As filed with the Securities and Exchange Commission on June 19, 2002
Registration No. 333-88802
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
ISLE OF CAPRI CASINOS, INC.
(Exact Name of Registrant as Specified in Its Charter)
(For Co-registrants, Please See Table of Other Registrants on the Following
Page)
Delaware 7990 41-1659606
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Identification No.)
Incorporation or Classification Code
Organization) Number)
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1641 Popps Ferry Road
Biloxi, Mississippi 39532
(228) 396-7000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
Allan B. Solomon
Executive Vice President, Secretary and General Counsel
2200 Corporate Boulevard, N.W., Suite 310
Boca Raton, Florida 33431
Telephone No.: (561) 995-6660
Facsimile No.: (561) 995-6665
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
Copy to:
Paul W. Theiss, Esq.
Robert J. Wild, Esq.
Mayer, Brown, Rowe & Maw
190 South LaSalle Street
Chicago, Illinois 60603
Telephone No.: (312) 782-0600
Facsimile No.: (312) 701-7711
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are to be 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 statement number of the earlier effective registration statement
for the same offering. [_]
TABLE OF OTHER REGISTRANTS
State of Primary standard
incorporation I.R.S. Employer industrial classification
Exact name of registrant as specified in its charter or organization Identification No. code number
---------------------------------------------------- --------------- ------------------ -------------------------
CSNO, L.L.C...................................... Louisiana 64-0925262 7990
Gemini, Inc...................................... Nevada 88-0103475 7990
Grand Palais Riverboat, Inc...................... Louisiana 72-1235423 7990
IOC-Boonville, Inc............................... Nevada 88-0303425 7990
IOC-Coahoma, Inc................................. Mississippi 64-0925253 7990
IOC-Davenport, Inc............................... Iowa 64-0928290 7990
IOC-Kansas City, Inc............................. Missouri 64-0921931 7990
IOC Holdings, LLC................................ Louisiana 64-0934982 7990
IOC-Lula, Inc.................................... Mississippi 88-0301634 7990
IOC-Natchez, Inc................................. Mississippi 88-0277687 7990
Isle of Capri Bettendorf, LC..................... Iowa 62-1810319 7990
Isle of Capri Casino-Tunica, Inc................. Mississippi 64-0907593 7990
Isle of Capri Casino Colorado, Inc............... Colorado 64-0863907 7990
Isle of Capri Marquette, Inc..................... Iowa 62-1810746 7990
LL Holding Corporation........................... Nevada 88-0445106 7990
Louisiana Riverboat Gaming Partnership........... Louisiana 72-1235811 7990
LRGP Holdings, L.L.C............................. Louisiana 64-0925264 7990
PPI, Inc......................................... Florida 65-0585198 7990
Riverboat Corporation of Mississippi............. Mississippi 64-0795563 7990
Riverboat Corporation of Mississippi-Vicksburg... Mississippi 42-1400605 7990
Riverboat Services, Inc.......................... Iowa 42-1360145 7990
St. Charles Gaming Company, Inc.................. Louisiana 72-1235262 7990
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c/o Isle of Capri Casinos, Inc. 1641 Popps Ferry Road Biloxi, Mississippi 39532 (228) 396-7000 (Address, including zip code, and telephone number, including area code, of each of the co-registrant's principal executive offices)
Allan B. Solomon Executive Vice President, Secretary and General Counsel 2200 Corporate Boulevard, N.W., Suite 310 Boca Raton, Florida 33431 Telephone No.: (561) 995-6660 Facsimile No.: (561) 995-6665 (Name, address, including zip code, and telephone number, including area code, of agent for service for each of the co-registrants)
Copy to:
Paul W. Theiss, Esq.
Robert J. Wild, Esq.
Mayer, Brown, Rowe & Maw
190 South LaSalle Street
Chicago, Illinois 60603
Telephone No.: (312) 782-0600
Facsimile No.: (312) 701-7711
PROSPECTUS
ISLE OF CAPRI CASINOS, INC.
Offer to Exchange $200,000,000 of its
9% Senior Subordinated Notes due 2012
for any and all of its outstanding
9% Senior Subordinated Notes due 2012
. The exchange offer expires at 5:00 p.m., New York City time, on July 19, 2002, unless extended.
. The exchange offer is subject only to the conditions that the exchange offer will not violate any applicable law or any interpretation of applicable law by the staff of the SEC.
. All outstanding notes that are validly tendered and not validly withdrawn will be exchanged.
. Tenders of outstanding notes may be withdrawn at any time before 5:00 p.m., New York City time, on the expiration date of the exchange offer.
. The exchange of notes will not be a taxable exchange for U.S. federal income tax purposes.
. We will not receive any proceeds from the exchange offer.
. The form and terms of the new notes to be issued are substantially identical to your old notes, except that the new notes will not have transfer restrictions and you will not have registration rights.
. There is no established trading market for the new notes, and we do not intend to apply for listing of the new notes on any securities exchange.
. All broker-dealers must comply with the registration and prospectus delivery requirements of the Securities Act. See "Plan of Distribution."
For a discussion of factors that you should consider before you participate in the exchange offer, see "Risk Factors" beginning on page 10 of this prospectus.
Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful and complete. Any representation to the contrary is a criminal offense.
None of the Louisiana Gaming Control Board, the Louisiana Riverboat Gaming Enforcement Division of the Louisiana State Police, the Mississippi Gaming Commission, the Missouri Gaming Commission, the Iowa Racing and Gaming Commission, the Nevada Gaming Commission, the Nevada State Gaming Control Board, the Colorado Department of Revenue Division of Gaming, the Colorado Limited Gaming Control Commission, the Florida Department of Business and Professional Regulation or any other regulatory agency has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is unlawful.
The date of this prospectus is June 19, 2002.
TABLE OF CONTENTS
Page
----
Incorporation of Information We File with the SEC i
Forward-Looking Statements....................... ii
Where You Can Find More Information.............. ii
Prospectus Summary............................... 1
Risk Factors..................................... 10
Use of Proceeds.................................. 19
Isle of Capri Casinos, Inc....................... 20
The Exchange Offer............................... 21
Description of the New Notes..................... 31
Certain Federal Income Tax Considerations........ 67
Plan of Distribution............................. 71
Legal Matters.................................... 71
Experts.......................................... 71
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You should rely only on the information contained in or incorporated by reference into this prospectus. We have not authorized any other person to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it. The information in this prospectus is accurate as of the date on the front cover. The information we have filed and will file with the SEC that is incorporated by reference into this prospectus is accurate as of the filing date of those documents. Our business, financial condition, results of operations and prospects may have changed since those dates and may change again.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
This prospectus "incorporates by reference" important business and financial information about our company that is not included in or delivered with the prospectus. This means:
. incorporated documents are considered part of this prospectus;
. we can disclose important information to you by referring you to those documents; and
. information that we file with the SEC will automatically update and supersede this prospectus.
The following documents are incorporated into this prospectus by reference:
. our Annual Report on Form 10-K for the fiscal year ended April 29, 2001;
. our Quarterly Report on Form 10-Q for the fiscal quarter ended July 29, 2001;
. our Quarterly Report on Form 10-Q for the fiscal quarter ended October 28, 2001;
. our Quarterly Report on Form 10-Q for the fiscal quarter ended January 27, 2002; and
. all documents filed by us under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus and before the exchange offer is complete.
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 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. You may obtain copies of the information incorporated by reference into this prospectus without charge upon oral or written request to: Isle of Capri Casinos, Inc.; Attention: Chief Financial Officer; 1641 Popps Ferry Road, Biloxi, Mississippi, 39532; Telephone: (228) 396-7000.
To obtain timely delivery of any of this information, you must make your request at least five business days prior to the expiration of the exchange offer. The date by which you must make your request is July 12, 2002.
FORWARD-LOOKING STATEMENTS
This prospectus includes or incorporates by reference forward-looking statements as they are defined in the Securities Act and the Exchange Act. We based these forward-looking statements on our current expectations and our projections about future events. These forward-looking statements could be negatively affected by risks, uncertainties and assumptions about us, including, among other things:
. the effect of general economic, credit and capital market conditions on our business;
. our substantial indebtedness;
. competition in our existing and any future markets;
. changes in gaming and non-gaming laws and regulations;
. our failure to obtain or retain licenses or regulatory approvals;
. our failure to obtain adequate financing to meet our goals; and
. the other factors described in the "Risk Factors" section.
All future written and oral forward-looking statements made by us or on our behalf are also subject to these factors. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in or incorporated by reference into this prospectus might not occur.
WHERE YOU CAN FIND MORE INFORMATION
You may read and copy the reports, statements and other information we file with the SEC at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these documents by writing to the SEC but must pay photocopying fees. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings are also available to the public on the SEC's Internet site (http://www.sec.gov).
PROSPECTUS SUMMARY
This summary contains basic information about this exchange offer. This summary does not contain all of the information that may be important to you in deciding whether to participate in the exchange offer. We encourage you to read the entire prospectus, including the information described under the heading "Risk Factors," and the business and financial information incorporated by reference into this prospectus before you participate in the exchange offer. Unless the context otherwise requires, the terms "Isle of Capri," "we," "our," "us" and other similar terms mean Isle of Capri Casinos, Inc. and all of its subsidiaries (except where it is clear that the terms exclude the Isle-Black Hawk or any unrestricted subsidiaries).
Isle of Capri Casinos, Inc.
We are a leading developer, owner and operator of branded gaming and related lodging and entertainment facilities in growing markets in the United States. Our principal executive office is located at 1641 Popps Ferry Road, Biloxi, Mississippi 39532. Our telephone number is (228) 396-7000. We maintain an Internet web site at http://www.theislecorp.com. Information contained on our web site is not incorporated by reference into this prospectus and you should not consider information contained on our web site as part of this prospectus.
The Exchange Offer
We sold $200.0 million of our 9% senior subordinated notes due 2012 to the initial purchasers on March 27, 2002. The initial purchasers resold those notes in reliance on Rule 144A, Regulation S and other exemptions under the Securities Act.
We entered into a registration rights agreement with the initial purchasers on March 27, 2002 in which we agreed, among other things, to:
. file a registration statement with the SEC relating to the exchange offer on or before June 10, 2002;
. deliver to you this prospectus;
. cause the registration statement, which includes this prospectus, to become effective on or before July 25, 2002; and
. complete the exchange offer within 30 business days after the registration statement becomes effective.
You are entitled to exchange your old notes for new registered 9% Senior Subordinated Notes due 2012 with substantially identical terms as the old notes, except for transfer restrictions and registration rights. If we do not complete the exchange offer on or before 30 business days after the registration statement becomes effective, the interest rate on your notes will be increased. You should read the discussion under the heading "The Exchange Offer--Purpose and Effect; Registration Rights" and "Description of the Notes" for further information regarding the new notes that we are offering in exchange for your old notes.
We believe that you may resell the new notes issued in the exchange offer without compliance with the registration and prospectus delivery provisions of the Securities Act, subject to the conditions described under "The Exchange Offer." You should read that section for further information regarding the exchange offer.
Recent Developments
We entered into an amended and restated $500.0 million senior credit facility on April 26, 2002. This facility consists of a five-year $250.0 million revolving credit facility and a six-year $250.0 million term loan facility.
On March 14, 2002, we announced that our Board of Directors authorized us to embark on plans to sell or otherwise dispose of our Isle-Tunica and Lady Luck-Las Vegas properties. We recorded a pre-tax asset impairment charge of approximately $61.4 million for our fiscal fourth quarter ended April 28, 2002. This charge consists of $59.2 million related to the write-down of our Tunica and Las Vegas properties and $2.2 million related to the write-down of barges and hulls held by us for development. The impairment loss on the write-down of assets, net of tax, is approximately $39.9 million, or $1.41 per diluted share.
On June 17, 2002, we announced earnings per diluted common share before extraordinary and non-recurring items, net of income taxes, of $0.70 for our fiscal fourth quarter ended April 28, 2002, compared to $0.37 per diluted common share calculated on the same basis for the comparable period in the prior year. The earnings per diluted common share for the fiscal quarter ended April 28, 2002, excludes the potentially dilutive effect of approximately 2,000,000 shares primarily related to unexercised stock options. If these shares had been included in the computation, the earnings per diluted common share for such period would have been $0.65. Extraordinary items of $1.9 million, net of income taxes, or $0.07 per diluted common share, relate to the extinguishment of the portion of our senior credit facility replaced by the issuance of the old notes to which this exchange offer relates. The non-recurring items of approximately $39.9 million, net of tax, or $1.41 per diluted common share, relate primarily to impairment of our Isle-Tunica and Lady Luck-Las Vegas properties. The net loss per diluted common share for the fourth quarter was $0.78 per share.
Terms of the Exchange Offer
The exchange offer relates to the exchange of up to $200.0 million aggregate principal amount of old notes for an equal aggregate principal amount of registered new notes. The new notes will be obligations of Isle of Capri and will be governed by the same indenture that governs the old notes.
New Notes........................ We are offering registered 9% Senior Subordinated Notes due 2012
for your notes. The form and terms of the new notes and your old
notes are substantially identical, except:
. the new notes will be registered under the Securities Act;
. the new notes will not bear any legends restricting transfer;
and
. except under limited circumstances, your rights under the
registration rights agreement, including your right to receive
additional interest, will terminate.
The Exchange Offer............... We are offering to exchange an aggregate of $200.0 million principal
amount of our new notes for $200.0 million of our old notes. Old notes
may be tendered in integral multiples of $1,000 principal amount. As
of the date of this prospectus, $200.0 million aggregate principal
amount of the old notes is outstanding.
Expiration Date.................. You have until 5:00 p.m., New York City time, on July 19, 2002 to
validly tender your old notes if you want to exchange your old notes
for new notes. We may extend that date under certain conditions.
Conditions of the Exchange Offer;
Extensions; Amendments......... 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 minimal
principal amount of old notes being tendered. We may waive any
condition or amend the terms of the exchange offer. If we materially
amend the exchange offer, we will notify you.
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We may also delay or extend the exchange offer and, if the above
conditions are not met, we may terminate the exchange offer. We will
notify you of any delay, extension or termination of the exchange
offer.
Interest........................... You will receive interest on the new notes from the date interest was
last paid on your old notes. If no interest was paid on your old notes,
you will receive interest from March 27, 2002. If your old notes are
exchanged for new notes, you will not receive any accrued interest on
your old notes.
Procedures for Tendering Old Notes;
Special Procedures for Beneficial If you want to participate in the exchange offer, you must transmit a
Owners........................... properly completed and signed letter of transmittal, and all other
documents required by the letter of transmittal, to the exchange agent.
Please send these materials to the exchange agent at the address set
forth in the accompanying letter of transmittal prior to 5:00 p.m., New
York City time, on the expiration date. You must also send one of the
following:
. certificates of your old notes;
. a timely confirmation of book-entry transfer of your old notes
into the exchange agent's account at The Depository Trust
Company; or
. the items required by the guaranteed delivery procedures
described below.
If you are a beneficial owner of your old notes and your old notes are
registered in the name of a nominee, such as a broker, dealer,
commercial bank or trust company, and you wish to tender your old
notes in the exchange offer, you should instruct your nominee to
promptly tender the old notes on your behalf.
If you are a beneficial owner and you want to tender your old notes on
your own behalf, you must, before completing and executing the letter
of transmittal and delivering your old notes, make appropriate
arrangements to either register ownership of your old notes in your
name or obtain a properly completed bond power from the registered
holder of your old notes.
By executing the letter of transmittal, you will represent to us that:
. you are not our "affiliate" (as defined in Rule 405 under the
Securities Act);
. you will acquire the new notes in the ordinary course of your
business;
. you are not a broker-dealer that acquired your notes directly
from us in order to resell them pursuant to Rule 144A under
the Securities Act or any other available exemption under the
Securities Act;
. if you are a broker-dealer that acquired your notes as a result
of market-making or other trading activities, you will deliver
a prospectus in connection with any resale of new notes; and
. you are not participating, do not intend to participate and
have no arrangement or understanding with any person to
participate in the distribution of the new notes.
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If your old notes are not accepted for exchange for any reason, we will
return your old notes to you at our expense.
Guaranteed Delivery Procedures If you wish to tender your old notes and:
. your old notes are not immediately available;
. you are unable to deliver on time your old notes or any other
document that you are required to deliver to the exchange
agent; or
. you cannot complete the procedures for delivery by book-
entry transfer on time;
then you may tender your old notes according to the guaranteed
delivery procedures that are discussed in the letter of transmittal and in
"The Exchange Offer--Guaranteed Delivery Procedures."
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Acceptance of Old Notes and
Delivery of New Notes...... We will accept all old notes that you have properly tendered on time
when all conditions of the exchange offer are satisfied or waived. The
new notes will be delivered promptly after we accept the old notes.
Withdrawal Rights.......... You may withdraw tenders of your old notes at any time prior to 5:00
p.m., New York City time, on the expiration date
The Exchange Agent......... State Street Bank and Trust Company is the exchange agent. Its
address and telephone number are set forth in "The Exchange Offer--
The Exchange Agent; Assistance."
Fees and Expenses.......... We will pay all expenses relating to the exchange offer and
compliance with the registration rights agreement. We will also pay
certain transfer taxes, if applicable, relating to the exchange offer.
Resales of New 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 the new notes may be offered for resale, resold and
otherwise transferred by you without further compliance with the
registration and prospectus delivery requirements of the Securities Act
if:
. you are not our "affiliate" (as defined in Rule 405 under the
Securities Act);
. you acquire the new notes in the ordinary course of your
business;
. you are not a broker-dealer that purchased old notes from us
to resell them pursuant to Rule 144A under the Securities Act
or any other available exemption under the Securities Act;
and
. you are not participating, and have no arrangement or
understanding with any person to participate, in a distribution
(within the meaning of the Securities Act) of the new notes.
You should read the information under the heading "The Exchange
Offer--Resales of the New Notes" for a more complete description of
why we believe that you can freely transfer new notes received in the
exchange offer without registration or delivery of a prospectus.
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All broker-dealers that are issued new notes for their own accounts in
exchange for old notes that were acquired as a result of market-making
or other trading activities must acknowledge that they will deliver a
prospectus meeting the requirements of the Securities Act in
connection with any resale of the new notes. If you are a broker-dealer
and are required to deliver a prospectus, you may use this prospectus
for an offer to resell, a resale or other transfer of the new notes.
Certain Tax Considerations The issuance of the new notes will not constitute a taxable exchange
for U.S. federal income tax purposes. You will not recognize any gain
or loss upon receipt of the new notes. See "Certain Federal Income
Tax Considerations."
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Registration Rights Agreement In connection with the sale of the old notes, we entered into a
registration rights agreement with the initial purchasers of the old
notes that grants the holders of the old notes registration rights. As a
result of making and consummating this exchange offer, we will have
fulfilled most of our obligations under the registration rights
agreement. If you do not tender your old notes in the exchange offer,
you will not have any further registration rights under the registration
rights agreement or otherwise unless you were not eligible to
participate in the exchange offer or do not receive freely transferrable
new notes in the exchange offer. See "The Exchange Offer--Purpose
and Effect; Registration Rights."
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Consequences of Not Exchanging Old Notes
If you do not exchange your old notes for new notes in the exchange offer, your old notes will continue to be subject to the restrictions on transfer contained in the legend on the old notes. In general, the old notes may
not be offered or sold unless they are registered under the Securities Act. However, you may offer or sell your old notes under 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.
Terms of the New Notes
Issuer................ Isle of Capri Casinos, Inc.
Notes Offered......... $200,000,000 in principal amount of 9% senior subordinated notes due
2012.
Maturity.............. March 15, 2012.
Interest Payment Dates March 15 and September 15 of each year, commencing September 15,
2002.
Guarantees............ Our obligations under the new notes will be, and our obligations under
the indenture are, jointly, severally and unconditionally guaranteed on
an unsecured senior subordinated basis by all of our existing and future
significant restricted subsidiaries. Our restricted subsidiaries that are
not significant restricted subsidiaries and our unrestricted subsidiaries
that own and operate the Isle-Black Hawk will not be guarantors. See
"Description of the New Notes--Subsidiary Guarantees."
Ranking............... The new notes and the subsidiary guarantees are general, unsecured
obligations that will rank:
. junior to all of our and the guarantors' existing and future
senior indebtedness, including any indebtedness under our
senior credit facility;
. senior to any of our and the guarantors' future indebtedness
subordinated to the new notes and the guarantees;
. equally with all of our outstanding 83/4% senior subordinated
notes due 2009 and any future senior subordinated
indebtedness that we or the guarantors incur; and
. effectively junior to all existing and future liabilities,
including trade payables, of our non-guarantor subsidiaries.
Assuming we had completed this exchange offer on January 27, 2002,
the new notes and the guarantees would have ranked:
. junior to $366.9 million of our and our restricted subsidiaries'
senior debt;
. effectively junior to $82.9 million of debt and other liabilities
of our subsidiaries that are not guarantors; and
. equal to the $390.0 million 83/4% senior subordinated notes
due 2009.
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Optional Redemption On or after March 15, 2007, we may redeem some or all of the new
notes at any time at the redemption prices listed in the section
"Description of the New Notes--Redemption and Repurchase
Offers-- Optional Redemption."
On or before March 15, 2005, we may redeem up to 35% of the new
notes with the net proceeds of a public equity offering if at least
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$130.0 million in aggregate principal amount of the new notes and the
old notes remains outstanding. See "Description of the New Notes--
Redemption and Repurchase Offers--Equity Proceeds Redemption."
Regulatory Redemption.. The new notes will be subject to mandatory redemption in the event of
certain determinations by the gaming authorities in jurisdictions in
which we conduct gaming operations. See "Description of the New
Notes--Redemption and Repurchase Offers--Gaming Redemption."
Change of Control Offer If we experience specific changes of control, we must offer to
repurchase the new notes at 101% of their principal amount, plus
accrued and unpaid interest. See "Description of the New Notes--
Redemption and Repurchase Offers--Change of Control Repurchase
Offer."
Certain Covenants...... The new notes will be governed by the same indenture under which
the old notes were issued. The indenture, among other things, restricts
our ability and the ability of our restricted subsidiaries to:
. borrow money or guarantee debt;
. use assets as security in other transactions;
. make restricted payments;
. pay dividends on, redeem or repurchase our stock or redeem
our restricted subsidiaries' stock;
. enter into transactions with affiliates;
. issue and sell capital stock of our restricted subsidiaries; and
. sell assets in excess of specified amounts, change the nature
of our business or merge with or into other companies.
These covenants are subject to a number of important qualifications
and exceptions described in the section entitled "Description of the
New Notes--Certain Covenants."
Our subsidiaries that own and operate the Isle-Black Hawk are not
subject to the covenants in the indenture. See "Description of the New
Notes--Certain Covenants."
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Selected Historical Consolidated Financial Data
The following table presents our selected historical consolidated financial data for the five fiscal years ended April 27, 1997, April 26, 1998, April 25, 1999, April 30, 2000 and April 29, 2001. This data is from our audited consolidated financial statements and the notes to those statements. This information should be read in conjunction with Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the consolidated financial statements and the related notes included in Item 8 of our Annual Report on Form 10-K for the fiscal year ended April 29, 2001, which is incorporated by reference into this prospectus. See "Incorporation of Information We File with the SEC."
Fiscal Year Ended (1)(2)
------------------------------------------------
April 27, April 26, April 25, April 30, April 29,
1997 1998 1999 2000 2001
--------- --------- --------- --------- ---------
(dollars in millions, except per share data)
Income Statement Data:
Operating Revenues:
Casino............................................................ $322.7 $388.2 $424.4 $ 619.4 $ 957.1
Rooms............................................................. 10.8 17.8 19.1 24.8 50.7
Pari-mutuel commissions and fees.................................. 19.4 22.6 21.3 22.0 22.2
Food, beverage and other.......................................... 55.0 57.5 65.2 93.6 148.3
------ ------ ------ -------- --------
Gross revenues................................................... 407.9 486.1 530.0 759.8 1,178.3
Less promotional allowances...................................... 42.1 69.3 73.2 113.1 195.5
------ ------ ------ -------- --------
Net revenues................................................... 365.8 416.8 456.8 646.7 982.8
Operating costs and expenses:
Casino............................................................ 64.3 76.1 77.7 116.1 192.2
Gaming taxes...................................................... 2.3 78.6 86.9 122.6 192.6
Rooms............................................................. 61.8 3.3 3.9 5.8 12.1
Pari-mutuel....................................................... 16.0 16.3 15.7 16.4 16.2
Food, beverage and other.......................................... 14.3 13.4 14.2 19.1 32.0
Marine and facilities............................................. 20.7 26.2 28.2 39.9 63.6
Marketing and administrative...................................... 121.3 108.2 121.0 167.6 249.9
Accrued litigation settlement (reversal).......................... -- -- (4.2) -- --
Valuation charge.................................................. 7.0 -- 5.1 -- 1.0
Preopening expenses............................................... 2.5 -- 3.3 3.4 0.2
Other charges..................................................... -- -- -- -- 8.2
Depreciation and amortization..................................... 27.1 33.6 36.3 42.3 69.1
------ ------ ------ -------- --------
Total operating expenses....................................... 337.3 355.7 388.1 533.2 837.1
------ ------ ------ -------- --------
Operating income...................................................... 28.5 61.1 68.7 113.5 145.7
Interest expense.................................................. (40.3) (51.6) (48.6) (60.4) (98.9)
Interest income................................................... 1.6 4.7 2.9 4.7 5.1
Gain on disposal of assets........................................ -- -- -- 3.1 0.3
Minority interest................................................. -- 0.8 2.2 (3.7) (6.4)
Equity in income (loss) of unconsolidated joint ventures.......... (0.2) -- (1.3) 0.3 (0.2)
------ ------ ------ -------- --------
Income (loss) before income taxes and extraordinary item.............. (10.4) 15.0 23.9 57.5 45.6
Income tax provision (benefit).................................... (1.6) 7.5 11.8 25.4 20.5
------ ------ ------ -------- --------
Income (loss) before extraordinary item............................... (8.8) 7.5 12.1 32.1 25.1
Extraordinary loss on extinguishment of debt, net of applicable
tax benefit...................................................... (12.3) -- (36.3) (1.0) --
------ ------ ------ -------- --------
Net income (loss)..................................................... $(21.1) $ 7.5 $(24.2) $ 31.1 $ 25.1
------ ------ ------ -------- --------
Earnings (loss) per share - basic..................................... $(0.94) $ 0.32 $(1.03) $ 1.18 $ 0.84
====== ====== ====== ======== ========
Balance Sheet Data and Other Data:
Cash and cash equivalents............................................. $ 51.8 $ 52.5 $ 85.1 $ 168.0 $ 76.7
Total assets.......................................................... 528.4 615.7 676.5 1,305.5 1,382.9
Long-term debt, including current portion............................. 379.5 442.1 532.8 962.9 1,039.1
Stockholders' equity.................................................. 78.0 86.1 62.0 155.5 166.0
Ratio of earnings to fixed charges(3)................................. -- 1.2x 1.3x 1.8x 1.4x
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Footnotes on following page
(2) The data presented for fiscal years prior to fiscal 1999 is not comparable to other fiscal years presented because it does not include the operating results of Isle-Black Hawk which opened December 30, 1998. The data presented for fiscal years prior to fiscal 2000 is not comparable to other fiscal years presented because it does not include the operating results of Isle-Tunica which opened July 26, 1999 and Isle-Natchez, Isle-Lula, Isle-Bettendorf, and Isle-Marquette which we acquired on March 2, 2000. The data presented for fiscal years prior to fiscal 2001 is not comparable to other fiscal years presented because it does not include the operating results of Isle-Kansas City which we acquired on June 6, 2000, Lady Luck-Las Vegas which we acquired on September 12, 2000, and Rhythm City--Davenport which we acquired on October 10, 2000.
(3) For purposes of determining the ratio of earnings to fixed charges, earnings consist of earnings before provision for income taxes and extraordinary item plus fixed charges, excluding capitalized interest. Fixed charges consist of interest on indebtedness, including capitalized interest, plus that portion of rental expense that is considered to be interest. This ratio does not include earnings and fixed charges of unconsolidated joint ventures. Earnings were inadequate to cover fixed charges by $10.2 million for fiscal 1997.
RISK FACTORS
Your investment in the new notes will involve certain risks. You should carefully consider the following factors, in addition to the other information included in this prospectus, before you decide whether to purchase the new notes.
Risks Related to Our Business
Our Substantial Indebtedness Could Adversely Affect Our Business, Financial Condition and Results of Operations and Prevent Us From Fulfilling Our Obligations Under the New Notes
We have a significant amount of debt. As of January 27, 2002, and giving effect to the issuance of the old notes, the restricted group had $1,156.9 million of total debt outstanding, which excludes $82.9 million of debt of our non-guarantor subsidiaries that is non-recourse to us. In April 2002, we entered into an amended and restated senior credit facility which refinanced our prior facility. This amended and restated senior credit facility consists of a five-year $250.0 million revolving credit facility and a six-year $250.0 million term loan facility.
Our significant indebtedness could have important consequences to you, such as:
. limiting our ability to satisfy our obligations with respect to the new notes;
. limiting our ability to obtain additional financing to fund our working capital requirements, capital expenditures, debt service, general corporate or other obligations, including our obligations with respect to the new notes;
. limiting our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make principal and interest payments on our indebtedness;
. increasing our interest expense if there is a rise in interest rates, because a portion of our borrowings are under our senior credit facility and, as such, we will have interest rate periods with short-term durations (typically 30 to 180 days) that require ongoing refunding at the then current rates of interest;
. causing our failure to comply with the financial and restrictive covenants contained in the indenture and agreements that govern the old notes and will govern the new notes, and the indenture and agreements governing the 83/4% senior subordinated notes due 2009, our senior credit facility and our other indebtedness which could cause a default under those instruments and which, if not cured or waived, could have a material adverse effect on us;
. placing us at a competitive disadvantage to our competitors who are not as highly leveraged; and
. increasing our vulnerability to and limiting our ability to react to changing market conditions, changes in our industry and economic downturns.
Any of the factors listed above could have a material adverse effect on our business, financial condition and results of operations. In addition, as of April 28, 2002, we had the capacity to issue additional indebtedness, including the ability to incur additional indebtedness under the revolving portion of our senior credit facility, of approximately $175.0 million, subject to the limitations imposed by the covenants in the senior credit facility, the indenture that governs the old notes, and will govern the new notes, and the indenture that governs the 8 3/4% senior subordinated notes due 2009. The indenture that governs the old notes and will govern the new notes, and the indenture governing the 83/4% senior subordinated notes due 2009 and the senior credit facility each contain financial and other restrictive covenants, but will not fully prohibit us from incurring additional debt. If new debt is added to our current level of indebtedness, related risks that we and you now face could increase.
Servicing Our Debt Requires a Significant Amount of Cash, and Our Ability to Generate Sufficient Cash Will Depend on Many Factors, Some of Which Are Beyond Our Control
We must repay all amounts borrowed under the revolving credit portion of our senior credit facility by April 2007, and all amounts borrowed under the term loan portion of such facility by April 2008, as well as the $390.0 million in aggregate principal amount of 83/4% senior subordinated notes due 2009 by April 2009. We are required to make quarterly principal payments on the $250.0 million term loan portion of our senior credit facility. The amount of these payments is currently $625,000 per quarter through the quarter ending March 2007, and $59.4 million per quarter for the quarters ending in June, September and December of 2007. The amount of these quarterly payments will increase in the event that we exercise our option to increase the amount of our borrowings under the term loan. In addition, we are required to make substantial quarterly interest payments on our senior credit facility and substantial semi-annual interest payments on the new notes and the 83/4% senior subordinated notes due 2009. Our ability to make payments on and refinance our indebtedness, including the new notes, and to fund our capital expenditures will depend on our ability to generate cash flow and secure financing in the future.
Our ability to generate cash flow will depend on:
. our future operating performance;
. the demand for services we provide;
. general economic conditions;
. competition; and
. legislative and regulatory factors affecting our operations and business.
Some of these factors are beyond our control. In addition, the ability to borrow funds under our senior credit facility in the future will depend on our meeting the financial covenants in the senior credit facility. We cannot assure you that our business will generate cash flow from operations or that future borrowings will be available to us under our senior credit facility or otherwise in an amount sufficient to enable us to pay our indebtedness, including the new notes, or to fund other liquidity needs. As a result, we may need to refinance all or a portion of our indebtedness, including the new notes, on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness on favorable terms or at all. Any inability to generate sufficient cash flow or refinance our indebtedness on favorable terms could have a material adverse effect on our financial condition.
We Face Significant Competition from Other Gaming Operations
We face intense competition in the markets in which we operate. We have numerous competitors, including land-based casinos, dockside casinos, riverboat casinos, casinos located on Native American reservations and at racing and pari-mutuel operations. Several of our competitors have substantially better name recognition, marketing and financial resources than we do. Legalized gaming is currently permitted in various forms throughout the United States. Certain states have recently legalized, and other states are currently considering legalizing, casino gaming in designated areas. In addition, many Native American tribes conduct casino gaming on reservations throughout the United States which have the advantages of being land-based and exempt from certain state and federal taxes. Some Native American tribes are either in the process of establishing, or are considering the establishment of, gaming at additional locations. There is no limit on the number of gaming licenses that may be granted in several of the markets in which we operate. As a result, new licenses could be awarded to gaming facilities in such markets, which could have an adverse effect on our operating results. In particular, we face significant new competition in the Lake Charles, Louisiana market. In February 2002, Boyd Gaming opened a casino with 15,000 square feet of gaming space with approximately 1,500 slot machines at Delta Downs, a horse racing facility. Delta Downs is 25 miles closer to Houston than the Isle-Lake Charles, making it the closest gaming facility to Houston. In addition, the last available Louisiana gaming license was recently awarded to Pinnacle Entertainment for a new development in the Lake Charles market. Expansion of existing gaming facilities and the development of new gaming facilities and casinos on Native American-owned lands will increase competition for our existing and future operations.
We also compete with other forms of legalized gaming and entertainment such as online computer gambling, bingo, pull tab games, card parlors, sports books, pari-mutuel or telephonic betting on horse racing and dog racing, state-sponsored lotteries, jai-alai, video lottery terminals, video poker terminals and, in the future, may compete with gaming at other venues. For example, there currently is legislation pending in Florida that, if passed, would legalize video poker, electronic games of chance or video lottery terminal gaming at pari-mutuel gaming facilities, including our facility in Pompano Beach, which could have an adverse effect on the operations of the Isle-Biloxi.
Our existing gaming facilities compete directly with other gaming properties in Louisiana, Mississippi, Missouri, Iowa, Colorado and Nevada. We also compete with gaming operations in other gaming jurisdictions such as Atlantic City, New Jersey. Our existing casinos attract a significant number of their customers from Houston and Dallas/Fort Worth, Texas; Mobile, Alabama; Jackson, Mississippi; Memphis, Tennessee; Little Rock, Arkansas and Denver, Colorado. Our continued success depends upon drawing customers from each of these geographic markets. Legalization of gaming in jurisdictions closer to these geographic markets than the jurisdictions in which our facilities are located would have a material adverse effect on our operating results. We expect competition to increase as new gaming operators enter our markets, existing competitors expand their operations, gaming activities expand in existing jurisdictions and gaming is legalized in new jurisdictions. We cannot predict with any certainty the effects of existing and future competition on our operating results.
Our Senior Credit Facility, the Indenture Governing the 83/4% Senior Subordinated Notes due 2009 and the Indenture that Governs the Old Notes, and will Govern the New Notes Restrict Our Operations
We have made and will need to make significant capital expenditures at our existing facilities to remain competitive with current and future competitors in our markets. Our senior credit facility, the indenture governing the 83/4% senior subordinated notes due 2009 and the indenture that governs the old notes, and will govern the new notes, each contain operating and financial restrictions that may limit our ability to obtain the financing to make these capital expenditures.
Our senior credit facility, among other things, limits our ability to:
. borrow money;
. make capital expenditures;
. use assets as security in other transactions;
. make restricted payments or restricted investments;
. incur contingent obligations; and
. sell assets and enter into leases and transactions with affiliates.
In addition, the senior credit facility requires us to meet financial ratios and tests, including:
. a maximum consolidated total leverage test;
. a maximum consolidated senior leverage test;
. a minimum consolidated fixed charge coverage test; and
. a minimum consolidated net worth test.
The indenture governing the 83/4% senior subordinated notes due 2009 and the indenture that governs the old notes, and will govern the new notes, each impose operating and financial restrictions on us that limit, among other things, our ability to:
. borrow money or guarantee debt;
. use assets as security in other transactions;
. make restricted payments;
. pay dividends on or redeem or repurchase our stock or our restricted subsidiaries' stock;
. enter into transactions with affiliates;
. issue and sell stock of restricted subsidiaries; and
. sell assets in excess of specified amounts, change the nature of our business or merge with or into other companies.
A breach of any restriction or covenant contained in our senior credit facility, the indenture governing the 83/4% senior subordinated notes due 2009 or the indenture that governs the old notes, and will govern the new notes, could cause a default under the new notes and other debt and result in a significant portion of our debt becoming immediately due and payable. We are not certain whether we would have, or would be able to obtain, sufficient funds to make these accelerated payments, including payments on the new notes. In addition, following the occurrence of certain events of default under our senior credit facility, we may be prohibited from making payments on the new notes.
We Are Subject to Extensive Regulation From Gaming Authorities
Licensing Requirements. As owners and operators of gaming facilities, we are subject to extensive state and local regulation. State and local authorities require us and our subsidiaries to demonstrate suitability to obtain and retain various licenses and require that we have registrations, permits and approvals to conduct gaming operations. The regulatory authorities in the jurisdictions in which we operate may, for any reasonable cause, limit, condition, suspend or revoke a license to conduct gaming operations or prevent us from owning the securities of any of our gaming subsidiaries. In addition, regulatory authorities in certain jurisdictions must approve, in advance, any restrictions on, transfers of, agreements not to encumber or pledges of equity securities which are issued by a corporation that is registered as an intermediary company with such state, or holds a gaming license. If these restrictions are not approved in advance, they will be invalid. Like all gaming operators in the jurisdictions in which we operate, we must periodically apply to renew our gaming licenses. We cannot assure you that we will be able to obtain such renewals. Regulatory authorities may also levy substantial fines against us or seize our assets, or the assets of our subsidiaries or of the people involved in violating gaming laws or regulations. Any of these events could have a material adverse effect on our business.
We have demonstrated suitability to obtain and have obtained all governmental licenses, registrations, permits and approvals necessary for us to operate our existing gaming facilities. We cannot assure you that we will be able to retain them or continue to demonstrate suitability to obtain any new licenses, registrations, permits or approvals. If we expand our gaming operations in the jurisdictions in which we currently operate or to new jurisdictions, we will have to meet suitability requirements and obtain additional licenses, registrations, permits and approvals from gaming authorities in these jurisdictions. The approval process can be time-consuming and costly and there is no assurance that we will be successful.
Potential Changes in Regulatory Environment. From time to time, legislators and special interest groups have proposed legislation that would expand, restrict or prevent gaming operations in the jurisdictions in which we operate. In addition, from time to time, certain anti-gaming groups propose referenda that, if adopted, would limit our ability to continue to operate in those jurisdictions in which such referenda are adopted. Any expansion of gaming or restriction on or prohibition of our gaming operations could have a material adverse effect on our operating results.
Taxation. State and local authorities raise a significant amount of revenue through taxes and fees on gaming activities. We believe that the prospect of raising significant revenue is one of the primary reasons that jurisdictions permit legalized gaming. As a result, gaming companies are typically subject to significant taxes and fees in addition to normal federal, state, local and provincial income taxes, and such taxes and fees are subject to
increase at any time. We pay substantial taxes and fees with respect to our operations. From time to time, federal, state, local and provincial legislators and officials have proposed changes in tax laws, or in the administration of such laws, affecting the gaming industry. In addition, worsening economic conditions could intensify the efforts of state and local governments to raise revenues through increases in gaming taxes. For example, in June 2002, the state legislature in Illinois, a state in which we do not own or operate any casinos, voted to increase gaming taxes to fund a budget shortfall. Some of the states in which we own or operate casinos also have budget shortfalls and may increase gaming taxes to raise more revenue. It is not possible to determine with certainty the likelihood of changes in tax laws or in the administration of such laws. Such changes, if adopted, could have a material adverse effect on our business, financial condition and results of operations.
We Are Subject to Non-Gaming Regulation
Several of our riverboats must comply with U.S. Coast Guard requirements as to boat design, on-board facilities, equipment, personnel and safety and must hold U.S. Coast Guard Certificates of Documentation and Inspection. The U.S. Coast Guard requirements also set limits on the operation of the riverboats and mandate licensing of certain personnel involved with the operation of the riverboats. Loss of a riverboat's Certificate of Documentation and Inspection could preclude its use as a riverboat casino. Each of our riverboats is inspected annually and, every five years, is subject to drydocking for inspection of its hull, which could result in a temporary loss of service.
We are required to have third parties periodically inspect and certify all of our casino barges for stability and single compartment flooding integrity. Our casino barges must also meet local fire safety standards. We would incur additional costs if any of our gaming facilities were not in compliance with one or more of these regulations.
We are also subject to certain federal, state and local environmental laws, regulations and ordinances that apply to non-gaming businesses generally, such as the Clean Air Act, the Clean Water Act, the Resource Conservation Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act and the Oil Pollution Act of 1990. Under various federal, state and local laws and regulations, an owner or operator of real property may be held liable for the costs of removal or remediation of certain hazardous or toxic substances or wastes located on its property, regardless of whether or not the present owner or operator knows of, or is responsible for, the presence of such substances or wastes. We have not identified any issues associated with our properties that could reasonably be expected to have an adverse effect on us or the results of our operations. However, certain of our properties are located in industrial areas or were used for industrial purposes for many years. As a consequence, it is possible that historical or neighboring activities have affected one or more of our properties and that, as a result, environmental issues could arise in the future, the precise nature of which we cannot now predict. The coverage and attendant compliance costs associated with these laws, regulations and ordinances may result in future additional costs.
Regulations adopted by the Financial Crimes Enforcement Network of the U.S. Treasury Department require us to report currency transactions in excess of $10,000 occurring within a gaming day, including identification of the patron by name and social security number. Substantial penalties can be imposed against us if we fail to comply with these regulations.
We are also subject to a variety of other local rules and regulations, including zoning, environmental, construction and land-use laws and regulations governing the serving of alcoholic beverages.
We Depend on Our Management and Employees
Our continued success will depend, among other things, on the efforts and skills of a few key executive officers and the experience of our property managers as well as our ability to attract and retain additional highly qualified personnel with gaming industry experience and qualifications to obtain the requisite licenses. We do not maintain ''key man'' life insurance for any of our employees. There is no assurance that we would be able to attract
and hire suitable replacements for any of our key employees. We need qualified executives, managers and skilled employees with gaming industry experience to continue to successfully operate our business. We believe a shortage of skilled labor in the gaming industry may make it increasingly difficult and expensive to attract and retain qualified employees. We expect that increased competition in the gaming industry will intensify this problem.
Inclement Weather and Other Conditions Could Seriously Disrupt Our Business, Financial Condition and Results of Operations
Dockside and riverboat facilities are subject to risks in addition to those associated with land-based casinos, including loss of service due to casualty, mechanical failure, extended or extraordinary maintenance, flood, hurricane or other severe weather. Our riverboats and barges face additional risks from the movement of vessels on waterways.
Reduced patronage and the loss of a dockside or riverboat casino from service for any period of time could adversely affect our results of operations. For example, as a result of flooding of the Mississippi River, we closed the Isle-Marquette from April 18 to May 2, 2001, and the Rhythm City-Davenport from April 18 to May 20, 2001. While our business interruption insurance provided sufficient coverage for those losses, we cannot assure you that the proceeds from any future claim will be sufficient to compensate us if one or more of our casinos experiences a closure.
Access to a number of our facilities may also be affected by road conditions, such as construction and traffic. In addition, severe weather such as high winds and blizzards occasionally limits access to the Isle-Black Hawk.
We Experience Quarterly Fluctuations in Results of Operations
Our quarterly operating results fluctuate because of seasonality and other factors. We typically generate the major portion of our income in our first and fourth fiscal quarters, which end in July and April, respectively.
Energy and Fuel Price Increases May Adversely Affect Our Costs 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 in the United States will negatively affect our results of operations. In addition, energy and fuel 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 to our properties, which would negatively impact our revenues. The extent of the impact is subject to the magnitude and duration of the energy and fuel price increases, but this impact could be material.
A Downturn in General Economic Conditions May Adversely Affect Our Results of Operations
Our business operations are subject to changes in international, national and local economic conditions, including changes in the economy related to future security alerts in connection with threatened or actual terrorist attacks such as those that occurred on September 11, 2001 which may affect our customers' willingness to travel. A recession or downturn in the general economy, or in a region constituting a significant source of customers for our properties, could result in fewer customers visiting our properties, which would adversely affect our results of operations.
Risks Related to the Exchange Offer and the New Notes
You May Not Be Able to Sell Your Old Notes if You Do Not Exchange Them for New
Notes in the Exchange Offer
If you do not exchange your old notes for new notes in the exchange offer, your old notes will continue to be subject to the restrictions on transfer as stated in the legend on the old notes. In general, you may not offer or
sell the old notes unless they are:
. registered under the Securities Act;
. offered or sold pursuant to an exemption from the Securities Act and applicable state securities laws; or
. offered or sold 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. In addition, holders who do not tender their old notes, except for certain instances involving the initial purchasers or holders of old notes who are not eligible to participate in the exchange offer or who do not receive freely transferable new notes pursuant to the exchange offer, will not have any further registration rights under the registration rights agreement or otherwise and will not have rights to receive additional interest.
The Market for Old Notes May Be Significantly More Limited after the Exchange Offer
If old notes are tendered and accepted for exchange pursuant to the exchange offer, the trading market for old notes that remain outstanding may be significantly more limited. As a result, the liquidity of the old notes not tendered for exchange may be adversely affected. The extent of the market for old notes and the availability of price quotations would depend upon a number of factors, including the number of holders of old notes remaining outstanding and the interest of securities firms in maintaining a market in the old notes. An issue of securities with a similar outstanding market value available for trading, which is called the "float," may command a lower price than would be comparable to an issue of securities with a greater float. As a result, the market price for old notes that are not exchanged in the exchange offer may be affected adversely as old notes exchanged pursuant to the exchange offer reduce the float. The reduced float also may make the trading price of the old notes that are not exchanged more volatile.
An Active Trading Market May Not Develop for the New Notes
The new 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 new notes, your ability to sell the new notes or the price at which you would be able to sell the new notes. If such markets were to exist, the new 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.
Restrictions on the Exchange Offer
Issuance of new 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 new 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--Resales of the New Notes" and "Plan of Distribution."
Your Right to Receive Payment on the New Notes or under the Guarantees Is Junior to Senior Debt and Effectively Junior to Debt and Other Liabilities of Our Non-Guarantor Subsidiaries and Is Equal With Our 83/4% Senior Subordinated Notes due 2009
The new notes will be junior to all of our existing and future senior debt, including any amounts we borrow under our senior credit facility or under our existing lines of credit. We must use our operating cash to pay
amounts due under debt that ranks senior to the new notes before we can use operating cash to make interest or principal payments on the new notes.
The subsidiary guarantees will be junior to all existing and future senior debt of the subsidiary guarantors. All subsidiaries that guarantee the notes also guarantee our senior credit facility. The subsidiary guarantors must use their operating cash to pay amounts due under debt that ranks senior to the guarantees before they can use their operating cash to make payments with respect to the guarantees of the new notes.
In addition, all payments on the new notes and the subsidiary guarantees will be blocked in the event of a payment default on senior debt and may be blocked for up to 179 of 365 days in the event of certain non-payment defaults on senior debt.
As of January 27, 2002, we and our significant restricted subsidiaries had approximately $366.9 million of senior debt outstanding. Since some of our subsidiaries will not guarantee the new notes, the new notes will be effectively junior to all debt and other liabilities of these non-guarantor subsidiaries. In the event of a bankruptcy, liquidation, reorganization or similar proceeding relating to any of our non-guarantor subsidiaries, holders of their debt and their trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to our creditors. Assuming we had completed this exchange offer on January 27, 2002, the new notes would have been effectively junior to approximately $82.9 million of debt and other liabilities of our non-guarantor subsidiaries and would be equal with the $390.0 million in aggregate principal amount of our 83/4% senior subordinated notes due 2009.
If there is a distribution to our creditors because of a bankruptcy, liquidation, reorganization or similar proceeding relating to us or our property, holders of debt that is senior to the new notes will be paid in full before any payment may be made with respect to the new notes. Similarly, in the event of a bankruptcy, liquidation, reorganization or similar proceeding relating to any subsidiary guarantor, its assets would be available to pay obligations under its guarantee only after all senior debt of that guarantor is paid in full.
The New Notes Are Unsecured--Your Right to Enforce Remedies is Limited by the Rights of Holders of Secured Debt
The new notes will not be secured by any of our assets or any assets of our subsidiaries. Our obligations under our senior credit facility are secured by substantially all of our assets and the assets of our subsidiaries other than our subsidiaries that own and operate the Isle-Black Hawk and Pompano Park. If we become insolvent or are liquidated, or if payment under our senior credit facility is accelerated, the lenders under our senior credit facility will be entitled to exercise the remedies available to a secured lender under applicable law. These lenders will have a claim on our assets and the assets of our subsidiaries before the holders of the new notes.
We are a Holding Company and Depend on the Business of Our Subsidiaries to Satisfy Our Obligations Under the New Notes
We are a holding company and our assets consist primarily of investments in our subsidiaries. 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 depend upon our subsidiaries' cash flow and their payment of funds to us. Our subsidiaries are not obligated to make funds available to us for payment on the new 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. In addition, the ability of our subsidiaries to make payments to us depends on applicable law and debt instruments to which they or we are a party, which may include requirements to maintain minimum levels of working capital and other assets. Distributions to us from our subsidiaries may not be adequate to permit us to pay interest and principal on the new notes when due.
The new notes will effectively rank junior to all existing and future liabilities of our subsidiaries that are not guarantors of the new notes, including trade payables. In the event of a bankruptcy, liquidation or dissolution of a non-guarantor subsidiary and following payment of its liabilities, the subsidiary may not have sufficient assets remaining to make any payments to us so that we can meet our obligations as the holding company, including our obligations to you under the new notes. As of January 27, 2002, our non-guarantor subsidiaries had approximately $82.9 million of debt outstanding. The indenture governing the new notes will not limit the ability of our non-guarantor subsidiaries to incur substantial additional debt.
The Guarantees May Be Unenforceable Due to Fraudulent Conveyance Statutes
The obligations of the subsidiary guarantors may be subject to challenge under state or federal fraudulent transfer laws. In general, under fraudulent conveyance laws, a court can subordinate or void an obligation such as a guarantee if it determines that the obligation was incurred with actual intent to hinder, delay or defraud creditors or if the guarantor did not receive fair consideration or reasonably equivalent value for the guarantee and:
. was insolvent or rendered insolvent as a result of the guarantee;
. 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 as they mature.
In addition, a court could void any payment by us or the guarantor pursuant to the new notes or a guarantee and require that payment to be returned to us or the guarantor, or to a fund for the benefit of our creditors or the creditors of the guarantor.
Generally an entity is insolvent if:
. the sum of its debts, including contingent or unliquidated debts, is greater than all of its property at a fair valuation; or
. the present fair saleable value of its assets is less than the amount required to pay its probable liability on existing debts as they become due.
