EXHIBIT 10.34
EXECUTION VERSION
HOLLYWOOD PARK, INC.
9 1/4% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
February 12, 1999
Xxxxxx Brothers Inc.
Cibc Xxxxxxxxxxx Corp.
Xxxxxx xxxxxxx & Co. Incorporated
NationsBANC XXXXXXXXXX SECURITIES LLC
XX XXXXX SECURITIES CORPORATION
XXXXXXXXXXX XXXXXXX SECURITIES, INC.
C/X XXXXXX BROTHERS INC.
THREE WORLD XXXXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
DEAR SIRS:
Hollywood Park, Inc., a Delaware corporation (the "Company"), proposes
-------
to issue and sell to Xxxxxx Brothers Inc., CIBC Xxxxxxxxxxx Corp., Xxxxxx
Xxxxxxx & Co. Incorporated, NationsBanc Xxxxxxxxxx Securities LLC, XX Xxxxx
Securities Corporation, and Xxxxxxxxxxx Xxxxxxx Securities, Inc. (collectively,
the "Initial Purchasers"), upon the terms and conditions set forth in this
------------------
agreement ("Agreement"), $350,000,000 in aggregate principal amount of its
---------
Series A 9 1/4% Senior Subordinated Notes due 2007 (the "Series A Notes")
--------------
guaranteed (the "Series A Guarantees") by each of the Restricted Subsidiaries of
-------------------
the Company other than Hollywood Park Kansas, Inc., Sunflower Racing, Inc. and
its subsidiary SR Food & Beverage Company, Jefferson Casino Corporation and its
subsidiary Casino Magic of Louisiana, Corp., Casino Magic Neuquen S.A. and its
subsidiary Casino Magic Support Services SA, Casino Magic Management Services
Corp., St. Louis Casino Corp., Boston Casino Corp., Casino Advertising, Inc.,
Boomtown Missouri, Inc., Boomtown Council Bluffs, Inc., Boomtown Iowa, L.C., Old
River Enterprises, Blue Diamond Hotel and Casino, Inc. and Boomtown Las Vegas,
Inc. (collectively, the "Guarantors"), in minimum denominations of $1,000
----------
principal amount pursuant to the terms of an Indenture (the "Indenture") among
---------
the Company, the Guarantors and The Bank of New York, as trustee (the
"Trustee"), relating to the Series A Notes. Capitalized terms used but not
-------
defined herein shall have the meanings given to such terms in the Indenture.
The Series A Notes will be offered and sold to you pursuant to an
exemption from the registration requirements under the Securities Act of 1933,
as amended (the "Securities Act"). The Company has prepared a preliminary
--------------
offering memorandum, dated January 29, 1999 (the "Preliminary Offering
--------------------
Memorandum") and will prepare a final offering memorandum (as it may be amended
----------
or supplemented from time to time, the "Offering Memorandum"), to be dated
-------------------
February 12, 1999, relating to the Company, the Series A Notes and the Series A
Guarantees. As described in the Offering Memorandum,
the Company will first use the net proceeds from the offering of the Series A
Notes to repay outstanding borrowings under the Company's Amended and Restated
Reducing Revolving Loan Agreement with a syndicate of banks led by Bank of
America National Trust & Savings Association, as Administrative Agent (the "Bank
----
Credit Facility"). The balance of the net proceeds will be used for general
---------------
corporate purposes.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act, the
Series A Notes (and all securities issued in exchange therefor or in
substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX
XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."
You have advised the Company that you will make offers and sales (the
"Exempt Resales") of the Series A Notes purchased by you hereunder on the terms
--------------
set forth in the Offering Memorandum, as amended or supplemented, solely (i) to
persons whom you
-2-
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Securities Act ("QIBs") and (ii) outside the United States to
-----
persons other than U.S. persons in offshore transactions meeting the
requirements of Rule 904 of Regulation S ("Regulation S") under the Securities
------------
Act (such persons specified in clauses (i) and (ii) being referred to herein as
the "Eligible Purchasers"). As used herein, the terms "offshore transaction,"
-------------------
"United States" and "U.S. person" have the respective meanings given to them in
Regulation S. You will offer the Series A Notes to Eligible Purchasers initially
at a price equal to 100% of the principal amount thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated February 18, 1999 (the "Closing
----------------------------- -------
Date"), in the form of Exhibit A hereto, for so long as such Series A Notes
----
constitute "Transfer Restricted Securities" (as defined in the Registration
------------------------------
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
and the Guarantors will agree to file with the Securities and Exchange
Commission (the "Commission") under the circumstances set forth therein, (i) a
----------
registration statement under the Securities Act (the "Exchange Offer
--------------
Registration Statement") relating to the Company's Series B 9 1/4% Senior
----------------------
Subordinated Notes due 2007 (the "Series B Notes" and, together with the Series
--------------
A Notes, the "Notes") to be offered in exchange for the Series A Notes, (such
-----
offer to exchange being referred to collectively as the "Registered Exchange
-------------------
Offer") and (ii) a shelf registration statement pursuant to Rule 415 under the
-----
Securities Act (the "Shelf Registration Statement") relating to the resale by
----------------------------
certain holders of the Series A Notes, and to use their best efforts to cause
such Registration Statements to be declared effective. This Agreement, the
Notes, the Guarantees (as defined herein), the Indenture and the Registration
Rights Agreement are hereinafter referred to collectively as the "Operative
---------
Documents." This is to confirm the agreements concerning the purchase of the
---------
Series A Notes from the Company by you.
1. Representations, Warranties and Agreements of the Company and the
Guarantors. The Company and the Guarantors jointly and severally represent,
warrant and agree that:
(a) The Offering Memorandum will be prepared by the Company for use by
the Initial Purchasers in connection with the Exempt Resales and will not differ
substantially from the Preliminary Offering Memorandum, unless otherwise agreed
to by the Initial Purchasers. No order or decree preventing the use of the
Offering Memorandum, or any order asserting that the transactions contemplated
by this Agreement are subject to the registration requirements of the Securities
Act has been issued and no proceeding for that purpose has commenced or is
pending or, to the knowledge of the Company and the Guarantors, is contemplated.
(b) The Offering Memorandum as of its date and as of the Closing Date
(in each case taken together with the documents expressly incorporated by
reference therein ("Incorporated Documents")), will not contain an untrue
statement of a material fact or omit to state a material fact necessary, in
order to make the statements, in light of the circumstances under which they
were made, not misleading, except that this representation and warranty does not
apply to statements in or omissions from the Offering Memorandum
-3-
made in reliance upon and in conformity with information relating to the Initial
Purchasers furnished to the Company in writing by or on behalf of the Initial
Purchasers expressly for use therein.
(c) The market-related and customer-related data and estimates included
in the Offering Memorandum are based on or derived from sources which the
Company believes to be reliable and accurate in all material respects.
(d) The Company and each Guarantor have been duly organized and are
validly existing as corporations, limited liability companies or partnerships,
as applicable, in good standing under the laws of their respective jurisdictions
of organization, are duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires such
qualification except for such qualification and good standing the failure of
which, individually or in the aggregate, would not reasonably be expected to
result in a material adverse effect on the condition (financial or other),
business, prospects, properties, stockholders' equity or results of operations
of the Company and its subsidiaries taken as a whole (a "Material Adverse
----------------
Effect"), and have all power and authority necessary to own or hold their
------
respective properties and to conduct the businesses in which they are engaged.
(e) All of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the Offering Memorandum or the
Incorporated Documents; and (i) approximately 51% of the capital stock of Casino
Magic Neuquen S.A., (ii) approximately 97% of the outstanding membership
interests in Indiana Ventures LLC and (iii) 100% of the issued shares of capital
stock of each other subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and (except for
directors' qualifying shares) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims, other than (A)
liens, encumbrances, equities or claims described in the Offering Memorandum or
the Incorporated Documents and (B) such other liens, encumbrances, equities or
claims as are not, individually or in the aggregate, material to the Company and
its subsidiaries, taken as a whole.
(f) The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement, the Indenture, the
Notes, the Guarantees and the Registration Rights Agreement.
(g) This Agreement has been duly authorized, executed and delivered by
the Company and the Guarantors.
(h) The Registration Rights Agreement will be duly authorized by the
Company and each of the Guarantors, and when duly executed by the proper
officers of the Company and the Guarantors (assuming due execution and delivery
by the Initial Purchasers) and delivered by the Company and each Guarantor, will
constitute a valid and binding agreement of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance with its terms,
subject to the effects of bankruptcy,
-4-
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing and except as rights to
indemnity and contribution thereunder may be limited by Federal or state
securities laws or principles of public policy.
