EXHIBIT 10.1
Xxxxxx'x Operating Company
Xxxxxx'x Entertainment, Inc.
$500,000,000
8.00% Senior Notes due 2011
PURCHASE AGREEMENT
New York, New York
January 24, 2001
Xxxxxxx Xxxxx Xxxxxx Inc.
Banc of America Securities LLC
Bear, Xxxxxxx & Co. Inc.
BNY Capital Markets, Inc.
CIBC World Markets Corp.
Commerzbank Capital Markets Corp.
Credit Lyonnais Securities (USA) Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Xxxx. Xxxxx Inc.
Fleet Securities, Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
XX Xxxxx Securities Corporation
Xxxxxxxxxxx Xxxxxxx Securities, Inc.
Xxxxx Fargo Brokerage Services, LLC
As Representatives of the Initial Purchasers
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx'x Operating Company, a Delaware corporation (the "Company") proposes
to issue and sell to the several parties named below (the "Initial Purchasers"),
for whom you (the "Representatives") are acting as representatives, $500,000,000
principal amount of its 8.00% Senior Notes due 2011, payment of principal,
interest and premium, if any, in respect of which notes are to be guaranteed by
Xxxxxx'x Entertainment, Inc., a Delaware corporation (the "Guarantor"; such
notes, together with such guarantee, the "Securities"). The Securities are to be
issued under an indenture (the "Indenture"), to be dated as of January 29, 2001,
among the Company, the Guarantor and Bank One Trust Company, N.A., as trustee
(the "Trustee"). The
1
Securities have the benefit of a registration rights agreement (the
"Registration Rights Agreement"), dated as of January 29, 2001, among the
Company, the Guarantor and the Initial Purchasers, pursuant to which the Company
and the Guarantor have agreed to register the Securities under the Act, subject
to the terms and conditions therein specified. The sale of the Securities to the
Initial Purchasers will be made without registration of the Securities under the
Act in reliance upon exemptions from the registration requirements of the Act.
In connection with the sale of the Securities, the Company and the
Guarantor have prepared a preliminary offering memorandum, dated January 22,
2001 (as amended or supplemented at the Execution Time, including any and all
exhibits thereto and any information incorporated by reference therein, the
"Preliminary Offering Memorandum"), and a final offering memorandum, dated
January 24, 2001 (including any and all exhibits thereto and any information
incorporated by reference therein, the "Offering Memorandum"). Each of the
Preliminary Offering Memorandum and the Offering Memorandum sets forth certain
information concerning the Company, the Guarantor and the Securities. Unless
stated to the contrary, all references herein to the Offering Memorandum are to
the Offering Memorandum at the Execution Time and are not meant to include any
amendment or supplement, or any information incorporated by reference therein,
subsequent to the Execution Time. The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendment or supplement thereto, in connection with the
offer and sale of the Securities by the Initial Purchasers.
To the extent there are no additional parties listed in the table below
other than you, the term Representatives as used herein shall mean you as the
Initial Purchasers, and the terms Representatives and Initial Purchasers shall
mean either the singular or plural as the context requires. The use of the
neuter in this Agreement shall include the feminine and masculine wherever
appropriate. Certain terms used herein are defined in Section 9 of Annex I
hereto. Unless stated to the contrary, any references herein to the terms
"amend", "amendment" or "supplement" with respect to the Offering Memorandum
shall be deemed to refer to and include any information filed under the Exchange
Act subsequent to the Execution Time which is incorporated by reference therein.
2
Subject to the terms and conditions, and in reliance upon the
representations and warranties, set forth or incorporated by reference herein,
the Company hereby agrees to sell to the several Initial Purchasers, and each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Securities set forth below opposite
its name at a purchase price of 98.242% of the principal amount of Securities,
plus accrued interest, if any, from January 29, 2001 to the date of payment and
delivery:
Principal Amount of
Securities
Initial Purchasers To Be Purchased
------------------ -------------------
Xxxxxxx Xxxxx Xxxxxx Inc.................................... US$305,000,000.00
Banc of America Securities LLC.............................. 15,000,000.00
Credit Suisse First Boston Corporation...................... 15,000,000.00
Deutsche Banc Xxxx. Xxxxx Inc............................... 15,000,000.00
Xxxxxxx, Xxxxx & Co......................................... 15,000,000.00
Xxxxxx Brothers Inc......................................... 15,000,000.00
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx 15,000,000.00
Incorporated...........................
Xxxxxx Xxxxxxx & Co. Incorporated........................... 15,000,000.00
Bear, Xxxxxxx & Co. Inc..................................... 10,000,000.00
BNY Capital Markets, Inc.................................... 10,000,000.00
CIBC World Markets Corp..................................... 10,000,000.00
Commerzbank Capital Markets Corp............................ 10,000,000.00
Credit Lyonnais Securities (USA) Inc........................ 10,000,000.00
Fleet Securities, Inc....................................... 10,000,000.00
XX Xxxxx Securities Corporation............................. 10,000,000.00
Xxxxxxxxxxx Xxxxxxx Securities, Inc......................... 10,000,000.00
Xxxxx Fargo Brokerage Services, LLC......................... 10,000,000.00
-----------------
Total.............................................. US$500,000,000.00
The Initial Purchasers will pay for the Securities upon delivery thereof at
the offices of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, 0 Xxxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx at 10:00 a.m. (New York City time) on January 29, 2001, or at such
other time, not later than 5:00 p.m. (New York City time) on January 29, 2001,
as shall be designated by the Representatives. The time and date of such payment
and delivery are hereinafter referred to as the Closing Date.
