EXHIBIT 4.1
EXECUTION COPY
RIO HOTEL & CASINO, INC.
9 1/2% Senior Subordinated Notes Due 2007
PURCHASE AGREEMENT
To: SALOMON BROTHERS INC New York, New York
BANCAMERICA SECURITIES, INC. February 4, 1997
In care of:
Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Rio Hotel & Casino, Inc., a Nevada corporation (the
"Company"), proposes to issue and sell to you (the "Purchasers")
$125,000,000 principal amount of its 9 1/2% Senior
Subordinated Notes Due 2007 (the "Securities") to be guaranteed
on a senior subordinated and unsecured basis by Rio Properties,
Inc., a Nevada corporation (the "Guarantor" or the "Subsidiary"),
and to be issued under an indenture (the "Indenture") to be dated
as of February 11, 1997, between the Company, the Guarantor and
IBJ Xxxxxxxx Bank and Trust Company, as trustee (the "Trustee").
The sale of the Securities to you will be made without
registration of the Securities under the Securities Act of 1933,
as amended (the "Act"), in reliance upon the exemption from the
registration requirements of the Act provided by Section 4(2)
thereof. You have advised the Company that you will make an
offering of the Securities purchased by you hereunder in
accordance with Section 4 hereof on the terms set forth in the
Final Memorandum (as defined below), as soon as you deem
advisable after this Agreement has been executed and delivered.
In connection with the sale of the Securities, the
Company has prepared a final offering memorandum, dated
February 4, 1997 (the "Final Memorandum"). The Final Memorandum
sets forth certain information concerning the Company, the
Guarantor and the Securities. The Company and the Guarantor,
jointly and severally, hereby confirm that they have authorized
the use of the Final Memorandum in connection with the offering
and resale by the Purchasers of the Securities. Any references
herein to the Final Memorandum shall be deemed to include all
exhibits thereto and all documents incorporated by reference
therein which were filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or before the Execution
Time (as defined below); and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Final
Memorandum shall be deemed to refer to and include the filing of
any document under the Exchange Act after the Execution Time
which is incorporated by reference therein.
The holders of the Securities will be entitled to the
benefits of the Registration Agreement dated the date hereof,
among the Company, the Guarantor and the Purchasers (the
"Registration Agreement").
Capitalized terms used herein without definitions have
the respective meanings assigned to them in the Final Memorandum.
1. REPRESENTATIONS AND WARRANTIES. The company and
the guarantor jointly and severally represent and warrant to, and
agree with, the purchasers as set forth below in this Section 1.
(a) The Final Memorandum as of its date did not, and
the Final Memorandum (as the same may have been amended or
supplemented) as of the Closing Date will not, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the Company and Guarantor make no
representations or warranties as to the information contained in
or omitted from the Final Memorandum in reliance upon and in
conformity with information furnished in writing to the Company
or Guarantor by the Purchasers specifically for inclusion in the
Final Memorandum (and any amendment or supplement thereof or
thereto). All documents incorporated by reference in the Final
Memorandum which were filed under the Exchange Act on or before
the Execution Time complied, and all such documents which are
filed under the Exchange Act after the Execution Time and on or
before the Closing Date will comply, in all material respects
with the applicable requirements of the Exchange Act and the
rules thereunder.
(b) Neither the Company nor the Guarantor has taken,
nor will it take, directly or indirectly, any action prohibited
by Rule l0b-6 under the Exchange Act or, from and after the
effective date thereof, Regulation M under the Exchange Act in
connection with any offering of the Securities.
(c) None of the Company, the Guarantor, any of their
respective affiliates (as defined in Rule 501(b) of Regulation D
under the Act ("Regulation D")) nor any person acting on its or
their behalf has directly, or through any agent, (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated
in respect of, any security (as defined in the Act) which is or
will be integrated with the sale of the Securities in a manner
that would require the registration of the Securities under the
Act or (ii) engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in
connection with the offering of the Securities.
(d) It is not necessary in connection with the offer,
sale and delivery of the Securities in the manner contemplated by
this Agreement and the Final Memorandum to register the
Securities under the Act or to qualify the Indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act").
(e) None of the Company, the Guarantor, any of
their respective affiliates, nor any person acting on its or
their behalf has engaged in any directed selling efforts
(as that term is defined in Regulation S under the Act
("Regulation S")) with respect to the Securities, and the
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Company, the Guarantor and their respective affiliates and any
person acting on its or their behalf have complied with the
offering restrictions requirement of Regulation S.
(f) The Company is subject to and in full compliance
with the reporting requirements of Section 13 or Section 15(d) of
the Exchange Act.
(g) The Securities satisfy the requirements set forth
in Rule 144A(d)(3) under the Act. The Company and the Guarantor
hereby agree to permit the Securities to be designated PORTAL
eligible securities, subject to the payment by the Purchasers of
the requisite fees related thereto, and have been advised by the
National Association of Securities Dealers, Inc. PORTAL Market
that the Securities have or will be designated PORTAL eligible
securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc.
(h) Each of the Company and the Guarantor has full
corporate power and authority to enter into this Agreement, the
Registration Agreement, the Indenture and the Securities and to
perform the transactions contemplated hereby and thereby. This
Agreement has been duly authorized, executed and delivered by the
Company and the Guarantor and constitutes a valid and binding
obligation of the Company and the Guarantor enforceable in
accordance with its terms and the execution and delivery of the
Registration Agreement and the Securities have been duly
authorized by the Company and the Guarantor and, when duly
executed and delivered by the parties thereto, will constitute
valid and binding obligations of the Company and the Guarantor,
enforceable against the Company and the Guarantor in accordance
with their respective terms, except in each case as
enforceability may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and except as to those
provisions relating to indemnity or contribution for liabilities
arising under federal and state securities laws. The execution,
delivery and performance of this Agreement, the Registration
Agreement and the Securities by the Company and the Guarantor and
the consummation of the transactions contemplated hereby and
thereby (i) will not violate any provisions of the Articles of
Incorporation, Bylaws or other organizational documents of the
Company or any of its subsidiaries, and (ii) will not conflict
with, result in a material breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a
material default under (A) any agreement, mortgage, deed of
trust, lease, franchise, license, indenture (including, without
limitation, the indenture governing the Company's outstanding
10 5/8% Senior Subordinated Notes Due 2005), permit or other
instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any
of its respective properties may be bound or affected, or (B) any
statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative
agency or other governmental body applicable to the Company or
any of its subsidiaries or any of their respective properties.
No consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
which has not already been obtained is required for the execution
and delivery of this Agreement, the Registration Agreement, the
Indenture, the Securities or the consummation of the transactions
contemplated hereby or thereby, except for compliance with the
Act, the blue sky or securities laws of any jurisdiction in
connection with the purchase and sale of the Securities by the
Purchasers, and the Nevada Gaming Control Act and rules and
regulations thereunder (the "Gaming Act").
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(i) Except as disclosed in the Final Memorandum, there
are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's and the Guarantor's
knowledge, threatened to which the Company or any of its
subsidiaries is or is threatened to be made a party or of which
property owned or leased by the Company or any of its
subsidiaries is or is threatened to be made the subject, which
actions, suits or proceedings could, individually or in the
aggregate, prevent or adversely affect the transactions
contemplated by this Agreement or result in a material adverse
change in the condition (financial or otherwise), properties,
business, results of operations or prospects of the Company or
its subsidiaries or materially and adversely affect the ability
of the Company or the Guarantor to perform its obligations under
this Agreement, the Registration Agreement, the Indenture, the
Securities or the transactions contemplated hereby or thereby;
and no labor disturbance by the employees of the Company or any
of its subsidiaries exists or is imminent which could materially
adversely affect such condition, properties, business, results of
operations or prospects. Neither the Company nor any of its
subsidiaries is a party or subject to the provisions of any
material injunction, judgment, decree or order of any court,
regulatory body, administrative agency or other governmental
body. Neither the Company nor the Guarantor has any reason to
believe that the Nevada Gaming Commission, the Nevada State
Gaming Control Board or the Xxxxx County Liquor and Gaming
Licensing Board or any other governmental agencies are
investigating the Company, the Guarantor or any related parties,
other than in ordinary course administrative reviews or in any
ordinary course review of the transactions contemplated hereby.
(j) Except as disclosed in or specifically
contemplated by the Final Memorandum, the Company and its
subsidiaries have sufficient trademarks, trade names, patent
rights, copyrights, licenses, approvals and governmental
authorizations (including, without limitation, all authorizations
from Nevada gaming and liquor authorities) to conduct their
businesses as now conducted; the Company's and its subsidiaries'
controlling persons, key employees and stockholders have all
necessary permits, licenses and other authorizations required by
applicable law for the Company and its subsidiaries to conduct
their businesses as now conducted; the expiration of any
trademarks, trade names, patent rights, copyrights, licenses,
approvals or governmental authorizations would not have a
material adverse effect on the condition (financial or
otherwise), business, results of operations or prospects of the
Company or its subsidiaries; the Company has no knowledge that
any of its stockholders is unsuitable or may be deemed unsuitable
by the Nevada Gaming Commission or the Nevada State Gaming
Control Board.
(k) The Company and its subsidiaries are conducting
business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which they are conducting
business, including, without limitation, all applicable local,
state and federal gaming, liquor and environmental laws and
regulations, except where the failure to be so in compliance
would not materially adversely affect the condition (financial or
otherwise), business, results of operations or prospects of the
Company and its subsidiaries, taken as a whole.
(l) Neither the Company nor the Guarantor is an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended, without taking account of any exemption
arising out of the number of holders of the Company's or the
Guarantor's securities.
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(m) Neither the Company nor the Guarantor has paid or
agreed to pay to any person any compensation for soliciting
another to purchase any securities of the Company or the
Guarantor (except as contemplated by this Agreement).
(n) The information provided by the Company pursuant
to Section 5(h) hereof will not, at the date thereof, contain any
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
2. PURCHASE AND SALE. Subject to the terms and
conditions and in reliance upon the representations and
warranties herein set forth, the Company agrees to sell to the
Purchasers, and the Purchasers agree to purchase from the
Company, at a purchase price of 97.25% of the principal amount
thereof, plus accrued interest, if any, from February 11, 1997,
to the Closing Date, the principal amount of the Securities set
forth opposite each Purchaser's name in Schedule I hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for
the Securities shall be made at 10:00 a.m., New York City time,
on February 11, 1997, or such later date as the Purchasers may
agree or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the
Purchasers against payment by the Purchasers of the purchase
price thereof to or upon the order of the Company by certified or
official bank check or checks drawn on or by a New York clearing
house bank and payable in next day funds or wire transfer in
federal (same-day) funds to a U.S. dollar account designated by
the Company and agreed to by the Purchasers not less than two
business days prior to the Closing Date. Delivery of the
Securities shall be made at such location as the Purchasers shall
reasonably designate at least one business day in advance of the
Closing Date and payment for the Securities shall be made at the
offices of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx. Certificates for the Securities shall be registered in
such names and in such denominations as the Purchasers may
request not less than three full business days in advance of the
Closing Date.
The Company agrees to have the certificates for the
Securities available for inspection, checking and packaging by
the Purchasers in New York, New York, not later than 1:00 p.m. on
the business day prior to the Closing Date.
4. OFFERING OF SECURITIES; RESTRICTIONS ON TRANSFER.
(a) The Purchasers represent and warrant to and agree with the
Company that (i) they have not solicited and will not solicit any
offer to buy or offer to sell the Securities by means of any form
of general solicitation or general advertising (within the
meaning of Regulation D) or in any manner involving a public
offering within the meaning of Section 4(2) of the Act or, with
respect to Securities sold in reliance on Regulation S, by means
of any directed selling efforts and (ii) they have solicited and
will solicit offers to buy the Securities only from, and have
offered and will offer, sell or deliver the Securities only
to, (A) persons who they reasonably believe to be
qualified institutional buyers (as defined in Rule 144A
under the Act) or, if any such person is buying for
one or more institutional accounts for which such person
is acting as fiduciary or agent, only when such person
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has represented to them that each such account is a qualified
institutional buyer, to whom notice has been given that such sale
or delivery is being made in reliance on Rule 144A, and, in each
case, in transactions under Rule 144A, (B) persons who they
reasonably believe to be institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D), and
who provide to them a letter in the form of Exhibit A hereto or
(C) persons to whom, and under circumstances which, they
reasonably believe offers and sales of Securities may be made
without registration of the Securities under the Act in reliance
upon Regulation S thereunder. The Purchasers also represent and
warrant and agree that they have offered and will offer to sell
the Securities only to, and have solicited and will solicit
offers to buy the Securities only from, persons that in
purchasing such Securities will be deemed to have represented and
agreed as provided under "Investor Representations and
Restrictions on Resale" in Exhibit B hereto.
