Exhibit 10.1
THE MAJESTIC STAR CASINO, LLC
THE MAJESTIC STAR CASINO CAPITAL CORP.
$40,000,000 9 1/2% SENIOR SECURED NOTES DUE 2010
PURCHASE AGREEMENT
December 16, 2005
XXXXXXXXX & COMPANY, INC.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Each of The Majestic Star Casino, LLC, an Indiana limited liability company
(the "Company"), The Majestic Star Casino Capital Corp., an Indiana corporation
("Capital" and, together with the Company, the "Issuers"), and each Subsidiary
Guarantor (as defined herein) hereby agrees with you as follows:
1. Issuance of Securities. The Issuers propose to issue and sell to
Xxxxxxxxx & Company, Inc. (the "Initial Purchaser"), and the Initial Purchaser
proposes to purchase, $40,000,000 aggregate principal amount of the Issuers'
9 1/2% Senior Secured Notes due 2010 (the "Series A Notes"). The Series A Notes
will be issued pursuant to an indenture dated as of October 7, 2003 (as amended
by a supplemental indenture (the "First Supplemental Indenture") to be executed
as of the Closing Date (as defined herein) (the "Existing Indenture") and, as
further amended by a second supplemental indenture to be executed as of the
Closing Date (the "Second Supplemental Indenture"), the Existing Indenture, as
further amended by the Second Supplemental Indenture, the "Indenture"), among
the Issuers, the Subsidiary Guarantors (as defined herein), and The Bank of New
York Trust Company, N.A. as successor to The Bank of New York, as trustee (the
"Trustee"). The Series A Notes and the Series B Notes (as defined herein), are
collectively referred to herein as the "Notes". Capitalized terms used, but not
defined herein, shall have the meanings set forth in the Indenture.
The Series A Notes will be offered and sold to the Initial Purchaser
pursuant to an exemption from the registration requirements under the Securities
Act of 1933, as amended (the "Act"). Upon original issuance thereof, and until
such time as the same is no longer required under the applicable requirements of
the Act, the Notes shall bear the legends set forth in the final offering
circular, dated the date hereof (the "Offering Circular"). The Company has
prepared a preliminary offering circular, dated December 7, 2005 (the
"Preliminary Offering Circular"), and the Offering Circular relating to the
offer and sale of the Series A Notes (the "Offering").
2. Agreements to Sell and Purchase. On the basis of the representations,
warranties, agreements and covenants herein and subject to the terms and
conditions herein set forth, the Issuers agree to issue and sell to the Initial
Purchaser, and the Initial Purchaser agrees to purchase from the Issuers,
$40,000,000 aggregate principal amount of the Series A Notes for a
purchase price of $39,596,666.67 which is equal to the excess of (x) the sum of
(1) 100 % of the aggregate principal amount thereof and (2) interest accrued
thereon from October 15, 2005 to the Closing Date, over (y) the aggregate amount
of fees and commissions to the Initial Purchaser.
3. Terms of Offering. The Initial Purchaser has advised the Company, and
the Company understands, that the Initial Purchaser will make offers to sell
(the "Exempt Resales") some or all of the Series A Notes purchased by the
Initial Purchaser hereunder on the terms set forth in the Offering Circular, as
amended or supplemented, to persons (the "Subsequent Purchasers") whom the
Initial Purchaser (i) reasonably believes to be "qualified institutional buyers"
as defined in Rule 144A under the Act, as such Rule may be amended from time to
time ("QIBs"), (ii) reasonably believes (based upon written representations made
by such persons to the Initial Purchaser) to be institutional "accredited
investors" ("Accredited Investors") as defined in Rule 501(a)(1), (2), (3) or
(7) under the Act or (iii) reasonably believes to be non-U.S. persons in
reliance upon Regulation S under the Act.
Holders of the Series A Notes (including Subsequent Purchasers) will have
the registration rights set forth in the registration rights agreement
applicable to the Series A Notes (the "Registration Rights Agreement"), to be
executed on and dated as of the Closing Date. Pursuant to the Registration
Rights Agreement, the Issuers and the Subsidiary Guarantors will agree, among
other things, to file with the Securities and Exchange Commission (the
"Commission") (a) a registration statement under the Act (the "Exchange Offer
Registration Statement") relating to 9 1/2% Senior Secured Notes of the Issuers
due 2010 (the "Series B Notes") which shall be identical in all material
respects to the Series A Notes (except that the Series B Notes shall have been
registered pursuant to the Exchange Offer Registration Statement and will not be
subject to restrictions on transfer or contain additional interest provisions)
to be offered in exchange for the Series A Notes (such offer to exchange being
referred to as the "Registered Exchange Offer"), and/or (b) under certain
circumstances, a shelf registration statement pursuant to Rule 415 under the Act
(the "Shelf Registration Statement") relating to the resale by certain holders
of the Series A Notes.
Concurrently with the sale of the Series A Notes on the Closing Date, the
Company and Majestic Star Casino Capital Corp. II ("Capital II"), a wholly-owned
subsidiary of the Company, will issue 9 3/4% senior unsecured notes due 2011
(the "Senior Notes") and Majestic Holdco, LLC ("Holdco"), the parent of the
Company and Majestic Star Holdco, Inc., a wholly-owned subsidiary of Holdco,
will issue 12 1/2% senior discount notes due 2011 (the "Discount Notes"). As
described in the Offering Circular, the Company intends to use a portion of the
proceeds from the sale of the Notes, the Senior Notes and the Discount Notes to,
among other things, acquire (the "Acquisition") all of the issued and
outstanding capital stock of Xxxxx Indiana, Inc., a Delaware corporation (and,
together with Xxxxxxxxxx Harbor Riverboats, L.L.C. and Xxxxxxxxxx Harbor Parking
Associates, LLC, "Xxxxx") pursuant to the stock purchase agreement dated as of
November 3, 2005, by and between the Company and Xxxxx Entertainment Resort
Holdings, L.P. (the "Stock Purchase Agreement"). On the Closing Date, the
Company will also, (i) amend its credit facility dated as of October 7, 2003, by
and between the Company and Xxxxx Fargo Foothill, Inc., in the manner described
in the Offering Circular (as amended, the "Amended Credit Facility") and (ii)
amend its intercreditor agreement dated as of October 7, 2003, by and among the
Trustee and Xxxxx Fargo Foothill, Inc., in the manner described in the Offering
Circular (as amended, the "Amended Intercreditor Agreement").
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Pursuant to the Existing Indenture, all subsidiaries of the Company listed
on Schedule A hereto, other than Xxxxx and Capital II (and pursuant to the
Second Supplemental Indenture, Xxxxx and Capital II), shall fully and
unconditionally guarantee, on a senior secured basis, to each holder of the
Notes and the Trustee, the payment and performance of the Company's obligations
under the Indenture and the Notes (each such subsidiary (including, upon the
consummation of the Acquisition, Xxxxx)) being referred to herein as a
"Subsidiary Guarantor" and such guarantee being referred to herein as a
"Guarantee").
Pursuant to the terms of the Security Documents (used herein as defined in
the Indenture and including the Pledge Joinder (as defined herein)), all of the
obligations under the Notes, the Indenture and the Registration Rights Agreement
will, in the case of such obligations of the Issuers and Subsidiary Guarantors
(other than Xxxxx), continue to, and, in the case of Xxxxx, will, be secured by
a lien and security interest in, or pledges of (the "Security Interests"),
substantially all of the assets of, all of the shares of capital stock of, and
all of the membership interests in the Issuers and the Subsidiary Guarantors
(the "Collateral"), to be granted to the Trustee, as secured party (in such
capacity, the "Secured Party") for the benefit of the holders of the Notes
(subordinate to the Lien on the Collateral securing the Amended Credit Facility
pursuant to the Amended Intercreditor Agreement), in the manner set forth in the
Offering Circular. In addition, certain of the Security Documents prohibit
transfer or mortgage of certain leasehold interests of the Issuers and
Subsidiary Guarantors. The Issuers, the Subsidiary Guarantors and Majestic
Holdco, LLC ("Parent"), collectively, are sometimes referred to herein as the
"Majestic Entities".
Effective upon consummation of the Acquisition, the Company will (a) cause
Xxxxx to become a Subsidiary Guarantor and execute (i) a counterpart hereto,
(ii) a Pledge Joinder to the Security Agreement (the "Pledge Joinder"), pursuant
to which, among other things, Xxxxx will become a party to the Security
Agreement), (iii) the Second Supplemental Indenture, (iv) the Guarantees, and
(v) the Registration Rights Agreement and (b) execute a Pledge Supplement to the
Security Agreement to pledge all of equity interests owned by it in Xxxxx
Indiana, Inc., Xxxxxxxxxx Harbor Riverboats, L.L.C. and Xxxxxxxxxx Harbor
Parking Associates, LLC (the "Pledge Supplement"). On the Closing Date, the
Company will cause Capital II to become a Subsidiary Guarantor and execute (i)
the Pledge Joinder, (ii) the Second Supplemental Indenture, (iii) the Guarantees
and (iv) the Registration Rights Agreement.
This Agreement, the Indenture, the Registration Rights Agreement, the
Notes, the Guarantees, the Amended Credit Facility, the Pledge Joinder, the
Pledge Supplement, the Security Documents and the Amended Intercreditor
Agreement, together with all other documents or instruments executed by the
Majestic Entities in connection with the transactions contemplated thereby,
collectively are referred to herein as the "Documents." The transactions
contemplated by the Documents are referred to herein as the "Transactions."
4. Delivery and Payment. Delivery to the Initial Purchaser of and payment
for the Series A Notes shall be made at a Closing (the "Closing") to be held at
9:00 a.m., New York City time, on December 21, 2005, (such time and date, the
"Closing Date") at the offices of Mayer, Brown, Xxxx & Maw LLP, 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000. The Closing Date and the location of delivery of and
the form of payment for the Series A Notes may be varied by agreement between
the Initial Purchaser and the Issuers.
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The Issuers shall deliver to the Initial Purchaser one or more certificates
representing the Series A Notes in definitive form, registered in such names and
denominations as the Initial Purchaser may request, against payment by the
Initial Purchaser of the purchase price therefor by immediately available
Federal funds bank wire transfer to such bank account or accounts as the Company
shall designate to the Initial Purchaser at least two Business Days prior to the
Closing. The certificates representing the Series A Notes in definitive form
shall be made available to the Initial Purchaser for inspection at the New York
offices of Mayer, Brown, Xxxx & Maw LLP (or such other place as shall be
reasonably acceptable to the Initial Purchaser) not later than 10:00 a.m.,
Eastern Standard Time, one Business Day immediately preceding the Closing Date.
Series A Notes to be represented by one or more definitive global securities in
book-entry form will be deposited on the Closing Date, by or on behalf of the
Company, with The Depository Trust Company ("DTC") or its designated custodian,
and registered in the name of Cede & Co.
5. Agreements of the Issuers and the Subsidiary Guarantors. Each of the
Issuers and the Subsidiary Guarantors, jointly and severally, hereby agrees:
(a) Certain Events. To (i) advise the Initial Purchaser promptly after
obtaining knowledge (and, if requested by the Initial Purchaser, confirm such
advice in writing) of (A) the issuance by any state securities commission of any
stop order suspending the qualification or exemption from qualification of any
of the Series A Notes for offer or sale in any jurisdiction, or the initiation
of any proceeding for such purpose by any state securities commission or other
regulatory authority, and (B) the happening of any event that makes any
statement of a material fact made in the Offering Circular untrue or that
requires the making of any additions to or changes in the Offering Circular in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, (ii) use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption
from qualification of any of the Notes under any state securities or Blue Sky
laws, and (iii) if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of any of the Series A Notes under any such laws,
use its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) Offering Circular. At any time prior to the completion of the sale of
all of the Series A Notes by the Initial Purchaser pursuant to Exempt Resales,
to (i) furnish the Initial Purchaser and those persons identified by the Initial
Purchaser to the Issuers, without charge, as many copies of the Preliminary
Offering Circular and the Offering Circular, and any amendments or supplements
thereto, as the Initial Purchaser may reasonably request, and (ii) promptly
prepare, upon the Initial Purchaser's request, any amendment or supplement to
the Offering Circular that the Initial Purchaser xxxxx xxx be necessary in
connection with Exempt Resales (and the Issuers and Subsidiary Guarantors hereby
consent, subject to the Initial Purchaser's compliance with its representations
and warranties set forth in Section 7, to the use of the Preliminary Offering
Circular and the Offering Circular, and any amendments and supplements thereto,
by the Initial Purchaser in connection with Exempt Resales).