We May Not Be Able to Repurchase Notes upon a Change of Control Offer
Upon the occurrence of specific "change of control" events, we must offer to repurchase all outstanding notes including the 8 3/4% senior subordinated notes due 2009, the old notes and the new notes. Our senior credit facility prohibits us from doing so until we have repaid the outstanding principal balance, accrued interest and other amounts owed under the senior credit facility. Any future agreements relating to indebtedness to which we become a party may contain similar provisions. Restrictions in our senior credit facility, the indenture governing the 8 3/4% senior subordinated notes due 2009 or the indenture that governs the old notes and will govern the new notes, may also prevent us from borrowing funds for the repurchase. In that event, we could refinance our outstanding debt or obtain consents under existing agreements. We may not be able to do so or may not be able to negotiate favorable refinancing terms. If we cannot refinance our debt or do not obtain the necessary consents, we will not be able to repurchase the notes. Our failure to repurchase notes tendered upon a change of control would cause us to default on the indenture governing the 8 3/4% senior subordinated notes due 2009, the indenture that governs the old notes, and will govern the new notes, and our senior credit facility and other senior debt. In the event of a default, the indentures would likely restrict payment to noteholders. See "Description of the New Notes--Redemption and Repurchase Offers."
We May Require You to Dispose of Your New Notes or Redeem Your New Notes if Any Gaming Authority Finds You Unsuitable to Hold Them
We may require you to dispose of your new notes or redeem your new notes if any gaming authority finds you unsuitable to hold them or in order to otherwise comply with gaming laws to which we are subject. Gaming
authorities can generally require that any beneficial owner of our securities, including holders of the new notes, file an application for a finding of suitability. If a gaming authority requires a record or beneficial owner of a new note to file a suitability application, the owner must apply for a finding of suitability within 30 days or at an earlier time prescribed by the gaming authority. The gaming authority has the power to investigate an owner's suitability and the owner must pay all costs of the investigation. If the owner is found unsuitable, then the owner may be required, either by law or the terms of the new notes, to dispose of the new notes. See "Description of the New Notes--Redemption and Repurchase Offers--Gaming Redemption."
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In consideration for issuing the new notes, we will receive outstanding old notes in like original principal amount at maturity. All old notes received in the exchange offer will be canceled.
ISLE OF CAPRI CASINOS, INC.
We are a leading developer, owner and operator of branded gaming facilities and related lodging and entertainment facilities in growing markets in the United States. We wholly own and operate thirteen gaming facilities located in Lake Charles and Bossier City, Louisiana; Lula, Biloxi, Vicksburg, Natchez and Tunica, Mississippi; Kansas City and Boonville, Missouri; Bettendorf, Davenport and Marquette, Iowa; and Las Vegas, Nevada. We also own a 57% interest in and receive a management fee for operating a gaming facility in Black Hawk, Colorado. All but two of these gaming facilities operate under the name "Isle of Capri" and feature our distinctive tropical island theme. In addition, we wholly own and operate a pari-mutuel harness racing facility in Pompano Beach, Florida.
THE EXCHANGE OFFER
Purpose and Effect; Registration Rights
We sold the old notes to the initial purchasers on March 27, 2002. The initial purchasers then resold the old notes under an offering memorandum dated March 21, 2002 in reliance on Rule 144A, Regulation S and other available exemptions under the Securities Act. On March 27, 2002, we entered into a registration rights agreement with the initial purchasers. Under the registration rights agreement, we agreed to:
. file a registration statement with the SEC relating to the exchange offer under the Securities Act no later than June 10, 2002;
. use our best efforts to cause the exchange offer registration statement to be declared effective under the Securities Act on or before July 25, 2002;
. commence the exchange offer promptly after the exchange offer registration statement is declared effective by the SEC;
. keep the exchange offer open for acceptance for at least 20 business days after notice of the exchange offer is mailed to holders of the old notes;
. cause the exchange offer to be consummated not later than 30 business days following the date of the effectiveness of the exchange offer registration statement;
. use our best efforts to promptly issue new notes in exchange for all old notes that have been properly tendered for exchange prior to the expiration of the exchange offer; and
. use our best efforts to keep the exchange offer registration statement effective until the closing of the exchange offer and thereafter until we have issued new notes in exchange for all old notes that have been properly tendered for exchange prior to the expiration of the exchange offer.
In the registration rights agreement, we agreed to file a shelf registration statement if:
. we are not permitted to effect the exchange offer under applicable law or applicable interpretations of law by the SEC staff;
. for any reason, the exchange offer is not consummated by August 23, 2002;
. any holder of old notes notifies us that it (1) is not entitled to participate in the exchange offer, (2) may not resell the new notes required by it in the exchange offer to the public without delivering a prospectus and this prospectus is not appropriate or available for purposes of these resales or (3) is a broker-dealer and owns old notes acquired directly from us or one of our affiliates; or
. the holders of a majority in aggregate principal amount of the old notes are not eligible to participate in the exchange offer and to receive new notes that they may resell to the public without volume restriction under the Securities Act and without similar restriction under applicable blue sky or state securities laws.
If we are required to file a shelf registration statement, we must use our best efforts to file the shelf registration statement relating to the old notes on or before the 60th day after the obligation to file the shelf registration statement arises. However, if our obligation arises because this exchange offer has not been consummated by August 23, 2002, we must use our best efforts to file the shelf registration statement by September 24, 2002. We will use our best efforts to cause the shelf registration statement to be declared effective no later than 120 days after the date that the obligation to file the shelf registration statement arises.
If the shelf registration statement is filed, we will use our best efforts to keep the shelf registration statement continuously effective, supplemented and amended until the second anniversary of the effective date of the shelf registration statement or a shorter period that will terminate when all the notes covered by the shelf registration statement have been sold pursuant to the shelf registration statement or otherwise cease to be outstanding.
A holder who sells old notes pursuant to the shelf registration statement generally will be required to be named as a selling securityholder in the prospectus and to deliver a copy of the prospectus to purchasers. If we are required to file a shelf registration statement, we will provide to each holder of the old notes copies of the prospectus that is a part of the shelf registration statement and notify each such holder when the shelf registration statement becomes effective. Such holder will be subject to some of the civil liability provisions under the Securities Act in connection with these sales and will be bound by the provisions of the registration rights agreement that are applicable to such holder (including certain indemnification and contribution obligations).
The registration rights agreement requires us to pay the holders of the notes additional interest if a registration default exists. A registration default will exist if:
. we fail to file any of the registration statements required by the registration rights agreement on or prior to the date specified for such filing;
. any of such registration statements is not declared effective by the SEC on or prior to the date specified for such effectiveness;
. the exchange offer is required to be consummated under the registration rights agreement and is not consummated by August 23, 2002;
. the shelf registration statement is declared effective but thereafter, during the period for which we are required to maintain the effectiveness of the shelf registration statement, it ceases to be effective or usable in connection with the resale of the new notes covered by the shelf registration statement; or
. the exchange offer registration statement is declared effective but thereafter, during the period for which we have agreed to make this prospectus available to broker-dealers for use in connection with the resale of new notes, the exchange offer registration statement ceases to be effective (or we restrict the use of the prospectus included in the exchange offer registration statement).
If a registration default exists, the interest rate of the old notes will be increased by 0.25% per year for the first 90-day period following the registration default. The interest rate will increase by an additional 0.25% per year at the beginning of each subsequent 90-day period (or portion thereof) until all registration defaults have been remedied. The interest rate may not be increased as a result of registration defaults by more than 1.00% per year. Following the cure of all registration defaults, the accrual of additional interest on the old notes will cease and the interest rate will revert to the original rate.
The exchange offer is intended to satisfy our exchange offer obligations under the registration rights agreement. The above summary of the registration rights agreements is not complete and is subject to, and qualified by reference to, all of the provisions of the registration rights agreement. A copy of the registration rights agreement is filed as an exhibit to the registration statement that includes this prospectus.
If you participate in the exchange offer, you will, with limited exceptions, receive notes that are freely tradeable and not subject to restrictions on transfer. You should read this prospectus under the heading "--Resales of the New Notes" for more information relating to your ability to transfer new notes.
The exchange offer is not being made to, nor will we accept tenders for exchange from, holders of old notes in any jurisdiction in which the exchange offer or the acceptance of the exchange offer would not be in compliance with the securities laws or blue sky laws of such jurisdiction.
Expiration Date; Extensions
The expiration date at the exchange offer is July 19, 2002 at 5:00 p.m., New York City time. We may extend the exchange offer in our sole discretion. If we extend the exchange offer, the expiration date will be the latest date and time to which the exchange offer is extended. We will notify the exchange agent of any extension by oral or written notice and will make a public announcement of the extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.
We expressly reserve the right, in our sole and absolute discretion:
. to delay accepting any old notes;
. to extend the exchange offer;
. if any of the conditions under "--Conditions of the Exchange Offer" have not been satisfied, to terminate the exchange offer; and
. to waive any condition or otherwise amend the terms of the exchange offer in any manner.
If the exchange offer is amended in a manner we deem to constitute a material change, we will promptly disclose the amendment by means of a prospectus supplement that will be distributed to the registered holders of the old notes. Any delay in acceptance, extension, termination or amendment will be followed promptly by an oral or written notice of the event to the exchange agent. We will also make a public announcement of the event. Without limiting the manner in which we may choose to make any pubic announcement and subject to applicable law, we have no obligation to publish, advertise or otherwise communicate any such pubic announcement other than by issuing a release to a national news service.
Terms of the Exchange Offer
We are offering, upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, to exchange $1,000 in principal amount of new notes for each $1,000 in principal amount of outstanding old notes. We will accept for exchange any and all old notes that are validly tendered on or before 5:00 p.m., New York City time, on the expiration date. Tenders of the old notes may be withdrawn at any time before 5:00 p.m., New York City time, on the expiration date. The exchange offer is not conditioned upon any minimum principal amount of old notes being tendered for exchange. However, the exchange offer is subject to the terms of the registration rights agreement and the satisfaction of the conditions described under "--Conditions of the Exchange Offer." Old notes may be tendered only in multiples of $1,000. Holders may tender less than the aggregate principal amount represented by their old notes if they appropriately indicate this fact on the letter of transmittal accompanying the tendered old notes or indicate this fact pursuant to the procedures for book-entry transfer described below.
As of the date of this prospectus, $200.0 million in aggregate principal amount of the old notes were outstanding. Solely for reasons of administration, we have fixed the close of business on June 17, 2002 as the record date for purposes of determining the persons to whom this prospectus and the letter of transmittal will be mailed initially. Only a holder of the old notes (or such holder's legal representative or attorney-in-fact) whose ownership is reflected in the records of State Street Bank and Trust Company, as registrar, or whose notes are held of record by the depositary, may participate in the exchange offer. There will be no fixed record date for determining the eligible holders of the old notes who are entitled to participate in the exchange offer. We believe that, as of the date of this prospectus, no holder is our "affiliate" (as defined in Rule 405 under the Securities Act).
We will be deemed to have accepted validly tendered old notes when, as and if we give oral or written notice of our acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of old notes and for purposes of receiving the new notes from us. If any tendered old notes are not accepted for exchange because of an invalid tender or otherwise, certificates for the unaccepted old notes will be returned, without expense, to the tendering holder as promptly as practicable after the expiration date.
Holders of old notes do not have appraisal or dissenters' rights under applicable law or the indenture as a result of the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations under the Exchange Act, including Rule 14e-1.
Holders who tender their old notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes pursuant to the exchange offer. We will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the exchange offer. See "--Fees and Expenses."
Neither our company nor our board of directors makes any recommendation to holders of old notes as to whether to tender any of their old notes pursuant to the exchange offer. In addition, no one has been authorized to make any such recommendation. Holders of old notes must make their own decision whether to participate in the exchange offer and, if the holder chooses to participate in the exchange offer, the aggregate principal amount of old notes to tender, after reading carefully this prospectus and the letter of transmittal and consulting with their advisors, if any, based on their own financial position and requirements.
Conditions of the Exchange Offer
You must tender your old notes in accordance with the requirements of this prospectus and the letter of transmittal in order to participate in the exchange offer.
Notwithstanding any other provision of the exchange offer, or any extension of the exchange offer, we will not be required to accept for exchange any old notes, and we may terminate or amend the exchange offer if we are not permitted to effect the exchange offer under applicable law or any interpretation of applicable law by the staff of the SEC. If we determine in our sole discretion that any of these events or conditions has occurred, we may, subject to applicable law:
. terminate the exchange offer and return all old notes tendered for exchange; or
. waive any condition or amend the terms of the exchange offer.
We expect that the above conditions will be satisfied. The above conditions are for our sole benefit and may be waived by us at any time in our sole discretion. Our failure at any time to exercise any of the above rights will not be a waiver of those rights and each right will be deemed an ongoing right that may be asserted at any time. Any determination by us concerning the events described above will be final and binding upon all parties.
The exchange offer is not conditioned upon any minimal principal amount of old notes being tendered.
Interest
Each new note will bear interest from the most recent date to which interest has been paid or duly provided for on the old note surrendered in exchange for such new note or, if no interest has been paid or duly provided for on such old note, from March 27, 2002. Holders of the old notes whose old notes are accepted for exchange will not receive accrued interest on their old notes for any period from and after the last interest payment date to which interest has been paid or duly provided for on their old notes prior to the original issue date of the new notes or, if no such interest has been paid or duly provided for, will not receive any accrued interest on their old notes, and will be deemed to have waived the right to receive any interest on their old notes accrued from and after such interest payment date or, if no such interest has been paid or duly provided for, from and after March 27, 2002.
Procedures for Tendering Old Notes
The tender of a holder's old notes and our acceptance of old notes will constitute a binding agreement between the tendering holder and us upon the terms and conditions of this prospectus and the letter of transmittal. Unless a holder tenders old notes according to the guaranteed delivery procedures or the book-entry procedures
described below, the holder must transmit the old notes, together with a properly completed and executed letter of transmittal and all other documents required by the letter of transmittal, to the exchange agent at its address before 5:00 p.m., New York City time, on the expiration date. The method of delivery of old notes, letters of transmittal and all other required documents is at the election and risk of the tendering holder. If delivery is by mail, we recommend delivery by registered mail, properly insured, with return receipt requested. Instead of delivery of mail, we recommend that each holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery.
Any beneficial owner of the old notes whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender old notes in the exchange offer should contact that registered holder promptly and instruct that registered holder to tender on its behalf. If the beneficial owner wishes to tender directly, it must, prior to completing and executing the letter of transmittal and tendering old notes, make appropriate arrangements to register ownership of the old notes in its name. Beneficial owners should be aware that the transfer of registered ownership may take considerable time.
Any financial institution that is a participant in DTC's Book-Entry Transfer Facility system may make book-entry delivery of the old notes by causing DTC to transfer the old notes into the exchange agent's account in accordance with DTC's procedures for such transfer. To be timely, book-entry delivery of old notes requires receipt of a confirmation of a book-entry transfer before the expiration date. Although delivery of the old notes may be effected through book-entry transfer into the exchange agent's account at DTC, the letter of transmittal, properly completed and executed, with any required signature guarantees and any other required documents or an agent's message (as described below), must in any case be delivered to and received by the exchange agent at its address on or before the expiration date, or the guaranteed delivery procedure set forth below must be complied with.
DTC has confirmed that the exchange offer is eligible for DTC's Automated Tender Offer Program. Accordingly, participants in DTC's Automated Tender Offer Program may, instead of physically completing and signing the applicable 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 Automated Tender Offer Program procedures for transfer. DTC will then send an agent's message to the exchange agent.
The term "agent's message" means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states:
. that DTC has received an express acknowledgment from a participant in DTC's Automated Tender Offer Program that is tendering old notes that are the subject of such book-entry confirmation;
. that the participant has received and agrees to be bound by the terms of the applicable letter of transmittal (or in the case of an agent's message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery); and
. that we may enforce such agreement against that participant.
Each signature on a letter of transmittal or a notice of withdrawal must be guaranteed unless the old notes are tendered:
. by a registered holder who has not completed the box entitled "Special Delivery Instructions"; or
. for the account of an eligible institution (as described below).
If a signature on a letter of transmittal or a notice of withdrawal is required to be guaranteed, the signature must be guaranteed by a participant in a recognized Medallion Signature Program (a "Medallion Signature Guarantor"). If the letter of transmittal is signed by a person other than the registered holder of the old notes, the
old notes surrendered for exchange must be endorsed by the registered holder, with the signature guaranteed by a Medallion Signature Guarantor. If any letter of transmittal, endorsement, bond power, power of attorney or any other document required by the letter of transmittal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should sign in that capacity when signing. Such person must submit to us evidence satisfactory, in our sole discretion, of his or her authority to so act unless we waive such requirement.
As used in this prospectus with respect to the old notes, a "registered holder" is any person in whose name the old notes are registered on the books of the registrar. An "eligible institution" is a firm that is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or any other "eligible guarantor institution" as such term is defined in Rule 17Ad-15 under the Exchange Act.
We will determine in our sole discretion all questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of old notes tendered for exchange. Our determination will be final and binding. We reserve the absolute right to reject old notes not properly tendered and to reject any old notes if acceptance might, in our judgment or our counsel's judgment, be unlawful. We also reserve the absolute right to waive any defects or irregularities or conditions of the exchange offer as to particular old notes at any time, including the right to waive the ineligibility of any holder who seeks to tender old notes in the exchange offer.
Our interpretation of the terms and conditions of the exchange offer, including the letter of transmittal and its instructions, 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 period of time as we determine. Neither our company nor the exchange agent is under any duty to give notification of defects in such tenders or will incur any liability for failure to give such notification. The exchange agent will use reasonable efforts to give notification of defects or irregularities with respect to tenders of old notes for exchange but will not incur any liability for failure to give such notification. Tenders of old notes will not be deemed to have been made until such irregularities have been cured or waived.
By tendering, you will represent to us that, among other things:
. you are not our "affiliate" (as defined in Rule 405 under the Securities Act);
. you will acquire the new notes in the ordinary course of your business;
. you are not a broker-dealer that acquired your notes directly from us in order to resell them pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act;
. if you are a broker-dealer that acquired your notes as a result of market-making or other trading activities, you will deliver a prospectus in connection with any resale of new notes; and
. you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate in the distribution of the new notes.
In connection with a book-entry transfer, each participant will confirm that it makes the representations and warranties contained in the letter of transmittal.
Guaranteed Delivery Procedures
If you wish to tender your old notes and:
. your old notes are not immediately available;
. you are unable to deliver on time your old notes or any other document that you are required to deliver to the exchange agent; or
. you cannot complete the procedures for delivery by book-entry transfer on time;
you may tender your old notes according to the guaranteed delivery procedures described in the letter of transmittal. Those procedures require that:
. tender must be made by or through an eligible institution and a notice of guaranteed delivery must be signed by the holder;
. on or before the expiration date, the exchange agent must receive from the holder and the eligible institution a properly completed and executed notice of guaranteed delivery by 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; and
. 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 four business days after the expiration date of the exchange offer.
Any holder who wishes to tender old notes pursuant to the guaranteed delivery procedures must ensure that the exchange agent receives the notice of guaranteed delivery and letter of transmittal relating to such old notes before 5:00 p.m., New York City time, on the expiration date.
Acceptance of Old Notes for Exchange; Delivery of New Notes
Upon satisfaction or waiver of all the conditions to the exchange offer, we will accept 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 new notes will be delivered promptly after acceptance of the old notes. For purposes of the exchange offer, we will be deemed to have accepted validly tendered old notes when, as and if we have given notice to the exchange agent.
Withdrawal Rights
Tenders of the old notes may be withdrawn by delivery of a written or facsimile transmission notice to the exchange agent at its address set forth under "--The Exchange Agent; Assistance" at any time before 5:00 p.m., New York City time, on the expiration date. Any such notice of withdrawal must:
. specify the name of the person having deposited 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, or, in the case of old notes transferred by book-entry transfer, the name and number of the account at DTC to be credited;
. be signed by the holder in the same manner as the original signature on the letter of transmittal by which old notes were tendered, including any required signature guarantees, or be accompanied by a bond power in the name of the person withdrawing the tender, in satisfactory form as determined by us in our sole discretion, executed by the registered holder, with the signature guaranteed by a Medallion Signature Guarantor, together with the other documents required upon transfer by the indenture; and
. specify the name in which the old notes are to be re-registered, if different from the person who deposited the old notes.
All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by us, in our sole discretion. Any old notes withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer and will be returned to the holder without cost as soon as practicable after withdrawal. Properly withdrawn old notes may be retendered pursuant to the procedures described under " --Procedures for Tendering Old Notes" at any time on or before the expiration date.
The Exchange Agent; Assistance
State Street Bank and Trust Company is the exchange agent. 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 the prospectus, the letter of transmittal and other related documents should be addressed to the exchange agent as follows:
By Registered or By Hand or Overnight
Certified Mail: Courier:
State Street Bank and State Street Bank and
Trust Company Corporate Trust Company Corporate
Trust Department P.O. Trust Window, 5th Floor 2
Box 778 Boston, Avenue de
Massachusetts 02102-0778 Lafayette Boston,
Massachusetts 02111-1724
|
To Confirm by Telephone or for Information:
(617) 662-1525 Attn: Mackenzie Elijah
Fees and Expenses
We will bear the expenses of soliciting old notes for exchange. The principal solicitation is being made by mail by the exchange agent. Additional solicitation may be made by telephone, facsimile or in person by officers and regular employees of our company and our affiliates and by persons so engaged by the exchange agent.
We will pay the exchange agent reasonable and customary fees for its services and will reimburse the exchange agent for its reasonable out-of-pocket expenses in connection with its services and pay other registration expenses, including fees and expenses of the trustee under the indenture, filing fees, blue sky fees and printing and distribution expenses.
We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptance of the exchange offer.
We will pay all transfer taxes, if any, applicable to the exchange of 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 those 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 those taxes or exemption is not submitted with the letter of transmittal, the amount of those transfer taxes will be billed directly to such tendering holder.
Accounting Treatment
The new 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 recognize no gain or loss for accounting purposes. The expenses of the exchange offer will be amortized over the term of the new notes.
Consequences of Not Exchanging Old Notes
As a result of this exchange offer, we will have fulfilled most of our obligations under the registration rights agreement. Holders who do not tender their old notes, except for certain instances involving the initial purchasers or holders of old notes who are not eligible to participate in the exchange offer or who do not receive freely transferrable new notes pursuant to the exchange offer, will not have any further registration rights under the registration rights agreement or otherwise and will not have rights to receive additional interest. Accordingly, any
holder who does not exchange its old notes for new notes will continue to hold the untendered old notes and will be entitled to all the rights and subject to all the limitations applicable under the indenture, except to the extent that such rights or limitations, by their terms, terminate or cease to have further effectiveness as a result of the exchange offer.
Any old notes that are not exchanged for new notes pursuant to the exchange offer will remain restricted securities within the meaning of the Securities Act. In general, such old notes may be resold only:
. to our company or any of our subsidiaries;
. inside the United States to a "qualified institutional buyer" in compliance with Rule 144A under the Securities Act;
. inside the United States to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) or an "accredited investor" that, prior to such transfer, furnishes or has furnished on its behalf by a U.S. broker-dealer to the trustee under the indenture a signed letter containing certain representations and agreements relating to the restrictions on transfer of the new notes, the form of which letter can be obtained from the trustee;
. outside the United States in compliance with Rule 904 under the Securities Act;
. pursuant to the exemption from registration provided by Rule 144 under the Securities Act, if available; or
. pursuant to an effective registration statement under the Securities Act.
Each accredited investor that is not a qualified institutional buyer and that is an original purchaser of any of the old notes from the initial purchasers will be required to sign a letter confirming that it is an accredited investor under the Securities Act and that it acknowledges the transfer restrictions summarized above.
Resales of the New 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. Although there has been no indication of any change in the staff's position, we cannot assure you that the staff of the SEC would make a similar determination with respect to the exchange offer as it has in its interpretive letters to third parties. Based on these interpretations by the staff, and except as provided below, we believe that new notes may be offered for resale, resold and otherwise transferred by a holder who participates in the exchange offer and is not a broker-dealer without further compliance with the registration and prospectus delivery provisions of the Securities Act. In order to receive new notes that are freely tradeable, a holder must acquire the new notes in the ordinary course of its business and may not participate, or have any arrangement or understanding with any person to participate, in the distribution (within the meaning of the Securities Act) of the new notes. Holders wishing to participate in the exchange offer must make the representations described in "--Procedures for Tendering Old Notes" above.
Any holder of old notes:
. who is our "affiliate" (as defined in Rule 405 under the Securities Act);
. who did not acquire the new notes in the ordinary course of its business;
. who is a broker-dealer that purchased old notes from us to resell them pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act; or
. who intends to participate in the exchange offer for the purpose of distributing (within the meaning of the Securities Act) new notes;
will be subject to separate restrictions. Each holder in any of the above categories:
. will not be able to rely on the interpretations of the staff of the Securities Act in the above-mentioned interpretive letters;
. will not be permitted or entitled to tender old notes in the exchange offer; and
. must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or other transfer of old notes, unless such sale is made pursuant to an exemption from such requirements.
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 new 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 new 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 new notes. Each such broker-dealer that receives new 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 new notes. For more detailed information, see "Plan of Distribution."
In addition, to comply with the securities laws of various jurisdictions, if applicable, the new 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 new notes for offer or sale under the securities or blue sky laws of the jurisdictions as any holder of the new notes reasonably requests.
DESCRIPTION OF THE NEW NOTES
The old notes were, and the new notes will be, issued as a single series of securities under the Indenture, dated as of March 27, 2002, among Isle of Capri, as issuer, certain of Isle of Capri's subsidiaries, as subsidiary guarantors, and State Street Bank and Trust Company, as trustee. The form and terms of the new notes are substantially identical to the form and terms of the old notes, except that the new notes:
. will be registered under the Securities Act; and
. will not bear any legends restricting transfer.
The new notes will be issued solely in exchange for an equal principal amount of old notes. As of the date of this prospectus, $200.0 million aggregate principal amount of old notes is outstanding.
In the following summaries:
. "new notes" refers to the registered notes being offered by this prospectus;
. "old notes" refers to your old notes that may be exchanged for new notes in the exchange offer;
. "notes" refers collectively to the new notes and the old notes; and
. "Isle of Capri" refers only to Isle of Capri Casinos, Inc. and not to any of its Subsidiaries.
The following summaries of certain provisions of the indenture are not complete and are subject to all the provisions of the indenture. Wherever we refer to particular sections or defined terms used in the indenture, such sections or defined terms are automatically incorporated into this prospectus. We have filed a copy of the indenture with the SEC and the indenture is incorporated by reference into the registration statement. The meanings of some of the terms that are important in understanding the following summaries are set forth below under the subheading "Definitions."
Brief Description of the New Notes and the Guarantees
The New Notes
The New Notes will be:
. general unsecured obligations of Isle of Capri;
. subordinated in right of payment to all existing and future Senior Indebtedness of Isle of Capri;
. equal in right of payment to all existing and future senior subordinated Indebtedness of Isle of Capri, including the $390.0 million in outstanding principal amount of Isle of Capri's 83/4% Senior Subordinated Notes due 2009 (the "Existing Notes");
. effectively subordinated to all secured Indebtedness of Isle of Capri;
. senior in right of payment to any future Indebtedness of Isle of Capri that is specifically subordinated to the new notes; and
. unconditionally guaranteed by the Subsidiary Guarantors.
The Guarantees
The new notes will be guaranteed by each of the existing and future Significant Restricted Subsidiaries of Isle of Capri (subject to the receipt of required approvals of any applicable Gaming Authority), which are initially substantially all of the subsidiaries of Isle of Capri except Casino America of Colorado, Inc. and its 57%-owned Subsidiary, Black Hawk LLC, and its Subsidiaries.
The Subsidiary Guarantees of the new notes will be:
. general unsecured obligations of each Subsidiary Guarantor;
. subordinated in right of payment to all existing and future Senior Indebtedness of each Subsidiary Guarantor;
. equal in right of payment to all existing and future senior subordinated indebtedness of the Subsidiary Guarantors, including the Subsidiary Guarantees with respect to Existing Notes;
. effectively subordinated to all secured Indebtedness of each Subsidiary Guarantor; and
. senior in right of payment to any future Indebtedness of each Subsidiary Guarantor that is specifically subordinated to the Subsidiary Guarantees.
As of January 27, 2002, we and our Significant Restricted Subsidiaries had approximately $366.9 million of Senior Indebtedness outstanding and our subsidiaries that are not Subsidiary Guarantors had approximately $82.9 million of debt and other liabilities outstanding that would be effectively senior to Isle of Capri's payment obligations on the new notes. As indicated above and as discussed in detail below under the subheading "Subordination," payments on the new notes will be subordinated to the payment of Senior Indebtedness of Isle of Capri and payments under the Subsidiary Guarantees will be subordinated to the payment of Senior Indebtedness of the Subsidiary Guarantors. The indenture will permit Isle of Capri and the Subsidiary Guarantors to incur additional Senior Indebtedness.
All of our Subsidiaries are currently "Restricted Subsidiaries," except for Casino America of Colorado, Inc., Black Hawk LLC and its Subsidiaries, which are "Unrestricted Subsidiaries." However, under the circumstances described below under the subheading "Restricted and Unrestricted Subsidiaries," are permitted to designate certain of our Subsidiaries as "Unrestricted Subsidiaries." Unrestricted Subsidiaries are not subject to many of the restrictive covenants in the indenture. Unrestricted Subsidiaries and Restricted Subsidiaries that are not Significant Restricted Subsidiaries will not guarantee the new notes.
Principal, Maturity and Interest
The new notes will be unsecured senior subordinated obligations of Isle of Capri. Isle of Capri will be permitted to issue additional notes from time to time under the indenture provided that Isle of Capri is able to incur the Indebtedness represented by any such additional notes in accordance with the covenant described under the caption "Certain Covenants--Limitation on Indebtedness." All notes issued under the indenture, including the new notes and any such additional notes, will be treated as a single class for all purposes under the indenture, including without limitation, waivers, amendments, redemptions and offers to purchase.
The new notes and any additional notes subsequently issued under the indenture will mature on March 15, 2012; will accrue interest at the rate of 9% per annum; and interest will be payable semiannually on each March 15 and September 15, to the holders of record of new notes at the close of business on each March 1 and September 1 immediately preceding such interest payment date. Interest on the new notes will accrue from the most recent date to which interest has been paid or duly provided for on the old notes surrendered in exchange for such new notes or, if no interest has been paid or duly provided for on such old notes, from March 27, 2002 and the first interest payment date thereon will be September 15, 2002. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
The new notes will be issued only in registered form, without coupons, in denominations of $1,000 and integral multiples of $1,000. Principal of, premium, if any, and interest on the new notes will be payable, and the new notes will be transferable, at the office or agency of Isle of Capri maintained for such purposes in the City of New York. Until otherwise designated by Isle of Capri, Isle of Capri's office or agency in New York will be the office of the trustee maintained for such purpose. In addition, interest may be paid by wire transfer or check
mailed to the Person entitled thereto as shown on the register for the new notes. No service charge will be made for any registration of transfer or exchange of the new notes, except for any tax or other governmental charge that may be imposed in connection therewith.
Ranking
The new notes will rank subordinate in right of payment to all existing and future Senior Indebtedness of Isle of Capri, senior in right of payment to all future subordinated Indebtedness of Isle of Capri and equal in right of payment with any other future senior subordinated Indebtedness of Isle of Capri, including the Existing new notes and any other notes that are issued under the indenture. Under the indenture, Isle of Capri and its Restricted Subsidiaries may incur additional Indebtedness, including Indebtedness which is senior to or equal in right of payment with the new notes, subject to the limitations set forth under the subheading "Certain Covenants--Limitation on Indebtedness." Additional Indebtedness in the form of permitted FF&E Financing or Capitalized Lease Obligations and certain other Indebtedness may be secured by certain assets of Isle of Capri or a Restricted Subsidiary, as applicable. See "Certain Covenants--Limitation on Liens."
Subsidiary Guarantees
Isle of Capri's payment obligations under the new notes will be jointly, severally, fully and unconditionally guaranteed on an unsecured senior subordinated basis by each of Isle of Capri's existing and future Significant Restricted Subsidiaries, subject to the receipt of required approvals of any applicable Gaming Authority. The Subsidiary Guarantees will be subordinated in right of payment to all existing and future Senior Indebtedness of the Subsidiary Guarantors. The new notes are not guaranteed by Casino America of Colorado, Inc., Black Hawk LLC or their Subsidiaries, any future Unrestricted Subsidiaries or any existing or future Restricted Subsidiaries that are not Significant Restricted Subsidiaries.
The indenture contains provisions the intent of which is to provide that the obligations of each Subsidiary Guarantor will be limited to the maximum amount that will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from, rights to receive contributions from, or payments made by or on behalf of, any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under the indenture, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under any applicable federal, state or foreign law. Each Subsidiary Guarantor that makes a payment or distribution under a Subsidiary Guarantee shall be entitled to contribution from each other Subsidiary Guarantor so long as the exercise of such right does not impair the rights of the holders of the new notes. See "Risk Factors--The Guarantees May Be Unenforceable due to Fraudulent Conveyance Statutes."
The indenture provides that in the event of:
(1) a sale or other disposition of all or substantially all of the assets of any Subsidiary Guarantor or the sale of a Subsidiary Guarantor by way of merger, consolidation or otherwise that, in each case, complies with the provisions set forth under the subheading "Certain Covenants--Limitation on Asset Sales and Events of Loss";
(2) a Subsidiary Guarantor becoming an Unrestricted Subsidiary pursuant to the terms of the indenture; or
(3) a sale or other disposition of all of the Capital Stock of any Subsidiary Guarantor that complies with the provisions set forth under the subheading "Certain Covenants--Limitation on Asset Sales and Events of Loss";
then such Subsidiary Guarantor or the corporation acquiring such assets, as applicable, shall be immediately released and relieved of any obligations under its Subsidiary Guarantee without any further action, provided that Isle of Capri complies with the provisions of the covenant described under the subheading "Certain Covenants--Limitation on Asset Sales and Events of Loss."
Redemption and Repurchase Offers
Optional Redemption
The new notes will be redeemable, in whole or in part, at Isle of Capri's option, at any time on or after March 15, 2007 at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest to the applicable redemption date, if redeemed during the 12-month period beginning on of the years indicated below:
Year Percentage ---- ---------- 2007............... 104.500% 2008............... 103.000% 2009............... 101.500% 2010 and thereafter 100.000% |
Equity Proceeds Redemption
In the event that Isle of Capri consummates a Qualified Public Equity Offering on or before March 15, 2005, Isle of Capri may redeem, at its option, up to 35% of the aggregate outstanding notes at a redemption price of 109.00% of the principal amount of the notes so redeemed plus accrued and unpaid interest to the redemption date, provided that, after any such redemption, at least $130.0 million in principal amount of notes remains outstanding.
Change of Control Repurchase Offer
In the event that a Change of Control shall occur, Isle of Capri is obligated to make an offer to purchase all outstanding new notes at a redemption price of 101% of the principal amount thereof, plus accrued and unpaid interest thereon to the repurchase date. There can be no assurance, however, that Isle of Capri will have sufficient funds to repurchase the new notes in that circumstance. If a Change of Control occurs, Isle of Capri is obligated to notify the holders of new notes in writing of such occurrence and to make an offer to purchase (the "Change of Control Offer"), on a business day (the "Change of Control Payment Date") not later than 60 days following the date of the Change of Control, all new notes then outstanding at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the Change of Control Payment Date. The Change of Control Offer is required to remain open for at least 20 business days and until the close of business on the Change of Control Payment Date. Neither the Board of Directors nor the trustee may waive or amend Isle of Capri's obligation to so offer to purchase all outstanding new notes in the event of a Change of Control without the holders of all of the outstanding notes consenting to such waiver or amendment. See "Amendments and Waiver."
There can be no assurance that Isle of Capri's debt instruments will permit
a Change of Control Offer to be made. In particular, Isle of Capri's Bank
Credit Facility provides that prior to making any such offer Isle of Capri
would be required to (i) repay in full all obligations (including any unpaid
principal, interest, fees, costs and expenses) owed by Isle of Capri under the
Bank Credit Facility) and terminate all commitments relating to the
Indebtedness under the Bank Credit Agreement or offer to repay in full all
obligations (including any unpaid principal, interest, fees, costs and
expenses) owing by Isle of Capri under the Bank Credit Facility and terminate
all commitments relating to the Indebtedness under the Bank Credit Facility and
to repay such obligations owed to each lender which has accepted such offer, or
(ii) obtain the requisite consents under the Bank Credit Facility to permit the
prepayment of the new notes. Failure to make a Change of Control Offer upon a
Change of Control would constitute a default under the indenture, even if such
Change of Control Offer is prohibited by Isle of Capri's debt instruments.
Gaming Redemption
Notwithstanding any other provision of the indenture, if any Gaming Authority requires that a holder or beneficial owner of new notes must be licensed, qualified or found suitable under any appl icable gaming law and the holder or beneficial owner fails to apply for a license, qualification or a finding of suitability within 30 days
after being requested to do so in such circumstance by the Gaming Authority or by Isle of Capri pursuant to an order of the Gaming Authority, or if such holder or such beneficial owner is not so licensed, qualified or found suitable, Isle of Capri shall have the right, at its option:
(1) to require such holder or beneficial owner to dispose of such holder's or beneficial owner's new notes within 30 days of receipt of such notice or such finding by the applicable Gaming Authority or such earlier date as may be ordered by such Gaming Authority; or
(2) to redeem the new notes of such holder or beneficial owner at a redemption price equal to the lesser of:
(a) the principal amount thereof, and
(b) the price at which such holder or beneficial owner acquired the new notes,
together with, in either case, accrued and unpaid interest, if any, to the earlier of the date of redemption or the date of the finding of unsuitability, if any, by such Gaming Authority, which may be less than 30 days following the notice of redemption, if so ordered by such Gaming Authority. Isle of Capri shall notify the trustee in writing of any such redemption as soon as practicable. The holder or beneficial owner of new notes applying for a license, qualification or a finding of suitability is obligated to pay all costs of the licensure or investigation for such qualification or finding of suitability.
Selection and Notice
In the event that less than all of the notes are to be redeemed or repurchased at any time, selection of notes for redemption or repurchase will be made by the trustee on a pro rata basis, by lot or by such other method, if any, as the trustee shall deem fair and appropriate; provided that no notes in a principal amount of $1,000 or less shall be redeemed or repurchased in part. Unless otherwise specified herein, notice of a redemption of or an offer to repurchase new notes shall be mailed by first class mail not less than 30 days nor more than 60 days before the redemption or repurchase date to each holder of new notes at its registered address. If any new note is to be redeemed or repurchased in part only, the notice of redemption or offer to repurchase that relates to such new note shall state the portion of the principal amount thereof to be redeemed or repurchased. A new note in a principal amount equal to the unredeemed or unpurchased portion thereof will be issued in the name of the holder thereof upon cancellation of the original new note. On and after the redemption or repurchase date, interest will cease to accrue on new notes or portions thereof redeemed or repurchased or called for redemption pursuant to the optional and mandatory redemption provisions and not forwarded for redemption.
Isle of Capri will comply with Rule 14e-1 promulgated under the Exchange Act, as amended, in making any offer to repurchase new notes described above.
Certain instruments, agreements or other documents evidencing, governing or otherwise relating to Indebtedness of Isle of Capri and its Subsidiaries may prohibit any such repurchases or redemptions unless such Indebtedness has been repaid in full and such instruments, agreements or other documents have been terminated. In addition, a Change of Control might constitute an event of default with respect to such Indebtedness permitting the holder (or an agent or other representative of such holder on its behalf) to accelerate the maturity thereof. In the event of a Change of Control, Isle of Capri will likely be required to refinance such Indebtedness and may need to incur additional Indebtedness in order to make payments for new notes to be redeemed or repurchased. There can be no assurance that Isle of Capri will be able to refinance such Indebtedness or to incur additional Indebtedness in order to make such payments.
Restricted and Unrestricted Subsidiaries
The indenture provides that, subject to the exceptions described below, each of the Isle of Capri's Subsidiaries other than Casino America of Colorado, Inc. and Black Hawk LLC and its Subsidiaries, and any entity that becomes a direct or indirect Subsidiary of Isle of Capri in the future will be a Restricted Subsidiary
unless Isle of Capri designates the Subsidiary to be an Unrestricted Subsidiary. Except as provided below, Isle of Capri may designate any existing or future Subsidiary of Isle of Capri as an Unrestricted Subsidiary, provided that
(1) the Subsidiary to be so designated does not own any Indebtedness or Capital Stock or own or hold any Lien on any asset or property of Isle of Capri or any other Restricted Subsidiary;
(2) either (i) the Subsidiary to be so designated has total assets of $100,000 or less or (ii) immediately before and after giving pro forma effect to such designation
(a) Isle of Capri could incur $1.00 of Indebtedness pursuant to the covenant described under the subheading "Certain Covenants--Limitation on Indebtedness" (other than under clauses 2(a) through (2)(h) thereof),
(b) no Default or Event of Default shall have occurred and be continuing, and
(c) Isle of Capri could make, pursuant to the covenant described under the subheading "Certain Covenants--Limitation on Restricted Payments," the Restricted Payment arising from the designation as described in the next paragraph and
(3) all transactions between the Subsidiary to be so designated and its Affiliates remaining in effect are permitted pursuant to the covenant described under the subheading "Certain Covenants--Limitation on Transactions with Affiliates."
Notwithstanding the foregoing, Isle of Capri may not designate any existing or future Subsidiary that holds, owns or operates, directly or indirectly, any assets or function directly relating to or necessary for the conduct of casino gaming at the Isle-Biloxi, the Isle-Vicksburg, the Isle-Bossier City, the Isle-Lake Charles, the Isle-Lula, the Isle-Boonville, the Isle-Kansas City, the Isle-Bettendorf and the Rhythm City-Davenport as an Unrestricted Subsidiary. Any Investment made by Isle of Capri or any Restricted Subsidiary in a Restricted Subsidiary which is redesignated an Unrestricted Subsidiary shall thereafter be considered as having been a Restricted Payment (to the extent not previously included as a Restricted Payment) made on the day such Subsidiary is designated an Unrestricted Subsidiary in the amount of the greater of
(1) the sum of the Fair Market Value of the interest of Isle of Capri and any of its Restricted Subsidiaries in such Subsidiary on such date as determined in accordance with GAAP and the amount of any obligation of such Subsidiary which Isle of Capri or any Restricted Subsidiary has guaranteed or for which it is in any other manner liable; and
(2) the amount of the Investments made by Isle of Capri and any of its Restricted Subsidiaries in such Subsidiary.
Any Subsidiary Guarantee entered into by a Restricted Subsidiary which is subsequently redesignated an Unrestricted Subsidiary shall be automatically released at such time as the Restricted Subsidiary becomes an Unrestricted Subsidiary. Unless so designated as an Unrestricted Subsidiary, any Subsidiary of Isle of Capri shall be classified as a Restricted Subsidiary.
An Unrestricted Subsidiary may be redesignated a Restricted Subsidiary, provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of Isle of Capri of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if
(1) such Indebtedness is permitted to be incurred under the covenant described under the subheading "Certain Covenants--Limitation on Indebtedness" (other than under clauses 2(a) through 2(h) thereof); and
(2) no Default or Event of Default shall have occurred and be continuing.
The designation of an Unrestricted Subsidiary or the removal of such designation is required to be made by the Board of Directors of Isle of Capri, such designation to be evidenced by a Board Resolution stating that the
Board of Directors has made such designation in accordance with the indenture, and Isle of Capri is required to deliver to the trustee this Board Resolution together with an Officers' Certificate certifying that the designation complies with the indenture. Such designation will be effective as of the date specified in the applicable Board Resolution, which may not be before the date the applicable Officers' Certificate is delivered to the trustee.
Subordination
The payment of the principal of, premium, if any, and interest on and any other amounts owing with respect to the new notes will be subordinated in right of payment, as described below, to the prior payment in full of all Senior Indebtedness.
The indenture will provide that in the event of any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relating to Isle of Capri, or any liquidation, dissolution or other winding-up of Isle of Capri, whether voluntary or involuntary, or any assignment for the benefit of creditors or other marshaling of assets or liabilities of Isle of Capri:
(1) all Senior Indebtedness of Isle of Capri and Senior Indebtedness of the Subsidiary Guarantors must be paid in full before any payment or distribution (excluding any payment or distribution of certain permitted equity or subordinated securities) is made on account of the principal of, premium, if any, or interest on, or any other amounts owing with respect to the new notes or the Subsidiary Guarantees, respectively; and
(2) until all Senior Indebtedness is paid in full, any distribution to which holders of the new notes would be entitled but for this provision shall be made to holders of Senior Indebtedness as their interests may appear, except that holders of the new notes may receive Capital Stock or any debt securities that are subordinated to Senior Indebtedness to at least the same extent as the new notes.
Similarly, in the event of a bankruptcy, liquidation, reorganization or similar proceeding relating to any Subsidiary Guarantor, its assets would be available to pay obligations under its Subsidiary Guarantee only after all Senior Indebtedness of that Subsidiary Guarantor is paid in full.
During the continuance of any default in the payment of any Designated Senior Indebtedness of Isle of Capri or a Subsidiary Guarantor at maturity or pursuant to which the maturity thereof may immediately be accelerated beyond any applicable grace period, no payment or distribution of any assets of Isle of Capri or such Subsidiary Guarantor of any kind or character (excluding any payment or distribution of certain permitted equity or subordinated securities and other than payments from trusts previously created pursuant to the provisions described under the subheading "Defeasance") shall be made on account of the principal of, premium, if any, or interest on, or any other amounts owing with respect to, or the purchase, redemption or other acquisition of, the new notes unless and until such default has been cured or waived or has ceased to exist or such Designated Senior Indebtedness shall have been discharged or paid in full.
During the continuance of any non-payment default with respect to any Designated Senior Indebtedness of Isle of Capri or a Subsidiary Guarantor pursuant to which the maturity thereof may be accelerated (in accordance with its terms a "Non-payment Default") and after the receipt by the trustee from the representatives of holders of such Designated Senior Indebtedness of a written notice of such Non-payment Default, no payment or distribution of any assets of Isle of Capri or such Subsidiary Guarantor of any kind or character (excluding any payment or distribution of certain permitted equity or subordinated securities and other than payments from trusts previously created pursuant to the provisions described under the subheading "Defeasance") may be made by Isle of Capri or such Subsidiary Guarantor on account of the principal of, premium, if any, or interest on, or any other amounts owing with respect to, or the purchase, redemption or other acquisition of, the new notes for the period specified below (the "Payment Blockage Period").
The Payment Blockage Period will commence upon the receipt of written notice of a Non-payment Default by the trustee from the representatives of holders of Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and will end on the earlier to occur of the following events:
(1) 179 days shall have elapsed since the receipt of such notice of a Non-payment Default (provided that such Designated Senior Indebtedness shall not theretofore have been accelerated);
(2) such default is cured or waived or ceases to exist or such Designated Senior Indebtedness is discharged; or
(3) such Payment Blockage Period shall have been terminated by written notice to Isle of Capri or the trustee from the representatives of holders of Designated Senior Indebtedness initiating such Payment Blockage Period.
After the end of any Payment Blockage Period, Isle of Capri shall promptly resume making any and all required payments in respect of the new notes, including any missed payments. Notwithstanding anything in the subordination provisions of the indenture or the new notes to the contrary,
(1) in no event shall a Payment Blockage Period extend beyond 179 days from the date of the receipt by the trustee of the notice initiating such Payment Blockage Period;
(2) there shall be a period of at least 186 consecutive days in each 365-day period when no Payment Blockage Period is in effect; and
(3) not more than one Payment Blockage Period with respect to the new notes may be commenced within any period of 365 consecutive days.
A Non-payment Default with respect to Designated Senior Indebtedness that existed or was continuing on the date of the commencement of any Payment Blockage Period with respect to the Designated Senior Indebtedness initiating such Payment Blockage Period cannot be made the basis for the commencement of a second Payment Blockage Period, whether or not within a period of 365 consecutive days, unless such default has been cured or waived for a period of not less than 90 consecutive days and subsequently recurs.
As used herein, the term "Designated Senior Indebtedness" means (1) Indebtedness incurred under the Bank Credit Facility and (2) any other Senior Indebtedness in a principal amount of at least $25.0 million outstanding which, at the time of determination, is specifically designated in the instrument governing such Senior Indebtedness as "Designated Senior Indebtedness" by Isle of Capri and is otherwise permitted to be "Designated Senior Indebtedness" under the Bank Credit Facility.
If Isle of Capri fails to make any payment on the new notes when due or within any applicable grace period, whether or not on account of the payment blockage provisions referred to above, such failure would constitute an Event of Default under the indenture and would enable the holders of the new notes to accelerate the maturity thereof. See the information under the subheading "Events of Default and Remedies."
By reason of such subordination, in the event of liquidation or insolvency, creditors of Isle of Capri who are holders of Senior Indebtedness may recover more, ratably, than the holders of the new notes and funds which would be otherwise payable to the holders of the new notes will be paid to the holders of Senior Indebtedness to the extent necessary to pay the Senior Indebtedness in full, and Isle of Capri may be unable to meet its obligations fully with respect to the new notes.
Certain Covenants
Set forth below are summaries of certain covenants contained in the indenture.
Limitation on Indebtedness
(1) The indenture provides that Isle of Capri may not, and may not cause or permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume, suffer to exist, guarantee or in any manner become
liable for the payment of ("incur") any Indebtedness (including any Acquired Indebtedness) or any Disqualified Stock unless:
(a) such Indebtedness or Disqualified Stock is incurred by Isle of Capri or a Subsidiary Guarantor;
(b) no Default or Event of Default shall have occurred and be continuing at the time of, or would occur after giving pro forma effect to, such incurrence of Indebtedness or Disqualified Stock; and
(c) on the date of such incurrence (the "Incurrence Date"), the Consolidated Coverage Ratio of Isle of Capri , after giving pro forma effect to such incurrence of such Indebtedness, would be at least 2.0 to 1.0.
(2) Notwithstanding the foregoing, Isle of Capri and its Restricted Subsidiaries may incur:
(a) Indebtedness and Disqualified Stock issued to and held by Isle of Capri or a wholly owned Restricted Subsidiary of Isle of Capri, provided that (i) any subsequent issuance or transfer of any Capital Stock that results in any such wholly owned Restricted Subsidiary ceasing to be a wholly owned Restricted Subsidiary or (ii) any transfer of such Indebtedness to a Person other than Isle of Capri or a wholly owned Restricted Subsidiary of Isle of Capri, will be deemed to be the incurrence of such Indebtedness or issuance of Disqualified Stock by the issuer thereof;
(b) Indebtedness under the old notes and the new notes, the Subsidiary Guarantees and the indenture;
(c) Indebtedness outstanding on March 27, 2002;
(d) FF&E Financing and Capitalized Lease Obligations to acquire or refinance furniture, fixtures and equipment incident to and useful in the operation of Casinos, Casino Hotels or any Casino Related Facility, provided that the sum of the aggregate principal amount of FF&E Financing and Capitalized Lease Obligations does not exceed, in the aggregate at any time outstanding, the sum of:
(i) the principal amount of FF&E Financing and Capitalized Lease Obligations outstanding on April 23, 1999; plus
(ii) $15.0 million; plus
(iii) $10.0 million times the number of Casinos acquired or developed by the Company and its Restricted Subsidiaries after April 23, 1999; plus
(iv) $7.5 million times the number of Casino Hotels acquired or developed by the Company and its Restricted Subsidiaries after April 23, 1999;
(e) Indebtedness in respect of performance bonds, letters of credit, bankers' acceptances and surety and appeal bonds incurred in the ordinary course of business, other than such Indebtedness outstanding on March 27, 2002 (or refinancings thereof permitted under clause (f) below), in an amount not to exceed $15.0 million in the aggregate at any time outstanding; Interest Rate and Currency Protection Obligations entered into in connection with the incurrence of Indebtedness otherwise permitted under the indenture; and Indebtedness arising under agreements providing for indemnification, adjustment of purchase price and similar obligations in connection with the disposition of property or assets;
(f) Indebtedness issued in exchange for or to repay, prepay, repurchase,
redeem, defease, retire or refinance ("refinance") any Indebtedness
(x) incurred pursuant to the provisions of Section (1) above or (y)
permitted by clauses (b) or (c) above or this clause (f) of this
Section 2, provided that:
(i) if the principal amount of the Indebtedness so issued shall exceed the sum of the principal amount of the Indebtedness so exchanged or refinanced plus any prepayment premium and costs reasonably incurred to effect the exchange or refinancing, then such excess shall be permitted only to the extent that it is otherwise permitted to be incurred under this covenant; and
(ii) the Indebtedness so issued:
(A) has a Stated Maturity not earlier than the Stated Maturity of the Indebtedness so exchanged or refinanced;
(B) has an average life to Stated Maturity equal to or greater than the remaining average life to Stated Maturity of the Indebtedness so exchanged or refinanced; and
(C) is subordinated to the notes to at least the same extent as the Indebtedness so exchanged or refinanced if such Indebtedness that is being exchanged or refinanced is subordinated to the notes.