(i) The Indenture will be duly authorized, and when duly executed by
the proper officers of the Company (assuming due execution and delivery by the
Trustee) and delivered by the Company, will constitute a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) or an implied covenant of good faith and fair
dealing; no qualification of the Indenture under the Trust Indenture Act of
1939, as amended (the "1939 Act") is required in connection with the Exempt
--------
Resales.
(j) The Series A Notes will be duly and validly authorized by the
Company and when duly executed by the Company in accordance with the terms of
the Indenture and, assuming due authentication of the Series A Notes by the
Trustee, upon delivery to the Initial Purchasers against payment therefor in
accordance with the terms hereof will constitute valid and binding obligations
of the Company entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law) or
an implied covenant of good faith and fair dealing; and the Series A Notes, when
issued and delivered, will conform in all material respects to the description
thereof contained in the Offering Memorandum.
(k) The Series A Guarantees will be duly and validly authorized by the
Guarantors and when duly endorsed on the Series A Notes in accordance with the
terms of the Indenture and, assuming due authentication of the Series A Notes by
the Trustee, upon delivery to the Initial Purchasers against payment therefor in
accordance with the terms hereof will constitute valid and binding obligations
of each of the Guarantors entitled to the benefits of the Indenture and
enforceable against each in accordance with their terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law) or
an implied covenant of good faith and fair dealing; and the Series A Guarantees,
when issued and delivered, will conform in all material respects to the
description thereof contained in the Offering Memorandum. Except as provided in
the Offering Memorandum, each subsidiary of the Company as of the date hereof
will be a Guarantor.
(l) The Series B Notes will be duly and validly authorized by the
Company and if and when duly issued and authenticated in accordance with the
terms of the Indenture and delivered in accordance with the Registered Exchange
Offer provided for in the Registration Rights Agreement, will constitute valid
and binding obligations of the Company entitled to the benefits of the
Indenture, enforceable against the Company in
-5-
accordance with their terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing.
(m) The guarantees of the Series B Notes (the "Series B Guarantees"
-------------------
and, together with the Series A Guarantees, the "Guarantees") will be duly and
----------
validly authorized by the Guarantors and if and when duly endorsed on the Series
B Notes in accordance with the terms of the Indenture and delivered in
accordance with the Registered Exchange Offer provided for in the Registration
Rights Agreement, will constitute valid and binding obligations of each of the
Guarantors entitled to the benefits of the Indenture and enforceable against
each of the Guarantors in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law) or
an implied covenant of good faith and fair dealing.
(n) The execution, delivery and performance of this Agreement and the
other Operative Documents by the Company and the Guarantors and the consummation
of the transactions contemplated hereby or thereby, and the consummation by the
Company of the transactions contemplated thereby, will not violate or constitute
a breach of, or a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of the Guarantors is
bound or to which any of the property or assets of the Company or any of the
Guarantors is subject, that is material to the financial condition or prospects
of the Company and its subsidiaries, taken as a whole (collectively, the
"Material Agreements"), except for violation or breach of which or default under
-------------------
which, individually, or in the aggregate, would not result in a Material Adverse
Effect, nor will such actions result in any violation of the provisions of the
charter or by-laws, or other organizational documents of the Company or any of
the Guarantors or any law, statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
the Guarantors or any of their properties or assets (collectively, "Law or Legal
------------
Requirements"), except where any such violation could not, singly or in the
------------
aggregate with all other such violations, reasonably be expected to have a
Material Adverse Effect, provided, that the provisions for indemnification and
contribution hereunder and thereunder may be limited by federal and state
securities laws and equitable principles and public policy considerations; and
except as may be required in connection with (i) the registration under the
Securities Act of the Series B Notes in accordance with the Registration Rights
Agreement, (ii) qualification of the Indenture under the 1939 Act in connection
with the consummation of the transactions contemplated by the Registration
Rights Agreement, (iii) compliance with the securities or Blue Sky laws of
various jurisdictions, (iv) applicable Gaming Laws and Gaming Authorities in
connection with the registration, sale and issuance of the Series B Notes and
Series B Guarantees and restrictions on the transfer of, and agreements not to
encumber, the equity securities of Boomtown, Inc. and Boomtown Hotel & Casino,
Inc. in connection with the registration, sale and issuance of the Series A
Notes, and (v) the Bank Credit Facility, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental agency
or body (collectively, "Consents and Filings") is required for the execution,
--------------------
delivery and
-6-
performance of this Agreement or any of the Operative Documents by the Company
and the Guarantors, as applicable, and the consummation of the transactions
contemplated hereby and thereby.
(o) Except as described in the Offering Memorandum or the Incorporated
Documents and except as provided by the Registration Rights Agreement, there are
no contracts, agreements or understandings between the Company and any person
granting such person the right (other than rights which have been waived or
satisfied or rights not exercisable in connection with the Offering Memorandum)
to require the Company to file a registration statement under the Securities Act
with respect to any debt securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities
registered pursuant to the Exchange Offer Registration Statement, the Shelf
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Securities Act.
(p) Except as described in the Offering Memorandum or the Incorporated
Documents, the Company and the Guarantors have not sold or issued any securities
with terms that are substantially similar to the Notes and the Guarantees during
the six-month period preceding the date of the Offering Memorandum, including
any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities
Act.
(q) Neither the Company nor any of the Guarantors has incurred, since
the date of the latest financial statements included in the Offering Memorandum,
any liability or obligation, direct or contingent, or entered into any
transaction, in each case not in the ordinary course of business, that is
material to the Company and its subsidiaries taken as a whole, otherwise than as
set forth or contemplated in the Offering Memorandum or the Incorporated
Documents; and, since such date, there has not been any material change in the
capital stock or material increase in the short-term or long-term debt of the
Company or any of the Guarantors or any material adverse change, or any
development involving or which would reasonably be expected to involve a
Material Adverse Effect, otherwise than as described or contemplated in the
Offering Memorandum or the Incorporated Documents.
(r) The historical and pro forma financial statements, together with
related notes, set forth in the Offering Memorandum comply as to form in all
material respects with the requirements of Regulation S-X under the Securities
Act applicable to registration statements on Form S-1 under the Securities Act.
The historical financial statements of the Company fairly present the financial
position of the Company (or its predecessors) at the respective dates indicated
and the results of operations and cash flows of the Company (or its
predecessors) for the respective periods indicated, in accordance with generally
accepted accounting principles consistently applied throughout such periods.
Such pro forma financial statements have been prepared on a basis consistent
with such historical statements of the Company, except for the pro forma
adjustments specified therein, and give effect to assumptions made on a
reasonable basis and in good faith and present the historical and proposed
transactions contemplated by the Offering Memorandum and this Agreement in
compliance with Regulation S-X in all material respects. The other financial and
statistical information and data included in the Offering Memorandum, historical
and pro forma, have been derived from the financial records of the Company (or
its predecessors)
-7-
and, in all material respects, have been prepared on a basis consistent with
such books and records of the Company (or its predecessors), except as disclosed
therein.
(s) Xxxxxx Xxxxxxxx LLP, who have audited certain financial statements
of the Company and the Guarantors, whose report appears in the Offering
Memorandum and who will deliver the letter referred to in Section 7(h) hereof,
are independent public accountants under Rule 101 of the AICPA's Code of
Professional Conduct, and its interpretation and rulings.
(t) The Company and each of the Guarantors have good and marketable
title to all property (real and personal) described in the Offering Memorandum
as being owned by them, free and clear of all liens, claims, security interests
or other encumbrances except such as are described in the Offering Memorandum or
the Incorporated Documents or, to the extent of any such liens, claims, security
interests or other encumbrances, such as would not reasonably be expected to
have a Material Adverse Effect (individually or in the aggregate) and all the
material property described in the Offering Memorandum as being held under lease
by the Company and the Guarantors is held by them under valid, subsisting and
enforceable leases, with only such exceptions as would not reasonably be
expected to have a Material Adverse Effect (individually or in the aggregate).
(u) The Company and each of the Guarantors own or possess adequate
rights to use all material patents, trademarks, service marks, trade names,
copyrights, licenses, inventions, trade secrets and other rights, and all
registrations or applications relating thereto, described in the Offering
Memorandum as being owned by them or necessary for the conduct of their
business, except as such would not reasonably be expected to have a Material
Adverse Effect (individually or in the aggregate), and the Company is not aware
of any pending or threatened claim to the contrary or any pending or threatened
challenge by any other person to the rights of the Company and the Guarantors
with respect to the foregoing which, if determined adversely to the Company and
the Guarantors would reasonably be expected to have a Material Adverse Effect
(individually or in the aggregate).