(c) Notice of Amendment or Supplement. Not to amend or supplement the
Offering Circular prior to the Closing Date, or at any time prior to the
completion of the resale of all of the Series A Notes by the Initial Purchaser
pursuant to Exempt Resales, unless the Initial Purchaser
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shall previously have been advised thereof and shall not have objected thereto
within three Business Days after being furnished a copy thereof.
(d) Preparation of Amendments and Supplements. At any time prior to the
completion of the resale of all of the Series A Notes by the Initial Purchaser
pursuant to Exempt Resales, (i) if any event shall occur as a result of which,
in the reasonable judgment of the Issuers or the Initial Purchaser or their
respective counsel, it becomes necessary or advisable to amend or supplement the
Offering Circular in order to make the statements therein, in the light of the
circumstances when such Offering Circular is delivered to a purchaser pursuant
to an Exempt Resale, not misleading, or if it is necessary to amend or
supplement the Offering Circular to comply with Applicable Law (as defined
herein), forthwith to prepare an appropriate amendment or supplement to the
Offering Circular (in form and substance satisfactory to the Initial Purchaser)
so that as so amended or supplemented, (A) the Offering Circular will not
include an untrue statement of material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances when it is so delivered, not misleading, and (B) the Offering
Circular will comply with Applicable Law, and (ii) if it becomes necessary or
advisable to amend or supplement the Offering Circular so that the Offering
Circular will contain all of the information specified in, and meet the
requirements of, Rule 144A(d)(4) under the Act, forthwith to prepare an
appropriate amendment or supplement to the Offering Circular (in form and
substance satisfactory to the Initial Purchaser) so that the Offering Circular,
as so amended or supplemented, will contain the information specified in, and
meet the requirements of, such Rule.
(e) Qualification of Securities. Prior to the sale of all of the Series A
Notes by the Initial Purchaser pursuant to Exempt Resales, to cooperate with the
Initial Purchaser and the Initial Purchaser's counsel in connection with the
qualification of the Series A Notes under the securities or Blue Sky laws of
such jurisdictions as the Initial Purchaser may request and continue such
qualification in effect so long as reasonably required for Exempt Resales, and
to file such consents to service of process or other documents as may be
necessary in order to effect such qualification; provided, that none of the
Issuers and the Subsidiary Guarantors shall be required in connection therewith
to file any general consent to service of process or to register or qualify as a
foreign corporation in any jurisdiction where it is not now so qualified or to
subject itself to general taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(f) Costs and Expenses. Whether or not any of the Offering or the
Transactions are consummated or this Agreement is terminated, to pay (i) all
costs, expenses, fees and taxes incident to and in connection with the
performance of the obligations of the Majestic Entities under this Agreement,
including: (A) the preparation, printing and distribution of the Preliminary
Offering Circular and the Offering Circular and all amendments and supplements
thereto (including, without limitation, financial statements and exhibits), and
all preliminary and final Blue Sky memoranda and all other agreements,
memoranda, correspondence and other documents prepared and delivered in
connection herewith (including the furnishing of copies of the foregoing to the
Initial Purchaser and such other persons as the Initial Purchaser may
designate), (B) the processing and distribution (including, without limitation,
word processing and duplication costs) and delivery of, and performance under,
each of the Documents and any other agreements or documents in connection with
the Transactions, (C) the preparation,
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issuance and delivery of the Notes, including the fees and expenses of the
Trustee and the Secured Party (including reasonable fees and expenses of their
respective counsel) and all costs and expenses related to the delivery of the
Series A Notes to the Initial Purchaser and pursuant to Exempt Resales,
including any transfer or other taxes payable thereon and (D) the qualification
of the Notes for offer and sale under the securities or Blue Sky laws of the
several states (including, without limitation, filing fees and reasonable fees
and disbursements of the Initial Purchaser's counsel relating to such
registration or qualification and the preparation of memoranda related thereto),
(ii) all fees and expenses of the counsel and accountants of the Majestic
Entities (except for any fees and expenses of Xxxxx prior to the Closing Date),
(iii) all expenses and listing fees in connection with the application for
quotation of the Series A Notes on the Private Offerings, Resales and Trading
Automated Linkages ("PORTAL") market, (iv) all fees and expenses (including fees
and expenses of counsel) of the Issuers in connection with approval of the Notes
by DTC for "book-entry" transfer, (v) all fees charged by rating agencies in
connection with the rating of the Notes, (vi) all fees and expenses (including
reasonable fees and expenses of counsel) of the Trustee and all collateral
agents, (vii) all costs and expenses of the Registered Exchange Offer, the
Exchange Offer Registration Statement and any Shelf Registration Statement, as
set forth in the Registration Rights Agreement, (viii) all fees and expenses
(including reasonable fees and expenses of counsel, subject to any limitations
imposed by previous agreements between the parties) incurred by the Initial
Purchaser in connection with the preparation, negotiation and execution of the
Documents and the consummation of the Transactions, (ix) all costs and expenses
in connection with the creation and perfection of the Security Interests
evidenced by the Security Documents (including without limitation, filing and
recording fees, search fees, taxes and costs of title policies) and (x) all
other costs and expenses incident and necessary to the performance of the
obligations of the Issuers and the Subsidiary Guarantors under this Agreement
for which provision is not otherwise made in this section.
(g) Use of Proceeds. To use their respective reasonable best efforts to use
the proceeds from the sale of the Series A Notes in the manner described in the
Offering Circular under the caption "Use of Proceeds."
(h) Waiver of Certain Laws. To the extent it may lawfully do so, not to
insist upon, plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension usury or other law, wherever enacted, now or
at any time hereafter in force, that would prohibit or forgive the payment of
all or any portion of the principal of or interest on the Notes, or that may
affect the covenants or the performance of the Indenture or any of the Security
Documents (and, to the extent it may lawfully do so, each Issuer hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power granted to the Trustee in the Indenture or to the Secured Party in the
Security Documents but shall suffer and permit the execution of every such power
as though no such law had been enacted).
(i) Security Interests. Subject to the terms of the Amended Intercreditor
Agreement, to do and perform all things required to be done and performed under
the Security Documents prior to, on and after the Closing Date, including,
without limitation, all things necessary or advisable to obtain on or prior to
the Closing Date (i) all Permits (as defined below), other than any gaming
approvals required to be obtained by a purchaser in a foreclosure sale,
necessary for the granting, perfection and enforcement of the Security Interests
and for the foreclosure by the
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Secured Party thereon following an Event of Default (as defined in the
Indenture), (ii) all termination statements, mortgage releases and other
documents necessary to terminate any Liens (as defined in the Indenture) on the
Collateral other than Permitted Liens (as defined in the Indenture), and (iii) a
valid and perfected, first priority Security Interest with respect to each of
the assets, shares of capital stock and membership interests which are to
constitute the Collateral.
(j) Integration. Not to, and to ensure that no affiliate (as defined in
Rule 501(b) under the Act) of any of the Issuers or Subsidiary Guarantors will,
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any "security" (as defined in the Act) that would be integrated with the sale
of the Series A Notes in a manner that would require the registration under the
Act of the sale to the Initial Purchaser or of offers or sales of Series A Notes
pursuant to Exempt Resales.
(k) Rule 144A Information. For so long as any of the Series A Notes remain
outstanding, during any period in which either of the Issuers is not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available, upon request, to any holder of the Notes in
connection with any sale thereof, the information required by Rule 144A(d)(4)
under the Act.
(l) DTC. To obtain the approval of DTC for "book entry" transfer of the
Notes, and to comply with the representation letter of the Issuers and the
Subsidiary Guarantors to DTC relating to the approval of the Notes by DTC for
"book entry" transfer.
(m) PORTAL. To use its best efforts to effect the inclusion of the Series A
Notes in PORTAL and to use its best efforts to maintain the listing of the
Series A Notes on PORTAL for so long as the Series A Notes are outstanding.
(n) Reporting Requirements. For so long as any of the Notes are
outstanding, (i) to furnish to the Trustee and deliver or cause to be delivered
to the holders of the Notes and the Initial Purchaser, within 15 days after
either Issuer is or would have been required to file such with the Commission,
(A) all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Issuers
were required to file such Forms, including for each a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report thereon by the Issuers' independent
certified public accountants and (B) all information that would be required to
be contained in a filing with the Commission on Form 8-K if the Issuers were
required to file such reports, provided, however, that in no case shall the
Company be required to furnish materials pursuant to this paragraph which are
filed and publicly accessible via XXXXX and (ii) from and after the time the
Exchange Offer Registration Statement or the Shelf Registration Statement (or
other registration statement under the Act with respect to the Notes) is filed
with the Commission, to file such information with the Commission so long as the
Commission will accept such filings.
(o) No Selling Efforts or General Solicitation. Except in connection with
the Registered Exchange Offer or the filing of the Shelf Registration Statement,
not to, and not to authorize or permit any person acting on its behalf to, (i)
distribute any offering material in connection with the offer and sale of the
Series A Notes other than the Preliminary Offering
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Circular and the Offering Circular and any amendments and supplements to the
Offering Circular prepared in compliance with this Agreement, or (ii) solicit
any offer to buy or offer to sell the Series A Notes by means of any form of
general solicitation or general advertising (including, without limitation, as
such terms are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act.
(p) No Similar Offerings. Except as described in the Offering Circular,
during the period beginning on the date hereof and continuing to and including
the Closing Date, not to, directly or indirectly, without the prior consent of
the Initial Purchaser, offer, sell, contract to sell, grant any option to
purchase or otherwise dispose of (or announce any offer or sale of, contract to
sell, grant of any option to purchase or other disposition of) any debt
securities of any of the Issuers or Subsidiary Guarantors substantially similar
to the Notes and the Guarantees; provided, that the foregoing will not apply to
(i) the Notes and the Guarantees, (ii) borrowings from financial institutions,
(iii) the Senior Notes and any guarantees thereunder and (iv) the Discount
Notes, in the case of each of clauses (i) through (iv) of this Section 5(o),
only to the extent not prohibited by the Indenture.
(q) Performance of Agreements. To comply in all material respects with all
of its agreements set forth in the Documents, and to use its reasonable best
efforts to do and perform all things required or necessary to be done and
performed under this Agreement by it prior to the Closing Date and to satisfy
all conditions precedent to the delivery of the Series A Notes and the
Guarantees and the granting, perfection and enforcement of the Security
Interests.
6. Representations and Warranties of the Issuers and the Subsidiary
Guarantors. As of the date hereof, each of the Issuers and the Subsidiary
Guarantors, jointly and severally, represents and warrants to the Initial
Purchaser that:
(a) Offering Circular. The Preliminary Offering Circular as of its date did
not, and the Offering Circular, as of its date did not, and as of the Closing
Date will not, and each supplement or amendment thereto as of its date will not,
contain any untrue statement of a material fact or omit to state any material
fact (except, in the case of the Preliminary Offering Circular, for pricing
terms and other financial terms intentionally left blank) necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing representation and warranty made in
this Section 6(a) shall not apply to any statements or omissions made in
reliance on and in conformity with information relating to the Initial Purchaser
furnished in writing to the Issuers by the Initial Purchaser specifically for
inclusion in the Preliminary Offering Circular or the Offering Circular. The
parties hereto acknowledge that for purposes of this Agreement (including this
Section 6(a) and Section 8) the only information furnished in writing to the
Issuers by the Initial Purchaser specifically for inclusion in the Preliminary
Offering Circular or the Offering Circular is the information set forth (i) on
the cover page of the Offering Circular with respect to the price of the Notes,
Senior Notes and Discount Notes (ii) in the third paragraph on page 185 of the
Offering Circular concerning offering the Notes, Senior Notes and Discount Notes
for resale by the Initial Purchaser, (iii) in the fifth paragraph on page 185 of
the Offering Circular concerning market-making by the Initial Purchaser, (iv) in
the sixth paragraph on page 185 of the Offering Circular concerning
stabilization by the Initial Purchaser and (v) in the first full paragraph on
page 186 of the Offering Circular concerning the affiliation of the Initial
Purchaser and their respective
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affiliates with the Issuers and their affiliates (such information described in
the immediately preceding clauses (i) through (v) of this Section 6(a), the
"Furnished Information"). Each of the Preliminary Offering Circular and the
Offering Circular, as of their respective dates contained, and the Offering
Circular, as of the Closing Date and as amended or supplemented, will contain,
all of the information required by Rule 144A(d)(4) under the Act. Each of the
Documents, as executed and delivered, and each of the Transactions, conforms to
the description thereof in the Offering Circular.
