$100,000,000
COAST HOTELS AND CASINOS, INC.
COAST RESORTS, INC.
9 1/2% SENIOR SUBORDINATED NOTES DUE 2009
PLACEMENT AGREEMENT
March 11, 2002
March 11, 0000
Xxxx xx Xxxxxxx Securities LLC
as Representative of the Placement Agents
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Coast Hotels and Casinos, Inc., a Nevada corporation (the "Company"),
proposes to issue and sell to Banc of America Securities LLC and each other
Placement Agent named in Schedule I hereto (collectively, the "Placement
Agents"), for whom Banc of America Securities LLC shall act as representative
(in such capacity, the "Representative"), $100,000,000 principal amount of its 9
1/2% Senior Subordinated Notes due 2009 (the "Notes") to be issued pursuant to
the provisions of that certain Indenture dated as of March 23, 1999, as amended
(the "Indenture"), among the Company, Coast Resorts, Inc., as Guarantor (the
"Guarantor"), and U.S. Bank, National Association (f/k/a Firstar Bank of
Minnesota, N.A.), as trustee (the "Trustee"), which shall be supplemented to
provide for the issuance of the Notes (the "Supplemental Indenture"). The Notes
will be guaranteed (the "Guaranty") by the Guarantor.
The Notes will be offered without being registered under the Securities Act
of 1933, as amended (the "Securities Act"), to qualified institutional buyers in
compliance with the exemption from registration provided by Rule 144A under the
Securities Act and in offshore transactions in reliance on Regulation S under
the Securities Act ("Regulation S").
The Placement Agents and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement dated as of the
Closing Date (as defined in Section 4), among the Company, the Guarantor and the
Placement Agents (the "Registration Rights Agreement").
In connection with the sale of the Notes, the Company will prepare a final
offering memorandum (the "Memorandum") including a description of the terms of
the Notes and the Guaranty, the terms of the offering and a description of the
Company and the Guarantor. As used herein, the term "Memorandum" shall include
in each case the documents incorporated by reference therein. The terms
"supplement", "amendment" and "amend" as used herein with respect to a
Memorandum shall include all documents deemed to be incorporated by reference in
the Memorandum that are filed subsequent to the date of such Memorandum with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
Additionally, prior to the sale of the Notes, the Company entered into that
certain Amendment No. 2 to the Amended and Restated Loan Agreement, dated as of
March 8, 2002, by and among the Company, Bank of America, N.A., as
administrative agent, and the several lenders referred to therein (the "Second
Amendment to the Loan Agreement").
1. Representations and Warranties. The Company and the Guarantor
represent and warrant to, and agree with, you that:
(a) (i) Each document, if any, to be filed pursuant to the
Exchange Act and incorporated by reference in the Memorandum complied
or will comply when so filed in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission
thereunder and (ii) the Memorandum, in the form used by the Placement
Agents to confirm sales and on the Closing Date (as defined in Section
4), as amended or supplemented if the Company and the Guarantor shall
have furnished any amendments or supplements thereto, will not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this paragraph do not
apply to statements or omissions in the Memorandum based upon
information relating to any Placement Agent furnished to the Company in
writing by such Placement Agent through the Representative expressly
for use therein.
(b) Each of the Company and the Guarantor has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Memorandum and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and the Guarantor, taken together. The
Company is the Guarantor's only subsidiary. The Company does not have
any subsidiaries.
(c) 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 are owned directly by the Guarantor, free and clear
of all liens, encumbrances, equities or claims, except for liens,
encumbrances, equities or claims arising under that certain Amended and
Restated Loan Agreement, dated as of September 16, 1999, by and among
the Company, Bank of America, N.A., as administrative agent, and the
several lenders referred to therein, as amended by the Amendment No. 1
to the Amended and Restated Loan Agreement, dated as of December 1,
2001, and the Second Amendment to the Loan Agreement (as so amended,
the "Loan Agreement").
(d) This Agreement has been duly and validly authorized by all
necessary action on the part of the Company and the Guarantor, and no
other corporate proceedings by the Company or the Guarantor are
necessary to authorize such actions. This Agreement has been executed
and delivered by the Company and the Guarantor.
