EXHIBIT 1.1
THE MAJESTIC STAR CASINO, LLC
THE MAJESTIC STAR CASINO CAPITAL CORP.
$260,000,000 9 1/2% SENIOR SECURED NOTES DUE 2010
PURCHASE AGREEMENT
September 26, 2003
XXXXXXXXX & COMPANY, INC.
XXXXX FARGO SECURITIES, LLC
c/x Xxxxxxxxx & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Each of The Majestic Star Casino, LLC, an Indiana limited
liability company (the "COMPANY"), The Majestic Star Casino Capital Corp., an
Indiana corporation ("CAPITAL" and, together with the Company, the "ISSUERS"),
and each Guarantor (as defined below) hereby agrees with you as follows:
1. ISSUANCE OF SECURITIES. The Issuers propose to issue and
sell to Xxxxxxxxx & Company, Inc. and Xxxxx Fargo Securities, LLC (each an
"INITIAL PURCHASER" and, together, the "INITIAL PURCHASERS"), and the Initial
Purchasers propose to purchase, $260,000,000 aggregate principal amount of the
Issuers' 9 1/2% Senior Secured Notes due 2010, Series A (the "SERIES A NOTES").
The Series A Notes will be issued pursuant to an indenture (the "INDENTURE"), to
be dated as of the Closing Date (as defined below), among the Issuers, the
Guarantors (as defined below), and The Bank of New York, as trustee (the
"TRUSTEE"). The Series A Notes and the Series B Notes (as defined below), each
with the Guarantee (as defined below) endorsed thereon, are collectively
referred to herein as the "NOTES." Each of the entities listed on SCHEDULE B
hereto and any future subsidiary guarantors party to the Indenture (such
entities and such future subsidiary guarantors, each a "GUARANTOR" and
collectively the "GUARANTORS") will fully and unconditionally guarantee on a
senior secured basis the obligations under the Notes and the Indenture (the
"GUARANTEES"), including the payment of principal, interest, premium, if any,
and Liquidated Damages (as defined in the Indenture), if any, on the Notes. The
obligations under the Notes and the Guarantees will be secured by security
interests in or pledges of (the "SECURITY INTERESTS") substantially all of the
assets of, and all of the shares of capital stock of and membership interests in
(the "COLLATERAL"), the Issuers, the Guarantors and the Issuers' respective
current and future "restricted subsidiaries," as such term is defined in the
Indenture (the Issuers, the Guarantors, such subsidiaries and, with respect to
the Security Interest in the membership interests in the Company, Xxxxxx
Development, Inc. ("PARENT"), collectively, the "GRANTORS"), as set forth in the
Offering Circular (as defined below). The Issuers, the Guarantors and the
Grantors collectively are sometimes referred to herein as the "MAJESTIC
ENTITIES." Under no circumstances shall Xxxxxxxxxx Harbor Riverboats, L.L.C., a
Delaware limited liability company, be deemed a Majestic Entity under this
Agreement.
The Series A Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "ACT"). The Issuers and the Guarantors
have prepared a preliminary offering circular, dated September 3, 2003 (the
"PRELIMINARY OFFERING CIRCULAR"), and a final offering circular, dated September
26, 2003 (the "OFFERING CIRCULAR"), relating to the offer and sale of the Series
A Notes (the "OFFERING").
Upon original issuance thereof, and until such time as the
same is no longer required under the Indenture or the applicable requirements of
the Act, the Series A Notes shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH
IS TWO YEARS (OR SUCH OTHER PERIOD THAT MAY HEREAFTER BE
PROVIDED UNDER RULE 144(k) UNDER THE SECURITIES ACT AS
PERMITTING RESALES OF RESTRICTED SECURITIES BY NON-AFFILIATES
WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH EITHER OF THE ISSUERS
OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS SECURITY
2
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUERS' AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (E) ABOVE TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN
EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN ACCORDANCE
WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER
APPLICABLE JURISDICTION. THE HOLDER OF THIS SECURITY AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions hereof, the Issuers shall issue and sell to the Initial
Purchasers (and, in order to induce the Initial Purchasers to purchase the
Series A Notes, the Guarantors shall enter into the Guarantees and the Grantors
shall grant the Security Interests) and each of the Initial Purchasers,
severally and not jointly, shall purchase from the Issuers, the principal amount
of Series A Notes set forth opposite the name of such Initial Purchaser on
Schedule A hereto, at the purchase price set forth opposite the name of such
Initial Purchaser on Schedule A hereto.
3. TERMS OF OFFERING. The Initial Purchasers have advised the
Issuers that the Initial Purchasers will make offers to sell (the "EXEMPT
RESALES") the Series A Notes purchased by the Initial Purchasers hereunder on
the terms set forth in the Offering Circular, as amended or supplemented, solely
to persons whom the Initial Purchasers reasonably believe to be a) "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBs"), or b)
institutional "accredited investors," as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Act, that make certain representations and
warranties to the Issuers ("ACCREDITED INVESTORS" and, together with QIBs,
"ELIGIBLE PURCHASERS").
Holders of the Series A Notes (including subsequent
transferees) will have the registration rights set forth in the registration
rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be executed on and
dated as of the Closing Date. Pursuant to the Registration Rights Agreement, the
Issuers and the Guarantors will agree, among other things, to file with the
3
Securities and Exchange Commission (the "COMMISSION"), under the circumstances
set forth therein, (a) a registration statement under the Act (the "EXCHANGE
OFFER REGISTRATION STATEMENT") relating to the 9 1/2% Senior Secured Notes due
2010, Series B, of the Issuers (the "SERIES B NOTES"), identical in all material
respects to the Series A Notes, including with respect to the Guarantees thereof
(except that the Series B Notes shall have been registered pursuant to such
registration statement), to be offered in exchange for the Series A Notes (such
offer to exchange being referred to as the "REGISTERED EXCHANGE OFFER"), and (b)
under certain circumstances, a shelf registration statement pursuant to Rule 415
under the Act (the "SHELF REGISTRATION STATEMENT") relating to the resale by
certain holders of the Series A Notes.
On the Closing Date, the Grantors will enter into certain
security and pledge agreements, mortgages and certain other documents, that will
provide for the grant of the Security Interests in the Collateral to the
Trustee, as secured party (in such capacity, the "SECURED PARTY"), or will
prohibit transfer or mortgage of certain leasehold interests, in each case, for
the benefit of the holders of the Notes (such documents, collectively, the
"SECURITY DOCUMENTS"). The Security Interests will secure the payment and
performance when due of all of the obligations of the Majestic Entities under
the Indenture, the Notes and the Security Documents. In addition, on the Closing
Date, the Issuers expect to enter into a new senior secured credit facility (the
"NEW CREDIT FACILITY"). In connection with entering into the New Credit
Facility, the Trustee and the lender under the New Credit Facility shall enter
into an Intercreditor Agreement, to be dated as of the Closing Date, in a form
reasonably satisfactory to the Initial Purchasers, which form shall be attached
as an exhibit to the Indenture (the "INTERCREDITOR AGREEMENT").
In connection with the Offering contemplated hereby, the
Issuers are offering to purchase (the "STAR TENDER OFFER") any and all of their
outstanding 10 7/8% Senior Secured Notes due 2006 (the "OLD STAR NOTES") and
soliciting consents to the adoption of certain amendments to the indenture
governing the Old Star Notes (the "OLD STAR NOTES INDENTURE") and the release of
the liens on collateral securing the Old Star Notes, each as more fully
described in the documents and instruments related thereto (the "STAR TENDER
OFFER DOCUMENTS"). In the event that any of the Old Star Notes are not
repurchased in the Star Tender Offer, the Company shall redeem such Old Star
Notes pursuant to the terms of the Old Star Notes Indenture (the "STAR
REDEMPTION"). Also in connection with the Offering, Majestic Investor Holdings,
LLC and Majestic Investor Capital Corp. (together the "INVESTOR NOTES ISSUERS")
are offering to purchase (the "INVESTOR TENDER OFFER," and together with the
Star Tender Offer, the "TENDER OFFERS") any and all of their outstanding 11.653%
Senior Secured Notes due 2007 (the "OLD INVESTOR NOTES," and together with the
Old Star Notes, the "OLD NOTES") and soliciting consents to the adoption of
certain amendments to the indenture governing the Old Investor Notes, the
termination of the guarantees by the guarantors of the Old Investor Notes and
the release of liens on collateral securing the Old Investor Notes, each as more
fully described in the documents and instruments related thereto (the "INVESTOR
TENDER OFFER DOCUMENTS," and collectively with the Star Tender Offer Documents,
the "TENDER OFFER DOCUMENTS").
4
This Agreement, the Indenture, the Registration Rights
Agreement, the Notes, the Guarantees, the Security Documents and the Tender
Offer Documents, collectively are referred to herein as the "OPERATIVE
DOCUMENTS." The New Credit Facility and the Intercreditor Agreement, together
with all other documents or instruments executed by the Majestic Entities in
connection with the transactions contemplated thereby, collectively are referred
to herein as the "BANK DOCUMENTS" and, together with the Operative Documents,
the "DOCUMENTS." The transactions contemplated by the Operative Documents,
including, without limitation, the Offering and the application of the proceeds
therefrom as described in the Offering Circular, the issuance and sale of the
Notes in accordance with this Agreement, the creation, grant, recording and
perfection of the Security Interests, the Tender Offers, and the Star Redemption
collectively are referred to herein as the "OPERATIVE TRANSACTIONS" and,
collectively with the transactions contemplated by the other Documents,
including without limitation the borrowing (if any) under the New Credit
Facility, the "TRANSACTIONS."
4. DELIVERY AND PAYMENT. Delivery to the Initial Purchasers of
and payment for the Series A Notes shall be made at a Closing (the "CLOSING") to
be held at 9:00 a.m., New York City time, on October 7, 2003, (such time and
date, the "CLOSING DATE") at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, Four Times Square, New York, New York 10036. The Closing Date and the
location of delivery of and the form of payment for the Series A Notes may be
varied by agreement between the Initial Purchasers and the Issuers.
The Issuers shall deliver to the Initial Purchasers one or
more certificates representing the Series A Notes (the "GLOBAL SECURITIES"),
each in definitive form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), or such other names as the Initial Purchasers
may request upon at least two Business Day's notice to the Issuers, in an amount
corresponding to the aggregate principal amount of the Series A Notes sold
pursuant to Exempt Resales to QIBs and to Accredited Investors, respectively, in
each case against payment by the Initial Purchasers of the purchase price
therefore by immediately available Federal funds bank wire transfer to such bank
account as the Issuers shall designate to the Initial Purchasers at least two
Business Days prior to the Closing. "BUSINESS DAY" means any day other than a
Saturday, a Sunday or a day on which banking institutions in The City of New
York or at a place of payment are authorized by law, regulation or executive
order to remain closed.
The Global Securities in definitive form shall be made
available to the Initial Purchasers for inspection at the offices of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times Square, New York, New York 10036 (or
such other place as shall be acceptable to the Initial Purchasers) not later
than 9:30 a.m., New York City time, one Business Day immediately preceding the
Closing Date.