(b) Due Organization; Good Standing. Each of the Majestic Entities (i) has
been duly organized, is validly existing and is in good standing under the laws
of its jurisdiction of organization, (ii) has all requisite power and authority
to conduct and carry on its business and to own, lease, use and operate its
properties and assets as described in the Offering Circular, and (iii) is duly
qualified or licensed to do business and is in good standing as a foreign
limited liability company or corporation, as the case may be, authorized to do
business in each jurisdiction in which the nature of its business or the
ownership, leasing, use or operation of its properties and assets requires such
qualification or licensing, except where failure to be so qualified or licensed
and in good standing would not have a material adverse effect on (A) the
properties, business, operations, earnings, assets, liabilities or condition
(financial or otherwise) of the Issuers and the Subsidiary Guarantors, taken as
a whole, (B) the ability of the Majestic Entities to perform their obligations
under any of the Documents, (C) the enforceability of any of the Security
Documents or the attachment, perfection or priority of any of the Security
Interests intended to be created thereby in any portion of the Collateral or (D)
the validity of any of the Documents or the consummation of any of the
Transactions (each, a "Material Adverse Effect").
(c) Subsidiaries. Immediately following the Closing, (i) Capital will have
no subsidiaries, (ii) the only subsidiaries of the Company will be Capital and
the Subsidiary Guarantors (collectively, the "Subsidiaries" and each, a
"Subsidiary"), (iii) the Company will directly or indirectly own 100% of the
outstanding shares of capital stock, membership interests or other equity
interests in Capital and each Subsidiary, in each case, free and clear of all
Liens, except for Permitted Liens and (iv) Parent will directly own 100% of the
outstanding membership interests in the Company free and clear of all Liens,
except for Permitted Liens. Except as disclosed in the Offering Circular, there
are no outstanding (i) securities convertible into or exchangeable for any
capital stock of, or any membership interests in, as the case may be, any of the
Issuers or Subsidiary Guarantors, (ii) options, warrants or other rights to
purchase or subscribe for any capital stock of or any membership interests in,
or any securities convertible into or exchangeable for any capital stock of or
any membership interests in, as the case may be, any of the Issuers or
Subsidiary Guarantors or (iii) contracts, commitments, agreements,
understandings, arrangements, undertakings, rights, calls or claims of any kind
relating to the issuance of any capital stock of, or any membership interests
in, as the case may be, any of the Issuers or Subsidiary Guarantors, any such
convertible or exchangeable securities or any such options, warrants or rights.
Except as set forth above, immediately following the Closing, none of the
Issuers or Subsidiary Guarantors will directly or indirectly own any capital
stock of or other equity interest in any person.
(d) Capitalization. All of the outstanding membership interests, capital
stock or other equity interests in the Company, Capital and each of the
Subsidiaries are validly issued and were not issued in violation of, and are not
subject to, any preemptive or similar rights. The table
9
under the caption "Capitalization" in the Offering Circular (including the
footnotes thereto) sets forth, as of its date, the pro forma capitalization of
the Issuers and the Subsidiaries, on a consolidated basis, after giving effect
to the Transactions and the Acquisition. Immediately following the Closing,
except as set forth in such table, neither of the Issuers nor any of the
Subsidiaries will have any liabilities, absolute, accrued, contingent or
otherwise other than (i) liabilities that are reflected in the Financial
Statements (as defined herein), (ii) liabilities incurred subsequent to
September 30, 2005, in the ordinary course of business, consistent with past
practice, that would not, singly or in the aggregate, have a Material Adverse
Effect, or (iii) loans made under the Amended Credit Facility.
(e) No Other Registration Rights. Except for this Agreement, the
Registration Rights Agreement, the registration rights agreement relating to the
Senior Notes, the purchase agreement relating to the Senior Notes and the Stock
Purchase Agreement, there are no contracts, commitments, agreements,
arrangements, understandings or undertakings of any kind to which any of the
Issuers or Subsidiary Guarantors is a party, or by which any of them is bound,
granting to any person the right (i) to require either of the Issuers or any
Subsidiary Guarantor to file a registration statement under the Act with respect
to any securities of either of the Issuers or any Subsidiary Guarantor or
requiring either of the Issuers or any Subsidiary Guarantor to include such
securities with the Notes registered pursuant to any registration statement, or
(ii) to purchase or offer to purchase any securities of any of the Issuers or
Subsidiary Guarantors.
(f) Power and Authority. Each of the Majestic Entities has all requisite
power and authority to execute and deliver, and to perform its obligations
under, the Documents to which it is a party and to consummate the transactions
contemplated thereby.
(g) Authorization of this Agreement. This Agreement and the Transactions
have been duly authorized by each of the Issuers and the Subsidiary Guarantors
(other than Xxxxx), and this Agreement has been validly executed and delivered
by, and is the legal, valid and binding obligation of, each of the Issuers and
the Subsidiary Guarantors (other than Xxxxx), enforceable against each of the
Issuers and the Subsidiary Guarantors (other than Xxxxx) in accordance with its
terms, and, effective upon consummation of the Acquisition, will be duly
authorized, validly executed and delivered by, and will become the legal, valid
and binding obligation of Xxxxx enforceable against Xxxxx in accordance with its
terms, except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
(ii) any rights of acceleration and the availability of equitable remedies may
be subject to general principles of equity (whether considered in a proceeding
in equity or at law) and (iii) the enforceability of the provisions of Section 8
providing for the indemnification of or contribution to a party with respect to
a liability may be limited if such provisions violate or are contrary to public
policy under applicable law.
(h) Authorization of Indenture. The Indenture and the transactions
contemplated thereby have been duly authorized by each of the Issuers and the
Subsidiary Guarantors (other than Xxxxx) and, effective upon the consummation of
the Acquisition, will be duly authorized by Xxxxx, and, on the Closing Date, the
Indenture will have been validly executed and delivered by, and will be the
legal, valid and binding obligation of, each of the Issuers and the Subsidiary
Guarantors, enforceable against each of the Issuers and the Subsidiary
Guarantors in accordance with its terms, except that (i) such enforceability may
be limited by applicable bankruptcy,
10
insolvency or similar laws affecting creditors' rights generally and (ii) any
rights of acceleration and the availability of equitable remedies may be subject
to general principles of equity (whether considered in a proceeding in equity or
at law). On the Closing Date, the Indenture will conform to the requirements of
the Trust Indenture Act of 1939, as amended (the "TIA"), applicable to an
indenture that is required to be qualified under the TIA.
(i) Authorization of Registration Rights Agreement. The Registration Rights
Agreement and the transactions contemplated thereby have been duly authorized by
each of the Issuers and the Subsidiary Guarantors (other than Xxxxx) and,
effective upon the consummation of the Acquisition, will be validly authorized
by Xxxxx, and, on the Closing Date, the Registration Rights Agreement will have
been validly executed and delivered by, and will be the legal, valid and binding
obligation of, each of the Issuers and the Subsidiary Guarantors, enforceable
against each of the Issuers and the Subsidiary Guarantors in accordance with its
terms, except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
(ii) any rights of acceleration and the availability of equitable remedies may
be subject to general principles of equity (whether considered in a proceeding
in equity or at law) and (iii) the enforceability of the provisions thereof
providing for the indemnification of or contribution to a party with respect to
a liability may be limited if such provisions violate or are contrary to public
policy under applicable law.
(j) Authorization of Series A Notes. The Series A Notes have been duly
authorized by each of the Issuers for issuance and sale to the Initial Purchaser
pursuant to this Agreement and, on the Closing Date, will have been validly
executed, authenticated, issued and delivered by the Issuers in accordance with
the terms of this Agreement and the Indenture. When the Series A Notes have been
issued, executed and authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the Initial Purchaser in accordance with the
terms of this Agreement, the Series A Notes will be legal, valid and binding
obligations of each of the Issuers, entitled to the benefits of the Indenture
and enforceable against each of the Issuers in accordance with their terms,
except to the extent that (i) such enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) any rights of acceleration and the availability of equitable remedies may
be subject to general principles of equity (whether considered in a proceeding
in equity or at law). The Notes rank and will rank on a parity with all senior
Indebtedness (as defined in the Indenture) of each of the Issuers that is
outstanding on the date hereof or that may be incurred hereafter and senior to
all other Indebtedness of each of the Issuers that is outstanding on the date
hereof or that may be incurred hereafter; provided, that pursuant to the Amended
Intercreditor Agreement, the Liens on the Collateral securing the Amended Credit
Facility will be senior to the Lien on the Collateral securing the Notes and the
Guarantees.
(k) Authorization of Series B Notes. The Series B Notes have been duly
authorized by each of the Issuers and, when issued in the Registered Exchange
Offer, (A) will have been validly executed, authenticated, issued and delivered
in accordance with the terms of the Indenture, the Registration Rights Agreement
and the Registered Exchange Offer and (B) will be legal, valid and binding
obligations of each of the Issuers, entitled to the benefits of the Indenture
and enforceable against each of the Issuers in accordance with their terms,
except to the extent that (i) such enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) any rights of acceleration and the availability of
11
equitable remedies may be subject to general principles of equity (whether
considered in a proceeding in equity or at law).
(l) No Violation. Parent is not in violation of its certificate of
formation or operating agreement (the "Parent Charter Documents"), the Company
is not in violation of its certificate of formation or operating agreement (the
"Company Charter Documents"), Capital is not in violation of its charter or
bylaws (the "Capital Charter Documents") and none of the Subsidiary Guarantors
is in violation of its certificate of formation or charter, as the case may be,
or operating agreement or bylaws, as the case may be, (the "Subsidiary Guarantor
Charter Documents" and, collectively with Parent Charter Documents, the Capital
Charter Documents and the Company Charter Documents, the "Charter Documents").
None of the Majestic Entities is (i) in violation of any applicable federal,
state, local or foreign statute, law or ordinance, or any judgment, decree,
rule, regulation or order, including, without limitation, the Indiana Riverboat
Gambling Act, the Mississippi Gaming Control Act and the Colorado Limited Gaming
Act of 1991, in each case including the rules and regulations promulgated
thereunder (collectively, "Applicable Law"), of any government, governmental or
regulatory agency or body (including, without limitation, the Indiana Gaming
Commission, the Mississippi Gaming Commission, the Colorado Limited Gaming
Control Commission, the Colorado Division of Gaming or other applicable gaming
authority (each, a "Gaming Authority")), court, arbitrator or self-regulatory
organization, domestic or foreign (each, a "Governmental Authority"), other than
violations that would not, singly or in the aggregate, have a Material Adverse
Effect, or (ii) in breach of or default under any bond, debenture, note or other
evidence of indebtedness, indenture, mortgage, deed of trust, lease or any other
agreement or instrument to which any such person is a party or by which any of
them or any of their respective property is bound (collectively, "Applicable
Agreements"), other than breaches or defaults that would not, singly or in the
aggregate, have a Material Adverse Effect. There exists no condition that, with
the passage of time or otherwise, would (x) constitute a violation of such
Charter Documents or Applicable Laws or (y) constitute a breach of or default
under any Applicable Agreement or (z) result in the imposition of any penalty or
the acceleration of any indebtedness, other than, in the case of the immediately
preceding clauses (y) and (z), such breaches, penalties or defaults that would
not, singly or in the aggregate, have a Material Adverse Effect. All Applicable
Agreements are in full force and effect and are legal, valid and binding
obligations, and no default has occurred or is continuing thereunder, other than
such defaults that would not, singly or in the aggregate, have a Material
Adverse Effect.
(m) No Conflict. None of the execution, delivery or performance by any of
the Majestic Entities of any of the Documents to which it is or will become a
party, nor the compliance with the terms and provisions thereof, nor the
consummation of any of the Transactions shall conflict with, violate, constitute
a breach of or a default (with the passage of time or otherwise) under, requires
the consent of any person (other than consents already obtained and in full
force and effect or that will have been obtained on or prior to the Closing
Date) under, results in the imposition of a Lien on any assets or capital stock
of, or membership interests in, either of the Issuers or any of the Subsidiaries
(other than Permitted Liens), or results in an acceleration of indebtedness
under, or pursuant to, (i) the Charter Documents, (ii) any Applicable Agreement,
or (iii) any Applicable Law, assuming, in the case of any Exempt Resales made to
Accredited Investors, the accuracy of the representations and warranties of such
Accredited Investors contained in letters of representations in the form of
Annex A attached to
12
the Offering Circular executed by such Accredited Investors. After giving effect
to the Transactions, no Default or Event of Default will exist.
