0001095811-01-504963.txt : 20011008
0001095811-01-504963.hdr.sgml : 20011008
ACCESSION NUMBER: 0001095811-01-504963
CONFORMED SUBMISSION TYPE: S-4
PUBLIC DOCUMENT COUNT: 10
FILED AS OF DATE: 20010918
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MSW INC
CENTRAL INDEX KEY: 0001016411
STANDARD INDUSTRIAL CLASSIFICATION: []
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-01
FILM NUMBER: 1739731
BUSINESS ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
MAIL ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ELDORADO INC
CENTRAL INDEX KEY: 0001016410
STANDARD INDUSTRIAL CLASSIFICATION: []
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-03
FILM NUMBER: 1739733
BUSINESS ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
MAIL ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BOYD KENNER INC
CENTRAL INDEX KEY: 0001016407
STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011]
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-05
FILM NUMBER: 1739738
BUSINESS ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
MAIL ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SAM WILL INC
CENTRAL INDEX KEY: 0001016409
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990]
IRS NUMBER: 880203673
STATE OF INCORPORATION: NV
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-06
FILM NUMBER: 1739739
BUSINESS ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
MAIL ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MARE BEAR INC
CENTRAL INDEX KEY: 0001016408
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990]
IRS NUMBER: 880203692
STATE OF INCORPORATION: NV
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-08
FILM NUMBER: 1739741
BUSINESS ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
MAIL ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BOYD TUNICA INC
CENTRAL INDEX KEY: 0001016403
STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011]
IRS NUMBER: 640829658
STATE OF INCORPORATION: MS
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-10
FILM NUMBER: 1739743
BUSINESS ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
MAIL ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: TREASURE CHEST CASINO LLC
CENTRAL INDEX KEY: 0001159109
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 721248550
STATE OF INCORPORATION: LA
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-02
FILM NUMBER: 1739732
BUSINESS ADDRESS:
STREET 1: 2950 INDUSTRIAL ROAD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
BUSINESS PHONE: 7027927200
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PAR A DICE GAMING CORP
CENTRAL INDEX KEY: 0001159110
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 371268902
STATE OF INCORPORATION: IL
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-07
FILM NUMBER: 1739740
BUSINESS ADDRESS:
STREET 1: 2950 INDUSTRIAL ROAD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
BUSINESS PHONE: 7027927200
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BOYD LOUISIANA LLC
CENTRAL INDEX KEY: 0001159111
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 860880651
STATE OF INCORPORATION: NV
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-11
FILM NUMBER: 1739744
BUSINESS ADDRESS:
STREET 1: 2950 INDUSTRIAL ROAD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
BUSINESS PHONE: 7027927200
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BOYD INDIANA INC
CENTRAL INDEX KEY: 0001159112
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 880310766
STATE OF INCORPORATION: IN
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-12
FILM NUMBER: 1739745
BUSINESS ADDRESS:
STREET 1: 2950 INDUSTRIAL ROAD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
BUSINESS PHONE: 7027927200
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BOYD ATLANTIC CITY INC
CENTRAL INDEX KEY: 0001159113
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 931221994
STATE OF INCORPORATION: NJ
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-13
FILM NUMBER: 1739746
BUSINESS ADDRESS:
STREET 1: 2950 INDUSTRIAL ROAD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
BUSINESS PHONE: 7027927200
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BLUE CHIP CASINO LLC
CENTRAL INDEX KEY: 0001159114
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 352087676
STATE OF INCORPORATION: IN
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-14
FILM NUMBER: 1739747
BUSINESS ADDRESS:
STREET 1: 2950 INDUSTRIAL ROAD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
BUSINESS PHONE: 7027927200
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CALIFORNIA HOTEL FINANCE CORP
CENTRAL INDEX KEY: 0000801429
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990]
IRS NUMBER: 880121743
STATE OF INCORPORATION: NV
FISCAL YEAR END: 0630
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-09
FILM NUMBER: 1739742
BUSINESS ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
BUSINESS PHONE: 7027927200
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BOYD GAMING CORP
CENTRAL INDEX KEY: 0000906553
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990]
IRS NUMBER: 880242733
STATE OF INCORPORATION: NV
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566
FILM NUMBER: 1739730
BUSINESS ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
BUSINESS PHONE: 7027927200
MAIL ADDRESS:
STREET 1: 2950 SOUTH INDUSTRIAL ROAD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
FORMER COMPANY:
FORMER CONFORMED NAME: BOYD GROUP
DATE OF NAME CHANGE: 19941130
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CALIFORNIA HOTEL & CASINO
CENTRAL INDEX KEY: 0000824412
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990]
IRS NUMBER: 880121743
STATE OF INCORPORATION: NV
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: S-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69566-04
FILM NUMBER: 1739734
BUSINESS ADDRESS:
STREET 1: 2950 S INDUSTRIAL RD
CITY: LAS VEGAS
STATE: NV
ZIP: 89109
BUSINESS PHONE: 7027927216
MAIL ADDRESS:
STREET 1: 2950 SOUTH INDUSTRIAL ROAD
CITY: SAS VEGAS
STATE: NV
ZIP: 89109
S-4
1
a75302s-4.txt
FORM S-4
1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 18, 2001
REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
BOYD GAMING CORPORATION
(Exact name of registrant as specified in its charter)
---------------------
NEVADA 88-0242733
(State or Other Jurisdiction of (I.R.S. Employe
Incorporation or Organization) Identification No.)
AND ITS GUARANTOR SUBSIDIARIES
INDIANA BLUE CHIP CASINO, LLC 35-2087676
NEW JERSEY BOYD ATLANTIC CITY, INC. 93-1221994
INDIANA BOYD INDIANA, INC. 88-0310766
LOUISIANA BOYD KENNER, INC. 88-0319489
NEVADA BOYD LOUISIANA L.L.C. 86-0880651
MISSISSIPPI BOYD TUNICA, INC. 64-0829658
NEVADA CALIFORNIA HOTEL AND CASINO 88-0121743
NEVADA CALIFORNIA HOTEL FINANCE CORPORATION 88-0217850
NEVADA ELDORADO, INC. 88-0093922
NEVADA MARE-BEAR, INC. 88-0203692
NEVADA M.S.W., INC. 88-0310765
ILLINOIS PAR-A-DICE GAMING CORPORATION 37-1268902
NEVADA SAM-WILL, INC. 88-0203673
LOUISIANA TREASURE CHEST CASINO, L.L.C. 72-1248550
(State or Other Jurisdiction of (Exact name of registrant (I.R.S. Employer
Incorporation or Organization) as specified in its charter) Identification No.)
---------------------
7990
(Primary Standard Industrial Classification Code No.)
---------------------
2950 INDUSTRIAL ROAD
LAS VEGAS, NEVADA 89109
(702) 792-7200
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
ELLIS LANDAU
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER
BOYD GAMING CORPORATION
2950 INDUSTRIAL ROAD
LAS VEGAS, NEVADA 89109
(702) 792-7200
(Name, address, including zip code, and telephone number, including area code of
agent for service)
COPY TO:
ROBERT M. MATTSON, JR.
MORRISON & FOERSTER LLP
19900 MACARTHUR BOULEVARD
TWELFTH FLOOR
IRVINE, CALIFORNIA 92612
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
CALCULATION OF REGISTRATION FEE
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED NOTE(1) PRICE(1) REGISTRATION FEE
---------------------------------------------------------------------------------------------------------------------------------
9 1/4% Senior Notes due 2009................. $200,000,000 100% $200,000,000 $50,000
---------------------------------------------------------------------------------------------------------------------------------
Guarantees of the 9 1/4% Senior Notes due
2009....................................... $200,000,000 100% $200,000,000 None(2)
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee in
pursuant to Rule 457 under the Securities Act of 1933, as amended (the
"Securities Act").
(2) Pursuant to Rule 457(n) under the Securities Act, no separate fee is payable
for the guarantees.
---------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER 18, 2001
PROSPECTUS
[BOYD GAMING LOGO]
$200,000,000
OFFER TO EXCHANGE
9 1/4% SENIOR NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
FOR ANY AND ALL OUTSTANDING 9 1/4% SENIOR NOTES DUE 2009
---------------------
THE EXCHANGE NOTES
We are offering to exchange $200 million aggregate principal amount of our
9 1/4% senior notes due 2009 that we have registered under the Securities Act of
1933, as amended (the exchange notes) for any and all outstanding 9 1/4% senior
notes due 2009 that we issued on July 26, 2001 (the old notes). The terms of the
exchange notes will be substantially similar to our old notes, except for the
elimination of some transfer restrictions, registration rights and certain
liquidated damages provisions relating to the old notes.
The exchange notes will mature on August 1, 2009. Interest on the exchange
notes will accrue at 9 1/4% per year, and the interest will be payable
semi-annually in arrears on February 1 and August 1, beginning February 1, 2002.
We may redeem the exchange notes at any time on or after August 1, 2005. In
addition, at any time prior to August 1, 2004, we may redeem up to 35% of the
notes with the net proceeds of one or more public equity offerings.
If we undergo a change of control or sell certain of our assets, we may be
required to offer to purchase exchange notes from holders. The exchange notes
will be our unsecured senior obligations and will rank senior to all of our
existing and future subordinated debt. The exchange notes will be effectively
subordinated to any secured debt, including debt under our bank credit facility.
Substantially all of our significant subsidiaries will guarantee the exchange
notes with unconditional guarantees that will be unsecured senior obligations of
such subsidiaries and will rank senior to all of such subsidiaries' existing and
future subordinated debt. The guarantees will be effectively subordinated to any
secured debt of our guarantor subsidiaries, including debt under our bank credit
facility, and to all liabilities of the non-guarantor subsidiaries.
MATERIAL TERMS OF THE EXCHANGE OFFER
The exchange offer expires at 5:00 p.m., New York City time, on ,
2001, unless extended.
Our completion of the exchange offer is subject to customary conditions
which we may waive.
Upon our completion of the exchange offer, all old notes that are validly
tendered and not withdrawn will be exchanged for an equal principal amount of
exchange notes that are registered under the Securities Act of 1933, as amended.
Tenders of old notes may be withdrawn at any time prior to the expiration of the
exchange offer.
The exchange of the exchange notes for old notes pursuant to the exchange
offer will not be a taxable exchange for U.S. Federal income tax purposes.
We will not receive any proceeds from the exchange offer.
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange note. The letter of
transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received in exchange for old notes where such old
notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. We have agreed that, for a period of 180
days after the expiration date, we will make this prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
---------------------
PLEASE SEE "RISK FACTORS" BEGINNING ON PAGE 10 OF THIS PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD CONSIDER BEFORE PARTICIPATING IN
THIS EXCHANGE OFFER.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION, THE NEVADA GAMING
COMMISSION, THE NEVADA STATE GAMING CONTROL BOARD, THE MISSISSIPPI GAMING
COMMISSION, THE NEW JERSEY CASINO CONTROL COMMISSION, THE NEW JERSEY DIVISION OF
GAMING ENFORCEMENT, THE LOUISIANA GAMING CONTROL BOARD, THE ILLINOIS GAMING
BOARD, THE INDIANA GAMING COMMISSION NOR ANY STATE SECURITIES COMMISSION, OTHER
STATE GAMING COMMISSION OR OTHER GAMING AUTHORITY OR OTHER REGULATORY AGENCY HAS
APPROVED OR DISAPPROVED OF THE NOTES OFFERED HEREBY OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
---------------------
The date of this prospectus is , 2001
3
TABLE OF CONTENTS
PAGE
----
Where You Can Find Additional Information................... ii
Incorporation of Certain Documents by Reference............. ii
Forward-Looking Statements.................................. iii
Market Data................................................. iii
Prospectus Summary.......................................... 1
Risk Factors................................................ 10
Use of Proceeds............................................. 18
Capitalization.............................................. 19
Selected Consolidated Financial Data........................ 20
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 23
Governmental Gaming Regulation.............................. 31
Description of Other Indebtedness........................... 32
The Exchange Offer.......................................... 35
Description of Exchange Notes............................... 45
Certain Federal Income Tax Considerations................... 82
Plan of Distribution........................................ 85
Legal Matters............................................... 86
Experts..................................................... 86
Index to Consolidated Financial Statements.................. F-1
4
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file reports, proxy statements and other information with the Securities
and Exchange Commission (the "SEC") under the Exchange Act of 1934, as amended.
You may read and copy this information at the SEC's Public Reference Room, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549.
You also may obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. Further information on the operation of the
SEC's Public Reference Room in Washington, D.C. can be obtained by calling the
SEC at 1-800-SEC-0330.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, such as us, who
file electronically with the SEC. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
Information with respect to us also may be obtained from us at 2950
Industrial Road, Las Vegas, Nevada 89109 or by telephone at (702) 792-7200.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the SEC and are incorporated
by reference in this prospectus:
- our Annual Report on Form 10-K for the year ended December 31, 2000;
- our Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
- our Quarterly Report on Form 10-Q for the quarter ended June 30, 2001;
- our current report on Form 8-K filed with the SEC on July 12, 2001; and
- all other documents filed by us pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this prospectus and
prior to the termination of the offering.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus is modified or superseded for
purposes of this prospectus to the extent that a statement contained in this
prospectus or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded does not, except as so
modified or superseded, constitute a part of this prospectus. We will provide
without charge to each person to whom a copy of this prospectus is delivered,
upon the request of such person, a copy of any or all of the documents that are
incorporated by reference herein, other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into such documents.
Written or telephone requests should be directed to Boyd Gaming Corporation,
2950 Industrial Road, Las Vegas, Nevada 89109, Attention: Investor Relations;
telephone (702) 792-7200.
TO OBTAIN TIMELY DELIVERY OF DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, YOU MUST REQUEST THE INFORMATION NO LATER THAN FIVE BUSINESS DAYS
PRIOR TO THE EXPIRATION OF THE EXCHANGE OFFER. THE EXCHANGE OFFER WILL EXPIRE ON
, 2001, UNLESS EXTENDED.
ii
5
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act, and Section 21E of the Securities Exchange
Act. Such statements include statements regarding our expectations, hopes or
intentions regarding the future, including but not limited to statements
regarding our strategy, competition (including the expansion of gaming into
additional markets), expenses, development plans (including anticipated costs,
timing and eventual acceptance of new facilities by the market), financing,
indebtedness, revenues, operations, regulations and compliance with applicable
laws. Forward-looking statements involve certain risks and uncertainties, and
actual results may differ materially from those discussed in any such statement.
Factors that could cause actual results to differ materially from such
forward-looking statements include the risks described in greater detail in
"Risk Factors" and elsewhere in this prospectus. All forward-looking statements
in this document are made as of the date hereof, based on information available
to us as of the date hereof, and we caution you not to rely on these statements
without also considering the risks and uncertainties associated with these
statements and our business that are addressed in this prospectus. We assume no
obligation to update any forward-looking statement.
MARKET DATA
Market data used throughout this prospectus, including information relating
to our relative position in the gaming industry, is based on the good faith
estimates of management, which estimates are based upon their review of internal
surveys, independent industry publications and other publicly available
information. Although we believe that such sources are reliable, we do not
guarantee the accuracy or completeness of this information, and we have not
independently verified such information.
iii
6
PROSPECTUS SUMMARY
The following summary contains basic information about this offering. It
does not contain all of the information that is important to you. For a more
complete understanding of this offering, we encourage you to read the entire
document and the documents we have referred you to, especially the risks of
investing in the notes discussed under "Risk Factors," before investing in these
notes. Unless the context otherwise indicates and except with respect to any
description of the notes, references to "we," "us," and "our" are to Boyd Gaming
Corporation and its subsidiaries, taken as a whole.
THE COMPANY
We are a multi-jurisdictional gaming company that has operated successfully
for over 25 years. We currently own and operate twelve gaming facilities, one of
which is expected to commence casino operations as early as November 2001. Our
facilities are located in eight distinct gaming markets in five states.
On May 31, 2001 we acquired substantially all of the assets of the Delta
Downs Racetrack, a horse racing facility near Vinton, Louisiana. We are
currently expanding this property and plan to add slot machines once we receive
the appropriate regulatory approvals. When the casino opens, Delta Downs will be
the closest casino to Houston, Texas. In addition, we are currently constructing
The Borgata, a $1 billion casino resort in Atlantic City, New Jersey. We expect
to open The Borgata in the summer of 2003 and will manage it upon completion.
The property is owned in a 50/50 joint venture with MGM MIRAGE.
The following table sets forth information regarding our properties as of
June 30, 2001.
YEAR CASINO OWNED OR
FACILITY OPENED OR SPACE SLOT TABLE HOTEL LEASED
STATE TYPE ACQUIRED (SQ. FEET) MACHINES GAMES ROOMS ACREAGE
----------- ---------- --------- ---------- -------- ----- ----- ---------
LAS VEGAS STRIP
Stardust Resort and
Casino................... Nevada Land-based 1985 75,000 1,598 69 1,552 61
DOWNTOWN LAS VEGAS
California Hotel and
Casino................... Nevada Land-based 1975 36,000 1,109 35 781 16
Fremont Hotel and Casino... Nevada Land-based 1985 32,000 1,133 28 447 2
Main Street Station Casino,
Brewery and Hotel........ Nevada Land-based 1993 28,500 930 20 406 15
BOULDER STRIP
Sam's Town Hotel and
Gambling Hall............ Nevada Land-based 1979 133,000 3,028 39 648 63
Eldorado Casino............ Nevada Land-based 1993 16,000 583 11 -- 4
Jokers Wild Casino......... Nevada Land-based 1993 22,500 640 11 -- 13
CENTRAL REGION
Sam's Town Hotel and
Gambling Hall............ Mississippi Dockside 1994 75,000 1,578 57 843 150
Par-A-Dice Hotel and
Casino................... Illinois Dockside 1996 33,000 1,122 34 208 19
Treasure Chest Casino...... Louisiana Dockside 1997 24,000 981 47 -- 14
Blue Chip Casino........... Indiana Riverboat 1999 37,400 1,512 47 188 35
Delta Downs Racetrack...... Louisiana Land-based 2001 Pending Pending -- -- 206
------- ------- --- ----- ---
TOTAL.............. 512,400 14,214 398 5,073 598
======= ======= === ===== ===
1
7
BUSINESS STRATEGY AND COMPETITIVE STRENGTHS
Our business strategy is to provide our customers with a high-quality
casino entertainment experience at an affordable price. We emphasize customer
service and offer a comfortable environment in order to develop and maintain
customer loyalty. We offer a variety of amenities to complement our guests'
gaming experiences, such as quality hotel rooms, varied dining choices and
appealing entertainment options. We draw upon our extensive experience in the
gaming industry to make each of our facilities appealing to a broad range of
customers and employ a variety of marketing and promotional activities to
attract customers. We regularly invest in our facilities to maintain their
quality, appeal and competitiveness. In evaluating new opportunities, we seek
gaming markets with strong demographics, good locations and limited potential
for new competition that will enable us to obtain a competitive advantage and
strong returns on investment.
Geographic Diversity. We own and operate twelve facilities, including
seven in Nevada, two in Louisiana and one in each of Illinois, Indiana and
Mississippi. Our properties in Nevada are located in three distinct markets
around Las Vegas: the Las Vegas Strip, downtown Las Vegas and the Boulder Strip.
The Borgata, our development project, is located in Atlantic City, New Jersey.
This geographic diversity reduces our dependency on any one market.
Emphasis on Slot Revenues. We emphasize slot revenues, the most
consistently profitable segment of the gaming business. We offer a wide variety
of games to attract customers, encourage them to play for longer periods of time
and thereby promote the stability of our gaming revenues. For the twelve months
ended June 30, 2001, slot revenues comprised approximately 80% of our gaming
revenues and approximately 59% of our gross revenues.
Comprehensive Marketing and Promotion. We actively promote our casino
entertainment offerings, hotels, restaurants and live entertainment using a
variety of media including outdoor, print, broadcast and the Internet. We have
developed and maintain an extensive customer database. We expand the database
daily by obtaining mailing addresses and other marketing information from our
casino customers. We employ a direct mail program targeting our database
customers with a variety of product offerings, including incentives to visit our
facilities frequently. During the year ended December 31, 2000, we distributed
approximately 9.2 million pieces of mail.
Downtown Properties Tap a Unique Niche Market. We have developed a
distinct niche for our downtown properties by focusing on customers from Hawaii.
We believe that for more than twenty years the California, and more recently the
Fremont and Main Street Station, have been the leading Las Vegas destinations
for visitors from Hawaii. We own a travel agency in Hawaii that currently
operates seven charter flights from Honolulu to Las Vegas each week, helping to
ensure a stable supply of reasonably-priced air seats. We also have strong,
informal relationships with other Hawaiian travel agencies and offer affordable,
all-inclusive packages.
Opportunistic Acquisitions. We have been opportunistic in acquiring gaming
properties at attractive prices. Our acquired properties have historically
generated a majority of their revenues from slot machines. Over the past five
years, we have made three acquisitions of gaming properties which generated an
average first year cash-on-cash return of approximately 26%. In the future, we
will continue to look for growth opportunities that allow us to maintain a
balanced capital structure.
Experienced Management Team. We are an experienced gaming operator and
have operated casinos in Las Vegas for over 25 years. Our senior management team
is an experienced group of industry veterans with an average tenure in the
gaming industry or applicable fields of expertise of more than twenty years.
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DELTA DOWNS ACQUISITION
On May 31, 2001, we acquired substantially all of the assets of the Delta
Downs Racetrack near Vinton, Louisiana, together with an off-track betting
facility in Mound, Louisiana. Delta Downs has historically conducted horse races
on a seasonal basis and operated year-round simulcast facilities for customers
to place bets on races held at other tracks. The operation of slot machines at
Delta Downs has been approved in a local referendum. We are currently a licensed
gaming operator in Louisiana and have applied for suitability to operate slot
machines at Delta Downs and for the approval to operate approximately 1,700 slot
machines at that property. However, we can provide no assurances that we will be
found suitable to operate slot machines at Delta Downs or that we will receive
approval to operate the number of slot machines applied for. We have begun a $35
million renovation project to expand the facility and equip a new casino. The
property will feature a 350-seat buffet, a 200-seat fine dining restaurant, a
sports bar and small food outlets, some of which will be located in the existing
82,000 square foot clubhouse. We expect the casino to begin operations as early
as November 2001 and believe that our cash flow will increase as a result,
however, we can provide no assurances that we will commence operations as
expected. See "Risk Factors -- Our expansion, development and renovation
projects may face significant risks inherent in the establishment of a new
enterprise or marketing strategy, including receipt of necessary government
approvals."
There are approximately 3.7 million adults living within 150 miles of Delta
Downs, including residents of Houston, Texas, which is approximately 122 miles
from our property. Lake Charles, Louisiana is currently the closest gaming
market to Houston. When our casino opens, it will be 25 miles closer to Houston
than the gaming properties in Lake Charles. Customers traveling from Houston,
Beaumont and other parts of southeastern Texas will generally have to drive past
Delta Downs to reach Lake Charles, and we intend to market to those customers.
We purchased the property for $125 million. The purchase price is subject
to adjustment based on the number of slot machines we receive approval to
operate and certain other performance-based criteria.
THE BORGATA DEVELOPMENT PROJECT
We are constructing The Borgata in Atlantic City. The Borgata is expected
to cost approximately $1.035 billion and will include a 40-story hotel tower
with 2,010 guest rooms, and a 120,000 square foot casino with 3,500 slot
machines and 120 table games. The property will also feature several specialty
restaurants and boutiques, a European-style health spa, meeting space and
several entertainment venues. We expect the property to open in the summer of
2003. When it opens, The Borgata will be the first new casino in Atlantic City
in over thirteen years. Situated on approximately 28 acres, The Borgata will be
served by the Brigantine Connector roadway, which will make the property one of
the most convenient properties in Atlantic City to access. We will operate the
property upon its completion.
We and MGM MIRAGE each own a 50% interest in the project and have each
invested $107 million as of June 30, 2001. We will each invest an additional
$100 million over the next two years. The remaining $621 million is being
financed by a bank credit facility that is non-recourse to both us and MGM
MIRAGE. We have provided an unlimited completion guarantee for the project but
have no other financial obligations to support the property. As of June 30,
2001, approximately 65% of the total construction hard costs have either been
spent or are subject to fixed-price contracts. In addition, as of June 30, 2001,
there was a $90 million cost contingency that has not yet been allocated. The
construction is currently on time and within budget.
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THE EXCHANGE OFFER
The Exchange Offer............ We are offering to exchange an aggregate of
$200 million principal amount of our exchange
notes for $200 million of our old notes. Old
notes may be exchanged in integral multiples of
$1,000 principal amount. To be exchanged, an
old note must be properly tendered and
accepted. All outstanding old notes that are
validly tendered and not validly withdrawn will
be exchanged for exchange notes issued on or
promptly after the expiration date of the
exchange offer. Currently, there is $200
million aggregate principal amount of old notes
outstanding and no exchange notes outstanding.
The form and terms of the exchange notes will
be substantially identical to those of the old
notes except that the exchange notes will have
been registered under the Securities Act.
Therefore, the exchange notes will not be
subject to certain transfer restrictions,
registration rights and certain liquidated
damage provisions applicable to the old notes
prior to consummation of the exchange offer.
Expiration Date............... The exchange offer will expire at 5:00 p.m.,
New York City time on , 2001, unless
extended, in which case the term "expiration
date" shall mean the latest date and time to
which the exchange offer is extended.
Withdrawal.................... You may withdraw the tender of your old notes
at any time prior to the expiration date of the
exchange offer. See "The Exchange
Offer -- Withdrawal Rights."
Conditions to the Exchange
Offer....................... The exchange offer is not subject to any
conditions other than that it not violate
applicable law or any applicable interpretation
of the staff of the SEC. The exchange offer is
not conditioned upon any minimum principal
amount of old notes being tendered for
exchange. See "The Exchange Offer -- Conditions
to the Exchange Offer."
Procedures for Tendering Old
Notes....................... If you are a holder of old notes who wishes to
accept the exchange offer, you must:
- properly complete, sign and date the
accompanying letter of transmittal (including
any documents required by the letter of
transmittal), or a facsimile of the letter of
transmittal, according to the instructions
contained in this prospectus and the letter
of transmittal, and mail or otherwise deliver
the letter of transmittal, together with your
old notes, to the exchange agent at the
address set forth under "The Exchange
Offer -- Exchange Agent;" or
- arrange for The Depository Trust Company to
transmit certain required information,
including an agent's message forming part of
a book-entry transfer in which you agree to
be bound by the terms of the letter of
transmittal, to the exchange agent in
connection with a book-entry transfer.
See "The Exchange Offer -- Procedures for
Tendering Old Notes."
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By tendering your old notes in either manner,
you will be representing, among other things,
that:
- you are acquiring the exchange notes issued
to you in the exchange offer in the ordinary
course of your business;
- you are not engaged in, and do not intend to
engage in, and have no arrangement or
understanding with any person to participate
in, a distribution of the exchange notes
issued to you in the exchange offer; and
- you are not an "affiliate" of ours.
Special Procedures for
Beneficial Owners........... If you beneficially own old notes registered in
the name of a broker, dealer, commercial bank,
trust company or other nominee and wish to
tender your beneficially owned old notes in the
exchange offer, you should contact the
registered holder promptly and instruct it to
tender the old notes on your behalf. See "The
Exchange Offer -- Procedures for Tendering Old
Notes."
Guaranteed Delivery
Procedures.................. If you wish to tender your old notes, but:
- your old notes are not immediately available;
or
- you cannot deliver your old notes, the letter
of transmittal or any other documents
required by the letter of transmittal to the
exchange agent prior to the expiration date;
or
- the procedures for book-entry transfer of
your old notes cannot be completed prior to
the expiration date, you may tender your old
notes pursuant to the guaranteed delivery
procedures set forth in this prospectus and
the letter of transmittal. See "The Exchange
Offer -- Guaranteed Delivery Procedures."
Acceptance of Old Notes for
Exchange and Delivery of
Exchange Notes.............. Upon effectiveness of the registration
statement of which this prospectus is a part
and commencement of the exchange offer, we will
accept any and all old notes that are properly
tendered in the exchange offer prior to 5:00
p.m., New York City time, on the expiration
date. The exchange notes issued pursuant to the
exchange offer will be delivered promptly
following the expiration date. See "The
Exchange Offer -- Acceptance of Old Notes For
Exchange and Delivery of Exchange Notes."
Certain Federal Income Tax
Considerations.............. The exchange of exchange notes for old notes in
the exchange offer will not be a taxable
exchange for U.S. federal income tax purposes.
See "Certain Federal Income Tax
Considerations."
Use of Proceeds............... We will not receive any proceeds from the
issuance of exchange notes pursuant to the
exchange offer.
Fees and Expenses............. We will pay all expenses incident to the
consummation of the exchange offer and
compliance with the registration rights
agreement. We will also pay certain transfer
taxes applicable to the exchange offer. See
"The Exchange Offer -- Fees and Expenses."
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Termination of Certain
Rights...................... The old notes were issued and sold in a private
offering to Deutsche Banc Alex. Brown Inc.,
Lehman Brothers Inc., Bear, Stearns & Co. Inc.,
CIBC World Markets Corp., Dresdner Kleinwort
Wasserstein-Grantchester, Inc., Scotia Capital
(USA) Inc., Wells Fargo Brokerage Services,
LLC, Credit Lyonnais Securities (USA) Inc.,
Fleet Securities, Inc. and SG Cowen Securities
Corporation as the initial purchasers, on July
26, 2001. In connection with that sale, we
executed and delivered a registration rights
agreement for the benefit of the noteholders.
Pursuant to the registration rights agreement,
holders of old notes: (i) have rights to
receive liquidated damages in certain
instances; and (ii) have certain rights
intended for the holders of unregistered
securities. Holders of exchange notes will not
be, and upon consummation of the exchange
offer, holders of old notes will no longer be,
entitled to the right to receive liquidated
damages in certain instances, as well as
certain other rights under the registration
rights agreement for holders of unregistered
securities. See "The Exchange Offer."
Resale of Exchange Notes...... We believe, based on an interpretation by the
staff of the SEC contained in no-action letters
issued to third parties in other transactions,
that you may offer to sell, sell or otherwise
transfer the exchange notes issued to you in
this exchange offer without complying with the
registration and prospectus delivery
requirements of the Securities Act, provided
that:
- you are acquiring the exchange notes issued
to you in the exchange offer in the ordinary
course of your business;
- you are not engaged in, and do not intend to
engage in, and have no arrangement or
understanding with any person to participate
in, a distribution of the exchange notes
issued to you in the exchange offer; and
- you are not an "affiliate" of ours within the
meaning of Rule 144 under the Securities Act.
If you are a broker-dealer and you receive
exchange notes for your own account in exchange
for old notes, you must acknowledge that you
will deliver a prospectus if you decide to
resell your exchange notes. See "Plan of
Distribution."
Consequences of Failure to
Exchange.................... If you do not tender your old notes or if you
tender your old notes improperly, you will
continue to be subject to the restrictions on
transfer of your old notes as contained in the
legend on the old notes. In general, you may
not sell or offer to sell the old notes, except
pursuant to a registration statement under the
Securities Act or any exemption from
registration thereunder and in compliance with
all applicable state securities laws. See "The
Exchange Offer -- Consequences of Failure to
Exchange."
Exchange Agent................ The Bank of New York is the exchange agent for
the exchange offer.
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THE EXCHANGE NOTES
The form and terms of the exchange notes will be substantially identical to
those of the old notes except that the exchange notes will have been registered
under the Securities Act. Therefore, the exchange notes will not be subject to
certain transfer restrictions, registration rights and certain liquidated damage
provisions applicable to the old notes prior to the consummation of the exchange
offer.
Issuer........................ Boyd Gaming Corporation
2950 Industrial Road
Las Vegas, Nevada 89109
(702) 792-7200
Total Amount of Exchange Notes
Offered..................... Up to $200 million in aggregate principal
amount of 9 1/4% senior notes due 2009.
Maturity...................... August 1, 2009.
Interest...................... 9 1/4% per year.
Interest Payment Dates........ Interest on the exchange notes will be payable
semi-annually in arrears on February 1 and
August 1, beginning on February 1, 2002.
Ranking....................... The exchange notes will be our unsecured senior
obligations and will rank senior to all of our
subordinated debt and equal with all of our
other senior debt except to the extent of the
value of any collateral securing such other
senior debt. The guarantees of the exchange
notes by certain of our subsidiaries will be
unsecured senior obligations of such
subsidiaries and will rank senior to all
subordinated debt and equal with all other
senior debt of such subsidiaries except to the
extent of the value of any collateral securing
such other debt.
As of June 30, 2001, as adjusted for the
completion of the offering of the old notes and
pro forma for the repayment of the Delta Downs
note, we estimate that we and our subsidiaries
would have had $864.0 million of senior debt,
of which $464.0 million would have been
secured. In addition, approximately $171.1
million would have been available to borrow
under our bank credit facility, $50 million of
which must remain unused until the opening of
The Borgata.
Guarantees.................... Substantially all of our significant
subsidiaries will guarantee the exchange notes.
If we cannot make payments required by the
exchange notes, our guarantor subsidiaries must
make them, subject to the ranking limitations
discussed above. The guarantees may be released
under certain circumstances. We are generally
not required to cause future subsidiaries to
become guarantors. See "Description of Exchange
Notes -- Subsidiary Guarantees."
Optional Redemption........... On or after August 1, 2005, we may redeem some
or all of the exchange notes at the redemption
prices listed in the "Description of Exchange
Notes" section under the heading "Optional
Redemption," plus accrued and unpaid interest.
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Optional Redemption After
Equity Offerings............ At any time before August 1, 2004, we can
choose to redeem up to 35% of the outstanding
exchange notes with money that we raise in one
or more public equity offerings, as long as:
- we pay 109.25% of the principal amount of the
exchange notes, plus accrued and unpaid
interest to the date of redemption;
- we redeem the exchange notes within 45 days
of closing the public equity offering; and
- at least 65% of the aggregate principal
amount of the exchange notes issued remains
outstanding afterwards (excluding notes held
by Boyd Gaming and its subsidiaries).
See "Description of Exchange Notes -- Optional
Redemption."
Redemption Based Upon Gaming
Laws........................ The exchange notes are subject to redemption
requirements imposed by gaming laws and
regulations of gaming authorities in
jurisdictions in which we conduct gaming
operations. See "Description of Exchange
Notes -- Mandatory Disposition or Redemption
Pursuant to Gaming Laws."
Change of Control Offer....... If a change of control of our company occurs,
we must give holders of the exchange notes the
opportunity to sell us their exchange notes at
101% of their principal amount, plus accrued
and unpaid interest.
Asset Sale Proceeds........... If we or certain of our subsidiaries engage in
asset sales, we generally must either invest
the net cash proceeds from such sales in our
business within a specified period of time,
prepay debt or make an offer to purchase a
principal amount of the exchange notes equal to
the excess net cash proceeds. The purchase
price of the exchange notes would be 100% of
their principal amount, plus accrued and unpaid
interest.
Certain Indenture
Provisions.................. The indenture governing the exchange notes
contains covenants that, among other things,
limit our (and our restricted subsidiaries')
ability to:
- incur additional debt;
- pay dividends or distributions on our capital
stock or repurchase our capital stock;
- make certain investments;
- create liens on our assets to secure debt;
- enter into transactions with affiliates;
- merge or consolidate with another company;
and
- transfer and sell assets.
These covenants are subject to a number of
important limitations and exceptions. See
"Description of Exchange Notes."
Risk Factors.................. See the section entitled "Risk Factors" for a
description of certain of the risks you should
consider before participating in the exchange
offer, including factors affecting
forward-looking statements.
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SUMMARY FINANCIAL DATA
We have derived the following summary historical financial data for each of
the three years ended December 31 from our audited consolidated financial
statements. We have derived the summary historical financial data for the six
months ended June 30, 2001 and 2000 from our unaudited condensed consolidated
financial statements, which include all adjustments, consisting only of normal
recurring adjustments, which are, in our opinion, necessary for a fair
presentation of our results of operations for such periods. Certain amounts have
been reclassified from those previously reported. See Note 17 to the
consolidated financial statements included in this prospectus. The results of
operations for the six months ended June 30, 2001 are not necessarily indicative
of the results for the full year. The summary data below should be read in
conjunction with "Selected Consolidated Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the historical consolidated financial statements and the notes thereto included
in this prospectus, as well as those incorporated by reference in this
prospectus.
SIX MONTHS ENDED
JUNE 30, FISCAL YEARS ENDED DECEMBER 31,
-------------------- ----------------------------------
2001 2000 2000 1999 1998
-------- -------- ---------- -------- --------
(IN THOUSANDS, EXCEPT RATIOS)
STATEMENT OF OPERATIONS DATA:
Net revenues..................... $561,702 $612,260(1) $1,131,538(1) $970,925 $960,639
Operating income................. 63,718 142,520 179,553 136,611 123,688
Interest expense, net............ 39,407 39,368 79,303 69,230 74,162
Net income....................... 14,466 63,722 62,765 38,301 28,600
OTHER FINANCIAL DATA:
EBITDA(2)........................ 112,756 117,548 203,939 212,218 203,020
Capital expenditures(3).......... 28,610 61,332 139,281 96,888 70,848
Depreciation and amortization.... 48,626 43,684 90,480 74,118 73,407
Ratio of earnings to fixed
charges(4).................... 1.4x 3.4x 2.1x 1.9x 1.7x
---------------
(1) Includes $71.0 million of net fee revenue which we received upon the
termination of the Silver Star management agreement in 2000.
(2) EBITDA consists of operating income plus depreciation, amortization,
preopening expenses of $4.9 million in 2000 and $1.5 million in 1999 and a
restructuring charge of $5.9 million in 1998 and minus $71.0 million of net
fees received from the termination of the Silver Star management agreement
in 2000. EBITDA information is presented solely as a supplemental disclosure
because we believe that it is a widely used measure of operating performance
in the gaming industry and for companies with a significant amount of
depreciation and amortization. EBITDA should not be construed as an
alternative to operating income (as determined in accordance with generally
accepted accounting principles), as an indicator of our operating
performance, or as an alternative to cash flow from operating activities (as
determined in accordance with generally accepted accounting principles) as a
measure of liquidity. We have significant uses for our cash flow, including
capital expenditures and debt principal repayments that are not reflected in
EBITDA. It should also be noted that not all gaming companies that report
EBITDA information calculate EBITDA in the same manner as we do.
(3) Includes capital expenditures for regular maintenance of $28.6 million and
$27.6 million for the six months ended June 30, 2001 and 2000, respectively,
and $69.9 million, $52.0 million and $57.8 million for the fiscal years
ended December 31, 2000, 1999 and 1998, respectively.
(4) For purposes of determining the ratio of earnings to fixed charges, earnings
are defined as earnings before income taxes, plus fixed charges. Fixed
charges consist of interest expense, including amortization of debt issuance
costs.
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RISK FACTORS
You should carefully consider the following risk factors and all other
information contained in this prospectus before participating in the exchange
offer. As used herein, the term "notes" means both the exchange notes and the
old notes, unless otherwise indicated.
RISKS RELATED TO OUR INDEBTEDNESS
OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR OPERATIONS AND FINANCIAL
RESULTS AND PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THESE NOTES.
We have now, and after the exchange offer will continue to have, a
significant amount of indebtedness. As of June 30, 2001, we had approximately
$1.1 billion of indebtedness and stockholders' equity of approximately $345
million.
Our substantial indebtedness could have important consequences to you. For
example, it could:
- make it more difficult for us to satisfy our obligations with respect to
these notes;
- increase our vulnerability to general adverse economic and industry
conditions;
- require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, which would reduce the
availability of our cash flow to fund working capital, capital
expenditures, expansion efforts and other general corporate purposes;
- limit our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate;
- place us at a competitive disadvantage compared to our competitors that
have less debt; and
- limit, along with the financial and other restrictive covenants in our
indebtedness, among other things, our ability to borrow additional funds.
Failure to comply with these covenants could result in an event of
default which, if not cured or waived, could have a significant adverse
effect on us.
TO SERVICE OUR INDEBTEDNESS, WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.
Our ability to make payments on and to refinance our indebtedness,
including these notes, and to fund planned capital expenditures and expansion
efforts will depend on our ability to generate cash in the future. This, to a
certain extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond our control.
It is unlikely that our business will generate sufficient cash flow from
operations, or that future borrowings will be available to us under our bank
credit facility, in amounts sufficient to enable us to pay our indebtedness,
including these notes, as it matures and to fund our other liquidity needs. We
believe that we will need to refinance all or a portion of our indebtedness,
including these notes, on or before maturity. We cannot assure you that we will
be able to refinance any of our indebtedness, including our bank credit facility
and these notes, on commercially reasonable terms or at all. We could have to
adopt one or more alternatives, such as reducing or delaying planned expenses
and capital expenditures, selling assets, restructuring debt, or obtaining
additional equity or debt financing or joint venture partners. There can be no
assurance that any of these financing strategies could be effected on
satisfactory terms, if at all. In addition, certain states' laws contain
restrictions on the ability of companies engaged in the gaming business to
undertake certain financing transactions. Some restrictions may prevent us from
obtaining necessary capital.
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WE AND OUR SUBSIDIARIES MAY STILL BE ABLE TO INCUR SUBSTANTIALLY MORE DEBT. THIS
COULD FURTHER EXACERBATE THE RISKS DESCRIBED ABOVE.
We and our subsidiaries may be able to incur substantial additional
indebtedness in the future. The terms of the indenture that govern these notes
do not fully prohibit us or our subsidiaries from doing so. Pro forma for the
offering of the old notes, including the application of the net proceeds from
the offering of the old notes, and for the repayment of the Delta Downs note,
our bank credit facility would permit additional borrowing of up to $171.1
million. All of those borrowings would be effectively senior to the notes and
the guarantees of our subsidiary guarantors. If new debt is added to our and our
subsidiaries' current debt levels, the related risks that we and they now face
could intensify.
RISKS RELATED TO THIS OFFERING
THE NOTES WILL BE EFFECTIVELY SUBORDINATED TO OUR SECURED INDEBTEDNESS AND THE
SECURED INDEBTEDNESS OF OUR GUARANTOR SUBSIDIARIES.
The old notes are, and upon exchange, the exchange notes will be, unsecured
and therefore will be effectively subordinated to any secured indebtedness we,
or our guarantor subsidiaries, may incur to the extent of the value of the
assets securing such indebtedness. In the event of a bankruptcy, liquidation or
reorganization or similar proceeding involving us, or our guarantor
subsidiaries, our assets and those of our guarantor subsidiaries that serve as
collateral will be available to satisfy the obligations under any secured
indebtedness before any payments are made on the notes. The notes will also be
effectively subordinated to the liabilities of our non-guarantor subsidiaries.
As of June 30, 2001, assuming we had completed the exchange offer and
repaid the Delta Downs note, these notes would have been effectively
subordinated to $464.0 million of secured debt and approximately $171.1 million
would have been available for borrowing as additional debt under our bank credit
facility.
WE ARE A HOLDING COMPANY AND DEPEND ON THE BUSINESS OF OUR SUBSIDIARIES TO
SATISFY OUR OBLIGATIONS UNDER THE NOTES.
We are a holding company. Our subsidiaries conduct substantially all of our
consolidated operations and own substantially all of our consolidated assets.
Consequently, our cash flow and our ability to pay our debts depends on our
subsidiaries' cash flow and their payment of funds to us. Our non-guarantor
subsidiaries, including the subsidiaries through which we own Delta Downs, are
not obligated to make funds available to us for payment on the notes or
otherwise. In addition, our subsidiaries' ability to make any payments to us
will depend on their earnings, the terms of their indebtedness, business and tax
considerations, legal and regulatory restrictions and economic conditions. The
ability of our subsidiaries to make payments to us is also governed by the
gaming laws of certain jurisdictions, which place limits on the amount of funds
which may be transferred to us and may require prior or subsequent approval for
any payments to us. Payments to us are also subject to legal and contractual
restrictions. Under the terms of The Borgata credit facility, the entity that
owns The Borgata project will be prohibited from paying dividends or otherwise
advancing funds to us except under certain limited circumstances.
CERTAIN OF OUR SUBSIDIARIES ARE NOT CURRENTLY GUARANTORS OF THESE NOTES.
Certain of our subsidiaries are not guarantors of these notes, including
the subsidiaries through which we own Delta Downs. However, pursuant to the
indenture for these notes, we are obligated to cause any subsidiary in existence
as of the date of the offering for the old notes, which subsequently contributes
more than 5% of our consolidated EBITDA (as defined) in any fiscal year
commencing after the date of the offering for the old notes, to become a
guarantor of these notes. There can be no assurance that any subsidiary will
reach such threshold and become a guarantor. We are generally not required to
cause future subsidiaries to become guarantors of these notes.
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WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE THE CHANGE
OF CONTROL OFFER REQUIRED BY THE INDENTURE.
Upon the occurrence of certain specific kinds of change of control events,
we will be required to offer to repurchase all outstanding notes. However, it is
possible that we will not have sufficient funds at the time of the change of
control to make the required repurchase of notes or that restrictions on our
bank credit facility will not allow such repurchases. See "Description of
Exchange Notes -- Repurchase at the Option of Holders -- Change of Control."
Our failure to repurchase the notes would be a default under the indenture
and also our bank credit facility. In addition, events constituting a change of
control and certain asset sales would generally require us to offer to
repurchase our 9.25% senior notes, of which an aggregate principal amount of
$200 million is outstanding, and our 9.50% senior subordinated notes, of which
an aggregate principal amount of $250 million is outstanding.
FRAUDULENT CONVEYANCE MATTERS -- FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER
SPECIFIC CIRCUMSTANCES, TO VOID GUARANTEES AND REQUIRE NOTEHOLDERS TO RETURN
PAYMENTS RECEIVED FROM GUARANTORS.
Under the federal bankruptcy law and comparable provisions of state
fraudulent transfer laws, a guarantee could be voided, or claims in respect of a
guarantee could be subordinated to all other debts of that guarantor, if the
guarantor at the time it incurred the indebtedness evidenced by its guarantee:
- received less than reasonably equivalent value or fair consideration for
the incurrence of such guarantee and was insolvent or rendered insolvent
by reason of such incurrence;
- was engaged in a business or transaction for which the guarantor's
remaining assets constituted unreasonably small capital; or
- intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature.
In addition, any payment by that guarantor pursuant to its guarantee could
be voided and required to be returned to the guarantor or to a fund for the
benefit of the creditors of the guarantor.
The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine whether
a fraudulent transfer has occurred. Generally, however, a guarantor would be
considered insolvent if:
- the sum of its debts, including contingent liabilities, was greater than
the fair saleable value of all of its assets;
- the present fair saleable value of its assets was less than the amount
that would be required to pay its probable liability on its existing
debts, including contingent liabilities, as they become absolute and
mature; or
- it could not pay its debts as they become due.
The considerations described above will also apply to the guarantees. See
"Description of Exchange Notes -- The Guarantees."
On the basis of historical financial information, recent operating history
and other factors, we believe that each guarantor, after giving effect to its
guarantee of the notes, and its guarantee of our bank credit facility will not
be insolvent, will not have unreasonably small capital for the business in which
it is engaged and will not have incurred debts beyond its ability to pay such
debts as they mature. We cannot assure you, however, as to what standard a court
would apply in making such determinations or that a court would agree with our
conclusions in this regard.
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AN ACTIVE TRADING MARKET MAY NOT DEVELOP FOR THESE NOTES.
We are offering the exchange notes to the holders of the old notes. The old
notes were sold in July 2001 to a small number of qualified institutional buyers
in the United States and to investors outside of the United States under
Regulation S and are eligible for trading in the Private Offerings, Resale and
Trading through Automatic Linkages (PORTAL) Market. To the extent that old notes
are tendered and accepted in the exchange offer, the trading market for
untendered and tendered but unaccepted old notes will be adversely affected. We
cannot assure you that this market will provide liquidity for you if you want to
sell your old notes. The liquidity of the trading market in these notes, and the
market price quoted for these notes, may be adversely affected by:
- changes in the overall market for high yield securities;
- changes in our financial performance or prospects;
- the prospects for companies in our industry generally;
- the number of holders of the notes;
- the interest of securities dealers in making a market for the notes; and
- prevailing interest rates.
As a result, you cannot be sure that an active trading market will develop
for the old notes or the exchange notes.
The exchange notes are new securities for which there is currently no
market. We cannot assure you as to the liquidity of markets that may develop for
the exchange notes, your ability to sell the exchange notes or the price at
which you would be able to sell the exchange notes. If such markets were to
exist, the exchange notes could trade at prices lower than their principal
amount or purchase price depending on many factors, including prevailing
interest rates and the markets for similar securities. The initial purchasers of
the old notes have advised us that they currently intend to make a market with
respect to the exchange notes. However, they are not obligated to do so, and any
market making activities may be discontinued at any time without notice. In
addition, such market making activity may be limited during the pendency of the
exchange offer.
YOU MAY HAVE TO DISPOSE OF THE NOTES IF YOUR OWNERSHIP OF THE NOTES IS
DETERMINED HARMFUL TO US.
If the ownership of any of the notes by any person or entity will preclude,
interfere with, threaten or delay the issuance, maintenance, existence or
reinstatement of any gaming or liquor license, permit or approval, or result in
the imposition of burdensome terms or conditions on such license, permit or
approval, as determined by any governmental authority or our Board of Directors,
the holder must dispose of the notes within a specified time. If the holder of
the notes fails to dispose of them within such time, we have the right to redeem
the notes at a price, without accrued interest, if any, equal to the lowest of
the holder's cost, the principal amount of such notes or the average of the
current market prices of such notes. See "Description of Exchange
Notes -- Mandatory Disposition or Redemption Pursuant to Gaming Laws."
RESTRICTIONS ON EXCHANGE OFFER.
Issuance of exchange notes in exchange for old notes pursuant to the
exchange offer will be made only after timely receipt by the exchange agent of a
properly completed and duly executed letter of transmittal, or an agent's
message in lieu thereof, including all other documents required by such letter
of transmittal. Therefore, holders of old notes desiring to tender such old
notes in exchange for exchange notes should allow sufficient time to ensure
timely delivery. We and the exchange agent are under no duty to give
notification of defects or irregularities with respect to the tenders of old
notes for exchange. Each broker-dealer that receives exchange notes for its own
account pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. See "The
Exchange Offer -- Resale of Exchange Notes" and "Plan of Distribution."
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CONSEQUENCES OF FAILURE TO EXCHANGE.
Holders of old notes who do not exchange their old notes for exchange notes
pursuant to the exchange offer will continue to be subject to the restrictions
on transfer of such old notes as set forth in the legend on the old notes. In
general, the old notes may not be offered or sold, unless registered under the
Securities Act, except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. To the
extent that old notes are tendered and accepted in the exchange offer, the
trading market for untendered and tendered but unaccepted old notes could be
adversely affected. See "The Exchange Offer -- Consequences of Failure to
Exchange."
RISKS RELATED TO BOYD GAMING AND THE GAMING INDUSTRY
INTENSE COMPETITION EXISTS IN THE GAMING INDUSTRY AND WE EXPECT COMPETITION TO
CONTINUE TO INTENSIFY.
The gaming industry is highly competitive. If other properties operate more
successfully, if existing properties are enhanced or expanded, or if additional
hotels and casinos are established in and around the locations in which we
conduct business, we may lose market share. In particular, the expansion of
casino gaming in or near any geographic area from which we attract or expect to
attract a significant number of our customers could have a significant adverse
effect on our business, financial condition and results of operations.
We also compete with legalized gaming from casinos located on Native
American tribal lands. In March 2000, California voters approved an amendment to
the California Constitution permitting Native American tribes in California to
operate a limited number of slot and video poker machines and house-banked card
games. The Governor of California has entered into compacts with numerous tribes
in California. The federal government has approved approximately 60 such
compacts, and casino-style gaming is now legal on those tribal lands. A
proliferation of Native American gaming in California, or a proliferation of
Native American gaming in other areas located near our properties, could have an
adverse effect on our operating results in those markets.
In Michigan, the Pokagon Band of Potawatomi Indians, a federally recognized
Native American tribe, has announced its intention to construct a land-based
gaming operation in or near the City of New Buffalo, Michigan, which is located
less than fifteen miles from our Blue Chip Casino. Although the Pokagons have
several legal and regulatory issues that must be resolved prior to construction
of the proposed gaming facility, if their facility is constructed and begins
operations, it could have a significant adverse impact on the operations of Blue
Chip.
The casinos owned and being developed by us compete, and will in the future
compete, with all forms of existing legalized gaming and with any new forms of
gaming that may be legalized in the future. Additionally, we face competition
from all other types of entertainment.
OUR EXPANSION, DEVELOPMENT AND RENOVATION PROJECTS MAY FACE SIGNIFICANT RISKS
INHERENT IN THE ESTABLISHMENT OF A NEW ENTERPRISE OR MARKETING STRATEGY,
INCLUDING RECEIPT OF NECESSARY GOVERNMENT APPROVALS.
We regularly evaluate expansion, development and renovation opportunities
and are currently involved in developing The Borgata and expanding and
renovating Delta Downs. Each of these projects will be subject to the many risks
inherent in the establishment of a new business enterprise or expansion or
renovation of an existing enterprise, including unanticipated design,
construction, regulatory, environmental and operating problems, and the
significant risks commonly associated with implementing a marketing strategy in
new markets. In particular, we may experience:
- shortages of materials (including slot machines or other gaming
equipment);
- shortages of skilled labor or work stoppages;
- unforeseen construction scheduling, engineering, environmental or
geological problems;
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- weather interference, floods, fires or other casualty losses; and
- unanticipated cost increases.
Our anticipated costs and construction period for projects are based upon
budgets, conceptual design documents and construction schedule estimates
prepared by us in consultation with our architects and contractors. The cost of
any project may vary significantly from initial expectations, and we may have a
limited amount of capital resources to fund cost overruns on any project. If we
cannot finance cost overruns on a timely basis, the completion of one or more
projects may be delayed until adequate funding is available. The completion
dates of any of our projects could also differ significantly from expectations
for construction-related or other reasons. We cannot assure you that any project
will be completed, if at all, on time or within established budgets. Significant
delays or cost overruns on our projects could have a material adverse effect on
our business, financial condition and results of operations.
Many permits, licenses and approvals necessary for our current projects
have not yet been obtained, including approval of the number of slot machines
permitted to operate at Delta Downs and our license to operate them. Failure to
obtain approval to operate slot machines, or a significant reduction in the
number of slot machines that we are approved to operate at Delta Downs, would
materially affect our ability to experience increased cash flow from Delta Downs
and would reduce the value of the Delta Downs acquisition. The scope of the
approvals required for projects of this nature is extensive, including gaming
approvals, state and local land-use permits, building and zoning permits and
liquor licenses. Unexpected changes or concessions required by local, state or
federal regulatory authorities could involve significant additional costs and
delay the scheduled openings of the facilities. We may not receive the necessary
permits, licenses and approvals or obtain the necessary permits, licenses and
approvals within the anticipated time frame. If we experience any of these
problems, our ability to expand, develop or renovate any of our projects,
including Delta Downs, could be adversely affected. For example, if we
experience any of these problems, we may not be able to commence operations at
Delta Downs in November 2001, or receive the applicable approvals to operate the
number of slot machines at that location as currently anticipated, or at all.
In addition, although we design our projects for existing facilities to
minimize disruption of business operations, expansion and renovation projects
require, from time to time, portions of the existing operations to be closed or
disrupted. Any significant disruption in operations could have a significant
adverse effect on our business, financial condition and results of operations.
IF WE ARE UNABLE TO FINANCE OUR EXPANSION, DEVELOPMENT AND RENOVATION PROJECTS
AS WELL AS CAPITAL EXPENDITURES THROUGH CASH FLOW AND BORROWINGS UNDER OUR BANK
CREDIT FACILITY, OUR EXPANSION, DEVELOPMENT AND RENOVATION EFFORTS WILL BE
JEOPARDIZED.
We intend to finance our current and future expansion, development and
renovation projects primarily with cash flow from operations and borrowings
under our bank credit facility. If we are unable to finance such projects in
this manner, we will have to adopt one or more alternatives, such as reducing or
delaying planned expansion, development and renovation projects as well as
capital expenditures, selling assets, restructuring debt or obtaining additional
equity financing or joint venture partners or modify our bank facility. These
sources of funds may not be sufficient to finance our expansion, and other
financing may not be available on acceptable terms, in a timely manner or at
all. In addition, our existing indebtedness contains certain restrictions on our
ability to incur additional indebtedness. If we are unable to secure additional
financing, we could be forced to limit or suspend expansion, development and
renovation projects, which may adversely affect our business, financial
condition and results of operations.
WE MAY BE REQUIRED TO PAY OR PERFORM CERTAIN OBLIGATIONS PURSUANT TO AN
UNLIMITED COMPLETION GUARANTY THAT WE ENTERED INTO IN CONNECTION WITH THE
CONSTRUCTION OF THE BORGATA.
A subsidiary of the entity that owns The Borgata entered into a $630
million credit agreement to provide financing for the development and
construction of The Borgata. Pursuant to the terms of that credit agreement, we
entered into an unlimited completion guaranty which requires us to guarantee the
performance of certain obligations of that entity. Under the completion
guarantee, if certain specified obligations are not
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met in connection with the construction of the project, we are required to bring
the project into compliance. This may require us to provide additional funds to
complete the construction. The completion guarantee is a senior unsecured
obligation of Boyd Gaming. If we are required to provide additional funds to
complete The Borgata, we may be required to seek consents or waivers from our
existing lenders under the bank credit facility.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENTAL GAMING REGULATION, WHICH MAY HARM OUR
BUSINESS.
We are subject to a variety of regulations in the jurisdictions in which we
operate. Regulatory authorities at the federal, state and local level have broad
powers with respect to the licensing of casino operations and may revoke,
suspend, condition or limit our gaming or other licenses, impose substantial
fines and take other actions, any one of which could have a significant adverse
effect on our business, financial condition and results of operations. If
additional gaming regulations are adopted in a jurisdiction in which we operate,
such regulations could impose restrictions or costs that could have a
significant adverse effect on us. From time to time, various proposals are
introduced in the legislatures of some of the jurisdictions in which we have
existing or planned operations that, if enacted, could adversely affect the tax,
regulatory, operational or other aspects of the gaming industry and our company.
Legislation of this type may be enacted in the future. The federal government
has also previously considered a federal tax on casino revenues and may consider
such a tax in the future. In addition, gaming companies are currently subject to
significant state and local taxes and fees in addition to normal federal and
state corporate income taxes, and such taxes and fees are subject to increase at
any time. Any material increase in these taxes or fees could adversely affect
us.
Our directors, officers and key employees must also be approved by certain
state regulatory authorities. If state regulatory authorities were to find a
person occupying any such position unsuitable, we would be required to sever our
relationship with that person. Certain public issuances of securities and
certain other transactions by us also require the approval of certain state
regulatory authorities.
A SUCCESSFUL CHALLENGE TO THE 1999 ILLINOIS LEGISLATION AUTHORIZING DOCKSIDE
GAMING COULD REQUIRE US TO ELIMINATE DOCKSIDE GAMING OPERATIONS.
In June 1999, Illinois passed an amendment to the Illinois Riverboat
Gambling Act to permit casinos to offer continuous dockside gaming with
unlimited ingress and egress. In addition to legalizing dockside gaming, the
amendment authorized the non-operational license in East Dubuque to relocate to
a new home dock. The licensee applied for renewal of its license and to relocate
its operation to Rosemont, Illinois. A group of plaintiffs filed a lawsuit
requesting the court to declare that the 1999 amendment violates the Illinois
and U.S. Constitutions because the grant of the Rosemont license amounted to
"special legislation." If a court invalidates the grant of the Rosemont license,
all of the provisions of the 1999 amendment, including the provisions legalizing
dockside gaming, would be invalidated. In such event, we would be required to
resume cruising at our dockside gaming activities at our Par-A-Dice Casino until
such time as the Illinois legislature passed a law reauthorizing dockside
gaming. On January 25, 2001, the court dismissed the lawsuit concluding that the
plaintiffs lacked standing. The plaintiffs filed a notice of appeal, but it is
uncertain as to whether the plaintiffs have timely filed the record on appeal.
Therefore, it is uncertain if the plaintiffs properly perfected their appellate
rights. If, however, the challenge to the Illinois Act is on-going, there is no
assurance that the Illinois Act will be upheld as constitutional. The loss of
dockside gaming at our Par-A-Dice Casino could adversely affect our financial
results.
RIVERBOATS AND DOCKSIDE FACILITIES ARE SUBJECT TO RISKS RELATING TO WEATHER OR
MECHANICAL FAILURE AND MUST COMPLY WITH APPLICABLE REGULATIONS.
Gaming operations conducted on riverboat casinos or at dockside facilities
could be lost from service for a variety of reasons, including casualty, forces
of nature, mechanical failure or extended or extraordinary maintenance.
Our riverboats must comply with U.S. Coast Guard requirements as to boat
design, on-board facilities, equipment, personnel and safety. Each riverboat
must hold a Certificate of Inspection or must be approved by
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the American Bureau of Shipping for stabilization and floatation, and may also
be subject to local zoning and building codes. The U.S. Coast Guard requirements
establish design standards, set limits on the operation of the vessels and
require individual licensing of all personnel involved with the operation of the
vessels. Loss of a vessel's Certificate of Inspection or American Bureau of
Shipping approval would preclude its use as a casino.
U.S. Coast Guard regulations require a hull inspection for all riverboats
at five-year intervals. Under certain circumstances, extensions may be approved.
The U.S. Coast Guard may require that such hull inspections be conducted at a
U.S. Coast Guard-approved dry-docking facility, and if so required, the travel
to and from such docking facility, as well as the time required for inspections
of the Treasure Chest, Par-A-Dice and Blue Chip riverboats, could be
significant. The loss of a dockside casino or riverboat casino from service for
any period of time could adversely affect our business, financial condition and
results of operations.
WE DRAW A SIGNIFICANT PERCENTAGE OF OUR CUSTOMERS FROM LIMITED GEOGRAPHIC
REGIONS AND BY AIR TRAVEL. CHANGES ADVERSELY IMPACTING THESE REGIONS, OR THE
AIRLINE INDUSTRY, MAY ALSO IMPACT OUR BUSINESS.
The California, Fremont and Main Street Station draw a substantial portion
of their customers from the Hawaiian market. During the fiscal year ended
December 31, 2000, patrons from Hawaii comprised approximately 67% of the room
nights sold at the California, 57% at the Fremont and 51% at Main Street
Station. An increase in fuel costs or transportation prices, a decrease in
airplane seat availability or a deterioration of relations with tour and travel
agents, as they affect travel between the Hawaiian market and our facilities,
could adversely affect our business, financial condition and results of
operations.
Our Las Vegas properties also draw a substantial number of customers from
certain other specific geographic areas, including Southern California, Arizona,
Las Vegas and the Midwest. With the amendment of the California Constitution,
Native American casinos may divert potential visitors away from Nevada, which
could negatively affect Nevada gaming markets. Each of our other properties
depends primarily on visitors from their respective surrounding regions. Adverse
economic conditions in any of these regions could have a significant adverse
effect on our business, financial condition and results of operations.
In addition, to the extent that the airline industry is negatively impacted
due to terrorist or similar activity, increased security restrictions or the
public's general reluctance to travel, our business, financial condition and
results of operation could be significantly adversely affected.
ENERGY PRICE INCREASES MAY ADVERSELY AFFECT OUR COST OF OPERATIONS AND OUR
REVENUES.
Our casino properties use significant amounts of electricity, natural gas
and other forms of energy. While no shortages of energy have been experienced,
the recent substantial increases in the cost of electricity and natural gas in
the United States have and may continue to negatively affect our operating
results. The extent of the impact is subject to the magnitude and duration of
the energy price increases, but this impact could be material. In addition,
energy price increases in cities that constitute a significant source of
customers for our properties could result in a decline in disposable income of
potential customers and a corresponding decrease in visitation and spending at
our properties, which would negatively impact revenues.
THE BOYD FAMILY OWNS A CONTROLLING INTEREST IN OUR CAPITAL STOCK AND MAY
SIGNIFICANTLY INFLUENCE OUR AFFAIRS.
William S. Boyd, our Chairman and Chief Executive Officer, together with
his immediate family, beneficially owned approximately 49% of our outstanding
shares of common stock as of June 30, 2001. As a result, the Boyd family has the
ability to significantly influence our affairs, including the election of our
directors and, except as otherwise provided by law, approving or disapproving
other matters submitted to a vote of our stockholders, including a merger,
consolidation or sale of assets. In addition, if the Boyd family were to sell
its shares to a single investor or limited group of investors, resulting in
those investors' beneficial ownership of 50% or more of our voting stock, a
change in control could be deemed to have occurred in connection with the notes.
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USE OF PROCEEDS
We will not receive any proceeds from the exchange of the exchange notes
for the old notes pursuant to the exchange offer.
We used the aggregate net proceeds from the offering of the old notes,
which were approximately $194 million, after deducting selling and offering
expenses, to:
- repay $125 million of revolving loans under our bank credit facility; and
- permanently repay an aggregate of $69 million of the term loans B and C
under our bank credit facility.
In addition, when we receive our license to operate slot machines at Delta
Downs we will reborrow $65 million of revolving loans under our bank credit
facility to repay the note we owe to the entities that sold Delta Downs to us.
Accordingly, the proceeds from the issuance of the old notes are indirectly
being used to finance our acquisition of Delta Downs. See "Description of Other
Indebtedness." We expect the casino to begin operations as early as November
2001, however, we can provide no assurances that we will commence operations as
expected.
Borrowings under our bank credit facility mature in June 2003 and bear
interest based on the agent bank's reference rate or the eurodollar rate, at our
discretion. As of June 30, 2001, the blended interest rate under the bank credit
facility was 6.8% per annum. As of June 30, 2001, the interest rate on the Delta
Downs note was 7.0% per annum. See "Description of Other Indebtedness."
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CAPITALIZATION
The following table sets forth our cash position and our historical
consolidated capitalization:
- as of June 30, 2001;
- as adjusted to give effect to the completion of the offering of the old
notes (and the application of the net proceeds of $194 million from the
offering of the old notes) as if such transaction occurred on June 30,
2001; and
- pro forma for the repayment of the Delta Downs note, as if such
transaction occurred on June 30, 2001.
AS OF JUNE 30, 2001
----------------------------------------------
PRO FORMA
AS ADJUSTED FOR FOR REPAYMENT
THE OFFERING OF OF THE DELTA
ACTUAL THE OLD NOTES DOWNS NOTE
-------- ------------------- -------------
(IN MILLIONS)
Cash and cash equivalents............................. $ 83.9 $ 83.9 $ 83.9
======== ======== ========
Long-term debt (including current maturities):
Bank credit facility(1)............................. $ 586.1 $ 392.1 $ 457.1
Delta Downs note(2)................................. 65.0 65.0 --
9.25% senior notes due 2003......................... 200.0 200.0 200.0
9.25% senior notes due 2009......................... -- 200.0 200.0
9.50% senior subordinated notes due 2007............ 250.0 250.0 250.0
Other............................................... 7.0 7.0 7.0
-------- -------- --------
Total long-term debt............................. 1,108.1 1,114.1 1,114.1
Stockholders' equity.................................. 344.7 344.7 344.7
-------- -------- --------
Total capitalization.................................. $1,452.8 $1,458.8 $1,458.8
======== ======== ========
---------------
(1) At June 30, 2001, the outstanding borrowings under our $700 million bank
credit facility consisted of $388.8 million of borrowings under our $500
million revolving credit facility and $197.3 million interim loans. As of
June 30, 2001, as adjusted for the completion of the offering of the old
notes and pro forma for the repayment of the Delta Downs note, approximately
$171.1 million would have been available for future borrowing under our bank
credit facility. Until The Borgata is open, we must maintain not less than
$50 million of unused availability under our bank credit facility.
(2) We entered into this secured note on May 31, 2001 in connection with our
acquisition of Delta Downs. When we receive our license to operate slot
machines at Delta Downs, we will repay the Delta Downs note by borrowing $65
million from our revolving credit facility. For a description of this note,
see "Description of Other Indebtedness -- Delta Downs Promissory Note."
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SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below is derived from
our audited consolidated financial statements, except for the financial data for
the six month periods ended June 30 which is derived from our unaudited
condensed consolidated financial statements which include all adjustments,
consisting only of normal recurring adjustments, which are, in our opinion,
necessary for a fair presentation of our results of operations for such periods.
Certain amounts have been reclassified from those previously reported. See Note
17 to the consolidated financial statements included in this prospectus. The
results of operations for the six months ended June 30, 2001 are not necessarily
indicative of the results for the full year. The summary data below should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the historical consolidated financial
statements and the notes thereto included in this prospectus, as well as those
incorporated by reference in this prospectus.