5. AGREEMENTS OF THE ISSUERS AND THE GUARANTORS. Each of the
Issuers and the Guarantors, jointly and severally, hereby agrees:
5
(a) Certain Events. To (i) advise the Initial
Purchasers promptly after obtaining knowledge (and, if requested by the
Initial Purchasers, confirm such advice in writing) of (A) the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Series A
Notes for offer or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any state securities commission or other
regulatory authority, and (B) the happening of any event that makes any
statement of a material fact made in the Offering Circular untrue or
that requires the making of any additions to or changes in the Offering
Circular in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading, (ii) use its
best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption from qualification of any of
the Notes under any state securities or Blue Sky laws, and (iii) if at
any time any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of any of the Series A Notes under any such laws, use its
best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) Offering Circular. At any time prior to the
completion of the sale of all of the Series A Notes by the Initial
Purchasers pursuant to Exempt Resales, to (i) furnish the Initial
Purchasers and those persons identified by the Initial Purchasers to
the Issuers, without charge, as many copies of the Preliminary Offering
Circular and the Offering Circular, and any amendments or supplements
thereto, as the Initial Purchasers may reasonably request, and (ii)
promptly prepare, upon the Initial Purchasers' request, any amendment
or supplement to the Offering Circular that the Initial Purchasers deem
may be necessary in connection with Exempt Resales (and the Issuers and
Guarantors hereby consent, subject to the Initial Purchasers'
compliance with its representations and warranties set forth in Section
7, to the use of the Preliminary Offering Circular and the Offering
Circular, and any amendments and supplements thereto, by the Initial
Purchasers in connection with Exempt Resales).
(c) Notice of Amendment or Supplement. Not to amend
or supplement the Offering Circular prior to the Closing Date, or at
any time prior to the completion of the resale of all of the Series A
Notes by the Initial Purchasers pursuant to Exempt Resales, unless the
Initial Purchasers shall previously have been advised thereof and shall
not have objected thereto within three Business Days after being
furnished a copy thereof.
(d) Preparation of Amendments and Supplements. At any
time prior to the completion of the resale of all of the Series A Notes
by the Initial Purchasers pursuant to Exempt Resales, (i) if any event
shall occur as a result of which, in the reasonable judgment of the
Issuers or the Initial Purchasers or their respective counsel, it
becomes necessary or advisable to amend or supplement the Offering
Circular in order to make the statements therein, in the light of the
circumstances when such Offering Circular is delivered to an Eligible
Purchaser, not misleading, or if it is necessary to amend or supplement
the Offering Circular to comply with Applicable Law (as defined below),
6
forthwith to prepare an appropriate amendment or supplement to the
Offering Circular (in form and substance satisfactory to the Initial
Purchasers) so that as so amended or supplemented, (A) the Offering
Circular will not include an untrue statement of material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances when it is so delivered, not
misleading, and (B) the Offering Circular will comply with Applicable
Law, and (ii) if it becomes necessary or advisable to amend or
supplement the Offering Circular so that the Offering Circular will
contain all of the information specified in, and meet the requirements
of, Rule 144A(d)(4) under the Act, forthwith to prepare an appropriate
amendment or supplement to the Offering Circular (in form and substance
satisfactory to the Initial Purchasers) so that the Offering Circular,
as so amended or supplemented, will contain the information specified
in, and meet the requirements of, such Rule.
(e) Qualification of Securities. Prior to the sale of
all of the Series A Notes by the Initial Purchasers pursuant to Exempt
Resales, to cooperate with the Initial Purchasers and the Initial
Purchasers' counsel in connection with the qualification of the Series
A Notes under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchasers may request and continue such qualification in
effect so long as reasonably required for Exempt Resales, and to file
such consents to service of process or other documents as may be
necessary in order to effect such qualification; provided, that none of
the Issuers and the Guarantors shall be required in connection
therewith to file any general consent to service of process or to
register or qualify as a foreign corporation in any jurisdiction where
it is not now so qualified or to subject itself to general taxation in
respect of doing business in any jurisdiction in which it is not
otherwise so subject.
(f) Costs and Expenses. Whether or not any of the
Operative Transactions are consummated or this Agreement is terminated,
to pay (i) all costs, expenses, fees and taxes incident to and in
connection with the performance of the obligations of the Majestic
Entities under this Agreement, including: (A) the preparation, printing
and distribution of the Preliminary Offering Circular and the Offering
Circular and all amendments and supplements thereto (including, without
limitation, financial statements and exhibits), and all preliminary and
final Blue Sky memoranda and all other agreements, memoranda,
correspondence and other documents prepared and delivered in connection
herewith (including the furnishing of copies of the foregoing to the
Initial Purchasers and such other persons as the Initial Purchasers may
designate), (B) the processing and distribution (including, without
limitation, word processing and duplication costs) and delivery of, and
performance under, each of the Operative Documents and any other
agreements or documents in connection with the Operative Transactions,
(C) the preparation, issuance and delivery of the Notes, including the
fees and expenses of the Trustee and the Secured Party (including
reasonable fees and expenses of their respective counsel) and all costs
and expenses related to the delivery of the Notes to the Initial
Purchasers and pursuant to Exempt Resales, including any transfer or
other taxes payable thereon and (D) the qualification of the Notes for
offer and sale under the securities or Blue Sky laws of the several
states (including, without limitation,
7
filing fees and reasonable fees and disbursements of the Initial
Purchasers' counsel relating to such registration or qualification and
the preparation of memoranda related thereto), (ii) all fees and
expenses of the counsel and accountants of the Majestic Entities, (iii)
all expenses and listing fees in connection with the application for
quotation of the Series A Notes in The Portal Market ("PORTAL") of the
National Association of Securities Dealers, Inc. (the "NASD"), (iv) all
fees and expenses (including fees and expenses of counsel) of the
Issuers in connection with approval of the Notes by DTC for
"book-entry" transfer, (v) all fees charged by rating agencies in
connection with the rating of the Notes, (vi) the costs and charges of
any transfer agent, registrar and/or depositary (including DTC), (vii)
all costs and expenses of the Registered Exchange Offer, the Exchange
Offer Registration Statement and any Shelf Registration Statement, as
set forth in the Registration Rights Agreement, (viii) all fees and
expenses (including reasonable fees and expenses of counsel, subject to
any limitations imposed by previous agreements between the parties)
incurred by the Initial Purchasers in connection with the preparation,
negotiation and execution of the Documents and the consummation of the
Transactions, and (ix) all other costs and expenses incident and
necessary to the performance of the obligations of the Issuers and the
Guarantors under this Agreement for which provision is not otherwise
made in this section.
(g) Use of Proceeds. To use their respective
reasonable best efforts to use the proceeds from the sale of the Series
A Notes in the manner described in the Offering Circular under the
caption "Use of Proceeds."
(h) Waiver of Certain Laws. To the extent it may
lawfully do so, not to insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension usury or
other law, wherever enacted, now or at any time hereafter in force,
that would prohibit or forgive the payment of all or any portion of the
principal of or interest on the Notes, or that may affect the covenants
or the performance of the Indenture or any of the Security Documents
(and, to the extent it may lawfully do so, each Issuer hereby expressly
waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the
execution of any power granted to the Trustee in the Indenture or to
the Secured Party in the Security Documents but shall suffer and permit
the execution of every such power as though no such law had been
enacted).
(i) Security Interests. To do and perform all things
required to be done and performed under the Security Documents prior
to, on and after the Closing Date, including, without limitation, all
things necessary or advisable to obtain on or prior to the Closing Date
(i) all Permits (as defined below), other than any gaming approvals
required to be obtained by a purchaser in a foreclosure sale, necessary
for the granting, perfection and enforcement of the Security Interests
and for the foreclosure by the Secured Party thereon following an Event
of Default (as defined in the Indenture), (ii) all termination
statements, mortgage releases and other documents necessary to
terminate any Liens (as defined in the Indenture) on the Collateral
(other than Liens created by the Indenture and
8
the Security Documents), Liens securing loans made under the New Credit
Facility and Permitted Liens (as defined in the Indenture), and (iii)
subject to the terms of the Intercreditor Agreement, a valid and
perfected, first priority Security Interest with respect to each of the
assets, shares of capital stock and membership interests which are to
constitute the Collateral.
(j) Integration. Not to, and to ensure that no
affiliate (as defined in Rule 501(b) under the Act) of any of the
Issuers or Guarantors will, sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any "security" (as defined in
the Act) that would be integrated with the sale of the Series A Notes
in a manner that would require the registration under the Act of the
sale to the Initial Purchasers or of offers or sales of Series A Notes
pursuant to Exempt Resales.
(k) Rule 144A Information. For so long as any of the
Series A Notes remain outstanding, during any period in which either of
the Issuers is not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to make
available, upon request, to any holder of the Notes in connection with
any sale thereof and any prospective Eligible Purchaser of such Notes
from such holder, the information required by Rule 144A(d)(4) under the
Act.
(l) DTC. To obtain the approval of DTC for "book
entry" transfer of the Notes, and to comply with the representation
letter of the Issuers and the Guarantors to DTC relating to the
approval of the Notes by DTC for "book entry" transfer.
(m) PORTAL. To use its best efforts to effect the
inclusion of the Series A Notes in PORTAL and to use its best efforts
to maintain the listing of the Series A Notes on PORTAL for so long as
the Series A Notes are outstanding.
(n) Reporting Requirements. For so long as any of the
Notes are outstanding, and whether or not required to do so by the
rules and regulations of the Commission, (i) to furnish to the Trustee
and deliver or cause to be delivered to the holders of the Notes and
the Initial Purchasers, within 15 days after either Issuer is or would
have been required to file such with the Commission, (i) all quarterly
and annual financial information that would be required to be contained
in a filing with the Commission on Forms 10-Q and 10-K if the Issuers
were required to file such Forms, including for each a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report
thereon by the Issuers' independent certified public accountants and
(B) all information that would be required to be contained in a filing
with the Commission on Form 8-K if the Issuers were required to file
such reports, and (ii) from and after the time the Exchange Offer
Registration Statement or the Shelf Registration Statement (or other
registration statement under the Act with respect to the Notes) is
filed with the Commission, to file such information with the Commission
so long as the Commission will accept such filings.
9
(o) No Selling Efforts or General Solicitation.
Except in connection with the Registered Exchange Offer or the filing
of the Shelf Registration Statement, not to, and not to authorize or
permit any person acting on its behalf to, (i) distribute any offering
material in connection with the offer and sale of the Series A Notes
other than the Preliminary Offering Circular and the Offering Circular
and any amendments and supplements to the Offering Circular prepared in
compliance with Section 5(d), or (ii) solicit any offer to buy or offer
to sell the Series A Notes by means of any form of general solicitation
or general advertising (including, without limitation, as such terms
are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act.
(p) No Similar Offerings. During the period beginning
on the date hereof and continuing to and including the Closing Date,
not to, directly or indirectly, without the prior consent of the
Initial Purchasers, offer, sell, contract to sell, grant any option to
purchase or otherwise dispose of (or announce any offer or sale of,
contract to sell, grant of any option to purchase or other disposition
of) any debt securities of any of the Issuers or Guarantors
substantially similar to the Notes and the Guarantees; provided, that
the foregoing will not apply to (i) the Notes and the Guarantees or
(ii) borrowings from financial institutions, in the case of each of
clauses (i) and (ii) of this Section 5(p), only to the extent not
prohibited by the Indenture.
