Exhibit 1
7,000,000 Shares
XXXX RESORTS, LIMITED
Common Stock
($0.01 Par Value)
EQUITY UNDERWRITING AGREEMENT
May 7, 2004
DEUTSCHE BANK SECURITIES INC.
As Representative of the several
Underwriters named in Schedule I
attached hereto
c/o Deutsche Bank Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxx Resorts, Limited, a Nevada corporation (the "Company"), proposes
to sell to the several underwriters (the "Underwriters") named in Schedule I
hereto, for whom Deutsche Bank Securities Inc. ("you" or "DBSI") is acting as
the representative (the "Representative"), an aggregate of 7,000,000 shares
(the "Firm Shares") of the Company's Common Stock, par value $0.01 per share
(the "Common Stock"). The respective amounts of the Firm Shares to be so
purchased by the several Underwriters are set forth opposite their names in
Schedule I hereto. The Company also proposes to sell at the Underwriters'
option an aggregate of up to 1,050,000 additional shares (the "Option Shares")
of the Company's Common Stock as set forth below.
As the Representative, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters,
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the Firm Shares set forth opposite their respective names
in Schedule I, plus their pro rata portion of the Option Shares if you elect
to exercise the over-allotment option in whole or in part for the account of
the several Underwriters. The Firm Shares and the Option Shares (to the extent
the aforementioned option is exercised) are herein collectively called the
"Shares." The offering and sale of the Shares is referred to herein as the
"Offering".
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the
Underwriters as follows:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-114022), and related prospectuses for the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of the Company's
Common Stock and other securities, as described therein, and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission (the "Rules and Regulations") under the
Securities Act, which registration statement, as so amended (including
post-effective amendments, if any), has been declared effective by the
Commission and copies of which have heretofore been delivered or made
available to the Underwriters. The registration statement, as amended at the
time it became effective, including the exhibits and information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A or 434(d) under the Securities Act, is hereinafter
referred to as the "Registration Statement." If the Company has filed or is
required pursuant to the terms hereof to file a registration statement
pursuant to Rule 462(b) under the Securities Act increasing the size of the
Offering by registering additional shares of Common Stock (a "Rule 462(b)
Registration Statement"), then, unless otherwise specified, any reference
herein to the term "Registration Statement" shall be deemed to include such
Rule 462(b) Registration Statement. Other than a Rule 462(b) Registration
Statement, which, if filed, becomes effective upon filing, no other document
with respect to the Registration Statement relating to this Offering has
heretofore been filed with the Commission. All of the Shares have been
registered under the Securities Act pursuant to the Registration Statement or,
if any Rule 462(b) Registration Statement is filed, will be duly registered
under the Securities Act with the filing of such Rule 462(b) Registration
Statement. No stop order suspending the effectiveness of either the
Registration Statement or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission. The Company, if required by the Rules and
Regulations of the Commission or by the Securities Act, proposes to file the
Prospectus (as defined below) with the Commission pursuant to Rule 424(b)
under the Securities Act ("Rule 424(b)"). The base prospectus contained in the
Registration Statement, at the time such registration statement was declared
effective, as supplemented by the final prospectus supplement relating to the
Offering in the form in which it is to be filed with the Commission pursuant
to Rule 424(b), is hereinafter referred to as the "Prospectus," except that if
any revised prospectus or prospectus supplement shall be provided to the
Underwriters by the Company for use in connection with the Offering which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule
424(b)), the term "Prospectus" shall also refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any reference herein to the
Registration Statement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on or before the effective date of the
Registration Statement or the date of the Prospectus, as the case may be, and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement or the Prospectus shall be deemed to
refer to and include (i) the filing, on or prior to the Closing Date, of any
document under the Exchange Act after the effective date of the Registration
Statement or the date of the Prospectus, as the case may be, which is
incorporated therein by reference and (ii) any such document so filed. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement and the Prospectus, or any amendments or supplements to
any of the foregoing shall be deemed to include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (the "XXXXX System").
(b) At the time of the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement or the effectiveness of
any post-effective amendment to the Registration Statement, when the
Prospectus is first filed with the Commission pursuant to Rule 424(b) or Rule
434 under the Securities Act ("Rule 434"), when any supplement to or amendment
of the Prospectus is filed with the Commission, when any document filed under
the Exchange Act (and incorporated by reference) was or is filed and at the
Closing Date, the Registration Statement and the Prospectus and any such
amendments thereof and supplements thereto contained or will contain all
statements which are required to be stated therein and complied or will comply
in all material respects with the applicable provisions of the Securities Act,
the Exchange Act and the Rules and Regulations, as applicable. If Rule 434 is
used, the Company will comply with the requirements of Rule 434 and the
Prospectus shall not be "materially different," as such term is used in Rule
434, from the Prospectus included in the Registration Statement at the time it
became effective. No representation and warranty is made in this subsection
(b), however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter through
the Representative specifically for use therein.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the state of
Nevada, with corporate power and authority to own or lease and operate its
properties and conduct its business as described in the Registration Statement
and the Prospectus and to enter into and to perform its obligations under this
Agreement. Each of the subsidiaries of the Company is listed on Exhibit A
hereto (each a "Subsidiary," and collectively, the "Subsidiaries") and has
been duly organized and is validly existing as a corporation or limited
liability company in good standing under the laws of the jurisdiction of its
organization, with corporate or limited liability company power and authority
to own or lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus. The Company does
not own or control, directly or indirectly, any corporation, association or
other entity other than the Subsidiaries listed on Exhibit A hereto. The
Company and each of the Subsidiaries are duly qualified to transact business
in all jurisdictions in which the conduct of their business requires such
qualification, except for such jurisdictions where the failure to so qualify
would not, individually or in the aggregate, reasonably be expected to result
in any material adverse change in the business, properties, assets,
operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole, whether or not occurring in the ordinary
course of business (any such change, a "Material Adverse Change"). The
outstanding membership interests and shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, the shares of
capital stock of such Subsidiaries are fully paid and non-assessable and,
except as accurately described in all material respects in the Registration
Statement or Prospectus or as set forth on Exhibit A, all such interests and
shares are owned by the Company or another Subsidiary free and clear of all
liens, encumbrances and equities and claims; and except as accurately
described in all material respects in the Registration Statement or Prospectus
or as set forth on Exhibit A, there are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other similar rights
to subscribe for or purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of
its Subsidiaries.
(d) As of the date hereof, the authorized capital stock of
the Company consists only of 400,000,000 shares of Common Stock, par value
$0.01 per share, and 40,000,000 shares of Preferred Stock, par value $0.01 per
share. As of the date hereof, there are 82,168,484 shares of Common Stock and
no shares of Preferred Stock outstanding. The outstanding shares of Common
Stock of the Company have been duly authorized and validly issued, are fully
paid and non-assessable, and have been issued in compliance with federal and
state securities laws. None of the outstanding shares of Common Stock of the
Company were issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase securities of the
Company. The Shares to be issued by the Company pursuant to this Agreement
have been duly authorized by all necessary corporate action, and such Shares,
when issued, will be validly issued, fully paid and non-assessable; and,
except as set forth in the Registration Statement or the Prospectus, no
preemptive rights, rights of first refusal or other similar rights of
stockholders or others exist with respect to any of the Shares or the issue
and sale thereof by the Company. Neither the filing of the Registration
Statement nor the Offering or sale of the Shares contemplated by this
Agreement gives rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any shares of Common Stock.
The Common Stock conforms in all material respects to the description thereof
contained in the Registration Statement. The form of certificate for the
shares of Common Stock conforms to the form required by the corporate law of
the state of Nevada.