(e) The Notes 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 Placement Agents in accordance with
the terms of this Agreement, will be valid and binding obligations of
the Company, enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity, and will be entitled to the benefits of
the Indenture pursuant to which such Notes are to be issued and the
Registration Rights Agreement.
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(f) The Guaranty to be endorsed on the Notes by the Guarantor
has been duly authorized, executed and delivered and, when the Notes
have been executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Placement Agents
in accordance with the terms of this Agreement, the Guaranty of the
Guarantor thereon will be the valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity, and will be entitled to the benefits of
the Indenture pursuant to which such Notes are to be issued and the
Registration Rights Agreement.
(g) Each of the Registration Rights Agreement and the
Supplemental Indenture has been duly authorized and, when executed and
delivered by the Company and the Guarantor, and the Trustee (in the
case of the Supplemental Indenture), will be a valid and binding
agreement of the Company and the Guarantor, enforceable against each of
them in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and general principles of equity and except
as rights to indemnification and contribution under the Registration
Rights Agreement may be limited under applicable law.
(h) The Indenture, as supplemented or amended through the date
hereof, is a valid and binding agreement of the Company and the
Guarantor, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity.
(i) The Second Amendment to the Loan Agreement has been duly
authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity.
(j) The execution and delivery by the Company and the Guarantor
of, and the performance by the Company and the Guarantor of their
respective obligations under, this Agreement, the Indenture, the
Supplemental Indenture, the Registration Rights Agreement, the Notes
and the Guaranty, as applicable, will not contravene any provision of
applicable law or the articles of incorporation or bylaws of the
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Company or the Guarantor or any agreement or other instrument binding
upon the Company or the Guarantor that is material to the Company or
the Guarantor or any judgment, order or decree applicable to the
Company or any of the aforementioned actions of any governmental body
or the Guarantor, agency or court having jurisdiction over the Company
or the Guarantor, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for
the performance by the Company or the Guarantor of their respective
obligations under this Agreement, the Indenture, the Supplemental
Indenture, the Registration Rights Agreement, the Notes and the
Guaranty, as applicable, except (i) such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Notes or by Federal and state securities laws
with respect to the Company's and the Guarantor's obligations under the
Registration Rights Agreement or (ii) where the failure to obtain such
consent, approval, authorization, order or qualification would not,
either individually or in the aggregate, have a material adverse effect
on the Company and the Guarantor, taken together.
(k) Each of the Company and the Guarantor possesses the
permits, licenses, consents and other authorizations (collectively,
"Governmental Licenses") issued by, and has made all filings with, the
appropriate regulatory entities necessary to own, lease and operate its
properties and to conduct the businesses now operated by it, except
where the failure thereof would not, singly or in the aggregate, have a
material adverse effect on the Company and the Guarantor, taken
together. All such Governmental Licenses are valid and in full force
and effect, except where the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and
effect would not have a material adverse effect on the Company and the
Guarantor, taken together. Each of the Company and Guarantor is in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a material adverse effect on the Company and the
Guarantor, taken together. No event has occurred (including, without
limitation, the receipt of any notice from any regulatory entity) which
allows, or after notice or lapse of time, or both, would allow
revocation, modification, suspension or termination of any Governmental
License or would result in any other material impairment of the rights
of the holder of any such Governmental Authorization which, singly or
in the aggregate, would result in a material adverse effect on the
Company and the Guarantor, taken together. To the knowledge of the
Company and the Guarantor, no regulatory entity is considering
limiting, suspending or revoking any Governmental License or is
investigating either of them, other than ordinary course administrative
reviews or any ordinary course review of the transactions contemplated
hereby.
(l) As of the Closing Date, there shall not have occurred any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or
in the earnings, business or operations of the Company from that set
forth in the Memorandum.