SIX MONTHS
SIX MONTHS ENDED ENDED FISCAL YEAR ENDED
JUNE 30, FISCAL YEAR ENDED DECEMBER 31, DECEMBER 31, JUNE 30,
------------------- ---------------------------------- ------------ -------------------
2001 2000 2000 1999 1998 1997 1997 1996
-------- -------- ---------- --------- --------- ------------ -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS
DATA:
Gaming revenues......... $462,465 $441,118 $ 868,983 $ 733,677 $ 722,124 $323,707 $573,782 $548,167
Food and beverage
revenues.............. 81,827 79,731 160,139 158,982 161,582 78,658 151,261 142,420
Room revenues........... 39,409 37,700 75,114 71,478 74,053 38,330 74,209 69,645
Other revenues.......... 39,994 36,071 73,125 69,988 70,903 39,074 58,311 49,895
Management fees and
joint venture......... -- 3,815 3,815 47,463 40,206 20,310 42,747 41,576
Termination fee, net.... -- 70,988 70,988 -- -- -- -- --
Promotional
allowances............ (61,993) (57,163) (120,626) (110,663) (108,229) (50,744) (91,396) (84,939)
-------- -------- ---------- --------- --------- -------- -------- --------
Net revenues............ 561,702 612,260 1,131,538 970,925 960,639 449,335 808,914 766,764
Total operating
expense............... 497,984 469,740 951,985 834,314 836,951 391,189 853,340 665,978
-------- -------- ---------- --------- --------- -------- -------- --------
Operating income
(loss)................ 63,718 142,520 179,553 136,611 123,688 58,146 (44,426) 100,786
Interest income......... 2 462 1,807 253 365 261 650 1,174
Interest expense, net... (39,407) (39,368) (79,303) (69,230) (74,162) (37,571) (61,672) (52,360)
-------- -------- ---------- --------- --------- -------- -------- --------
Income (loss) before
provision (benefit)
for income taxes,
cumulative effect of a
change in accounting
principle and
extraordinary items... 24,313 103,614 102,057 67,634 49,891 20,836 (105,448) 49,600
Provision (benefit) for
income taxes.......... 9,847 39,892 39,292 27,595 21,291 8,736 (34,025) 20,021
-------- -------- ---------- --------- --------- -------- -------- --------
Income (loss) before
cumulative effect of a
change in accounting
principle and
extraordinary items... 14,466 63,722 62,765 40,039 28,600 12,100 (71,423) 29,579
Cumulative effect of a
change in accounting
for start-up
activities, net of
tax................... -- -- -- (1,738) -- -- -- --
-------- -------- ---------- --------- --------- -------- -------- --------
Income (loss) before
extraordinary items... 14,466 63,722 62,765 38,301 28,600 12,100 (71,423) 29,579
Extraordinary items, net
of tax................ -- -- -- -- -- (7,240) (6,069) (1,435)
-------- -------- ---------- --------- --------- -------- -------- --------
Net income (loss)....... $ 14,466 $ 63,722 $ 62,765 $ 38,301 $ 28,600 $ 4,860 $(77,492) $ 28,144
======== ======== ========== ========= ========= ======== ======== ========
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SIX MONTHS
SIX MONTHS ENDED ENDED FISCAL YEAR ENDED
JUNE 30, FISCAL YEAR ENDED DECEMBER 31, DECEMBER 31, JUNE 30,
------------------- ---------------------------------- ------------ -------------------
2001 2000 2000 1999 1998 1997 1997 1996
-------- -------- ---------- --------- --------- ------------ -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PER SHARE DATA:
Basic and diluted net
income (loss) per
common share:
Income (loss) before
cumulative effect
of a change in
accounting
principle and
extraordinary
items............. $ 0.23 $ 1.02 $ 1.01 $ 0.65 $ 0.46 $ 0.20 $ (1.19) $ 0.52
Cumulative effect of
a change in
accounting for
start-up
activities, net of
tax............... -- -- -- (0.03) -- -- -- --
Extraordinary
items............. -- -- -- -- -- (0.12) (0.10) (0.03)
-------- -------- ---------- --------- --------- -------- -------- --------
Net income (loss)... $ 0.23 $ 1.02 $ 1.01 $ 0.62 $ 0.46 $ 0.08 $ (1.29) $ 0.49
======== ======== ========== ========= ========= ======== ======== ========
Dividends on Common
Stock............. -- -- -- -- -- -- -- --
Weighted average
common shares:
Basic.......... 62,235 62,229 62,232 62,124 61,749 61,525 60,248 57,058
Diluted........ 62,248 62,303 62,278 62,293 61,850 61,786 60,248 57,058
OTHER FINANCIAL DATA:
EBITDA(a)............. $112,756 $117,548 $ 203,939 $ 212,218 $ 203,020 $ 93,243 $157,636 $171,416
Cash flow from
operating
activities.......... 72,153 150,393 213,127 159,147 121,749 57,742 82,009 103,879
Cash flow used in
investing
activities.......... (100,044) (62,821) (246,699) (357,120) (57,511) (125,226) (250,311) (105,734)
Cash flow from (used
in) financing
activities.......... 23,770 (101,695) 35,439 208,228 (66,578) 90,811 174,542 (32,334)
Depreciation and
amortization........ 48,626 43,684 90,480 74,118 73,407 35,097 67,242 60,626
Ratio of earnings to
fixed charges(b).... 1.4x 3.4x 2.1x 1.9x 1.7x 1.6x (c) 1.8x
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DECEMBER 31, JUNE 30,
JUNE 30, ------------------------------------------------- ---------------------
2001 2000 1999 1998 1997 1997 1996
---------- ---------- ---------- ---------- ---------- ---------- --------
(IN THOUSANDS)
BALANCE SHEET DATA:
Cash and cash equivalents.............. $ 83,938 $ 88,059 $ 86,192 $ 75,937 $ 78,277 $ 55,220 $ 48,980
Total assets........................... 1,684,527 1,577,614 1,443,981 1,146,256 1,152,415 1,030,185 953,425
Long-term debt......................... 1,108,063 1,019,298 983,893 776,851 844,760 741,633 594,839
Stockholders' equity................... 344,736 329,778 266,979 227,306 197,141 191,316 233,257
---------------
(a) EBITDA consists of operating income plus depreciation, amortization,
preopening expenses of $4.9 million in 2000 and $1.5 million in 1999 and a
restructuring charge of $5.9 million in 1998 and minus $71.0 million of net
fees received from the termination of the Silver Star management agreement
in 2000. EBITDA information is presented solely as a supplemental disclosure
because we believe that it is a widely used measure of operating performance
in the gaming industry and for companies with a significant amount of
depreciation and amortization. EBITDA should not be construed as an
alternative to operating income (as determined in accordance with generally
accepted accounting principles), as an indicator of our operating
performance, or as an alternative to cash flow from operating activities (as
determined in accordance with general accepted accounting principles) as a
measure of liquidity. We have significant uses for our cash flow, including
capital expenditures and debt principal repayments that are not reflected in
EBITDA. It shall also be noted that not all gaming companies that report
EBITDA information calculate EBITDA in the same manner as we do.
(b) For purposes of determining the ratio of earnings to fixed charges, earnings
are defined as earnings before income taxes, cumulative effect of a change
in accounting principle and extraordinary items plus fixed charges. Fixed
charges consist of interest expense, including amortization of debt issuance
costs.
(c) Earnings were insufficient to cover fixed charges by $109 million for the
fiscal year ended June 30, 1997.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
We are a multi-jurisdictional gaming company that has operated successfully
for over 25 years. We currently own and operate twelve gaming facilities, one of
which is expected to commence casino operations as early as November 2001,
however, we can provide no assurances that we will commence operations as
expected. Our facilities are located in eight distinct gaming markets in five
states.
Our business strategy is to provide our customers with a high-quality
casino entertainment experience at an affordable price. We emphasize customer
service and offer a comfortable environment in order to develop and maintain
customer loyalty. We offer a variety of amenities to complement our guests'
gaming experience, such as quality hotel rooms, varied dining choices and
appealing entertainment options. We draw upon our extensive experience in the
gaming industry to make each of our facilities appealing to a broad range of
customers and employ a variety of marketing and promotional activities to
attract these customers. We regularly invest in our facilities to maintain their
quality, appeal and competitiveness. In evaluating new opportunities, we seek
gaming markets with strong demographics, good locations and limited potential
for new competition that will enable us to obtain a competitive advantage and
strong returns on investment.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain
operating data for our properties. As used herein, "Boulder Strip Properties"
consist of Sam's Town Hotel and Gambling Hall, the Eldorado Casino and Jokers
Wild Casino; "Downtown Properties" consist of the California Hotel and Casino,
the Fremont Hotel and Casino, Main Street Station Casino, Brewery and Hotel and
Vacations Hawaii, our wholly-owned travel agency which operates for the benefit
of the Downtown casino properties; and "Central Region Properties" consist of
Sam's Town Hotel and Gambling Hall in Tunica County, Mississippi, Par-A-Dice
Hotel and Casino, Treasure Chest Casino, Blue Chip Casino, and management fee
income from Silver Star Resort and Casino (through January 31, 2000). Net
revenues displayed in this table and discussed in this section are net of
promotional allowances; as such, references to casino, room, and food and
beverage revenues do not agree with the amounts on the Consolidated Statements
of Operations. For the purpose of this table, information enclosed therein
excludes corporate expense, including related depreciation and amortization,
preopening expense and the termination fee.
YEAR ENDED DECEMBER 31,
--------------------------------
2000 1999 1998
---------- -------- --------
(IN THOUSANDS)
Net revenues
Stardust.................................................. $ 150,048 $144,950 $159,199
Boulder Strip Properties.................................. 171,794 185,103 190,820
Downtown Properties(a).................................... 223,819 217,189 206,120
Central Region Properties................................. 514,889 423,683 404,500
---------- -------- --------
Total properties.................................. $1,060,550 $970,925 $960,639
========== ======== ========
Operating income
Stardust.................................................. $ 1,286 $ 2,182 $ 10,326
Boulder Strip Properties(b)............................... 8,126 20,631 24,690
Downtown Properties....................................... 25,989 22,735 13,390
Central Region Properties(b)(c)........................... 103,455 121,538 102,932
---------- -------- --------
Total properties.................................. $ 138,856 $167,086 $151,338
========== ======== ========
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---------------
(a) Includes revenues related to Vacations Hawaii, our Honolulu Travel Agency,
of $42.1 million, $37.5 million and $32.3 million, respectively, for the
years ended December 31, 2000, 1999 and 1998.
(b) Before preopening expense.
(c) Before restructuring charge.
YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999
REVENUES
Consolidated net revenues before the termination fee increased 9.2% for the
year ended December 31, 2000 compared to 1999. Company-wide casino revenues
increased 18.0%, while food and beverage revenues and room revenues remained
virtually unchanged. The increase in net revenues is due primarily to the
acquisition of Blue Chip in November 1999. Blue Chip contributed $181 million in
net revenues during 2000 compared to $23 million during 1999. Partially
offsetting the increase related to Blue Chip were declines in net revenues at
Sam's Town Las Vegas, Sam's Town Tunica and Treasure Chest of 8.4%, 15.4% and
14.4%, respectively. The declines in net revenues at both Sam's Town operations
are primarily due to significant construction disruption as well as the
competitive environment in their respective gaming markets. The decline in net
revenues at Treasure Chest is due primarily to intense promotional competition
from its land-based competitor. Also offsetting the increase in net revenues
from Blue Chip is the January 2000 termination of the management contract for
Silver Star which contributed $3.8 million in revenues during 2000 compared to
$47 million during 1999.
OPERATING INCOME
For the year ended December 31, 2000 consolidated operating income before
preopening expense and termination fee decreased 17.8% to $113 million from $138
million during 1999. The acquisition of Blue Chip contributed $62 million of
operating income during 2000 and Silver Star (which terminated in January 2000)
contributed $3.8 million in operating income during 2000 compared to operating
income of $7.8 million from Blue Chip and $46 million from Silver Star during
1999. Offsetting the effects of Blue Chip and Silver Star were declines in
operating income at Sam's Town Las Vegas, Sam's Town Tunica and Treasure Chest
mainly related to their decline in revenues.
STARDUST
For the year ended December 31, 2000, net revenues at the Stardust
increased 3.5% compared to 1999. Casino revenues increased 0.7% due primarily to
an increase in slot wagering. Room revenues declined 1.4% due mainly to a 2.5%
decline in available rooms as a result of the closure of the motor inn rooms in
1999. Operating income declined 41% to $1.3 million during 2000 compared to $2.2
million during 1999 due to the competitive environment on the Las Vegas Strip as
well as an increase in showroom expenses. Operating results during 1999 were
impacted by a renovation project that was completed at the end of 1999.
BOULDER STRIP PROPERTIES
For the year ended December 31, 2000, net revenues at the Boulder Strip
Properties declined 7.2% compared to the year ended December 31, 1999. The
decline is mainly attributable to construction disruption related to the Sam's
Town Las Vegas' renovation and expansion project as well as increased
competition. Sam's Town Las Vegas' renovation and expansion project was
substantially complete at December 31, 2000. We are revamping and enhancing our
marketing programs for Sam's Town Las Vegas to build revenues following the
disruptive construction period. Casino revenues at the Boulder Strip Properties
declined 3.9% due to declines in slot and table game wagering and non-gaming
revenues declined 19.7% due mainly to the permanent closure of Sam's Town Las
Vegas' Western Emporium. Operating income at the Boulder Strip Properties
declined 61% during 2000 as compared to 1999. The decline in operating income is
primarily attributable to the decline in net revenues.
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30
DOWNTOWN PROPERTIES
Net revenues at the Downtown Properties increased 3.1% during the year
ended December 31, 2000 compared to 1999. The increase is attributable to a
12.1% increase in net revenues at Vacations Hawaii. Hawaiian customers comprise
a significant portion of the available room nights at these Downtown casino
properties. Operating income at the Downtown Properties increased $3.3 million
or 14.3% during 2000 compared to 1999. The increase in operating income is
primarily attributable to cost consolidation efforts and more effective
marketing at the Downtown casino properties.
CENTRAL REGION
During the year ended December 31, 2000, net revenues from the Central
Region increased 22% compared to 1999. The majority of the increase is due to
the November 1999 acquisition of Blue Chip, which contributed $181 million in
net revenues during 2000 as compared to $23 million during 1999. Also
contributing to the increase in net revenues was a 10.2% increase at Par-A-Dice
due mainly to the change to dockside operations in June 1999. Sam's Town Tunica
and Treasure Chest experienced declines in net revenues of 15.4% and 14.4%,
respectively, due to their highly competitive environments as well as
significant construction disruption at Sam's Town Tunica involving its main
entry, casino and restaurant operations. The renovation project at Sam's Town
Tunica was substantially complete at December 31, 2000. We are aggressively
marketing all aspects of the Sam's Town Tunica property to build revenues
following the disruptive construction period. Management fees from Silver Star
declined $44 million as the management contract was terminated on January 31,
2000. Operating income in the Central Region declined 14.9% during 2000 as
compared to 1999. The increase in operating income from the acquisition of Blue
Chip as well as the increase in net revenues at Par-A-Dice did not offset the
declines in operating income related to the reduction in net revenues from
Treasure Chest, termination of the management contract and related fee income
from Silver Star or the operating loss of $9.8 million experienced at Sam's Town
Tunica.
TERMINATION FEE
On October 20, 1999, we agreed to terminate our management contract with
the Tribe prior to the contract's expiration date in June 2001 in exchange for a
one-time payment of $72 million. Pursuant to that agreement, we continued to
manage Silver Star under the terms of the management contract through January
31, 2000, at which time the Tribe made the one-time termination payment and we
recorded the termination fee, net of certain expenses.
OTHER EXPENSES
Depreciation and amortization expense increased 22% during the year ended
December 31, 2000 compared to 1999, primarily as a result of depreciation and
amortization expense related to the fixed assets, intangible license rights and
deferred acquisition costs of Blue Chip (acquired in November 1999).
Preopening expense increased $3.4 million during the year ended December
31, 2000 compared to 1999 due primarily to an increase in our share of
preopening expense in The Borgata, our Atlantic City joint venture, as well as a
result of unsuccessful efforts to assist in the development and operation of a
Rhode Island Indian casino with the Narragansett Indian Tribe.
OTHER INCOME (EXPENSE)
Other income and expense is primarily comprised of interest expense, net of
capitalized interest. Net interest expense increased by $10.1 million during the
year ended December 31, 2000 compared to 1999. The increase is primarily
attributable to higher average debt levels as a result of the borrowings related
to the November 1999 acquisition of Blue Chip. Net interest expense was
partially offset by $6.3 million in capitalized interest costs during 2000
compared to $1.8 million during 1999.
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31
NET INCOME
As a result of these factors, we reported net income of $63 million and $38
million, respectively, during the years ended December 31, 2000 and 1999.
YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998
REVENUES
Consolidated net revenues increased 1.1% during the year ended December 31,
1999 compared to the year ended December 31, 1998. Company-wide casino revenues
increased 1.4%, food and beverage revenues declined 2.6% and room revenues
declined 3.6%. Net revenues from the Nevada Region decreased 1.6% during 1999
compared to 1998 due to a 5.4% increase at the Downtown Properties, offset by
declines of 8.9% at the Stardust and 3.0% at the Boulder Strip Properties. The
decline in net revenues at the Stardust is attributable in part to increased
competition on the Las Vegas Strip as well as construction disruption related to
its year-long renovation project that was substantially completed by the end of
1999. The decline in net revenues at the Boulder Strip Properties is
attributable to the competitive environment on the Boulder Strip as well as
construction disruption experienced at Sam's Town Las Vegas related to its $84
million renovation and expansion project that began in August 1999. Net revenues
in the Central Region increased 4.7% during the year ended December 31, 1999
compared to the year ended December 31, 1998. The increase is attributable, in
part, to the acquisition of Blue Chip Casino on November 10, 1999, a 15.2%
increase at Par-A-Dice due to the change to dockside operations which began on
June 26, 1999, and an 18.0% increase from Silver Star due mainly to the July 1,
1999 increase in the management fee percentage from 30% to 40% of operating
income. These increases in the Central Region were partially offset by a decline
in net revenues due to the closure of the Sam's Town Kansas City property on
July 15, 1998.
OPERATING INCOME
For the year ended December 31, 1999, consolidated operating income before
preopening expense and impairment and restructuring charges increased by 6.5% to
$138 million compared to $130 million in the prior year. Operating income in the
Nevada Region declined 5.9% as the 70% gain experienced at the Downtown
Properties did not overcome the declines experienced at the Stardust and the
Boulder Strip due to increased competition and construction disruption at the
Stardust and Sam's Town Las Vegas. In the Central Region, operating income
increased 18.1% due to the acquisition of Blue Chip Casino, a 37% increase in
operating income at Par-A-Dice due to the change to dockside operations which
began on June 26, 1999 and an 18.5% increase at Silver Star related to the
change in the management fee percentage from 30% to 40% of operating income.
These increases were offset by declines in operating income at Sam's Town Tunica
(24%) and Treasure Chest (18.2%) due to increased competition in their
respective gaming markets.
STARDUST
For the year ended December 31, 1999, net revenues at the Stardust declined
by 8.9% versus the prior year due to increased competition as well as
construction disruption related to the year-long renovation project that was
substantially completed by the end of 1999. Casino revenues declined 8.5% due
primarily to a decline in slot and table game wagering. Room revenues declined
11.0% resulting from a 25% decline in the number of available rooms due to the
April 1999 closure of motor inn rooms and the renovation of guest rooms in both
hotel towers. Operating income declined 79% to $2.2 million during 1999 from
$10.3 million in 1998. Operating income margin declined to 1.5% during 1999 from
6.3% in 1998. These declines in operating income and operating income margin are
a result of the decline in revenues.
BOULDER STRIP PROPERTIES
Net revenues at the Boulder Strip Properties declined 3.0% during the year
ended December 31, 1999 compared to the year ended December 31, 1998 due mainly
to construction disruption related to the ongoing $84 million renovation and
expansion project at Sam's Town Las Vegas, which began during the last half of
1999. Casino revenues remained virtually unchanged as a slight increase in slot
win percentage offset a 7.5%
26
32
decline in table game wagering. Non-gaming revenues declined 14.3% due primarily
to the permanent closure of Sam's Town Las Vegas' Western Emporium in September
1999 as part of the property's renovation and expansion project. During 1999,
operating income decreased 16.4% or $4.1 million compared to 1998. Operating
income margin declined to 11.1% for 1999 compared to 12.9% for 1998. The decline
in operating income and margin is attributable to the decline in revenues, an
increase in marketing expense for 1999 compared to 1998 and the inventory
liquidation of the Western Emporium.
DOWNTOWN PROPERTIES
Net revenues at the Downtown Properties increased 5.4% during 1999 compared
to 1998. Casino revenues increased 3.9% due primarily to increased slot wagering
at each of the Downtown casino properties. Non-gaming revenues during the year
ended December 31, 1999 increased 6.3% compared to 1998 due to a 16.0% increase
in revenues related to Vacations Hawaii, our Honolulu travel agency. Hawaiian
customers comprise a significant portion of the available room nights at these
Downtown casino properties. Operating income at the Downtown Properties
increased $9.3 million or 70% during 1999 compared to 1998, and operating income
margin increased to 10.4% during 1999 from 6.5% during 1998. These increases in
operating income and operating income margin are attributable to the increase in
net revenues coupled with cost consolidation and effective marketing at the
Downtown casino properties.
CENTRAL REGION
Net revenues from the Central Region increased 4.7% during 1999 compared to
1998. The increase is attributable, in part, to Blue Chip Casino, which
generated $23.2 million in revenues from the November 10, 1999 date of
acquisition through the end of calendar 1999, as well as a 15.2% increase in
revenues at Par-A-Dice and an 18.0% increase in management fees from Silver
Star. The increase at Par-A-Dice is due mainly to the change to dockside
operations which began in Illinois on June 26, 1999. The increase in revenues at
Silver Star is due mainly to the increase in the management fee percentage from
30% to 40% of operating income on July 1, 1999 pursuant to the terms of the
management agreement. Net revenues at Treasure Chest declined 1.3% and net
revenues at Sam's Town Tunica declined 4.8% due to reductions in slot and table
game wagering related to increased competition in both gaming markets. Operating
income for the Central Region increased to $122 million during 1999 from $103
million during 1998 due primarily to the acquisition of Blue Chip Casino and the
increase in net revenues at Par-A-Dice and Silver Star, partially offset by
declines in operating income at Sam's Town Tunica and Treasure Chest.
OTHER EXPENSES
Depreciation expense remained virtually unchanged during 1999 compared to
1998 as an increase in depreciation expense related to the fixed assets of Blue
Chip Casino (acquired on November 10, 1999) was offset by declines related to
fully depreciated fixed assets at certain properties that have been operating
for over five years. Amortization expense of intangible license rights and
acquisition costs increased 10.0% during 1999 compared to 1998 due to the
acquisition of Blue Chip Casino. Preopening expense during 1999 was $1.5 million
and relates primarily to our share of preopening expense in The Borgata, our
Atlantic City joint venture.
OTHER INCOME (EXPENSE)
Other income and expense is primarily comprised of interest expense.
Interest expense decreased by $4.9 million during the year ended December 31,
1999 compared to the prior year. The decline is attributable to lower average
debt levels during the year combined with a decline in interest rates on
floating rate debt. In addition, we capitalized $1.8 million in interest costs
during 1999. There were no such costs capitalized during the year ended December
31, 1998.
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CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING FOR START-UP ACTIVITIES
We reported a charge of $1.7 million, net of $0.9 million in tax benefits,
as the cumulative effect of a change in accounting for start-up activities. The
American Institute of Certified Public Accountants issued Statement of Position
98-5, "Reporting on the Costs of Start-Up Activities" that required us to
expense certain previously capitalized costs of start-up activities as the
cumulative effect of a change in accounting principle.
NET INCOME
As a result of these factors, we reported net income of $38.3 million and
$28.6 million, respectively, during the years ended December 31, 1999 and 1998.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW FROM OPERATING ACTIVITIES AND WORKING CAPITAL
During 2000, we generated operating cash flow of $213 million compared to
$159 million during 1999. The increase in operating cash flow is primarily
attributable to the $72 million termination payment received from Silver Star as
well as the incremental earnings from Blue Chip, which was acquired in November
1999, partially offset by declines in earnings principally at Sam's Town Tunica,
Treasure Chest and Sam's Town Las Vegas. As of December 31, 2000 and 1999, we
had balances of cash and cash equivalents of $88 million and $86 million,
respectively, and a working capital deficit of $28 million at December 31, 2000
compared to working capital of $5.7 million at December 31, 1999. We have
historically operated with minimal or negative levels of working capital in
order to minimize borrowings and related interest costs under the bank credit
facility.
CASH FLOW FROM INVESTING ACTIVITIES
We are committed to continually maintaining and enhancing our existing
facilities, most notably by upgrading and remodeling our casinos, hotel rooms,
restaurants and other public spaces, and by providing the latest slot machines
for our customers. Our capital expenditures primarily related to these purposes
were approximately $59 million and $60 million, respectively, during the years
ended December 31, 2000 and 1999. In addition to these capital expenditures, we
expanded and/or renovated Sam's Town Las Vegas and Sam's Town Tunica. Capital
expenditures for these projects were approximately $81 million in 2000. During
1999, the Company incurred approximately $19 million in capital expenditures for
the renovation of the Stardust and incurred approximately $13 million in capital
expenditures for the renovation and expansion of Sam's Town Las Vegas.
On November 10, 1999, we acquired the Blue Chip Casino, a riverboat casino
in Michigan City, Indiana for $261 million in net cash. Included as part of the
acquisition was a partially constructed hotel and parking facility attached to
the existing casino complex. The hotel opened in February 2000. We funded the
acquisition and completion of the project from borrowings under our bank credit
facility.
During 2000, we invested $102 million in our unconsolidated subsidiaries,
substantially all of which relates to our Atlantic City joint venture as
compared to $4.7 million during 1999. See "-- Expansion and Other Projects."
CASH FLOW FROM FINANCING ACTIVITIES
Substantially all of the funding for our acquisitions and renovation and
expansion projects comes from cash flow from existing operations as well as debt
financing. Cash flow provided by financing activities totaled $35 million during
2000, substantially all of which was borrowed from our bank credit facility.
During 1999, cash flow provided by financing activities totaled $208 million,
substantially all of which was borrowed from our bank credit facility to
partially fund the acquisition of Blue Chip and other capital expenditures.
28
34
EXPANSION AND OTHER PROJECTS
The Borgata. Our subsidiary, Boyd Atlantic City, Inc., or BAC, owns half
of the membership interests in Marina District Development Holding Co., LLC, or
the Holding Company. MAC, Corp., or MAC, a subsidiary of MGM MIRAGE, owns the
other half of the membership interests. The Holding Company owns all of the
membership interests of Marina District Development Company, LLC, or the
Operating Company. The Operating Company is developing The Borgata, a casino
resort in Atlantic City. We, through BAC, will control the development and
operation of The Borgata. The Borgata will be constructed on property adjacent
to and connected to MGM MIRAGE's planned wholly-owned resort. The operating
agreement contemplates a total project cost of $1.035 billion for The Borgata.
We expect to open The Borgata during the summer of 2003.
The operating agreement requires us and MGM MIRAGE to make equity
contributions aggregating $207 million each towards the development of The
Borgata. We have invested $107 million as of June 30, 2001, while MGM MIRAGE has
contributed land, personal property and intangible property valued at $90
million and cash of $17 million. We expect that we will each invest an
additional $75 million between now and March 31, 2002, and post a letter of
credit for the remaining $25 million.
The remaining $621 million of total project costs will be drawn from a $630
million credit agreement that a subsidiary of the Operating Company entered into
on December 13, 2000. Under the terms of this agreement, no dividends or funds
may be advanced to us except for our share of taxes based on income or upon
achievement of certain performance milestones. Except for an unlimited
completion guaranty, pursuant to which we have agreed to guaranty performance of
certain obligations of this entity, the credit agreement is non-recourse to us
and MGM MIRAGE. If we contribute additional cash, there will be no proportionate
increase in our ownership of The Borgata.
Customer Information System. We have undertaken a Customer Information
System, or CIS, project that will standardize our customer tracking systems. The
purpose of the CIS project is to link all points of customer contact at a
particular property to enable us to better monitor customer activity in order to
enhance and direct marketing efforts. For the year ended December 31, 2000, we
incurred $10.9 million in costs associated with the CIS project, $9.5 million of
which has been capitalized. We expect to spend $10 million in 2001 on the next
phases of the CIS project. We have incurred $23 million in cumulative costs
related to the CIS project, $21 million of which has been capitalized. We have
never undertaken a technology project of this magnitude and may experience
difficulties in the integration and implementation of this project. In addition,
given the inherent difficulties of a project of this magnitude and the resources
required, the timing and costs involved could differ materially from those that
we anticipate. There can be no assurance that the CIS project will be completed
successfully, on schedule, or within budget.
Substantial funds are required for the completion of The Borgata and the
CIS project. There can be no assurances that any of the above mentioned projects
will go forward on a timely basis, if at all, or ultimately become operational.
The source of funds required to meet our working capital needs (including
maintenance capital expenditures) is expected to be cash flow from operations
and availability under our bank credit facility. The source of funds for our
expansion and other projects may come from cash flow from operations and
availability under our bank credit facility, incremental bank financing,
additional debt or equity offerings, joint venture partners or other sources. No
assurance can be given that additional financing will be available or that, if
available, such financing will be obtainable on terms favorable to us or our
stockholders.
The Borgata project is subject to the many risks inherent in the
development and operation of a new business enterprise, including potential
unanticipated design, construction, regulatory, environmental and operating
problems, increased project costs, timing delays, lack of adequate financing and
the significant risks commonly associated with implementing a marketing strategy
for a market in which we have not previously operated. If The Borgata project
does not become operational within the time frames and budgets currently
contemplated or does not compete successfully in its new markets, it could have
a material adverse effect on our business, financial condition and results of
operations.
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35
INDEBTEDNESS
Our $700 million bank credit facility consists of a $500 million revolving
credit facility and two term loan components (the term loan B and the term loan
C) each with original principal balances of $100 million. Our revolving credit
facility, term loan B and term loan C all mature in June 2003. At December 31,
2000, $198.3 million of borrowings were outstanding under our term loans and
$363.9 million was outstanding under our revolving credit facility. Pursuant to
the terms of The Borgata credit agreement, we are required to maintain $50
million of unused availability under our revolving credit facility until The
Borgata opens. Availability under the revolving credit facility will be reduced
by $15.6 million on December 31, 2001 and at the end of each quarter thereafter
until March 31, 2003. Term loan B repayments are in increments of $0.25 million
per quarter which began on September 30, 1999 and will continue through March
31, 2003. Term loan C repayments are in increments of $0.25 million per quarter,
which began on December 31, 2000 and will continue through March 31, 2003. The
interest rate on the bank credit facility is based upon either the alternate
base rate or the eurodollar rate, plus an applicable margin that is determined
by the level of a predefined financial leverage ratio. The blended interest rate
under the bank credit facility at December 31, 2000 was 8.8%. In addition, we
incur a commitment fee on the unused portion of the revolving credit facility
which ranges from 0.375% to 0.50% per annum. The bank credit facility is secured
by substantially all of our real and personal property and that of our
subsidiaries. Our obligations under the bank credit facility are guaranteed by
all of our significant subsidiaries. See "Description of Indebtedness" for a
description of certain covenants under our bank credit facility, as well as our
9.25% notes and our 9.50% notes.
We believe that our bank credit facility and cash flow from operating
activities will be sufficient to meet our operating and capital expenditure
requirements for the next twelve months. In the longer term, or if we experience
a significant decline in revenues, or in the event of unforeseen circumstances,
we may require additional funds and may seek to raise such funds through public
or private equity or debt financing, bank lines of credit or other sources. We
can make no assurances that additional financing will be available or, if
available, will be on terms favorable to us.
Our ability to service our debt will be dependent on our future
performance, which will be affected by, among other things, prevailing economic
conditions and financial, business and other factors, certain of which are
beyond our control.
RECENTLY ISSUED ACCOUNTING STANDARDS
See Notes 1 and 17 to the consolidated financial statements included in
this prospectus for a complete discussion of recently issued accounting
standards and their expected impact on our consolidated financial statements.
MARKET RISK
Market risk is the risk of loss arising from adverse changes in market
rates and prices, such as interest rates, foreign currency exchange rates and
commodity prices. Our primary exposure to market risk is interest rate risk
associated with our long-term debt. We attempt to limit our exposure to interest
rate risk by managing the mix of our long-term fixed-rate borrowings and
short-term borrowings under our bank credit facility. Borrowings under our bank
credit facility bear interest, at our option, at the agent bank's quoted base
rate or the eurodollar rate plus a specified premium in each case. However, the
amount of outstanding borrowings is expected to fluctuate and may be reduced
from time to time. At December 31, 2000, we did not utilize any hedging
instruments.
A subsidiary of the Operating Company entered into a credit agreement to
borrow up to $630 million to be used in connection with the development of The
Borgata. Except for an unlimited completion guaranty, the credit agreement is
non-recourse to Boyd Gaming. The credit agreement requires the borrower to enter
into interest rate protection agreements. At December 31, 2000, the subsidiary
did not utilize any interest rate protection agreements.
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GOVERNMENTAL GAMING REGULATION
We are subject to extensive regulation under laws, rules and supervisory
procedures primarily in the jurisdictions where our facilities are located or
docked. Some jurisdictions, including Nevada, Illinois, Indiana, Louisiana,
Mississippi and New Jersey, empower their regulators to investigate
participation by licensees in gaming outside their jurisdiction and require
access to and periodic reports respecting those gaming activities. Violations of
laws in one jurisdiction could result in disciplinary action in other
jurisdictions.
Under provisions of gaming laws in jurisdictions in which we have
operations and under our organizational documents certain of our securities are
subject to restrictions on ownership which may be imposed by specified
governmental authorities. The restrictions may require a holder of our
securities to dispose of the securities or, if the holder refuses, or is unable,
to dispose of the securities, we may be required to repurchase the securities.
For additional information see "Item 1 -- Investment
Considerations -- Governmental Gaming Regulation" in our Annual Report on Form
10-K for the year ended December 31, 2000, which is incorporated herein by
reference.
Each holder of a note, by accepting any note, will be deemed to have agreed
to be bound by the requirements imposed on holders of our debt securities by the
gaming authority of any jurisdiction in which we conduct or propose to conduct
gaming activity. In addition, the indenture governing the notes provides that if
a holder of a note or beneficial owner of a note is required to be licensed,
qualified or found suitable under the applicable gaming laws and is not so
licensed, qualified or found suitable within any time period specified by the
applicable gaming authority, the holder will be required, at our request, to
dispose of its notes within a time period that either we prescribe or such other
time period prescribed by the applicable gaming authority, and thereafter, we
shall have the right to redeem such holder's notes. See "Description of Exchange
Notes -- Mandatory Disposition or Redemption Pursuant to Gaming Laws."
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DESCRIPTION OF OTHER INDEBTEDNESS
The following is a summary of the material terms of our outstanding
indebtedness. For further details, you should refer to the various governing
instruments. See "Where You Can Find Additional Information."
BANK CREDIT FACILITY
On June 30, 1999, we entered into a senior secured credit facility with a
syndicate of commercial lending institutions. We amended the bank credit
facility as of July 26, 2000, and further amended the facility as of May 21,
2001. The $700 million bank credit facility is comprised of a $500 million
reducing revolving credit facility and two term loans, each with an original
balance of $100 million. The bank credit facility matures in June 2003.
Availability under the $500 million revolving credit facility will reduce
at the rate of $15.625 million per calendar quarter beginning on December 31,
2001 and will terminate on June 15, 2003. Each of the two term loans requires
repayments in increments of $0.25 million per quarter, which continue through
March 31, 2003. There is a 0.25% repayment fee on one of the term loans. A final
payment of $124.75 million is required to repay the term loans in June 2003.
Prepayments, including the $69 million term loan prepayment made upon
consummation of the offering of the old notes, will reduce the amount of this
final payment. The revolving credit facility contains a $60 million sublimit for
the issuance of letters of credit associated with The Borgata and a $15 million
sublimit for the issuance of other letters of credit. The revolving credit
facility also includes a sublimit for a swingline loan facility of $15 million.
Until construction of The Borgata is completed, we have agreed to maintain at
least $50 million of unused availability on our revolving credit facility.
Indebtedness outstanding under the bank credit facility has the first claim
on the assets pledged to secure the indebtedness under the bank credit facility.
Borrowings under the bank credit facility bear interest, at our option, at
a margin above (a) the eurodollar rate, or (b) the "alternate base rate,"
defined as the higher of (1) the reference rate as announced by the
administrative agent, and (2) the federal funds rate plus 0.50%. Swingline loans
bear interest at the alternate base rate plus the alternate base rate margin
minus 0.50%. The margin above the eurodollar rate and the alternate base rate,
and the fee on the unfunded portions of the revolving facility, vary from 1.00%
to 3.25%, 0.00% to 2.00%, and 0.375% and 0.50%, respectively, based on our total
leverage ratio, as defined in the bank credit facility.
The bank credit facility requires us to prepay the term loans until they
have been repaid in full, and thereafter to reduce the revolving bank credit
facility, in the following amounts:
- the net cash proceeds received by us from the issuance after July 21,
1999 of (1) senior unsecured notes, and (2) subordinated unsecured notes
in excess of $250 million, excluding, in each case, certain refinancing
indebtedness;
- the net cash proceeds received by us or any of our subsidiaries from
significant asset dispositions;
- all cash insurance proceeds received by us or any of our subsidiaries
from any condemnation award or casualty loss, unless such proceeds are
used to repair or replace the property subject to such casualty; and
- net cash proceeds in excess of $125 million received by us in connection
with the issuance of the old notes were required to be used to partially
prepay the terms loans.
Our obligations under the bank credit facility are guaranteed by all of our
significant subsidiaries and must be guaranteed by future significant
subsidiaries. If we cannot make payments required by the bank credit facility,
these guarantor subsidiaries must make them instead.
The obligations under the bank credit facility are secured by first deeds
of trust on each of our properties and a first preferred ship mortgage on
Treasure Chest, Par-A-Dice and Sam's Town Tunica. Additionally, the lenders
under the credit agreement have a first security interest in substantially all
of our assets and assets of the bank credit facility guarantors, excluding
certain personal property with respect to which applicable
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contracts or law prohibit the granting of a security interest. These security
interests are, in each case, subject to permitted liens.
The bank credit facility contains certain financial and other covenants
including, without limitation, various covenants (i) requiring the maintenance
of a minimum net worth, (ii) requiring the maintenance of a minimum interest
coverage ratio, (iii) establishing a maximum permitted total leverage ratio and
senior secured leverage ratio, (iv) imposing limitations on the incurrence of
additional indebtedness, (v) imposing limitations on the maximum permitted
expansion capital expenditures during the term of the bank credit facility, (vi)
imposing limits on the maximum permitted maintenance capital expenditures during
each year of the term of the bank credit facility and (vii) imposing
restrictions on investments, dividends and certain other payments. We believe
that we were in compliance with the bank credit facility covenants at June 30,
2001.
9.25% SENIOR NOTES
In October 1996, we issued $200 million of senior notes that mature on
October 1, 2003 and bear interest at a rate of 9.25% per year. Certain of our
subsidiaries have guaranteed payment of the 9.25% notes on a senior basis. The
9.25% notes and the guarantees thereof are senior unsecured obligations, ranking
equal in right of payment with all of our existing and future senior debt and
senior to all subordinated debt.
The 9.25% notes are not subject to redemption at our option prior to
maturity. If the 9.25% notes are not rated "investment grade," then upon a
change of control, or if the 9.25% notes have been rated "investment grade,"
upon a change in control and a ratings decline, each holder of 9.25% notes has
the option to require us to repurchase its 9.25% notes at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any.
Our 9.25% notes contain limitations on, among other things, (a) the
incurrence of liens, (b) transactions with affiliates, (c) payment restrictions
affecting restricted subsidiaries and (d) certain consolidations, mergers and
transfers of assets.
During any period of time that the 9.25% notes have investment grade
status, and no default or event of default has occurred and is continuing under
the 9.25% indenture, we and our restricted subsidiaries will not be subject to
certain limitations of the 9.25% indenture, including limitations on (a) our
ability and the ability of our restricted subsidiaries (as defined in the 9.25%
indenture) to incur additional indebtedness, (b) the payment of dividends and
other distributions with respect to our capital stock and the capital stock of
our restricted subsidiaries and the purchase, redemption or retirement of our
capital stock and the capital stock of our restricted subsidiaries, (c) the
making of certain investments and (d) asset sales. In the event that we and our
restricted subsidiaries are not subject to such covenants with respect to the
9.25% notes for any period of time as a result of the preceding sentence and,
subsequently, at least two of three specified rating agencies withdraw their
ratings or assign the 9.25% notes a rating below the required ratings, then we
and our restricted subsidiaries will thereafter again be subject to such
covenants for the benefit of the holders of 9.25% notes.
We believe that we and our subsidiaries were in compliance with the
covenants related to the 9.25% notes at June 30, 2001.
9.50% SENIOR SUBORDINATED NOTES
In July 1997, we issued $250 million of senior subordinated notes that
mature on July 15, 2007 and bear interest at a rate of 9.50% per year. The 9.50%
notes are our unsecured senior subordinated obligations, are subordinated in
right of payment to all of our existing and future senior debt, rank equal to
any future senior subordinated debt and senior to any of our junior subordinated
debt. The 9.50% notes are effectively subordinated to all of our subsidiaries'
existing and future debt and other liabilities, including trade payables and
preferred stock, if any.
The 9.50% notes are redeemable, at our option, in whole or in part, at any
time on or after July 15, 2002 at the redemption prices set forth in the
indenture governing the notes, plus accrued and unpaid interest, if any, to the
date of redemption. If the 9.50% notes are not rated "investment grade," then
upon a change of control, or if the 9.50% notes are rated "investment grade,"
upon a change of control and a ratings decline, each holder
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of notes has the option to require us to repurchase such holder's notes, at a
cash purchase price equal to 101% of the principal amount thereof, plus accrued
and unpaid interest, if any.
Our 9.50% notes contain limitations on, among other things, (a) the payment
of dividends and other distributions with respect to our capital stock and the
capital stock of our restricted subsidiaries and the purchase, redemption or
retirement of our capital stock and the capital stock of our restricted
subsidiaries, (b) the making of certain investments, (c) the incurrence of
liens, (d) transactions with affiliates, (e) payment restrictions affecting
restricted subsidiaries and (f) certain consolidations, mergers and transfers of
assets.
During any period of time that the 9.50% notes have investment grade status
and no default or event of default has occurred and is continuing under the
9.50% indenture, we and our restricted subsidiaries will not be subject to
certain limitations of the 9.50% indenture including limitations on (a) our
ability and the ability of our restricted subsidiaries (as defined in the 9.50%
indenture) to incur additional indebtedness and (b) asset sales. In the event
that we are not subject to the covenants with respect to the 9.50% notes for any
period of time as a result of the preceding sentence and, subsequently, at least
two of three specified rating agencies withdraw their ratings or assign the
9.50% notes a rating below the required ratings, then we will thereafter again
be subject to such covenants for the benefit of the holders of 9.50% notes.
We believe that we and our subsidiaries were in compliance with the
covenants related to the 9.50% notes at June 30, 2001.
DELTA DOWNS PROMISSORY NOTE
On May 31, 2001, in connection with the purchase of substantially all of
the assets of Delta Downs, we entered into a promissory note with the sellers.
Pursuant to the terms of the Delta Downs note, we are obligated to pay the
sellers, subject to certain conditions, $65 million, together with simple
interest assessed at a rate per annum pursuant to the following schedule:
- 7% from May 31, 2001 through July 31, 2001;
- 10% from August 1, 2001 through March 31, 2002; and
- 12% from April 1, 2002 until the Delta Downs note is paid.
The Delta Downs note is secured by a mortgage on the property and security
interests in all movable property. The Delta Downs mortgage is subject and
subordinate to $60 million of the mortgage under our bank credit facility. In
addition, the principal amount due under the Delta Downs note may be reduced
pursuant to offsets in certain instances and may be prepaid in full or in part.
Pursuant to the terms of the Delta Downs note, we are required to pay the
sellers accrued interest monthly, beginning on June 30, 2001. In addition, we
are required to pay the sellers a principal payment of $15 million on December
31, 2001 if the Delta Downs note is still outstanding as of that date. The
entire unpaid balance of the Delta Downs note, including any additional amounts
due to the sellers pursuant to the Delta Downs note, are due and payable in full
upon the earlier of:
- five business days after the State of Louisiana issues all required
permits under the applicable laws for the operation of slot machines at
Delta Downs;
- the closing of any sale of the Delta Downs business we acquired; or
- June 30, 2003.
The occurrence of any of the following events would constitute an event of
default under the Delta Downs note, which would entitle the sellers to
accelerate the maturity date of the amounts due and to foreclose on the property
encumbered by the Delta Downs mortgage:
- acceleration or maturity of our bank loans; and
- our failure to pay the Delta Downs note in full on the date it is due.
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THE EXCHANGE OFFER
The following summary of certain provisions of the registration rights
agreement does not purport to be complete and reference is made to the
provisions of the registration rights agreement, which has been filed as an
exhibit to the registration statement of which this prospectus is a part.
PURPOSE OF THE EXCHANGE OFFER
The old notes were issued and sold in a private offering to Deutsche Banc
Alex. Brown Inc., Lehman Brothers Inc., Bear, Stearns & Co. Inc., CIBC World
Markets Corp., Dresdner Kleinwort Wasserstein-Grantchester, Inc., Scotia Capital
(USA) Inc., Wells Fargo Brokerage Services, LLC, Credit Lyonnais Securities
(USA) Inc., Fleet Securities, Inc. and SG Cowen Securities Corporation as the
initial purchasers pursuant to a purchase agreement, on July 26, 2001. The
initial purchasers subsequently sold the old notes to "qualified institutional
buyers," as defined in Rule 144A under the Securities Act, in reliance on Rule
144A, and outside the United States under Regulation S of the Securities Act. As
a condition to the sale of the old notes, we entered into a registration rights
agreement with the initial purchasers on July 26, 2001. Pursuant to the
registration rights agreement, we and the guarantors agreed that we would:
1) cause to be filed, on or prior to September 24, 2001, an exchange
offer registration statement with the SEC under the Securities Act
concerning the exchange offer;
2) use commercially reasonable efforts to:
a) cause such registration statement to be declared effective by
the SEC on or prior to December 23, 2001;
b) keep the registration statement effective until the exchange
offer is consummated;
c) consummate the exchange offer on or prior to 30 business days
after the registration statement is declared effective by the SEC; and
d) keep the registration statement effective for a period of 180
days after the expiration of the exchange offer.
We are making the exchange offer to satisfy certain of our obligations
under the registration rights agreement. Other than pursuant to the registration
rights agreement, we are not required to file any registration statement to
register any outstanding old notes. Holders of old notes who do not tender their
old notes or whose old notes are tendered but not accepted in the exchange offer
must rely on an exemption from the registration requirements under the
securities laws, including the Securities Act, if they wish to sell their old
notes.
RESALE OF EXCHANGE NOTES
We are making the exchange offer in reliance on the position of the staff
of the SEC as set forth in interpretive letters addressed to third parties in
other transactions. However, we have not sought our own interpretive letter and
we can provide no assurance that the staff would make a similar determination
with respect to the exchange offer as it has in interpretive letters to third
parties. Based on these interpretations by the staff, we believe that the
exchange notes issued in the exchange offer in exchange for old notes may be
offered for resale, resold and otherwise transferred by a holder other than any
holder who is a broker-dealer, without further compliance with the registration
and prospectus delivery requirements of the Securities Act, provided that:
- holders are acquiring the exchange notes issued in the exchange offer in
the ordinary course of their business;
- holders are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of the exchange notes issued in the exchange offer; and
- holders are not an "affiliate" of ours within the meaning of Rule 144
under the Securities Act.
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If you are a broker-dealer, an "affiliate" of ours, or have an arrangement
or understanding with any person to participate in, a distribution of the
exchange notes issued in the exchange offer, you cannot rely on the position of
the staff of the SEC contained in the no-action letters mentioned above and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, unless an exemption
from registration is otherwise available.
Each broker-dealer that receives exchange notes for its own account in
exchange for old notes, which the broker-dealer acquired as a result of
market-making activities or other trading activities, may be deemed an
"underwriter" with in the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of the exchange notes. Each such broker-dealer that
receives exchange notes for its own account in exchange for old notes, where the
broker-dealer acquired the old notes as a result of market-making activities or
other trading activities, must acknowledge, as provided in the letter of
transmittal, that it will deliver a prospectus in connection with any resale of
such exchange notes. For more detailed information, see "Plan of Distribution."
In addition, to comply with the securities laws of various jurisdictions,
if applicable, the exchange notes may not be offered or sold unless they have
been registered or qualified for sale in the jurisdiction or an exemption from
registration or qualification is available and is complied with. We have agreed,
pursuant to the registration rights agreement and subject to specified
limitations therein, to register or qualify the exchange notes for offer or sale
under the securities or blue sky laws of the jurisdictions as any holder of the
exchange notes reasonably requests.
TERMS OF THE EXCHANGE
We are offering to exchange, subject to the conditions described in this
prospectus and in the letter of transmittal accompanying this prospectus, an
aggregate of $200 million principal amount of our exchange notes for $200
million of our old notes. Old notes may be exchanged in integral multiples of
$1,000 principal amount. To be exchanged, an old note must be properly tendered
and accepted. All outstanding old notes that are validly tendered and not
validly withdrawn will be exchanged for exchange notes issued on or promptly
after the expiration date of the exchange offer. Currently, there is $200
million principal amount of old notes outstanding and no exchange notes
outstanding.
We will accept for exchange any and all old notes that are validly tendered
on or prior to 5:00 p.m., New York City time, on the expiration date. Tenders of
the old notes may be withdrawn at any time prior to 5:00 p.m., New York City
time, on the expiration date. The exchange offer is not conditioned upon any
minimum principal amount of the old notes being tendered for exchange. However,
the exchange offer is subject to the terms and provisions of the registration
rights agreement. See "-- Conditions to the Exchange Offer."
The exchange notes will evidence the same indebtedness as the old notes and
will be entitled to the benefits of the indenture. The form and terms of the
exchange notes will be substantially identical to those of the old notes except
that the exchange notes will have been registered under the Securities Act.
Therefore, the exchange notes will not be subject to certain transfer
restrictions, registration rights and certain liquidated damage provisions
applicable to the old notes. See "Description of Exchange Notes."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The exchange offer will expire at 5:00 p.m. New York City time, on
, 2001, unless we, in our sole discretion, extend the exchange offer.
The time and date, as it may be extended, is referred to herein as the
"expiration date."
In order to extend the exchange offer, we will notify the exchange agent of
any extension by oral or written notice and will make a public announcement
thereof, each prior to 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date of the exchange offer.
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We expressly reserve the right at our sole discretion:
- to delay accepting the old notes;
- to extend the exchange offer;
- to terminate the exchange offer and not accept the old notes not
previously accepted if any of the conditions listed under "-- Conditions
to the Exchange Offer" are not satisfied or waived by us, by giving oral
or written notice of such delay, extension or termination to the exchange
agent; or
- to amend the terms of the exchange offer in any manner.
We will follow any delay in acceptance, extension or termination as
promptly as practicable by oral or written notice to the exchange agent. If we
amend the exchange offer in a manner we determine constitutes a material change,
we will promptly disclose the amendment in a prospectus supplement that we will
distribute to the registered holders of the old notes. We may also extend the
exchange offer for a period of at least five business days, depending upon the
significance of the amendment and the manner of disclosure.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or exchange the exchange notes for, any old
notes, and may terminate the exchange offer as provided in this prospectus
before the acceptance of the old notes, if, in our sole judgment, the exchange
offer violates applicable law, rules or regulations or an applicable
interpretation of the staff of the SEC.
If we determine in our sole discretion that any of these conditions are not
satisfied, we may:
- refuse to accept any old notes and return all tendered old notes to you;
- extend the exchange offer and retain all old notes tendered before the
exchange offer expires, subject, however, to your rights to withdraw the
old notes;
- waive the unsatisfied conditions with respect to the exchange offer and
accept all properly tendered old notes that have not been withdrawn; or
- amend the terms of the exchange offer in any manner.
If the waiver or amendment constitutes a material change to the exchange
offer, we will promptly disclose the waiver or amendment by means of a
prospectus supplement that we will distribute to the registered holders of the
old notes, and may extend the exchange offer for a period of at least five
business days, depending on the significance of the waiver and the manner of
disclosure to the registered holders of the old notes.
The exchange offer is not conditioned upon any minimal principal amount of
notes being tendered.
ACCRUED INTEREST
Interest on the exchange notes will accrue at the rate of 9.25% per annum
and will be payable semi-annually in arrears on February 1 and August 1,
commencing on February 1, 2002. Interest on the exchange notes will accrue from
the date of original issuance or, if interest has already been paid, from the
date it was most recently paid. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months. Interest on the old notes
accepted for exchange, which interest accrued at the rate of 9.25% per annum,
will cease to accrue on the day prior to the issuance of the exchange notes.
PROCEDURES FOR TENDERING OLD NOTES
Our acceptance of old notes tendered by a holder will constitute a binding
agreement between the tendering holder and us upon the terms and subject to the
conditions described in this prospectus and in the letter of transmittal
accompanying this prospectus.
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A holder of old notes may tender the old notes by:
- properly completing and signing the letter of transmittal;
- properly completing any required signature guarantees;
- properly completing any other documents required by the letter of
transmittal; and
- delivering all of the above, together with the certificate or
certificates representing the old notes being tendered, to the exchange
agent at its address set forth under "-- Exchange Agent" on or prior to
the expiration date; or
- complying with all the procedures for book-entry transfer described
below; or
- complying with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF THE DELIVERY
IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL PROPERLY INSURED, WITH RETURN
RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY. HOLDERS SHOULD NOT SEND OLD NOTES OR LETTERS OF
TRANSMITTAL TO US.
The signature on the letter of transmittal need not be guaranteed if:
- tendered old notes are registered in the name of the signer of the letter
of transmittal; and
- the exchange notes to be issued in exchange for the old notes are to be
issued in the name of the holder; and
- any untendered old notes are to be reissued in the name of the holder.
In any other case:
- the certificates representing the tendered old notes must be properly
endorsed for transfer by the registered holder or be accompanied by a
properly completed bond power from the registered holder or appropriate
powers of attorney, in form satisfactory to us;
- the tendered old notes must be duly executed by the holder; and
- signatures on the endorsement, bond power or powers of attorney must be
guaranteed by a bank, broker, dealer, credit union, savings association,
clearing agency or other institution, each an "eligible institution" that
is a member of a recognized signature guarantee medallion program within
the meaning of Rule 17Ad-15 under the Exchange Act.
If the exchange notes and/or old notes not exchanged are to be delivered to
an address other than that of the registered holder appearing on the note
registrar for the old notes, the signature in the letter of transmittal must be
guaranteed by an eligible institution.
If the letter of transmittal or any old notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
us, such persons must submit proper evidence satisfactory to us of their
authority to so act.
The exchange agent will make a request within two business days after the
date of receipt of this prospectus to establish accounts with respect to the old
notes at The Depository Trust Company, the "book-entry transfer facility," for
the purpose of facilitating the exchange offer. We refer to The Depository Trust
Company in this prospectus as "DTC." Subject to establishing the accounts, any
financial institution that is a participant in the book-entry transfer
facility's system may make book-entry delivery of old notes by causing the
book-entry transfer facility to transfer the old notes into the exchange agent's
account with respect to the old notes in accordance with the book-entry transfer
facility's procedures for the transfer. Although delivery of old notes may be
effected through book-entry transfer into the exchange agent's account at the
book-entry
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transfer facility, an appropriate letter of transmittal with any required
signature guarantee and all other required documents, or an agent's message,
must in each case be properly transmitted to and received or confirmed by the
exchange agent at its address set forth below prior to the expiration date, or,
if the guaranteed delivery procedures described below are complied with, within
the time period provided under such procedures.
The exchange agent and DTC have confirmed that the exchange offer is
eligible for the DTC Automated Tender Offer Program. We refer to the Automated
Tender Offer Program in this prospectus as "ATOP." Accordingly, DTC participants
may, in lieu of physically completing and signing the letter of transmittal and
delivering it to the exchange agent, electronically transmit their acceptance of
the exchange offer by causing DTC to transfer old notes to the exchange agent in
accordance with DTC's ATOP procedures for transfer. DTC will then send an
agent's message.
The term "agent's message" means a message which:
- is transmitted by DTC;
- received by the exchange agent and forming part of the book-entry
transfer;
- states that DTC has received an express acknowledgment from a participant
in DTC that is tendering old notes which are the subject of the
book-entry transfer;
- states that the participant has received and agrees to be bound by all of
the terms of the letter of transmittal; and
- states that we may enforce the agreement against the participant.
Each broker-dealer that receives exchange notes for its own account in
exchange for old notes, where the broker-dealer acquired the old notes as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of the exchange
notes. For additional information, see "Plan of Distribution."
If you beneficially own the old notes registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and wish to tender your
beneficially owned old notes in the exchange offer, you should contact the
registered holder promptly and instruct it to tender the old notes on your
behalf. The beneficial owner may also obtain and include with the letter of
transmittal the old notes properly endorsed for transfer by the registered
holder or accompanied by a properly completed bond power from the registered
holder, with signatures on the endorsement or bond power guaranteed by an
eligible institution. If the beneficial owner wishes to tender directly, the
beneficial owner must, prior to completing and executing the letter of
transmittal and tendering the old notes, make appropriate arrangements to
register ownership of the old notes in the beneficial owner's name. Beneficial
owners should be aware that the transfer of registered ownership may take
considerable time.
By tendering, each registered holder of old notes will represent to us
that, among other things:
- the exchange notes to be acquired in connection with the exchange offer
by the holder and each beneficial owner of the old notes are being
acquired by the holder and each beneficial owner in the ordinary course
of business of the holder and each beneficial owner;
- the holder and each beneficial owner are not participating, do not intend
to participate, and have no arrangement or understanding with any person
to participate, in the distribution of the exchange notes;
- the holder and each beneficial owner acknowledge and agree that any
person participating in the exchange offer for the purpose of
distributing the exchange notes must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with
a secondary resale transaction of the exchange notes acquired by such
person and cannot rely on the position of the staff of the SEC set forth
in no-action letters that are discussed herein under "-- Resales of
Exchange Notes";
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- that if the holder is a broker-dealer that acquired old notes as a result
of market making or other trading activities, it will deliver a
prospectus in connection with any resale of exchange notes acquired in
the exchange offer;
- the holder and each beneficial owner understand that a secondary resale
transaction described above should be covered by an effective
registration statement containing the selling security holder information
required by Item 507 or 508, as applicable, of Regulation S-K of the
Commission;
- neither the holder nor any beneficial owner is an "affiliate," as defined
under Rule 144 of the Securities Act, of ours; and
- in connection with a book-entry transfer, each participant will confirm
that it makes the representations and warranties contained in the letter
of transmittal.
All questions as to the validity, form, eligibility, including time of
receipt, and acceptance of old notes tendered for exchange will be determined by
us in our sole discretion, which determination will be final and binding. We
reserve the absolute right to reject any and all tenders of any old notes not
properly tendered or not to accept any old notes which acceptance might, in our
judgment or the judgment of our counsel, be unlawful. We also reserve the
absolute right to waive any defects or irregularities or conditions of the
exchange offer as to any old notes either before or after the expiration date,
including the right to waive the ineligibility of any holder who seeks to tender
old notes in the exchange offer.
The interpretation of the terms and conditions of the exchange offer
including the letter of transmittal and the instructions contained in the letter
of transmittal by us will be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of old notes for
exchange must be cured within such reasonable period of time as we determine.
Neither we, the exchange agent nor any other person has any duty to give
notification of any defect or irregularity with respect to any tender of old
notes for exchange, nor will any of us incur any liability for failure to give
such notification.
GUARANTEED DELIVERY PROCEDURES
If you desire to tender your old notes, but:
- your old notes are not immediately available; or
- you cannot deliver your old notes, the letter of transmittal or any other
documents required by the letter of transmittal to the exchange agent
prior to the expiration date; or
- the procedures for book-entry transfer of your old notes cannot be
completed prior to the expiration date,
you may effect a tender according to the guaranteed delivery procedures set
forth in the letter of transmittal.
Pursuant to such procedures:
- your tender of old notes must be made by or through an eligible
institution and you must properly complete and duly execute a notice of
guaranteed delivery (as defined in the letter of transmittal);
- on or prior to the expiration date, the exchange agent must have received
from you and the eligible institution a properly completed and duly
executed notice of guaranteed delivery (by facsimile transmission, mail
or hand delivery) setting forth the name and address of the holder, the
certificate number or numbers of the tendered old notes, and the
principal amount of tendered old notes, stating that the tender is being
made thereby and guaranteeing that, within three (3) business days after
the date of delivery of the notice of guaranteed delivery, the tendered
old notes, a duly executed letter of transmittal and any other required
documents will be deposited by the eligible institution with the exchange
agent; and
- such properly completed and executed documents required by the letter of
transmittal and the tendered old notes in proper form for transfer (or
confirmation of a book-entry transfer of such old notes into the exchange
agent's account at DTC) must be received by the exchange agent within
three (3) business days after the expiration date.
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Any holder who wishes to tender their old notes pursuant to the guaranteed
delivery procedures described above must ensure that the exchange agent receives
the notice of guaranteed delivery relating to such old notes prior to 5:00 p.m.,
New York City time, on the expiration date.
Unless old notes being tendered by the above-described method are deposited
with the exchange agent, a tender will be deemed to have been received as of the
date when the tendering holder's properly completed and duly signed letter of
transmittal, or a properly transmitted agent's message, accompanied by the old
notes or a confirmation of book-entry transfer of the old notes into the
exchange agent's account at the book-entry transfer facility is received by the
exchange agent.
Issuances of exchange notes in exchange for old notes tendered pursuant to
a notice of guaranteed delivery will be made only against deposit of the letter
of transmittal and any other required documents and the tendered old notes or a
confirmation of book-entry and an agent's message.
WITHDRAWAL RIGHTS
Tenders of old notes may be withdrawn at any time prior to the expiration
date. For a withdrawal to be effective, a written notice of withdrawal sent by
telegram, facsimile transmission, with receipt confirmed by telephone, or letter
must be received by the exchange agent at the address set forth in this
prospectus prior to the expiration date. Any notice of withdrawal must:
- specify the name of the person having tendered the old notes to be
withdrawn;
- identify the old notes to be withdrawn, including the certificate number
or numbers and principal amount of such old notes;
- specify the principal amount of old notes to be withdrawn;
- include a statement that the holder is withdrawing his election to have
the old notes exchanged;
- be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the old notes were tendered or as
otherwise described above, including any required signature guarantees,
or be accompanied by documents of transfer sufficient to have the trustee
under the indenture register the transfer of the old notes into the name
of the person withdrawing the tender; and
- specify the name in which any such old notes are to be registered, if
different from that of the person who tendered the old notes.
The exchange agent will return the properly withdrawn old notes promptly
following receipt of the notice of withdrawal. If old notes have been tendered
pursuant to the procedure for book-entry transfer, any notice of withdrawal must
specify the name and number of the account at the book-entry transfer facility
to be credited with the withdrawn old notes or otherwise comply with the
book-entry transfer facility procedure. All questions as to the validity of
notices of withdrawals, including time of receipt, will be determined by us in
our sole discretion and our determination will be final and binding on all
parties.
Any old notes so withdrawn will be deemed not to have been validly tendered
for exchange for purposes of the exchange offer. Any old notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the holder without cost to the holder. In the case of old notes
tendered by book-entry transfer into the exchange agent's account at the
book-entry transfer facility pursuant to the book-entry transfer procedures
described above, the old notes will be credited to an account with the
book-entry transfer facility specified by the holder. In either case, the old
notes will be returned as soon as practicable after withdrawal, rejection of
tender or termination of the exchange offer. Properly withdrawn old notes may be
retendered by following one of the procedures described under "-- Procedures for
Tendering Old Notes" above at any time prior to the expiration date.
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ACCEPTANCE OF OLD NOTES FOR EXCHANGE AND DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all the conditions to the exchange offer, we
will accept any and all old notes that are properly tendered in the exchange
offer prior to 5:00 p.m., New York City time, on the expiration date. The
exchange notes issued pursuant to the exchange offer will be delivered promptly
following the expiration date. For purposes of the exchange offer, we will be
deemed to have accepted validly tendered old notes, when, as, and if we have
given oral or written notice thereof to the exchange agent.
In all cases, issuances of exchange notes for old notes that are accepted
for exchange pursuant to the exchange offer will be made only after timely
receipt by the exchange agent of such old notes, a properly completed and duly
executed letter of transmittal and all other required documents (or of
confirmation of a book-entry transfer of such old notes into the exchange
agent's account at DTC); provided, however, that we reserve the absolute right
to waive any defects or irregularities in the tender or conditions of the
exchange offer. If any tendered old notes are not accepted for any reason, such
unaccepted old notes will be returned without expense to the tendering holder
thereof as promptly as practicable after the expiration or termination of the
exchange offer.
EXCHANGE AGENT
The Bank of New York, has been appointed as the exchange agent for the
exchange offer. All executed letters of transmittal should be directed to the
exchange agent at one of the addresses set forth below:
THE BANK OF NEW YORK
BY REGISTERED OR CERTIFIED MAIL, OVERNIGHT DELIVERY, OR HAND DELIVERY:
The Bank of New York
101 Barclay Street
Bond Redemption Unit
Lobby Level
New York, NY 10286
Attention: Santino Ginocchietti
BY FACSIMILE TRANSMISSION:
(212) 815-6339
CONFIRM BY TELEPHONE:
(212) 815-6331
FOR ADDITIONAL INFORMATION:
Santino Ginocchietti
101 Barclay Street, 21W
New York, NY 10286
(212) 815-6331
You should direct questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal and
requests for notices of guaranteed delivery to the exchange agent at the address
and telephone number set forth in the letter of transmittal.
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ON THE LETTER OF
TRANSMITTAL, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
THE ONE SET FORTH ON THE LETTER OF TRANSMITTAL, WILL NOT CONSTITUTE A VALID
DELIVERY.
FEES AND EXPENSES
Pursuant to the registration rights agreement, we are required to pay all
expenses incident to the consummation of the exchange offer, including our
compliance, as well as the guarantors' compliance, with
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the registration rights agreement, regardless of whether a registration
statement becomes effective, including without limitation:
- all registration and filing fees and expenses;
- all fees and expenses of compliance with federal securities and state
blue sky or securities laws;
- all expenses of printing (including printing certificates for the
exchange notes to be issued in the exchange offer and printing of
prospectuses), messenger and delivery services and telephone;
- all fees and disbursements of our counsel;
- all application and filing fees in connection with listing the exchange
notes on a national securities exchange or automated quotation system
pursuant to the requirements of the registration rights agreement; and
- all fees and disbursements of our independent certified public
accountants (including the expenses of any special audit and comfort
letters required by or incident to such performance).
We will pay all transfer taxes, if any, applicable to the exchange of the
old notes pursuant to the exchange offer. If, however, a transfer tax is imposed
for any reason other than the exchange of the old notes pursuant to the exchange
offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption is not submitted
with the letter of transmittal, the amount of such transfer taxes will be billed
directly to such tendering holder.
ACCOUNTING TREATMENT
The exchange notes will be recorded at the same carrying value as the old
notes, as reflected in our accounting records on the date of the exchange.
Accordingly, we will not recognize a gain or loss for accounting purposes. The
expenses of the exchange offer will be amortized over the term of the exchange
notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of old notes who do not exchange their old notes for exchange notes
pursuant to the exchange offer will continue to be subject to the restrictions
on transfer of the old notes as described in the legend on the old notes. Old
notes not exchanged pursuant to the exchange offer will continue to remain
outstanding in accordance with their terms. In general, the old notes may not be
offered or sold unless registered under the Securities Act, except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. We do not currently anticipate that we will
register the old notes under the Securities Act.
Participation in the exchange offer is voluntary, and holders of old notes
should carefully consider whether to participate. Holders of old notes are urged
to consult their financial and tax advisors in making their own decision on what
action to take. As a result of the making of, and upon acceptance for exchange
of all validly tendered old notes pursuant to the terms of, this exchange offer,
we will have fulfilled a covenant contained in the registration rights
agreement. Holders of old notes who do not tender their old notes in the
exchange offer will continue to hold the old notes and will be entitled to all
the rights and limitations applicable to the old notes under the indenture,
except for any rights under the registration rights agreement that by their
terms terminate or cease to have further effectiveness as a result of the making
of this exchange offer. All untendered old notes will continue to be subject to
the restrictions on transfer described in the indenture. To the extent that old
notes are tendered and accepted in the exchange offer, the trading market for
untendered old notes could be adversely affected.
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SHELF REGISTRATION STATEMENT
If, pursuant to the terms of the registration rights agreement:
1) the exchange offer is not permitted by applicable law or policy of
the SEC; or
2) any holder of the old notes notifies us within 20 days following
the date we are required to consummate the exchange offer that:
a) such holder was prohibited by law or policy of the SEC from
participating in the exchange offer; or
b) such holder cannot resell the exchange notes acquired by it in
the exchange offer to the public without delivering a prospectus and the
prospectus contained in the exchange offer registration statement is not
appropriate or available for such resales by such holder; or
c) such holder is a broker-dealer and holds old notes acquired
directly from us or any of our affiliates,
then we and the guarantors shall use commercially reasonable efforts to file a
shelf registration statement pursuant to Rule 415 under the Securities Act
(which may be an amendment to the exchange offer registration statement),
subject to the terms set forth in the registration rights agreement, and cause
such shelf registration statement to become effective on or prior to 90 days
after such registration statement was required to be filed.
In addition, pursuant to the registration rights agreement, we are
required, to the extent necessary to ensure that the shelf registration
statement is available for sales of old notes by certain holders of old notes,
to use commercially reasonable efforts to keep any shelf registration statement
so required continuously effective, supplemented, amended and current as
required by and subject to the provisions of the registration rights agreement,
for a period ranging from at least two years to less than one, depending on the
circumstances, all as set forth in the registration rights agreement.