The Securities shall have the terms set forth in the Offering Memorandum
dated January 24, 2001, including the following:
3
TERMS OF SECURITIES
Maturity Date: February 1, 2011
Interest Rate: 8.00%
Optional Redemption: Make Whole Call at TSY + 25 basis points
Interest Payment Dates: Each February 1 and August 1, commencing August 1, 2001
Closing Date: January 29, 2001
All provisions contained in the Annex I hereto, entitled "Purchase
Agreement General Provisions," are herein incorporated by reference in their
entirety and shall be deemed to be a part of this Agreement to the same extent
as if such provisions had been set forth in full herein, except that if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control.
4
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
Agreement and your acceptance shall represent a binding agreement between the
Company and the Guarantor and the several Initial Purchasers.
Very truly yours,
XXXXXX'X OPERATING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
XXXXXX'X ENTERTAINMENT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
5
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
Banc of America Securities LLC
Credit Suisse First Boston Corporation
Deutsche Banc Xxxx. Xxxxx Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
BNY Capital Markets, Inc.
CIBC World Markets Corp.
Commerzbank Capital Markets Corp.
Credit Lyonnais Securities (USA) Inc
Fleet Securities, Inc.
XX Xxxxx Securities Corporation
Xxxxxxxxxxx Xxxxxxx Securities, Inc.
Xxxxx Fargo Brokerage Services, LLC
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
For themselves and the other several Initial
Purchasers named in the foregoing Agreement.
6
ANNEX I
Xxxxxx'x Operating Company
Guaranteed Debt Securities
Payment of Principal, Interest and
Premium, if any, Guaranteed by
Xxxxxx'x Entertainment, Inc.
PURCHASE AGREEMENT GENERAL PROVISIONS
January 24, 2001
The provisions set forth herein are incorporated by reference in a Purchase
Agreement of even date herewith (such agreement, including the provisions hereof
as incorporated therein, the "Purchase Agreement"). The Purchase Agreement is
sometimes referred to herein as "this Agreement." Terms defined in the Purchase
Agreement are used herein as therein defined.
1. REPRESENTATIONS AND WARRANTIES. The Company and the Guarantor, jointly
and severally, represent and warrant to and agree with each of the Initial
Purchasers that:
(a) The Preliminary Offering Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and the Offering
Memorandum does not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Preliminary Offering Memorandum or the
Offering Memorandum based upon information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser
through the Representatives expressly for use therein;
(b) Each of the Company and the Guarantor has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Offering
Memorandum and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company or the Guarantor and their
respective subsidiaries, taken as a whole;
1
(c) Each subsidiary of the Company and the Guarantor, respectively,
has been duly organized, is validly existing as a corporation, limited
liability company or partnership in good standing under the laws of the
jurisdiction of its organization, has the power and authority to own its
property and to conduct its business as described in the Offering
Memorandum and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company or the Guarantor and their
respective subsidiaries, taken as a whole; all of the issued shares of
capital stock or other equity interests of each subsidiary of the Company
and the Guarantor, respectively, have been duly and validly authorized and
issued, are fully paid and non-assessable. Except as set forth in or as
incorporated by reference in the Offering Memorandum, all of the shares of
capital stock or other equity or partnership interests of each subsidiary
of the Company or the Guarantor which would be considered a "significant
subsidiary" for purposes of Rule 1-02 under Regulation S-X pursuant to the
Act (the "Significant Subsidiaries") are owned directly or indirectly by
the Company or the Guarantor, respectively. Except as set forth in or as
incorporated by reference in the Offering Memorandum, all of the shares of
capital stock or other equity or partnership interests of subsidiaries of
the Company or the Guarantor held by the Company or the Guarantor are held
free and clear of all liens, encumbrances, equities or claims except such
liens, encumbrances, equities or claims imposed by Gaming Laws, the terms
of any partnership agreement pertaining to any partnership that is a
subsidiary of the Company or which would not would not have a material
adverse effect on the Company or the Guarantor and their respective
subsidiaries, taken as a whole;
(d) This Agreement has been duly authorized, executed and delivered by
each of the Company and the Guarantor;
(e) The Indenture has been, or will be by the Closing Date, duly
authorized, executed and delivered by each of the Company and the Guarantor
and, assuming due authorization, execution and delivery thereof by the
Trustee, is, or will be by the Closing Date, a valid and binding agreement
of each of the Company and the Guarantor, respectively, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general principles
of equity;
(f) The Registration Rights Agreement has been, or will be by the
Closing Date, duly authorized, executed and delivered by each of the
Company and the Guarantor and, assuming due authorization, execution and
delivery thereof by the Representatives, is, or will be by the Closing
Date, a valid and binding agreement of each of the Company and the
Guarantor, respectively, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and general principles of equity;
(g) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with the
terms of the Purchase
2
Agreement, (assuming due authorization, execution and delivery thereof by
the Trustee) will be entitled to the benefits of the Indenture, and will be
valid and binding obligations of the Company and the Guarantor,
respectively, in each case enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of equity;
(h) The execution and delivery by each of the Company and the
Guarantor of, and the performance by each of the Company and the Guarantor
of its respective obligations under, this Agreement, the Indenture, the
Registration Rights Agreement and the Securities will not contravene any
provision of applicable law or the certificate of incorporation or by-laws
of the Company or the Guarantor, respectively, or any agreement or other
instrument binding upon the Company or any of its subsidiaries, or the
Guarantor or any of its subsidiaries, respectively, that is material to the
Company or the Guarantor and their respective subsidiaries, taken as a
whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or the Guarantor and any of
their respective subsidiaries, and no consent, approval, authorization,
filing with or order of, or qualification with, any governmental body or
agency is required in connection with, and prior to the consummation of,