(m) There are no legal or governmental proceedings pending or,
to the knowledge of the Company and Guarantor, threatened, to which the
Company or the Guarantor is a party or to which any of the properties
of the Company or the Guarantor is subject other than proceedings that
will be accurately described in all material respects in the Memorandum
and proceedings that would not have a material adverse effect (i) on
the Company and the Guarantor, taken together, (ii) on the power or
4
ability of the Company or the Guarantor to perform their respective
obligations under this Agreement, the Indenture, the Supplemental
Indenture, the Registration Rights Agreement, the Notes or the
Guaranty, as applicable.
(n) The Company and the Guarantor have good and marketable fee
simple title to all real property owned by them which is material to
their businesses, free and clear of all liens and defects other than
(i) those that are described in the Memorandum and (ii) such liens and
encumbrances as do not materially affect the value of such property and
do not interfere with the use made and proposed to be made of such
property. The Company and the Guarantor have a valid leasehold
interest in all leases of real property and buildings held by them
under lease, free and clear of all liens, other than (i) such liens and
encumbrances as are not material and do not interfere with the use made
and proposed to be made of such real property and buildings and (ii)
such liens and encumbrances as will be described in the Memorandum.
(o) The Company and the Guarantor own, possess or have the
right to use, or can acquire on reasonable terms, all patents, patent
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks and trade names ("intellectual property") currently employed by
them in connection with the business now operated by them, except where
the failure to own, possess, have the right to use or otherwise be able
to acquire such intellectual property would not, singly or in the
aggregate, have a material adverse effect on the Company and the
Guarantor, taken together; and, neither the Company nor the Guarantor
has received any notice of infringement of or conflict with asserted
rights of others with respect to any of such intellectual property
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to have a
material adverse effect on the Company and the Guarantor, taken
together.
(p) The Company and the Guarantor (i) are in compliance with
all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety or the
environment and relating to hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and the
Guarantor, taken together.
(q) Neither the Company nor the Guarantor has any costs or
liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties)
which would, singly or in the aggregate, have a material adverse effect
on the Company and the Guarantor, taken together.
5
(r) The Company is not, and after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as
described in the Memorandum, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(s) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") of the
Company 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 Securities Act) which is or will be
integrated with the sale of the Notes in a manner that would require
the registration under the Securities Act of the Notes or the Guaranty
or (ii) other than with respect to actions taken by the Placement
Agents, as to which the Company makes no representation or warranty,
engaged in any form of general solicitation or general advertising in
connection with the offering of the Notes (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities
Act.
(t) No "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act (i) has imposed (or has informed the Company that it is
considering imposing) any condition on the Company retaining any rating
assigned to it or any of its securities or (ii) has indicated to the
Company that it is considering (A) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so
assigned or (B) any change in the outlook for any rating of the Company
or any of its securities.
(u) None of the Company, 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 any person acting on its or
their behalf have complied and will comply with the offering
restrictions requirement of Regulation S in connection with the offer
and sale of the Notes, except no representation, warranty or agreement
is made by the Company in this paragraph with respect to actions taken
by or on behalf of the Placement Agents.
(v) It is not necessary in connection with the offer, sale and
delivery of the Notes to the Placement Agents in the manner
contemplated by this Agreement to register the Notes or the Guaranty
under the Securities Act and the Indenture, as amended, is qualified
under the Trust Indenture Act of 1939, as amended.
(w) The Notes satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
6
2. Agreements to Sell and Purchase. Subject to the conditions set forth
herein and upon the basis of the representations and warranties herein
contained, the Company hereby agrees to sell to the several Placement Agents,
and each Placement Agent agrees, severally and not jointly, to purchase from the
Company the respective principal amount of Notes set forth in Schedule I hereto
opposite its name at a purchase price of 103.5% of the principal amount thereof
(the "Purchase Price"), plus accrued interest, if any, to the Closing Date.
The Company hereby agrees that, without the prior written consent of the
Representative, it will not, during the period beginning on the date hereof and
continuing to and including the Closing Date, offer, sell, contract to sell or
otherwise dispose of any debt of the Company or warrants to purchase debt of the
Company substantially similar to the Notes (other than the sale of the Notes
under this Agreement).