LIQUIDATED DAMAGES
If, pursuant to the terms of the registration rights agreement, one of the
following occurs, each a "registration default":
- we and the guarantors do not file any of the registration statements
required by the registration rights agreement with the SEC on or prior to
the applicable filing deadline; or
- such registration statement has not been declared effective by the SEC on
or prior to the applicable effectiveness deadline; or
- we and the guarantors fail to consummate the exchange offer on or prior
to 30 business days after the registration statement is declared
effective by the SEC; or
- any registration statement required by the registration rights agreement
is filed and declared effective but shall thereafter cease to be
effective for the applicable period or fail to be useable for its
intended purpose without being succeeded immediately by a post-effective
amendment or another registration statement that cures such failure and
that is itself declared effective immediately,
then we and the guarantors jointly and severally agree to pay to each holder of
old notes affected thereby liquidated damages in an amount equal to $.05 per
$1,000 in principal amount of old notes held by such holder for each week that
the registration default described above continues for the first 90-day period
immediately following the occurrence of such registration default.
The amount of the liquidated damages increase by an additional $.05 per
week per $1,000 in principal amount of notes with respect to each subsequent
90-day period until all registration defaults described above have been cured,
up to a maximum amount of liquidated damages of $.50 per week per $1,000 in
principal amount of old notes; provided that we and the guarantors shall in no
event be required to pay liquidated damages for more than one registration
default at any given time.
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DESCRIPTION OF EXCHANGE NOTES
You can find the definitions of certain terms used in this description
under the subheading "-- Certain Definitions." In this description, the word
"Boyd Gaming" refers only to Boyd Gaming Corporation and not to any of its
subsidiaries.
Boyd Gaming will issue the exchange notes under an indenture among itself,
the Guarantors and The Bank of New York, as trustee. The terms of the exchange
notes include those stated in the indenture and those made part of the indenture
by reference to the Trust Indenture Act of 1939.
The following description is a summary of the material provisions of the
indenture. It does not restate this agreement in its entirety. We urge you to
read the indenture because the indenture, and not this description, define your
rights as holders of the exchange notes. Certain defined terms used in this
description but not defined below under "-- Certain Definitions" have the
meanings assigned to them in the indenture. A copy of the indenture is filed as
an exhibit to the registration statement of which this prospectus is a part.
Except as otherwise indicated below, the following summary applies to both
the exchange notes and the old notes. As used herein, the term "notes" means
both the exchange notes and the old notes, unless otherwise indicated.
The form and term of the exchange notes will be identical in all material
respects to the form and terms of the old notes, except that the exchange notes
will be registered under the Securities Act, and therefore the exchange notes
will not be subject to certain transfer restrictions, registration rights and
certain liquidated damage provisions applicable to the old notes prior to the
consummation of the exchange offer. See "The Exchange Offer."
The registered Holder of a note will be treated as the owner of it for all
purposes. Only registered Holders will have rights under the indenture.
BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES
THE NOTES
- are general unsecured obligations of Boyd Gaming;
- are equal in right of payment with all existing and future unsecured
senior Indebtedness of Boyd Gaming, including its 9.25% senior notes due
2003;
- are senior in right of payment to all existing and future subordinated
Indebtedness of Boyd Gaming, including its 9.50% Senior Subordinated
Notes due 2007; and
- are unconditionally guaranteed by the Guarantors.
However, the notes are effectively subordinated to all borrowings under our
bank credit facility, which is secured by substantially all of the assets of
Boyd Gaming and the Guarantors. See "Risk Factors -- We are a holding company
and depend on the business of our subsidiaries to satisfy our obligations under
the notes" and "Risk Factors -- The notes will be effectively subordinated to
our secured indebtedness and the secured indebtedness of our guarantor
subsidiaries."
THE GUARANTEES
The notes are guaranteed by all of Boyd Gaming's current significant
subsidiaries (other than the subsidiaries owning Delta Downs). The Guarantors
will include all of the significant subsidiaries which are guarantors of our
9.25% senior notes, plus certain additional subsidiaries.
Each guarantee of the notes:
- is a general unsecured obligation of the Guarantor; and
- is equal in right of payment with all existing and future unsecured
senior Indebtedness of that Guarantor.
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The operations of Boyd Gaming are conducted through its subsidiaries and,
therefore, Boyd Gaming depends on the cash flow of its subsidiaries to meet its
obligations, including its obligations under the notes. As indicated above, not
all of our subsidiaries will guarantee the notes. The guarantor subsidiaries
generated substantially all of our consolidated revenues in the twelve month
period ended June 30, 2001 and held substantially all of our consolidated assets
as of June 30, 2001. The subsidiaries which directly or indirectly acquired the
assets of Delta Downs subsequent to March 31, 2001 will not initially guarantee
the notes.
In the event of a bankruptcy, liquidation or reorganization of any of the
non-guarantor subsidiaries, such non-guarantor subsidiary must pay the Holders
of its debt and its trade creditors before it will be able to distribute any of
its assets to us. The notes will be effectively subordinated in right of payment
to all Indebtedness and other liabilities and commitments (including trade
payables and lease obligations) of Boyd Gaming's non-guarantor subsidiaries.
Thus, any right of Boyd Gaming to receive assets of any of its non-guarantor
subsidiaries upon the subsidiary's liquidation or reorganization (and the
consequent right of the Holders of the notes to participate in those assets)
will be effectively subordinated to the claims of that subsidiary's creditors,
except to the extent that Boyd Gaming is itself recognized as a creditor of the
subsidiary, in which case the claims of Boyd Gaming would still be subordinate
in right of payment to any security in the assets of the subsidiary and any
indebtedness of the subsidiary senior to that held by Boyd Gaming. See "Risk
Factors -- We are a holding company and depend on the business of our
subsidiaries to satisfy our obligations under the notes."
As of the date of the indenture, all of our subsidiaries will be
"Restricted Subsidiaries." Under the circumstances described below under the
subheading "Certain Definitions -- Unrestricted Subsidiary," we will, in the
future, be permitted to designate certain of our subsidiaries as "Unrestricted
Subsidiaries." Our Unrestricted Subsidiaries will not be subject to the
restrictive covenants in the indenture and will not guarantee the notes.
PRINCIPAL, MATURITY AND INTEREST
Boyd Gaming will exchange the old notes, which have an aggregate principal
amount of $200 million, for the exchange notes. Boyd Gaming will issue exchange
notes in denominations of $1,000 and integral multiples of $1,000. The exchange
notes will mature on August 1, 2009.
Boyd Gaming may issue additional notes from time to time after this
offering. Any offering of additional notes is subject to the covenants described
below under the caption "Certain Covenants -- Limitation on Indebtedness." The
notes and any additional notes subsequently issued under the indenture will be
treated as a single class for all purposes under the indenture, including,
without limitation, waivers, amendments, redemptions and offers to purchase.
Interest on the notes will accrue at the rate of 9.25% per annum and will
be payable semi-annually in arrears on February 1 and August 1, commencing on
February 1, 2002. Boyd Gaming will make each interest payment to the Holders of
record existing on the immediately preceding January 15 and July 15.
Interest on the notes will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
All payments on the notes will be made at the office or agency of the
paying agent and registrar within the City and State of New York unless Boyd
Gaming elects to make interest payments by check mailed to the Holders at their
address set forth in the register of Holders. Principal and interest shall be
considered paid on the date due if on such date the trustee or paying agent
holds money sufficient to pay all principal and interest then due.
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PAYING AGENT AND REGISTRAR FOR THE NOTES
The trustee will initially act as paying agent and registrar. Boyd Gaming
may change the paying agent or registrar without prior notice to the Holders of
the notes, and Boyd Gaming or any of its Subsidiaries may act as paying agent or
registrar.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange notes in accordance with the indenture.
The registrar and the trustee may require a Holder to furnish appropriate
endorsements and transfer documents in connection with a transfer of notes.
Holders will be required to pay all taxes due on transfer. Boyd Gaming is not
required to transfer or exchange any note selected for redemption. Also, Boyd
Gaming is not required to transfer or exchange any note for a period of fifteen
days before a selection of notes to be redeemed.
SUBSIDIARY GUARANTEES
The notes will be guaranteed by each of Boyd Gaming's current significant
subsidiaries, other than Boyd Louisiana Racing, Inc. and Boyd Racing, L.L.C.
(the "Delta Downs Subsidiaries"). Boyd Gaming has also agreed to cause any
non-guarantor Restricted Subsidiary which is a Restricted Subsidiary on the
Issue Date and which contributes more than 5% of Boyd Gaming's Consolidated
EBITDA in any fiscal year commencing after the Issue Date to become a Guarantor
under the indenture within 120 days after the end of the fiscal year in which
such obligation arises. The notes will also be guaranteed by any future
subsidiaries to which any Guarantor transfers assets unless:
(1) with respect to each such transfer the transfer is at least as
favorable to such Guarantor as could be obtained in a similar transaction
in arm's-length dealings with a Person who is not an Affiliate of such
Guarantor, and with respect to each transfer (a) involving aggregate
payments in excess of $5 million, Boyd Gaming delivers to the trustee an
Officers' Certificate certifying that such transfer was approved by a
majority of the disinterested members of the Board of Directors of Boyd
Gaming as complying with the foregoing standard and (b) involving aggregate
payments in excess of $10 million, Boyd Gaming delivers to the trustee an
opinion letter from an Independent Advisor to the effect that such transfer
is fair, from a financial point of view, to the Guarantor; and
(2) each such transfer is for Property other than securities of the
transferee and its Affiliates.
Any Person required by the preceding sentence to become a Guarantor because
of a transfer of assets must be or become a Restricted Subsidiary at the time of
such transfer.
These Subsidiary Guarantees will be joint and several obligations of the
Guarantors. The obligations of each Guarantor under its Subsidiary Guarantee
will be limited as necessary to prevent that Subsidiary Guarantee from
constituting a fraudulent conveyance under applicable law. See "Risk
Factors -- Fraudulent conveyance matters."
A Guarantor may not 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 Boyd Gaming or
another Guarantor, unless:
(1) immediately after giving effect to that transaction, no Default or
Event of Default exists; and
(2) either:
(a) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation
or merger assumes all the obligations of that Guarantor under the
indenture, its Subsidiary Guarantee and the registration rights
agreement pursuant to a supplemental indenture satisfactory to the
trustee; or
(b) the Net Proceeds of such sale or other disposition are applied
in accordance with the applicable provisions of the indenture.
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The Subsidiary Guarantee of a Guarantor will be released:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or after
giving effect to such transaction) a Subsidiary of Boyd Gaming, if the sale
or other disposition complies with the "Asset Sale" provisions of the
indenture; or
(2) in connection with any sale of all of the Capital Stock of a
Guarantor to a Person that is not (either before or after giving effect to
such transaction) a Subsidiary of Boyd Gaming, if the sale complies with
the "Asset Sale" provisions of the indenture.
See "-- Repurchase at the Option of Holders -- Asset Sales; Event of Loss."
OPTIONAL REDEMPTION
At any time prior to August 1, 2004, Boyd Gaming may on any one or more
occasions redeem up to 35% of the aggregate principal amount of the notes issued
under the indenture at a redemption price of 109.25% of the principal amount,
plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of one or more Public Equity
Offerings; provided that:
(1) at least 65% of the aggregate principal amount of notes issued
under the indenture remains outstanding immediately after the occurrence of
such redemption (excluding notes held by Boyd Gaming and its Subsidiaries);
and
(2) the redemption occurs within 45 days of the date of the closing of
such Public Equity Offering.
Except pursuant to the preceding paragraph, the notes will not be
redeemable at Boyd Gaming's option prior to August 1, 2005.
On or after August 1, 2005, Boyd Gaming may redeem all or a portion of the
notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on August 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2005........................................................ 104.625%
2006........................................................ 102.313%
2007 and thereafter......................................... 100.000%
MANDATORY REDEMPTION
Boyd Gaming is not required to make mandatory redemption or sinking fund
payments with respect to the notes.
MANDATORY DISPOSITION OR REDEMPTION PURSUANT TO GAMING LAWS
If a Holder or beneficial owner of a note is required to be licensed,
qualified or found suitable under applicable Gaming Laws and is not so licensed,
qualified or found suitable within any time period specified by the applicable
Gaming Authority, the Holder shall be obliged, at the request of Boyd Gaming, to
dispose of such Holder's notes within a time period prescribed by Boyd Gaming or
such other time period prescribed by such Gaming Authority (in which event Boyd
Gaming's obligation to pay any interest after the receipt of such notice shall
be limited as provided in such Gaming Laws), and thereafter, Boyd Gaming shall
have the right to redeem, on the date fixed by Boyd Gaming for the redemption of
such notes, such Holder's notes at a redemption price equal to the lesser of (1)
the lowest closing sale price of the notes on any trading day during the 120-day
period ending on the date upon which Boyd Gaming shall have received notice from
a Gaming Authority of such Holder's disqualification or (2) the price at which
such Holder or beneficial owner acquired the notes, unless a different
redemption price is required by such Gaming Authority, in which event such
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required price shall be the redemption price. Boyd Gaming is not required to pay
or reimburse any Holder or beneficial owner of a note for the costs of licensure
or investigation for such licensure, qualification or finding of suitability.
Any Holder or beneficial owner of a note required to be licensed, qualified or
found suitable under applicable Gaming Laws must pay all investigative fees and
costs of the Gaming Authorities in connection with such qualification or
application therefor.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
If a Change of Control occurs, each Holder of notes will have the right to
require Boyd Gaming to repurchase all or any part (equal to $1,000 or an
integral multiple of $1,000) of that Holder's notes pursuant to a Change of
Control Offer on the terms set forth in the indenture. In the Change of Control
Offer, Boyd Gaming will offer a Change of Control Payment in cash equal to 101%
of the aggregate principal amount of notes repurchased plus accrued and unpaid
interest and Liquidated Damages, if any, on the notes repurchased, to the date
of purchase. Within 30 days following any Change of Control, Boyd Gaming will
mail a notice to each Holder stating, among other things:
(1) that a Change of Control has occurred and a Change of Control
Offer is being made pursuant to the covenant entitled "Repurchase at the
Option of Holders -- Change of Control" and that all notes (or portions
thereof) timely tendered will be accepted for payment;
(2) the purchase price and the Change of Control Payment Date, 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 the
indenture and described in such notice;
(3) that any note (or portion thereof) accepted for payment (and for
which payment has been duly provided on the Change of Control Payment Date)
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date;
(4) that any notes (or portions thereof) not tendered will continue to
accrue interest;
(5) a description of the transaction or transactions constituting the
Change of Control; and
(6) the procedures that Holders must follow in order to tender their
notes (or portions thereof) for payment and the procedures that Holders
must follow in order to withdraw an election to tender notes (or portions
thereof) for payment.
Boyd Gaming 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 Change of
Control provisions of the indenture, Boyd Gaming will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Change of Control provisions of the indenture by virtue of
such conflict.
On the Change of Control Payment Date, Boyd Gaming 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 Boyd
Gaming.
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
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surrendered, if any; provided that each new note will be in a principal amount
of $1,000 or an integral multiple of $1,000.
The provisions described above that require Boyd Gaming to make a Change of
Control Offer following a Change of Control will be applicable whether or not
any other provisions of the indenture are applicable. Except as described above
with respect to a Change of Control, the indenture does not contain provisions
that permit the Holders of the notes to require that Boyd Gaming repurchase or
redeem the notes in the event of a takeover, recapitalization or similar
transaction.
In the event the notes have Investment Grade Status at the earlier of the
public announcement of (x) the occurrence of a Change of Control or (y) (if
applicable) the intention of Boyd Gaming to effect a Change of Control, the
foregoing Change of Control provisions shall not apply unless both a Change of
Control with respect to Boyd Gaming and a Rating Decline shall occur. If the
notes have Investment Grade Status at the earlier of the public announcement of
(x) the occurrence of a Change of Control or (y) (if applicable) the intention
of Boyd Gaming to effect a Change of Control, and Boyd Gaming effects defeasance
of the notes under the indenture prior to the date of a Rating Decline, Boyd
Gaming will not be obligated to make a repurchase offer as a result of such
Change of Control and Rating Decline. While Boyd Gaming has no present intention
to defease the notes, Boyd Gaming could elect to defease the notes in the event
that a proposed corporate action could not be undertaken in compliance with the
restrictive covenants in the notes and the terms of the notes did not then
permit Boyd Gaming to effect a redemption. The effect of the preceding provision
is that in the event that the two designated ratings agencies rated the notes
"investment grade" prior to such Change of Control, Boyd Gaming would only be
required to make a Change of Control Offer if, within 90 days of the
announcement of such Change of Control, at least one of the two designated
ratings agencies have rated the notes "non-investment grade" and Boyd Gaming
does not elect to defease the notes prior to the announcement of such
"non-investment grade" ratings.
There can be no assurance that Boyd Gaming will be able to fund any
repurchase of the notes pursuant to a Change of Control Offer. Boyd Gaming's
existing bank credit facility contains, and any future credit facilities or
other agreements relating to indebtedness of Boyd Gaming may contain,
prohibitions or restrictions on Boyd Gaming's ability to effect such a
repurchase. In the event a Change of Control Offer is mandated at a time when
such prohibitions or restrictions are in effect, Boyd Gaming could seek the
consent of its lenders to the purchase of notes or could attempt to refinance
the borrowings that contain such prohibition. If Boyd Gaming does not obtain
such a consent or repay such borrowings, Boyd Gaming will be effectively
prohibited from purchasing notes. In such case, Boyd Gaming's failure to
purchase tendered notes would constitute an Event of Default under the
indenture. See "Risk Factors -- Financing a Change of Control Offer."
The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of Boyd Gaming and its
Subsidiaries taken as a whole. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
Holder of notes to require Boyd Gaming to repurchase its notes as a result of a
sale, lease, transfer, conveyance or other disposition of less than all of the
assets of Boyd Gaming and its Subsidiaries taken as a whole to another Person or
group may be uncertain.
ASSET SALES; EVENT OF LOSS
Other than upon an Event of Loss, Boyd Gaming shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, consummate any
Asset Sale after the Issue Date, where the Property subject to such Asset Sale
has an aggregate Fair Market Value equal to or in excess of $10 million, unless:
(1) Boyd Gaming or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the Property subject to such Asset Sale;
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(2) at least 75% of such consideration consists of cash or Temporary
Cash Investments; provided, however, that for purposes of this clause (2),
(A) the assumption of Indebtedness of Boyd Gaming or a Restricted
Subsidiary which is not subordinated to the notes or any Guarantee shall
be deemed to be Temporary Cash Investments if Boyd Gaming, such
Restricted Subsidiary, and all other Restricted Subsidiaries of Boyd
Gaming, to the extent any of the foregoing are liable with respect to
such Indebtedness, are expressly released from all liability for such
Indebtedness by the Holder thereof in connection with such Asset Sale,
(B) any securities or notes received by Boyd Gaming or such
Restricted Subsidiary from such transferee that are converted by Boyd
Gaming or such Restricted Subsidiary into cash or Temporary Cash
Investments within ten business days of the date of such Asset Sale
shall be deemed to be Temporary Cash Investments, and
(C) Boyd Gaming and its Restricted Subsidiaries may receive
consideration in the form of securities exceeding 25% of the
consideration for one or more Asset Sales so long as Boyd Gaming and its
Restricted Subsidiaries do not hold such securities having an aggregate
Fair Market Value in excess of $50 million at any time outstanding;
(3) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect, on a pro
forma basis, to, such Asset Sale; and
(4) the Board of Directors of Boyd Gaming determines in good faith
that such Asset Sale complies with clauses (1) and (2).
Upon an Event of Loss incurred by Boyd Gaming or any of its Restricted
Subsidiaries, the Net Proceeds received from such Event of Loss shall be applied
in the same manner as proceeds from Asset Sales described above and pursuant to
the procedures set forth below.
Within 270 days after the receipt of the Net Proceeds of an Asset Sale or
Event of Loss, an amount equal to 100% of the Net Proceeds from such Asset Sale
or Event of Loss may be applied by Boyd Gaming or a Restricted Subsidiary:
(1) to permanently repay, redeem or repurchase Indebtedness of Boyd
Gaming or Indebtedness of any Restricted Subsidiary or
(2) to reinvest in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary with Net
Proceeds received by Boyd Gaming or another Restricted Subsidiary);
provided, however, that if Boyd Gaming or any Restricted Subsidiary
contractually commits within such 270-day period to apply such Net Proceeds
within 180 days of such contractual commitment in accordance with the above
clauses (1) or (2), 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.
Any Net Proceeds from an Asset Sale or Event of Loss that are not used in
accordance with the preceding paragraph shall constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $20 million (taking into account
income earned on such Excess Proceeds), Boyd Gaming shall make an offer to
purchase (prepayment offer), on a pro rata basis, from all Holders of the notes,
and, at the election of Boyd Gaming, the Holders of any other outstanding
Indebtedness equal in ranking to the notes having comparable rights, an
aggregate principal amount of notes and, if applicable, such other Indebtedness
equal to the Excess Proceeds, at a price in cash at least equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and, if applicable,
Liquidated Damages, in accordance with the procedures summarized herein and set
forth in the indenture. To the extent that any portion of the Excess Proceeds
remains after compliance with the preceding sentence and provided that all
Holders have been given the opportunity to tender the notes for repurchase in
accordance with the indenture, Boyd Gaming or such Restricted Subsidiary may use
such remaining amount for general corporate purposes and the amount of Excess
Proceeds shall be
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reset to zero. Pending application of Net Proceeds pursuant to clause (1) and
(2) above, such Net Proceeds will be invested in Temporary Cash Investments.
Within ten Business Days after the amount of Excess Proceeds exceeds $20
million, Boyd Gaming shall send a prepayment offer notice, by first-class mail,
to the Holders, accompanied by such information regarding Boyd Gaming and its
Subsidiaries as Boyd Gaming in good faith believes will enable such Holders to
make an informed decision with respect to the prepayment offer. The prepayment
offer notice will state, among other things:
(1) that Boyd Gaming is offering to purchase notes pursuant to the
provisions of the indenture described herein;
(2) that any note (or any portion thereof) accepted for payment (and
for which payment has been duly provided on the purchase date) pursuant to
the prepayment offer shall cease to accrue interest after the purchase
date;
(3) the purchase price and purchase date, which shall be, subject to
any contrary requirements of applicable law, no less than 30 days nor more
than 60 days from the date the prepayment offer Notice is mailed;
(4) the aggregate principal amount of notes (or portions thereof) to
be purchased; and
(5) a description of the procedure which Holders must follow in order
to tender their notes (or portions thereof) and the procedures that Holders
must follow in order to withdraw an election to tender their notes (or
portions thereof) for payment.
Boyd Gaming will comply with the requirements of Rule 14e-1 under the
Exchange Act, and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the purchase
of notes as a result of a prepayment offer. To the extent that the provisions of
any securities laws or regulations conflict with the provisions relating to the
prepayment offer, Boyd Gaming will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
the indenture described above by virtue of such conflict.
SELECTION AND NOTICE
If less than all of the notes are to be redeemed at any time, the trustee
will select notes for redemption as follows:
(1) if the notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the notes are listed; or
(2) if the notes are not listed on any national securities exchange,
on a pro rata basis, by lot or by such method as the trustee deems fair and
appropriate.
No notes of $1,000 or less can be redeemed in part. Notices of redemption
will be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of notes 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. Notices of redemption
may not be conditional.
If any note is to be redeemed in part only, the notice of redemption that
relates to that note will state the portion of the principal amount of that note
that is to be redeemed. A new note in principal amount equal to the unredeemed
portion of the original note (so long as such amount is in a denomination of
$1,000 or integral multiples thereof) will be issued in the name of the Holder
of notes upon cancellation of the original note. Notes called for redemption
become due on the date fixed for redemption. On and after the redemption date,
interest ceases to accrue on notes or portions of them called for redemption.
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CERTAIN COVENANTS
Set forth below are certain covenants contained in the indenture. During
any period of time that:
(1) the notes have Investment Grade Status, and
(2) no Default or Event of Default has occurred and is continuing
under the indenture with respect to the notes,
Boyd Gaming and its Restricted Subsidiaries will not be subject to the
provisions of the indenture with respect to the notes described above under
"Repurchase at Option of Holders -- Assets Sales; Event of Loss" and below under
"-- Limitation on Indebtedness" and "-- Limitation on Restricted Payments"
(collectively, the suspended covenants).
In the event that Boyd Gaming and its Restricted Subsidiaries are not
subject to the suspended covenants with respect to the notes for any period of
time as a result of the preceding sentence and, subsequently, at least one of
the two designated Rating Agencies withdraws its rating or assigns the notes a
rating below the required Investment Grade Ratings, then Boyd Gaming and its
Restricted Subsidiaries will thereafter again be subject to the suspended
covenants for the benefit of the notes and compliance with the Suspended
Covenant with respect to Restricted Payments made after the time of such
withdrawal or assignment will be calculated in accordance with the terms of the
covenant described below under "-- Limitation on Restricted Payments" as if such
covenant had been in effect during the entire period of time from the Issue Date
with respect to the notes.
LIMITATION ON INDEBTEDNESS
Boyd Gaming shall not, and shall not permit any Restricted Subsidiary to,
incur any Indebtedness; provided, however, that Boyd Gaming or any Restricted
Subsidiary may incur Indebtedness if no Event of Default has occurred and is
continuing and Boyd Gaming's Consolidated Fixed Charge Coverage Ratio would
exceed 2.0 to 1.0, after giving effect to:
(1) the Incurrence of such Indebtedness as if such Indebtedness was
Incurred at the beginning of the Reference Period and (if applicable) the
application of the net proceeds thereof to repay other Indebtedness as if
the application of such proceeds occurred at the beginning of the Reference
Period;
(2) the Incurrence and retirement of any other Indebtedness since the
first day of the Reference Period as if such Indebtedness was Incurred or
retired at the beginning of the Reference Period; and
(3) the acquisition or disposition of any company or business by Boyd
Gaming or any Restricted Subsidiary since the first day of the Reference
Period including any acquisition or disposition which will be consummated
contemporaneously with the Incurrence of such Indebtedness, as if such
acquisition or disposition occurred at the beginning of the Reference
Period.
Notwithstanding the foregoing limitation, Boyd Gaming or any Restricted
Subsidiary, as specified below, may Incur the following Indebtedness:
(1) Indebtedness of Boyd Gaming evidenced by the notes and
Indebtedness of any Restricted Subsidiary evidenced by a Guarantee of the
notes;
(2) Indebtedness of Boyd Gaming or any Restricted Subsidiary
outstanding on the Issue Date;
(3) Indebtedness of Boyd Gaming under the Credit Facility in an
aggregate amount outstanding at any time (including any Permitted
Refinancing Indebtedness with respect thereto) not to exceed $500 million,
as such amount may be permanently reduced by the lenders under the Credit
Facility as a result of repayments of Indebtedness thereunder with Net
Proceeds of Asset Sales pursuant to the covenant described above under
"Repurchase at the Option of Holders -- Asset Sales; Event of Loss," and
the Guarantee by any Restricted Subsidiary of such Indebtedness of Boyd
Gaming;
(4) Indebtedness of Boyd Gaming or a Restricted Subsidiary owing to
and held by a Restricted Subsidiary or Boyd Gaming; provided, however, that
any subsequent issuance or transfer of any Capital
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Stock or other event that results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any subsequent transfer of any such
Indebtedness except to Boyd Gaming or a Restricted Subsidiary shall be
deemed in each case to constitute the Incurrence of such Indebtedness by
the issuer thereof;
(5) Indebtedness of Boyd Gaming or a Restricted Subsidiary under
Interest Rate Agreements, provided that the obligations under such
agreements are related to payment obligations on Indebtedness otherwise
permitted by the terms of this covenant;
(6) Indebtedness of Boyd Gaming or a Restricted Subsidiary under
Currency Exchange Protection Agreements, provided that such Currency
Exchange Protection Agreements were entered into for the purpose of
limiting exchange rate risks in connection with transactions entered into
in the ordinary course of business;
(7) Indebtedness of Boyd Gaming or any Restricted Subsidiary in
connection with one or more standby letters of credit, performance bonds or
completion guarantees issued in the ordinary course of business or pursuant
to self-insurance obligations and not in connection with the borrowing of
money or the obtaining of advances or credit;
(8) Indebtedness of Boyd Gaming or any Restricted Subsidiary
outstanding under Permitted FF&E Financings which are either:
(A) Non-Recourse Indebtedness of Boyd Gaming and its Restricted
Subsidiaries; or
(B) limited in amount (including any Permitted Refinancing
Indebtedness with respect thereto) for each Gaming Facility owned or
leased by Boyd Gaming or any of its Restricted Subsidiaries to the
lesser of:
(1) the amount of FF&E used in such Gaming Facility and financed
by such Permitted FF&E Financing, or
(2) $10 million;
(9) So long as no Event of Default has occurred and is continuing,
Indebtedness of Boyd Gaming not otherwise permitted to be Incurred pursuant
to the provisions of the immediately preceding paragraph or this paragraph
in an aggregate amount Incurred not to exceed $25 million; or
(10) Permitted Refinancing Indebtedness Incurred in respect of
Indebtedness of Boyd Gaming or any Restricted Subsidiary outstanding
pursuant to the provisions of the immediately preceding paragraph or
clauses (1), (2), (3), (8) and this clause (10) of this paragraph.
For purposes of determining compliance with the "Limitation on
Indebtedness" covenant, in the event that an item of proposed Indebtedness meets
the criteria of more than one of the categories described in clauses (1) through
(10) above, or is entitled to be incurred pursuant to the first paragraph of
this covenant, Boyd Gaming will be permitted to classify such item of
Indebtedness on the date of its incurrence in any manner that complies with this
covenant. Indebtedness outstanding under the revolving facility under Boyd
Gaming's Credit Facility on the Issue Date, after giving effect to the
application of the proceeds from the issuance of the notes, will be deemed to
have been incurred under clause (3) of the second paragraph above.
LIMITATION ON RESTRICTED PAYMENTS
Boyd Gaming shall not make, and shall not permit any Restricted Subsidiary
to make, any Restricted Payment if at the time of, and after giving effect to,
such proposed Restricted Payment:
(1) a Default or an Event of Default shall have occurred and be
continuing;
(2) Boyd Gaming could not Incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of "-- Limitation on
Indebtedness;" or
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(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments made from and after July 22, 1997 (the amount of any
Restricted Payment, if made other than in cash, to be based upon Fair
Market Value) would exceed an amount equal, without duplication, to the sum
of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from April 1, 1997 to the end of the
most recent fiscal quarter ended immediately prior to the date of such
Restricted Payment (or, in the case such Consolidated Net Income shall
be a deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by Boyd Gaming from
the issue or sale of its Capital Stock (other than Disqualified Stock)
subsequent to March 31, 1997 (other than an issuance or sale to a
Subsidiary of Boyd Gaming or an employee stock ownership plan or other
trust established by Boyd Gaming or any of its Subsidiaries or pursuant
to clauses (3) or (4) in the following paragraph);
(C) the amount by which Indebtedness of Boyd Gaming or any
Guarantor is reduced on Boyd Gaming's balance sheet upon the conversion
or exchange (other than an issuance or sale to a Subsidiary of Boyd
Gaming or an employee stock ownership plan or other trust established by
Boyd Gaming or any of its Subsidiaries) subsequent to March 31, 1997, of
any Indebtedness of Boyd Gaming or any Guarantor convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of Boyd
Gaming (less the amount of any cash or other property distributed by
Boyd Gaming or any Restricted Subsidiary upon such conversion or
exchange);
(D) the amount equal to the net reduction in Investments subsequent
to March 31, 1997 resulting from:
(1) payments of dividends, repayments of loans or advances or
other transfers of assets to Boyd Gaming or any Guarantor or the
satisfaction or reduction (other than by means of payments by Boyd
Gaming or any Restricted Subsidiary) of obligations of other Persons
which have been Guaranteed by Boyd Gaming or any Guarantor; or
(2) the redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries which execute Guaranties, in each case such net
reduction in Investments being:
(x) valued as provided in the Definition of "Investment";
(y) in an amount not to exceed the aggregate amount of
Investments previously made by Boyd Gaming or any Guarantor which
were treated as a Restricted Payment; and
(z) included in this clause (D) only to the extent not
included in Consolidated Net Income;
(E) payments of dividends, repayments of loans or advances or other
transfers of assets to Boyd Gaming or any Guarantor from The Borgata
Joint Venture to the extent such dividends, repayments, advances or
other transfers exceed $100 million; but only to the extent that any
such payments are excluded from the computation of Consolidated Net
Income; and
(F) $75 million.
The provisions of the preceding paragraph shall not prohibit:
(1) the payment of any dividend within 60 days after the date of its
declaration if such dividend could have been paid on the date of its
declaration in compliance with such provisions; provided that at the time
of payment of such dividend no Default under any provision of the indenture
other than this covenant shall have occurred and be continuing (or would
result therefrom);
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(2) the redemption or repurchase of any Capital Stock or Indebtedness
of Boyd Gaming (other than any Capital Stock or Indebtedness which is held
or beneficially owned by, or issued by, any member of the Boyd Family, Boyd
Gaming or any Affiliate of Boyd Gaming),
(A) if the Holder or beneficial owner of such Capital Stock or
Indebtedness is required to qualify under the Gaming Laws and does not
so qualify; or
(B) if necessary in the reasonable, good faith judgment of the
Board of Directors, as evidenced by a Board Resolution, to prevent the
loss or secure the reinstatement of any Gaming License which if lost or
not reinstated, as the case may be, would have a material adverse effect
on the business of Boyd Gaming and its Subsidiaries, taken as a whole,
or would restrict the ability of Boyd Gaming or any of its Subsidiaries
to conduct business in any gaming jurisdiction;
(3) any purchase, redemption or other acquisition or retirement of
Capital Stock of Boyd Gaming made by exchange for, or out of the proceeds
of the substantially concurrent sale of, Capital Stock (other than
Disqualified Stock) of Boyd Gaming;
(4) any purchase, redemption or other acquisition or retirement of the
Indebtedness of any Person made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Capital Stock (other than
Disqualified Stock) of Boyd Gaming;
(5) any purchase, redemption, defeasance or other acquisition or
retirement for value of Indebtedness from the proceeds of Permitted
Refinancing Indebtedness;
(6) Investments not to exceed $100 million in The Borgata Joint
Venture made subsequent to March 31, 1997;
(7) Investment Guarantees to the extent permitted by the provisions
described under the caption, "-- Limitation on Indebtedness" above that
constitute Permitted Joint Venture Investments and Guarantee (with full
rights of subrogation) Indebtedness Incurred by a Permitted Joint Venture
to acquire or construct Gaming Facilities; provided that such Indebtedness:
(A) is not expressly subordinated in right of payment or otherwise
to any other Indebtedness of such Permitted Joint Venture; and
(B) is secured by first priority security interests in such Gaming
Facilities;
(8) payments pursuant to Investment Guarantees which were entered into
in compliance with clause (7) of this paragraph; and
(9) any Permitted Stardust Contribution.
The full amount of any Restricted Payments made subsequent to March 31,
1997 pursuant to clauses (1) and (2) of the preceding paragraph (but not
pursuant to clauses (3), (4), (5), (6) and (9) of the preceding paragraph) shall
be included in the calculation of the aggregate amount of the Restricted
Payments referred to in the next preceding paragraph.
With respect to any Investment Guarantee:
(1) if at any time Boyd Gaming or any Restricted Subsidiary ceases to
control the day-to-day operations of the Permitted Joint Venture the
Indebtedness of which is Guaranteed by the Investment Guarantee, the full
amount of such Investment Guarantee shall thereafter be included in the
calculation of the aggregate amount of Restricted Payments referred to in
the first paragraph under this section; and
(2) if Boyd Gaming or a Restricted Subsidiary retains such control,
any amount actually paid pursuant to such Investment Guarantee shall be
included in the calculation of the aggregate amount of Restricted Payments
referred to in first paragraph under this section.
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LIMITATION ON LIENS
Boyd Gaming shall not, and shall not permit any existing or future
Guarantor or any Restricted Subsidiary existing on the Issue Date (such
Guarantors and Restricted Subsidiaries being referred to as "Specified
Subsidiaries") to, directly or indirectly, incur or suffer to exist, any Lien
upon any of its Property, whether now owned or hereafter acquired, or any
interest therein or any income or profits therefrom, unless it has made or will
make effective provision whereby the notes will be secured by such Lien equally
and ratably with (or prior to) all other Indebtedness of Boyd Gaming or any such
Specified Subsidiary secured by such Lien except for:
(1) Permitted Liens;
(2) Liens on assets financed through Permitted FF&E Financings
securing Indebtedness permitted under clause (8) in the second paragraph of
"-- Limitation on Indebtedness";
(3) Liens on the Property of Boyd Gaming or any Specified Subsidiary
existing on the date of the indenture;
(4) Liens securing Indebtedness Incurred pursuant to the Credit
Facility;
(5) Liens in favor of Boyd Gaming or a Specified Subsidiary;
(6) Liens on the Property of a Person at the time such Person becomes
a Specified Subsidiary; provided, however, that:
(A) any such Lien may not extend to any other Property of Boyd
Gaming or any Specified Subsidiary; and
(B) any such Lien was not Incurred in anticipation of or in
connection with the transaction or series of related transactions
pursuant to which such Person became a Specified Subsidiary; or
(7) Liens to secure any refinancing, refunding, extension, renewal or
replacement (or successive refinancings, refundings, extensions, renewals
or replacements) as a whole or in part of any Indebtedness secured by any
Lien referred to in the foregoing clauses (2), (3), (6) and (7); provided,
however, that:
(A) such new Lien shall be limited to all or part of the same
Property subject to the original Lien (plus improvements on such
Property); and
(B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of:
(1) the outstanding principal amount or, if greater, committed
amount of the Indebtedness described under clauses (2), (3), (6) or
(7); and
(2) an amount necessary to pay any fees and expenses, including
premiums, related to such refinancing, refunding, extension, renewal
or replacement.
LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
Boyd Gaming shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distributions to Boyd Gaming or
any other Restricted Subsidiary on its Capital Stock or with respect to any
other interest or participation in, or measured by, its profits;
(2) pay any indebtedness owed to Boyd Gaming or any other Restricted
Subsidiary;
(3) make loans or advances to Boyd Gaming or any other Restricted
Subsidiary; or
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(4) transfer any of its Property to Boyd Gaming or any other
Restricted Subsidiary, except for such encumbrances or restrictions
existing under or by reason of:
(A) agreements in effect on the Issue Date;
(B) applicable law;
(C) customary nonassignment provisions in leases entered into in
the ordinary course of business and consistent with past practices;
(D) Permitted Refinancing Indebtedness; provided, however, that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive than those contained in
the agreements governing the Indebtedness being refinanced; or
(E) agreements in existence with respect to a Restricted Subsidiary
at the time it is so designated; provided, however, that such agreements
are not entered into in anticipation or contemplation of such
designation.
Nothing contained in this covenant shall prevent Boyd Gaming or any
Restricted Subsidiary from granting any Lien permitted by the "-- Limitation on
Liens" covenant.
LIMITATION ON TRANSACTIONS WITH AFFILIATES
Boyd Gaming shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, conduct any business or enter into or suffer to exist
any transaction or series of transactions (including the purchase, sale,
transfer, lease or exchange of any Property, the making of any Investment, the
giving of any Guarantee or the rendering or receiving of any service) with, from
or for the benefit of any Affiliate, any Related Person or any officer or
director of any Affiliate or a Related Person (an affiliate transaction) unless:
(1) the terms of such affiliate transaction are in writing, in the
best interest of Boyd Gaming or such Restricted Subsidiary, as the case may
be, and at least as favorable to Boyd Gaming or such Restricted Subsidiary,
as the case may be, as those that could be obtained at the time of such
affiliate transaction in a similar transaction in arm's-length dealings
with a Person who is not such an Affiliate, Related Person or officer or
director of an Affiliate or Related Person;
(2) with respect to each affiliate transaction involving aggregate
payments to either party in excess of $5 million, Boyd Gaming delivers to
the trustee an Officers' Certificate certifying that such affiliate
transaction was approved by a majority of the disinterested members of the
Board of Directors and that such affiliate transaction complies with clause
(1); and
(3) with respect to each affiliate transaction involving aggregate
payments in excess of $10 million, Boyd Gaming delivers to the trustee an
opinion letter from an Independent Advisor to effect that such affiliate
transaction is fair, from a financial point of view.
Notwithstanding the foregoing limitation, Boyd Gaming may enter into or
suffer to exist the following:
(1) any transaction pursuant to any contract in existence on the Issue
Date;
(2) any Restricted Payment permitted to be made pursuant to
"-- Limitation on Restricted Payments";
(3) any transaction or series of transactions between Boyd Gaming and
one or more of its Restricted Subsidiaries or between two or more of its
Restricted Subsidiaries; and
(4) the payment of compensation (including amounts paid pursuant to
employee benefit plans) for the personal services of officers, directors
and employees of Boyd Gaming or any of its Restricted Subsidiaries, so long
as the Board of Directors in good faith shall have approved the terms
thereof and deemed the services theretofore or thereafter to be performed
for such compensation or fees to be fair consideration therefor.
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MAINTENANCE OF PROPERTIES AND OTHER MATTERS
Boyd Gaming shall, and shall cause each of its Subsidiaries to, maintain
its Properties in good working order and condition and make all necessary
repairs, renewals and replacements; provided, however, that nothing in this
provision shall prevent Boyd Gaming or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its Properties, if such
discontinuance is, in the judgment of Boyd Gaming, both desirable in the conduct
of the business of Boyd Gaming and its Subsidiaries, taken as a whole, and not
disadvantageous in any material respect to the Holders.
Boyd Gaming shall, and shall cause each of its Subsidiaries to, insure and
keep insured, with financially sound and reputable insurers, so much of their
respective Properties and in such amounts as is usually and customarily insured
by Persons engaged in a similar business with respect to Properties of a similar
character against loss by fire and the extended coverage perils. None of Boyd
Gaming or any of its Subsidiaries shall maintain a system of self-insurance in
lieu of or in combination with the foregoing insurance with respect to its
Properties; provided that deductibles under the insurance policy or policies of
Boyd Gaming and its Subsidiaries shall not be considered to be self-insurance as
long as such deductibles accord with financially sound and approved practices of
Persons owning or operating Properties of a similar character and maintaining
similar insurance coverage.
Boyd Gaming shall, and shall cause each of its Subsidiaries to, keep proper
books and records of accounts in which full and correct entries will be made of
all its business transactions in accordance with GAAP. Boyd Gaming shall cause
the books and records of accounts of Boyd Gaming and its Subsidiaries to be
examined, either on a consolidated or on an individual basis, by one or more
firms of independent public accountants not less frequently than annually. Boyd
Gaming shall, and shall cause each of its Subsidiaries to, prepare its financial
statements in accordance with GAAP.
Boyd Gaming shall, and shall cause each of its Subsidiaries to, comply with
all Legal Requirements and to obtain any licenses, permits, franchises or other
authorizations, including Gaming Licenses, from Governmental Authorities
necessary to the ownership or operation of its Properties or to the conduct of
its business.
Notwithstanding the foregoing provisions in this covenant, failure by Boyd
Gaming or any of its Subsidiaries to comply with such provisions shall not be
deemed to be a breach of such provisions to the extent that such failure would
not have a material adverse effect on Boyd Gaming and its Subsidiaries, taken as
a whole.
LIMITATION ON ACTIVITIES OF BOYD GAMING
Boyd Gaming shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in (through acquisition or otherwise) any business other
than a Related Business.
LIMITATION ON STATUS AS AN INVESTMENT COMPANY
Boyd Gaming shall not, and shall not permit any of its Subsidiaries to,
become an "investment company" (as that term is defined in the Investment
Company Act of 1940), to the extent such status would subject Boyd Gaming or any
such Subsidiary to regulation under the Investment Company Act, except for
Subsidiaries established for the purpose of financing the operating businesses
of Boyd Gaming and its Subsidiaries.
PAYMENT FOR CONSENT
Boyd Gaming will not, and will not permit any of its 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 the 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.
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MERGER, CONSOLIDATION AND SALE OF ASSETS
Neither Boyd Gaming nor any Guarantor shall merge or consolidate with or
into any other entity (other than a merger or consolidation of a Guarantor with
or into Boyd Gaming or another Guarantor, and other than a merger or
consolidation of a Guarantor where the surviving entity is not Boyd Gaming or a
Subsidiary of Boyd Gaming) or in one transaction or a series of related
transactions sell, convey, assign, transfer, lease or otherwise dispose of all
or substantially all of its Property unless:
(1) the entity formed by or surviving any such consolidation or merger
(if Boyd Gaming or such Guarantor is not the surviving entity) or the
Person to which such sale, assignment, transfer, lease or conveyance is
made (the "Successor"):
(A) shall be a corporation organized and existing under the laws of
the United States of America or a State thereof or the District of
Columbia and such corporation expressly assumes, by supplemental
indenture satisfactory to the trustee, executed and delivered to the
trustee by such corporation, the due and punctual payment of the
principal, premium, if any, and interest on all the notes, according to
their tenor, and the due and punctual performance and observance of all
the covenants and conditions of the indenture to be performed by Boyd
Gaming or such Guarantor, as the case may be; and
(B) the Successor shall have all Gaming Licenses required to
operate all Gaming Facilities to be owned by such Successor;
(2) in the case of a sale, transfer, assignment, lease, conveyance or
other disposition of all or substantially all of Boyd Gaming's Property or
of such Guarantor's Property, such Property shall have been transferred as
an entirety or virtually as an entirety to one Person;
(3) immediately before and after giving effect to such transaction or
series of transactions on a pro forma basis, no Default or Event of Default
shall have occurred and be continuing;
(4) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including, without limitation, any
Indebtedness Incurred or anticipated to be Incurred in connection with such
transaction or series of transactions), Boyd Gaming or the Successor, as
the case may be, would be able to Incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of "-- Limitation of
Indebtedness"; and
(5) immediately after giving effect to such transaction or series of
transactions on a pro forma basis including, without limitation, any
Indebtedness Incurred or anticipated to be Incurred in connection with such
transaction or series of transactions), Boyd Gaming or the Successor shall
have a Consolidated Net Worth equal to or greater than the Consolidated Net
Worth of Boyd Gaming immediately prior to the transaction or series of
transactions.
REPORTS
Whether or not required by the Commission, so long as any notes are
outstanding, Boyd Gaming will furnish to the Holders of notes, within 15 days
after the time periods specified in the Commission's rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and
10-K if Boyd Gaming were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report on
the annual financial statements by Boyd Gaming's certified independent
accountants; and
(2) all current reports that would be required to be filed with the
Commission on Form 8-K if Boyd Gaming were required to file such reports.
In addition, following the consummation of the exchange offer contemplated
by the registration rights agreement, whether or not required by the Commission,
Boyd Gaming will file a copy of all of the information
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and reports referred to in clauses (1) and (2) above with the Commission for
public availability within the time periods specified in the Commission's rules
and regulations (unless the Commission will not accept such a filing). In
addition, Boyd Gaming and the Subsidiary Guarantors have agreed that, until the
consummation of the exchange offer and, in the event that, at any time
thereafter, Boyd Gaming is no longer subject to the reporting requirements under
the Exchange Act for so long as any notes remain outstanding, they will furnish
to the Holders and to prospective investors, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an Event of Default:
(1) default with respect to payment of interest on any of the notes
when it becomes due and payable, and the continuance of such default for a
period of 30 days;
(2) default with respect to payment of principal or premium, if any,
on any of the notes when due at maturity, upon acceleration, required
purchase or otherwise;
(3) failure by Boyd Gaming or any Guarantor to observe, perform or
comply with the covenants and agreements described in "-- Merger,
Consolidation and Sale of Assets" herein;
(4) failure by Boyd Gaming or the Guarantors to observe, perform or
comply with any of the other covenants and agreements in the indenture and
such failure to observe, perform or comply continues for a period of 30
days after receipt by Boyd Gaming of a written notice from the trustee or
Holders of not less than 25% in aggregate principal amount of the notes
then outstanding;
(5) Indebtedness of Boyd Gaming or any Restricted Subsidiary is not
paid when due within any applicable grace period or is accelerated by the
Holders thereof and, in either case, the total amount of such unpaid or
accelerated Indebtedness exceeds $10 million;
(6) the entry by a court of competent jurisdiction of one or more
judgments or orders against Boyd Gaming or any Restricted Subsidiary in an
uninsured aggregate amount in excess of $10 million and such judgment or
order is not discharged, waived, stayed or satisfied for a period of 60
consecutive days;
(7) certain events of bankruptcy, insolvency or reorganization
affecting Boyd Gaming or any Restricted Subsidiary;
(8) any revocation, suspension or loss of any Gaming License which
results in the cessation of business for a period of more than 90
consecutive days of the business of any Gaming Facility owned, leased or
operated directly or indirectly by Boyd Gaming or any of its Subsidiaries
(other than any voluntary relinquishment of a Gaming License if such
relinquishment is, in the reasonable, good faith judgment of the Board of
Directors, evidenced by a Board Resolution, both desirable in the conduct
of the business of Boyd Gaming and its Subsidiaries, taken as a whole, and
not disadvantageous in any material respect to the Holders); and
(9) any Guaranty ceases to be in full force and effect (other than
pursuant to the terms of the indenture) or is declared null and void or any
Guarantor denies that it has any further liability under its Guaranty or
gives notice to such effect.
A Default under clauses (5), (6) or (8) above is not an Event of Default
until the trustee or Holders of not less than 25% in aggregate principal amount
of the notes notify Boyd Gaming of the Default.
Boyd Gaming shall deliver to the trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default, its status and what action Boyd Gaming is taking or
proposes to take with respect thereto.
The indenture provides that the trustee, within 90 days after the
occurrence of any continuing Default or Event of Default that is known to the
trustee, will give notice to the Holders; provided, however, that, except
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in the case of a default in payment of principal of or interest on the notes,
the trustee may withhold such notice as long as it in good faith determines that
such withholding is in the interest of the Holders.
The indenture provides that if an Event of Default with respect to the
notes (other than an Event of Default resulting from certain events of
bankruptcy, insolvency or reorganization with respect to Boyd Gaming or a
Restricted Subsidiary) shall have occurred and be continuing, the trustee or the
registered Holders of not less than 25% in aggregate principal amount of the
notes then outstanding may accelerate the maturity of all the notes in which
event the notes shall become immediately due and payable; provided, however,
that after such acceleration but before a judgment or decree based on
acceleration is obtained by the trustee, the registered Holders of a majority in
aggregate principal amount of the notes then outstanding, may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than the nonpayment of accelerated principal, have been cured or waived as
provided in the indenture. In case an Event of Default resulting from certain
events of bankruptcy, insolvency or reorganization with respect to Boyd Gaming
or a Restricted Subsidiary shall occur, the notes shall be due and payable
immediately without any declaration or other act on the part of the trustee or
the Holders.
The Holders of a majority in principal amount of the notes then outstanding
shall have the right to waive any existing Default with respect to the notes or
compliance with any provision of the indenture or the notes and to direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee, subject to certain limitations specified in the indenture.
No Holder will have any right to institute any proceeding with respect to
the indenture or for any remedy thereunder, unless:
(1) such Holder shall have previously given to the trustee written
notice of a continuing Event of Default;
(2) Holders of at least 25% in aggregate principal amount of the notes
then outstanding shall have made written request and offered reasonable
indemnity to the trustee to institute such proceeding as a trustee; and
(3) the trustee shall not have received from the Holders of a majority
in aggregate principal amount of the notes then outstanding a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days.
However, such limitations do not apply to a suit instituted by a Holder for
enforcement of payment of the principal of and premium, if any, or interest on
such Holder's note on or after the respective due dates expressed in such note.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of Boyd Gaming
or any Guarantor, as such, will have any liability for any obligations of Boyd
Gaming or the Guarantors under the notes, the indenture, the Subsidiary
Guarantees, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of notes by accepting a note waives
and 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.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Boyd Gaming may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding notes and all obligations
of the Guarantors discharged with respect to their Subsidiary Guarantees ("Legal
Defeasance") except for:
(1) the rights of Holders of outstanding notes to receive payments in
respect of the principal of, or interest or premium and Liquidated Damages,
if any, on such notes when such payments are due from the trust referred to
below;
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(2) Boyd Gaming's obligations with respect to the notes concerning
issuing temporary notes, registration of notes, mutilated, destroyed, lost
or stolen notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the trustee,
and Boyd Gaming's and the Guarantor's obligations in connection therewith;
and
(4) the Legal Defeasance provisions of the indenture.
In addition, Boyd Gaming may, at its option and at any time, elect to have
the obligations of Boyd Gaming and the Guarantors released with respect to
certain covenants that are described in the indenture ("Covenant Defeasance")
and thereafter any omission to comply with those covenants will not constitute a
Default or Event of Default with respect to the notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events with respect to Boyd Gaming)
described under "Events of Default and Remedies" will no longer constitute an
Event of Default with respect to the notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) Boyd Gaming must irrevocably deposit with the trustee, in trust,
for the benefit of the Holders of the notes, cash in U.S. dollars,
non-callable U.S. Government Obligations, or a combination of cash in U.S.
dollars and non-callable U.S. Government Obligations, in amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, or interest and premium and
Liquidated Damages, if any, on the outstanding notes on the stated maturity
or on the applicable redemption date, as the case may be, and Boyd Gaming
must specify whether the notes are being defeased to maturity or to a
particular redemption date;
(2) in the case of Legal Defeasance, Boyd Gaming has delivered to the
trustee an opinion of counsel reasonably acceptable to the trustee
confirming that:
(a) Boyd Gaming has received from, or there has been published by,
the Internal Revenue Service a ruling or
(b) since the date of the 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 will 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 Covenant Defeasance, Boyd Gaming has delivered 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 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 has 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);
(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 the indenture) to which Boyd Gaming is
a party or by which Boyd Gaming is bound;
(6) Boyd Gaming must deliver to the trustee an officers' certificate
stating that the deposit was not made by Boyd Gaming with the intent of
preferring the Holders of notes over the other creditors of Boyd
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Gaming with the intent of defeating, hindering, delaying or defrauding
creditors of Boyd Gaming or others; and
(7) Boyd Gaming 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.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the indenture,
the notes and the guarantees may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the notes then
outstanding (including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer for, notes), and any existing
default or compliance with any provision of the indenture, the notes or the
guarantees may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding notes (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, notes).
Without the consent of each Holder of an outstanding note, an amendment or
waiver may not, among other things:
(1) reduce the principal amount of notes whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any note;
(3) reduce the principal of or extend the stated maturity of any note,
reduce the premium payable upon the redemption of any note or change the
time at which note may be redeemed (other than provisions relating to the
covenants described above under the caption "-- Repurchase at the Option of
Holders");
(4) impair the right of any Holder to receive payment of principal of,
or interest or premium, or Liquidated Damages, if any, on the notes on or
after the due dates therefor or to institute suit for the enforcement of
any payment on or with respect to such Holder's notes;
(5) make any note payable in money other than that stated in the
notes;
(6) subordinate in right of payment, or otherwise subordinate the
notes to any other obligation of Boyd Gaming or any Guarantor;
(7) release any security interest in favor of the notes or guarantees;
or
(8) make any change in any guarantee that would adversely affect the
Holders.
Notwithstanding the preceding, without the consent of any Holder of notes,
Boyd Gaming, the Guarantors and the trustee may amend or supplement the
indenture, among other things:
(1) to cure any ambiguity, defect, omission or inconsistency;
(2) to provide for the assumption by a successor corporation of Boyd
Gaming's or any Guarantor's obligations under the indenture;
(3) to provide for uncertificated notes in addition to or in place of
certificated notes; provided that the uncertificated notes are issued in
registered form for purposes of Section 163(f) of the Internal Revenue
Code, or in a manner such that the uncertificated notes are described in
Section 163(f)(2)(B) of the Internal Revenue Code;
(4) to add additional guarantees with respect to the notes or to
secure the notes;
(5) to add to the covenants of Boyd Gaming or any Guarantor for the
benefit of the Holders of the notes or to surrender any right or power
conferred upon Boyd Gaming or any Guarantor;
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(6) to release a Guarantor which has been sold, or whose assets have
been sold, in accordance with the provisions of the indenture;
(7) to make any change that does not adversely affect the rights of
any Holder of notes;
(8) to comply with requirements of the Commission in order to effect
or maintain the qualification of the indenture under the Trust Indenture
Act; or
(9) to provide for the issuance of additional notes in accordance with
the limitations set forth in the indenture on the Issue Date.
The consent of the Holders of the notes is not necessary under the
indenture to approve the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the proposed amendment.
After an amendment of the indenture becomes effective, Boyd Gaming is
required to mail to the Holders of notes a notice brief describing such
amendment. However, the failure to give such notice to all Holders of notes, or
any defect therein, will not impair or affect the validity of the amendment.
SATISFACTION AND DISCHARGE
The indenture will be discharged and will cease to be of further effect as
to all notes issued thereunder, when:
(1) either:
(a) all notes that have been authenticated, except lost, stolen or
destroyed notes that have been replaced or paid and notes for whose
payment money has been deposited in trust and thereafter repaid to Boyd
Gaming, 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 Boyd Gaming 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 U.S.
Government Obligations, or a combination of cash in U.S. dollars and
non-callable U.S. Government Obligations, in 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 and Liquidated Damages,
if any, and accrued interest to the date of maturity or redemption;
(2) Boyd Gaming or any Guarantor has paid or caused to be paid all
other sums payable by it under the indenture;
(3) other than with respect to a discharge when the notes have become
due and payable, no Default or Event of Default has occurred and is
continuing on the date of the deposit or will occur as a result of the
deposit and the deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which Boyd Gaming is a
party or by which Boyd Gaming is bound; and
(4) Boyd Gaming has delivered irrevocable instructions to the trustee
under the indenture to apply the deposited money toward the payment of the
notes at maturity or the redemption date, as the case may be.
In addition, Boyd Gaming 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.
CONCERNING THE TRUSTEE
If the trustee becomes a creditor of Boyd Gaming or any Guarantor, the
indenture limits its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security or
otherwise. The trustee will be permitted to engage in other transactions;
however, if it
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acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
The Holders of a majority in principal amount of the then-outstanding notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the trustee, subject to
certain exceptions. The indenture provides that in case an Event of Default
occurs and is continuing, the trustee will be required, in the exercise of its
power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request of any
Holder of notes, unless such Holder has offered to the trustee security and
indemnity satisfactory to it against any loss, liability or expense.
BOOK-ENTRY, DELIVERY AND FORM
The exchange notes will be issued in the form of one or more global notes.
The global notes will be deposited with, or on behalf of, The Depository Trust
Company ("DTC") and registered in the name of DTC or its nominee, who will be
the global notes Holder. Except as set forth below, the global notes may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Investors may hold their beneficial interests
in the global notes directly through DTC if they are participating organizations
or "participants" in such system or indirectly through organizations that are
participants in such system. Beneficial interests in the global notes may not be
exchanged for notes in certificated form except in the limited circumstances
described below.
So long as the global note Holder is the registered owner of any notes, the
global note Holder will be considered the sole Holder under the indenture of any
notes evidenced by the global notes. Beneficial owners of notes evidenced by the
global notes will not be considered the owners or Holders of the notes under the
Indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the trustee thereunder. Neither Boyd
Gaming nor the trustee will have any responsibility or liability for any aspect
of the records of DTC or for maintaining, supervising or reviewing any records
of DTC relating to the notes.
DEPOSITORY PROCEDURES
The following description of the operations and procedures of DTC and Cedel
are provided solely as a matter of convenience. These operations and procedures
are solely within the control of the respective settlement systems and are
subject to changes by them. Boyd Gaming takes no responsibility for these
operations and procedures and urges investors to contact the system or their
participants directly to discuss these matters.
DTC has advised Boyd Gaming that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the participants) and to facilitate the clearance and settlement of transactions
in those securities between participants through electronic book-entry changes
in accounts of its participants. The participants include securities brokers and
dealers (including the Initial Purchasers), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly (collectively, the indirect participants). Persons
who are not participants may beneficially own securities held by or on behalf of
DTC only through the participants or the indirect participants. The ownership
interests in, and transfers of ownership interests in, each security held by or
on behalf of DTC are recorded on the records of the participants and indirect
participants.
DTC has also advised Boyd Gaming that, pursuant to procedures established
by it:
(1) upon deposit of the global notes, DTC will credit the accounts of
participants designated by the exchange agent with portions of the
principal amount of the global notes; and
(2) ownership of these interests in the global notes will be shown on,
and the transfer of ownership of these interests will be effected only
through, records maintained by DTC (with respect to the
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participants) or by the participants and the indirect participants (with
respect to other owners of beneficial interest in the global notes).
Except as described below, owners of interest in the global notes will not
have notes registered in their names, will not receive physical delivery of
notes in certificated form and will not be considered the registered owners or
"Holders" thereof under the indenture for any purpose.
Payments in respect of the principal of, and interest and premium and
Liquidated Damages, if any, on a global note registered in the name of DTC or
its nominee will be payable to DTC in its capacity as the registered Holder
under the indenture. Under the terms of the indenture, Boyd Gaming and the
trustee will treat the Persons in whose names the notes, including the global
notes, are registered as the owners of the notes for the purpose of receiving
payments and for all other purposes. Consequently, neither Boyd Gaming, the
Guarantors, the trustee nor any agent of Boyd Gaming, the Guarantors or the
trustee has or will have any responsibility or liability for:
(1) any aspect of DTC's records or any participant's or indirect
participant's records relating to or payments made on account of beneficial
ownership interest in the global notes or for maintaining, supervising or
reviewing any of DTC's records or any participant's or indirect
participant's records relating to the beneficial ownership interests in the
global notes; or
(2) any other matter relating to the actions and practices of DTC or
any of its participants or indirect participants.
DTC has advised Boyd Gaming that its current practice, upon receipt of any
payment in respect of securities such as the notes (including principal and
interest), is to credit the accounts of the relevant participants with the
payment on the payment date unless DTC has reason to believe it will not receive
payment on such payment date. Each relevant participant is credited with an
amount proportionate to its beneficial ownership of an interest in the principal
amount of the relevant security as shown on the records of DTC. Payments by the
participants and the indirect participants to the beneficial owners of notes
will be governed by standing instructions and customary practices and will be
the responsibility of the participants or the indirect participants and will not
be the responsibility of DTC, the trustee or Boyd Gaming. Neither Boyd Gaming
nor the trustee will be liable for any delay by DTC or any of its participants
in identifying the beneficial owners of the notes, and Boyd Gaming and the
trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES
A global note is exchangeable for definitive notes in registered
certificated form (certificated notes) if:
(1) DTC (a) notifies Boyd Gaming that it is unwilling or unable to
continue as depositary for the global notes or (b) has ceased to be a
clearing agency registered under the Exchange Act, and, in either case,
Boyd Gaming fails to appoint a successor depositary;
(2) Boyd Gaming, at its option, notifies the trustee in writing that
it elects to cause the issuance of the certificated notes; or
(3) there has occurred and is continuing a Default or Event of Default
with respect to the notes.
In addition, beneficial interests in a global note may be exchanged for
certificated notes upon prior written notice given to the trustee by or on
behalf of DTC in accordance with the indenture. In all cases, certificated notes
delivered in exchange for any global note or beneficial interests in global
notes will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the depositary (in accordance with its customary
procedures) and will bear the applicable restrictive legends, unless that legend
is not required by applicable law.
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EXCHANGE OF CERTIFICATED NOTES FOR GLOBAL NOTES
Certificated notes may not be exchanged for beneficial interests in any
global note unless the transferor first delivers to the trustee a written
certificate (in the form provided in the indenture) to the effect that such
transfer will comply with the appropriate transfer restrictions applicable to
such notes.
SAME DAY SETTLEMENT AND PAYMENT
We will make payments in respect of the notes represented by the global
notes (including principal, premium, if any, interest and Liquidated Damages, if
any) by wire transfer of immediately available funds to the accounts specified
by the global note Holder. Boyd Gaming will make all payments of principal,
interest and premium and Liquidated Damages, if any, with respect to
certificated notes, by mailing a check to each such Holder's registered address.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the indenture. Reference
is made to the indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Additional Assets" means:
(1) any Property (other than cash, cash equivalents or securities) to
be owned by Boyd Gaming or a Restricted Subsidiary and used in a Related
Business;
(2) the costs of improving, restoring, replacing or developing any
Property owned by Boyd Gaming or a Restricted Subsidiary which is used in a
Related Business; or
(3) Investments in any other Person engaged primarily in a Related
Business (including the acquisition from third parties of Capital Stock of
such Person) as a result of which such other Person becomes a Restricted
Subsidiary in compliance with the procedure for designation of Restricted
Subsidiaries set forth below in the Definition of "Restricted Subsidiary."
"Affiliate" means, with respect to any Person, a Person
(1) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such
Person,
(2) which directly or indirectly through one or more intermediaries
beneficially owns or holds 10% or more of any class of the Voting Stock of
such Person (or a 10% or greater equity interest in a Person which is not a
corporation), or
(3) of which 10% or more of any class of the Voting Stock (or, in the
case of a Person which is not a corporation, 10% or more of the equity
interest) is beneficially owned or held directly or indirectly through one
or more intermediaries by such Person.
The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Asset Sale" means the sale, conveyance, transfer, lease or other
disposition, whether in a single transaction or a series of related transactions
(including, without limitation, dispositions pursuant to Sale/ Leaseback
Transactions or pursuant to the merger of Boyd Gaming or any of its Restricted
Subsidiaries with or into any person other than Boyd Gaming or one of its
Restricted Subsidiaries), by Boyd Gaming or one of its Restricted Subsidiaries
to any Person other than Boyd Gaming or one of its Restricted Subsidiaries of:
(1) any of the Capital Stock or other ownership interests of any
Subsidiary of Boyd Gaming; or
(2) any other Property of Boyd Gaming or any Property of its
Restricted Subsidiaries,
in each case not in the ordinary course of business of Boyd Gaming or such
Restricted Subsidiary.
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Notwithstanding the foregoing, the following items will not be deemed to be
Asset Sales:
(A) any issuance or other such disposition of Capital Stock or other
ownership interests of any Restricted Subsidiary to Boyd Gaming or another
Restricted Subsidiary;
(B) any such disposition of Property between or among Boyd Gaming and
its Restricted Subsidiaries;
(C) the sale or other disposition of cash or Temporary Cash
Investments;
(D) any exchange of like Property pursuant to Section 1031 of the
Internal Revenue Code of 1986, as amended, for use in a Related Business;
and
(E) a Restricted Payment that is Permitted by the covenant described
above under the caption "-- Certain Covenants -- Limitation on Restricted
Payments."
"Attributable Indebtedness" means Indebtedness deemed to be Incurred in
respect of a Sale/Leaseback Transaction and shall be, at the date of
determination, the present value (discounted at the actual rate of interest
implicit in such transaction, compounded annually), of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).
"Board of Directors" means the Board of Directors of Boyd Gaming or any
committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of Boyd Gaming to have been duly adopted by the Board
of Directors, to be in full force and effect on the date of such certification
and delivered to the trustee.
"Borgata Facility" means the casino facility in Atlantic City, New Jersey
developed pursuant to The Borgata Joint Venture.
"Borgata Joint Venture" means the joint venture pursuant to that certain
Joint Venture Agreement dated as of May 29, 1996, by and between MAC, CORP., a
wholly-owned subsidiary of Mirage Resorts, Incorporated, a Nevada corporation,
and Grand K, Inc., a wholly-owned subsidiary of Boyd Gaming, which subsequently
assigned its interest to Boyd Atlantic City, Inc., as such agreement is amended
from time to time.
"Boyd Family" means William S. Boyd, any direct descendant or spouse of
such person, or any direct descendant of such spouse, and any trust or other
estate in which each person who has a beneficial interest, directly or
indirectly through one or more intermediaries, in Capital Stock of Boyd Gaming
is one of the foregoing persons.
"Capital Lease Obligations" means Indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP and the amount of such Indebtedness shall be
the capitalized amount of such obligations determined in accordance with GAAP.
For purposes of "-- Certain Covenants # Limitation on Liens," Capital Lease
Obligations shall be deemed secured by a Lien on the Property being leased.
"Capital Stock" means, with respect to any Person, any and all shares or
other equivalents (however designated) of corporate stock, partnership interests
or any other participation, right, warrants, options or other interest in the
nature of an equity interest in such Person, but excluding any debt security
convertible or exchangeable into such equity interest.