(q) Performance of Agreements. To comply in all
material respects with all of its agreements set forth in the Operative
Documents, and to use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this
Agreement by it prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Series A Notes and the Guarantees and
the granting, perfection and enforcement of the Security Interests.
6. REPRESENTATIONS AND WARRANTIES OF THE ISSUERS AND THE
GUARANTORS. As of the date hereof, each of the Issuers and the Guarantors,
jointly and severally, represents and warrants to the Initial Purchasers that:
(a) Offering Circular. The Preliminary Offering
Circular as of its date did not, and each of the Offering Circular and
the Tender Offer Documents, as of its date does not and as of the
Closing Date will not, and each supplement or amendment thereto as of
its date will not, contain any untrue statement of a material fact or
omit to state any material fact (except, in the case of the Preliminary
Offering Circular, for pricing terms and other financial terms
intentionally left blank) necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The foregoing representation and warranty made in this
Section 6(a) shall not apply to any statements or omissions made in
reliance on and in conformity with information relating to the Initial
Purchasers furnished in writing to the Issuers by the Initial
Purchasers specifically for inclusion in the Preliminary Offering
Circular or the Offering Circular. The parties hereto acknowledge that
for purposes of this Agreement
10
(including this Section 6(a) and Section 8) the only information
furnished in writing to the Issuers by the Initial Purchasers
specifically for inclusion in the Preliminary Offering Circular or the
Offering Circular is the information set forth (i) on the cover page of
the Offering Circular with respect to the price of the Notes, (ii) in
the third paragraph on page 142 of the Offering Circular concerning
offering the Notes for resale by the Initial Purchasers, (iii) in the
fourth paragraph on page 142 of the Offering Circular concerning
market-making by the Initial Purchasers, (iv) in the sixth paragraph on
page 142 of the Offering Circular concerning stabilization by the
Initial Purchasers and (v) in the seventh paragraph on page 142 of the
Offering Circular concerning the affiliation of the Initial Purchasers
and their respective affiliates with the Issuers and their affiliates
(such information described in the immediately preceding clauses (i)
through (v) of this Section 6(a), the "FURNISHED INFORMATION"). Each of
the Preliminary Offering Circular and the Offering Circular, as of
their respective dates contained, and the Offering Circular, as of the
Closing Date and as amended or supplemented, will contain, all of the
information specified in, and meet the requirements of, Rule 144A(d)(4)
under the Act. Each of the Documents, as executed and delivered, and
each of the Transactions, conforms to the description thereof in the
Offering Circular.
(b) 144A Eligibility. There are no securities of any
Issuer or Guarantor registered under the Exchange Act or listed on a
national securities exchange registered under Section 6 of the Exchange
Act or quoted in a United States automated inter-dealer quotation
system.
(c) Due Organization; Good Standing. Each of the
Majestic Entities (i) has been duly organized, is validly existing and
is in good standing under the laws of its jurisdiction of organization,
(ii) has all requisite power and authority to conduct and carry on its
business and to own, lease, use and operate its properties and assets
as described in the Offering Circular, and (iii) is duly qualified or
licensed to do business and is in good standing as a foreign limited
liability company or corporation, as the case may be, authorized to do
business in each jurisdiction in which the nature of its business or
the ownership, leasing, use or operation of its properties and assets
requires such qualification or licensing, except where failure to be so
qualified or licensed and in good standing would not have a material
adverse effect on (A) the properties, business, operations, earnings,
assets, liabilities or condition (financial or otherwise) of the
Issuers and the Guarantors, taken as a whole, (B) the ability of the
Majestic Entities to perform its obligations under any of the
Documents, (C) the enforceability of any of the Security Documents or
the attachment, perfection or priority of any of the Security Interests
intended to be created thereby in any portion of the Collateral or (D)
the validity of any of the Documents or the consummation of any of the
Transactions (each, a "MATERIAL ADVERSE EFFECT").
(d) Subsidiaries. Immediately following the Closing,
(i) Capital will have no subsidiaries, (ii) the only subsidiaries of
the Company will be Capital and the direct and indirect subsidiaries of
the Company listed on SCHEDULE C to this Agreement
11
(collectively, the "SUBSIDIARIES" and each, a "SUBSIDIARY"), (iii) the
Company will directly or indirectly own 100% of the outstanding shares
of capital stock of Capital and 100% of the membership interests in
each Subsidiary, in each case, free and clear of all Liens, except for
Liens created by the Indenture, Liens created by the Security
Documents, Liens securing loans made under the New Credit Facility and
Permitted Liens and (iv) Parent will directly own 100% of the
outstanding membership interests in the Company free and clear of all
Liens, except for Liens created by the Indenture and the Security
Documents. Except as disclosed in the Offering Circular, there are no
outstanding (i) securities convertible into or exchangeable for any
capital stock of or any membership interests in, as the case may be,
any of the Issuers or Guarantors, (ii) options, warrants or other
rights to purchase or subscribe for any capital stock of or any
membership interests in, or any securities convertible into or
exchangeable for any capital stock of or any membership interests in,
as the case may be, any of the Issuers or Guarantors or (iii)
contracts, commitments, agreements, understandings, arrangements,
undertakings, rights, calls or claims of any kind relating to the
issuance of any capital stock of or any membership interests in, as the
case may be, any of the Issuers or Guarantors, any such convertible or
exchangeable securities or any such options, warrants or rights. Except
as set forth above, immediately following the Closing, none of the
Issuers or Guarantors will directly or indirectly own any capital stock
of or other equity interest in any person.
(e) Capitalization. All of the outstanding membership
interests in the Company and each of the Subsidiaries are validly
issued and were not issued in violation of, and are not subject to, any
preemptive or similar rights. All of the outstanding shares of capital
stock of Capital have been duly authorized, are validly issued, fully
paid and nonassessable, and were not issued in violation of, and are
not subject to, any preemptive or similar rights. The table under the
caption "Capitalization" in the Offering Circular (including the
footnotes thereto) sets forth, as of its date, the pro forma
capitalization of the Issuers and the Subsidiaries, on a consolidated
basis, after giving effect to the Transactions. Immediately following
the Closing, except as set forth in such table, neither of the Issuers
nor any of the Subsidiaries will have any liabilities, absolute,
accrued, contingent or otherwise other than (i) liabilities that are
reflected in the Financial Statements (as defined below), (ii)
liabilities incurred subsequent to June 30, 2003, in the ordinary
course of business, consistent with past practice, that would not,
singly or in the aggregate, have a Material Adverse Effect, or (iii)
loans made under the New Credit Facility.
(f) No Other Registration Rights. Except for this
Agreement and the Registration Rights Agreement, there are no
contracts, commitments, agreements, arrangements, understandings or
undertakings of any kind to which any of the Issuers or Guarantors is a
party, or by which any of them is bound, granting to any person the
right (i) to require either of the Issuers or any Guarantor to file a
registration statement under the Act with respect to any securities of
either of the Issuers or any Guarantor or requiring either of the
Issuers or any Guarantor to include such securities with the Notes
12
registered pursuant to any registration statement, or (ii) to purchase
or offer to purchase any securities of any of the Issuers or
Guarantors.
(g) Power and Authority. Each of the Majestic
Entities has all requisite power and authority to execute and deliver,
and to perform its obligations under, the Operative Documents to which
it is a party and to consummate the Transactions contemplated thereby.
(h) Authorization of this Agreement. This Agreement
and the Transactions contemplated hereby (including, without
limitation, the Offering and the issuance and sale of the Notes in
accordance with this Agreement) have been duly authorized by each of
the Issuers and the Guarantors, and this Agreement has been validly
executed and delivered by, and is the legal, valid and binding
obligation of, each of the Issuers and the Guarantors, enforceable
against each of the Issuers and the Guarantors in accordance with its
terms, except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally, (ii) any rights of acceleration and the availability of
equitable remedies may be subject to general principles of equity
(whether considered in a proceeding in equity or at law) and (iii) the
enforceability of the provisions of Section 8 providing for the
indemnification of or contribution to a party with respect to a
liability may be limited if such provisions violate or are contrary to
public policy under applicable law.
(i) Authorization of Indenture. The Indenture and the
Transactions contemplated thereby have been duly authorized by each of
the Issuers and the Guarantors and, on the Closing Date, the Indenture
will have been validly executed and delivered by, and will be the
legal, valid and binding obligation of, each of the Issuers and the
Guarantors, enforceable against each of the Issuers and the Guarantors
in accordance with its terms, except that (i) such enforceability may
be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject
to general principles of equity (whether considered in a proceeding in
equity or at law). On the Closing Date, the Indenture will conform to
the requirements of the Trust Indenture Act of 1939, as amended (the
"TIA"), applicable to an indenture that is required to be qualified
under the TIA.
(j) Authorization of Registration Rights Agreement.
The Registration Rights Agreement and the Transactions contemplated
thereby have been duly authorized by each of the Issuers and the
Guarantors and, on the Closing Date, the Registration Rights Agreement
will have been validly executed and delivered by, and will be the
legal, valid and binding obligation of, each of the Issuers and the
Guarantors, enforceable against each of the Issuers and the Guarantors
in accordance with its terms, except that (i) such enforceability may
be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally, (ii) any rights of acceleration
and the availability of equitable remedies may be subject to general
principles of equity (whether considered in
13
a proceeding in equity or at law) and (iii) the enforceability of the
provisions of Section 8 thereof providing for the indemnification of or
contribution to a party with respect to a liability may be limited if
such provisions violate or are contrary to public policy under
applicable law.
(k) Authorization of Series A Notes. The Series A
Notes have been duly authorized by each of the Issuers for issuance and
sale to the Initial Purchasers pursuant to this Agreement and, on the
Closing Date, will have been validly executed, authenticated, issued
and delivered by the Issuers in accordance with the terms of this
Agreement and the Indenture. When the Series A Notes have been issued,
executed and authenticated in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Series A Notes will be
legal, valid and binding obligations of each of the Issuers, entitled
to the benefits of the Indenture and enforceable against each of the
Issuers in accordance with their terms, except to the extent that (i)
such enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (ii) any
rights of acceleration and the availability of equitable remedies may
be subject to general principles of equity (whether considered in a
proceeding in equity or at law). The Notes rank and will rank on a
parity with all senior Indebtedness (as defined in the Indenture) of
each of the Issuers that is outstanding on the date hereof or that may
be incurred hereafter and senior to all other Indebtedness of each of
the Issuers that is outstanding on the date hereof or that may be
incurred hereafter; provided, that pursuant to the Intercreditor
Agreement, the Lien on the Collateral securing the New Credit Facility
will be senior to the Lien on the Collateral securing the Notes and the
Guarantees.
(l) Authorization of Series B Notes. The Series B
Notes have been duly authorized by each of the Issuers and, when issued
in the Registered Exchange Offer, (A) will have been validly executed,
authenticated, issued and delivered in accordance with the terms of the
Indenture, the Registration Rights Agreement and the Registered
Exchange Offer and (B) will be legal, valid and binding obligations of
each of the Issuers, entitled to the benefits of the Indenture and
enforceable against each of the Issuers in accordance with their terms,
except to the extent that (i) such enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general principles
of equity (whether considered in a proceeding in equity or at law).