(b) The Purchasers represent and warrant that (i) they
have not offered or sold, and will not offer or sell, in the
United Kingdom, by means of any document, any Securities other
than to persons whose ordinary business it is to buy or sell
shares or debentures, whether as principal or agent, or in
circumstances which do not constitute an offer to the public
within the meaning of the United Kingdom Companies Xxx 0000,
(ii) they have complied and will comply with all applicable
provisions of the Financial Services Xxx 0000 of the United
Kingdom with respect to anything done by them in relation to the
Securities in, from or otherwise involving the United Kingdom and
(iii) they have only issued or passed on, and will only issue or
pass on, in the United Kingdom any document received by them in
connection with the issue of the Securities to a person who is of
the kind described in Article 9(3) of the Financial Services Xxx
0000 (Investment Advertisements) (Exemptions) Order 1988 or is a
person to whom the document may otherwise lawfully be issued or
passed on.
5. AGREEMENTS. The Company and the Guarantor jointly
and severally agree with the Purchasers that:
(a) The Company and the Guarantor will furnish to the
Purchasers, without charge, 500 copies of the Final Memorandum
and any supplements and amendments thereof or thereto. The
Company and the Guarantor will pay 50% of the expenses of
printing or other production of all documents relating to the
offering, not to exceed $5,000.
(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act
which are incorporated by reference therein, without prior
consent of the Purchasers (which consent shall not be
unreasonably or untimely withheld). Prior to the completion of
the sale of the Securities by the Purchasers, the Company will
not file any document under the Exchange Act which is
incorporated by reference in the Final Memorandum unless the
Company has furnished you a copy for your review prior to filing
and will not file any such document to which you reasonably and
timely object.
(c) The Company will promptly advise the Purchasers
when, prior to the completion of the sale of the Securities by
the Purchasers, any document filed under the Exchange Act which
is incorporated by reference in the Final Memorandum shall have
been filed with the Securities and Exchange Commission (the
"Commission").
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(d) If at any time prior to the completion of the sale
of the Securities by the Purchasers, any event occurs as a result
of which the Final Memorandum as then amended or supplemented
would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein
in the light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or supplement
the Final Memorandum (including any document incorporated by
reference therein which was filed under the Exchange Act) to
comply with the Exchange Act or the rules thereunder or other
applicable law, the Company and the Guarantor promptly will
notify the Purchasers of the same and will prepare and provide to
the Purchasers an amendment or supplement which will correct such
statement or omission or effect such compliance and, in the case
of such an amendment or supplement which is to be filed under the
Exchange Act and which is incorporated by reference in the Final
Memorandum, will file such amendment or supplement with the
Commission.
(e) The Company will arrange for the qualification of
the Securities for sale by the Purchasers under the laws of such
jurisdictions as the Purchasers may reasonably designate, will
maintain such qualifications in effect so long as reasonably
required for the sale of the Securities and will arrange for the
determination of the legality of the Securities for purchase by
institutional investors. Each of the Company and the Guarantor
will promptly advise the Purchasers of the receipt by it of any
notification with respect to the suspension of the qualification
of the Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose.
(f) Neither the Company nor any affiliate (as defined
in Rule 501(b) of Regulation D) of the Company will solicit any
offer to buy or offer or sell the Securities by means of any form
of general solicitation or general advertising (within the
meaning of Regulation D).
(g) None of the Company, its affiliates nor any person
acting on behalf of the Company or its affiliates will engage in
any directed selling efforts with respect to the Securities
within the meaning of Regulation S, and the Company, its
affiliates and each such person acting on its or their behalf
will comply with the offering restrictions requirement of
Regulation S.
(h) The Company and the Guarantor shall, during any
period in the three years after the Closing Date in which it is
not subject to Section 13 or 15(d) of the Exchange Act, make
available, upon request, to any holder of such Securities in
connection with any sale thereof and any prospective purchaser
(as designated by such holder) of Securities from such holder the
information ("Rule 144A Information") specified in
Rule 144A(d)(4) under the Act. This covenant is intended to be
for the benefit of the holders, and the prospective purchasers
designated by such holders, from time to time of such Securities.
(i) The Company and the Guarantor will not, and will
not permit any of their respective affiliates (as defined in
Rule 501(b) of Regulation D) to, resell any Securities which
constitute "restricted securities" under Rule 144 that have been
acquired by any of them.
(j) None of the Company, the Guarantor nor any of
their respective affiliates (as defined in Rule 501(b)
of Regulation D) will sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security
(as defined in the Act) the offering of which security
7
will be integrated with the sale of the Securities in a manner
which would require the registration of the Securities under the
Act.
(k) The Company shall include information
substantially in the form set forth in Exhibit B in each Final
Memorandum.
(l) The Company and the Guarantor shall use their best
efforts in cooperation with the Purchasers to permit the
Securities to be eligible for clearance and settlement through
The Depository Trust Company.
(m) The Company will not, for a period of 90 days
following the Execution Time without prior written consent of
Salomon Brothers Inc ("Salomon") (which consent will not be
unreasonably or untimely withheld), offer, sell or contract to
sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any debt securities issued or
guaranteed by the Company or the Guarantor (other than the
Securities). Neither the Company nor the Guarantor will at any
time offer, sell, contract to sell or otherwise dispose of,
directly or indirectly, any securities under circumstances where
such offer, sale, contract or disposition would cause the
exemption afforded by Section 4(2) of the Securities Act or the
safe harbor of Regulation S thereunder to cease to be applicable
to the offer and sale of the Securities as contemplated by this
Agreement and the Final Offering Memorandum.
(n) The Company will apply the net proceeds from the
sale of the Securities sold by it substantially in accordance
with its statements under the caption "Use of Proceeds" in the
Final Memorandum.