A "Change of Control" shall be deemed to occur if:
(1) any "person" or "group" (within the meaning of Sections 13(d)(3)
and 14(d)(2) of the Exchange Act or any successor provision to either of
the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act), other than the Permitted Holders and other than a
Restricted Subsidiary, becomes
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the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time) of 50% or more
of the total voting power of all classes of the Voting Stock of Boyd Gaming
and/or warrants or options to acquire such Voting Stock, calculated on a
fully diluted basis; provided that for purposes of this clause (1), the
members of the Boyd Family shall be deemed to beneficially own any Voting
Stock of a corporation held by any other corporation (the "parent
corporation") so long as the members of the Boyd Family beneficially own
(as so defined), directly or indirectly through one or more intermediaries,
in the aggregate 50% or more of the total voting power of the Voting Stock
of the parent corporation;
(2) the sale, lease, conveyance or other transfer of all or
substantially all of the Property of Boyd Gaming (other than to any
Restricted Subsidiary) shall have occurred;
(3) the stockholders of Boyd Gaming shall have approved any plan of
liquidation or dissolution of Boyd Gaming;
(4) Boyd Gaming consolidates with or merges into another Person or any
Person consolidates with or merges into Boyd Gaming in any such event
pursuant to a transaction in which the outstanding Voting Stock of Boyd
Gaming is reclassified into or exchanged for cash, securities or other
property, other than any such transaction where:
(A) the outstanding Voting Stock of Boyd Gaming is reclassified
into or exchanged for Voting Stock of the surviving corporation that is
Capital Stock; and
(B) the Holders of the Voting Stock of Boyd Gaming immediately
prior to such transaction own, directly or indirectly, not less than a
majority of the Voting Stock of the surviving corporation immediately
after such transaction in substantially the same proportion as before
the transaction; or
(5) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new directors whose election or appointment by such board or whose
nomination for election by the stockholders of Boyd Gaming was approved by
a vote of either:
(A) 66 2/3% 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; or
(B) members of the Boyd Family who beneficially own (as defined for
purposes of clause (1) above), directly or indirectly through one or
more intermediaries, in the aggregate 50% or more of the total voting
power of the Voting Stock of Boyd Gaming),
cease for any reason to constitute a majority of the Board of Directors then in
office.
"Consolidated EBITDA" means, for any period, without duplication, the sum
of:
(1) Consolidated Net Income; and
(2) to the extent Consolidated Net Income has been reduced thereby:
(a) Consolidated Fixed Charges; (b) provisions for taxes based on income;
(c) consolidated depreciation expense; (d) consolidated amortization
expense; (e) all preopening expenses paid or accrued; and (f) other noncash
items reducing Consolidated Net Income,
minus other noncash items increasing Consolidated Net Income;
all as determined on a consolidated basis for Boyd Gaming and its Restricted
Subsidiaries in conformity with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means the ratio of Consolidated
EBITDA during the Reference Period to the aggregate amount of Consolidated Fixed
Charges during the Reference Period.
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"Consolidated Fixed Charges" means, for any period, the total interest
expense of Boyd Gaming and its consolidated Subsidiaries (other than
Unrestricted Subsidiaries), including:
(1) the interest component of Capital Lease Obligations;
(2) one-third of the rental expense attributable to operating leases;
(3) amortization of Indebtedness discount and commissions, discounts
and other similar fees and charges owed with respect to Indebtedness;
(4) noncash interest payments;
(5) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
(6) net costs pursuant to Interest Rate Agreements;
(7) dividends on all Preferred Stock of Restricted Subsidiaries held
by Persons other than Boyd Gaming or a Restricted Subsidiary;
(8) interest attributable to the Indebtedness of any other Person for
which Boyd Gaming or any Restricted Subsidiary is responsible or liable as
obligor, guarantor or otherwise (including Indebtedness Guaranteed pursuant
to Investment Guarantees) and
(9) any dividend or distribution, whether in cash, property or
securities, on Disqualified Stock of Boyd Gaming.
"Consolidated Net Income" means for any period, the net income (loss) of
Boyd Gaming and its Subsidiaries determined in accordance with GAAP; provided,
however, that the following items shall be excluded from the computation of
Consolidated Net Income:
(1) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that, subject to the limitations contained in
(4) below,
(A) the net income (or, if applicable, Boyd Gaming's equity in the
net income) of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to Boyd Gaming or a
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution to a Restricted Subsidiary,
to the limitations contained in clause (3) below), and
(B) Boyd Gaming's equity in a net loss of any such Person (other
than an Unrestricted Subsidiary) for such period shall be included in
determining such Consolidated Net Income;
(2) any net income (loss) of any Person acquired by Boyd Gaming or a
Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;
(3) any net income (loss) of any Restricted Subsidiary if such
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to Boyd Gaming, except that:
(A) subject to the limitations contained in (4) below, Boyd
Gaming's equity in the net income of any such Restricted Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period to Boyd Gaming or another
Restricted Subsidiary as a dividend (subject, in the case of a dividend
to another Restricted Subsidiary, to the limitation contained in this
clause), and
(B) Boyd Gaming's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(4) any gain or loss realized upon the sale or other disposition of
any Property of Boyd Gaming or its consolidated Subsidiaries (including
pursuant to any Sale/Leaseback Transaction) which is not sold
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or otherwise disposed of in the ordinary course of business and any gain or
loss realized upon the sale or other disposition of any Capital Stock of
any Person;
(5) items classified as extraordinary or any non-cash item classified
as nonrecurring; and
(6) the cumulative effect of a change in accounting principles.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of Boyd Gaming and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter ending at least 45 days prior to the taking of any action for the
purpose of which the determination is being made, as
(1) the par or stated value of all outstanding Capital Stock plus,
(2) paid-in capital or capital surplus relating to such Capital Stock
plus,
(3) any retained earnings or earned surplus, less
(A) any accumulated deficit, and
(B) any amounts attributable to Disqualified Stock.
"Credit Facility" means the senior secured credit facility outstanding on
the Issue Date, as amended from time to time, among Boyd Gaming, certain
Subsidiaries and a syndicate of banks, and any extensions, revisions,
refinancings or replacements thereof by an institutional lender or syndicate of
institutional lenders.
"Currency Exchange Protection Agreement" means, in respect of a Person, any
foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Disqualified Stock" of a Person means any Capital Stock of such Person:
(1) that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or otherwise:
(A) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise;
(B) is or may become redeemable or repurchaseable at the option of
the Holder thereof, in whole or in part; or
(C) is convertible or exchangeable or exercisable for Indebtedness;
and
(2) as to which the maturity, mandatory redemption, conversion or
exchange or redemption at the option of the Holder thereof occurs, or may
occur, in the case of each of clauses (1) or (2) on or prior to the first
anniversary of the Stated Maturity of the notes; provided, however, that
such Capital Stock of Boyd Gaming or any of its Subsidiaries shall not
constitute Disqualified Stock if it is redeemable prior to the first
anniversary of the Stated Maturity of the notes only if:
(A) the Holder or a beneficial owner of such Capital Stock is
required to qualify under the Gaming Laws and does not so qualify; or
(B) the Board of Directors determines in its reasonable, good faith
judgment, as evidenced by a Board Resolution, that as a result of a
Holder or beneficial owner owning such Capital Stock, Boyd Gaming or any
of its Subsidiaries has lost or may lose any Gaming License, which if
lost or not reinstated, as the case may be, would have a material
adverse effect on the business of Boyd Gaming and its Subsidiaries,
taken as a whole, or would restrict the ability of Boyd Gaming or any of
its Subsidiaries to conduct business in any gaming jurisdiction.
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"Event of Loss" means, with respect to any Property, any loss, destruction
or damage of such Property, or any condemnation, seizure or taking, by exercise
of the power of eminent domain or otherwise, of such Property, or confiscation
or requisition of the use of such Property.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means with respect to any Property, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will be
determined, except as otherwise provided:
(1) if such Property has a Fair Market Value of less than $5 million,
by any Officer of Boyd Gaming; or
(2) if such Property has a Fair Market Value in excess of $5 million,
by a majority of the Board of Directors and evidenced by a Board
Resolution, dated within 30 days of the relevant transaction, delivered to
the trustee.
"GAAP" means accounting principles generally accepted in the United States
of America in effect on the date of the indenture.
"Gaming Authority" means any of the Nevada Gaming Commission, the Nevada
State Gaming Control Board, the Louisiana Gaming Control Board, the Mississippi
Gaming Commission, the New Jersey Casino Control Commission, the New Jersey
Division of Gaming Enforcement, the Illinois Gaming Board, the Indiana Gaming
Commission and any other agency (including, without limitation, any agency
established by a federally-recognized Indian tribe to regulate gaming on such
tribe's reservation) which has, or may at any time after the date of the
indenture have, jurisdiction over the gaming activities of Boyd Gaming or any of
its Subsidiaries or any successor to such authority.
"Gaming Facility" means any gaming or parimutuel wagering establishment and
other property or assets directly ancillary thereto or used in connection
therewith, including any building, restaurant, hotel, theater, parking
facilities, retail shops, land, golf courses and other recreation and
entertainment facilities, vessel, barge, ship and equipment or 100% of the
equity interest of a Person the primary business of which is ownership and
operation of any of the foregoing.
"Gaming Laws" means the gaming laws of a jurisdiction or jurisdictions to
which Boyd Gaming or any of its Subsidiaries is, or may at any time after the
date of the indenture be, subject.
"Gaming License" means any license, permit, franchise or other
authorization from any governmental authority required on the date of the
indenture or at any time thereafter to own, lease, operate or otherwise conduct
the gaming business of Boyd Gaming and its Subsidiaries, including all licenses
granted under Gaming Laws and other Legal Requirements.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such first Person:
(1) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such other Person (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); or
(2) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in
part); provided, however, that the term "Guarantee" shall not include (i)
endorsements for collection or deposit in the ordinary course of business;
or (ii) any obligation in the nature of a completion guaranty which is
limited solely to an obligation to complete the development, construction
or opening of any new Gaming Facility entered into on behalf of any
Permitted Joint Venture. The term "Guarantee" used as a verb has a
corresponding meaning.
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"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), extend,
assume, Guarantee or become liable in respect of such Indebtedness or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness or obligation on the consolidated balance sheet of such Person
including by merger or operation of law (and "Incurrence," "Incurred,"
"Incurrable" and "Incurring" shall have meanings correlative to the foregoing).
The accretion of principal of a noninterest bearing or other discount security
shall not be deemed the Incurrence of Indebtedness so long the amount thereof is
included in the computation of "Consolidated Fixed Charges" for all purposes
under the indenture.
"Indebtedness" means (without duplication), with respect to any Person, any
indebtedness, secured or unsecured, contingent or otherwise, which is for
borrowed money (whether or not the recourse of the lender is to the whole of the
Property of such Person or only to a portion thereof), or the principal amount
of such indebtedness evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (excluding any balances that constitute customer advance
payments and deposits, accounts payable or trade payables, and other accrued
liabilities arising in the ordinary course of business) if and to the extent any
of the foregoing indebtedness would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, and shall also include, to the
extent not otherwise included:
(1) any Capital Lease Obligations;
(2) Indebtedness of other Persons secured by a Lien to which the
Property owned or held by such Person is subject, whether or not the
obligation or obligations secured thereby shall have been assumed (the
amount of such Indebtedness being deemed to be the lesser of the value of
such Property or the amount of the Indebtedness so secured);
(3) Guarantees of Indebtedness of other Persons;
(4) any Disqualified Stock;
(5) any Attributable Indebtedness;
(6) all obligations of such Person in respect of letters of credit,
bankers' acceptances or other similar instruments or credit transactions
issued for the account of such Person (including reimbursement obligations
with respect thereto), other than obligations with respect to letters of
credit securing obligations (other than obligations described in this
definition) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the third
business day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit;
(7) in the case of Boyd Gaming, Preferred Stock of its Restricted
Subsidiaries; and
(8) obligations pursuant to any Interest Rate Agreement or Currency
Exchange Protection Agreement.
Notwithstanding the foregoing, Indebtedness shall not include any interest
or accrued interest until due and payable. For purposes of this definition, the
maximum fixed repurchase price of any Disqualified Stock or Preferred Stock that
does not have a fixed repurchase price shall be calculated in accordance with
the terms of such Disqualified Stock or Preferred Stock as if such Disqualified
Stock or Preferred Stock were repurchased on any date on which Indebtedness
shall be required to be determined pursuant to the indenture; provided, however,
that if such Disqualified Stock or Preferred Stock is not then permitted to be
repurchased, the repurchase price shall be the book value of such Disqualified
Stock or Preferred Stock. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability of any other obligations described
in clauses (1) through (8) above in respect thereof at such date.
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"Independent Advisor" means, an investment banking firm of national
standing with non-investment grade debt underwriting experience or any third
party appraiser of national standing; provided, however, that such firm or
appraiser is not an Affiliate of Boyd Gaming.
"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement.
"Investment" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution (by means of transfers of cash
or other Property to others or payments for Property or services for the account
or use of others), in connection with the performance of obligations under any
completion guaranty or otherwise, to, or Incurrence of an Investment Guarantee
or a Guarantee of any obligation of, or purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidence of Indebtedness
issued by, any other Person, including the designation by the Board of Directors
of a Person to be an Unrestricted Subsidiary. In determining the amount of any
Investment in respect of any Property other than cash, such Property shall be
valued at its Fair Market Value at the time of such Investment.
"Investment Grade Rating" means a rating equal to or higher than Baa3 (or
the equivalent) by Moody's (or any successor to the rating agency business
thereof) and BBB- (or the equivalent) by S&P (or any successor to the rating
agency business thereof).
"Investment Grade Status" means any time at which the ratings of the notes
by each of Moody's (or any successor to the rating agency business thereof) and
S&P (or any successor to the rating agency business thereof) are Investment
Grade Ratings.
"Investment Guarantee" means any Guarantee by Boyd Gaming or a Restricted
Subsidiary of Indebtedness of a Permitted Joint Venture; provided, such
Guarantee complies with the requirements of clause (8) of the second paragraph
of "-- Limitation on Restricted Payments"; provided, further, that only such
Indebtedness of such Permitted Joint Venture Guaranteed by Boyd Gaming or a
Restricted Subsidiary that matures by its terms prior to the time (if any) that
the ability of Boyd Gaming or a Restricted Subsidiary to control the day-to-day
operations of such Permitted Joint Venture (pursuant to a management contract or
otherwise) is scheduled to expire may constitute Indebtedness subject to an
Investment Guarantee.
"Issue Date" means the date on which the notes are initially issued.
"Legal Requirements" means all laws, statutes and ordinances and all rules,
orders, rulings, regulations, directives, decrees, injunctions and requirements
of all governmental authorities, that are now or may hereafter be in existence,
and that may be applicable to Boyd Gaming or any Subsidiary or Affiliate thereof
or the trustee (including building codes, zoning and environmental laws,
regulations and ordinances and Gaming Laws), as modified by any variances,
special use permits, waivers, exceptions or other exemptions which may from time
to time be applicable.
"Lien" means with respect to any Property of any Person, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority, or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such Property (including any Capital Lease
Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing). Any
Sale/Leaseback Transaction shall be deemed to constitute a Lien on the Property
which is the subject of such Sale/Leaseback Transaction securing the
Attributable Indebtedness represented thereby.
"Moody's" means Moody's Investors Service, Inc.
"Net Cash Proceeds" with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale, net of attorney's fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
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"Net Proceeds" from any Asset Sale or Event of Loss by any Person or its
Restricted Subsidiaries means cash and cash equivalents received in respect of
the Property sold or with respect to which an Event of Loss occurred, net of:
(1) all reasonable out-of-pocket expenses of such Person or such
Restricted Subsidiary Incurred in connection with an Asset Sale of such
type, including, without limitation, all legal, title and recording tax
expenses, commissions and fees and expenses incurred (but excluding any
finder's fee or broker's fee payable to any Affiliate of such Person) and
all Federal, state, provincial, foreign and local taxes arising in
connection with such Asset Sale or Event of Loss that are paid or required
to be accrued as a liability under GAAP by such Person or its Restricted
Subsidiaries;
(2) all payments made by such Person or its Restricted Subsidiaries on
any Indebtedness which is secured by such Property in accordance with the
terms of any Lien upon or with respect to such Property or which must, by
the terms of such Lien, or in order to obtain a necessary consent to such
Asset Sale or by applicable law, be repaid out of the proceeds from such
Asset Sale or Event of Loss; and
(3) all contractually required distributions and other payments made
to minority interest Holders (but excluding distributions and payments to
Affiliates of such Person) in Restricted Subsidiaries of such Person as a
result of such Asset Sale or Event of Loss; provided, however, that, in the
event that any consideration for an Asset Sale (which would otherwise
constitute Net Proceeds) is required to be held in escrow pending
determination of whether a purchase price adjustment will be made, such
consideration (or any portion thereof) shall become Net Proceeds only at
such time as it is released to such Person or its Restricted Subsidiaries
from escrow; and provided further, however, that any noncash consideration
received in connection with an Asset Sale or Event of Loss which is
subsequently converted to cash shall be deemed to be Net Proceeds at and
from the time of such conversion.
"Non-Recourse Indebtedness" means Indebtedness of a Person to the extent
that under the terms thereof or pursuant to applicable law:
(1) no personal recourse shall be had against such Person for the
payment of the principal of or interest or premium, if any, on such
Indebtedness; and
(2) enforcement of obligations on such Indebtedness is limited only to
recourse against interests in Property purchased with the proceeds of the
Incurrence of such Indebtedness and as to which neither Boyd Gaming nor any
of its Restricted Subsidiaries provides any credit support or is liable.
"Officer" means the Chief Executive Officer, President, Treasurer, any
Executive Vice President, Senior Vice President or any Vice President of Boyd
Gaming.
"Officers' Certificate" means a certificate signed by two Officers at least
one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of Boyd Gaming.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the trustee. The counsel may be an employee of or counsel to Boyd
Gaming or the trustee.
"Permitted FF&E Financing" means Indebtedness of Boyd Gaming or any of its
Restricted Subsidiaries that is Incurred to finance the acquisition or lease
after the date of the indenture of newly acquired or leased furniture, fixtures
or equipment (FF&E) used directly in the operation of a Gaming Facility owned or
leased by Boyd Gaming or its Restricted Subsidiaries and secured by a Lien on
such FF&E in an amount not to exceed 100% of the cost of the FF&E so purchased
or leased.
"Permitted Holders" means the Boyd Family and any group (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) comprised solely of
members of the Boyd Family.
"Permitted Investment" means an Investment by Boyd Gaming or any Restricted
Subsidiary in:
(1) a Restricted Subsidiary or a Person which will, upon the making of
such Investment, become a Restricted Subsidiary; provided, however, that
the primary business of such Restricted Subsidiary is a Related Business;
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(2) another Person if as a result of such Investment such other Person
is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, Boyd Gaming or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related
Business;
(3) Temporary Cash Investments;
(4) receivables owing to Boyd Gaming or any Restricted Subsidiary, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as Boyd
Gaming or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business;
(6) loans or advances to employees made in the ordinary course of
business consistent with past practices of Boyd Gaming or such Restricted
Subsidiary, as the case may be;
(7) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to Boyd Gaming or any
Restricted Subsidiary or in satisfaction of judgments; and
(8) securities received pursuant to clause (2) of the first paragraph
under "-- Redemption at the Option of Holders -- Asset Sales; Events of
Loss."
"Permitted Joint Venture" means a Person in which a Permitted Joint Venture
Investment has been made by Boyd Gaming or any Restricted Subsidiary.
"Permitted Joint Venture Investment" means any Investment in a Person
primarily engaged or preparing to engage in a Related Business if (1) other than
with respect to any Person which is a Native American tribe or an agency or
instrumentality thereof, immediately after giving effect to such Investment,
Boyd Gaming or a Restricted Subsidiary will own at least 35% of the shares of
Capital Stock (including at least 35% of the total voting power thereof) of such
Person, and will control the day-to-day operations of such Person pursuant to a
management contract or otherwise; or (2) with respect to any Person which is a
Native American tribe or an agency or instrumentality thereof, there is in
effect a written agreement which has been approved by all required Gaming
Authorities, pursuant to which Boyd Gaming or one of its Restricted Subsidiaries
will manage such tribe's gaming activities at the facility or facilities for
which the Investment is being made in exchange for customary fees and
reimbursements.
"Permitted Liens" means:
(1) Liens for taxes, assessments or governmental charges or levies on
the Property of Boyd Gaming or any Specified Subsidiary if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or
are being contested in good faith and by appropriate proceedings;
(2) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens on the Property of Boyd Gaming or
any Specified Subsidiary which secure payment of obligations arising in the
ordinary course of business;
(3) Liens on the Property of Boyd Gaming or any Specified Subsidiary
in favor of issuers of performance bonds and surety bonds obtained in the
ordinary course of business;
(4) other Liens on the Property of Boyd Gaming or any Specified
Subsidiary incidental to the conduct of their respective businesses or the
ownership of their respective Properties which were not created in
connection with the Incurrence of Indebtedness or the obtaining of advances
or credit and which do not in the aggregate materially detract from the
value of their respective Properties or materially impair the use thereof
in the operation of their respective businesses;
(5) pledges or deposits by Boyd Gaming or any Specified Subsidiary
under workmen's compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Indebtedness) or leases to which
Boyd Gaming or
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any Specified Subsidiary is a party, or deposits to secure public or
statutory obligations of Boyd Gaming or any Specified Subsidiary, or
deposits for the payment of rent, in each case Incurred in the ordinary
course of business;
(6) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and do not
materially detract from the value of such Property; and
(7) Liens securing obligations to the trustee pursuant to the
compensation and indemnity provisions of the indenture.
"Permitted Refinancing Indebtedness" means any renewals, extensions,
substitutions, refinancings or replacements of any Indebtedness, including any
successive extensions, renewals, substitutions, refinancings or replacements
(and including refinancings by Boyd Gaming of Indebtedness of a Restricted
Subsidiary) so long as:
(1) the aggregate amount of Indebtedness represented thereby is not
increased by such renewal, extension, substitution, refinancing or
replacement;
(2) the average life and Stated Maturity is not shortened; and
(3) the new Indebtedness shall not be senior in right of payment to
the Indebtedness that is being extended, renewed, substituted, refinanced
or replaced; provided, however, that Permitted Refinancing Indebtedness
shall not include:
(a) Indebtedness of a Subsidiary that refinances Indebtedness of
Boyd Gaming or another Subsidiary; or
(b) Indebtedness of Boyd Gaming that refinances the Indebtedness of
an Unrestricted Subsidiary.
"Permitted Stardust Contribution" shall mean the contribution by Mare-Bear,
Inc. (or any other Guarantor which owns the Stardust Casino facility on the Las
Vegas Strip) of the Stardust real estate (and improvements thereon) to a
Permitted Joint Venture which is not a Subsidiary of Boyd Gaming, which
contribution shall be permitted if (i) it occurs subsequent to the opening of
The Borgata Facility; (ii) pro forma for such contribution the Consolidated
Fixed Charge Coverage Ratio of Boyd Gaming and its Restricted Subsidiaries is
2.5 to 1 or greater; (iii) at the time Boyd Gaming enters into a binding
agreement to make any such contribution the notes have ratings from S&P and
Moody's which are not less than the ratings assigned by such rating agencies to
the notes on the Issue Date, respectively (and there is no announced review
pending for a possible downgrade of such ratings); (iv) the terms of any such
contribution comply with the requirements of the provision described above under
"-- Certain Covenants -- Limitation on Transactions with Affiliates," without
regard to the exception set forth in clause (2) of the second paragraph thereof;
and (v) Boyd Gaming shall have delivered to the trustee under the indenture for
payment to the Holders of the notes, an amount equal to the greater of (a) $7.50
per each $1,000 principal amount of notes then outstanding; or (b) an amount per
$1,000 principal amount of notes then outstanding equal to the amount, if any,
paid (per $1,000 principal amount) to the Holders of Boyd Gaming 9.50% Senior
Subordinated Notes due 2007 as consideration for their consent to such
contribution of the Stardust property to a permitted joint venture.
"Person" means any individual, corporation, company (including limited
liability company), partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Stock" means any Capital Stock of a Person, however designated,
which entitles the Holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the Holders of other
Capital Stock issued by such Person.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including, without limitation, Capital Stock in any other Person
(but excluding Capital Stock or other securities issued by such first Person).
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"Public Equity Offering" means an underwritten public offering of Capital
Stock of the Company pursuant to an effective registration statement under the
Securities Act.
"Qualified Non-Recourse Debt" means Indebtedness:
(1) as to which neither Boyd Gaming 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;
provided, however, that the provision by Boyd Gaming of a completion
guaranty or the making of payments with respect thereto, in each case, to
the extent permitted under the covenant described above under "-- Certain
Covenants -- Limitation on Restricted Payments," shall not prevent any
Indebtedness from constituting Qualified Non-Recourse Debt;
(2) no default with respect to which (including any rights that the
Holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any Holder of any Indebtedness of Boyd Gaming or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment of the Indebtedness to be accelerated or payable prior to its
stated maturity; and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of Boyd Gaming or any of
its Restricted Subsidiaries.
"Rating Agencies" means S&P and Moody's or any successor to the respective
rating agency businesses thereof.
"Rating Decline" shall have occurred if at any date within 90 calendar days
after the date of public disclosure of the occurrence of a Change of Control
(which period will be extended for so long as Boyd Gaming's debt ratings are
under publicly announced review for possible downgrading (or without an
indication of the direction of a possible ratings change) by either Moody's or
S&P or their respective successors) the notes no longer have Investment Grade
Status.
"Reference Period" means the period of four consecutive fiscal quarters
ending with the last full fiscal quarter immediately preceding the date of a
proposed Incurrence, Restricted Payment or other transaction.
"Related Business" means the business conducted (or proposed to be
conducted) by Boyd Gaming and its Subsidiaries in connection with any Gaming
Facility and any and all reasonably related businesses necessary for, in
support, furtherance or anticipation of and/or ancillary to or in preparation
for, such business including, without limitation, the development, expansion or
operation of any Gaming Facility (including any land-based, dockside, riverboat
or other type of casino), owned, or to be owned, leased or managed by Boyd
Gaming or one of its Subsidiaries.
"Related Person" means any legal or beneficial owner of 5% or more of any
class of Capital Stock of Boyd Gaming or any of its Subsidiaries.
"Restricted Payment" means:
(1) any dividend or distribution (whether made in cash, property or
securities) declared or paid on or with respect to any shares of Capital
Stock of Boyd Gaming or to Boyd Gaming's stockholders except for such
dividends or distributions payable solely in Capital Stock of Boyd Gaming
(other than Disqualified Stock of Boyd Gaming);
(2) a payment made by Boyd Gaming or any Restricted Subsidiary (other
than to Boyd Gaming or a Restricted Subsidiary) to purchase, redeem,
acquire or retire any Capital Stock of Boyd Gaming or Capital Stock of any
Affiliate of Boyd Gaming or any warrants, rights or options, to directly or
indirectly purchase or acquire any such Capital Stock or any securities
exchangeable for or convertible into any such Capital Stock;
(3) a payment made by Boyd Gaming or any Restricted Subsidiary to
redeem, repurchase, defease or otherwise acquire or retire for value, prior
to any scheduled maturity, scheduled sinking fund or
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mandatory redemption payment (other than the purchase, repurchase, or other
acquisition of any Indebtedness subordinate in right of payment to the
notes purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year
of the date of acquisition), Indebtedness of Boyd Gaming or any Guarantor
which is subordinate (whether pursuant to its terms or by operation of law)
in right of payment to the notes or the Guarantees; or
(4) any Investment (other than a Permitted Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of Boyd Gaming that:
(a) has not been designated by the Board of Directors of Boyd Gaming
as an Unrestricted Subsidiary; or
(b) was an Unrestricted Subsidiary, but has been redesignated by the
Board of Directors of Boyd Gaming as a Restricted Subsidiary,
in each case as provided under the definition of Unrestricted Subsidiary;
provided, however, that no Subsidiary shall become a Restricted Subsidiary
unless, immediately after giving pro forma effect to such designation, Boyd
Gaming would be able to incur at least $1.00 of additional Indebtedness pursuant
to the first paragraph of "Certain Covenants -- Limitation on Indebtedness."
"Sale/Leaseback Transaction" means, with respect to any Person, any direct
or indirect arrangement pursuant to which Property is sold or transferred by
such Person or a Restricted Subsidiary of such Person and is thereafter leased
back from the purchaser or transferee thereof by such Person or one of its
Restricted Subsidiaries.
"S&P" means Standard &Poor's Ratings Group, a division of the McGraw-Hill
Companies, Inc.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which a payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the Holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subsidiary" of any Person means any corporation, association, partnership,
limited liability company or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries of such Person; or
(3) one or more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following:
(1) Investments in U.S. Government Obligations maturing within 90 days
of the date of acquisition thereof;
(2) Investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 90 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws
of the United States of America or any state thereof having capital,
surplus and undivided profits aggregating in excess of $500,000,000 and
whose long-term debt is rated "A-3" or higher, "A--" or higher or "A--" or
higher according to Moody's, S&P or Fitch Credit Rating Co. (or such
similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the
Securities Act)), respectively;
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(3) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered
into with a bank meeting the qualifications described in clause (2) above;
and
(4) Investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than Boyd
Gaming or an Affiliate of Boyd Gaming) organized and in existence under the
laws of the United States of America with a rating at the time as of which
any Investment therein is made of "P-1" (or higher) according to Moody's
"A-1" (or higher) according to S&P or "A-1" (or higher) according to Fitch
Credit Rating Co. (or such similar equivalent rating by at least one
"nationally recognized statistical rating organization" (as defined in Rule
436 under the Securities Act)); and
(5) investments in money market funds substantially all of whose
assets comprise securities of the types described in clauses (1) through
(4) above.
"Unrestricted Subsidiary" means (1) any Subsidiary of Boyd Gaming which at
the time of determination shall be an Unrestricted Subsidiary (as designated by
the Board of Directors) and (2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of Boyd Gaming
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary (unless such Subsidiary owns any Capital Stock of or owns or holds
any Lien on any Property of Boyd Gaming or any other Subsidiary of Boyd Gaming
which is not a Subsidiary of the Subsidiary to be so designated); provided,that
such Subsidiary has no Indebtedness other than Qualified Non-Recourse Debt and:
(A) the Subsidiary to be so designated has total assets of $1,000 or
less; or
(B) such designation is effective immediately upon such entity
becoming a Subsidiary of Boyd Gaming.
Subject to clause (2) above, the Board of Directors may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately
after giving pro forma effect to such redesignation, Boyd Gaming would be able
to incur at least $1.00 of additional Indebtedness pursuant to the first
paragraph of "Certain Covenants -- Limitation on Indebtedness."
If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirement with respect to Qualified Non-Recourse Debt, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture
and any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of Boyd Gaming as of such date (and, if such Indebtedness
is not permitted to be incurred as of such date under the covenant described
above under the caption "Limitation on Indebtedness," Boyd Gaming shall be in
Default of such covenant).
Any such designation by the Board of Directors will be evidenced to the
trustee by filing with the trustee a copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying:
(1) that such designation complies with the foregoing provisions; and
(2) giving the effective date of such designation,
such filing with the trustee to occur within 75 days after the end of the fiscal
quarter of Boyd Gaming in which such designation is made (or, in the case of a
designation made during the last fiscal quarter of the fiscal year, within 120
days after the end of such fiscal year).
"U.S. Government Obligations" means direct obligations (or Certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Voting Stock" means securities of any class or classes of a Person, the
Holders of which are ordinarily, in the absence of contingencies, entitled to
vote for corporate directors (or Persons performing equivalent functions).
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
In this section we summarize some of the tax considerations relevant to the
exchange of your old notes for exchange notes in the exchange offer and the
ownership and disposition of the exchange notes by holders who acquire the
exchange notes pursuant to the exchange offer and who or which hold the exchange
notes as capital assets for purposes of the U.S. Internal Revenue Code. This
summary does not purport to be a complete analysis of all potential tax
considerations relating to the exchange notes. The U.S. Internal Revenue Code
contains rules relating to securities held by special categories of holders,
including financial institutions, certain insurance companies, broker-dealers,
tax-exempt organizations, traders in securities that elect to mark-to-market,
investors liable for the alternative minimum tax, investors that hold shares as
part of a straddle or a hedging or conversion transaction, and investors whose
functional currency is not the U.S. dollar. We do not discuss these rules and
holders who are in special categories should consult their own tax advisors.
This discussion is based on the current provisions of:
- the U.S. Internal Revenue Code and current and proposed regulations under
the U.S. Internal Revenue Code;
- the administrative policies published by the U.S. Internal Revenue
Service or "IRS"; and
- judicial decisions;
all of which are subject to change either prospectively or retroactively.
We intend this summary to be a general description of the U.S. federal
income tax considerations material to the exchange of your old notes for
exchange notes in the exchange offer and the ownership and disposition of the
exchange notes by holders who acquire the exchange notes pursuant to the
exchange offer. We do not discuss U.S., state, local, foreign or other tax laws,
including gift and estate tax laws, that may apply.
YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE APPLICATION
OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION AS
WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE FEDERAL ESTATE OR GIFT TAX RULES
OR UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN OR OTHER TAXING JURISDICTION OR
UNDER ANY APPLICABLE TAX TREATY.
We have not sought and will not seek any rulings from the IRS on the
matters discussed in this section. The IRS may take a different position on the
tax consequences of the exchange of your old notes for exchange notes in the
exchange offer and the ownership and disposition of the exchange notes by
holders who acquire the exchange notes pursuant to the exchange offer and that
position may be sustained.
We refer to you as a "U.S. Holder" if you are an individual or entity who
or that is:
- for purposes of the U.S. Internal Revenue Code, a citizen or resident in
the U.S.;
- a corporation or other entity created or organized under the laws of the
U.S. or any political subdivision of the U.S.;
- an estate, the income of which is subject to U.S. federal income taxation
regardless of its source;
- a trust which either (1) is subject to supervision of a court within the
U.S. and the control of one or more U.S. persons, or (2) has elected to
be treated as a U.S. person; or
- otherwise subject to U.S. federal income tax on a net income basis on the
exchange notes.
We refer to persons who or that are not "U.S. holders" as "non-U.S.
holders."
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U.S. HOLDERS
Interest. If you are a U.S. holder, the stated interest on the exchange
notes generally will be taxable to you as ordinary income at the time that it is
paid or accrued, in accordance with your method of accounting for U.S. federal
income tax purposes.
Sale, Exchange or Other Taxable Disposition of an Exchange Note. As a U.S.
holder, you will recognize gain or loss on the sale, retirement, redemption or
other taxable disposition of an exchange note in an amount equal to the
difference between (1) the amount of cash and the fair market value of other
property received in exchange for the exchange note, other than amounts for
accrued but unpaid stated interest, and (2) your adjusted tax basis in the
exchange note. Any gain or loss recognized will generally be capital gain or
loss. The capital gain or loss will generally be long-term capital gain or loss
your holding period for the exchange note is more than one year. Otherwise, the
capital gain or loss will be a short-term capital gain or loss.
Market Discount. U.S. holders should be aware that the resale of the
exchange notes may be affected by the "market discount" rules of the U.S.
Internal Revenue Code under which a purchaser of an exchange note acquiring the
exchange note at a market discount generally would be required to include as
ordinary income a portion of the gain realized upon the disposition or
retirement of such exchange note, to the extent of the market discount that has
accrued but not been included in income while the debt instrument was held by
such purchaser.
Exchange Offer. As a U.S. holder, you will not recognize taxable gain or
loss from exchanging notes for exchange notes in the registered exchange offer.
The holding period of the exchange notes will include the holding period of the
old notes that are exchanged for the exchange notes. The adjusted tax basis of
the exchange notes will be the same as the adjusted tax basis of the old notes
exchanged for the exchange notes immediately before the exchange.
Consent Payments. The indenture requires the Company to make a consent
payment to holders in the event of certain transfers of the Stardust property.
Any such payment, if made, will be taxable to you as ordinary income when
received or accrued in accordance with your method of accounting for U.S.
federal income tax purposes.
Effectively Connected Income. Holders whose income on the exchange notes
is subject to U.S. federal income tax on a net income basis because such income
is effectively connected with the conduct of a trade or business within the
United States should consult their own tax advisors concerning the U.S. tax
consequences of the exchange notes.
Backup Withholding and Information Reporting. As a U.S. holder, you may be
subject to information reporting and possible backup withholding. If applicable,
backup withholding would apply at a maximum rate of 31% on interest on, or the
proceeds of a sale, exchange, redemption, retirement, or other disposition of,
an exchange note, unless you (1) are a corporation or come within other exempt
categories and, when required, demonstrate this fact, or (2) provide us or our
agent with your taxpayer identification number, certify as to no loss of
exemption from backup withholding, and otherwise comply with the backup
withholding rules.
NON-U.S. HOLDERS
INTEREST
If you are a non-U.S. holder, interest paid to you on the exchange notes
will not be subject to U.S. withholding tax if:
- you do not actually or constructively own 10% or more of the total
combined voting power of all classes of our stock;
- you are not a "controlled foreign corporation" for U.S. federal income
tax purposes that is related to us through stock ownership;
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- you are not a bank that received the interest on an extension of credit
made under a loan agreement entered into in the ordinary course of your
trade or business; and
- either (1) you, as the beneficial owner of the exchange note, provide us
or our agent with a statement, on U.S. Treasury Form W-8 BEN or a
suitable substitute form, signed under penalties of perjury that includes
your name and address and certifies that you are not a U.S. person, or
(2) an exemption is otherwise established. If you hold your exchange
notes through certain foreign intermediaries or certain foreign
partnerships, such foreign intermediaries or partnerships must also
satisfy the certification requirements of applicable U.S. Treasury
Regulations.
If these requirements are not met, you will be subject to U.S. withholding
tax at a rate of 30%, or lower treaty rate, if applicable, on interest payments.
Sale, Exchange or Other Taxable Disposition of an Exchange Note. As a
non-U.S. holder, gain realized by you on the sale, exchange or redemption of an
exchange note generally will not be subject to U.S. withholding tax. However,
gain will be subject to U.S. tax if (1) you are an individual who is present in
the U.S. for a total of 183 days or more during the taxable year in which the
gain is realized and other conditions are satisfied, or (2) you are subject to
tax under U.S. tax laws that apply to certain U.S. expatriates.
BACKUP WITHHOLDING AND INFORMATION REPORTING.
The amount of any interest paid to, and the tax withheld with respect to, a
non-U.S. holder must generally be reported annually to the IRS and to such
non-U.S. holder regardless of whether any tax was actually withheld.
Payments on the exchange notes made by us or our paying agent to
noncorporate non-U.S. holders may be subject to information reporting and
possibly to "backup withholding" at a maximum rate of 31%. Information reporting
and backup withholding generally do not apply, however, to payments made by us
or our paying agent on an exchange note if we (1) have received from you the
U.S. Treasury Form W-8 BEN or a suitable substitute form as described above
under "Non-U.S. Holders -- Interest," or otherwise establish an exemption and
(2) do not have actual knowledge that you are a U.S. holder.
Payment of proceeds from a sale of an exchange note to or through the U.S.
office of a broker is subject to information reporting and backup withholding
unless you certify as to your non-U.S. status or otherwise establish an
exemption from information reporting and backup withholding and the broker does
not have actual knowledge that you are a U.S. holder. Payment outside the United
States of the proceeds of the sale of an exchange note to or through a foreign
office of a "broker," as defined in the applicable U.S. Treasury Regulations,
should not be subject to information reporting or backup withholding. However,
U.S. information reporting, but not backup withholding, generally will apply to
a payment made outside the U.S. of the proceeds of a sale an exchange note
through an office outside the U.S. of a broker if the broker:
- is a U.S. person;
- is a foreign person who derives 50% or more of its gross income from the
conduct of a U.S. trade or business;
- is a "controlled foreign corporation" for U.S. federal income tax
purposes; or
- is a foreign partnership, if at any time during its taxable year, one or
more of its partners are U.S. persons, as defined in U.S. Treasury
Regulations, who in the aggregate hold more than 50% of the income or
capital interest in the partnership or if, at any time during its taxable
year, the foreign partnership is engaged in a U.S. trade or business.
However, information reporting will not apply if (1) you certify as to your
non-U.S. status or the broker has documentary evidence in its records that you
are a non-U.S. holder, and certain other conditions are met or (2) an exemption
is otherwise established.
Any amounts withheld under the backup withholding regulations from a
payment to you will be allowed as a refund or credit against your U.S. federal
income tax liability, provided that you follow the requisite procedures.
84
90
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of the exchange notes. Broker-dealers
may use this prospectus, as it may be amended or supplemented from time to time,
in connection with the resale of exchange notes received in exchange for old
notes where the broker-dealer acquired the old notes as a result of
market-making activities or other trading activities. We have agreed that,
starting at the expiration date and ending 180 days after the expiration date,
we will make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers or any other persons. Broker-dealers may sell exchange notes
received by them for their own account pursuant to the exchange offer from time
to time in one or more transactions:
- in the over-the-counter market;
- in negotiated transactions;
- through the writing of options on the exchange notes; or
- through a combination of the above methods of resale,
at market prices prevailing at the time of resale, at prices related to the
prevailing market prices or negotiated prices. Broker-dealers may resell
exchange notes directly to purchasers or to or through brokers or dealers who
may receive compensation in the form of commissions or concessions from any
broker-dealer and/or the purchasers of the exchange notes. Any broker-dealer
that resells exchange notes that were received by it for its own account
pursuant to the exchange offer and any broker or dealer that participates in a
distribution of the exchange notes may be deemed to be "underwriters" within the
meaning of the Securities Act and any profit on any resale of exchange notes and
any commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
We have agreed to pay certain expenses incident to the exchange offer
(including the expenses of one counsel for the holders of old notes), other than
commissions and concessions of any broker-dealer. We also will provide
indemnification against specified liabilities, including liabilities that may
arise under the Securities Act, to holders of old notes in the exchange offer
for exchange notes. By its acceptance of the exchange offer, any broker-dealer
that receives exchange notes pursuant to the exchange offer agrees to notify us
before using the prospectus in connection with the sale or transfer of exchange
notes. The broker-dealer further acknowledges and agrees that, upon receipt of
notice from us of the happening of any event which:
- makes any statement in the prospectus untrue in any material respect; or
- requires the making of any changes in the prospectus to make the
statements in the prospectus not misleading,
which notice we agree to deliver promptly to the broker-dealer, the
broker-dealer will suspend use of the prospectus until we have notified the
broker-dealer that delivery of the prospectus may resume and have furnished
copies of any amendment or supplement to the prospectus to the broker-dealer.
85
91
LEGAL MATTERS
The validity of the exchange notes and the guarantees will be passed upon
for Boyd Gaming Corporation and its guarantor subsidiaries by Morrison &
Foerster LLP, Irvine, California.
EXPERTS
The consolidated financial statements of Boyd Gaming Corporation and
Subsidiaries as of December 31, 2000 and 1999, and for each of the three years
in the period ended December 31, 2000, included in this prospectus have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is included herein, and has been so included in reliance upon the
report of such firm given upon their authority as experts in auditing and
accounting.
86
92
BOYD GAMING CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE
----
Independent Auditors' Report................................ F-2
Consolidated Balance Sheets
As of December 31, 2000 and 1999.......................... F-3
Consolidated Statements of Operations
For the years ended December 31, 2000, 1999 and 1998...... F-4
Consolidated Statements of Changes in Stockholders' Equity
For the years ended December 31, 2000, 1999 and 1998...... F-5
Consolidated Statements of Cash Flows
For the years ended December 31, 2000, 1999 and 1998...... F-6
Notes to Consolidated Financial Statements.................. F-7
Selected Quarterly Financial Information (unaudited)........ F-30
F-1
93
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Boyd Gaming Corporation and Subsidiaries:
We have audited the accompanying consolidated balance sheets of Boyd Gaming
Corporation and Subsidiaries (the "Company") as of December 31, 2000 and 1999,
and the related consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the three years in the period ended December
31, 2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Boyd Gaming Corporation and
Subsidiaries at December 31, 2000 and 1999, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2000, in conformity with accounting principles generally accepted in the
United States of America.
DELOITTE & TOUCHE LLP
Las Vegas, Nevada
February 14, 2001 (except for Note 17 as to
which the date is July 11, 2001)
F-2
94
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31,
-----------------------
2000 1999
---------- ----------
ASSETS
Current assets
Cash and cash equivalents................................. $ 88,059 $ 86,192
Accounts receivable, net.................................. 14,260 17,585
Inventories............................................... 6,200 6,181
Prepaid expenses and other................................ 11,837 14,718
Income taxes receivable................................... 66 1,108
Deferred income taxes..................................... 8,149 16,835
---------- ----------
Total current assets................................. 128,571 142,619
Property and equipment, net................................. 959,966 901,014
Investment in unconsolidated subsidiaries, net.............. 105,560 5,708
Other assets and deferred charges, net...................... 38,213 39,981
Intangible assets, net...................................... 345,304 354,659
---------- ----------
Total assets......................................... $1,577,614 $1,443,981
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt...................... $ 2,485 $ 1,744
Accounts payable.......................................... 38,540 36,531
Construction payables..................................... 9,816 8,609
Accrued liabilities
Payroll and related.................................... 36,115 31,184
Interest and other..................................... 70,061 58,862
---------- ----------
Total current liabilities............................ 157,017 136,930
Long-term debt, net of current maturities................... 1,016,813 982,149
Deferred income taxes and other liabilities................. 74,006 57,923
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value; 5,000,000 shares
authorized............................................. -- --
Common stock, $.01 par value; 200,000,000 shares
authorized; 62,234,954 and 62,227,753 shares
outstanding............................................ 622 622
Additional paid-in capital................................ 142,020 141,986
Retained earnings......................................... 187,136 124,371
---------- ----------
Total stockholders' equity........................... 329,778 266,979
---------- ----------
Total liabilities and stockholders' equity........... $1,577,614 $1,443,981
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
95
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31,
------------------------------------
2000 1999 1998
---------- ---------- ----------
Revenues
Casino................................................. $ 868,983 $ 733,677 $ 722,124
Food and beverage...................................... 160,139 158,982 161,582
Room................................................... 75,114 71,478 74,053
Other.................................................. 73,125 69,988 70,903
Management fees and joint venture...................... 3,815 47,463 40,206
Termination fee, net................................... 70,988 -- --
---------- ---------- ----------
Gross revenues........................................... 1,252,164 1,081,588 1,068,868
Less promotional allowances.............................. 120,626 110,663 108,229
---------- ---------- ----------
Net revenues........................................ 1,131,538 970,925 960,639
---------- ---------- ----------
Costs and expenses
Casino................................................. 423,017 355,284 352,289
Food and beverage...................................... 103,056 103,439 106,195
Room................................................... 22,292 22,532 24,724
Other.................................................. 70,256 63,825 65,626
Selling, general and administrative.................... 167,678 145,788 147,647
Maintenance and utilities.............................. 49,053 41,972 41,144
Depreciation........................................... 80,678 67,793 67,656
Amortization of intangible license rights and
acquisition costs................................... 9,802 6,325 5,751
Corporate expense...................................... 21,259 25,867 19,994
Preopening expense..................................... 4,894 1,489 --
Restructuring charge................................... -- -- 5,925
---------- ---------- ----------
Total............................................... 951,985 834,314 836,951
---------- ---------- ----------
Operating income......................................... 179,553 136,611 123,688
---------- ---------- ----------
Other income (expense)
Interest income........................................ 1,807 253 365
Interest expense, net of amounts capitalized........... (79,303) (69,230) (74,162)
---------- ---------- ----------
Total............................................... (77,496) (68,977) (73,797)
---------- ---------- ----------
Income before provision for income taxes and cumulative
effect................................................. 102,057 67,634 49,891
Provision for income taxes............................... 39,292 27,595 21,291
---------- ---------- ----------
Income before cumulative effect.......................... 62,765 40,039 28,600
Cumulative effect of a change in accounting for start-up
activities, net of tax benefit of $936................. -- (1,738) --
---------- ---------- ----------
Net income............................................... $ 62,765 $ 38,301 $ 28,600
========== ========== ==========
Basic and diluted net income per common share:
Income before cumulative effect........................ $ 1.01 $ 0.65 $ 0.46
Cumulative effect, net of tax.......................... -- (0.03) --
---------- ---------- ----------
Net income.......................................... $ 1.01 $ 0.62 $ 0.46
========== ========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
96
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2000
(IN THOUSANDS, EXCEPT SHARE DATA)
COMMON STOCK ADDITIONAL TOTAL
------------------- PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
---------- ------ ---------- -------- -------------
Balances, January 1, 1998.............. 61,669,628 $617 $139,054 $ 57,470 $197,141
Net income............................. -- -- -- 28,600 28,600
Stock issued in connection with
employee stock purchase plan......... 357,886 3 1,562 -- 1,565
---------- ---- -------- -------- --------
Balances, December 31, 1998............ 62,027,514 620 140,616 86,070 227,306
Net income............................. -- -- -- 38,301 38,301
Stock issued in connection with
employee stock purchase plan......... 179,801 2 1,256 -- 1,258
Stock options exercised................ 20,438 -- 114 -- 114
---------- ---- -------- -------- --------
Balances, December 31, 1999............ 62,227,753 622 141,986 124,371 266,979
Net income............................. -- -- -- 62,765 62,765
Stock options exercised................ 7,201 -- 34 -- 34
---------- ---- -------- -------- --------
Balances, December 31, 2000............ 62,234,954 $622 $142,020 $187,136 $329,778
========== ==== ======== ======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
97
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
YEAR ENDED DECEMBER 31,
--------------------------------
2000 1999 1998
--------- --------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.................................................. $ 62,765 $ 38,301 $ 28,600
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization........................... 90,480 74,118 73,407
Cumulative effect of a change in accounting principle... -- 2,674 --
Deferred income taxes................................... 24,023 20,010 26,259
Preopening expense...................................... 4,894 1,489 --
Restructuring charge.................................... -- -- 5,925
Equity loss in unconsolidated subsidiaries.............. 1,942 1,356 --
Changes in assets and liabilities:
Accounts receivable, net................................ 3,491 3,055 (616)
Inventories............................................. (19) 3,569 339
Prepaid expenses and other.............................. 2,881 366 (574)
Other assets............................................ 972 (4,906) (814)
Other current liabilities............................... 19,910 8,632 (3,350)
Other liabilities....................................... 746 526 851
Income taxes receivable................................. 1,042 9,957 (8,278)
--------- --------- --------
Net cash provided by operating activities............. 213,127 159,147 121,749
--------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash paid for acquisition of Blue Chip Casino......... -- (261,195) --
Investments in and advances to unconsolidated
subsidiaries............................................ (101,960) (4,717) --
Proceeds from sale of Sam's Town Kansas City's assets..... -- 2,000 10,500
Acquisition of property, equipment and other assets....... (139,845) (91,719) (68,011)
Preopening expense........................................ (4,894) (1,489) --
--------- --------- --------
Net cash used in investing activities................. (246,699) (357,120) (57,511)
--------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt.................. -- -- 8,000
Payments on long-term debt................................ (745) (1,958) (2,909)
Net borrowings (payments) under credit agreements......... 36,150 209,000 (73,000)
Proceeds from issuance of common stock.................... 34 1,186 1,331
--------- --------- --------
Net cash provided by (used in) financing activities... 35,439 208,228 (66,578)
--------- --------- --------
Net increase (decrease) in cash and cash equivalents........ 1,867 10,255 (2,340)
Cash and cash equivalents, beginning of year................ 86,192 75,937 78,277
--------- --------- --------
Cash and cash equivalents, end of year...................... $ 88,059 $ 86,192 $ 75,937
========= ========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest, net of amounts capitalized........ $ 72,934 $ 67,329 $ 74,080
Cash paid for income taxes, net of refunds................ 14,226 7,882 5,992
========= ========= ========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
Property additions acquired on construction and trade
payables which were accrued, but not yet paid........... $ 10,045 $ 10,609 $ 5,440
Receivable from sale of Sam's Town Kansas City's assets... -- -- 2,000
Acquisition of Blue Chip Casino
Fair value of non-cash assets acquired.................. $ -- $ 267,074 $ --
Net cash paid to seller................................. -- 261,195 --
--------- --------- --------
Liabilities assumed..................................... $ -- $ 5,879 $ --
========= ========= ========
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
98
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Boyd Gaming Corporation and its wholly-owned subsidiaries, collectively referred
to herein as the "Company." The Company owns and operates eleven casino
entertainment facilities located in Las Vegas, Nevada, Tunica, Mississippi, East
Peoria, Illinois, Kenner, Louisiana, and Michigan City, Indiana as well as a
travel agency located in Honolulu, Hawaii. In addition, the Company managed a
casino entertainment facility in Philadelphia, Mississippi for which it had a
management contract that terminated on January 31, 2000 (see Note 3). All
material intercompany accounts and transactions have been eliminated.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include highly liquid investments with an
original maturity of three months or less. These investments are stated at cost
which approximates fair value.
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out and retail inventory methods.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation and amortization
are computed using the straight-line method over the estimated useful lives of
the assets. Costs of major improvements are capitalized, while costs of normal
repairs and maintenance are charged to expense as incurred. Gains or losses on
disposal of assets are recognized as incurred.
CAPITALIZED INTEREST
Interest costs associated with major construction projects are capitalized.
When no debt is incurred specifically for a project, interest is capitalized on
amounts expended for the project using the Company's weighted average cost of
borrowing. Capitalization of interest ceases when the project or discernible
portions of the project are substantially complete. Capitalized interest during
the years ended December 31, 2000 and 1999 was $6.3 million and $1.8 million,
respectively. There were no such interest costs capitalized during the year
ended December 31, 1998.
INTANGIBLE ASSETS
The excess of total acquisition costs over the fair market value of net
assets acquired is amortized using the straight-line method over forty years.
Management periodically assesses the recoverability of intangible assets by
comparing its carrying value to the undiscounted cash flows expected to be
generated by the acquired operation during the anticipated period of benefit.
DEBT ISSUANCE COSTS
Debt issuance costs incurred in connection with the issuance of long-term
debt are capitalized and amortized to interest expense over the terms of the
related debt agreements.
REVENUE AND PROMOTIONAL ALLOWANCES
Casino revenue represents the net win from gaming activities, which is the
difference between gaming wins and losses. Revenues include the estimated retail
value of rooms, food and beverage, and other goods and
F-7
99
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
services provided to customers on a complimentary basis. Such amounts are then
deducted as promotional allowances. The estimated cost of providing these
promotional allowances is charged to the casino department in the following
amounts:
YEAR ENDED DECEMBER 31,
---------------------------
2000 1999 1998
------- ------- -------
(IN THOUSANDS)
Room.................................................... $12,672 $11,101 $12,190
Food and beverage....................................... 73,284 70,822 71,663
Other................................................... 7,430 7,217 5,123
------- ------- -------
Total................................................. $93,386 $89,140 $88,976
======= ======= =======
PREOPENING EXPENSES
In accordance with Statement of Position 98-5, "Reporting on the Costs of
Start-Up Activities," the Company expenses certain costs of start-up activities
as incurred. During the year ended December 31, 2000, the Company expensed $4.9
million in preopening costs, including $1.5 million relating to the Company's
share of preopening expenses in The Borgata, the Company's Atlantic City joint
venture (see Note 7) and $1.5 million relating to the Company's unsuccessful
efforts to assist in the development and operation of a Rhode Island Indian
casino with the Narragansett Indian Tribe. During the year ended December 31,
1999, the Company expensed $1.5 million in preopening costs that related
primarily to the Company's share of preopening expense in The Borgata. The
initial application of this statement in January 1999 required the Company to
expense certain previously capitalized items as a cumulative effect of a change
in accounting principle. As such, the Company reported a charge of $1.7 million,
net of tax, to the consolidated statement of operations during the three month
period ended March 31, 1999 as the cumulative effect of the change in accounting
principle.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Significant estimates used by the Company
include the estimated useful lives for depreciable and amortizable assets, the
estimated allowance for doubtful accounts receivable, the estimated valuation
allowance for deferred tax assets, and estimated cash flows in assessing the
recoverability of long-lived assets. Actual results could differ from those
estimates.
RECLASSIFICATIONS
Certain prior period amounts in the consolidated financial statements have
been reclassified to conform to the December 31, 2000 presentation. These
reclassifications had no effect on the Company's net income.
RECENTLY ISSUED ACCOUNTING STANDARDS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments
and Hedging Activities" and SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities (an amendment of SFAS 133)." These
statements establish accounting and reporting standards for derivative
instruments for fiscal years beginning after June 15, 2000. At December 31,
2000, the Company did not have any significant
F-8
100
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
derivative instruments or hedging activities, and therefore, management believes
that the initial application of these statements will not have a material impact
on the Company's consolidated financial statements.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
101"). SAB 101 clarifies existing accounting principles related to revenue
recognition in financial statements. The Company adopted SAB 101 during the
fourth quarter of 2000 and the adoption did not affect the Company's
consolidated financial statements for the year ended December 31, 2000.
NOTE 2. ACQUISITIONS
On November 10, 1999, the Company acquired Blue Chip Casino, L.L.C. ("Blue
Chip") for approximately $261 million in net cash, including $10.3 million for a
hotel and parking facility that was under construction and attached to the
existing casino complex. Intangible license rights, representing the excess of
the purchase price over the fair value of the net assets acquired, was
approximately $158 million. The purchase price excludes a contingent purchase
price payment of $5.0 million. The contingent purchase price payment will be
made to the former owners of Blue Chip Casino, Inc. in the event that, over a
period of 36 months, Blue Chip's aggregated earnings before interest, taxes,
depreciation and amortization and certain other qualified expenses exceeds a
specified amount. Blue Chip Casino opened in August 1997. The Company's pro
forma consolidated results of operations, as if the acquisition had occurred on
January 1, 1998, are as follows:
YEAR ENDED DECEMBER 31,
-----------------------
1999 1998
---------- ----------
Pro forma (in thousands, except per share data):
Net revenues.............................................. $1,131,781 $1,122,853
Income before cumulative effect........................... $ 60,656 $ 42,994
Net income................................................ $ 55,635 $ 42,994
Basic and diluted net income per common share:
Income before cumulative effect........................... $ 0.98 $ 0.70
Net income................................................ $ 0.90 $ 0.70
NOTE 3. TERMINATION OF MANAGEMENT CONTRACT
On October 20, 1999, the Company signed an agreement with the Mississippi
Band of Choctaw Indians (the "Tribe") to terminate the Company's management of
the Silver Star Resort and Casino in Philadelphia Mississippi. Under the
agreement, the Company continued to manage Silver Star under the terms of the
management contract through January 31, 2000, at which time the Tribe made and
the Company recorded a one-time payment of $72 million. The agreement with the
Tribe terminated the Company's original management contract 17 months prior to
the contract's scheduled maturity date. The one-time payment accelerated the
utilization of the Company's tax credits and net operating losses carried
forward from prior years.
NOTE 4. RESTRUCTURING CHARGE
On June 30, 1998, the Company recorded a $5.9 million restructuring charge
in connection with its announcement to cease operations at Sam's Town Kansas
City. Termination benefits of approximately $3 million for substantially all of
the property's 646 employees were paid and included as part of the restructuring
charge. Other costs to exit the Kansas City gaming market of approximately $3
million were included in the restructuring charge and principally represent the
recognition of liabilities for various long-term commitments which the Company
intends to honor. The Company paid approximately $0.1 million related to the
long-term commitments during each of the years ended December 31, 2000 and 1999.
At
F-9
101
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
December 31, 2000, the $0.1 million current portion and the $0.3 million
non-current portion of the remaining restructuring charge liabilities are
included in "Interest and other" and "Deferred income taxes and other
liabilities," respectively, on the accompanying consolidated balance sheet.
During July 1998, the Company closed Sam's Town Kansas City and sold
substantially all of its tangible assets for $12.5 million, which approximated
net book value for those assets. In connection with the sale, the Company
generated a tax loss of approximately $100 million. At December 31, 2000, the
federal income tax benefit associated with this loss has been realized.
NOTE 5. ACCOUNTS RECEIVABLE
Accounts receivable consists of the following:
DECEMBER 31,
-----------------
2000 1999
------- -------
(IN THOUSANDS)
Casino...................................................... $12,883 $11,186
Hotel....................................................... 2,935 2,594
Other....................................................... 4,733 8,444
------- -------
Total....................................................... 20,551 22,224
Less allowance for doubtful accounts........................ 6,291 4,639
------- -------
Accounts receivable, net.................................... $14,260 $17,585
======= =======
NOTE 6. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
ESTIMATED DECEMBER 31,
LIFE -----------------------
(YEARS) 2000 1999
--------- ---------- ----------
(IN THOUSANDS)
Land............................................... -- $ 162,664 $ 161,443
Buildings and leasehold improvements............... 3 - 40 778,745 691,165
Furniture and equipment............................ 3 - 10 428,387 383,094
Riverboats and barges.............................. 12 - 40 100,818 101,211
Construction in progress........................... -- 37,500 46,838
---------- ----------
Total.............................................. 1,508,114 1,383,751
Less accumulated depreciation and amortization..... 548,148 482,737
---------- ----------
Property and equipment, net........................ $ 959,966 $ 901,014
========== ==========
NOTE 7. INVESTMENT IN JOINT VENTURE AND OTHER UNCONSOLIDATED SUBSIDIARIES
The Company, through Boyd Atlantic City, Inc. ("BAC") and Mirage Resorts
Incorporated, through its subsidiary's MAC, Corp. ("MAC"), entered into a
certain joint venture agreement ("The Joint Venture Agreement") and formed a
joint venture (the "Joint Venture") for the purpose of developing and owning a
casino hotel entertainment facility in the Marina District of Atlantic City, New
Jersey. The Joint Venture originated on May 29, 1996. In May 2000, Mirage was
acquired by MGM Grand, Inc. which subsequently changed its name to MGM MIRAGE
("MGM").
F-10
102
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
On December 13, 2000, (a) MAC contributed certain real property as well as
certain tangible and intangible personal property to the Joint Venture, and (b)
BAC contributed $90 million in cash to the Joint Venture. BAC and MAC each
received a credit to its capital account in the amount of $90 million upon
making the foregoing contributions.
Following the foregoing contributions, on December 13, 2000, the Joint
Venture was merged with and into Marina District Development Company, LLC
("MDDC, LLC"). MDDC, LLC is the surviving entity of such merger. The sole member
of MDDC, LLC is Marina District Development Holding Co., LLC ("Holding Co.").
BAC and MAC each have a 50% interest in Holding Co. Pursuant to terms of a
certain Contribution and Adoption Agreement made effective December 13, 2000,
the members adopted the Joint Venture Agreement as the Operating Agreement of
Holding Co. (the "Operating Agreement").
The Operating Agreement provides for the development and ownership of a
casino/hotel complex to be comprised of at least 2,000 rooms, a casino and
related amenities to be known as The Borgata (the "Project"). The Project will
be constructed on property adjacent to and connected to MGM's planned
wholly-owned resort. The Operating Agreement contemplates a total cost of $1.035
billion for the Project. Certain project costs exceeding the $1.035 billion
budget would be funded by the Company without any proportionate increase in the
ownership of the Project by the Company. The Company, through BAC, will control
the development and operation of the Project. The Operating Agreement provides
for BAC and MAC to make equity contributions aggregating $207 million each and
further contemplates $621 million in non-recourse financing for the Project. On
December 13, 2000, MDDC, LLC entered into a $630 million credit agreement.
Except for a completion guaranty, by which the Company has agreed to guaranty
performance of certain obligations to MDDC, LLC, the credit agreement is
non-recourse to the Company and MGM. Pursuant to the terms of the Operating
Agreement, certain project costs exceeding $1.035 billion are permitted to be
added to the amount of Project financing. At December 31, 2000 and 1999, the
Company's net equity method investment in and advances to The Borgata was $104
million and $4.2 million, respectively.
The Company has a one-third investment in Tunica Golf Course, L.L.C.
(d.b.a. River Bend Links) located in Tunica, Mississippi which had its grand
opening in April 1999. The Company accounts for its share of the golf course's
net income or loss under the equity method of accounting. At December 31, 2000
and 1999, the Company's net investment in and advances to the golf course was
$1.7 million and $2.3 million, respectively.
NOTE 8. INTANGIBLE ASSETS
Intangible assets consists of the following:
DECEMBER 31,
-------------------
2000 1999
-------- --------
(IN THOUSANDS)
Par-A-Dice license rights................................... $115,999 $115,999
Treasure Chest license rights............................... 84,858 84,858
Blue Chip license rights.................................... 158,019 158,019
Other....................................................... 15,209 15,209
-------- --------
Total intangible assets..................................... 374,085 374,085
Less accumulated amortization............................... 28,781 19,426
-------- --------
Intangible assets, net.................................... $345,304 $354,659
======== ========
F-11
103
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 9. LONG-TERM DEBT
Long-term debt consists of the following:
DECEMBER 31,
---------------------
2000 1999
---------- --------
(IN THOUSANDS)
Bank Credit Facility........................................ $ 562,150 $526,000
9.25% Senior Notes.......................................... 200,000 200,000
9.50% Senior Subordinated Notes............................. 250,000 250,000
Other....................................................... 7,148 7,893
---------- --------
Total long-term debt........................................ 1,019,298 983,893
Less current maturities..................................... 2,485 1,744
---------- --------
Total..................................................... $1,016,813 $982,149
========== ========
Effective July 28, 2000, the Company amended its bank credit facility
("Bank Credit Facility") primarily to allow for an increase in its investment in
The Borgata for an aggregate investment of $225 million and to reduce and modify
the Company's capital raising requirement for The Borgata. At December 31, 2000,
the Bank Credit Facility consisted of a $500 million revolver component (the
"Revolver") and two term loan components with original principal balances of
$100 million each ("Term Loan B" and "Term Loan C"). The Revolver, Term Loan B
and Term Loan C all mature in June 2003. Availability under the Revolver will be
reduced by $15.6 million on December 31, 2001 and at the end of each quarter
thereafter until March 31, 2003. Term Loan B will be repaid in increments of
$0.25 million per quarter which began on September 30, 1999 and will continue
through March 31, 2003. Term Loan C will be repaid in increments of $0.25
million per quarter which began on December 31, 2000 and will continue through
March 31, 2003. As of December 31, 2000, the Company had unused availability of
$136.1 million under the Bank Credit Facility. Pursuant to the terms of The
Borgata credit agreement, the Company must maintain $50 million of unused
availability under the Bank Credit Facility until construction of The Borgata is
complete. The interest rate on the Bank Credit Facility is based upon either the
alternate base rate or the eurodollar rate, plus an applicable margin that is
determined by the level of a predefined financial leverage ratio. The blended
interest rate under the Bank Credit Facility at December 31, 2000 was 8.8%. In
addition, the Company incurs a commitment fee on the unused portion of the
Revolver which ranges from 0.375% to 0.50% per annum. The Bank Credit Facility
is secured by substantially all of the real and personal property of the Company
and its subsidiaries, including eleven casino properties. The obligations of the
Company under the Bank Credit Facility are guaranteed by the significant
subsidiaries of the Company.
The Bank Credit Facility contains certain financial and other covenants
including, without limitation, various covenants (i) requiring the maintenance
of a minimum net worth, (ii) requiring the maintenance of a minimum interest
coverage ratio, (iii) establishing a maximum permitted total leverage ratio and
senior secured leverage ratio, (iv) imposing limitations on the incurrence of
additional indebtedness, (v) imposing limitations on the maximum permitted
expansion capital expenditures during the term of the Bank Credit Facility, (vi)
imposing limits on the maximum permitted maintenance capital expenditures during
each year of the term of the Bank Credit Facility, and (vii) imposing
restrictions on investments, dividends and certain other payments. Management
believes the Company and its subsidiaries are in compliance with the Bank Credit
Facility covenants.
On October 4, 1996, the Company issued $200 million of 9.25% Senior Notes
(the "9.25% Notes") due October 1, 2003. The 9.25% Notes require semi-annual
interest payments in April and October of each year through October 2003, at
which time the entire principal balance becomes due and payable. The 9.25% Notes
contain certain restrictive covenants regarding, among other things, incurrence
of debt, sales of assets, mergers
F-12
104
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
and consolidations and limitations on restricted payments (as defined in the
indenture relating to the 9.25% Notes). In addition, the 9.25% Notes are
guaranteed by a majority of the Company's significant subsidiaries that existed
at the time the 9.25% Notes were issued. The guaranties are full, unconditional,
and joint and several. (See Note 16 for a presentation of separate condensed
financial statement information on a combined basis for the parent only, as well
as the Company's guarantor subsidiaries and non-guarantor subsidiaries).
On July 22, 1997, the Company issued $250 million principal amount of 9.50%
Senior Subordinated Notes (the "9.50% Notes") due July 2007. The 9.50% Notes
require semi-annual interest payments in January and July of each year through
July 2007, at which time the entire principal balance becomes due and payable.
The 9.50% Notes contain certain restrictive covenants regarding, among other
things, incurrence of debt, sales of assets, mergers and consolidations and
limitations on restricted payments (as defined in the indenture relating to the
9.50% Notes). The 9.50% Notes may be redeemed at the Company's option anytime
after July 15, 2002 at redemption prices ranging from 104.75% in 2002 to 100% in
2005 and thereafter.
The estimated fair value of the Company's long-term debt at December 31,
2000 was approximately $983 million, versus its book value of $1.0 billion. At
December 31, 1999, the estimated fair value of the Company's long-term debt was
approximately $976 million, versus its book value of $984 million. The estimated
fair value amounts were based on quoted market prices on or about December 31,
2000 and 1999 for the Company's debt securities that are traded. For the debt
securities that are not traded, fair value was based on estimated discounted
cash flows using current rates offered to the Company for debt securities having
the same remaining maturities.
Interest rates on the Company's other long-term debt are approximately
7.0%. Management believes the Company is in compliance with all covenants
contained in its long-term debt agreements at December 31, 2000.
The scheduled maturities of long-term debt for the years ending December 31
are as follows:
(IN THOUSANDS)
2001........................................................ $ 2,485
2002........................................................ 2,455
2003........................................................ 758,637
2004........................................................ 522
2005........................................................ 560
Thereafter.................................................. 254,639
----------
Total..................................................... $1,019,298
==========
F-13
105
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 10. COMMITMENTS AND CONTINGENCIES
Future minimum lease payments required under noncancelable operating leases
(principally for land) as of December 31, 2000 are as follows:
(IN THOUSANDS)
2001........................................................ $ 5,865
2002........................................................ 3,748
2003........................................................ 2,296
2004........................................................ 1,890
2005........................................................ 1,889
Thereafter.................................................. 68,026
-------
Total..................................................... $83,714
=======
Rent expense for the years ended December 31, 2000, 1999 and 1998 was $5.3
million, $4.4 million and $3.2 million, respectively, and is included in
selling, general and administrative expenses on the consolidated statements of
operations.