(g) Indebtedness incurred by Isle of Capri and its Restricted Subsidiaries under one or more Credit Facilities in an aggregate principal amount at any one time outstanding not to exceed the greater of (i) $400.0 million and (ii) 1.5 times the Consolidated Cash Flow of Isle of Capri and its Restricted Subsidiaries for the period consisting of the four full fiscal quarters for which financial statements are available that immediately precede the date on which the Indebtedness is incurred (less any Indebtedness incurred pursuant to this clause (g) that is permanently prepaid, repaid, redeemed, purchased or retired with Net Cash Proceeds from any Asset Sale or Event of Loss pursuant to the terms of the covenant described under the subheading "Limitation on Asset Sales and Events of Loss"); and
(h) Indebtedness, other than Indebtedness permitted by clauses (a) through (g) above, which does not exceed $25.0 million (less any Indebtedness incurred pursuant to this clause (h) that is permanently prepaid, repaid, redeemed, purchased or retired with Net Cash Proceeds from any Asset Sale or Event of Loss pursuant to the terms of the covenant described under the subheading "Limitation on Asset Sales and Events of Loss") in the aggregate at any time outstanding.
Limitation on Liens
Isle of Capri may not, and may not cause or permit any Restricted Subsidiary, directly or indirectly, to, create, incur, assume or suffer to exist any Lien of any kind upon any of its property or assets (including, without limitation, any income or profits) now owned or acquired by it after April 23, 1999 or any proceeds therefrom, unless the new notes are equally and ratably secured (except that Liens securing Subordinated Indebtedness shall be expressly subordinate to the Liens securing the notes to the same extent such Subordinated Indebtedness is subordinate to the notes), other than:
(1) Liens existing on April 23, 1999;
(2) Liens securing Senior Indebtedness of Isle of Capri and the Subsidiary Guarantors permitted to be incurred under the indenture;
(3) Liens securing FF&E Financing or Capitalized Lease Obligations permitted pursuant to clause (2)(d) of the covenant described under the subheading "Limitation on Indebtedness"; provided that:
(a) the amount of such Indebtedness incurred in any individual case secured by such a Lien, at the time such Indebtedness is incurred, does not exceed the lesser of (i) the cost and (ii) the Fair Market Value of the property or assets purchased or acquired with the proceeds of such FF&E Financing or Capitalized Lease Obligation;
(b) the Indebtedness secured by such Lien shall have otherwise been permitted to be incurred under the Indenture;
(c) such Lien shall attach to such property or assets upon their acquisition; and
(d) such Lien (other than a Permitted Vessel Lien) shall not encumber or attach to any other assets or property of Isle of Capri or any of its other Restricted Subsidiaries;
(4) Liens securing Indebtedness incurred pursuant to clause (2)(h) of the covenant described under the subheading "Limitation on Indebtedness";
(5) the replacement, extension or renewal of any Lien permitted by clauses
(1) through (4) upon or in the same property theretofore subject thereto
or the replacement, extension or renewal (without increase in the
principal amount (other than to pay any prepayment premium and costs
reasonably incurred to effect the replacement, extension or renewal, or
change in any direct or contingent obligor) of the Indebtedness secured
thereby; and
(6) Permitted Liens.
Limitation on Restricted Payments
Isle of Capri may not make, directly or indirectly, and may not permit any Restricted Subsidiary to make, directly or indirectly, any Restricted Payment unless:
(1) no Default or Event of Default shall have occurred and be continuing at the time of and after giving pro forma effect to such Restricted Payment;
(2) immediately after giving effect to such Restricted Payment, Isle of Capri could incur at least $1.00 of Indebtedness pursuant to the covenant described under the subheading "Limitation on Indebtedness" (other than under clauses (2)(a) through (2)(h) thereof); and
(3) the aggregate amount of all Restricted Payments declared or made after March 27, 2002 does not exceed the sum of the following amounts (without duplication):
(a) 50% of Consolidated Net Income (or in the event such Consolidated Net Income shall be a deficit, minus 100% of such deficit) accrued during the period (treated as one accounting period) beginning on January 25, 1999 and ending on the last day of Isle of Capri's last fiscal quarter ending before the date of such proposed Restricted Payment; plus
(b) an amount equal to the aggregate Net Cash Proceeds received by Isle of Capri from the issuance or sale (other than to a Subsidiary) of its Capital Stock (excluding Disqualified Stock, but including Capital Stock issued upon conversion of convertible Indebtedness and from the exercise of options, warrants or rights to purchase Capital Stock (other than Disqualified Stock) of Isle of Capri) on or after April 23, 1999; plus
(c) to the extent not otherwise included in Isle of Capri's Consolidated Net Income, 100% of cash dividends, if applicable, or distributions or the amount of the cash principal and interest payments received since April 23, 1999 by Isle of Capri or any Restricted Subsidiary from any Unrestricted Subsidiary or in respect of any Investment constituting a Restricted Payment (other than dividends, if applicable, or distributions to pay obligations owed to a person other than Isle of Capri or any Restricted Subsidiary by or with respect to such Unrestricted Subsidiary, such as income taxes) until the entire amount of the Investment in such Unrestricted Subsidiary has been received or the entire amount of such Investment constituting a Restricted Payment has been returned, as the case may be, and 50% of such amounts thereafter;
provided that, if no Default or Event of Default shall have occurred and be continuing at the time of and after giving effect to such Restricted Payment, the foregoing provisions will not prohibit:
(i) the payment of any dividend within 60 days after the date of its declaration if, at the date of declaration, such payment would be permitted by such provisions;
(ii) the redemption or repurchase of any Capital Stock or Indebtedness of Isle of Capri, including the new notes, if required by any Gaming Authority or if determined, in the good faith judgment of the Board of Directors, to be necessary to prevent the loss or to secure the grant or reinstatement of any gaming license or other right to conduct lawful gaming operations;
(iii) the repurchase of Capital Stock from directors, officers and employees (or their respective estates or beneficiaries) upon death, disability, retirement or termination of employment up to an amount not to exceed an aggregate of $2.0 million in any fiscal year of Isle of Capri;
(iv) Permitted Investments; and
(v) the incurrence, creation, assumption, suffering to exist of, or payment with respect to any Qualified Guarantee.
The full amount of any Restricted Payment made pursuant to the foregoing clause (i) or clause (ii) or clause (2) of the definition of Permitted Investments, however, will be included in the calculation of the aggregate amount of Restricted Payments available to be made pursuant to clause (3) of this Section.
With respect to any Qualified Guarantee:
(1) if at any time Isle of Capri or its Restricted Subsidiaries cease to control the day-to-day gaming operations of the entity that issued the guaranteed Indebtedness, the aggregate principal amount of such Indebtedness that is guaranteed pursuant to such Qualified Guarantee shall thereafter be included in the calculation of the aggregate amount of Restricted Payments available to be made pursuant to clause (3) of this Section; and
(2) if Isle of Capri or its Restricted Subsidiaries retain control of the
day-to-day gaming operations of the entity that issued the guaranteed
Indebtedness, (a) any amounts actually paid by Isle of Capri or its
Restricted Subsidiaries with respect to such Qualified Guarantee shall
thereafter be included in the calculation of the aggregate amount of
Restricted Payments available to be made pursuant to clause (3) of this
Section and (b) if and for so long as an event of default occurs and is
continuing with respect to such guaranteed Indebtedness, the aggregate
principal amount of such Indebtedness that is guaranteed pursuant to the
Qualified Guarantee shall be included in the calculation of the
aggregate amount of Restricted Payments available to be made pursuant to
clause (3) of this Section.
Limitation on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries
Isle of Capri may not, directly or indirectly, and may not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist or enter into any agreement with any Person that would cause any consensual encumbrance or restriction of any kind on the ability of any Restricted Subsidiary to:
(1) pay dividends, in cash or otherwise, or make any other distributions on its Capital Stock or any other interest or participation in, or measured by, its profits owned by, or pay any Indebtedness owed to, Isle of Capri or a Restricted Subsidiary;
(2) make any loans or advances to Isle of Capri or any Restricted Subsidiary; or
(3) transfer any of its properties or assets to Isle of Capri or any Restricted Subsidiary, except in each case for:
(a) restrictions imposed by the notes, the indenture and the Subsidiary Guarantees;
(b) customary non-assignment provisions restricting subletting or assignment of any lease entered into in the ordinary course of business, consistent with industry practices;
(c) restrictions imposed by applicable gaming laws or any applicable Gaming Authority;
(d) restrictions under any agreement relating to any property, assets or business acquired by Isle of Capri or its Restricted Subsidiaries, which restrictions existed at the time of acquisition, were not put in place in anticipation of such acquisition and are not applicable to any Person other than the Person acquired, or to any property, assets or business other than the property, assets and business of the Person acquired;
(e) any such contractual encumbrance in existence as of March 27, 2002 or imposed by or in connection with the incurrence of any FF&E Financing or Capitalized Lease Obligations permitted pursuant to clause (2)(d) of the covenant described under the subheading "Limitation on Indebtedness," provided such encumbrance does not have the effect of restricting the payment of
dividends to Isle of Capri or any Restricted Subsidiary or the payment of Indebtedness owed to Isle of Capri or any Restricted Subsidiary or reducing the amount of any such dividends or payments;
(f) any restrictions with respect to Capital Stock or assets, respectively, of a Restricted Subsidiary of Isle of Capri imposed pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Restricted Subsidiary;
(g) restrictions imposed by the Bank Credit Facility; and
(h) replacements of restrictions imposed pursuant to clauses (a) through
(g) that are no more restrictive than those being replaced.
Limitation on Asset Sales and Events of Loss
Isle of Capri may not, directly or indirectly, and may not permit any Restricted Subsidiary to, directly or indirectly, make any Asset Sale unless:
(1) at the time of such Asset Sale, Isle of Capri or such Restricted Subsidiary, as the case may be, receives consideration at least equal to the Fair Market Value of the assets sold or otherwise disposed of;
(2) the proceeds therefrom consist of at least 75% cash or Cash Equivalents; and
(3) no Default or Event of Default shall have occurred and be continuing at the time of or after giving pro forma effect to such Asset Sale.
Isle of Capri and its Restricted Subsidiaries may, on or before the 180th day after the date on which Isle of Capri or such Restricted Subsidiary consummates an Asset Sale or suffers an Event of Loss, apply 100% of the Net Cash Proceeds therefrom to either (1) prepay, repay, redeem or purchase (and permanently reduce the commitments under) any Senior Indebtedness or (2) make a Permitted Related Investment (or enter into a binding agreement to make a Permitted Related Investment). The amount of such Net Cash Proceeds not so applied to either prepay, repay, redeem or purchase any Senior Indebtedness or make a Permitted Related Investment will constitute "Excess Sale/Loss Proceeds." The indenture provides that, when the aggregate amount of Excess Sale/Loss Proceeds equals $10.0 million, Isle of Capri is obligated to make an offer to purchase (a "Excess Sale/Loss Proceeds Offer") from all holders of the notes in accordance with the procedures set forth in the indenture up to a maximum principal amount (expressed as a multiple of $1,000) of notes equal to such Excess Sale/Loss Proceeds, less the accrued and unpaid interest on such notes. The offer price for the notes will be payable in cash in an amount equal to 100% of the principal amount of the notes plus accrued and unpaid interest, if any, to the date of repurchase. Each Excess Sale/Loss Proceeds Offer shall remain open for a period of at least 20 business days. To the extent an Excess Sale/Loss Proceeds Offer is not fully subscribed to by the holders of the notes, Isle of Capri may retain such unutilized portion of the Excess Sale/Loss Proceeds for any application or use not prohibited by the terms of the indenture.
Limitation on Disposition of Stock of Restricted Subsidiaries
Isle of Capri shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, issue, transfer, convey, sell, lease or otherwise dispose of any shares of Capital Stock of a Restricted Subsidiary to any Person (other than to Isle of Capri or a wholly owned Subsidiary), unless (1) (a) such transfer, conveyance, sale, lease or other disposition is of all of the Capital Stock of such Restricted Subsidiary or (b) after giving effect to such transfer, conveyance, sale, lease or other disposition, Isle of Capri or the applicable Subsidiary Guarantor remains the owner of a majority of the Capital Stock of such Restricted Subsidiary and (2) the Net Cash Proceeds from such transfer, conveyance, sale, lease or other disposition are applied in accordance with the covenant described under the subheading "Limitation on Asset Sales and Events of Loss". No Restricted Subsidiary shall issue any preferred stock or other Capital Stock having a preference as to dividends, upon liquidation or otherwise over the Capital Stock of such Restricted Subsidiary owned, directly or indirectly, by Isle of Capri.
Limitation on Transactions with Affiliates
Isle of Capri may not, and Isle of Capri may not permit, cause or suffer any Restricted Subsidiary to, conduct any business or enter into any transaction or series of transactions (including, without limitation, the sale, transfer, disposition, purchase, exchange, lease or use of assets, property or services) or enter into any contract, agreement, understanding, loan, advance or guarantee with or for the benefit of any of their respective Affiliates, including, without limitation, any Unrestricted Subsidiary, other than Isle of Capri or another Restricted Subsidiary (each an "Affiliate Transaction"), except:
(1) such transactions that are set forth in writing and are entered into in good faith and on terms that are no less favorable to Isle of Capri or such Restricted Subsidiary, as the case may be, than those that could have been obtained in a comparable transaction on an arm's-length basis from a Person not an Affiliate of Isle of Capri or such Restricted Subsidiary or, if in the reasonable opinion of a majority of the Independent directors of Isle of Capri, such standard is inapplicable to the subject Affiliate Transaction, then such Affiliate Transaction is fair to Isle of Capri or the Restricted Subsidiary, as the case may be (or to the stockholders as a group in the case of a pro rata dividend or other distribution to stockholders permitted under the subheading "Limitation on Restricted Payments"), from a financial point of view;
(2) such transactions that are existing as of March 27, 2002; and
(3) reasonable and customary compensation and indemnification of directors, officers and employees.
In addition, Isle of Capri and its Restricted Subsidiaries may not enter into any Affiliate Transaction (or series of related Affiliate Transactions that are part of a common plan) under clause (1) above involving aggregate payments or other Fair Market Value:
(1) in excess of $5.0 million unless, prior to the consummation thereof, the transaction is approved by the Board of Directors of Isle of Capri, including a majority of the disinterested directors, such approval to be evidenced by a Board Resolution delivered to the trustee with an Officers' Certificate stating that such Board of Directors has determined that such Affiliate Transaction complies with clause (1) above; and
(2) in excess of $15.0 million unless, prior to the consummation thereof, Isle of Capri shall have received an opinion, from an independent nationally recognized firm experienced in the appraisal or similar review of similar types of transactions, that such transaction or series of related transactions is on terms which are fair, from a financial point of view, to Isle of Capri or such Restricted Subsidiary.
Change In Nature of Business
Isle of Capri may not, and may not permit any of its Restricted Subsidiaries to, own, manage or conduct any operation other than a Permitted Line of Business.
Consolidation, Merger, Conveyance, Transfer or Lease
Neither Isle of Capri nor any Restricted Subsidiary may consolidate with or merge with or into or sell, assign, convey, lease or transfer all or substantially all of its properties and assets to any Person or group of affiliated Persons in a single transaction or through a series of transactions, except that:
(1) Isle of Capri may consolidate with or merge with or into or sell, assign, convey, lease or transfer all or substantially all of its properties and assets to any Person or group of affiliated Persons in a single transaction or through a series of transactions if:
(a) Isle of Capri is the continuing Person or the resulting, surviving or transferee Person (the "surviving entity") is a corporation organized and existing under the laws of the United States or any State thereof or the District of Columbia;
(b) the surviving entity expressly assumes, by a supplemental indenture (or similar instrument) executed and delivered to the trustee, in form and substance reasonably satisfactory to the trustee, all of the obligations of Isle of Capri under the notes and the indenture;
(c) immediately before and immediately after giving pro forma effect to such transaction, or series of transactions (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing;
(d) if the transaction or series of transactions involves Isle of Capri, Isle of Capri or the surviving entity, immediately before and after giving effect to such transaction or series of transactions (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of the transaction or series of transactions), has a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of Isle of Capri immediately prior to such transaction or series of transactions;
(e) if the transaction or series of transactions involves Isle of Capri, immediately after giving effect to such transaction or series of transactions on a pro forma basis, Isle of Capri or the surviving entity could incur at least $1.00 of Indebtedness pursuant to the covenant described under the subheading "Limitation on Indebtedness" (other than under clauses (2)(a) through (2)(h) thereof);
(f) Isle of Capri or the surviving entity has delivered to the trustee an Officers' Certificate stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction or series of transactions, such supplemental indenture complies with this covenant and that all conditions precedent in the indenture relating to the transaction or series of transactions have been satisfied;
(g) such transaction will not result in the loss of any gaming or other license necessary for the continued operation of any Restricted Subsidiary as conducted immediately prior to such consolidation, merger, conveyance, transfer or lease; and
(h) if any property of Isle of Capri or any Restricted Subsidiary would thereupon become subject to any Lien, the covenant described under the subheading "Limitation on Liens" is complied with; and
(2) a Restricted Subsidiary may consolidate with or merge into or sell, assign, convey, lease or transfer all or substantially all of its properties and assets to Isle of Capri or to any Restricted Subsidiary if:
(a) the surviving entity is Isle of Capri or a Restricted Subsidiary;
(b) the surviving entity expressly assumes, by a supplemental indenture (or similar instrument) executed and delivered to the trustee, in form and substance reasonably satisfactory to the trustee, all of the obligations of such Restricted Subsidiary under the notes, the Subsidiary Guarantees (if applicable) and the indenture; and
(c) such transaction will not result in the loss of any gaming or other license necessary for the continued operation of any Restricted Subsidiary as conducted immediately prior to such sale, assignment, conveyance, transfer or lease.
Reports To Holders Of New Notes
Whether or not Isle of Capri is subject to the periodic reporting requirements under the Exchange Act, it shall deliver to the trustee and each holder of new notes (1) 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 Isle of Capri was required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" that describes the financial condition and results of operations of Isle of Capri and its Consolidated
Subsidiaries (provided that, such reports shall show in reasonable detail, either on the face of the financial statements or in the footnotes thereto, the financial condition and results of operations of Isle of Capri and its Significant Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries and other Subsidiaries of Isle of Capri that are not Subsidiary Guarantors with such reasonable detail as required by the SEC or as would be required by the SEC if Isle of Capri was subject to the periodic reporting requirements of the Exchange Act) and, with respect to the annual information only, a report thereon by Isle of Capri's certified independent accountants and (2) all current reports that would be required to be filed with the SEC on Form 8-K if Isle of Capri was required to file such reports, in each case within the time periods specified in the SEC's rules and regulations. Following the consummation of the exchange offer, whether or not required by the rules and regulations of the SEC, Isle of Capri will 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) and make such information available to securities analysts and prospective investors upon request. In addition, Isle of Capri has agreed that, for so long as any notes remain outstanding, it will furnish to the holders of the notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Limitation on Other Senior Subordinated Indebtedness
Isle of Capri shall not, and shall not cause or permit any of the Restricted Subsidiaries to, create, incur, assume, guarantee or in any other manner become liable with respect to any Indebtedness other than the notes and the Subsidiary Guarantees that is subordinate in right of payment to any Senior Indebtedness of Isle of Capri or such Restricted Subsidiary, as applicable, unless such Indebtedness is either (1) equal in right of payment with the notes or the Subsidiary Guarantees, as applicable or (2) subordinate in right of payment to the notes or the Subsidiary Guarantees, as applicable, in the same manner and at least to the same extent as the notes are subordinated to Senior Indebtedness of Isle of Capri or as such Subsidiary Guarantee is subordinated to Senior Indebtedness of such Subsidiary Guarantor, as applicable.
Events of Default and Remedies
Events of Default
Any one of the following agents will be an "Event of Default" under the terms of the indenture:
(1) a default in the payment of any interest on the notes when it becomes due and payable and the continuance of any such default for a period of 30 days; or
(2) a default in the payment of the principal of or premium, if any, on the notes when due at maturity, upon acceleration, optional redemption, required repurchase or otherwise; or
(3) the default by Isle of Capri or any Subsidiary Guarantor in the performance, or breach, of any term, covenant or agreement in the indenture (other than defaults specified in clause (1) or (2) above or clause (4) below), and the continuance of such default or breach for a period of 30 days after written notice to Isle of Capri by the trustee or to Isle of Capri and the trustee by the holders of at least 25% in aggregate principal amount of the outstanding notes; or
(4) the default by Isle of Capri or any Subsidiary Guarantor in the performance, or breach, of the covenant described under the subheading "Certain Covenants--Consolidation, Merger, Conveyance, Transfer or Lease"; the failure of Isle of Capri to make or consummate an Excess Sale/Loss Proceeds Offer in accordance with the covenant described under the subheading "Certain Covenants--Limitation on Asset Sales and Events of Loss"; or the failure of Isle of Capri to make or consummate a Change of Control Offer in accordance with the provisions described under the subheading "Certain Covenants--Change of Control Repurchase Offer"; or
(5) the failure by Isle of Capri or any Restricted Subsidiary, after any applicable grace period, to make any payment when due of principal of, premium in respect of or interest on any other Indebtedness, other than Non-Recourse Indebtedness, in an aggregate principal amount of $10.0 million or more, or the acceleration of the maturity of other Indebtedness, other than Non-Recourse Indebtedness, in an aggregate principal amount of $10.0 million or more for any other reason; or
(6) one or more final judgments, orders or decrees for the payment of money not covered by insurance in excess of $10.0 million, either individually or in an aggregate amount, shall be entered against Isle of Capri or any Restricted Subsidiary or any of their respective properties and not discharged, and there shall have been a period of 60 days during which a stay of enforcement of such judgment or order, by reason of pending appeal or otherwise, shall not be in effect; or
(7) certain events of bankruptcy, insolvency or reorganization with respect to Isle of Capri or any of its Significant Restricted Subsidiaries shall have occurred; or
(8) the revocation, termination, suspension or cessation to be effective of any gaming license or other right to conduct lawful gaming operations at any Casino in any jurisdiction of Isle of Capri or any Subsidiary which shall continue for more than 90 consecutive days (other than the voluntary relinquishment of any such gaming license or right if, in the reasonable opinion of Isle of Capri (as evidenced by an Officers' Certificate) such relinquishment (a) is in the best interest of Isle of Capri and its Subsidiaries, taken as a whole and (b) does not adversely affect the holders of the notes in any material respect and (c) is not reasonably expected to have, nor are the reasons therefor reasonably expected to have, any material adverse effect on the effectiveness of any gaming license or similar right, or any right to renewal thereof, or on the prospective receipt of any such license or right, in each case, in Mississippi, Louisiana or such other jurisdiction in which any Material Operations of Isle of Capri or its Subsidiaries are located); or
(9) any of (a) a default or material breach by any Restricted Subsidiary of its obligations under any Subsidiary Guarantee which continues for a period of 30 days after written notice to Isle of Capri by the trustee or to Isle of Capri and the trustee by the holders of at least 25% in aggregate principal amount of the outstanding notes, (b) the repudiation by any Restricted Subsidiary of its obligations under the Subsidiary Guarantees or (c) a judgment or decree by a court or governmental agency of competent jurisdiction declaring the unenforceability of the payment obligations under the Subsidiary Guarantee.
Acceleration
If an Event of Default other than an Event of Default specified in clause
(7) above occurs, then the trustee or the holders of at least 25% in aggregate
principal amount of the outstanding notes may, by written notice, and the
trustee upon the request of the holders of not less than 25% in aggregate
principal amount of the outstanding notes is obligated to, declare the
principal of and accrued interest on all the notes to be due and payable
immediately provided that so long as the Bank Credit Facility is in effect,
such acceleration shall not be effective until the earlier of (1) five business
days following the delivery of notice of acceleration to the agent under the
Bank Credit Facility and (2) the acceleration of any Indebtedness under the
Bank Credit Facility. If an Event of Default specified in clause (7) above
occurs, then the principal of and accrued interest on all the notes ipso facto
becomes and is immediately due and payable without any declaration or other act
on the part of the trustee or any holder.
After a declaration of acceleration, the holders of a majority in aggregate principal amount of outstanding notes may, by notice to the trustee, rescind such declaration of acceleration if all existing Events of Default have been cured or waived, other than nonpayment of principal of and accrued interest on the notes that has become due solely as a result of such acceleration and if the rescission of acceleration would not conflict with any judgment or decree. The holders of a majority in aggregate principal amount of the outstanding notes also have the right to waive past defaults under the indenture except a default in the payment of the principal of or interest on any note, or in respect of a covenant or a provision which cannot be modified or amended without the consent of all holders.
In the event of a declaration of acceleration in respect of the notes because an Event of Default specified in clause (5) above shall have occurred and be continuing, such declaration of acceleration shall be automatically
annulled if the Indebtedness that is the subject of such Event of Default has been discharged or the holders thereof have rescinded their declaration of acceleration in respect of such Indebtedness, and written notice of such discharge or rescission, as the case may be, shall have been given to the trustee by Isle of Capri and countersigned by the holders of such Indebtedness or a trustee, fiduciary or agent for such holders, within 30 days after such declaration of acceleration in respect of the notes, and no other Event of Default has occurred during such 30-day period which has not been cured or waived during such period.
No holder of any of the notes has any right to institute any proceeding with respect to the indenture or any remedy thereunder, unless the holders of at least 25% in aggregate principal amount of the outstanding notes have made written request, and offered reasonable indemnity, to the trustee to institute such proceeding as trustee, the trustee has failed to institute such proceeding within 15 days after receipt of such notice and the trustee has not within such 15-day period received directions inconsistent with such written request by holders of a majority in aggregate principal amount of the outstanding notes. Such limitations do not apply, however, to a suit instituted by a holder of a note for the enforcement of the payment of the principal of, premium, if any, or accrued interest on, such note on or after the Stated Maturity thereof.
Defeasance
Isle of Capri may at any time terminate all of its obligations with respect to the notes ("defeasance"), except for certain obligations, including those regarding any trust established for a defeasance and obligations to register the transfer or exchange of the notes, to replace mutilated, destroyed, lost or stolen notes and to maintain agencies in respect of notes. Isle of Capri may at any time terminate its obligations under certain covenants set forth in the indenture, including all of those described under the subheading "Certain Covenants," and any omission to comply with such obligations will not constitute a Default or an Event of Default with respect to the notes issued under the indenture ("covenant defeasance"). In order to exercise either defeasance or covenant defeasance, Isle of Capri must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the notes, money or United States Government Obligations, or a combination thereof, in such amounts as will be sufficient to pay the principal of and premium, if any, and interest on the notes to redemption or maturity, together with all other sums payable by it under the indenture, and comply with certain other conditions, including the delivery of an opinion as to certain tax matters. Defeasance of the notes will result in the termination of the obligations of the Subsidiary Guarantors under their respective Subsidiary Guarantees.
Satisfaction and Discharge
The indenture will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange of notes) as to all outstanding notes when either:
(1) all such notes theretofore authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by Isle of Capri and thereafter repaid to Isle of Capri or discharged from such trust) have been delivered to the trustee for cancellation; or
(2) (a) all such notes not theretofore delivered to the trustee for cancellation have become due and payable and Isle of Capri has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust for this purpose an amount of money sufficient to pay and discharge the entire Indebtedness on the notes not theretofore delivered to the trustee for cancellation, for principal, premium, if any, and accrued interest to the date of such deposit,
(b) Isle of Capri has paid all sums payable by it under the Indenture; and
(c) Isle of Capri has delivered irrevocable instructions to the trustee to apply the deposited money toward the payment of the notes at maturity or the redemption date, as the case may be. In addition, Isle of Capri must deliver an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent to satisfaction and discharge have been complied with.
Amendments and Waivers
From time to time Isle of Capri, when authorized by resolutions of the Board of Directors, and the trustee may, without the consent of the holders of the notes, amend, waive or supplement the indenture, the notes or the Subsidiary Guarantees for certain specified purposes, including, among other things, curing ambiguities, defects or inconsistencies and making any change that does not adversely affect the rights of any holder. Other amendments and modifications of the indenture or the notes may be made by Isle of Capri and the trustee with the consent of the holders of not less than a majority of the aggregate principal amount of the outstanding notes; provided that no such modification or amendment may, without the consent of the holder of each outstanding note affected thereby,
(1) reduce the principal amount outstanding of, change the Stated Maturity of, or alter the redemption provisions of, the notes;
(2) change the currency in which any notes or any premium or the accrued interest thereon is payable;
(3) reduce the percentage in principal amount outstanding of notes whose holders must consent to an amendment, supplement or waiver or consent to take any action under the indenture or the notes;
(4) impair the right to institute suit for the enforcement of any payment on or with respect to the notes;
(5) modify the ability to waive defaults or specified covenants, except to increase the percentage of notes required to effect a waiver;
(6) reduce the rate of or change the time for, payment of interest on the notes;
(7) modify or change any provision of the indenture or the related definitions affecting the subordination or ranking of the notes or any Subsidiary Guarantee in any manner that materially and adversely affects the holders; or
(8) amend, change or modify the obligation of Isle of Capri to make and consummate a Change of Control Offer in the event of a Change of Control or make and consummate an Excess Sale/Loss Proceeds Offer with respect to any Asset Sale or Event of Loss or modify any of the provisions or definitions with respect thereto.
In addition to the foregoing, no modification or amendment may, without the consent of the holders of at least 66 2/3% of the aggregate principal amount of the outstanding notes, modify the terms of or release any of the Subsidiary Guarantees except as provided under the subheading "Subsidiary Guarantees" and "Restricted and Unrestricted Subsidiaries."
Regarding the Trustee
State Street Bank and Trust Company is the trustee under the indenture.
Book-Entry Notes
The old notes offered and sold to qualified institutional buyers (as defined under Rule 144A of the Securities Act) or "QIBs" were each registered in book-entry form and are represented by a global note in fully registered form without interest coupons. The global note was deposited with the trustee as custodian for The Depository Trust Company or "DTC" and registered in the name of Cede & Co.
The old notes offered and sold to persons outside the United States who received such old notes pursuant to sales in accordance with Regulation S under the Securities Act were initially represented by a global note in fully registered form without interest coupons. This global note was deposited with the trustee as custodian for DTC and registered in the name of Cede & Co. Before the expiration of the "40-day restricted period" (within the meaning of Rule 903 of Regulation S), transfers of interest in this global note were only effected through records maintained by DTC, Cedel Bank, societe anonyme ("CEDEL") or the Euroclear System ("Euroclear").
Except as described below, the new notes will be represented by one or more global notes. We will deposit the global notes representing the new notes with DTC. The global notes will be registered in the name of DTC or its nominee. Except as provided below, the new notes will not be issued in definitive form. One certificate will be issued in the principal amount of $200 million.
Holders of new notes who elect to take physical delivery of their certificates instead of holding their interest through the global notes will be issued a certificated new note in registered form. Upon the transfer of any certificated new note initially issued to such holders, such certificated new note will, unless the transferee requests otherwise or the global notes have previously been exchanged in whole for certificated new notes, be exchanged for an interest in the global notes representing the new notes.
The Depository Trust Company is a limited-purpose trust company organized under the New York Banking Law. It is a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants (including CEDEL and Euroclear) deposit with it. DTC also facilitates the settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through electronic book-entry changes in participants' accounts, which eliminates the need for physical movement of certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and other organizations. DTC is owned by a number of its direct participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to DTC's book entry system is also available to others, such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. These other entities are referred to as "indirect participants." The rules applicable to DTC and its participants are on file with the SEC.
Purchases of new notes represented by a global note under DTC's system must be made by or through direct participants. Direct participants will receive a credit for the new notes on DTC's records. The ownership interest of each actual purchaser of each new note will be recorded on the direct and indirect participants' records. Each actual purchaser is referred to as a "beneficial owner." Beneficial owners will not receive written confirmation from DTC of their purchase, but beneficial owners are expected to receive written confirmations providing details of the transaction and periodic statements of their holdings from the direct or indirect participant through which the beneficial owner entered into the transaction.
Transfers of ownership interests in the new notes will be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in the new notes, except if use of the book-entry system for the new notes is discontinued. All beneficial ownership interests in the global notes, including those held through Euroclear or CEDEL, will be subject to the procedures and requirements of DTC and, where applicable, Euroclear or CEDEL.
The laws of some states require that certain purchasers of notes take physical delivery of securities in definitive form. These limits and laws may impair the ability to transfer beneficial interests in the global notes.
So long as the depository for the global notes, or its nominee, is the registered owner of the global notes, it will be considered the sole owner or holder of the notes represented by the global notes. Except as provided below, owners of beneficial interests in the new notes represented by the global notes will not be entitled to have their new notes represented by such global notes registered in their names, will not receive or be entitled to receive physical delivery of the new notes in definitive form and will not be considered the owners or holders of the notes under the indenture.
To facilitate subsequent transfers, all notes deposited by participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of the new notes with DTC and their registration in the
name of Cede & Co. cause no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the new note. DTC's records reflect only the identity of the direct participants to whose accounts the notes are credited, which may or may not be the beneficial owners. The participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants and by direct participants and indirect participants to beneficial owners will be governed by arrangements among them. Those arrangements are subject to any applicable statutory or regulatory requirements.
Neither DTC nor Cede & Co. will consent or vote with respect to the new notes. Under its usual procedures, DTC mails an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to direct participants whose accounts the new notes are credited on the record date. Those direct participants are identified in a listing attached to the omnibus proxy.
We will make payments of principal, any premium and interest on the global notes through the trustee or a paying agent to the depository, as the registered owner of the global notes. None of the trustee, the paying agent or our company will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of the global notes or for maintaining, supervising or reviewing any records relating to beneficial ownership interests.
DTC has advised us that, upon its receipt of any payment in respect of a global note, it will credit direct participants' accounts on the payable date in accordance with their respective holdings shown on DTC's records unless it has reason to believe that it will not receive payment on the payable date. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with notes held for the accounts of customers in bearer form or registered in "street name." These payments will be the responsibility of the participant and not of DTC, the paying agent or our company, subject to any applicable statutory or regulatory requirements.
It is our responsibility or the paying agent's responsibility to make payments to DTC. It is the responsibility of DTC to disburse the payments to direct participants. It is the responsibility of direct and indirect participants to disburse the payments to beneficial owners.
Transfer between participants in DTC will be effected in the ordinary way in accordance with DTC rules. If a holder requires physical delivery of certificated notes for any reason, including to sell notes to persons in states which require physical delivery of such notes or to pledge such notes, the holder must transfer its interest in the global note in accordance with the normal procedures of DTC and the procedures set forth in the indenture. Transfers between participants in Euroclear and CEDEL will be effected in the ordinary way in accordance with their respective rules and operating procedures.
Cross-market transfers between DTC, on the one hand, and directly or indirectly through Euroclear or CEDEL participants, on the other, will be effected by DTC in accordance with DTC rules on behalf of Euroclear or CEDEL, as the case may be, by its respective depository. However, such cross-market transactions will require delivery of instructions to Euroclear or CEDEL, as the case may be, by the counterparty in such system in accordance with its rules and procedures and within its established deadlines (Brussels time). Euroclear or CEDEL, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depository to take action to effect final settlement on its behalf by delivering or receiving interests in the global note in DTC and making or receiving payment in accordance with normal procedures for same-day funds settlements applicable to DTC. CEDEL participants and Euroclear participants may not deliver instructions directly to the depositories for CEDEL or Euroclear.
Because of time zone differences, the securities account of a Euroclear or CEDEL participant purchasing an interest in a global note from a DTC participant will be credited during the securities settlement processing day (which must be a business day for Euroclear and CEDEL) immediately following the DTC settlement date. The
credit of any transactions in interests in a global note settled during such processing day will be reported to the relevant Euroclear or CEDEL participant on such day. Cash received in Euroclear or CEDEL as a result of sales of interests in a global note by or through a Euroclear or CEDEL participant to a DTC participant will be received for value on the DTC settlement date but will be available in the relevant Euroclear or CEDEL cash account only as of the business day following DTC settlement date.
Subject to certain conditions, any person having a beneficial interest in a global note may, upon request to the trustee, exchange its beneficial interest for certificated notes. Upon any such issuance of certificated notes, the trustee is required to register such certificated notes in the name of, and cause the same to be delivered to, the person or persons who requested certificated notes or its nominee. In addition, if DTC is at any time unwilling or unable to continue as a depositary for the global notes and a successor depositary is not appointed by us within 90 days, we will issue certificated notes in exchange for the global notes. If there is an event of default under the indenture, DTC will exchange the global notes for certificated notes, which it will distribute to its participants.
According to DTC, the above information has been provided to its participants and other members of the financial community for informational purposes only and is not intended to serve as a representation, warranty or contract modification of any kind.
The information in this section concerning DTC and its book-entry system has been obtained from sources that we believe to be reliable. However, we take no responsibility for the accuracy of that information.
Certain Definitions
Set forth below are the meanings of some of the terms that are important in understanding the above description of the new notes and the terms contained in the indenture.
"Acquired Indebtedness" means Indebtedness of a Person existing at the time such Person becomes a Subsidiary of Isle of Capri or that is assumed in connection with an Asset Acquisition by such Person, but not Indebtedness incurred in connection with, or in anticipation of, such Person becoming a Subsidiary of Isle of Capri or such acquisition.
"Affiliate" of any Person means any other Person that, directly or indirectly, controls, is controlled by or is under direct or indirect common control with, such Person and with respect to any natural Person, any other immediate family member of such natural Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of Voting Stock or other equity interests, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing; provided that, in any event, any Person that owns directly or indirectly 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 10% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.
"Airplane" means the King Air 200 airplane owned by Isle of Capri on March 27, 2002.
"Asset Acquisition" means (1) any capital contribution (including, without limitation, transfers of cash or other property to others or payments for property or services for the account or use of others, or otherwise), or purchase or acquisition of Capital Stock or other similar ownership or profit interest, by Isle of Capri or any of its Subsidiaries in any other Person, in either case pursuant to which such Person shall become a Subsidiary of Isle of Capri or any of its Subsidiaries or shall be merged with or into Isle of Capri or any of its Subsidiaries or (2) any acquisition by Isle of Capri or any of its Subsidiaries of the assets of any Person which constitute substantially all of an operating unit or business of such Person.
"Assets Held for Sale or Development" means:
(1) the FFC Preferred Stock;
(2) the Airplane;
(3) the Real Estate Options;
(4) the Cripple Creek Land; and
(5) the Discontinued Assets.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease (other than an operating lease relating to assets the fair market value of which, determined in the good faith judgment of the Board of Directors, does not exceed $2.0 million) assignment, issuance or other disposition (including, without limitation, by means of a sale-leaseback transaction) by Isle of Capri or any Restricted Subsidiary to any Person (other than Isle of Capri or a wholly owned Restricted Subsidiary), in one transaction or a series of related transactions, of:
(1) any Capital Stock of any Restricted Subsidiary or other similar equity interest; or
(2) any other property or asset of Isle of Capri or any Restricted Subsidiary other than:
(a) Assets Held for Sale or Development;
(b) any Excess Land;
(c) current assets, as defined in accordance with GAAP, in the ordinary course of business;
(d) damaged, worn out or other obsolete property in the ordinary course of business if such property is no longer necessary for the proper conduct of such business;
(e) property no longer used or useful in the ordinary course of business or property replaced with similar property of similar utility in the ordinary course of business;
(f) each other disposition (or series of related dispositions) that results in Net Cash Proceeds to Isle of Capri and its Restricted Subsidiaries of less than or equal to $1.0 million; and
(g) an Investment permitted under the covenant described under the subheading "Certain Covenants--Limitation on Restricted Payments" or a disposition made in accordance with the covenant described under the subheading "Certain Covenants--Consolidation, Merger, Conveyance, Transfer or Lease."
"Bank Credit Facility" means that certain Amended and Restated Credit Agreement dated as of March 2, 2000 among Isle of Capri, the lenders named therein and Canadian Imperial Bank of Commerce, as administrative agent and issuing lender, including any notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended (including any amendment and restatement thereof), modified, extended, deferred, refunded, substituted, replaced or refinanced from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder or adding Subsidiaries of Isle of Capri as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, creditor, lender or group of creditors or lenders.
"Black Hawk LLC" means the Isle of Capri Casino located in Black Hawk, Colorado.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of Isle of Capri, to have been duly adopted by the Board of Directors of Isle of Capri, or any duly authorized committee thereof and to be in full force and effect on the date of such certification, and delivered to the trustee.
"Capital Stock" means, with respect to any Person, any and all shares, interests (including partnership and other equity interests), participations, rights in, or other equivalents (however designated and whether voting or
nonvoting) of, such Person's capital stock, whether outstanding on March 27, 2002 or issued after such date, and any and all rights, warrants or options exchangeable for or convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation to pay rent or other amounts under a lease of (or other agreement conveying the right to use) any property (whether real, personal or mixed) that is required to be classified and accounted for as a capital lease obligation under GAAP, and, for the purpose of the indenture, the amount of such obligation at any date of determination shall be the capitalized amount thereof at such date, determined in accordance with GAAP.
"Cash Equivalents" means any of the following, to the extent owned by Isle of Capri or any of its Restricted Subsidiaries free and clear of all Liens and having a maturity of not greater than 270 days from the date of acquisition:
(1) any evidence of Indebtedness issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof);
(2) insured certificates of deposit or acceptances of any commercial bank
that is a member of the Federal Reserve System, that issues (or the
parent of which issues) commercial paper rated as described in clause
(3) below and that has combined capital and surplus and undivided
profits of not less than $500.0 million;
(3) commercial paper issued by a corporation (except an Affiliate of Isle of Capri) organized under the laws of any state of the United States or the District of Columbia and rated at least A-1 (or the then equivalent grade) by Standard & Poor's Corporation or at least Prime-1 (or the then equivalent grade) by Moody's Investors Service, Inc.; and
(4) repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the United States government or any agency or other instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof), provided that the terms of such repurchase and reverse repurchase agreements comply with the guidelines set forth in the Federal Financial Agreements of Depository Institutions with Securities Dealers and Others, as adopted by the Comptroller of the Currency.
"Casino" means a gaming establishment owned by Isle of Capri or a Restricted Subsidiary and containing at least 600 slot machines and 10,000 square feet of space dedicated to the operation of games of chance.
"Casino Hotel" means any hotel or similar hospitality facility with at least 100 rooms owned by Isle of Capri or a Restricted Subsidiary and serving a Casino.
"Casino Related Facility" means any building, restaurant, theater, amusement park or other entertainment facility, parking or recreational vehicle facilities or retail shops located at or adjacent to, and directly ancillary to, a Casino and used or to be used in connection with such Casino, other than a Casino Hotel.
"Change of Control" means after March 27, 2002, an event or series of events by which:
(1) any "person" or "group" (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) (other than the Permitted Equity Holders) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have "beneficial ownership" of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of securities representing the greater of
(a) that percentage of the combined voting power of Isle of Capri's outstanding Voting Stock held by Permitted Equity Holders (including shares as to which Isle of Capri or a Permitted Equity Holder holds an effective proxy to vote); or
(b) 35% or more of the combined voting power of Isle of Capri's outstanding Voting Stock;
but excluding in each case from the percentage of voting power held by any group, the voting power of shares owned by the Permitted Equity Holders who are deemed to be members of the group provided that such Permitted Equity Holders beneficially own a majority of the voting power of the Voting Stock held by such group, and at such time the Permitted Equity Holders together shall fail to beneficially own, directly or indirectly, securities representing at least the same percentage of voting power of such Voting Stock as the percentage "beneficially owned" by such person or group; or
(2) during any period of 24 consecutive months, individuals who at the beginning of such period constituted the Board of Directors (together with any new or replacement directors whose election by the Board of Directors, or whose nomination for election by Isle of Capri's shareholders, was approved by a vote of at least a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors then in office; or
(3) Isle of Capri consolidates with or merges with or into any Person or conveys, transfers or leases all or substantially all of its assets to any Person, pursuant to a transaction in which the outstanding Voting Stock of Isle of Capri is changed into or exchanged for cash, securities or other property (other than any such transaction where the outstanding Voting Stock of Isle of Capri is (a) changed only to the extent necessary to reflect a change in the jurisdiction of incorporation of Isle of Capri or (b) is exchanged for (i) Voting Stock of the surviving corporation which is not Disqualified Stock or (ii) cash, securities and other property (other than Capital Stock of the surviving corporation) in an amount which could be paid by Isle of Capri as a Restricted Payment as described under the subheading "Limitation on Restricted Payments" (and such amount shall be treated as a Restricted Payment) and no person or group, other than Permitted Equity Holders (including any Permitted Equity Holders who are part of a group where such Permitted Equity Holders beneficially own a majority of the voting power of the Voting Stock held by such group), owns immediately after such transaction, directly or indirectly, more than 35% of the combined voting power of the outstanding Voting Stock of the surviving corporation; or
(4) Isle of Capri is liquidated or dissolved or adopts a plan of liquidation or dissolution other than in a transaction which complies with the provisions described under the subheading "Consolidation, Merger, Conveyance, Transfer or Lease."
"Consolidated" refers to the consolidation of accounts in accordance with
GAAP.
"Consolidated Cash Flow" means, for any period, the sum of:
(1) the Consolidated Net Income of Isle of Capri and its Restricted Subsidiaries for such period; plus
(2) the sum of the following items to the extent deducted in determining Consolidated Net Income in accordance with GAAP and without duplication:
(a) all Consolidated Interest Expense;
(b) Consolidated Non-cash Charges;
(c) Consolidated Income Tax Expense; and
(d) any pre-opening expenses.
"Consolidated Coverage Ratio" means the ratio of:
(1) Consolidated Cash Flow of Isle of Capri and its Restricted Subsidiaries for the period (the "Reference Period") consisting of the four full fiscal quarters for which financial statements are available that immediately precede the date of the transaction or other circumstances giving rise to the need to calculate the Consolidated Coverage Ratio (the "Transaction Date") to
(2) the Consolidated Interest Expense for such Reference Period based upon the pro forma amount of Indebtedness of Isle of Capri and its Restricted Subsidiaries outstanding on the Transaction Date and after giving effect to the transaction in question, unless otherwise provided in the indenture.
For purposes of this definition, if the Transaction Date occurs before the date on which Isle of Capri's consolidated financial statements for the four full fiscal quarters after March 27, 2002 are available, Consolidated Cash Flow and Consolidated Interest Expense shall be calculated, in the case of Isle of Capri and its Restricted Subsidiaries, after giving effect on a pro forma basis as if the Notes outstanding on the Transaction Date were issued on the first day of such four full fiscal quarter period.
In addition, Consolidated Cash Flow and Consolidated Interest Expense shall be calculated after giving effect on a pro forma basis for the period of such calculation to
(1) the incurrence or retirement of any Indebtedness of Isle of Capri and its Restricted Subsidiaries at any time during the Reference Period or subsequent to such Reference Period but prior to the Transaction Date, including, without limitation, the incurrence of the Indebtedness giving rise to the need to make such calculation (unless otherwise provided in the indenture), as if such Indebtedness were incurred or retired on the first day of the Reference Period; provided that if Isle of Capri or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a third Person, the above clause shall give effect to the incurrence of such guaranteed Indebtedness as if Isle of Capri or such Restricted Subsidiary had directly incurred such guaranteed Indebtedness; and
(2) any Asset Sale, Event of Loss or Asset Acquisition (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of Isle of Capri or any of its Restricted Subsidiaries (including any Person who becomes a Subsidiary as result of the Asset Acquisition) incurring Acquired Indebtedness) occurring during the Reference Period or subsequent to such Reference Period but prior to the Transaction Date, and any permanent prepayment, repayment, redemption, purchase or retirement of Indebtedness in connection with such Asset Sale, Event of Loss, Asset Acquisition, as if such Asset Sale, Event of Loss or Asset Acquisition and/or retirement occurred on the first day of the Reference Period.
Furthermore, in calculating Consolidated Interest Expense for purposes of this "Consolidated Coverage Ratio," interest on Indebtedness determined on a fluctuating basis shall be deemed to accrue at the rate in effect on the Transaction Date for such entire period.
"Consolidated Income Tax Expense" means, as applied to any Person for any period, federal, state, local and foreign income taxes (including franchise taxes imposed in lieu of or as additional income tax) of such Person and its Restricted Subsidiaries for such period, determined in accordance with GAAP; provided, that for purposes hereof, "income taxes" shall specifically exclude any taxes paid to or imposed by a Gaming Authority.
"Consolidated Interest Expense" means as applied to any Person for any period the sum of the following items, without duplication:
(1) the aggregate amount of interest recognized by such Person and its Restricted Subsidiaries in respect of their Consolidated Indebtedness, including all interest capitalized by such Person and its Restricted Subsidiaries during such period and all commissions, discounts and other similar fees and charges owed by such Person or any of its Restricted Subsidiaries for letters of credit and bankers' acceptance financing and the net costs associated with Interest Rate and Currency Protection Obligations of such Person and its Restricted Subsidiaries, but excluding other financing costs, amortization of deferred financing cost and debt discount or premium;
(2) the aggregate amount of the interest component of rentals in respect of Capitalized Lease Obligations recognized by such Person and its Restricted Subsidiaries;
(3) to the extent any Indebtedness of any other Person is guaranteed by such Person or any of its Restricted Subsidiaries, the aggregate amount of interest paid or accrued by such other Person during such period attributable to any such guaranteed Indebtedness;
(4) the interest portion of any deferred payment obligation;
(5) an amount equal to 1/3 of the base rental expense (i.e., not any rent expense paid as a percentage of revenues) attributable to such Person and its Restricted Subsidiaries; and
(6) the amount of dividends payable by such Person and its Restricted Subsidiaries in respect of Disqualified Stock (other than such dividends payable to such Restricted Subsidiaries). "Consolidated Net Income" means, for any period, the aggregate of the consolidated Net Income or net loss of Isle of Capri and its Restricted Subsidiaries determined in accordance with GAAP, less (to the extent included in such consolidated Net Income)
(1) the Net Income or net loss of any Person (the "other Person")
(a) other than a Restricted Subsidiary, except in each such case such Net Income shall be included to the extent of the amount of management fees or cash dividends or other cash distributions in respect of Capital Stock or other interest owned actually paid (out of funds legally available therefor) to and received by Isle of Capri or its Restricted Subsidiaries, other than dividends, if applicable, or other distributions to pay obligations of or with respect to such Unrestricted Subsidiary, such as income taxes; or
(b) in which Isle of Capri or any of its Restricted Subsidiaries has a joint interest with a third party (which interest of a third party causes the Net Income or net loss of such other Person not to be consolidated into the Net Income or net loss of Isle of Capri and its Restricted Subsidiaries in accordance with GAAP), except in each such case such Net Income shall be included to the extent of the amount of management fees or cash dividends or other cash distributions in respect of Capital Stock or other interest owned actually paid (out of funds legally available therefor) to and received by Isle of Capri or its Restricted Subsidiaries, other than dividends, if applicable, or other distributions to pay obligations of or with respect to such Unrestricted Subsidiary, such as income taxes;
(2) items classified as extraordinary or any non-cash item classified as non-recurring, other than the tax benefit of the utilization of net operating loss carry forwards or alternative minimum tax credits;
(3) except to the extent includable in clause (1) above, the Net Income or loss of any other Person accrued or attributable to any period before the date on which it becomes a Restricted Subsidiary or is merged into or consolidated with Isle of Capri or any of its Restricted Subsidiaries or such other Person's property or Capital Stock (or a portion thereof) is acquired by Isle of Capri or any of its Restricted Subsidiaries; and
(4) the Net Income of any Restricted Subsidiary to the extent that the declaration of dividends or similar distributions by such Restricted Subsidiary of that income is not at the time permitted, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgement, decree, order, statute, law, rule or governmental regulations applicable to that Restricted Subsidiary or its stockholders.