(o) As soon as practicable following receipt by the
Company of a written request from Salomon, the Company and the
Guarantor shall support the participation of Salomon in the next
increase in the borrowing limit or in the refinancing of the
Guarantor's outstanding $200 million secured revolving credit
facility, and shall take all reasonable actions within their
power to cause the appointment of Salomon as documentation agent
or syndication agent, subject to the participation of Salomon in
such facility at a level which is reasonable and customary for
such appointment.
(p) The Company agrees to make the following personnel
available to the Purchasers, at a time specified by the
Purchasers, for participation in a telephonic conference call
with potential purchasers of the Securities from the purchasers:
Xxxxxxx X. Xxxxxxx XX, Chairman of the Board and Chief Executive
Officer of the Company and Xxxxx X. Xxxxxxx, Xx., President and
Director of the Company.
6. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS.
The obligations of the Purchasers to purchase the Securities
shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the
date and time that this Agreement is executed and delivered by
the parties hereto (the "Execution Time") and the Closing Date,
to the accuracy of the statements of the Company and the
Guarantor made in any certificates pursuant to the provisions
hereof, to the performance by the Company and the Guarantor of
their respective obligations hereunder and to the following
additional conditions:
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(a) At the Closing Date, you shall have received
evidence in form and substance satisfactory to you that the
offering of the Securities complies (whether as a result of the
receipt of appropriate waivers or otherwise) with applicable
gaming laws.
(b) The Company shall have furnished to the Purchasers
the opinion of Xxxxxx Xxxxxxxx Xxxxxx & Xxxxxxx, counsel for the
Company, dated the Closing Date, to the effect that:
(i) each of the Company and the Guarantor has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its
properties and conduct its business as described in the
Final Memorandum, and is duly qualified to do business
as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such
qualification wherein it owns or leases material
properties or conducts material business;
(ii) all the outstanding shares of capital stock
of the Guarantor have been duly and validly authorized
and issued and are fully paid and nonassessable, and
all outstanding shares of capital stock of the
Guarantor are owned by the Company directly free and
clear of any perfected security interest (except for a
pledge thereof securing the Rio Bank Loan) and, to the
knowledge of such counsel, after due inquiry, any other
security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity
capitalization is as set forth in the Final Memorandum;
and the Securities conform to the description thereof
contained in the Final Memorandum;
(iv) the Indenture has been duly authorized,
executed and delivered by the Company and the
Guarantor, and constitutes a legal, valid and binding
instrument enforceable in accordance with its terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from
time to time in effect); the Securities are in the form
contemplated by the Indenture and have been duly
authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and
delivered to and paid for by the Purchasers pursuant to
this Agreement, will constitute legal, valid and
binding obligations entitled to the benefits of the
Indenture and enforceable in accordance with their
terms (in rendering the opinion in this paragraph, such
counsel may assume that New York law is identical to
Nevada law on such applicable parts of the opinion
governed by New York law);
(v) the statements in the Final
Memorandum under the headings: "Business--
Regulation and Licensing", "Business--Legal
Proceedings", "Description of Notes--Mandatory
Disposition or Redemption Pursuant to Gaming
9
Laws", and "Certain U.S. Federal Tax Consequences"
fairly summarize the matters therein described;
(vi) such counsel has no reason to believe that as
of the Execution Time the Final Memorandum contained
any untrue statement of a material fact or omitted to
state any material fact required to be stated therein
or necessary to make the statements therein not
misleading or that the Final Memorandum includes any
untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein,
in the light of the circumstances under which they were
made, not misleading;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company and the
Guarantor;
(viii) no consent, approval, authorization or
order of any court or governmental agency or body is
required for the consummation of the transactions
contemplated herein, except such as may be required
under the blue sky or securities laws of any
jurisdiction in connection with the purchase and
distribution of the Securities by the Purchasers and
such other approvals (specified in such opinion) as
have been obtained;
(ix) the issue and sale of the Securities, the
execution and delivery of this Agreement, the
Registration Agreement, the Securities and the
Indenture by the Company and the Guarantor, the
consummation of any other of the transactions herein or
therein contemplated or the fulfillment of the terms
hereof or thereof will not conflict with, result in a
breach or violation of, or constitute a default under
any law or the charter or by-laws of the Company or the
Guarantor or the terms of any indenture (including,
without limitation, the indenture governing the
Company's outstanding 10 5/8% Senior Subordinated Notes
Due 2005) or other agreement or instrument known to
such counsel and to which the Company or any of its
subsidiaries is a party or bound or any judgment, order
or decree known to such counsel to be applicable to the
Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Company
or any of its subsidiaries;
(x) each of the Company and the Guarantor has
full corporate power and authority to enter into this
Agreement, the Registration Agreement, the Indenture
and the Securities and to sell and deliver the
Securities to be sold by it to the Purchasers; this
Agreement, the Registration Agreement, the Indenture
and the Securities have been duly and validly
authorized by all necessary corporate action by the
Company and the Guarantor, have been duly and
validly executed and delivered by and on behalf
of the Company and the Guarantor, and are
valid and binding agreements of the Company and
the Guarantor enforceable in accordance with
their terms, except as enforceability may be
limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally
and except as to those provisions relating to
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indemnity or contribution for liabilities arising under
federal and state securities laws (as to which no
opinion need be expressed); and to the best of such
counsel's knowledge after due inquiry no approval,
authorization, order, consent, registration, filing,
qualification, license or permit of or with any court,
regulatory, administrative or other governmental body
is required for the execution and delivery of this
Agreement, the Registration Agreement, the Indenture or
the Securities by the Company or the Guarantor or the
consummation of the transactions contemplated hereby or
thereby, except such as have been obtained and are in
full force and effect under the Act or applicable
gaming laws and such as may be required under
applicable state securities or blue sky laws in
connection with the purchase and distribution of the
Securities by the Purchasers and the clearance of such
offering with the NASD;
(xi) it is not necessary in connection with the
offer, sale and delivery by the Purchasers of the
Securities in the manner contemplated by this Agreement
to register the Securities under the Act or to qualify
the Indenture under the Trust Indenture Act;
(xii) no approval of the Nevada gaming
authorities is required with respect to the issuance of
Securities or the transactions contemplated by this
Agreement and the Indenture, except as has already been
obtained;
(xiii) to the best of such counsel's knowledge,
there are no legal or governmental actions, suits or
proceedings pending or threatened to which the Company
or any of its subsidiaries is or is threatened to be
made a party or of which property owned or leased by
the Company or any of its subsidiaries is or is
threatened to be made the subject, which actions, suits
or proceedings could, individually or in the aggregate,
prevent or adversely affect the transactions
contemplated by this Agreement, the Registration
Agreement, the Indenture or the Securities or result in
a material adverse change in the condition (financial
or otherwise), properties, business, results of
operations or prospects of the Company and its
subsidiaries; and neither the Company nor any of its
subsidiaries is a party or subject to the provisions of
any injunction, judgment, decree or order of any court,
regulatory body, administrative agency or other
governmental body which could materially adversely
affect the condition (financial or otherwise),
business, results of operations or prospects of the
Company and its subsidiaries, taken as a whole; and
neither the Company nor any related party is being
investigated by the Nevada Gaming Commission, the
Nevada State Gaming Control Board or any federal, state
or local liquor or gaming regulatory body or any other
governmental agency, other than in ordinary course
administrative reviews or in any ordinary course review
of the transactions contemplated by this Agreement; and
(xiv) neither the Company nor the Guarantor
is, or upon the closing of the offering
contemplated by this Agreement, will be, an
"investment company" within the meaning of the
Investment Company Act of 1940, as amended, without
11
taking account of any exemption therefrom arising out
of the number of holders of the Company's or the
Guarantor's securities.