(n) Permits. No permit, certificate, authorization, approval, consent,
license or order of, or filing, registration, declaration or qualification with,
any Governmental Authority or any other person (collectively, "Permits") is
required in connection with, or as a condition to, the execution, delivery or
performance of any of the Documents, the compliance with the terms and
provisions thereof or the consummation of any of the Transactions, other than
(i) such Permits as have been made or obtained on or prior to the Closing Date,
which Permits are in full force and effect on the Closing Date, (ii) such
Permits, the failure of which to make or obtain would not, singly or in the
aggregate, have a Material Adverse Effect, (iii) the filing of the Exchange
Offer Registration Statement and, if required by the Registration Rights
Agreement, the Shelf Registration Statement, with applicable Gaming Authorities,
(iv) the approval of the Indiana Gaming Commission of the Documents prior to
Closing, and (v) the filing of loan reports with the Mississippi Gaming
Commission pursuant to MGC Regulation II Licensing I, Section 11 with respect to
the offering of the Notes and the transactions related to the Amended Credit
Facility and (vi) the Colorado Division of Gaming and the Colorado Gaming
Commission post-closing regulatory approval (the Permits described in clauses
(iii), (v) and (vi) of this Section 6(n), collectively, the "Post-Closing
Permits").
(o) No Proceedings. There is no action, claim, suit, demand, hearing,
notice of violation or deficiency, or proceeding (including, without limitation,
any investigation or partial proceeding, such as a deposition), domestic or
foreign (collectively, "Proceedings"), pending or, to the knowledge of the
Issuers or the Subsidiary Guarantors, threatened (i) either with respect to any
of the Majestic Entities in connection with, or that seeks to restrain, enjoin,
prevent the consummation of, or otherwise challenge, any of the Documents or any
of the Transactions, or (ii) that could, singly or in the aggregate, have a
Material Adverse Effect. Other than rules and regulations of Gaming Authorities,
none of the Majestic Entities is subject to any judgment, order, decree, rule or
regulation of any Governmental Authority that could, singly or in the aggregate,
have a Material Adverse Effect. No injunction or order has been issued and no
Proceeding is pending or, to the knowledge of the Issuers and the Subsidiary
Guarantors, threatened that (i) asserts that the offer, sale and delivery of the
Series A Notes and the Guarantees to the Initial Purchaser pursuant to this
Agreement or the initial resale of the Series A Notes and the Guarantees by the
Initial Purchaser in the manner contemplated by this Agreement is subject to the
registration requirements of the Act, or (ii) would prevent or suspend the
issuance or sale of the Notes, including the Exempt Resales, or the use of the
Preliminary Offering Circular, the Offering Circular, or any amendment or
supplement thereto, in any jurisdiction.
(p) Regulated Persons. Each of the Issuers and the Subsidiary Guarantors
and each of their respective directors, members, managers, officers and
employees (each of the Issuers and the Subsidiary Guarantors and each of such
other persons, a "Regulated Person" and, collectively, the "Regulated Persons")
has all Permits (including, without limitation, Permits with respect to engaging
in gaming operations) necessary or advisable to own, lease, use and operate the
properties and assets and to conduct and carry on the businesses described in
the Offering Circular, other than such Permits the failure of which to have
would not, singly or in the aggregate, have a Material Adverse Effect on (A) the
pledge by the Parent of its membership
13
interests in the Company, and (B) the Exchange Offer. All such Permits are valid
and in full force and effect. Each of the Regulated Persons is in compliance
with the terms and conditions of all Permits (including, without limitation,
Permits with respect to engaging in gaming operations) necessary or advisable to
own, lease, use and operate the properties and assets and to conduct and carry
on the businesses described in the Offering Circular, other than where such
failure to be in compliance would not, singly or in the aggregate, have a
Material Adverse Effect. None of the execution, delivery or performance of any
of the Documents, nor the compliance with the terms and provisions thereof, nor
the consummation of any of the Transactions will allow or result in, and no
event has occurred which allows or results in, or after notice or lapse of time
would allow or result in, the imposition of any material penalty under, or the
revocation or termination of, any such Permit or any material impairment of the
rights of the holder of any such Permit. None of the Issuers or Subsidiary
Guarantors has any reason to believe that any issuer is considering limiting,
conditioning, suspending, modifying, revoking or not renewing any such Permit.
(q) No Investigations of Regulated Persons. To the knowledge of the Issuers
and the Subsidiary Guarantors, (i) no Governmental Authority is investigating
any Regulated Person, other than ongoing general oversight investigations
conducted in the ordinary course of business, and (ii) there is no basis for any
of the Gaming Authorities to deny the renewal of the current Permits held by any
of the Regulated Persons.
(r) Title to Assets. Immediately following the Closing, each Majestic
Entity (i) will have good and marketable title, free and clear of all Liens
(other than Permitted Liens), to all property and assets described in the
Offering Circular to be owned by it, (ii) will enjoy peaceful and undisturbed
possession under all leases of real property and under all material leases to
which it is a party as lessee and (iii) will hold a valid leasehold interest
with respect to each such lease. Capital and Capital II have no material assets.
(s) Sufficiency and Condition of Assets. The assets of each of the Issuers
and the Subsidiary Guarantors include all of the assets and properties necessary
or required in, or otherwise material to, the conduct of the businesses of each
of them as currently conducted and as proposed to be conducted, and such assets
are in working condition, except where the failure of such assets to be in
working condition would not, singly or in the aggregate, have a Material Adverse
Effect.
(t) Insurance. Each of the Issuers and the Subsidiaries maintains
reasonably adequate insurance covering its properties, operations, personnel and
businesses against losses and risks in accordance with customary industry
practice. All such insurance is outstanding and duly in force.
(u) Real Property. No condemnation, eminent domain, or similar proceeding
exists, is pending or, to the knowledge of the Issuers and the Subsidiary
Guarantors, is threatened, with respect to or that could affect any properties
or assets of either of the Issuers or any of the Subsidiary Guarantors, except
for such proceedings as would not, singly or in the aggregate, have a Material
Adverse Effect. No owned real property of either of the Issuers or any of the
Subsidiary Guarantors is subject to any sales contract, option, right of first
refusal or similar agreement or arrangement with any third party. There is no
real property currently under
14
contract or subject to an option in favor of any of the Issuers or any of the
Subsidiary Guarantors, except for real property which the failure of the Issuers
or any of the Subsidiary Guarantors to acquire, would not, singly or in the
aggregate, have a Material Adverse Effect.
(v) Related Party Transactions. Except as adequately disclosed in the
Offering Circular, there are no related party transactions that would be
required to be disclosed in the Offering Circular if the Offering Circular were
a prospectus included in a registration statement on Form S-1 filed under the
Act.
(w) Taxes. All tax returns required to be filed by either of the Issuers or
by any of the Subsidiary Guarantors in any jurisdiction (including foreign
jurisdictions) have been filed and, when filed, all such returns were accurate
in all material respects, and all taxes, assessments, fees and other charges
(including, without limitation, withholding taxes, penalties and interest) due
or claimed to be due from either of the Issuers or from any of the Subsidiary
Guarantors have been paid, other than those being contested in good faith by
appropriate proceedings, or those that are currently payable without penalty or
interest and, in each case, for which an adequate reserve or accrual has been
established on the books and records of the Issuers or the Subsidiary
Guarantors, as applicable, in accordance with generally accepted accounting
principles of the United States, consistently applied ("GAAP"). Except as
disclosed in the Offering Circular, there are no actual or proposed additional
tax assessments for any tax period against either of the Issuers or against any
of the Subsidiary Guarantors that could, singly or in the aggregate, have a
Material Adverse Effect. The charges, accruals and reserves on the books and
records of the Issuers and the Subsidiary Guarantors, as applicable, in respect
of any tax liability for any tax periods not finally determined are adequate to
meet any assessments of tax or re-assessments of additional tax for any such
period.
(x) Intellectual Property. The Issuers and the Subsidiary Guarantors own or
possess, or are licensed under, and have the right to use, all patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names (collectively,
"Intellectual Property") currently used in, currently proposed to be used in, or
necessary for the conduct of, their businesses, free and clear of all Liens,
other than Permitted Liens, except where the failure to own or possess or
otherwise be able to acquire such Intellectual Property would not, singly or in
the aggregate, have a Material Adverse Effect. Except as disclosed in the
Offering Circular, to the knowledge of the Issuers and the Subsidiary
Guarantors, no claims have been asserted by any person challenging the use of
any such Intellectual Property by any of the Issuers or the Subsidiary
Guarantors or questioning the validity or effectiveness of any license or
agreement related thereto, and to the knowledge of the Issuers and the
Subsidiary Guarantors, there is no valid basis for any such claim, and to the
knowledge of the Issuers and the Subsidiary Guarantors, the use of such
Intellectual Property by the Issuers and the Subsidiary Guarantors will not
infringe on the Intellectual Property rights of any other person.
(y) Accounting Controls. Each of the Issuers and the Subsidiary Guarantors
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) material transactions are executed in accordance
with management's general or specific authorization, (ii) material transactions
are recorded as necessary to permit preparation of
15
financial statements in conformity with GAAP, and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any material
differences.
(z) Financial Statements. The audited historical consolidated financial
statements and related notes of the Company and its subsidiaries and the audited
historical financial statements and related notes of Xxxxx Indiana, Inc.,
Xxxxxxxxxx Harbor Riverboats, LLC and Xxxxxxxxxx Harbor Parking Associates, LLC
contained in the Offering Circular (the "Audited Financial Statements") and the
unaudited consolidated historical financial statements and related notes of the
Company and its subsidiaries and the unaudited historical financial statements
and related notes of Xxxxx Indiana, Inc. contained in the Offering Circular (the
"Interim Financial Statements" and, together with the Audited Financial
Statements, the "Financial Statements") present fairly the financial position,
results of operations and cash flows of such entities on the basis stated in the
Offering Circular, as of the respective dates and for the respective periods to
which they apply, and have been prepared in accordance with GAAP consistently
applied throughout the periods involved, except as disclosed in the Financial
Statements. The summary historical financial data included in the Offering
Circular have been prepared on a basis consistent with that of the Financial
Statements and present fairly the financial position and results of operations
of the applicable entities, as of the respective dates and for the respective
periods indicated.
The unaudited pro forma condensed combined financial statements and related
notes, excluding EBITDA and Adjusted EBITDA data, included in the Offering
Circular (i) comply with the requirements of Regulation S-X that would be
applicable if the Offering Circular were a prospectus included in a registration
statement on Form S-1 filed under the Act (the "S-X Requirements") and all other
rules and guidelines of the Commission with respect to pro forma financial
statements, (ii) present fairly the unaudited pro forma condensed combined
financial position and results of operations of the entities described in the
Offering Circular as of the dates and for the periods indicated, after giving
effect to the Transactions, the Acquisition, and the other transactions
described in the Offering Circular, (iii) have been prepared on a basis
consistent with the Financial Statements, except for the pro forma adjustments
specified therein, and (iv) are based on good faith, reasonable estimates and
assumptions of the Company. Except as described in the Offering Circular, the
summary unaudited pro forma financial data included in the Offering Circular has
been derived from such pro forma financial statements and presents fairly the
pro forma consolidated financial position and results operations of the entities
described in the Offering Circular as of the respective dates and for the
respective periods indicated.
All other financial and statistical data regarding the Issuers and the
Subsidiaries included in the Offering Circular are fairly and accurately
presented. To the knowledge of the Company, (i) PricewaterhouseCoopers LLP, the
accountants who have audited the financial statements of the Issuers and the
Subsidiaries (other than Xxxxx), included as part of the Preliminary Offering
Circular and the Offering Circular and (ii) Ernst & Young LLP, the accountants
who have audited the financial statements of Xxxxx, included as part of the
Preliminary Offering Circular and the Offering Circular, are independent
certified public accountants with respect to the Company and the Subsidiaries
(other than Xxxxx) and Xxxxx, as applicable, under Rule 101 of
16
the AICPA's code of Professional conduct and its interpretations and rulings,
during the periods covered by the financial statements on which they reported
included in the Offering Circular.
To the knowledge of the Company (i) at October 31, 2005, there was no
material (x) change in the capital stock, (y) increase in long-term debt or (z)
decrease in consolidated net current assets or stockholders' equity of the
Company, on a consolidated basis, as compared with amounts shown in the
September 30, 2005, unaudited consolidated balance sheet included in the
Offering Circular, or (ii) for the period from September 30, 2005 to October 31,
2005, there was no material decrease, as compared to the corresponding period in
the preceding year, in consolidated net sales or in the total amounts of income
before extraordinary items or of net income, except in all instances for
changes, increases or decreases that the Offering Circular discloses have
occurred or may occur.