(v) Except as described in the Offering Memorandum or the Incorporated
Documents, there are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any of its
subsidiaries or to which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company or any of its subsidiaries is the
subject which are reasonably likely to cause a Material Adverse Effect.
(w) There are no contracts or other documents which would be required
to be described in a prospectus contained in a registration statement on Form S-
1 by the Securities Act or by the rules and regulations thereunder which have
not been described in the Offering Memorandum or the Incorporated Documents
(other than certain contracts or documents required by Item 402 of Regulation S-
K under the Securities Act).
(x) No material relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers, stockholders,
customers or
-8-
suppliers of the Company on the other hand, except as described in the Offering
Memorandum or the Incorporated Documents.
(y) The Company is not involved in any strike, job action or labor
dispute with any group of employees that would reasonably be expected to have a
Material Adverse Effect, and, to the Company's knowledge, no such action or
dispute is threatened.
(z) Except as disclosed in the Offering Memorandum or the Incorporated
Documents, the Company 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"), where
failure to so comply would have a Material Adverse Effect; no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any material liability; the
Company has not incurred and does not expect to incur any material liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code") (other than contributions in the normal course which are
not in default); and each "pension plan" for which the Company 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,
which would reasonably be expected to result in any loss of such qualification
where such failure to qualify or loss of qualification would reasonably be
expected to have a Material Adverse Effect.
(aa) The Company and the Guarantors have filed all federal, state and
local income and franchise tax returns required to be filed through the date
hereof and have paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of the Guarantors nor does the
Company have any knowledge of any proposed or asserted tax deficiency which, if
determined adversely to the Company and its subsidiaries, might have a Material
Adverse Effect.
(bb) Neither the Company nor any of the Guarantors (i) is in violation
of its charter or by-laws or other organizational document, (ii) is in default
in any material respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any Material
Agreement or (iii) is in violation in any material respect of any law,
ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject, except as any such violation or default (i)
is disclosed in the Offering Memorandum or the Incorporated Documents, or (ii)
could not, singly or in the aggregate with all other such violations and
defaults, reasonably be expected to have a Material Adverse Effect.
(cc) Neither the Company nor any of the Guarantors has failed to
obtain any material license, permit, certificate, franchise or other approvals
or authorizations of governmental or regulatory authorities as are necessary
under applicable law to own their respective properties and to conduct their
respective businesses in the manner conducted as of the Closing Date as
described in the Offering Memorandum or the Incorporated Documents, including
all governmental licenses, permits, approvals and authorizations
-9-
necessary for the operation of their respective gaming and racing facilities and
for the operation of their respective hotel, restaurant, entertainment,
truckstop and related facilities (the "Permits") except to the extent that the
-------
failure to have any such Permit could not, singly or in the aggregate with all
other such failures, reasonably be expected to have a Material Adverse Effect;
the Company and each of the Guarantors has fulfilled and performed, in all
material respects, all their respective material obligations with respect to the
Permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or has resulted or after notice
or lapse of time would result in any other material impairment of the rights of
the holder of any such Permit subject in each case to such qualification as may
be set forth in the Offering Memorandum or the Incorporated Documents and except
to the extent that any such revocation or termination could not, singly or in
the aggregate with all other such revocations and terminations, reasonably be
expected to have a Material Adverse Effect; and, except as described in the
Offering Memorandum or the Incorporated Documents, none of the Permits contains
any restriction more burdensome than the restrictions typically applicable to
operators of gaming businesses or enterprises, the compliance with which could
reasonably be expected to have a Material Adverse Effect.
(dd) To the best of the Company's knowledge, neither the Company nor
any of the Guarantors, nor any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of its
subsidiaries, has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity or has
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds or violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977, except
as such that would not reasonably be expected to have a Material Adverse Effect.
(ee) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of the
Guarantors (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
that would not have, or would not be reasonably likely to have, singularly or in
the aggregate with all such violations and remedial actions, a Material Adverse
Effect. There has been no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company has knowledge,
except for any such spill, discharge, leak, emission, injection, escape, dumping
or release which would not have or would not be reasonably likely to have,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a Material Adverse
Effect. The terms "hazardous wastes," "toxic wastes," "hazardous substances" and
"medical wastes" shall have the meanings specified in any applicable local,
state, federal and foreign laws or regulations with respect to environmental
protection.
-10-
(ff) Neither the Company nor any Guarantor has violated any Federal,
state or local law relating to discrimination in hiring, promotion or pay of
employees except where such violation could not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any Guarantor has caused or
permitted any goods to be manufactured, sold or distributed by any of its
employees in violation of the minimum wage or overtime laws of Sections 6 and 7
of the Federal Fair Labor Standards Act, except where such violation could not
reasonably be expected to have a Material Adverse Effect.
(gg) Neither the Company nor any Guarantor is and upon sale of the
Series A Notes to be issued and sold thereby in accordance herewith and the
application of the net proceeds to the Company of such sale as described in the
Offering Memorandum under the caption "Use of Proceeds," will not be, an
"investment company" within the meaning of such term under the United States
Investment Company Act of 1940 and the rules and regulations of the Commission
thereunder.
(hh) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D ("Regulation D") under the Securities Act) of the Company has
-----------
directly, or through any agent (provided that no representation is made as to
the Initial Purchasers or any person acting on its behalf), (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or could be integrated with
the offering and sale of the Notes in a manner that would require the
registration of the Series A Notes under the Securities Act or (ii) engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D, including, but not limited to, advertisements, articles, notices
or other communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising) in
connection with the offering of the Series A Notes.
(ii) Except as permitted by the Securities Act, the Company has not
distributed and, prior to the later to occur of the Closing Date and completion
of the distribution of the Series A Notes, will not distribute any offering
material in connection with the offering and sale of the Series A Notes other
than the Offering Memorandum.
(jj) When the Series A Notes are issued and delivered pursuant to this
Agreement, such Series A Notes will not be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities of the Company that are
listed on a national securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or that are
------------
quoted in a U.S. automated inter-dealer quotation system.
(kk) Assuming (i) that your representations and warranties in Section
2 are true, (ii) compliance by you with your covenants set forth in Section 2
and (iii) that each of the Eligible Purchasers is a QIB or a person who is not a
"U.S. person" who acquires the Series A Notes outside the United States in an
"offshore transaction" (within the meaning of Rule 904 of Regulation S), the
purchase of the Series A Notes by you pursuant hereto and the resale of the
Series A Notes pursuant hereto pursuant to the Exempt Resales is exempt from the
registration requirements of the Securities Act.
-11-
(ll) None of the Company or any of its affiliates or any person acting
on its or their behalf has engaged or will engage in any directed selling
efforts within the meaning of Regulation S with respect to the Notes, and the
Company and its affiliates and all persons acting on its of their behalf have
complied with and will comply with the offering restrictions requirements of
Regulation S in connection with the offering of the Notes outside of the United
States. The sales of the Series A Notes pursuant to Regulation S are "offshore
transactions" and are not part of a plan or scheme to evade the registration
provision of the Securities Act. The Company makes no representation in this
paragraph (ll) with respect to the Initial Purchasers.
(mm) The Company is a "reporting issuer" as defined in Rule 902 under
the Securities Act.
(nn) The Company is not, nor will it be, as a result of or after
giving effect to the issuance of the Notes and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, (i) insolvent, (ii) left with an unreasonably small capital
with which to engage in its existing and anticipated businesses or (iii)
incurring debts beyond its ability to pay such debts as they mature. The Company
is not issuing the Notes in anticipation of insolvency.
(oo) The Guarantors taken as a whole, are not, nor will they be as a
result of or after giving effect to the issuance of the Notes, or the incurrence
of liabilities thereunder, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, (i)
insolvent, (ii) left with an unreasonably small capital with which to engage in
their existing and anticipated businesses or (iii) incurring debts beyond their
ability to pay such debts as they mature. None of the Guarantors is issuing its
guaranty of the Notes in anticipation of insolvency.
(pp) The Offering Memorandum, as of its date, and each amendment or
supplement thereto, as of its date, in each case taken together with the
documents incorporated by reference therein, contains all the information
specified in, and meets the requirements of, Rule 144A(d)(4) under the
Securities Act.