In rendering such opinion, such counsel may rely
(A) as to matters involving the application of laws of any
jurisdiction other than the State of Nevada or the United States,
to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for
the Purchasers and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the
Company and public officials. References to the Final Memorandum
in this paragraph (b) include any amendments or supplements
thereof or thereto at the Closing Date.
(c) The Purchasers shall have received from Cravath,
Swaine & Xxxxx, counsel for the Purchasers, such opinion or
opinions, dated the Closing Date, with respect to the issuance
and sale of the Securities, the Indenture, the Final Memorandum
(together with any amendment or supplement thereof or thereto)
and other related matters as the Purchasers may reasonably
require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them
to pass upon such matters.
(d) The Company shall have furnished to the Purchasers
a certificate of the Company, signed by the Chairman of the Board
or the President and the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect
that the signers of such certificate have carefully examined the
Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of the
Company and the Guarantor in this Agreement are true
and correct in all material respects on and as of the
Closing Date with the same effect as if made on the
Closing Date and the Company and the Guarantor have
complied with all the agreements and satisfied all the
conditions on their part to be performed or satisfied
at or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum (exclusive
of any amendment or supplement thereof or thereto),
there has been no material adverse change in the
condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, whether
or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in
the Final Memorandum (exclusive of any amendment or
supplement thereof or thereto).
(e) At the Execution Time and at the Closing Date,
Xxxxxx Xxxxxxxx LLP shall have furnished to the Purchasers a
letter or letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to
the Purchasers, confirming that they are independent certified
public accountants under Rule 101 of the AICPA's Code of
Professional Conduct and its interpretations and rulings and
stating in effect that:
12
(i) with respect to the nine-month periods ended
September 30, 1996 and 1995, they have:
(a) read the unaudited consolidated balance
sheet as of September 30, 1996, and the
unaudited statements of income, retained
earnings, and cash flows of the Company
for the nine-month periods, ended
September 30, 1996 and 1995, included in
the Final Memorandum, and agreed the
amounts contained therein to the
Company's accounting records and
(b) inquired of certain officials of the
Company who have responsibility for
financial and accounting matters whether
the unaudited consolidated financial
statements referred to in (a) above are
in conformity with generally accepted
accounting principles applied on a basis
substantially consistent with that of
the audited consolidated financial
statements included in the Final
Memorandum and that such officials have
stated that the unaudited consolidated
financial statements referred to in (a)
above are in conformity with generally
accepted accounting principles applied
on a basis substantially consistent with
that of the audited consolidated
financial statements included in the
Final Memorandum.
(ii) with respect to the period from October 1,
1996 to December 31, 1996 they have:
(a) read the unaudited consolidated
financial statements of the Company for
the year ended December 31, 1996,
furnished them by the Company, and
agreed the amounts contained therein to
the Company's accounting records and
(b) made inquiry of certain officials of the
Company who have responsibility for
financial and accounting matters
regarding whether (1) the unaudited
consolidated financial statements
referred to in (a) above are stated on a
basis substantially consistent with that
of the audited consolidated financial
statements included in the Final
Memorandum, (2) at December 31, 1996,
there was any change in the capital
stock, increase in long-term debt or any
decrease in consolidated net current
assets or stockholders' equity of the
consolidated companies as compared with
amounts shown in the September 30, 1996,
unaudited consolidated balance sheet
included in the Final Memorandum,
and (3) for the period from October 1,
1996, to December 31, 1996, there
13
were any decreases, as compared with the
corresponding period in the preceding
year, in consolidated net sales or in
the total or per-share amounts of net
income and that such officials stated
that (x) the unaudited consolidated
financial statements referred to in (a)
above are stated on a basis
substantially consistent with that of
the audited consolidated financial
statements included in the Final
Memorandum, (y) at December 31, 1996,
there was no change in the capital
stock, no increase in long-term debt,
and no decrease in consolidated net
current assets or stockholders' equity
of the consolidated companies as
compared with amounts shown in the
September 30, 1996, unaudited
consolidated balance sheet included in
the Final Memorandum and (z) there were
no decreases for the period from
October 1, 1996, to December 31, 1996,
as compared with the corresponding
period in the preceding year, in
consolidated net sales or in the total
or per-share amounts of net income.
(iii) they have made inquiries of certain
officials of the Company who have responsibility for
financial and accounting matters regarding whether
(a) there was any change at a specified date not more
than five days prior to the date of the letter, in the
capital stock or long-term debt of the Company or any
decreases in stockholders' equity or consolidated net
current assets as compared with amounts shown on the
December 31, 1996, unaudited consolidated balance
sheet, included in the Final Memorandum or (b) for the
period from January 1, 1997 to such specified date,
there were any decreases, as compared with the
corresponding period in the preceding year, in
consolidated net sales or in the total per share
amounts of net income and that such officials stated
that there were no such changes or decreases and that
the Company has prepared no financial statements as of
any date or for any period subsequent to December 31,
1996.