(e) The table relating to the capitalization of the Company
under the heading "Capitalization" set forth in the Prospectus, including the
footnotes thereto, (i) with respect to the actual capitalization of the
Company as of March 31, 2004, presents fairly the information contained
therein and (ii) with respect to the expected capitalization of the Company as
of March 31, 2004 on an as adjusted basis giving effect to the sale of the
Shares and the other transactions contemplated by this Agreement, the
Registration Statement and the Prospectus, was prepared in good faith by the
Company, and represents the best estimates and assumptions of the Company with
respect to the information contained therein. All of the Shares conform to the
description thereof contained in the Registration Statement.
(f) As of their respective dates and at all subsequent times
up to and including the Closing Date (as defined in Section 2.2(b) (and, if
any Option Shares are purchased, the Option Closing Date (as defined in
Section 2.2(c), the Registration Statement and the Prospectus, as amended or
supplemented by any amendments and supplements thereto, do not contain, and
will not contain, any untrue statement of material fact and do not omit, and
will not omit, to state any material fact required to be stated therein or
necessary to make the statements therein, (i) in the case of the Registration
Statement, not misleading and (ii) in the case of the Prospectus, in the light
of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
information contained in or omitted from the Prospectus, or any such amendment
or supplement, in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter through the
Representative specifically for use in the preparation thereof.
(g) The consolidated financial statements of the Company and
its Subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement and the Prospectus
(collectively, the "financial statements"), present fairly the consolidated
financial position and the results of operations and cash flows of the Company
and its Subsidiaries, at the indicated dates and for the indicated periods.
Such financial statements have been prepared in accordance with generally
accepted principles of accounting as applied in the United States,
consistently applied throughout the periods involved, except as disclosed
therein, and all adjustments necessary for a fair presentation of results for
such periods have been made. The financial and statistical data included or
incorporated by reference in the Registration Statement and the Prospectus,
including such data set forth under the captions "Capitalization" and
"Selected Consolidated Historical Financial Data," presents fairly the
information shown therein and such data has been compiled on a basis
consistent with the financial statements presented therein and the books and
records of the Company and its Subsidiaries. The as adjusted financial
information included or incorporated by reference in the Registration
Statement and the Prospectus presents fairly in all material respects the
information shown therein, has been properly compiled on the bases described
therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(h) Deloitte & Touche LLP, which has audited and certified
the financial statements filed with the Commission as part of, or incorporated
by reference in, the Registration Statement, is an independent public
accountant as required by the Securities Act and the Rules and Regulations of
the Commission.
(i) There are no pro forma or as adjusted financial
statements which are required to be included in the Registration Statement and
Prospectus in accordance with Regulation S-X which have not been included as
so required. The pro forma and as adjusted financial information included in
the Registration Statement and the Prospectus has been properly compiled and
prepared in accordance with the applicable requirements of the Securities Act,
the Exchange Act and the Rules and Regulations and includes all adjustments
necessary to present fairly in accordance with generally accepted accounting
principles the pro forma and as adjusted financial position of the respective
entity or entities presented therein at the respective dates indicated and
their cash flows and the results of operations for the respective periods
specified.
(j) The assumptions used in preparing the pro forma and as
adjusted financial information included in the Registration Statement and the
Prospectus provide a reasonable and good faith basis for presenting the
significant effects directly attributable to the transactions or events
described therein; the related adjustments made in the preparation of such pro
forma and as adjusted financial information give appropriate effect to those
assumptions; and such pro forma and as adjusted financial information reflect
the proper application of those adjustments to the corresponding historical
financial statement amounts.
(k) There is no action, suit, claim or proceeding pending
or, to the knowledge of the Company, threatened (i) against the Company or any
of the Subsidiaries or (ii) that has as the subject thereof any officer or
director of, or property owned or leased by or to, the Company or any of its
Subsidiaries, in each case, before any court or administrative agency or
otherwise where, in any such case, (A) there is a reasonable possibility of
such action, suit or proceeding being determined adversely to the Company or
its Subsidiaries and (B) any such action, suit, claim or proceeding, if so
determined adversely, would reasonably be expected to result in a Material
Adverse Change, or prevent, adversely affect, hinder or delay the consummation
of the transactions contemplated by this Agreement or the performance by the
Company or any of its Subsidiaries of their obligations hereunder except as
otherwise disclosed in the Registration Statement or the Prospectus. Except as
otherwise disclosed in the Registration Statement or the Prospectus, neither
the Company nor any of its Subsidiaries is involved in any labor dispute with
the employees of the Company or any of its Subsidiaries or predecessors, or
with the employees of any principal supplier, contractor or sub-contractor of
the Company or any of its Subsidiaries that would reasonably be expected to
result in a Material Adverse Change, and, to the best of the Company's
knowledge, no such dispute is threatened or imminent.
(l) Except as disclosed in the Registration Statement or the
Prospectus, the Company and its Subsidiaries have good and marketable title in
fee simple to all real property and good title to all personal property owned
by them or reflected as owned by them in the Registration Statement and the
Prospectus, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in the consolidated financial statements described
in Section 1(g) above or that do not, individually or in the aggregate,
materially and adversely affect the value of such property and do not,
individually or in the aggregate, materially interfere with the use made or
proposed to be made of such property by the Company and its Subsidiaries.
Except as disclosed in the Registration Statement or the Prospectus, the real
property, improvements, equipment and personal property held under lease by
the Company or any Subsidiary are held under valid and enforceable leases,
with such exceptions as are not material and do not materially interfere with
the use made or proposed to be made of such leased real property,
improvements, equipment or personal property by the Company or such
Subsidiary.
(m) The Company and its Subsidiaries have timely filed all
federal, state, local and foreign tax returns that have been required to be
filed, all of which tax returns are true, correct and complete in all material
respects, and have timely paid all taxes due and payable, except (i) as may be
being contested in good faith and by appropriate proceedings and for which the
Company and its Subsidiaries have established reserves that are adequate for
the payment thereof and are in conformity with generally accepted accounting
principles as applied in the United States or (ii) to the extent that the
failure to timely file any such tax returns or to timely pay such taxes has
not resulted in, and would not reasonably be expected to result in, a Material
Adverse Change. All material taxes of the Company and its Subsidiaries not yet
due and payable have been provided for in the consolidated financial
statements described in Section 1(g) above to the extent required by and in
conformity with generally accepted accounting principles as applied in the
United States, and the Company has not received written notice of any actual
or proposed additional material tax assessment against the Company or any of
its Subsidiaries.
(n) Except as disclosed in each of the Registration
Statement and the Prospectus, since the respective dates as of which
information is given in each of the Registration Statement and the Prospectus,
as each may be amended or supplemented, (i) there has not been any Material
Adverse Change or any development that would reasonably be expected to result
in a Material Adverse Change, (ii) the Company and its Subsidiaries, taken as
a whole, have not incurred any material liability or obligation, indirect,
direct or contingent, not in the ordinary course of business, nor entered into
any material transaction or agreement not in the ordinary course of business
and (iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company or, except for dividends paid to the Company or
other Subsidiaries, any of its Subsidiaries on any class of capital stock or
repurchase or redemption or call by the Company or any of its Subsidiaries of
capital stock.
(o) The Company has full right, power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus. This Agreement and the transactions
contemplated by this Agreement, the Registration Statement and the Prospectus
have been duly and validly authorized by all necessary corporate action on the
part of the Company. This Agreement has been duly executed and delivered by
the Company, and constitutes the legal, valid, and binding obligation of the
Company, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws affecting creditors' rights
generally, except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and except as may be limited by state or
federal laws or policies relating to the non-enforceability of the
indemnification provisions contained herein.