No financial statements as of any date or for any period subsequent to
October 31, 2005, are available. However, to the Company's knowledge, (i) at
December 16, 2005, there was no material (x) change in the capital stock (y)
increase in long-term debt or (z) material decrease in consolidated net current
assets or stockholders' equity of the Company, on a consolidated basis, as
compared with amounts shown in the September 30, 2005, unaudited consolidated
balance sheet included in the Offering Circular, or (ii) for the period from
October 31, 2005 to December 16, 2005, there was no material decrease, as
compared to the corresponding period in the preceding year, in consolidated net
sales or in the total amounts of income before extraordinary items or of net
income, except in all instances for changes, increases or decreases that the
Offering Circular discloses have occurred or may occur.
(aa) No Material Adverse Change. Subsequent to the respective dates as of
which information is given in the Offering Circular, except as adequately
disclosed in the Offering Circular, and except for the Acquisition and the
Transactions (i) neither of the Issuers nor any of the Subsidiary Guarantors has
incurred any liabilities, direct or contingent, that are material, singly or in
the aggregate, to any of them, or has entered into any material transactions not
in the ordinary course of business, (ii) there has not been any material
decrease in the capital stock or membership interests, as the case may be, or
any material increase in long-term indebtedness or any material increase in
short-term indebtedness of any of the Issuers or the Subsidiary Guarantors, or
any payment of or declaration to pay any dividends or any other distribution
with respect to any of the Issuers or the Subsidiary Guarantors, and (iii) there
has not been any material adverse change in the properties, business,
operations, earnings, assets, liabilities or condition (financial or otherwise)
of the Issuers and the Subsidiary Guarantors taken as a whole (each of clauses
(i), (ii) and (iii), a "Material Adverse Change"). Except as disclosed in the
Offering Circular, to the knowledge of the Issuers and the Subsidiary
Guarantors, there is no event that has occurred or that is reasonably likely to
occur which, if it were to occur, could reasonably be expected to, singly or in
the aggregate, have a Material Adverse Effect or result in a Material Adverse
Change.
(bb) Ratings. No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed either of the Issuers or any Subsidiary Guarantor that
it is considering imposing) any condition (financial or otherwise) on the
Issuers' or any Subsidiary Guarantor's retaining any rating assigned to any
securities of either of the Issuers or any Subsidiary Guarantor, or (ii) has
indicated to either of the
17
Issuers or any Subsidiary Guarantor that it is considering (A) the downgrading,
suspension, or withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so assigned, or (B)
any change in the outlook for any rating of any securities of either of the
Issuers or any Subsidiary Guarantor.
(cc) Solvency. Each of the Issuers and each Subsidiary Guarantor is
incurring its respective indebtedness under the Series A Notes and the
Guarantees for proper purposes and in good faith. Immediately before and after
giving effect to the issuance of the Series A Notes, (i) the assets of the
Issuers and their subsidiaries (including the Subsidiary Guarantors), considered
as a whole and as a going concern, at a fair valuation, will exceed the sum of
their debts, taken as a whole; (ii) the present fair salable value of the assets
of the Issuers and their subsidiaries (including the Subsidiary Guarantors),
considered as a whole and as a going concern, will exceed the amount required to
pay their liability on their debts, taken as a whole; (iii) each of the Issuers
will have adequate capital with which to conduct their respective present and
anticipated businesses; and (iv) neither the Issuers nor any Subsidiary
Guarantor will intend to incur or believe or reasonably should believe that it
will incur debts beyond its ability to pay as those debts become due. Neither
Issuer is aware of any reason why it would be inappropriate to consider, for
purposes of clauses (i) and (ii) above, the Issuers and the Subsidiaries as a
going concern. For purposes of this paragraph, "debts" includes contingent and
unliquidated debts.
(dd) No Solicitation. Neither of the Issuers nor any of their affiliates
nor anyone acting on their behalf has (i) taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the Notes or to facilitate the sale or resale of any of the Notes, (ii)
sold, bid for, purchased, or paid anyone any compensation for soliciting
purchases of, any of the Notes, or (iii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of either
of the Issuers.
(ee) No Registration of Notes. Without limiting any provision herein, no
registration under the Act, and no qualification of the Indenture under the TIA
is required for the sale of the Series A Notes and the Guarantees to the Initial
Purchaser as contemplated hereby or for the Exempt Resales, assuming (i) that
the purchasers in the Exempt Resales are QIBs, Accredited Investors or non-U.S.
persons (as defined under Regulation S under the Act), (ii) the accuracy of the
Initial Purchaser's representations contained in Section 7, and (iii) the
accuracy of the representations made by each Accredited Investor who purchases
the Series A Notes pursuant to an Exempt Resale as set forth in the letter of
representation in the form of Annex A to the Offering Circular. No form of
general solicitation or general advertising (including, without limitation, as
such terms are used in Regulation D under the Act) was used by either of the
Issuers or any of their respective affiliates or any of their respective
representatives in connection with the offer and sale of any of the Series A
Notes or in connection with Exempt Resales. No securities of the same class as
the Series A Notes have been offered, issued or sold by either of the Issuers or
any of their respective affiliates within the six-month period immediately prior
to the date hereof.
(ff) ERISA. The Issuers have disclosed to the Initial Purchaser each
employee benefit plan maintained by the Issuers and their Affiliates which is a
"plan" within the meaning of Section 4975(e)(i) of the Internal Revenue Code of
1986, as amended, or the regulations
18
promulgated thereunder (the "Code"). No condition exists or event or transaction
has occurred in connection with any employee benefit plan that could result in
either of the Issuers or any such "Affiliate" incurring any liability, fine or
penalty that could, singly or in the aggregate, have a Material Adverse Effect.
Neither of the Issuers nor any Affiliate maintains any employee pension benefit
plan that is subject to Title IV of the Employee Retirement Income Security Act
of 1974, as amended, or the rules and regulations promulgated thereunder
("ERISA"). The terms "employee benefit plan" and "employee pension benefit plan"
shall have the meanings assigned to such terms in Section 3 of ERISA. The term
"Affiliate" shall have the meaning assigned to such term in Section 407(d)(7) of
ERISA.
(gg) Investment Company Act and Other Federal Regulations. None of the
Issuers nor any of the Subsidiaries has taken, and none of them will take, any
action that may cause this Agreement or the issuance of the Series A Notes to,
and none of the Transactions will, violate or result in a violation of Section 7
of the Exchange Act (including, without limitation, Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System). Neither of the Issuers or
any of the Subsidiaries is subject to regulation, or shall become subject to
regulation upon the consummation of the Offering and sale of the Series A Notes
and the application of the net proceeds thereof as described in the Offering
Circular, or the consummation of any of the other Transactions, under the
Investment Company Act of 1940, as amended, and the rules and regulations and
interpretations promulgated thereunder, or under any other Federal or state
statute or regulation limiting its ability to incur or assume indebtedness for
borrowed money.
(hh) No Brokers. Neither of the Issuers nor any of the Subsidiary
Guarantors has dealt with any broker, finder, commission agent or other person
(other than the Initial Purchaser) in connection with the Transactions that has
resulted in either of the Issuers or any of the Subsidiary Guarantors having any
obligation to pay any broker's fee or commission in connection with the
Transactions (other than commissions and fees to the Initial Purchaser as set
forth in the Offering Circular).
(ii) No Labor Disputes. To our knowledge, neither of the Issuers nor any of
the Subsidiaries is engaged in any unfair labor practice. Except as would not,
singly or in the aggregate, have a Material Adverse Effect, there are (i) no
unfair labor practice complaints or other proceedings pending or, to the
knowledge of the Issuers and the Subsidiary Guarantors, threatened against
either of the Issuers or any of the Subsidiaries before the National Labor
Relations Board or any state, local or foreign labor relations board or any
industrial tribunal, and no grievances or arbitration proceedings arising out of
or under any collective bargaining agreement are so pending or, to the knowledge
of the Issuers and the Subsidiary Guarantors, threatened, (ii) no strikes, labor
disputes, slowdowns or stoppages pending or, to the knowledge of the Issuers and
the Subsidiary Guarantors, threatened against either of the Issuers or any of
the Subsidiaries, (iii) no union representation questions existing with respect
to the employees of either of the Issuers or any of the Subsidiaries, and, to
the knowledge of the Issuers and the Subsidiary Guarantors, no union organizing
activities taking place, (iv) to the knowledge of the Company, there is no
threatened or pending liability against the Company, or any of its Subsidiaries
pursuant to the Worker Adjustment Retraining and Notification Act of 1988, as
amended ("WARN"), or any similar state or local law concerning a mass layoff
that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect and (v) no
19
term or condition of employment exists through arbitration awards, settlement
agreements, or side agreement that is contrary to the express terms of any
applicable collective bargaining agreement other than such term or condition
that, individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect.
(jj) Environmental Laws. Except as disclosed in the Offering Circular, or
as otherwise would not, singularly or in the aggregate, have a Material Adverse
Effect or otherwise require disclosure in the Offering Circular, (i) neither of
the Issuers nor any of the Subsidiaries has been or is in violation of any
federal, state or local laws and regulations relating to pollution or protection
of human health or the environment, including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened releases
of toxic or hazardous substances, materials or wastes, or petroleum and
petroleum products ("Materials of Environmental Concern"), or otherwise relating
to the protection of human health and safety, or the use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern
(collectively, "Environmental Laws"), which violation includes, but is not
limited to, noncompliance with, or lack of, any permits or other environmental
authorizations; (ii) there are no circumstances, either past, present or that
are reasonably foreseeable, that may lead to any such violation in the future;
(iii) neither of the Issuers nor any of the Subsidiaries has received any
communication (written or oral), whether from a Governmental Authority or
otherwise, alleging any such violation; (iv) there is no pending or threatened
claim, action, investigation, notice (written or oral) or other Proceeding by
any person or entity alleging potential liability of either of the Issuers or
any of the Subsidiaries (or against any person or entity for whose acts or
omissions the Issuers or any of the Subsidiaries is or may reasonably be
expected to be liable, either contractually or by operation of law) for
investigatory, cleanup, or other response costs, or natural resources or
property damages, or personal injuries, attorney's fees or penalties relating to
(A) the presence, or release into the environment, of any Materials of
Environmental Concern at any location, or (B) circumstances forming the basis of
any violation or potential violation, of any Environmental Law (collectively,
"Environmental Claims"); and (v) there are no past or present actions,
activities, circumstances, conditions, events or incidents that could reasonably
form the basis of any Environmental Claim.
Each of the Issuers and the Subsidiaries, as appropriate, (i) have
conducted a review of the effect of Environmental Laws on the business,
operations and properties of each of the Issuers and the Subsidiaries, in the
course of which, or as a result of which, the Issuers have identified and
evaluated associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for cleanup, 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); and (ii) have conducted environmental investigations of, and
have reviewed reasonably available information regarding, the business,
properties and operations of each of the Issuers and the Subsidiaries, and of
other properties within the vicinity of their business, properties and
operations, as appropriate for the circumstances of each such property and
operation; on the basis of such reviews, investigations and inquiries, the
Issuers have reasonably concluded that any costs and liabilities associated with
such matters would not have, singularly or in the aggregate, a Material Adverse
Effect or otherwise require disclosure in the Offering Circular.
20
(kk) Representations and Warranties. Each certificate signed by any officer
of any of the Majestic Entities and delivered to the Initial Purchaser or
counsel for the Initial Purchaser in connection with the Transactions shall be
deemed to be a representation and warranty by such Majestic Entities to the
Initial Purchaser as to the matters covered thereby.
(ll) Authorization of Guarantees of Series A Notes. The Guarantee to be
endorsed on the Series A Notes by each Subsidiary Guarantor has been duly
authorized by each such Subsidiary Guarantor (other than Xxxxx) and effective
upon the consummation of the Acquisition, will be duly authorized by Xxxxx and,
on the Closing Date, will have been validly executed and delivered by each such
Subsidiary Guarantor in accordance with the terms of the Indenture. When the
Series A Notes have been issued, executed and authenticated in accordance with
the terms of the Indenture and delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, the Guarantee of each
Subsidiary Guarantor endorsed on the Series A Notes will be the legal, valid and
binding obligation of each such Subsidiary Guarantor, enforceable against each
such Subsidiary Guarantor in accordance with its terms, except to the extent
that (i) such enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or at
law). The Guarantees to be endorsed on the Series A Notes rank and will rank on
a parity with all senior Indebtedness of the Subsidiary Guarantors that is
outstanding on the date hereof or that may be incurred hereafter and senior to
all other Indebtedness of the Subsidiary Guarantors that is outstanding on the
date hereof or that may be incurred hereafter; provided, that pursuant to the
Amended Intercreditor Agreement, the Lien on the Collateral securing the Amended
Credit Facility will be senior to the Lien on the Collateral securing the Notes
and the Guarantees.