(iv) they have performed certain other specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
subsidiaries) set forth in the Final Memorandum,
including the information set forth under the caption
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Final
Memorandum, complies with certain information provided
in the past.
References to the Final Memorandum in this
paragraph (e) include any amendment or supplement thereof or
thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if
earlier, the dates as of which information is given
in the Final Memorandum (exclusive of any amendment or
supplement thereof or thereto), there shall not have been
(i) any change or decrease specified in the letter or
14
letters referred to in paragraph (e) of this Section 6 or
(ii) any change, or any development involving a prospective
change, in or affecting the business or properties of the Company
and its subsidiaries the effect of which, in any case referred to
in clause (i) or (ii) above, is, in the judgment of the
Purchasers, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereof or
thereto).
(g) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of the Securities or any of
the Company's or the Guarantor's debt securities by any
"nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice
given of any intended or potential decrease in any such rating or
of a possible change in any such rating that does not indicate
the direction of the possible change.
(h) On or prior to the Closing Date, the Company and
the Guarantor shall have furnished to the Purchasers such further
information, certificates and documents as the Purchasers may
reasonably request.
(i) On or prior to the Closing Date the Registration
Agreement shall have been executed substantially in the form
hereto delivered to you and shall have been delivered to you and
the Trustee.
(j) On the Closing Date, the Company (i) shall have
received from Xxxxxx Xxxxxxxx LLP a letter dated as of the
Closing Date, in form and substance satisfactory to the
Purchasers, stating, among other things, the results of their
review of the interim financial information of the Company as
described in Statement of Auditing Standards No. 71 and
(ii) shall furnish a copy of such letter to the Purchasers.
If any of the conditions specified in this Section 6
shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to the Purchasers and counsel for the Purchasers,
this Agreement and all obligations of the Purchasers hereunder
may be canceled at, or at any time prior to, the Closing Date by
the Purchasers. Notice of such cancellation shall be given to
the Company in writing or telegraph confirmed in writing.
The documents required to be delivered by this
Section 6 shall be delivered at the office of Cravath, Swaine &
Xxxxx, counsel for the Purchasers, at Worldwide Plaza, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the Closing Date.
7. REIMBURSEMENT OF PURCHASER'S EXPENSES. If the sale
of the Securities provided for herein is not consummated because
any condition to the obligations of the Purchasers set forth in
Section 6 hereof is not satisfied, because of any termination
pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company or the Guarantor
to perform any agreement herein or comply with any provision
hereof other than by reason of a default by the Purchasers in
payment for the Securities on the Closing Date, the Company and
the Guarantor jointly and severally will reimburse the Purchasers
severally upon
15
demand for all reasonable out-of-pocket expenses (including
reasonable fees and reasonable disbursements of counsel) that
shall have been incurred by them in connection with the proposed
purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The
Company and the Guarantor jointly and severally agree to
indemnify and hold harmless each Purchaser, the directors,
officers, employees and agents of each Purchaser and each person
who controls any Purchaser within the meaning of either the Act
or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material
fact contained in the Final Memorandum or any Rule 144A
Information provided by the Company to any holder or prospective
purchaser of Securities pursuant to Section 5(h), or in any
amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that neither the Company
nor the Guarantor will be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Final
Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Purchaser
specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company and the
Guarantor may otherwise have.
(b) Each Purchaser severally and not jointly agrees to
indemnify and hold harmless each of the Company and the
Guarantor, their respective directors, officers, and each person
who controls the Company or the Guarantor within the meaning of
either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Guarantor to the
Purchasers, but only with reference to written information
relating to the Purchasers furnished to the Company by or on
behalf of the Purchasers specifically for inclusion in the Final
Memorandum, or in any amendment thereof or supplement thereto.
This indemnity agreement will be in addition to any liability
which the Purchasers may otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action,
such indemnified party will, 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 commencement
thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party
other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's
choice at the indemnifying party's expense to represent the
16
indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter
be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth
below); PROVIDED, HOWEVER, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any
such action include both the indemnified party and the
indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified
parties, 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.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any
reason, the Company and the Guarantor on the one hand and the
Purchasers on the other hand agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and
the Guarantor or the Purchasers, as applicable, may be subject in
such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantor or the
Purchasers, as applicable, from the offering of the Securities;
PROVIDED, HOWEVER, that in no case shall any Purchaser be
responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by such
Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
Company and the Guarantor on the one hand and the Purchasers on
the other hand shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Guarantor or the
Purchasers, as applicable, in connection with the statements or
omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the
Company and the Guarantor shall be deemed to be equal to the
total net proceeds from the offering (before deducting expenses),
and benefits received by the Purchasers shall be deemed to be
equal to the total purchase discounts and commissions received by
the Purchasers from the Company in connection with the purchase
of the Securities hereunder. Relative fault shall be determined
by reference to whether any alleged untrue statement or
omission relates to information provided by the Company,
the Guarantor or the Purchasers. The Company, the Guarantor
and the Purchasers agree that it would not be just
17
and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person
who controls a Purchaser within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent
of a Purchaser shall have the same rights to contribution as such
Purchaser, and each person who controls the Company or the
Guarantor within the meaning of either the Act or the Exchange
Act and each officer and director of the Company or the Guarantor
shall have the same rights to contribution as the Company and the
Guarantor, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. DEFAULT BY A PURCHASER. If any Purchaser shall
fail to purchase and pay for any of the Securities agreed to be
purchased by such Purchaser hereunder and such failure to
purchase shall constitute a default in the performance of its
obligations under this Agreement, the remaining Purchaser shall
be obligated severally to take up and pay for the Securities
which the defaulting Purchaser agreed but failed to purchase;
PROVIDED, HOWEVER, that in the event that the aggregate principal
amount of Securities which the defaulting Purchaser agreed but
failed to purchase shall exceed 10% of the aggregate principal
amount of Securities set forth in Schedule I hereto, the
remaining Purchaser shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Purchaser does not purchase
all the Securities, this Agreement will terminate without
liability to any nondefaulting Purchaser, the Company or the
Guarantor. In the event of a default by any Purchaser as set
forth in this Section 9, the Closing Date shall be postponed for
such period, not exceeding seven days, as the nondefaulting
Purchaser shall determine in order that the required changes in
the Final Memorandum or in any other documents or arrangements
may be effected. Nothing contained in this Agreement shall
relieve any defaulting Purchaser of its liability, if any, to the
Company or any nondefaulting Purchaser for damages occasioned by
its default hereunder.