(p) Neither the Company nor any of its Subsidiaries is or
with the giving of notice or passage of time, or both, will be, in violation
of or in default under (i) its charter, by-laws, operating agreement or other
organizational document or (ii) the terms of any other security issued by it
or any obligation, agreement, covenant or condition contained in any
stockholders' agreement, contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of them may be
bound, or to which any of the property or assets of the Company or any of its
Subsidiaries is subject (collectively, the "Agreements and Instruments")
except, solely with respect to this clause (ii), for such violations or
defaults that would not reasonably be expected to result in a Material Adverse
Change. The (x) execution, delivery and performance of this Agreement, and any
other material agreement or instrument entered into or issued or to be entered
into or issued by the Company or any of its Subsidiaries in connection with
the transactions contemplated hereby or thereby, (y) compliance by the Company
and its Subsidiaries with their obligations hereunder or thereunder and (z)
consummation of the transactions contemplated by this Agreement or the
Prospectus (including the issuance and sale of the Shares and the use of the
proceeds therefrom in the manner set forth under the caption "Use of Proceeds"
in the Prospectus), do not and will not, (i) (A) require the consent from any
other party that has not already been obtained, (B) result in a breach of or
conflict with any of the terms and provisions of any Agreements and
Instruments, (C) constitute a default (or an event which with notice or the
passage of time, or both, would constitute a default) under any Agreements and
Instruments, (D) except with respect to transactions contemplated by the
Registration Statement and the Prospectus, result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its Subsidiaries or (E) trigger a Repayment Event (as
defined below) pursuant to any Agreements or Instruments, except for such
failure to obtain necessary consents, breaches, conflicts, defaults or
Repayment Events or liens, charges or encumbrances that, singly or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Change; (ii) violate any provision of the charter, by-laws, operating
agreement or other organizational document of the Company or any of its
Subsidiaries as applicable; or (iii) violate any applicable law, statute,
rule, regulation, judgment, order, writ, decree, ordinance or directive, of
any government, judicial, regulatory or other legal or governmental
instrumentality, agency, body or court, domestic or foreign, having
jurisdiction over it or any of its assets or properties, except as would not
reasonably be expected to have a Material Adverse Change. As used herein, a
"Repayment Event" means any event or condition that gives the holder of any
note, debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of
its Subsidiaries.
(q) No approval, consent, order, authorization, designation,
declaration or filing by or with any government, judicial, regulatory,
administrative or other legal or governmental body, foreign or domestic
(including, without limitation, the Nevada Gaming Commission, the Nevada State
Gaming Control Board, the Xxxxx County Liquor and Gaming Licensing Board, the
Public Utilities Commission of Nevada, the Nevada State Engineer's Office and
the Macau Special Administrative Region of the People's Republic of China)
(together, the "Consents") is necessary in connection with the execution,
delivery and performance by the Company of this Agreement, and the
consummation of the transactions contemplated by this Agreement or the
Prospectus, except (a) such as have been already obtained, (b) the
registration under the Securities Act or the Rules and Regulations of the
Shares, which has become effective, (c) approvals by or from the gaming and
other regulatory authorities (including, without limitation, the Nevada Gaming
Commission, the Nevada State Gaming Control Board, the Xxxxx County Liquor and
Gaming Licensing Board, the Public Utilities Commission of Nevada, the Nevada
State Engineer's Office and the Macau Special Administrative Region of the
People's Republic of China), which have been obtained, (d) such Consents as
may be required under the State securities of Blue Sky Laws, the Nasdaq
National Market or the by-laws and rules of the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the purchase and
distribution of the Shares by the Underwriters, each of which, except as
disclosed in the Prospectus, has been obtained and is in full force and
effect, and (e) as disclosed in the Registration Statement and the Prospectus.
(r) Except as disclosed in the Registration Statement or the
Prospectus or as would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change, (i) the Company and each of
its Subsidiaries has obtained and holds all franchises, licenses, leases,
permits, approvals, notifications, certifications, registrations,
authorizations, exemptions, variances, qualifications, easements, rights of
way, liens and other rights, privileges and approvals (including with respect
to environmental laws) required under any federal, state, local or foreign law
or governmental authority ("Permits") for the ownership or current use of all
real property owned or leased by the Company or such Subsidiary and for any
other property otherwise currently operated by or on behalf of, or for the
benefit of, such entity and for the operation of each of its businesses as
presently conducted, (ii) all such Permits are in full force and effect, and
the Company and each of its Subsidiaries has performed and observed all
requirements of such Permits, (iii) no event has occurred that allows or
results in, or after notice or lapse of time would allow or result in,
revocation or termination by the issuer thereof or in any other impairment of
the rights of the holder of any such Permit, (iv) no such Permits contain any
restrictions, either individually or in the aggregate, that are materially
burdensome to the Company or any of its Subsidiaries, or to the current
operation of any of its businesses or any property currently owned, leased or
otherwise operated by such entity, (v) the Company and each of its
Subsidiaries reasonably believes that each of its Permits will be timely
renewed and complied with, without material expense, and that any additional
Permits that may be required of such entity in order to conduct its business
as proposed to be conducted will be timely obtained and complied with, without
material expense, and (vi) the Company does not have any knowledge or any
reason to believe that any governmental authority is considering limiting,
suspending, revoking or renewing any such Permits on terms materially more
burdensome than the terms of such Permit as in effect as the date hereof.
(s) Except as otherwise disclosed in the Registration
Statement or the Prospectus or as would not reasonably be expected to result
in a Material Adverse Change, (i) neither the Company nor any of its
Subsidiaries is or has in the past been in violation of any applicable
federal, state, local or foreign statute, law, rule, regulation, ordinance,
code or rule of common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"); (ii) neither the Company nor any of its Subsidiaries nor, to the
knowledge of the Company, any third party, has used, released, discharged,
generated, manufactured, produced, stored, or disposed of in, on, under, or
about the real property owned or leased by the Company or any of its
Subsidiaries or any improvements thereon (the "Sites") or transported thereto
or therefrom, any Hazardous Materials that would reasonably be expected to
subject the Company or any of its Subsidiaries to any liability under any
Environmental Law; (iii) there are no underground tanks and no Hazardous
Materials used, stored or present at or on the Sites that would reasonably be
expected to result in liability for the Company or any of its Subsidiaries
under applicable Environmental Laws; (iv) to the knowledge of the Company
after due inquiry, there is or has been no condition, circumstance, action,
activity or event that could reasonably form the basis of any violation of, or
any liability to the Company or any of its Subsidiaries under, any
Environmental Law; (v) there is no pending or, to the knowledge of the
Company, threatened, action, proceeding, investigation or inquiry by any
regulatory or governmental body or any non-governmental third party with
respect to the presence or release of Hazardous Materials, on, from or to the
Sites; (vi) the Company does not have any knowledge of any past or existing
violations of any applicable Environmental Laws by any person relating in any
way to the Sites; and (vii) neither the Company nor any of its Subsidiaries
has received any complaint, adverse order, directive, citation or adverse
notice from any governmental body with respect to any Environmental Law.