(mm) Authorization of Guarantees of Series B Notes. The Guarantee to be
endorsed on the Series B Notes by each Subsidiary Guarantor has been duly
authorized by each such Subsidiary Guarantor (other than Xxxxx) and effective
upon the consummation of the Acquisition, will be duly authorized by Xxxxx and,
when the Series B Notes are issued, will have been validly executed and
delivered by each such Subsidiary Guarantor in accordance with the terms of the
Indenture, the Registration Rights Agreement and the Registered Exchange Offer.
When the Series B Notes have been issued, executed and authenticated in
accordance with the terms of the Registered Exchange Offer and the Indenture,
the Guarantee of each Subsidiary Guarantor endorsed on the Series B Notes will
be the legal, valid and binding obligation of each such Subsidiary Guarantor,
enforceable against each such Subsidiary Guarantor in accordance with its terms,
except to the extent that (i) such enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) any rights of acceleration and the availability of equitable remedies may
be subject to general principles of equity (whether considered in a proceeding
in equity or at law). The Guarantees to be endorsed on the Series B Notes will
rank on a parity with all senior Indebtedness of the Subsidiary Guarantors that
is outstanding on the date hereof or that may be incurred hereafter and senior
to all other Indebtedness of the Subsidiary Guarantors that is outstanding on
the date hereof or that may be incurred hereafter; provided, that pursuant to
the Amended Intercreditor Agreement, the Lien on the Collateral securing the
Amended Credit Facility will be senior to the Lien on the Collateral securing
the Notes and the Guarantees.
21
(nn) Authorization of Security Documents. Each of the Security Documents
and the transactions contemplated thereby (including, without limitation, the
creation, grant, recording and perfection of the Security Interests, the
execution and filing of financing statements and the payment of any fees and
taxes in connection therewith) have been duly authorized by each Majestic Entity
party thereto (other than Xxxxx) and, effective upon the consummation of the
Acquisition, will be duly authorized by Xxxxx and, on the Closing Date, each of
the Security Documents will have been validly executed and delivered by, and
will be the legal, valid and binding obligation of, each of the Majestic
Entities party thereto, enforceable against each of the Majestic Entities party
thereto in accordance with its terms, except that (i) such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general principles of
equity (whether considered in a proceeding in equity or at law).
(oo) Security Interests.
(a) The Security Interests granted by the Company and the Subsidiary
Guarantors (other than the New Subsidiary Guarantors) under the
Security Agreement (as supplemented by the Pledge Supplement)
will secure the Notes and the Guarantees, respectively, and all
other Obligations related thereto upon issuance and sale thereof,
and it is not necessary to make any new filings or take any other
action to perfect, or to maintain the perfection, of such
Security Interests.
(b) Upon:
(i) execution and delivery of the Security Documents (as
supplemented by the Pledge Joinder) by the New Subsidiary
Guarantors and the Trustee and compliance by the New
Subsidiary Guarantors with their respective obligations
thereunder; and
(ii) (A) the filing or recording of such Security Documents or
appropriate financing statements with the appropriate
filing records, registry, or other public office,
together with the payment of the requisite filing or
recordation fees related thereto, and
(B) in the case of motor vehicles, upon the recordation or
notation of the Trustee's security interest on the
certificates of title or ownership in respect of such
motor vehicles and the filing of the Uniform Commercial
Code financing statements delivered by the New
Subsidiary Guarantors having an interest in such motor
vehicles to the Trustee with respect to such motor
vehicles,
the Security Interest of the Trustee in the Collateral in
which the New Subsidiary Guarantors have any right, title or
interest will be a valid and enforceable perfected security
interest, which Security
22
Interest will be superior to and prior to the rights of all
third persons other than holders of Permitted Liens.
(c) As of the Closing Date, except with respect to Permitted Liens,
to the knowledge of the Company, there will be no currently
effective financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or
recorded with any filing records, registry, or other public
office, that purports to cover, affect or give notice of any
present or possible future Lien on, or security interest in, any
assets or property of the Company or the Subsidiary Guarantors or
any rights thereunder.
(pp) 144A Eligibility. Other than the Existing Senior Secured Notes (as
defined in the Offering Circular), there are no securities of any Issuer or
Guarantor registered under the Exchange Act or listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted in a United
States automated inter-dealer quotation system.
7. Representations and Warranties of the Initial Purchaser. As of the date
hereof, the Initial Purchaser, represents and warrants to the Issuers and the
Subsidiary Guarantors that:
(a) QIB or Accredited Investor. It is a QIB, with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Series A Notes, and it
will offer the Series A Notes for resale only upon the terms and conditions set
forth in this agreement and the Offering Circular.
(b) Eligible Purchasers. It (i) is not acquiring the Series A Notes with a
view to any distribution thereof or with any present intention of offering or
selling any of the Series A Notes in a transaction that would violate the Act or
the securities laws of any state of the United States or any other applicable
jurisdiction, and (ii) will be soliciting offers for the Series A Notes only
from, and will be reoffering and reselling the Series A Notes only to, (A)
persons in the United States whom it reasonably believes to be (x) QIBs in
reliance on the exemption from the registration requirements of the Act provided
by Rule 144A under the Act, or (y) Accredited Investors that execute and deliver
to each of the Issuers and the Initial Purchaser a letter containing certain
representations and agreements in the form attached as Annex A to the Offering
Circular or (B) non-U.S. persons reasonably believed by the Initial Purchaser to
be a purchaser referred to in Regulation S under the Act; provided, however,
that in purchasing such Notes, such persons are deemed to have represented and
agreed as provided under the caption "Notice to Investors" contained in the
Offering Circular.
(c) No General Solicitation. No form of general solicitation or general
advertising in violation of the Act has been or will be used by the Initial
Purchaser or any of its representatives in connection with the offer and sale of
any of the Series A Notes pursuant hereto, including but not limited to,
articles, notices or other communications published in any newspaper, magazine
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising.
(d) Power and Authority. It has all requisite power and authority to enter
into, deliver and perform its obligations under this Agreement and the
Registration Rights Agreement and
23
each of this Agreement and the Registration Rights Agreement has been duly and
validly authorized by it.
8. Indemnification. (a) Indemnification of Initial Purchaser. Each of the
Issuers and the Subsidiary Guarantors shall, jointly and severally, without
limitation as to time, indemnify and hold harmless the Initial Purchaser and
each person, if any, who controls (within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act) the Initial Purchaser (any of such persons
being hereinafter referred to as a "Controlling Person"), and the respective
officers, directors, partners, employees, representatives and agents of the
Initial Purchaser and any such Controlling Person (collectively, the "Purchaser
Indemnified Parties"), to the fullest extent lawful, from and against any and
all losses, claims, damages, liabilities, costs (including, without limitation,
costs of preparation and reasonable attorneys' fees) and expenses including,
without limitation, costs and expenses incurred in connection with
investigating, preparing, pursuing or defending against any of the foregoing
(collectively, "Losses"), as incurred, directly or indirectly caused by, related
to, based upon, arising out of or in connection with (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Circular or the Offering Circular (or any amendment or supplement
thereto) or (ii) any omission or alleged omission to state therein 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;
provided, that neither of the Issuers nor any Subsidiary Guarantor shall be
liable under the indemnity provided in this Section 8(a) to any Purchaser
Indemnified Party for any Losses that (A) result solely from an untrue statement
of a material fact contained in, or the omission of a material fact from, any
Preliminary Offering Circular, which untrue statement or omission was corrected
in the Offering Circular (as then amended or supplemented) if it shall have been
determined by a court of competent jurisdiction by final and nonappealable
judgment that (1) such Purchaser Indemnified Party sold the Notes to the person
alleging such Loss and failed to send or give, at or prior to the written
confirmation of such sale, a copy of the Offering Circular (as then amended or
supplemented), if required by law to have so delivered it, and (2) the Issuers
had previously furnished copies of the corrected Offering Circular to such
Purchaser Indemnified Party within a reasonable amount of time prior to such
sale or such confirmation, and (3) the corrected Offering Circular, if
delivered, would have been a complete defense against the person asserting such
Loss; or (B) are based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with the Furnished
Information. The parties hereto agree that the only information furnished in
writing to the Issuers by the Initial Purchaser specifically for inclusion in
the Preliminary Offering Circular or the Offering Circular is the Furnished
Information. The Issuers shall notify the Initial Purchaser promptly of the
institution, threat or assertion of any Proceeding of which either of the
Issuers or any Subsidiary is aware in connection with the matters addressed by
this Agreement which involves either of the Issuers, any of the Subsidiaries or
any of the Purchaser Indemnified Parties.
(b) Actions Against Parties; Notification. If any Proceeding shall be
brought or asserted against any person entitled to indemnification hereunder (an
"Indemnified Party"), such Indemnified Party shall give prompt written notice to
the party or parties from which such indemnification is sought (the
"Indemnifying Parties") in writing; provided, that the failure to so notify the
Indemnifying Parties shall not relieve the Indemnifying Parties from any
obligation or liability except to the extent (but only to the extent) that it
shall be finally determined by a court
24
of competent jurisdiction (which determination is not subject to appeal) that
the Indemnifying Parties have been prejudiced materially by such failure.
(c) Actions Against Parties; Procedure and Conditions. The Indemnifying
Parties shall have the right, exercisable by giving written notice to an
Indemnified Party, within 20 Business Days after receipt of written notice from
such Indemnified Party of such Proceeding, to assume, at their expense, the
defense of any such Proceeding; provided, that an Indemnified Party shall have
the right to employ separate counsel in any such Proceeding and to participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or parties unless: (i) the Indemnifying
Parties have agreed to pay such fees and expenses; (ii) the Indemnifying Parties
shall have failed promptly to assume the defense of such Proceeding or shall
have failed to employ counsel reasonably satisfactory to such Indemnified Party;
or (iii) the named parties to any such Proceeding (including any impleaded
parties) include both such Indemnified Party and one or more Indemnifying
Parties (or any affiliates or controlling persons of any of the Indemnifying
Parties), and such Indemnified Party shall have been advised by counsel that
there may be one or more defenses available to such Indemnified Party that are
in addition to, or in conflict with, those defenses available to the
indemnifying party or such affiliate or controlling person (in which case, if
such Indemnified Party notifies the Indemnifying Parties in writing that it
elects to employ separate counsel at the expense of the Indemnifying Parties,
the Indemnifying Parties shall not have the right to assume the defense thereof
and the reasonable fees and expenses of such counsel shall be at the expense of
the Indemnifying Parties; it being understood, however, that, the Indemnifying
Parties shall not, in connection with any one such Proceeding or separate but
substantially similar or related Proceedings in the same jurisdiction, arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with appropriate
local counsel) at any time for such Indemnified Party).
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, consent to entry of any judgment in or enter into any
settlement of any pending or threatened Proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Party is a party thereto) unless such judgment or settlement
includes, as an unconditional term thereof, the giving by the claimant or
plaintiff to each Indemnified Party of a release, in form and substance
satisfactory to the Indemnified Party, from all Losses that may arise from such
Proceeding or the subject matter thereof (whether or not any Indemnified Party
is a party thereto).
(d) Indemnification of the Issuers and the Subsidiary Guarantors. The
Initial Purchaser agrees to indemnify and hold harmless each of the Issuers and
the Subsidiary Guarantors and each of their controlling persons and their
respective members, managers, officers, directors, partners, employees and
representatives to the same extent as the foregoing indemnity from the Issuers
and the Subsidiary Guarantors to each of the Purchaser Indemnified Parties
stated in Section 8(a), but only with respect to Losses that are caused by an
untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with the Furnished Information. The parties hereto
agree that the only information furnished in writing to the Issuers by the
Initial Purchaser specifically for inclusion in the Preliminary Offering
Circular or the Offering Circular is the Furnished Information. Notwithstanding
the foregoing, any liability of the Initial Purchaser hereunder shall be limited
to
25
an amount not to exceed the total discounts, commissions and other compensation
received by the Initial Purchaser under this Agreement, less the aggregate
amount of any damages that the Initial Purchaser has otherwise been required to
pay by reason of the untrue or alleged untrue statements or the omissions or
alleged omissions to state a material fact (the "Aggregate Discount").