10. TERMINATION. This Agreement shall be subject
to termination in the absolute discretion of the Purchasers, by
notice given to the Company prior to delivery of and payment for
the Securities, if prior to such time (i) trading in the
Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange or the
National Association of Securities Dealers Automated
Quotation National Market System shall have been suspended
or limited or minimum prices shall have been established
on either of such Exchange or Market System, (ii) a banking
moratorium shall have been declared either by Federal or New York
State authorities or (iii) there shall have occurred any outbreak
or escalation of hostilities, declaration by the United States
of a national emergency or war or other calamity or
crisis the effect of which on financial markets
is such as to make it, in the judgment of the
Purchasers, impracticable or inadvisable to proceed
with the offering or delivery of the Securities
as contemplated by the Final Memorandum (exclusive of
any amendment or supplement thereof or thereto).
18
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of the
Purchasers set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation
made by or on behalf of the Purchasers or the Company or any of
the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for
the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Purchasers, will be mailed, delivered or telegraphed and
confirmed to them, care of Salomon Brothers Inc, at Xxxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed
to it at 0000 Xxxx Xxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000,
attention of Xxxxx Xxxxxxx.
13. SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and
controlling persons referred to in Section 8 hereof, and, except
as expressly set forth in Section 5(h) hereof, no other person
will have any right or obligation hereunder.
19
14. APPLICABLE LAW. This Agreement will be governed
by and construed in accordance with the laws of the State of New
York.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the
enclosed duplicate hereof, whereupon this Agreement and your
acceptance shall represent a binding agreement between the
Company, the Guarantor and the Purchasers.
Very truly yours,
RIO HOTEL & CASINO, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Treasurer
GUARANTOR:
RIO PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
Salomon Brothers Inc
for itself and on behalf of
BancAmerica Securities, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
20
SCHEDULE I
Principal Amount
of Securities to
PURCHASERS BE PURCHASED
Salomon Brothers Inc $106,250,000
BancAmerica Securities, Inc. 18,750,000
Total $125,000,000
EXHIBIT A
FORM OF INVESTMENT LETTER
FOR INSTITUTIONAL ACCREDITED INVESTORS
Rio Hotel & Casino, Inc.
c/o IBJ Xxxxxxxx Bank and Trust Company, as Trustee
Xxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
In connection with our proposed purchase of
$ aggregate principal amount of 9 1/2% Senior
Subordinated Notes Due 2007 (the "Notes") of Rio Hotel & Casino,
Inc., a Nevada corporation (the "Company"), we confirm that:
1. We understand that the Notes have not been
registered under the Securities Act of 1933 (the "Securities
Act"), and may not be sold except as permitted in the following
sentence. We understand and agree, on our own behalf and on
behalf of any accounts for which we are acting as hereinafter
stated, (x) that such Notes are being offered only in a
transaction not involving any public offering within the meaning
of the Securities Act, (y) that if we decide to resell, pledge or
otherwise transfer such Notes within three years after the date
of the original issuance of the Notes or if within three months
after we cease to be an affiliate (within the meaning of Rule 144
under the Securities Act) of the Company, such Notes may be
resold, pledged or transferred only (i) to the Company, (ii) so
long as the Notes are eligible for resale pursuant to Rule 144A
under the Securities Act ("Rule 144A"), to a person whom we
reasonably believe is a "qualified institutional buyer" (as
defined in Rule 144A) ("QIB") that purchases for its own account
or for the account of a QIB to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A
(as indicated by the box checked by the transferor on the
Certificate of Transfer on the reverse of the certificate for the
Notes), (iii) in an offshore transaction in accordance with
Regulation S under the Securities Act (as indicated by the box
checked by the transferor on the Certificate of Transfer on the
reverse of the certificate for the Notes), (iv) to an institution
that is an "accredited investor" as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act (as indicated by the box
checked by the transferor on the Certificate of Transfer on the
reverse of the certificate for the Notes) which has certified to
the Company and the Trustee that it is such an accredited
investor and is acquiring the Notes for investment purposes and
not for distribution, (v) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 (if
applicable) under the Securities Act, or (vi) pursuant to an
effective registration statement under the Securities Act, in
each case in accordance with any applicable securities laws of
any of the United States, and we will notify any purchaser of the
Notes from us of the above resale restriction,
if then applicable. We further understand that in
connection with any transfer of the Notes by us that
the Company and the Trustee may request, and if so
requested we will furnish, such certificates, legal opinions and
A-2
other information as they may reasonably require to confirm that
any such transfer complies with the foregoing restrictions.
2. We are able to fend for ourselves in the
transactions contemplated by this Offering Memorandum, we have
knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment
in the Notes, and we and any accounts for which we are acting are
each able to bear the economic risk of our or its investment and
can afford the complete loss of such investment.
3. We understand that the minimum principal amount of
Notes that may be purchased by an institutional accredited
investor is $100,000.
4. We understand that the Company, Salomon Brothers
Inc and BancAmerica Securities, Inc., as the initial purchasers
of the Notes ("Initial Purchasers"), and others will rely upon
the truth and accuracy of the foregoing acknowledgments,
representations and agreements, and we agree that if any of the
acknowledgments, representations and warranties deemed to have
been made by us by our purchase of Notes, for our own account or
of one or more accounts as to each of which we exercise sole
investment discretion, are no longer accurate, we shall promptly
notify the Company and the Initial Purchasers.
5. We are acquiring the Notes purchased by us for
investment purposes and not for distribution of our own account
or for one or more accounts as to each of which we exercise sole
investment discretion and we are or such account is an
institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act).
6. You are entitled to rely upon this letter and you
are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters
covered hereby.