(t) Except as otherwise disclosed in the Registration
Statement or the Prospectus, (i) the Company and its Subsidiaries each own or
possess the valid right to use all trademarks, trade names, service marks,
domain names and copyrights (together with the applications for registrations
and registrations therefor), non-patent license rights, know-how (including
trade secrets and other unpatented and unpatentable proprietary or
confidential information, materials, systems or procedures), technologies,
inventions and other non-patent intellectual property or non-patent
proprietary rights (collectively, "Intellectual Property"), which are material
to any of their businesses and are presently used in their businesses, and
neither the Company nor any of its Subsidiaries has any reason to believe that
it or they will not own or possess or be able to obtain when needed the valid
right to use all Intellectual Property necessary to carry on their businesses
as presently proposed to be conducted; (ii) neither the Intellectual Property
owned or used by, nor the conduct or operation of the businesses (as presently
and proposed to be conducted or operated) of, the Company or any of its
Subsidiaries has infringed upon, misappropriated or violated, or, if the
businesses are conducted or operated as presently intended, will, to the
knowledge of the Company or any of its Subsidiaries, infringe upon,
misappropriate or violate, any Intellectual Property of any other person or
entity; (iii) to the knowledge of the Company, none of the Intellectual
Property or the patents or patent rights (collectively, the "Patents"),
employed by the Company or any of its Subsidiaries has been obtained or is
being used by the Company or any such Subsidiary in violation of any
contractual obligation binding on the Company, such Subsidiary or any of their
respective officers, directors or employees or otherwise in violation of the
rights of any persons, except as would not reasonably be expected to result in
a Material Adverse Change; (iv) neither the Company nor any of its
Subsidiaries has received any written communications or been served with any
document relating to any action or proceeding, nor, to the knowledge of the
Company or any of its Subsidiaries, is any action or proceeding pending,
alleging that the Company or any such Subsidiary has violated, infringed upon
or misappropriated, or, by conducting its business as set forth in the
Registration Statement and the Prospectus, would violate, infringe upon or
misappropriate, any of the Intellectual Property or Patents of any other
person or entity; (v) the Company does not know of any material infringement
by others of Intellectual Property or Patents owned by or licensed to the
Company or any of its Subsidiaries; (vi) neither the Company nor any of its
Subsidiaries has any reason to believe that it does not own or have a valid
right to use, or will not own or possess or be unable to acquire or obtain the
valid right to use, any Patents necessary to carry on their businesses as
presently conducted or as proposed to be conducted; and (vii) neither the
Company nor its Subsidiaries has any reason to believe that the Patents owned
or used by the Company or any of its Subsidiaries, or the conduct or operation
of their businesses has infringed, or that the Patents or the conduct or
operation of businesses as presently or proposed to be conducted will
infringe, any Patent of any other person or entity. The Company and its
Subsidiaries have taken all reasonable steps necessary to secure their
interests in, and protect the secrecy, confidentiality and value of, their
Intellectual Property and Patents, including without limitation entering into
written confidentiality agreements with their employees and contractors.
(u) Neither the Company, nor to the Company's knowledge, any
of its affiliates (within the meaning of Rule 144 under the Securities Act)
(each, an "Affiliate"), has taken, nor will the Company, or to the Company's
knowledge, any of such Affiliates take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares. The Company acknowledges that the Underwriters may engage in passive
market making transactions in the Shares on the Nasdaq National Market in
accordance with Regulation M under the Exchange Act.
(v) Neither the Company nor any of its Subsidiaries is, and
upon the issuance and sale of the Shares as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus, none
of them will be, required to register as an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended (the "1940 Act")
and the Rules and Regulations of the Commission.
(w) Neither the Company nor any of its Subsidiaries is a
"holding company" or a "subsidiary company" of a "holding company," as such
terms are defined in the Public Utilities Holding Company Act of 1935, as
amended, or is a "public utility," as such term is defined in the Federal
Power Act, as amended.
(x) To the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's officers,
directors or 5% or greater securityholders, other than (i) as set forth in the
Registration Statement and the Prospectus, (ii) Baron Capital Group's Inc.
affiliation with Baron Capital (a member of the NASD and a broker dealer for
several of its affiliated investment advisory firms) and (iii) Bank of America
Corporation's affiliation with Banc of America Securities LLC (a member of the
NASD).
(y) The Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States and to maintain
accountability for assets, (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(z) The Company and each of its Subsidiaries carry, or are
covered by, insurance with insurers of recognized financial responsibility in
such amounts, with such deductibles and covering such risks as is commercially
reasonable and as the Company and its Subsidiaries deem adequate and prudent
for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
businesses including, but not limited to, policies covering real and personal
property owned or leased by the Company and its Subsidiaries against theft,
damage, destruction, acts of vandalism and earthquakes. Such insurance
coverage (including deductibles, retentions and self-insurance amounts)
complies with the insurance coverage required at the Closing Date (or if any
Option Shares are being purchased, at the Option Closing Date) under the
Master Disbursement Agreement, dated as of October 30, 2002, by and among Xxxx
Las Vegas, LLC, Xxxx Las Vegas Capital Corp., Xxxx Design & Development, LLC,
Deutsche Bank Trust Company Americas, Xxxxx Fargo Bank, National Association
and Xxxxx Fargo Bank Nevada, National Association. The Company has no reason
to believe that such insurance coverage cannot be renewed as and when such
coverage expires or that similar coverage could not be obtained from similar
insurers at a cost that would not reasonably be expected to result in a
Material Adverse Change (other than as a result of general market conditions).
(aa) Except for matters that would not reasonably be
expected to result in a Material Adverse Change, the Company and each of its
Subsidiaries is in compliance with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"). No "reportable
event" (as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company or any of its Subsidiaries would
have any liability. Neither the Company nor any of its Subsidiaries has
incurred or expects to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Section 412 with respect to unpaid or delinquent contributions or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"). Except for matters that
would not reasonably be expected to result in a Material Adverse Change, each
"pension plan" for which the Company or any Subsidiary would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or by failure to act,
that would cause the loss of such qualification.
(bb) The statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
which the Company reasonably and in good faith believes are reliable and
accurate, and such data agree with the sources from which they are derived.
(cc) Neither the Company nor any of its Subsidiaries nor, to
the best of the Company's knowledge, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any of its
Subsidiaries or any beneficial owner of 10 percent or more of the capital
stock of the Company or any of its Subsidiaries has, with respect to the
Company or any of its Subsidiaries, (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating
to political activity, (ii) made any unlawful payment to any foreign or
domestic government official or employee from corporate funds, (iii) violated
or is in violation of any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (iv) made any bribe, unlawful rebate, payoff, influence
payment, kickback or other unlawful payment.
(dd) Based on the knowledge of the chief executive officer
and chief financial officer of the Company, (i) the Annual Report on Form 10-K
for the year ended December 31, 2003 and the Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 2004 (each a "Report", and together, the
"Reports"), fully comply with the requirements of Section 13(a) or 15(d) of
the Exchange Act; and (ii) the information contained in each Report fairly
presents, in all material respects, the financial condition and results of
operations of the Company and its consolidated Subsidiaries as of the date of
filing with the Commission.
(ee) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement and the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and will comply
in all material respects with the requirements of the Securities Act, the
Exchange Act and the Rules and Regulations of the Commission thereunder, and,
when read together with the other information set forth in, or incorporated by
reference in, the Prospectus, at the time the Registration Statement and any
amendments thereto became effective and at the Closing Date (as defined
below), do not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(ff) There are no contracts or other documents (including,
without limitation, any voting agreement), which are required to be described
in the Registration Statement and the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act, the Exchange Act or the Rules
and Regulations of the Commission thereunder and which have not been so
described or filed.
(gg) The Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act and files reports with the Commission
on the XXXXX System. The Company's Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and the outstanding shares of the Company's
Common Stock are listed on the Nasdaq National Market and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of its Common Stock under the Exchange Act or de-listing the
Common Stock from the Nasdaq National Market, nor has the Company received any
notification that the Commission or the Nasdaq National Market is
contemplating terminating such registration or listing.