the transactions contemplated in, or for the performance by the Company or
the Guarantor of its respective obligations under, this Agreement, the
Indenture, the Registration Rights Agreement and the Securities, except
such as will be obtained under the Act, the Exchange Act, and the Trust
Indenture Act, or as may be required by the securities or Blue Sky laws of
the various states and securities laws of any jurisdiction outside the
United States in connection with the offer and sale of the Securities or as
may be required pursuant to Gaming Laws;
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company or the Guarantor and their respective
subsidiaries, taken as a whole, from that set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent
to the Execution Time);
(j) To the knowledge of the Company, there are no known legal or
governmental proceedings pending or threatened to which the Company or the
Guarantor and any of their respective subsidiaries is a party or to which
any of the properties of the Company or the Guarantor or any of their
respective subsidiaries is subject that are not adequately disclosed in the
Offering Memorandum and which would, individually or in the aggregate, have
a material adverse effect on the Company or the Guarantor and their
respective subsidiaries, taken as a whole. Neither the Company nor the
Guarantor has any reason to believe that any governmental agency with
authority pursuant to any Gaming Law is investigating the Company, the
Guarantor or any of their respective subsidiaries in any non-routine
matter, the results of which would materially affect the operations of the
Company and the subsidiaries of the Company. Due to the highly regulated
nature of the business of the Company and the subsidiaries of the Company,
there are ongoing investigations by various governmental agencies with
authority pursuant to the various Gaming Laws;
3
(k) Neither the Company nor the Guarantor is, and after giving effect
to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Offering Memorandum, neither will be,
an "investment company" or an entity "controlled by an investment company"
as such terms are defined in the Investment Company Act;
(l) The Company and the Guarantor and their respective subsidiaries
(i) are in compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, individually or in the aggregate, have a material adverse effect
on the Company or the Guarantor and their respective subsidiaries, taken as
a whole;
(m) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, individually or in the aggregate, have a material
adverse effect on the Company or the Guarantor and their respective
subsidiaries, taken as a whole;
(n) Except as disclosed in the Offering Memorandum, each of the
Company and the Guarantor and their respective subsidiaries has sufficient
trademarks, trade names, patent rights, copyrights, or licenses to conduct
their businesses as now conducted in all material respects;
(o) Except as disclosed in or specifically contemplated by the
Offering Memorandum, each of the Company and the Guarantor and their
respective subsidiaries has sufficient licenses, approvals and
authorizations required pursuant to Gaming Laws to conduct their current
businesses except such licenses, approvals and authorizations required
pursuant to Gaming Laws the absence of which, either individually or in the
aggregate, would not have a material adverse effect on the Company or the
Guarantor and their respective subsidiaries, taken as a whole;
(p) Each of the Company's and Guarantor's and their respective
subsidiaries' controlling persons, key employees, and, to the Company's or
the Guarantor's knowledge, stockholders, have all necessary permits,
licenses and other authorizations required by Gaming Laws for the Company,
the Guarantor and their respective subsidiaries to conduct their businesses
as now conducted in all material respects; and neither the Company nor the
Guarantor has any knowledge that any of their respective
4
stockholders is unsuitable or may be deemed unsuitable by any authorities
pursuant to Gaming Laws;
(q) No labor dispute with the employees of the Company or the
Guarantor or any of their respective subsidiaries exists, or to the
knowledge of the Company or the Guarantor, respectively, is imminent which
would, individually or in the aggregate, have a material adverse effect on
the Company or the Guarantor and their respective subsidiaries, taken as a
whole;
(r) Neither the Company, nor the Guarantor, nor any of their
respective affiliates, nor any person acting on its or their behalf has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of the Securities under the Act;
(s) Neither the Company, nor the Guarantor, nor any of their
respective affiliates, nor any person acting on its or their behalf has
engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with any offer or sale of the
Securities in the United States;
(t) Assuming the accuracy of the representations and warranties and
compliance with the agreements of the Initial Purchasers made pursuant to
Section 3 and each "accredited investor" made pursuant to the letter
required by Section 3(a)(ii) and except as described in the Offering
Memorandum under "Description of Notes -- Registration Rights," it is not
necessary in connection with the offer, sale and delivery of the Securities
in the manner contemplated by this Agreement and the Offering Memorandum to
register the Securities under the Act or to qualify the Indenture under the
Trust Indenture Act;
(u) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act;
(v) Neither the Company, nor the Guarantor, nor any of their
respective affiliates, nor any person acting on its or their behalf has
engaged in any directed selling efforts with respect to the Securities, and
each of them has complied with the offering restrictions requirement of
Regulation S. Terms used in this paragraph have the meanings given to them
by Regulation S;
(w) The Company and Guarantor are subject to and in full compliance
with the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act; and
(x) Neither the Company nor the Guarantor has paid or agreed to pay to
any person any compensation for soliciting another to purchase any
securities of the Company or Guarantor (except as contemplated by this
Agreement).
2. PAYMENT AND DELIVERY. Except as otherwise provided in this Section 2,
payment for the Securities shall be made to the Company in Federal or other
funds immediately available at the time and place set forth in the Purchase
Agreement, upon delivery to the Representatives for the respective accounts of
the several Initial Purchasers of the Securities
5
registered in such names and in such denominations as the Representatives shall
request in writing not less than one full Business Day prior to the date of
delivery, with any transfer taxes payable in connection with the transfer of the
Securities to the Initial Purchasers duly paid by the Company. Delivery of the
Securities shall be made through the facilities of the Depository Trust Company
unless the Representatives shall otherwise instruct.