3. Terms of Offering. You have advised the Company that the Placement
Agents will make an offering of the Notes purchased by the Placement Agents
hereunder on the terms to be set forth in the Memorandum, as soon as practicable
after this Agreement is entered into as in your judgment is advisable.
4. Payment and Delivery. Payment for the Notes shall be made to the Company
in Federal or other funds immediately available in New York City against
delivery of such Notes for the respective accounts of the several Placement
Agents at 10:00 a.m., New York City time, on March 19, 2002, or at such other
time on the same or such other date, not later than March 26, 2002, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "Closing Date."
Certificates for the Notes shall be in definitive form or global form, as
specified by you in accordance with the terms of the Indenture, and registered
in such names and in such denominations as you shall request in writing not
later than one full business day prior to the Closing Date. The certificates
evidencing the Notes shall be delivered to you on the Closing Date for the
respective accounts of the several Placement Agents, with any transfer taxes
payable in connection with the transfer of the Notes to the Placement Agents
duly paid, against payment of the Purchase Price therefor, plus accrued
interest, if any, to the date of payment and delivery.
5. Conditions to the Placement Agents' Obligations. The several obligations
of the Placement Agents to purchase and pay for the Notes on the Closing Date
are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded the Company, the Guarantor or any of their securities or
in the rating outlook for the Company or the Guarantor by any
"nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
7
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company or the Guarantor from that set forth in
the Memorandum that, in your judgment, is material and adverse
and that makes it, in your judgment, impracticable to market the
Notes on the terms and in the manner contemplated in the
Memorandum.
(b) The Placement Agents shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive
officer of the Company and the Guarantor, to the effect set forth in
Section 5(a)(i) and to the effect that the representations and
warranties of the Company and the Guarantor contained in this Agreement
are true and correct as of the Closing Date and that the Company and
the Guarantor have complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Placement Agents shall have received on the Closing
Date the opinions of Xxxxxx, Xxxx & Xxxxxxxx LLP, outside counsel for
the Company and the Guarantor, and XxXxxxxx Carano Xxxxxx XxXxxx Xxxxxx
Xxxxxxxxxx & Xxxxx LLP, outside Nevada counsel for the Company, dated
the Closing Date, to the effect set forth in Exhibits A-1 and A-2,
respectively. Such opinions shall be rendered to the Placement Agents
at the request of the Company and the Guarantor and shall so state
therein.
(d) The Placement Agents shall have received on the Closing
Date an opinion of Xxxxxx & Xxxxxxx, counsel for the Placement Agents,
dated the Closing Date, in form and substance reasonably satisfactory
to the Placement Agents, covering such matters as are customarily
covered in such opinions.
(e) The Placement Agents shall have received on each of the
date hereof and the Closing Date a letter, dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Placement Agents, from PricewaterhouseCoopers LLP, independent
public accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in or incorporated by reference into the
Memorandum; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(f) The Company shall have received all consents, waivers or
amendments under the Loan Agreement and any other agreement to which
the Company or the Guarantor is a party which are necessary or
appropriate for the consummation of the transactions contemplated
hereby.
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6. Covenants of the Company and the Guarantor. In further consideration of
the agreements of the Placement Agents contained in this Agreement, the Company
and the Guarantor, jointly and severally, covenant with each Placement Agent as
follows:
(a) To furnish to you in New York City, without charge, prior
to 3:00 p.m. New York City time on March 15, 2002 and during the period
mentioned in Section 6(c), as many copies of the Memorandum, any
documents incorporated by reference therein and any supplements and
amendments thereto as you may reasonably request.
(b) Before amending or supplementing the Memorandum, to furnish
to you a copy of each such proposed amendment or supplement and not to
use any such proposed amendment or supplement to which you reasonably
object.
(c) If, during such period after the date on which the
Memorandum is first delivered to you and prior to the date on which all
of the Notes shall have been sold by the Placement Agents, any event
shall occur or condition exist as a result of which it is necessary to
amend or supplement the Memorandum in order to make the statements
therein, in the light of the circumstances when the Memorandum is
delivered to a purchaser, not misleading, or if, in the reasonable
opinion of counsel for the Placement Agents, it is necessary to amend
or supplement the Memorandum to comply with applicable law, forthwith
to prepare and furnish, at its own expense, to the Placement Agents,
either amendments or supplements to the Memorandum so that the
statements in the Memorandum as so amended or supplemented will not, in
the light of the circumstances when the Memorandum is delivered to a
purchaser, be misleading or so that the Memorandum, as amended or
supplemented, will comply with applicable law.