The Company is required to pay, to the City of Kenner, Louisiana, a
boarding fee of $2.50 for each passenger boarding the Company's Treasure Chest
riverboat casino during the year. The future minimum payment due in 2001 to the
City of Kenner, based upon a portion of actual passenger counts from the prior
year, is approximately $4.0 million.
The Company is subject to various claims and litigation in the normal
course of business. In the opinion of management, all pending legal matters are
either adequately covered by insurance or, if not insured, will not have a
material adverse impact on the Company's consolidated financial statements.
NOTE 11. EMPLOYEE BENEFIT PLANS
The Company contributes to multi-employer pension plans under various union
agreements. Contributions, based on wages paid to covered employees, totaled
approximately $2.0 million, $2.3 million and $2.4 million for the years ended
December 31, 2000, 1999 and 1998, respectively. The Company's share of the
unfunded liability related to multi-employer plans, if any, is not determinable.
The Company has retirement savings plans under Section 401(k) of the
Internal Revenue Code covering its non-union employees. The plans allow
employees to defer up to the lesser of the Internal Revenue Code prescribed
maximum amount or 15% of their income on a pre-tax basis through contributions
to the plans. The Company expensed voluntary contributions of $4.4 million, $2.8
million and $2.8 million for the years ended December 31, 2000, 1999 and 1998,
respectively, to the Company's 401(k) profit-sharing plans and trusts.
F-14
106
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 12. INCOME TAXES
A summary of the provision for income taxes is as follows:
YEAR ENDED DECEMBER 31,
---------------------------
2000 1999 1998
------- ------- -------
(IN THOUSANDS)
Current
Federal............................................... $13,579 $ 5,845 $(7,021)
State................................................. 2,053 1,740 1,465
------- ------- -------
15,632 7,585 (5,556)
------- ------- -------
Deferred
Federal............................................... 20,820 18,697 25,532
State................................................. 2,840 1,313 1,315
------- ------- -------
23,660 20,010 26,847
------- ------- -------
Total.............................................. $39,292 $27,595 $21,291
======= ======= =======
The following table provides a reconciliation between the federal statutory
rate and the effective income tax rate from continuing operations where both are
expressed as a percentage of income.
DECEMBER 31,
------------------
2000 1999 1998
---- ---- ----
Tax provision at statutory rate............................. 35.0% 35.0% 35.0%
Increase resulting from:
State income tax, net of federal benefit.................. 3.1 2.9 3.6
Company provided benefits................................. 0.2 0.3 1.9
Other, net................................................ 0.2 2.6 2.2
---- ---- ----
Total.................................................. 38.5% 40.8% 42.7%
==== ==== ====
F-15
107
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The tax items comprising the Company's net deferred tax liability are as
follows:
DECEMBER 31,
-----------------
2000 1999
------- -------
(IN THOUSANDS)
Deferred tax liabilities:
Difference between book and tax basis of property......... $60,068 $44,645
Difference between book and tax basis of amortizable
assets................................................. 13,821 10,855
State tax liability....................................... 4,170 3,574
Other..................................................... 2,152 895
------- -------
Gross deferred liability.................................. 80,211 59,969
------- -------
Deferred tax assets:
Tax credit carryforward................................... 7,324 12,600
Reserve for employee benefits............................. 3,209 1,249
Net operating loss carryforward........................... -- 2,774
Provision for doubtful accounts........................... 1,994 1,516
Reserve differential for gaming activities................ 1,950 982
Preopening expense amortized for tax purposes............. 914 666
Other..................................................... 1,085 471
------- -------
Gross deferred tax asset.................................. 16,476 20,258
------- -------
Net deferred tax liability............................. $63,735 $39,711
======= =======
At December 31, 1999, the Company had approximately $8.0 million of federal
tax net operating loss carryforwards which were fully utilized during the year
ended December 31, 2000. Additionally, the Company has tax credit carryforwards
that can be utilized to offset its future regular federal income tax liability.
At December 31, 2000 and 1999, the Company had approximately $7.2 million and
$9.4 million, respectively, of federal alternative minimum tax credit
carryforwards which may be carried forward indefinitely. At December 31, 1999,
the Company had approximately $3.2 million of general business credit
carryforwards that were fully utilized during the year ended December 31, 2000.
The Internal Revenue Service has completed examinations of the Company's
federal consolidated income tax returns through the fiscal year ended June 30,
1992. The Company is currently under examination for fiscal years ended June 30,
1993 and 1994. The Internal Revenue Service has proposed adjustments in
connection with the examination of the 1993 and 1994 returns but no final
determinations have been made. The Mississippi State Tax Commission is examining
the Mississippi income tax returns for the years ended December 31, 1997 through
1999. In the opinion of management, any tax liability arising from these
examinations will not have a material adverse impact on the Company's
consolidated financial statements.
NOTE 13. STOCKHOLDERS' EQUITY AND STOCK INCENTIVE PLANS
EMPLOYEE STOCK PURCHASE PLAN
Under the terms of the Company's Employee Stock Purchase Plan (the "Plan"),
eligible employees had been able to purchase the Company's common stock,
semi-annually, through payroll deductions, at 85% of the market price either on
the purchase date or the offering date, whichever price is lower. The Company
canceled the Plan on July 1, 1999.
F-16
108
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
STOCK OPTIONS
As of December 31, 2000, the Company had in effect various stock option
plans. Stock options awarded under these plans are granted primarily to
employees and directors of the Company. The maximum number of shares of common
stock available for issuance under these plans is approximately 9.6 million
shares.
Options granted under the plans generally become exercisable ratably over a
three or four year period from the date of grant. Options granted under the
plans have an exercise price equal to the market price of the Company's common
stock on the date of grant and expire no later than ten years after the date of
grant.
Summarized information for the stock options plans is as follows:
OPTIONS OPTION PRICES
--------- --------------
Options outstanding at January 1, 1998..................... 4,702,010 $5.50 - $17.00
Options granted............................................ 1,112,600 4.56 - 7.50
Options canceled........................................... (115,400) 4.56 - 13.63
--------- --------------
Options outstanding at December 31, 1998................... 5,699,210 $4.56 - $17.00
Options granted............................................ 1,079,000 5.56 - 6.56
Options canceled........................................... (317,909) 4.56 - 17.00
Options exercised.......................................... (20,438) 4.56 - 5.75
--------- --------------
Options outstanding at December 31, 1999................... 6,439,863 $4.56 - $17.00
Options granted............................................ 1,490,000 4.50 - 4.69
Options canceled........................................... (276,653) 4.56 - 17.00
Options exercised.......................................... (7,201) 4.56 - 4.56
--------- --------------
Options outstanding at December 31, 2000................... 7,646,009 $4.50 - $17.00
========= ==============
Exercisable options at December 31, 2000................... 5,166,328
=========
Options available for grant at December 31, 2000........... 1,924,018
=========
The following table summarizes the information about stock options
outstanding at December 31, 2000:
OPTIONS OUTSTANDING
----------------------------------------------- OPTIONS EXERCISABLE
WEIGHTED AVERAGE ----------------------------
REMAINING WEIGHTED WEIGHTED
RANGE OF NUMBER CONTRACTUAL AVERAGE NUMBER AVERAGE
EXERCISE PRICES OUTSTANDING LIFE (YEARS) EXERCISE PRICE EXERCISABLE EXERCISE PRICE
--------------- ----------- ---------------- -------------- ----------- --------------
$ 4.50 - $ 5.56 3,446,509 8.85 $ 4.83 977,911 $ 4.91
5.75 - 8.37 2,896,000 5.19 6.80 2,884,917 6.80
11.50 - 17.00 1,303,500 3.25 16.06 1,303,500 16.06
--------- ---- ------ --------- ------
7,646,009 6.51 $ 7.49 5,166,328 $ 8.78
========= ==== ====== ========= ======
The Company accounts for employee stock options in accordance with
Accounting Principle Board Opinion No. 25. The following table discloses the
Company's pro forma net income and net income per share assuming compensation
cost for employee stock options had been recognized under SFAS No. 123,
"Accounting for Stock-Based Compensation." In addition, the table includes the
excess of the compensation cost under SFAS No. 123 over the cost recognized
related to the Employee Stock Purchase Plan. The table also discloses the
weighted-average assumptions used in estimating the fair value of each option
grant on the date of grant using the Black-Scholes option pricing model and the
estimated weighted-average fair value of
F-17
109
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
the options granted. The model assumes no expected future dividend payments on
the Company's common stock for the options granted since July 1, 1995.
YEAR ENDED DECEMBER 31,
--------------------------------------
2000 1999 1998
---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Income before cumulative effect
As reported......................................... $62,765 $40,039 $28,600
Pro forma........................................... 61,321 38,768 26,694
Net income
As reported......................................... $62,765 $38,301 $28,600
Pro forma........................................... 61,321 37,030 26,694
Basic and diluted income per share before cumulative
effect
As reported......................................... $ 1.01 $ 0.65 $ 0.46
Pro forma -- basic.................................. 0.99 0.62 0.43
Pro forma -- diluted................................ 0.98 0.62 0.43
Basic and diluted net income per share
As reported......................................... $ 1.01 $ 0.62 $ 0.46
Pro forma -- basic.................................. 0.99 0.60 0.43
Pro forma -- diluted................................ 0.98 0.59 0.43
Weighted-average assumptions
Expected stock price volatility..................... 57.58% 64.56% 57.16%
Risk-free interest rate............................. 5.39% 6.65% 5.02%
Expected option lives (years)....................... 3.90 2.82 3.39
Estimated fair value of options granted............. $ 2.18 $ 2.55 $ 1.83
Because the accounting method prescribed by SFAS No. 123 is not applicable
to options granted prior to July 1, 1995, the compensation cost reflected in the
pro forma amounts shown above may not be representative of that to be expected
in future years.
F-18
110
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 14. SEGMENT INFORMATION
The Company's management reviews the results of operations, certain assets,
and additions to property and equipment based on distinct geographic gaming
market segments: the Stardust Resort and Casino on the Las Vegas Strip; Sam's
Town Hotel and Gambling Hall, the Eldorado Casino and Jokers Wild Casino on the
Boulder Strip; the Downtown Properties; Sam's Town Hotel and Gambling Hall in
Tunica, Mississippi; Par-A-Dice Hotel and Casino in East Peoria, Illinois;
Treasure Chest Casino in Kenner, Louisiana; Blue Chip Casino in Michigan City,
Indiana (acquired November 10, 1999); and management fee income from Silver Star
Resort and Casino located near Philadelphia, Mississippi (through January 31,
2000). As used herein, "Downtown Properties" consist of the California Hotel and
Casino, the Fremont Hotel and Casino, Main Street Station Casino, Brewery and
Hotel and Vacations Hawaii.
YEAR ENDED DECEMBER 31,
------------------------------
2000 1999 1998
-------- -------- --------
(IN THOUSANDS)
Casino Revenue
Stardust.................................................. $ 99,798 $ 98,926 $107,857
Sam's Town Las Vegas...................................... 112,477 117,673 117,954
Eldorado and Jokers Wild.................................. 29,617 30,182 29,150
Downtown Properties....................................... 134,634 133,138 127,948
Sam's Town Tunica......................................... 85,682 98,644 103,556
Sam's Town Kansas City.................................... -- -- 17,666
Par-A-Dice................................................ 127,951 113,945 97,650
Treasure Chest............................................ 102,168 118,688 120,343
Blue Chip................................................. 176,656 22,481 --
-------- -------- --------
Total casino revenue................................... $868,983 $733,677 $722,124
======== ======== ========
EBITDA(1)
Stardust.................................................. $ 16,325 $ 14,403 $ 22,114
Sam's Town Las Vegas...................................... 18,446 26,891 31,366
Eldorado and Jokers Wild.................................. 6,008 7,626 8,134
Downtown Properties....................................... 42,392 38,649 28,314
Sam's Town Tunica......................................... 35 22,818 27,802
Sam's Town Kansas City.................................... -- -- (2,534)
Par-A-Dice................................................ 47,050 41,965 33,229
Treasure Chest............................................ 16,007 30,597 36,087
Silver Star............................................... 74,803 45,626 38,502
Blue Chip................................................. 75,120 9,510 --
-------- -------- --------
Property EBITDA........................................ 296,186 238,085 223,014
-------- -------- --------
Other Costs and Expenses
Corporate expense......................................... 21,259 25,867 19,994
Depreciation and amortization............................. 90,480 74,118 73,407
Restructuring charge...................................... -- -- 5,925
Preopening expense........................................ 4,894 1,489 --
Other expense, net........................................ 77,496 68,977 73,797
-------- -------- --------
Total other costs and expenses......................... 194,129 170,451 173,123
-------- -------- --------
Income before provision for income taxes and other items.... 102,057 67,634 49,891
Provision for taxes......................................... 39,292 27,595 21,291
-------- -------- --------
Income before cumulative effect............................. 62,765 40,039 28,600
Cumulative effect, net of tax............................... -- (1,738) --
-------- -------- --------
Net income.................................................. $ 62,765 $ 38,301 $ 28,600
======== ======== ========
F-19
111
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31,
---------------------------
2000 1999
-------------- ----------
(IN THOUSANDS)
Assets(2)
Stardust................................................. $ 162,096 $ 173,727
Sam's Town Las Vegas..................................... 220,594 159,152
Eldorado and Jokers Wild................................. 17,201 18,249
Downtown Properties...................................... 154,026 162,007
Sam's Town Tunica........................................ 161,060 146,221
Par-A-Dice............................................... 153,701 158,410
Treasure Chest........................................... 111,806 113,799
Blue Chip................................................ 263,881 268,617
---------- ----------
Total properties' assets.............................. 1,244,365 1,200,182
Corporate Entities....................................... 60,905 55,491
---------- ----------
Total property, equipment and intangible assets,
net................................................. $1,305,270 $1,255,673
========== ==========
YEAR ENDED DECEMBER 31,
----------------------------
2000 1999 1998
-------- ------- -------
(IN THOUSANDS)
Additions to Property and Equipment
Stardust............................................. $ 3,566 $25,960 $14,705
Sam's Town Las Vegas................................. 75,191 27,740 14,331
Eldorado and Jokers Wild............................. 1,190 2,461 1,745
Downtown Properties.................................. 8,317 11,917 7,683
Sam's Town Tunica.................................... 24,673 7,578 5,903
Sam's Town Kansas City............................... -- -- 53
Par-A-Dice........................................... 2,840 2,346 4,686
Treasure Chest....................................... 5,307 3,090 1,016
Blue Chip............................................ 8,762 4,820 --
-------- ------- -------
Total properties' additions....................... 129,846 85,912 50,122
Corporate Entities................................... 9,435 10,976 20,726
-------- ------- -------
Total additions to property and equipment......... $139,281 $96,888 $70,848
======== ======= =======
---------------
(1) EBITDA is earnings before interest, taxes, depreciation, amortization,
preopening expense and restructuring charge. The Company believes that
EBITDA is a useful financial measurement for assessing the operating
performances of its properties. EBITDA does not represent net income or cash
flows from operating, investing or financing activities as defined by
accounting principles generally accepted in the United States of America.
(2) Assets represent property and equipment and intangible assets, net of
accumulated depreciation and amortization.
F-20
112
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 15. EARNINGS PER SHARE
A reconciliation of income and shares outstanding for basic and diluted
earnings per share is as follows:
YEAR ENDED DECEMBER 31,
--------------------------------------
2000 1999 1998
---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Income before cumulative effect....................... $62,765 $40,039 $28,600
======= ======= =======
Weighted average common stock outstanding............. 62,232 62,124 61,749
Dilutive effect of stock options outstanding.......... 46 169 101
------- ------- -------
Weighted average common and potential shares
outstanding......................................... 62,278 62,293 61,850
======= ======= =======
Basic and diluted earnings per share.................. $ 1.01 $ 0.65 $ 0.46
======= ======= =======
Options to purchase approximately 5.3 million, 4.8 million and 5.7 million,
shares of common stock, respectively, at December 31, 2000, 1999 and 1998 at
prices of $5.56 - $17.00, $5.56 - $17.00 and $5.56 - $17.00, respectively, were
outstanding during the period but not included in the computation of diluted
earnings per share because their exercise price was in excess of the average
market price of the common stock for the period presented.
NOTE 16. GUARANTOR INFORMATION
The Company's 9.25% Notes (see Note 9) are guaranteed by a majority of the
Company's wholly-owned existing significant subsidiaries. These guaranties are
full, unconditional, and joint and several. The following consolidating
schedules present separate condensed financial statement information on a
combined basis for the parent only, as well as the Company's guarantor
subsidiaries and non-guarantor subsidiaries, as of and for the years ended
December 31, 2000 and 1999 and for the year ended December 31, 1998.
F-21
113
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
AS OF DECEMBER 31, 2000
COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
---------- ---------- ---------- ----------- ------------
(IN THOUSANDS)
ASSETS
Current assets.................. $ 1,354 $ 96,701 $ 30,285 $ 231(1) $ 128,571
Property and equipment, net..... 44,493 766,603 148,870 -- 959,966
Investment in unconsolidated
subsidiaries, net............. -- 1,700 103,860 -- 105,560
Other assets and deferred
charges, net.................. 1,285,373 (459,081) 462,906 (1,250,985)(1)(2) 38,213
Intangible assets, net.......... -- 112,849 232,455 -- 345,304
---------- --------- -------- ----------- ----------
Total assets............... $1,331,220 $ 518,772 $978,376 $(1,250,754) $1,577,614
========== ========= ======== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities............. $ 30,304 $ 86,993 $ 39,516 $ 204(1) $ 157,017
Long-term debt, net of current
maturities.................... 959,150 57,663 -- -- 1,016,813
Deferred income taxes and other
liabilities................... 11,988 55,321 6,697 -- 74,006
Stockholders' equity............ 329,778 318,795 932,163 (1,250,958)(2) 329,778
---------- --------- -------- ----------- ----------
Total liabilities and
stockholders' equity..... $1,331,220 $ 518,772 $978,376 $(1,250,754) $1,577,614
========== ========= ======== =========== ==========
---------------
Elimination Entries
(1) To eliminate intercompany payables and receivables.
(2) To eliminate investment in subsidiaries and subsidiaries' equity.
F-22
114
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
AS OF DECEMBER 31, 1999
COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
---------- ---------- ---------- ----------- ------------
(IN THOUSANDS)
ASSETS
Current assets.................. $ 17,583 $ 100,696 $ 26,599 $ (2,259)(1) $ 142,619
Property and equipment, net..... 43,559 708,072 149,383 -- 901,014
Investment in unconsolidated
subsidiaries, net............. -- 2,098 3,610 -- 5,708
Other assets and deferred
charges, net.................. 1,163,857 (526,786) 460,752 (1,057,842)(1)(2) 39,981
Intangible assets, net.......... -- 116,107 238,552 -- 354,659
---------- --------- -------- ----------- ----------
Total assets............... $1,224,999 $ 400,187 $878,896 $(1,060,101) $1,443,981
========== ========= ======== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities............. $ 36,470 $ 62,993 $ 39,640 $ (2,173)(1) $ 136,930
Long-term debt, net of current
maturities.................... 914,028 68,088 33 -- 982,149
Deferred income taxes and other
liabilities................... 7,522 49,059 1,342 -- 57,923
Stockholders' equity............ 266,979 220,047 837,881 (1,057,928)(2) 266,979
---------- --------- -------- ----------- ----------
Total liabilities and
stockholders' equity..... $1,224,999 $ 400,187 $878,896 $(1,060,101) $1,443,981
========== ========= ======== =========== ==========
---------------
Elimination Entries
(1) To eliminate intercompany payables and receivables.
(2) To eliminate investment in subsidiaries and subsidiaries' equity.
F-23
115
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2000
COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
-------- ---------- ---------- ----------- ------------
(IN THOUSANDS)
Revenues
Casino........................... $ -- $590,159 $278,824 $ -- $ 868,983
Food and beverage................ -- 142,918 17,221 -- 160,139
Room............................. -- 72,656 2,458 -- 75,114
Other............................ 11,997 29,338 46,774 (14,984)(1) 73,125
Management fee................... 154,880 6,411 67,509 (224,985)(1) 3,815
Termination fee, net............. -- 70,988 -- -- 70,988
-------- -------- -------- --------- ----------
Gross revenues..................... 166,877 912,470 412,786 (239,969) 1,252,164
Less promotional allowances........ -- 102,670 17,956 -- 120,626
-------- -------- -------- --------- ----------
Net revenues.................. 166,877 809,800 394,830 (239,969) 1,131,538
-------- -------- -------- --------- ----------
Costs and expenses
Casino........................... -- 320,381 102,636 -- 423,017
Food and beverage................ -- 83,794 19,262 -- 103,056
Room............................. -- 21,093 1,199 -- 22,292
Other............................ -- 84,694 66,441 (80,879)(1) 70,256
Selling, general and
administrative................ -- 116,157 51,521 -- 167,678
Maintenance and utilities........ -- 36,011 13,042 -- 49,053
Depreciation and amortization.... 2,535 66,556 21,389 -- 90,480
Corporate expense................ 34,233 145 1,865 (14,984)(1) 21,259
Preopening expense............... 1,890 1,362 1,642 -- 4,894
-------- -------- -------- --------- ----------
Total......................... 38,658 730,193 278,997 (95,863) 951,985
-------- -------- -------- --------- ----------
Operating income................... 128,219 79,607 115,833 (144,106) 179,553
Other income (expense), net........ (73,056) (5,113) 673 -- (77,496)
-------- -------- -------- --------- ----------
Income before income taxes and
cumulative effect................ 55,163 74,494 116,506 (144,106) 102,057
Provision (benefit) for income
taxes............................ (7,602) 37,972 8,922 -- 39,292
-------- -------- -------- --------- ----------
Net income......................... $ 62,765 $ 36,522 $107,584 $(144,106) $ 62,765
======== ======== ======== ========= ==========
---------------
Elimination Entries
(1) To eliminate intercompany revenue and expense.
F-24
116
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1999
COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
-------- ---------- ---------- ----------- ------------
(IN THOUSANDS)
Revenues
Casino........................... $ -- $592,508 $141,169 $ -- $ 733,677
Food and beverage................ -- 147,927 11,055 -- 158,982
Room............................. -- 71,478 -- -- 71,478
Other............................ 11,380 31,990 40,787 (14,169)(1) 69,988
Management fee................... 121,996 53,490 24,172 (152,195)(1) 47,463
-------- -------- -------- --------- ----------
Gross revenues..................... 133,376 897,393 217,183 (166,364) 1,081,588
Less promotional allowances........ -- 99,892 10,771 -- 110,663
-------- -------- -------- --------- ----------
Net revenues.................. 133,376 797,501 206,412 (166,364) 970,925
-------- -------- -------- --------- ----------
Costs and expenses
Casino........................... -- 304,797 50,487 -- 355,284
Food and beverage................ -- 91,739 11,700 -- 103,439
Room............................. -- 22,532 -- -- 22,532
Other............................ -- 72,919 45,603 (54,697)(1) 63,825
Selling, general and
administrative................ -- 114,949 30,839 -- 145,788
Maintenance and utilities........ -- 35,164 6,808 -- 41,972
Depreciation and amortization.... 1,950 61,853 10,315 -- 74,118
Corporate expense................ 38,226 160 1,649 (14,168)(1) 25,867
Preopening expense............... 202 -- 1,287 -- 1,489
-------- -------- -------- --------- ----------
Total......................... 40,378 704,113 158,688 (68,865) 834,314
-------- -------- -------- --------- ----------
Operating income................... 92,998 93,388 47,724 (97,499) 136,611
Other income (expense), net........ (63,898) (6,117) 1,038 -- (68,977)
-------- -------- -------- --------- ----------
Income before income taxes and
cumulative effect................ 29,100 87,271 48,762 (97,499) 67,634
Provision (benefit) for income
taxes............................ (10,939) 37,352 1,182 -- 27,595
-------- -------- -------- --------- ----------
Income before cumulative effect.... 40,039 49,919 47,580 (97,499) 40,039
Cumulative effect, net of taxes.... (1,738) -- -- -- (1,738)
-------- -------- -------- --------- ----------
Net income......................... $ 38,301 $ 49,919 $ 47,580 $ (97,499) $ 38,301
======== ======== ======== ========= ==========
---------------
Elimination Entries
(1) To eliminate intercompany revenue and expense.
F-25
117
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
-------- ---------- ---------- ----------- ------------
(IN THOUSANDS)
Revenues
Casino........................... $ -- $601,781 $120,343 $ -- $ 722,124
Food and beverage................ -- 151,837 9,745 -- 161,582
Room............................. -- 74,053 -- -- 74,053
Other............................ 9,517 37,903 35,180 (11,697)(1) 70,903
Management fee................... 106,903 47,439 20,174 (134,310)(1) 40,206
-------- -------- -------- --------- ----------
Gross revenues..................... 116,420 913,013 185,442 (146,007) 1,068,868
Less promotional allowances........ -- 98,374 9,855 -- 108,229
-------- -------- -------- --------- ----------
Net revenues.................. 116,420 814,639 175,587 (146,007) 960,639
-------- -------- -------- --------- ----------
Costs and expenses
Casino........................... -- 310,552 41,737 -- 352,289
Food and beverage................ -- 96,040 10,155 -- 106,195
Room............................. -- 24,724 -- -- 24,724
Other............................ -- 77,071 38,424 (49,869)(1) 65,626
Selling, general and
administrative................ -- 122,759 24,888 -- 147,647
Maintenance and utilities........ -- 35,625 5,519 -- 41,144
Depreciation and amortization.... 642 63,718 9,047 -- 73,407
Corporate expense................ 28,528 1,514 1,649 (11,697)(1) 19,994
Restructuring charge............. -- 5,925 -- -- 5,925
-------- -------- -------- --------- ----------
Total......................... 29,170 737,928 131,419 (61,566) 836,951
-------- -------- -------- --------- ----------
Operating income................... 87,250 76,711 44,168 (84,441) 123,688
Other income (expense), net........ (68,204) (6,572) 979 -- (73,797)
-------- -------- -------- --------- ----------
Income before income taxes......... 19,046 70,139 45,147 (84,441) 49,891
Provision (benefit) for income
taxes............................ (9,539) 30,825 5 -- 21,291
-------- -------- -------- --------- ----------
Net income......................... $ 28,585 $ 39,314 $ 45,142 $ (84,441) $ 28,600
======== ======== ======== ========= ==========
---------------
Elimination Entries
(1) To eliminate intercompany revenue and expense.
F-26
118
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2000
COMBINED
COMBINED NON-
PARENT GUARANTORS GUARANTORS CONSOLIDATED
-------- ---------- ---------- ------------
(IN THOUSANDS)
Cash flows from operating activities........... $(52,915) $ 123,846 $ 142,196 $ 213,127
-------- --------- --------- ---------
Cash flows from investing activities
Investment in and advances to unconsolidated
subsidiaries.............................. -- -- (101,960) (101,960)
Acquisition of property, equipment and other
assets.................................... (9,319) (115,747) (14,779) (139,845)
Preopening expense........................... (1,890) (1,362) (1,642) (4,894)
-------- --------- --------- ---------
Net cash used in investing activities..... (11,209) (117,109) (118,381) (246,699)
-------- --------- --------- ---------
Cash flows from financing activities
Receipt/(payments) on long-term debt......... 9,685 (10,396) (34) (745)
Receipt/(payment) of dividends............... 18,475 2,123 (20,598) --
Net borrowings under credit agreements....... 36,150 -- -- 36,150
Proceeds from issuance of common stock....... 34 -- -- 34
-------- --------- --------- ---------
Net cash provided by (used in) financing
activities.............................. 64,344 (8,273) (20,632) 35,439
-------- --------- --------- ---------
Net increase (decrease) in cash and cash
equivalents.................................. 220 (1,536) 3,183 1,867
Cash and cash equivalents, beginning of
period....................................... 138 62,755 23,299 86,192
-------- --------- --------- ---------
Cash and cash equivalents, end of period....... $ 358 $ 61,219 $ 26,482 $ 88,059
======== ========= ========= =========
F-27
119
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1999
COMBINED
COMBINED NON-
PARENT GUARANTORS GUARANTORS CONSOLIDATED
--------- ---------- ---------- ------------
(IN THOUSANDS)
Cash flows from operating activities........... $(270,354) $148,012 $ 281,489 $ 159,147
--------- -------- --------- ---------
Cash flows from investing activities
Proceeds from sale of Sam's Town Kansas
City's assets............................. -- 2,000 -- 2,000
Net cash paid for acquisition of Blue Chip
Casino.................................... -- -- (261,195) (261,195)
Investment in and advances to unconsolidated
subsidiaries.............................. -- (266) (4,451) (4,717)
Acquisition of property, equipment and other
assets.................................... (8,892) (80,906) (1,921) (91,719)
Preopening expense........................... (202) -- (1,287) (1,489)
--------- -------- --------- ---------
Net cash used in investing activities..... (9,094) (79,172) (268,854) (357,120)
--------- -------- --------- ---------
Cash flows from financing activities
Payments on long-term debt................... (1,550) (408) -- (1,958)
Receipt/(payment) of dividends............... 69,896 (61,169) (8,727) --
Net borrowings under credit agreements....... 209,000 -- -- 209,000
Proceeds from issuance of common stock....... 1,186 -- -- 1,186
--------- -------- --------- ---------
Net cash provided by (used in) financing
activities.............................. 278,532 (61,577) (8,727) 208,228
--------- -------- --------- ---------
Net increase (decrease) in cash and cash
equivalents.................................. (916) 7,263 3,908 10,255
Cash and cash equivalents, beginning of
period....................................... 1,054 55,492 19,391 75,937
--------- -------- --------- ---------
Cash and cash equivalents, end of period....... $ 138 $ 62,755 $ 23,299 $ 86,192
========= ======== ========= =========
F-28
120
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
COMBINED
COMBINED NON-
PARENT GUARANTORS GUARANTORS CONSOLIDATED
-------- ---------- ---------- ------------
(IN THOUSANDS)
Cash flows from operating activities............. $ 64,427 $ 37,873 $ 19,449 $121,749
-------- -------- -------- --------
Cash flows from investing activities
Proceeds from sale of Sam's Town Kansas City's
assets...................................... -- 10,500 -- 10,500
Acquisition of property, equipment and other
assets...................................... (11,514) (54,467) (2,030) (68,011)
-------- -------- -------- --------
Net cash used in investing activities....... (11,514) (43,967) (2,030) (57,511)
-------- -------- -------- --------
Cash flows from financing activities
Proceeds from issuance of long-term debt....... -- 8,000 -- 8,000
Payments on long-term debt..................... (2,218) (562) (129) (2,909)
Receipt/(payment) of dividends................. 19,196 (4,169) (15,027) --
Net borrowings under credit agreements......... (73,000) -- -- (73,000)
Proceeds from issuance of common stock......... 1,331 -- -- 1,331
-------- -------- -------- --------
Net cash provided by (used in) financing
activities................................ (54,691) 3,269 (15,156) (66,578)
-------- -------- -------- --------
Net increase (decrease) in cash and cash
equivalents.................................... (1,778) (2,825) 2,263 (2,340)
Cash and cash equivalents, beginning of period... 2,832 58,317 17,128 78,277
-------- -------- -------- --------
Cash and cash equivalents, end of period......... $ 1,054 $ 55,492 $ 19,391 $ 75,937
======== ======== ======== ========
NOTE 17. SUBSEQUENT EVENT
In January 2001, the Emerging Issues Task Force of the Financial Accounting
Standards Board reached a consensus in EITF Issue No. 00-22, "Accounting for
'Points' and Certain Other Time-Based or Volume-Based Sales Incentive Offers,
and Offers for Free Products or Services to be Delivered in the Future". EITF
Issue No. 00-22 requires that the redemption of "Points" for cash be recognized
as a reduction of revenue. EITF Issue No. 00-22 was required to be adopted for
quarterly financial statements ending after February 15, 2001.
The EITF also required that, after adoption, prior period financial
statements, presented for comparative purposes, be reclassified to comply with
this consensus. In accordance with the adoption of this consensus by the Company
in its March 2001 Form 10-Q, amounts in its consolidated statements of
operations and related notes for the three years in the period ended December
31, 2000 have been reclassified from that previously reported. This
reclassification had no effect on the Company's previously reported net income.
F-29
121
SELECTED QUARTERLY FINANCIAL INFORMATION
(UNAUDITED)
YEAR ENDED DECEMBER 31, 2000
------------------------------------------------------
FIRST SECOND THIRD FOURTH TOTAL
-------- -------- -------- -------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Net revenues........................... $347,440 $264,820 $264,360 $254,918 $1,131,538
Operating income....................... 112,779 29,741 24,102 12,931 179,553
Net income (loss)...................... 57,069 6,653 3,700 (4,657) 62,765
======== ======== ======== ======== ==========
Basic and diluted net income (loss) per
common share:
Net income (loss)...................... $ 0.92 $ 0.11 $ 0.06 $ (0.07) $ 1.01
======== ======== ======== ======== ==========
YEAR ENDED DECEMBER 31, 1999
----------------------------------------------------
FIRST SECOND THIRD FOURTH TOTAL
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Net revenues............................ $239,381 $237,849 $235,470 $258,225 $970,925
Operating income........................ 35,419 33,066 33,708 34,418 136,611
Cumulative effect of a change in
accounting for start-up activities,
net of tax............................ (1,738) -- -- -- (1,738)
Net income.............................. 8,902 9,705 10,337 9,357 38,301
======== ======== ======== ======== ========
Basic and diluted net income per common
share:
Income before cumulative effect......... $ 0.17 $ 0.16 $ 0.17 $ 0.15 $ 0.65
Cumulative effect, net of tax........... (0.03) -- -- -- (0.03)
-------- -------- -------- -------- --------
Net income.............................. $ 0.14 $ 0.16 $ 0.17 $ 0.15 $ 0.62
======== ======== ======== ======== ========
F-30
122
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE EXCHANGE OFFER COVERED BY THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------------
UNTIL , 2002 (180 DAYS AFTER THE EXPIRATION DATE OF THIS EXCHANGE
OFFER) ALL DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT
PARTICIPATING IN THIS EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
ALL TENDERED OLD NOTES, EXECUTED LETTERS OF TRANSMITTAL AND OTHER RELATED
DOCUMENTS SHOULD BE DIRECTED TO THE EXCHANGE AGENT. QUESTIONS AND REQUESTS FOR
ASSISTANCE AND REQUESTS FOR ADDITIONAL COPIES OF THIS PROSPECTUS, THE LETTER OF
TRANSMITTAL AND OTHER RELATED DOCUMENTS SHOULD BE ADDRESSED TO THE EXCHANGE
AGENT AS FOLLOWS:
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE BANK OF NEW YORK
101 Barclay Street
Bond Redemption Unit
Lobby Level
New York, NY 10286
Attention: Santino Ginocchietti
By facsimile transmission:
(212) 815-6339
To confirm by telephone or for information:
(212) 815-6331
(ORIGINALS OF ALL DOCUMENTS SUBMITTED BY FACSIMILE SHOULD BE SENT PROMPTLY
BY HAND, OVERNIGHT COURIER, OR REGISTERED OR CERTIFIED MAIL).
(BOYD GAMING LOGO)
$200,000,000
OFFER TO EXCHANGE
9 1/4% SENIOR NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933,
FOR ANY AND ALL OUTSTANDING
9 1/4% SENIOR NOTES DUE 2009
-------------------------
PROSPECTUS
-------------------------
Dated , 2001
123
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Sections 78.751 and 78.752 of the Nevada Revised Statutes, the
Company has broad powers to indemnify and insure its directors and officers
against liabilities they may incur in their capacities as such.
Article VIII of the Company's Restated Articles of Incorporation and
Article 10 of the Company's Restated Bylaws provide for indemnification of its
directors, officers, employees and other agents to the maximum extent permitted
by law. Similar provisions are set forth in the Guarantors' charter documents.
The Company also has entered into Indemnification Agreements with its executive
officers and directors and provides indemnity insurance pursuant to which
directors and officers are indemnified or insured against liability or loss
under certain circumstances which may include liability, or related loss under
the Securities Act and the Exchange Act.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
---------- -----------
3.1(7) Restated Articles of Incorporation.
3.2(10) Restated Bylaws.
3.3(14) Certificate of Amendment of Articles of Incorporation.
4.1(8) Registration Agreement, dated July 17, 1997, by and among
the Registrant, Salomon Brothers Inc., UBS Securities LLC
and CIBC Wood Gundy Securities Corp.
4.2(9) Form of Indenture relating to $200,000,000 aggregate
principal amount of 9.25% Senior Subordinated Notes due
2003, including the Form of Note.
4.3(8) Form of Indenture relating to 9.50% Senior Subordinated
Notes due 2007, dated as of July 22, 1997, between the
Registrant and State Street Bank and Trust Company,
including the Form of Note.
4.4(8) First Supplemental Indenture, by and among the Registrant,
as Issuer, certain subsidiaries of the Registrant, as
Guarantors, and The Bank of New York, as Trustee, dated as
of December 31, 1996.
4.5 Registration Rights Agreement, dated as of July 26, 2001, by
and among the Registrant, as Issuer, certain subsidiaries of
the Registrant, as Guarantors, and the Initial Purchasers
named therein.
4.6 Form of Indenture relating to $200,000,000 aggregate
principal amount of 9.25% Senior Notes due 2009, dated as of
July 26, 2001, by and among the Registrant, as Issuer,
certain subsidiaries of the Registrant, as Guarantors, and
The Bank of New York, as Trustee, including the Form of
Note.
5.1 Opinion of Morrison & Foerster LLP.
10.1(1) Ninety-Nine Year Lease dated June 30, 1954, by and among
Fremont Hotel, Inc., and Charles L. Ronnow and J.L. Ronnow,
and Alice Elizabeth Ronnow.
10.2(1) Lease Agreement dated October 31, 1963, by and between
Fremont Hotel, Inc. and Cora Edit Garehime.
10.3(1) Lease Agreement dated December 31, 1963, by and among
Fremont Hotel, Inc., Bank of Nevada and Leon H. Rockwell,
Jr.
10.4(1) Lease Agreement dated June 7, 1971, by and among Anthony
Antonacci, Margaret Fay Simon and Bank of Nevada, as
Co-Trustees under Peter Albert Simon's Last Will and
Testament, and related Assignment of Lease dated February
25, 1985 to Sam-Will, Inc. and Fremont Hotel, Inc.
10.5(4) Lease Agreement dated July 25, 1973, by and between
California Hotel and Casino and William Peccole, as Trustee
of the Peter Peccole 1970 Trust.
II-1
124
EXHIBIT
NUMBER DESCRIPTION
---------- -----------
10.6(1) Lease Agreement dated July 1, 1974, by and among Fremont
Hotel, Inc. and Bank of Nevada, Leon H. Rockwell, Jr. and
Margorie Rockwell Riley.
10.7(1) Ground Lease Agreement dated July 5, 1978, by and among
California Hotel and Casino, and Irene Elizabeth Carey, as
Trustee of the Carey Survivor's Trust U/A October 18, 1972
and Irene Elizabeth Carey, as Trustee of the Carey Family
Trust U/A October 18, 1972.
10.8(1) Ninety-Nine Year Lease dated December 1, 1978 by and between
Matthew Paratore, and George W. Morgan and LaRue Morgan, and
related Lease Assignment dated November 10, 1987 to
Sam-Will, Inc., d/b/a/ Fremont Hotel and Casino.
10.9(1) Implemented Proposal dated June 15, 1992, by and between
Stardust Hotel and Casino and the Back-End Teamsters Local
Union No. 995.
10.10(1) Implemented Proposal dated June 15, 1992, by and between
Fremont Hotel and Casino and the Back-End Teamsters Local
Union No. 995.
10.11(2) Casino Management Agreement dated August 30, 1993, by and
between Treasure Chest Casino, L.L.C. and Boyd Kenner, Inc.
10.12(4) Amended and Restated Operating Agreement dated August 5,
1994, by and between Treasure Chest Casino, L.L.C. and Boyd
Kenner, Inc.
10.13(4) Development Agreement dated June 6, 1994, by and among the
Registrant, Boyd Kansas City, Inc. and Port Authority of
Kansas City, Missouri.
10.14(2) Form of Indemnification Agreement.
10.15(2)* 1993 Flexible Stock Incentive Plan and related agreements.
10.16(2)* 1993 Directors Non-Qualified Stock Option Plan and related
agreements.
10.17(11)* 1993 Employee Stock Purchase Plan and related agreements.
10.18(1) 401(k) Profit Sharing Plan and Trust.
10.19(5) Joint Venture Agreement of Stardust A.C., dated as of May
29, 1996, by and between MAC, Corp., a New Jersey
Corporation, which is a wholly-owned subsidiary of Mirage
Resorts Incorporated, a Nevada Corporation, and Grand K,
Inc., a Nevada Corporation, which is a wholly-owned
subsidiary of the Registrant. (Certain portions of this
exhibit have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for
confidential treatment for this Agreement.)
10.20(3) Amended and Restated Joint Venture Agreement of Stardust
A.C.
10.21(6) Property Purchase Agreement dated as of August 9, 1996, by
and between Steamboat Station Company, a Nevada general
partnership, and Boyd Reno, Inc., a Nevada corporation and
wholly-owned subsidiary of the Registrant.
10.22(12) Unit Purchase Agreement by and among the Registrant, Boyd
Indiana, Inc., Blue Chip Casino, Inc., Blue Chip Casino,
LLC, and certain individuals, dated as of June 27, 1999.
10.23(12) First Amended and Restated Credit Agreement, dated as of
June 30, 1999 by and among the Registrant as the Borrower,
Certain Commercial Lending Institutions, as the Lenders,
Canadian Imperial Bank of Commerce, as L/C Issuer and
Administrative Agent, Wells Fargo Bank N.A., as Swingline
Lender and Syndication Agent, and Bank of America National
Trust and Savings Association, as Documentation Agent.
10.24(13) Termination and Transition Agreement between the Registrant
and the Mississippi Band of Choctaw Indians, dated as of
October 20, 1999.
10.25(14) First Amendment to First Amended and Restated Credit
Agreement, dated as of July 26, 2000, by and among the
Registrant as the Borrower, Certain Commercial Lending
Institutions, as the Lenders, Canadian Imperial Bank of
Commerce, as letter of credit issuer and administrative
Agent, Wells Fargo Bank, N.A., as Swingline Lender and
Syndication Agent, and Bank of America, N.A., as
Documentation Agent.
10.26(19)* 2000 Executive Management Incentive Plan.
10.27(14) Certificate of Amendment of Articles of Incorporation.
10.28(14)* 1996 Stock Incentive Plan (as amended on May 25, 2000).
10.29(15) Second Amended and Restated Joint Venture Agreement with
Marina District Development Company dated as of August 31,
2000.
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EXHIBIT
NUMBER DESCRIPTION
---------- -----------
10.30(17) Contribution and Adoption Agreement by and among Marina
District Development Holding Co., LLC, MAC, Corp. and Boyd
Atlantic City, Inc. effective as of December 13, 2000.
10.31(17) Guaranty of Performance and Completion dated December 13,
2000.
10.32(18) Second Amendment to First Amended and Restated Credit
Agreement dated as of May 21, 2001, by and among the
Registrant as the Borrower, and certain commercial lending
institutions as named therein.
12.1 Computation of Ratio of Earnings to Fixed Charges.
21.1(17) Subsidiaries of the Registrant.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Morrison & Foerster LLP (included in Exhibit
5.1).
24.1 Power of Attorney (included in Part II to this Registration
Statement).
25.1 Statement of Eligibility of The Bank of New York, as
trustee, on Form T-1.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
---------------
* Management contracts or compensatory plans or arrangements.
(1) Incorporated by reference to the Registration Statement on Form S-1, File
No. 33-51672, of California Hotel and Casino and California Hotel Finance
Corporation, which became effective on November 18, 1992.
(2) Incorporated by reference to the Registrant's Statement on Form S-1, File
No. 33-64006, which became effective on October 15, 1993.
(3) Incorporated by reference to the Registrant's Current Report on Form 8-K
dated July 14, 1998.
(4) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended June 30, 1995.
(5) Incorporated by reference to the Registrant's Current Report on Form 8-K
dated June 7, 1996.
(6) Incorporated by reference to the Registrant's Exhibit 2.1 of Current Report
on Form 8-K dated August 16, 1996.
(7) Incorporated by reference to Exhibit 3.1 of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1996.
(8) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended June 30, 1997.
(9) Incorporated by reference to the Registrant's Registration Statement on
Form S-3, File No. 333-0555.
(10) Incorporated by reference to Exhibit 3.2 of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1999.
(11) Incorporated by reference to the Registration Statement on Form S-8, File
No. 333-79895, dated June 3, 1999.
(12) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999.
(13) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1999.
(14) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 2000.
(15) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 2000.
II-3
126
(16) Refer to page 73 in the Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000.
(17) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 2001.
(18) Incorporated by reference to Exhibit 10.31 of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2001.
(19) Incorporated by reference to Appendix A of the Registrant's Definitive
Proxy Statement for its Annual Meeting on May 25, 2000.
(b) Financial Statement Schedules
Schedule I (incorporated by reference)
ITEM 22. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 20 above, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-4
127
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
BOYD GAMING CORPORATION
By: /s/ ELLIS LANDAU
-----------------------------------
Ellis Landau
Executive Vice President, Chief
Financial Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD Chief Executive Officer, September 17, 2001
----------------------------------------------------- Chairman of the Board of
William S. Boyd Directors and Director
(Principal Executive Officer)
/s/ MARIANNE BOYD JOHNSON Vice Chairman, Vice President, September 17, 2001
----------------------------------------------------- Assistant Secretary and
Marianne Boyd Johnson Director
/s/ DONALD D. SNYDER President and Director September 17, 2001
-----------------------------------------------------
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Senior Executive Vice September 17, 2001
----------------------------------------------------- President, Chief Operating
Robert L. Boughner Officer and Director
/s/ WILLIAM R. BOYD Vice President and Director September 17, 2001
-----------------------------------------------------
William R. Boyd
/s/ ELLIS LANDAU Executive Vice President, September 17, 2001
----------------------------------------------------- Chief Financial Officer and
Ellis Landau Treasurer (Principal Financial
Officer)
II-5
128
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JEFFREY G. SANTORO Vice President and Controller September 17, 2001
----------------------------------------------------- (Principal Accounting Officer)
Jeffrey G. Santoro
/s/ PHILIP J. DION Director September 17, 2001
-----------------------------------------------------
Philip J. Dion
/s/ MICHAEL O. MAFFIE Director September 17, 2001
-----------------------------------------------------
Michael O. Maffie
/s/ MAJ. GEN. BILLY G. MCCOY, RET. USAF Director September 17, 2001
-----------------------------------------------------
Maj. Gen. Billy G. McCoy, Ret. USAF
/s/ PERRY B. WHITT Director September 17, 2001
-----------------------------------------------------
Perry B. Whitt
II-6
129
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
BLUE CHIP CASINO, LLC
By: /s/ WILLIAM S. BOYD
----------------------------------
William S. Boyd
Operating Manager
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD Operating Manager (Principal September 17, 2001
--------------------------------------------- Executive Officer)
William S. Boyd
/s/ DONALD D. SNYDER Treasurer and Manager September 17, 2001
--------------------------------------------- (Principal Financial and
Donald D. Snyder Accounting Officer)
/s/ ROBERT L. BOUGHNER Secretary and Manager September 17, 2001
---------------------------------------------
Robert L. Boughner
II-7
130
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
BOYD ATLANTIC CITY, INC.
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Vice President, Chief Financial
Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons and
in the capacities indicated on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Vice President, Chief Financial September 17, 2001
--------------------------------------------- Officer and Treasurer (Principal
Ellis Landau Financial and Accounting
Officer)
/s/ ROBERT L. BOUGHNER Vice President, Secretary and September 17, 2001
--------------------------------------------- Director
Robert L. Boughner
/s/ DONALD D. SNYDER Vice President and Director September 17, 2001
---------------------------------------------
Donald D. Snyder
II-8
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SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
BOYD INDIANA, INC.
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Senior Vice President, Chief
Financial Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons and
in the capacities indicated on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Senior Vice President, Chief September 17, 2001
--------------------------------------------- Financial Officer and Treasurer
Ellis Landau (Principal Financial and
Accounting Officer)
/s/ ROBERT L. BOUGHNER Senior Vice President, Secretary September 17, 2001
--------------------------------------------- and Director
Robert L. Boughner
/s/ DONALD D. SNYDER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Donald D. Snyder
II-9
132
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
BOYD KENNER, INC.
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Senior Vice President, Chief
Financial Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons and
in the capacities indicated on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Senior Vice President, Chief September 17, 2001
--------------------------------------------- Financial Officer and Treasurer
Ellis Landau (Principal Financial and
Accounting Officer)
/s/ DONALD D. SNYDER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Robert L. Boughner
II-10
133
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
BOYD LOUISIANA L.L.C.
By: /s/ WILLIAM S. BOYD
----------------------------------
William S. Boyd
Manager
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD Manager (Principal Executive September 17, 2001
--------------------------------------------- Officer)
William S. Boyd
/s/ DONALD D. SNYDER Manager (Principal Financial September 17, 2001
--------------------------------------------- and Accounting Officer)
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Manager September 17, 2001
---------------------------------------------
Robert L. Boughner
II-11
134
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
BOYD TUNICA, INC.
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Senior Vice President, Chief
Financial Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons and
in the capacities indicated on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Senior Vice President, Chief September 17, 2001
--------------------------------------------- Financial Officer and Treasurer
Ellis Landau (Principal Financial and
Accounting Officer)
/s/ DONALD D. SNYDER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Robert L. Boughner
II-12
135
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
CALIFORNIA HOTEL AND CASINO
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Senior Vice President, Chief
Financial Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Senior Vice President, Chief September 17, 2001
--------------------------------------------- Financial Officer and Treasurer
Ellis Landau (Principal Financial and
Accounting Officer)
/s/ DONALD D. SNYDER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Robert L. Boughner
II-13
136
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
CALIFORNIA HOTEL FINANCE CORPORATION
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Vice President, Chief Financial
Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Vice President, Chief Financial September 17, 2001
--------------------------------------------- Officer and Treasurer
Ellis Landau (Principal Financial and
Accounting Officer)
/s/ DONALD D. SNYDER Vice President and Director September 17, 2001
---------------------------------------------
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Vice President and Director September 17, 2001
---------------------------------------------
Robert L. Boughner
II-14
137
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
ELDORADO, INC.
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Senior Vice President, Chief
Financial Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Senior Vice President, Chief September 17, 2001
--------------------------------------------- Financial Officer and Treasurer
Ellis Landau (Principal Financial and
Accounting Officer)
/s/ DONALD D. SNYDER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Robert L. Boughner
/s/ GEORGE ROBERT NEUMAN Vice President and Director September 17, 2001
---------------------------------------------
George Robert Neuman
II-15
138
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
MARE-BEAR, INC.
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Senior Vice President, Chief
Financial Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Senior Vice President, Chief September 17, 2001
--------------------------------------------- Financial Officer and Treasurer
Ellis Landau (Principal Financial and
Accounting Officer)
/s/ DONALD D. SNYDER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Robert L. Boughner
II-16
139
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
M.S.W., INC.
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Senior Vice President, Chief
Financial Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Senior Vice President, Chief September 17, 2001
--------------------------------------------- Financial Officer and Treasurer
Ellis Landau (Principal Financial and
Accounting Officer)
/s/ DONALD D. SNYDER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Robert L. Boughner
II-17
140
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
PAR-A-DICE GAMING CORPORATION
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Senior Vice President, Chief
Financial Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Vice President, Chief Financial September 17, 2001
--------------------------------------------- Officer and Treasurer
Ellis Landau (Principal Financial and
Accounting Officer)
/s/ DONALD D. SNYDER Vice President and Director September 17, 2001
---------------------------------------------
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Vice President, Secretary and September 17, 2001
--------------------------------------------- Director
Robert L. Boughner
/s/ MAUNTY C. COLLINS Vice President and Director September 17, 2001
---------------------------------------------
Maunty C. Collins
II-18
141
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
SAM-WILL, INC.
By: /s/ ELLIS LANDAU
----------------------------------
Ellis Landau
Senior Vice President, Chief
Financial Officer and Treasurer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD President and Director September 17, 2001
--------------------------------------------- (Principal Executive Officer)
William S. Boyd
/s/ ELLIS LANDAU Senior Vice President, Chief September 17, 2001
--------------------------------------------- Financial Officer and Treasurer
Ellis Landau (Principal Financial and
Accounting Officer)
/s/ DONALD D. SNYDER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Senior Vice President and September 17, 2001
--------------------------------------------- Director
Robert L. Boughner
II-19
142
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas, State of
Nevada, on September 17, 2001.
TREASURE CHEST CASINO, L.L.C.
By: /s/ WILLIAM S. BOYD
------------------------------------
William S. Boyd
Chief Executive Officer and Manager
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ellis Landau and Jeffrey G.
Santoro, and each of them (with full power in each to act alone), as
attorneys-in-fact and agents for the undersigned, each with full power of
substitution for and in the name, place, and stead of the undersigned, to sign
and file with the Commission under the Securities Act any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments, and other documents to be filed with the Commission pertaining to
the registration of the securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite or desirable,
hereby ratifying and confirming all that each of said attorneys-in-fact, his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ WILLIAM S. BOYD Chief Executive Officer and September 17, 2001
--------------------------------------------- Manager (Principal Executive
William S. Boyd Officer)
/s/ DONALD D. SNYDER Manager (Principal Financial September 17, 2001
--------------------------------------------- and Accounting Officer)
Donald D. Snyder
/s/ ROBERT L. BOUGHNER Manager September 17, 2001
---------------------------------------------
Robert L. Boughner
II-20
143
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.1(7) Restated Articles of Incorporation.
3.2(10) Restated Bylaws.
3.3(14) Certificate of Amendment of Articles of Incorporation.
4.1(8) Registration Agreement, dated July 17, 1997, by and among
the Registrant, Salomon Brothers Inc., UBS Securities LLC
and CIBC Wood Gundy Securities Corp.
4.2(9) Form of Indenture relating to $200,000,000 aggregate
principal amount of 9.25% Senior Subordinated Notes due
2003, including the Form of Note.
4.3(8) Form of Indenture relating to 9.50% Senior Subordinated
Notes due 2007, dated as of July 22, 1997, between the
Registrant and State Street Bank and Trust Company,
including the Form of Note.
4.4(8) First Supplemental Indenture, by and among the Registrant,
as Issuer, certain subsidiaries of the Registrant, as
Guarantors, and The Bank of New York, as Trustee, dated as
of December 31, 1996.
4.5 Registration Rights Agreement, dated as of July 26, 2001, by
and among the Registrant, as Issuer, certain subsidiaries of
the Registrant, as Guarantors, and the Initial Purchasers
named therein.
4.6 Form of Indenture relating to $200,000,000 aggregate
principal amount of 9.25% Senior Notes due 2009, dated as of
July 26, 2001, by and among the Registrant, as Issuer,
certain subsidiaries of the Registrant, as Guarantors, and
The Bank of New York, as Trustee, including the Form of
Note.
5.1 Opinion of Morrison & Foerster LLP.
10.1(1) Ninety-Nine Year Lease dated June 30, 1954, by and among
Fremont Hotel, Inc., and Charles L. Ronnow and J.L. Ronnow,
and Alice Elizabeth Ronnow.
10.2(1) Lease Agreement dated October 31, 1963, by and between
Fremont Hotel, Inc. and Cora Edit Garehime.
10.3(1) Lease Agreement dated December 31, 1963, by and among
Fremont Hotel, Inc., Bank of Nevada and Leon H. Rockwell,
Jr.
10.4(1) Lease Agreement dated June 7, 1971, by and among Anthony
Antonacci, Margaret Fay Simon and Bank of Nevada, as
Co-Trustees under Peter Albert Simon's Last Will and
Testament, and related Assignment of Lease dated February
25, 1985 to Sam-Will, Inc. and Fremont Hotel, Inc.
10.5(4) Lease Agreement dated July 25, 1973, by and between
California Hotel and Casino and William Peccole, as Trustee
of the Peter Peccole 1970 Trust.
10.6(1) Lease Agreement dated July 1, 1974, by and among Fremont
Hotel, Inc. and Bank of Nevada, Leon H. Rockwell, Jr. and
Margorie Rockwell Riley.
10.7(1) Ground Lease Agreement dated July 5, 1978, by and among
California Hotel and Casino, and Irene Elizabeth Carey, as
Trustee of the Carey Survivor's Trust U/A October 18, 1972
and Irene Elizabeth Carey, as Trustee of the Carey Family
Trust U/A October 18, 1972.
10.8(1) Ninety-Nine Year Lease dated December 1, 1978 by and between
Matthew Paratore, and George W. Morgan and LaRue Morgan, and
related Lease Assignment dated November 10, 1987 to
Sam-Will, Inc., d/b/a/ Fremont Hotel and Casino.
10.9(1) Implemented Proposal dated June 15, 1992, by and between
Stardust Hotel and Casino and the Back-End Teamsters Local
Union No. 995.
10.10(1) Implemented Proposal dated June 15, 1992, by and between
Fremont Hotel and Casino and the Back-End Teamsters Local
Union No. 995.
10.11(2) Casino Management Agreement dated August 30, 1993, by and
between Treasure Chest Casino, L.L.C. and Boyd Kenner, Inc.
144
10.12(4) Amended and Restated Operating Agreement dated August 5, 1994, by and between Treasure
Chest Casino, L.L.C. and Boyd Kenner, Inc.
10.13(4) Development Agreement dated June 6, 1994, by and among the Registrant, Boyd Kansas
City, Inc. and Port Authority of Kansas City, Missouri.
10.14(2) Form of Indemnification Agreement.
10.15(2)* 1993 Flexible Stock Incentive Plan and related agreements.
10.16(2)* 1993 Directors Non-Qualified Stock Option Plan and related agreements.
10.17(11)* 1993 Employee Stock Purchase Plan and related agreements.
10.18(1) 401(k) Profit Sharing Plan and Trust.
10.19(5) Joint Venture Agreement of Stardust A.C., dated as of May 29, 1996, by and between
MAC, Corp., a New Jersey Corporation, which is a wholly-owned subsidiary of Mirage
Resorts Incorporated, a Nevada Corporation, and Grand K, Inc., a Nevada Corporation,
which is a wholly-owned subsidiary of the Registrant. (Certain portions of this
exhibit have been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment for this Agreement.)
10.20(3) Amended and Restated Joint Venture Agreement of Stardust A.C.
10.21(6) Property Purchase Agreement dated as of August 9, 1996, by and between Steamboat
Station Company, a Nevada general partnership, and Boyd Reno, Inc., a Nevada
corporation and wholly-owned subsidiary of the Registrant.
10.22(12) Unit Purchase Agreement by and among the Registrant, Boyd Indiana, Inc., Blue Chip
Casino, Inc., Blue Chip Casino, LLC, and certain individuals, dated as of June 27,
1999.
10.23(12) First Amended and Restated Credit Agreement, dated as of June 30, 1999 by and among
the Registrant as the Borrower, Certain Commercial Lending Institutions, as the
Lenders, Canadian Imperial Bank of Commerce, as L/C Issuer and Administrative Agent,
Wells Fargo Bank N.A., as Swingline Lender and Syndication Agent, and Bank of America
National Trust and Savings Association, as Documentation Agent.
10.24(13) Termination and Transition Agreement between the Registrant and the Mississippi Band
of Choctaw Indians, dated as of October 20, 1999.
10.25(14) First Amendment to First Amended and Restated Credit Agreement, dated as of July 26,
2000, by and among the Registrant as the Borrower, Certain Commercial Lending
Institutions, as the Lenders, Canadian Imperial Bank of Commerce, as letter of credit
issuer and administrative Agent, Wells Fargo Bank, N.A., as Swingline Lender and
Syndication Agent, and Bank of America, N.A., as Documentation Agent.
10.26(19)* 2000 Executive Management Incentive Plan.
10.27(14) Certificate of Amendment of Articles of Incorporation.
10.28(14)* 1996 Stock Incentive Plan (as amended on May 25, 2000).
10.29(15) Second Amended and Restated Joint Venture Agreement with Marina District Development
Company dated as of August 31, 2000.
10.30(17) Contribution and Adoption Agreement by and among Marina District Development Holding
Co., LLC, MAC, Corp. and Boyd Atlantic City, Inc. effective as of December 13, 2000.
10.31(17) Guaranty of Performance and Completion dated December 13, 2000.
10.32(18) Second Amendment to First Amended and Restated Credit Agreement dated as of May 21,
2001, by and among the Registrant as the Borrower, and certain commercial lending
institutions as named therein.
12.1 Computation of Ratio of Earnings to Fixed Charges.
21.1(17) Subsidiaries of the Registrant.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Morrison & Foerster LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included in Part II to this Registration Statement).
145
25.1 Statement of Eligibility of The Bank of New York, as trustee, on Form T-1.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
---------------
* Management contracts or compensatory plans or arrangements.
(1) Incorporated by reference to the Registration Statement on Form S-1, File
No. 33-51672, of California Hotel and Casino and California Hotel Finance
Corporation, which became effective on November 18, 1992.
(2) Incorporated by reference to the Registrant's Statement on Form S-1, File
No. 33-64006, which became effective on October 15, 1993.
(3) Incorporated by reference to the Registrant's Current Report on Form 8-K
dated July 14, 1998.
(4) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended June 30, 1995.
(5) Incorporated by reference to the Registrant's Current Report on Form 8-K
dated June 7, 1996.
(6) Incorporated by reference to the Registrant's Exhibit 2.1 of Current
Report on Form 8-K dated August 16, 1996.
(7) Incorporated by reference to Exhibit 3.1 of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1996.
(8) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended June 30, 1997.
(9) Incorporated by reference to the Registrant's Registration Statement on
Form S-3, File No. 333-0555.
(10) Incorporated by reference to Exhibit 3.2 of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1999.
(11) Incorporated by reference to the Registration Statement on Form S-8, File
No. 333-79895, dated June 3, 1999.
(12) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1999.
(13) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1999.
(14) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 2000.
(15) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 2000.
(16) Refer to page 73 in the Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000.
(17) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 2001.
(18) Incorporated by reference to Exhibit 10.31 of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2001.
(19) Incorporated by reference to Appendix A of the Registrant's Definitive
Proxy Statement for its Annual Meeting on May 25, 2000.
EX-4.5
3
a75302ex4-5.txt
EXHIBIT 4.5
1
EXHIBIT 4.5
================================================================================
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JULY 26, 2001
BY AND AMONG
BOYD GAMING CORPORATION,
THE GUARANTORS SIGNATORIES HERETO
AND
DEUTSCHE BANC ALEX. BROWN INC.
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
CIBC WORLD MARKETS CORP.
DRESDNER KLEINWORT WASSERSTEIN--GRANTCHESTER, INC.
SCOTIA CAPITAL (USA) INC.
WELLS FARGO BROKERAGE SERVICES, LLC
CREDIT LYONNAIS SECURITIES (USA) INC.
FLEET SECURITIES, INC.
SG COWEN SECURITIES CORPORATION
================================================================================
2
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of July 26, 2001, by and among Boyd Gaming Corporation, a Nevada
corporation (the "COMPANY"), the subsidiaries of the Company listed on the
signature pages hereto (the "GUARANTORS"), and Deutsche Banc Alex. Brown Inc.
and each of the other Initial Purchasers listed on Schedule B to the Purchase
Agreement (as defined below) (each an "INITIAL PURCHASER" and, collectively, the
"INITIAL PURCHASERS"), each of whom has agreed to purchase the Company's 9 1/4%
Series A Senior Notes due 2009 (the "SERIES A NOTES") pursuant to the Purchase
Agreement, dated July 20, 2001, (the "PURCHASE AGREEMENT"), by and among the
Company, the Guarantors and the Initial Purchasers.
In order to induce the Initial Purchasers to purchase the Series A
Notes, the Company has agreed to provide the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 3 of the Purchase
Agreement. Capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them the Indenture, dated July 26, 2001, between the
Company and Bank of New York, as Trustee, relating to the Series A Notes and the
Series B Notes (the "INDENTURE").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the effectiveness under the Act of
the Exchange Offer Registration Statement relating to the Series B Notes to be
issued in the Exchange Offer, (b) the maintenance of such Exchange Offer
Registration Statement continuously effective and the keeping of the Exchange
Offer open for a period not less than the period required pursuant to Section
3(b) hereof and (c) the delivery by the Company to the Registrar under the
Indenture of Series B Notes in the same aggregate principal amount as the
aggregate principal amount of Series A Notes validly tendered by Holders thereof
pursuant to the Exchange Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
3
EFFECTIVENESS DEADLINE: As defined in Section 3(a) and 4(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
EXCHANGE OFFER: The exchange and issuance by the Company of a principal
amount of Series B Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal amount of
Series A Notes that are validly tendered by such Holders in connection with such
exchange and issuance.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers propose
to sell the Series A Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act and pursuant to Regulation S under
the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective Registration Statement in reliance upon
Rule 430A under the Act), as amended or supplemented by any prospectus
supplement and by all other amendments thereto, including post-effective
amendments, and all material incorporated by reference into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Series B Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
REGULATION S: Regulation S promulgated under the Act.
RULE 144: Rule 144 promulgated under the Act.
SERIES B NOTES: The Company's 9 1/4% Series B Senior Notes due 2009 to
be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as
contemplated by Section 6 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
2
4
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each (A) Series A Note, until the
earliest to occur of (i) the date on which such Series A Note is exchanged in
the Exchange Offer for a Series B Note which is entitled to be resold to the
public by the Holder thereof without complying with the prospectus delivery
requirements of the Act, (ii) the date on which such Series A Note has been
registered under the Act and disposed of in accordance with a Shelf Registration
Statement (and the purchasers thereof have been issued Series B Notes), (iii)
the date on which such Series A Note is distributed to the public pursuant to
Rule 144 under the Act, or (iv) the date on which such Series A Note shall have
ceased to be outstanding and each (B) Series B Note held by a Broker Dealer
until the date on which such Series B Note is disposed of by a Broker-Dealer
pursuant to the "Plan of Distribution" contemplated by the Exchange Offer
Registration Statement (including the delivery of the Prospectus contained
therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law or Commission policy (after the procedures set forth in Section
6(a)(i) below have been complied with), the Company and the Guarantors shall (i)
cause the Exchange Offer Registration Statement to be filed with the Commission
on or prior to 60 days after the Closing Date (such 60th day being the "FILING
DEADLINE"), (ii) use commercially reasonable efforts to cause such Exchange
Offer Registration Statement to be declared effective by the Commission on or
prior to 150 days after the Closing Date (such 150th day being the
"EFFECTIVENESS DEADLINE"), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) use commercially reasonable efforts to cause
all necessary filings, if any, in connection with the registration and
qualification of the Series B Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting (i) registration of the Series B Notes to be offered
in exchange for the Series A Notes that are Transfer Restricted Securities and
(ii) resales of Series B Notes by Broker-Dealers that tendered into the Exchange
Offer Series A Notes that such Broker-Dealer acquired for its own account as a
result of market making activities or other trading activities (other than
Series A Notes acquired directly from the Company or any of its Affiliates) as
contemplated by Section 3(c) below.
3
5
(b) The Company and the Guarantors shall use commercially reasonable
efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantors shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Series B Notes shall be included
in the Exchange Offer Registration Statement. The Company and the Guarantors
shall use commercially reasonable efforts to cause the Exchange Offer to be
Consummated not later than 30 business days after the Exchange Offer
Registration Statement is declared effective (such 30th day being the
"CONSUMMATION DEADLINE").
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any Affiliate of the Company), may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission.
Because such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Series B
Notes received by such Broker-Dealer in the Exchange Offer, the Company and
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the Prospectus
contained in the Exchange Offer Registration Statement is available for sales of
Series B Notes by Broker-Dealers, the Company and the Guarantors agree to use
commercially reasonable efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented, amended and current as required
by and subject to the provisions of Section 6(a) and (c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the Consummation Deadline or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Registration
Statement have been sold pursuant thereto. The Company and the Guarantors shall
provide sufficient copies of the latest version of such Prospectus to such
Broker-Dealers, promptly upon request, and in no event later than one day after
such request, at any time during such period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted by
applicable law or Commission policy (after the Company and the Guarantors have
complied with the procedures set forth in Section 6(a)(i) below) or (ii) if any
Holder of Transfer Restricted Securities shall
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notify the Company within 20 days following the Consummation Deadline that (A)
such Holder was prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Series B Notes acquired by
it in the Exchange Offer to the public without delivering a prospectus and the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder or (C) such Holder is a
Broker-Dealer and holds Series A Notes acquired directly from the Company or any
of its Affiliates, then the Company and the Guarantors shall use commercially
reasonable efforts to:
(x) cause to be filed, on or prior to 30 days after the earlier
of (i) the date on which the Company determines that the Exchange Offer
Registration Statement cannot be filed as a result of clause (a)(i)
above and (ii) the date on which the Company receives the notice
specified in clause (a)(ii) above, (such earlier date, the "FILING
DEADLINE"), a shelf registration statement pursuant to Rule 415 under
the Act (which may be an amendment to the Exchange Offer Registration
Statement (the "SHELF REGISTRATION STATEMENT")), relating to all
Transfer Restricted Securities, and
(y) cause such Shelf Registration Statement to become effective
on or prior to 90 days after the Filing Deadline for the Shelf
Registration Statement (such 90th day the "EFFECTIVENESS DEADLINE").