"Consolidated Net Worth" means, at any date of determination, the sum of:
(1) the consolidated equity of the common stockholders of such Person and its Restricted Subsidiaries on such date; plus
(2) the respective amounts reported on such Person's most recent balance sheet with respect to any series of preferred stock (other than Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received by such Person upon issuance of such preferred stock; less
(a) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of tangible assets of a going concern business made within 12 months after the acquisition of such business) subsequent to the date of the indenture in the book value of any asset owned by such Person or a Restricted Subsidiary of such Person;
(b) all investments in Persons that are not Restricted Subsidiaries; and
(c) all unamortized debt discount and expense and unamortized deferred charges, all of the foregoing determined in accordance with GAAP.
"Consolidated Non-cash Charges" of any Person means, for any period, the aggregate depreciation, amortization and other non-cash charges of such Person and its Restricted Subsidiaries on a Consolidated basis for such period, as determined in accordance with GAAP (excluding any non-cash charge which requires an accrual or reserve for cash charges for any future period).
"Credit Facility" means one or more debt or commercial paper facilities with banks or other institutional lenders (including the Bank Credit Facility) providing for revolving credit loans, term loans or letters of credit, in each case together with any amendments, supplements, modifications (including by any extension of the maturity thereof), substitutions, refinancings or replacements thereof by a lender or a syndicate of lenders in one or more successive transactions (including any such transaction that changes the amount available thereunder, replaces such agreement or document or provides for other agents or lenders).
"Cripple Creek Land" means the real estate owned or leased by Isle of Capri in Cripple Creek, Colorado.
"Default" means any Event of Default or an event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.
"Discontinued Assets" means the following assets held for sale by Isle of Capri or its Subsidiaries as of March 27, 2002:
(1) the Diamond Lady riverboat;
(2) the Lucky Seven barge and other unused marine equipment; and
(3) gaming equipment held for sale.
"Disqualified Stock" means, with respect to any Person, any Capital Stock or other similar ownership or profit interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is exchangeable for Indebtedness, or is redeemable at the option of the holder thereof, in whole or in part, on or before the Maturity Date of the Notes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Event of Loss" means, with respect to any property or asset (tangible or intangible, real or personal) that has a Fair Market Value of $5.0 million or more, any of the following:
(1) any loss, destruction or damage of such property or asset;
(2) any institution of any proceedings for the condemnation or seizure of such property or asset or for the exercise of any right of eminent domain or navigational servitude; or
(3) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property or asset, or confiscation of such property or asset or the requisition of the use of such property or asset.
"Excess Land" means the approximately 12 acres of land owned by Isle of Capri or its Restricted Subsidiaries as of March 27, 2002 Date adjacent to the Isle-Bossier City.
"Excess Sale/Loss Proceeds" and ''Excess Sale/Loss Proceeds Offer" have the meanings set forth in the covenant described under the subheading "Certain Covenants--Limitation on Asset Sales and Events of Loss."
"Fair Market Value" or "fair value" means, with respect to any asset or property, the price which could be reasonably expected to 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. Unless otherwise specified by the indenture, Fair Market Value shall be determined by the Board of Directors of Isle of Capri acting in good faith and shall be evidenced by a Board Resolution delivered to the trustee.
"FFC Preferred Stock" means the shares of preferred stock, $100 par value, of Freedom Financial Corporation owned by Isle of Capri.
"FF&E" means furniture, fixtures and equipment used in the ordinary course of business in the operation of a Permitted Line of Business.
"FF&E Financing" means Indebtedness, the proceeds of which will be used solely to finance or refinance the acquisition or lease by Isle of Capri or a Restricted Subsidiary of FF&E.
"GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board that are applicable from time to time.
"Gaming Authority" means any agency, authority, board, bureau, commission, department, office or instrumentality of any nature whatsoever of the United States federal or any foreign government, any state, province or any city or other political subdivision or otherwise and whether now or hereafter in existence, or any officer or official thereof, with authority to regulate any gaming operation (or proposed gaming operation) owned, managed, or operated by Isle of Capri or any of its Subsidiaries.
"Indebtedness" of any Person means:
(1) any liability, contingent or otherwise, of such Person:
(a) for borrowed money, whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof;
(b) evidenced by a note, bond, debenture or similar instrument, letters of credit, bankers' acceptances or other similar facilities, other than a trade payable or other than a current liability incurred in the ordinary course of business; or
(c) for the payment of money relating to a Capitalized Lease Obligation or other obligation relating to the deferred purchase price of property or services (including a purchase money obligation, but not including any docking fees payable to Louisiana Downs, Inc. or guarantees thereof);
(2) any liability of others of the kind described in the preceding clause
(1) which such Person has guaranteed or which is otherwise its legal
liability, including, without limitation, any obligation;
(a) to pay or purchase such liability;
(b) to supply funds to or in any other manner invest in the debtor (including an agreement to pay for property or services irrespective of whether such property is received or such services are rendered); and
(c) to purchase or lease (other than pursuant to an operating lease of hotel rooms or similar lodging facilities entered into for the principal purpose of providing lodging at or near the site of a Casino, which facilities are reasonably expected to be beneficial to Isle of Capri's operating results) property or to purchase services;
in each such case primarily for the purpose of enabling a debtor to make a payment of such Indebtedness or to assure the holder or such Indebtedness against loss;
(3) any obligation secured by a Lien to which the property or assets of such Person are subject, whether or not the obligations secured thereby shall have been assumed by or shall otherwise be such Person's legal liability;
(4) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Capital Stock of or other ownership or profit interest in such Person or any of its Affiliates or any warrants, rights or options to acquire such Capital Stock, valued, in the case of Disqualified Stock, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends;
(5) all Interest Rate and Currency Protection Obligations; and
(6) any and all deferrals, renewals, extensions and refundings of, or amendments, modifications or supplements to, any liability of the kind described in any of the preceding clauses.
"Interest Rate and Currency Protection Obligations" means the obligations of any Person pursuant to any interest rate swap, cap or collar agreement, interest rate future or option contract, currency swap agreement, currency future or option contract and other similar agreement designed to hedge against fluctuations in interest rates or foreign exchange rates.
"Investment" in any Person means any direct or indirect loan, advance, guarantee or other extension of credit or capital contribution to (by means of transfers of cash or other property to others or payments for property or services for the account or use of others, or otherwise), or purchase or acquisition of Capital Stock, warrants, rights, options, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, such Person or Indebtedness of any other Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness. The amount of any Investment shall be the original cost of such Investment, plus the cost of all additions thereto, and minus the amount of any portion of such Investment repaid to the Person making such Investment in cash as a repayment of principal or a return of capital, as the case may be, but without any other adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment. In determining the amount of any Investment involving a transfer of any property other than cash, such property shall be valued at its fair value at the time of such transfer, as determined in good faith by the Board of Directors of the Person making such transfer, whose determination will be conclusive absent manifest error.
"Isle-Bettendorf" means the Isle of Capri Casino located in Bettendorf, Iowa.
"Isle-Biloxi" means the Isle of Capri Casino located in Biloxi, Mississippi.
"Isle-Boonville" means the Isle of Capri Casino located in Boonville, Missouri.
"Isle-Bossier City" means the Isle of Capri Casino located in Bossier City, Louisiana.
"Isle-Kansas City" means the Isle of Capri Casino located in Kansas City, Missouri.
"Isle-Lake Charles" means the Isle of Capri Casino located in Lake Charles, Louisiana.
"Isle-Lula" means the Isle of Capri Casino located in Lula, Mississippi.
"Isle-Vicksburg" means the Isle of Capri Casino located in Vicksburg, Mississippi.
"Lien" means any mortgage, lien (statutory or other), pledge, security interest, encumbrance, claim, hypothecation, assignment for security, deposit arrangement or preference or other security agreement of any kind or nature whatsoever. For purposes of the indenture, a Person shall be deemed to own subject to a Lien any
property which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such Person.
"Marketable Securities" means Cash Equivalents or any fund investing primarily in Cash Equivalents.
"Material Operations" means assets or operations of Isle of Capri or its Subsidiaries that (1) that exceed 5% of the assets of Isle of Capri and its Consolidated Subsidiaries or (2) contributed more than 5% of the income from continuing operations of Isle of Capri and its Consolidated Subsidiaries (before income taxes, extraordinary items and intercompany management or similar fees) for the most recently completed four fiscal quarters of Isle of Capri for which financial statements are available.
"Maturity" or "Maturity Date" when used with respect to any note, means the date specified in such note as the fixed date on which the last installment of principal of such note is due and payable.
"Net Cash Proceeds" means, with respect to any Asset Sale, Event of Loss, issuance or sale by Isle of Capri of its Capital Stock or incurrence of Indebtedness, as the case may be, the proceeds thereof in the form of cash or Cash Equivalents received by Isle of Capri or any of its Restricted Subsidiaries (whether as initial consideration, through the payment or disposition of deferred compensation or the release of reserves), after deducting therefrom (without duplication) (1) reasonable and customary brokerage commissions, underwriting fees and discounts, legal fees, finders fees and other similar fees and expenses incurred in connection with such Asset Sale or Event of Loss, (2) provisions for all taxes payable as a result of such Asset Sale or Event of Loss, (3) payments made to retire and permanently reduce any commitment with respect to any Indebtedness (other than payments on the notes) secured by the assets subject to such Asset Sale or Event of Loss to the extent required pursuant to the terms of such Indebtedness and (4) appropriate amounts to be provided by Isle of Capri or any of its Restricted Subsidiaries, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale or Event of Loss and retained by Isle of Capri or any of its Restricted Subsidiaries, as the case may be, after such Asset Sale or Event of Loss, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale or Event of Loss, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash or Cash Equivalents, actually paid to a Person that is not an Affiliate of Isle of Capri or, in the case of reserves, are actually established and, in each case, are properly attributable to such Asset Sale or Event of Loss.
"Net Income" means, with respect to any Person for any period, the net income or loss of such Person determined in accordance with GAAP.
"Non-Recourse Indebtedness" means Indebtedness (1) as to which none of Isle of Capri or any of its Restricted Subsidiaries provides any credit support or is directly or indirectly liable for the payment of principal or interest thereof and a default with respect to which would not entitle any party to cause any other Indebtedness of Isle of Capri or a Restricted Subsidiary to be accelerated or (2) incurred by Isle of Capri or a Restricted Subsidiary to purchase one or more assets from the lending source, provided that the lender's only remedy against the obligor in the event of a default with respect to such Indebtedness, whether as a result of the failure to pay principal or interest when due or any other reason, is limited to repossession of such assets purchased.
"Permitted Equity Holders" means Bernard Goldstein, Irene Goldstein and their lineal descendents (including adopted children and their lineal descendents) and any entity the equity interests of which are owned by only such persons or which was established for the exclusive benefit of, or the estate of, any of the foregoing.
"Permitted Investments" means
(1) Investments in Marketable Securities;
(2) loans or advances to employees not to exceed an aggregate of $250,000 in any fiscal year of Isle of Capri and $1.0 million in the aggregate at any one time outstanding; and
(3) Investments in a Permitted Line of Business by Isle of Capri or a Restricted Subsidiary made in one or more Persons in an aggregate amount not to exceed $50.0 million at any one time outstanding.
"Permitted Liens" means:
(1) Liens on property acquired by Isle of Capri or any Restricted Subsidiary (including an indirect acquisition of property by way of a merger of a Person with or into Isle of Capri or any Restricted Subsidiary or the acquisition of a Person), provided that such Liens were in existence prior to the contemplation of such acquisition, merger or consolidation, and were not created in connection therewith or in anticipation thereof, and provided that such Liens do not extend to any additional property or assets of Isle of Capri or any Restricted Subsidiary;
(2) statutory Liens (other than those arising under ERISA) to secure the performance of obligations, surety or appeal bonds, performance bonds or other obligations of a like nature, maritime Liens for crew wages, salvage, suppliers and providers of services incurred in the ordinary course of business (exclusive of obligations in respect of the payment of borrowed money), or for taxes, assessments or governmental charges or claims, provided that in each case the obligations are not yet delinquent or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and any reserve or other adequate provision as shall be required in conformity with GAAP shall have been made therefor;
(3) leases or subleases granted to others not interfering in any material respect with the business of Isle of Capri or any Restricted Subsidiary;
(4) any charter of a Vessel, provided that (a) in the good faith judgment of the Board of Directors of the Company such Vessel is not necessary for the conduct of the business of Isle of Capri or any of its Restricted Subsidiaries as conducted immediately prior thereto; (b) the terms of the charter are commercially reasonable and represent the Fair Market Value of the charter; and (c) the Person chartering the assets agrees to maintain the Vessel and evidences such agreement by delivering such an undertaking to the trustee;
(5) with respect to the property involved, easements, rights-of-way, navigational servitudes, restrictions, minor defects or irregularities in title and other similar charges or encumbrances which do not interfere in any material respect with the ordinary conduct of business of Isle of Capri and its Subsidiaries as now conducted or as contemplated herein;
(6) Liens arising in the ordinary course of business in connection with workers' compensation, unemployment insurance or other types of social security (other than those arising under ERISA);
(7) any interest or title of a lessor in property subject to any Capitalized Lease Obligation or an operating lease;
(8) Liens arising from the filing of Uniform Commercial Code financing statements with respect to leases;
(9) Liens arising from any final judgment or order not constituting an Event of Default;
(10) Liens on documents or property under or in connection with letters of credit in the ordinary course of business, if and to the extent that the related Indebtedness is permitted under clause (1)(e) of the covenant described under the subheading "Certain Covenants--Limitation on Indebtedness"; and
(11) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods in the ordinary course of business.
"Permitted Line of Business" means, with respect to any Person, any casino gaming or pari-mutuel wagering business of such Person or any business that is related to, ancillary to or supportive of, connected with or arising out of the casino gaming or pari-mutuel wagering business of such Person (including, without limitation, developing and operating lodging, dining, amusement, sports or entertainment facilities, transportation services or other related activities or enterprises and any additions or improvements thereto).
"Permitted Related Investment" means the acquisition of property or assets by a Person to be used in connection with a Permitted Line of Business of such Person.
"Permitted Vessel Liens" means a Lien on a Vessel to secure FF&E Financing or Capitalized Lease Obligations where the holder or holders (or an agent, trustee or other representative for such holder or holders):
(1) agrees to release such Lien upon satisfaction of such FF&E Financing;
(2) agrees to release such Lien upon payment (or promise of payment) to such holder or holders (or such representative) of that portion of the proceeds of the sale of such Vessel attributable to the related FF&E; and
(3) acknowledges that such Lien does not create rights on the hull and other equipment constituting such Vessel (other than the related FF&E).
"Person" means an individual, partnership, corporation (including a business trust), joint stock company, limited liability company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
"Qualified Guarantee" means a guarantee by Isle of Capri or any of its Restricted Subsidiaries of Indebtedness of any entity primarily engaged or preparing to engage in a Permitted Line of Business, provided that:
(1) unless such Indebtedness was incurred by a Native American tribe or any agency or instrumentality thereof, Isle of Capri and its Restricted Subsidiaries at the time of the incurrence, creation or assumption of the guarantee (a) own in the aggregate at least 35% of the outstanding Voting Stock of such entity and (b) control the day to day gaming operation of such entity pursuant to a written management agreement;
(2) the primary purpose for which such Indebtedness was incurred was to
finance the development, construction or acquisition of a facility that
(a) is located in a jurisdiction in which the conduct of gaming using
electronic gaming devices is permitted pursuant to applicable law and
(b) conducts or, following such development, construction or
acquisition, will conduct gaming utilizing electronic gaming devices or
that is related to, ancillary or supportive of, connected with or
arising out of such gaming business;
(3) the pro forma Consolidated Coverage Ratio of Isle of Capri on the date of the guarantee would have been greater than 2.50 to 1.00;
(4) none of the Permitted Equity Holders or any Affiliate of such Persons, other than Isle of Capri or its Restricted Subsidiaries, is a direct or indirect obligor, contingently or otherwise, of such Indebtedness or a direct or indirect holder of any Capital Stock of such entity, other than through their respective ownership interests in Isle of Capri;
(5) at the time of the incurrence, creation or assumption of the guarantee, the notes shall be rated at least "B2" by Moody's Investor's Services, Inc. and "B" by Standard & Poor's Corporation or their respective successors (or, if either such entity or both shall not make a rating of the notes publicly available, a nationally recognized securities rating agency or agencies, as the case may be, selected by Isle of Capri); and
(6) if such Indebtedness is incurred by a Native American tribe or any agency or instrumentality thereof, including any tribal authority, for so long as such guarantee is outstanding such tribe and Isle of Capri or one of its Restricted Subsidiaries will have in effect a written agreement which has been approved by all required Governmental Authorities pursuant to which Isle of Capri or one of its Restricted Subsidiaries will manage such tribe's gaming activities at the facility or facilities with respect to which the Indebtedness was incurred in exchange for customary fees and reimbursements.
"Qualified Public Equity Offering" means a firm commitment underwritten public offering of common stock of Isle of Capri for which Isle of Capri receives net proceeds of at least $30.0 million and after which the common stock is traded on a national securities exchange or quoted on The NASDAQ Stock Market.
"Real Estate Options" means
(1) all options held by Isle of Capri or its Restricted Subsidiaries, directly or indirectly, at April 23, 1999 for an amount, in each case, not exceeding $1.0 million to purchase or lease land; and
(2) all options acquired by Isle of Capri, directly or indirectly, after April 23, 1999 for an amount, in each case, not exceeding $2.0 million, to purchase or lease land.
"Redeemable Capital Stock" means any class or series of Capital Stock to the extent that, either by its terms, by the terms of any security into which it is convertible or exchangeable, or by contract or otherwise, is or upon the happening of an event or passage of time would be, required to be redeemed prior to the final Stated Maturity of the notes or is redeemable at the option of the holder thereof at any time prior to such Stated Maturity, or is convertible into or exchangeable for debt securities at any time prior to such Stated Maturity.
"Restricted Payment" means any of
(1) the declaration or payment of any dividend or any other distribution on Capital Stock of Isle of Capri or any Subsidiary or any payment made to the direct or indirect holders (in their capacities as such) of Capital Stock of Isle of Capri or any Subsidiary (other than (a) dividends or distributions payable solely in Capital Stock (other than Disqualified Stock) otherwise permitted by the indenture and (b) in the case of a Subsidiary, dividends or distributions payable to Isle of Capri or to a Restricted Subsidiary of Isle of Capri);
(2) the purchase, defeasance, redemption or other acquisition or retirement for value of any Capital Stock of Isle of Capri or any Subsidiary (other than Capital Stock of such Subsidiary held by Isle of Capri or any of its Restricted Subsidiaries);
(3) the making of any principal payment on, or the purchase, defeasance, repurchase, redemption or other acquisition or retirement for value, before any scheduled maturity, scheduled repayment or scheduled sinking fund payment, of, any Indebtedness which is subordinated in any manner in right of payment to the notes (other than Indebtedness acquired 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); and
(4) the making of any Investment or guarantee of any Investment by Isle of Capri or any Subsidiary in any Person other than
(a) in a Person that would be, directly or indirectly, a Restricted Subsidiary of Isle of Capri immediately after giving effect to such Investment; or
(b) under a plan of reorganization or similar proceeding under applicable bankruptcy law or in connection with a workout involving creditors of such Person in exchange for Indebtedness owing by such Person that did not violate the limitations set forth under the subheading "Certain Covenants--Limitations on Restricted Payments."
"Restricted Subsidiary" means any Subsidiary of Isle of Capri that has not been designated as an Unrestricted Subsidiary pursuant to and in compliance with the provisions described under "Restricted and
Unrestricted Subsidiaries," or a Subsidiary that has been designated as a Restricted Subsidiary pursuant to and in compliance with the provisions described under "Restricted and Unrestricted Subsidiaries."
"Rhythm City-Davenport" means the Rhythm City Casino located in Davenport, Iowa.
"Senior Indebtedness" means (1) principal of, premium, if any, and interest (including post-petition interest) on, and all fees, costs, expenses and other amounts payable with respect to the Indebtedness under the Bank Credit Facility and (2) the principal of, premium, if any, and interest on any Indebtedness of Isle of Capri or the Subsidiary Guarantors, whether outstanding on March 27, 2002 or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to any Indebtedness of Isle of Capri or the Subsidiary Guarantors, as applicable. Notwithstanding the foregoing, "Senior Indebtedness" shall not include, to the extent constituting Indebtedness,
(1) Indebtedness evidenced by the notes or the Subsidiary Guarantees;
(2) Indebtedness that is subordinate or junior in right of payment to any Indebtedness of Isle of Capri or the Subsidiary Guarantors;
(3) Indebtedness which, when incurred and without respect to any election under Section 1111(b) of Title 11, U.S. Code, is without recourse to Isle of Capri or the Subsidiary Guarantors;
(4) Indebtedness which is represented by Redeemable Capital Stock;
(5) Indebtedness for goods, materials or services purchased in the ordinary course of business or Indebtedness consisting of trade payables or other current liabilities (other than any current liabilities owing under the Bank Credit Facility or the current portion of any long-term Indebtedness which would constitute Senior Indebtedness but for the operation of this clause (5));
(6) Indebtedness of or amounts owed by Isle of Capri or the Subsidiary Guarantors for compensation to employees or for services rendered to Isle of Capri or the Subsidiary Guarantors;
(7) Indebtedness of or amounts owed by Isle of Capri or a Restricted Subsidiary to Isle of Capri or another Restricted Subsidiary;
(8) any liability for federal, state, local or other taxes owed or owing by Isle of Capri or the Subsidiary Guarantors;
(9) Indebtedness of Isle of Capri or a Subsidiary Guarantor to any other Subsidiary of Isle of Capri; and
(10) that portion of any Indebtedness which at the time of issuance is issued in violation of the indenture.
"Significant Restricted Subsidiary" means any Restricted Subsidiary that is a guarantor of Isle of Capri's obligations under the Bank Credit Facility or any other Credit Facility.
"Stated Maturity" means, with respect to any security or Indebtedness, the date specified in such security or Indebtedness as the fixed date on which the principal of such security or Indebtedness, as applicable, is due and payable, including pursuant to any mandatory redemption or repayment provision (but excluding any provision providing for the repurchase of such security or repayment of such Indebtedness, as applicable, at the option of the holder thereof).
"Subordinated Indebtedness" means Indebtedness that is subordinated in right of payment to the notes in all respects, matures at a date later than the Maturity Date of the notes and has an average life longer than that applicable to the notes.
"Subsidiary" of any Person means any corporation, partnership, joint venture, trust or estate of which (or in which) more than 50% of (1) the issued and outstanding Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or similar governing body of such corporation or other entity (irrespective of whether at the time Capital Stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (2) the interest in the capital or profits of such partnership or joint venture or (3) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person.
"Subsidiary Guarantees" means the guarantees of the Subsidiary Guarantors with respect to Isle of Capri's obligations under the notes and the indenture.
"Subsidiary Guarantors" means each existing and future Significant Restricted Subsidiary of Isle of Capri and any other Subsidiary that executes a Subsidiary Guarantee.
"United States Government Obligations" means securities that are
(1) direct obligations of the United States of America for the payment of which its full faith and credit is pledged; or
(2) obligations of a Person, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America.
"Unrestricted Subsidiary" means any Subsidiary of Isle of Capri that
(1) Isle of Capri has designated, pursuant to provisions described under the subheading "Restricted and Unrestricted Subsidiaries," as an Unrestricted Subsidiary and that has not been redesignated as a Restricted Subsidiary pursuant to such paragraph; and
(2) any Subsidiary of any such Unrestricted Subsidiary.
"Vessel" means any riverboat or barge, whether now owned or hereafter acquired by Isle of Capri or any Restricted Subsidiary, useful for gaming, administrative, entertainment or any other purpose whatsoever.
"Voting Stock" of any Person means Capital Stock of such Person which ordinarily has voting power for the election of directors (or Persons performing similar functions) of such Person, whether at all times or only as long as no senior class of securities has such voting power by reason of any contingency.
"wholly owned" with respect to a Subsidiary of any Person means (1) with respect to a Subsidiary that is a partnership, limited liability company or similar entity, a Subsidiary whose capital or other equity interest is 99% or greater beneficially owned by such Person and (2) with respect to a Subsidiary that is other than a partnership, limited liability company or similar entity, a Subsidiary whose capital stock or other equity interest is 100% beneficially owned by such Person.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
In this section we summarize some of the material U.S. federal income tax considerations relevant to the exchange of your old notes for new notes in the exchange offer and the ownership and disposition of the new notes by holders who acquire the new notes pursuant to the exchange offer and who or which hold the new 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 new 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 new notes in the exchange offer and the ownership and disposition of the new notes by holders who acquire the new 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 new notes in the exchange offer and the ownership and disposition of the new notes by holders who acquire the new 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 the primary 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 new notes.
We refer to persons who or that are not "U.S. holders" as "non-U.S. holders."
U.S. Holders
Interest
We believe that payments of stated interest on the new notes will constitute "qualified stated interest" for purposes of the original issue discount ("OID") rules of the code and generally will be taxable to you as ordinary income at the time that such amounts are paid or accrued, in accordance with your method of accounting for U.S. federal income tax purposes. We believe that the new notes will not be issued with OID because they satisfy a statutory de minimus exception. If the new notes were issued with OID, U.S. holders would be required to include amounts of OID in income before the receipt of cash attributable to such OID.
Sale, Exchange or Other Taxable Disposition of a New Note
As a U.S. holder, you will recognize gain or loss on the sale, retirement, redemption or other taxable disposition of a new 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 new note, other than amounts for accrued but unpaid stated interest, and (2) your adjusted tax basis in the new 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 new 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 new notes may be affected by the "market discount" rules of the U.S. Internal Revenue Code under which a purchaser of a new note acquiring the new 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 new 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 old notes for new notes in the registered exchange offer. The holding period of the new notes will include the holding period of the old notes that are exchanged for the new notes. The adjusted tax basis of the new notes will be the same as the adjusted tax basis of the old notes exchanged for the new notes immediately before the exchange.
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 rate of up to 31% on interest on, or the proceeds at a sale, exchange, redemption, retirement, or other disposition of, a new 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 new 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;
. 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 your are not a U.S. person, or
(2) an exemption is otherwise established. If you hold your new 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.
Effectively Connected Income
Holders whose income on the new 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 acquiring of the new notes.
Sale, Exchange or Other Taxable Disposition of a New Note
As a non-U.S. holder, gain realized by you on the sale, exchange or redemption of a new 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. holders regardless of whether any tax was actually withheld.
Payments on the new 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 rate of up to 31%. Information reporting and backup withholding generally do not apply, however, to payments made by us or our paying agent on a new 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 a new 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 a new 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 the sale of a new 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 your 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.
The foregoing summary is included for general information only. Each holder of old notes should consult its tax advisor as to the specific tax consequences to it of the exchange offer, including the application of and effect of state, local, foreign and other tax laws.
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account as a result of market-making activities or other trading activities in connection with the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of new notes. 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 new notes received in exchange for old notes where such old notes were acquired as a result of market-making activities or other trading activities.
We will receive no proceeds in connection with the exchange offer or any sale of new notes by broker-dealers. New notes received by broker-dealers for their own account pursuant to the exchange offer may be sold 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 new notes; or
. a combination of these methods of resale,
at market prices prevailing at the time of resale, at prices related to prevailing market prices, or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers that may receive compensation in the form of commissions or concessions from the broker-dealers or the purchasers of any new notes. Any broker-dealer that resells new 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 new notes may be deemed to be an "underwriter" within the meaning of the Securities Act, and any profit on any resale of new 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.
LEGAL MATTERS
Mayer, Brown, Rowe & Maw, Chicago, Illinois will pass on the validity of, and certain legal matters concerning, the new notes.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated financial statements included in our Annual Report on Form 10-K as of April 29, 2001 and April 30, 2000 and for the years ended April 29, 2001, April 30, 2000 and April 25, 1999, as set forth in their report, which is incorporated by reference into this prospectus and elsewhere in the registration statement. Our consolidated financial statements are incorporated by reference in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing.
$200,000,000
Exchange Offer
ISLE OF CAPRI CASINOS, INC.
9% Senior Subordinated Notes due 2012
PROSPECTUS
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
(a) Section 145 of the Delaware General Corporation Law; Section 83 of the Louisiana Business Corporation Law; Article 8, Subarticle E of the Mississippi Business Corporation Law; Article 109 of the Colorado Business Corporation Act; Division VIII, Part E of the Iowa Business Corporation Act; Section 78.751 of the Nevada Business Corporation Act; Section 351.355 of the General and Business Corporation Law of the State of Missouri; and Section 607.0850 of the Florida Business Corporation Act: (1) give corporations organized in those states broad powers to indemnify their present and former directors and officers and those of affiliated corporations against expenses incurred in the defense of any lawsuit to which they are made parties by reason of being or having been such directors or officers, subject to specified conditions and exclusions, (2) give a director or officer who successfully defends an action the right to be so indemnified and (3) authorize the co-registrants to buy directors' and officers' liability insurance.
(b) Article 8 of Isle of Capri's Certificate of Incorporation provides for indemnification of directors and officers to the fullest extent permitted by law.
In accordance with Section 102(b)(7) of the Delaware General Corporation Law, Isle of Capri's Certificate of Incorporation provides that directors shall not be personally liable for monetary damages for breaches of their fiduciary duty as directors except for (1) breaches of their duty of loyalty to the registrant or its stockholders, (2) acts or omissions not in good faith or that involve intentional misconduct or knowing violations of law, (3) unlawful payment of dividends as prohibited by Section 174 of the Delaware General Corporation Law or (4) transactions from which a director derives an improper personal benefit.
Various provisions contained in the Articles of Incorporation, By-laws or other organizational documents of the other co-registrants provide for indemnification of the directors and officers of those co-registrants and, in some cases, limit or eliminate the personal liability of the directors of those co-registrants in accordance with the laws of the states in which those co-registrants are organized.
Item 21. Exhibits and Financial Statement Schedules
(a) A list of exhibits filed with this registration statement is contained in the index to exhibits, which is incorporated by reference.
(b) None required or applicable.
(c) Not applicable.
Item 22. Undertakings
Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) that, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
II-1
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering.
(4) 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 that is incorporated by reference in this
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.
(5) 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 or otherwise, the registrant has been advised that, in the opinion of the SEC, 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.
(6) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 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 this registration statement through the date of responding to the request.
(7) 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 this registration statement when it became effective.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the registrants has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Biloxi, State of Mississippi, on June 19, 2002.
ISLE OF CAPRI CASINOS, INC.
By: /s/ Bernard Goldstein*
-----------------------------
Bernard Goldstein
Chairman, Chief Executive
Officer and Director
|
CSNO, L.L.C.; GEMINI, INC.; GRAND
PALAISRIVERBOAT, INC.;
IOC-BOONVILLE, INC.; IOC-COAHOMA,
INC.; IOC-DAVENPORT, INC.;
IOC-KANSAS CITY, INC.; IOC
HOLDINGS, LLC;IOC-LULA, INC.;
IOC-NATCHEZ, INC.; ISLE OFCAPRI
BETTENDORF, LC; ISLE OF
CAPRICASINO-TUNICA, INC.; ISLE OF
CAPRICASINO COLORADO, INC.; ISLE
OF CAPRIMARQUETTE, INC.; LL
HOLDINGCORPORATION; LOUISIANA
RIVERBOATGAMING PARTNERSHIP; LRGP
HOLDINGS,L.L.C.; RIVERBOAT
CORPORATION OFMISSISSIPPI;
RIVERBOAT CORPORATION
OFMISSISSIPPI-VICKSBURG;
RIVERBOATSERVICES, INC.; ST.
CHARLES GAMINGCOMPANY, INC.
By: /s/ Bernard Goldstein*
-----------------------------
Bernard Goldstein
Chairman, Chief Executive
Officer and Director
|
PPI, INC.
By: /s/ Bernard Goldstein*
------------------------------
Bernard Goldstein
Chairman, President, Chief
Executive Officer and Director
|
II-3
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Bernard Goldstein* Chairman, Chief Executive June 19, 2002
----------------------------- Officer and Director--Isle of
Bernard Goldstein Capri Casinos, Inc.; CSNO,
L.L.C.; Gemini, Inc.; Grand
Palais Riverboat, Inc.;
IOC-Boonville, Inc.;
IOC-Coahoma, Inc.;
IOC-Davenport, Inc.;
IOC-Kansas City, Inc.; IOC
Holdings, LLC; IOC-Lula,
Inc.; IOC-Natchez, Inc.; Isle
of Capri Bettendorf, LC; Isle
of Capri Casino-Tunica, Inc.;
Isle of Capri Casino
Colorado, Inc.; Isle of Capri
Marquette, Inc.; LL Holding
Corporation; Louisiana
Riverboat Gaming Partnership;
LRGP Holdings, L.L.C.;
Riverboat Corporation of
Mississippi; Riverboat
Corporation of
Missippi-Vicksburg; Riverboat
Services, Inc.; St. Charles
Gaming Company, Inc.
(Principal Executive Officer)
Chairman, President, Chief
Executive Officer and
Director--PPI, Inc.
(Principal Executive Officer)
/s/ John M. Gallaway* President, Chief Operating June 19, 2002
----------------------------- Officer and Director--Isle of
John M. Gallaway Capri Casinos, Inc.; CSNO,
L.L.C.; Gemini, Inc.; Grand
Palais Riverboat, Inc.;
IOC-Boonville, Inc.;
IOC-Coahoma, Inc.;
IOC-Davenport, Inc.;
IOC-Kansas City, Inc.; IOC
Holdings, LLC; IOC-Lula,
Inc.; IOC-Natchez, Inc.; Isle
of Capri Bettendorf, LC; Isle
of Capri Casino-Tunica, Inc.;
Isle of Capri Casino
Colorado, Inc.; Isle of Capri
Marquette, Inc.; LL Holding
Corporation; Louisiana
Riverboat Gaming Partnership;
LRGP Holdings, L.L.C.;
Riverboat Corporation of
Mississippi; Riverboat
Corporation of
Missippi-Vicksburg; Riverboat
Services, Inc.; St. Charles
Gaming Company, Inc.
Director--PPI, Inc.
|
II-4
Signature Title Date
--------- ----- ----
/s/ Allan B. Solomon Executive Vice President, June 19, 2002
----------------------------- Secretary, General Counsel
Allan B. Solomon and Director--Isle of Capri
Casinos, Inc.; CSNO, L.L.C.;
Gemini, Inc.; Grand Palais
Riverboat, Inc.;
IOC-Boonville, Inc.;
IOC-Coahoma, Inc.;
IOC-Davenport, Inc.;
IOC-Kansas City, Inc.; IOC
Holdings, LLC; IOC-Lula,
Inc.; IOC-Natchez, Inc.; Isle
of Capri Bettendorf, LC; Isle
of Capri Casino-Tunica, Inc.;
Isle of Capri Casino
Colorado, Inc.; Isle of Capri
Marquette, Inc.; LL Holding
Corporation; Louisiana
Riverboat Gaming Partnership;
LRGP Holdings, L.L.C.;
Riverboat Corporation of
Mississippi; Riverboat
Corporation of
Missippi-Vicksburg; Riverboat
Services, Inc.; St. Charles
Gaming Company, Inc.
Secretary and Director--PPI,
Inc.
/s/ Robert S. Goldstein* Director--Isle of Capri June 19, 2002
----------------------------- Casinos, Inc.
Robert S. Goldstein
/s/ Alan J. Glazer* Director--Isle of Capri June 19, 2002
----------------------------- Casinos, Inc.
Alan J. Glazer
/s/ Emanuel Crystal* Director--Isle of Capri June 19, 2002
----------------------------- Casinos, Inc.
Emanuel Crystal
/s/ W. Randolph Baker* Director--Isle of Capri June 19, 2002
----------------------------- Casinos, Inc.
W. Randolph Baker
/s/ Jeffrey D. Goldstein* Director--Isle of Capri June 19, 2002
----------------------------- Casinos, Inc.
Jeffrey D. Goldstein
|
II-5
Signature Title Date
--------- ----- ----
/S/ REXFORD A. YEISLEY* Senior Vice President, Chief June 19, 2002
----------------------------- Financial Officer, Treasurer
Rexford A. Yeisley and Assistant Secretary--Isle
of Capri Casinos, Inc.; CSNO,
L.L.C.; Gemini, Inc.; Grand
Palais Riverboat, Inc.;
IOC-Boonville, Inc.;
IOC-Coahoma, Inc.;
IOC-Davenport, Inc.;
IOC-Kansas City, Inc.; IOC
Holdings, LLC; IOC-Lula,
Inc.; IOC-Natchez, Inc.; Isle
of Capri Bettendorf, LC; Isle
of Capri Casino-Tunica, Inc.;
Isle of Capri Casino
Colorado, Inc.; Isle of Capri
Marquette, Inc.; LL Holding
Corporation; Louisiana
Riverboat Gaming Partnership;
LRGP Holdings, L.L.C.;
Riverboat Corporation of
Mississippi; Riverboat
Corporation of
Missippi-Vicksburg; Riverboat
Services, Inc.; St. Charles
Gaming Company, Inc.
(Principal Financial and
Accounting Officer)
Treasurer--PPI, Inc.
(Principal Financial and
Accounting Officer)
|
*By: /S/ ALLAN B. SOLOMON June 19, 2002
-------------------------
Allan B. Solomon
Attorney-in-fact
|
II-6
INDEX TO EXHIBITS
Exhibit
Number Description
------ -----------
1.1* Purchase Agreement, dated as of March 21, 2002, among Isle of Capri Casinos, Inc., the subsidiary
guarantors named therein and Dresdner Kleinwort Wasserstein-Grantchester, Inc. for itself and as
representative of the other initial purchasers
3.1A Certificate of Incorporation of Casino America, Inc.(4)
3.1B Amendment to Certificate of Incorporation of Casino America, Inc.(13)
3.2A By-laws of Casino America, Inc.(4)
3.2B Amendments to By-laws of Casino America, Inc., dated February 7, 1997(10)
3.3* Articles of Organization of CSNO, L.L.C.
3.4* Operating Agreement of CSNO, L.L.C.
3.5 Amended and Restated Articles of Incorporation of Grand Palais Riverboat, Inc.(14)
3.6 By-laws of Grand Palais Riverboat, Inc.(14)
3.7 Articles of Incorporation of IOC-Coahoma, Inc.(14)
3.8 By-laws of IOC-Coahoma, Inc.(14)
3.9 Articles of Incorporation of Isle of Capri Casino-Tunica, Inc.(14)
3.10 By-laws of Isle Capri Casino-Tunica, Inc.(14)
3.11 Articles of Incorporation of Isle of Capri Casino Colorado, Inc.(14)
3.12 By-laws of Isle of Capri Casino Colorado, Inc.(14)
3.13 Amended and Restated Partnership Agreement of Louisiana Riverboat Gaming Partnership(14)
3.14* Articles of Organization of LRGP Holdings, L.L.C.
3.15* Operating Agreement of LRGP Holdings, L.L.C.
3.16 Articles of Incorporation of PPI, Inc.(14)
3.17 By-laws of PPI, Inc.(14)
3.18 Articles of Incorporation of Riverboat Corporation of Mississippi(14)
3.19 By-laws of Riverboat Corporation of Mississippi(14)
3.20 Articles of Incorporation of Riverboat Corporation of Mississippi-Vicksburg(14)
3.21 By-laws of Riverboat Corporation of Mississippi-Vicksburg(14)
3.22 Articles of Incorporation of Riverboat Services, Inc.(14)
3.23 By-laws of Riverboat Services, Inc.(14)
3.24 Articles of Incorporation of St. Charles Gaming Company, Inc.(14)
3.25 By-laws of St. Charles Gaming Company, Inc.(14)
3.26* Articles of Organization of IOC Holdings, LLC
3.27* Operating Agreement of IOC Holdings, LLC
3.28* Articles of Incorporation of IOC-Natchez, Inc.
3.29* By-laws of IOC-Natchez, Inc.
3.30* Articles of Incorporation of IOC-Lula, Inc.
3.31* By-laws of IOC-Lula, Inc.
3.32* Articles of Incorporation of IOC-Boonville, Inc.
3.33* By-laws of IOC-Boonville, Inc.
3.34* Articles of Incorporation of IOC-Kansas City, Inc.
3.35* By-laws of IOC-Kansas City, Inc.
3.36* Articles of Organization of Isle of Capri Bettendorf, LC
3.37* Operating Agreement of Isle of Capri Bettendorf, LC
3.38* Articles of Incorporation of Isle of Capri Marquette, Inc.
3.39* By-laws of Isle of Capri Marquette, Inc.
3.40* Articles of Incorporation of IOC-Davenport, Inc.
3.41* By-laws of IOC-Davenport, Inc.
|
Exhibit
Number Description
------ -----------
3.42* Articles of Incorporation of Gemini, Inc.
3.43* By-laws of Gemini, Inc.
3.44* Articles of Incorporation of LL Holding Corporation
3.45* By-laws of LL Holding Corporation
4.1 Specimen Certificate of Common Stock(1)
4.2 Isle of Capri Casinos, Inc. agrees to furnish to the Securities
and Exchange Commission, upon its request, the instruments
defining the rights of holders of long term debt where the total
amount of securities authorized thereunder does not exceed 10%
of Isle of Capri Casinos, Inc.'s total consolidated assets
4.3* Indenture, dated as of March 27, 2002 among Isle of Capri
Casinos, Inc., the subsidiary guarantors named therein and State
Street Bank and Trust Company, as trustee
4.4* Registration Rights Agreement, dated as of March 27, 2002, among
Isle of Capri Casinos, Inc., the subsidiary guarantors named
therein and Dresdner Kleinwort Wasserstein-Grantschester, Inc.
for itself and as representative of the other initial purchasers
4.5A Indenture, dated as of April 23, 1999, among Isle of Capri
Casinos, Inc. the subsidiary guarantors named therein and State
Street Bank and Trust Company, as trustee(10)
4.5B* First Supplemental Indenture, dated as of September 16, 1999,
among Isle of Capri Casinos, Inc. the subsidiary guarantors
named therein and State Street Bank and Trust Company, as trustee
4.5C* Second Supplemental Indenture, dated as of April 30, 2001, among
Isle of Capri Casinos, Inc. the subsidiary guarantors named
therein and State Street Bank and Trust Company, as trustee
4.6 Registration Rights Agreement, dated as of April 23, 1999, among
Isle of Capri Casinos, Inc., the subsidiary guarantors named
therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Wasserstein Perella Securities, Inc., for themselves and on
behalf of the other initial purchasers(10)
4.7 Rights Agreement, dated as of February 7, 1997, between Casino
America, Inc. and Norwest Bank Minnesota, N.A., as rights
agent(9)
5.1* Opinion of Mayer, Brown, Rowe & Maw as to the legality of the
securities being registered
10.1 Casino America, Inc. 1992 Stock Option Plan(2)
10.2 Casino America, Inc. 1992 Stock Option Plan Amendment(3)
10.3 Casino America, Inc. 1993 Stock Option Plan, as amended(7)
10.4 Casino America, Inc. description of Employee Bonus Plan(3)
10.5 Casino America, Inc. Retirement Trust and Savings Plan(3)
10.6 Director's Option Plan(6)
10.7 Biloxi Waterfront Project Lease dated as of April 9, 1994 by and
between the City of Biloxi, Mississippi and Riverboat
Corporation of Mississippi(5)
10.8 First Amendment to Biloxi Waterfront Project Lease (Hotel
Lease), dated as of April 26, 1995, by and between Riverboat
Corporation of Mississippi(7)
10.9 Amended and Restated Lease, dated as of April 19, 1999, among
Port Resources, Inc. and CRU, Inc., as landlords and St. Charles
Gaming Company, Inc., as tenant(13)
10.10 Amended Casino America, Inc. 1992 Stock Option Plan(8)
10.11 Amended Casino America, Inc. 1993 Stock Option Plan(8)
10.12 Amended Casino America, Inc. 1993 Stock Option Plan(11)
10.13 Amended Casino America, Inc. 1993 Stock Option Plan(12)
10.14 Lease of property in Coahoma, Mississippi dated as of November
16, 1993 by and among Roger Allen Johnson, Jr., Charles Bryant
Johnson and Magnolia Lady, Inc.
10.15 Addendum to Lease dated as of June 22, 1994 by and among Roger
Allen Johnson, Jr., Charles Bryant Johnson and Magnolia Lady,
Inc.(15)
10.16 Second addendum to Lease dated as of October 17, 1995 by and
among Roger Allen Johnson, Jr., Charles Bryant Johnson and
Magnolia Lady, Inc.(15)
10.17 Amended and Restated Operating Agreement of Isle of Capri Black
Hawk, L.L.C., dated as of July 29, 1997, between Casino America
of Colorado, Inc. and Blackhawk Gold, Ltd., as amended
|
Exhibit
Number Description
------ -----------
10.18 Development Agreement dated as of June 17, 1997, between City of Bettendorf, Lady Luck
Bettendorf, Lady Luck Quad Cities, Inc. and Bettendorf Riverboat Development, LC
10.19 Operator's Contract, dated as of December 28, 1989, between Riverboat Development Authority and
the Connelley Group, LP, as amended on February 9, 1990, March 1, 1990, January 1, 1991,
September 30, 1994 and March 1, 1998
10.20 2000 Long-Term Stock Incentive Plan(16)
10.21 Isle of Capri Deferred Bonus Plan(16)
10.22 Employment Agreement dated as of January 1, 2002 between Isle of Capri Casinos, Inc. and John M.
Gallaway
10.23 Employment Agreement dated as of January 1, 2002 between Isle of Capri Casinos, Inc. and Allan B.
Solomon
10.24 Employment Agreement dated as of January 1, 2002 by and between Isle of Capri Casinos, Inc. and
Rexford A. Yeisley
10.25 Employment Agreement dated as of January 1, 2002 by and between Isle of Capri Casinos, Inc. and
Timothy M. Hinkley
10.26 Employment Agreement dated as of January 1, 2002 between Isle of Capri Casinos, Inc. and Bernard
Goldstein
10.27* Second Amended and Restated Credit Agreement, dated as of April 26, 2002, among Isle of Capri
Casinos, Inc., the lenders listed therein, Canadian Imperial Bank of Commerce, as administrative
agent and issuing lender, Dresdner Bank AG, New York and Grand Cayman Branches and Deutsche
Bank Trust Company Americas, as co-syndication agents, Credit Lyonnais Los Angeles Branch,
Wells Fargo Bank, N.A. and The CIT Group/Equipment Financing, Inc., as co-documentation agents
and CIBC World Market Corp., as lead arranger
11.1* Computation of ratio of per share earnings
12.1* Computation of ratio of earnings to fixed charges
21.1* Subsidiaries of Isle of Capri Casinos, Inc.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Mayer, Brown, Rowe & Maw (contained in Exhibit 5.1)
24.1* Powers of attorney
25.1* Form T-1 Statement of eligibility under the Trust Indenture Act of 1939 of State Street Bank and
Trust Company
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
|
* Filed as an exhibit to the Registration Statement filed on May 22, 2002.
(1) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 30, 1992 (File No. 0-20538) and
incorporated herein by reference.
(2) Filed as an exhibit to Casino America, Inc.'s Current Report on Form 8-K
filed June 17, 1992 (File No. 0-20538) and incorporated herein by reference.
(3) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 30, 1993 (File No. 0-20538) and
incorporated herein by reference.
(4) Filed as an exhibit to Casino America, Inc.'s Registration Statement on
Form S-1 filed September 3, 1993, as amended (Reg. No. 33-68434), and
incorporated herein by reference.
(5) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 30, 1994 (File No. 0-20538) and
incorporated herein by reference.
(6) Filed as an exhibit to Casino America, Inc.'s Registration Statement on
Form S-8 filed June 30, 1994 (File No. 33-80918) and incorporated herein by
reference.
(7) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 30, 1995 (File No. 0-20538) and
incorporated herein by reference.
(8) Filed as an exhibit to Casino America, Inc.'s Proxy Statement for the
fiscal year ended April 30, 1996 (File No. 0-20538) and incorporated herein
by reference.
(9) Filed as an exhibit to Casino America, Inc.'s Current Report on Form 8-K
filed on February 14, 1997 (File No. 0-20538) and incorporated herein by
reference.
(10) Filed as an exhibit to Isle of Capri Casinos, Inc.'s Annual Report on Form
10-K for the fiscal year ended April 27, 1997 (File No. 0-20538) and
incorporated herein by reference.
(11) Filed as an exhibit to Casino America, Inc.'s Proxy Statement for the
fiscal year ended April 27, 1997 (File No. 0-20538) and incorporated
herein by reference.
(12) Filed as an exhibit to Casino America, Inc.'s Proxy Statement for the
fiscal year ended April 26, 1998 (File No. 0-20538) and incorporated
herein by reference.
(13) Filed as an exhibit to Isle of Capri Casinos, Inc.'s Annual Report on Form
10-K for the fiscal year ended April 25, 1999 (File No. 0-20538) and
incorporated herein by reference.
(14) Filed as an exhibit to Isle of Capri Casinos, Inc.'s Registration
Statement on Form S-4 filed on July 2, 1999 (File No. 333-82243) and
incorporated herein by reference.
(15) Filed as an exhibit to Isle of Capri Casinos, Inc.'s Annual Report on Form
10-K for the fiscal year ended April 30, 2000 (File No. 0-20538) and
incorporated herein by reference.
(16) Filed as an exhibit to Isle of Capri Casinos, Inc.'s Proxy Statement for
the fiscal year ended April 30, 2000 (File No. 0-20538) and incorporated
herein by reference.
Exhibit 10.14
LEASE
THIS LEASE is made and entered into this ___ day of November, 1993, by and between Roger Allen Johnson, Jr. and Charles Bryant Johnson (hereinafter collectively referred to as "Landlord"), and Magnolia Lady, Inc., a Mississippi corporation (hereinafter referred to as "Tenant").
SECTION 1
LEASED PROPERTY
1.01. Upon the conditions, limitations, covenants and agreements set forth below, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, those premises (the "Leased Property") consisting of that land described in Exhibit "A" attached hereto and incorporated herein by reference, together with all improvements thereon, and all appurtenances thereto including, without limitation, all water rights, riparian rights, littoral rights and bottomland rights. The Leased Property is leased to Tenant for any lawful use, including, without limitation, gaming. Landlord reserves all mineral rights to subject leased property and all other reservations set forth in Section 9.04 during the term of this lease.
1.02. For the period of the lease of that property described in Exhibit "A", Landlord grants unto the Tenant the exclusive right to conduct gaming on property described in Exhibit "B" attached hereto, and incorporated herein by reference. Terms, conditions, limitations, covenants and agreements for lease of that property described in Exhibit "B", or any part thereof, shall be negotiated at the time of leasing, but shall not be less than those contained in this Lease. Landlord reserves unto himself, his heirs and assigns, the right to use or lease the property described in Exhibit "B" during the term of this lease for any lawful use without limitation, except for gaming.
1.03. Landlord also covenants, warrants, and agrees hereby to grant Tenant a right of first refusal as described in Section 9.03 to purchase and/or lease the property described on Exhibit "C", or any part thereof, attached hereto and incorporated herein by reference.