(hh) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(ii) None of the Company, its Affiliates or any person
acting on its or any of their behalf (other than the Underwriters, as to whom
the Company does not make any representation) has engaged or will engage, in
connection with the offering of the offered Shares, in any form of general
solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act.
(jj) No relationship, direct or indirect, exists between or
among any of the Company, a Subsidiary or any affiliate of the Company, on the
one hand, and any director, officer, stockholder, customer or supplier of the
Company, a Subsidiary or any affiliate of the Company, on the other hand,
which is required by the Securities Act, the Exchange Act or the Rules and
Regulations to be described in the Registration Statement or the Prospectus
which is not so described as required. There are no outstanding loans,
advances (except normal advances for business expenses in the ordinary course
of business) or guarantees of indebtedness by the Company, a Subsidiary or any
affiliate of the Company to or for the benefit of any of the officers or
directors of the Company, a Subsidiary or any affiliate of the Company or any
of their respective family members which are required to be disclosed in the
Registration Statement and the Prospectus and which are not disclosed therein.
(kk) There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments for sale or
liens related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in, the
Company or any wholly owned subsidiary thereof or with respect to any capital
stock or other ownership interest that the Company or any of its Subsidiaries
owns in a less than wholly owned subsidiary, except (i) as otherwise disclosed
in the Prospectus, or (ii) such as are not material to the business,
prospects, financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole.
(ll) The chief executive officer and chief financial officer
of the Company are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Rules 13a-14 and 15d-14 of the Rules
and Regulations under the Exchange Act) for the Company and have (i) designed
such disclosure controls and procedures to ensure that material information
relating to the Company and its Subsidiaries is made known to the chief
executive officer and chief financial officer by others within the Company and
its Subsidiaries, (ii) evaluated the effectiveness of the of the Company's
disclosure controls and procedures as of a the end of the period (the
"Evaluation Date") covered by each Report, and (iii) presented in each Report
their conclusions about the effectiveness of the disclosure controls and
procedures based on their evaluation as of the Evaluation Date. The chief
executive officer and chief financial officer of the Company have disclosed,
based upon their evaluation as of the Evaluation Date, to the Company's
auditors and the Audit Committee of the Company's Board of Directors (i) all
significant deficiencies in the design or operation of internal controls which
could adversely affect the Company's ability to record, process, summarize and
report financial data and have identified for the Company's auditors any
material weaknesses in internal controls, and (ii) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the registrant's internal controls. The chief executive officer and
chief financial officer have indicated in each Report whether or not there
were significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the Evaluation Date,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
(nn) Except as disclosed in the Registration Statement and
the Prospectus, there are no contracts, agreements or understandings between
the Company (or any Subsidiary) and any person that would give rise to a valid
claim against the Company, any Subsidiary or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with the
transactions contemplated by this Agreement, the Registration Statement and
the Prospectus or, to the Company's or any Subsidiary's knowledge, any
arrangements, agreements, understandings, payments or issuance with respect to
the Company or any Subsidiary or any of their respective officers, directors,
shareholders, partners, employees, subsidiaries or affiliates that may affect
the Underwriters' compensation as determined by the NASD.
(mm) Except as disclosed in the Registration Statement and
the Prospectus, no holder of any Common Stock or other security of the Company
or any Subsidiary or any security convertible into, or exercisable or
exchangeable for, Common Stock or any other such security (any "Relevant
Security") or debt security has any rights to require registration of any
Relevant Security or debt security as part or on account of, or otherwise in
connection with, the offer and sale of the Shares contemplated hereby, and any
such rights so disclosed have either been fully complied with by the Company
or effectively waived by the holders thereof, and any such waivers remain in
full force and effect.
(oo) Any certificate required hereunder signed by or on
behalf of the Company and delivered to DBSI or to counsel for the Underwriters
shall be deemed to be a representation and warranty by the Company to each
Underwriter as to the matters covered thereby (and is subject to the
limitations therein, if any).
The Company acknowledges that the Underwriter and, for purposes of
the opinions to be delivered pursuant to Section 6 hereof, counsel to the
Company and counsel to the Underwriter will rely upon the accuracy and
truthfulness of the foregoing representations and hereby consents to such
reliance.
2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set forth,
the Company agrees to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a price of $38.31 per share, the
number of Firm Shares set forth opposite the name of each Underwriter in
Schedule I hereof, subject to adjustments in accordance with Section 9 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to
be made in Federal (same day) funds to an account designated by the Company
against electronic delivery thereof of the Firm Shares to the accounts of the
several Underwriters through the facilities of The Depository Trust Company in
New York, New York, in accordance with the instructions from the
Representative. Such payment and delivery are to be made through the
facilities of The Depository Trust Company, New York, New York at 10:00 a.m.,
New York time, on May 12, 2004 or at such other time and date not later than
five business days thereafter as you and the Company shall agree upon, such
time and date being herein referred to as the "Closing Date." (As used herein,
"business day" means a day on which the New York Stock Exchange is open for
trading and on which banks in New York are open for business and are not
permitted by law or executive order to be closed.)
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase the Option Shares at the price per share as set forth in the first
paragraph of this Section 2. The option granted hereby may be exercised in
whole or in part by giving written notice (i) at any time before the Closing
Date and (ii) only once thereafter within 30 days after the date of this
Agreement, by you, as the Representative, to the Company setting forth the
number of Option Shares as to which the several Underwriters are exercising
the option and the time and date at which such Shares are to be delivered. The
time and date at which Option Shares are to be electronically delivered shall
be determined by the Representative but shall not be earlier than two nor
later than 10 full business days after the exercise of such option, nor in any
event prior to the Closing Date (such time and date being herein referred to
as the "Option Closing Date"). The option with respect to the Option Shares
granted hereunder may be exercised only to cover over-allotments in the sale
of the Firm Shares by the Underwriters. You, as the Representative of the
several Underwriters, may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to the Company. To
the extent, if any, that the option is exercised, payment for the Option
Shares shall be made on the Option Closing Date in Federal (same day) funds to
an account designated by the Company against electronic delivery thereof of
the Option Shares to the accounts of the several Underwriters through the
facilities of The Depository Trust Company in New York, New York, in
accordance with the instructions from the Representative.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representative deems it
advisable to do so. The Firm Shares are to be initially offered to the public
at the public offering price set forth in the Prospectus. The Representative
may from time to time thereafter change the public offering price and other
selling terms. To the extent, if at all, that any Option Shares are purchased
pursuant to Section 2 hereof, the Underwriters will offer them to the public
on the foregoing terms.
It is further understood that you will act as the
Representative for the Underwriters in the offering and sale of the Shares in
accordance with a Master Agreement Among Underwriters entered into by you and
the several other Underwriters.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the several
Underwriters that:
(a) If Rule 430A is used or the filing of the Prospectus is
otherwise required under Rule 424(b) or Rule 434, the Company will file the
Prospectus (properly completed if Rule 430A has been used) pursuant to Rule
424(b) within the prescribed time period and will provide evidence
satisfactory to DBSI of such timely filing. If the Company elects to rely on
Rule 434, the Company will prepare and file a term sheet that complies with
the requirements of Rule 434.