(m) Authorization of Guarantees of Series A Notes.
The Guarantee to be endorsed on the Series A Notes by each Guarantor
has been duly authorized by each such Guarantor and, on the Closing
Date, will have been validly executed and delivered by each such
Guarantor in accordance with the terms of the Indenture. When the
Series A Notes have been issued, executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid
for by the Initial Purchasers in accordance with the terms of this
Agreement, the Guarantee of each Guarantor endorsed on the Series A
14
Notes will be the legal, valid and binding obligation of each such
Guarantor, enforceable against each such Guarantor in accordance with
its terms, except to the extent that (i) such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general principles
of equity (whether considered in a proceeding in equity or at law). The
Guarantees to be endorsed on the Series A Notes rank and will rank on a
parity with all senior Indebtedness of the Guarantors that is
outstanding on the date hereof or that may be incurred hereafter and
senior to all other Indebtedness of the Guarantors that is outstanding
on the date hereof or that may be incurred hereafter; provided, that
pursuant to the Intercreditor Agreement, the Lien on the Collateral
securing the New Credit Facility will be senior to the Lien on the
Collateral securing the Notes and the Guarantees.
(n) Authorization of Guarantees of Series B Notes.
The Guarantee to be endorsed on the Series B Notes by each Guarantor
has been duly authorized by each such Guarantor and, when the Series B
Notes are issued, will have been validly executed and delivered by each
such Guarantor in accordance with the terms of the Indenture, the
Registration Rights Agreement and the Registered Exchange Offer. When
the Series B Notes have been issued, executed and authenticated in
accordance with the terms of the Registered Exchange Offer and the
Indenture, the Guarantee of each Guarantor endorsed on the Series B
Notes will be the legal, valid and binding obligation of each such
Guarantor, enforceable against each such Guarantor in accordance with
its terms, except to the extent that (i) such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general principles
of equity (whether considered in a proceeding in equity or at law). The
Guarantees to be endorsed on the Series B Notes will rank on a parity
with all senior Indebtedness of the Guarantors that is outstanding on
the date hereof or that may be incurred hereafter and senior to all
other Indebtedness of the Guarantors that is outstanding on the date
hereof or that may be incurred hereafter; provided, that pursuant to
the Intercreditor Agreement, the Lien on the Collateral securing the
New Credit Facility will be senior to the Lien on the Collateral
securing the Notes and the Guarantees.
(o) Authorization of Security Documents. Each of the
Security Documents and the Transactions contemplated thereby
(including, without limitation, the creation, grant, recording and
perfection of the Security Interests, the execution and filing of
financing statements and the payment of any fees and taxes in
connection therewith) have been duly authorized by each Majestic Entity
party thereto and, on the Closing Date, each of the Security Documents
will have been validly executed and delivered by, and subject to
obtaining consents referenced in paragraphs (r) and (t), will be the
legal, valid and binding obligation of, each of the Majestic Entities
party thereto, enforceable against each of the Majestic Entities party
thereto in accordance with its terms, except that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or
similar laws
15
affecting creditors' rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject
to general principles of equity (whether considered in a proceeding in
equity or at law).
(p) No Violation. Parent is not in violation of its
charter or bylaws (the "PARENT CHARTER DOCUMENTS"), the Company is not
in violation of its certificate of formation or operating agreement
(the "COMPANY CHARTER DOCUMENTS"), Capital is not in violation of its
charter or bylaws (the "CAPITAL CHARTER DOCUMENTS"), and none of the
Guarantors is in violation of its certificate of formation or charter,
as the case may be, or operating agreement or bylaws, as the case may
be, (the "GUARANTOR CHARTER DOCUMENTS" and, collectively with Parent
Charter Documents, the Company Charter Documents and the Capital
Charter Documents, the "CHARTER DOCUMENTS"). None of the Majestic
Entities is (i) in violation of any federal, state, local or foreign
statute, law or ordinance, or any judgment, decree, rule, regulation or
order, including, without limitation, the Indiana Riverboat Gambling
Act, the Nevada Gaming Control Act, the Mississippi Gaming Control Act
and the Colorado Limited Gaming Control Act of 1991, in each case
including the rules and regulations promulgated thereunder
(collectively, "APPLICABLE LAW"), of any government, governmental or
regulatory agency or body (including, without limitation, the Indiana
Gaming Commission, the Nevada Gaming Commission, the Nevada State
Gaming Control Board, the Mississippi Gaming Commission, the Colorado
Limited Gaming Control Commission, the Colorado Department of Revenue
Gaming Commission or other applicable gaming authority (each, a "GAMING
AUTHORITY")), court, arbitrator or self-regulatory organization,
domestic or foreign (each, a "GOVERNMENTAL AUTHORITY"), other than
violations that would not, singly or in the aggregate, have a Material
Adverse Effect, or (ii) in breach of or default under any bond,
debenture, note or other evidence of indebtedness, indenture, mortgage,
deed of trust, lease or any other agreement or instrument to which any
such person is a party or by which any of them or any of their
respective property is bound (collectively, "APPLICABLE AGREEMENTS"),
other than breaches or defaults that would not, singly or in the
aggregate, have a Material Adverse Effect. There exists no condition
that, with the passage of time or otherwise, would (x) constitute a
violation of such Charter Documents or Applicable Laws or (y)
constitute a breach of or default under any Applicable Agreement or (z)
result in the imposition of any penalty or the acceleration of any
indebtedness, other than, in the case of the immediately preceding
clauses (y) and (z), such breaches, penalties or defaults that would
not, singly or in the aggregate, have a Material Adverse Effect. All
Applicable Agreements are in full force and effect and are legal, valid
and binding obligations, and no default has occurred or is continuing
thereunder, other than such defaults that would not, singly or in the
aggregate, have a Material Adverse Effect.
(q) No Conflict. None of the execution, delivery or
performance of any of the Documents, nor the compliance with the terms
and provisions thereof, nor the consummation of any of the Transactions
shall conflict with, violate, constitute a breach of or a default (with
the passage of time or otherwise) under, result in the imposition of a
16
Lien on any assets or capital stock of or membership interests in
either of the Issuers or any of the Subsidiaries (except as created by
the Indenture and the Security Documents), or result in an acceleration
of indebtedness under or pursuant to, (i) the Charter Documents, (ii)
any Applicable Agreement or (iii) any Applicable Law. After giving
effect to the Transactions, no Default or Event of Default (each, as
defined in the Indenture) will exist.
(r) Permits. No permit, certificate, authorization,
approval, consent, license or order of, or filing, registration,
declaration or qualification with, any Governmental Authority or any
other person (collectively, "PERMITS") is required in connection with,
or as a condition to, the execution, delivery or performance of any of
the Documents, the compliance with the terms and provisions thereof or
the consummation of any of the Transactions, other than (i) such
Permits as have been made or obtained on or prior to the Closing Date,
which Permits are in full force and effect on the Closing Date, (ii)
such Permits the failure of which to make or obtain would not, singly
or in the aggregate, have a Material Adverse Effect, (iii) the filing
of the Exchange Offer Registration Statement and, if required by the
Registration Rights Agreement, the Shelf Registration Statement, with
applicable Gaming Authorities, (iv) the approval of the Indiana Gaming
Commission of the Documents prior to Closing, (v) approval of the
Nevada Gaming Commission of (A) the pledge by the Parent of its
membership interests in the Company and (B) the Exchange Offer, and (v)
the filing of loan reports with the Mississippi Gaming Commission
pursuant to MGC Regulation II Licensing I, Section 11 with respect to
the offering of the Series B Notes and the transactions related to the
New Credit Facility (the Permits described in clauses (iii), (iv) and
(v) of this Section 6(r), collectively, the "POST-CLOSING PERMITS").
(s) No Proceedings. There is no action, claim, suit,
demand, hearing, notice of violation or deficiency, or proceeding
(including, without limitation, any investigation or partial
proceeding, such as a deposition), domestic or foreign (collectively,
"PROCEEDINGS"), pending or, to the knowledge of the Issuers and the
Guarantors, threatened (i) either with respect to any of the Majestic
Entities in connection with, or that seeks to restrain, enjoin, prevent
the consummation of, or otherwise challenge, any of the Documents or
any of the Transactions, or (ii) that could, singly or in the
aggregate, have a Material Adverse Effect. Other than rules and
regulations of Gaming Authorities, none of the Majestic Entities is
subject to any judgment, order, decree, rule or regulation of any
Governmental Authority that could, singly or in the aggregate, have a
Material Adverse Effect. No injunction or order has been issued and no
Proceeding is pending or, to the knowledge of the Issuers and the
Guarantors, threatened that (i) asserts that the offer, sale and
delivery of the Series A Notes and the Guarantees to the Initial
Purchasers pursuant to this Agreement or the initial resale of the
Series A Notes and the Guarantees by the Initial Purchasers in the
manner contemplated by this Agreement is subject to the registration
requirements of the Act, or (ii) would prevent or suspend the issuance
or sale of the Notes, including the Exempt Resales, or the
17
use of the Preliminary Offering Circular, the Offering Circular, or any
amendment or supplement thereto, in any jurisdiction.
(t) Regulated Persons. Each of the Issuers and the
Guarantors and each of their respective directors, members, managers,
officers and employees (each of the Issuers and the Guarantors and each
of such other persons, a "REGULATED PERSON" and, collectively, the
"REGULATED PERSONS") has all Permits (including, without limitation,
Permits with respect to engaging in gaming operations) necessary or
advisable to own, lease, use and operate the properties and assets and
to conduct and carry on the businesses described in the Offering
Circular, other than (i) such Permits the failure of which to have
would not, singly or in the aggregate, have a Material Adverse Effect
and (ii) the approval of the Nevada Gaming Commission, to the extent
the spin-off of Xxxxxx Nevada Gaming, LLC and the termination of the
registration of any of the Issuers or Guarantors with the Nevada Gaming
Commission does not occur, of (A) the pledge by the Parent of its
membership interests in the Company, (B) the Exchange Offer and (C)
negative covenants constituting restrictions on the transfer of and
agreements not to encumber the equity securities of any of the Issuers
and Guarantors registered with the Nevada Gaming Commission. All such
Permits are valid and in full force and effect. Each of the Regulated
Persons is in compliance with the terms and conditions of all Permits
(including, without limitation, Permits with respect to engaging in
gaming operations) necessary or advisable to own, lease, use and
operate the properties and assets and to conduct and carry on the
businesses described in the Offering Circular, other than where such
failure to be in compliance would not, singly or in the aggregate, have
a Material Adverse Effect. None of the execution, delivery or
performance of any of the Documents, nor the compliance with the terms
and provisions thereof, nor the consummation of any of the Transactions
will allow or result in, and no event has occurred which allows or
results in, or after notice or lapse of time would allow or result in,
the imposition of any material penalty under, or the revocation or
termination of, any such Permit or any material impairment of the
rights of the holder of any such Permit. None of the Issuers or
Guarantors has any reason to believe that any issuer is considering
limiting, conditioning, suspending, modifying, revoking or not renewing
any such Permit.