2. Representations, Warranties and Agreements of the Initial Purchasers.
Each Initial Purchaser represents and warrants with respect to itself that:
(a) Such Initial Purchaser is a QIB or an institutional accredited
investor as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities Act
(each, an "Accredited Institution"), in either case with such knowledge and
----------------------
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (i) is not acquiring the Series A Notes
with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Securities Act or the securities laws of any State of the United
States or any other applicable jurisdiction; (ii) in connection with the Exempt
Resales, will solicit offers to buy the Notes only from, and will offer, sell or
deliver the Notes only to, the Eligible Purchasers in accordance with this
-12-
Agreement and on the terms contemplated by the Offering Memorandum; and (iii)
will not offer or sell the Notes, nor has it offered or sold the Notes by, or
otherwise engaged in, any form of general solicitation or general advertising
(within the meaning of Regulation D; including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising) in connection with the offering of the
Series A Notes.
(c) The Series A Notes have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. The Initial Purchasers
represent that they have not offered, sold or delivered the Series A Notes, and
will not offer, sell or deliver the Series A Notes (i) as part of its
distribution at any time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Series A Notes and the Closing Date (such
period, the "Restricted Period"), within the United States or to, or for the
-----------------
account or benefit of U.S. persons, except in accordance with Rule 144A under
the Securities Act, or to Accredited Institutions in transactions that are
exempt from the registration requirements of the Securities Act. Accordingly,
each Initial Purchaser represents and agrees that neither it, its affiliates nor
any persons acting on its or their behalf has engaged or will engage in any
directed selling efforts within the meaning of Rule 901(b) of Regulation S with
respect to the Notes, and it, its affiliates and all persons acting on its
behalf have complied and will comply with the offering restriction requirements
of Regulation S.
(d) Such Initial Purchaser agrees that, at or prior to confirmation of
a sale of Notes (other than a sale pursuant to Rule 144A in transactions that
are exempt from the registration requirements of the Securities Act), it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Notes from it during the Restricted
Period a confirmation or notice substantially to the following effect:
"The Notes covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering or the closing date, except in either case in accordance with
Regulation S (or Rule 144A if available) under the Securities Act.
Terms used above have the meanings assigned to them in Regulation S."
Such Initial Purchaser further agrees that it has not entered and will
not enter into any contractual arrangement with respect to the distribution or
delivery of the Notes, except with its affiliates or with the prior written
consent of the Company.
(e) Such Initial Purchaser further represents and agrees that (i) it
has not offered or sold and will not offer or sell any Notes to persons in the
United Kingdom prior to the expiry of the period of six months from the issue
date of the Notes, except to
-13-
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, (ii) it has complied and will
comply with all applicable provisions of the Financial Services Xxx 0000 with
respect to anything done by it in relation to the Notes in, from or otherwise
involving the United Kingdom, and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issuance of the Notes to a person who is of a kind described
in Article 11(3) of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1995 or is a person to whom the document may otherwise
lawfully be issued or passed on.
(f) Such Initial Purchaser agrees not to cause any advertisement of
the Notes to be published in any newspaper or periodical or posted in any public
place and not to issue any circular relating to the Notes, except such
advertisements as include the statements required by Regulation S.
(g) The sales of the Series A Notes pursuant to Regulation S are
"offshore transactions" and are not part of a plan or scheme to evade the
registration provisions of the Securities Act.
(h) Such Initial Purchaser understands that the Company and, for
purposes of the opinions to be delivered to you pursuant to Section 7 hereof,
counsel to the Company and counsel to the Initial Purchasers, will rely upon the
accuracy and truth of the foregoing representations and hereby consents to such
reliance.
The terms used in this Section 2 that have meanings assigned to them
in Regulation S are used herein as so defined.
Each Initial Purchaser further agrees that, in connection with the
Exempt Resales, it will solicit offers to buy the Series A Notes only from, and
will offer to sell the Series A Notes only to, the Eligible Purchasers in Exempt
Resales. Such Initial Purchaser will deliver an Offering Memorandum, as amended
or supplemented through the date of each Exempt Resale, contemporaneously with
or prior to each such Exempt Resale (to the extent made available by the
Company) if the Company has not already done so, and it has not delivered, and
will not after the date of this Agreement deliver any offering materials other
than the Offering Memorandum or any amendment or supplement thereto in
connection with any Exempt Resale without the prior consent of the Company. In
addition, upon the Company's request, the Initial Purchasers shall advise the
Company (which advice may be by telephone) when their initial distribution of
the Notes has been completed.
3. Purchase of the Notes and the Guarantees by the Initial Purchasers. On
the basis of the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell the Series A
Notes (and cause the Guarantors to issue the Series A Guarantees) to the several
Initial Purchasers and each of the Initial Purchasers, severally and not
jointly, agrees to purchase the aggregate principal amount of Series A Notes set
opposite that Initial Purchaser's name in Schedule 1 hereto. Each Initial
Purchaser will purchase such aggregate principal amount of Series A Notes at
-14-
an aggregate purchase price equal to 97 5/8% of the aggregate principal amount
thereof (the "Purchase Price").
--------------
The Company shall not be obligated to deliver any of the Series A
Notes and Series A Guarantees to be delivered on the Closing Date (as defined
herein), except upon payment for all the Series A Notes to be purchased on the
Closing Date as provided herein.
4. Delivery of and Payment for the Notes and the Guarantees.
(a) Delivery of and payment for the Series A Notes and the Series A
Guarantees shall be made at the office of Irell & Xxxxxxx LLP, 0000 Xxxxxx xx
xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 at 8:00 A.M., California
time, on the third full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the Initial
Purchasers and the Company.
(b) On the Closing Date, one or more Series A Notes in definitive
form, registered in the name of Cede & Co., as nominee of the Depository Trust
Company ("DTC"), or such other names as the Initial Purchasers may request upon
at least one business day's notice to the Company, having an aggregate principal
amount corresponding to the aggregate principal amount of Series A Notes sold
pursuant to Eligible Resales (collectively, the "Global Note"), shall be
delivered by the Company to the Initial Purchasers against payment by the
Initial Purchasers of the purchase price thereof by wire transfer of immediately
available funds as the Company may direct by written notice delivered to you two
business days prior to the Closing Date. The Global Note in definitive form
shall be made available to you for inspection not later than 2:00 p.m. on the
business day prior to the Closing Date.
(c) Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Initial Purchaser hereunder.
5. Further Agreements of the Company. The Company agrees:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, of (i) the issuance by any state securities commission of any
stop order suspending the qualification or exemption from qualification of any
Series A Notes or Series A Guarantees for offering or sale in any jurisdiction,
or the initiation or threatening of any proceeding for such purpose by the
Commission or any state securities commission or other regulatory authority, and
(ii) the happening of any event that makes any statement of a material fact made
in the Offering Memorandum untrue or which requires the making of any additions
to or changes in the Offering Memorandum in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company shall use all commercially reasonable efforts to prevent
the issuance of any stop order or order suspending the qualification or
exemption of the Series A Notes or Series A Guarantees under any state
securities or Blue Sky laws and, if at any time any state securities commission
shall issue any stop order suspending the qualification or exemption of the
Series A Notes or Series A Guarantees under any state securities or Blue Sky
laws,
-15-
the Company shall use every reasonable effort to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish to you, as many copies of the Offering Memorandum, and
any amendments or supplements thereto, as you may reasonably request. Such
copies shall be furnished without charge for use in connection with the Exempt
Resales for the nine month period immediately following the Closing Date. The
Company consents to the use of the Offering Memorandum, and any amendments and
supplements thereto required pursuant to this Agreement, by you in connection
with the Exempt Resales that are in compliance with this Agreement.
(c) Not to amend or supplement the Offering Memorandum prior to the
Closing Date or during the period referred to in (d) below unless you shall
previously have been advised of, and shall not have reasonably objected to, such
amendment or supplement within a reasonable time, but in any event not longer
than five days after being furnished a copy of such amendment or supplement. The
Company shall promptly prepare, upon any reasonable request by you, any
amendment or supplement to the Offering Memorandum that may be necessary or
advisable in connection with Exempt Resales.
(d) If, in connection with any Exempt Resales, any event shall occur
that, in the judgment of the Company or in the judgment of counsel to you, makes
any statement of a material fact in the Offering Memorandum untrue or that
requires the making of any additions to or changes in the Offering Memorandum in
order to make the statements in the Offering Memorandum, in light of the
circumstances under which they were made at the time that the Offering
Memorandum is delivered to prospective Eligible Purchasers, not misleading, or
if it is necessary to amend or supplement the Offering Memorandum to comply with
applicable law, the Company shall promptly notify you of such event and prepare
an appropriate amendment or supplement to the Offering Memorandum so that (i)
the statements in the Offering Memorandum as amended or supplemented will, in
light of the circumstances under which they were made at the time that the
Offering Memorandum is delivered to prospective Eligible Purchasers, not be
misleading and (ii) the Offering Memorandum will comply with applicable law.