(b) Prior to and through the completion of the distribution
of the Shares, the Company will notify you promptly (and, if requested by
DBSI, will confirm such notice in writing) (i) of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information, (ii) of the Company's
intention to file or prepare any supplement or amendment to the Registration
Statement or the Prospectus, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, including but not limited to Rule 462(b) under
the Securities Act, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, it being understood that the Company shall make
every reasonable effort to avoid the issuance of any such stop order, (v) of
the receipt of any comments from the Commission, and (vi) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for that purpose. If the Commission shall
propose or enter a stop order at any time, the Company will, prior to and
through the completion of the distribution of the Shares, make every
reasonable effort to prevent the issuance of any such stop order and, if
issued, to obtain the lifting of such order as soon as possible. Prior to and
through the completion of the distribution of the Shares, the Company will not
file any amendment to the Registration Statement or any amendment of or
supplement to the Prospectus (including the prospectus required to be filed
pursuant to Rule 424(b) or Rule 434) that differs from the prospectus
supplement filed with the Commission on May 7, 2004 or file any document under
the Exchange Act if such document would be deemed to be incorporated by
reference into the Prospectus to which DBSI shall reasonably object in writing
after being timely furnished in advance a copy thereof. The Company will
provide DBSI with copies of all such amendments, filings and other documents a
sufficient time prior to any filing or other publication thereof to permit
DBSI a reasonable opportunity to review and comment thereon.
(c) The Company will cooperate with the Representative in
endeavoring to qualify the Shares for sale under (or obtain exemptions from
the application of the qualification requirements of) the securities laws of
such jurisdictions as the Representative may reasonably have designated in
writing and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction where it is not now
so qualified or required to file such a consent. The Company will, from time
to time, prepare and file such statements, reports, and other documents, as
are or may be required to continue such qualifications in effect for so long a
period as the Representative may reasonably request for distribution of the
Shares. The Company shall advise the Representative promptly of the suspension
of the qualification or registration of (or any such exemption relating to)
the Shares for offering, sale or trading in any jurisdiction or any initiation
of threat of any proceeding for any such purpose, and in the event of the
issuance of any order suspending such qualification, registration or
exemption, the Company shall use its best efforts to obtain the withdrawal
thereof at the earliest possible moment.
(d) The Company consents to the use and delivery of the
Prospectus by the Underwriters in accordance with Rule 430 and Section 5(b) of
the Securities Act.
(e) The Company will maintain in the Company's files
manually signed copies of the Registration Statement, as initially filed and
all amendments thereto, including all consents and exhibits filed therewith,
for at least five years after the date of filing. The Company will promptly
deliver to each of the Underwriters such number of copies of the Prospectus
and the Registration Statement, and all amendments of and supplements to such
documents, if any, and all documents incorporated by reference in the
Registration Statement and Prospectus or any amendment thereof or supplement
thereto, as you may reasonably request. Prior to 10:00 A.M., New York City
time, on the business day next succeeding the date of this Agreement and from
time to time thereafter, the Company will furnish the Underwriters with copies
of the Prospectus in New York City in such quantities as you may reasonably
request.
(f) The Company will comply with the Securities Act, the
Exchange Act and the Rules and Regulations of the Commission thereunder, so as
to permit the completion of the distribution of the Shares as contemplated in
this Agreement and the Prospectus. If during the period in which a prospectus
is required by law to be delivered by an Underwriter or dealer, any event
shall occur as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances existing at the time the Prospectus is delivered to
a purchaser, not misleading, or, if it is necessary at any time prior to the
consummation of the Offering to amend or supplement the Prospectus to comply
with any law, the Company promptly will prepare and file with the Commission
an appropriate amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will not, in
the light of the circumstances when it is so delivered, be misleading, or so
that the Prospectus will comply with the law.
(g) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the date of the Prospectus, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at
least 12 consecutive months beginning after the date of the Prospectus, which
earnings statement shall comply with the requirements of Section 11(a) of the
Act and Rule 158 of the Rules and Regulations, and will advise you in writing
when such statement has been so made available.
(h) Prior to the Closing Date, the Company will furnish to
the Underwriters, as soon as they have been prepared by or are available to
the Company, a copy of any unaudited interim financial statements of the
Company for any period subsequent to the period covered by the most recent
financial statements appearing in the Registration Statement and the
Prospectus.
(i) No offering, sale, short sale or other disposition of
any shares of Common Stock of the Company or other securities convertible into
or exchangeable or exercisable for shares of Common Stock or derivative of
Common Stock (or agreement for such) will be made for a period of 60 days
after the date of this Agreement, directly or indirectly, by the Company
otherwise than hereunder or without the prior written consent of DBSI, which
consent shall not be unreasonably withheld; provided, however, that the
Company may issue (i) shares of its Common Stock upon the exercise of options,
(ii) shares of its Common Stock pursuant to stock grants, (iii) options to
purchase its Common Stock, to directors, officers and employees of the
Company, issued pursuant to employee or director benefit plans, stock option
plans or the employee compensation plans and (iv) at the Company's discretion,
up to 1,500,000 shares of Common Stock to be issued in connection with a
transaction or series of transactions not initially involving a public
offering.
(j) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act or the Exchange Act, will
file all documents required to be filed with the Commission pursuant to the
Securities Act, the Exchange Act and the Rules and Regulations within the time
periods required thereby (including any extensions permitted by the Rules and
Regulations thereunder).
(k) The Company will use its best efforts to list, subject
to notice of issuance, the Shares on the Nasdaq National Market.
(l) The Company will use its best efforts to cause each
executive officer, director, other person or entity listed on Exhibit B to
furnish to you, on or prior to the Closing Date, a letter or letters
substantially in the form of Exhibit C hereto (the "Lockup Agreements").
(m) The Company will use its best efforts to cause each
executive officer, director and 5% or greater stockholder of the Company's
Common Stock, on or prior to the Closing Date, a NASD Questionnaire
substantially in the form of Exhibit D hereto (the "NASD Questionnaires").
(n) The Company shall apply the net proceeds of its sale of
the Shares as set forth in the Prospectus and shall file such reports with the
Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the
Act.
(o) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a manner
as would require the Company or any of the Subsidiaries to register as an
investment company under the 1940 Act.
(p) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for the Common Stock.
(q) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident
to the performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the following:
(i) accounting fees of the Company; (ii) the fees and disbursements of counsel
for the Company; (iii) the cost of printing and delivering to, or as requested
by, the Underwriters copies of the Registration Statement, the Prospectus,
this Agreement, the Listing Application, the Blue Sky Survey and any
supplements or amendments thereto; (iv) the filing fees of the Commission; (v)
the filing fees and expenses (including reasonable and documented legal fees
and disbursements of counsel to the Underwriters, not to exceed $25,000)
incident to securing any required review by the NASD of the terms of the sale
of the Shares; (vi) the Listing Fee of the Nasdaq National Market; and (vii)
the expenses, including the reasonable and documented fees and disbursements
of counsel for the Underwriters, incurred in connection with the qualification
of the Shares under State securities or Blue Sky laws. The Company shall not,
however, be required to pay for any of the Underwriters costs and expenses
(other than those as described in clauses (v) and (vii) above), including,
without limitation, (a) the fees and expenses of counsel to the Underwriters
(other than as set forth above), (b) the "roadshow" expenses of the
Underwriters and (c) the advertising expenses of the Underwriters incurred in
connection with the Offering; provided, however, if the sale of Shares
pursuant to Section 2 of this Agreement shall not be consummated because the
conditions in Section 6 hereof (other than Section 6(k)) are not satisfied, or
because this Agreement is terminated by the Representative pursuant to Section
11(a) hereof, or by reason of any failure, refusal or inability on the part of
the Company to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on its part to be
performed, unless such failure, refusal or inability is due primarily to the
default or omission of any Underwriter, the Company shall reimburse the
several Underwriters for reasonable out-of-pocket expenses, including
reasonable and documented fees and disbursements of counsel, reasonably
incurred in connection with investigating, marketing and proposing to market
the Shares or in contemplation of performing their obligations hereunder; but
the Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the
sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on the Option
Closing Date are subject to the accuracy, as of the Closing Date or the Option
Closing Date, as the case may be, of the representations and warranties of the
Company contained herein, and to the performance by the Company of its
covenants and obligations hereunder to be performed prior to the Closing Date
or the Option Closing Date, as the case may be, and to the following
additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall remain effective on the date of this Agreement and
through the Closing Date or the Option Closing Date, as the case may be, the
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with Section 4(a) hereof and a form of the Prospectus containing
information relating to the description of the Shares and the method of
distribution and similar matters shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period. No stop order
suspending the effectiveness of the Registration Statement, as amended from
time to time, shall have been issued and no proceedings for that purpose shall
have been taken or, to the knowledge of the Company, shall be contemplated or
threatened by the Commission and no injunction, restraining order or order of
any nature by a federal or state court of competent jurisdiction shall have
been issued as of the Closing Date which would prevent the issuance of the
Shares.