(d) To endeavor to qualify the Notes for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of their
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of counsel and the accountants of the
Company and the Guarantor in connection with the issuance and sale of
the Notes and all other fees or expenses in connection with the
preparation of the Memorandum and all amendments and supplements
thereto, including all printing costs associated therewith, and the
delivering of copies thereof to the Placement Agents, in the quantities
herein above specified, (ii) all costs and expenses related to the
transfer and delivery of the Notes to the Placement Agents, including
any transfer or other taxes payable thereon, (iii) the cost of printing
or producing any Blue Sky or legal investment memorandum in connection
with the offer and sale of the Notes under state securities laws and
all expenses in connection with the qualification of the Notes for
offer and sale under state securities laws as provided in Section 6(d)
hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Placement Agents in connection with such
qualification and in connection with the Blue Sky or legal investment
9
memorandum, (iv) any fees charged by rating agencies for the rating of
the Notes, (v) the fees and expenses, if any, incurred in connection
with the admission of the Notes for trading in PORTAL or any
appropriate market system, (vi) the costs and charges of the Trustee
and any transfer agent, registrar or depositary, (vii) the cost of the
preparation, issuance and delivery of the Notes, (viii) the costs and
expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering of
the Notes, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road
show, and (ix) all other costs and expenses incident to the performance
of the obligations of the Company and the Guarantor hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 8, and the
last paragraph of Section 10, the Placement Agents will pay all of
their costs and expenses, including fees and disbursements of their
counsel, transfer taxes payable on resale of any of the Notes by them
and any advertising expenses connected with any offers they may make.
(f) Neither the Company, the Guarantor nor any of their
Affiliates will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the
Securities Act) which could be integrated with the sale of the Notes in
a manner which would require the registration under the Securities Act
of the Notes.
(g) Not to solicit any offer to buy or offer or sell the Notes
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) or in
any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.
(h) While any of the Notes remain "restricted securities"
within the meaning of the Securities Act, to make available, upon
request, to any seller of such Notes the information specified in Rule
144A(d)(4) under the Securities Act, unless the Company is then subject
to Section 13 or 15(d) of the Exchange Act.
(i) If requested by you, to use its best efforts to permit the
Notes to be designated PORTAL securities in accordance with the rules
and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL Market.
(j) None of the Company, the Guarantor or any of their
Affiliates or any person acting on any of their behalf (other than the
Placement Agents) will engage in any directed selling efforts (as that
term is defined in Regulation S) with respect to the Notes, and the
Company, the Guarantor and their Affiliates and each person acting on
any of their behalf (other than the Placement Agents) will comply with
the offering restrictions requirement of Regulation S.
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(k) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined
in Rule 144A under the Securities Act) to resell any of the Notes which
constitute "restricted securities" under Rule 144A that have been
reacquired by any of them.
7. Offering of Notes; Restrictions on Transfer. (a) Each Placement Agent,
severally and not jointly, represents and warrants that such Placement Agent is
a qualified institutional buyer as defined in Rule 144A under the Securities Act
(a "QIB"). Each Placement Agent, severally and not jointly, agrees with the
Company and the Guarantor that (i) it will not solicit offers for, or offer or
sell, Notes by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (ii) it will solicit offers for Notes only from, and will offer Notes
only to, persons that it reasonably believes to be (A) in the case of offers
inside the United States, QIBs and (B) in the case of offers outside the United
States, to persons other than U.S. persons (including dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)) in reliance upon
Regulation S under the Securities Act that, in each case, in purchasing such
Notes are deemed to have represented and agreed as provided in the Final
Memorandum under the caption "Transfer Restrictions".