(e) For a period of 90 days from the date of the Offering Memorandum,
not to, directly or indirectly, sell, contract to sell, grant any option to
purchase, issue any instrument convertible into or exchangeable for, or
otherwise transfer or dispose of, any debt securities of the Company or any of
its subsidiaries, except (i) for the Series B Notes in connection with the
Registered Exchange Offer or (ii) with the prior consent of Xxxxxx Brothers Inc.
(f) Promptly from time to time to take such action as the Initial
Purchasers may reasonably request to qualify the Series A Notes and the Series A
Guarantees for offering and sale under the securities laws of such jurisdictions
as the Initial Purchasers may request (provided, however, that the Company shall
not in any event be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not now so qualified or to take any action that
would subject it to taxation or service of process in any jurisdiction in which
it is not now so subject, other than service of process with respect to the
offering and sale of the Notes) and to comply with such laws so as to permit the
-16-
continuance of sales and dealings therein in such jurisdictions for as long as
may be necessary to complete the distribution of the Series A Notes and the
Series A Guarantees.
(g) Prior to the Closing Date, to furnish to you, as soon as they have
been prepared, a copy of any internal consolidated financial statements of the
Company for any period subsequent to the period covered by the financial
statements appearing in the Offering Memorandum.
(h) To use all commercially reasonable efforts to do and perform all
things required to be done and performed under this Agreement by it prior to or
after the Closing Date and to satisfy all conditions precedent on its part to
the delivery of the Series A Notes.
(i) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act) that
would be integrated with the sale of the Series A Notes in a manner that would
require the registration under the Securities Act of the sale to you or the
Eligible Purchasers of Series A Notes.
(j) The Company and each Guarantor agrees to comply in all material
respects with the terms and conditions of the Operative Documents applicable to
it and all agreements set forth in the representation letters of the Company to
the DTC relating to the approval of the Notes by DTC for "book entry" transfer.
(k) The Company and each Guarantor agree that in connection with any
registration of the Notes pursuant to the Registration Rights Agreement, or at
such earlier time as may be so required by law, the Indenture shall be qualified
under the 1939 Act and the Company and Guarantors will enter into any necessary
supplemental indentures and take any other necessary action in connection
therewith.
(l) Except as stated in this Agreement and in the Offering Memorandum,
neither the Company nor any Guarantor has taken or will take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Notes to
facilitate the sale or resale of the Notes. Except as permitted by the
Securities Act, neither the Company, nor any Guarantor will permit any person
acting on its behalf to solicit any offers to buy and will not offer to sell the
Notes by means of any form of general solicitation or general advertising or by
means of any directed selling efforts (as defined in Regulation S and the
Commission's releases related thereto).
(m) During any period in which the Company is not subject to Section
13 or 15(d) of the Exchange Act within the two year period following the Closing
Date, to make available to any registered holder or beneficial owner of Series A
Notes in connection with any sale thereof and any prospective purchaser of such
Series A Notes from such registered holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act.
(n) To use best efforts to effect the inclusion of the Notes in the
National Association of Securities Dealers, Inc. Automated Quotation System -
PORTAL ("PORTAL").
------
-17-
(o) To apply the net proceeds from the sale of the Series A Notes
being sold by the Company as set forth in the Offering Memorandum under the
caption "Use of Proceeds."
(p) To take such steps as shall be necessary to ensure that neither
the Company nor any subsidiary shall become an "investment company" within the
meaning of such term under the United States Investment Company Act of 1940 and
the rules and regulations of the Commission thereunder.
(q) To assist the Initial Purchasers and counsel for the Initial
Purchasers in connection with their continuing due diligence.
(r) To take such steps as shall be necessary to ensure that all the
subsidiaries of the Company that are not designated as "unrestricted
subsidiaries" in accordance with the Indenture will be guarantors of the Notes,
to the extent required by the Indenture.
(s) To use its reasonable best efforts to obtain a consent under the
Bank Credit Facility to the issuance and sale of the Notes and the use of
proceeds therefrom.
(t) Neither the Company nor any Guarantor will claim voluntarily, and
the Company and each Guarantor will, subject to the fiduciary duties of the
Board of Directors of the Company and each Guarantor and applicable law, resist
actively any attempts to claim the benefit of any usury laws against the holders
of any Notes.
6. Expenses. The Company agrees to pay: (a) the costs incident to the
authorization, issuance, sale and delivery of the Notes and the Guarantees and
any taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing of the Offering Memorandum and any amendments and
supplements thereto; (c) the costs of distributing the Offering Memorandum and
any amendment or supplement to the Offering Memorandum, all as provided in this
Agreement; (d) the fees, disbursements and expenses of the Company's counsel and
accountants; (e) all expenses and listing fees in connection with the
application for quotation of the Series A Notes in PORTAL; (f) all fees and
expenses (including fees and expenses of counsel) of the Company in connection
with approval of the Notes by DTC for "book-entry" transfer; (g) the fees and
expenses of qualifying the Notes and Guarantees under the securities laws of the
several jurisdictions as provided in Section 5(f) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Initial Purchasers); (h) any fees charged by securities rating
services for rating the Notes and Guarantees; (i) all costs and expenses
incident to the performance of the Company's obligations under Section 11 and
(j) all other costs and expenses incident to the performance of the obligations
of the Company and the Guarantors. Except as provided in Section 11 hereof, the
Initial Purchasers shall pay their own costs and expenses (including the costs
and expenses of their counsel). Notwithstanding the foregoing, the Company and
the Initial Purchasers shall each pay their own expenses relating to the road
show, provided, however, that the Initial Purchasers shall pay all of the costs
of renting the chartered plane and of the investor meetings (including meals
with investors).
-18-
7. Conditions of Initial Purchasers' Obligations. The respective
obligations of the Initial Purchasers hereunder are subject to each of the
following terms and conditions:
(a) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Offering Memorandum or any
amendment or supplement thereto, nor any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of
the Securities Act shall have been issued, and no proceedings for that purpose
shall have been commenced or shall be pending or, to the knowledge of the
Company or any Guarantor, be contemplated. No order suspending the sale of the
Notes in any jurisdiction shall have been issued, and no proceedings for that
purpose shall have been commenced or shall be pending or, to the knowledge of
either the Company or any Guarantor, shall be contemplated.
(b) No Initial Purchaser shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Offering Memorandum (taken
together with the Incorporated Documents) or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of Xxxxxx &
Xxxxxxx, counsel for the Initial Purchasers, is material or omits to state a
fact which, in the opinion of such counsel, is material and is necessary to make
the statements, in the light of the circumstances under which they were made,
not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the other Operative
Documents, the Offering Memorandum, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Initial Purchasers, and
the Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(d) Irell & Xxxxxxx LLP shall have furnished to the Initial
Purchasers, its written opinion, as counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, to the effect that:
(i) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Offering Memorandum and is duly registered
and qualified to conduct its business and is in good standing
as a foreign corporation in each jurisdiction listed on a
schedule to the opinion;
(ii) Each Guarantor is an entity duly incorporated, validly
existing and in good standing under the laws of its
jurisdiction of incorporation or organization with full
corporate, limited liability company or partnership, as
applicable, power and
-19-
authority to own, lease and operate its properties and to
conduct its business as described in the Offering Memorandum
and is duly registered and qualified to conduct its business
and is in good standing as a foreign corporation, partnership
or other entity in each jurisdiction listed on a schedule to
the opinion;
(iii) The Company has the corporate power and authority to
enter into this Agreement and the other Operative Documents
and to issue, sell and deliver the Notes to be sold by it to
the Initial Purchasers as provided herein, and this Agreement
and each of the other Operative Documents (other than the
Notes) have been duly authorized, executed and delivered by
the Company and such Operative Documents (other than this
Agreement) are valid and legally binding agreements of the
Company, enforceable against the Company in accordance with
their respective terms;
(iv) Each Guarantor has the corporate, limited liability
company or partnership, as applicable, power and authority to
enter into this Agreement and the other Operative Documents,
and this Agreement and each of the other applicable Operative
Documents (other than the Guarantees) have been duly
authorized, executed and delivered by each Guarantor and such
Operative Documents (other than this Agreement) is valid and
legally binding agreement of each Guarantor, enforceable
against each Guarantor in accordance with its respective
terms;
(v) The Notes have been duly authorized, executed and issued
by the Company and, assuming due authentication thereof by the
Trustee and upon payment and delivery in accordance with the
terms of the Purchase Agreement, will constitute valid and
legally binding obligations of the Company enforceable against
the Company in accordance with their terms and entitled to the
benefits of the Indenture; and the Notes, when issued and
delivered, will conform to the description thereof contained
in the Offering Memorandum in all material respects.
