to comply or breach is cured or waived).  If the failure to comply with or breach of the reporting obligations under Section 4.03 of the Indenture is continuing on such 365th day, such Special Interest will cease to accrue and the Notes will have the benefit of all other remedies for a Default or Event of Default provided for under the terms of the Indenture.

 

(14)         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.

 

(15)         NO RECOURSE AGAINST OTHERS.  No director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture, the Note 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 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

 

(16)         AUTHENTICATION.  This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

(17)         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).

 

(18)         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 will have all the rights set forth in the Registration Rights Agreement dated as of March 7, 2011, among the Company, the Guarantors and the other parties named on the signature pages thereof or, in the case of Additional Notes, Holders of Restricted Global Notes and Restricted Definitive Notes will have the rights set forth in one or more registration rights agreements, if any, among the Company, the Guarantors and the other parties thereto, relating to rights given by the Company and the Guarantors to the purchasers of any Additional Notes (collectively, the “Registration Rights Agreement”).

 

(19)         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.

 

(20)         GOVERNING LAW.  THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF

 

A-8

 

CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement.  Requests may be made to:

 

Isle of Capri Casinos, Inc.

600 Emerson Rd., Suite 300

St. Louis, Missouri 63141

Attention:  Edmund L. Quatmann, Jr.

 

A-9

 

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 SSN or TIN)

 

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

(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-10

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Company pursuant to Section 4.10, 4.11 or 4.16 of the Indenture, check the appropriate box below:

 

	
oSection 4.10
    	
 
    	
oSection 4.11
    	
 
    	
oSection 4.16
    

 

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10, 4.11 or Section 4.16 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-11

 

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:

 

	
Date of Exchange
    	
 
    	
Amount of decrease in
   Principal Amount of
   this Global Note
    	
 
    	
Amount of increase in
   Principal Amount of
   this Global Note
    	
 
    	
Principal Amount of
   this Global Note
   following such
   decrease
   (or increase)
    	
 
    	
Signature of authorized
   officer of Trustee or
   Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*                 This schedule should be included only if the Note is issued in global form.

 

A-12

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

Isle of Capri Casinos, Inc.

600 Emerson Rd., Suite 300

St. Louis, Missouri 63141

 

 

[Registrar address block]

 

Re:  7.750% Senior Notes due 2019

 

Reference is hereby made to the Indenture, dated as of March 7, 2011 (the “Indenture”), among Isle of Capri Casinos, Inc., as issuer (the “Company”), the Guarantors party thereto and U.S. Bank National Association, 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.  o   Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A.  The Transfer is being effected pursuant to and in accordance with Rule 144A under the 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 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 Restricted Definitive Note and in the Indenture and the Securities Act.

 

2.  o   Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Restricted Definitive Note pursuant to Regulation S.  The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the 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

 

B-1

 

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 Restricted Definitive Note and in the Indenture and the Securities Act.

 

3.  o   Check and complete if Transferee will take delivery of a beneficial interest in a Restricted 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)           o   such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

 

or

 

(b)           o   such Transfer is being effected to the Company or a subsidiary thereof;

 

or

 

(c)           o   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.

 

4.  o   Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.

 

(a)  o   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)  o   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)  o   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

 

B-2

 

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:
    
	
 
    	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    	
 
    
					

 

B-3

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

1.             The Transferor owns and proposes to transfer the following:

 

[CHECK ONE OF (a) OR (b)]

 

(a)   o   a beneficial interest in the:

 

(i)          o   144A Global Note (CUSIP                   ), or

 

(ii)         o   Regulation S Global Note (CUSIP                   ), or

 

(b)  o    a Restricted Definitive Note.

 

2.             After the Transfer the Transferee will hold:

 

[CHECK ONE]

 

(a)  o   a beneficial interest in the:

 

(i)          o   144A Global Note (CUSIP                   ), or

 

(ii)         o   Regulation S Global Note (CUSIP                   ), or

 

(iii)        o   Unrestricted Global Note (CUSIP                   ); or

 

(b)  o   a Restricted Definitive Note; or

 

(c)  o   an Unrestricted Definitive Note,

 

in accordance with the terms of the Indenture.

 

B-4

 

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

Isle of Capri Casinos, Inc.

600 Emerson Rd., Suite 300

St. Louis, Missouri 63141

 

[Registrar address block]

 

Re:  7.750% Senior Notes due 2019

 

(CUSIP                 )

 

Reference is hereby made to the Indenture, dated as of March 7, 2011 (the “Indenture”), among Isle of Capri Casinos, Inc., as issuer (the “Company”), the Guarantors party thereto and U.S. Bank National Association, 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)  o  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 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)  o  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)  o  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

 

C-1

 

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)  o  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)  o  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)  o  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] o 144A Global Note, o Regulation S 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.

 

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-2

 

EXHIBIT D

 

FORM OF NOTATION OF 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 March 7, 2011 (the “Indenture”) among Isle of Capri Casinos, Inc., (the “Company”), the Guarantors party thereto and U.S. Bank National Association, as trustee (the “Trustee”), (a) the due and punctual payment of the principal of, premium on, if any, interest and Special Interest, if any, on, the Notes, whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of, premium on, if any, interest and Special Interest, if any, on, the Notes, if any, if lawful, 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 Note Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee.  Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound by such provisions and (b) appoints the Trustee attorney-in-fact of such Holder for such purpose.

 

Capitalized terms used but not defined herein have the meanings given to them in the Indenture.

 

	
 
    	
[NAME   OF GUARANTOR(S)]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

D-1

 

EXHIBIT E

 

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 Isle of Capri Casinos, Inc. (or its permitted successor), a Delaware corporation (the “Company”), the Company, the other Guarantors (as defined in the Indenture referred to herein) and U.S. Bank National Association, as trustee under the 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 March 7, 2011, providing for the issuance of 7.750% Senior Notes due 2019 (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 “Note 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 to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof.

 

3.             NO RECOURSE AGAINST OTHERS.  No director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, this Indenture, the Note 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 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.

 

4.             NEW YORK LAW TO GOVERN.  THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE 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.

 

5.             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.

 

E-1

 

6.             EFFECT OF HEADINGS.  The Section headings herein are for convenience only and shall not affect the construction hereof.

 

7.             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.

 

E-2

 

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:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ISLE   OF CAPRI CASINOS, INC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
[EXISTING   GUARANTORS]
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
U.S. BANK NATIONAL ASSOCIATION,
   as Trustee
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Authorized   Signatory
    

 

E-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00185-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00185-of-00352.parquet"}]]