3. OFFERING BY INITIAL PURCHASERS. Each Initial Purchaser, severally and
not jointly, represents and warrants to and agrees with the Company and the
Guarantor that:
(a) It has not offered or sold, and, until the Securities are
registered under the Act as described in the Final Memorandum under the
caption "Description of Notes -- Registration Rights," will not offer or
sell, any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the Act) and
that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A; or (ii) to other
institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D) who provide to it and to the Company a letter
in the form of Exhibit A hereto; or (iii) in accordance with the
restrictions set forth in Exhibit B hereto.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of any
form of general solicitation or general advertising (within the meaning of
Regulation D) in the United States.
4. CONDITIONS TO THE INITIAL PURCHASERS' OBLIGATIONS. The several
obligations of the Initial Purchasers are subject to the performance by the
Company and Guarantor of their obligations hereunder and to the following
conditions:
(a) Subsequent to the execution and delivery of the Purchase Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's or
the Guarantor's securities by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
or the Guarantor and their respective subsidiaries, taken as a whole,
from that set forth in the Offering Memorandum (exclusive of any
amendments or supplements thereto subsequent to the Execution Time)
that, in the judgment of the Representatives, is material and adverse
and that makes it, in the judgment of the Representatives,
impracticable to market the Securities on the terms and in the manner
contemplated in the Offering Memorandum.
6
(b) The Initial Purchasers shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
each of the Company and the Guarantor, to the effect set forth in Section
4(a)(i) above and to the effect that the representations and warranties of
the Company and the Guarantor, respectively, contained in this Agreement
are true and correct as of the Closing Date and that the Company and the
Guarantor, respectively, have complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date. The officer signing and delivering
such certificate may rely upon the best of his or her knowledge as to
proceedings threatened.
(c) The Initial Purchasers shall have received on the Closing Date an
opinion of Xxxx X. Xxxxx, Associate General Counsel of the Company and the
Guarantor, dated the Closing Date, to the effect that:
(i) each of the Company, the Guarantor and the Significant
Subsidiaries has been duly organized, is validly existing as a
corporation, limited liability company or partnership in good standing
under the laws of the jurisdiction of its organization, has the power
and authority to own its property and to conduct its business as
described in the Offering Memorandum and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company or the Guarantor and their respective
subsidiaries, taken as a whole;
(ii) after inquiry of the members of the legal departments of the
Company and Guarantor, to the best of such counsel's knowledge, (A)
there are no legal or governmental proceedings pending or threatened
to which the Company or the Guarantor and any of their respective
subsidiaries is a party or to which any of the properties of the
Company or the Guarantor or any of their respective subsidiaries is
subject that are not adequately disclosed in the Offering Memorandum
and which would, individually or in the aggregate, have a material
adverse effect on the Company or the Guarantor and their respective
subsidiaries, taken as a whole, (B) there are no material statutes,
regulations, contracts or other documents that are not adequately
disclosed in the Offering Memorandum, and (C) there is no non-routine
investigation of the Company, the Guarantor or any of their respective
subsidiaries, by any governmental agency with authority pursuant to
any Gaming Law, the results of which would have a material adverse
effect on the Company, the Guarantor or any of their respective
subsidiaries;
(iii) Each of the Company's, the Guarantor's and their respective
subsidiaries' controlling persons, key employees, and, to the best of
such counsel's knowledge, their stockholders, have all necessary
permits, licenses and other authorizations required by Gaming Laws for
the Company, the Guarantor and their respective subsidiaries to
conduct their businesses as now conducted except such licenses,
approvals and authorizations required pursuant to Gaming Laws the
absence of which, either individually or in the aggregate, would not
7
have a material adverse effect on the Company or the Guarantor and
their respective subsidiaries, taken as a whole; and to the best of
such counsel's knowledge none of the respective stockholders of the
Company or the Guarantor is unsuitable or may be deemed unsuitable by
any authorities pursuant to Gaming Laws;
(iv) the statements (A) in the Offering Memorandum under the
captions "Regulation and Licensing," and "Legal Matters," (B) in
"Items 1 and 2 - Business and Properties--Government Regulation" and
"Item 3 - Legal Proceedings" of the Company's annual report on Form
10-K in respect of the year ended December 31, 1999, which is
incorporated by reference in the Offering Memorandum, and (C) in Item
2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations--Debt and Liquidity" of the Company's quarterly
report on Form 10-Q in respect of the quarter ended September 30,
2000, which is incorporated by reference in the Offering Memorandum,
in each case insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to
therein;
(v) no consent, approval, authorization of, or qualification with
any authority pursuant to Gaming Laws is required with respect to the
issuance of the Securities or the transactions contemplated by this
Agreement and the Indenture prior to such issuance of the Securities
or the transactions contemplated by this Agreement, except as has
already been obtained; and
(vi) the execution and delivery by each of the Company and the
Guarantor of, the transactions contemplated in, and the performance by
the Company and the Guarantor of its respective obligations under,
this Agreement, the Indenture, the Registration Rights Agreement and
the Securities will not contravene, to the best of such counsel's
knowledge, any agreement or other instrument binding upon the Company
or the Guarantor and any of their respective subsidiaries that is
material to the Company or the Guarantor and their respective
subsidiaries, taken as a whole, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or the Guarantor
or any of their respective subsidiaries, including without limitation,
pursuant to any Gaming Laws.