1.04. Landlord grants Tenant non-exclusive rights of way or easements across the parcels described in Exhibits "B" and "C" so as to provide access to both the North and South sides of U.S. Highway 49. Landlord will not be required to pay any portion of the costs incurred in the construction of access roads to the Leased Property nor any expenses that might be incurred in securing access to U. S. Highway 49. Landlord makes no warranty as to the suitability of the Leased Property for any road construction or location. There shall be mutual access between the Leased Property and the property described in Exhibit "C" flowing under the road elevation or bridge at U. S. Highway 49. Landlord reserves the right to approve construction and engineering plans for said right-of-ways and easements prior to the commencement of construction, with said approvals not to be unreasonably withheld.
SECTION 2
TERM
2.01. The term of this Lease shall be for a period of forty (40) years, unless terminated earlier as elsewhere herein provided; provided that if the Commencement Date (as hereinafter defined) is not the first day of a calendar month the term hereof shall be for forty (40) years plus the period between the commencement Date and the first day of the next succeeding calendar month.
2.02. (a) Subject to Section 2.02 (b), the start of the term of this Lease (the "Commencement Date") shall be December 1, 1993, or an earlier date if specified by the Tenant and notification is made to the Landlord in accordance with Section 16 below.
(b) This commencement of this Lease is subject to the satisfaction of the following conditions precedent:
(i) Tenant shall have received, at Tenant's expense, a leasehold policy of title insurance in such amounts, and otherwise in a form and from an insurer or insurers reasonably satisfactory to Tenant, with such endorsements and reinsurance as Tenant may reasonably request, insuring Tenant as the lessee hereunder; and,
(ii) Tenant shall have received evidence, in form of survey by a professional engineer (P.E.) and registered land surveyor (R.L.S.), in form and substance satisfactory to Tenant, that the Leased Property is accessible by way of abutting public streets or to public streets over property granted or dedicated rights-of-way. Tenant shall obtain necessary surveys and title policy and shall provide proof to the Landlord of such accessibility.
2.03. With time being of the essence, Tenant covenants to promptly and
diligently seek to satisfy the conditions precedent set forth in Section
2.02(b). Landlord shall render Tenant its full and complete cooperation in
satisfying the conditions precedent to this Lease.
2.04. In the event the conditions precedent to Tenant's obligations hereunder are not satisfied prior to December 1, 1993, Tenant may, by written notice to Landlord, at any time thereafter elect to terminate this Lease so long as such conditions are unsatisfied and not waived by Tenant.
2.05. Tenant may, in its discretion, for any reason, elect to terminate this Lease at any time after the Commencement Date with thirty (30) days notice to Landlord.
2.06. If this Lease is terminated pursuant to this Section Tenant shall have no further liabilities and obligations other than to pay rent as accrued as of the date of termination and to perform those duties required in Sections 7 and 8 below.
2.07. Tenant shall only build and operate casino and hotel facilities on the Leased Property; however, the casino and hotel facilities may include restaurants or related facilities inside or physically connected to such casino or hotel. Tenant shall not construct or establish other separate structures or enterprises, including but not limited to food service establishments, R-V parks, or a convenience store, without the prior approval of the Landlord, which approval shall not be unreasonably withheld.
SECTION 3
RENT
3.01. After the Commencement Date, but prior to the commencement of gaming operations on the Leased Property, Tenant shall pay rent at the rate of Two Thousand Five Hundred Dollars ($2,500) per month. Such rent shall be paid on the tenth day of each month. All such rental payments shall be credited to and applied toward monthly rental payments set out in Section 3.03.
3.02. Upon the commencement of gaming operations by Tenant on the Leased Property Tenant shall pay as rent for its use of the Leased Property a monthly rental equal to the greater of:
(a) $1.00 for each customer or patron boarding any casino vessel operated by Tenant on the Leased Property during that month; or
(b) 4% of the "Gross Revenue" as defined in Mississippi Code Ann. Sec. 75-76-5(p) derived from any and all gaming or gambling activities, including boarding fees, if any, on any casino vessel moored on the Leased Property and 4% of the revenue derived from the sale of alcoholic beverages on such Casino Vessels or the Premises. Any future gaming license fees based on gross revenue that might be enacted into law by the Mississippi Legislature or adopted by any political subdivision at the state of Mississippi, including the imposition of that license
fee presently authorized by Mississippi Code Annotated "75-76-195, shall be deducted from gross revenue on a monthly or prorata basis; or
(c) $10,000.00 each month.
The computation of the "Gross Revenue" derived from any and all gaming or gambling activities shall follow the calculation of gross revenues under the Mississippi Gaming Control Act, specifically Miss. Code Ann. Sections 75-76-181 and 193 (1972) as now written unless both parties agree to accept and adopt any subsequent amendment of that statute. To illustrate, if in a given month "Gross Revenue" as calculated under the Mississippi Gaming Control Act were to be $800,000.00 and Gross Revenue derived from the sale of alcoholic beverages on the Leased Premises were to be $100,000.00, the Rent due to Landlord under paragraph (b) above would be calculated by adding $800,000.00 to $100,000.00, arriving at a grand total of $900,000.00, and calculating 4% of the grand total figure to derive a rent of $36,000.00.
The Tenant shall pay each month's rent not later than the tenth day of the following month as time is of the essence. For any monthly rent payment owing under this lease and not paid when due, Tenant agrees to pay as additional rent an amount equal to ten percent (l0%) of the amount owing for that month. Landlord or its representatives may at reasonable times and upon reasonable notice examine the books and records of Tenant to verify the number of patrons and Gross Revenues. Landlord and his professional representatives, including without limitation attorneys and accountants, will hold all information gathered through such examination in confidence and will not disclose such information to anyone without Tenant's written approval. Also, Tenant gives its written and irrevocable consent for Landlord to obtain copies of any and all reports of revenue filed with the State Tax Commission of Mississippi or the Mississippi
Gaming Commission including sales tax returns or reports derived from the operation of any and all businesses conducted on the Leased Premises.
3.03. If Tenant does not commence gaming operations on the Leased Property prior to June 1, 1994, Tenant shall in its sole discretion have the right to extend the time by which it may commence gaming operations from month to month by paying Landlord a monthly rent of $150.000,00. Such rent payments shall be due on June 1, 1994, and the tenth day of every month thereafter, beginning July 10, 1994, until such time as Tenant terminates the Lease under the provisions hereof or Tenant commences gaming operations on the Leased Property. A sum equal to 75% of the aforesaid rental payments shall be credited to and applied towards rental payments that will be made upon commencement of gaming operations, as described in Section 3.02, and the remaining 25% shall not be credited to and applied towards rental payments.
3.04. Cessation of gambling during the term of this Lease due to any cause not the fault of the Landlord shall not suspend any provisions of this Agreement, subject, however, to the provisions set forth in Section 15.
3.05. Tenant shall furnish Landlord with each month's rental payment, full information regarding gross revenues from gaming, alcoholic beverages, on the casino vessel or vessels on the Leased Property, and the total number of customers or patrons boarding the vessel or vessels during that month as furnished to the Mississippi Gaming Commission or the Mississippi State Tax Commission, so that the Landlord can accurately compute the amount of rental due.
3.06. Tenant shall pay to the Landlord an additional rent in the sum of $3,333.33 per month due and payable on or before the tenth day of each month with the first payment due on November 10, 1993. Such rental payments shall not be credited or applied towards rental payments specified in Section 3.03.
3.07. Tenant shall pay an additional rental of $20,000.00 annually with the first annual payment to commence on or before June 1, 1994 and which may be used by the Landlord to pay for premiums of a performance bond in the sum of One Million Dollars ($1,000,000.00) or more. This performance bond shall cover all contingent costs of environmental cleanup for the Leased Property following termination or expiration of the term of the Lease and would only apply in the event Tenant or its transferees, subletees, or assignees refuse or are economically unable to remedy any conditions on the premises that violate any federal, state and local laws and ordinances governing the environment or health and safety, including those related to toxic or hazardous substances and other contaminants.
3.08. On or before November 25, 1993, Tenant shall tender to Landlord the sum of $500,000.00 which shall constitute a prepayment on the purchase of dirt provided in Section 8 and an advance of all rents to be paid under Section 3, and upon receipt, the aforesaid sum shall be used to pay in full and completely satisfy all deeds of trust, mortgages, liens, or other encumbrances in anywise affecting the properties described in Exhibits "A", "B", and "C".
3.09. For purposes of Section 3, Tenant as herein used shall include all assignees, licensees, subletees or transferees.
3.10. All rents and other monies are required to be paid by Tenant at the address and location set forth in Section 16.02 below or at such other place as Landlord may, from time to time, designate in writing.
SECTION 4
REMOVAL OF EQUIPMENT
4.01. Landlord and Tenant acknowledge that the Leased Property is not intended to include equipment presently located on the Leased Property. Landlord shall remove the
Equipment from the Leased Property (but shall not be required to remove any
buildings or structures located thereon) within the time periods specified in
Section 4.02.
4.02. Landlord will have a period of 60 days (or such lesser period as Landlord elects) after the Commencement Date to remove the Equipment from the Leased Property. Landlord will give Tenant written notice once the Equipment has in fact been removed from the Leased Property. Such notice may not be given and will not be effective unless the Equipment has in fact been removed from the Leased Property.
4.03. Landlord covenants and agrees to hold Tenant and the Leased Property harmless from any and all liability, loss, damage, costs, expenses, including attorneys' fees, judgments, claims, liens and demands of any kind whatsoever in connection with, arising out of, or by reason of Landlord's removal of the Equipment from the Leased Property.
SECTION 5
GOVERNMENT REGULATIONS
5.01. Landlord shall promptly apply for and use its best efforts to obtain all necessary licenses and other approvals and permits, if any, required for Landlord from any state or local gaming and liquor licensing authorities (collectively "Governmental Authorities") for the operation by Tenant of its business at the Leased Property, at Tenant's expense, and shall otherwise fully cooperate with such authorities in connection with any approval or permit applications of Landlord or Tenant, or otherwise, which shall include, without limitation, provision of such information, books and records as may be requested by such authorities and compliance with all orders and requirements of such authorities.
5.02. Tenant shall, at Tenant's sole cost and expense, (a) pay all license and application fees of Landlord for Approvals (as defined below) which Landlord is required to obtain pursuant to Section 5.01 if such Approvals are required generally and routinely for landlords that receive
percentage rent as contemplated by this Lease; (b) pay all fees and expenses, including, without limitation, all investigatory fees and expenses of Governmental Authorities associated with Investigations of Landlord required generally and routinely for landlords that receive percentage rent as contemplated by this Lease; and (c) pay all costs to procure information necessary for such Approvals.
5.03. For the purposes of this Section a "Denial" means (a) Landlord or any person or entity associated with Landlord is (i) denied a license or is denied or otherwise unable to obtain any other approval or permit required by any Governmental Authority with respect to the Leased Property (collectively "Approvals"), (ii) is required by any Governmental Authority to apply for an Approval and does not apply within any required time limit, or (iii) withdraws any application for approval other than upon a determination by the applicable Governmental Authority that such Approval is not required; or (b) any Governmental Authority Commences or threatens to commence any suit or proceeding against Tenant or any affiliate of Tenant or to terminate or deny any Approval of Tenant or any affiliate of Tenant as a result of Landlord or any person or entity associated with Landlord. For the purpose of this Section "Equityholder" means any shareholder, partner or Other Person or entity owning an equity interest in Landlord. For the purpose of this Section "Other Person" means any officer, director, employee or other person with similar functions associated with Landlord. If a denial occurs which may be cured by the replacement or removal of or disassociation from, one or more Equityholders or Other Persons, then Landlord shall, within one hundred twenty (120) days from such Denial, replace, remove or otherwise disassociate from the disapproved Equityholder or Other Person in a manner acceptable to the Governmental Authorities. Any person who replaces an Equityholder or other person and receives Denial shall be afforded the same one hundred twenty (120) day period to
replace, remove or otherwise disassociate himself. If a Denial occurs and a cure of the type described in the preceding sentence cannot be effected within the time limit set forth in the previous sentence, Tenant shall have the right, in addition to all its other rights and remedies, to elect to (a) terminate this Lease, or (b), if applicable, exercise the purchase rights described below.
5.04. The purchase right granted Tenant hereunder is only the right to purchase the equity interest of an Equityholder in Landlord if such Equityholder is the basis of a Denial. In the event that the basis of Denial is an Other Person, the purchase right is the right to purchase the Leased Property.
5.05. The total purchase price shall be the fair market value of the interest acquired on the date of the Denial. However, there shall be factored in the events resulting in the Denial so that no person or entity is enriched at the expense of others as a result of improper actions or behavior.
5.06. Tenant shall exercise the purchase right provided in Section 5.02 by
so notifying Landlord in writing. If Tenant and the seller are not able to agree
on the fair market value of the interest to be acquired within ten (10) days of
Tenant's election to exercise its purchase right, then either party may at any
time thereafter elect to cause such value to be determined by appraisal. The
party electing appraisal ("Electing Party") shall include in its notice the name
of this proposed appraiser. Unless the other party ("Responding Party") objects
within ten (10) days after notice from the Electing Party, such appraiser shall
be the sole appraiser. If the Responding Party does so object, such objection
shall be accompanied by its designation of an appraiser. If such two appraisers
cannot agree on the fair market value of the interest being conveyed within ten
(10) days after their appointment, they shall select a third appraiser, the
third appraiser shall be selected by a judge of the Chancery Court of Coahoma County upon application of either party. Should such judge not make such selection within ten (10) days after he or she is requested to do so, such selection shall be made by the nearest office of the American Arbitration Association. All appraisers shall make their appraisals within (a) twenty (20) days after expiration of the period in which the Responding Party can object to its appointment, in the case of a single appraiser, and twenty (20) days after the appointment of the third appraiser in the case of the three appraisers. In the case of an appraisal by three appraisers, the fair market value shall be conclusively deemed to be an amount equal to the average of the two closest appraisals. The appraisers shall be persons experienced in appraising the interest being appraised and in the case of real estate shall be MAI appraisers. The appraisers shall be impartial and unrelated, directly or indirectly, so far as employment of services is concerned, to Tenant or the selling party. The appraisers shall be bound to determine fair market value of the interest being conveyed subject to the limitations captained in this Lease. Each party shall pay one-half (1/2) of the cost of the appraisal, including the appraisers' fees, except that in the case of where two or three appraisers are appointed, each party shall pay all of the fees of the appraiser appointed by it but, as stated above, such party shall pay one-half (1/2) of all other appraisal costs.
5.07. The purchase price shall be paid by Tenant (i) at the closing in cash or (ii) in Tenant's discretion, in equal installments payable over six (6) years following the closing. If Tenant elects to pay the balance of the purchase price in accordance with clause (ii) of the preceding sentence, an initial installment equal to thirty percent (30%) of the balance of the purchase price will be payable at the closing. The remaining amount will be payable in five (5) equal installments of principal, plus accrued interest, on each anniversary of the closing. The
unpaid principal balance of the purchase price shall bear interest at the prime rate plus one percent. For the purpose of the preceding sentence, "prime rate" shall mean the rate of interest per annum from time to time publicly announced by Bank of America N.A. (or, if Bank of America, N.A. is no longer in existence or is no longer announcing such a rate, then such other comparable bank as Tenant may elect) as its prime or reference rate. The rate of interest shall change on the effective date of any change in the prime rate.
5.08. Upon exercise of the purchase right any equity interest shall be conveyed to Tenant with full warranties of title and any real estate shall be conveyed by general warranty deed subject only to matters existing on the date of Tenant's title insurance policy referred to in Section 2.02 above and matters caused by Tenant.
5.09. Without limiting the generality of Section 5.11 hereof, in the event of any conveyance of an equity interest:
(a) if such interest is evidenced by any certificate, at the closing the seller shall deliver to Tenant duly endorsed certificates evidencing such equity interest, with signatures guarantied; and
(b) after such purchase Tenant shall be entitled to deduct from any payments due Landlord hereunder an amount equal to the same percentage thereof as the percentage such purchased equity interest constitutes of all equity of its class.
5.10. Without limiting the generality of Section 5.11 hereof, in the event of any real estate conveyance;
(a) At the closing, Tenant shall receive at Tenant's expense an extended ALTA owner's policy of title insurance, in the face amount of the purchase price, and otherwise in a form and from an insurer or insurers reasonably satisfactory to Tenant, with such
endorsements and reinsurance as Tenant may reasonably require, insuring Tenant's title to the Leased Property.
(b) Closing costs other than title insurance shall be allocated in accordance with the then prevailing practice in Coahoma County, Mississippi. Rent shall be prorated as of the date of the closing. At the closing, Landlord shall provide Tenant with a suitable affidavit satisfying the requirements of the Internal Revenue Code relating to withholding of a portion of the purchase price in the event of a purchase from a foreign person.
5.11. Landlord, Tenant and any affected Equityholder shall promptly upon request prepare, execute and deliver such further documents, and shall promptly obtain beneficiary statements and similar certificates and perform such other acts as shall from time to time be reasonably required in effecting the closing and the better perfecting, assuring, conveying, assigning, transferring and confirming unto Tenant the property and the rights to be conveyed or assigned pursuant to this Section.
SECTION 6
REPRESENTATIONS AND WARRANTIES
6.01. Landlord hereby represents and warrants to Tenant as follows:
(a) Landlord reasonably believes that it has good and marketable title to the properties described in Exhibits "A", "B" and "C" subject to any matters shown in the Title Policy described in Section 2.02(b)(i) above. Prior to December 1, 1993, Landlord will insure that the properties described in Exhibits "A", "B", and "C" are free from all deeds of trust, mortgages, liens, or other encumbrances and, afterwards, will insure that all properties described in Exhibit "A", all rights of way, and all pits while being used for dirt excavation as described in Section 8 shall remain free from all deeds of trust, mortgages, liens, or other encumbrances.
(b) This Lease constitutes the legal, valid and binding obligation of Landlord, enforceable in accordance with its terms.
(c) Landlord is not aware of any adverse condition undisclosed to Tenant which would materially adversely affect Tenant's use of the Leased Property.
(d) Neither Landlord, nor, to the best of Landlord's knowledge, any other person associated with Landlord is unwilling to file all necessary applications to obtain whatever Approvals may be required of such persons in connection with the Leased Property. Neither Landlord, nor, to the best of Landlord's knowledge, any other person associated with Landlord has ever engaged in any conduct or practices which any of the foregoing persons should reasonably believe would cause such person or entity to be denied any Approval.
6.02. Tenant hereby represents and warrants to Landlord as follows:
(a) Tenant has full power and authority to enter into this Lease.
(b) The execution, delivery and performance of this Lease by the person executing the same on behalf of the Tenant have been duly and validly authorized and this Lease constitutes the legal, valid and binding obligation of Tenant enforceable in accordance with its terms.
(c) Tenant shall use its best efforts to obtain, in a prompt and diligent manner, all approvals and regulatory permits required for Tenant's use for gaming purposes of the Leased Property and agrees to abide by the laws of the State of Mississippi, including but not limited to the Mississippi Gaming Control Act, all laws pertaining to and resolutions and ordinances promulgated by the Yazoo-Mississippi Delta Levee Board, and any ordinances passed by the Board of Supervisors of Coahoma County, Mississippi, as well as the laws of the United States of America.
(d) Tenant is aware that the real property described in Exhibits "A", "B" and "C" lie in the flood plain of the Mississippi River and is subject to the River's overflow.
6.03. Landlord further gives no warranty as to the suitability of the property for any gaming or gaming-related purpose, as provided under the Mississippi Gaming Control Act. Tenant has had an opportunity to inspect the property and satisfies itself as to the suitability of the property for its intended use.
SECTION 7
POSSESSION AND SURRENDER OF LEASED PROPERTY
7.01. Possession of the Leased Property shall be delivered to Tenant on the Commencement Date. Thereafter, throughout the term of this Lease Tenant shall have sole and exclusive possession of the Leased Property. Tenant and Tenant's employees and representatives shall have the right, throughout the period prior to the Commencement Date, to enter upon the Leased Property for the purposes of making tests, surveys and obtaining other data, and shall have the right to disturb the soil thereon. Upon the expiration or sooner termination of the term of this Lease all improvements on the Leased Property shall belong to Landlord.
7.02. Notwithstanding the foregoing, Tenant may, but shall not be required to, and at its sole cost and expense, prior to the expiration or sooner termination of the term of this Lease, remove any and all furniture, fixtures, equipment, gaming vessels and/or barges, boats and/or other personal property which Tenant has installed or placed on the Leased Property (all of which are hereinafter referred to as "Tenant's Property") from the Leased Property and tenant shall thereupon surrender to Landlord the Leased Property, together with any of Tenant's Property which Tenant has elected not to remove, in "as-is" condition, except that Tenant shall be required to remove all structures, equipment or materials that are destroyed, dilapidated or not
fit for commercial use, with such removals to be performed in accordance with the requirements of Section 8 below; provided, however, prior to any alteration, removal of coffer dams or other work preparatory to removal of the fixtures, equipment, gaming vessels and/or barges, boats and/or other personal property, which Tenant has installed, the Tenant shall furnish a performance bond or other security in an amount sufficient to secure the performance of such work in conformity with the requirements of Section 8 below.
SECTION 8
ALTERATIONS AND IMPROVEMENTS
8.01. Tenant shall be entitled but not required to make any additions, alterations, improvements or changes in or to the Leased Property, and any improvements shall be at the sole cost and expense of the Tenant, and shall be made in compliance with the standards of all county, state and federal regulatory agencies. Upon the termination of this Lease, Tenant shall at his expense, close and cover to ground level, all slips, canals, excavations, pits, and revetments, unless waived by Landlord. Tenant shall complete such work in accordance with standards established by the U. S. Army Corps of Engineers and all pertinent state and federal regulatory agencies.
8.02. All fill dirt excavated and used by Tenant in construction on the Leased Property and for right-of-way construction on parcels described in Exhibits "B" or "C" shall be purchased from Landlord or his assigns at the rate of $1.00 per cubic yard and shall be provided by Landlord from a location on the premises described in Exhibit "B", but excluding property described in Exhibits "A" and "C". Tenant shall be responsible for the excavation and transportation of all fill dirt. Tenant shall be allowed to purchase fill dirt for construction on the Leased Property and for right-of-ways from other sources, only in the event Landlord is unable to provide sufficient quantities of fill dirt on the time schedules required by Tenant.
SECTION 9
RIGHT OF FIRST REFUSAL
9.01. Landlord grants to Tenant a right of first refusal to purchase the Leased Property in the event that Landlord shall desire to sell all or any portion of the Leased Property. In the event Landlord shall have received a bona fide offer to purchase all or any portion of the Leased Property which Landlord intends to accept, Landlord shall notify Tenant of such offer, which notice shall include a copy of such offer. Tenant shall be required within ten (10) business days of receipt of such notice, to elect by written notice to Landlord to purchase the Leased Property upon the terms and conditions set forth in the offer or waive the right of first refusal with respect to such offer. Failure of Tenant to respond to Landlord's notice within ten (10) business days of delivery by Landlord shall be deemed to be a waiver of Tenant's right of first refusal. In the event Tenant elects to exercise its right of first refusal, the closing shall be the date set for closing in the offer, or thirty (30) days after Tenant elects to purchase. If the Tenant does not exercise the right of first refusal with respect to a transaction and that transaction is not finalized on the terms presented to Tenant within thirty (30) days of the closing date set forth in the original offer to purchase, Tenant's right of first refusal shall be reinstated. The Landlord and prospective purchaser shall have the right to extend the closing date in the contract for sale of the Leased Premises for not more than twenty-nine (29) days and said extension shall not be deemed to be a new or amended contract that would give Tenant a right of first refusal. The closing date shall be a calendar date certain and not a conditional date. This right shall not extend to any intra-family sale by or between members of Landlord's family, or corporations wholly owned by Landlord's family. However, anyone acquiring the Leased Property in a transaction exempt from this right of first refusal shall themselves thereafter be subject to such right, and the documents of transfer shall so provide.
9.02. Landlord grants to Tenant a right of first refusal to purchase the
property described in Exhibit "B" attached in the event that Landlord shall
desire to sell all or any portion of the property described in Exhibit "B" for
any lawful purpose, subject to Tenant's right to conduct gaming on the premises.
In the event Landlord receives a bona fide offer to purchase all or any portion
of the property described in Exhibit "B", which Landlord intends to accept,
Landlord shall notify Tenant of such offer, which notice shall include a copy of
such offer. Tenant shall be required within ten (10) business days of receipt of
such notice, to elect by written notice to Landlord to purchase the property
described in Exhibit "B" upon the terms and conditions set forth in the offer or
waive the right of first refusal with respect to such offer. Failure of Tenant
to respond to Landlord's notice within ten (10) business days of delivery by
Landlord shall be deemed to be a waiver of Tenant's right of first refusal. In
the event Tenant elects to exercise its right of first refusal, the closing
shall be the date set for closing in the offer or thirty (30) days after Tenant
elects to purchase. If Tenant does not exercise the right of first refusal with
respect to a transaction and that transaction is not finalized on the terms
presented to Tenant within thirty (30) days of the closing date set forth in the
original offer to purchase, Tenant's right of first refusal shall be reinstated.
The Landlord and prospective purchaser shall have the right to extend the
closing date in the original offer to purchase for not more than twenty-nine
(29) days and said extension shall not be deemed to be a new or amended contract
that would give Tenant a right of first refusal. The closing date shall be a
calendar date certain and not a conditional date. This right shall not extend to
any intra-family sale by or between members of Landlord's family, or
corporations wholly owned by Landlord's family. However, anyone acquiring the
property described in Exhibit "B" in a transaction exempt from this right of
first refusal shall themselves thereafter be subject to such right, and the documents of transfer shall so provide.
9.03. Landlord grants to Tenant a right of first refusal to own or lease
any property described in Exhibit "C" in the event Landlord shall desire to sell
or lease all or any portion of that land described in Exhibit "C". In the event
Landlord shall have received a bona fide written offer to purchase or lease or
an option to purchase or lease all or any of the property described in Exhibit
"C", which Landlord intends to accept, Landlord shall notify Tenant of such
offer, which notice shall include a copy of such offer. Tenant shall be required
within ten (10) business days of receipt of such notice, to elect by written
notice to Landlord to purchase or lease any or all of the property described in
Exhibit "C" upon the terms and conditions set forth in the offer or waive the
right of first refusal with respect to such offer. Failure of Tenant to respond
to Landlord's notice within ten (10) business days of delivery by Landlord shall
be deemed to be a waiver of Tenant's right of first refusal. In the event Tenant
elects to exercise its right of first refusal, the closing shall be the date set
for closing in the offer, or thirty (30) days after Tenant elects to purchase.
If Tenant does not exercise the right of first refusal with respect to a
transaction and that transaction is not finalized on the terms presented to
Tenant within thirty (30) days of the closing date set forth in the original
offer to purchase, Tenant's right of first refusal shall be reinstated. The
Landlord and prospective purchaser or lessee shall have the right to extend the
closing date in the original offer to purchase for not more than twenty-nine
(29) days and said extension shall not be deemed to be a new or amended contract
that would give Tenant a right of first refusal. This right shall not extend to
any intra-family sale, lease or option by or between members of Landlord's
family, or corporations wholly owned by Landlord's immediate family. However,
anyone acquiring the Property described in Exhibit "C" in a
transaction exempt from this right of first refusal shall themselves thereafter be subject to such right, and the documents of transfer shall so provide.
9.04. Should there be a sale or lease of property described in Exhibits "A", "B", or "C", or any parts thereof, Landlord reserves unto himself all crop bases, allotments, and history pertaining to any and all crops on the subject property as administered under the programs of the Agricultural, Stabilization, and Conservation Service of the United States Department of Agriculture, as well as all mineral interest in and to the subject property.
SECTION 10
INDEMNIFICATION
10.01. Tenant hereby covenants and agrees to indemnify, save and hold Landlord, free, clear and harmless from any and all liability, loss, damages, costs, expenses, including attorneys' fees, judgments, claims, liens and demands of any kind whatsoever in connection with, arising out of, or by reason of: (a) Tenant's occupancy and use of the Leased Property and the conduct of its business thereon; (b) the environmental impact of occupancy and/or use of Leased Property by Tenant, its subcontractors, assigns, sublessees, officers, employees, agents, or customers, except that such indemnity shall not apply to any pre-existing conditions on the premises; (c) the inaccuracy or breach of any warranties or covenants of Tenant contained in this Lease; and any act, omission, or negligence of Tenant, its agents or employees while in, upon, about or in any way connected with the Leased Property.
10.02. Landlord covenants and agrees to indemnify, save and hold Tenant free, clear and harmless from any and all liability, loss, damages, costs, expenses, including attorneys' fees, judgments, claims, liens and demands, any kind whatsoever in connection with, arising out of, or by reason of: (a) the inaccuracy or breach of any warranties or covenants of Landlord contained in this Lease; (b) any act, omission or negligence of Landlord, its agents or employees while in,
upon, about or in any way connected with the Leased Property; or (c) any matter, not otherwise specifically provided for in this Lease, arising from or connected with the Leased Property and accruing on or before the Commencement Date.
10.03. The indemnified party shall provide the indemnifying party notice of any such claims of liability with reasonable promptness and the indemnifying party, at its election, shall have the right of defense in such proceedings, by counsel of its own choosing and reasonably satisfactory to the indemnified party, at the indemnifying party's expense. The indemnified party shall cooperate fully in all respects with the indemnifying party in any such defense, including, without limitation, by making available to the indemnifying party all pertinent information under the control of the indemnified party. If the indemnifying party so notifies the indemnified party concurrently with the indemnifying party's notice of election to defend, the indemnifying party may defend, but not settle, a claim without waiving its right to assert that such claim is not subject to indemnity agreements in this Section. If the indemnifying party elects to defend a claim, the indemnified party may at the indemnified party's expense participate in such matter with counsel of the indemnified party's own choosing.
SECTION 11
TENANT'S RIGHT TO MORTGAGE
11.01. Tenant shall have the right, without Landlord's approval, to mortgage its interest in this Lease, or to pledge, sale-leaseback, or otherwise assign this Lease as security for financing.
11.02. This Lease may be amended from time to time to the extent reasonably requested by any prospective mortgagee, provided that such proposed amendments do not reduce the rent payable to Landlord under this Lease or otherwise materially and adversely affect the rights of Landlord or its interest in the Leased Property.
SECTION 12
ASSIGNMENT, SUBLETTING AND ENCUMBRANCE
Tenant may assign or otherwise transfer any interest herein, or sublease or license the use of all or any portion of the Leased Property, only with the written consent of Landlord. Landlord reserves the right of inspection of the books and records of all sublessees, licensees and assigns of the Tenant.
Landlord may transfer or assign its interest of the Lease, subject to first receiving necessary prior approval of such transactions by the appropriate governmental authorities, including the Mississippi Gaming Commission.
Any transfer, assignment, or sublease of the Tenant shall not relieve Tenant from any liabilities accruing for payment of all rents herein provided and from any obligation thereafter accruing to keep and be bound by all terms, covenants and conditions of the Lease, unless Landlord consents to allowing transferee, assignee or sublessee to assume these obligations, which consent shall not be unreasonably withheld or delayed.
Tenant is aware that Landlord intends to form a business corporation to which some or all of the real property described in Exhibits "A", "B" and "C" shall be conveyed. The owners, officers and directors of the aforesaid corporations will consist of Landlord and their immediate family members.
SECTION 13
CONDEMNATION
If all or any part of the Leased Property be condemned or taken by a competent authority for any public or quasi-public purpose, Tenant shall be entitled to that portion of the award payable on account of damage to or loss of the leasehold estate of Tenant under this Lease or to the unexpired term thereof. Landlord shall receive four (4) percent of that portion of the award
payable resulting from damage to or loss of the leasehold estate of Tenant. Additionally, Landlord shall be entitled to that portion of the award payable on account of damage to or loss of Landlord's reversionary interest in the Leased Property. Nothing herein shall prevent Tenant from prosecuting claims for matters for which it is separately entitled such as lost profits and moving expenses. Landlord shall receive four percent (4%) of such proceeds.
SECTION 14
INSURANCE
14.01. Tenant shall, at all times during the term hereof, at its sole cost and expense, procure and maintain in full force and effect a policy of general liability insurance assuring against loss, damage or liability for injury to or death to persons and loss or damage to property occurring in connection with the Leased Property and all rights-of-way or Tenant's use thereof. Such liability shall provide that Landlord and his assigns is an additional insured thereunder and shall be in amounts not less than One Million Dollars ($1,000,000.00) for bodily injuries to or death to one person and not less than Five Million Dollars ($5,000,000.00) for any one incident or accident on the Leased Property and all rights-of-way, on which Tenant has an interest.
14.02. Tenant may, during the term hereof, procure additional insurance against such risk and in such amounts and forms as Tenant shall elect in its sole discretion. Tenant may maintain the insurance of the kind and in amounts required under this Lease under a blanket insurance policy or policies which may cover other properties owned or operated by Tenant or any Affiliate of Tenant as well as the Leased Property. All insurance maintained pursuant to this Lease may contain acommercially reasonable deductible clause.
14.03. All insurance proceeds payable under any fire, other casualty and/or rental insurance shall be payable solely to Tenant and Landlord shall have no interest therein, unless Tenant has a use and occupancy policy which provides coverage for loss of profits to which
Landlord shall receive four percent (4%) of the insurance proceeds. Should casino vessel be damaged beyond use as a casino or destroyed by fire, windstorm, or other disaster, Tenant will remove the damaged vessel at its expense.
14.04. Landlord may during the term hereof, procure additional insurance in his own separate right against any such risks and in such amounts and forms as he shall elect in his sole discretion without participation of Tenant.
SECTION 15
TENANT'S DEFAULT
15.01. Tenant shall be in default hereunder if:
(a) Tenant shall default in the payment of any sum of money required to be paid hereunder and such default continues for twenty (20) days after written notice thereof from Landlord to Tenant, but if Tenant's failure to timely pay rentals when due result in Landlord sending notices of failure to Tenant more than three (3) times in a calendar year, Landlord may terminate this Lease at his sole option; or
(b) Tenant shall default in the performance of any other term, covenant or condition of this Lease on the part of Tenant to be kept and performed and such default continues for thirty (30) days after written notice thereof from Landlord to Tenant; provided, however, that if the default complained of in such notice is of such a nature that the same can be rectified or cured, but cannot with reasonable diligence be done within said thirty (30) day period, then such default shall be deemed to be rectified or cured if Tenant shall, within said thirty (30) day period commence to rectify and cure the same and shall thereafter complete such rectification and cure with all due diligence.
(c) Tenant shall make a transfer in fraud of creditors or shall make an assignment for the benefit of creditors.
(d) Tenant shall file a petition under any section or chapter of the National Bankruptcy Act, as amended, or under any similar law or Statute of the United States or any State thereof; or Tenant shall be adjudged bankrupt or insolvent in proceedings filed against Tenant thereunder.
(e) A receiver or trustee shall be appointed for all or substantially all of the assets of Tenant, which remains unstayed and in effect for more than thirty (30) days.
(f) Tenant shall construct a gaming facility of less than thirty thousand (30,000) square feet on the property described in Exhibit "A".
(g) Revocation of gaming license constitutes default.
(h) Cessation of gaming for sixty (60) consecutive days or ninety (90) days during any twelve (12) month period, if such cessation occurs at Tenant's election. Such cessation shall not constitute default if it occurs due to causes beyond Tenant's reasonable control.
15.02. Landlord's remedies.
(a) Upon default by Tenant, Landlord shall have the option of terminating this Lease.
(b) If Tenant shall fail to pay an installment of rent promptly on the day when the same shall become due and payable hereunder, and shall continue in default for a period of thirty (30) days after written notice thereof by Landlord, or if Tenant shall fail to promptly keep and perform any other affirmative covenant of this Lease, strictly in accordance with the terms of this Lease and shall continue in default for a period of thirty (30) days after written notice thereof by Landlord of default and demand of performance, then, in any such event, and as often as any such event shall occur, Landlord may (i) declare the said term ended and enter into said Lease
Premises, or any part thereof, either with or without process of law, and expel Tenant or any person occupying the same in or upon said premises, using such force as may be necessary so to do, and so to repossess and enjoy said premises in Landlord's former estate; or (ii) re-let the premises applying said rent from the new Tenant on this Lease and Tenant shall be responsible for no more than the balance that may be due, should a balance exist. Anything hereinbefore contained to the contrary notwithstanding, if any default shall occur, other than in the payment of money, which cannot with due diligence be cured within a period of thirty (30) days, and Tenant prior to the expiration of thirty (30) days from and after the giving of notice as aforesaid, commences to eliminate the cause of such default and proceeds diligently and with reasonable dispatch to take all steps and to undertake all work required to cure such default and does so cure such default, then Landlord shall not have the right to declare the said term ended by reason of such default.
SECTION 16
SERVICE OF NOTICES
16.01. Any and all notices and demands by any party hereto to the other party, required or desired to be given hereunder shall be in writing and shall be validly given or made only if signed and deposited in the United States mail, certified or registered, postage prepaid, return receipt requested or if made by Federal Express or other similar delivery service keeping records of deliveries and attempted deliveries or if made by telecopy. Service by United States mail or delivery service shall be conclusively deemed made on the first business day delivery is attempted or upon receipt, whichever is sooner. Service by telecopy shall be deemed made upon confirmed transmission.
16.02. Any notice or demand to Landlord shall be addressed to Landlord at 1850 Old Lula-Rich Road, P. O. Box 397, Lula, Mississippi 38644.
16.03. Any notice or demand to Tenant shall be addressed to Tenant at c/o Andrew Tompkins, Lady Luck Casino Hotel, 206 N. Third St., Las Vegas, NV 89101, facsimile (702) 477-3003.
16.04. Any party hereto may change its address for the purpose of receiving notices or demands as herein provided by a written notice given in the manner aforesaid to the other party hereto, which notice of change of address shall not become effective, however, until the actual receipt thereof by the other party.
SECTION 17
SUCCESSORS AND ASSIGNS
The terms, provisions, covenants and conditions contained in this Lease shall apply to, bind and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of Landlord and Tenant, respectively.
SECTION 18
PARTIAL INVALIDITY
If any term, covenant or condition of this Lease, or any application thereof, should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, covenants and conditions of this Lease, and all applications thereof, not held invalid, void or unenforceable, shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereof.
SECTION 19
ENTIRE AGREEMENT
This Lease contains the entire agreement between the parties and cannot be changed or terminated orally.
SECTION 20
MEMORANDUM OF LEASE
This Lease shall not be recorded. The parties will execute and record a memorandum of this Lease, within ten (10) days of the execution of the Lease.
SECTION 21
MISCELLANEOUS
21.01. The captions appearing at the commencement of the sections hereof are descriptive only and for convenience in reference to this Lease and in no way whatsoever define, limit or describe the scope or intent of this Lease, nor in any way affect this Lease.
21.02. Masculine or feminine pronouns shall be substituted for the neuter form and vice versa, and the plural shall be substituted for the singular form and vice versa, in any place or places herein which the context requires such substitution or substitutions.
21.03. The laws of the State of Mississippi shall govern the interpretation, validity, construction, performance and effect of this Lease.
21.04. In the event any action, including any bankruptcy proceeding, is commenced by either party against the other in connection herewith the prevailing party shall be entitled to its costs and expenses, including reasonable attorneys' fees.
21.05. This Lease shall not be construed either for or against Landlord or Tenant, but this Lease shall be interpreted in accordance with the general tenor of its language.
21.06. Nothing contained in this Lease shall constitute or be construed to be or create a partnership or joint venture between Landlord, their successors or assigns, and Tenant, its successors or assigns.
21.07. Any real and personal property taxes and assessments levied during the term of this Lease on the real property subject to this Lease will be paid by the Tenant.
21.08. Termination of this Lease for any reason, shall terminate any and all rights and options of the Tenant to that property described in Exhibits "A", "B" and "C" attached hereto.
21.09. There are no real estate commission costs to be paid in connection with this closing. The Landlord is not responsible for any brokerage commission, finder's fee, or other similar compensation arising out of or in connection with this transaction.
21.10. Tenant shall comply with all provisions of the Mississippi Gaming Control Act and all laws which would affect the Leased Property.
21.11. Waiver by either party of any breach of any covenant contained in this agreement shall not be deemed a Waiver of any subsequent breach of that same covenant or any other covenant.
21.12. Should the Mississippi Gaming commission, the Mississippi Tax Commission or any other governmental agency levy a cash fine on the Tenant, it shall be the sole responsibility of Tenant to pay this fine.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first above written.
LANDLORD TENANT: /s/ Roger Allen Johnson, Jr. MAGNOLIA LADY, INC. ---------------------------- Roger Allen Johnson, Jr. /s/ Charles Bryant Johnson By: /s/ Andrew H. Tompkins ---------------------------- --------------------------------- Charles Bryant Johnson Andrew H. Tompkins, President |
STATE OF MISSISSIPPI
COUNTY OF COAHOMA
Personally appeared before me, the undersigned authority in and for the said county and state, on this 16th day of November, 1993, within my jurisdiction, the within named Roger Allen Johnson, Jr., who acknowledged that he executed the above and foregoing instrument.
My Commission Expires:
STATE OF MISSISSIPPI
COUNTY OF COAHOMA
Personally appeared before me, the undersigned authority in and for the said county and state, on this 16th day of November, 1993, within my jurisdiction, the within named Charles Bryant Johnson, who acknowledged that he executed the above and foregoing instrument.
My Commission Expires:
STATE OF NEVADA
COUNTY OF CLARK
Personally appeared before me, the undersigned authority in and for the said county and state, on this 23rd day of November, 1993, within my jurisdiction, the within named Andrew H. Tompkins, who acknowledged that he is President of Magnolia Lady, Inc., a Mississippi corporation, and that for and on behalf of the said corporation, and as its act and deed he executed the above and foregoing instrument, after first having been duly authorized by said corporation so to do.
My Commission Expires:
Exhibit 10.17
AMENDED AND RESTATED OPERATING AGREEMENT
OF
ISLE OF CAPRI BLACK HAWK L.L.C.
This AMENDED AND RESTATED OPERATING AGREEMENT is made as of this 29/th/ day of July, 1997 by Casino America of Colorado, Inc. ("Casino America of Colorado") and Blackhawk Gold, Ltd. ("Blackhawk Gold") and those other persons, if any, who from time to time become parties to or are otherwise bound by this Agreement as provided herein.
The parties hereto are parties to and Operating Agreement dated April 25, 1997. The parties wish to amend and restate the Operating Agreement, pursuant to this Amended and Restated Operating Agreement, which supersedes and replaces the Operating Agreement, effective as of the Closing Date. The parties therefore agree as follows:
ARTICLE 1: ORGANIZATION AND DEFINITIONS
1.1 Company Name. The business of the Company will be conducted under the name "Isle of Capri Blackhawk L.L.C." or any other name determined by the Company in accordance with governing law.
1.2 Initial Ownership. Upon execution of this Amended and Restated Operating Agreement, the Ownership Interest of the Company is as set forth below:
Member Ownership Interest Initial Contribution
------ ------------------ --------------------
Blackhawk Gold, Ltd. 45% $7,500,000
Casino America of Colorado, Inc. 55% $9,200,000
|
The Ownership Interest shall be adjusted from time to time in accordance
with the provisions of this Agreement. The Ownership Interests of the Members
shall at all times be maintained on Appendix I hereto, which shall be amended
chronologically from time to time as necessary. Effective as of the Closing,
Blackhawk Gold has sold to Casino America of Colorado a portion of it's
Ownership Interest representing 4.2% of the total Ownership Interests in the
Company so that, as of the Closing Date, the respective percentage Ownership
Interests are as follows: Blackhawk Gold - 40.8% and Casino America of Colorado
- 59.2%.
1.3 Colorado Office and Agent. The initial registered office of the Company in Colorado is located at 1675 Broadway, Suite 1200, Denver, Colorado 80202, and its initial registered agent at such address is CT Corporation. The Company may subsequently change its registered office or
registered agent in Colorado in accordance with the Act. The Company's principal place of business is 711 Washington Loop, Biloxi, Mississippi 39530.
1.4 Term. The Company began on the date its Articles of Organization were filed with the Colorado Secretary of State and continues until December 31, 2096, or such earlier date as a Dissolution may occur.
1.5 Foreign Qualification. After formation of the Company under the Act, the Company will apply for any required certificate of authority to do business in any other state or jurisdiction where its conducts business, as appropriate.
1.6 Definitions. Terms used with initial capital letters will have the meanings specified in Exhibit "A", applicable to both singular and plural forms, for all purposes of this Agreement.
ARTICLE 2: PURPOSES AND POWERS
2.1 Principal Purpose. The business and principal purpose of the Company is to investigate, seek, acquire and engage in casino gaming in the Black Hawk/Central City, Colorado area, and to engage in all activities related thereto, including, without limitation, the operation of restaurants, gift shops and/or a hotel.
2.2 Powers. The Company has all of the powers granted to a limited liability company under the Act, as well as all powers necessary or convenient to achieve its purposes and to further its business.
ARTICLE 3: CAPITAL CONTRIBUTIONS
3.1 Initial Capital of the Company. The Members have made an initial Capital Contribution to the Company and have received the Initial Ownership Interests set forth in Section 1.2 above.
3.2 No Additional Capital Contributions. Except as agreed by the Members in the Members Agreement, no Member shall be required to make an additional Capital Contribution to the Company.
3.3 No Withdrawal. Except as specifically provided in this Agreement, no Member will be entitled to withdraw all or any part of such Member's capital from the Company or, when such withdrawal of capital is permitted, to demand a distribution of property other than cash.
3.4 No Interest on Capital. No Member will be entitled to receive interest on such Member's Capital Contribution or Capital Account.
3.5 Loans by Members. The Company may borrow money from any Member or Affiliate for Company purposes on such terms as the Company and such Member or Affiliate may agree.
Any such advance or loan will be treated as indebtedness of the Company, and will not be treated as a Capital Contribution by a Member.
3.6 Capital Accounts. A Capital Account will be maintained for each Member and credited, charged and otherwise adjusted in accordance with generally accepted accounting principles consistently applied. Each Member's Capital Account will be:
[a] Credited with [i] the capital contributions (net of liabilities secured by such property that the Company takes subject to or assumes), [ii] the Member's allocable share of Profits and [iii] all other items properly credited to the Member's Capital Account; and
[b] Charged with [i] the amount of cash distributed to the Member by the Company, [ii] the Fair Market Value of property distributed to the Member by the Company (net of liabilities secured by such property that the Member takes subject to or assumes), [iii] the Member's allocable share of Losses and [iv] all other items properly charged to the Member's Capital Account.
Any unrealized appreciation or depreciation with respect to any asset distributed in kind will be allocated among the Members in accordance with the provisions of Article 5 as though such asset had been sold for its Fair Market Value on the date of Distribution, and each Member's Capital Account will be adjusted to reflect both the deemed realization of such appreciation or depreciation and the Distribution of such property. In determining the Fair Market Value of any asset of the Company for purposes of any Distribution, the Company may obtain the written report of any one or more independent qualified appraisers (or appraisal firms). If more than one appraisal report is obtained by the Company, Fair Market Value will be determined as the average of such appraised values. The Company will select each such appraiser (or appraisal firm), and bear the cost of any such appraisal.
The Capital Account of each Member shall be determined and maintained in accordance with generally accepted accounting principles consistently applied in the casino industry. For income tax purposes, the Company shall make all required elections under Section 704(b) of the Code.
3.7 Transfer. If all or any part of an Ownership Interest is transferred in accordance with this Agreement, the Capital Account and Ownership Interest of the Transferor (including a pro-rata share of Capital Contributions) that is attributable to the transferred interest will carry over to the Transferee.
3.8 Certificates for Units Representing Ownership Interests. Ownership Interests in the Company shall be represented by Units and a Person's Ownership Interest shall equal the number of Units owned by such Person divided by the total number of Units issued and outstanding. The Units shall be represented by Certificates, which shall be in such form as may be determined by the Managers. Certificates shall be signed by a majority of the Managers. All Certificates shall be consecutively numbered or otherwise identified. The name of the Person to whom the Units are issued, with the number of Units and the date of issue, shall be entered on the books of the Company. All Certificates surrendered to the Company for transfer shall be
canceled and no new Certificate shall be issued until the former Certificate for a like number of Units shall have been surrendered and canceled, except that in the case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the Company as the Managers may prescribe. Transfers of Units of the Company shall be made only on the books of the Company by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Company, and, on surrender for cancellation of the Certificate for such Units. The Person in whose name a Unit or Units stands on the books of the Company shall be deemed the owner thereof for all purposes as regards the Company.
ARTICLE 4: MEMBERS AND MANAGERS
4.1 Management by Managers. Except as to matters expressly reserved to the Members by statute or by this Operating Agreement, the business and affairs of the Company shall be managed by the Managers set forth below, as such Managers may be changed from time to time as set forth herein. The initial Managers of the Company shall be John M. Gallaway, Allan B. Solomon, whose address is 711 Washington Loop, Biloxi, Mississippi, and H. Thomas Winn, whose address is 3040 Post Oak Boulevard, Suite 675, Houston, Texas. Each Member shall have the right to elect one Manager, except that so long as Casino America of Colorado or its Affiliates own a Majority In Interest of the Company, Casino America of Colorado or its Affiliates shall be entitled to elect a majority of the Managers, which initially shall be two Managers, and Blackhawk Gold shall be entitled to elect one Manager. Each Member shall have the right to remove, replace, fill a vacancy or designate a temporary replacement for the Manager or Managers elected by it.
Managers shall hold office for a term of one year from election, or until the next Annual Meeting of Members. Any action provided for in the Agreement that may be taken by the Company may, except as otherwise provided in this Agreement, only be taken with the consent of a majority of the Managers or by the officers of the Company to the extent a majority of the Managers have delegated authority with respect to such actions to such officers. Except as provided in Section 4.9 below or as to any other matter the Members agree shall require a unanimous vote, actions of the Managers shall be by majority vote at meetings duly called for purposes of taking action at which a quorum is present. A quorum at any meeting of the Managers shall consist of a majority of the Mangers then appointed. The Managers may also act by unanimous written consent in lieu of a meeting.
Meetings of the Managers shall be held no less often than quarterly (one of which shall be the Annual Meeting of the Members) on dates established therefor at each preceding Annual Meeting of the Managers. Special meetings of the Managers shall be held from time to time as called by any of the Managers on no less than five (5) days' advance notice given in writing by the Manager calling such meeting, which notice may be given by facsimile, Federal Express or similar courier service, certified mail or personal delivery. Notices of meetings shall be effective when sent, if sent by facsimile, or upon receipt, if given by certified mail, overnight courier or personal delivery, in each case at the address of each of the Managers on the books and records
of the Company. The Managers may participate in a meeting by means of conference telephone or similar communications equipment by which all the members participating in the meeting can hear each other at the same time. Such participation will constitute presence in person at the meeting and waiver of any required notice.
4.2 Member's Representative. Each Member which is not an individual will designate one or more individuals to act as such Member's duly authorized representative and agent for purposes of exercising such Member's vote on any matter involving the Company requiring the approval or action of the Members. Each Member which is not an individual may also designate one or more individuals as an alternate in the event that the primary representative is unavailable to act for any reason. A Member may change any such designation at any time upon similar notice. The representatives of a Member will cast the vote of each Member in accordance with such Member's Ownership Interest, as provided in this Article.
4.3 Majority Voting. All decisions reserved by the Act or this Operating Agreement to the Members will be made by the affirmative vote of Members owning more than 50% of the Ownership Interests held by all Members, without regard to quorum requirements, unless the unanimous vote (under Section 4.9) provisions apply or except as to any other matter the Member agree shall require a unanimous vote or as otherwise specifically provided in this Agreement. Any determination to be made by the Members will be made in each Member's sole and absolute discretion.
4.4 No Resignation or Retirement. Each Member agrees not to voluntarily resign or retire as a Member of the Company. However, if such voluntary resignation or retirement occurs in contravention of this Agreement, the withdrawing Member will, without further act, become a Transferee of such Ownership Interest (with the limited rights of a Transferee as set forth in Section 13.6). Any Member who resigns or retires from the Company in contravention of this Agreement will be liable to the Company and the other Members for proven monetary damages (but any such action or proposed action to resign or retire will not be subject to any equitable action for injunctive relief or specific performance).