(e) Contribution. If the indemnification provided for in this Section 8 is
unavailable to an Indemnified Party or is insufficient to hold such Indemnified
Party harmless for any Losses in respect of which this Section 8 would otherwise
apply by its terms (other than by reason of exceptions provided in this Section
8), then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Issuers and the Subsidiaries, on the one
hand, and the Initial Purchaser, on the other hand, from the Offering or (ii) if
the allocation provided by clause (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 (i) above but also the relative fault of the Issuers and
the Subsidiaries, on the one hand, and the Initial Purchaser, on the other hand,
in connection with the actions, statements or omissions that resulted in such
Losses, as well as any other relevant equitable considerations. The relative
benefits received by the Issuers and the Subsidiaries, on the one hand, and the
Initial Purchaser, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the Offering (before deducting
expenses) received by the Issuers, on the one hand, and the total discounts and
commissions received by the Initial Purchaser, on the other hand, bear to the
total price of the Series A Notes in Exempt Resales as set forth on the cover
page of the Offering Circular. The relative fault of the Issuers and the
Subsidiaries, on the one hand, and the Initial Purchaser, on the other hand,
shall be determined by reference to, among other things, whether any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Issuers or any
Subsidiary, on the one hand, or the Initial Purchaser, on the other hand, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by
an Indemnified Party as a result of any Losses shall be deemed to include any
legal or other fees or expenses incurred by such party in connection with any
Proceeding, to the extent such party would have been indemnified for such fees
or expenses if the indemnification provided for in this Section 8 was available
to such party.
Each party hereto agrees that it would not be just and equitable if
contribution pursuant to this Section 8(e) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8(e), the Initial Purchaser shall
not be required to contribute, in the aggregate, any amount in excess of the
Aggregate Discount. 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.
(f) Nonexclusive Remedy. The indemnity and contribution agreements
contained in this Section 8 are in addition to any liability that any of the
Issuers, the Subsidiary Guarantors or
26
the Initial Purchaser may otherwise have to the Indemnified Parties, and does
not limit in any way rights or remedies which may otherwise be available at law
or in equity.
9. Conditions. (a) Conditions to Obligations of Initial Purchaser. The
obligations of the Initial Purchaser to purchase the Series A Notes under this
Agreement are subject to the satisfaction or waiver of each of the following
conditions:
(i) Representations and Warranties of the Issuers and the Subsidiary
Guarantors. All the representations and warranties of each of the Issuers
and the Subsidiary Guarantors in this Agreement shall be true and correct
in all material respects (other than representations and warranties with a
Material Adverse Effect qualifier or other materiality qualifier, which
shall be true and correct as written) at and as of the Closing Date after
giving effect to the Transactions with the same force and effect as if made
on and as of such date. On or prior to the Closing Date, each of the
Issuers and the Subsidiary Guarantors shall have performed or complied in
all material respects with all of the agreements and satisfied in all
material respects all conditions on their respective parts to be performed,
complied with or satisfied on or prior to the Closing Date pursuant to this
Agreement.
(ii) Availability of Offering Circular. The Offering Circular shall
have been printed and copies made available to the Initial Purchaser not
later than [12:00 noon], New York City time, on the first Business Day
following the date of this Agreement or at such later date and time as the
Initial Purchaser may approve.
(iii) No Injunction. No injunction, restraining order or order of any
nature by a Governmental Authority shall have been issued as of the Closing
Date that would prevent or interfere with the issuance and sale of the
Series A Notes or the consummation of any of the other transactions
contemplated by the Documents; and no stop order suspending the
qualification or exemption from qualification of any of the Series A Notes
in any jurisdiction shall have been issued and no Proceeding for that
purpose shall have been commenced or be pending or contemplated.
(iv) No Proceedings. No action shall have been taken and no Applicable
Law shall have been enacted, adopted or issued that would, as of the
Closing Date, prevent the issuance and sale of the Series A Notes or the
consummation of any of the other Transactions. No Proceeding shall be
pending or threatened other than Proceedings that (A) if adversely
determined would not, singly or in the aggregate, adversely affect the
issuance or marketability of the Series A Notes, and (B) would not, singly
or in the aggregate, have a Material Adverse Effect.
(v) No Material Adverse Change. Since the date as of which information
is given in the Offering Circular (without giving effect to any amendment
thereto or supplement thereto), there shall not have been any Material
Adverse Change the effect of which, in the sole judgment of the Initial
Purchaser, makes it impractical or inadvisable to proceed with the
completion of the Offering or the purchase and sale of the Notes.
27
(vi) PORTAL. The Notes shall have (A) been designated PORTAL
securities in accordance with the rules and regulations adopted by the NASD
relating to trading in the PORTAL market, and (B) received a rating of
"BB-" and "B2" from Standard & Poor's Corporation and Xxxxx'x Investors
Services, Inc., respectively.
(vii) Maintenance of Rating. As of the Closing Date, (i) there shall
not have occurred any downgrading, suspension or withdrawal of, nor shall
any notice have been given of any potential or intended downgrading,
suspension or withdrawal of, or of any review (or of any potential or
intended review) for a possible change that does not indicate the direction
of the possible change in, any rating of any securities of either of the
Issuers (including, without limitation, the placing of any of the foregoing
ratings on credit watch with negative or developing implications or under
review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes of
Rule 436(g)(2) under the Act, (ii) there shall not have occurred any
change, nor shall any notice have been given of any potential or intended
change, in the outlook for any rating of any securities of either of the
Issuers by any such rating organization and (iii) no such rating
organization shall have given notice that it has assigned (or is
considering assigning) a lower rating to the Notes than that on which the
Notes were marketed.
(viii) Officers', Secretary's and Solvency Certificates. The Initial
Purchaser shall have received on the Closing Date (A) certificates dated
the Closing Date, signed by (1) the President and Chief Executive Officer,
and (2) the principal financial or accounting officer of each of the
Issuers and Subsidiary Guarantors, on behalf of such Issuer or Subsidiary
Guarantor, confirming the matters set forth in paragraphs (i), (iii), (iv),
(v), (vii) and (xii) of this Section 9(a), (B) a certificate, dated the
Closing Date, signed by the principal financial or accounting officer of
the Company, on behalf of the Issuers and the Subsidiary Guarantors,
stating that certain data identified by the Initial Purchaser and included
in the Offering Circular has been reviewed by such persons and, to the best
knowledge of such persons, subject to the risks and limitations described
in the Preliminary Offering Circular and the Offering Circular, is true and
accurate in all material respects and is based on or derived from sources
which the Company believes to be reliable and accurate, which certificate
shall be in form and substance satisfactory to counsel for the Initial
Purchaser, (C) a certificate, dated the Closing Date, signed by the
Secretary of each of the Issuers and Subsidiary Guarantors, certifying such
matters as the Initial Purchaser may reasonably request, and (D) a
certificate of solvency, dated the Closing Date, signed by the principal
financial or accounting officer of the Majestic Entities substantially in
the form previously approved by the Initial Purchaser.
(ix) Opinions of Counsel. The Initial Purchaser shall have received, a
favorable opinion (in form and substance satisfactory to the Initial
Purchaser and counsel to the Initial Purchaser), dated the Closing Date, of
each of the following: (A) Xxxxxx Xxxxxxx PLLC, special counsel to the
Issuers and Subsidiary Guarantors; (B) Xxxxxxx Xxxxxx Winter & Stennis,
P.A., special Mississippi counsel to the Issuers and Subsidiary Guarantors;
(C) Xxxxxxxx Xxxxxx & X'Xxxxxxx and Xxxxx X. Xxxxxx LLC, special Colorado
counsel to the Issuers and Subsidiary Guarantors; (D) Xxxxxxxxxx, Xxxxxxx &
Xxxxxx, L.L.P., special Mississippi vessel counsel to the Issuers and
Subsidiary
28
Guarantors; (E) Ice Xxxxxx, special Indiana counsel to the Issuers and
Subsidiary Guarantors; (F) Ice Xxxxxx, special Indiana vessel counsel to
the Issuers and Subsidiary Guarantors and (G) Mayer, Brown, Xxxx & Maw LLP,
special counsel to the Initial Purchaser.
(x) Accountants' Comfort Letters.
(A) The Initial Purchaser shall have received from
Pricewaterhouse Coopers, LLP, independent auditors, with respect to
the Issuers and the Subsidiaries (other than Xxxxx), (1) a customary
comfort letter, dated the date of the Offering Circular, in form and
substance reasonably satisfactory to the Initial Purchaser and its
counsel, with respect to the financial statements and certain
financial information of the Issuers and the Subsidiaries contained in
the Offering Circular (the "Pricewaterhouse Comfort Letter"), and (2)
a customary comfort letter, dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchaser and its
counsel, to the effect that Pricewaterhouse Coopers, LLP reaffirms the
statements made in the Pricewaterhouse Comfort Letter.
(B) The Initial Purchaser shall have received from Ernst & Young,
LLP, independent auditors, with respect to the Xxxxx, (1) a customary
comfort letter, dated the date of the Offering Circular, in form and
substance reasonably satisfactory to the Initial Purchaser and its
counsel, with respect to the financial statements and certain
financial information of Xxxxx contained in the Offering Circular (the
"E&Y Comfort Letter"), and (2) a customary comfort letter, dated the
Closing Date, in form and substance reasonably satisfactory to the
Initial Purchaser and its counsel, to the effect that Ernst & Young,
LLP reaffirms the statements made in the E&Y Comfort Letter.
(xi) Execution, Delivery and Content of Documents. The Documents shall
have been executed and delivered by all parties thereto and the Initial
Purchaser shall have received a fully executed original of each Document
and all opinions, certificates and other documents required by the
Documents. The terms of each Document shall conform in all material
respects to the description thereof in the Offering Circular to the extent
described therein.
(xii) Consummation of Transactions. Each of the Transactions shall
have been consummated on terms that conform in all material respects to the
description thereof in the Offering Circular.
(xiii) Issuance of Senior Notes and Discount Notes. The Senior Notes
and Discount Notes shall have been issued on terms that conform in all
material respects to the descriptions thereof in the Offering Circular.
(xiv) Permits. All Permits required to be obtained from, and all
notices or declarations required to be made with, any Gaming Authority or
other Governmental Authority to permit the issuance and sale of the Series
A Notes in accordance with the terms of, and in the aggregate principal
amount set forth in, this Agreement shall have
29
been obtained and made, in each case free of any conditions other than
those set forth in this Agreement; and all Permits (other than the
Post-Closing Permits) required to be obtained from, and all notices or
declarations required to be made with, any Gaming Authority or other
Governmental Authority to consummate the Transactions contemplated by the
Documents shall have been obtained and made, in each case free of any
conditions other than those set forth in such Documents.
(xv) Additional Documents. Counsel to the Initial Purchaser shall have
been furnished with such documents as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
this Section 9 and in order to evidence the accuracy, completeness and
satisfaction of the representations, warranties and conditions contained in
this Agreement.
(xvi) The Acquisition. The Acquisition shall have been consummated
concurrently with the Offering pursuant to the terms of the Stock Purchase
Agreement.
(xvii) Amended Credit Facility; Amended Intercreditor Agreement and
Pledge Joinder and Pledge Supplement. Each of the Amended Credit Facility,
the Amended Intercreditor Agreement, the Pledge Joinder, the Pledge
Supplement, the First Supplemental Indenture and the Second Supplemental
Indenture shall have been executed and delivered by all parties thereto,
and the Initial Purchaser shall have received a fully executed original of
each such document which, in each case, shall be in form and substance
reasonably satisfactory to the Initial Purchaser.
(xviii) Security. The Trustee shall have received (with a copy for the
Initial Purchaser) on the Closing Date:
(A) appropriately completed copies of Uniform Commercial Code
financing statements naming each of The Majestic Star Casino II, Inc.
(f/k/a Xxxxx Indiana, Inc.), Xxxxxxxxxx Harbor Parking Associates,
LLC, Xxxxxxxxxx Harbor Riverboats, L.L.C. and Capital II
(collectively, the "New Subsidiary Guarantors"), as a debtor and the
Trustee as the secured party, or other similar instruments or
documents to be filed under the UCC of all jurisdictions as may be
necessary or, in the reasonable opinion of the Trustee and its
counsel, desirable to perfect the Security Interests of the Trustee
pursuant to the Security Agreement;
(B) proper instruments, if any, to be filed in the U.S. Patent
and Trademark Office that may be deemed desirable in order to perfect
the liens granted on trademarks, which liens have been created by the
Security Documents;
(C) appropriately completed copies of duly executed payoff
letters, Uniform Commercial Code Form UCC-3 termination statements, if
any, necessary to release all Liens (other than Permitted Liens) of
the New Subsidiary Guarantors in any collateral described in any
security agreement previously granted by such Persons;
(D) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report
certified by a
30
party acceptable to the Trustee, dated a date reasonably near to the
Closing Date, listing all effective financing statements which name
any Issuers or any Subsidiary Guarantor (under its present name and
any previous names) as the debtor, together with copies of such
financing statements (none of which shall cover any collateral
described in any Security Document, other than such financing
statements that evidence Permitted Liens);
(E) bailee letters and landlord waivers, if any, in form and
substance reasonably satisfactory to the Initial Purchasers, executed
by the Issuers or the appropriate Majestic Entities for delivery to
each of the persons specified in the Security Documents as holding
Collateral;
(F) confirmation from the Original Agent (as defined in the
Amended Intercreditor Agreement) that it has received the original
stock certificates of Xxxxx Indiana, Inc. and Capital II pledged to
the Secured Party pursuant to the Security Documents, together with
undated stock powers or endorsements duly executed in blank in
connection therewith;
(G) such other approvals, opinions, or documents as the Trustee
or the Initial Purchaser may reasonably request in form and substance
reasonably satisfactory to the Trustee and the Initial Purchaser; and
(H) the Trustee and its counsel and the Initial Purchaser and its
counsel shall be satisfied that (i) the Lien granted to the Trustee,
for the benefit of itself and the Holders is of the priority described
in the Offering Circular; and (ii) no Lien exists on any of the
collateral described above other than the Lien created in favor of the
Trustee, for the benefit of itself and the Holders, pursuant to the
Security Documents, in each case subject to the Permitted Liens.