(u) No Investigations of Regulated Persons. To the
knowledge of the Issuers and the Guarantors, (i) no Governmental
Authority is investigating any Regulated Person, other than ongoing
general oversight investigations conducted in the ordinary course of
business, and (ii) there is no basis for any of the Gaming Authorities
to deny the renewal of the current Permits held by any of the Regulated
Persons.
(v) Title to Assets. Immediately following the
Closing, each of the Issuers and each of the Guarantors (i) will have
good and marketable title, free and clear of all Liens (other than
Liens created by the Indenture or the Security Documents, Liens
securing loans made under the New Credit Facility and Permitted Liens),
to all property and assets described in the Offering Circular to be
owned by it, (ii) will enjoy peaceful and undisturbed possession under
all leases of real property and under all material leases
18
to which it is a party as lessee and (iii) will hold a valid leasehold
interest with respect to each such lease. Capital has no material
assets.
(w) Sufficiency and Condition of Assets. The assets
of each of the Issuers and the Guarantors include all of the assets and
properties necessary or required in, or otherwise material to, the
conduct of the businesses of each of them as currently conducted and as
proposed to be conducted, and such assets are in working condition,
except where the failure of such assets to be in working condition
would not, singly or in the aggregate, have a Material Adverse Effect.
(x) Insurance. Each of the Issuers and the
Subsidiaries maintains reasonably adequate insurance covering its
properties, operations, personnel and businesses against losses and
risks in accordance with customary industry practice. All such
insurance is outstanding and duly in force.
(y) Real Property. No condemnation, eminent domain,
or similar proceeding exists, is pending or, to the knowledge of the
Issuers and the Guarantors, is threatened, with respect to or that
could affect any properties or assets of either of the Issuers or any
of the Guarantors, except for such proceedings as would not, singly or
in the aggregate, have a Material Adverse Effect. No owned real
property of either of the Issuers or any of the Guarantors is subject
to any sales contract, option, right of first refusal or similar
agreement or arrangement with any third party. There is no real
property currently under contract or subject to an option in favor of
any of the Issuers or any of the Guarantors, except for real property
which the failure of the Issuers or any of the Guarantors to acquire,
would not, singly or in the aggregate, have a Material Adverse Effect.
(z) Related Party Transactions. Except as adequately
disclosed in the Offering Circular, there are no related party
transactions that would be required to be disclosed in the Offering
Circular if the Offering Circular were a prospectus included in a
registration statement on Form S-1 filed under the Act.
(aa) Security Interests. Upon execution and delivery
of the Security Documents and the issuance of the Notes, the Security
Documents will create, in favor of the Secured Party, for the benefit
of the holders of the Notes, a legal, valid and enforceable Lien on,
and security interest in, all of the right, title and interest of the
Grantors in the Collateral and the proceeds thereof; provided, however,
that the pledges of the equity interests in the Issuers, Majestic
Investor, LLC and Majestic Investor Holdings, LLC will not be effected
until after the issuance of the Notes, upon consummation of the
spin-off of Xxxxxx Nevada Gaming, LLC or receipt of the approval of the
Nevada Gaming Commission. As of the Closing Date, the Security
Interests will be valid and perfected, and, subject only to the
Intercreditor Agreement, will constitute first priority Liens on and
security interests in such Collateral. As of the Closing Date, the
Collateral will be subject to no other Liens, other than Permitted
Liens and, following
19
the entering into of the New Credit Facility, Liens securing loans made
under the New Credit Facility.
(bb) Taxes. All tax returns required to be filed by
either of the Issuers or by any of the Guarantors in any jurisdiction
(including foreign jurisdictions) have been filed and, when filed, all
such returns were accurate in all material respects, and all taxes,
assessments, fees and other charges (including, without limitation,
withholding taxes, penalties and interest) due or claimed to be due
from either of the Issuers or from any of the Guarantors have been
paid, other than those being contested in good faith by appropriate
proceedings, or those that are currently payable without penalty or
interest and, in each case, for which an adequate reserve or accrual
has been established on the books and records of the Issuers or the
Guarantors, as applicable, in accordance with generally accepted
accounting principles of the United States, consistently applied
("GAAP"). There are no actual or proposed additional tax assessments
for any tax period against either of the Issuers or against any of the
Guarantors that could, singly or in the aggregate, have a Material
Adverse Effect. The charges, accruals and reserves on the books and
records of the Issuers and the Guarantors, as applicable, in respect of
any tax liability for any tax periods not finally determined are
adequate to meet any assessments of tax or re-assessments of additional
tax for any such period.
(cc) Intellectual Property. The Issuers and the
Guarantors own or possess, or are licensed under, and have the right to
use, all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"INTELLECTUAL PROPERTY") currently used in, or necessary for the
conduct of, their businesses, free and clear of all Liens, other than
Permitted Liens, except where the failure to own or possess or
otherwise be able to acquire such intellectual property would not,
singly or in the aggregate, have a Material Adverse Effect. To the
knowledge of the Issuers and the Guarantors, no claims have been
asserted by any person challenging the use of any such Intellectual
Property by any of the Issuers or the Guarantors or questioning the
validity or effectiveness of any license or agreement related thereto,
and to the knowledge of the Issuers and the Guarantors, there is no
valid basis for any such claim, and to the knowledge of the Issuers and
the Guarantors, the use of such Intellectual Property by the Issuers
and the Guarantors will not infringe on the Intellectual Property
rights of any other person.
(dd) Accounting Controls. Each of the Issuers and the
Guarantors maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) material
transactions are executed in accordance with management's general or
specific authorization, (ii) material transactions are recorded as
necessary to permit preparation of financial statements in conformity
with GAAP, and to maintain asset accountability, (iii) access to assets
is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for
20
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any material differences.
(ee) Financial Statements. The audited historical
combined financial statements and related notes of the Issuers and the
Subsidiaries contained in the Offering Circular (the "AUDITED FINANCIAL
STATEMENTS") and the unaudited combined historical financial statements
and related notes of the Issuers and the Subsidiaries contained in the
Offering Circular (the "INTERIM FINANCIAL STATEMENTS" and, together
with the Audited Financial Statements, the "FINANCIAL STATEMENTS")
present fairly the combined financial position, results of operations
and cash flows of the Issuers and the Subsidiaries on the basis stated
in the Offering Circular, as of the respective dates and for the
respective periods to which they apply, and have been prepared in
accordance with GAAP consistently applied throughout the periods
involved, except as disclosed in the Financial Statements, and the
requirements of Regulation S-X that would be applicable if the Offering
Circular were a prospectus included in a registration statement on Form
S-1 filed under the Act (the "S-X REQUIREMENTS"). The summary
historical financial data included in the Offering Circular for the
Issuers and the Subsidiaries have been prepared on a basis consistent
with that of the Financial Statements and present fairly the financial
position and results of operations of the Issuers and the Subsidiaries,
on a combined basis and on a property-by-property basis, as of the
respective dates and for the respective periods indicated.
The pro forma consolidated financial statements and related
notes, excluding EBITDA and Adjusted EBITDA, included in the Offering Circular
(w) comply with the S-X Requirements and all other rules and guidelines of the
Commission with respect to pro forma financial statements, (x) present fairly
the pro forma consolidated financial position, results of operations and cash
flow of the Issuers and the Subsidiaries as of the dates and for the periods
indicated, after giving effect to the Transactions, (y) have been prepared on a
basis consistent with the Financial Statements, except for the pro forma
adjustments specified therein, and (z) are based on good faith, reasonable
estimates and assumptions of the Company. The summary pro forma financial data
included in the Offering Circular have been derived from such pro forma
financial statements and present fairly the pro forma consolidated financial
position and results operations of the Issuers and the Subsidiaries as of the
respective dates and for the respective periods indicated.
All other financial and statistical data regarding the Issuers
and the Subsidiaries included in the Offering Circular are fairly and accurately
presented. PricewaterhouseCoopers LLP are independent public accountants with
respect to the Issuers and the Subsidiaries.
(ff) No Material Adverse Change. Subsequent to the
respective dates as of which information is given in the Offering
Circular, except as adequately disclosed in the Offering Circular, (i)
neither of the Issuers nor any of the Guarantors has incurred any
liabilities, direct or contingent, that are material, singly or in the
aggregate, to any of them, or has entered into any material
transactions not in the ordinary course of business,
21
(ii) there has not been any material decrease in the capital stock or
membership interests, as the case may be, or any material increase in
long-term indebtedness or any material increase in short-term
indebtedness of any of the Issuers or the Guarantors, or any payment of
or declaration to pay any dividends or any other distribution with
respect to any of the Issuers or the Guarantors, and (iii) there has
not been any material adverse change in the properties, business,
operations, earnings, assets, liabilities or condition (financial or
otherwise) of the Issuers and the Guarantors taken as a whole (each of
clauses (i), (ii) and (iii), a "MATERIAL ADVERSE CHANGE"). Except as
disclosed in the Offering Circular, to the knowledge of the Issuers and
the Guarantors, there is no event that has occurred or that is
reasonably likely to occur which, if it were to occur, could reasonably
be expected to, singly or in the aggregate, have a Material Adverse
Effect or result in a Material Adverse Change.
(gg) Ratings. No "nationally recognized
statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act (i) has imposed (or has informed either
of the Issuers or any Guarantor that it is considering imposing) any
condition (financial or otherwise) on the Issuers' or any Guarantor's
retaining any rating assigned to any securities of either of the
Issuers or any Guarantor, or (ii) has indicated to either of the
Issuers or any Guarantor that it is considering (A) the downgrading,
suspension, or withdrawal of, or any review for a possible change that
does not indicate the direction of the possible change in, any rating
so assigned, or (B) any change in the outlook for any rating of any
securities of either of the Issuers or any Guarantor.
(hh) Solvency. Each of the Issuers and each
Guarantor is incurring its respective indebtedness under the Series A
Notes and the Guarantees for proper purposes and in good faith.
Immediately before and after giving effect to the issuance of the
Series A Notes, (i) the assets of the Issuers and their subsidiaries
(including the Guarantors), considered as a whole and as a going
concern, at a fair valuation, will exceed the sum of their debts, taken
as a whole; (ii) the present fair salable value of the assets of the
Issuers and their subsidiaries (including the Guarantors), considered
as a whole and as a going concern, will exceed the amount required to
pay their liability on their debts, taken as a whole; (iii) each of the
Issuers will have adequate capital with which to conduct their
respective present and anticipated businesses; and (iv) neither the
Issuers nor any Guarantor will intend to incur or believe or reasonably
should believe that it will incur debts beyond its ability to pay as
those debts become due. Neither issuer is aware of any reason why it
would be inappropriate to consider, for purposes of clauses (i) and
(ii) above, the Issuers and their subsidiaries as a going concern. For
purposes of this paragraph, "debts" includes contingent and
unliquidated debts.
(ii) No Solicitation. Neither of the Issuers nor
any of their affiliates nor anyone acting on their behalf has (i)
taken, directly or indirectly, any action designed to cause or to
result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price
of the Notes or to facilitate the sale or resale of any of the Notes,
(ii) sold, bid for, purchased, or paid anyone any
22
compensation for soliciting purchases of, any of the Notes, or (iii)
paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of either of the Issuers.