If, after the Company has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Company is required
to file and make effective a Shelf Registration Statement solely because the
Exchange Offer is not permitted under applicable federal law (i.e., clause
(a)(i) above), then the filing of the Exchange Offer Registration Statement
shall be deemed to satisfy the requirements of clause (x) above; provided that,
in such event, the Company shall remain obligated to meet the Effectiveness
Deadline set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use commercially reasonable efforts to keep any Shelf
Registration Statement required by this Section 4(a) continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Sections 6(b) and (c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years, or one year if
such Shelf Registration Statement is filed at the requests of a Holder or
Holders, (in each case, as such time may be extended pursuant to Section
6(c)(i)) following the Closing Date, or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Shelf Registration
Statement have been sold pursuant thereto.
The Company shall be deemed not to have used commercially reasonable
efforts to keep the Shelf Registration Statement effective during the requisite
period if it voluntarily takes any action that would result in Holders of
Transfer Restricted Securities covered thereby not being able to publicly offer
and sell such Transfer Restricted Securities during that period, unless (i) such
action is required by applicable law or (ii) such action is taken by the Company
in good faith and for valid business reasons (not including avoidance of the
Company's obligations
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hereunder), including the acquisition or divestiture of assets, so long as the
Company promptly thereafter complies with the requirements of Section 6 hereto,
if applicable.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 15 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein and any other information
reasonably required by the Company in order to fulfill its obligations
hereunder. No Holder of Transfer Restricted Securities shall be entitled to
liquidated damages pursuant to Section 5 hereof unless and until such Holder
shall have provided all such information. Each selling Holder agrees to promptly
furnish additional information as requested by the Commission or as required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline
or (iv) any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective for any 180-day
period during any 360 day period or fail to be usable for its intended purpose
without being succeeded immediately by a post-effective amendment to such
Registration Statement or another Registration Statement that cures such failure
and that is itself declared effective immediately (each such event referred to
in clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the Company and the
Guarantors hereby jointly and severally agree to pay to each Holder of Transfer
Restricted Securities affected thereby liquidated damages in an amount equal to
$.05 per $1,000 in principal amount of Transfer Restricted Securities held by
such Holder for each week that the Registration Default continues for the first
90-day period immediately following the occurrence of the first such
Registration Default. The amount of the liquidated damages shall increase by an
additional $.05 per week per $1,000 principal amount of Notes with respect to
each subsequent 90-day period until all Registration Defaults have been cured,
up to a maximum amount of liquidated damages for all Registration Defaults of
$.50 per week per $1,000 in principal amount of Transfer Restricted Securities;
provided that the Company and the Guarantors shall in no event be required to
pay liquidated damages for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (i) above, (2) upon the effectiveness of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon Consummation of the
Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the liquidated damages
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payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company and the Guarantors to pay liquidated damages with respect to securities
shall survive until such time as such obligations with respect to such
securities shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use commercially reasonable
efforts to effect such exchange and to permit the resale of Series B Notes by
Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:
(i) If, following the date hereof there has been announced a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, that in the reasonable opinion of counsel to the Company
raises a substantial question as to whether the Exchange Offer is
permitted by applicable federal law, the Company and the Guarantors
hereby agree to seek a no-action letter or other favorable decision from
the Commission allowing the Company and the Guarantors to Consummate an
Exchange Offer for such Transfer Restricted Securities. The Company and
the Guarantors hereby agree to pursue the issuance of such a decision to
the Commission staff level. In connection with the foregoing, the
Company and the Guarantors hereby agree to take all such other
commercially reasonable actions as may be requested by the Commission or
otherwise required in connection with the issuance of such decision,
including without limitation (A) participating in telephonic conferences
with the Commission, (B) delivering to the Commission staff an analysis
prepared by counsel to the Company setting forth the legal bases, if
any, upon which such counsel has concluded that such an Exchange Offer
should be permitted and (C) diligently pursuing a resolution (which need
not be favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without
limitation, any Holder who is a Broker Dealer) shall furnish, upon the
request of the Company, prior to the Consummation of the Exchange Offer,
a written representation to the Company and the Guarantors (which may be
contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that (A) it is not an
Affiliate of the Company, (B) it is not engaged in, and does not intend
to engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Series B Notes to be issued in the
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Exchange Offer and (C) it is acquiring the Series B Notes in its
ordinary course of business. As a condition to its participation in the
Exchange Offer each Holder using the Exchange Offer to participate in a
distribution of the Series B Notes shall acknowledge and agree that, if
the resales are of Series B Notes obtained by such Holder in exchange
for Series A Notes acquired directly from the Company or an Affiliate
thereof, it (1) could not, under Commission policy as in effect on the
date of this Agreement, rely on the position of the Commission
enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and
Exxon Capital Holdings Corporation (available May 13, 1988), as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and similar no-action letters (including, if applicable, any
no-action letter obtained pursuant to clause (i) above), and (2) must
comply with the registration and prospectus delivery requirements of the
Act in connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K.
(iii) To the extent required by Commission policies and
procedures, prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and, if applicable, any no-action letter obtained pursuant to
clause (i) above, (B) including a representation that neither the
Company nor any Guarantor has entered into any arrangement or
understanding with any Person to distribute the Series B Notes to be
received in the Exchange Offer and that, to the best of the Company's
and each Guarantor's information and belief, each Holder participating
in the Exchange Offer is acquiring the Series B Notes in its ordinary
course of business and has no arrangement or understanding with any
Person to participate in the distribution of the Series B Notes received
in the Exchange Offer and (C) any other commercially reasonable
undertaking or representation required by the Commission as set forth in
any no-action letter obtained pursuant to clause (i) above, if
applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall:
(i) comply with all the provisions of Section 6(c) below and use
commercially reasonable efforts to effect such registration to permit
the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof (as
indicated in the information furnished to the Company pursuant to
Section 4(b) hereof), and pursuant thereto the Company and the
Guarantors will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the
Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods
of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof, and
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(ii) issue, upon the request of any Holder or purchaser of
Series A Notes covered by any Shelf Registration Statement contemplated
by this Agreement, Series B Notes having an aggregate principal amount
equal to the aggregate principal amount of Series A Notes sold pursuant
to the Shelf Registration Statement and surrendered to the Company for
cancellation; the Company shall register Series B Notes on the Shelf
Registration Statement for this purpose and issue the Series B Notes to
the purchaser(s) of securities subject to the Shelf Registration
Statement in the names as such purchaser(s) shall designate.
(c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company and the
Guarantors shall:
(i) use commercially reasonable efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain an untrue statement of material fact or omit to
state any material fact necessary to make the statements therein not
misleading or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this Agreement, the
Company and the Guarantors shall file promptly an appropriate amendment
to such Registration Statement curing such defect, and, if Commission
review is required, use commercially reasonable efforts to cause such
amendment to be declared effective as soon as practicable. If at any
time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending
the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the
Company and the Guarantors shall use commercially reasonable efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may
be; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iii) advise each Holder promptly and, if requested by such
Holder, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to any applicable Registration Statement or any
post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for
additional information relating
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thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Act
or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale
in any jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening of
any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the
Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes
in the Prospectus in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(v) furnish to each Holder in connection with such exchange or
sale, if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders in connection with
such sale, if any, for a period of at least three Business Days, and the
Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which such Holders shall reasonably object within three Business Days
after the receipt thereof. A Holder shall be deemed to have reasonably
objected to such filing if such Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed,
contains an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading or
fails to comply with the applicable requirements of the Act;
(vi) make available for inspection by each such person who would
be an "underwriter" as a result of either (i) the sale by such person of
Series A Notes covered by such Shelf Registration Statement or (ii) the
sale during the period referred to in Section 3(c) above by a
Broker-Dealer of Series B Notes (provided that a Broker-Dealer shall not
be deemed to be an underwriter solely as a result of it being required
to deliver a prospectus in connection with any resale of Series B Notes)
and any attorney, accountant or other agent retained by any such person
(collectively, the "INSPECTORS"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries
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(collectively, the "RECORDS") as shall be reasonably necessary to enable
them to exercise any applicable due diligence responsibilities, and
cause the officers, directors and employees of the Company and its
subsidiaries to supply all information in each case reasonably requested
by any such Inspector in connection with such Registration Statement.
Records which the Company determines, in good faith, to be confidential
and any Records which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a material misstatement or
omission in such Registration Statement, (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or (iii) the information in such Records has been
generally available to the public. Each selling Holder of such Transfer
Restricted Securities and each such Broker-Dealer will be required to
agree that information obtained by it as a result of such inspections
shall be deemed confidential and shall not be used by it as the basis
for any market transactions in the securities of the Company unless and
until such is made generally available to the public. Each selling
Holder of such Transfer Restricted Securities and each such
Broker-Dealer will be required to further agree that it will, upon
learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company
at its expense to undertake appropriate action to prevent disclosure of
the Records deemed confidential;
(vii) if requested by any Holders in connection with such
exchange or sale, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Holders may reasonably request to
have included therein concerning themselves, including, without
limitation, information relating to the "Plan of Distribution"
concerning their Transfer Restricted Securities; and make all required
filings of such Prospectus supplement or post-effective amendment as
soon as practicable after the Company is notified of the matters to be
included in such Prospectus supplement or post-effective amendment;
(viii) furnish to each Holder in connection with such exchange
or sale without charge, at least one copy of the Registration Statement,
as first filed with the Commission, and of each amendment thereto,
including all documents incorporated by reference therein and all
exhibits (including exhibits incorporated therein by reference);
(ix) deliver to each Holder without charge, as many copies of
the Prospectus (including each preliminary prospectus) and any amendment
or supplement thereto as such Persons reasonably may request; the
Company and the Guarantors hereby consent to the use (in accordance with
law) of the Prospectus and any amendment or supplement thereto by each
selling Holder in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(x) upon the request of any Holder, enter into such agreements
(including underwriting agreements) and make such representations and
warranties and take all such other actions in connection therewith in
order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to any applicable Registration Statement
contemplated by this Agreement as may be reasonably requested by any
Holder in
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connection with any sale or resale pursuant to any applicable
Registration Statement. In such connection, the Company and the
Guarantors shall:
(A) upon request of any Holder, furnish (or in the case
of paragraphs (2) and (3), use commercially reasonable efforts
to cause to be furnished) to each Holder, upon Consummation of
the Exchange Offer or upon the effectiveness of the Shelf
Registration Statement, as the case may be:
(1) a certificate, dated such date, signed on
behalf of the Company and each Guarantor by (x) the
President or any Vice President of the Company and such
Guarantor and (y) a principal financial or accounting
officer of the Company and such Guarantor, confirming,
as of the date thereof, the matters set forth in
Sections 6(ff), 9(a) and 9(b) of the Purchase Agreement
and such other similar matters as such Holders may
reasonably request;
(2) an opinion, dated the date of Consummation
of the Exchange Offer or the date of effectiveness of
the Shelf Registration Statement, as the case may be, of
counsel for the Company and the Guarantors covering
matters similar to those set forth in paragraphs (e)
through (k) of Section 9 of the Purchase Agreement and
such other matters as such Holder may reasonably
request, and in any event including a statement to the
effect that such counsel has participated in conferences
with officers and other representatives of the Company
and the Guarantors, representatives of the independent
public accountants for the Company and the Guarantors
and have considered the matters required to be stated
therein and the statements contained therein, although
such counsel has not independently verified the
accuracy, completeness or fairness of such statements;
and that such counsel advises that, on the basis of the
foregoing (relying as to materiality to the extent such
counsel deems appropriate upon the statements of
officers and other representatives of the Company and
the Guarantors and without independent check or
verification), no facts came to such counsel's attention
that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective and, in the case of the Exchange Offer
Registration Statement, as of the date of Consummation
of the Exchange Offer, contained an untrue statement of
a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, or that the
Prospectus contained in such Registration Statement as
of its date and, in the case of the opinion dated the
date of Consummation of the Exchange Offer, as of the
date of Consummation, contained an untrue statement of a
material fact or omitted to state a material fact
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading. Without limiting the foregoing,
such counsel may state further that such counsel assumes
no responsibility for, and has not
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independently verified, the accuracy, completeness or
fairness of the financial statements, notes and
schedules and other financial data included in any
Registration Statement contemplated by this Agreement or
the related Prospectus; and
(3) a customary comfort letter, dated the date
of Consummation of the Exchange Offer, or as of the date
of effectiveness of the Shelf Registration Statement, as
the case may be, from the Company's independent
accountants, in the customary form and covering matters
of the type customarily covered in comfort letters to
underwriters in connection with underwritten offerings,
and affirming the matters set forth in the comfort
letters delivered pursuant to Section 9(m) of the
Purchase Agreement (or, in the case of a person that
does not satisfy the conditions for receipt) if a "cold
comfort" letter specified in Statement of Auditing
Standards No. 72, an "agreed-upon procedures letter";
and
(B) deliver such other documents and certificates as may
be reasonably requested by the selling Holders to evidence
compliance with the matters covered in clause (A) above and with
any customary conditions contained in any agreement entered into
by the Company and the Guarantors pursuant to this clause (xi);
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all
other commercially reasonable acts or things necessary to enable the
disposition in such jurisdictions of the Transfer Restricted Securities
covered by the applicable Registration Statement; provided, however,
that neither the Company nor any Guarantor shall be required to register
or qualify as a foreign corporation or broker dealer where it is not now
so qualified or to take any action that would subject it to the service
of process in suits, other than as to matters and transactions relating
to the Registration Statement or to taxation, in any jurisdiction where
it is not now so subject;
(xii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and to register, subject to compliance with the Indenture, such
Transfer Restricted Securities in such denominations and such names as
the selling Holders may request at least two Business Days prior to such
sale of Transfer Restricted Securities;
(xiii) use commercially reasonable efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xii)
above;
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(xiv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration Statement
covering such Transfer Restricted Securities and provide the Trustee
under the Indenture with certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with the Depository
Trust Company;
(xv) otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in paragraph (c) of Rule 158 under the Act);
(xvi) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance with
the terms of the TIA; and execute and use commercially reasonable
efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be
so qualified in a timely manner; and
(xvii) provide promptly to each Holder, upon request, each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(B) or (C) or any notice from the Company of the existence of
any fact of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.
14
16
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Series B Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and the Guarantors; and (v) all fees
and disbursements of independent certified public accountants of the Company and
the Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Series A Notes in the Exchange Offer and/or selling
or reselling Series A Notes or Series B Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Latham & Watkins,
unless another firm shall be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all losses,
claims, damages, liabilities, judgments, (including without limitation, any
reasonable legal or other expenses incurred in connection with investigating or
defending any matter, including any action that could give rise to any such
losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, preliminary prospectus or Prospectus (or any amendment
or supplement thereto) provided by the Company to any Holder or any prospective
purchaser of Series B Notes or registered Series A Notes, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
provided, however, that this indemnity does not apply to any loss, claim,
damage, liability or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission (i) made in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of such Holder or any underwriter with respect to such Holder, expressly for use
in the Registration Statement (or
15
17
any amendment or supplement thereto) or any Prospectus (or any amendment or
supplement thereto) or (ii) contained in any preliminary prospectus if such
Holder or such underwriter failed to send or deliver a copy of the Prospectus
(in the form it was first provided to such parties for confirmation of sales) to
the person asserting such losses, claims, damages or liabilities on or prior to
the delivery of such written confirmation of any sale of securities covered
thereby to such party in any case where the Company shall have previously
furnished copies thereof to such Holder or such underwriter, as the case may be,
in accordance with this Agreement, at or prior to the written confirmation of
the sale of such securities to such party and the untrue statement contained in
or the omission from the preliminary prospectus was corrected in or the omission
from the preliminary prospectus was corrected in the Prospectus (or any
amendment or supplement thereto). Any amounts advanced by the Company to an
indemnified party pursuant to this Section 8 as a result of such losses shall be
returned to the Company if it shall be finally determined by a court of
competent jurisdiction in a judgment not subject to appeal or final review that
such indemnified party was not entitled to indemnification by the Company.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and the Guarantors, and
their respective directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company, or the Guarantors to the same extent as the foregoing indemnity
from the Company and the Guarantors set forth in section (a) above, but only
with reference to information included in the Registration Statement or any
Prospectus (or any amendment or supplement thereto) in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
such Holder expressly for use in any Registration Statement. In no event shall
any Holder, its directors, officers or any Person who controls such Holder be
liable or responsible for any amount in excess of the amount by which the total
amount received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages that such Holder, its directors, officers or any Person who controls
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all reasonable fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), a Holder shall not be required
to assume the defense of such action pursuant to this Section 8(c), but may
employ separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action
16
18
(including any impleaded parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by a
majority of the Holders, in the case of the parties indemnified pursuant to
Section 8(a), and by the Company and the Guarantors, in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with the indemnifying party's written consent or (ii) effected without
the indemnifying party's written consent if the settlement is entered into more
than 30 business days after the indemnifying party shall have received a request
from the indemnified party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section
8 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and the Holders, on the other hand, from their sale
of Transfer Restricted Securities or (ii) if the allocation provided by clause
8(d)(i) is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Company and the Guarantors, on the one hand,
and of the Holder, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
fault of the Company and the Guarantors, on the one hand, and of the Holder, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or such Guarantor, on the one hand, or by the Holder, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable
17
19
by a party as a result of the losses, claims, damages, liabilities and judgments
referred to above shall be deemed to include, subject to the limitations set
forth in Section 8(a), any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or claim.
The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(c) are several in
proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder, to such Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A, and (ii) is subject to Section 13 or 15 (d) of the
Exchange Act, to make all filings required thereby in a timely manner in order
to permit resales of such Transfer Restricted Securities pursuant to Rule 144.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company and the Guarantors acknowledge and agree that
any failure by the Company and/or the Guarantors to comply with their respective
obligations under Sections 3 and 4 hereof may result in material irreparable
injury to the Initial Purchasers or the Holders for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchasers or
any Holder may obtain such relief as may be required to specifically enforce the
18
20
Company's and the Guarantor's obligations under Sections 3 and 4 hereof. The
Company and the Guarantors further agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof. The
Company and the Guarantors represent and warrant to the Holders that the rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's and the
Guarantors' securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect the rights of Holders
hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
10(e), which address initially is, with respect to each Holder, the
address set forth on the records of the Registrar under the Indenture,
with a copy to the Registrar under the Indenture; and
19
21
(ii) if to the Company or the Guarantors:
Boyd Gaming Corporation
2950 Industrial Road
Las Vegas, Nevada 89109
Telecopier No.: (702) 792-7335
Attention: Chief Financial Officer
With a copy to:
Morrison and Foerster LLP
19900 MacArthur Boulevard, 12th Floor
Irvine, California 92612
Telecopier No.: (949) 251-0900
Attention: Robert M. Mattson, Jr.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
The Company, by notice to the Registrar, may designate additional or
different addresses for subsequent notices or communications.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
The Company shall notify Deutsche Banc. Alex Brown Inc., as
representative of the Initial Purchasers, on the date of the Exchange Offer
Registration Statement or a Shelf Registration Statement, as the case may be, is
filed with the Commission.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms hereof or of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including any restrictions on resale set
forth in this Agreement, the Purchase Agreement, and the Indenture, and such
Person shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
20
22
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[Signature Page Follows]
21
23
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BOYD GAMING CORPORATION, a Nevada corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
BLUE CHIP CASINO, LLC, an Indiana
limited liability company
By: /s/ William S. Boyd
------------------------------------------
Name: William S. Boyd
Title: Operating Manager
BOYD ATLANTIC CITY, INC.,
a New Jersey corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
BOYD INDIANA, INC., an Indiana corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
BOYD KENNER, INC., a Louisiana corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
S-1
24
BOYD LOUISIANA L.L.C.,
a Nevada limited liability company
By: /s/ William S. Boyd
------------------------------------------
Name: William S. Boyd
Title: Manager
BOYD TUNICA, INC., a Mississippi corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
CALIFORNIA HOTEL AND CASINO,
a Nevada corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
CALIFORNIA HOTEL FINANCE CORPORATION,
a Nevada corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
S-2
25
ELDORADO, INC., a Nevada corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
MARE-BEAR, INC., a Nevada corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
M.S.W., INC., a Nevada corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
PAR-A-DICE GAMING CORPORATION,
an Illinois corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
S-3
26
SAM-WILL, INC., a Nevada corporation
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
TREASURE CHEST CASINO, L.L.C.,
a Louisiana limited liability company
By: /s/ Ellis Landau
------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
S-4
27
DEUTSCHE BANC ALEX. BROWN INC.
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC
CIBC WORLD MARKETS CORP.
CREDIT LYONNAIS SECURITIES (USA) INC.
DRESDNER KLEINWORT WASSERSTEIN--GRANTCHESTER, INC.
FLEET SECURITIES, INC.
SCOTIA CAPITAL (USA) INC.
SG COWEN SECURITIES CORPORATION
WELLS FARGO BROKERAGE SERVICES, LLC
By: DEUTSCHE BANC ALEX. BROWN INC.
By: /s/ Paul Whyte
----------------------------------
Name: Paul Whyte
Title: Managing Director
By: /s/ John C. Cushman
----------------------------------
Name: John C. Cushman
Title: Director
S-5
EX-4.6
4
a75302ex4-6.txt
EXHIBIT 4.6
1
EXHIBIT 4.6
================================================================================
BOYD GAMING CORPORATION
and
BLUE CHIP CASINO, LLC
BOYD ATLANTIC CITY, INC.
BOYD INDIANA, INC.
BOYD KENNER, INC.
BOYD LOUISIANA L.L.C.
BOYD TUNICA, INC.
CALIFORNIA HOTEL AND CASINO
CALIFORNIA HOTEL FINANCE CORPORATION
ELDORADO, INC.
MARE-BEAR, INC.
M.S.W., INC.
PAR-A-DICE GAMING CORPORATION
SAM-WILL, INC.
TREASURE CHEST CASINO, L.L.C.
9 1/4% SENIOR NOTES DUE 2009
-----------------------
INDENTURE
Dated as of July 26, 2001
-----------------------
THE BANK OF NEW YORK
Trustee
-----------------------
================================================================================
2
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................... 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... N.A.
(a)(4)................................................... N.A.
(a)(5)................................................... 7.10
(b)...................................................... 7.10
(c)...................................................... N.A.
311(a)...................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... N.A.
312(a)...................................................... 2.05
(b)...................................................... 12.03
(c)...................................................... 12.03
313(a)...................................................... 7.06
(b)(1)................................................... 10.03
(b)(2)................................................... 7.07
(c)...................................................... 7.06;12.02
(d)...................................................... 7.06
314(a)...................................................... 4.03;12.02
(b)...................................................... 10.02
(c)(1)................................................... 12.04
(c)(2)................................................... 12.04
(c)(3)................................................... N.A.
(d)...................................................... N.A.
(e)...................................................... 12.05
(f)...................................................... N.A.
315(a)...................................................... 7.01
(b)...................................................... 7.05,12.02
(c)...................................................... 7.01
(d)...................................................... 7.01
(e)...................................................... 6.11
316(a) (last sentence)...................................... 2.09
(a)(1)(A)................................................ 6.05
(a)(1)(B)................................................ 6.04
(a)(2)................................................... N.A.
(b)...................................................... 6.07
(c)...................................................... 2.12
317(a)(1)................................................... 6.08
(a)(2)................................................... 6.09
(b)...................................................... 2.04
318(a)...................................................... 12.01
(b)...................................................... N.A.
(c)...................................................... 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
3
TABLE OF CONTENTS
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Page
----
Section 1.01. Definitions................................................ 1
Section 1.02. Other Definitions.......................................... 18
Section 1.03. Incorporation by Reference of Trust Indenture Act.......... 18
Section 1.04. Rules of Construction...................................... 19
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating............................................ 19
Section 2.02. Execution and Authentication............................... 20
Section 2.03. Registrar and Paying Agent................................. 20
Section 2.04. Paying Agent to Hold Money in Trust........................ 21
Section 2.05. Holder Lists............................................... 21
Section 2.06. Transfer and Exchange...................................... 21
Section 2.07. Replacement Notes.......................................... 32
Section 2.08. Outstanding Notes.......................................... 32
Section 2.09. Treasury Notes............................................. 32
Section 2.10. Temporary Notes............................................ 32
Section 2.11. Cancellation............................................... 33
Section 2.12. Defaulted Interest......................................... 33
Section 2.13. CUSIP Numbers.............................................. 33
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee......................................... 33
Section 3.02. Selection of Notes to Be Redeemed.......................... 33
Section 3.03. Notice of Redemption....................................... 34
Section 3.04. Effect of Notice of Redemption............................. 35
Section 3.05. Deposit of Redemption Price................................ 35
Section 3.06. Notes Redeemed in Part..................................... 35
Section 3.07. Optional Redemption........................................ 35
Section 3.08. Mandatory Redemption....................................... 36
Section 3.09. Mandatory Disposition Or Redemption Pursuant
To Gaming Laws............................................. 36
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes........................................... 36
Section 4.02. Maintenance of Office or Agency............................ 37
Section 4.03. Reports.................................................... 37
Section 4.04. Compliance Certificate..................................... 37
Section 4.05. Stay and Extension Laws.................................... 38
Section 4.06. Restricted Payments........................................ 38
Section 4.07. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.................................... 40
Section 4.08. Incurrence of Indebtedness................................. 40
i
4
Section 4.09. Asset Sales; Event of Loss................................. 42
Section 4.10. Transactions with Affiliates............................... 44
Section 4.11. Liens...................................................... 45
Section 4.12. Activities of the Company.................................. 45
Section 4.13. Corporate Existence........................................ 45
Section 4.14. Offer to Repurchase Upon Change of Control................. 45
Section 4.15. Maintenance of Properties and Other Matters................ 47
Section 4.16. Limitation on Status of Investment Company................. 47
Section 4.17. Payment for Consent........................................ 47
Section 4.18. Additional Note Guarantees................................. 48
Section 4.19. Certain Suspended Covenants................................ 48
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation and Sale of Assets................... 49
Section 5.02. Successor Corporation Substituted.......................... 49
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.......................................... 50
Section 6.02. Acceleration............................................... 51
Section 6.03. Other Remedies............................................. 51
Section 6.04. Waiver of Past Defaults.................................... 52
Section 6.05. Control by Majority........................................ 52
Section 6.06. Limitation on Suits........................................ 52
Section 6.07. Rights of Holders of Notes to Receive Payment.............. 53
Section 6.08. Collection Suit by Trustee................................. 53
Section 6.09. Trustee May File Proofs of Claim........................... 53
Section 6.10. Priorities................................................. 53
Section 6.11. Undertaking for Costs...................................... 54
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.......................................... 54
Section 7.02. Rights of Trustee.......................................... 55
Section 7.03. Individual Rights of Trustee............................... 56
Section 7.04. Trustee's Disclaimer....................................... 56
Section 7.05. Notice of Defaults......................................... 56
Section 7.06. Reports by Trustee to Holders of the Notes................. 56
Section 7.07. Compensation and Indemnity................................. 56
Section 7.08. Replacement of Trustee..................................... 57
Section 7.09. Successor Trustee by Merger, etc........................... 58
Section 7.10. Eligibility; Disqualification.............................. 58
Section 7.11. Preferential Collection of Claims Against Company.......... 59
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance... 59
Section 8.02. Legal Defeasance and Discharge............................. 59
Section 8.03. Covenant Defeasance........................................ 59
Section 8.04. Conditions to Legal or Covenant Defeasance................. 60
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Section 8.05. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions.............. 61
Section 8.06. Repayment to Company....................................... 61
Section 8.07. Reinstatement.............................................. 62
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes........................ 62
Section 9.02. With Consent of Holders of Notes........................... 63
Section 9.03. Compliance with Trust Indenture Act........................ 64
Section 9.04. Revocation and Effect of Consents.......................... 64
Section 9.05. Notation on or Exchange of Notes........................... 64
Section 9.06. Trustee to Sign Amendments, etc............................ 65
ARTICLE 10.
NOTE GUARANTEES
Section 10.01. Guarantee.................................................. 65
Section 10.02. Limitation on Guarantor Liability.......................... 66
Section 10.03. Execution and Delivery of Note Guarantee................... 66
Section 10.04. Guarantors May Consolidate, etc., on Certain Terms......... 66
Section 10.05. Releases Following Sale of Assets.......................... 67
Section 10.06. Indemnity and Subrogation.................................. 68
Section 10.07. Contribution and Subrogation............................... 68
Section 10.08. Subordination.............................................. 68
Section 10.09. Termination................................................ 68
Section 10.10. No Waiver; Amendment....................................... 68
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge................................. 69
Section 11.02. Application of Trust Money................................. 69
ARTICLE 12.
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls............................... 70
Section 12.02. Notices.................................................... 70
Section 12.03. Communication by Holders of Notes
with Other Holders of Notes................................ 71
Section 12.04. Certificate and Opinion as to Conditions Precedent......... 71
Section 12.05. Statements Required in Certificate or Opinion.............. 71
Section 12.06. Rules by Trustee and Agents................................ 72
Section 12.07. No Personal Liability of Directors, Officers,
Employees and Stockholders................................. 72
Section 12.08. Governing Law.............................................. 72
Section 12.09. No Adverse Interpretation of Other Agreements.............. 72
Section 12.10. Successors................................................. 72
Section 12.11. Severability............................................... 72
Section 12.12. Counterpart Originals...................................... 73
Section 12.13. Table of Contents, Headings, etc........................... 73
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EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of July 26, 2001 by and among Boyd Gaming
Corporation, a Nevada corporation (the "Company"), Blue Chip Casino, LLC, an
Indiana limited liability company, Boyd Atlantic City, Inc., a New Jersey
corporation, Boyd Indiana, Inc., an Indiana corporation, Boyd Kenner, Inc., a
Louisiana corporation, Boyd Louisiana L.L.C., a Nevada limited liability
company, Boyd Tunica, Inc., a Mississippi corporation, California Hotel and
Casino, a Nevada corporation, California Hotel Finance Corporation, a Nevada
corporation, Eldorado, Inc., a Nevada corporation, Mare-Bear, Inc., a Nevada
corporation, M.S.W., Inc., a Nevada corporation, Par-A-Dice Gaming Corporation,
an Illinois corporation, Sam-Will, Inc., a Nevada corporation, and Treasure
Chest Casino, L.L.C., a Louisiana limited liability company (together with such
other Persons as may execute Note Guarantees hereunder from time to time, the
"Guarantors") and The Bank of New York, a New York banking corporation, as
trustee (the "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 of
the 9 1/4% Series A Senior Notes due 2009 (the "Series A Notes") and the 9 1/4%
Series B Senior Notes due 2009 (the "Series B Notes" and, together with the
Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a global note 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.
"Additional Assets" means: (i) any Property (other than cash, cash
equivalents or securities) to be owned by the Company or a Restricted Subsidiary
and used in a Related Business, (ii) the costs of improving, restoring,
replacing or developing any Property owned by the Company or a Restricted
Subsidiary which is used in a Related Business or (iii) Investments in any other
Person engaged primarily in a Related Business (including the acquisition from
third parties of Capital Stock of such Person) as a result of which such other
Person becomes a Restricted Subsidiary in compliance with the procedure for
designation of Restricted Subsidiaries set forth in the definition of
"Restricted Subsidiary" herein.
"Additional Notes" means additional Notes (other than the Initial Notes)
issued under this Indenture in accordance with Sections 2.02, and subject to
compliance with Article 4 hereof, as part of the same series as the Initial
Notes.
"Affiliate" means, with respect to any Person, a Person (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such Person, (ii) which directly
or indirectly through one or more intermediaries beneficially owns or holds 10%
or more of any class of the Voting Stock of such Person (or a 10% or greater
equity interest in a Person which is not a corporation) or (iii) of which 10% or
more of any class of the Voting Stock (or, in the case of a Person which is not
a corporation, 10% or more of the equity interest) is beneficially owned or held
directly or indirectly through one or more intermediaries by such Person. For
purposes of this definition, the term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
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"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"Asset Sale" means the sale, conveyance, transfer, lease or other
disposition, whether in a single transaction or a series of related transactions
(including, without limitation, dispositions pursuant to Sale/ Leaseback
Transactions or pursuant to the merger of the Company or any of its Restricted
Subsidiaries with or into any person other than the Company or one of its
Restricted Subsidiaries), by the Company or one of its Restricted Subsidiaries
to any Person other than the Company or one of its Restricted Subsidiaries of:
(i) any of the Capital Stock or other ownership interests of any Subsidiary of
the Company or (ii) any other Property of the Company or any Property of its
Restricted Subsidiaries, in each case not in the ordinary course of business of
the Company or such Restricted Subsidiary. Notwithstanding the foregoing, the
following items will not be deemed to be Asset Sales: (a) any issuance or other
such disposition of Capital Stock or other ownership interests of any Restricted
Subsidiary to the Company or another Restricted Subsidiary; (b) any such
disposition of Property between or among the Company and its Restricted
Subsidiaries; (c) the sale or other disposition of cash or Temporary Cash
Investments; (d) any exchange of like Property pursuant to Section 1031 of the
Internal Revenue Code of 1986, as amended, for use in a Related Business; and
(e) a Restricted Payment that is permitted by the covenant described in Section
4.07 hereof.
"Attributable Indebtedness" means Indebtedness deemed to be Incurred in
respect of a Sale/ Leaseback Transaction and shall be, at the date of
determination, the present value (discounted at the actual rate of interest
implicit in such transaction, compounded annually), of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Borgata Facility" means the casino facility in Atlantic City, New
Jersey developed pursuant to the Borgata Joint Venture.
"Borgata Joint Venture" means the joint venture pursuant to that certain
Joint Venture Agreement dated as of May 29, 1996, by and between MAC, CORP., a
wholly-owned subsidiary of Mirage Resorts, Incorporated, a Nevada corporation,
and Grand K, Inc., a wholly-owned subsidiary of the Company, which subsequently
assigned its interest to Boyd Atlantic City, Inc., as such agreement is amended
from time to time.
"Boyd Family" means William S. Boyd, any direct descendant or spouse of
such person, or any direct descendant of such spouse, and any trust or other
estate in which each person who has a beneficial interest, directly or
indirectly through one or more intermediaries, in Capital Stock of the Company
is one of the foregoing persons.
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"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP. For purposes of Section 4.11 hereof, Capital Lease Obligations shall
be deemed secured by a Lien on the Property being leased.
"Capital Stock" means, with respect to any Person, any and all shares or
other equivalents (however designated) of corporate stock, partnership interests
or any other participation, right, warrants, options or other interest in the
nature of an equity interest in such Person, but excluding any debt security
convertible or exchangeable into such equity interest.
"Change of Control" means the occurrence of any of the following: (i)
the consummation of any transaction, the result of which any "person" or "group"
(within the meaning of Sections 13(d)(3)and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1)under the Exchange Act), other than the Permitted Holders and
other than a Restricted Subsidiary, becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act, except that a Person shall be deemed to
have "beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time) of 50% or more of the total voting power of all classes of the Voting
Stock of the Company and/or warrants or options to acquire such Voting Stock,
calculated on a fully diluted basis; provided that for purposes of this clause
(i), the members of the Boyd Family shall be deemed to beneficially own any
Voting Stock of a corporation held by any other corporation (the "parent
corporation") so long as the members of the Boyd Family beneficially own (as so
defined), directly or indirectly through one or more intermediaries, in the
aggregate 50% or more of the total voting power of the Voting Stock of the
parent corporation; (ii) the sale, lease, conveyance or other transfer of all or
substantially all of the Property of the Company (other than to any Restricted
Subsidiary); (iii) the approval of any plan of liquidation or dissolution of the
Company by the stockholders of the Company; (iv) the Company consolidates with
or merges into another Person or any Person consolidates with or merges into the
Company in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company is reclassified into or exchanged for cash,
securities or other property, other than any such transaction where (a) the
outstanding Voting Stock of the Company is reclassified into or exchanged for
Voting Stock of the surviving corporation that is Capital Stock and (b) the
holders of the Voting Stock of the Company immediately prior to such transaction
own, directly or indirectly, not less than a majority of the Voting Stock of the
surviving corporation immediately after such transaction in substantially the
same proportion as before the transaction; or (v) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (together with any new directors whose election or
appointment by such board or whose nomination for election by the stockholders
of the Company was approved by a vote of either (a) 66 2/3% 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, or (b)
members of the Boyd Family who beneficially own (as defined for purposes of
clause (i) above), directly or indirectly through one or more intermediaries, in
the aggregate 50% or more of the total voting power of the Voting Stock of the
Company), cease for any reason to constitute a majority of the Board of
Directors then in office.
"Change of Control Time" means the earlier of the public announcement of
(x) a Change of Control or (y) (if applicable) the intention of the Company to
effect a Change of Control.
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"Change of Control Triggering Event" means both a Change of Control and
a Rating Decline with respect to the Securities; provided, however, that a
change of Control Triggering Event shall not be deemed to have occurred if (i)
at the Change of Control Time the Securities have Investment Grade Status and
(ii) the Company effects defeasance of the Securities pursuant to the provisions
of Article 8 prior to a Rating Decline.
"Clearstream" means Clearstream Banking, SA.
"Company" means Boyd Gaming Corporation, a Nevada corporation, and any
and all successors thereto.
"Consolidated EBITDA" means, for any period, without duplication, the
sum of: (i) Consolidated Net Income; and (ii) to the extent Consolidated Net
Income has been reduced thereby: (a) Consolidated Fixed Charges, (b) provisions
for taxes based on income, (c) consolidated depreciation expense, (d)
consolidated amortization expense, (e) all preopening expenses paid or accrued,
and (f) other noncash items reducing Consolidated Net Income; minus other
noncash items increasing Consolidated Net Income, all as determined on a
consolidated basis for the Company and its Restricted Subsidiaries in conformity
with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means the ratio of
Consolidated EBITDA during the Reference Period to the aggregate amount of
Consolidated Fixed Charges during the Reference Period.
"Consolidated Fixed Charges" means, for any period, the total interest
expense of the Company and its consolidated Subsidiaries (other than
Unrestricted Subsidiaries) including (i) the interest component of Capital Lease
Obligations, (ii) one-third of the rental expense attributable to operating
leases, (iii) amortization of Indebtedness discount and commissions, discounts
and other similar fees and charges owed with respect to Indebtedness, (iv)
noncash interest payments, (v) commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing, (vi)
net costs pursuant to Interest Rate Agreements, (vii) dividends on all Preferred
Stock of Restricted Subsidiaries held by Persons other than the Company or a
Restricted Subsidiary, (viii) interest attributable to the Indebtedness of any
other Person for which the Company or any Restricted Subsidiary is responsible
or liable as obligor, guarantor or otherwise (including Indebtedness Guaranteed
pursuant to Investment Guarantees) and (ix) any dividend or distribution,
whether in cash, property or securities, on Disqualified Stock of the Company.
"Consolidated Net Income" means for any period, the net income (loss) of
the Company and its Subsidiaries determined in accordance with GAAP; provided,
however, that the following items shall be excluded from the computation of
Consolidated Net Income (i) any net income (loss) of any Person if such Person
is not a Restricted Subsidiary, except that, subject to the limitations
contained in clause (iv) below, (a) the net income (or, if applicable, the
Company's equity in the net income) of any such Person for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (iii) below) and (b) the Company's equity in a
net loss of any such Person (other than an Unrestricted Subsidiary) for such
period shall be included in determining such Consolidated Net Income; (ii) any
net income (loss) of any Person acquired by the Company or a Subsidiary in a
pooling of interests transaction for any period prior to the date of such
acquisition; (iii) any net income (loss) of any Restricted Subsidiary if such
Subsidiary is subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Restricted Subsidiary, directly
or indirectly, to the Company, except that: (a) subject to the limitations
contained in
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(iv) below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period to the Company or another Restricted
Subsidiary as a dividend (subject, in the case of a dividend to another
Restricted Subsidiary, to the limitation contained in this clause) and (b) the
Company's equity in a net loss of any such Restricted Subsidiary for such period
shall be included in determining such Consolidated Net Income; (iv) any gain or
loss realized upon the sale or other disposition of any Property of the Company
or its consolidated Subsidiaries (including pursuant to any Sale/Leaseback
Transaction) which is not sold or otherwise disposed of in the ordinary course
of business and any gain or loss realized upon the sale or other disposition of
any Capital Stock of any Person; (v) items classified as extraordinary or any
non-cash item classified as nonrecurring; and (vi) the cumulative effect of a
change in accounting principles.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter ending at least 45 days prior to the taking of any action for the
purpose of which the determination is being made, as (i) the par or stated value
of all outstanding Capital Stock plus (ii) paid-in capital or capital surplus
relating to such Capital Stock plus (iii) any retained earnings or earned
surplus less (a) any accumulated deficit and (b) any amounts attributable to
Disqualified Stock.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facility" means the senior secured credit facility outstanding
on the Issue Date, as amended from time to time, among the Company, certain
Subsidiaries and a syndicate of banks, and any extensions, revisions,
refinancings or replacements thereof by an institutional lender or syndicate of
institutional lenders.
"Currency Exchange Protection Agreement" means, in respect of a Person,
any foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event which is, or after notice or passage of time
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.
"Disqualified Stock" of a Person means any Capital Stock of such Person
(i) that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or otherwise, (a) matures or is
mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (b)
is or may
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become redeemable or repurchaseable at the option of the holder thereof, in
whole or in part, or (c) is convertible or exchangeable or exercisable for
Indebtedness and (ii) as to which the maturity, mandatory redemption, conversion
or exchange or redemption at the option of the holder thereof occurs, or may
occur, in the case of each of clauses (i) or (ii) on or prior to the first
anniversary of the Stated Maturity of the Notes; provided, however, that such
Capital Stock of the Company or any of its Subsidiaries shall not constitute
Disqualified Stock if it is redeemable prior to the first anniversary of the
Stated Maturity of the Notes only if (a) the holder or a beneficial owner of
such Capital Stock is required to qualify under the Gaming Laws and does not so
qualify, or (b) the Board of Directors determines in its reasonable, good faith
judgment, as evidenced by a Board Resolution, that as a result of a holder or
beneficial owner owning such Capital Stock, the Company or any of its
Subsidiaries has lost or may lose any Gaming License, which if lost or not
reinstated, as the case may be, would have a material adverse effect on the
business of the Company and its Subsidiaries, taken as a whole, or would
restrict the ability of the Company or any of its Subsidiaries to conduct
business in any gaming jurisdiction.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Event of Loss" means, with respect to any Property, any loss,
destruction or damage of such Property, or any condemnation, seizure or taking,
by exercise of the power of eminent domain or otherwise, of such Property, or
confiscation or requisition of the use of such Property.
"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.
"Fair Market Value" means with respect to any Property, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will be
determined, except as otherwise provided (i) if such Property has a Fair Market
Value of less than $5 million, by any Officer of the Company or (ii) if such
Property has a Fair Market Value in excess of $5 million, by a majority of the
Board of Directors and evidenced by a Board Resolution, dated within 30 days of
the relevant transaction, delivered to the Trustee.
"GAAP" means generally accepted accounting principles of the United
States of America set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect on the
date of this Indenture.
"Gaming Authority" means any of the Nevada Gaming Commission, the Nevada
State Gaming Control Board, the Louisiana Gaming Control Board, the Mississippi
Gaming Commission, the New Jersey Casino Control Commission, the New Jersey
Division of Gaming Enforcement, the Illinois Gaming Board, the Indiana Gaming
Commission and any other agency (including, without limitation, any agency
established by a federally-recognized Indian tribe to regulate gaming on such
tribe's reservation)
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which has, or may at any time after the date of this Indenture have,
jurisdiction over the gaming activities of the Company or any of its
Subsidiaries or any successor to such authority.
"Gaming Facility" means any gaming or pari-mutuel wagering establishment
and other property or assets directly ancillary thereto or used in connection
therewith, including any building, restaurant, hotel, theater, parking
facilities, retail shops, land, golf courses and other recreation and
entertainment facilities, vessel, barge, ship and equipment or 100% of the
equity interest of a Person the primary business of which is ownership and
operation of any of the foregoing.
"Gaming Laws" means the gaming laws of a jurisdiction or jurisdictions
to which the Company or any of its Subsidiaries is, or may at any time after the
date of this Indenture be, subject.
"Gaming License" means any license, permit, franchise or other
authorization from any governmental authority required on the date of this
Indenture or at any time thereafter to own, lease, operate or otherwise conduct
the gaming business of the Company and its Subsidiaries, including all licenses
granted under Gaming Laws and other Legal Requirements.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such first Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (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) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided, however, that the term "Guarantee" shall not include (a)
endorsements for collection or deposit in the ordinary course of business; or
(b) any obligation in the nature of a completion guaranty which is limited
solely to an obligation to complete the development, construction or opening of
any new Gaming Facility entered into on behalf of any Permitted Joint Venture.
The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means each Guarantor listed on the signature pages of this
Indenture (excluding any Guarantor released in accordance with the terms hereof)
and any Subsidiary that executes a Note Guarantee in accordance with the
provisions of this Indenture, and its respective successors and assigns.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means the Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that shall be issued in a denomination equal to the outstanding
principal amount of the Notes held by Institutional Accredited Investors.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
extend, assume, Guarantee or become liable in
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respect of such Indebtedness or other obligation or the recording, as required
pursuant to GAAP or otherwise, of any such Indebtedness or obligation on the
consolidated balance sheet of such Person including by merger or operation of
law (and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have
meanings correlative to the foregoing). The accretion of principal of a
noninterest bearing or other discount security shall not be deemed the
Incurrence of Indebtedness so long the amount thereof is included in the
computation of "Consolidated Fixed Charges" for all purposes under this
Indenture.
"Indebtedness" means (without duplication), with respect to any Person,
any indebtedness, secured or unsecured, contingent or otherwise, which is for
borrowed money (whether or not the recourse of the lender is to the whole of the
Property of such Person or only to a portion thereof), or the principal amount
of such indebtedness evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (excluding any balances that constitute customer advance
payments and deposits, accounts payable or trade payables, and other accrued
liabilities arising in the ordinary course of business) if and to the extent any
of the foregoing indebtedness would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, and shall also include, to the
extent not otherwise included (i) any Capital Lease Obligations; (ii)
Indebtedness of other Persons secured by a Lien to which the Property owned or
held by such Person is subject, whether or not the obligation or obligations
secured thereby shall have been assumed (the amount of such Indebtedness being
deemed to be the lesser of the value of such Property or the amount of the
Indebtedness so secured); (iii) Guarantees of Indebtedness of other Persons;
(iv) any Disqualified Stock; (v) any Attributable Indebtedness; (vi) all
obligations of such Person in respect of letters of credit, bankers' acceptances
or other similar instruments or credit transactions issued for the account of
such Person (including reimbursement obligations with respect thereto), other
than obligations with respect to letters of credit securing obligations (other
than obligations described in this definition) entered into in the ordinary
course of business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the third business day following receipt by such Person of a demand
for reimbursement following payment on the letter of credit; (vii) in the case
of the Company, Preferred Stock of its Restricted Subsidiaries; and (viii)
obligations pursuant to any Interest Rate Agreement or Currency Exchange
Protection Agreement.
Notwithstanding the foregoing, Indebtedness shall not include any
interest or accrued interest until due and payable. For purposes of this
definition, the maximum fixed repurchase price of any Disqualified Stock or
Preferred Stock that does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Stock or Preferred Stock as if
such Disqualified Stock or Preferred Stock were repurchased on any date on which
Indebtedness shall be required to be determined pursuant to this Indenture;
provided, however, that if such Disqualified Stock or Preferred Stock is not
then permitted to be repurchased, the repurchase price shall be the book value
of such Disqualified Stock or Preferred Stock. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of any
other obligations described in clauses (i) through (viii) above in respect
thereof at such date.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent Advisor" means, an investment banking firm of national
standing with non-investment grade debt underwriting experience or any third
party appraiser of national standing; provided, however, that such firm or
appraiser is not an Affiliate of the Company.
"Indirect Participant" means a Person who holds a beneficial interest in
a Global Note through a Participant.
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"Initial Notes" means the first $200 million aggregate principal amount
of Notes issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement.
"Investment" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution (by means of transfers of cash
or other Property to others or payments for Property or services for the account
or use of others), in connection with the performance of obligations under any
completion guaranty or otherwise, to, or Incurrence of an Investment Guarantee
or a Guarantee of any obligation of, or purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidence of Indebtedness
issued by, any other Person, including the designation by the Board of Directors
of a Person to be an Unrestricted Subsidiary. In determining the amount of any
Investment in respect of any Property other than cash, such Property shall be
valued at its Fair Market Value at the time of such Investment.
"Investment Grade Rating" means a rating equal to or higher than Baa3
(or the equivalent) by Moody's (or any successor to the rating agency business
thereof) and BBB- (or the equivalent) by S&P (or any successor to the rating
agency business thereof).
"Investment Grade Status" means any time at which the ratings of the
Notes by each of Moody's (or any successor to the rating agency business
thereof) and S&P (or any successor to the rating agency business thereof) are
Investment Grade Ratings.
"Investment Guarantee" means any Guarantee by the Company or a
Restricted Subsidiary of Indebtedness of a Permitted Joint Venture; provided,
such Guarantee complies with the requirements of clause (vii) of Section 4.06(b)
hereof; provided, further, that only such Indebtedness of such Permitted Joint
Venture Guaranteed by the Company or a Restricted Subsidiary that matures by its
terms prior to the time (if any) that the ability of the Company or a Restricted
Subsidiary to control the day-to-day operations of such Permitted Joint Venture
(pursuant to a management contract or otherwise) is scheduled to expire may
constitute Indebtedness subject to an Investment Guarantee.
"Issue Date" means the date on which the Initial Notes are initially
issued.
"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.
"Legal Requirements" means all laws, statutes and ordinances and all
rules, orders, rulings, regulations, directives, decrees, injunctions and
requirements of all governmental authorities, that are now or may hereafter be
in existence, and that may be applicable to the Company or any Subsidiary or
Affiliate thereof or the Trustee (including building codes, zoning and
environmental laws, regulations and ordinances and Gaming Laws), as modified by
any variances, special use permits, waivers, exceptions or other exemptions
which may from time to time be applicable.
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"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 Property of any Person, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority, or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such Property (including any Capital Lease
Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing). Any
Sale/Leaseback Transaction shall be deemed to constitute a Lien on the Property
which is the subject of such Sale/Leaseback Transaction securing the
Attributable Indebtedness represented thereby.
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Moody's" means Moody's Investors Service, Inc.
"Net Cash Proceeds" with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale, net of attorney's fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Net Proceeds" from any Asset Sale or Event of Loss by any Person or its
Restricted Subsidiaries means cash and cash equivalents received in respect of
the Property sold or with respect to which an Event of Loss occurred, net of (i)
all reasonable out-of-pocket expenses of such Person or such Restricted
Subsidiary Incurred in connection with an Asset Sale of such type, including,
without limitation, all legal, title and recording tax expenses, commissions and
fees and expenses incurred (but excluding any finder's fee or broker's fee
payable to any Affiliate of such Person) and all Federal, state, provincial,
foreign and local taxes arising in connection with such Asset Sale or Event of
Loss that are paid or required to be accrued as a liability under GAAP by such
Person or its Restricted Subsidiaries, (ii) all payments made by such Person or
its Restricted Subsidiaries on any Indebtedness which is secured by such
Property in accordance with the terms of any Lien upon or with respect to such
Property or which must, by the terms of such Lien, or in order to obtain a
necessary consent to such Asset Sale or by applicable law, be repaid out of the
proceeds from such Asset Sale or Event of Loss, and (iii) all contractually
required distributions and other payments made to minority interest holders (but
excluding distributions and payments to Affiliates of such Person) in Restricted
Subsidiaries of such Person as a result of such Asset Sale or Event of Loss;
provided, however, that, in the event that any consideration for an Asset Sale
(which would otherwise constitute Net Proceeds) is required to be held in escrow
pending determination of whether a purchase price adjustment will be made, such
consideration (or any portion thereof) shall become Net Proceeds only at such
time as it is released to such Person or its Restricted Subsidiaries from
escrow; and provided further, however, that any noncash consideration received
in connection with an Asset Sale or Event of Loss which is subsequently
converted to cash shall be deemed to be Net Proceeds at and from the time of
such conversion.
"Non-Recourse Indebtedness" means Indebtedness of a Person to the extent
that under the terms thereof or pursuant to applicable law: (i) no personal
recourse shall be had against such Person for the payment of the principal of or
interest or premium, if any, on such Indebtedness, and (ii) enforcement of
obligations on such Indebtedness is limited only to recourse against interests
in Property purchased with the proceeds of the Incurrence of such Indebtedness
and as to which neither the Company nor any of its Restricted Subsidiaries
provides any credit support or is liable.
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"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
payment obligations under this Indenture and on 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 shall be treated as a
single class for all purposes under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Officer" means the Chief Executive Officer, President, Treasurer, any
Executive Vice President, Senior Vice President or any Vice President of the
Company.
"Officers' Certificate" means a certificate signed by two Officers at
least one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel that
meets the requirements of Section 12.05 hereof. The counsel may be an employee
of or counsel to the Company.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted FF&E Financing" means Indebtedness of the Company or any of
its Restricted Subsidiaries that is Incurred to finance the acquisition or lease
after the date of this Indenture of newly acquired or leased furniture, fixtures
or equipment ("FF&E") used directly in the operation of a Gaming Facility owned
or leased by the Company or its Restricted Subsidiaries and secured by a Lien on
such FF&E in an amount not to exceed 100% of the cost of the FF&E so purchased
or leased.
"Permitted Holders" means the Boyd Family and any group (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) comprised solely of
members of the Boyd Family.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(i) a Restricted Subsidiary or a Person which will, upon the making of
such Investment, become a Restricted Subsidiary; provided, however, that the
primary business of such Restricted Subsidiary is a Related Business;
(ii) another Person if as a result of such Investment such other Person
is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iii) Temporary Cash Investments;
(iv) receivables owing to the Company or any Restricted Subsidiary, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however, that
such trade terms may include such concessionary trade terms as the Company or
any such Restricted Subsidiary deems reasonable under the circumstances;
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(v) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of business;
(vi) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Restricted
Subsidiary, as the case may be;
(vii) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments; and
(viii) securities received pursuant to clause (ii) of Section 4.09(a)
hereof.
"Permitted Joint Venture" means a Person in which a Permitted Joint
Venture Investment has been made by the Company or any Restricted Subsidiary.
"Permitted Joint Venture Investment" means any Investment in a Person
primarily engaged or preparing to engage in a Related Business if (i) other than
with respect to any Person which is a Native American tribe or an agency or
instrumentality thereof, immediately after giving effect to such Investment, the
Company or a Restricted Subsidiary will own at least 35% of the shares of
Capital Stock (including at least 35% of the total voting power thereof) of such
Person, and will control the day-to-day operations of such Person pursuant to a
management contract or otherwise; or (ii) with respect to any Person which is a
Native American tribe or an agency or instrumentality thereof, there is in
effect a written agreement which has been approved by all required Gaming
Authorities, pursuant to which the Company or one of its Restricted Subsidiaries
will manage such tribe's gaming activities at the facility or facilities for
which the Investment is being made in exchange for customary fees and
reimbursements.
"Permitted Liens" means:
(i) Liens for taxes, assessments or governmental charges or levies on
the Property of the Company or any Specified Subsidiary if the same shall not at
the time be delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings;
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens on the Property of the Company or any
Specified Subsidiary which secure payment of obligations arising in the ordinary
course of business;
(iii) Liens on the Property of the Company or any Specified Subsidiary
in favor of issuers of performance bonds and surety bonds obtained in the
ordinary course of business;
(iv) other Liens on the Property of the Company or any Specified
Subsidiary incidental to the conduct of their respective businesses or the
ownership of their respective Properties which were not created in connection
with the Incurrence of Indebtedness or the obtaining of advances or credit and
which do not in the aggregate materially detract from the value of their
respective Properties or materially impair the use thereof in the operation of
their respective businesses;
(v) pledges or deposits by the Company or any Specified Subsidiary under
workmen's compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts (other than
for the payment of Indebtedness) or leases to which the Company or any Specified
Subsidiary is a party, or deposits to secure public or statutory obligations
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of the Company or any Specified Subsidiary, or deposits for the payment of rent,
in each case Incurred in the ordinary course of business; and
(vi) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and do not materially
detract from the value of such Property; and (vii) Liens securing obligations to
the Trustee pursuant to the compensation and indemnity provisions of this
Indenture.
"Permitted Refinancing Indebtedness" means any renewals, extensions,
substitutions, refinancings or replacements of any Indebtedness, including any
successive extensions, renewals, substitutions, refinancings or replacements
(and including refinancings by the Company of Indebtedness of a Restricted
Subsidiary) so long as: (i) the aggregate amount of Indebtedness represented
thereby is not increased by such renewal, extension, substitution, refinancing
or replacement, (ii) the average life and Stated Maturity is not shortened, and
(iii) the new Indebtedness shall not be senior in right of payment to the
Indebtedness that is being extended, renewed, substituted, refinanced or
replaced; provided, however, that Permitted Refinancing Indebtedness shall not
include: (a) Indebtedness of a Subsidiary that refinances Indebtedness of the
Company or another Subsidiary or (b) Indebtedness of the Company that refinances
the Indebtedness of an Unrestricted Subsidiary.
"Permitted Stardust Contribution" shall mean the contribution by
Mare-Bear, Inc. (or any other Guarantor which owns the Stardust Casino facility
on the Las Vegas Strip) of the Stardust real estate (and improvements thereon)
to a Permitted Joint Venture which is not a Subsidiary of the Company, which
contribution shall be permitted if (i) it occurs subsequent to the opening of
the Borgata Facility; (ii) pro forma for such contribution the Consolidated
Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries is
2.5 to 1 or greater; (iii) at the time the Company enters into a binding
agreement to make any such contribution the Notes have ratings from S&P and
Moody's which are not less than the ratings assigned by such rating agencies to
the Notes on the Issue Date, respectively (and there is no announced review
pending for a possible downgrade of such ratings); (iv) the terms of any such
contribution comply with the requirements of the provision described in Section
4.10 hereof, without regard to the exception set forth in clause (ii) of the
second paragraph thereof; and (v) the Company shall have delivered to the
Trustee for payment to the Holders of the Notes an amount equal to the greater
of (a) $7.50 per each $1,000 principal amount of Notes then outstanding; or (b)
an amount per $1,000 principal amount of Notes then outstanding equal to the
amount, if any, paid to the holders of the Company's 9.50% Senior Subordinated
Notes due 2007 as consideration for their consent to such contribution of the
Stardust property to a permitted joint venture.
"Person" means any individual, corporation, company (including limited
liability company), partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, Capital Stock in any
other Person (but excluding Capital Stock or other securities issued by such
first Person).
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"Public Equity Offering" means an underwritten public offering of
Capital Stock of the Company pursuant to an effective registration statement
under the Securities Act.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Non-Recourse Debt" means Indebtedness:
(i) 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; provided, however, that the
provision by the Company of a completion guaranty or the making of payments with
respect thereto, in each case, to the extent permitted under Section 4.06 hereof
shall not prevent any Indebtedness from constituting Qualified Non-Recourse
Debt;
(ii) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both any
holder of any Indebtedness of the Company or any of its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Company or any of its
Restricted Subsidiaries.
"Rating Agencies" means S&P and Moody's or any successor to the
respective rating agency businesses thereof.
"Rating Decline" shall have occurred if at any date within 90 calendar
days after the date of public disclosure of the occurrence of a Change of
Control (which period will be extended for so long as the Company's debt ratings
are under publicly announced review for possible downgrading (or without an
indication of the direction of a possible ratings change) by either Moody's or
S&P or their respective successors) the Notes no longer have Investment Grade
Status.
"Reference Period" means the period of four consecutive fiscal quarters
ending with the last full fiscal quarter immediately preceding the date of a
proposed Incurrence, Restricted Payment or other transaction.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of July 26, 2001, by and among the Company 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 between the Company 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.
"Regulation S Global Note" means a global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
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"Related Business" means the business conducted (or proposed to be
conducted) by the Company and its Subsidiaries in connection with any Gaming
Facility and any and all reasonably related businesses necessary for, in
support, furtherance or anticipation of and/or ancillary to or in preparation
for, such business including, without limitation, the development, expansion or
operation of any Gaming Facility (including any land-based, dockside, riverboat
or other type of casino), owned, or to be owned, leased or managed by the
Company or one of its Subsidiaries.
"Related Person" means any legal or beneficial owner of 5% or more of
any class of Capital Stock of the Company or any of its Subsidiaries.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
"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 Payment" means:
(i) any dividend or distribution (whether made in cash, property or
securities) declared or paid on or with respect to any shares of Capital Stock
of the Company or to the Company's stockholders except for such dividends or
distributions payable solely in Capital Stock of the Company (other than
Disqualified Stock of the Company);
(ii) a payment made by the Company or any Restricted Subsidiary (other
than to the Company or a Restricted Subsidiary) to purchase, redeem, acquire or
retire any Capital Stock of the Company or Capital Stock of any Affiliate of the
Company or any warrants, rights or options, to directly or indirectly purchase
or acquire any such Capital Stock or any securities exchangeable for or
convertible into any such Capital Stock;
(iii) a payment made by the Company or any Restricted Subsidiary to
redeem, repurchase, defease or otherwise acquire or retire for value, prior to
any scheduled maturity, scheduled sinking fund or mandatory redemption payment
(other than the purchase, repurchase, or other acquisition of any Indebtedness
subordinate in right of payment to the Notes purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of acquisition), Indebtedness of
the Company or any Guarantor which is subordinate (whether pursuant to its terms
or by operation of law) in right of payment to the Notes or the Note Guarantees;
or
(iv) any Investment (other than a Permitted Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that (a) has
not been designated by the Board of Directors of the Company as an Unrestricted
Subsidiary, or (b) was an Unrestricted Subsidiary but has been redesignated by
the Board of Directors of the Company as a Restricted Subsidiary, in each case
as provided under the definition of Unrestricted Subsidiary; provided, however,
that no Subsidiary shall become a Restricted Subsidiary unless, immediately
after giving pro forma effect to such designation, the Company would be able to
incur at least $1.00 of additional Indebtedness pursuant to Section 4.08(a)
hereof.
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"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"Sale/Leaseback Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold or transferred
by such Person or a Restricted Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Restricted Subsidiaries.
"S&P" means Standard & Poor's Ratings Group, a division of the
McGraw-Hill Companies, Inc.
"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.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which a payment of principal of
such security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subsidiary" of any Person means any corporation, association,
partnership, limited liability company or other business entity of which more
than 50% of the total voting power of shares of Capital Stock or other interests
(including partnership interests) entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such
Person, (ii) such Person and one or more Subsidiaries of such Person or (iii)
one or more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following:
(i) Investments in U.S. Government Obligations maturing within 90 days
of the date of acquisition thereof,
(ii) Investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 90 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America or any state thereof having capital, surplus and
undivided profits aggregating in excess of $500,000,000 and whose long-term debt
is rated "A-3" or higher, "A-" or higher or "A-" or higher according to
Moody's, S&P or Fitch Credit Rating Co. (or such similar equivalent rating by at
least one "nationally recognized statistical rating organization" (as defined in
Rule 436 under the Securities Act)), respectively,
(iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with a bank meeting the qualifications described in clause (ii) above,
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(iv) Investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than the Company
or an Affiliate of the Company) organized and in existence under the laws of the
United States of America with a rating at the time as of which any Investment
therein is made of "P-1" (or higher) according to Moody's "A-1" (or higher)
according to S&P or "A-1" (or higher) according to Fitch Credit Rating Co. (or
such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the Securities
Act)), and
(v) investments in money market funds substantially all of whose assets
comprise securities of the types described in clauses (i) through (iv) above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company which
at the time of determination shall be an Unrestricted Subsidiary (as designated
by the Board of Directors) and (ii) any Subsidiary of an Unrestricted
Subsidiary.
The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary (unless such Subsidiary owns any Capital Stock of or owns or holds
any Lien on any Property of the Company or any other Subsidiary of the Company
which is not a Subsidiary of the Subsidiary to be so designated); provided, that
such Subsidiary has no Indebtedness other than Qualified Non-Recourse Debt and
(a) the Subsidiary to be so designated has total assets of $1,000 or less, or
(b) such designation is effective immediately upon such entity becoming a
Subsidiary of the Company.
Subject to clause (ii) above, the Board of Directors may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately
after giving pro forma effect to such redesignation, the Company would be able
to incur at least $1.00 of additional Indebtedness pursuant to Section 4.08(a)
hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirement with respect to Qualified Non-Recourse Debt, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture
and any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date (and, if such Indebtedness
is not permitted to be incurred as of such date under Section 4.08 hereof, the
Company shall be in Default of such covenant).
Any such designation by the Board of Directors will be evidenced to the
Trustee by filing with the Trustee a copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying (i) that such
designation complies with the foregoing provisions and (ii) giving the effective
date of such designation, such filing with the Trustee to occur within 75 days
after the end of the fiscal
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quarter of the Company in which such designation is made (or, in the case of a
designation made during the last fiscal quarter of the fiscal year, within 120
days after the end of such fiscal year).
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" means securities of any class or classes of a Person, the
holders of which are ordinarily, in the absence of contingencies, entitled to
vote for corporate directors (or Persons performing equivalent functions).
Section 1.02. Other Definitions.
Defined
in
Term Section
---- -------
"Affiliate Transaction"...................................... 4.10
"Asset Sale Offer"........................................... 3.09
"Authentication Order"....................................... 2.02
"Change of Control Offer".................................... 4.14
"Change of Control Payment".................................. 4.14
"Change of Control Payment Date"............................. 4.14
"Claiming Guarantor"......................................... 10.07
"Contributing Guarantor"..................................... 10.07
"Covenant Defeasance"........................................ 8.03
"Event of Default"........................................... 6.01
"Excess Proceeds"............................................ 4.09
"Legal Defeasance"........................................... 8.02
"Offer Amount"............................................... 3.09
"Offer Period"............................................... 3.09
"Paying Agent"............................................... 2.03
"Prepayment Offer"........................................... 4.09
"Purchase Date".............................................. 3.09
"Registrar".................................................. 2.03
"Specified Subsidiary........................................ 4.11
"Successor".................................................. 5.01
"Suspended Covenants"........................................ 4.19
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;
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"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:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include
the singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time; and
(g) unsecured Indebtedness shall not be deemed to be subordinate or
junior to secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form shall be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of
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Exchanges of Interests in the Global Note" attached thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are held
by Participants through Euroclear or Clearstream.
Section 2.02. Execution and Authentication.
Two Officers shall 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 shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers (an "Authentication Order"), authenticate Notes for original issue up
to the aggregate principal amount stated in paragraph 4 of the Initial Notes
plus the aggregate principal amount stated in paragraph 4 of any Additional
Notes permitted to be issued under this Indenture. The aggregate principal
amount of Notes outstanding at any time may not exceed such amount except as
provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
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 shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
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The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon payment over to the Trustee,
the Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least five
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 Section 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee. Upon the occurrence of either of
the preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also
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shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest
in the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided,
however, that prior to the expiration of the Restricted Period,
transfers of beneficial interests in the Regulation S Global Note may
not be made to a U.S. Person or for the account or benefit of a U.S.
Person (other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the Registrar
either (A) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such
increase or (B) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above. Upon consummation of an Exchange Offer by the
Company in accordance with Section 2.06(f) hereof, the requirements of
this Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of
a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of
a beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of
a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
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hereto, including the certifications and certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with 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:
(1) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder
in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in
a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder
in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
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.
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(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for
a Restricted Definitive Note or to transfer such beneficial interest to
a Person who takes delivery thereof in the form of a Restricted
Definitive Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to
an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Company shall execute and the Trustee shall authenticate
and deliver to the Person designated in the instructions a Definitive
Note in the appropriate principal amount. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note pursuant
to this Section 2.06(c) shall be registered in such name or names and in
such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange
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for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that
it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the 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:
(1) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note that does not
bear the Private Placement Legend, a certificate from
such holder in the form of Exhibit C hereto, including
the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in
a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a Definitive Note that does not
bear the Private Placement Legend, a certificate from
such holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the
Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive Note,
then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company shall execute and the Trustee
shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant to
this Section 2.06(c)(iii) shall be registered in such name or names and
in such authorized denomination or denominations
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as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note
issued in exchange for a beneficial interest pursuant to this Section
2.06(c)(iii) shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance
on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B)
through (D) above, a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Note, in the case of
clause (B) above, the 144A Global Note, in the case of clause (C) above,
the Regulation S Global Note, and in all other cases, the IAI Global
Note.
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(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) 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:
(1) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs
in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive
Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange
or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Note and increase or cause to be increased the aggregate
principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B),
(ii)(D) or (iii) above at a time when an Unrestricted Global
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Note has not yet been issued, the Company shall issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the
Trustee shall authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of Definitive
Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes.