Very truly yours,
___________________________________
(Name of Purchaser)
By: _____________________________
Date: _____________________________
EXHIBIT B
NOTICE TO INVESTORS
OFFERS AND SALES BY THE INITIAL PURCHASERS
The Notes have not been registered under the Securities
Act and may not be offered or sold in the United States or to, or
for the account or benefit of, U.S. persons except in accordance
with an applicable exemption from the registration requirements
thereof. Accordingly, the Notes are being offered and sold only
(1) in the United States to qualified institutional buyers
("Qualified Institutional Buyers") under Rule 144A under the
Securities Act and other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) ("Institutional Accredited Investors") in a private sale
exempt from the registration requirements of the Securities Act,
and (2) outside the United States to non-U.S. persons ("foreign
purchasers") in reliance upon Regulation S under the Securities
Act. Each Institutional Accredited Investor that is a purchaser
of Notes from an Initial Purchaser will be required to sign a
certificate in the form provided by an Initial Purchaser. The
only Notes that will be eligible to be deposited with The
Depository Trust Company are Notes held by Qualified
Institutional Buyers and Institutional Accredited Investors.
INVESTOR REPRESENTATIONS AND RESTRICTIONS ON RESALE
Each purchaser of the Notes will be deemed to have
represented and agreed as follows:
(1) it is acquiring the Notes for its own account or
for an account with respect to which it exercises sole investment
discretion, and that it or such account is a Qualified
Institutional Buyer, an Institutional Accredited Investor
acquiring the Notes for investment purposes and not for
distribution or a foreign purchaser outside the United States;
(2) it acknowledges that the Notes have not been
registered under the Securities Act and may not be sold except as
permitted below;
(3) it understands and agrees (x) that such Notes are
being offered only in a transaction not involving any public
offering within the meaning of the Securities Act, and (y) that
(A) if within three years after the date of original issuance of
the Notes or if it was during the three months preceding such
date of transfer an affiliate of the Company, it decides to
resell, pledge or otherwise transfer such Notes on which the
legend set forth below appears, such Notes may be resold, pledged
or transferred only (i) to the Company, (ii) so long as such
Security is eligible for resale pursuant to Rule 144A, to a
person whom the seller reasonably believes is a Qualified
Institutional Buyer that purchases for its own account or for the
account of a Qualified Institutional Buyer to whom notice is
given that the resale, pledge or transfer is being made in
reliance on Rule 144A (as indicated by the box checked by the
transferor on the Certificate of Transfer on the reverse
of the Note), (iii) in an offshore transaction
in accordance with Regulation S (as indicated by the
box checked by the transferor on the Certificate of
Transfer on the reverse of the Note) but, if such
transfer is being effected by an Initial Foreign Purchaser or
B-2
any foreign purchaser who has purchased Notes from an Initial
Foreign Purchaser or from any person other than a QIB or an
Institutional Accredited Investor pursuant to this clause (iii)
prior to the expiration of the 40 day restricted period (within
the meaning of Rule 903(c)(3) of Regulation S under the
Securities Act), the transferee shall have certified to the
Company and the Trustee for the Notes that such transferee is a
non-U.S. Person (within the meaning of Regulation S) and that
such transferee is acquiring the Notes in an offshore
transaction, (iv) to an Institutional Accredited Investor (as
indicated by the box checked by the transferor on the Certificate
of Transfer on the reverse of the Note if such Note is not in
book-entry form) who has certified to the Company and the Trustee
for the Notes that such transferee is an Institutional Accredited
Investor and is acquiring the Notes for investment purposes and
not for distribution (provided that no Initial Foreign Purchaser
or any foreign purchaser who has purchased Notes from an Initial
Foreign Purchaser or from any person other than a QIB or an
Institutional Accredited Investor pursuant to clause (iii) shall
be permitted to transfer any Notes purchased by it to an
Institutional Accredited Investor pursuant to this clause (iv)
prior to the expiration of the "40 day restricted period" (within
the meaning of Rule 903(c)(3) of Regulation S under the
Securities Act)), (v) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 (if applicable)
under the Securities Act, or (vi) pursuant to an effective
registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of
the United States, (B) the purchaser will, and each subsequent
holder is required to, notify any purchaser of Notes from it of
the resale restrictions referred to in (A) above, if then
applicable, and (C) with respect to any transfer of Notes by an
Institutional Accredited Investor, such holder will deliver to
the Company and the Trustee such certificates and other
information as they may reasonably require to confirm that the
transfer by it complies with the foregoing restrictions;
(4) it understands that the notification requirement
referred to in (3) above will be satisfied in the case only of
transfer by physical delivery of certificated Notes other than a
global certificate by virtue of the fact that the following
legend will be placed on the Notes unless otherwise agreed by the
Company:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT
OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR
TO THE THIRD ANNIVERSARY OF THE ISSUANCE HEREOF
(OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY
HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY
TIME DURING THE THREE MONTHS PRECEDING THE DATE OF
SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO
THE COMPANY, (2) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A, PURCHASING
B-3
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED
BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE
REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION
THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY
THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING
THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A CERTIFICATE IN THE FORM
ATTACHED TO THIS SECURITY IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE,
(5) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT OR
(6) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES. AN
INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS
SECURITY AGREES THAT IT WILL FURNISH TO THE
COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND
OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE
TO CONFIRM THAT ANY TRANSFER BY IT OF THIS
SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS.
THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE
COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR"
AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IS HOLDING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION OR (3) A NON-.U.S. PERSON OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF (OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(0)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT";
B-4
(5) it (i) is able to fend for itself in the
transactions contemplated by this Offering Memorandum; (ii) has
such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its
prospective investment in the Notes; and (iii) has the ability to
bear the economic risks of its prospective investment and can
afford the complete loss of such investment; and
(6) it understands that the Company, the Initial
Purchasers and others will rely upon the truth and accuracy of
the foregoing acknowledgments, representations and agreements and
agrees that if any of the acknowledgments, representations and
warranties deemed to have been made by it by its purchase of
Notes are no longer accurate, it shall promptly notify the
Company and the Initial Purchaser. If it is acquiring the Notes
as a fiduciary or agent for one or more investor accounts, it
represents that it has sole investment discretion with respect to
each such account and it has full power to make the foregoing
acknowledgments, representations and agreements on behalf of such
account.