(d) The Initial Purchasers shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxxx, outside counsel for the Company and the
Guarantor, dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by each of the Company and the Guarantor;
8
(ii) the Indenture has been duly authorized, executed and
delivered by each of the Company and the Guarantor and, assuming due
authorization, execution and delivery thereof by the Trustee, is the
legally valid and binding agreement of each of the Company and the
Guarantor, enforceable against the Company and the Guarantor in
accordance with its terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
general principles of equity;
(iii) the Registration Rights Agreement has been duly authorized,
executed and delivered by each of the Company and the Guarantor;
(iv) the Securities have been duly authorized and, when executed
and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, assuming due authorization, execution and
delivery thereof by the Trustee, will be entitled to the benefits of
the Indenture, will conform in all material respects as to legal
matters to the descriptions thereof contained in the Offering
Memorandum under the heading "Description of Notes" and will be
legally valid and binding obligations of the Company and the
Guarantor, respectively, enforceable against the Company and the
Guarantor in accordance with their respective terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and general principles of equity;
(v) the execution and delivery of this Agreement, the Indenture,
the Registration Rights Agreement and the Securities by each of the
Company and the Guarantor, the transactions contemplated in, and the
performance by each of the Company and the Guarantor on or prior to
the date hereof of its respective obligations under, this Agreement,
the Indenture, the Registration Rights Agreement and the Securities,
will not violate the certificate of incorporation or by-laws of each
of the Company or the Guarantor, respectively, the Delaware General
Corporation law, or any provision of any applicable federal or New
York statute, rule or regulation (other than federal securities laws,
which are specifically addressed elsewhere herein, or state securities
laws or Gaming Laws), and no consent, approval, authorization or order
of, or filing with, any federal or New York or Delaware court or
governmental agency or body is required for the transactions
contemplated in, or the performance by each of the Company and the
Guarantor on or prior to the date hereof of its obligations under,
this Agreement, the Indenture and the Securities, except such as may
be required under the state securities laws or Blue Sky laws in
connection with the offer and sale of the Securities or as may be
required by Gaming Laws;
(vi) the statements under the heading "Description of Notes" in
the Offering Memorandum, insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings and fairly summarize the
matters referred to therein;
9
(vii) assuming the accuracy of the representations and warranties
and compliance with the agreements contained herein, the Securities
are not required to be registered under the Act and the Indenture is
not required to be qualified under the Trust Indenture Act for the
offer and sale by the Initial Purchasers of the Securities in the
manner contemplated by this Agreement;
(viii) neither the Company nor the Guarantor is, and after giving
effect to the offering and sale of the Securities and the application
of the proceeds thereof as described in the Offering Memorandum,
neither will be, an "investment company" as defined in the Investment
Company Act without taking account of any exemption arising out of the
number of holders of the Company's securities; and
(ix) Such counsel shall also state that, in addition, no facts
have come to such counsel's attention that cause such counsel to
believe that the Offering Memorandum, as of its date and as of the
Closing Date, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required
to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, it being understood that such counsel need express no
belief with respect to the financial statements and schedules or
other financial data included or incorporated by reference in, or
omitted from, the Offering Memorandum.
With respect to the last paragraph of this Section 4(d), Xxxxxx & Xxxxxxx
may state that its opinion and belief are based upon its participation in the
preparation of the Offering Memorandum and any amendments or supplements thereto
(but not including documents incorporated therein by reference) and review and
discussion of the contents thereof (including documents incorporated by
reference), but are without independent check or verification (except to the
extent set forth in Section 4(d)(vi)).
The opinion of Xxxxxx & Xxxxxxx described in this Section 4(d) shall be
rendered to the Initial Purchasers at the request of the Company and the
Guarantor and shall so state therein.
(e) The Initial Purchasers shall have received from Cleary, Gottlieb,
Xxxxx & Xxxxxxxx, counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Indenture, the
Registration Rights Agreement, the Offering Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the
Representatives may reasonably require, and the Company and the Guarantor
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) At the Execution Time and at the Closing Date, Xxxxxx Xxxxxxxx &
Co. shall have furnished to the Initial Purchasers a letter or letters,
dated respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the
10
Initial Purchasers, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the Offering
Memorandum (as amended or supplemented at the date of the letter) and
reported on by them comply in form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company, the Guarantor and its
subsidiaries; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards
which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and executive,
human resources and audit committees of the Company, the Guarantor and
its subsidiaries; and inquiries of certain officials of the Company
and of the Guarantor who have responsibility for financial and
accounting matters of the Company, the Guarantor and its subsidiaries
as to transactions and events subsequent to September 30, 2000,
nothing came to their attention which caused them to believe that:
with respect to the period subsequent to September 30, 2000, there
were any changes, at a specified date not more than five Business Days
prior to the date of the letter, in the consolidated long-term debt of
the Guarantor or capital stock of the Guarantor or decreases in the
stockholders' equity of the Guarantor as compared with the amounts
shown on the September 30, 2000 consolidated balance sheet included or
incorporated in the Offering Memorandum (as amended or supplemented at
the date of the letter), or for the period from September 30, 2000 to
such specified date there were any decreases, as compared with the
corresponding period in the preceding year in consolidated total
revenues or operating income or income before income taxes or the
total or per share amounts of consolidated net income of the Guarantor
and its subsidiaries, except in all instances for changes or decreases
set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary by the Initial
Purchasers.
(iii) the statements and information contained in the letter or
letters are of the type ordinarily included in accountants' "comfort
letters" to Initial Purchasers with respect to the financial
statements and certain financial information contained in or
incorporated by reference into the Offering Memorandum.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Offering Memorandum, there shall not have
been (i) any change or decrease specified in the letter or letters referred
to in paragraph (f) of this Section 4 or (ii) any change, or any
development involving a prospective change, in or affecting the business or
properties of the Company and the Guarantor and its
11
subsidiaries the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the judgment of the Initial Purchasers, so material and
adverse as to make it impractical or inadvisable to market the Securities
as contemplated by the Offering Memorandum.