(xix) Filing Statements. All Uniform Commercial Code financing
statements or other similar financing statements and Uniform Commercial
Code Form UCC-3 termination statements required pursuant to clauses (A) and
(C) above (collectively, the "Filing Statements") shall have been delivered
to CT Corporation System or another similar filing service company
acceptable to the Trustee (the "Filing Agent"). The Filing Agent shall have
acknowledged in a writing reasonably satisfactory to the Trustee and its
counsel (i) the Filing Agent's receipt of all Filing Statements, (ii) that
the Filing Statements have either been submitted for filing in the
appropriate filing offices or will be submitted for filing in the
appropriate offices within ten days following the Closing Date and (iii)
that the Filing Agent will notify the Trustee and its counsel of the
results of such submissions within 30 days following the Closing Date.
(b) Conditions to Issuers' and Subsidiary Guarantors' Obligations. The
obligations of the Issuers to sell, and the obligations of the Subsidiary
Guarantors to guarantee, the Series A Notes under this Agreement is subject to
the satisfaction or waiver of each of the following conditions:
31
(i) Payment. The Initial Purchaser shall have delivered payment to the
Issuers for the Series A Notes pursuant to Sections 2 and 4 of this
Agreement and shall have complied with all other obligations and agreements
required to be complied with by it hereunder on or prior to the Closing
Date.
(ii) Representations and Warranties. All of the representations and
warranties of the Initial Purchaser in this Agreement shall be true and
correct in all material respects at and as of the Closing Date, with the
same force and effect as if made on and as of such date.
(iii) No Injunctions. No injunction, restraining order or order of any
nature by a Governmental Authority shall have been issued as of the Closing
Date that would prevent or interfere with the issuance and sale of the
Series A Notes; and no stop order suspending the qualification or exemption
from qualification of any of the Series A Notes in any jurisdiction shall
have been issued and no Proceeding for that purpose shall have been
commenced or be pending or contemplated as of the Closing Date.
10. Termination. This Agreement shall become effective upon the execution
and delivery of this Agreement by the parties hereto. The Initial Purchaser may
terminate this Agreement at any time prior to the Closing Date by written notice
to the Issuers if any of the following has occurred:
(a) Material Adverse Effect. Since the date as of which information is
given in the Offering Circular, any Material Adverse Effect or any Material
Adverse Change that would, in the Initial Purchaser's judgment, (i) make it
impracticable or inadvisable to proceed with the Offering or delivery of the
Series A Notes, including the Exempt Resales, on the terms and in the manner
contemplated in the Offering Circular or (ii) materially impair the investment
quality of the Notes.
(b) Failure to Satisfy Conditions. The failure of the Issuers or any of the
Subsidiary Guarantors to satisfy the conditions contained in Section 9(a) on or
prior to the Closing Date.
(c) Outbreak of Hostilities. Any attack on or incidences of terrorism
involving the United States, any outbreak or escalation of hostilities directly
or indirectly involving the United States, any military action or commencement
or declaration of war by or directly or indirectly involving the United States,
any declaration of a national emergency, any other calamity, emergency or crisis
directly or indirectly involving the United States, any material adverse change
in economic conditions in or the financial markets of the United States or
elsewhere or any material adverse change or development involving a prospective
change in national or international political, financial or economic conditions,
in each case the effect of which could make it, in the Initial Purchaser's
judgment, impracticable or inadvisable to market or proceed with the offering or
delivery of the Series A Notes on the terms and in the manner contemplated in
the Offering Circular or to enforce contracts for the sale of any of the Series
A Notes.
(d) Suspension of Trading. The suspension or limitation of trading
generally in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq
32
National Market or any setting of limitations on prices for securities on any
such exchange or on the Nasdaq National Market.
(e) Enactment of Adverse Law. The enactment, publication, decree or other
promulgation after the date hereof of any Applicable Law that in the Initial
Purchaser's opinion materially and adversely affects, or could materially and
adversely affect, the properties, business, prospects, result of operations,
earnings, assets, liabilities or condition (financial or otherwise) of either of
the Issuers or any of the Subsidiaries.
(f) Downgrade of Securities. On or after the date hereof, (i) there shall
not have occurred any downgrading, suspension or withdrawal of, nor shall any
notice have been given of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended review) for a
possible change that does not indicate the direction of the possible change in,
any rating of the Issuers or any of the Subsidiary Guarantors or any securities
of the Issuers or any of the Subsidiary Guarantors (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have
occurred any adverse change, nor shall any notice have been given of any
potential or intended adverse change, in the outlook for any rating of Issuers
or the Subsidiary Guarantors or any securities of Issuers or the Subsidiary
Guarantors (by any such rating organization and (iii) no such rating
organization shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Notes than that on which the Notes were
marketed.
(g) Banking Moratorium. The declaration of a banking moratorium by any
Governmental Authority; or the taking of any action by any Governmental
Authority after the date hereof in respect of its monetary or fiscal affairs
that in the Initial Purchaser's opinion could have a material adverse effect on
the financial markets in the United States or elsewhere.
The respective indemnities, contribution and expense reimbursement
provisions and agreements, and representations, warranties and other statements
of the Issuers and the Subsidiary Guarantors and the Initial Purchaser set forth
in or made pursuant to this Agreement shall remain operative and in full force
and effect, and will survive, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of the Initial Purchaser or any
of the Issuers or Subsidiary Guarantors, or any of their respective officers,
directors, members or managers or any of their respective controlling persons,
(ii) acceptance of the Notes, and payment for them hereunder, and (iii) any
termination of this Agreement (including, without limitation, any termination
pursuant to this Section 10). Without limiting the foregoing, notwithstanding
any termination of this Agreement, the Issuers and the Subsidiary Guarantors
shall be and shall remain jointly and severally liable (i) for all expenses that
they have agreed to pay pursuant to Section 5(f), and (ii) pursuant to Section
8.
11. Miscellaneous. (a) Notices. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to any of the Majestic
Entities, to 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, facsimile
number (000) 000-0000, Attention: Chief Financial Officer, with a copy to 000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxx, XX 00000, facsimile number (702)
382-5562, Attention: Chief Financial Officer, and an additional copy to
00
Xxxxxx Xxxxxxx XXXX, 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, facsimile
number (000) 000-0000, Attention: Jin-Xxx Xxx, Esq. and (ii) if to the Initial
Purchaser, to c/x Xxxxxxxxx & Company, Inc., 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Fellder, Esq., with a copy to Mayer,
Brown, Xxxx & Maw LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx X. Xxxxx, Esq. (provided, that any notice pursuant to Section 8 will be
mailed, delivered, telegraphed or sent by facsimile and confirmed to the party
to be notified and its counsel), or in any case to such other address as the
person to be notified may have requested in writing.
(b) Successors and Assigns. This Agreement has been and is made solely for
the benefit of and shall be binding upon each of the Issuers, the Subsidiary
Guarantors, the Initial Purchaser and, to the extent provided in Section 8, the
controlling persons, officers, directors, partners, employees, representatives
and agents referred to in Section 8, and their respective heirs, executors,
administrators, successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Series A Notes from the Initial Purchaser merely because
of such purchase. Notwithstanding the foregoing, it is expressly understood and
agreed that each purchaser who purchases Series A Notes from the Initial
Purchaser is intended to be a beneficiary of the Issuers' covenants contained in
the Registration Rights Agreement to the same extent as if the Series A Notes
were sold and those covenants were made directly to such purchaser by each of
the Issuers, and each such purchaser shall have the right to take action against
each of the Issuers to enforce, and obtain damages for any breach of, those
covenants.
(c) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED, AND
THE RIGHTS OF THE PARTIES SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAWS AND RULE 327(b) OF THE NEW YORK CIVIL
PRACTICE LAWS AND RULES. EACH OF THE ISSUERS AND SUBSIDIARY GUARANTORS HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE MAJESTIC
ENTITIES IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDINGS BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH OF THE ISSUERS AND SUBSIDIARY GUARANTORS IRREVOCABLY CONSENTS, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE
34
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
SUCH ISSUER OR SUCH SUBSIDIARY GUARANTOR, AS THE CASE MAY BE, AT THE ADDRESS SET
FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE INITIAL PURCHASER TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY OF THE ISSUERS AND SUBSIDIARY GUARANTORS IN ANY
OTHER JURISDICTION.
(d) Counterparts. This Agreement may be signed in various counterparts
which together shall constitute one and the same instrument.
(e) Headings. The Headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. When
a reference is made in this Agreement to a Section, paragraph, subparagraph,
Schedule or Exhibit, such reference shall mean a Section, paragraph,
subparagraph, Schedule or Exhibit to this Agreement unless otherwise indicated.
(f) Interpretation. The words "include," "includes," and "including" when
used in this Agreement shall be deemed in each case to be followed by the words
"without limitation." The phrases "the date of this agreement," "the date
hereof," and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to December 16, 2005. The words "hereof," "herein,"
"herewith," "hereby" and "hereunder" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole and not to
any particular provision of this Agreement. The phrase "to the knowledge of the
issuers and the guarantors" means the actual knowledge, after due inquiry, of
each of Xxx X. Xxxxxx and Xxx Xxxxxxx. Unless the context otherwise requires,
defined terms shall include the singular and plural and the conjunctive and
disjunctive forms of the terms defined.
(g) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(h) Amendment. This Agreement may be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may be given,
provided that the same are in writing and signed by each of the signatories
hereto.
12. Xxxxx Execution. On the Closing Date, effective upon the consummation
of the Acquisition, (i) the Company will cause Xxxxx to become a party to this
Agreement (as a Subsidiary Guarantor) by executing and delivering this Agreement
to the Initial Purchaser and executing and delivering the Guarantees, Pledge
Joinder, Registration Rights Agreement and
35
Second Supplemental Indenture and any other Document to which Xxxxx is to become
a party, (ii) the Company shall execute and deliver the Pledge Supplement. By
executing and delivering this Agreement, Xxxxx expressly agrees (A) to take any
and all actions required to be taken by a Subsidiary Guarantor under this
Agreement or any other Document to which it becomes a party and (B) that all
representations and warranties made in this Agreement by the Company on behalf
of Xxxxx shall be considered to be effective as to, and binding upon, Xxxxx as
of the consummation of the Acquisition.
[signature pages follow this page]
36
Please confirm that the foregoing correctly sets forth the agreement among
the Issuers, the Subsidiary Guarantors and the Initial Purchaser.
Very truly yours,
THE MAJESTIC STAR CASINO, LLC
By:
------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
THE MAJESTIC STAR CASINO CAPITAL CORP.
By:
------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
MAJESTIC INVESTOR, LLC
By:
------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
MAJESTIC INVESTOR HOLDINGS, LLC
By:
------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
Senior Secured Notes Purchase Agreement
S-1
MAJESTIC INVESTOR CAPITAL CORP.
By:
------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
XXXXXX MISSISSIPPI GAMING, LLC
By:
------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
XXXXXX COLORADO GAMING, LLC
By:
-----------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
MAJESTIC STAR CASINO CAPITAL CORP. II
By:
-----------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
Senior Secured Notes Purchase Agreement
S-2
ACCEPTED AND AGREED TO:
XXXXXXXXX & COMPANY, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Senior Secured Notes Purchase Agreement
S-3
Accepted and Agreed to as of the 21st day of December, 2005:
THE MAJESTIC STAR CASINO II, INC.,
(f.k.a. Xxxxx Indiana, Inc.)
By:
------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
XXXXXXXXXX HARBOR PARKING
ASSOCIATES, LLC
By:
------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
XXXXXXXXXX HARBOR RIVERBOATS, L.L.C.
By:
------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
Senior Secured Notes Purchase Agreement
S-4