(b) The Representative shall have received from Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Company, an opinion dated the
Closing Date or the Option Closing Date, as the case may be, substantially in
the form attached hereto as Annex I.
(c) The Representative shall have received from Xxxxxxx
Brignone, Nevada counsel for the Company, an opinion dated the Closing Date or
the Option Closing Date, as the case may be, substantially in the form
attached hereto as Annex II.
(d) The Representative shall have received from Xxxxxx
Xxxxxxxxx xx Xxxxxxxx Xxxxxxx xx Xxxxx, special Macau counsel for the Company,
an opinion dated the Closing Date or the Option Closing Date, as the case may
be, substantially in the form attached hereto as Annex III.
(e) The Representative shall have received from Fulbright &
Xxxxxxxx, special regional counsel for the Company, an opinion dated the
Closing Date or the Option Closing Date, as the case may be, substantially in
the form attached hereto as Annex IV.
(f) The Representative shall have received from Xxxx &
Partners, special Isle of Man counsel for the Company, an opinion dated the
Closing Date or the Option Closing Date, as the case may be, substantially in
the form attached hereto as Annex V.
(g) The Representative shall have received from Hoosenally
and Neo, special Hong Kong counsel for the Company, an opinion dated the
Closing Date or the Option Closing Date, as the case may be, substantially in
the form attached hereto as Annex VI.
(h) The Representative shall have received from Lionel,
Xxxxxx & Xxxxxxx, counsel for Aruze USA, Inc., an opinion dated the Closing
Date or the Option Closing Date, as the case may be, substantially in the form
attached hereto as Annex VII.
(i) The Representative shall have received from Nagashima
Ohno & Tsunematsu, counsel for Aruze USA, Inc. and Xx. Xxxxx Xxxxx, an opinion
dated the Closing Date or the Option Closing Date, as the case may be,
substantially in the form attached hereto as Annex VIII.
(j) The Representative shall have received from Xxxxxx &
Xxxxxxx LLP, counsel for the Underwriters, an opinion dated the Closing Date
or the Option Closing Date, as the case may be, in form and substance
reasonably satisfactory to the Representative.
(k) The Representative shall have received at or prior to
the Closing Date from Xxxxxx & Xxxxxxx LLP a memorandum or summary, in form
and substance satisfactory to the Representative, with respect to the
qualification for the Offering by the Underwriters of the Shares under the
State securities or Blue Sky laws of such jurisdictions as the Representative
may reasonably have designated to the Company.
(l) You shall have received, on each of the date hereof, the
Closing Date and, if applicable, the Option Closing Date, a letter dated the
date hereof, the Closing Date or the Option Closing Date, as the case may be,
in form and substance satisfactory to you, of Deloitte & Touche LLP confirming
that they are independent public accountants within the meaning of the
Securities Act and the applicable published Rules and Regulations thereunder
and stating that in their opinion the financial statements and schedules
examined by them and included or incorporated by reference in the Registration
Statement and the Prospectus comply in form in all material respects with the
applicable accounting requirements of the Securities Act and the related
published Rules and Regulations; and containing such other statements and
information as is ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
and statistical information contained or incorporated by reference in the
Registration Statement and Prospectus.
(m) The Representative shall have received on the Closing
Date and, if applicable, the Option Closing Date, as the case may be, a
certificate or certificates of the Chief Executive Officer and the Chief
Financial Officer of the Company to the effect that, as of the Closing Date or
the Option Closing Date, as the case may be, each of them severally represents
as follows:
(i) The conditions set forth in subsection (a) of
this Section 6 have been satisfied and no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceedings for such purpose have been taken or are, to his knowledge,
contemplated or threatened by the Commission;
(ii) The representations and warranties of the
Company contained in Section 1 hereof were true and correct as of the date
hereof and are true and correct as of the Closing Date or the Option Closing
Date, as the case may be;
(iii) The final Prospectus has been filed pursuant
to Rule 424;
(iv) He or she has carefully examined the
Registration Statement and the Prospectus and, in his or her opinion, as of
the effective date of the Registration Statement, the statements contained in
the Registration Statement were true and correct, and such Registration
Statement and Prospectus did not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, and since the effective date of the Registration Statement, no
event has occurred which should have been set forth in a supplement to or an
amendment of the Prospectus which has not been so set forth in such supplement
or amendment; and
(v) Since the respective dates as of which
information is given in the Registration Statement and Prospectus, there has
not been any Material Adverse Change or any development that could reasonably
be expected to result in a Material Adverse Change, whether or not arising in
the ordinary course of business.
(n) Xxxxxx & Xxxxxxx LLP, on behalf of the Representative,
shall have submitted information regarding this transaction to the NASD for
review under NASD Rule 2710 and the NASD shall have issued an opinion that it
has "no objection" to the proposed underwriting terms and arrangements among
the Company and the several Underwriters set forth in this Agreement.
(o) The Company shall have furnished to the Representative
such further certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related matters as
the Representative may reasonably have requested.
(p) The Firm Shares and Option Shares, if any, have been
duly listed, subject to notice of issuance, on the Nasdaq National Market
(q) Each executive officer, director, other person or entity
listed Exhibit B shall have executed and delivered to the Representative the
Lock-up Agreements, and such Lock-up Agreements are in full force and effect.
(r) For the period from and after the date of this Agreement
and prior to the Closing Date and, with respect to the Option Shares, any
Option Closing Date, in the judgment of the Representative, there shall not
have occurred any Material Adverse Change.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they
are in all material respects reasonably satisfactory to the Representative and
to Xxxxxx & Xxxxxxx LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be
terminated by the Representative by notifying the Company of such termination
in writing or by telegram at or prior to the Closing Date or the Option
Closing Date, as the case may be.