(h) As of the Closing Date the Securities shall be rated not lower
than BBB- by Standard & Poor's Corporation and Baa3 by Xxxxx'x Investors
Service, Inc.
(i) The Securities shall be eligible for clearance and settlement
through The Depositary Trust Company.
(j) Prior to the Closing Date, the Company shall have furnished to the
Initial Purchasers such further information, certificates and documents as
the Representatives may reasonably request.
5. COVENANTS OF THE COMPANY AND THE GUARANTOR. In further consideration of
the agreements of the Initial Purchasers herein contained, each of the Company
and the Guarantor covenants with each Initial Purchaser as follows that:
(a) The Company and the Guarantor shall furnish the Representatives,
without charge, prior to 10:00 a.m. New York City time on the Business Day
next succeeding the date of this Agreement and during the period mentioned
in Section 5(c) below, as many copies of the Offering Memorandum, any
documents incorporated by reference therein and any supplements and
amendments thereto as the Representatives may reasonably request.
(b) The Company and the Guarantor shall not amend or supplement the
Final Memorandum without the prior written consent of the Representatives,
which shall not be unreasonably withheld or delayed and the Company and the
Guarantor shall not file any document under the Exchange Act that is
incorporated by reference in the Offering Memorandum unless, prior to such
proposed filing, they have furnished the Representatives with a copy of
such document for review by the Representatives and the Representatives
have not reasonably objected to the filing of such document. The Company or
the Guarantor, as the case may be, shall promptly advise the
Representatives when any document filed under the Exchange Act that is
incorporated by reference in the Offering Memorandum shall have been filed
with the Commission.
(c) If, at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Offering Memorandum in
order to make the statements therein, in the light of the circumstances
when the Offering Memorandum is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Initial Purchasers, it is
necessary to amend or supplement the Offering Memorandum to comply with
applicable law, forthwith to notify the Representatives of such event or
condition and prepare and furnish, at its own expense, to the Initial
Purchasers and such other persons as the Initial Purchasers may reasonably
request, either amendments or supplements to the Offering Memorandum (in
such quantities as the Initial Purchasers may reasonably request) so that
the statements in the
12
Offering Memorandum as so amended or supplemented will not, in the light of
the circumstances when the Offering Memorandum is delivered to a purchaser,
be misleading or so that the Offering Memorandum, as amended or
supplemented, will comply with law.
(d) The Company and Guarantor shall endeavor to qualify the Securities
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives shall reasonably request and promptly
advise the Initial Purchasers of the receipt by the Company or the
Guarantor of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening-of any proceeding for such purpose.
(e) The Company and Guarantor shall not, and shall not permit any of
their Affiliates to, resell any Securities that have been acquired by any
of them, except, in the case of a Controlled Affiliate, until the earlier
of (i) the consummation of the Exchange Offer and (ii) the declaration of
effectiveness of a Shelf Registration Statement pursuant to the
Registration Rights Agreement.
(f) Neither the Company, nor the Guarantor, nor any of their
respective Affiliates, nor any person acting on behalf of any of the
foregoing, will, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that
would require the registration of the Securities under the Act.
(g) Neither the Company, nor the Guarantor, nor any of their
respective Affiliates, nor any person acting on behalf of any of the
foregoing, will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities in the United States.
(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, each of the Company and
the Guarantor will, during any period in which it is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act or it is not exempt
from such reporting requirements pursuant to and in compliance with Rule
12g3-2(b) under the Exchange Act, to provide to each holder of such
restricted securities and to each prospective purchaser (as designated by
such holder) of such restricted securities, upon the request of such holder
or prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Act. This covenant is intended to be for the benefit
of the holders, and the prospective purchasers designated by such holders,
from time to time of such restricted securities.
(i) Neither the Company, nor the Guarantor, nor any of their
respective Affiliates, nor any person acting on behalf of any of the
foregoing, will engage in any directed selling efforts with respect to the
Securities, and each of them will comply with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the meanings
given to them by Regulation S.
13
(j) To cooperate with the Representatives and use its best efforts to
permit the Securities to be eligible for clearance and settlement through
The Depository Trust Company.
(k) During the period beginning at the Execution Time and continuing
until the date which is thirty (30) days after the Closing Date, not to
offer, sell, contract to sell or otherwise dispose of any debt securities
of the Company or warrants to purchase debt securities of the Company
substantially similar to the Securities (other than (i) the Securities and
(ii) commercial paper issued in the ordinary course of business), without
the prior written consent of the Representatives.
(l) Not to take, directly or indirectly, any action designed to or
which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company or the Guarantor
to facilitate the sale or resale of the Securities.
(m) In connection with any disposition of Securities pursuant to a
transaction made in compliance with paragraph 6 of Exhibit A, the Company
and the Guarantor will reissue certificates evidencing such Securities
without the legend referred to in paragraph 5 of Exhibit A (provided, in
the case of a transaction made in compliance with paragraph 6(f) of Exhibit
A, that the legal opinion referred to therein so permits).