(b) Each Placement Agent, severally and not jointly, represents,
warrants, and agrees with respect to offers and sales outside the United
States that:
(i) such Placement Agent understands that no action has been or
will be taken in any jurisdiction by the Company or the Guarantor that
would permit a public offering of the Notes, or possession or
distribution of either Memorandum or any other offering or publicity
material relating to the Notes, in any country or jurisdiction where
action for that purpose is required;
(ii) such Placement Agent will comply with all applicable laws
and regulations in each jurisdiction in which it acquires, offers,
sells or delivers Notes or has in its possession or distributes either
Memorandum or any such other material, in all cases at its own expense;
(iii) the Notes have not been 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 Rule
144A or Regulation S under the Securities Act or pursuant to another
exemption from the registration requirements of the Securities Act;
(iv) such Placement Agent has offered Notes and will offer and
sell Notes (A) as part of their distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 of
Regulation S or as otherwise permitted in Section 7(a); accordingly,
neither such Placement Agent, its Affiliates nor any persons acting on
its or their behalf have engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the Notes,
and any such Placement Agent, its Affiliates and any such persons have
complied and will comply with the offering restrictions requirement of
Regulation S;
11
(v) such Placement Agent has (A) not offered or sold and, prior
to the date six months after the Closing Date, will not offer or sell
any Notes to persons in the United Kingdom, except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or 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,
(B) 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 (C) only issued or passed on and will only issue or pass on
in the United Kingdom any document received by it in connection with
the issue of the Notes to a person who is of a kind described in
Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on;
(vi) such Placement Agent understands that the Notes have not
been and will not be registered under the Securities and Exchange Law
of Japan, and represents that it has not offered or sold, and agrees
not to offer or sell, directly or indirectly, any Notes in Japan or for
the account of any resident thereof except pursuant to any exemption
from the registration requirements of the Securities and Exchange Law
of Japan and otherwise in compliance with applicable provisions of
Japanese law; and
(vii) such Placement Agent agrees that, at or prior to
confirmation of sales of the Notes, 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 to substantially 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 and 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 meaning given to them by Regulation S."
Terms used in this Section 7(b) have the meanings given to them by Regulation S.
8. Indemnity and Contribution. (a) The Company and the Guarantor, jointly
and severally, agree to indemnify and hold harmless each Placement Agent and
each person, if any, who controls any Placement Agent within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
12
the Memorandum (as amended or supplemented if the Company and the Guarantor
shall have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact necessary to make
the statements therein in the light of the circumstances under which they were
made not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Placement
Agent furnished to the Company in writing by such Placement Agent through the
Representative expressly for use therein.
(a) Each Placement Agent agrees, severally and not jointly, to indemnify
and hold harmless the Company and the Guarantor, their directors, their officers
and each person, if any, who controls the Company or the Guarantor within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Company and the
Guarantor to such Placement Agent, but only with reference to information
relating to such Placement Agent furnished to the Company in writing by such
Placement Agent expressly for use in either Memorandum or any amendments or
supplements thereto.
(b) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. The Company may assume
at its sole expense the defense of any such litigation or proceeding; such
defense shall be conducted by counsel reasonably satisfactory to such
indemnified person and the Company shall pay the fees and disbursements of such
counsel related to such proceeding. Notwithstanding the foregoing, in any such
proceeding, any indemnified party shall have the right to retain its own counsel
and assume its own defense in such proceeding, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the
Representative, in the case of parties indemnified pursuant to Section 8(a), and
by the Company, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
13
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the third and fourth sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section 8(a) or 8(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Guarantor on the one hand and the Placement Agents on the other hand from the
offering of the Notes or (ii) if the allocation provided by clause 8(d)(i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 8(d)(i) above but
also the relative fault of the Company and the Guarantor on the one hand and of
the Placement Agents on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Guarantor on the one hand and the Placement Agents on the
other hand in connection with the offering of the Notes shall be deemed to be in
the same respective proportions as the net proceeds from the offering of the
Notes (before deducting expenses) received by the Company and the total
discounts and commissions received by the Placement Agents, in each case as set
forth in the Memorandum, bear to the aggregate offering price of the Notes. The
relative fault of the Company and the Guarantor on the one hand and of the
Placement Agents on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Guarantor, on the one hand, or by the
Placement Agents, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Placement Agents' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective principal amount of Notes they have purchased hereunder, and not
joint.