In such event the Company and the Underwriters shall not be
under any obligation to each other (except to the extent provided in Sections
5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the
portion of the Shares required to be delivered as and when specified in this
Agreement are subject to the conditions that at the Closing Date or the Option
Closing Date, as the case may be, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and be in effect or
proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act,
against any losses, claims, damages or liabilities to which such Underwriter
or any such controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement thereto,
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made or
(iii) any act or failure to act, or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Shares or
the Offering contemplated hereby, and which is included as part of or referred
to in any loss, claim, damage, liability or action arising out of or based
upon matters covered by clause (i) or (ii) above (provided, that the Company
shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts
or failures to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or willful misconduct); provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission made in
the Registration Statement, the Prospectus, or such amendment or supplement,
in reliance upon and in conformity with written information furnished to the
Company by or through the Representative specifically for use in the
preparation thereof; provided, further, that the Company will not be liable to
any Underwriter with respect to any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Prospectus to the extent
that (1) such loss, claim, damage, or liability results from an untrue
statement of a material fact or an omission of a material fact contained
therein, which untrue statement or omission was corrected in the final
Prospectus or a supplement to the final Prospectus, (2) the Company had
previously furnished sufficient quantities of the final Prospectus or the
supplement to the final Prospectus, as applicable, to such Underwriter within
a reasonable amount of time prior to such sale, and (3) such Underwriter
failed to deliver the final Prospectus or the supplement to the final
Prospectus, as applicable, if required by law to have so delivered it, and
such delivery would have been a complete defense against the person asserting
such loss, claim, liability, expense, or damage. The Company also agrees to
reimburse each Underwriter and each such controlling person upon demand for
any legal or other out-of-pocket expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding or
in responding to a subpoena or governmental inquiry related to the Offering of
the Shares, whether or not such Underwriter or controlling person is a party
to any action or proceeding. In the event that it is finally judicially
determined that the Underwriters were not entitled to receive payments for
legal and other expenses pursuant to this subparagraph, the Underwriters will
promptly return all sums that had been advanced pursuant hereto.
(b) Each Underwriter severally and not jointly will
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or any amendment or supplement thereto or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (ii)
any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus or any amendment or supplement thereto, or the
omission or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances under which they were made; and will
reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that each Underwriter will be liable in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission has been made in the
Registration Statement, the Prospectus or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representative specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a) or (b). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party and shall pay
as incurred the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30 days of
presentation) the reasonable fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them or (iii) the indemnifying party
shall have failed to assume the defense and employ counsel reasonably
acceptable to the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees and expenses of more
than one separate firm for all such indemnified parties. Such firm shall be
designated in writing by you in the case of parties indemnified pursuant to
Section 8(a) and by the Company in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party
is an actual or potential party to such claim, action or proceeding) unless
such settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim, action or
proceeding.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the Offering of
the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the Offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 8(d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to above in this Section 8(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by such
Underwriter, and (ii) no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 8(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration
Statement, the Prospectus or any supplement or amendment thereto, each party
against whom contribution may be sought under this Section 8 hereby consents
to the jurisdiction of any state or federal court in New York City, agrees
that process issuing from such court may be served upon it by any other
contributing party and consents to the service of such process and agrees that
any other contributing party may join it as an additional defendant in any
such proceeding in which such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party to the
indemnified party as such losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements contained in this Section
8 and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect, regardless of
(i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers or any
persons controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor
to any Underwriter, or any person controlling any Underwriter, or to the
Company, its directors or officers, or any person controlling the Company,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the
case may be, any Underwriter shall fail to purchase and pay for the portion of
the Shares which such Underwriter has agreed to purchase and pay for on such
date (otherwise than by reason of any default on the part of the Company) you,
as Representative of the Underwriters, shall use your reasonable efforts to
procure within 36 hours thereafter one or more of the other Underwriters, or
any others, to purchase from the Company such amounts as may be agreed upon
and upon the terms set forth herein, the Shares which the defaulting
Underwriter or Underwriters failed to purchase. If during such 36 hours you,
as such Representative, shall not have procured such other Underwriters, or
any others, to purchase the Shares agreed to be purchased by the defaulting
Underwriter or Underwriters, then (a) if the aggregate number of shares with
respect to which such default shall occur does not exceed 10% of the Shares to
be purchased on the Closing Date or the Option Closing Date, as the case may
be, the other Underwriters shall be obligated, severally, in proportion to the
respective numbers of Shares which they are obligated to purchase hereunder,
to purchase the Shares which such defaulting Underwriter or Underwriters
failed to purchase, or (b) if the aggregate number of shares of Shares with
respect to which such default shall occur exceeds 10% of the Shares to be
purchased on the Closing Date or the Option Closing Date, as the case may be,
the Company or you as the Representative of the Underwriters will have the
right, by written notice given within the next 36-hour period to the parties
to this Agreement, to terminate this Agreement without liability on the part
of the non-defaulting Underwriters or of the Company except to the extent
provided in Sections 5 and 8 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 9, the Closing Date
or Option Closing Date, as the case may be, may be postponed for such period,
not exceeding seven days, as you, as Representative, may determine in order
that the required changes in the Registration Statement or in the Prospectus
or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter.
Any action taken under this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: (i) if to the Underwriters, to Deutsche
Bank Securities Inc., 00 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000;
Attention: Syndicate Manager, with a copy to Deutsche Bank Securities Inc., 00
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel,
with a copy to Underwriter's Counsel at Xxxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx,
Esq.; and (ii) if to the Company, to Xxxx X. Xxxxxxxxxx, Esq., and its counsel
at Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP at the addresses set forth in the
Registration Statement.
11. TERMINATION.
This Agreement may be terminated by you:
(a) by notice to the Company at any time prior to the
Closing Date or any Option Closing Date (if different from the Closing Date
and then only as to Option Shares) if any of the following has occurred: (i)
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any Material Adverse Change or any
development that could, in your judgment, be expected to result in a Material
Adverse Change, whether or not arising in the ordinary course of business,
(ii) any outbreak or escalation of hostilities or declaration of war or
national emergency or other national or international calamity or crisis or
change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable judgment,
make it impracticable or inadvisable to market the Shares or to enforce
contracts for the sale of the Shares, (iii) suspension of trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market or limitation on prices (other than
limitations on hours or numbers of days of trading) for securities on either
such Exchange, (iv) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court or other governmental
authority which in your opinion materially and adversely affects or may
materially and adversely affect the business or operations of the Company, (v)
the declaration of a banking moratorium by United States or New York State
authorities, (vi) any downgrading, or placement on any watch list for possible
downgrading, in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Exchange Act); (vii) the suspension of
trading of the Company's Common Stock by the Nasdaq National Market, the
Commission, or any other governmental authority or, (viii) the taking of any
action by any governmental body or agency in respect of its monetary or fiscal
affairs which in your reasonable opinion would result in a Material Adverse
Change in the securities markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit
of the Underwriters and the Company and their respective successors,
executors, administrators, heirs and assigns, and the officers, directors and
controlling persons referred to herein, and no other person will have any
right or obligation hereunder. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign merely because of such
purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company and the Underwriters acknowledge and agree that
the only information furnished or to be furnished by any Underwriter to the
Company for inclusion in any Prospectus or the Registration Statement consists
of the information set forth in the third, tenth through seventeenth and
twenty-third paragraphs under the caption "Underwriting" in the Prospectus.
14. PARTIAL ENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph
or provision of this Agreement shall not affect the validity or enforceability
of any other Section, paragraph or provision hereof. If any Section, paragraph
or provision of this Agreement is, for any reason, determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable and to
effect the original intent of the parties hereto.
15. MISCELLANEOUS.
The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless
of (a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers and (c) delivery of and payment for
the Shares under this Agreement.
This Agreement may be executed in two or more counterparts
(including by facsimile), each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
(Signature Page Follows)
If the foregoing letter is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
XXXX RESORTS, LIMITED
a Nevada corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
DEUTSCHE BANK SECURITIES INC.
As Representative of the several
Underwriters listed on Schedule I
By: Deutsche Bank Securities Inc.
/s/ A. Xxxx Xxxxxxx
---------------------------------
Name: A. Xxxx Xxxxxxx
Title: Director
/s/ Xxxxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Director