(n) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Company's and the Guarantor's
obligations under this Agreement, including:
(i) the fees, disbursements and expenses of the Company's and
Guarantor's counsel and the Company's and Guarantor's accountants in
connection with the registration and delivery of the Securities under
the Act and all other fees or expenses in connection with the
preparation of the Preliminary Offering Memorandum and the Offering
Memorandum and amendments and supplements or amendments to either of
the foregoing, including all printing costs associated therewith, and
the mailing and delivering of copies thereof to the Initial Purchasers
and dealers, in the quantities hereinabove specified,
(ii) all costs and expenses related to the transfer and delivery
of the Securities to the Initial Purchasers, including any transfer or
other taxes payable thereon (but excluding any transfer taxes on
resale of any of the Securities by the Initial Purchasers),
(iii) the cost of printing or producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of the
Securities under state law and all expenses in connection with the
qualification of the Securities for offer and sale under state law as
provided in Section 5(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Initial
14
Purchasers in connection with such qualification and in connection
with the Blue Sky or legal investment memorandum,
(iv) the fees and disbursements of the Company's and Guarantor's
counsel and accountants and of the Trustee and its counsel,
(v) any fees charged by the rating agencies for the rating of the
Securities,
(vi) the costs and expenses of the Company and the Guarantor
relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Securities,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and the Guarantor and any
such consultants, and the cost of any aircraft chartered in connection
with the road show, and
(vii) all other costs and expenses incident to the performance of
the obligations of the Company and the Guarantor hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 6 entitled
"Indemnity and Contribution", and the last paragraph of Section 8
below, the Initial Purchasers will pay all of their costs and
expenses, including fees and disbursements of their counsel, and any
advertising expenses connected with any offers they may make.
6. INDEMNITY AND CONTRIBUTION.
(a) The Company and the Guarantor, jointly and severally, agree to
indemnify and hold harmless each Initial Purchaser and each person, if any,
who controls any Initial Purchaser within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum or amendment or supplement
thereto if the Company or the Guarantor shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to any Initial Purchaser furnished to the Company in writing by
such Initial Purchaser through the Representatives expressly for use
therein.
15
(b) Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Guarantor, and each person,
if any, who controls the Company or the Guarantor, respectively, within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act
to the same extent as the foregoing indemnity from the Company and the
Guarantor to such Initial Purchaser, but only with reference to information
relating to such Initial Purchaser furnished to the Company in writing by
such Initial Purchaser through the Representatives expressly for use in the
Preliminary Offering Memorandum, the Offering Memorandum or any amendments
or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to either Section 6(a) or 6(b), such person (the
"Indemnified Party") shall promptly notify the person against whom such
indemnity may be sought (the "Indemnifying Party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any
such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for the fees and expenses of more than
one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed
as they are incurred. Such firm shall be designated in writing by the
Representatives, in the case of parties indemnified pursuant to Section
6(a) above, and by the Company, in the case of parties indemnified pursuant
to Section 6(b) above. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
16
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 6(a) or
6(b) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand from the offering of the Securities or
(ii) if the allocation provided by clause 6(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 6(d)(i) above but also the
relative fault of the Company and the Guarantor on the one hand and of the
Initial Purchasers on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Initial Purchasers on the
other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from
the offering of such Securities (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by
the Initial Purchasers, in each case as set forth in the table on the cover
of the Offering Memorandum Supplement, bear to the aggregate Public
Offering Price of the Securities. The relative fault of the Company and the
Guarantor on the one hand and the Initial Purchasers on the other hand
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Guarantor or by the Initial Purchasers and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Initial Purchasers'
respective obligations to contribute pursuant to this Section 6 are several
in proportion to the respective principal amounts of Securities they have
purchased hereunder, and not joint.
(e) The Company, the Guarantor and the Initial Purchasers agree that
it would not be just or equitable if contribution pursuant to this Section
6 were determined by PRO RATA allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 6(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred
to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or
17
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The remedies provided for in this Section 6 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 6 and the representations, warranties and other statements of the
Company and the Guarantor contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any Initial
Purchaser or any person controlling any Initial Purchaser or the Company or
the Guarantor, or their respective officers or directors or any person
controlling the Company or the Guarantor, respectively, and (iii)
acceptance of and payment for any of the Securities.
7. TERMINATION. This Agreement shall be subject to termination by notice
given by the Representatives to the Company, if (a) after the execution and
delivery of the Purchase Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company or the Guarantor shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representatives,
is material and adverse and (b) in the case of any of the events specified in
clauses 7(a)(i) through 7(a)(iv), such event, individually or together with any
other such event, makes it, in the judgment of the Representatives,
impracticable to market the Securities on the terms and in the manner
contemplated in the Offering Memorandum.
8. DEFAULTING INITIAL PURCHASERS. If, on the Closing Date, any one or more
of the Initial Purchasers shall fail or refuse to purchase Securities that it
has or they have agreed to purchase hereunder on such date, and the aggregate
amount of Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase is not more than one-tenth
of the aggregate amount of the Securities to be purchased on such date, the
other Initial Purchasers shall be obligated severally in the proportions that
the amount of Securities set forth opposite their respective names in the
Purchase Agreement bears to the aggregate amount of Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as the Representatives may specify, to purchase the Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
or refused to purchase on such date; PROVIDED that in no event shall the amount
of Securities that any Initial Purchaser has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 8 by an amount in excess of
one-ninth of such amount of Securities without the written consent of such
Initial Purchaser. If, on the Closing Date, any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase Securities and the aggregate amount
of Securities with respect to which such default occurs is more than one-tenth
of the aggregate amount of Securities to be purchased on
18
such date, and arrangements satisfactory to the Representatives and the Company
for the purchase of such Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser or the Company. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Offering Memorandum or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.
If this Agreement shall be terminated by the Initial Purchasers, or any of
them, because of any failure or refusal on the part of the Company or the
Guarantor to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or the Guarantor shall be unable to
perform its obligations under this Agreement, the Company and the Guarantor will
reimburse the Initial Purchasers or such Initial Purchasers as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Initial Purchasers in connection with this Agreement
or the offering contemplated hereunder.
9. DEFINITIONS. The terms which follow, when used in this Agreement, shall
have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of Regulation
D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange Commission.