Any Restricted Definitive Note may be transferred to and registered in
the name of Persons who take delivery thereof in the form of a
Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item
(2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if
applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the 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:
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(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an
Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit C hereto, including the
certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant
to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend
in substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, PLEDGED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
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BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), OR (B) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE LATER OF THE DATE OF THE ORIGINAL ISSUANCE OF
THIS NOTE OR THE DATE THIS NOTE WAS ACQUIRED FROM AN AFFILIATE OF THE COMPANY,
REOFFER, PLEDGE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3), OR (7) OF RULE 501 UNDER THE
SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT WHO, PRIOR TO SUCH TRANSFER, FURNISHES TO THE COMPANY A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTES AND AN OPINION OF COUNSEL (IF THE COMPANY
SO REQUESTS), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, AND IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 2.06 (and all Notes issued in exchange therefor
or substitution thereof) shall not bear the Private Placement
Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to
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such cancellation, if any beneficial interest in a Global Note is exchanged for
or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note or for Definitive Notes, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 3.10, 4.09, 4.14 and 9.05
hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid and legally binding obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register
the transfer of or to exchange any Notes during a period beginning at
the opening of business 15 days before the day of any selection of Notes
for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part or (C) to
register the transfer of or to exchange a Note between a record date and
the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner of
such Note for the purpose of receiving payment of principal of and
interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
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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, in the absence of notice to the Company or the Trustee that
the Note has been acquired by a bona fide purchaser, the Company shall issue and
the Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect 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 a Holder
for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as
not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the Company or a Subsidiary of the Company
shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee actually knows are so owned
shall be so disregarded.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.
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Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
such canceled Notes in its customary manner (consistent with all applicable
legal requirements). Certification of the disposition of all canceled Notes
shall be delivered to the Company. The Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall promptly notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
Section 2.13. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers and, if it does
so, the Trustee shall use the CUSIP numbers in notices of redemption or exchange
as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP numbers
printed in the notice or on the Notes and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company will promptly
notify the Trustee of any change in the CUSIP numbers.
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 shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes to be redeemed
or purchased among the Holders of the Notes in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes
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are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method as the Trustee considers appropriate. In the
event of partial redemption by lot, the particular Notes to be redeemed shall be
selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption date by the Trustee from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 4.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes (including CUSIP Numbers) to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion (so long as such amount is in a denomination of $1,000 or
integral multiples thereof) shall be issued upon cancellation of the original
Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and providing a form setting forth the information to be stated in such
notice as provided in the preceding paragraph.
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Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.07, the Company
shall not have the option to redeem the Notes pursuant to this Section 3.07
prior to August 1, 2005. On or after August 1, 2005, the Company shall have the
option to redeem the Notes, in whole or in part, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on August
1 of the years indicated below:
Year Percentage
---- ----------
2005............................................... 104.625%
2006............................................... 102.313%
2007 and thereafter................................ 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section 3.07,
at any time prior to August 1, 2004, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes at a
redemption price equal to 109.25% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any, to the redemption date, with
the net cash proceeds of one or more Public Equity Offerings; provided that (i)
at least 65% of the aggregate principal amount of Notes originally issued remain
outstanding immediately after the occurrence of such
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redemption (excluding Notes held by the Company and its Subsidiaries); and (ii)
the redemption occurs within 45 days of the date of the closing of such Public
Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
The Company shall not be required to make mandatory redemption payments
with respect to the Notes.
Section 3.09. Mandatory Disposition Or Redemption Pursuant To Gaming Laws.
If a Holder or beneficial owner of a Note is required to be licensed,
qualified or found suitable under applicable Gaming Laws and is not so licensed,
qualified or found suitable within any time period specified by the applicable
Gaming Authority, the Holder shall be obliged, at the request of the Company, to
dispose of such Holder's Notes within a time period prescribed by the Company or
such other time period prescribed by such Gaming Authority (in which event the
Company's obligation to pay any interest after the receipt of such notice shall
be limited as provided in such Gaming Laws), and thereafter, the Company shall
have the right to redeem, on the date fixed by the Company for the redemption of
such Notes, such Holder's Notes at a redemption price equal to the lesser of (1)
the lowest closing sale price of the Notes on any trading day during the 120-day
period ending on the date upon which the Company shall have received notice from
a Gaming Authority of such Holder's disqualification or (2) the price at which
such Holder or beneficial owner acquired the Notes, unless a different
redemption price is required by such Gaming Authority, in which event such
required price shall be the redemption price. The Company is not required to pay
or reimburse any Holder or beneficial owner of a Note for the costs of licensure
or investigation for such licensure, qualification or finding of suitability.
Any Holder or beneficial owner of a Note required to be licensed, qualified or
found suitable under applicable Gaming Laws must pay all investigative fees and
costs of the Gaming Authorities in connection with such qualification or
application therefor.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
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Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
Section 4.03. Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Holders of
Notes within 15 days after it would be required to file them with the SEC (i)
all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, following consummation of the Exchange Offer, whether or not required
by the rules and regulations of the SEC, the Company shall file a copy of all
such information and reports with the SEC for public availability within the
time periods specified in the SEC's rules and regulations (unless the SEC will
not accept such a filing). The Company shall at all times comply with TIA
Section 314(a).
(b) Until the consummation of the Exchange Offer, and, in the event, at
any time thereafter, the Company is no longer subject to the reporting
requirements under the Exchange Act, for so long as any Notes remain
outstanding, the Company and the Guarantors shall furnish to the Holders and to
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04. Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor is
so required under the TIA) shall deliver to the Trustee, within 120 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the 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
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and is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, not more than 30 days after any Officer becomes 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.
Section 4.05. Stay and Extension Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.06. Restricted Payments.
(a) The Company shall not make, and shall not permit any Restricted
Subsidiary to make, any Restricted Payment if at the time of, and after giving
effect to, such proposed Restricted Payment:
(i) a Default or an Event of Default shall have occurred and be
continuing;
(ii) the Company could not Incur at least $1.00 of additional
Indebtedness pursuant to Section 4.08(a) hereof; or
(iii) the aggregate amount of such Restricted Payment and all
other Restricted Payments made from and after July 22, 1997 (the amount
of any Restricted Payment, if made other than in cash, to be based upon
Fair Market Value) would exceed an amount equal, without duplication, to
the sum of:
(A) 50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from April 1, 1997
to the end of the most recent fiscal quarter ended immediately
prior to the date of such Restricted Payment (or, in the case
such Consolidated Net Income shall be a deficit, minus 100% of
such deficit);
(B) the aggregate Net Cash Proceeds received by the
Company from the issue or sale of its Capital Stock (other than
Disqualified Stock) subsequent to March 31, 1997 (other than an
issuance or sale to a Subsidiary of the Company or an employee
stock ownership plan or other trust established by the Company
or any of its Subsidiaries or pursuant to clauses (iii) or (iv)
in Section 4.06(b));
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(C) the amount by which Indebtedness of the Company or
any Guarantor is reduced on the Company's balance sheet upon the
conversion or exchange (other than an issuance or sale to a
Subsidiary of the Company or an employee stock ownership plan or
other trust established by the Company or any of its
Subsidiaries) subsequent to March 31, 1997, of any Indebtedness
of the Company or any Guarantor convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of the Company
(less the amount of any cash or other property distributed by
the Company or any Restricted Subsidiary upon such conversion or
exchange);
(D) the amount equal to the net reduction in Investments
subsequent to March 31, 1997 resulting from (i) payments of
dividends, repayments of loans or advances or other transfers of
assets to the Company or any Guarantor or the satisfaction or
reduction (other than by means of payments by the Company or any
Restricted Subsidiary) of obligations of other Persons which
have been Guaranteed by the Company or any Guarantor; or (ii)
the redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries which execute Note Guarantees, in each case such
net reduction in Investments being: (x) valued as provided in
the definition of "Investment," in Section 1.01 hereof, (y) in
an amount not to exceed the aggregate amount of Investments
previously made by the Company or any Guarantor which were
treated as a Restricted Payment, and (z) included in this clause
(D) only to the extent not included in Consolidated Net Income;
(E) payments of dividends, repayments of loans or
advances or other transfers of assets to the Company or any
Guarantor from the Borgata Joint Venture to the extent such
dividends, repayments, advances or other transfers exceed $100
million; but only to the extent that any such payments are
excluded from the computation of Consolidated Net Income; and
(F) $75 million.
(b) The provisions of the preceding paragraph shall not prohibit (i) the
payment of any dividend within 60 days after the date of its declaration if such
dividend could have been paid on the date of its declaration in compliance with
such provisions; provided that at the time of payment of such dividend no
Default under any provision of this Indenture other than this covenant shall
have occurred and be continuing (or would result therefrom); (ii) the redemption
or repurchase of any Capital Stock or Indebtedness of the Company (other than
any Capital Stock or Indebtedness which is held or beneficially owned by, or
issued by, any member of the Boyd Family, the Company or any Affiliate of the
Company), if the holder or beneficial owner of such Capital Stock or
Indebtedness is required to qualify under the Gaming Laws and does not so
qualify or if necessary, in the reasonable, good faith judgment of the Board of
Directors, as evidenced by a Board Resolution, to prevent the loss or secure the
reinstatement of any Gaming License which if lost or not reinstated, as the case
may be, would have a material adverse effect on the business of the Company and
its Subsidiaries, taken as a whole, or would restrict the ability of the Company
or any of its Subsidiaries to conduct business in any gaming jurisdiction; (iii)
any purchase, redemption or other acquisition or retirement of Capital Stock of
the Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock (other than Disqualified Stock) of the
Company; (iv) any purchase, redemption or other acquisition or retirement of the
Indebtedness of any Person made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock (other than Disqualified Stock)
of the Company; (v) any purchase, redemption, defeasance or other acquisition or
retirement for value of Indebtedness from the proceeds of Permitted Refinancing
Indebtedness; (vi) Investments not to exceed $100 million in The Borgata Joint
Venture made subsequent
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to March 31, 1997; (vii) Investment Guarantees to the extent permitted under
Section 4.08 hereof that constitute Permitted Joint Venture Investments and
Guarantee (with full rights of subrogation) Indebtedness Incurred by a Permitted
Joint Venture to acquire or construct Gaming Facilities provided that such
Indebtedness is not expressly subordinated in right of payment or otherwise to
any other Indebtedness of such Permitted Joint Venture and is secured by first
priority security interests in such Gaming Facilities; (viii) payments pursuant
to Investment Guarantees which were entered into in compliance with clause (vii)
of this Section 4.06(b); and (ix) any Permitted Stardust Contribution.
(c) The full amount of any Restricted Payments made subsequent to March
31, 1997 pursuant to clauses (i) and (ii) of Section 4.06(b) (but not pursuant
to clauses (iii), (iv), (v), (vi), and (ix) of Section 4.06(b)) shall be
included in the calculation of the aggregate amount of the Restricted Payments
referred to in Section 4.06(a). With respect to any Investment Guarantee (x) if
at any time the Company or any Restricted Subsidiary ceases to control the
day-to-day operations of the Permitted Joint Venture the Indebtedness of which
is Guaranteed by the Investment Guarantee, the full amount of such Investment
Guarantee shall thereafter be included in the calculation of the aggregate
amount of Restricted Payments referred to in Section 4.06(a) and (y) if the
Company or a Restricted Subsidiary retains such control, any amount actually
paid pursuant to such Investment Guarantee shall be included in the calculation
of the aggregate amount of Restricted Payments referred to in Section 4.06(a).
Section 4.07. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions to the Company
or any other Restricted Subsidiary on its Capital Stock or with respect to any
other interest or participation in, or measured by, its profits; (ii) pay any
indebtedness owed to the Company or any other Restricted Subsidiary; (iii) make
loans or advances to the Company or any other Restricted Subsidiary; or (iv)
transfer any of its Property to the Company or any other Restricted Subsidiary,
except for such encumbrances or restrictions existing under or by reason of (a)
agreements in effect on the Issue Date; (b) applicable law; (c) customary
nonassignment provisions in leases entered into in the ordinary course of
business and consistent with past practices; (d) Permitted Refinancing
Indebtedness; provided, however, that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced; or (e) agreements in existence with respect to a Restricted
Subsidiary at the time it is so designated; provided, however, that such
agreements are not entered into in anticipation or contemplation of such
designation.
Nothing contained in this Section 4.07 shall prevent the Company or any
Restricted Subsidiary from granting any Lien permitted by Section 4.11 hereof.
Section 4.08. Incurrence of Indebtedness.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur any Indebtedness; provided, however, that the Company or
any Restricted Subsidiary may incur Indebtedness if no Event of Default has
occurred and is continuing and the Company's Consolidated Fixed Charge Coverage
Ratio would exceed 2.0 to 1.0, after giving effect to:
(i) the Incurrence of such Indebtedness as if such Indebtedness
was Incurred at the beginning of the Reference Period and (if
applicable) the application of the net proceeds thereof to repay other
Indebtedness as if the application of such proceeds occurred at the
beginning of the Reference Period,
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(ii) the Incurrence and retirement of any other Indebtedness
since the first day of the Reference Period as if such Indebtedness was
Incurred or retired at the beginning of the Reference Period, and
(iii) the acquisition or disposition of any company or business
by the Company or any Restricted Subsidiary since the first day of the
Reference Period including any acquisition or disposition which will be
consummated contemporaneously with the Incurrence of such Indebtedness,
as if such acquisition or disposition occurred at the beginning of the
Reference Period.
(b) Notwithstanding the foregoing limitation, the Company or any
Restricted Subsidiary may Incur the following Indebtedness:
(i) Indebtedness of the Company evidenced by the Notes and
Indebtedness of any Restricted Subsidiary evidenced by a Note Guarantee;
(ii) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the Issue Date;
(iii) Indebtedness of the Company under the Credit Facility in
an aggregate amount outstanding at any time (including any Permitted
Refinancing Indebtedness with respect thereto) not to exceed $500
million, as such amount may be permanently reduced by the lenders under
the Credit Facility as a result of repayments of Indebtedness thereunder
with Net Proceeds of Asset Sales pursuant to Section 4.09 hereof, and
the Guarantee by any Restricted Subsidiary of such Indebtedness of the
Company;
(iv) Indebtedness of the Company or a Restricted Subsidiary
owing to and held by a Restricted Subsidiary or the Company; provided,
however, that any subsequent issuance or transfer of any Capital Stock
or other event that results in any such Restricted Subsidiary ceasing to
be a Restricted Subsidiary or any subsequent transfer of any such
Indebtedness except to the Company or a Restricted Subsidiary shall be
deemed in each case to constitute the Incurrence of such Indebtedness by
the issuer thereof;
(v) Indebtedness of the Company or a Restricted Subsidiary under
Interest Rate Agreements, provided that the obligations under such
agreements are related to payment obligations on Indebtedness otherwise
permitted by the terms of this Section 4.08;
(vi) Indebtedness of the Company or a Restricted Subsidiary
under Currency Exchange Protection Agreements, provided that such
Currency Exchange Protection Agreements were entered into for the
purpose of limiting exchange rate risks in connection with transactions
entered into in the ordinary course of business;
(vii) Indebtedness of the Company or any Restricted Subsidiary
in connection with one or more standby letters of credit, performance
bonds or completion guarantees issued in the ordinary course of business
or pursuant to self-insurance obligations and not in connection with the
borrowing of money or the obtaining of advances or credit;
(viii) Indebtedness of the Company or any Restricted Subsidiary
outstanding under Permitted FF&E Financings which are either (a)
Non-Recourse Indebtedness of the Company and its Restricted
Subsidiaries; or (b) limited in amount (including any Permitted
Refinancing Indebtedness with respect thereto) for each Gaming Facility
owned or leased by the Company or
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any of its Restricted Subsidiaries to the lesser of (1) the amount of
FF&E used in such Gaming Facility and financed by such Permitted FF&E
Financing, or (2) $10 million;
(ix) So long as no Event of Default has occurred and is
continuing, Indebtedness of the Company not otherwise permitted to be
Incurred pursuant to the provisions of Section 4.08(a) or this Section
4.08(b) in an aggregate amount Incurred not to exceed $25 million; or
(x) Permitted Refinancing Indebtedness Incurred in respect of
Indebtedness of the Company or any Restricted Subsidiary outstanding
pursuant to the provisions of Section 4.08(a) or clauses (i), (ii),
(iii), (viii) and this clause (x) of this Section 4.08(b).
(c) For purposes of determining compliance with this Section 4.08, in
the event that an item of proposed Indebtedness meets the criteria of more than
one of the categories described in clauses (i) through (x) of Section 4.08(b),
or is entitled to be incurred pursuant to Section 4.08(a), the Company will be
permitted to classify such item of Indebtedness on the date of its incurrence in
any manner that complies with this Section 4.08. Indebtedness outstanding under
the revolving facility under the Company's Credit Facility on the Issue Date,
after giving effect to the application of the proceeds from the issuance of the
Initial Notes, will be deemed to have been incurred under clause (iii) of
Section 4.08(b) above.
Section 4.09. Asset Sales; Event of Loss.
(a) Other than upon an Event of Loss, the Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, consummate any
Asset Sale after the Issue Date, where the Property subject to such Asset Sale
has an aggregate Fair Market Value equal to or in excess of $10 million, unless
(i) the Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the Property subject to such Asset Sale; (ii) at least 75% of such
consideration consists of cash or Temporary Cash Investments; provided, however,
that for purposes of this clause (ii), (a) the assumption of Indebtedness of the
Company or a Restricted Subsidiary which is not subordinated to the Notes or any
Note Guarantee shall be deemed to be Temporary Cash Investments if the Company,
such Restricted Subsidiary, and all other Restricted Subsidiaries of the
Company, to the extent any of the foregoing are liable with respect to such
Indebtedness, are expressly released from all liability for such Indebtedness by
the holder thereof in connection with such Asset Sale, (b) any securities or
notes received by the Company or such Restricted Subsidiary from such transferee
that are converted by the Company or such Restricted Subsidiary into cash or
Temporary Cash Investments within ten business days of the date of such Asset
Sale shall be deemed to be Temporary Cash Investments and (c) the Company and
its Restricted Subsidiaries may receive consideration in the form of securities
exceeding 25% of the consideration for one or more Asset Sales so long as the
Company and its Restricted Subsidiaries do not hold such securities having an
aggregate Fair Market Value in excess of $50 million at any time outstanding;
(iii) no Default or Event of Default shall have occurred and be continuing at
the time of, or would occur after giving effect, on a pro forma basis, to, such
Asset Sale; and (iv) the Board of Directors of the Company determines in good
faith that such Asset Sale complies with clauses (i) and (ii).
(b) Upon an Event of Loss incurred by the Company or any of its
Restricted Subsidiaries, the Net Proceeds received from such Event of Loss shall
be applied in the same manner as proceeds from Asset Sales described in Section
4.09(a) and pursuant to the procedures set forth in this Section 4.09.
(c) Within 270 days after the receipt of the Net Proceeds of an Asset
Sale or Event of Loss, an amount equal to 100% of the Net Proceeds from such
Asset Sale or Event of Loss may be applied by the Company or a Restricted
Subsidiary (i) to permanently repay, redeem or repurchase Indebtedness of
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the Company or Indebtedness of any Restricted Subsidiary or (ii) to reinvest in
Additional Assets (including by means of an Investment in Additional Assets by a
Restricted Subsidiary with Net Proceeds received by the Company or another
Restricted Subsidiary); provided, however, that if the Company or any Restricted
Subsidiary contractually commits within such 270-day period to apply such Net
Proceeds within 180 days of such contractual commitment in accordance with the
above clauses (i) or (ii), 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 Section 4.09(c) shall be
considered satisfied.
(d) Any Net Proceeds from an Asset Sale or Event of Loss that are not
used in accordance with the preceding paragraph shall constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $20 million
(taking into account income earned on such Excess Proceeds), the Company shall
make an offer to purchase (the "Prepayment Offer"), on a pro rata basis, from
all Holders of the Notes, and, at the election of the Company, the holders of
any other outstanding Indebtedness equal in ranking to the Notes having
comparable rights, an aggregate principal amount of Notes and, if applicable,
such other Indebtedness equal to the Excess Proceeds, at a price in cash at
least equal to 100% of the principal amount thereof, plus accrued and unpaid
interest and, if applicable, Liquidated Damages thereon, in accordance with
Section 4.09(e), (f), (g) and (h). To the extent that any portion of the Excess
Proceeds remains after compliance with the preceding sentence and provided that
all Holders have been given the opportunity to tender the Notes for repurchase
in accordance with Section 4.09(e), the Company or such Restricted Subsidiary
may use such remaining amount for general corporate purposes and the amount of
Excess Proceeds shall be reset to zero. Pending application of Net Proceeds
pursuant to clause (i) and (ii) of Section 4.09(c), such Net Proceeds will be
invested in Temporary Cash Investments.
(e) Within ten Business Days after the amount of Excess Proceeds exceeds
$20 million, the Company shall send a prepayment offer notice, by first-class
mail, to the Holders, accompanied by such information regarding the Company and
its Subsidiaries as the Company in good faith believes will enable such Holders
to make an informed decision with respect to the Prepayment Offer. The
prepayment offer notice will state, among other things:
(i) that the Company is offering to purchase Notes pursuant to
Section 4.09 of the Indenture;
(ii) that any Note (or any portion thereof) accepted for payment
(and for which payment has been duly provided on the purchase date)
pursuant to the Prepayment Offer shall cease to accrue interest after
the purchase date;
(iii) the purchase price and purchase date, which shall be,
subject to any contrary requirements of applicable law, no less than 30
days nor more than 60 days from the date the Prepayment Offer Notice is
mailed;
(iv) the aggregate principal amount of Notes (or portions
thereof) to be purchased; and
(v) a description of the procedure which Holders must follow in
order to tender their Notes (or portions thereof) and the procedures
that Holders must follow in order to withdraw an election to tender
their Notes (or portions thereof) for payment.
(f) Not later than the date upon which written notice required by
Section 4.09(e) is delivered to the Trustee, the Company shall irrevocably
deposit with the Trustee or with the Paying Agent (or, if the Company is acting
as its own paying agent, segregate and hold in trust) in Temporary Cash
Investments an amount equal to the purchase price plus accrued and unpaid
interest, if any, to the Holders entitled
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thereto, to be held for payment in accordance with the provisions of this
Section. Holders electing to have a Note purchased will be required to surrender
the Note, with an appropriate form duly completed, to the Company at the address
specified in the notice at least five Business Days prior to the purchase date.
Holders will be entitled to withdraw their election if the Trustee or the
Company receives not later than three Business Days prior to the purchase date,
a telegram, telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Note which was delivered for purchase by
the Holder, the certificate number of such Note and a statement that such Holder
is withdrawing his election to have such Note purchased.
(g) On the purchase date, the Company shall deliver to the Trustee the
Notes or portions thereof which have been properly tendered to and are to be
accepted by the Company. The Trustee (or Paying Agent) shall, on the purchase
date, mail or deliver payment of the purchase price to each tendering Holder. In
the event that the aggregate purchase price of the Notes delivered by the
Company to the Trustee is less than the amount deposited with the Trustee (or
Paying Agent), the Trustee (or Paying Agent) shall deliver the excess to the
Company immediately after the end of the payment date.
(h) The Company will comply, to the extent applicable, with the
requirements of Rule 14e-1 under the Exchange Act, and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the purchase of Note required by this Section. To
the extent that the provisions of any securities laws or regulations conflict
with the provisions relating to the Prepayment Offer, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this Section 4.09 by virtue thereof.
Section 4.10. Transactions with Affiliates.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, conduct any business or enter into or
suffer to exist any transaction or series of transactions (including the
purchase, sale, transfer, lease or exchange of any Property, the making of any
Investment, the giving of any Guarantee or the rendering or receiving of any
service) with, from or for the benefit of any Affiliate, any Related Person or
any officer or director of any Affiliate or a Related Person (an "Affiliate
Transaction") unless: (i) the terms of such Affiliate Transaction are in
writing, in the best interest of the Company or such Restricted Subsidiary, as
the case may be, and at least as favorable to the Company or such Restricted
Subsidiary, as the case may be, as those that could be obtained at the time of
such Affiliate Transaction in a similar transaction in arm's-length dealings
with a Person who is not such an Affiliate, Related Person or officer or
director of an Affiliate or Related Person; (ii) with respect to each Affiliate
Transaction involving aggregate payments to either party in excess of $5
million, the Company delivers to the trustee an Officers' Certificate certifying
that such Affiliate Transaction was approved by a majority of the disinterested
members of the Board of Directors and that such Affiliate Transaction complies
with clause (i); and (iii) with respect to each Affiliate Transaction involving
aggregate payments in excess of $10 million, the Company delivers to the trustee
an opinion letter from an Independent Advisor to the effect that such Affiliate
Transaction is fair, from a financial point of view.
(b) Notwithstanding the limitation of Section 4.10(a), the Company may
enter into or suffer to exist the following: (i) any transaction pursuant to any
contract in existence on the Issue Date; (ii) any Restricted Payment permitted
to be made pursuant to Section 4.06 hereof; (iii) any transaction or series of
transactions between the Company and one or more of its Restricted Subsidiaries
or between two or more of its Restricted Subsidiaries; and (iv) the payment of
compensation (including amounts paid pursuant to employee benefit plans) for the
personal services of officers, directors and employees of the Company or any of
its Restricted Subsidiaries, so long as the Board of Directors in good faith
shall have approved the terms thereof and deemed the services theretofore or
thereafter to be performed for such compensation or fees to be fair
consideration therefor.
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Section 4.11. Liens.
The Company shall not, and shall not permit any existing or future
Guarantors or any Restricted Subsidiary existing on the Issue Date (such
Guarantor and Restricted Subsidiaries being referred to as "Specified
Subsidiaries") to, directly or indirectly, Incur or suffer to exist, any Lien
upon any of its Property, whether now owned or hereafter acquired, or any
interest therein or any income or profits therefrom, unless it has made or will
make effective provision whereby the Notes will be secured by such Lien equally
and ratably with (or prior to) all other Indebtedness of the Company or any
Specified Subsidiary secured by such Lien except for: (i) Permitted Liens; (ii)
Liens on assets financed through Permitted FF&E Financings securing Indebtedness
permitted under clause (viii) of Section 4.08(b) hereof; (iii) Liens on the
Property of the Company or any Specified Subsidiary existing on the date of this
Indenture; (iv) Liens securing Indebtedness Incurred pursuant to the Credit
Facility; (v) Liens in favor of the Company or a Specified Subsidiary; (vi)
Liens on the Property of a Person at the time such Person becomes a Specified
Subsidiary; provided, however, that: (a) any such Lien may not extend to any
other Property of the Company or any Specified Subsidiary; and (b) any such Lien
was not Incurred in anticipation of or in connection with the transaction or
series of related transactions pursuant to which such Person became a Specified
Subsidiary; or (vii) Liens to secure any refinancing, refunding, extension,
renewal or replacement (or successive refinancings, refundings, extensions,
renewals or replacements) as a whole or in part of any Indebtedness secured by
any Lien referred to in the foregoing clauses (ii), (iii), (vi) and (vii);
provided, however, that (x) such new Lien shall be limited to all or part of the
same Property subject to the original Lien (plus improvements on such Property)
and (y) the Indebtedness secured by such Lien at such time is not increased to
any amount greater than the sum of (1) the outstanding principal amount or, if
greater, committed amount of the Indebtedness described under clauses (ii),
(iii), (vi) or (vii) and (2) an amount necessary to pay any fees and expenses,
including premiums, related to such refinancing, refunding, extension, renewal
or replacement.
Section 4.12. Activities of the Company.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in (through acquisition or otherwise) any business other
than a Related Business.
Section 4.13. 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 (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
Section 4.14. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of (i) a Change of Control (if, at the Change of
Control Time the Notes do not have Investment Grade Status) or (ii) a Change of
Control Triggering Event (if, at the Change of Control Time the Notes have
Investment Grade Status) each Holder shall have the right to require the Company
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of such Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at a purchase price
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equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the purchase date (the "Change of Control Payment").
(b) Within 30 days following (i) any Change of Control or, (ii) in the
event the Notes have Investment Grade Status at the earlier of the public
announcement of (x) a Change of Control or (y) (if applicable) the intention of
the Company to effect a Change of Control, a Change of Control Triggering Event,
the Company shall mail a notice to the Trustee and each Holder stating, among
other things: (1) that a Change of Control or Change of Control Triggering
Event, as the case may be, has occurred and a Change of Control Offer is being
made pursuant to this Section 4.14 and that all Notes (or portions thereof)
timely tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be, subject to any contrary requirements of
applicable law, no earlier than 30 days nor later than 60 days from the date
such notice is mailed (the "Change of Control Payment Date"); (3) that any Note
(or portion thereof) accepted for payment (and for which payment has been duly
provided on the Change of Control Payment Date) pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control Payment
Date; (4) that any Notes (or portions thereof) not tendered will continue to
accrue interest; (5) a description of the transaction or transactions
constituting the Change of Control or Change of Control Triggering Event, as the
case may be; and (6) the procedures that Holders must follow in order to tender
their Notes (or portions thereof) for payment and the procedures that Holders
must follow in order to withdraw an election to tender Notes (or portions
thereof) for payment.
(c) Not later than the date upon which written notice required by
Section 4.14(b) is delivered to the Trustee, the Company shall irrevocably
deposit with the Trustee or with a paying agent (or, if the Company is acting as
its own paying agent, segregate and hold in trust) in Temporary Cash Investments
an amount equal to the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto, to be held for payment in accordance with the
provisions of this Section 4.14. Holders electing to have a Note purchased will
be required to surrender the Note, with an appropriate form duly completed, to
the Company at the address specified in the notice at least five Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than three Business Days prior
to the purchase date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note which was
delivered for purchase by the Holder, the certificate number of such Note and a
statement that such Holder is withdrawing his election to have such Note
purchased.
(d) On the purchase date, the Company shall deliver to the Trustee the
Notes or portions thereof which have been properly tendered to and are to be
accepted by the Company. The Trustee shall on the purchase date, mail or deliver
payment of the purchase price to each tendering Holder. In the event that the
aggregate purchase price of the Notes delivered by the Company to the Trustee is
less than the amount deposited with the Trustee, the Trustee shall deliver the
excess to the Company immediately after the end of the payment date.
(e) The Company will comply, to the extent applicable, with the
requirements of Rule 14e-1 under the Exchange Act, and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the purchase of Notes in connection with a Change
of Control or Change of Control Triggering Event, as the case may be. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions relating to the Change of Control Offer, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under Section 4.14 by virtue thereof.
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Section 4.15. Maintenance of Properties and Other Matters.
(a) The Company shall, and shall cause each of its Subsidiaries to,
maintain its Properties in good working order and condition and make all
necessary repairs, renewals and replacements; provided, however, that nothing in
this provision shall prevent the Company or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its Properties, if such
discontinuance is, in the judgment of the Company, both desirable in the conduct
of the business of the Company and its Subsidiaries, taken as a whole, and not
disadvantageous in any material respect to the Holders.
(b) The Company shall, and shall cause each of its Subsidiaries to,
insure and keep insured, with financially sound and reputable insurers, so much
of their respective Properties and in such amounts as is usually and customarily
insured by Persons engaged in a similar business with respect to Properties of a
similar character against loss by fire and the extended coverage perils. None of
the Company or any of its Subsidiaries shall maintain a system of self-insurance
in lieu of or in combination with the foregoing insurance with respect to its
Properties; provided that deductibles under the insurance policy or policies of
the Company and its Subsidiaries shall not be considered to be self-insurance as
long as such deductibles accord with financially sound and approved practices of
Persons owning or operating Properties of a similar character and maintaining
similar insurance coverage.
(c) The Company shall, and shall cause each of its Subsidiaries to, keep
proper books and records of accounts in which full and correct entries will be
made of all its business transactions in accordance with GAAP. The Company shall
cause the books and records of accounts of the Company and its Subsidiaries to
be examined, either on a consolidated or on an individual basis, by one or more
firms of independent public accountants not less frequently than annually. The
Company shall, and shall cause each of its Subsidiaries to, prepare its
financial statements in accordance with GAAP.
(d) The Company shall, and shall cause each of its Subsidiaries to,
comply with all Legal Requirements and to obtain any licenses, permits,
franchises or other authorizations, including Gaming Licenses, from Governmental
Authorities necessary to the ownership or operation of its Properties or to the
conduct of its business.
(e) Notwithstanding the provisions of Section 4.15(a), (b), (c) or (d),
failure by the Company or any of its Subsidiaries to comply with such provisions
shall not be deemed to be a breach of such provisions to the extent that such
failure would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
Section 4.16. Limitation on Status of Investment Company.
The Company shall not, and shall not permit any of its Subsidiaries to,
become an "investment company" (as that term is defined in the Investment
Company Act of 1940), to the extent such status would subject the Company or any
such Subsidiary to regulation under the Investment Company Act, except for
Subsidiaries established for the purpose of financing the operating businesses
of the Company and its Subsidiaries.
Section 4.17. Payment for Consent.
Neither the Company nor any of its Subsidiaries shall 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
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amend in the time frame set forth in the solicitation documents relating to such
consent, waiver or agreement.
Section 4.18. Additional Note Guarantees.
(a) If any non-Guarantor Restricted Subsidiary which is a Restricted
Subsidiary on the Issue Date and contributes more than 5% of the Company's
Consolidated EBITDA in any fiscal year commencing after the Issue Date, then
such non-Guarantor Restricted Subsidiary shall execute a Note Guarantee in the
form of a Supplemental Indenture and deliver an Opinion of Counsel in accordance
with the terms of this Indenture within 120 days after the end of the fiscal
year in which such non-Guarantor Restricted Subsidiary reaches such 5%
threshold. The form of such Note Guarantee is attached as Exhibit E hereto.
(b) If any Guarantor transfers assets to any Subsidiary of the Company
after the date of this Indenture, then such Subsidiary shall execute a Note
Guarantee in the form of a Supplemental Indenture and deliver an Opinion of
Counsel in accordance with the terms of this Indenture unless:
(i) with respect to each such transfer the transfer is at least
as favorable to such Guarantor as could be obtained in a similar
transaction in arm's-length dealings with a Person who is not an
Affiliate of such Guarantor, and with respect to each transfer (a)
involving aggregate payments in excess of $5 million, the Company
delivers to the trustee an Officers' Certificate certifying that such
transfer was approved by a majority of the disinterested members of the
Board of Directors of the Company as complying with the foregoing
standard and (b) involving aggregate payments in excess of $10 million,
the Company delivers to the trustee an opinion letter from an
Independent Advisor to the effect that such transfer is fair, from a
financial point of view, to the Guarantor; and
(ii) each such transfer is for Property other than securities of
the transferee and its Affiliates.
Any Person required by the preceding sentence to become a Guarantor because of a
transfer of assets must be or become a Restricted Subsidiary at the time of such
transfer.
Section 4.19. Certain Suspended Covenants.
During any period of time that: (i) the Notes have Investment Grade
Status, and (ii) no Default or Event of Default has occurred and is continuing
under this Indenture with respect to the Notes, the Company and its Restricted
Subsidiaries will not be subject to Sections 4.06, 4.08 and 4.09 hereof
(collectively, the "Suspended Covenants"). In the event that the Company and its
Restricted Subsidiaries are not subject to the Suspended Covenants with respect
to the Notes for any period of time as a result of the preceding sentence and,
subsequently, at least one of the two designated Rating Agencies withdraws its
rating or assigns the Notes a rating below the required Investment Grade
Ratings, then the Company and its Restricted Subsidiaries will thereafter again
be subject to the Suspended Covenants for the benefit of the Notes and
compliance with the Suspended Covenant with respect to Restricted Payments made
after the time of such withdrawal or assignment will be calculated in accordance
with the terms of Section 4.06 hereof as if such covenant had been in effect
during the entire period of time from the Issue Date with respect to the Notes.
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ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation and Sale of Assets.
Neither the Company nor any Guarantor shall merge or consolidate with or
into any other entity (other than a merger or consolidation of a Guarantor with
or into the Company or another Guarantor, and other than a merger or
consolidation of a Guarantor where the surviving entity is not the Company or a
Subsidiary of the Company) or in one transaction or a series of related
transactions sell, convey, assign, transfer, lease or otherwise dispose of all
or substantially all of its Property unless (i) the entity formed by or
surviving any such consolidation or merger (if the Company or such Guarantor is
not the surviving entity) or the Person to which such sale, assignment,
transfer, lease or conveyance is made (the "Successor") (a) shall be a
corporation organized and existing under the laws of the United States of
America or a State thereof or the District of Columbia and such corporation
expressly assumes, by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation, the due and punctual
payment of the principal, premium, if any, and interest on all the Notes,
according to their tenor, and the due and punctual performance and observance of
all the covenants and conditions of this Indenture to be performed by the
Company or such Guarantor, as the case may be; and (b) the Successor shall have
all Gaming Licenses required to operate all Gaming Facilities to be owned by
such Successor; (ii) in the case of a sale, transfer, assignment, lease,
conveyance or other disposition of all or substantially all of the Company's
Property or of such Guarantor's Property, such Property shall have been
transferred as an entirety or virtually as an entirety to one Person; (iii)
immediately before and after giving effect to such transaction or series of
transactions on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing; (iv) immediately after giving effect to such
transaction or series of transactions on a pro forma basis (including, without
limitation, any Indebtedness Incurred or anticipated to be Incurred in
connection with such transaction or series of transactions), the Company or the
Successor, as the case may be, would be able to Incur at least $1.00 of
additional Indebtedness pursuant to Section 4.08(a) hereof; and (v) immediately
after giving effect to such transaction or series of transactions on a pro forma
basis (including, without limitation, any Indebtedness Incurred or anticipated
to be Incurred in connection with such transaction or series of transactions),
the Company or the Successor shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately prior to the
transaction or series of transactions.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale, assignment,
transfer, conveyance or other disposition of all of the Company's assets that
meets the requirements of Section 5.01 hereof.
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ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest on any of the Notes
when it becomes due and payable and such default continues for a period of 30
days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes when due at maturity, upon acceleration, required
purchase or otherwise;
(c) the Company or any Guarantor fails to observe, perform or comply
with the covenants and agreements of Section 5.01 hereof;
(d) the Company or any Guarantor fails to observe, perform or comply
with any of the other covenants and agreements in this Indenture and such
failure to observe, perform or comply continues for a period of 30 days after
receipt by the Company of a written notice from the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes (including Additional
Notes, if any) then outstanding voting as a single class;
(e) Indebtedness of the Company or any Restricted Subsidiary is not paid
when due within any applicable grace period or is accelerated by the holders
thereof and, in either case, the total amount of such unpaid or accelerated
Indebtedness exceeds $10 million;
(f) the entry by a court of competent jurisdiction of one or more
judgments or orders against the Company or any Restricted Subsidiary in an
uninsured aggregate amount in excess of $10 million and such judgment or order
is not discharged, waived, stayed or satisfied for a period of 60 consecutive
days;
(g) the Company or any Restricted Subsidiary pursuant to or within the
meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a custodian of it or for
all or substantially all of its property, or
(iv) makes a general assignment for the benefit of its
creditors,
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Restricted
Subsidiary in an involuntary case;
(ii) appoints a custodian of the Company or any Restricted
Subsidiary or for all or substantially all of the property of the
Company or any Restricted Subsidiary; or
(iii) orders the liquidation of the Company or any Restricted
Subsidiary;
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and the order or decree remains unstayed and in effect for 60 consecutive days;
(i) any revocation, suspension or loss of any Gaming License which
results in the cessation of business for a period of more than 90 consecutive
days of the business of any Gaming Facility owned, leased or operated directly
or indirectly by the Company or any of its Subsidiaries (other than any
voluntary relinquishment of a Gaming License if such relinquishment is, in the
reasonable, good faith judgment of the Board of Directors, evidenced by a Board
Resolution, both desirable in the conduct of business of the Company and its
Subsidiaries, taken as a whole, and not disadvantageous in any material respect
to the Holders); and
(j) any Note Guarantee is held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect (other than pursuant to the terms of this Indenture) or any Guarantor
shall deny or disaffirm its obligations under such Guarantor's Note Guarantee or
gives notice to such effect.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
A Default under clause (e), (f) or (i) of this Section 6.01 is not an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the Notes notify the Company of the Default. Such notice must specify
the Default, demand that it be remedied and state that such notice is a "Notice
of Default."
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default, its status and what action the Company is taking or
proposes to take with respect thereto.
Section 6.02. Acceleration.
If an Event of Default with respect to the Notes (other than an Event of
Default resulting from Section 6.01(g) or (h) hereof) shall have occurred and be
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Notes then outstanding may accelerate the maturity of
all the Notes in which event the Notes (including any accrued interest and, if
applicable, Liquidated Damages thereon) shall become immediately due and
payable; provided, however, that after such acceleration but before a judgment
or decree based on acceleration is obtained by the Trustee, the Holders of a
majority in aggregate principal amount of the Notes then outstanding, may, by
written notice to the Trustee, rescind and annul such acceleration if all Events
of Default, other than the nonpayment of accelerated principal, have been cured
or waived as provided in this Indenture. In case an Event of Default resulting
from Section 6.01(g) or (h) hereof shall occur, the Notes (including any accrued
interest and, if applicable, Liquidated Damages, thereon) shall be due and
payable immediately without any declaration or other act on the part of the
Trustee or the Holders.
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, and interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
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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 principal amount of the Notes then
outstanding by notice to the Trustee may waive an existing Default and its
consequences hereunder except (i) a Default in the payment of principal of or
interest or Liquidated Damages on a Note or (ii) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Holder of Notes affected. Upon any such waiver, such Default shall cease to
exist and shall be deemed to have been cured for every purpose of this
Indenture, but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability; provided, however, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification or security satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
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Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of
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any kind, according to the amounts due and payable on the Notes for
principal, premium and Liquidated Damages, if any and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions specifically required to be furnished to it hereunder to
determine whether or not they substantially conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
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(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any 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 to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. The Trustee shall be under no obligation to exercise any of its rights and
powers under this Indenture at the request of any Holders, unless such Holders
shall have offered to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may rely upon any document (whether in its original or
facsimile form) believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its own selection with respect to legal matters relating to this
Indenture and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) 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, and each agent, custodian and other Person employed to act hereunder.
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Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
actually known to a Responsible Officer of the Trustee, the Trustee shall mail
to Holders of Notes a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
of principal of, premium, if any, or interest on any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA Section 313(a) (but if no event described in TIA
Section 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA
Section 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA Section 313(d). The Company
shall promptly notify the Trustee when the Notes are listed on any stock
exchange or delisted therefrom.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee as agreed upon in writing from time
to time reasonable compensation for its acceptance of this Indenture and
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee promptly upon request for all reasonable out-of-pocket expenses
incurred or made by it in addition to the compensation for its services. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents and counsel.
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The Company shall fully indemnify the Trustee against any and all
losses, liabilities, claims, damages or expenses (including reasonable legal
fees and expenses) incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense shall be determined by a court of
competent jurisdiction to have been caused by its own negligence or willful
misconduct. 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 except to the extent that the
Company is actually prejudiced by failure of the Trustee to provide timely
notice of claims of which a Responsible Officer has received written notice. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture and the resignation or removal of
the Trustee.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
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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.
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 20% in principal amount of the then outstanding Notes
may petition at the expense of the Company any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
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 or
banking association, the successor corporation without any further act shall be
the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture and any of the Notes shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
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Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 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 the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Notes when such payments
are due, (b) the Company's obligations with respect to such Notes under Article
2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (d) this Article Eight. Subject to compliance with this Article Eight, 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.
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Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.06, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.14, hereof and clause (iv) of Section 5.01 hereof with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the
Notes shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof,
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but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(c) through 6.01(i) hereof , except for Sections 6.01(g) and
6.01(h) with respect to the Company (but not with respect to any Restricted
Subsidiary) shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash in United States dollars, non-callable U.S.
Government Obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium and Liquidated Damages, if any,
and interest on the outstanding Notes on the stated date for payment thereof or
on the applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
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;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes 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 same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Notes pursuant to this Article Eight concurrently
with such incurrence) or insofar as Sections 6.01(g) or 6.01(h) hereof is
concerned, at any time in the period ending on the 91st day after the date of
deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company is a party or by
which the Company is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that on the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
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(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.05. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable U.S.
Government Obligations deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable U.S. Government Obligations held by it
as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
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 shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
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Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable U.S. Government Obligations 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 obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Note
Guarantees or the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, omission, defect or inconsistency;
(b) to comply with Article Five;
(c) to provide for uncertificated Notes in addition to or in place of
certificated Notes; provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Internal Revenue Code, or
in a manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Internal Revenue Code;
(d) to add additional Note Guarantees with respect to the Notes or to
secure the Notes;
(e) to add to the covenants of the Company or any Guarantor for the
benefit of the Holders of the Notes or to surrender any right or power conferred
upon the Company or any Guarantor;
(f) to release a Guarantor which has been sold, or whose assets have
been sold, in accordance with the provisions of this Indenture;
(g) to make any change that does not adversely affect the rights of any
Holder of Notes;
(h) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(i) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture as of the date hereof.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the
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terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Note
Guarantees and the Notes without notice to any Holder of Notes but with the
consent of the Holders of at least a majority in principal amount of the Notes
(including Additional Notes, if any) then outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium, if any, or interest on the
Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture, the Note
Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including Additional
Notes, if any) voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes). Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes (including Additional Notes,
if any) then outstanding voting as a single class may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder), among other things:
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of interest on any
Note;
(c) reduce the principal of or extend the stated maturity of any Note;
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(d) reduce the premium payable upon the redemption of any Note or change
the time at which a Note may be redeemed except as provided above with respect
to Article Three;
(e) impair the right of any Holder to receive payment of principal of,
or interest or premium, or Liquidated Damages, if any, on the Notes on or after
the due dates therefor or to institute suit for the enforcement of any payment
on or with respect to such Holder's Notes;
(f) make any Note payable in money other than that stated in the Notes;
(g) subordinate in right of payment, or otherwise subordinate the Notes
to any other obligation of the Company or any Guarantor;
(h) release any security interest in favor of the Notes or Note
Guarantees;
(i) make any change in any Note Guarantee that would adversely affect
the Holders; or
(j) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. From and after the date an amendment, supplement or waiver becomes
effective in accordance with its terms, it shall bind every Holder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
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Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall receive and (subject to Section 7.01 hereof) shall be fully protected in
relying upon, in addition to the documents required by Section 12.04 hereof, an
Officer's Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental indenture is authorized or permitted by this
Indenture.
ARTICLE 10.
NOTE GUARANTEES
Section 10.01. Guarantee.
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: (a) the principal
of and interest on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any
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stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors
shall have the right to seek contribution from any non-paying Guarantor so long
as the exercise of such right does not impair the rights of the Holders under
the Guarantee.
Section 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, 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.
Section 10.03. Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form included in Exhibit E shall be endorsed by an Officer of such Guarantor
on each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Guarantor by its President or one of its
Vice Presidents.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 10.01 shall 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 shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
In the event that a Subsidiary is required by Section 4.18 hereof to
become a Guarantor, the Company shall cause such Subsidiary to execute a
supplemental indenture to this Indenture and a Note Guarantee in accordance with
Section 4.18 hereof and this Article 10, to the extent applicable. Neither the
Company nor any then-existing Guarantor shall be required to sign any such
supplemental indenture or Note Guarantee.
Section 10.04. Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 10.05, 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:
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(a) subject to Section 10.05 hereof, either:
(i) the Person acquiring property in any such sale or
disposition or the Person formed by or surviving any such consolidation
or merger (if other than a Guarantor or the Company) unconditionally
assumes all the obligations of such Guarantor, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to
the Trustee, under the Notes, the Indenture and the Note Guarantee on
the terms set forth herein or therein; or
(ii) the Net Proceeds of such sale or other disposition are
applied in accordance with the terms of this Indenture; and
(b) immediately after giving effect to such transaction, no Default or
Event of Default exists.
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 shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the 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 shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees 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 (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 10.05. Releases Following Sale of Assets.
In the event of a sale or other disposition of all of the assets of any
Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all to the capital stock of any Guarantor, in each case to a
Person that is not (either before or after giving effect to such transactions) a
Subsidiary of the Company, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the capital
stock of such Guarantor) or the corporation acquiring the property (in the event
of a sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Note
Guarantee; provided that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.09 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 4.09
hereof, the Trustee shall execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Note
Guarantee.
Any Guarantor not released from its obligations under its Note Guarantee
shall remain liable for the full amount of principal of and interest on the
Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 10.
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Section 10.06. Indemnity and Subrogation.
In addition to all such rights of indemnity and subrogation as the
Guarantors may have under applicable law (but subject to Sections 10.01 and
10.08), the Company agrees that (a) in the event a payment shall be made by any
Guarantor under any Note Guarantee, the Company shall indemnify such Guarantor
for the full amount of such payment and such Guarantor shall be subrogated to
the rights of the person to whom such payment shall have been made to the extent
of such payment.
Section 10.07. Contribution and Subrogation.
Each Guarantor (a "Contributing Guarantor") agrees (subject to Section
10.08) that, in the event a payment shall be made by any other Guarantor under
any Note Guarantee and such other Guarantor (the "Claiming Guarantor") shall not
have been fully indemnified by the Company as provided in Section 10.06, the
Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal
to the amount of such payment multiplied by a fraction, the numerator of which
shall be the net worth of the Contributing Guarantor on the date hereof and the
denominator of which shall be the aggregate net worth of all the Guarantors on
the date hereof (or, in the case of any Guarantor becoming a party hereto
pursuant to Section 4.18, the date of execution and delivery by such Guarantor
of a supplemental indenture). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 10.07 shall be subrogated to the
rights of such Claiming Guarantor under Section 10.06 to the extent of such
payment.
Section 10.08. Subordination.
Notwithstanding any provision of this Agreement to the contrary, all
rights of the Guarantors under Sections 10.06 and 10.07 and all other rights of
indemnity, contribution or subrogation under applicable law or otherwise shall
be fully subordinated to the indefeasible payment in full in cash of the payment
obligations hereunder. No failure on the part of the Company or any Guarantor to
make the payments required by Sections 10.06 and 10.07 (or any other payments
required under applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Guarantor with respect to any Note Guarantee,
and each Guarantor shall remain liable for the full amount of the obligations of
such Guarantor under each such Note Guarantee.
Section 10.09. Termination.
Sections 10.06, 10.07, 10.08 and 10.09 shall survive and be in full
force and effect so long as any payment obligation hereunder is outstanding and
has not been indefeasibly paid in full in cash, and shall continue to be
effective or be reinstated, as the case may be, if at any time any payment
obligation hereunder is rescinded or must otherwise be restored by any Holder or
any Guarantor upon the bankruptcy or reorganization of the Company, any
Guarantor or otherwise.
Section 10.10. No Waiver; Amendment.
No failure on the part of any Guarantor to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by any Guarantor preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law. None of
the Guarantors shall be deemed to have waived any rights hereunder unless such
waiver shall be in writing and signed by such parties.
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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 theretofore 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 making
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 U.S. Government Obligations,
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 and
Liquidated Damages, if any, and accrued interest to the date of
maturity or redemption;
(2) other than with respect to a discharge when the Notes have become due
and payable, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company is a party or by which the Company is bound;
(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 the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money shall have been deposited with the Trustee pursuant to subclause (b) of
clause (1) of this Section, the provisions of Section 11.02 and Section 8.06
shall survive such satisfaction and discharge.
Section 11.02. Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 11.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company
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acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for whose
payment such money has been deposited with the Trustee; but such money need not
be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 11.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.01; provided that if the Company has made any payment of principal
of, premium, if any, or interest on any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or U.S. Government Obligations
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 Section 318(c), the imposed duties shall 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 mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address, as follows:
If to the Company and/or any Guarantor:
Boyd Gaming Corporation
2950 Industrial Road
Las Vegas, Nevada 89109
Telecopier No.: (702) 792-7335
Attention: General Counsel
With a copy to:
Morrison & Foerster LLP
19900 MacArthur Boulevard
Irvine, California 92612
Telecopier No.: (949) 251-0900
Attention: Robert Mattson
If to the Trustee:
The Bank of New York
101 Barclay Street
New York, NY 10286
Telecopier No.: (212) 815-5915
Attention: Corporate Trust Administration
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The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
Section 12.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 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 Section 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:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall 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.
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 Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
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(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 12.06. Rules by 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 past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or such Guarantor under the Notes, the Note
Guarantees, this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 12.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL 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.
Section 12.10. Successors.
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of each Guarantor in this Indenture shall bind its
successors, except as otherwise provided in Section 10.05.
Section 12.11. Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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Section 12.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 12.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
BOYD GAMING CORPORATION, a Nevada corporation
By: /s/ William S. Boyd
-------------------------------------------
Name: William S. Boyd
Title: Chairman of the Board
and Chief Executive Officer
[CORPORATE SEAL]
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Executive Vice President, Treasurer
and Chief Financial Officer
BLUE CHIP CASINO, LLC, an
Indiana limited liability company
By: /s/ William S. Boyd
-------------------------------------------
Name: William S. Boyd
Title: Operating Manager
BOYD ATLANTIC CITY, INC.,
a New Jersey corporation
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Vice President, Treasurer
and Chief Financial Officer
BOYD INDIANA, INC., an Indiana corporation
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Senior Vice President, Treasurer
and Chief Financial Officer
BOYD KENNER, INC., a Louisiana corporation
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Senior Vice President, Treasurer
and Chief Financial Officer
81
BOYD LOUISIANA L.L.C.,
a Nevada limited liability company
By: /s/ William S. Boyd
-------------------------------------------
Name: William S. Boyd
Title: Manager
BOYD TUNICA, INC., a Mississippi corporation
By: /s/ William S. Boyd
-------------------------------------------
Name: William S. Boyd
Title: Chairman of the Board and
Chief Executive Officer
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Senior Vice President, Treasurer
and Chief Financial Officer
CALIFORNIA HOTEL AND CASINO,
a Nevada corporation
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Senior Vice President, Treasurer
and Chief Financial Officer
Attest:
By: /s/ Brian A. Larson
----------------------------------------
Name: Brian A. Larson
Title: Senior Vice President and Secretary
CALIFORNIA HOTEL FINANCE CORPORATION,
a Nevada corporation
By: /s/ William S. Boyd
-------------------------------------------
Name: William S. Boyd
Title: President
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Vice President, Treasurer
and Chief Financial Officer
82
ELDORADO, INC., a Nevada corporation
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Senior Vice President, Treasurer
and Chief Financial Officer
MARE-BEAR, INC., a Nevada corporation
By: /s/ William S. Boyd
-------------------------------------------
Name: William S. Boyd
Title: President
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Senior Vice President, Treasurer
and Chief Financial Officer
M.S.W., INC., a Nevada corporation
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Senior Vice President, Treasurer
and Chief Financial Officer
Attest:
By: /s/ Brian A. Larson
----------------------------------------
Name: Brian A. Larson
Title: Senior Vice President and Secretary
PAR-A-DICE GAMING CORPORATION,
an Illinois corporation
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Senior Vice President, Treasurer
and Chief Financial Officer
83
SAM-WILL, INC., a Nevada corporation
By: /s/ William S. Boyd
-------------------------------------------
Name: William S. Boyd
Title: President
By: /s/ Ellis Landau
-------------------------------------------
Name: Ellis Landau
Title: Senior Vice President, Treasurer
and Chief Financial Officer
TREASURE CHEST CASINO, L.L.C.,
a Louisiana limited liability company
By: /s/ William S. Boyd
-------------------------------------------
Name: William S. Boyd
Title: Chief Executive Officer
84
THE BANK OF NEW YORK
By: /s/ Stacey Poindexter
-------------------------------------------
Name: Stacey Poindexter
Title: Assistant Treasurer
85
EXHIBIT A
[Face of Note]
--------------------------------------------------------------------------------
CUSIP/CINS ____________
9 1/4% Senior Notes due 2009
No. ___ $____________
BOYD GAMING CORPORATION
promises to pay to________________________________________or registered assigns,
the principal sum of ___________________________________________________________
Dollars on August 1, 2009.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Dated: July ___, 2001
BOYD GAMING CORPORATION
By:
-------------------------------------------
Name:
Title:
By:
-------------------------------------------
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------------
Authorized Signatory
--------------------------------------------------------------------------------
A-1
86
[Back of Note]
9 1/4% Senior Notes due 2009
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, PLEDGED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE LATER
OF THE DATE OF THE ORIGINAL ISSUANCE OF THIS NOTE OR THE DATE THIS NOTE WAS
ACQUIRED FROM AN AFFILIATE OF THE COMPANY, REOFFER, PLEDGE, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
(2), (3), OR (7) OF RULE 501 UNDER THE SECURITIES ACT IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT WHO, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE COMPANY A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
NOTES AND AN OPINION OF COUNSEL (IF THE COMPANY SO REQUESTS), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (3) AGREES THAT IT WILL
GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.(1)
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND
--------
(1) This legend should be included on the Restricted Global Notes and
Restricted Definitive Notes and omitted from Unrestricted Global Notes
and Unrestricted Definitive Notes.
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(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY.(2)
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
1. INTEREST. Boyd Gaming Corporation, a Nevada corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 9
1/4% per annum from July 26, 2001 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages
semi-annually in arrears on February 1 and August 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be February 1, 2002. The Company shall pay
interest on overdue principal and premium, if any, from time to time on demand
at a rate that is 1% per annum in excess of the rate then in effect; it shall
pay interest on overdue installments of interest from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the January 15 or July 15
immediately preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of July 26, 2001 (the "Indenture") among the Company, the Guarantors identified
therein and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Initial Notes are obligations
of the Company limited to
--------
(2) This legend should be included on the Global Notes and omitted from
Definitive Notes.
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$200 million in aggregate principal amount [and, as of _____________, the
Additional Notes are obligations of the Company limited to $_____ million in
aggregate principal amount](3).
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to August 1, 2005.
On or after August 1, 2005, the Company shall have the option to redeem the
Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest and Liquidated Damages thereon, if
any, to the applicable redemption date, if redeemed during the twelve-month
period beginning on August 1 of the years indicated below:
Year Percentage
---- ----------
2005.................................................. 104.625%
2006.................................................. 102.313%
2007 and thereafter................................... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, at any time prior to August 1, 2004, the Company may, on one or more
occasions, redeem up to 35% of the aggregate principal amount of Notes at a
redemption price equal to 109.25% of the principal amount thereof plus accrued
and unpaid interest and Liquidated Damages, if any, to the redemption date, with
the net cash proceeds of one or more Public Equity Offerings; provided that (i)
at least 65% of the aggregate principal amount of the Notes originally issued
remain outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries) and (ii) the
redemption occurs within 45 days of the date of the closing of such Public
Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in Paragraph 8 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. MANDATORY DISPOSITION OR REDEMPTION PURSUANT TO GAMING LAWS.
Pursuant to the Indenture, the Company will have the right to require a
Holder to dispose of such Holder's Notes if such Holder or the beneficial owner
of such Notes is not licensed or found qualified or suitable by a Gaming
Authority. In the event any such Holder fails to dispose of Notes within a
prescribed time period, the Company shall have the right to call such Notes for
redemption at a redemption price equal to the lesser of (i) the lowest closing
sale price of the Notes on any trading day during the 120-day period ending on
the date upon which the Company shall have received notice from Gaming Authority
of such Holder's disqualification or (ii) the price at which such Holder or
beneficial owner acquired the Notes, unless a different redemption price is
required by such Gaming Authority, in which event such required price shall be
the redemption price.
8. REPURCHASE AT OPTION OF THE HOLDER.
(a) Upon the occurrence of (i) a Change of Control (if, at the Change of
Control Time the Notes do not have Investment Grade Status) or, (ii) a Change of
Control Triggering Event (if, at the Change of Control Time the Notes have
Investment Grade Status), each Holder of Notes shall have the
--------
(3) To be included as appropriate in connection with any issuance of
Additional Notes.
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right to require the Company to purchase such Holder's Notes, in whole, or in
part in a principal amount that is an integral multiple of $1,000, pursuant to a
Change of Control Offer, at a purchase price in cash equal to 101% of the
principal amount thereof on any Change of Control Payment Date plus accrued and
unpaid interest, if any, to the Change of Control Payment Date.
Within 30 calendar days following any Change of Control Triggering
Event, the Company shall send, or cause to be sent, by first-class mail, postage
prepaid, a notice regarding the Change of Control Offer to the Trustee and each
Holder of Notes. The Holder of this Note may elect to have this Note or a
portion hereof in an authorized denomination purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below and tendering this
Note pursuant to the Change of Control Offer. Unless the Company defaults in the
payment of the Change of Control Purchase Price with respect thereto, all Notes
or portions thereof accepted for payment pursuant to the Change of Control Offer
will cease to accrue interest from and after the Change of Control Payment Date.
(b) If at any time the Company or any Restricted Subsidiary engages in
any Asset Sale and/or an Event of Loss, as a result of which the aggregate
amount of Excess Proceeds exceed $20,000,000, the Company shall, within 10
Business Days of the date the amount of Excess Proceeds exceeds $20,000,000, use
the then-existing Excess Proceeds to make an offer to purchase, on a pro rata
basis, from all Holders of the Notes, and at the election of the Company, the
holders of any other outstanding Indebtedness equal in ranking to the Notes
having comparable rights, an aggregate principal amount of Notes, and, if
applicable, such other Indebtedness, equal to the Excess Proceeds, at a purchase
price in cash equal to 100% of the principal amount thereof, plus accrued and
unpaid interest and, if applicable, Liquidated Damages, thereon. Upon completion
of a Prepayment Offer (including payment for accepted Notes), any surplus Excess
Proceeds that were the subject of such offer shall cease to be Excess Proceeds,
and the Company may then use such amounts for general corporate purposes.
Within 10 Business Days of the date the amount of Excess Proceeds
exceeds $20,000,000, the Company shall send, or cause to be sent, by first-class
mail, postage prepaid, a notice regarding the Prepayment Offer to each Holder of
Notes. The Holder of this Note may elect to have this Note or a portion hereof
in an authorized denomination purchased by completing the form entitled "Option
of Holder to Elect Purchase" appearing below and tendering this Note pursuant to
the Prepayment Offer. Unless the Company defaults in the payment of the purchase
price with respect thereto, all Notes or portions thereof selected for payment
pursuant to the Prepayment Offer will cease to accrue interest from and after
the Purchase Date.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
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11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions set
forth in the Indenture, (i) the Indenture, the Note Guarantees or the Notes may
be amended without prior notice to any Holder of Notes but with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Notes (including Additional Notes, if any) and (ii) any past Default
and its consequences may be waived with the written consent of the Holders of at
least a majority in principal amount of the outstanding Notes (including
Additional Notes, if any). Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder of Notes, the Company and the
Trustee may amend the Indenture or the Notes (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to comply with Article Five of the
Indenture; (iii) to provide for uncertificated Notes in addition to or in place
of certificated Notes; (iv) to add additional Note Guarantees with respect to
the Notes or to secure the Notes; (v) to release a Guarantor if such Guarantor
is sold in compliance with Section 10.05 of the Indenture; (vi) to add
additional covenants or to surrender rights and powers conferred on the Company
or any Guarantor; (vii) to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the TIA; (viii) to
make any change that does not adversely affect the rights of any Holder in any
material respect; or (ix) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in the Indenture.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on the Notes; (ii) default in payment
when due of principal of or premium, if any, on the Notes when the same becomes
due and payable at maturity, upon acceleration, required purchase or otherwise,
(iii) failure by the Company or any Guarantor to comply with Section 5.01 of the
Indenture; (iv) failure by the Company or the Guarantors to observe, perform or
comply with any of the other covenants and agreements in the Indenture and such
failure to observe, perform or comply continues for a period of 30 days after
receipt by the Company of a written notice from the Trustee or Holders of not
less than 25% in aggregate principal amount of the Notes (including Additional
Notes, if any) then outstanding voting as a single class; (v) Indebtedness of
the Company or any Restricted Subsidiary is not paid when due within any
applicable grace period or is accelerated by the holders thereof and, in either
case, the total amount of such unpaid or accelerated Indebtedness exceeds $10
million; (vi) the entry by a court of competent jurisdiction of one or more
judgments or orders against the Company or any Restricted Subsidiary in an
uninsured aggregate amount in excess of $10 million and such judgment or order
is not discharged, waived, stayed or satisfied for a period of 60 consecutive
days; (vii) certain events of bankruptcy, insolvency or reorganization affecting
the Company or any Restricted Subsidiary; (viii) any revocation, suspension or
loss of any Gaming License which results in the cessation of business for a
period of more than 90 consecutive days of the business of any Gaming Facility
owned, leased or operated directly or indirectly by the Company or any of its
Subsidiaries (other than any voluntary relinquishment of a Gaming License if
such relinquishment is, in the reasonable, good faith judgment of the Board of
Directors, evidenced by a Board Resolution, both desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and not
disadvantageous in any material respect to the Holders); and (ix) any Note
Guarantee ceases to be in full force and effect (other than pursuant to the
terms of the Indenture) or is declared null and void or any Guarantor denies
that it has any further liability under its Note Guarantee or gives notice to
such effect. A Default under clause (v), (vi) or (viii) is not an Event of
Default until the Trustee or the Holders of at least 25% in principal amount of
the Notes notify the Company of the Default. If any Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct
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the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default and its consequences under the Indenture except
a continuing Default in the payment of interest on, or the principal of, the
Notes.
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. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
16. AUTHENTICATION. This Note shall 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 shall have all the rights set forth in the Registration Rights
Agreement dated as of July 26, 2001, among the Company, the Guarantors and the
parties named on the signature pages thereof (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.
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 Boyd Gaming Corporation, 2950 Industrial Road, Las
Vegas, Nevada 89109, Attention: General Counsel.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature:__________________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.09 or 4.14 of the Indenture, check the appropriate box below:
[ ] Section 4.09 [ ] Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.09 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:
$________________
Date: _______________
Your Signature:__________________________
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:__________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
Amount of Amount of of this Global Signature of
decrease in increase in Note following authorized
Principal Amount of Principal Amount of such decrease officer of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Note Custodian
---------------- ------------------- -------------------- ------------------ ---------------------
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Boyd Gaming Corporation
2950 Industrial Road
Las Vegas, Nevada 89109
Telecopier No.: (___) ___-____
Attention: _________________
[Registrar address block]
Re: 9 1/4% Senior Notes due 2009
Reference is hereby made to the Indenture, dated as of July 26, 2001
(the "Indenture"), among Boyd Gaming Corporation, as issuer (the "Company"), the
Guarantors listed on the signature pages thereto, and The Bank of New York, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United 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
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than an Initial Purchaser). Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Indenture and
(2) an Opinion of Counsel provided by the Transferor or the Transferee
(a copy of which the Transferor has attached to this certification), to
the effect that such Transfer is in compliance with the Securities Act.
Upon consummation of the proposed transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the IAI Global Note and/or the
Definitive Notes and in the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or
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Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-----------------------------------------
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
Dated: _______________________
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________),
or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________),
or
(iii) [ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP _________);
or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Boyd Gaming Corporation
2950 Industrial Road
Las Vegas, Nevada 89109
Telecopier No.: (___) ___-____
Attention: _________________
[Registrar address block]
Re: 9 1/4% Senior Notes due 2009
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of July 26, 2001
(the "Indenture"), among Boyd Gaming Corporation, as issuer (the "Company"), the
Guarantors listed on the signature pages thereto and The Bank of New York, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [ ] 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
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EXHIBIT C
a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ]144A Global Note, [ ]Regulation S Global Note, [ ]IAI Global Note
with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
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:
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EXHIBIT C
Dated: ______________________
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EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Boyd Gaming Corporation
2950 Industrial Road
Las Vegas, Nevada 89109
Telecopier No.: (___) ___-____
Attention: _________________
[Registrar address block]
Re: 9 1/4% Senior Notes due 2009
Reference is hereby made to the Indenture, dated as of July 26, 2001
(the "Indenture"), among Boyd Gaming Corporation, as issuer (the "Company"), the
Guarantors listed on the signature pages thereto and The Bank of New York, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing the Definitive Note or beneficial interest
in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
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EXHIBIT D
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
-----------------------------------------
[Insert Name of Accredited Investor]
By:
--------------------------------------
Name:
Title:
Dated: _______________________
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EXHIBIT E
FORM OF NOTE GUARANTEE
For value received, each Guarantor (which term includes any Person
required to become a Guarantor under the Indenture and any successor to any
Guarantor 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 July 26, 2001 (the "Indenture") among
Boyd Gaming Corporation, the Guarantors listed on the signature pages thereto
and The Bank of New York, as trustee (the "Trustee"), (a) the due and punctual
payment of the principal of, premium, if any, and interest on the Notes (as
defined in the Indenture), whether at maturity, by acceleration, redemption or
otherwise, the due and punctual payment of interest on overdue principal and
premium, and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the 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.