(jj) No Registration of Notes. Without limiting
paragraph (r) above, no registration under the Act, and no
qualification of the Indenture under the TIA is required for the sale
of the Series A Notes and the Guarantees to the Initial Purchasers as
contemplated hereby or for the Exempt Resales, assuming (i) that the
purchasers in the Exempt Resales are Eligible Purchasers, (ii) the
accuracy of the Initial Purchasers' representations contained in
Section 7, and (iii) the accuracy of the representations made by each
Accredited Investor who purchases the Series A Notes pursuant to an
Exempt Resale as set forth in the letter of representation in the form
of Annex A to the Offering Circular. No form of general solicitation or
general advertising (including, without limitation, as such terms are
used in Regulation D under the Act) was used by either of the Issuers
or any of their respective affiliates or any of their respective
representatives in connection with the offer and sale of any of the
Series A Notes or in connection with Exempt Resales. No securities of
the same class as the Series A Notes have been offered, issued or sold
by either of the Issuers or any of their respective affiliates within
the six-month period immediately prior to the date hereof.
(kk) No Registration of Tender Offer. Without
limiting paragraph (r) above, no registration under the Act, or filing
under the Exchange Act, or qualification under the TIA is required in
connection with the commencement or consummation of the Tender Offers
or the Star Redemption.
(ll) ERISA. The Issuers have disclosed to the
Initial Purchasers each employee benefit plan maintained by the Issuers
and their Affiliates which is a "plan" within the meaning of Section
4975(e)(i) of the Internal Revenue Code of 1986, as amended, or the
regulations promulgated thereunder (the "CODE"). No condition exists or
event or transaction has occurred in connection with any employee
benefit plan that could result in either of the Issuers or any such
"Affiliate" incurring any liability, fine or penalty that could, singly
or in the aggregate, have a Material Adverse Effect. Neither of the
Issuers nor any Affiliate maintains any employee pension benefit plan
that is subject to Title IV of the Employee Retirement Income Security
Act of 1974, as amended, or the rules and regulations promulgated
thereunder ("ERISA"). The terms "employee benefit plan" and "employee
pension benefit plan" shall have the meanings assigned to such terms in
Section 3 of ERISA. The term "Affiliate" shall have the meaning
assigned to such term in Section 407(d)(7) of ERISA.
(mm) Investment Company Act and Other Federal
Regulations. None of the Issuers nor any of the Subsidiaries has taken,
and none of them will take, any action that may cause this Agreement or
the issuance of the Series A Notes to, and none of the Transactions
will, violate or result in a violation of Section 7 of the Exchange Act
(including, without limitation, Regulation T (12 C.F.R. Part 220),
Regulation U (12
23
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System). Neither of the Issuers or any
of the Subsidiaries is subject to regulation, or shall become subject
to regulation upon the consummation of the Offering and sale of the
Series A Notes and the application of the net proceeds thereof as
described in the Offering Circular, or the consummation of any of the
other Transactions, under the Investment Company Act of 1940, as
amended, and the rules and regulations and interpretations promulgated
thereunder, or under any other Federal or state statute or regulation
limiting its ability to incur or assume indebtedness for borrowed
money.
(nn) No Brokers. Neither of the Issuers nor any
of the Guarantors has dealt with any broker, finder, commission agent
or other person (other than the Initial Purchasers) in connection with
the Transactions and neither of the Issuers or any of the Guarantors is
under any obligation to pay any broker's fee or commission in
connection with the Transactions (other than commissions and fees to
the Initial Purchasers as set forth in the Offering Circular)
(oo) No Labor Disputes. To our knowledge, neither
of the Issuers nor any of the Subsidiaries is engaged in any unfair
labor practice. Except as would not, singly or in the aggregate, have a
Material Adverse Effect, there are (i) no unfair labor practice
complaints or other proceedings pending or, to the knowledge of the
Issuers and the Guarantors, threatened against either of the Issuers or
any of the Subsidiaries before the National Labor Relations Board or
any state, local or foreign labor relations board or any industrial
tribunal, and no grievances or arbitration proceedings arising out of
or under any collective bargaining agreement are so pending or, to the
knowledge of the Issuers and the Guarantors, threatened, (ii) no
strikes, labor disputes, slowdowns or stoppages pending or, to the
knowledge of the Issuers and the Guarantors, threatened against either
of the Issuers or any of the Subsidiaries, and (iii) no union
representation questions existing with respect to the employees of
either of the Issuers or any of the Subsidiaries, and, to the knowledge
of the Issuers and the Guarantors, no union organizing activities
taking place.
(pp) Environmental Laws. Except as disclosed in
the Offering Circular, or as otherwise would not, singularly or in the
aggregate, have a Material Adverse Effect or otherwise require
disclosure in the Offering Circular, (i) neither of the Issuers nor any
of the Subsidiaries has been or is in violation of any federal, state
or local laws and regulations relating to pollution or protection of
human health or the environment, including, without limitation, laws
and regulations relating to emissions, discharges, releases or
threatened releases of toxic or hazardous substances, materials or
wastes, or petroleum and petroleum products ("MATERIALS OF
ENVIRONMENTAL CONCERN"), or otherwise relating to the protection of
human health and safety, or the use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern
(collectively, "ENVIRONMENTAL LAWS"), which violation includes, but is
not limited to, noncompliance with, or lack of, any permits or other
environmental authorizations; (ii) there are no circumstances, either
past, present or that are reasonably foreseeable, that
24
may lead to any such violation in the future; (iii) neither of the
Issuers nor any of the Subsidiaries has received any communication
(written or oral), whether from a Governmental Authority or otherwise,
alleging any such violation; (iv) there is no pending or threatened
claim, action, investigation, notice (written or oral) or other
Proceeding by any person or entity alleging potential liability of
either of the Issuers or any of the Subsidiaries (or against any person
or entity for whose acts or omissions the Issuers or any of the
Subsidiaries is or may reasonably be expected to be liable, either
contractually or by operation of law) for investigatory, cleanup, or
other response costs, or natural resources or property damages, or
personal injuries, attorney's fees or penalties relating to (A) the
presence, or release into the environment, of any Materials of
Environmental Concern at any location, or (B) circumstances forming the
basis of any violation or potential violation, of any Environmental Law
(collectively, "ENVIRONMENTAL CLAIMS"); and (v) there are no past or
present actions, activities, circumstances, conditions, events or
incidents that could reasonably form the basis of any Environmental
Claim.
Each of the Issuers and the Subsidiaries, as
appropriate, (i) have conducted a review of the effect of Environmental
Laws on the business, operations and properties of each of the Issuers
and the Subsidiaries, in the course of which, or as a result of which,
the Issuers have identified and evaluated associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities, and any potential liabilities to
third parties); and (ii) have conducted environmental investigations
of, and have reviewed reasonably available information regarding, the
business, properties and operations of each of the Issuers and the
Subsidiaries, and of other properties within the vicinity of their
business, properties and operations, as appropriate for the
circumstances of each such property and operation; on the basis of such
reviews, investigations and inquiries, the Issuers have reasonably
concluded that any costs and liabilities associated with such matters
would not have, singularly or in the aggregate, a Material Adverse
Effect or otherwise require disclosure in the Offering Circular.
(qq) Representations and Warranties. Each
certificate signed by any officer of any of the Majestic Entities and
delivered to the Initial Purchasers or counsel for the Initial
Purchasers in connection with the Operative Transactions shall be
deemed to be a representation and warranty by such Majestic Entities to
the Initial Purchasers as to the matters covered thereby.
7. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS.
As of the date hereof, each of the Initial Purchasers, severally and not
jointly, represents and warrants to the Issuers and the Guarantors that:
(a) QIB or Accredited Investor. It is either a QIB or
an Accredited Investor, in either case, with such knowledge and
experience in financial and business
25
matters as is necessary in order to evaluate the merits and risks of an
investment in the Series A Notes.
(b) Eligible Purchasers. It (i) is not acquiring the
Series A Notes with a view to any distribution thereof or with any
present intention of offering or selling any of the Series A Notes in a
transaction that would violate the Act or the securities laws of any
state of the United States or any other applicable jurisdiction, and
(ii) will be soliciting offers for the Series A Notes only from, and
will be reoffering and reselling the Series A Notes only to, persons in
the United States whom it reasonably believes to be (A) QIBs in
reliance on the exemption from the registration requirements of the Act
provided by Rule 144A under the Act or (B) Accredited Investors that
execute and deliver to each of the Issuers and the Initial Purchasers a
letter containing certain representations and agreements in the form
attached as Annex A to the Offering Circular.
(c) No General Solicitation. No form of general
solicitation or general advertising in violation of the Act has been or
will be used by the Initial Purchasers or any of its representatives in
connection with the offer and sale of any of the Series A Notes
pursuant hereto, including but not limited to, articles, notices or
other communications published in any newspaper, magazine or similar
medium or broadcast over television or radio, or any seminar or meeting
whose attendees have been invited by any general solicitation or
general advertising.
(d) Representations of Eligible Purchasers. In
connection with the Exempt Resales, it will solicit offers to buy the
Series A Notes only from, and will offer and sell the Series A Notes
only to, persons whom it reasonably believes to be Eligible Purchasers
who, in purchasing such Series A Notes, will be deemed to have
represented and agreed that: (i) such Eligible Purchaser understands
that such Series A Notes have not been registered under the Act or any
other applicable securities law; (ii) the Series A Notes purchased by
such Eligible Purchaser may be offered, sold or otherwise transferred
prior to the date which is two years (or such other period that may
hereafter be provided under Rule 144(k) under the Act as permitting
resales of restricted securities by non-affiliates without restriction)
after the later of the original issue date of the Series A Notes and
the last date on which either of the Issuers or any affiliate of the
Issuers was the owner of the Series A Notes (or any predecessor of the
Series A Notes) only (A) to either of the Issuers, (B) pursuant to a
registration statement which has been declared effective under the Act,
(C) for so long as the Series A Notes are eligible for resale pursuant
to Rule 144A under the Act, to a person it reasonably believes is a QIB
that purchases for its own account or for the account of a QIB to whom
notice is given that the transfer is being made in reliance on Rule
144A under the Act, (D) to an institutional "accredited investor"
within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Act that is acquiring the Series A Notes for its own account
or for the account of such an institutional "accredited investor" for
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Act or (E)
pursuant to another available exemption from the registration
requirements of the Act, subject (1) in
26
each of the foregoing clauses (A) through (E) to any requirement of law
that the disposition of its property or the property of such investor
account or accounts be at all times within its or their control, (2) to
the Issuers' and the Trustee's right prior to any such offer, sale or
transfer pursuant to clause (D) or (E) above to require the delivery of
an opinion of counsel, certifications and/or other information
satisfactory to each of them, and in each of the foregoing cases, a
certificate of transfer in the form appearing on the Series A Notes is
completed and delivered by the transferor to the Trustee and (3) in
each of the foregoing clauses (A) through (E) in accordance with
applicable securities laws of any U.S. state or any other applicable
jurisdiction; and (iii) such Eligible Purchaser will deliver to each
person to whom the Series A Notes are transferred a notice
substantially to the effect of the foregoing.