(vi) The Guarantees have been duly authorized and executed by
the respective Guarantors and, assuming due authentication of
the Notes by the Trustee, upon payment and delivery in
accordance with the terms of the Purchase Agreement will
constitute valid and legally binding obligations of each of
the Guarantors enforceable in accordance with their terms.
-20-
(vii) (x) The offer, sale or delivery of the Notes as of the
Closing Date, and (y) the execution, delivery and performance
by the Company and the Guarantors of this Agreement and the
other Operative Documents, and (z) compliance by the Company
and the Guarantors with the provisions hereof or thereof and
consummation by the Company and the Guarantors of the
transactions contemplated hereby or thereby, do not and will
not violate and do not and will not constitute a breach of, or
a default under (including any event which, with notice or
lapse of time or both, would be a breach of or a default
under), (a) the certificate or articles of incorporation or
partnership or membership agreement or bylaws or other
organizational documents of the Company or any of its
subsidiaries as in effect on the Closing Date or (b) any
agreement or instrument listed under Items 4 or 10 in the
exhibit index to the Company's 1997 Form 10-K or in the
exhibit index to the Company's subsequently filed Forms 10-Q
as in effect on the Closing Date, except, with respect to this
clause (b) any such violation, breach or default that could
not, singly or in the aggregate, with all such other
violations, breaches and defaults, reasonably be expected to
have a Material Adverse Effect; and other than as described in
the Offering Memorandum, and, based solely on facts known to
such counsel, no such action will result in any violation of
any Law or Legal Requirement in effect as of the Closing Date
which in such counsel's experience is customarily applicable
to transactions of the type contemplated by the Operative
Documents (assuming for the purposes of this paragraph
compliance with all applicable state securities and Blue Sky
laws and, in the case of the Registration Rights Agreement,
the Securities Act, the Exchange Act and the 1939 Act);
(viii) No Consent or Filing based on Law or Legal Requirements
(including California Gaming Laws) as in effect on the Closing
Date which in such counsel's experience is customarily
applicable to transactions of the type contemplated by the
Operative Documents is required on the part of the Company or
any of its subsidiaries for the valid issuance and sale of the
Notes to the Initial Purchasers as contemplated by this
Agreement or the execution, delivery or performance by the
Company and the Guarantors of each of the Operative Documents,
to which each is a party, except (A) as have been obtained and
are in full force and effect, (B) as may be required under
state securities or Blue Sky laws governing the purchase and
distribution of the Notes or such as may be required under the
Securities Act, the Exchange Act or the 1939 Act in connection
with the performance by the Company of its obligations under
the Registration Rights
-21-
Agreement and (C) as may be required by applicable Gaming Laws
and Gaming Authorities in connection with the registration,
sale and issuance of the Series B Notes and any Guarantees
thereof, as to which such counsel need not express an opinion;
(ix) To the knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened against the
Company or any of its subsidiaries, or to which the Company or
any of its subsidiaries or any of their respective property or
assets is subject, which are not disclosed in the Offering
Memorandum or the Incorporated Documents and which could,
singly or in the aggregate with all other such proceedings,
reasonably be expected to have a Material Adverse Effect or
materially adversely affect the consummation of the
transactions contemplated by the Operative Documents;
(x) To such counsel's knowledge, there are no contracts or
documents of a character required by the Securities Act or by
the rules and regulations thereunder to be described in a
prospectus included in a registration statement on Form S-1
which are not described in the Offering Memorandum or the
Incorporated Documents (other than certain contracts or
documents required by Item 402 of Regulation S-K under the
Securities Act);
(xi) The statements in the Offering Memorandum, insofar as
they are descriptions of contracts, agreements or other legal
documents, or refer to statements of law or legal conclusions
are true and accurate in all material respects and summarize
fairly the information required to be shown in all material
respects, except statements of law or legal conclusions in the
section entitled "Business" under the heading "Regulation and
Licensing" that address jurisdictions other than California,
as to which such counsel need express no opinion;
(xii) Except as described in the Offering Memorandum, to the
knowledge of such counsel, no holder of any securities of the
Company (except for the holders of the Notes) or any other
person has the right to have any securities of the Company
included in any registration statement contemplated by the
Registration Rights Agreement;
(xiii) No registration of any of the Notes under the
Securities Act is required for the sale of the Notes to the
Initial Purchasers as contemplated in this Agreement or for
the Exempt Resales (assuming (A) that each Initial Purchaser
is a
-22-
Qualified Institutional Buyer, (B) that any person who buys
the Notes in the Exempt Resales is an Eligible Purchaser, (C)
the accuracy of the Initial Purchasers' representations in
this Agreement, (D) the accuracy of the representations of the
Company and the Guarantors in this Agreement regarding the
absence of general solicitation in connection with the Exempt
Resales and (E) the accuracy of the representations made by,
and in compliance with the agreements made by, all purchasers
under the terms set forth in the Offering Memorandum under the
caption "Notice to Investors");
(xiv) Except for issuances of Notes pursuant to the Registered
Exchange Offer, as defined in the Indenture, no qualification
of the Indenture under the 1939 Act is required in connection
with the offer and sale of the Notes contemplated hereby or in
connection with the Exempt Resales;
(xv) Assuming that the proceeds of issuance of the Notes are
used as set forth in the Offering Memorandum, neither the
consummation of the transactions contemplated hereby nor the
sale, issuance, execution or delivery of the Notes, nor the
application of the proceeds therefrom (if applied as described
in the Offering Memorandum under the caption "Use of
Proceeds"), will violate Regulation T (12 C.F.R. Part 220), U
(12 C.F.R. Part 221) or X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System;
Such counsel shall also have furnished to the Initial
Purchasers a written statement, addressed to the Initial
Purchasers and dated the Closing Date to the effect that in
the course of the preparation by the Company of the Offering
Memorandum, such counsel participated in conferences with
certain officers and employees of the Company, representatives
of Xxxxxx Xxxxxxxx LLP and representatives of the Initial
Purchasers and their counsel at which the contents of the
Offering Memorandum and related matters were discussed and,
although such counsel need not pass upon or assume any
responsibility for the accuracy, completeness or fairness of
the statements contained or incorporated in the Offering
Memorandum, no facts have come to such counsel's attention
that lead it to believe that the Offering Memorandum (and the
Incorporated Documents), as of its date and as of the Closing
Date, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading. Such counsel need not assume any responsibility
for or independently verify the accuracy, completeness or
-23-
fairness of the financial statements and schedules and other
financial data included or incorporated in the Offering
Memorandum and need express no view as to the accounting or
financial records from which such financial statements,
schedules and data are derived.
In rendering such opinion, such counsel will state that,
except as set forth in the next sentence, its opinions are
limited to, and do not express any opinion as to any laws
other than, the Federal Law of the United States, the laws of
the State of California, and the General Corporation Law of
the State of Delaware, in each case as in effect on the date
thereof. Notwithstanding the foregoing, (A) the opinions in
Paragraphs (iii), (iv), (v) and (vi) above relating to the
enforceability of the agreements named therein may be limited
to, and such counsel need not express any opinion as to such
matters under any laws other than, the laws of the State of
New York as in effect on the date thereof, (B) the opinions in
Paragraphs (iii), (iv), (v) and (vi) above relating to the
valid and legally binding nature of the agreements named
therein on the entities executing the same (as distinguished
from the enforceability of such agreements) shall also be
expressed as to the laws of the State of New York as in effect
on the date thereof and (C) the term "Law and Legal
Requirements" as used in Paragraph (vii) above shall include
the laws of the State of New York as in effect on the date
thereof.
(e) The Company shall have received from the lenders under the Bank
Credit Facility all consents, waivers and authorizations necessary for the
consummation of the transactions contemplated hereby, in form and substance
reasonably satisfactory to the Initial Purchasers.