4.5 Powers. Each manager is an agent of the Company for the purpose of conducting its business and affairs. The act of any Manager for apparently carrying on in the usual way of the Company's business or affairs binds the Company unless the Manager so acting has, in fact, no authority to act for the Company in the particular matter and the person with whom such Member is dealing has knowledge of such lack of authority. The act of any Manager which is not apparently for the carrying on in the usual way of the Company's business or affairs does not bind the Company unless authorized in accordance with this Agreement. Each Manager agrees to act on behalf of the Company only in compliance with this Agreement, and agrees that any act in contravention of this Agreement renders such Manager liable to the Company and other Members for monetary damages and other relief.
4.6 Substitute Members. A Transferee may be admitted as a substitute Member of the Company only upon the affirmative written agreement of all of the Members (excluding the Transferor Member), effective upon a date specified (which must be on or after the effective date of the Transfer, as determined under Section 13.5).
4.7 Additional Members. Subject to Section 4.9, additional Members of the Company may be admitted incident to the contribution of money or other property to the Company (or otherwise) only upon the affirmative written agreement of all Members, effective upon a date specified by all the Members.
4.8 Officers. The Company, acting through the Managers, may appoint and remove such officers as it determines to be necessary or desirable to carry out the day-to-day management of the Company. The Company's officers may include a president, one or more vice presidents, a secretary and a treasurer, as well as one or more assistant vice presidents, secretaries and treasurers. Such officers may also include a chief executive officer, chief operating officer and chief financial officer. Appointment as an officer or agent of the Company will not, of itself create any contract rights. The officers of the Company, acting in their capacity as such, will be agents acting on behalf of the Company as principal. No officer of the Company has the continuing exclusive authority to make independent business decisions on behalf of the Company without the approval of the Managers as set forth in this Article.
4.9 Unanimous Vote. The following actions by the Company will require the affirmative vote of all the Managers and the Members, without regard to quorum requirements.
[a] The admission of an additional Member under Section 4.7;
[b] Any non pro-rata distribution, including the non pro-rata distribution of assets in kind in Liquidation under Section 12.3;
[c] The amendment of this Agreement, except as provided in Section 14.1 of this Agreement;
[d] The merger of the Company with any other business entity as provided by governing law; or
[e] The sale of substantially all of the Company's assets.
ARTICLE 5: ALLOCATION OF PROFITS AND LOSSES
5.1 Profits and Losses. For each Fiscal Year, Profits or Losses of the Company will be an amount equal to the Company's income or loss determined under the accrual method of accounting, in accordance with generally accepted accounting principles consistently applied.
5.2 General Allocation Rule. Except as otherwise provided in (or until changed pursuant to) this Agreement, the Profits or Losses of the Company, including items of income, gain, loss and deduction for each Fiscal Year, will be allocated to the Members in proportion to their respective Ownership Interests as defined herein. Appropriate adjustment during the Fiscal Year of any change in this allocation will be determined in accordance with Section 706 of the Code and the Section 706 Regulation to take into account the varying interests of the Members in the Company during such Fiscal Year, in the manner determined by the Company.
5.3 Exception. Notwithstanding the general rule on allocation and for tax accounting purposes only and not for financial statement purposes or any other provision of this Operating Agreement, no cash shall be distributed to any Member if the effect thereof would be to create a deficit in his Capital Account balance or increase the deficit in his Capital Account below the sum of [1] the amount (if any,) which he is required to contribute to the Company and [2] said Member's share of gain which the Company would recognize upon a sale of its property for an amount equal to the balance of the non-recourse debt encumbering it, (the "Company's Minimum Gain") and such cash shall be retained by the Company and shall be distributed to the Member at the earliest time or times possible when such distributions will not cause such a deficit or increase such a deficit in the distributee's Capital Account balance. Notwithstanding the provisions of Section 5.2, the following allocations of net profits and net losses and items thereof shall be made:
[a] If in any taxable year there is a net decrease in the amount of the Company's Minimum Gain, each Member shall be allocated items of the Company's net profits for that year (and, if necessary, subsequent years) equal to that Member's share of the net decrease in the Company's Minimum Gain (within the meaning of Treasury Regulation Section 1.704-2(g)(2)). The items to be so allocated shall be determined in accordance with Treasury Regulation Section 1.704-2(j). This Section 5.3 is intended to comply with the Minimum Gain Chargeback requirement in Treasury Regulation Section 1.704-2 and shall be interpreted consistently therewith.
[b] If during any taxable year a Member unexpectedly receives any adjustments,
allocations or distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), or (6), then items of net profits shall be
specifically allocated to each Member in an amount and manner sufficient to
eliminate, to the then required by Treasury Regulation Section
1.704-(1)(b)(2)(ii)(d), the deficit in the Capital Account of such Member
as quickly as possible, provided that an allocation pursuant to this
Section 5.3[b] shall be made only if and to the extent that such Member has
an adjusted Capital Account deficit after all other allocations provided
for in this Article 5 have been tentatively made and as if this Section
5.3[b] were not in this Agreement. This Section 5.3[b] is intended to
comply with the Qualified Income Offset requirements in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
It is the intent of the Members that the allocations provided for in this Operating Agreement have "substantial economic effect," as the term is defined in Section 704(b) of the Code. Notwithstanding anything in this Section 5.3 to the contrary, nothing contained in this Section 5.3 shall serve to restrict any distribution by the Company to any Member.
5.4 Tax Allocations. Allocation of items of income, gain, loss and deduction of the Company for federal income tax purposes for a Fiscal Year will be allocated, as nearly as is practicable, in accordance with the manner in which such items are reflected in the allocations of Profits and Losses among the Members for such Fiscal Year. To the extent possible, principles identical to those that apply to allocations for federal income tax purposes will apply for state and local income tax purposes.
5.5 Transfer. Except as otherwise provided in Section 5.2, if an Ownership Interest is transferred during any Fiscal Year (whether by Transfer or liquidation of an Ownership Interest, or otherwise), the books of the Company will be closed as of the effective date of Transfer. The Profits or Losses attributed to the period from the first day of such Fiscal Year through the effective date of Transfer will be allocated to the Transferor, and the Profits or Losses attributed to the period commencing on the effective date of Transfer will be allocated to the Transferee. In lieu of an interim closing of the books of the Company and with the agreement of the Transferor and Transferee, the Company may agree to allocate Profits and Losses for such Fiscal Year between the Transferor and Transferee based on a daily proration of items for such Fiscal Year or any other reasonable method of allocation (including an allocation of extraordinary Company items, as determined by the Company, based on when such items are recognized for federal income tax purposes).
5.6 Contributed Property. All items of income, gain, loss and deduction with
respect to property contributed (or deemed contributed) to the Company will,
solely for tax purposes, be allocated among the Members as required by Section
704(c) of the Code so as to take into account the variation between the tax
basis of the property and its Fair Market Value at the time of contribution. For
example, if there is built-in gain with respect to contributed property, upon
the Company's sale of that property the pre-contribution taxable gain (as
subsequently adjusted under the Section 704(c) Regulations during the period
such property was held by the Company) would be allocated to the contributing
Member (and such pre-contribution gain would not again create a Capital Account
adjustment since the property was credited to Capital Account upon contribution
at its Fair Market Value). Except as limited by the following sentence, the
allocation of tax items with respect to Section 704(c) property to Members not
contributing such property will, to the extent possible, be equal to the
allocation of the corresponding book items made to such noncontributing Members
with respect to such property. If book allocations of cost recovery deductions
(such as depreciation or amortization) exceed the tax allocations of those items
so that the ceiling rule of the Section 704(c) Regulations applies, any curative
or remedial allocations of tax items will be made as the Company may determine.
All tax allocations made under this provision will be made in accordance with
Section 704(c) of the Code and the Section 704(c) Regulations.
5.7 Tax Credits. Any tax credit, and any tax credit recapture, will be allocated to the Members in the same ratio that the federal income tax basis of the asset (to which such tax credit relates) is allocated to the Members under the Section 46 Regulations, and if no basis is allocated, in the same manner as Profits are allocated to the Members under Section 5.2.
ARTICLE 6: DISTRIBUTIONS
6.1 Prorata Distributions. The Company will make distributions to the Members in proportion to their Ownership Interests. Any Net Sales Cash that is realized incident to the Dissolution and Liquidation of the Company will be distributed as provided in Article 12, with any Net Sales Cash that is realized other than incident to the Dissolution and Liquidation of the Company to be distributed in accordance with this Section 6.1.
6.2 Nonprorata Distributions. Unless the Members otherwise unanimously agree, the Members intend that all Distributions will be made to the Members in proportion to their Ownership Interests. In the event any Distribution is not made in proportion to their Ownership Interests without the unanimous consent of the Members, any excess Distribution to a Member will be treated as an advance or loan made by the Company to such Member, payable to the Company with Interest and on demand.
6.3 Payment. Any Distribution will be made to a Member only if such Person owns an Ownership Interest on the date of Distribution, as reflected on the books of the Company.
6.4 Withholding. If required by the Code or by state or local law, the Company will withhold any required amount from Distributions to a Member for payment to the appropriate taxing authority. Any amount so withheld from a Member will be treated as a Distribution by the Company to such Person. Each Member agrees to timely file any agreement that is required by any taxing authority in order to avoid any withholding obligation that would otherwise be imposed on the Company.
6.5 Distribution Limitation. Notwithstanding any other provision of this Agreement, the Company will not make any Distribution to the Members unless, after the Distribution, the liabilities of the Company (other than liabilities to Members on account of their Capital Contributions) have been paid or there remains property of the Company sufficient to pay them.
6.6 Cash Reserves. The Company will establish and maintain reasonable cash reserves for [a] operating expenses (other than depreciation, amortization or similar non-cash allowances), [b] capital improvements, [c] debt service, [d] working capital and [e] bankroll. The amount of such reserves will be as the Company may from time to time determine.
ARTICLE 7: MEETINGS OF MEMBERS
7.1 Annual Meeting. Unless the Company determines (whether by vote or otherwise) that an annual meeting is not necessary or desirable, the annual meeting of the Members will be held on the second Tuesday of April in each year at 9:00 a.m. (local time) by Notice to all other Members. The purpose of the annual meeting is to review the Company's operations for the preceding Fiscal Year and to transact such business as may come before the meeting. The failure to hold any annual meeting has no adverse effect on the continuance of the Company.
7.2 Special Meetings. Special meetings of the Members, for any purpose or purposes, may be called by any Member or Members owning at least ten percent (10%) of the Ownership Interests held by all Members by notice to all other Members.
7.3 Place. The Members calling the meeting may designate any place as the place of meeting for any meeting of the Members. If no designation is made, or if a special meeting is otherwise called, the place of meeting will be the Company's executive offices in Colorado.
7.4 Notice. Notice of any annual meeting determined by resolution of the Members or of any special meeting must be given not less than 5 days nor more than 30 days before the date of the meeting. Such notice must state the place, day, and hour of the meeting and, in the case of a special meeting, the purpose for which the meeting is called.
7.5 Waiver of Notice. Any Member may waive, in writing, any notice is required to be given to such Member, whether before or after the time stated in such notice. Any Member who signs minutes of action (or written consent or agreement) will be deemed to have waived any required notice with respect to such action.
7.6 Record Date. For the purpose of determining Members entitled to notice of or to vote at any meeting of Members, the date on which notice of the meeting is first given will be the record date for the determination of Members. Any such determination of Members entitled to vote at any meeting of Members will apply to any adjournment of a meeting.
7.7 Quorum. A quorum at any meeting of Members shall consist of Members owning at least 50% of the Ownership Interests held by all Members. Any meeting at which a quorum is not present may adjourn the meeting to another place, day and hour without further notice.
7.8 Manner of Acting. If a quorum is present, the affirmative vote of Members as set forth in Article 4 will be the act of the Company.
7.9 Proxies. At a meeting of the Members, a Member may vote in person or by written proxy given to another Member. Such proxy must be signed by the Member or by a duly authorized attorney-in-fact and filed with the Company before or at the time of the meeting. No proxy will be valid after eleven months from the date of its signing unless otherwise provided in the proxy. Attendance at the meeting by the Member giving the proxy will revoke the proxy during the period of attendance.
7.10 Meetings by Telephone. The Members may participate in a meeting by means of conference telephone or similar communications equipment by which all Members participating in the meeting can hear each other at the same time. Such participation will constitute presence in person at the meeting and waiver of any required notice.
7.11 Action Without a Meeting. Any action required or permitted to be taken at a meeting of Members under this Article 7 may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by Members owning total Ownership Interests sufficient for the particular action as set forth in Article 4. Action so taken is effective when sufficient Members approving the action have signed the consent, unless the consent specifies a later effective date. Notice of the action must be provided to all members.
ARTICLE 8: LIABILITY OF A MEMBER
8.1 Limited Liability: Unless otherwise provided in the Act, the Articles or an agreement signed by the Member to be subjected to any individual liability, no Member of the Company is individually liable for the debts or liabilities of the Company.
8.2 Liability to Company. Each member is liable to the Company for any Capital Contribution or Distribution that has been wrongfully or erroneously returned or paid to such Person in violation of the Act, the Articles of this Agreement.
ARTICLE 9: INDEMNIFICATION
9.1 Indemnification. Except with respect to any actions or omissions described in Section 14.10 and the last sentence of Section 4.4 and 4.5, the Company will indemnify, defend and hold harmless any Person who was or is a party (or is threatened to be made a party) to any Proceeding by reason of the fact that such Person was a Member, or agent or representative thereof, a Manager, employee or agent of the Company to the fullest extent permitted by the Act. Any such indemnification will apply to any Liability actually and reasonably incurred in connection with the defense or settlement of the Proceeding.
9.2 Expense Advancement. With respect to the expenses actually and reasonably incurred by a Member or Manager who is a party to a Proceeding, the Company shall provide funds to such Person in advance of the final disposition of the Proceeding if the Person furnishes the Company with such Person's written affirmation of a good-faith belief that such Person has met the standard of conduct described in the Act, and such Person agrees in writing to repay the advance if it is subsequently determined that such Person has not met such standard of conduct.
9.3 Insurance. The indemnification provisions of this Article do not limit a Member's or Manager's right to recover under any insurance policy or other financial arrangement by the Company (including any self-insurance, trust fund, letter of credit, guaranty or surety). If, with respect to any Liability, any Member or Manager receives an insurance or other indemnification payment which, together with any indemnification payment made by the Company, exceeds the amount of such liability, then such Member or Manager will immediately repay such excess to the Company.
ARTICLE 10: ACCOUNTING AND REPORTING
10.1 Fiscal Year. For income tax and accounting purposes, the Fiscal Year of the Company will end on the last Sunday in April of each year (unless otherwise required by the Code).
10.2 Accounting Method. For accounting purposes, the Company will use generally accepted accounting principles.
10.3 Tax Elections. The Company will have the authority to make such tax elections, and to revoke any such elections, as the Company may from time to time determine.
10.4 Returns. The Company will cause the preparation and timely filing of all tax returns required to be filed by the Company pursuant to the Code, as well as other tax returns required in each jurisdiction in which the Company does business.
10.5 Reports. The Company will furnish a Profit or Loss statement and a balance sheet to each Member within a reasonable time after the end of each fiscal quarter. The Company books will be closed at the end of each Fiscal Year and audited financial statements prepared showing the financial condition of the Company and its Profits or Losses from operations. Copies of these statements will be given to each Member. In addition, as soon as is practicable after the close of each Fiscal Year (and in any event within 90 days following the end of each Fiscal Year), the Company will provide each member with all necessary tax reporting information.
10.6 Books and Records. The records of the Company will be kept at the Company's business office in Colorado, and will be available for inspection and copying by any Member at such Person's expense, during ordinary business hours.
10.7 Information. Any Member has the right to inspect and copy the Company books and records as provided in Section 10.6 and to have a formal accounting of Company affairs whenever circumstances render it just and reasonable. In addition, subject to reasonable standards as established by the Company from time to time, and upon reasonable demand for any purpose reasonably related to the Member's interest as a Member, any Member has the right to obtain from the Company correct and complete information relating to the state of the Company's business and its financial condition.
10.8 Banking. The Company may establish one or more bank or financial accounts and safe deposit boxes. The Company may authorize one or more individuals to sign checks on and withdraw funds from such bank or financial accounts and to have access to such safe deposit boxes, and may place such limitations and restrictions on such authority as the Company deems advisable.
10.9 Tax Matters Partner. Until further action by the Company, Casino America of Colorado is designated as the tax matters partner under Section 6231(a)(7) of the Code. The tax matters partner will be responsible for notifying all Members of ongoing proceedings, both administrative and judicial, and will represent the Company throughout any such proceeding. The Members will furnish the tax matters partner with such information as it may reasonably request to provide the Internal Revenue Service with sufficient information to allow proper notice to the Members. If an administrative proceeding with respect to a partnership item under the Code has begun, and the tax matters partner so requests, each Member will notify the tax matters partner of its treatment of any partnership item on its federal income tax return, if any, which is inconsistent with the treatment of that item on the partnership return for the Company. Any settlement agreement with the Internal Revenue Service will be binding upon the Members only as provided in the Code. The tax matters partner will not bind any Member to any extension of the statute of limitations or to a settlement agreement without such Member's written consent. Any Member who enters into a settlement agreement with respect to any partnership item will notify the other Members of such settlement agreement and its terms within 30 days from the date of settlement. If the tax matters partner does not file a petition for readjustment of the partnership items in the Tax Court, Federal District Court or Claims Court within the 90 day period following a notice of a final partnership administrative adjustment, any notice partner or 5-percent group (as such terms are defined in the Code) may institute such
action within the following 60 days. The tax partner will timely notify the other Members in writing of its decision. Any notice partner or 5 percent group will notify any other Member of its filing of any petition for readjustment.
10.10 No Partnership. The classification of the Company as a partnership will apply only for federal (and, as appropriate, state and local) income tax purposes. This characterization, solely, for tax purposes, does not create or imply a general partnership between the Members for state law or any other purpose. Instead, the Members acknowledge the status of the Company as a limited liability company formed under the Act.
ARTICLE 11: DISSOLUTION OF THE COMPANY
11.1 Dissolution. Dissolution of the Company will occur only upon the happening of any of the following events:
[a] an event of Withdrawal (as defined in Section 11.2) of a Member, unless there is at least one remaining Member (including any Transferee admitted as a substitute Member);
[b] By unanimous agreement of the Members; or
[c] December 31, 2096.
11.2 Events of Withdrawal. An event of Withdrawal of a Member occurs when any of the following occurs:
[a] With respect to any Member, upon the Transfer of all of such Member's Ownership Interest not approved by a majority of the Members (which Transfer is treated as a resignation);
[b] With respect to any Member, upon the voluntary withdrawal (including any resignation or retirement in contravention of Section 4.4) of the Member by notice to all other Members;
[c] With respect to any Member that is a corporation, upon filing of articles of dissolution of the corporation;
[d] With respect to any Member that is a partnership or a limited liability company, upon dissolution of such entity;
[e] With respect to any Member who is an individual, upon either the death or retirement of the individual, or upon such Person's insanity or the entry by a court of competent jurisdiction of an order adjudicating the individual to be incompetent to manage such individual's person or estate;
[f] With respect to any Member that is a trust, upon termination of the trust;
[g] With respect to any member that is an estate, upon final distribution of the estate's Ownership Interest;
[h] Any other event which terminates the continued membership of a Member in the company;
[i] With respect to any Member, the bankruptcy of the Member, so long as there is one or more remaining Members.
Within 30 days following the happening of any event of Withdrawal with respect to a Member, such Member must give notice of the date and the nature of such event to the Company. Any Member failing to give such notice will be liable in damages for the consequences of such failure as otherwise provided in this Agreement. Upon the occurrence of an event of Withdrawal with respect to a Member, such Member will cease to have voting rights under Article 4, and such Member's Ownership Interest will be deemed transferred to such Member's Transferee or other successor in interest (which Person, unless already a Member in such capacity, will have only the limited rights of a Transferee as set forth in Section 13.6, unless and until admitted as a substitute Member).
11.3 Bankruptcy. Notwithstanding anything else to the contrary contained or in
Section 7-80-801(1)(c) of the Act, the bankruptcy of a Member will not dissolve
the Company. The bankruptcy of a Member will be deemed to occur when such
Person: [a] files a voluntary petition in bankruptcy, [b] is adjudged a bankrupt
or insolvent, or has entered against such Person an order for relief in any
bankruptcy or insolvency proceeding, [c] files a petition or answer seeking for
such Person any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or regulation,
[d] files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against such Person in any proceeding
of this nature, or [e] seeks, consents to or acquiesces in the appointment of a
trustee, receiver or liquidator of all or any substantial part of such Person's
properties. In addition, the bankruptcy of a Member will be deemed to occur if
any proceeding filed against a Member seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation is not dismissed within 120 days or if the
appointment without the Member's consent (or acquiescence of a trustee, receiver
or liquidator of the Member or of all or any substantial part of such Person's
properties) is not vacated or stayed within 90 days (or if after the expiration
of any stay, if the appointment is not vacated within 90 days).
ARTICLE 12: LIQUIDATION
12.1 Liquidation. Upon Dissolution of the Company, the Company will immediately proceed to wind up its affairs and liquidate. The Managers will appoint a liquidating trustee. The winding up and Liquidation of the Company will be accomplished in a businesslike manner as determined by the liquidating trustee and this Article 12. A reasonable time will be allowed for the orderly Liquidation of the Company and the discharge of liabilities to creditors so as to enable the Company to provide for any losses attendant upon Liquidation. Any gain or loss on
disposition of any Company assets in Liquidation will be allocated to Members and credited or charged to Capital Accounts in accordance with the provisions of Articles 3 and 5. Any liquidating trustee is entitled to reasonable compensation for services actually performed, and may contract for such assistance in the liquidation process as such Person deems necessary. Until the filing of articles of dissolution as provided in Section 12.6, the liquidating trustee may settle and close the Company's business, prosecute and defend suits, dispose of its property, discharge or make provision for its liabilities, and make distributions in accordance with the priorities set forth in Section 12.2.
12.2 Priority of Payment. The assets of the Company will be distributed in Liquidation of the Company in the following order:
[a] First, to non-Member creditors of the Company in order of priority as provided by law in payment of unpaid liabilities of the Company to the extent required by law or under agreements with such creditors;
[b] Second, to the setting of any reserves which the Members reasonably deem necessary for any anticipated, contingent or unforeseen liabilities or obligations of the Company arising out of or in connection with the conduct of the Company's business. At the expiration of such period as the Members reasonably deem advisable, the balance thereof shall be distributed in accordance with this Section 12.2;
[c] Third, to any Member for any other loans or debts owing to such Member by the Company;
[d] Fourth, to all Members in proportion to their Capital Account balances to the extent allowable under Section 5.3 until their Capital Account balances are reduced to zero; and,
[e] Fifth, the balance, if any, to all Members in proportion to their Ownership Interests percentages under Section 5.2.
12.3 Distribution to Members. Distributions in Liquidation due to the Members may be made by either or a combination of the following methods: selling the Company assets and distributing the net proceeds, or by distributing the Company assets to the Members at their net Fair Market Value in kind. Any liquidating Distribution in kind to the Members may be made either by a pro-rata Distribution of undivided interests or, upon the affirmative Vote of all Members, by non-pro-rata Distribution of specific assets at Fair Market Value on the effective date of Distribution. Any Distribution in kind may be made subject to, or require assumption of, liabilities to which such property may be subject, but in the case of any non pro-rata Distribution only upon the express written agreement of the Member receiving the Distribution. Each Member hereby agrees to save and hold harmless the other Members from such Member's share of any and all such liabilities which are taken subject to or assumed. Appropriate and customary prorations and adjustments shall be made incident to any Distribution in kind. The Members will look solely to the assets of the Company for the return of their Capital Contributions, and if the assets of the Company remaining after the payment or discharge of the debts and liabilities of the
Company are insufficient to return such contributions, they will have no recourse against any other Member.
12.4 No Restoration Obligation. Except as otherwise specifically provided in Article 8, nothing contained in this Agreement imposes on any Member an obligation to make a Capital Contribution in order to restore a deficit Capital Account upon Liquidation of the Company. Furthermore, each Member will look solely to the assets of the Company for the return of such Member's Capital Contribution and Capital Account.
12.5 Liquidating Reports. A report will be submitted with each liquidating distribution to Members, showing the collections, disbursements and distributions during the period which is subsequent to any previous report. A final report, showing cumulative collections, disbursements and distributions, will be submitted upon completion of the liquidation process.
12.6 Articles of Dissolution. Upon Dissolution of the Company and the completion of the winding up of its business, the Company will file articles of dissolution (to cancel its Articles of Organization) with the Colorado Secretary of State pursuant to the Act. At such time, the Company will also file an application for withdrawal of its certificate of authority in any jurisdiction where it is then qualified to do business.
ARTICLE 13: TRANSFER RESTRICTIONS
13.1 General Restriction. No Member may Transfer all or any part of its Ownership Interest in any manner whatsoever except: [a] to a Permitted Transferee as set forth in Section 13.3 or [b] after full compliance with the right of first refusal set forth in Section 13.4, and in either case only if the requirements of Section 13.5 have also been satisfied. Any other Transfer of all or any part of an Ownership Interest is null and void, and of no effect. Any Member who makes a Transfer of all of such Member's Ownership Interest will be treated as resigning from the Company on the effective date of such Transfer. Any Member who makes a Transfer of part (but not all) of such Member's Ownership Interest will continue as a Member (with respect to the interest retained), and such partial Transfer will not constitute an event of Withdrawal of such Member. The rights and obligations of any resigning Member or of any Transferee of an Ownership Interest will be governed by the other provisions of this Agreement.
13.2 No Member Rights. No Member has the right or power to confer upon any Transferee the attributes of a Member in the Company. The Transferee of all or any part of an Ownership Interest by operation of law does not, by virtue of such Transfer, succeed to any rights as a Member in the Company.
13.3 Permitted Transferee. Subject to the requirements set forth in Section 13.5, a Person may Transfer all or any part of such Person's Ownership Interest:
[a] To an Affiliate of such Person.
[b] To another Member,
[c] To the Company,
[d] To a Person approved by all the Members;
[e] To another Person as part of a merger, reorganization, consolidation or sale of all or substantially all of the assets of a Person that controls any Member; or
[f] In the form of a pledge or the granting of a security interest to another
Person or a foreclosure or sale in lieu of foreclosure in connection with
the granting of any such pledge or security interest as described in
Section 13.7.
13.4 Right of First Refusal. Prior to any proposed Transfer of all or any part
of an Ownership Interest, other than to a Permitted Transferee pursuant to
Section 13.3, the Transferor must obtain a Third Party Offer. For purposes of
this Section 13.4, a Transfer of an Ownership Interest of a Member shall be
deemed to occur upon any change in control of such Member other than to a
Permitted Transferee pursuant to Section 13.3. The Third Party Offer must not be
subject to unstated conditions or contingencies or be part of a larger
transaction such that the price for the Ownership Interest stated in such Third
Party Offer does not accurately reflect the Fair Market Value (reduced by the
amount of associated liabilities) of such Ownership Interest. The Third Party
Offer must contain a description of all of the consideration, material terms and
conditions of the proposed Transfer. The Transferor will give notice of the
Third Party Offer to the Company and all the Members exclusive of Transferees
who have not been admitted as substitute Members pursuant to Section 4.6 (the
"Other Members') other than the Transferor, together with a written offer to
sell the Ownership Interest (which is the subject of the Third Party Offer) to
the Company and the other Members on the same price and terms as the Third Party
Offer as provided herein. The Company may accept such offer by the Transferor,
in whole but not in part, by giving notice to the Transferor within 30 days
after notice of such offer. Unless otherwise agreed, the closing of such sale
will be held at the Company's registered office in Colorado on a date to be
specified by the Company which is not later than 60 days after the date of the
Company's notice of acceptance. At the closing, the Company will deliver the
consideration in accordance with the terms of the Third Party Offer, and the
Transferor will by appropriate documents assign to the Company the Ownership
Interest to be sold, free and clear of all liens, claims and encumbrances.
Subject to Section 13.5, if the Company has not accepted the Third Party Offer
and closed the purchase in accordance with this Section 13.4, the Other Members
shall have the right, on a pro rata basis in accordance with the ratio of their
Percentage Ownership Interests, to purchase, in whole but not in part, the
Ownership Interest of the Transferor in accordance with the terms of the Third
Party Offer by written notice to the Transferor within 30 days after the
expiration of the thirty-day period for the Company's acceptance. If all of the
other Members reject the offer or if the offer is not closed in accordance with
this Section 13.4, the Transferor will be free for a period of 60 days after the
last day for such acceptance to sell all, but not less than all, of such
Ownership Interest so offered, but only to the Third Party for a price and on
terms no more favorable to the Third Party than the Third Party Offer. If such
Ownership Interest is not so sold within such 60-day period (or within any
extensions of such period agreed to in writing by the Company), all rights to
sell such Ownership Interest pursuant to such Third Party Offer (without making
another offer to the Company
pursuant to this Section 13.4) will terminate and the provisions of this Article will continue to apply to any proposed future Transfer.
13.5 General Conditions on Transfers. No Transfer of an Ownership Interest after the date of this Agreement will be effective unless all of the conditions set forth below are satisfied:
[a] Unless waived by the Company, the Transferor signs and delivers to the Company an undertaking in form and substance satisfactory to the Company to pay all reasonable expenses incurred by the Company in connection with the Transfer (including, but not limited to, reasonable fees of counsel and accountants and the costs to be incurred with any additional accounting required in connection with the Transfer, and the cost and fees attributable to preparing, filing and recording such amendments to the organizational documents or filings as may be required by law);
[b] Such transfer does not require the registration of such transferred interest pursuant to any applicable federal or state securities laws, and the Transferor delivers to the Company an opinion of counsel for the Transferor satisfactory in form and substance to the Company to the effect that the Transfer of the Ownership Interest is in compliance with the applicable federal and state securities laws, and a statement of the Transferee in form and substance satisfactory to the Company making appropriate representations and warranties in respect to compliance with the applicable federal and state securities laws and as to any other matter reasonably required by the Company;
[c] The Company receives an opinion from its counsel that [i] the Transfer does not cause the Company to lose its classification as a partnership for federal or state income tax purposes, and [ii] the Transfer, together with all other Transfers within the preceding twelve months, does not cause a termination of the Company for federal or state income tax purposes;
[d] The Transferor signs and delivers to the Company a copy of the assignment of the Ownership Interest to the Transferee, together with the Certificates for Units representing such Ownership Interest, duly executed for assignment;
[e] The Transferee signs and delivers to the Company its agreement to be bound by this Agreement;
[f] Such Transfer does not cause the Company to become a "Publicly Traded Partnership," as such term is defined in Sections 469(k)(2) or 7704(b) of the Code;
[g] Such Transfer does not subject the Company to regulation under the Investment Company Act of 1940, the Investment Advisers Act of 1940 or the Employee Retirement Income Security Act of 1974, each as amended;
[h] Such Transfer is in compliance with the Colorado Limited Gaming Act;
[i] Such Transfer is not made to any Person who lacks the legal right, power or capacity to own such Interest; and
[j] The Transfer is in compliance with the other provisions of this Article.
Except as the Company and the Transferee may otherwise agree, the Transfer of an Ownership Interest will be effective as of 12:01 a.m. (Mountain Time) on the first day of the month following the month in which all of the above conditions have been satisfied. Upon the effective date, Appendix I will be deemed amended to reflect the new Ownership Interests.
Notwithstanding anything to the contrary expressed or implied in this Agreement, the sale, assignment, transfer, pledge or other disposition of any direct or indirect interest in the Company is subject to the laws of the state of Colorado and the requirements, limitations and decisions of the Colorado Division of Gaming and the Colorado Limited Gaming Control Commission.
13.6 Rights of Transferees. Any Transferee of an Ownership Interest will, on the
effective date of the Transfer, have only those rights of an assignee as
specified in the Act and this Agreement unless and until such Transferee is
admitted as a substitute Member. This provision limiting the rights of a
Transferee will not apply if such Transferee is already a Member; provided that,
any Member who resigns or retires from the Company in contravention of Section
4.4 will have only the rights of an assignee as specified in the Act and this
Agreement. Any Transferee of all or any part of an Ownership Interest who is not
admitted as a substitute Member in accordance with this Agreement has no right
[a] to participate or interfere in the management or administration of the
Company's business or affairs, [b] to vote or agree on any matter affecting the
Company or any Member, [c] to require any information on account of Company
transactions, or [d] to inspect the Company's books and records. The only right
of a Transferee of all or any part of an Ownership Interest who is not admitted
as a substitute Member in accordance with this Agreement is to receive the
allocations and Distributions to which the Transferor was entitled (to the
extent of the Ownership Interest transferred) and to receive required tax
reporting information. However, each Transferee of all or any part of an
Ownership Interest (including both immediate and remote Transferees) will be
subject to all of the obligations, restrictions and other terms contained in the
Agreement as if such Transferee were a Member. To the extent of any Ownership
Interest transferred, the Transferor Member does not possess any right or power
as a Member and may not exercise any such right or power directly or indirectly
on behalf of the Transferee. The Members acknowledge that these provisions may
differ from the rights of an assignee as set forth in the Act, and the Members
agree that they intend, to that extent, to vary those provisions by this
Agreement.
13.7 Security Interest. The pledge or granting of a security interest, lien or other encumbrance in or against all or any part of a Member's Ownership Interest does not cause the Member to cease to be a Member or constitute an event of Withdrawal. Upon foreclosure or sale in lieu of foreclosure of any such secured interest, the secured party will be entitled to receive the allocations and Distributions as to which a security interest has been granted by such Member. In no event will any secured party be entitled to exercise any rights under this Agreement, and such secured party may look only to such Member for the enforcement of any of its rights as a
creditor. In no event will the Company have any liability or obligation to any Person by reason of the Company's payment of a Distribution to any secured party as long as the Company makes such payment in reliance upon written instructions from the Member to whom such Distributions would be payable. Any secured party will be entitled, with respect to the security interest granted, only to the Distributions to which the assigning Member would be entitled under this Agreement, and only if, as and when such Distribution is made by the Company. Neither the Company nor any Member will owe any fiduciary duty of any nature to a secured party. Reference to any secured party includes any assignee or successor-in-interest of such Person.
13.8 Regulatory Compliance Restrictions. Notwithstanding anything to the contrary in this Agreement or elsewhere, the following provisions shall apply.
The Company shall not issue any voting securities or other voting interests, except in accordance with the provisions of the Colorado Limited Gaming Act and the regulations promulgated thereunder. The issuance of any voting securities or other voting interests shall be deemed not to be issued and outstanding until (a) the Company shall cease to be subject to the jurisdiction of the Colorado Limited Gaming Control Commission, or (b) the Colorado Limited Gaming Control Commission shall, by affirmative action, validate said issuance or waive any defect in issuance.
No voting securities or other voting interests issued by the Company and no interests, claim or charge therein or thereto shall be transferred in any manner whatsoever except in accordance with the provisions of the Colorado Limited Gaming Act and the regulations promulgated thereunder. Any transfer in violation thereof shall be void until (a) the Company shall cease to be subject to the jurisdiction of the Colorado Limited Gaming Control Commission, or (b) the Colorado Limited Gaming Control Commission shall, by affirmative action, validate said transfer or waive any defect in said transfer.
If the Colorado Limited Gaming Control Commission at any time determines
that a holder of voting securities or other voting interests of this Company is
unsuitable to hold such securities or other voting interests, then the Company
may, within sixty (60) days after the findings of unsuitability, purchase such
voting securities or other voting interests of such unsuitable Person at the
lesser of (i) the cash equivalent of such Person's investment in the Company, or
(ii) the current market price as of the date of the finding of unsuitability
unless such voting securities or other voting interests are transferred to a
suitable person (as determined by the Commission) within sixty (60) days after
the finding of unsuitability. Until such voting securities or other voting
interests are owned by Persons found by the Commission to be suitable to own
them, (a) the Company shall not be required or permitted to pay any dividend or
interest with regard to the voting securities or other voting interests, (b) the
holder of such voting securities or other voting interests shall not be entitled
to vote on any matter as the holder of the voting securities shall not for any
purposes be included in the voting securities or other voting interests of the
Company entitled to vote, and (c) the Company shall not pay any remuneration in
any form to the holder of the voting securities or other voting interests except
in exchange for such voting securities or other voting interests as provided in
this paragraph.
ARTICLE 14: GENERAL PROVISIONS
14.1 Amendment. This Agreement may be amended by the unanimous written agreement
of the Members. Any amendment will become effective upon such approval, unless
otherwise provided. Notice of any proposed amendment must be given at least 5
days in advance of the meeting at which the amendment will be considered (unless
the approval is evidenced by duly signed minutes of action). Any duly adopted
amendment to this Agreement is binding upon, and inures to the benefit of, each
Person who holds an Ownership Interest at the time of such amendment.
Notwithstanding any other provision of this Agreement, with respect to any
Transferee not admitted as a substitute Member, no amendment to Section 5.2
(relating to the general allocation rule for allocation of Profits or Losses),
Section 6.1 (relating to pro-rata Distributions), Section 12.2 (relating to
Distributions in Liquidation) and Section 14.1 (relating to amendment of this
Agreement) will be effective, nor will such Person be required to make any
Capital Contribution, without such Person's written consent. Non-Material
amendments relating to this Agreement or that are necessary for compliance with
applicable law may be made by the Managers.
14.2 Unregistered Interests. Each Member [a] acknowledges that the Ownership Interests are being offered and sold without registration under The Securities Act of 1933, as amended, or under similar provisions of state law, [b] represents and warrants that such Person is an accredited investor as defined for federal securities laws purposes, [c] represents and warrants that it is acquiring an Ownership Interest for such Person's own account, for investment, and with no view to the distribution of the Ownership Interest, and [d] agrees not to Transfer, or to attempt to Transfer, all or any part of its Ownership Interest without registration under the Securities Act of 1933, as amended, and any applicable state securities laws, unless the Transfer is exempt from such registration requirements.
14.3 Waiver of Partition Right. Each Member waives and renounces any right that such Person may have prior to Dissolution and Liquidation to institute or maintain any action for partition with respect to any real property owned by the Company.
14.4 Waivers Generally. No course of dealing will be deemed to amend or discharge any provision of this Agreement. No delay in the exercise of any right will operate as a waiver of such right. No single or partial exercise of any right will preclude its further exercise, a waiver of any right on any one occasion will not be construed as a bar to, or waiver of, any such right on any other occasion.
14.5 Equitable Relief. If any Person proposes to Transfer all or any part of such Person's Ownership Interest in violation of the terms of this Agreement, the Company or any Member may apply to any court of competent jurisdiction for an injunctive order prohibiting such proposed Transfer except upon compliance with the terms of this Agreement, and the Company or any Member may institute and maintain any action or proceeding against the Person proposing to make such Transfer to compel the specific performance of this Agreement. Any attempted Transfer in violation of this Agreement is null and void, and of no force and effect. The Person against whom such action or proceeding is brought waives the claim or defense that an adequate
remedy at law exists, and such Person will not urge in any such action or proceeding the claim or defense that such remedy at law exists.
14.6 Remedies for Breach. The rights and remedies of the Members set forth in this Agreement are neither mutually exclusive nor exclusive of any right or remedy provided by law, in equity or otherwise. The Members agree that all legal remedies (such as monetary damages) as well as all equitable remedies (such as specific performance) will be available for any breach or threatened breach of any provision of this Agreement.
14.7 Original. This Agreement is signed in two original documents that are to be delivered to each initial Member. A photocopy of this Agreement, as signed, will be delivered to each substitute or additional Member, and each such photocopy will be deemed to be an original document.
14.8 Notices. Any notices (including any communication or delivery) required or permitted under this agreement will be in writing and will be addressed to the Members at their respective addresses, as set forth on the Register of Members maintained by the Company. All notices may be made by mail, personal delivery, courier service or facsimile machine, and will be effective upon delivery. Any Member may change such Person's address by notice to the Company and each other Member.
14.9 Costs. If the Company or any Member retains counsel for the purpose of enforcing or preventing the breach or any threatened breach of any provision of this Agreement or for any other remedy relating to it, then the prevailing party will be entitled to be reimbursed by the non-prevailing party for all costs and expenses so incurred (including reasonable attorneys' fees, costs of bonds, and fees and expenses for expert witnesses) unless the arbitrator or other trier of fact determined otherwise in the interest of fairness.
14.10 Indemnification. Each Member hereby indemnifies and agrees to hold harmless the Company and each other Member from any liability, cost or expense arising from or related to any act or failure to act of such Member which is in violation of this Agreement.
14.11 Partial Invalidity. Wherever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. However, if for any reason any one or more of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any respect, such action will not affect any other provision of this Agreement. In such event, this Agreement will be construed as if such invalid, illegal or unenforceable provision had never been contained in it.
14.12 Entire Agreement. This Agreement, together with the Members Agreement, contains the entire agreement and understanding of the Members with respect to its subject matter, and it supersedes all prior written and oral agreements. No amendment of this Agreement will be effective for any purpose unless it is made in accordance with Section 14.1.
14.13 Benefit. The contribution obligations of each Member will inure solely to the benefit of the other Members and the Company, without conferring on any other Person any rights of enforcement or other rights.
14.14 Binding Effect. This Agreement is binding upon, and inures to the benefit of, the Members and their permitted successors and assigns; provided that, any Transferee will have only the rights specified in Section 13.6 unless admitted as a substitute Member in accordance with this Agreement.
14.15 Further Assurances. Each Member agrees, without further consideration, to sign and deliver such other documents of further assurance as may reasonably be necessary to effectuate the provisions of this Agreement.
14.16 Headings. Article and section titles have been inserted for convenience of reference only. They are not intended to affect the meaning or interpretation of this Agreement.
14.17 Terms. Terms used with initial capital letters will have the meanings specified, applicable to both singular and plural forms, for all purposes of this Agreement. All pronouns (and any variation) will be deemed to refer to the masculine, feminine or neuter, as the identity of the Person may require. The singular or plural include the other, as the context requires or permits. The word include (and any variation) is used in an illustrative sense rather than a limiting sense.
14.18 Governing Law; Conflicts. This Agreement will be governed by, and construed in accordance with, the laws of the State of Colorado (except to the extent preempted by any federal law or the gaming laws of any state or governmental agency having jurisdiction over the affairs of any Member). Any conflict or apparent conflict between this Agreement and the Act will be resolved in favor of this Agreement except as otherwise required by the Act. The Members have entered into a Members Agreement, dated as of the date of this Agreement, which Members Agreement contains certain provisions as to the affairs of the Company and the conduct of its business and which, for purposes of the Act, shall be considered, together with this Agreement, as an "operating agreement" of the Company.
14.19. Effectiveness. The effectiveness and enforceability of this Agreement are subject to the occurrence of the Closing. This Agreement shall automatically, without further action by any of the parties, become effective and enforceable according to its terms, and shall supersede and replace the Operating Agreement, as of the Closing Date. In the event the Closing shall not have occurred by September 3, 1997, this Agreement shall be null and void ab initio and none of the parties shall have any rights or obligations of any kind under or pursuant to this Agreement. The Operating Agreement shall remain effective, and its terms shall apply, until the Closing.
IN WITNESS WHEREOF, the initial Members have signed this Amended and Restated Operating Agreement of Isle of Capri Black Hawk, L.L.C. as of the date first set forth above.
CASINO AMERICA OF COLORADO, INC.,
a Colorado corporation
By: /s/
----------------------------------------
BLACKHAWK GOLD, LTD.,
a Nevada corporation
By: /s/ H. Thomas Winn
----------------------------------------
H. Thomas Winn, President
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APPENDIX I
Ownership Interests
Date Ownership Interests
---- -------------------
1. April 25, 1997 Casino America of Colorado, Inc. 51.6%
Blackhawk Gold, Ltd. 48.4%
2. July ___, 1997 Casino America of Colorado, Inc. 55%
Blackhawk Gold, Ltd. 45%
3.* August ___, 1997 Casino America of Colorado, Inc. 59.20%
Blackhawk Gold, Ltd. 40.80%
4.
5.
6.
7.
8.
9.
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10.
*Effective at the Closing Date.
EXHIBIT "A"
Definitions
Act: The Colorado Limited Liability Company Act, as amended
from time to time.
Affiliate: An "Affiliate" of a Person means a Person directly or
indirectly controlling, controlled by or under common
control with such Person. For this purpose and for
purposes of the use of the term "control" in this
Agreement, control means the possession, direct or
indirect, 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.
Agreement: This Amended and Restated Operations Agreement, as
amended from time to time.
Articles: The Articles of Organization of the Company as filed
under the Act, as amended from time to time.
Blackhawk Gold: Blackhawk Gold, Ltd., a Nevada corporation, and its
Permitted Transferees (provided that any Transferee will
become a substitute Member only in accordance with the
Agreement).
Capital Account: The book value capital account maintained under Section
3.6.
Capital Contribution: Any contribution by a Member to the Company.
Capital Transaction: Any sale, exchange, condemnation (including any eminent
domain or similar transaction), casualty, financing,
refinancing or other disposition with respect to any
real or personal property owned by the Company which is
not in the ordinary course of business.
Casino America of
Colorado: Casino America of Colorado, Inc., a Colorado
corporation, and its Permitted Transferees (provided
that any Transferee will become a substitute Member only
in accordance with the Agreement).
Closing: The consummation of the sale of $75 million first
mortgage notes due 2004 issued by the Company and Isle
of Capri Black Hawk Capital Corp. to finance the
development, construction, equipping and operation of
the casino gaming project and related facilities in
Black Hawk, Colorado.
Closing Date: The date and time at which the Closing occurs.
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Code: The Internal Revenue Code of 1986, as amended from time
to time (including corresponding provisions of
subsequent revenue laws).
Company: Isle of Capri Blackhawk, L.L.C., as formed under the
Articles and as operating under this Agreement.
Dissolution: The dissolution of the Company as provided in Section
11.1.
Distribution: A distribution of money or other property made by the
Company with respect to an Ownership Interest.
Fair Market Value: As to any property, the price at which a willing seller
would sell and a willing buyer would buy such property
having full knowledge of the relevant facts, in an
arm's-length transaction without time constraints, and
without being under any compulsion to buy or sell, or
the value otherwise agreed by the Members to be the Fair
Market Value.
Fiscal Year: The fiscal and taxable year of the Company as determined
under this Agreement, including both 12-month and short
taxable years.
Initial Ownership: The relative Ownership Interest of the Members existing
upon the execution of this Agreement entitling the
holders thereof to all the benefits of ownership in the
Company, but which Ownership Interests may be changed
from time to time as set forth in this Agreement.
Liability: The obligation to pay any judgment, settlement, penalty,
fine or reasonable expense (including attorneys' fees)
incurred with respect to any Proceeding.
Liquidation: The process of terminating the Company and winding up
its business under Article 12 after its Dissolution.
Losses: The Company's net loss (including deductions) for any
Fiscal Year, determined under Section 5.1.
Majority In Interest: More than 50% of the Ownership Interests.
Member: A person who is an initial Member of the Company, or who
is subsequently admitted as a substitute or an
additional Member as provided in this Agreement.
Members Agreement: The agreement, of even date with this Agreement, between
the Company, Blackhawk Gold, Casino America of Colorado,
Casino America, Inc., and Nevada Gold & Casinos, Inc.
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Net Sales Cash: Cash receipts of the Company from a Capital Transaction,
less payment of fees or expenses related to the Capital
Transaction.
Notice: Written notice (including any communication or
delivery), actually given pursuant to Section 14.8.
Ownership Interest: With respect to each Person owning an interest in the
Company, all of the interests of such Person in the
Company (including, without limitation, an interest in
Profits and Losses of the Company, a Capital Account
interest, and all other rights and obligations of such
Person under this Agreement), expressed as a percentage
(carried to the nearest one-thousandth of a percent, if
other than an even percentage), as initially set forth
in Section 1.2 and as subsequently changed in accordance
with this Agreement.
Permitted Transferee: A person described in Section 13.3 to whom an Ownership
Interest may be transferred without compliance with a
right of first refusal.
Person: An individual, corporation, trust, partnership, limited
liability company, limited liability association,
unincorporated organization, association or other
entity.
Proceeding: Any threatened, pending or completed claim, action, suit
or proceeding, whether formal or informal, and whether
civil, administrative, investigative or criminal.
Profits: The Company's net profit (including income and gains)
for any Fiscal Year, determined under Section 5.1.
Profits Interest: Each Member's (or Transferee's) percentage interest
(carried to the nearest one-thousandth of a percent, if
other than an even percentage), in the Profits of the
Company, determined under Section 5.2.
Regulations: The Treasury Regulations (including temporary
regulations) promulgated under the Code, as amended from
time to time (including corresponding provisions of
succeeding regulations).
Third Party: With respect to any Member, a Person other than an
Affiliate.
Third Party Offer: A bona fide, non-collusive, binding, arm's length
written offer from a Third Party stated in terms of U.S.
dollars.
Transfer: A sale, exchange, assignment or other disposition of
Ownership Interest, whether voluntary or by operation of
law.
Transferee: A person to whom an Ownership Interest is transferred in
compliance with this Agreement.
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Transferor: A person who transfers an Ownership Interest in
compliance with this Agreement.
Withdrawal: The occurrence of an event with respect to a Member
which terminates membership in the Company, as provided
in Section 11.2.
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AMENDMENT NO. 1 TO AMENDED AND RESTATED OPERATING
AGREEMENT OF ISLE OF CAPRI BLACK HAWK, L.L.C.
This AMENDMENT NO. 1 TO AMENDED AND RESTATED OPERATING AGREEMENT OF ISLE OF
CAPRI BLACK HAWK, L.L.C. is made as of this 3/rd/ day of October, 2001 by Casino
America of Colorado, Inc. ("Casino America of Colorado") and Blackhawk Gold,
Ltd. ("Blackhawk Gold") and those other persons, if any, who from time to time
become parties to or are otherwise bound by this Agreement as provided herein.
This Amendment amends and restates in its entirety Section 6.5 and Section 6.6 of the Amended and Restated Operating Agreement dated July 29, 1997 by and between the parties.
6.5 Distribution and Limitation. The Company will make distributions to its members in accordance with this Agreement of (i) amounts necessary to pay income tax at a rate of 40% of taxable income allocated to each Member for each fiscal quarter to be paid no later than 45 days after the end of each such fiscal quarter and (ii) 100% of excess cash flow, determined on a fiscal quarter basis, to be paid no later than 45 days after the end of each such fiscal quarter. Excess cash flow is defined as EBITDA less (i) management fees, (ii) capital expenditures approved by the Managers, (iii) cash paid for interest, (iv) tax distributions to Members, (v) scheduled principal payments, and (vi) required offers to repurchase bonds. Notwithstanding the above, the Distributions to Members shall not exceed 50% of the excess cash flow, to increase to 75% of excess cash flow after July 31, 2002, if consolidated total leverage is below 2.00x. Notwithstanding the above, such Distributions shall not be in excess of that entitled to be made pursuant to any currently existing indenture or credit facility entered into by the Company, provided that each Member has agreed in writing to enter into such facility.
6.6 Reserved.
--------
CASINO AMERICA OF COLORADO, INC. BLACKHAWK GOLD, LTD.
a Colorado corporation a Colorado corporation
By: /s/ By: /s/ H. Thomas Winn
------------------------------ -----------------------------
H. Thomas Winn, President
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Exhibit 10.18
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT is made as of this 17th day of June, 1997 by and among the CITY OF BETTENDORF, a municipal corporation of the State of Iowa (the "City") and LADY LUCK BETTENDORF, L.C., an Iowa limited liability company, LADY LUCK QUAD CITIES, INC., a Delaware corporation and BETTENDORF RIVERFRONT DEVELOPMENT COMPANY, L.C., an Iowa limited liability company (hereinafter collectively referred to as "Lady Luck").