(e) Power and Authority. It has all requisite power
and authority to enter into, deliver and perform its obligations under
this Agreement and the Registration Rights Agreement and each of this
Agreement and the Registration Rights Agreement has been duly and
validly authorized by it.
8. INDEMNIFICATION.
(a) Indemnification of Initial Purchasers. Each of
the Issuers and the Guarantors shall, jointly and severally, without
limitation as to time, indemnify and hold harmless each of the Initial
Purchasers and each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act) any of the
Initial Purchasers (any of such persons being hereinafter referred to
as a "CONTROLLING PERSON"), and the respective officers, directors,
partners, employees, representatives and agents of any of the Initial
Purchasers and any such controlling person (collectively, the
"PURCHASER INDEMNIFIED PARTIES"), to the fullest extent lawful, from
and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and reasonable
attorneys' fees) and expenses (including, without limitation, costs and
expenses incurred in connection with investigating, preparing, pursuing
or defending against any of the foregoing) (collectively, "LOSSES"), as
incurred, directly or indirectly caused by, related to, based upon,
arising out of or in connection with (i) any untrue statement or
alleged untrue statement of a material fact contained in the
Preliminary Offering Circular or the Offering Circular (or any
amendment or supplement thereto) or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
that neither of the Issuers nor any Guarantor shall be liable under the
indemnity provided in this Section 8(a) to any Purchaser Indemnified
Party for any Losses that (A) result solely from an untrue statement of
a material fact contained in, or the omission of a material fact from,
any Preliminary Offering Circular, which untrue statement or omission
was corrected in the Offering Circular (as then amended or
supplemented) if it shall have been determined by a court of competent
jurisdiction by final and nonappealable judgment that (1) such
Purchaser Indemnified Party sold the Notes to the person alleging such
Loss and failed to
27
send or give, at or prior to the written confirmation of such sale, a
copy of the Offering Circular (as then amended or supplemented), if
required by law to have so delivered it, and (2) the Issuers had
previously furnished copies of the corrected Offering Circular to such
Purchaser Indemnified Party within a reasonable amount of time prior to
such sale or such confirmation, and (3) the corrected Offering
Circular, if delivered, would have been a complete defense against the
person asserting such Loss; or (B) are based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on
and in conformity with the Furnished Information. The parties hereto
agree that the only information furnished in writing to the Issuers by
the Initial Purchasers specifically for inclusion in the Preliminary
Offering Circular or the Offering Circular is the Furnished
Information. The Issuers shall notify the Initial Purchasers promptly
of the institution, threat or assertion of any Proceeding of which
either of the Issuers or any Subsidiary is aware in connection with the
matters addressed by this Agreement which involves either of the
Issuers, any of the Subsidiaries or any of the Purchaser Indemnified
Parties.
(b) Actions Against Parties; Notification. If any
Proceeding shall be brought or asserted against any person entitled to
indemnification hereunder (an "INDEMNIFIED PARTY"), such Indemnified
Party shall give prompt written notice to the party or parties from
which such indemnification is sought (the "INDEMNIFYING PARTIES") in
writing; provided, that the failure to so notify the Indemnifying
Parties shall not relieve the Indemnifying Parties from any obligation
or liability except to the extent (but only to the extent) that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal) that the Indemnifying Parties
have been prejudiced materially by such failure.
(c) The Indemnifying Parties shall have the right,
exercisable by giving written notice to an Indemnified Party, within 20
Business Days after receipt of written notice from such Indemnified
Party of such Proceeding, to assume, at their expense, the defense of
any such Proceeding; provided, that an Indemnified Party shall have the
right to employ separate counsel in any such Proceeding and to
participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party or parties
unless: (i) the Indemnifying Parties have agreed to pay such fees and
expenses; (ii) the Indemnifying Parties shall have failed promptly to
assume the defense of such Proceeding or shall have failed to employ
counsel reasonably satisfactory to such Indemnified Party; or (iii) the
named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and one or more Indemnifying
Parties (or any affiliates or controlling persons of any of the
Indemnifying Parties), and such Indemnified Party shall have been
advised by counsel that there may be one or more defenses available to
such Indemnified Party that are in addition to, or in conflict with,
those defenses available to the indemnifying party or such affiliate or
controlling person (in which case, if such Indemnified Party notifies
the Indemnifying Parties in writing that it elects to employ separate
counsel at the expense of the Indemnifying Parties, the Indemnifying
Parties shall not have the right to assume the defense thereof and the
reasonable fees and expenses of such counsel shall be at the
28
expense of the Indemnifying Parties; it being understood, however,
that, the Indemnifying Parties shall not, in connection with any one
such Proceeding or separate but substantially similar or related
Proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (together with appropriate
local counsel) at any time for such Indemnified Party).
No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of any judgment in
or enter into any settlement of any pending or threatened Proceeding in
respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Party is a party thereto)
unless such judgment or settlement includes, as an unconditional term
thereof, the giving by the claimant or plaintiff to each Indemnified
Party of a release, in form and substance satisfactory to the
Indemnified Party, from all Losses that may arise from such Proceeding
or the subject matter thereof (whether or not any Indemnified Party is
a party thereto).
(d) Indemnification of the Issuers and the
Guarantors. Each of the Initial Purchasers, severally but not jointly,
agrees to indemnify and hold harmless each of the Issuers and the
Guarantors and each of their controlling persons and the respective
members, managers, officers, directors, partners, employees,
representatives and agents of the Issuers and the Guarantors and any
such controlling person to the same extent as the foregoing indemnity
from the Issuers and the Guarantors to each of the Purchaser
Indemnified Parties stated in Section 8(a), but only with respect to
Losses that are caused by an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
the Furnished Information. The parties hereto agree that the only
information furnished in writing to the Issuers by the Initial
Purchasers specifically for inclusion in the Preliminary Offering
Circular or the Offering Circular is the Furnished Information.
Notwithstanding the foregoing, any liability of an Initial Purchaser
hereunder shall be limited to an amount not to exceed the excess (such
excess, the "AGGREGATE DISCOUNT") of (i) the aggregate gross proceeds
received by such Initial Purchaser from the sale of the Series A Notes
(plus, in the case of Xxxxxxxxx & Company, Inc., any arranger fees
received by Xxxxxxxxx & Company, Inc. in connection with the New Credit
Facility) over (ii) the sum of (A) the aggregate price at which such
Initial Purchaser purchased the Series A Notes from the Issuers and (B)
the amount of any Losses that such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement of
such omission or alleged omission.
(e) Contribution. If the indemnification provided for
in this Section 8 is unavailable to an Indemnified Party or is
insufficient to hold such Indemnified Party harmless for any Losses in
respect of which this Section 8 would otherwise apply by its terms
(other than by reason of exceptions provided in this Section 8), then
each indemnifying party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses (i) in such proportion as
is appropriate to reflect the relative benefits received by the Issuers
and the Subsidiaries, on the one hand, and the Initial Purchasers, on
the other hand, from
29
the Offering or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Issuers and the Subsidiaries,
on the one hand, and the Initial Purchasers, on the other hand, in
connection with the actions, statements or omissions that resulted in
such Losses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers and the Subsidiaries, on
the one hand, and the Initial Purchasers, on the other hand, shall be
deemed to be in the same proportion as the total net proceeds from the
Offering (before deducting expenses) received by the Issuers, on the
one hand, and the total discounts and commissions received by the
Initial Purchasers, on the other hand, bear to the total price of the
Series A Notes in Exempt Resales as set forth on the cover page of the
Offering Circular. The relative fault of the Issuers and the
Subsidiaries, on the one hand, and the Initial Purchasers, on the other
hand, shall be determined by reference to, among other things, whether
any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information
supplied by the Issuers or any Subsidiary, on the one hand, or the
Initial Purchasers, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by an
Indemnified Party as a result of any Losses shall be deemed to include
any legal or other fees or expenses incurred by such party in
connection with any Proceeding, to the extent such party would have
been indemnified for such fees or expenses if the indemnification
provided for in this Section 8 was available to such party.
Each party hereto agrees that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 8(d), the Initial Purchasers shall not be required to
contribute, in the aggregate, any amount in excess of the Aggregate
Discount. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
(f) Nonexclusive Remedy. The indemnity and
contribution agreements contained in this Section 8 are in addition to
any liability that any of the Issuers, the Guarantors or the Initial
Purchasers may otherwise have to the Indemnified Parties, and does not
limit in any way rights or remedies which may otherwise be available at
law or in equity.
30
9. CONDITIONS.
(a) Conditions to Obligations of Initial Purchasers.
The obligations of the Initial Purchasers to purchase the Series A
Notes under this Agreement are subject to the satisfaction or waiver of
each of the following conditions:
(i) Representations and Warranties of the
Issuers and the Guarantors. All the representations and warranties of
each of the Issuers and the Guarantors in this Agreement shall be true
and correct in all material respects (other than representations and
warranties with a Material Adverse Effect qualifier or other
materiality qualifier, which shall be true and correct as written) at
and as of the Closing Date after giving effect to the Transactions with
the same force and effect as if made on and as of such date. On or
prior to the Closing Date, each of the Issuers and the Guarantors shall
have performed or complied in all material respects with all of the
agreements and satisfied in all material respects all conditions on
their respective parts to be performed, complied with or satisfied on
or prior to the Closing Date pursuant to this Agreement.
(ii) Availability of Offering Circular. The
Offering Circular shall have been printed and copies made available to
the Initial Purchasers not later than 12:00 noon, New York City time,
on the first Business Day following the date of this Agreement or at
such later date and time as the Initial Purchasers may approve.
(iii) No Injunction. No injunction, restraining
order or order of any nature by a Governmental Authority shall have
been issued as of the Closing Date that would prevent or interfere with
the issuance and sale of the Series A Notes or the consummation of any
of the other transactions contemplated by the Operative Documents; and
no stop order suspending the qualification or exemption from
qualification of any of the Series A Notes in any jurisdiction shall
have been issued and no Proceeding for that purpose shall have been
commenced or be pending or contemplated.
(iv) No Proceedings. No action shall have been
taken and no Applicable Law shall have been enacted, adopted or issued
that would, as of the Closing Date, prevent the issuance and sale of
the Series A Notes or the consummation of any of the other transactions
contemplated by the Operative Documents. No Proceeding shall be pending
or threatened other than Proceedings that (A) if adversely determined
would not, singly or in the aggregate, adversely affect the issuance or
marketability of the Series A Notes, and (B) would not, singly or in
the aggregate, have a Material Adverse Effect.
(v) No Material Adverse Change. Since the date
as of which information is given in the Offering Circular (without
giving effect to any amendment thereto or supplement thereto), there
shall not have been any Material Adverse Change.
(vi) PORTAL. The Notes shall have (A) been
designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the PORTAL
market, and (B) received a rating of "B" and "B2" from Standard &
Poor's Corporation and Xxxxx'x Investors Services, Inc., respectively.