(f) The Initial Purchasers shall have received on the Closing Date the
following opinions, dated the Closing Date, addressed to the Initial Purchasers
and in form and substance reasonably satisfactory to the Initial Purchasers,
with respect to certain gaming matters and matters of local law:
(i) Opinion of Xxxxxxx Xxxxxx, gaming counsel for the Company
and the Guarantors in the State of Nevada;
(ii) Opinion of Xxxxx Xxxxxx, gaming counsel for the Company
and the Guarantors in the State of Louisiana;
(iii) Opinion of Xxxxxxx Xxxxxx Winter & Stennis, P.A., gaming
counsel for the Company and the Guarantors in the State of
Mississippi;
-24-
(iv) Opinion of Xxxxxxxx, Xxxxxxx & Salmon, P.L.C., counsel
for the Company and the Guarantors in the State of Arizona;
(v) Opinion of Xxxxxxx Xxxxx Xxxxx Xxxxxxxx Xxxxxx & Xxxxx
LLP, counsel for the Company and the Guarantors in the State
of Indiana;
(vi) Opinion of Xxxxxxx, Street and Deinard, counsel for the
Company and the Guarantors in the State of Minnesota; and
(vii) Opinion of Xxxxx, Xxxxxx & Xxxxxx LLP, counsel for the
Company and the Guarantors in the State of Colorado.
(g) The Initial Purchasers shall have received from Xxxxxx & Xxxxxxx,
counsel for the Initial Purchasers, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Series A Notes, the Series A
Guarantees, the Offering Memorandum and other related matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of enabling
them to pass upon such matters.
(h) On the Closing Date, the Initial Purchasers shall have received
from Xxxxxx Xxxxxxxx LLP, a letter, in form and substance satisfactory to the
Initial Purchasers, addressed to the Initial Purchasers (i) confirming that they
are independent public accountants under Rule 101 of the AICPA's Code of
Professional Conduct, and its interpretation and rulings and (ii) stating, as of
the Closing Date, the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to Initial Purchasers in connection with registered public
offerings.
(i) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the respective dates as of which information is given in the
Offering Memorandum any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Offering Memorandum or in the
Incorporated Documents or (ii) since such date there shall not have been any
change in the capital stock or long-term debt of the Company or any of the
Guarantors or any change, or any development involving a prospective change, in
or affecting the business, management, financial position, stockholders' equity
or results of operations of the Company and the Guarantors taken as a whole,
otherwise than as set forth or contemplated in the Offering Memorandum or the
Incorporated Documents, the effect of which, in any such case described in
clause (i) or (ii), is, in the judgment of the Initial Purchasers, so material
and adverse as to make it impracticable or inadvisable to proceed with the sale
or the delivery of the Notes and the Guarantees being delivered on the Closing
Date on the terms and in the manner contemplated in the Offering Memorandum.
-25-
(j) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction; (ii) a banking moratorium shall have been
declared by Federal or New York state authorities; or (iii) the United States
shall have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or there shall have occurred
such a material adverse change in general economic, political or financial
conditions, the effect of any of the items in this clause (iii) on the financial
markets of the United States or the market for the Notes is such as to make it,
in the judgment of the Initial Purchasers, impracticable or inadvisable to
proceed with the sale or delivery of the Notes being delivered on the Closing
Date on the terms and in the manner contemplated in the Offering Memorandum.
(l) (i) There shall not have been any material increase in the
consolidated short-term or consolidated long-term debt of the Company or any
Guarantor (other than in the ordinary course of business) from that set forth in
or contemplated by the Offering Memorandum or the Incorporated Documents; (ii)
there shall not have been, since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise expressly stated in the
Offering Memorandum or the Incorporated Documents, (A) any material adverse
change in the condition (financial or other), business, prospects, liabilities
(contingent or otherwise), properties, net worth, solvency or results of
operations of the Company and the Guarantors taken as a whole or (B) any other
event which should have been set forth in a supplement or amendment to the
Offering Memorandum; (iii) the Company and the Guarantors shall not have any
liabilities or obligations, direct or contingent (whether or not in the ordinary
course of business), that are material to the Company and the Guarantors taken
as a whole, other than those reflected in the Offering Memorandum or the
Incorporated Documents; (iv) each of the representations and warranties of the
Company and each of the Guarantors contained in this Agreement shall be true and
correct (A) on and as of the date hereof and (B) in all material respects
(except for those representations and warranties that are qualified as to
materiality or Material Adverse Effect, which shall be true and correct as
written) on and as of the Closing Date as if made on and as of the Closing Date
and the Company and the Guarantors have complied with all their agreements
contained herein, and the conditions set forth in Section 7(b) and 7(i); (v) the
Company and each Guarantor shall have executed and delivered each other
Operative Document to which the Company or such Guarantor is or is required to
be a party; (vi) as of the Closing Date the Company is not, nor will it be, as a
result of or after giving effect to the issuance of the Notes and the execution,
delivery and performance of this Agreement and
-26-
the consummation of the transactions contemplated hereby and thereby, (x)
insolvent, (y) left with an unreasonably small capital with which to engage in
its existing and anticipated businesses or (z) incurring debts beyond its
ability to pay such debts as they mature; (vii) collectively, the Guarantors are
not as of the Closing Date nor will they be, after giving effect to the issuance
of the Notes and the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, (x) insolvent, (y)
left with an unreasonably small capital with which to engage in their respective
existing and anticipated businesses or (z) incurring debts beyond their ability
to pay such debts as such debts mature; and (viii) the Initial Purchasers shall
have received a certificate, dated the Closing Date and signed on behalf of the
Company by the chief executive officer and the chief financial officer of the
Company and by the chief financial officer or a vice president of each Guarantor
(or such other officers as are acceptable to the Initial Purchasers), certifying
each of the matters set forth in this Section 7(l) and to the effect that, such
individuals have carefully examined the Offering Memorandum and, in their
opinion the Offering Memorandum (including the Incorporated Documents) as of its
date and as of the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(m) The Notes shall have been approved for trading on PORTAL.
(n) The Company and the Guarantors shall have furnished or caused to
be furnished to the Initial Purchasers such further certificates, documents and
opinions as the Initial Purchasers shall have reasonably requested.
(o) There shall not have been made any amendment or supplement to the
Offering Memorandum to which any of the Initial Purchasers has objected.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
8. Indemnification and Contribution.
(a) The Company and the Guarantors shall jointly and severally
indemnify and hold harmless each Initial Purchaser, its officers, employees and
agents and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which that
Initial Purchaser, officer, agent, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in the
Offering Memorandum or in any amendment or supplement thereto or (B) in any blue
sky application or other document prepared or executed by the Company (or based
upon any written information furnished by the Company) specifically for the
purpose of qualifying any or all of the Series A Notes under the securities laws
of any state or other jurisdiction (any such application, document or
information being hereinafter called a "Blue Sky Application"), or (ii) the
--------------------
omission or
-27-
alleged omission to state in the Offering Memorandum, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
and shall reimburse each Initial Purchaser and each such officer, employee,
agent or controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Initial Purchaser, officer, employee, agent or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company and the Guarantors
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made (i)
in the Offering Memorandum, or in any such amendment or supplement, or in any
Blue Sky Application, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Initial Purchaser
specifically for inclusion therein, or (ii) in the Preliminary Offering
Memorandum or the Offering Memorandum, as the case may be, if a copy of the
Offering Memorandum (as then amended or supplemented and provided by the Company
through the Closing Date) was not sent or given by or on behalf of such Initial
Purchasers to the person asserting any such loss, claim, damage, liability or
expense, at or prior to the written confirmation of the sale of the Notes and
the Offering Memorandum (as of the Closing Date) could have corrected such
untrue or alleged untrue statement or such omission or alleged omission. The
foregoing indemnity agreement is in addition to any liability which the Company
and the Guarantors may otherwise have to any Initial Purchaser or to any
officer, employee or controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, the Guarantors, their officers, employees, and
agents, each of their directors, and each person, if any, who controls the
Company and the Guarantors within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company, the Guarantors or any such director,
officer or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in the Offering Memorandum or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the omission or
alleged omission to state in the Offering Memorandum, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
that Initial Purchaser specifically for inclusion therein, and shall reimburse
the Company, the Guarantors and any such director, officer or controlling person
for any legal or other expenses reasonably incurred by the Company, such
Guarantor or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Initial Purchaser
may otherwise have to the Company, the Guarantors or any such director, officer,
employee or controlling person.