WHEREAS, the City desires to assist in the participation of the redevelopment of the former J.I. Case property; and
WHEREAS, the acquisition of real estate and construction of certain public access improvements (as described below) for public use will benefit the residents of the City with additional public parking and increased access to the riverfront; and
WHEREAS, the site and surrounding area have been found by the City to be an area deserving of urban renewal - economic redevelopment status, which status authorizes the development of a tax increment financing District to fund certain public and private improvements in District 1 under Ordinance 36-90 (the "District"); and
WHEREAS, this Agreement is in the public's interest and in furtherance of the urban renewal plan; and
WHEREAS, this Agreement will assist in the redevelopment of such property, provide additional parking for the downtown area and increase public access to the riverfront; and
WHEREAS, this Agreement shall detail certain limits on the District funds and the manner of their expenditure; and
WHEREAS, the purpose of this Agreement is to increase public access to the City's riverfront and downtown, ensure both increased tax base within the community and further job opportunities for the residents of the City; and
WHEREAS, City participation in the below described project will diversify the tax base by increasing commercial property development, make it more likely that the Bettendorf Riverfront Development Company will be able to market and fill the commercial center adjacent to the Lady Luck boat, and will springboard other phases of expansion of the former J.I. Case site; and
WHEREAS, in order to accomplish the foregoing purposes, Lady Luck has assembled a development site, as more particularly set forth on Exhibit "A" (the "Property"); and
WHEREAS, it is a goal of this Agreement to provide the improvements called for herein without adversely impacting the
current revenues of the Bettendorf School District and Scott County.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Lady Luck and the City agree to develop the Property as a joint project which will be known as the Bettendorf Downtown Riverfront Project (the "Project") which shall be comprised of the following elements ("Project Improvements");
A. Waterfront hotel and restaurant as set forth on Exhibit "B" (the "Hotel");
B. A railroad overpass for vehicular access from State Street to the Hotel as set forth on Exhibit "C" (the "Overpass");
C. The Bettendorf Downtown Riverfront Parking Center consisting of a multi-level 500 car parking ramp as set forth on Exhibit "D" (the "Parking Facility");
D. An improved area for public parking on State Street as set forth on Exhibit "E" (the "Parking Courtyard");
E. The Marina with seasonal and transient docking facilities as set forth on Exhibit "F" (the "Marina");
A. Lady Luck shall design and construct or cause to be constructed) the Hotel, Overpass, Parking Facility and Marina. Lady Luck shall consult with the City in all matters relating to the development and construction of these improvements, and shall comply with all laws regarding site plan approvals and permitting. This consultation shall include, without limitation, the following matters:
i. The design and construction of the improvements;
ii. The selection, approval, hiring and discharge of engineers, architects, contractors, subcontractors, professionals and other third parties;
iii. The negotiation and execution of contracts, agreements, easements, and other documents with third parties; and
iv. The preparation of budgets, cost estimates, financial projections, statements, information and reports as Lady Luck deems appropriate.
B. The City shall not, in this consultation, unreasonably withhold or delay its approval.
C. Lady Luck shall demolish the Plaza Building at 1823 State Street at its cost (including any environmental remediation as required by applicable law), shall backfill the building footprint with appropriate fill materials including a top layer of soil sufficient to sustain grass (which shall be initially sodded by Lady Luck) and shall cause the real estate (as legally described on Exhibit "E-1") to be donated to the City for the City's use.
D. Lady Luck shall pay all real estate taxes imposed on the Property.
E. Lady Luck shall pay to the City one-half of the damages awarded to (or the settlement amount negotiated with) the owners of the real estate fronting on George Thuenen Drive arising out of the taking of any access thereto by the construction of the Overpass.
F. For the life of bonds issued by the City to finance its obligations hereunder, Lady Luck or its assignees shall not object to a minimum assessed valuation of the Hotel, Parking Facility and Marina in an amount of $32 million commencing December 31, 1997.
G. Lady Luck shall pay a maintenance fee of Fifty Thousand Dollars ($50,000) per year commencing on January 1 following completion of construction of the Overpass and each year thereafter for fifteen (15) years (or a total of fifteen (15) payments). The City shall deposit these fees into a trust and agency account to use for the repair and/or replacement of the Overpass. Further, in the event traffic conditions require signalization at the intersection of State Street and George Thuenen Drive, Lady Luck will reimburse the city for the cost of the signals and the installation thereof and any surface modification required thereby. However, the City agrees that it will not require such signalization during the initial traffic assessment period which shall be the two (2) year period
following completion of the Overpass. However, nothing in this Agreement shall be deemed to give Lady Luck any special legal entitlements for use of the Overpass and related site improvements.
A. After the execution of this Development Agreement, the City shall cause to be issued tax increment financing bonds or notes in sufficient amounts to meet the obligations contained herein. Interest for said bonds or notes shall be as established at competitive bid or pursuant to a loan agreement and private negotiated sale. Interest and principal shall first be paid from incremental proceeds generated solely by the Project. In the event additional proceeds are necessary, they shall be derived from increment within the District.
B. The City agrees to purchase from Lady Luck the Overpass for a purchase price equal to the documented costs of the Overpass' design, development, construction and related site work and to pay to Lady Luck to offset its costs of design and construction of the Parking Facility, Marina and related site work, sums not to exceed Seven Million Five Hundred Thousand Dollars ($7,500,000) in total, which amount shall be funded by the aforementioned tax increment financing and advanced to the contractors per the agreed upon construction schedule. In the event additional expenditures are required for construction which exceed the aforementioned Seven Million Five Hundred Thousand Dollar ($7,500,000) threshold, those excess costs shall be borne by Lady Luck. In the event the tax increment financing proceeds are in excess of the documented costs by Lady Luck for the design, development and construction of the Parking Facility, Marina, Overpass and related site work, the balance of those proceeds shall be used by the city for other Project Improvements within the District as authorized by law. In the event insufficient tax increment is created to fund the documented costs up to the Seven Million Five Hundred Thousand Dollar ($7,500,000) threshold referred to above, any annual shortfall necessary to fund the aforementioned bonds shall be covered by the City utilizing revenues obtained from taxes and fees generated by Lady Luck. Once the foregoing $7,500,000 threshold is established, Lady Luck Bettendorf agrees to cover any shortfall in incremental income from the District necessary for the payment of the bonds or notes (due to failure of the Assessor to assess the Hotel, Parking Facility and Marina at the minimum assessed valuation of $32 million or any other reason). In the event of such a shortfall, Lady Luck Bettendorf shall
provide the City with sufficient funds to compensate for the shortfall, which funds shall be treated as payments in lieu of taxes.
C. The City shall have the ability to use all funds generated by the coverage ratio to the extent the District provides revenues necessary for coverage pursuant the documents for sale of the bonds. Such coverage funds may be used by the City to repay the Bettendorf School District and Scott County any shortfall of revenue from the existing increment incurred by virtue of this Agreement.
A. Within 30 days from the date of execution of this Agreement, Lady Luck shall submit a site plan and design development documents (the "Design Development Documents") for the area as it will look upon completion of the Project. The Design Development Documents shall include the location and size of all Project Improvements required by this Agreement. Lady Luck shall secure the appropriate approvals from the City so that such documents conform to all relevant zoning, building, fire, landscape, and stormwater detention codes which are then in effect.
B. The Design Development Documents shall serve as the baseline for the construction documents. From the completion of the Design Development Documents until the completion of the final construction documents, Lady Luck will consult with the City prior to any major change to the Design Development Documents. The City may also propose changes to the Design Development Documents. The construction documents shall include all detailed final working drawings and specifications as are usual and customary in a project of this size and scope.
C. Subject to Unavoidable Delays, which are defined as delays as the result of strikes, unforeseeable and unavoidable casualties, governmental actions, judicial actions commenced by third parties, weather, floods, other acts of God or other causes and event outside of Lady Luck's control, Lady Luck shall have the Project Improvements completed according to the Construction Schedule attached as Exhibit "G", to which Lady Luck and the City shall use their best efforts to adhere. The Construction Schedule has been established to coordinate completion times of each Project Improvement. It is the intention of the parties that the Marina, Overpass and Parking Facility be completed prior to the Hotel opening (or as soon thereafter as is commercially reasonable). In the event the
construction of the Marina is not completed before April 1 following the completion of the Hotel, Lady Luck shall pay the City a penalty of $100,000 per month for each month or prorated portion thereof after such April 1 date until the completion date of the Marina, unless such delay is caused by a force majeure in the contract of Lady Luck's Marina contractor or other cause outside of the control of Lady Luck.
The following matters shall have been satisfied before any of the parties to this Agreement are bound by their undertakings and obligations:
A. Lady Luck shall have executed construction agreements for the Hotel, Marina, Overpass and Parking Facility.
B. Lady Luck shall have secured a firm commitment for financing the construction of the Hotel and shall have received satisfactory evidence of sufficient funding for the aforementioned tax increment financing.
C. Lady Luck shall have received all necessary approvals from any governmental agency, utility, railroad or other entity whose approval is required for Lady Luck's undertakings and obligations under this Agreement specifically including, but not limited to approval of this Agreement by the Iowa Racing and Gaming Commission.
D. Each of the parties hereto shall have properly approved, authorized, and executed an original counterpart of this Agreement. Each party hereto represents and warrants to the other parties that this Agreement has been duly approved by its governing body, which has by proper proceedings authorized the execution and delivery of this Agreement and the performance of each and every undertaking of such party herein contained.
If any of the foregoing conditions precedent does not occur within twelve (12) months of the date of this Agreement, either party may terminate this Agreement upon written notice to the
other party. This Agreement shall remain in full force and effect for the life of the bonds issued by the City to finance its obligations under this Agreement. However, the parties' obligations to pay into, maintain and administer the repair/replacement account under paragraph 2(G) hereof shall survive and extend beyond the term of this Agreement.
Lady Luck shall not engage in any financing or any other transaction creating any mortgage or other encumbrances or lien upon the Project Improvements as outlined above, except with the consent of the City which consent shall not be unreasonably withheld. Creating encumbrances for the purpose of obtaining funds necessary for the construction of the Project Improvements shall not be subject to the limitations of this paragraph.
Upon completion, the Overpass shall be transferred to the City for general public use and without any special legal entitlements to use by any private person. Such transfer may be by dedication, easement, or deed, as appropriate. All transfers to the City shall be free of any liens, and shall be without known hazard. Upon demolition, clean up and remediation, if any, of the Plaza building site, such ground shall also be transferred to the City, free of lien or hazards.
Acquisition of these sites represents an urban renewal project within the meaning of Iowa Code Section 403.17(24) and 384.95.
Lady Luck agrees to allow the city reasonable access to financial records after giving Lady Luck reasonable notice in order to verify that the amounts listed for the Project Improvements described above have been spent toward the completion of those Project Improvements. Lady Luck shall advise and consult with the City or its financial advisor regarding the business plan for the Marina and Hotel.
The following areas of the Project Improvements shall be maintained by the City upon completion and transfer to the City:
A. All surfaces of the Overpass and any connection access ways.
B. All lights whose purpose is the illumination of Overpass.
The City agrees to cooperate in good faith with Lady Luck in connection with the performance of all of the activities contemplated herein and to use all reasonable efforts and diligence to promptly respond to any reasonable requests or notices received by it from Lady Luck pursuant to the terms hereof. The City further agrees to consider in good faith any
required variance from the terms of this Agreement regarding Lady Luck's performance or the construction of the Project Improvements which may be reasonably necessary to allow for the completion thereof or which the city may reasonably determine to be in the best interests of the District and the residents of the City.
In the event of any breach of any covenant, agreement, restriction or regulation contained in this Agreement, by Lady Luck or the City, the dispute shall be first mediated and then (if necessary) arbitrated. Only after a good faith effort to mediate such dispute has failed shall the matter proceed to arbitration. On the written notice of either party to the other of a breach of this Agreement, each party shall designate their representatives and shall meet within three (3) days after receipt of the notice. The parties themselves shall then attempt to resolve the dispute within fourteen (14) days of the meeting. Should the parties be unable to agree upon a resolution of the dispute, the parties agree that Federal Mediation and Conciliation Service shall be appointed as mediator/arbitrator, whose decision(s) shall be final, and judgment may be made and entered in any court in accordance therewith (except that either party may petition a court of competent jurisdiction for review of errors of law). Either
party may notify the mediator/arbitrator and so commence the
mediation/arbitration process. The mediator/arbitrator shall meet with the
parties to hear the dispute within ten (10) days of such notification and shall
attempt to resolve the dispute or issue his arbitration decision within fourteen
(14) days of the first meeting. Each party shall abide by the decision of the
mediator/arbitrator and shall pay the amounts, costs and expenses as awarded by
the mediator/arbitrator with the mediator/arbitrator fee to be borne equally by
both parties. The parties further agree that the nonbreaching party may
institute separate legal proceedings to enjoin the threatened or attempted
violation of any covenant, agreement, restriction or regulation contained
herein. The parties agree that specific performance may accordingly be a remedy
for and ordered by any court.
For so long as the City has any debt outstanding (tax increment financing or refinancing or refunding notes, bonds, or other financial obligations) dependent upon the property taxes generated by this site (as shown on the site plan referred to in Section 4) Lady Luck shall continue to operate the Lady Luck boat, or a boat of similar capacity, at the site (except for the minimum time necessary to conduct the requisite hull inspection
required by the U.S. Coast Guard or similar governmental requirements).
It is intended by the parties that this project is intended to be Phase I of further development on the site. Such further development will include expansion of the Marina and Pavilion. Within 24 months of the completion of the improvements contained herein the parties shall develop a plan and timetable for the next phase improvements. Lady Luck shall consult with the City in the preparation of this development plan.
It is the intent of the parties that the Lady Luck boat and new Hotel continue to be the premiere facilities in the Quad City area with facilities and amenities warranting at least a three diamond rating by the American Automobile Association, Mobil or such similarly published rating service. Lady Luck shall ensure that it or its assigns and successors shall reserve such funds as are necessary to continue to maintain these facilities in a first class condition.
No construction or finished improvement shall interfere with the ability of the City or Corps of Engineers to
maintain the floodwall or interceptor sewer along Lady Luck property.
Lady Luck will consult with representatives of the City at least monthly during construction to discuss progress of the Project.
Until such time as the City accepts any property deeded to it, Lady Luck shall bear all risk of loss or risk of harm to others, occurring by virtue of this project, and shall indemnify and hold harmless the City therefrom.
In the event Lady Luck does not fund the payment of its obligations described herein, Lady Luck agrees to pay the City an additional 25(cent) per person for each person entering the Lady Luck boat (which additional sums shall be used to pay these obligations), paid with and on the same schedule as the 50(cent) currently being paid. Such fee will thereafter continue until such obligations are paid.
Lady Luck shall allow a bike path to be placed through the Property as agreed upon by the parties. Construction of a minimum six foot pedestrian walkway on the Overpass on Thuenen
Drive shall be a part of that project. Construction of the bike path on other parts of the site shall be at the City's expense.
From time to time hereafter without further consideration, the parties agree to execute and deliver, or cause to be executed and delivered, such further agreements and instruments, and shall take such other actions, as any party may reasonably request in order to more effectively memorialize, confirm and effectuate the intentions, undertakings and obligations contemplated by this Agreement.
This Agreement may be executed in any number of counterparts with the same effect as if the parties hereto had signed the same document. All such counterparts shall constitute one instrument.
Dated this 23/rd/ day of June, 1997.
CITY OF BETTENDORF
By___________________________________________
Mayor
By___________________________________________
City Administrator
Dated this 17th day of June, 1997.
LADY LUCK BETTENDORF, L.C.
By _______________________________________________
By _______________________________________________
Dated this 17th day of June, 1997.
BETTENDORF RIVERFRONT
DEVELOPMENT COMPANY, L.C.
By________________________________________________
Dated this 17th day of June, 1997.
LADY LUCK QUAD CITIES, INC.
By________________________________________________
THIS AMENDMENT TO DEVELOPMENT AGREEMENT (the "Amendment") is made this _____ day of August, 1998, by and among GREEN BRIDGE COMPANY, an Iowa corporation, BETTENDORF RIVERFRONT DEVELOPMENT COMPANY, L.C., an Iowa limited liability company, LADY LUCK GAMING CORPORATION, a Delaware corporation, and LADY LUCK BETTENDORF, L.C., an Iowa limited liability company (hereinafter collectively referred to as "LLB") and the CITY OF BETTENDORF, a municipal corporation of the State of Iowa (the "City").
WHEREAS, City and LLB have entered into a Development Agreement dated August 16, 1994 (the "Development Agreement"); and
WHEREAS, the Development Agreement provided for a development fee to be paid to the City of Buettendorf (the "Development Fee"); and
WHEREAS, pursuant to 99F.10(3) of the Code of Iowa, the City is authorized to adopt an ordinance providing for an administration fee of up to fifty cents ($.50) for each person admitted to the Lady Luck Bettendorf Casino (the "Admission Fee"); and
WHEREAS, accordingly, the City previously approved and adopted such an ordinance providing for an Admission Fee of fifty cents ($.50)(the "Admission Fee Ordinance"); and
WHEREAS, the City and LLB desire to amend and increase the Development Fee in lieu of an Admission Fee with the increased Development Fee calculated as a percentage of the total adjusted gross receipts; and
WHEREAS, the parties desire to amend the Development Agreement as provided herein.
NOW, THEREFORE, it is agreed as follows:
1. Paragraph 3 of the Development Agreement is hereby amended by renumbering that paragraph as 3A and supplementing the section with the following:
"3B. Commencing September 1, 1998, in lieu of the foregoing paragraph 3A, LLB agrees to weekly pay a Development Fee to the City (in addition to the license fees paid to the Riverbend Regional Authority) equal to 1.65% of the adjusted gross receipts (as defined inss.99F.1(1) of the Iowa Code). In the event this Development Fee is adjusted downward by any future amendment of Chapter 99F of the Code of Iowa, any rule promulgated thereunder, or any ruling by any agency or court of competent jurisdiction construing the relevant law and/or regulation, LLB agrees to pay a fee to the City calculated to compensate the City for any resulting deficiency in the Development Fee (from the amount contemplated by this Agreement). Subject to the following conditions subsequent, Lady Luck Bettendorf agrees to pay to the City a minimum annual Development Fee of $1,020,000 (the "Floor Amount"). The Floor Amount will be computed on an annual basis from September 1 through
August 31 of each year with any deficiency between the Floor Amount and the Development Fee due and payable on September 10, immediately following such year.
3C. The Floor Amount shall terminate at LLB's option for any year during which any of the following conditions subsequent occur which result in a decrease of adjusted gross receipt to less than $64,000,000:
a) a change in Illinois gaming law resulting in dockside gaming in the Illinois Quad Cities;
b) introduction and operation of a fourth casino in the Quad City area;
c) removal of the Lady Luck Bettendorf vessel for a hull inspection if required by applicable regulation; or
d) any change in Chapter 99F of the Code of Iowa or to the rules promulgated thereunder by the Iowa Racing and Gaming Commission.
If LLB so elects to terminate the Floor Amount, the City shall have the corresponding option to elect to receive for such year a Development Fee as computed under paragraph 3A above together with an additional adjustment equal to the maximum amount which could have been charged by the City as an Admission Fee under 99F.10(3) of the Code of Iowa"
2. Paragraph 5 of the Development Agreement is hereby amended by supplementing the section with the following:
"Paragraph 3B of this Agreement is expressly conditioned upon no Admission Fee being charged by the City as authorized by 99F.10(30) of the Code of Iowa. The absence of such an Admission Fee shall be a condition subsequent of LLB's obligations under paragraph 3B hereof."
3. In all other aspects the parties hereto ratify and confirm the Development Agreement.
4. This Amendment is expressly subject to approval by the Iowa Racing and Gaming Commission and will be effective on the later of September 1, 1998 or the effective date of the City's adoption of its resolution rescinding the Admission Fee Ordinance.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their duly authorized representatives as of the day and year first above written.
CITY OF BETTENDORF, IOWA
By /s/ Ann Hutchinson
------------------------------------
Ann Hutchinson
Title: Mayor
By /s/ Decker P. Ploehn
------------------------------------
Decker P. Ploehn
Title: City Administrator
|
LADY LUCK BETTENDORF, L.C.
BETTENDORF RIVERFRONT DEVELOPMENT
COMPANY, L.C.
By /s/ Michael L. Sampson
-----------------------------
Michael L. Sampson
Title: Manager
|
GREEN BRIDGE COMPANY
By /s/ Jeffrey D. Goldstein
-----------------------------
Jeffrey D. Goldstein
Title: President
|
LADY LUCK GAMING CORPORATION
By /s/ Andrew H. Tompkins
-----------------------------
Andrew H. Tompkins
Title: President
|
THIS AMENDMENT TO OPERATOR'S CONTRACT (the "Amendment") is made this _____ day of August 1998, by and among GREEN BRIDGE COMPANY, an Iowa corporation, BETTENDORF RIVERFRONT DEVELOPMENT COMPANY, L.C., an Iowa limited liability company, LADY LUCK GAMING CORPORATION, a Delaware corporation, and LADY LUCK BETTENDORF, L.C., an Iowa limited liability company (hereinafter collectively referred to as the "Operator") and RIVERBEND REGIONAL AUTHORITY, an Iowa not-for-profit corporation ("RRA").
WHEREAS, Operator and RRA have entered into an Operator's Contract dated August 11, 1994 (the "Operator's Contract"); and
WHEREAS, the parties desire to amend the Operator's Contract as provided herein.
NOW, THEREFORE, it is agreed as follows:
1. Paragraph 5 of the Operator's Contract is hereby amended to read in its entirety as follows:
"5. Commencing on September 1, 1998 and continuing for the term of this Contract, the Operator shall pay a fee to RRA equal to 4.1% of the adjusted gross receipts (as defined in Section 99F.1(1) of the Iowa Code). In order to assist RRA in its budgeting and grant process, subject to the foregoing conditions subsequent, Operator agrees to pay RRA a minimum annual fee of $3,000,000.00 (the "Floor Amount"). The Floor Amount will be reconciled on an annual basis from September 1
through August 31 of each year with any deficiency between the Floor Amount and the accumulated weekly percentage fee due and payable on September 10, immediately following such year. The Floor Amount shall be automatically terminated for any year during which any of the following conditions subsequent occur which result in a decrease of adjusted gross receipts to less than $64,000,000.00:
a.) a change in Illinois gaming law resulting in dockside gaming in the Illinois Quad Cities;
b.) introduction and operation of a fourth casino in either Rock Island or Scott Counties;
c.) removal of the Lady Luck Bettendorf vessel for a hull inspection if required by applicable regulation; or
d.) any change in Chapter 99F of the Iowa Code or regulations promulgated by the Iowa Racing and Gaming Commission (IRGC).
From said sums, RRA shall be responsible for all of its administrative costs, the annual DCI investigation of its board members as may be required, all legal expenses, salaries, and all related costs associated with RRA's administration of the license. Operator covenants and agrees to pay all charges as required by IRGC. Operator agrees to hold RRA harmless for any such charges required by IRGC. The Operator shall provide at its expense, all necessary documentation to establish to the reasonable satisfaction of RRA and IRGC the computation of the fee set forth above. Operator agrees to pay to RRA and to account to RRA as required to comply with IRGC's rules and regulations. Operator shall pay the percentage fee required herein weekly by 12:00 Noon on Friday following the completion of each calendar week."
2. Paragraph 7 of the Operator's Contract is hereby amended by increasing the termination fee from $500,000.00 to $1,000,000.00 which fee shall be payable within thirty (30) days.
3. In all other respects the parties hereto ratify and confirm the Operator's Contract.
4. This Amendment is expressly subject to approval by the Iowa Racing and Gaming Commission and will be effective on September 1, 1998. Operator further agrees to pay all legal and accounting expenses of RRA related to the negotiation, preparation and approval of the Amendment.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their duly authorized representatives as of the day and year first above written.
RIVERBEND REGIONAL AUTHORITY
By ________________________________________
Its President
By ________________________________________
Its Secretary
LADY LUCK BETTENDORF, L.C.
By ________________________________________
Title: Manager
BETTENDORF RIVERFRONT DEVELOPMENT COMPANY,
L.C.
By /s/ Michael L. Sampson
-----------------------------------------
Michael L. Sampson
Title: Manager
|
GREEN BRIDGE COMPANY
By /s/ Jeffrey D. Goldstein
-----------------------------------------
Jeffrey D. Goldstein
Title: President
|
LADY LUCK GAMING CORPORATION
By /s/ Andrew H. Tompkins
-----------------------------------------
Andrew H. Tompkins
Title: President
|
Exhibit 10.19
This agreement is made and entered into by and between the Riverboat Development Authority (Authority) and The Connelly Group, L.P. (Connelly) as of this 28th day of December, 1989.
WHEREAS, in April of 1989, the State of Iowa enacted the Gambling Excursion Riverboat Bill, which authorities, by local option, limited gambling activity on excursion boats on the Mississippi, Missouri, and inland rivers, lakes and reservoirs in Iowa; and
WHEREAS, pursuant to the provisions of the enactment, residents of Scott County, Iowa, approved such gambling activity for any area within Scott County, Iowa; and
WHEREAS, the Authority is an Iowa non-profit corporation with its principal place of business in Scott County, Iowa, which corporation was formed for the purpose of making an application to the Iowa Racing and Gaming Commission for an excursion gambling boat license; and
WHEREAS, Connelly has or will enter into a development agreement with the City of Davenport, Iowa for the implementation of certain development within the City of Davenport provided that the Authority and Connelly are granted licenses to operate excursion boats; and
WHEREAS, Connelly has or will enter into a lease with the City of Davenport for the use of the Davenport levee to dock and operate an excursion gaming boat; and
WHEREAS, Connelly wishes to enter into a contract with the Authority as an operator of an excursion gambling boat pursuant to the rules and regulations of the Iowa Racing and Gaming Commission.
NOW THEREFORE, for and in consideration of the mutual covenants herein contained, it is agreed as follows:
1. That Connelly acknowledges and requests that the Authority make an application for an Iowa excursion boat gambling license designating Connelly as an operator all pursuant to the provisions of the Iowa Code Chapter 99F, and all related chapters of the Iowa Code.
2. That the application so submitted to the Iowa Racing and Gaming Commission on behalf of the Authority and on behalf of Connelly as an operator shall provide that Connelly will operate a gambling excursion boat docked exclusively in the City of Davenport, Iowa.
3. That Connelly shall be responsible for the payment of all application fees to the Iowa Racing and Gaming Commission and all fees or expenses charged by the Iowa Department of Criminal Investigation for background check and investigation of all Authority Board members and Connelly. It is understood that Connelly will pay, in addition to any initial fees, any and all additional fees or charges made by the Iowa Racing and Gaming Commission and/or the Iowa Department of Criminal Investigation.
4. Connelly will provide advances against future admissions fees as hereinafter provided for to pay for all reasonable costs incurred by the Authority. The Authority anticipates that such expenses shall not exceed $25,000, which amount shall include, but not be limited to all
legal and accounting expenses, secretarial and general administration and office start-up costs. Additional advances will be made by Connelly on an "as needed" basis up to a total of $50,000. Connelly shall have the right to review any request for such additional advances. All reasonable requests by the Authority up to $50,000 will be granted.
All advances shall be repaid at the end of the first year of operation from the admissions fees provided for in paragraph 8 hereof. In the event that the license application on behalf of the Authority and/or Connelly is denied, the Authority shall return to Connelly, all remaining unspent advances. The Authority shall not be required to reimburse Connelly for any advances spent by the Authority prior to the denial of the license.
5. This contract shall run form the date of execution until the termination of the initial license period for the Authority and for Connelly as issued by the Iowa Racing and Gaming Commission. It is anticipated that the license will be issued for a three year period to commence in May of 1991, and run through May of 1994. It is agreed that in any event, this contract shall terminate on May 1, 1994. Provided, however, that so long as Connelly has substantially complied with the Iowa Racing and Gaming Commission rules, and the Authority's gaming license is renewed. Connelly is hereby granted the right to renew this agreement for succeeding three year periods, the last of which shall terminate on the anniversary date of the license in the year 2000 or at such later date to which Scott County may extend its referendum and the Authority's license is extended.
6. Connelly as operator, shall be responsible for the payment of all annual licensing fees as required by the Iowa Racing and Gaming Commission, the payment of all premiums or any additional fees required by the Iowa Racing and Gaming Commission under the provisions of Chapter 997 and its regulations and any amendments thereto, or any other provisions of the Iowa Code, all of which are required in order to maintain an excursion boat gambling license. The operator shall be responsible for the payment to the Authority of all wagering taxes as assessed upon the adjusted gross receipts pursuant to Iowa Code Section 99F, and assessed by the Iowa Racing and Gaming Commission. All such payments shall be made by the operator in a timely fashion to the Authority, to enable the Authority to make payments as required by statute and by the rules and regulations of the Iowa Racing and Gaming Commission.
7. The operator agrees to provide all necessary accounting and verification required by the Iowa Racing and Gaming Commission to determine the adjusted gross receipts in order to determine the gaming taxes as assessed pursuant to Iowa Code Chapter 99F, and shall comply with all reasonable requests of the Authority and/or Iowa Racing and Gaming Commission, or any other regulating body, to determine the extent of the gaming tax, and further agrees to make any payments required in a timely fashion.
8. During the initial term of this lease, the operator shall pay an admissions charge to the Authority equal to $2.00 for all admissions either paid or complimentary, excepting only actual and necessary officials and employees of the Authority and operator, and all other persons actually working on the excursion gambling boat as more particularly set forth under the rules of the Iowa Racing and Gaming Commission and Chapter 997. From said sum, the Authority shall be responsible for all of its administrative costs, the annual DCI investigation of its board members as required, all legal expenses, salaries, and all related costs associated with the administration of the license. In addition, the Authority covenants and agrees to pay to the City of Davenport an amount of up to $.50 per admission as set by city ordinance, and shall further pay an amount of $.50 on the admissions as required by the Iowa Racing and Gaming Commission thereunder. Any increase in the $.50 charge per admission for the City of Davenport
or the Iowa Racing and Gaming Commission shall be born by Connelly. The operator shall provide at its expense, all necessary accounting and documentation to establish to the reasonable satisfaction of the Authority and the Iowa Racing and Gaming Commission the number of all admissions. The operator agrees to pay to the Authority and to account to the Authority as required to comply with the Iowa Racing and Gaming Commission rules and regulations.
In the event that this contract is extended as contemplated in Paragraph 5, during the first three year extension, (the years beginning April 1, 1994, through March 31, 1997), the Authority shall have the right to increase the per person admissions charge in an amount equal to one-half of the percentage increase, if any, in the Consumer Price Index hereafter called "Index" for Chicago, Illinois for all items of the Bureau of Labor Statistics of the United States Department of Labor. Such an increase shall be calculated by multiplying the $2.00 admissions charge by the fraction which is obtained by utilizing the Index rate as of April 1, 1991, (Base Rate) as the denominator, and the excess of the Index rate as of April 1, 1994, over the Base Rate as the numerator and dividing the resulting fraction by 2. The resulting fraction, when multiplied by the present rate of $2.00 will constitute the increase which when added to $2.00 will constitute the extension rate, provided, however, that the extension rate shall not exceed $3.00. Any such increase shall be included within an extension agreement. In the event that this contract is extended for an additional, or third, three year period (the years beginning April 1, 1997 and ending March 31, 2000), the Authority shall have the right to increase the admissions charge in an amount equal to one-half of the percentage increase, if any, in the Consumer Price Index, hereinafter called "Index" for Chicago, Illinois for all items of the Bureau of Labor Statistics of the United States Department of Labor. Such an increase shall be calculated by multiplying the initial $2.00 admissions charge by the fraction which is obtained by utilizing the Base Rate, as the denominator and the excess of the rate as of April 1, 1997, over the Base Rate, as the numerator and dividing the resulting fraction by 2. The resulting fraction, when multiplied by the initial rate of $2.00 will constitute the increase, which when added to $2.00 will constitute the extension rate; provided, however that the extension rate shall not exceed $4.00. Any such increase shall be included within an extension agreement. For all purposes hereof, in the event this "Index" is no longer in existence, then the successor index, it if exists, or the index most similar to the "Index" shall be used for purposes of this agreement. Notwithstanding the right of the Authority to increase the per person admissions charge as set forth above, no such increase shall be permitted, implemented or paid for any year if the Connelly Group's gambling operations will not generate a net profit for such year after taking into account such increase. By way of example, assume for the year beginning on April 1, 1994, and ending March 31, 1995, that Connelly's net profit on gambling operations was $100,000, that 400,000 persons has been charged admissions for such year, and that the increase calculated as set forth above, before this limitation, would be $.50. In this example, the Authority could not collect the increase in the admissions rate for such year because the effect of the increase would be to make Connelly unprofitable for the year (e.g., 400,000 admissions x $.50 = $200,000 of additional Connelly expense which exceeds $100,000 of net profits). For purposes of this agreement, net profit shall mean the net profit reflected on the financial statement submitted to the Iowa Racing and Gaming Commission at year end, reduced by the principal portion of Connelly's debt service. For fiscal years beginning on April 1, 1994, any increases as set forth above will be calculated on a year to year basis using the above formula and any permitted increases shall be paid to the Authority by Connelly in a lump sum within fifteen (15) days after the submission of the above year and financial statements to the Iowa Racing and Gaming Commission for the year in question beginning with the year ending March 31, 1995.
9. The operator agrees to hold the Authority harmless and to defend it from any and all claims arising out of the operator's operation of its gambling and excursion boat and any
related activity of the operator as required by this agreement, city and county ordinances, or state or federal statutes, and all regulations promulgated thereunder. The operator shall be responsible for the payment of all legal expenses incurred by the Authority in defense of any such claim, and all costs attributable thereto including payment of any settlements, damage awards and interest thereon. The operator shall not be responsible for any acts or omissions of the Authority, and the indemnity shall not apply thereto.
10. The Authority agrees to submit to the Iowa Racing and Gaming Commission on behalf of the operator, any reasonable requests of the operator to amend its operation or its authority. The parties recognize that Connelly anticipates the need for additional excursion gaming boat(s) and the Authority does agree to support requests with the Iowa Racing and Gaming Commission for additional boat(s) at such time as Connelly believes such additions to be financially feasible.
11. The operator, its parent, successor or assigns, or any entity that it, its parent, successor or assigns affiliate with, hereby agree not to enter into any agreement to operate a gambling excursion boat from any port-of-call or docking facility within the areas of Scott, County, in Iowa, and Rock Island, County in Illinois during the term of this agreement and any extensions, and for a period of eighteen (18) months after the termination of this agreement provided, however that this clause shall not be effective if this contract is terminated by the Authority without cause.
12. The operator agrees to provide the Authority approximately 1,200 square foot of suitable office space at its Davenport facility without charge to the Authority.
13. The Authority agrees with the operator that it will not enter into any agreements with any operators, and will not make application to the Racing and Gaming Commission for any operator, to operate gambling excursion boats within the City of Davenport, Iowa without first obtaining the written consent of the operator which may be withheld by the operator for any reason in operator's sole and absolute discretion. In addition, the Authority agrees to take all reasonable steps available to the Authority to prevent any other operator or excursion boat gambling license holder from having or acquiring a port-of-call or operations site within the City of Davenport without the written prior permission of the operator.
14. The operator agrees, subject to all applicable Iowa and federal laws, to dock its gambling excursion boat during the winter or off season, at the facilities it leases from the City of Davenport, and to the extent permitted by the Iowa Racing and Gaming Commission and consistent with prudent business judgment, to maintain casino style gambling operation on he boat on a year around basis.
15. It is agreed that this contract is intended to comply with, and is subject to all the rules and regulations of the Iowa Racing and Gaming Commission, the ordinances of the City of Davenport, and the laws of the State of Iowa and of the United States of America. The terms of this contract are subject to amendment to comply with any of said requirements or any changes in any laws or regulations. In the event that any provision of this contract is determined to be invalid by a court of competent jurisdiction, the remaining provisions of the contract shall remain in full force and effect.
16. The operator agrees that it will provide, at its expense, within the time requirements set forth by the regulations of the Iowa Racing and Gaming Commission, all necessary audits of financial transactions and conditions of the operations conducted by the
operator, as well as audits of the financial transactions, and conditions of the operator's total operations as required by the rules and regulations of the Iowa Racing and Gaming Commission.
17. The Authority agrees that in the event the Authority enters into a contract with another operator, the financial terms of which are, in the judgment of Connelly, more favorable than those provided for herein, this contract shall be amended to provide for any such more favorable financial terms from and after the date of the execution of any such contract with another operator.
18. The operator and the Authority do hereby agree and covenant with each other to comply with the terms of Iowa Code Section 997, all chapters of the Iowa Code, the U.S. Federal Code, all City ordinances of the City of Davenport, and any and all regulations promulgated pursuant to any such laws as duly adopted. Both parties represent and covenant with each other that they will cooperate with each other in order to achieve their mutual goals.
19. This agreement embodies the entire agreement between the parties and may be amended or supplemented only by an instrument in writing executed by the parties against whom the enforcement is sought.
20. All representations, warranties and indemnities set forth in this agreement shall survive the execution hereof.
21. This agreement may be executed in a number of identical counterparts, and if so executed, each such counterpart is deemed an original for all purposes, and all such counterparts shall collectively constitute one agreement.
22. This agreement binds the parties hereto and inures to the benefit of their respective heirs, personal representatives, successors or assigns.
23. In addition to the acts and deeds recited in this agreement and contemplated herein, the parties hereto shall execute any and all additional agreements as may be necessary to consummate the transactions contemplated by this agreement and to fulfill the intentions of this agreement.
24. Time is of the essence of this agreement and each and every provision contained herein.
25. In the event a dispute arises between the parties, hereto, each party shall be responsible for paying its own attorney's fees and court costs, if any, incurred in connection with such dispute.
26. If and in the event of a dispute arising hereunder, venue is vested in the Iowa District Court where venue is proper, or in any Federal District Court which has jurisdiction. Connelly acknowledges that it has negotiated this agreement in Scott County, Iowa, and has made numerous business contacts and entered into agreements relating to matters sufficient to confer jurisdiction on the Iowa District Court in and for Scott County.
27. The parties hereto represent to each other that each has the full right, power and authority to enter into this agreement and to fully perform its obligations. The persons executing this agreement warrant and represent that each has the authority to executed in the capacity stated and to bind the parties hereto.
28. Connelly shall not have the right to assign this agreement without the prior written consent of the Iowa Racing and Gaming Commission and the Authority.
29. If, and in the event, any provision of this agreement is determined to be invalid for any reason, it shall be severed and all other provisions not determined invalid shall continue with full force and affect.
30. No failure by either party hereto, at any time, to require the performance by the other of any term of this agreement, shall in any way affect the right of either party to enforce such terms, nor shall any waiver, by either party of any terms hereof be taken or held to be a waiver of any other provision of this agreement. No waiver of any term or provision of this agreement shall be effective unless the same is in writing, signed by the parties hereto.
31. This agreement is entered into in the State of Iowa and shall be construed in accordance therewith, and all of the rights and obligations hereunder shall be determined in accordance with the laws of the State of Iowa.
This agreement is signed and entered into the day and year first written.
THE CONNELLY GROUP, L.P. RIVERBOAT DEVELOPMENT AUTHORITY
By: Dalls III, Inc. By: /s/ Mary Ellen Chamberlin
------------------------------------- ---------------------------------
Its General Partner
By:_____________________________________ By: /s/ Robert H. Gallagher
Alan Bernthaler, ---------------------------------
Vice-President
|
WHEREAS, the Riverboat Development Authority (Authority) and the Connelly Group L.P. (Connelly) have entered into an operator's contract dated December 28, 1989; and
WHEREAS, the parties wish to amend the contract.
NOW THEREFORE for and in consideration of the mutual covenants herein contained, it is agreed to amend the original contract by adding the following:
1. Paragraph 8 of the original agreement shall be amended by adding the following language, to-wit:
In no event shall Connelly receive any portion of any admissions fee charged to admit an individual onto an excursion gaming boat operated pursuant to this Operator's Contract. All such admissions fees collected by Connelly shall be paid exclusively to the Authority.
2. It is understood that neither Connelly nor the Authority shall by lease, contract, understanding or arrangement of any kind, grant, assign, or turn over to any person or entity the operation of any excursion gambling boat operated pursuant to the authority of a license issued to either Connelly or the Authority by the Iowa Racing and Gambling Commission. This paragraph in no way prohibits Connelly from entering into a management contract providing same is approved by the Authority and by the Iowa Racing and Gaming Commission.
3. Any management contract entered into by Connelly shall provide that it is subject to the terms and conditions of this operator's contract and further that all the obligations, rights, privileges, and duties provided for in the operator's contract shall apply to any such management contract.
4. Connelly and the Authority hereby jointly accept the responsibility for compliance with the act and all laws of the State of Iowa and the rules of the Commission.
5. Connelly and the Authority agree that the Commission and each of them shall have the right to audit each other's records to the extent necessary to provide verification of compliance under this Agreement.
6. In addition to any other monies paid to the Authority, hereunder, Connelly agrees that if the win from gambling in any given year exceeds $44,000,000 the Authority will be paid an amount equal to two percent (2%) of any such excess win over $44,000,000.
7. In the event either Connelly or the Authority is deemed by the other or the Commission not to be in compliance with the terms of this Agreement, the non-breaching party or the Commission shall be entitled to specific performance of the terms of this Agreement. Further, the parties agree that in the event of any operational default, the defaulting party shall be required to cure such default to the satisfaction of the Commission. In the event said party does not cure the default to the satisfaction of the Commission, then the non-defaulting party may, at its option, after obtaining written approval from the Commission and giving the other party thirty (30) days written notice and opportunity to cure, declare this Agreement terminated.
8. That in all other respects, the original contract and amendment thereto are hereby ratified and confirmed.
Dated this 1/st/ day of March, 1990.
THE CONNELLY GROUP, L.P. RIVERBOAT DEVELOPMENT AUTHORITY
By: Dalls, III, Inc By:______________________________
---------------------------------------- Mary Ellen Chamberlin
Its General Partner President
By: /s/ John E. Connelly By: /s/ Robert H. Gallagher
----------------------------------------- ------------------------------
John Connelly, President Robert H. Gallagher
Secretary
|
WHEREAS, the Riverboat Development Authority (Authority) and the Connelly Group L.P. (Connelly) have entered into an operator's contract dated December 28, 1989; and
WHEREAS, the parties wish to amend the contract.
NOW THEREFORE for and in consideration of the mutual covenants herein contained, it is agreed to amend the original contract by adding the following:
1. Paragraph 8 of the original agreement shall be amended by adding the following language, to-wit:
In no event shall Connelly receive any portion of any admissions fee charged to admit an individual onto an excursion gaming boat operated pursuant to this Operator's Contract. All such admissions fees collected by Connelly shall be paid exclusively to the Authority.
2. It is understood that neither Connelly nor the Authority shall by lease, contract, understanding or arrangement of any kind, grant, assign, or turn over to any person or entity the operation of any excursion gambling boat operated pursuant to the authority of a license issued to either Connelly or the Authority by the Iowa Racing and Gaming Commission. This paragraph in no way prohibits Connelly from entering into a management contract providing same is approved by the Authority and by the Iowa Racing and Gaming Commission.
3. Any management contract entered into by Connelly shall provide that it is subject to the terms and conditions of this operator's contract and further that all the obligations, rights, privileges, and duties provided for in the operator's contract shall apply to any such management contract.
4. Connelly and the Authority hereby jointly accept the responsibility for compliance with the act and all laws of the State of Iowa and the rules of the Commission.
5. Connelly and the Authority agree that the Commission and each of them shall have the right to audit each other's records to the extent necessary to provide verification of compliance under this Agreement.
6. In the event either Connelly or the Authority is deemed by the other or the Commission not to be in compliance with the terms of this Agreement, the non-breaching party or the Commission shall be entitled to specific performance of the terms of this Agreement. Further, the parties agree that in the event of any operational default, the defaulting party shall be required to cure such default to the satisfaction of the Commission. In the event said party does not cure the default to the satisfaction of the Commission, then the non-defaulting party may, at its option, after obtaining written approval from the Commission and giving the other party thirty (30) days written notice and opportunity to cure, declare this Agreement terminated.
7. That in all other respects, the original contract between the parties is hereby ratified and confirmed.
Dated this 9/th/ day of February, 1990.
THE CONNELLY GROUP, L.P. RIVERBOAT DEVELOPMENT AUTHORITY
By: Dalls, III, Inc. By: /s/ Mary Ellen Chamberlin
------------------------------------ --------------------------------
Its General Partner Mary Ellen Chamberlin
President
By:____________________________________ By: /s/ Robert H. Gallagher
Alan Bernthaler --------------------------------
Vice-President Robert H. Gallagher
Secretary
|
WHEREAS, the Riverboat Development Authority (Authority) and the Connelly Group L.P. (Connelly) have entered into an operator's contract dated December 28, 1989; and
WHEREAS, the parties wish to amend Paragraph 8 of the contract in order to provide that Connelly will pay the $.50 per admission directly to the City of Davenport, and will further pay the admissions charges as required by the Iowa Racing and Gaming Commission; and
WHEREAS, it is the intention of the parties hereto that the Authority be placed in the same position substantially as it was at the time the original contract between the parties was executed on December 28, 1989.
NOW, THEREFORE, for and in consideration of the mutual covenants herein contained, it is agreed to amend the original contract as follows:
1. The original Paragraph 8 contained in the Operator's Contract dated December 28, 1989, is hereby deleted, and the following language is substituted therefore.
During the initial term of this lease, the operator shall pay an admissions charge to the Authority equal to $1.00 for the first 500,000 admissions, and $1.50 for all admissions in excess thereof. Payment shall be for all admissions, either paid or complimentary, excepting only actual and necessary officials and employees of the Authority and Operator, and all other persons actually working on the excursion gambling boat as more particularly set forth under the rules of the Iowa Racing and Gaming Commission and Chapter 99F. From said sum, the Authority shall be responsible for all of its administrative costs, the annual DCI investigation of its Board members as required, all legal expenses, salaries, and all related costs associated with the administration of the license. Connelly covenants and agrees to pay to the City of Davenport, all amounts as required by the City of Davenport, and shall further be responsible for the payment of all charges as required by the Iowa Racing and Gaming Commission. Connelly agrees to hold the Authority Harmless for any charge, except as specifically stated in the immediately preceding sentence, required by the City of Davenport, and/or any charges required by the Iowa Racing and Gaming Commission. The Operator shall provide at its expense, all necessary accounting and documentation to establish to the reasonable satisfaction of the Authority, the City of Davenport, and the Iowa Racing and Gaming Commission, the number of all admissions. The Operator agrees to pay to the Authority and to account to the Authority as required to comply with the Iowa Racing and Gaming Commission's rules and regulations. The Operator shall pay said sums as required herein weekly by 12:00 Noon on the Friday following the completion of each calendar week.
In the event that this contract is extended as contemplated in paragraph 5, during the first three year extension, (The years beginning April 1, 1994 through March 31, 1997), the Authority shall have the right to increase the per person admissions charge in an amount equal to one-half of the percentage increase, if any, in the Consumer Price Index hereinafter called "Index" for Chicago, Illinois for all items of the Bureau of Labor Statistics of the United States Department Labor. Such an increase shall be calculated by multiplying the $1.00 or the $1.50 admissions charge, depending on the number of admissions, by the fraction which is obtained by utilizing the index rate as of April 1, 1991, (Base Rate) as the denominator, and the excess of the Index Rate as of April 1, 1994, over the Base Rate as the numerator and dividing the resulting fraction by two. The resulting fraction, when multiplied by the present rate of $1.00 or $1.50 depending on the number of admissions, will constitute the increase which, when added to the present rate will
constitute the extension rate provided, however, that the extension rate shall not exceed the maximum of $2.25. Any increase shall be included within an extension agreement. In the event that this contract is extended for an additional, or third, three year period, (the years beginning April 1, 1997, and ending March 31, 2000), the Authority shall have the right to increase the admissions charge in an amount equal to one-half of the percentage increase, if any, in the "index". Such an increase shall be calculated by multiplying the initial $1.00 or $1.50 admissions charge, depending on the number of admissions, by the fraction which is obtained by utilizing the Base Rate, as the denominator and the excess of the rate as of April 1, 1997, over the Base Rate, as the numerator, and dividing the result by two. The resulting fraction, when multiplied by the initial rate of $1.00 or $1.50 depending on the number of admissions, constitutes the extension rate, provided, however, that the extension rate shall not exceed $3.00. Any such increase shall be included within an extension agreement. For all purposes hereof, in the event this "Index" is no longer in existence, then the successor index, if it exists, or the Index most similar to the "Index" shall be used for purposes of this agreement. Notwithstanding the right of the Authority to increase the per person admissions charge as set forth above, no such increase shall be permitted, implemented or paid for any year if the Connelly Group's gambling operations will not generate a net profit for such year after taking into account such increases. By way of example, assume for the year beginning on April 1, 1994, and ending March 31, 1995, that Connelly's net profit on gambling operations was $100,000, that 400,000 persons had been charged admissions for such year, and that the increase calculated as set forth above, before this limitation, would be $.50. In this example, the Authority could not collect the increase in the admissions rate for such year because the effect of the increase would be to make Connelly unprofitable for the year (e.g., 400,000 admissions x $.50 = $200,000 of additional Connelly expense which exceeds $100,000 of net profits). For purposes of this agreement, net profit shall mean the net profit reflected on the financial statement submitted to the Iowa Racing and Gaming Commission at year end, reduced by the principal portion of Connelly's debt service. For fiscal years beginning on April 1, 1994, any increases as set forth above will be calculated on a year to year basis using the above formula and any permitted increases shall be paid to the Authority by Connelly in a lump sum within fifteen (15) days after the submission of the above year end financial statements to the Iowa Racing and Gaming Commission for the year in question beginning with the year ending March 31, 1995.
In no event shall Connelly receive any portion of any admissions fees charged to admit an individual onto an excursion boat operated pursuant to this operator's contract. All such admissions fees collected by Connelly, shall be paid to the Authority, the City of Davenport, or the Iowa Racing and Gaming Commission.
2. That in all other respects, the original contract and the amendments thereto, are hereby ratified and confirmed.
Dated this _________________ day of January, 1991.
THE CONNELLY GROUP, L.P. RIVERBOAT DEVELOPMENT AUTHORITY
By /s/ Dalls III, Inc. By ____________________________
-----------------------------------
its General Partner
By /s/ Ralph J. Vaclavik By ____________________________
-----------------------------------
Ralph J. Vaclavik
Assistant Treasurer
|
WHEREAS, the Riverboat Development Authority (Authority) and The Connelly Group, L.P., its successors and assigns (Connelly) have entered into an Operator's Contract dated December 28, 1989; and
WHEREAS, the contract has been, from time to time, amended; and
WHEREAS, it is the intention of the parties to amend said contract to provide for its extension, and to provide for changes in the initial financial provisions.
NOW, THEREFORE, for and in consideration of the mutual covenants herein contained, it is agreed to amend the original contract and amendments thereto as follows:
1. Paragraph No. 8 of the original contract is amended to read as follows:
"From and after the approval of this amendment, and for the period of this contract, Connelly shall pay the Authority as follows:
A. $27,500 per week, which payment shall be received by the Authority by 12:00 Noon each Friday.
B. Annual payment equal to 2% of the adjusted gaming receipts as defined in Iowa Code Section 99F.1(11), over $34,000,000 for each fiscal year, commencing July 1, 1994. Payments shall be made on the 15th day of July of each year. The first payment shall be due July 15, 1995.
C. Annual payment equal to $1.50 for each admission, either paid or complimentary, excepting any actual and necessary officials and employees of the Authority and Connelly, and all other persons actually working on the excursion gambling boat as more particularly set forth under the rules of the Iowa Racing and Gaming Commission and Chapter 99F of the Iowa Code in excess of 1,117,579 based upon each contract year. A contract year shall be from April 1, through March 31, of the subsequent year. Payment shall be due on or before the 15th day of
April of each year, the first payment to be made on or before April 15, 1995. It is understood that the Authority has been receiving payments weekly from Connelly since April 1, 1994. Connelly shall be given credit against the payment of $1.50 for all admissions in excess of 1,117,579 in an amount equal to that amount of money paid to the Authority in excess of $27,500 per week from and after April 1, 1994, up to and including March 31, 1995.