"Controlled Affiliate" means any person or entity that is directly, or
indirectly through one or more intermediaries, controlled by the Company, the
Guarantor, or both.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer" shall have the meaning ascribed thereto by the
Registration Rights Agreement.
"Execution Time" shall mean, the date and time that this Agreement is
executed and delivered by the parties hereto.
"Gaming Laws" means any foreign, federal, state or local law and the rules
and regulations thereunder and any similar laws and regulations governing any
aspect of legalized gambling in any foreign, federal, state or local
jurisdiction in which the Company or the Guarantor or any of their respective
subsidiaries conducts business.
19
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Shelf Registration Statement" shall have the meaning ascribed thereto by
the Registration Rights Agreement.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
10. COUNTERPARTS. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
12. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
20
EXHIBIT A
NON-DISTRIBUTION LETTER FOR INSTITUTIONAL ACCREDITED INVESTORS
_____________ ___, 2001
Xxxxxxx Xxxxx Xxxxxx Inc.
Bank of America Securities LLC
Credit Suisse First Boston Corporation
Deutsche Banc Xxxx. Xxxxx Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
BNY Capital Markets, Inc.
CIBC World Markets Corp.
Commerzbank Capital Markets Corp.
Credit Lyonnais Securities (USA) Inc
Xxxxxxxxxxx Xxxxxxx Securities, Inc.
Fleet Securities, Inc.
XX Xxxxx Securities Corporation
Xxxxx Fargo Brokerage Services, LLC
As Representatives of the
Initial Purchasers
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx'x Entertainment, Inc.
Xxxxxx'x Operating Company, Inc.
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Re: Purchase of $ principal amount
of 8.00% Senior Notes Due 2011 (the "Securities")
Of Xxxxxx'x Entertainment, Inc. (The "Company")(1)
--------------------------------------------------
Ladies and Gentlemen:
-------------------
(1) Each U.S. purchaser, or account for which each U.S. purchaser is acting,
should purchase at least $250,000 of Securities.
A-1
In connection with our purchase of the Securities we confirm that:
1. We understand that the Securities are not being and will not be
registered under the Securities Act of 1933, as amended (the "Act"), and are
being sold to us in a transaction that is exempt from the registration
requirements of the Act.
2. We acknowledge that (a) neither the Company, nor the Guarantor, nor the
Initial Purchasers (as defined in the Offering Memorandum dated January 24, 2001
relating to the Securities (the "Offering Memorandum")) nor any person acting on
behalf of the Company, the Guarantor or the Initial Purchasers has made any
representation to us with respect to the Company, the Guarantor or the offer or
sale of any Securities; and (b) any information we desire concerning the
Company, the Guarantor and the Securities or any other matter relevant to our
decision to purchase the Securities (including a copy of the Offering
Memorandum) is or has been made available to us.
3. We have such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in the
Securities, and we are (or any account for which we are purchasing under
paragraph 4 below is) an institutional "accredited investor" (within the meaning
of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Act) able to bear
the economic risk of investment in the Securities.
4. We are acquiring the Securities for our own account (or for accounts as
to which we exercise sole investment discretion and have authority to make, and
do make, the statements contained in this letter) and not with a view to any
distribution of the Securities, subject, nevertheless, to the understanding that
the disposition of our property will at all times be and remain within our
control.
5. We understand that (a) the Securities will be in registered form only
and that any certificates delivered to us in respect of the Securities will bear
a legend substantially to the following effect:
"These Securities have not been registered under the Securities Act of
1933. Further offers or sales of these Securities are subject to
certain restrictions, as set forth in the Offering Memorandum dated
January 24, 2001 relating to these Securities."
and (b) the Company and the Guarantor have agreed to reissue such
certificates without the foregoing legend only in the event of a disposition of
the Securities in accordance with the provisions of paragraph 6 below (provided,
in the case of a disposition of the Securities in accordance with paragraph 6(f)
below, that the legal opinion referred to in such paragraph so permits), or at
our request at such time as we would be permitted to dispose of them in
accordance with paragraph 6(a) below.
6. We agree that in the event that at some future time we wish to dispose
of any of the Securities, we will not do so unless such disposition is made in
accordance with any applicable securities laws of any state of the United States
and:
(a) the Securities are sold in compliance with Rule 144(k) under the
Act; or
A-2
(b) the Securities are sold in compliance with Rule 144A under the
Act; or
(c) the Securities are sold in compliance with Rule 904 of Regulation
S under the Act; or
(d) the Securities are sold pursuant to an effective registration
statement under the Act; or
(e) the Securities are sold to the Company; or
(f) the Securities are disposed of in any other transaction that does
not require registration under the Act, and we theretofore have furnished
to the Company or its designee an opinion of counsel experienced in
securities law matters to such effect or such other documentation as the
Company or its designee may reasonably request.
Very truly yours,
By ______________________
(Authorized Officer)
A-3
EXHIBIT B
SELLING RESTRICTIONS FOR OFFERS AND
SALES OUTSIDE THE UNITED STATES
(1)(a) The Securities have not been and will not be registered under the
Act and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Initial Purchaser represents and agrees that, except as otherwise
permitted by Section 3(a)(i) or (ii) of the Agreement to which this is an
exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) or (ii) of the Agreement to which this is
an exhibit), it shall have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Securities from
it during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Act") and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons (i)
as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and January 29, 2001,
except in either case in accordance with Regulation S or Rule 144A under
the Act. Terms used above have the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with
its Affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it has not
offered or sold and, prior to the date six months after the date of issuance of
the Securities, will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or as agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986 of the United Kingdom with respect to
B-1
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Securities to a person who is of a kind
described in Article 9(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom the document may
otherwise lawfully be issued or passed on.
B-2