(d) The Company, the Guarantor and the Placement Agents agree that it would
not be just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Placement Agents were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in Section 8(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 8(d) shall be deemed to
14
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Placement Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the Notes resold by it in
the initial placement of such Notes were offered to investors exceeds the amount
of any damages that such Placement Agent has otherwise been required to pay by
reason of such 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 remedies
provided for in this Section 8 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.
(e) The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Company and the
Guarantor contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Placement Agent or any person
controlling any Placement Agent or by or on behalf of the Company or the
Guarantor, their officers or directors or any person controlling the Company or
the Guarantor and (iii) acceptance of and payment for any of the Notes.
9. Termination. This Agreement shall be subject to termination by notice
given by you to the Company and the Guarantor, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of
any securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of national or international hostilities or any crisis or calamity, or any
change in the United States or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States' or international political, financial or economic conditions
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 9(a)(i) through 9(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Notes on the terms and in the manner contemplated in the Memorandum
or to enforce contracts for the sale of securities.
10. Effectiveness; Defaulting Placement Agents. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any of the Placement Agents shall fail or refuse
to purchase Notes that it or they have agreed to purchase hereunder on such
date, and the aggregate principal amount of Notes which such defaulting
Placement Agent agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of Notes to be purchased on such
15
date, the other Placement Agents shall be obligated severally to purchase the
Notes which such defaulting Placement Agent agreed but failed or refused to
purchase on such date; provided that in no event shall the principal amount of
Notes that a Placement Agent has agreed to purchase pursuant to this Agreement
be increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of Notes without the written consent of such Placement
Agent. If, on the Closing Date, any Placement Agent shall fail or refuse to
purchase Notes which it has agreed to purchase hereunder on such date and the
aggregate principal amount of Notes with respect to which such default occurs is
more than one-tenth of the aggregate principal amount of Notes to be purchased
on such date, and arrangements satisfactory to you and the Company for the
purchase of such Notes are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Placement Agent, the Company or the Guarantor. In any such case either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Memorandum or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve a defaulting Placement Agent from
liability in respect of any default of such Placement Agent under this
Agreement.
If this Agreement shall be terminated by the Placement Agents, or any of
them, because of any failure or refusal on the part of the Company or the
Guarantor to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or the Guarantor shall be unable to
perform its obligations under this Agreement, the Company and the Guarantor will
reimburse the Placement Agents or such Placement Agent as has so terminated this
Agreement with respect to itself, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Placement Agent in connection with this Agreement or the offering
contemplated hereunder.
11. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
[Signature page follows]
16
Very truly yours,
COAST HOTELS AND CASINOS, INC.
By: /s/
-------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President and
Chief Financial Officer
COAST RESORTS, INC.
By: /s/
--------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President and
Chief Financial Officer
Accepted as of the date hereof
Banc of America Securities LLC
Xxxxxx Xxxxxxx & Co. Incorporated
Deutsche Banc Alex. Xxxxx Inc.
Dresdner Kleinwort Xxxxxxxxxxx--Grantchester, Inc.
Xxxxxx Brothers Inc.
Xxxxx Fargo Brokerage Services, LLC
By: Banc of America Securities LLC
By: /s/
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
[Signature page to Placement Agreement]
SCHEDULE I
Principal Amount of
Placement Agent Notes to be Purchased
Banc of America Securities LLC $ 40,000,000
Xxxxxx Xxxxxxx & Co. Incorporated $ 40,000,000
Deutsche Banc Alex. Xxxxx Inc. $ 5,000,000
Dresdner Kleinwort Xxxxxxxxxxx--Grantchester, Inc. $ 5,000,000
Xxxxxx Brothers Inc. $ 5,000,000
Xxxxx Fargo Brokerage Services, LLC $ 5,000,000
------------
Total $100,000,000
============
A2-1