BLUE CHIP CASINO, LLC,
an Indiana limited liability company
By:
-----------------------------------------
Name: William S. Boyd
Title: Operating Manager
BOYD ATLANTIC CITY, INC.,
a New Jersey corporation
By:
-----------------------------------------
Name: Ellis Landau
Title: Vice President, Treasurer
and Chief Financial Officer
BOYD INDIANA, INC., an Indiana corporation
By:
-----------------------------------------
Name: Ellis Landau
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
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EXHIBIT E
BOYD KENNER, INC., a Louisiana corporation
By:
-----------------------------------------
Name: Ellis Landau
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
BOYD LOUISIANA L.L.C.,
a Nevada limited liability company
By:
-----------------------------------------
Name: William S. Boyd
Title: Manager
BOYD TUNICA, INC., a Mississippi corporation
By:
-----------------------------------------
Name: William S. Boyd
Title: Chairman of the Board
and Chief Executive Officer
By:
-----------------------------------------
Name: Ellis Landau
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
CALIFORNIA HOTEL AND CASINO,
a Nevada corporation
By:
-----------------------------------------
Name: Ellis Landau
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
Attest:
By:
-----------------------------------------
Name: Brian A. Larson
Title: Senior Vice President and Secretary
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EXHIBIT E
CALIFORNIA HOTEL FINANCE CORPORATION,
a Nevada corporation
By:
-----------------------------------------
Name: William S. Boyd
Title: President
By:
-----------------------------------------
Name: Ellis Landau
Title: Vice President, Treasurer
and Chief Financial Officer
ELDORADO, INC., a Nevada corporation
By:
-----------------------------------------
Name: Ellis Landau
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
MARE-BEAR, INC., a Nevada corporation
By:
-----------------------------------------
Name: William S. Boyd
Title: President
By:
-----------------------------------------
Name: Ellis Landau
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
M.S.W., INC., a Nevada corporation
By:
-----------------------------------------
Name: Ellis Landau
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
Attest:
By:
-----------------------------------------
Name: Brian A. Larson
Title: Senior Vice President and Secretary
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EXHIBIT E
PAR-A-DICE GAMING CORPORATION,
an Illinois corporation
By:
-----------------------------------------
Name: Ellis Landau
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
SAM-WILL, INC., a Nevada corporation
By:
-----------------------------------------
Name: William S. Boyd
Title: President
By:
-----------------------------------------
Name: Ellis Landau
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
TREASURE CHEST CASINO, L.L.C.,
a Louisiana limited liability company
By:
-----------------------------------------
Name: William S. Boyd
Title: Chief Executive Officer
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EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of Boyd Gaming Corporation (or its permitted successor), a Nevada
corporation (the "Company") and The Bank of New York, 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 July 26, 2001 providing for
the issuance of its 9 1/4% Senior Notes due 2009 (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 as
follows:
(a) Along with all Guarantors named in the Indenture, to jointly
and severally Guarantee to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and
assigns, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of and interest on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on
the Notes, if any, if lawful, and all other obligations of the Company
to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and
thereof; and
(ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately.
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(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes
or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any
provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of
a guarantor.
(c) The following is hereby waived: diligence presentment,
demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever.
(d) This Note Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture, and the Guaranteeing Subsidiary accepts all obligations of a
Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to
either the Company or the Guarantors, any amount paid by either to the
Trustee or such Holder, this Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any
right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 of the
Indenture 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 (y) in the event of
any declaration of acceleration of such obligations as provided in
Article 6 of the Indenture, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantors for
the purpose of this Note Guarantee.
(h) The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does
not impair the rights of the Holders under the Guarantee.
(i) Pursuant to Section 10.02 of the Indenture, after giving
effect to any maximum amount and any other contingent and fixed
liabilities that are relevant under any applicable Bankruptcy Law or
fraudulent conveyance 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 Article 10 of the Indenture, this new Note
Guarantee shall be limited to the maximum amount permissible such that
the obligations of such Guarantor under this Note Guarantee will not
constitute a fraudulent transfer or conveyance.
3. EXECUTION AND DELIVERY. The Guaranteeing Subsidiary agrees that this
Note Guarantee shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
F-2
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4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not 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:
(i) subject to Sections 10.04 and 10.05 of the
Indenture, either (x) the Person acquiring property in any such
sale or disposition or the Person formed by or surviving any
such consolidation or merger (if other than a Guarantor or the
Company) unconditionally assumes all the obligations of such
Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the
Notes, the Indenture and the Note Guarantee on the terms set
forth herein or therein; or (y) the Net Proceeds of such sale or
other disposition are applied in accordance with the terms of
the Indenture; and
(ii) immediately after giving effect to such
transaction, no Default or Event of Default exists.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the Note Guarantee endorsed upon
the Notes and the due and punctual performance of all of the covenants
and conditions of the Indenture to be performed by the Guarantor, such
successor corporation shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a
Guarantor. Such successor corporation thereupon may cause to be signed
any or all of the 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
shall in all respects have the same legal rank and benefit under the
Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 and Section 10.05 of
Article 10 of the Indenture, and notwithstanding clauses (a) and (b)
above, nothing contained in the Indenture or in any of the Notes shall
prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of
the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
5. RELEASES.
(a) In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise,
or a sale or other disposition of all to the capital stock of any
Guarantor, in each case to a Person that is not (either before or after
giving effect to such transaction) a Subsidiary of the Company, then
such Guarantor (in the event of a sale or other disposition, by way of
merger, consolidation or otherwise, of all of the capital stock of such
Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of
such Guarantor) will be released and relieved of any obligations under
its Note Guarantee; provided that the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of
the Indenture, including without limitation Section 4.09 of the
Indenture. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or
other disposition
F-3
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was made by the Company in accordance with the provisions of the
Indenture, including without limitation Section 4.09 of the Indenture,
the Trustee shall execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its
Note Guarantee.
(b) Any Guarantor not released from its obligations under its
Note Guarantee shall remain liable for the full amount of principal of
and interest on the Notes and for the other obligations of any Guarantor
under the Indenture as provided in Article 10 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
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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: _______________, 200__
[GUARANTEEING SUBSIDIARY]
By:
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------------------
Authorized Signatory
F-5
113
SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Indenture as of
the Issue Date:
NAME STATE OF ORGANIZATION
---- ---------------------
Blue Chip Casino, LLC Indiana
Boyd Atlantic City, Inc. New Jersey
Boyd Indiana, Inc. Indiana
Boyd Kenner, Inc. Louisiana
Boyd Louisiana L.L.C. Nevada
Boyd Tunica, Inc. Mississippi
California Hotel and Casino Nevada
California Hotel Finance Corporation Nevada
Eldorado, Inc. Nevada
Mare-Bear, Inc. Nevada
M.S.W., Inc. Nevada
Par-A-Dice Gaming Corporation Illinois
Sam-Will, Inc. Nevada
Treasure Chest Casino, L.L.C. Louisiana
F-6
EX-5.1
5
a75302ex5-1.txt
EXHIBIT 5.1
1
EXHIBIT 5.1
[MORRISON & FOERSTER LLP LETTERHEAD]
September 17, 2001
Boyd Gaming Corporation
2950 Industrial Road
Las Vegas, Nevada 89109
Re: $200,000,000 9 1/4% Senior Notes Due 2009; Registration Statement on
Form S-4
Ladies and Gentlemen:
We have acted as counsel for Boyd Gaming Corporation, a Nevada corporation
(the "Company"), and certain of its subsidiaries, Blue Chip Casino, LLC, an
Indiana limited liability company, Boyd Atlantic City, Inc., a New Jersey
corporation, Boyd Indiana, Inc., an Indiana corporation, Boyd Kenner, Inc., a
Louisiana corporation, Boyd Louisiana L.L.C., a Nevada limited liability
company, Boyd Tunica, Inc., a Mississippi corporation, California Hotel and
Casino, a Nevada corporation, California Hotel Finance Corporation, a Nevada
corporation, Eldorado, Inc., a Nevada corporation, Mare-Bear, Inc., a Nevada
corporation, M.S.W., Inc., a Nevada corporation, Par-A-Dice Gaming Corporation,
an Illinois corporation, Sam-Will, Inc., a Nevada corporation, and Treasure
Chest Casino, L.L.C., a Louisiana limited liability company (collectively, the
"Guarantors"), in connection with a registration statement on Form S-4 (the
"Registration Statement") under the Securities Act of 1933, as amended, for the
registration of up to an aggregate of $200,000,000 principal amount of 9 1/4%
Senior Notes Due 2009 (the "Exchange Notes") by the Company, and the
registration of guarantees of the Exchange Notes (the "Guarantees") issued by
the Guarantors, in connection with the exchange offer (the "Exchange Offer") of
$200,000,000 in previously issued 9 1/4% Senior Notes Due 2009 (the "Old Notes")
for the Exchange Notes. The Exchange Notes will be issued pursuant to the terms
and conditions of, and in the forms set forth in, an indenture (the "Indenture")
by and among the Company, the Guarantors named therein and The Bank of New York,
a New York banking corporation, as trustee (the "Trustee"), the form of which is
filed as an exhibit to the Registration Statement. The Exchange Notes, the
Guarantees and the Indenture are collectively referred to hereinafter as the
"Documents."
2
Boyd Gaming Corporation
September 17, 2001
Page Two
In connection with this opinion, we have examined originals or copies of
the Documents. In addition, we have examined such records, documents,
certificates of public officials and of the Company, made such inquiries of
officials of the Company, and considered such questions of law as we have deemed
necessary for the purpose of rendering the opinions set forth herein.
In connection with this opinion, we have assumed the genuineness of all
signatures, the authenticity of all items submitted to us as originals, and the
conformity with originals of all items submitted to us as copies. We have also
assumed that each party to the Documents, other than the Company and the
Guarantors, has the power and authority to execute and deliver, and to perform
and observe the provisions of, the Documents, and has duly authorized, executed
and delivered the Documents, that the indenture constitutes the legal, valid and
binding obligations of the Trustee, and that the Indenture has been duly
authenticated by the Trustee and will be duly qualified under the Trust
Indenture Act of 1939, as amended. We have also assumed compliance with all
applicable state securities and "Blue Sky" laws.
The opinions hereinafter expressed are subject to the following
qualifications and exceptions:
(i) The effect of bankruptcy, insolvency, reorganization, arrangement,
moratorium, or other similar laws relating to or affecting the rights of
creditors generally, including, without limitation, laws relating to fraudulent
transfers or conveyances, preferences and equitable subordination;
(ii) Limitations imposed by general principles of equity upon the
availability of equitable remedies or the enforcement of provisions of the
Documents; and the effect of judicial decisions which have held that certain
provisions are unenforceable where their enforcement would violate the implied
covenants of good faith and fair dealing, or would be commercially unreasonable,
or where their breach is not material;
(iii) We express no opinion as to the effect on the opinions expressed
herein of (a) the compliance or non-compliance of any party to the Documents
(other than the Company and the Guarantors) with any laws or regulations
applicable to it, or (b) the legal or regulatory status or the nature of the
business of any such party (other than the Company or the Guarantors);
(iv) The effect of judicial decisions which may permit the introduction of
extrinsic evidence to supplement the terms of the Documents or to aid in the
interpretation of the Documents;
(v) We express no opinion as to the enforceability of provisions of the
Documents imposing, or which are construed as effectively imposing, penalties or
forfeitures;
(vi) the enforceability of provisions of the Documents that purport to
establish evidentiary standards or make determinations conclusive;
3
Boyd Gaming Corporation
September 17, 2001
Page Three
(vii) The enforceability of any indemnification or contribution provisions
in the Documents which may be limited or prohibited by federal or state
securities laws or by public policy;
(viii) We express no opinion as to the enforceability of the waiver of stay
or extension laws contained in Section 4.05 of the Indenture; and
(ix) We express no opinion as to the enforceability of any choice of law
provisions contained in the Documents or the enforceability of any provisions
which purport to establish a particular court as the forum for adjudication of
any controversy relating to the Documents or which purport to cause any party to
waive or alter any right to a trial by jury or which waive objection to
jurisdiction.
Our opinion is based upon current statutes, rules, regulations, cases and
official interpretive opinions, and it covers certain items that are not
directly or definitively addressed by such authorities.
Based upon and subject to the limitations and qualifications set forth
herein, we are of the opinion that:
1. The Exchange Notes, when executed and authenticated in accordance with
the provisions of the Indenture and upon valid tender of the Old Notes to The
Bank of New York, as exchange agent for the Exchange Offer, and issuance of the
Exchange Notes in exchange for such tendered Old Notes in accordance with the
terms of the Registration Statement and the Indenture, will be legally issued
and binding obligations of the Company.
2. The Guarantees endorsed upon the Exchange Notes, when the Exchange Notes
are executed and authenticated in accordance with the provisions of the
Indenture and upon valid tender of the Old Notes to The Bank of New York, as
exchange agent for the Exchange Offer, and issuance of the Exchange Notes in
exchange for such tendered Old Notes in accordance with the terms of the
Registration Statement and the Indenture, will be legally issued and binding
obligations of the Guarantors.
We express no opinion as to matters governed by laws of any jurisdiction
other than the following as in effect on the date hereof: the substantive laws
of the State of New York (including its applicable choice of law rules); Nevada
law (in sole reliance of the opinion of McDonald Carano Wilson McCune Bergin
Frankovich & Hicks LLP ("McDonald")); Mississippi law (in sole reliance on the
opinion of Watkins Ludlam Winter & Stennis, P.A. ("Watkins")); Indiana law (in
sole reliance on the opinion of Ice Miller ("Ice")); Louisiana law (in sole
reliance on the opinion of McGlinchey, Stafford & Lang ("McGlinchey")); Illinois
law (in sole reliance on the opinion of More Law Group, P.C. ("More")); New
Jersey law (in sole reliance on the opinion of Cooper Perskie April Niedelman
Wagenheim & Levenson ("Cooper")); and the federal laws (other than laws related
to gaming) of the United States of
4
Boyd Gaming Corporation
September 17, 2001
Page Four
America. Insofar as the foregoing opinions relate to the matters of state or
federal laws covered by such opinions, our opinions are subject to all of the
exceptions, limitations and qualifications set forth in those opinions. With
respect to matters involving state and federal gaming laws that are covered by
the opinions of McDonald, Watkins, Ice, McGlinchey, More and Cooper referred to
above, we are relying solely on those opinions as they relate to the opinions
expressed herein and we express no other opinions concerning such laws.
We hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement and any amendments thereto and to the reference to our
firm under the caption "Legal Matters" in the prospectus included therein.
Very truly yours,
/s/ Morrison & Foerster LLP
EX-12.1
6
a75302ex12-1.txt
EXHIBIT 12.1
1
BOYD GAMING CORPORATION EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
($ IN THOUSANDS, EXCEPT FOR RATIOS)
(UNAUDITED)
Six Months Ended Years Ended
June 30, December 31,
---------------------- -----------------------------------
2001 2000 2000 1999 1998
--------- --------- --------- --------- ---------
Earnings Calculation:
Income (loss) before provision (benefit)
for income taxes, cumulative effect of a
change in accounting principle and
extraordinary items $ 24,313 $ 103,614 $ 102,057 $ 67,634 $ 49,891
Add:
Interest expense 39,407 39,368 79,303 69,230 74,162
Interest component of rent expense 1,050 803 1,767 1,470 1,065
--------- --------- --------- --------- ---------
Earnings available for fixed charges $ 64,770 $ 143,785 $ 183,127 $ 138,334 $ 125,118
========= ========= ========= ========= =========
Fixed charges:
Interest expense $ 39,407 $ 39,368 $ 79,303 $ 69,230 $ 74,162
Capitalized interest 6,571 2,249 6,253 1,786 --
Interest component of rent expense 1,050 803 1,767 1,470 1,065
--------- --------- --------- --------- ---------
Total fixed charges $ 47,028 $ 42,420 $ 87,323 $ 72,486 $ 75,227
========= ========= ========= ========= =========
Ratio of earnings to fixed charges 1.4x 3.4x 2.1x 1.9x 1.7x
========= ========= ========= ========= =========
Six Months Fiscal Year Ended
Ended June 30,
December 31, ------------------------
1997 1997 1996
------------ ---------- ---------
Earnings Calculation:
Income (loss) before provision (benefit)
for income taxes, cumulative effect of a
change in accounting principle and
extraordinary items $ 20,836 $ (105,448) $ 49,600
Add:
Interest expense 37,571 61,672 52,360
Interest component of rent expense 595 1,072 960
--------- ---------- ---------
Earnings available for fixed charges $ 59,002 $ (42,704) $ 102,920
========= ========== =========
Fixed charges:
Interest expense $ 37,571 $ 61,672 $ 52,360
Capitalized interest -- 3,200 4,600
Interest component of rent expense 595 1,072 960
--------- ---------- ---------
Total fixed charges $ 38,166 $ 65,944 $ 57,920
========= ========== =========
Ratio of earnings to fixed charges 1.6x (0.6)x 1.8x
========= ========== =========
Deficit $ (108,648)
EX-23.1
7
a75302ex23-1.txt
EXHIBIT 23.1
1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Boyd Gaming Corporation
and Subsidiaries on Form S-4 of our report dated February 14, 2001 (except for
Note 17 as to which the date is July 11, 2001) appearing in the Prospectus,
which is part of this Registration Statement. We also consent to the reference
to us under the heading "Experts" in such Prospectus.
/s/ DELOITTE & TOUCHE LLP
Las Vegas, Nevada
September 14, 2001
EX-25.1
8
a75302ex25-1.txt
EXHIBIT 25.1
1
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
---------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
BOYD GAMING CORPORATION
(Exact name of obligor as specified in its charter)
Nevada 88-0242733
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2950 Industrial Road
Las Vegas, Nevada 89109
(Address of principal executive offices) (Zip code)
Blue Chip Casino, LLC
(Exact name of obligor as specified in its charter)
Indiana 35-2087676
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2
Boyd Atlantic City, Inc.
(Exact name of obligor as specified in its charter)
New Jersey 93-1221994
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Boyd Indiana, Inc.
(Exact name of obligor as specified in its charter)
Indiana 88-0310766
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Boyd Kenner, Inc.
(Exact name of obligor as specified in its charter)
Louisiana 88-0319489
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Boyd Louisiana L.L.C.
(Exact name of obligor as specified in its charter)
Nevada 86-0880651
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Boyd Tunica, Inc.
(Exact name of obligor as specified in its charter)
Mississippi 64-0829658
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
- 2 -
3
California Hotel and Casino
(Exact name of obligor as specified in its charter)
Nevada 88-0121743
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
California Hotel Finance Corporation
(Exact name of obligor as specified in its charter)
Nevada 88-0217850
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Eldorado, Inc.
(Exact name of obligor as specified in its charter)
Nevada 88-0093922
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Mare-Bear, Inc.
(Exact name of obligor as specified in its charter)
Nevada 88-0203692
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
M.S.W., Inc.
(Exact name of obligor as specified in its charter)
Nevada 88-0310765
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
- 3 -
4
Par-A-Dice Gaming Corporation
(Exact name of obligor as specified in its charter)
Illinois 37-1268902
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Sam-Will, Inc.
(Exact name of obligor as specified in its charter)
Nevada 88-0203673
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Treasure Chest Casino, L.L.C.
(Exact name of obligor as specified in its charter)
Louisiana 72-1248550
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
---------------------------
9-1/4% Senior Notes due 2009
(Title of the indenture securities)
================================================================================
- 4 -
5
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
--------------------------------------------------------------------------------
Name Address
--------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York, N.Y.
New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y.
10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
- 2 -
7
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 30th day of August, 2001.
THE BANK OF NEW YORK
By: /S/ THOMAS E. TABOR
--------------------------------
Name: THOMAS E. TABOR
Title: VICE PRESIDENT
- 3 -
8
EXHIBIT 7
--------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2001,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin ...................................... $ 2,811,275
Interest-bearing balances ....................... 3,133,222
Securities:
Held-to-maturity securities ..................... 147,185
Available-for-sale securities ................... 5,403,923
Federal funds sold and Securities purchased
under agreements to resell ...................... 3,378,526
Loans and lease financing receivables:
Loans and leases held for sale .................. 74,702
Loans and leases, net of unearned income ........ 37,471,621
LESS: Allowance for loan and
lease losses .................................. 599,061
Loans and leases, net of unearned
income and allowance .......................... 36,872,560
Trading Assets .................................... 11,757,036
Premises and fixed assets (including
capitalized leases) ............................. 768,795
Other real estate owned ........................... 1,078
Investments in unconsolidated subsidiaries
and associated companies ........................ 193,126
Customers' liability to this bank on
acceptances outstanding ......................... 592,118
Intangible assets
Goodwill ....................................... 1,300,295
Other intangible assets ........................ 122,143
Other assets ...................................... 3,676,375
-----------
9
Total assets ...................................... $70,232,359
===========
LIABILITIES
Deposits:
In domestic offices ............................. $25,962,242
Noninterest-bearing ............................. 10,586,346
Interest-bearing ................................ 15,395,896
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ........................ 24,862,377
Noninterest-bearing ............................. 373,085
Interest-bearing ................................ 24,489,292
Federal funds purchased and securities sold
under agreements to repurchase .................. 1,446,874
Trading liabilities ............................... 2,373,361
Other borrowed money:
(includes mortgage indebtedness and
obligations under capitalized
leases) ......................................... 1,381,512
Bank's liability on acceptances executed and
outstanding ..................................... 592,804
Subordinated notes and debentures ................. 1,646,000
Other liabilities ................................. 5,373,065
-----------
Total liabilities ................................. $63,658,235
===========
EQUITY CAPITAL
Common stock ...................................... 1,135,284
Surplus ........................................... 1,008,773
Retained earnings ................................. 4,426,033
Accumulated other comprehensive income ............ 4,034
Other equity capital components ................... 0
Total equity capital .............................. 6,574,124
-----------
Total liabilities and equity capital .............. $70,232,359
===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been
10
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.
Thomas A. Renyi ] Directors
Gerald L. Hassell ]
Alan R. Griffith ]
--------------------------------------------------------------------------------
EX-99.1
9
a75302ex99-1.txt
EXHIBIT 99.1
1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
BOYD GAMING CORPORATION
$200,000,000
OFFER TO EXCHANGE
9 1/4% SENIOR NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
FOR ANY AND ALL OUTSTANDING 9 1/4% SENIOR NOTES DUE 2009
---------------------
PURSUANT TO THE PROSPECTUS DATED , 2001
--------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 2001, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE
EXTENDED FROM TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT
ANY TIME PRIOR TO THE EXPIRATION DATE.
--------------------------------------------------------------------------------
The Exchange Agent is:
THE BANK OF NEW YORK
BY REGISTERED OR CERTIFIED MAIL, FOR ADDITIONAL
HAND OR OVERNIGHT DELIVERY: INFORMATION:
The Bank of New York FACSIMILE TRANSACTIONS: The Bank of New York
101 Barclay Street (212) 815-6339 Santino Ginocchietti
Bond Redemption Unit 101 Barclay Street, 21W
Lobby Level TO CONFIRM BY TELEPHONE: New York, NY 10286
New York, NY 10286 (212) 815-6331 (212) 815-6331
Attention: Santino Ginocchietti
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE VALID DELIVERY TO THE EXCHANGE AGENT.
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
By execution hereof, the undersigned acknowledges receipt of the prospectus
dated , 2001 (the "Prospectus"), of Boyd Gaming Corporation, a Nevada
corporation (the "Company"), and this letter of transmittal and the instructions
hereto (the "Letter of Transmittal"), which together constitute the Company's
offer to exchange (the "Exchange Offer") an aggregate principal amount of up to
$200 million 9 1/4% senior notes due 2009 that have been registered under the
Securities Act of 1933, as amended (the "Exchange Notes") for any and all
outstanding 9 1/4% senior notes due 2009 that we issued on July 26, 2001 (the
"Old Notes"). Recipients of the Prospectus should read the requirements
described in the Prospectus with respect to eligibility to participate in the
Exchange Offer. Capitalized terms used but not defined herein have the meaning
given to them in the Prospectus.
2
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE CHECKING ANY
BOX BELOW.
This Letter of Transmittal is to be used by a holder of Old Notes:
- if certificates representing tendered Old Notes are to be forwarded
herewith;
- if a tender of certificates for Old Notes is to be made by book-entry
transfer to the account maintained by the Exchange Agent at the
Depository Trust Company ("DTC") pursuant to the procedures set forth in
the "Exchange Offer" section of the Prospectus; or
- if a tender is made pursuant to the guaranteed delivery procedures in the
section of the Prospectus entitled "The Exchange Offer -- Guaranteed
Delivery Procedures."
Holders of Old Notes that are tendering by book-entry transfer to the
account maintained by the Exchange Agent at DTC can execute the tender through
the Automated Tender Offer Program ("ATOP") for which the Exchange Offer will be
eligible. DTC participants that are accepting the Exchange Offer must transmit
their acceptance to DTC which will verify the acceptance and execute a
book-entry delivery to the Exchange Agent's account at DTC. DTC will then send
an agent's message forming part of a book-entry transfer in which the
participant agrees to be bound by the terms of the Letter of Transmittal (an
"Agent's Message") to the Exchange Agent for its acceptance.
In order to properly complete this Letter of Transmittal, a holder of Old
Notes must:
- complete the box entitled, "Description of Old Notes Tendered;"
- if appropriate, check and complete the boxes relating to book-entry
transfer, guaranteed delivery, Special Issuance Instructions and Special
Delivery Instructions;
- sign the Letter of Transmittal by completing the box entitled "Sign Here
to Tender Your Old Notes in the Exchange Offer;" and
- complete the substitute Form W-9.
Each holder of Old Notes should carefully read the detailed instructions
below prior to completing the Letter of Transmittal.
Holders of Old Notes who desire to tender their Old Notes for exchange,
but:
- such holder's Old Notes are not immediately available;
- such holder cannot deliver their Old Notes, this Letter of Transmittal
and all other documents required hereby to the Exchange Agent; or
- such holder cannot complete the procedures for book-entry transfer on or
prior to the Expiration Date,
must tender the Old Notes pursuant to the guaranteed delivery procedures set
forth in the section of Prospectus entitled "The Exchange Offer -- Guaranteed
Delivery Procedures." See Instruction 2.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT. IN ORDER TO ENSURE PARTICIPATION IN THE EXCHANGE OFFER, OLD NOTES MUST BE
PROPERLY TENDERED PRIOR TO THE EXPIRATION DATE.
Holders of Old Notes who wish to tender their Old Notes for exchange must
complete columns (1) through (3) in the box below entitled "Description of Old
Notes Tendered," and sign the box below entitled "Sign Here to Tender Your Old
Notes in the Exchange Offer." If only those columns are completed, such holder
of Old Notes will have tendered for exchange all Old Notes listed in column (3)
below. If the holder of Old Notes wishes to tender for exchange less than all of
such Old Notes, column (4) must be completed in full. In such case, such holder
of Old Notes should refer to Instruction 5.
The Exchange Offer may be extended, terminated or amended, as provided in
the Prospectus. During any such extension of the Exchange Offer, all Old Notes
previously tendered and not validly withdrawn pursuant to the Exchange Offer
will remain subject to such Exchange Offer.
2
3
The undersigned hereby tenders for exchange the Old Notes described in the
box entitled "Description of Old Notes Tendered" below pursuant to the terms and
conditions described in the Prospectus and this Letter of Transmittal.
----------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
AGGREGATE PRINCIPAL PRINCIPAL AMOUNT
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S) CERTIFICATE AMOUNT REPRESENTED BY TENDERED FOR EXCHANGE
(PLEASE FILL IN, IF BLANK) NUMBER(S) CERTIFICATE(S)(A) (IF LESS THAN ALL)(B)
----------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL AMOUNT OF OLD NOTES TENDERED
----------------------------------------------------------------------------------------------------------------------
(A) Unless otherwise indicated in this column, any tendering holder will be
deemed to have tendered the entire principal amount represented by the
Old Notes indicated in the column labeled "Aggregate Principal Amount
Represented by Certificate(s)."
(B) The minimum permitted tender is $1,000 in principal amount of Old
Notes. All other tenders must be integral multiples of $1,000. See
Instruction 5.
[ ] CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY DTC TO THE EXCHANGE
AGENT'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
-----------------------------------------------------------------------------
DTC Book-Entry Number:
-----------------------------------------------------------------------------
Transaction Code Number:
-----------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE
INSTITUTIONS ONLY):
Name(s) of Registered Holders:
-----------------------------------------------------------------------------
Window Ticket Number (if any):
-----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------------------------------------------------------------------
Name of Eligible Institution (as defined below) that Guaranteed Delivery:
-----------------------------------------------------------------------------
Name of Tendering Institution:
-----------------------------------------------------------------------------
DTC Book-Entry Number:
-----------------------------------------------------------------------------
Transaction Code Number:
-----------------------------------------------------------------------------
3
4
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO HOLDS OLD NOTES ACQUIRED FOR YOUR
OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES AND
WISH TO RECEIVE COPIES OF THE PROSPECTUS AND COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO FOR USE IN CONNECTION WITH RESALES OF EXCHANGE NOTES
RECEIVED FOR YOUR OWN ACCOUNT IN EXCHANGE FOR SUCH OLD NOTES.
Name:
-----------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------------
Aggregate Principal Amount of Old Notes so Held:
-----------------------------------------------------------------------------
Only registered holders are entitled to tender their Old Notes for exchange
in the Exchange Offer. Any financial institution that is a participant in DTC's
system and whose name appears on a security position listing as the record owner
of the Old Notes and who wishes to make book-entry delivery of Old Notes as
described above must complete and execute a participant's letter (which will be
distributed to participants by DTC) instructing DTC's nominee to tender such Old
Notes for exchange.
Persons who are beneficial owners of Old Notes but are not registered
holders and who seek to tender Old Notes should:
- promptly contact the registered holder of such Old Notes and instruct
such registered holder to tender on his or her behalf;
- obtain and include with this Letter of Transmittal, Old Notes properly
endorsed for transfer by the registered holder or accompanied by a
properly completed bond power from the registered holder, with signatures
on the endorsement or bond power guaranteed by a bank, broker, dealer,
credit union, savings association, clearing agency or other institution,
each an "Eligible Institution" that is a member of a recognized signature
guarantee medallion program within the meaning of Rule 17Ad-15 under the
Exchange Act; or
- effect a record transfer of such Old Notes from the registered holder to
such beneficial owner and comply with the requirements applicable to
registered holders for tendering Old Notes prior to the Expiration Date.
See the section entitled "The Exchange Offer -- Procedures for Tendering
Old Notes" in the Prospectus.
SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
4
5
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company for exchange the aggregate principal
amount of Old Notes indicated in this Letter of Transmittal. Subject to, and
effective upon, the acceptance for exchange of the Old Notes tendered herewith,
the undersigned hereby sells, assigns, transfers and exchanges to, or upon the
order of, the Company all right, title and interest in and to all such Old Notes
tendered for exchange hereby. The undersigned hereby irrevocably constitutes and
appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of
the undersigned (with full knowledge that the Exchange Agent also acts as agent
of the Company) with respect to such Old Notes, with full power of substitution
and resubstitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest) to:
- deliver such Old Notes in registered certificated form, or transfer
ownership of such Old Notes through book-entry transfer at the book-entry
transfer facility, to or upon the order of the Company, upon receipt by
the Exchange Agent, as the undersigned's Agent, of the same aggregate
principal amount of the Exchange Notes;
- present and deliver such Old Notes for transfer on the books of the
Company; and
- receive all benefits or otherwise exercise all rights and incidents of
beneficial ownership of such Old Notes, all in accordance with the terms
of the Exchange Offer.
The undersigned represents and warrants that it has full power and
authority to tender, sell, assign, exchange, and transfer the Old Notes tendered
hereby and that the Company will acquire good, marketable and unencumbered title
to the tendered Old Notes, free and clear of all security interests, liens,
restrictions, charges and encumbrances, conditional sale agreements or other
obligations relating to their sale or transfer, and not subject to any adverse
claim when the same are accepted by the Company. The undersigned also warrants
that it will, upon request, execute and deliver any additional documents deemed
by the Exchange Agent or the Company to be necessary or desirable to complete
the exchange, assignment and transfer of tendered Old Notes or transfer
ownership of such Old Notes on the account books maintained by the book-entry
transfer facility. The undersigned further agrees that acceptance of any and all
validly tendered Old Notes by the Company and the issuance of Exchange Notes in
exchange therefor shall constitute performance in full by the Company of its
obligations under the registration rights agreement entered into with the
initial purchasers named therein on July 26, 2001 (the "Registration Rights
Agreement").
By tendering, each holder of Old Notes represents that:
- the Exchange Notes to be acquired in connection with the Exchange Offer
by the holder and each beneficial owner of the Old Notes are being
acquired by the holder and each beneficial owner in the ordinary course
of business of the holder and each beneficial owner;
- the holder and each beneficial owner are not participating, do not intend
to participate, and have no arrangement or understanding with any person
to participate, in the distribution of the Exchange Notes;
- the holder and each beneficial owner acknowledge and agree that any
person participating in the Exchange Offer for the purpose of
distributing the Exchange Notes must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with
a secondary resale transaction of the Exchange Notes acquired by such
person and cannot rely on the position of the staff of the Commission set
forth in the applicable no-action letters; see "The Exchange
Offer -- Resales of Exchange Notes" in the Prospectus;
- that if the holder is a broker-dealer that acquired Old Notes as a result
of market making or other trading activities, it will deliver a
Prospectus in connection with any resale of Exchange Notes acquired in
the Exchange Offer;
- the holder and each beneficial owner understand that a secondary resale
transaction described above should be covered by an effective
registration statement containing the selling security holder information
required by Item 507 or 508, as applicable, of Regulation S-K of the
Securities and Exchange Commission (the "Commission");
- neither the holder nor any beneficial owner is an "affiliate," as defined
under Rule 144 of the Securities Act, of ours; and
5
6
- in connection with a book-entry transfer, each participant will confirm
that it makes the representations and warranties set forth in this Letter
of Transmittal.
The undersigned has read and agrees to all of the terms of the Exchange Offer.
The undersigned also acknowledges that the Company is making this Exchange
Offer in reliance on the position of the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in certain interpretive letters
issued to third parties in other transactions. Based on the Commission
interpretations, the Company believes that the Exchange Notes issued in exchange
for the Old Notes pursuant to the Exchange Offer may be offered for resale,
resold and otherwise transferred by holders thereof (other than a broker-dealer
who purchased Old Notes directly from the Company for resale pursuant to Rule
144A under the Securities Act or any other available exemption under the
Securities Act or any such holder that is an "affiliate" of the Company within
the meaning of Rule 405 under the provisions of the Securities Act) without
further compliance with the registration and prospectus delivery provisions of
the Securities Act; provided that such Exchange Notes are acquired in the
ordinary course of such holders' business and such holders are not engaged in,
and do not intend to engage in, a distribution of such Exchange Notes and have
no arrangement with any person to participate in the distribution of such
Exchange Notes. However, the Company does not intend to request the Commission
to consider, and the Commission has not considered, the Exchange Offer in the
context of an interpretive letter, and there can be no assurance that the staff
of the Commission would make a similar determination with respect to the
Exchange Offer as in other circumstances.
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes and has no arrangement or understanding to participate in a
distribution of Exchange Notes. If any holder is an affiliate of the Company, is
engaged in or intends to engage in or has any arrangement or understanding with
respect to the distribution of the Exchange Notes to be acquired pursuant to the
Exchange Offer, such holder (i) could not rely on the applicable interpretations
of the staff of the Commission and (ii) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. If the undersigned is a broker-dealer holding Old Notes that
were acquired for its own account as a result of market-making activities or
other trading activities, it acknowledges that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
Exchange Notes received in respect of such Old Notes pursuant to the Exchange
Offer, however, by so acknowledging and by delivering a prospectus in connection
with the exchange of Old Notes, the undersigned will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. By its
acceptance of the Exchange Offer, any broker-dealer that receives Exchange Notes
pursuant to the Exchange Offer agrees to notify the Company before using the
Prospectus in connection with the sale or transfer of Exchange Notes.
The Company has agreed that, subject to the provisions of the Registration
Rights Agreement, the Prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of Exchange
Notes received in exchange for Old Notes which were acquired by such
broker-dealer for its own account as a result of market-making or other trading
activities, for a period ending 180 days after the Expiration Date or, if
earlier, when all such Exchange Notes have been disposed of by such
broker-dealer. In that regard, each broker-dealer by tendering such Old Notes
and executing this Letter of Transmittal, agrees that, upon receipt of notice
from the Company of the occurrence of any event or the discovery of any fact
which makes any statement contained or incorporated by reference in the
Prospectus untrue in any material respect or which causes the Prospectus to omit
to state a material fact necessary in order to make the statements contained or
incorporated by reference therein, in light of the circumstances under which
they were made, not misleading, such broker-dealer will suspend the sale of
Exchange Notes pursuant to the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission and has
furnished copies of the amended or supplemented Prospectus to the broker-dealer
or the Company has given notice that the sale of the Exchange Notes may be
resumed, as the case may be. If the Company gives such notice to suspend the
sale of the Exchange Notes, it shall extend the 180-day period referred to above
during which broker-dealers are entitled to use the Prospectus in connection
with the resale of Exchange Notes by the number of days during the period from
and including the date of the giving of such notice to and including the date
when broker-dealers shall have received copies of the supplemented or amended
Prospectus necessary to permit resales of the Exchange Notes or to and including
the date on which the Company has given notice that the sale of Exchange Notes
may be resumed, as the case may be.
6
7
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal and every obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators, trustees
in bankruptcy, and personal and legal representatives of the undersigned and
shall not be affected by, and shall survive, the death or incapacity of the
undersigned. Old Notes properly tendered may be withdrawn at any time prior to
the Expiration Date in accordance with the terms of this Letter of Transmittal.
The Exchange Offer is subject to certain conditions, each of which may be
waived or modified by the Company, in whole or in part, at any time and from
time to time, as described in the Prospectus under the caption "The Exchange
Offer -- Conditions to the Exchange Offer." The undersigned recognizes that as a
result of such conditions the Company may not be required to accept for
exchange, or to issue Exchange Notes in exchange for, any of the Old Notes
properly tendered hereby. In such event, the tendered Old Notes not accepted for
exchange will be returned to the undersigned without cost to the undersigned at
the address shown below the undersigned's signature(s) unless otherwise
indicated under "Special Issuance Instructions" below.
Unless otherwise indicated under "Special Issuance Instructions" below,
please return any certificates representing Old Notes not tendered or not
accepted for exchange in the name(s) of the holders appearing under "Description
of Old Notes Tendered." Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail any certificates representing Old Notes not
tendered or not accepted for exchange (and accompanying documents as
appropriate) to the address(es) of the holders appearing under "Description of
Old Notes Tendered." In the event that both the "Special Issuance Instructions"
and the "Special Delivery Instructions" are completed, please issue the
certificates representing the Exchange Notes issued in exchange for the Old
Notes accepted for exchange in the name(s) of, and return any Old Notes not
tendered or not accepted for exchange to, the person or persons so indicated.
Unless otherwise indicated under "Special Issuance Instructions," in the case of
a book-entry delivery of Old Notes, please credit the account maintained at DTC
with any Old Notes not tendered or not accepted for exchange. The undersigned
recognizes that the Company does not have any obligation pursuant to the Special
Issuance Instructions, to transfer any Old Notes from the name of the holder
thereof if the Company does not accept for exchange any of the Old Notes so
tendered or if such transfer would not be in compliance with any transfer
restrictions applicable to such Old Notes.
7
8
--------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8)
To be completed ONLY if (i) Exchange Notes issued for Old Notes,
certificates for Old Notes in a principal amount not exchanged for Exchange
Notes, or Old Notes (if any) not tendered for exchange are to be issued in the
name of someone other than the undersigned, or (ii) Old Notes tendered by
book-entry transfer which are not exchanged are to be returned by credit to an
account maintained at DTC other than the account indicated above.
Issue to:
Name: ---------------------------------------------------
(PLEASE PRINT)
Address: ------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
(INCLUDE ZIP CODE)
Taxpayer Identification or Social Security Number:
---------------------------------------------------------
Credit Old Notes not exchanged and delivered by book-entry transfer to the
DTC account set forth below:
---------------------------------------------------------
(ACCOUNT NUMBER)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8)
To be completed ONLY if the Exchange Notes issued for Old Notes,
certificates for Old Notes in a principal amount not exchanged for Exchange
Notes, or Old Notes (if any) not tendered for exchange are to be sent to someone
other than the undersigned or to the undersigned at an address other than that
shown above.
Mail to:
Name: ---------------------------------------------------
(PLEASE PRINT)
Address: ------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
(INCLUDE ZIP CODE)
Taxpayer Identification or Social Security Number:
---------------------------------------------------------
--------------------------------------------------------------------------------
8
9
--------------------------------------------------------------------------------
SIGN HERE TO TENDER YOUR OLD NOTES IN THE EXCHANGE OFFER
SIGNATURE(S) OF HOLDERS OF OLD NOTES
X Date:
-------------------------------------------------- --------------------------------------------------
X Date:
-------------------------------------------------- --------------------------------------------------
SIGNATURE OF OWNER
This Letter of Transmittal must be signed by the registered holders of Old
Notes exactly as the name(s) appear(s) on certificate(s) representing the Old
Notes or on a security position listing or by person(s) authorized to become
registered holders by certificates and documents transmitted herewith. If
signature is by attorney-in-fact, executor, administrator, trustee, guardian,
officer of a corporation or other person acting in a fiduciary or representative
capacity, please provide the following information and see Instruction 6.
Name(s): Address:
-------------------------------------------------- --------------------------------------------------
(PLEASE PRINT) (INCLUDE ZIP CODE)
Capacity: Telephone
-------------------------------------------------- Number: ------------------------------------------
(FULL TITLE) (INCLUDE AREA CODE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 6)
Signature (s) Guaranteed by:
--------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
--------------------------------------------------------------------------------
(TITLE OF OFFICER SIGNING THIS GUARANTEE)
--------------------------------------------------------------------------------
(NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES -- PLEASE PRINT)
--------------------------------------------------------------------------------
(ADDRESS AND TELEPHONE NUMBER OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES)
Date:
---------------------------
--------------------------------------------------------------------------------
9
10
-------------------------------------------------------------------------------------------------------------------
IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9
-------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: THE BANK OF NEW YORK
-------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING ______________________________
AND DATING BELOW TIN
(Social Security Number or
Employer Identification Number)
---------------------------------------------------------------------------------------
DEPARTMENT OF PART 2--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING PLEASE WRITE "EXEMPT" HERE (SEE
THE TREASURY INSTRUCTIONS)
INTERNAL
REVENUE SERVICE ________________________________
---------------------------------------------------------------------------------------
PART 3--CERTIFICATION UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) The number shown on this form is my correct TIN (or I am waiting for a number
to be issued to me); and
PAYOR'S REQUEST FOR
TAXPAYER IDENTIFICATION (2) I am not subject to backup withholding because: (a) I am exempt from backup
NUMBER ("TIN") withholding, or (b) I have not been notified by the Internal Revenue Service (the
AND CERTIFICATION "IRS") that I am subject to backup withholding as a result of a failure to
report all interest or dividends or (c) the IRS has notified me that I am no
longer subject to backup withholding.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACK-UP
WITHHOLDING.
SIGNATURE _________________________________________________
DATE ________________
-------------------------------------------------------------------------------------------------------------------
You must cross out item (2) of Part 3 above if you have been notified by
the IRS that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
--------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE
"APPLIED FOR" IN PART 1 OF THE SUBSTITUTE FORM W-9
--------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and that I mailed or delivered an application to
receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administrative Office (or I intend to mail or
deliver an application in the near future). I understand that if I do not
provide a taxpayer identification number to the Payor within sixty (60) days,
the Payor is required to withhold 31% of all reportable payments made to me
thereafter until I provide a number.
Signature ______________________________________ Date ______________
--------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF UP TO 31% OF ANY REPORTABLE PAYMENTS. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
10
11
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. GUARANTEE OF SIGNATURES. Signatures on this Letter of Transmittal need
not be guaranteed if:
- tendered Old Notes are registered in the name of the signer of the Letter
of Transmittal, unless such holder has completed either the box entitled
"Special Issuance Instructions" or the box entitled "Special Delivery
Instructions";
- the Exchange Notes to be issued in exchange for the Old Notes are to be
issued in the name of the holder; and
- any untendered Old Notes are to be reissued in the name of the holder.
In any other case:
- the certificates representing the tendered Old Notes must be properly
endorsed for transfer by the registered holder or be accompanied by a
properly completed bond power from the registered holder or appropriate
powers of attorney, in form satisfactory to us;
- the tendered old notes must be duly executed by the holder; and
- signatures on the endorsement, bond power or powers of attorney must be
guaranteed by an Eligible Institution.
If the Exchange Notes and/or Old Notes not exchanged are to be delivered to
an address other than that of the registered holder appearing on the note
registrar for the Old Notes, the signature in the Letter of Transmittal must be
guaranteed by an Eligible Institution.
Persons who are beneficial owners of Old Notes but are not the registered
holder and who seek to tender Old Notes for exchange should:
- promptly contact the registered holder of such Old Notes and instruct
such registered holders to tender on his or her behalf;
- obtain and include with this Letter of Transmittal, Old Notes properly
endorsed for transfer by the registered holder or accompanied by a
properly completed bond power from the registered holder, with signatures
on the endorsement or bond power guaranteed by an Eligible Institution;
or
- effect a record transfer of such Old Notes from the registered holder to
such beneficial owner and comply with the requirements applicable to
registered holders for tendering Old Notes prior to the Expiration Date.
See Instruction 6.
DO NOT SEND THIS LETTER OF TRANSMITTAL OR ANY OLD NOTES TO THE COMPANY.
2. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR OLD NOTES
OR BOOK-ENTRY CONFIRMATIONS; GUARANTEED DELIVERY PROCEDURES. This Letter of
Transmittal is to be completed by registered holders if certificates
representing Old Notes are to be forwarded herewith. All physically delivered
Old Notes, as well as a properly completed and duly executed Letters of
Transmittal (or manually signed facsimiles thereof) and any other required
documents, must be received by the Exchange Agent at its address set forth on
the cover of this Letter of Transmittal prior to the Expiration Date or the
tendering holder must comply with the guaranteed delivery procedures set forth
below. Delivery of the documents to DTC does not constitute delivery to the
Exchange Agent.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, OLD NOTES AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF
THE HOLDER THEREOF. IF SUCH DELIVERY IS BY MAIL, IT IS SUGGESTED THAT HOLDERS
USE PROPERLY INSURED REGISTERED MAIL, RETURN RECEIPT REQUESTED, AND THAT THE
MAILING BE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE, TO PERMIT DELIVERY TO
THE EXCHANGE AGENT PRIOR TO SUCH DATE. EXCEPT AS OTHERWISE PROVIDED BELOW, THE
DELIVERY WILL BE DEEMED MADE WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE
AGENT. THIS LETTER OF TRANSMITTAL AND OLD NOTES TENDERED FOR EXCHANGE SHOULD BE
SENT ONLY TO THE EXCHANGE AGENT, NOT TO THE COMPANY.
11
12
If a holder desires to tender Old Notes pursuant to the Exchange Offer and
such holder's Old Notes are (i) not immediately available; (ii) such holder
cannot deliver their Old Notes, this Letter of Transmittal and all other
documents required hereby to the Exchange Agent prior to the Expiration Date; or
(iii) such holder cannot complete the procedures for book-entry transfer on or
prior to the Expiration Date, such holder may effect a tender of such Old Notes
in accordance with the guaranteed delivery procedures set forth in the
Prospectus under "The Exchange Offer -- Guaranteed Delivery Procedures."
Pursuant to the guaranteed delivery procedures:
- your tender of Old Notes must be made by or through an Eligible
Institution and you must properly complete and duly execute a Notice of
Guaranteed Delivery;
- on or prior to the Expiration Date, the Exchange Agent must have received
from you and the Eligible Institution a properly completed and duly
executed Notice of Guaranteed Delivery (by facsimile transmission, mail
or hand delivery) setting forth the name and address of the holder, the
certificate number or numbers of the tendered Old Notes, and the
principal amount of tendered Old Notes, stating that the tender is being
made thereby and guaranteeing that, within three (3) business days after
the date of delivery of the Notice of Guaranteed Delivery, the tendered
Old Notes, a duly executed Letter of Transmittal and any other required
documents will be deposited by the Eligible Institution with the Exchange
Agent; and
- such properly completed and executed documents required by the Letter of
Transmittal and the tendered Old Notes in proper form for transfer (or
confirmation of a book-entry transfer of such Old Notes into the Exchange
Agent's account at DTC) must be received by the Exchange Agent within
three (3) business days after the Expiration Date.
Any holder who wishes to tender their Old Notes pursuant to the guaranteed
delivery procedures described above must ensure that the exchange agent receives
the notice of guaranteed delivery relating to such Old Notes prior to 5:00 p.m.,
New York City time, on the Expiration Date.
Unless Old Notes being tendered by the above-described method are deposited
with the Exchange Agent, a tender will be deemed to have been received as of the
date when the tendering holder's properly completed and duly signed Letter of
Transmittal, or a properly transmitted agent's message, accompanied by the Old
Notes or a confirmation of book-entry transfer of the Old Notes into the
Exchange Agent's account at the book-entry transfer facility is received by the
Exchange Agent.
Issuances of Exchange Notes in exchange for Old Notes tendered pursuant to
a notice of guaranteed delivery will be made only against deposit of this Letter
of Transmittal and any other required documents and the tendered Old Notes or a
confirmation of book-entry and an agent's message.
All tendering holders, by execution of this Letter of Transmittal, waive
any right to receive any notice of the acceptance of their Old Notes for
exchange.
3. INADEQUATE SPACE. If the space provided in the box entitled
"Description of Old Notes Tendered" above is inadequate, the certificate numbers
and principal amounts of Old Notes tendered should be listed on a separate
signed schedule affixed hereto.
4. WITHDRAWAL OF TENDERS. A tender of Old Notes may be withdrawn at any
time prior to the Expiration Date by delivery of written or facsimile (receipt
confirmed by telephone) notice of withdrawal to the Exchange Agent at the
address set forth on the cover of this Letter of Transmittal. To be effective, a
notice of withdrawal must:
- specify the name of the person having tendered the Old Notes to be
withdrawn (the "Depositor");
- identify the Old Notes to be withdrawn (including the certificate number
or numbers and principal amount of such Old Notes);
- specify the principal amount of Old Notes to be withdrawn;
- include a statement that such holder is withdrawing his or her election
to have such Old Notes exchanged;
12
13
- be signed by the holder in the same manner as the original signature on
the Letter of Transmittal by which such Old Notes were tendered or as
otherwise described above (including any required signature guarantees)
or be accompanied by documents of transfer sufficient to have the trustee
under the Indenture register the transfer of such Old Notes into the name
of the person withdrawing the tender; and
- specify the name in which any such Old Notes are to be registered, if
different from that of the Depositor.
The Exchange Agent will return the properly withdrawn Old Notes promptly
following receipt of notice of withdrawal. If Old Notes have been tendered
pursuant to the procedure for book-entry transfer, any notice of withdrawal must
specify the name and number of the account at the book-entry transfer facility.
All questions as to the validity of notices of withdrawals, including, time of
receipt, will be determined by the Company and such determination will be final
and binding on all parties.
Any Old Notes so withdrawn will be deemed not to have been validly tendered
for exchange for purposes of the Exchange Offer. Any Old Notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder (or, in the case of
Old Notes tendered by book-entry transfer into the Exchange Agent's account at
the book-entry transfer facility pursuant to the book-entry transfer procedures
described above, such Old Notes will be credited to an account with such
book-entry transfer facility specified by the holder) as soon as practicable
after withdrawal, rejection of tender or termination of the Exchange Offer.
Properly withdrawn Old Notes may be retendered by following one of the
procedures described under the caption "The Exchange Offer -- Procedures for
Tendering Old Notes" in the Prospectus at any time prior to the Expiration Date.
5. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS OF OLD NOTES THAT TENDER BY
BOOK-ENTRY TRANSFER). Tenders of Old Notes will be accepted only in integral
multiples of $1,000 principal amount. If a tender for exchange is to be made
with respect to less than the entire principal amount of any Old Notes, fill in
the principal amount of Old Notes which are tendered for exchange in column (4)
of the box entitled "Description of Old Notes Tendered," as more fully described
in the footnotes thereto. In the case of a partial tender for exchange, a new
certificate, in fully registered form, for the remainder of the principal amount
of the Old Notes, will be sent to the holders of Old Notes unless otherwise
indicated in the boxes entitled "Special Issuance Instructions" or "Special
Delivery Instructions" above, as soon as practicable after the expiration or
termination of the Exchange Offer.
6. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder
of the Old Notes tendered for exchange hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Old Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal. If any
tendered Old Notes are registered in different names on several certificates, it
will be necessary to complete, sign and submit as many separate copies of this
Letter of Transmittal and any necessary or required documents as there are names
in which certificates are held.
If this Letter of Transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Company of their authority so to act must be submitted, unless waived by the
Company.
If this Letter of Transmittal is signed by the registered holder of the Old
Notes listed and transmitted hereby, no endorsements of certificates or separate
bond powers are required unless certificates for Old Notes not tendered or not
accepted for exchange are to be issued or returned in the name of a person other
than for the registered holder thereof. Signatures on such certificates must be
guaranteed by an Eligible Institution (unless signed by an Eligible
Institution).
If this Letter of Transmittal is signed by a person other than the
registered holder of the Old Notes, the certificates representing such Old Notes
must be properly endorsed for transfer by the registered holder or be
accompanied by a properly completed bond power from the registered holder or
appropriate powers of attorney, in any case signed by such registered holder
exactly as the name(s) of the registered holder of the Old Notes appear(s) on
the certificates. Signatures on the endorsement or bond power must be guaranteed
by an Eligible Institution (unless signed by an Eligible Institution).
13
14
7. TRANSFER TAXES. Except as set forth in this Instruction 7, the Company
will pay or cause to be paid any transfer taxes applicable to the exchange of
the Old Notes pursuant to the Exchange Offer. If, however, a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any transfer taxes (whether imposed on the
registered holders or any other persons) will be payable by the tendering
holder. If satisfactory evidence of the payment of such taxes or exemptions
therefrom is not submitted with this Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
8. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of Old
Notes should indicate in the applicable box the name and address to which the
Exchange Notes issued pursuant to the Exchange Offer and any substitute
certificates evidencing the Old Notes not exchanged are to be issued or sent, if
different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the Employer
Identification or Social Security Number of the person named must also be
indicated. A holder of Old Notes tendering Old Notes by book-entry transfer may
request that the Exchange Notes and the Old Notes not exchanged be credited to
such account maintained at the DTC as such holder of Old Notes may designate. If
no such instructions are given, such Exchange Notes and Old Notes not exchanged
will be returned to the name or address of the person signing this Letter of
Transmittal or credited to the account listed beneath the box entitled
"Description of Old Notes."
9. IRREGULARITIES. All questions as to the forms of all documents and the
validity of (including time of receipt) and acceptance of the tenders and
withdrawals of Old Notes will be determined by the Company, in its sole
discretion, which determination shall be final and binding. The Company reserves
the absolute right to reject any or all tenders of Old Notes that are not in
proper form or the acceptance of which would, in the Company's opinion or the
judgment of the Company's counsel, be unlawful. The Company also reserves the
right to waive any defects, irregularities or conditions of tender as to
particular Old Notes. The Company's interpretations of the terms and conditions
of the Exchange Offer (including the instructions in this Letter of Transmittal)
will be final and binding. Any defect or irregularity in connection with tenders
of Old Notes must be cured within such time as the Company determines, unless
waived by the Company. Tenders of Old Notes shall not be deemed to have been
made until all defects or irregularities have been waived by the Company or
cured. Neither the Company, the Exchange Agent, nor any other person will be
under any duty to give notice of any defects or irregularities in tenders of Old
Notes, or will incur any liability to registered holders of Old Notes for
failure to give such notice.
10. WAIVER OF CONDITIONS. To the extent permitted by applicable law, the
Company reserves the right to waive any and all conditions to the Exchange Offer
as described under "The Exchange Offer -- Conditions to the Exchange Offer" in
the Prospectus, and accept for exchange any Old Notes tendered.
11. TAX IDENTIFICATION NUMBER AND BACKUP WITHHOLDING. Federal income tax
law generally requires that a holder of Old Notes whose tendered Old Notes are
accepted for exchange or such holder's assignee (in either case, the "Payee"),
provide the Exchange Agent (the "Payor") with such Payee's correct Taxpayer
Identification Number ("TIN"), which, in the case of a Payee who is an
individual, is such Payee's social security number. If the Payor is not provided
with the correct TIN or an adequate basis for an exemption, such Payee may be
subject to a $50 penalty imposed by the Internal Revenue Service and payments
made with respect to the Old Notes may be subject to backup withholding in an
amount of up to 31%. If withholding results in an overpayment of taxes, a refund
may be obtained.
To prevent backup withholding, each Payee must provide such Payee's correct
TIN by completing the "Substitute Form W-9" set forth herein, certifying that
the TIN provided is correct (or that such Payee is awaiting a TIN) and that:
- the Payee is exempt from backup withholding;
- the Payee has not been notified by the Internal Revenue Service that such
Payee is subject to backup withholding as a result of a failure to report
all interest or dividends; or
- the Internal Revenue Service has notified the Payee that such Payee is no
longer subject to backup withholding.
If the Payee does not have a TIN, such Payee should consult the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 (the "W-9 Guidelines") for instructions on applying for a TIN, write
"Applied For" in the space for the TIN in Part 1 of the Substitute Form W-9, and
sign and date the Substitute Form W-9 and the Certificate of Awaiting Taxpayer
Identification Number set forth herein. If the Payee does not provide such
Payee's TIN to the Payor within sixty (60) days, backup withholding will begin
and continue until such Payee furnishes
14
15
such Payee's TIN to the Payor. Note: Writing "Applied For" on the form means
that the Payee has already applied for a TIN or that such Payee intends to apply
for one in the near future.
If Old Notes are held in more than one name or are not in the name of the
actual owner, consult the W-9 Guidelines for information on which TIN to report.
Exempt Payees (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. To prevent possible erroneous backup withholding, an exempt Payee
must enter its correct TIN in Part I of the Substitute Form W-9, write "Exempt"
in Part 2 of such form and sign and date the form. See the W-9 Guidelines for
additional instructions. In order for a nonresident alien or foreign entity to
qualify as exempt, such person must submit a completed Form W-8, "Certificate of
Foreign Status," signed under penalty of perjury attesting to such exempt
status. Such form may be obtained from the Payor.
12. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any holder whose Old
Notes have been mutilated, lost, stolen or destroyed should contact the Exchange
Agent at the address or telephone number set forth on the cover of this Letter
of Transmittal for further instructions.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
relating to the procedure for tendering, as well as requests for additional
copies of the Prospectus, this Letter of Transmittal, the Notice of Guaranteed
Delivery and the Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9 may be directed to the Exchange Agent at its address set
forth on the cover of this Letter of Transmittal.
14. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Old Notes, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of their Old Notes for exchange.
15. NO NOTICE OF DEFECT. Neither the Company, the Exchange Agent nor any
other person is obligated to give notice of any defect or irregularity with
respect to any tender of Old Notes nor shall any of them incur any liability for
failure to give any such notice.
IMPORTANT -- THIS LETTER OF TRANSMITTAL, TOGETHER WITH CERTIFICATES FOR
TENDERED OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS, WITH ANY REQUIRED SIGNATURE
GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE
AGENT PRIOR TO THE EXPIRATION DATE.
15
EX-99.2
10
a75302ex99-2.txt
EXHIBIT 99.2
1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY FOR
BOYD GAMING CORPORATION
$200,000,000
OFFER TO EXCHANGE
9 1/4% SENIOR NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
FOR ANY AND ALL OUTSTANDING 9 1/4% SENIOR NOTES DUE 2009
---------------------
PURSUANT TO THE PROSPECTUS DATED , 2001
--------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 2001, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE
EXTENDED FROM TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT
ANY TIME PRIOR TO THE EXPIRATION DATE.
--------------------------------------------------------------------------------
The Exchange Agent is:
THE BANK OF NEW YORK
BY REGISTERED OR CERTIFIED FOR ADDITIONAL
MAIL, INFORMATION:
HAND OR OVERNIGHT DELIVERY: FACSIMILE TRANSACTIONS: The Bank of New York
The Bank of New York (212) 815-6339 Santino Ginocchietti
101 Barclay Street 101 Barclay Street, 21W
Bond Redemption Unit TO CONFIRM BY TELEPHONE: New York, NY 10286
Lobby Level (212) 815-6331 (212) 815-6331
New York, NY 10286
Attention: Santino
Ginocchietti
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE VALID DELIVERY TO THE EXCHANGE AGENT.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON THE
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE LETTER OF TRANSMITTAL.
This form or one substantially equivalent hereto must be used by a holder
of the 9 1/4% senior notes due 2009 (the "Old Notes") of Boyd Gaming
Corporation, a Nevada corporation (the "Company") to accept the Company's offer
to exchange (the "Exchange Offer") the 9 1/4% senior notes due 2009 that have
been registered under the Securities Act of 1933, as amended (the "Exchange
Notes") for any and all outstanding Old Notes, made pursuant to the Prospectus,
dated , 2001 (the "Prospectus"), and the related Letter of Transmittal
and the instructions thereto (the "Letter of Transmittal") if such holder's Old
Notes are not immediately available, such holder cannot deliver their Old Notes,
the Letter of Transmittal and all other documents required hereby to the
Exchange Agent prior to the Expiration Date, or such holder cannot complete the
procedures for book-entry transfer on or prior to the Expiration Date. This form
may be delivered by mail or hand delivery or transmitted, via facsimile, to the
Exchange Agent as set forth above. Capitalized terms used but not defined herein
shall have the meaning given to them in the Prospectus or the Letter of
Transmittal.
2
Ladies and Gentlemen:
The undersigned hereby tenders to the Company upon the terms and subject to
the conditions set forth in the Prospectus and the related Letter of Transmittal
(receipt of which is hereby acknowledged), the aggregate principal amount of Old
Notes specified below pursuant to the guaranteed delivery procedures set forth
in the Prospectus and in Instruction 2 of the Letter of Transmittal.
By so tendering the Old Notes, the undersigned does hereby make, at and as
of the date hereof, the representations and warranties of a tendering holder of
Old Notes set forth in the Letter of Transmittal. The undersigned understands
that tenders of Old Notes may be withdrawn pursuant to Instruction 4 of the
Letter of Transmittal.
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and every obligation of the undersigned under
this Notice of Guaranteed Delivery shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.
The undersigned hereby tenders the Old Notes listed below:
--------------------------------------------------------------------------------
AGGREGATE PRINCIPAL AMOUNT OF OLD
NAME(S), ADDRESS(ES) AND TELEPHONE NOTES
NUMBER(S) OF REGISTERED HOLDER(S) CERTIFICATE NUMBER(S) TENDERED (IF LESS THAN ALL)
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL AMOUNT OF OLD NOTES TENDERED _____________________
--------------------------------------------------------------------------------
If Old Notes will be delivered by book-entry transfer to the Depository
Trust Company, please provide the account number. Account number:
____________________________
--------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE
X Date:
------------------------------------------------------------ ----------------------------------
X Date:
------------------------------------------------------------ ----------------------------------
(SIGNATURE(S) OF REGISTERED HOLDER OR AUTHORIZED SIGNATORY)
This Notice of Guaranteed Delivery must be signed by the registered holders
of Old Notes exactly as their name(s) appear(s) on certificate(s) representing
the Old Notes or on a security position listing or by person(s) authorized to
become registered holders by certificates and documents transmitted herewith.
--------------------------------------------------------------------------------
2
3
If signature is by attorney-in-fact, executor, administrator, trustee,
guardian, officer of a corporation or other person acting in a fiduciary or
representative capacity, please provide the following information. See
Instruction 2.
--------------------------------------------------------------------------------
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s): Address:
------------------------------------------ -------------------------------------------
Capacity: -------------------------------------------
------------------------------------------ -------------------------------------------
(FULL TITLE) (INCLUDE ZIP CODE)
Name(s): Telephone Number:
------------------------------------------
Capacity: -------------------------------------------
------------------------------------------ (INCLUDE AREA CODE)
(FULL TITLE)
--------------------------------------------------------------------------------
THE ACCOMPANYING GUARANTEE MUST BE COMPLETED.
3
4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program or the Stock
Exchange Medallion Program or any other bank, broker, dealer, credit union,
savings association, clearing agency or other institution, each an "Eligible
Institution" that is a member of a recognized signature guarantee medallion
program within the meaning of Rule 17Ad-15 under the Exchange Act of 1934, as
amended ("Exchange Act"), hereby (i) represents that the above-named persons are
deemed to own the Old Notes tendered hereby within the meaning of Rule 14e-4
promulgated under the Exchange Act ("Rule 14e-4"), (ii) represents that such
tender of Old Notes complies with Rule 14e-4 and (iii) guarantees that the Old
Notes tendered hereby in proper form for transfer or confirmation of book-entry
transfer of such Old Notes into the Exchange Agent's account at the book-entry
transfer facility, in each case together with a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) with any
required signature guarantees and any other documents required by the Letter of
Transmittal, will be received by the Exchange Agent at its address set forth
above within three (3) business days after the date of execution hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Exchange Agent and must deliver the Letter of Transmittal and
Old Notes to the Exchange Agent within the time period shown herein. Failure to
do so could result in a financial loss to such Eligible Institution.
--------------------------------------------------------------------------------
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name of Firm: -------------------------------------- Address: ------------------------------------
By: ------------------------------------------------ ---------------------------------------------
(AUTHORIZED SIGNATURE)
Name: ---------------------------------------------- ---------------------------------------------
(INCLUDE ZIP CODE)
Title: --------------------------------------------- Telephone Number:
(FULL TITLE) ---------------------------------------------
(INCLUDE AREA CODE)
Date: ---------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DO NOT SEND OLD NOTES WITH THIS FORM. OLD NOTES SHOULD BE SENT TO THE
EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL.
--------------------------------------------------------------------------------
4
5
INSTRUCTIONS
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY.
A properly completed and duly executed copy of this Notice of Guaranteed
Delivery and any other documents required by this Notice of Guaranteed Delivery
must be received by the Exchange Agent at its address set forth herein prior to
the Expiration Date. The method of delivery of this Notice of Guaranteed
Delivery and any other required documents to the Exchange Agent is at the
election and sole risk of the holder, and the delivery will be deemed made only
when actually received by the Exchange Agent. If delivery is by mail, registered
mail with return receipt requested, properly insured, is recommended. As an
alternative to delivery by mail, the holders may wish to consider using an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure timely delivery.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY.
If this Notice of Guaranteed Delivery is signed by the registered holder of
the Old Notes tendered for exchange hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the certificate without
alteration, enlargement, or any change whatsoever. If this Notice of Guaranteed
Delivery is signed by a participant of the Depository Trust Company whose name
appears on a security position listing as the owner of the Old Notes, the
signature must correspond with the name shown on the security position listing
as the owner of the Old Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder of the Old Notes or a participant of the Depository Trust
Company, the certificates representing such Old Notes must be properly endorsed
for transfer by the registered holder or be accompanied by a properly completed
bond power from the registered holder or appropriate powers of attorney, in any
case signed by such registered holder exactly as the name(s) of the registered
holder of the Old Notes appear(s) on the certificates. Signatures on the
endorsement or bond power must be guaranteed by an Eligible Institution (unless
signed by an Eligible Institution).
If this Notice of Guaranteed Delivery is signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and proper evidence satisfactory to the Company of its
authority so to act must be submitted, unless waived by the Company.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Requests for assistance relating to the procedure for tendering, as well as
requests for additional copies of the Prospectus and the Notice of Guaranteed
Delivery may be directed to the Exchange Agent at its address set forth on the
cover of this Notice of Guaranteed Delivery.
5
EX-99.3
11
a75302ex99-3.txt
EXHIBIT 99.3
1
EXHIBIT 99.3
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER -- Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
----------------------------------------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
----------------------------------------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if
combined funds, the first individual on the
account(1)
3. Husband/wife (joint account) The actual owner of the account or, if joint
funds, either person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only
contributor, the minor(1)
6. Account in the name of guardian or The ward, minor or incompetent person(3)
committee for a designated ward, minor or
incompetent person
7. a. A revocable savings trust account (in The grantor-trustee(1)
which grantor is also trustee)
b. Any "trust" account that is not a legal The actual owner(1)
or valid trust under State law
----------------------------------------------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
----------------------------------------------------------------------------------------------
8. Sole proprietorship account The owner(4)
9. A valid trust, estate or pension trust The legal entity (do not furnish the
identifying number of the personal
representative or trustee unless the legal
entity itself is not designated in the
account title)(5)
10. Corporate account The corporation
11. Religious, charitable or educational The organization
organization account
12. Partnership account held in the name of The partnership
the business
13. Association, club or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or prison)
that receives agricultural program
payments
----------------------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) You must show your individual name, but you may also enter your business or
"doing business" name. If the owner does not have an employer identification
number, furnish the owner's social security number.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.
2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
resident individuals), Form SS-4, Application for Employer Identification Number
(for businesses and all other entities), Form W-7 for International Taxpayer
Identification Number (for alien individuals required to file U.S. tax returns),
at an office of the Social Security Administration or the Internal Revenue
Service.
To complete Substitute Form W-9, if you do not have a taxpayer identification
number, write "Applied For" in the space for the taxpayer identification number
in Part I, sign and date the Form, and give it to the requester. Generally, you
will then have 60 days to obtain a taxpayer identification number and furnish it
to the requester. If the requester does not receive your taxpayer identification
number within 60 days, backup withholding, if applicable, will begin and will
continue until you furnish your taxpayer identification number to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING PENALTIES
Payees specifically exempted from backup withholding on ALL payments include the
following:*
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan ("IRA"), or a custodial account under section 403(b)(7) if
the account satisfies the requirements of section 401(f)(2).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
- A foreign government or a political subdivision, agency or instrumentality
thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if (i) this interest is $600 or more, (ii) the
interest is paid in the course of the payer's trade or business and (iii)
you have not provided your correct taxpayer identification number to the
payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE A SUBSTITUTE FORM W-9 TO AVOID
POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE FORM, SIGN
AND DATE THE FORM AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends and patronage dividends that are
not subject to information reporting are also not subject to backup withholding.
For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividends,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividends, and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE STATEMENTS WITH RESPECT TO WITHHOLDING.--If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--If you falsify certifications
or affirmations, you are subject to criminal penalties including fines and/or
imprisonment.
(4) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends or
patronage dividends in gross income and such failure is due to negligence, a
penalty of 5% is imposed on any portion of any underpayment attributable to the
failure.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
---------------
* Unless otherwise noted herein, all references below to section numbers or to
regulations are references to the Internal Revenue Code and the regulations
promulgated thereunder.