From said sums, the Authority shall be responsible for all of its administrative costs, the annual DCI investigation of its board members as required, all legal expenses, salaries, and all related costs associated with the administration of the license. Connelly covenants and agrees to pay the City of Davenport, all sums of money as required by the City of Davenport, and further to be responsible for the payment of all charges as required by the Iowa Racing and Gaming Commission.
Connelly agrees to hold the Authority harmless any charge required by the City of Davenport and/or any charges required by the Iowa Racing and Gaming Commission. Connelly shall provide, at its expense, all necessary accounting and documentation to establish to the reasonable satisfaction of the Authority, the City of Davenport, and the Iowa Racing and Gaming Commission, the number of all admissions. Connelly agrees to pay to the Authority and to account to the Authority as required to comply with the Iowa Racing and Gaming Commission's rules and regulations.
D. In no event shall Connelly receive any portion of any admissions fees charged to admit an individual onto the excursion operated pursuant to this contract. All such admission fees collected by Connelly, shall be
paid to the Authority, the City of Davenport, or the Iowa Racing and Gaming Commission.
2. Paragraph No. 5 of the original contract is hereby amended to read as follows:
A. This contract shall run from the date of execution until March 31, 1998; provided, however, that so long as Connelly has substantially complied with the Iowa Racing and Gaming Rules, and the Authority's gaming license is renewed and/or in effect, the parties will negotiate thereafter for succeeding three year periods the extension of this agreement, the last of which shall terminate on the anniversary date of the license in the year to which Scott County may extend its referendum and the Authority's license is so extended.
3. This amendment, and any further amendments hereto, are expressly subject to the approval of the Iowa Racing and Gaming Commission. In the event that the Iowa Racing and Gaming Commission requires any amendment of this contract, all parties agree to make a best efforts attempt to negotiate in good faith, such additional terms as are acceptable to the Iowa Racing and Gaming Commission. Further, in the event that Chapter 99F of the Code of Iowa is amended to permit the imposition of the state gaming taxes based on percentage of revenue, the parties agree to make a best efforts attempt to negotiate in good faith, a replacement operator's fee based upon a percentage of the revenue that reasonably equates to the fees to be paid to the Authority under the terms of the contract and amendments thereto.
4. The Authority hereby agrees that subject to the approval of the Iowa Racing and Gaming Commission, Connelly is granted the right to move the turnstile from its present location to the entrance of the present guest service center.
5. That in all other respects, the terms of the original contract, and the amendments thereto that are not in direct conflict with this amendment are hereby ratified and affirmed.
Dated this 30th day of September, 1994.
RIVERBOAT DEVELOPMENT AUTHORITY
By /s/ Mary Allen Chamberlin
-----------------------------------------------------
Mary Allen Chamberlin, President
By /s/ Robert H. Gallagher
-----------------------------------------------------
Robert H. Gallagher, Secretary
|
THE CONNELLY GROUP, L.P. by its General Partner,
PRESIDENT RIVERBOAT CASINO-Iowa, Inc,
By /s/ Edward Ellers
-----------------------------------------------------
Edward Ellers, President
|
By _________________________________________
RESOLUTION
WHEREAS, the Operator's Contract is amended between the Riverboat Development Authority and The Connelly Group, L.P. expires by its terms on March 1, 1998; and
WHEREAS, the Riverboat Development Authority and the The Connelly Group, L.P. wish to extend the Operator's Contract as originally drawn and amended through February 28, 2002.
BE IT HEREBY RESOLVED that Mary Ellen Chamberlin as President, and Robert H. Gallagher as Secretary of the Riverboat Development Authority is hereby authorized to execute any and all documents necessary in order to extend the contract between the Riverboat Development Authority and the President Riverboat Casino, Inc., up to and including February 28, 2002.
BE IT FURTHER RESOLVED that in all other respects, the original written agreements between the Riverboat Development Authority and the Connelly Group, L.P., including all amendments thereto, are hereby ratified and affirmed.
Dated this 24/th/ day of February, 1998.
/s/ Mary Ellen Chamberlin
---------------------------------------
Mary Ellen Chamberlin, President
/s/ Robert H. Gallagher
---------------------------------------
Robert H. Gallagher, Secretary
|
AMENDMENT TO OPERATOR'S AGREEMENT
WHEREAS, the Riverboat Development Authority and the Connelly Group, L.P., originally entered into an Operator's Agreement dated December 28, 1989; and
WHEREAS, the contract has from time to time been amended; and
WHEREAS, it is the intentions of the parties to amend said contract to provide for its extension up to and including February 28, 2002.
NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained, it is agreed as follows:
1. The original Operator's Agreement between the Riverboat Development Authority and the Connelly Group, L.P., dated December 28, 1989, is hereby extended up to and including February 28, 2002.
2. In all other respects, the original agreement and all amendments executed thereto, are hereby ratified and confirmed.
Dated this 1/st/ day of March, 1998.
RIVERBOAT DEVELOPMENT AUTHORITY
By /s/ Mary Ellen Chamberlin
-----------------------------------------------
Mary Ellen Chamberlin, President
By /s/ Robert H. Gallagher
-----------------------------------------------
Robert H. Gallagher, Secretary
|
THE CONNELLY GROUP, L.P. BY
PRESIDENT RIVERBOAT CASINO IOWA, INC.
ITS GENERAL PARTNER
By_______________________________________________
Vice-President
Exhibit 10.22
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this 1/st/ day of January, 2002 between Isle of Capri Casinos, Inc., a Delaware corporation (the "Company") and John M. Gallaway ("Employee").
In consideration of the mutual promises of this Agreement, the Company and Employee agree as follows:
1. Effective Date. This Agreement shall be effective as of the date hereof and replaces the employment agreement currently in place between the "Company" and the "Employee".
(a) Term. The Company hereby employs Employee, and Employee accepts such employment and agrees to perform services for the Company and/or its subsidiaries, (hereinafter collectively referred to as the "Company") for an initial period of one (1) year from and after the Effective Date of this Agreement (the "Initial Term") and for successive one-year periods (the "Renewal Terms"), unless terminated at an earlier date in accordance with Section 3 of this Agreement (the Initial Term and the Renewal Terms together referred to as the "Term of Employment").
(b) Service with Company. During the Term of Employment, Employee agrees to perform reasonable employment duties as the Board of Directors of the Company shall assign to him from time to time. Employee also agrees to serve, for any period for which he is elected as an officer of the Company; provided, however, that Employee shall not be entitled to any additional compensation for serving as an officer of the Company. From and after the Effective Date, Employee shall continue to be an executive officer of the Company with the title of President and Chief Operating Officer.
(c) Performance of Duties. Employee agrees to serve the Company faithfully and to the best of his ability and to devote substantially all of his time, attention and efforts to the business and affairs of the Company during the Term of Employment.
(d) Compensation. During the Term of Employment, the Company shall pay to Employee as compensation for services to be rendered hereunder an aggregate base salary of $500,000 per year, payable in equal monthly, or more frequent payments, subject to increases, if any, as may be determined by the Company. Employee shall also be eligible to participate in any stock option plans of the Company. In addition to the base salary, any bonuses, and participation in stock option plans, Employee shall be eligible to participate in any
employee benefit plans or programs of the Company as are or may be made generally available to employees of the Company and those made available to officers of the Company. The Company will pay or reimburse Employee for all reasonable and necessary out-of-pocket expense incurred by him in the performance of his duties under this Agreement, subject to the presentment of appropriate vouchers in accordance with the Company's policies for expense verification.
(a) The Term of Employment shall terminate prior to its expiration in the event that at any time during such term:
(i) The Company delivers a notice of termination for "cause to
Employee". For purposes of this section, "cause" shall mean
any dishonesty, disloyalty, material breach of corporate
policies, gross misconduct on the part of Employee in the
performance of Employee's duties hereunder or a violation of
Section 5 of this agreement. If Employee is terminated for
cause, there shall be no severance paid to Employee and his
benefits shall terminate, except as may be provided by law.
(ii) The Company for any other reason terminates the Term of Employment. If Employee signs a General Release in a form acceptable to the Company that releases the Company from any and all claims that Employee may have and affirmatively agrees not to violate any of the provisions of Section 5 hereof, Employee shall be entitled to continue to receive his salary and, to the extent legally permissible continue to participate in the employee benefit programs for a period of 24 months from and after such termination or until new employment begins, which ever occurs first. If Employee fails to sign the form, Employee shall not be entitled to any continuing payments or benefits. In lieu of monthly payments, a lump sum award may be authorized by the Board of Directors. Employee shall be provided out-placement service with an out-placement firm or service selected by the Company and at the reasonable expense of the Company.
(iii) Employee for any reason voluntarily terminates the Term of Employment. In said event, Employee shall not be entitled to any compensation and his benefits shall terminate, except as may be provided by law, from and after termination.
(iv) However, if Employee voluntarily terminates the Term of Employment due to Retirement all stock options shall become fully vested and exercisable and the Employee's deferred bonus payments shall be fully vested and paid. The term "Retirement"
shall mean the termination by Employee of his employment by reason of reaching the age of 65 or such later date approved by the Board of Directors.
(v) Employee dies or becomes disabled as determined in good faith by the Board of Directors. Employee, or his estate, shall continue to receive his salary and, to the extent legally permissible continue to participate in the employee benefit programs for a period of 24 months from and after such termination or until new employment begins, which ever occurs first. In lieu of monthly payments, a lump sum award may be authorized by the Board of Directors. Employee shall also be entitled to a lump sum payment equal to the average of the last 3 years bonus payment inclusive of deferred amounts.
(b) Except as provided above, the vesting of stock options and deferred bonus payments shall be governed by the provisions of the Company's Stock Option Plans and Deferred Bonus Plan.
4. Change In Control of the Company. A change in control of the Company defined as its sale, acquisition, merger or buyout to an unaffiliated person that has significant effect or a reduction in the responsibilities, position or compensation of Employee or if Employee is required to move the location of his principal residence a distance of more than 35 miles prior to or during the initial 12 months of the change of control will entitle Employee to the following severance:
(i) 24 month's salary paid as salary continuation plus a lump sum payment equal to the average of the previous 3 years bonus payment inclusive of deferred amounts. Salary continuation shall terminate if and when Employee beings new employment during the period of salary continuation.
(ii) Health and welfare benefits shall be fully paid by the Company and run concurrently with salary continuation.
(iii) All stock options shall become fully vested and exercisable and Employee's deferred bonus payments shall be fully vested and paid.
(iv) Employee shall be provided out-placement services with a mutually agreed upon out-placement firm or service selected by the Company and at the reasonable expense of the Company.
(a) Ownership. Employee agrees that all inventions, copyrightable material, business and/or technical information, marketing plans, customer lists and trade secrets which arise out of the performance of this Agreement are the property of the Company.
(b) Confidentiality. Except as is consistent with Employee's duties and responsibilities within the scope of his employment with the Company, Employee agrees to keep confidential indefinitely, and not to use or disclose to any unauthorized person, information which is not generally known and which is proprietary to the Company, including all information that the Company treats as confidential, ("Confidential Information"). Upon termination of Employee's employment, Employee will promptly turn over to the Company all software, records, manuals, books, forms, documents, notes, letters, memoranda, reports, data, tables, compositions, articles, devices, apparatus, marketing plans, customer lists and other items that disclose, describe or embody Confidential Information including all copies of the confidential Information in his possession, regardless of who prepared them.
(c) Non-competition. Employee agrees to the following covenant not to compete beginning on the effective date of this Agreement and continuing until one year after termination of his employment relationship with the Company:
Employee agrees not to compete, directly or indirectly (including as an officer, director, partner, employee, consultant, independent contractor, or more than 5% equity holder of any equity) with the Company in any way concerning the ownership, development or management of any gaming operation or facility within a 75-mile radius of any gaming operation or facility with respect to which the Company owns, renders or proposes to render consulting or management services.
(d) Non-solicitation.Employee agrees not to solicit or recruit, directly or indirectly, any management employee (director level and above) of the Company for employment during the one (1) year period after termination of his employment relationship with the Company.
(a) Successors and Assigns. This Agreement is binding on and inures to the benefit of the Company's successors and assigns. The Company may assign this Agreement in connection with a merger, consolidation, assignment, sale or other disposition of substantially all of its assets or business. This Agreement may not be assigned by Employee.
(b) Modification, Waivers. This Agreement may be modified or amended only by a writing signed by the Company, and Employee. The Company's failure, or delay in exercising any right, or partial exercise of any right, will not waive any provision of this
Agreement or preclude the Company from otherwise or further exercising any rights or remedies hereunder, or any other rights or remedies granted by any law or any related document.
(c) Governing Law, Arbitration. The laws of Delaware will govern the validity, construction, and performance of this Agreement. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Both the Company and Employee hereby consent to this binding arbitration provision.
(d) Remedies. Employee understands that if he fails to fulfill his obligations under this Agreement, the damages to the Company would be very difficult to determine. Therefore, in addition to any other rights or remedies available to the Company at law, in equity, or by statute, Employee hereby consents to the specific enforcement of this Agreement by the Company through an injunction or restraining order issued by the appropriate court.
(e) Captions. The headings in this Agreement are for convenience only and do not affect the interpretation of this Agreement.
(f) Severability. To the extent any provision of this Agreement shall be invalid or enforceable with respect to Employee, it shall be considered deleted here from with respect to Employee and the remainder of such provision and this Agreement shall be unaffected and shall continue in full force and effect. In furtherance to and not in limitation of the foregoing, should the duration or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid and enforceable under applicable law with respect to Employee, then such provision shall be construed to cover only that duration, extent or activities which are validly and enforceably covered with respect to Employee. Employee acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its expressed terms) possible under applicable laws.
(g) Entire Agreement. This Agreement supersedes all previous and contemporaneous oral negotiations, commitments, writings and understandings between the parties concerning the matters herein or therein, including without limitation, any policy of personnel manuals of the Company.
(h) Notices. All notices and other communications required or permitted under this Agreement shall be in writing and sent by registered first-class mail, postage prepaid, and shall be deemed delivered upon hand delivery or upon mailing (postage prepaid and by registered or certified mail) to the following address:
If to the Company, to:
Isle of Capri Casinos, Inc.
1641 Popps Ferry Road
Biloxi MS 39532
If to the Employee: to:
These addresses may be changed at any time by like notice.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed in a manner appropriate for such party as of the date first above written.
ISLE OF CAPRI CASINOS, INC.
By: /s/ Bernard Goldstein --------------------------------------- |
"EMPLOYEE"
By: /s/ John Gallaway --------------------------------------- |
Exhibit 10.23
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this 1st day of January, 2002 between Isle of Capri Casinos, Inc., a Delaware corporation (the "Company") and Allan B. Solomon ("Employee").
In consideration of the mutual promises of this Agreement, the Company and Employee agree as follows:
1. Effective Date. This Agreement shall be effective as of the date hereof and replaces the employment agreement currently in place between the "Company" and the "Employee".
(a) Term. The Company hereby employs Employee, and Employee accepts such employment and agrees to perform services for the Company and/or its subsidiaries, (hereinafter collectively referred to as the "Company") for an initial period of one (1) year from and after the Effective Date of this Agreement (the "Initial Term") and for successive one-year periods (the "Renewal Terms"), unless terminated at an earlier date in accordance with Section 3 of this Agreement (the Initial Term and the Renewal Terms together referred to as the "Term of Employment").
(b) Service with Company. During the Term of Employment, Employee agrees to perform reasonable employment duties as the Board of Directors of the Company shall assign to him from time to time. Employee also agrees to serve, for any period for which he is elected as an officer of the Company; provided, however, that Employee shall not be entitled to any additional compensation for serving as an officer of the Company. From and after the Effective Date, Employee shall continue to be an executive officer of the Company with the title of Executive Vice President and Legal Counsel.
(c) Performance of Duties. Employee agrees to serve the Company faithfully and to the best of his ability and to devote substantially all of his time, attention and efforts to the business and affairs of the Company during the Term of Employment.
(d) Compensation. During the Term of Employment, the Company shall pay to Employee as compensation for services to be rendered hereunder an aggregate base salary of $355,000 per year, payable in equal monthly, or more frequent payments, subject to increases, if any, as may be determined by the Company. Employee shall also be eligible to participate in any stock option plans of the Company. In addition to the base salary, any bonuses, and participation in stock option plans, Employee shall be eligible to participate in any employee benefit plans or programs of the Company as are or may be made generally available to employees of the Company and those made available to officers of the Company. The
Company will pay or reimburse Employee for all reasonable and necessary out-of-pocket expense incurred by him in the performance of his duties under this Agreement, subject to the presentment of appropriate vouchers in accordance with the Company's policies for expense verification.
(a) The Term of Employment shall terminate prior to its expiration in the event that at any time during such term:
(i) The Company delivers a notice of termination for "cause to Employee". For purposes of this section, "cause" shall mean any dishonesty, disloyalty, material breach of corporate policies, gross misconduct on the part of Employee in the performance of Employee's duties hereunder or a violation of Section 5 of this agreement. If Employee is terminated for cause, there shall be no severance paid to Employee and his benefits shall terminate, except as may be provided by law.
(ii) The Company for any other reason terminates the Term of Employment. If Employee signs a General Release in a form acceptable to the Company that releases the Company from any and all claims that Employee may have and affirmatively agrees not to violate any of the provisions of Section 5 hereof, Employee shall be entitled to continue to receive his salary and, to the extent legally permissible continue to participate in the employee benefit programs for a period of 12 months from and after such termination or until new employment begins, which ever occurs first. If Employee fails to sign the form, Employee shall not be entitled to any continuing payments or benefits. In lieu of monthly payments, a lump sum award may be authorized by the Board of Directors. Employee shall be provided out-placement service with an out-placement firm or service selected by the Company and at the reasonable expense of the Company.
(iii) Employee for any reason voluntarily terminates the Term of Employment. In said event, Employee shall not be entitled to any compensation and his benefits shall terminate, except as may be provided by law, from and after termination.
(iv) However, if Employee voluntarily terminates the Term of Employment due to Retirement all stock options shall become fully vested and exercisable and the Employee's deferred bonus payments shall be fully vested and paid. The term "Retirement" shall mean the termination by Employee of his employment by
reason of reaching the age of 65 or such later date approved by the Board of Directors.
(v) Employee dies or becomes disabled as determined in good faith by the Board of Directors. Employee, or his estate, shall continue to receive his salary and, to the extent legally permissible continue to participate in the employee benefit programs for a period of 18 months from and after such termination or until new employment begins, which ever occurs first. In lieu of monthly payments, a lump sum award may be authorized by the Board of Directors. Employee shall also be entitled to a lump sum payment equal to the average of the last 3 years bonus payment inclusive of deferred amounts.
(b) Except as provided above, the vesting of stock options and deferred bonus payments shall be governed by the provisions of the Company's Stock Option Plans and Deferred Bonus Plan.
4. Change In Control of the Company. A change in control of the Company defined as its sale, acquisition, merger or buyout to an unaffiliated person that has significant effect or a reduction in the responsibilities, position or compensation of Employee or if Employee is required to move the location of his principal residence a distance of more than 35 miles prior to or during the initial 12 months of the change of control will entitle Employee to the following severance:
(i) 18 month's salary paid as salary continuation plus a lump sum payment equal to the average of the previous 3 years bonus payment inclusive of deferred amounts. Salary continuation shall terminate if and when Employee beings new employment during the period of salary continuation.
(ii) Health and welfare benefits shall be fully paid by the Company and run concurrently with salary continuation.
(iii) All stock options shall become fully vested and exercisable and Employee's deferred bonus payments shall be fully vested and paid.
(iv) Employee shall be provided out-placement services with a mutually agreed upon out-placement firm or service selected by the Company and at the reasonable expense of the Company.
(a) Ownership. Employee agrees that all inventions, copyrightable material, business and/or technical information, marketing plans, customer lists and trade secrets which arise out of the performance of this Agreement are the property of the Company.
(b) Confidentiality. Except as is consistent with Employee's duties and responsibilities within the scope of his employment with the Company, Employee agrees to keep confidential indefinitely, and not to use or disclose to any unauthorized person, information which is not generally known and which is proprietary to the Company, including all information that the Company treats as confidential, ("Confidential Information"). Upon termination of Employee's employment, Employee will promptly turn over to the Company all software, records, manuals, books, forms, documents, notes, letters, memoranda, reports, data, tables, compositions, articles, devices, apparatus, marketing plans, customer lists and other items that disclose, describe or embody Confidential Information including all copies of the confidential Information in his possession, regardless of who prepared them.
(c) Non-competition. Employee agrees to the following covenant not to compete beginning on the effective date of this Agreement and continuing until one year after termination of his employment relationship with the Company:
Employee agrees not to compete, directly or indirectly (including as an officer, director, partner, employee, consultant, independent contractor, or more than 5% equity holder of any equity) with the Company in any way concerning the ownership, development or management of any gaming operation or facility within a 75-mile radius of any gaming operation or facility with respect to which the Company owns, renders or proposes to render consulting or management services.
(d) Non-solicitation. Employee agrees not to solicit or recruit, directly or indirectly, any management employee (director level and above) of the Company for employment during the one (1) year period after termination of his employment relationship with the Company.
(a) Successors and Assigns. This Agreement is binding on and inures to the benefit of the Company's successors and assigns. The Company may assign this Agreement in connection with a merger, consolidation, assignment, sale or other disposition of substantially all of its assets or business. This Agreement may not be assigned by Employee.
(b) Modification, Waivers. This Agreement may be modified or amended only by a writing signed by the Company, and Employee. The Company's failure, or delay in exercising any right, or partial exercise of any right, will not waive any provision of this
Agreement or preclude the Company from otherwise or further exercising any rights or remedies hereunder, or any other rights or remedies granted by any law or any related document.
(c) Governing Law, Arbitration. The laws of Delaware will govern the validity, construction, and performance of this Agreement. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Both the Company and Employee hereby consent to this binding arbitration provision.
(d) Remedies. Employee understands that if he fails to fulfill his obligations under this Agreement, the damages to the Company would be very difficult to determine. Therefore, in addition to any other rights or remedies available to the Company at law, in equity, or by statute, Employee hereby consents to the specific enforcement of this Agreement by the Company through an injunction or restraining order issued by the appropriate court.
(e) Captions. The headings in this Agreement are for convenience only and do not affect the interpretation of this Agreement.
(f) Severability. To the extent any provision of this Agreement shall be invalid or enforceable with respect to Employee, it shall be considered deleted here from with respect to Employee and the remainder of such provision and this Agreement shall be unaffected and shall continue in full force and effect. In furtherance to and not in limitation of the foregoing, should the duration or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid and enforceable under applicable law with respect to Employee, then such provision shall be construed to cover only that duration, extent or activities which are validly and enforceably covered with respect to Employee. Employee acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its expressed terms) possible under applicable laws.
(g) Entire Agreement.This Agreement supersedes all previous and contemporaneous oral negotiations, commitments, writings and understandings between the parties concerning the matters herein or therein, including without limitation, any policy of personnel manuals of the Company.
(h) Notices. All notices and other communications required or permitted under this Agreement shall be in writing and sent by registered first-class mail, postage prepaid, and shall be deemed delivered upon hand delivery or upon mailing (postage prepaid and by registered or certified mail) to the following address:
If to the Company, to:
Isle of Capri Casinos, Inc.
1641 Popps Ferry Road
Biloxi MS 39532
If to the Employee, to:
7858 Afton Villa Ct.
Boca Raton FL 33433
These addresses may be changed at any time by like notice.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed in a manner appropriate for such party as of the date first above written.
ISLE OF CAPRI CASINOS, INC.
By: /s/ ------------------------------------- |
"EMPLOYEE"
By: /s/ Allan B. Solomon ------------------------------------- |
Exhibit 10.24
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this 1/st/ day of January, 2002 between Isle of Capri Casinos, Inc., a Delaware corporation (the "Company") and Rexford A. Yeisley ("Employee").
In consideration of the mutual promises of this Agreement, the Company and Employee agree as follows:
1. Effective Date. This Agreement shall be effective as of the date hereof and replaces the employment agreement in place between the "Company" and the "Employee".
(a) Term. The Company hereby employs Employee, and Employee accepts such employment and agrees to perform services for the Company and/or its subsidiaries, (hereinafter collectively referred to as the "Company") for an initial period of one (1) year from and after the Effective Date of this Agreement (the "Initial Term") and for successive one-year periods (the "Renewal Terms"), unless terminated at an earlier date in accordance with Section 3 of this Agreement (the Initial Term and the Renewal Terms together referred to as the "Term of Employment").
(b) Service with Company. During the Term of Employment, Employee agrees to perform reasonable employment duties as the Board of Directors of the Company shall assign to him from time to time. Employee also agrees to serve, for any period for which he is elected as an officer of the Company; provided, however, that Employee shall not be entitled to any additional compensation for serving as an officer of the Company. From and after the Effective Date, Employee shall continue to be an executive officer of the Company with the title of Senior Vice President and Chief Financial Officer.
(c) Performance of Duties. Employee agrees to serve the Company faithfully and to the best of his ability and to devote substantially all of his time, attention and efforts to the business and affairs of the Company during the Term of Employment.
(d) Compensation. During the Term of Employment, the Company shall pay to Employee as compensation for services to be rendered hereunder an aggregate base salary of $270,000 per year, payable in equal monthly, or more frequent payments, subject to increases, if any, as may be determined by the Company. Employee shall also be eligible to participate in any stock option plans of the Company. In addition to the base salary, any bonuses, and participation in stock option plans, Employee shall be eligible to participate in any employee benefit plans or programs of the Company as are or may be made generally available to employees of the Company and those made available to officers of the Company. The Company will pay or reimburse Employee for all reasonable and necessary out-of-pocket
expense incurred by him in the performance of his duties under this Agreement, subject to the presentment of appropriate vouchers in accordance with the Company's policies for expense verification.
(a) The Term of Employment shall terminate prior to its expiration in the event that at any time during such term:
(i) The Company delivers a notice of termination for "cause to Employee". For purposes of this section, "cause" shall mean any dishonesty, disloyalty, material breach of corporate policies, gross misconduct on the part of Employee in the performance of Employee's duties hereunder or a violation of Section 5 of this agreement. If Employee is terminated for cause, there shall be no severance paid to Employee and his benefits shall terminate, except as may be provided by law.
(ii) The Company for any other reason terminates the Term of Employment. If Employee signs a General Release in a form acceptable to the Company that releases the Company from any and all claims that Employee may have and affirmatively agrees not to violate any of the provisions of Section 5 hereof, Employee shall be entitled to continue to receive his salary and, to the extent legally permissible continue to participate in the employee benefit programs for a period of 12 months from and after such termination or until new employment begins, which ever occurs first. If Employee fails to sign the form, Employee shall not be entitled to any continuing payments or benefits. In lieu of monthly payments, a lump sum award may be authorized by the Board of Directors. Employee shall be provided out-placement service with an out-placement firm or service selected by the Company and at the reasonable expense of the Company.
(iii) Employee for any reason voluntarily terminates the Term of Employment. In said event, Employee shall not be entitled to any compensation and his benefits shall terminate, except as may be provided by law, from and after termination.
(iv) However, if Employee voluntarily terminates the Term of Employment due to Retirement all stock options shall become fully vested and exercisable and the Employee's deferred bonus payments shall be fully vested and paid. The term "Retirement" shall mean the termination by Employee of his employment by reason of reaching the age of 65 or such later date approved by the Board of Directors.
(v) Employee dies or becomes disabled as determined in good faith by the Board of Directors. Employee, or his estate, shall continue to receive his salary and, to the extent legally permissible continue to participate in the employee benefit programs for a period of 18 months from and after such termination or until new employment begins, which ever occurs first. In lieu of monthly payments, a lump sum award may be authorized by the Board of Directors. Employee shall also be entitled to a lump sum payment equal to the average of the last 3 years bonus payment inclusive of deferred amounts.
(b) Except as provided above, the vesting of stock options and deferred bonus payments shall be governed by the provisions of the Company's Stock Option Plans and Deferred Bonus Plan.
4. Change In Control of the Company. A change in control of the Company defined as its sale, acquisition, merger or buyout to an unaffiliated person that has significant effect or a reduction in the responsibilities, position or compensation of Employee or if Employee is required to move the location of his principal residence a distance of more than 35 miles prior to or during the initial 12 months of the change of control will entitle Employee to the following severance:
(i) 18 month's salary paid as salary continuation plus a lump sum payment equal to the average of the previous 3 years bonus payment inclusive of deferred amounts. Salary continuation shall terminate if and when Employee beings new employment during the period of salary continuation.
(ii) Health and welfare benefits shall be fully paid by the Company and run concurrently with salary continuation.
(iii) All stock options shall become fully vested and exercisable and Employee's deferred bonus payments shall be fully vested and paid.
(iv) Employee shall be provided out-placement services with a mutually agreed upon out-placement firm or service selected by the Company and at the reasonable expense of the Company.
(a) Ownership. Employee agrees that all inventions, copyrightable material, business and/or technical information, marketing plans, customer lists and trade secrets which arise out of the performance of this Agreement are the property of the Company.
(b) Confidentiality. Except as is consistent with Employee's duties and responsibilities within the scope of his employment with the Company, Employee agrees to keep confidential indefinitely, and not to use or disclose to any unauthorized person, information which is not generally known and which is proprietary to the Company, including all information that the Company treats as confidential, ("Confidential Information"). Upon termination of Employee's employment, Employee will promptly turn over to the Company all software, records, manuals, books, forms, documents, notes, letters, memoranda, reports, data, tables, composition, articles, devices, apparatus, marketing plans, customer lists and other items that disclose, describe or embody Confidential Information including all copies of the confidential Information in his possession, regardless of who prepared them.
(c) Non-competition. Employee agrees to the following covenant not to compete beginning on the effective date of this Agreement and continuing until one year after termination of his employment relationship with the Company:
Employee agrees not to compete, directly or indirectly (including as an officer, director, partner, employee, consultant, independent contractor, or more than 5% equity holder of any equity) with the Company in any way concerning the ownership, development or management of any gaming operation or facility within a 75-mile radius of any gaming operation or facility with respect to which the Company owns, renders or proposes to render consulting or management services.
(d) Non-solicitation.Employee agrees not to solicit or recruit, directly or indirectly, any management employee (director level and above) of the Company for employment during the one (1) year period after termination of his employment relationship with the Company.
(a) Successors and Assigns. This Agreement is binding on and inures to the benefit of the Company's successors and assigns. The Company may assign this Agreement in connection with a merger, consolidation, assignment, sale or other disposition of substantially all of its assets or business. This Agreement may not be assigned by Employee.
(b) Modification, Waivers. This Agreement may be modified or amended only by a writing signed by the Company, and Employee. The Company's failure, or delay in exercising any right, or partial exercise of any right, will not waive any provision of this Agreement or preclude the Company from otherwise or further exercising any rights or remedies hereunder, or any other rights or remedies granted by any law or any related document.
(c) Governing Law, Arbitration. The laws of Delaware will govern the validity, construction, and performance of this Agreement. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules,
and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Both the Company and Employee hereby consent to this binding arbitration provision.
(d) Remedies. Employee understands that if he fails to fulfill his obligations under this Agreement, the damages to the Company would be very difficult to determine. Therefore, in addition to any other rights or remedies available to the Company at law, in equity, or by statute, Employee hereby consents to the specific enforcement of this Agreement by the Company through an injunction or restraining order issued by the appropriate court.
(e) Captions. The headings in this Agreement are for convenience only and do not affect the interpretation of this Agreement.
(f) Severability. To the extent any provision of this Agreement shall be invalid or enforceable with respect to Employee, it shall be considered deleted here from with respect to Employee and the remainder of such provision and this Agreement shall be unaffected and shall continue in full force and effect. In furtherance to and not in limitation of the foregoing, should the duration or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid and enforceable under applicable law with respect to Employee, then such provision shall be construed to cover only that duration, extent or activities which are validly and enforceably covered with respect to Employee. Employee acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its expressed terms) possible under applicable laws.
(g) Entire Agreement.This Agreement supersedes all previous and contemporaneous oral negotiations, commitments, writings and understandings between the parties concerning the matters herein or therein, including without limitation, any policy of personnel manuals of the Company.
(h) Notices. All notices and other communications required or permitted under this Agreement shall be in writing and sent by registered first-class mail, postage prepaid, and shall be deemed delivered upon hand delivery or upon mailing (postage prepaid and by registered or certified mail) to the following address:
If to the Company, to:
Isle of Capri Casinos, Inc.
1641 Popps Ferry Road
Biloxi MS 39532
If to the Employee: to:
These addresses may be changed at any time by like notice.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed in a manner appropriate for such party as of the date first above written.
ISLE OF CAPRI CASINOS, INC.
By: /s/ ------------------------------------------------- |
"EMPLOYEE"
By: /s/ R. A. Yeisley ------------------------------------------------- |
Exhibit 10.25
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this 1/st/ day of January, 2002 between Isle of Capri Casinos, Inc., a Delaware corporation (the "Company") and Timothy Hinkley ("Employee").
In consideration of the mutual promises of this Agreement, the Company and Employee agree as follows:
1. Effective Date. This Agreement shall be effective as of the date hereof and replaces the employment agreement in place between the "Company" and the "Employee".
(a) Term. The Company hereby employs Employee, and Employee accepts such employment and agrees to perform services for the Company and/or its subsidiaries, (hereinafter collectively referred to as the "Company") for an initial period of one (1) year from and after the Effective Date of this Agreement (the "Initial Term") and for successive one-year periods (the "Renewal Terms"), unless terminated at an earlier date in accordance with Section 3 of this Agreement (the Initial Term and the Renewal Terms together referred to as the "Term of Employment").
(b) Service with Company. During the Term of Employment, Employee agrees to perform reasonable employment duties as the Board of Directors of the Company shall assign to him from time to time. Employee also agrees to serve, for any period for which he is elected as an officer of the Company; provided, however, that Employee shall not be entitled to any additional compensation for serving as an officer of the Company. From and after the Effective Date, Employee shall continue to be an executive officer of the Company with the title of Senior Vice President of Operations.
(c) Performance of Duties. Employee agrees to serve the Company faithfully and to the best of his ability and to devote substantially all of his time, attention and efforts to the business and affairs of the Company during the Term of Employment.
(d) Compensation. During the Term of Employment, the Company shall pay to Employee as compensation for services to be rendered hereunder an aggregate base salary of $270,000 per year, payable in equal monthly, or more frequent payments, subject to increases, if any, as may be determined by the Company. Employee shall also be eligible to participate in any stock option plans of the Company. In addition to the base salary, any bonuses, and participation in stock option plans, Employee shall be eligible to participate in any employee benefit plans or programs of the Company as are or may be made generally available to employees of the Company and those made available to officers of the Company. The Company will pay or reimburse Employee for all reasonable and necessary out-of-pocket
expense incurred by him in the performance of his duties under this Agreement, subject to the presentment of appropriate vouchers in accordance with the Company's policies for expense verification.
(a) The Term of Employment shall terminate prior to its expiration in the event that at any time during such term:
(i) The Company delivers a notice of termination for "cause to
Employee". For purposes of this section, "cause" shall mean
any dishonesty, disloyalty, material breach of corporate
policies, gross misconduct on the part of Employee in the
performance of Employee's duties hereunder or a violation of
Section 5 of this agreement. If Employee is terminated for
cause, there shall be no severance paid to Employee and his
benefits shall terminate, except as may be provided by law.
(ii) The Company for any other reason terminates the Term of Employment. If Employee signs a General Release in a form acceptable to the Company that releases the Company from any and all claims that Employee may have and affirmatively agrees not to violate any of the provisions of Section 5 hereof, Employee shall be entitled to continue to receive his salary and, to the extent legally permissible continue to participate in the employee benefit programs for a period of 12 months from and after such termination or until new employment begins, which ever occurs first. If Employee fails to sign the form, Employee shall not be entitled to any continuing payments or benefits. In lieu of monthly payments, a lump sum award may be authorized by the Board of Directors. Employee shall be provided out-placement service with an out-placement firm or service selected by the Company and at the reasonable expense of the Company.
(iii) Employee for any reason voluntarily terminates the Term of Employment. In said event, Employee shall not be entitled to any compensation and his benefits shall terminate, except as may be provided by law, from and after termination.
(iv) However, if Employee voluntarily terminates the Term of Employment due to Retirement all stock options shall become fully vested and exercisable and the Employee's deferred bonus payments shall be fully vested and paid. The term "Retirement" shall mean the termination by Employee of his employment by reason of reaching the age of 65 or such later date approved by the Board of Directors.
(v) Employee dies or becomes disabled as determined in good faith by the Board of Directors. Employee, or his estate, shall continue to receive his salary and, to the extent legally permissible continue to participate in the employee benefit programs for a period of 18 months from and after such termination or until new employment begins, which ever occurs first. In lieu of monthly payments, a lump sum award may be authorized by the Board of Directors. Employee shall also be entitled to a lump sum payment equal to the average of the last 3 years bonus payment inclusive of deferred amounts.
(b) Except as provided above, the vesting of stock options and deferred bonus payments shall be governed by the provisions of the Company's Stock Option Plans and Deferred Bonus Plan.
4. Change In Control of the Company. A change in control of the Company defined as its sale, acquisition, merger or buyout to an unaffiliated person that has significant effect or a reduction in the responsibilities, position or compensation of Employee or if Employee is required to move the location of his principal residence a distance of more than 35 miles prior to or during the initial 12 months of the change of control will entitle Employee to the following severance:
(i) 18 month's salary paid as salary continuation plus a lump sum payment equal to the average of the previous 3 years bonus payment inclusive of deferred amounts. Salary continuation shall terminate if and when Employee beings new employment during the period of salary continuation.
(ii) Health and welfare benefits shall be fully paid by the Company and run concurrently with salary continuation.
(iii) All stock options shall become fully vested and exercisable and Employee's deferred bonus payments shall be fully vested and paid.
(iv) Employee shall be provided out-placement services with a mutually agreed upon out-placement firm or service selected by the Company and at the reasonable expense of the Company.
(a) Ownership. Employee agrees that all inventions, copyrightable material, business and/or technical information, marketing plans, customer lists and trade secrets which arise out of the performance of this Agreement are the property of the Company.
(b) Confidentiality. Except as is consistent with Employee's duties and responsibilities within the scope of his employment with the Company, Employee agrees to keep confidential indefinitely, and not to use or disclose to any unauthorized person, information which is not generally known and which is proprietary to the Company, including all information that the Company treats as confidential, ("Confidential Information"). Upon termination of Employee's employment, Employee will promptly turn over to the Company all software, records, manuals, books, forms, documents, notes, letters, memoranda, reports, data, tables, composition, articles, devices, apparatus, marketing plans, customer lists and other items that disclose, describe or embody Confidential Information including all copies of the confidential Information in his possession, regardless of who prepared them.
(c) Non-competition. Employee agrees to the following covenant not to compete beginning on the effective date of this Agreement and continuing until one year after termination of his employment relationship with the Company:
Employee agrees not to compete, directly or indirectly (including as an officer, director, partner, employee, consultant, independent contractor, or more than 5% equity holder of any equity) with the Company in any way concerning the ownership, development or management of any gaming operation or facility within a 75-mile radius of any gaming operation or facility with respect to which the Company owns, renders or proposes to render consulting or management services.
(d) Non-solicitation. Employee agrees not to solicit or recruit, directly or indirectly, any management employee (director level and above) of the Company for employment during the one (1) year period after termination of his employment relationship with the Company.
(a) Successors and Assigns. This Agreement is binding on and inures to the benefit of the Company's successors and assigns. The Company may assign this Agreement in connection with a merger, consolidation, assignment, sale or other disposition of substantially all of its assets or business. This Agreement may not be assigned by Employee.
(b) Modification, Waivers. This Agreement may be modified or amended only by a writing signed by the Company, and Employee. The Company's failure, or delay in exercising any right, or partial exercise of any right, will not waive any provision of this Agreement or preclude the Company from otherwise or further exercising any rights or remedies hereunder, or any other rights or remedies granted by any law or any related document.
(c) Governing Law, Arbitration. The laws of Delaware will govern the validity, construction, and performance of this Agreement. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules,
and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Both the Company and Employee hereby consent to this binding arbitration provision.
(d) Remedies. Employee understands that if he fails to fulfill his obligations under this Agreement, the damages to the Company would be very difficult to determine. Therefore, in addition to any other rights or remedies available to the Company at law, in equity, or by statute, Employee hereby consents to the specific enforcement of this Agreement by the Company through an injunction or restraining order issued by the appropriate court.
(e) Captions. The headings in this Agreement are for convenience only and do not affect the interpretation of this Agreement.
(f) Severability. To the extent any provision of this Agreement shall be invalid or enforceable with respect to Employee, it shall be considered deleted here from with respect to Employee and the remainder of such provision and this Agreement shall be unaffected and shall continue in full force and effect. In furtherance to and not in limitation of the foregoing, should the duration or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid and enforceable under applicable law with respect to Employee, then such provision shall be construed to cover only that duration, extent or activities which are validly and enforceably covered with respect to Employee. Employee acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its expressed terms) possible under applicable laws.
(g) Entire Agreement. This Agreement supersedes all previous and contemporaneous oral negotiations, commitments, writings and understandings between the parties concerning the matters herein or therein, including without limitation, any policy of personnel manuals of the Company.
(h) Notices. All notices and other communications required or permitted under this Agreement shall be in writing and sent by registered first-class mail, postage prepaid, and shall be deemed delivered upon hand delivery or upon mailing (postage prepaid and by registered or certified mail) to the following address:
If to the Company, to:
Isle of Capri Casinos, Inc.
1641 Popps Ferry Road
Biloxi MS 39532
If to the Employee, to:
These addresses may be changed at any time by like notice.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed in a manner appropriate for such party as of the date first above written.
ISLE OF CAPRI CASINOS, INC.
By: /s/ --------------------------------- |
"EMPLOYEE"
By: /s/ Timothy M. Hinkley --------------------------------- |
Exhibit 10.26
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this 1st day of January, 2002 between Isle of Capri Casinos, Inc., a Delaware corporation (the "Company") and Bernard Goldstein ("Employee").
In consideration of the mutual promises of this Agreement, the Company and Employee agree as follows:
1. Effective Date. This Agreement shall be effective as of the date hereof and replaces the employment agreement in place between the "Company" and the "Employee".
(a) Term. The Company hereby employs Employee, and Employee accepts such employment and agrees to perform services for the Company and/or its subsidiaries, (hereinafter collectively referred to as the "Company") for an initial period of one (1) year from and after the Effective Date of this Agreement (the "Initial Term") and for successive one-year periods (the "Renewal Terms"), unless terminated at an earlier date in accordance with Section 3 of this Agreement (the Initial Term and the Renewal Terms together referred to as the "Term of Employment").
(b) Service with Company. During the Term of Employment, Employee agrees to perform reasonable employment duties as the Board of Directors of the Company shall assign to him from time to time. Employee also agrees to serve, for any period for which he is elected as an officer of the Company; provided, however, that Employee shall not be entitled to any additional compensation for serving as an officer of the Company. From and after the Effective Date, Employee shall continue to be an executive officer of the Company with the title of Chief Financial Officer.
(c) Performance of Duties. Employee agrees to serve the Company faithfully and to the best of his ability and to devote substantially all of his time, attention and efforts to the business and affairs of the Company during the Term of Employment.
(d) Compensation. During the Term of Employment, the Company shall pay to Employee as compensation for services to be rendered hereunder an aggregate base salary of $500,000 per year, payable in equal monthly, or more frequent payments, subject to increases, if any, as may be determined by the Company. Employee shall also be eligible to participate in any stock option plans of the Company. In addition to the base salary, any bonuses, and participation in stock option plans, Employee shall be eligible to participate in any employee benefit plans or programs of the Company as are or may be made generally available to employees of the Company and those made available to officers of the Company. The Company will pay or reimburse Employee for all reasonable and necessary out-of-pocket
expense incurred by him in the performance of his duties under this Agreement, subject to the presentment of appropriate vouchers in accordance with the Company's policies for expense verification.
(a) The Term of Employment shall terminate prior to its expiration in the event that at any time during such term:
(i) The Company delivers a notice of termination for "cause to Employee". For purposes of this section, "cause" shall mean any dishonesty, disloyalty, material breach of corporate policies, gross misconduct on the part of Employee in the performance of Employee's duties hereunder or a violation of Section 5 of this agreement. If Employee is terminated for cause, there shall be no severance paid to Employee and his benefits shall terminate, except as may be provided by law.
(ii) The Company for any other reason terminates the
Term of Employment. If Employee signs a General
Release in a form acceptable to the Company
that releases the Company from any and all
claims that Employee may have and affirmatively
agrees not to violate any of the provisions of
Section 5 hereof, Employee shall be entitled to
continue to receive his salary and, to the
extent legally permissible continue to
participate in the employee benefit programs
for a period of 24 months from and after such
termination or until new employment begins,
which ever occurs first. If Employee fails to
sign the form, Employee shall not be entitled
to any continuing payments or benefits. In lieu
of monthly payments, a lump sum award may be
authorized by the Board of Directors. Employee
shall be provided out-placement service with an
out-placement firm or service selected by the
Company and at the reasonable expense of the
Company.
(iii) Employee for any reason voluntarily terminates the Term of Employment. In said event, Employee shall not be entitled to any compensation and his benefits shall terminate, except as may be provided by law, from and after termination.
(iv) However, if Employee voluntarily terminates the Term of Employment due to Retirement all stock options shall become fully vested and exercisable and the Employee's deferred bonus payments shall be fully vested and paid. The term "Retirement" shall mean the termination by Employee of his employment by reason of reaching the age of 65 or such later date approved by the Board of Directors.
(v) Employee dies or becomes disabled as determined in good faith by the Board of Directors. Employee, or his estate, shall continue to receive his salary and, to the extent legally permissible continue to participate in the employee benefit programs for a period of 24 months from and after such termination or until new employment begins, which ever occurs first. In lieu of monthly payments, a lump sum award may be authorized by the Board of Directors. Employee shall also be entitled to a lump sum payment equal to the average of the last 3 years bonus payment inclusive of deferred amounts.
(b) Except as provided above, the vesting of stock options and deferred bonus payments shall be governed by the provisions of the Company's Stock Option Plans and Deferred Bonus Plan.
4. Change In Control of the Company. A change in control of the Company defined as its sale, acquisition, merger or buyout to an unaffiliated person that has significant effect or a reduction in the responsibilities, position or compensation of Employee or if Employee is required to move the location of his principal residence a distance of more than 35 miles prior to or during the initial 12 months of the change of control will entitle Employee to the following severance:
(i) 24 month's salary paid as salary continuation plus a lump sum payment equal to the average of the previous 3 years bonus payment inclusive of deferred amounts. Salary continuation shall terminate if and when Employee begins new employment during the period of salary continuation.
(ii) Health and welfare benefits shall be fully paid by the Company and run concurrently with salary continuation.
(iii) All stock options shall become fully vested and exercisable and Employee's deferred bonus payments shall be fully vested and paid.
(iv) Employee shall be provided out-placement services with a mutually agreed upon out-placement firm or service selected by the Company and at the reasonable expense of the Company.
(a) Ownership. Employee agrees that all inventions, copyrightable material, business and/or technical information, marketing plans, customer lists and trade secrets which arise out of the performance of this Agreement are the property of the Company.
(b) Confidentiality. Except as is consistent with Employee's duties and responsibilities within the scope of his employment with the Company, Employee agrees to keep confidential indefinitely, and not to use or disclose to any unauthorized person, information which is not generally known and which is proprietary to the Company, including all information that the Company treats as confidential, ("Confidential Information"). Upon termination of Employee's employment, Employee will promptly turn over to the Company all software, records, manuals, books, forms, documents, notes, letters, memoranda, reports, data, tables, compositions, articles, devices, apparatus, marketing plans, customer lists and other items that disclose, describe or embody Confidential Information including all copies of the confidential Information in his possession, regardless of who prepared them.
(c) Non-competition. Employee agrees to the following covenant not to compete beginning on the effective date of this Agreement and continuing until one year after termination of his employment relationship with the Company:
Employee agrees not to compete, directly or indirectly (including as an officer, director, partner, employee, consultant, independent contractor, or more than 5% equity holder of any equity) with the Company in any way concerning the ownership, development or management of any gaming operation or facility within a 75-mile radius of any gaming operation or facility with respect to which the Company owns, renders or proposes to render consulting or management services.
(d) Non-solicitation.Employee agrees not to solicit or recruit, directly or indirectly, any management employee (director level and above) of the Company for employment during the one (1) year period after termination of his employment relationship with the Company.
(a) Successors and Assigns. This Agreement is binding on and inures to the benefit of the Company's successors and assigns. The Company may assign this Agreement in connection with a merger, consolidation, assignment, sale or other disposition of substantially all of its assets or business. This Agreement may not be assigned by Employee.
(b) Modification, Waivers. This Agreement may be modified or amended only by a writing signed by the Company, and Employee. The Company's failure, or delay in exercising any right, or partial exercise of any right, will not waive any provision of this Agreement or preclude the Company from otherwise or further exercising any rights or remedies hereunder, or any other rights or remedies granted by any law or any related document.
(c) Governing Law, Arbitration. The laws of Delaware will govern the validity, construction, and performance of this Agreement. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules,
and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Both the Company and Employee hereby consent to this binding arbitration provision.
(d) Remedies. Employee understands that if he fails to fulfill his obligations under this Agreement, the damages to the Company would be very difficult to determine. Therefore, in addition to any other rights or remedies available to the Company at law, in equity, or by statute, Employee hereby consents to the specific enforcement of this Agreement by the Company through an injunction or restraining order issued by the appropriate court.
(e) Captions. The headings in this Agreement are for convenience only and do not affect the interpretation of this Agreement.
(f) Severability. To the extent any provision of this Agreement shall be invalid or enforceable with respect to Employee, it shall be considered deleted here from with respect to Employee and the remainder of such provision and this Agreement shall be unaffected and shall continue in full force and effect. In furtherance to and not in limitation of the foregoing, should the duration or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid and enforceable under applicable law with respect to Employee, then such provision shall be construed to cover only that duration, extent or activities which are validly and enforceably covered with respect to Employee. Employee acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its expressed terms) possible under applicable laws.
(g) Entire Agreement.This Agreement supersedes all previous and contemporaneous oral negotiations, commitments, writings and understandings between the parties concerning the matters herein or therein, including without limitation, any policy of personnel manuals of the Company.
(h) Notices. All notices and other communications required or permitted under this Agreement shall be in writing and sent by registered first-class mail, postage prepaid, and shall be deemed delivered upon hand delivery or upon mailing (postage prepaid and by registered or certified mail) to the following address:
If to the Company, to:
Isle of Capri Casinos, Inc.
1641 Popps Ferry Road
Biloxi MS 39532
If to the Employee: to:
These addresses may be changed at any time by like notice.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed in a manner appropriate for such party as of the date first above written.
ISLE OF CAPRI CASINOS, INC.
By: /s/ ------------------------------------- |
"EMPLOYEE"
By: /s/ Bernard Goldstein ------------------------------------ |
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in Amendment No. 1 to the Registration Statement (Form S-4) of Isle of Capri Casinos, Inc. for the offer to exchange up to $200,000,000 of its 9% Senior Subordinated Notes due 2012 and to the incorporation by reference therein of our report dated June 14, 2001, with respect to the consolidated financial statements of Isle of Capri Casinos, Inc. incorporated by reference in its Annual Report (Form 10-K) at April 29, 2001 and April 30, 2000 and for the years ended April 29, 2001, April 30, 2000, and April 25, 1999, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
New Orleans, Louisiana
June 14, 2002
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