-28-
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof; provided, however, any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment thereof has been specifically
authorized by the indemnifying party in writing, (ii) such indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of such
counsel it is advisable, under applicable standards of professional conduct, for
such indemnified party to employ separate counsel or (iii) the indemnifying
party has failed to assume the defense of such action and employ counsel
reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to one local counsel) at any time for all such indemnified parties,
which firm shall be designated in writing by Xxxxxx Brothers Inc., if the
indemnified parties under this Section 8 consist of Initial Purchasers or any of
their respective officers, employees or controlling persons, or by the Company,
if the indemnified parties under this Section consist of the Company, the
Guarantors or any of the Company's or the Guarantors' directors, officers,
employees or controlling persons. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party
-29-
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Guarantors on the one hand and the Initial
Purchasers on the other from the offering of the Series A Notes and the Series A
Guarantees or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Guarantors on the one hand and the Initial
Purchasers on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Guarantors on the one hand and the Initial
Purchasers on the other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the Series A
Notes purchased under this Agreement (before deducting expenses) received by the
Company and the Guarantors, on the one hand, and the total discounts and
commissions received by the Initial Purchasers with respect to the Series A
Notes and the Series A Guarantees purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the Series A Notes
under this Agreement. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Guarantors or the Initial Purchasers, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contributions
pursuant to this Section 8(d) were to be determined by pro rata allocation (even
if the Initial Purchasers were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Series A Notes purchased by it were resold to
Eligible Purchasers exceeds the amount of any damages which such Initial
Purchaser has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers' obligations
to contribute as provided in this Section 8(d) are several in proportion to
their respective underwriting obligations and not joint.
-30-
(e) The Initial Purchasers severally confirm and the Company and the
Guarantors acknowledge that the last paragraph on the cover page, the
stabilization legend on page iv and the seventh, eighth, and last paragraphs
under the caption "Plan of Distribution" constitute the only information
concerning such Initial Purchasers furnished in writing to the Company by or on
behalf of the Initial Purchasers specifically for inclusion in the Offering
Memorandum.
9. Default By One or More of the Initial Purchasers. If any Initial
Purchaser shall default in its obligation to purchase the Notes which it has
agreed to purchase hereunder, and if the aggregate principal amount of the Notes
to remain unpurchased does not exceed 10% of the aggregate principal amount of
all the Notes to be purchased hereunder, each non-defaulting Initial Purchaser
shall be required to purchase its pro rata share (based upon the principal
amount of Notes which such Initial Purchaser agreed to purchase hereunder) of
the Notes of such defaulting Initial Purchaser or Initial Purchasers. If after
giving effect to the foregoing, any of the Notes remain unpurchased, each of the
Company and any non-defaulting Initial Purchaser shall have the right, but not
the obligation, to terminate this Agreement, without liability on the part of
any non-defaulting Initial Purchaser or the Company, except for the expenses to
be borne by the Company and the Initial Purchasers as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof.
Nothing herein shall relieve a defaulting Initial Purchaser from liability for
its default.
10. Termination. The obligations of the Initial Purchasers hereunder may be
terminated by Xxxxxx Brothers Inc. by notice given to and received by the
Company prior to delivery of and payment for the Series A Notes and the Series A
Guarantees if, prior to that time, any of the events described in Sections 7(i),
7(j) or 7(k) shall have occurred, the lenders under the Bank Credit Facility
shall not have consented to the issuance and sale of the Notes and the use of
proceeds therefrom or if the Initial Purchasers shall decline to purchase the
Series A Notes for any reason permitted under this Agreement. The obligations of
the Company and the Guarantors hereunder may be terminated by the Company by
notice given to and received by Xxxxxx Brothers Inc. prior to delivery of and
payment for the Series A Notes and the Series A Guarantees.
11. Reimbursement of Initial Purchasers' Expenses. If the Company and the
Guarantors shall fail to tender the Series A Notes and the Series A Guarantees
for delivery to the Initial Purchasers by reason of any failure, refusal or
inability on the part of the Company and the Guarantors to perform any agreement
on its part to be performed, or because any other condition of the Initial
Purchasers' obligations hereunder required to be fulfilled by the Company and
the Guarantors is not fulfilled, the Company and the Guarantors will reimburse
the Initial Purchasers for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel) incurred by the Initial Purchasers
in connection with this Agreement and the proposed purchase of the Series A
Notes and the Series A Guarantees, and upon demand the Company and the
Guarantors shall pay the full amount thereof to Xxxxxx Brothers Inc. The
Company's refusal to tender the Series A Notes and Series A Guarantees pursuant
to Section 9 hereof shall not trigger any obligation by the Company to reimburse
the Initial Purchasers' expenses.
-31-
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 000-000-0000), with a copy to Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx,
Esq. (Fax: 000-000-0000) and, in the case of any notice pursuant to Section
8, to the Director of Litigation, Office of the General Counsel, Xxxxxx
Brothers Inc., Three World Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000; and
(b) if to the Company and the Guarantors, shall be delivered or
sent by mail, telex or facsimile transmission to Hollywood Park, Inc. 0000
Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: G. Xxxxxxx
Xxxxxxxx (Fax: 000-000-0000), with a copy to Irell & Xxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxx X. Xxxxx, Esq. (Fax: 000-000-0000).
Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Company shall be entitled to act and rely
upon any request, consent, notice or agreement given or made on behalf of the
Initial Purchasers by Xxxxxx Brothers Inc.
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Initial Purchasers, the Company, the
Guarantors and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
and the Guarantors contained in this Agreement shall also be deemed to be for
the benefit of the person or persons, if any, who control any Initial Purchaser
within the meaning of Section 15 of the Securities Act and (B) the indemnity
agreement of the Initial Purchasers contained in Section 8(b) of this Agreement
shall be deemed to be for the benefit of directors of the Company and the
Guarantors and any person controlling the Company and the Guarantors within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties and
agreements of the Company, the Guarantors and the Initial Purchasers contained
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall survive the delivery of and payment for the Notes and the
Guarantees and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
-32-
15. Definitions. For purposes of this Agreement: (a) "business day" means
each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close; (b) "subsidiary" has the meaning set forth in Rule 405
of the rules and regulations of the Commission under the Securities Act; and
(c), unless otherwise defined, the phrase "to the Company's knowledge" and
similar phrases refer to the knowledge of the senior executives of the Company.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature pages follow]
-33-
If the foregoing correctly sets forth the agreement among the Company,
the Guarantors and the Initial Purchasers, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
HOLLYWOOD PARK, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
HOLLYWOOD PARK OPERATING COMPANY
By: /s/ G. Xxxxxxx Xxxxxxxx
-----------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
HP CASINO, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
HOLLYWOOD PARK FALL OPERATING COMPANY
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Executive Vice President
HOLLYWOOD PARK FOOD SERVICES, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Executive Vice President
S-1
TURF PARADISE, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
CRYSTAL PARK HOTEL AND CASINO DEVELOPMENT COMPANY,
LLC
By: HP/Xxxxxxx, Inc.
its Manager
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
HP/XXXXXXX, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
HP YAKAMA, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
HP YAKAMA CONSULTING, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
BOOMTOWN, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
S-2
BOOMTOWN HOTEL & CASINO, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
LOUISIANA GAMING ENTERPRISES, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
LOUISIANA-I GAMING, A LOUISIANA PARTNERSHIP IN
COMMENDAM
BY: Louisiana Gaming Enterprises, Inc.
its general partner
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
BAYVIEW YACHT CLUB, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
MISSISSIPPI-I GAMING, LP
By: Bayview Yacht Club, Inc.
its general partner
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
S-3
BOOMTOWN HOOSIER, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
INDIANA VENTURES LLC
BY: Boomtown Hoosier, Inc.
its Manager
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
PINNACLE GAMING DEVELOPMENT CORP.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: President
SWITZERLAND COUNTY DEVELOPMENT CORP.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
CASINO MAGIC CORP.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
MARDI GRAS CASINO CORP.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
S-4
BILOXI CASINO CORP.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
CASINO MAGIC FINANCE CORP.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
CASINO MAGIC AMERICAN CORP.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
BAY ST. LOUIS CASINO CORP.
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
CASINO ONE CORPORATION
By: /s/ G. Xxxxxxx Xxxxxxxx
------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: Vice President
S-5
Accepted:
XXXXXX BROTHERS INC.
CIBC XXXXXXXXXXX CORP.
XXXXXX XXXXXXX & CO. INCORPORATED
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XX XXXXX SECURITIES CORPORATION
XXXXXXXXXXX XXXXXXX SECURITIES, INC.
By: XXXXXX BROTHERS INC.
BY: /s/ Xxxxxx Xxxxxx
----------------------------
Authorized Representative
S-6
SCHEDULE 1
Principal
Initial Purchasers: Amount of Notes
------------------ ---------------
Xxxxxx Brothers Inc................................................ $175,000,000
------------
CIBC Xxxxxxxxxxx Corp.............................................. $ 35,000,000
------------
Xxxxxx Xxxxxxx & Co. Incorporated.................................. $ 35,000,000
------------
NationsBanc Xxxxxxxxxx Securities LLC.............................. $ 35,000,000
------------
XX Xxxxx Securities Corporation.................................... $ 35,000,000
------------
Xxxxxxxxxxx Xxxxxxx Securities, Inc................................ $ 35,000,000
------------
Total $350,000,000
============
I-1