(vii) Maintenance of Rating. As of the Closing
Date, (i) there shall not have occurred any downgrading, suspension or
withdrawal of, nor shall any notice have been given of any potential or
intended downgrading, suspension or
31
withdrawal of, or of any review (or of any potential or intended
review) for a possible change that does not indicate the direction of
the possible change in, any rating of any securities of either of the
Issuers (including, without limitation, the placing of any of the
foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any
"nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall
not have occurred any change, nor shall any notice have been given of
any potential or intended change, in the outlook for any rating of any
securities of either of the Issuers by any such rating organization and
(iii) no such rating organization shall have given notice that it has
assigned (or is considering assigning) a lower rating to the Notes than
that on which the Notes were marketed.
(viii) Officers', Secretary's and Solvency
Certificates. The Initial Purchasers shall have received on the Closing
Date (A) certificates dated the Closing Date, signed by (1) the Chief
Executive Officer, and (2) the principal financial or accounting
officer of each of the Issuers and Guarantors, on behalf of such Issuer
or Guarantor, confirming the matters set forth in paragraphs (i),
(iii), (iv), (v), (vii) and (xii) of this Section 9(a), (B) a
certificate, dated the Closing Date, signed by the (1) Chief Executive
Officer and (2) the principal financial or accounting officer of each
of the Issuers and Guarantors, on behalf of each such Issuer or
Guarantor, stating that the industry, statistical and market-related
data included in the Offering Circular has been reviewed by such
persons and, to the best knowledge of such persons, subject to the
risks and limitations described in the Preliminary Offering Circular
and the Offering Circular, is true and accurate in all material
respects and is based on or derived from sources which the Issuers
believe to be reliable and accurate, which certificate shall be in form
and substance satisfactory to counsel for the Initial Purchasers, (C) a
certificate, dated the Closing Date, signed by the Secretary of each of
the Issuers and Guarantors, certifying such matters as the Initial
Purchasers may reasonably request, and (D) a certificate of solvency,
dated the Closing Date, signed by the principal financial or accounting
officer of the Issuers and Guarantors substantially in the form
previously approved by the Initial Purchasers.
(ix) Opinions of Counsel. The Initial Purchasers
shall have received, a favorable opinion (in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers), dated the Closing Date, of each of the following: (A)
Xxxxxx Xxxxxxx PLC, special counsel to the Issuers and Guarantors,
containing opinions substantially to the effect of the opinions set
forth in EXHIBIT A hereto; (B) Xxxxxxx Xxxxxxxx, special Nevada counsel
to the Issuers and Guarantors, containing opinions substantially to the
effect of the opinions set forth in EXHIBIT B hereto; (C) Xxxxxxx
Xxxxxx Winter & Stennis, P.A., special Mississippi counsel to the
Issuers and Guarantors, containing opinions substantially to the effect
of the opinions set forth in EXHIBIT C hereto; (D) Xxxxxxxx Xxxxxx &
X'Xxxxxxx, special Colorado counsel to the Issuers and Guarantors,
containing opinions substantially to the effect of the opinions set
forth in EXHIBIT D hereto; (E) Xxxxxxxxxx, Xxxxxxx & Xxxxxx, L.L.P.,
special Mississippi
32
vessel counsel to the Issuers and Guarantors, containing opinions
substantially to the effect as the opinions set forth in EXHIBIT E
hereto; (F) Ice Xxxxxx, special Indiana counsel to the Issuers and
Guarantors, containing opinions substantially to the effect as the
opinions set forth in EXHIBIT F hereto; (G) Ice Xxxxxx, special Indiana
vessel counsel to the Issuers and Guarantors, contain opinions
substantially to the effect as the opinions set forth in EXHIBIT G
hereto, and (H) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special
counsel to the Initial Purchasers.
(x) Accountants' Comfort Letters.
(A) (A) At the date of the Offering
Circular, PricewaterhouseCoopers LLP shall have furnished to
you a letter, dated the date of delivery thereof, in form and
substance satisfactory to the Initial Purchasers and
PricewaterhouseCoopers LLP, to the effect that: (w) they are
independent certified public accountants with respect to the
Company and its Subsidiaries within the applicable rules and
regulations adopted by the Securities and Exchange Commission;
(x) in their opinion, the consolidated financial statements of
the Company and its Subsidiaries audited by them and included
in the Offering Circular are prepared in accordance with
Regulation S-X of the Securities and Exchange Commission; (y)
on the basis of procedures (but not an audit in accordance
with generally accepted auditing standards) consisting of: (1)
Reading the minutes of meetings of the stockholders and the
Board of Directors of the Company and its consolidated
subsidiaries since December 31, 2002 as set forth in the
minute books through a specified date not more than five
business days prior to the date of delivery of such letter;
(2) Performing the procedures specified by the American
Institute of Certified Public Accountants for a review of
interim financial information as described in SAS 100, Interim
Financial Information or SAS 71, Interim Financial
Information, as applicable, on the unaudited condensed interim
financial statements of the Company and its consolidated
subsidiaries included in the Offering Circular and reading the
unaudited interim financial data for the period from the date
of the latest balance sheet included in the Offering Circular
to the date of the latest available interim financial data;
and (3) Making inquiries of certain officials of the Company
who have responsibility for financial and accounting matters
regarding the specific items for which representations are
requested below; nothing has come to their attention as a
result of the foregoing procedures that caused them to believe
that: (a) the unaudited condensed interim financial
statements, included in the Offering Circular, do not comply
as to form in all material respects with the applicable
sections of Regulation S-X; (b) any material modifications
should be made to the unaudited condensed interim financial
statements, included in the Offering Circular, for them to be
in conformity with generally accepted accounting principles;
(c) at the date of the latest available interim financial data
and at a specified date not more than five business days prior
to the date of delivery of such letter, there was any change
in the member's contributed capital, increase in long-term
debt or any decreases in
33
consolidated net current assets (working capital) or any
increase in member's deficit of the Company and Subsidiaries
as compared with amounts shown in the latest balance sheet
included in the Offering Circular or for the period from the
date of the latest income statement included in the Offering
Circular to the date of the latest available financial data
and for the period from the date of the latest income
statement included in the Offering Circular to a specified
date not more than five business days prior to delivery of
such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated
net operating revenues, operating income or net income, except
in all instances for changes, increases or decreases which the
Offering Circular discloses have occurred or may occur, or
they shall state any specific changes, increases or decreases;
(z) the letter shall also state that certain information set
forth under the captions, "Offering Circular Summary",
"Summary Pro Forma Financial and Operating Data", "Risk
Factors", "The Refinancing", "Capitalization", "Unaudited Pro
Forma Condensed Consolidated Financial Data", "Selected
Historical Financial and Operating Data", "Management's
Discussion and Analysis of Financial Condition and Results of
Operations", "Business", "Management", "Certain Relationships
and Related Transactions" which is expressed in dollars (or
percentages derived from such dollar amounts) and has been
obtained from accounting records which are subject to controls
over financial reporting or which has been derived directly
from such accounting records by analysis or computation, is in
agreement with such records or computations made there from.
(B) At the date of closing,
PricewaterhouseCoopers LLP shall have furnished to you a
letter (the "Bringdown Letter") reaffirming comments in its
initial letter ( the "Comfort Letter") to the items in clause
(A) above, the Bringdown Letter will be dated the date of
delivery, but no more than three days prior to the Closing
Date, in form and substance satisfactory to the Initial
Purchasers and PricewaterhouseCoopers LLP.
(xi) Execution and Delivery of Operative
Documents. The Operative Documents shall have been executed and
delivered by all parties thereto and the Initial Purchasers shall have
received a fully executed original of each Operative Document.
(xii) Consummation of Transactions. Each of the
Transactions shall have been consummated on terms that conform in all
material respects to the description thereof in the Offering Circular.
(xiii) The Initial Purchasers shall have received
copies of duly executed payoff letters, UCC-3 termination statements,
mortgage releases and other collateral releases and terminations, each
in form and substance satisfactory to the Initial
34
Purchasers evidencing, as the case may be, (A) the repurchase of the
Old Notes pursuant to the Tender Offers, (B) the termination of each
agreement and instrument relating to any indebtedness secured by the
Collateral and (C) the release of each item of Collateral securing such
indebtedness and the termination of all Liens created thereunder, and
each such payoff letter, release and termination shall be in full force
and effect.
(xiv) Security Documents. The Issuers
shall have furnished to the Initial Purchasers the Security Documents
duly executed by the respective Grantors party thereto, together with:
(A) proper financing statements, each
in the form to be filed on the Closing Date under the Uniform
Commercial Code of all jurisdictions that may be deemed
necessary or desirable in order to perfect the Liens created
by the Security Documents, covering the Collateral and naming
the Secured Party as secured party, which financing statements
shall be so filed on the Closing Date;
(B) proper instruments to be filed in
the U.S. Patent and Trademark Office that may be deemed
desirable in order to perfect the liens granted on trademarks,
which liens have been created by the Security Documents;
(C) contemplated requests for
information and lien search results, listing all effective
financing statements filed as of a recent date in the
jurisdictions referred to in Section 9(a)(xiv)(A) that name
any of the Majestic Entities as debtor, together with copies
of such financing statements (none of which shall cover the
Collateral described in the Security Documents);
(D) copies of duly executed payoff
letters, UCC-3 termination statements, mortgage releases,
intellectual property releases and other collateral releases
and terminations, each in form and substance satisfactory to
the Initial Purchasers evidencing the release of each item of
Collateral and the termination of all Liens thereon (other
than Liens created by the Indenture and the Security
Documents), and each such payoff letter, release and
termination shall be in full force and effect.
(E) bailee letters and landlord
waivers, in form and substance reasonably satisfactory to the
Initial Purchasers, executed by the Issuers or the appropriate
Grantors for delivery to each of the persons specified in the
Security Documents as holding Collateral;
(F) the original membership interest
certificates and stock certificates pledged to the Secured
Party pursuant to the Security Documents, together with
undated stock powers or endorsements duly executed in blank in
connection therewith;
35
(G) mortgages (including vessel
mortgages and ship mortgages), assignments of rents and
leases, and fixture filings in form and substance approved by
the Initial Purchasers, to be recorded on the Closing Date in
all jurisdictions that may be deemed necessary or desirable in
order to perfect the liens created by the Security Documents,
covering the Collateral, which mortgages, assignments of rents
and leases, and fixture filings shall be so recorded on the
Closing Date;
(H) irrevocable commitment by a title
insurance company approved by the Initial Purchasers in the
Initial Purchasers' reasonable discretion to issue one or more
lender's policies of title insurance insuring the liens
created by the Security Documents, subject only to those title
matters and exceptions approved by the Initial Purchasers,
together with fully executed reinsurance agreements in form
and substance approved by the Initial Purchasers, providing
for reinsurance in the amounts required by the Initial
Purchasers with title insurance companies approved by the
Initial Purchasers; and
(I) any other documents required to be
delivered to the Secured Party pursuant to the Security
Documents and reasonable evidence that all other actions
necessary or desirable to perfect and protect the Liens
created by the Security Documents have been taken.
(xv) Permits. All Permits required to be
obtained from, and all notices or declarations required to be made
with, any Gaming Authority or other Governmental Authority to permit
the issuance and sale of the Series A Notes in accordance with the
terms of, and in the aggregate principal amount set forth in, this
Agreement shall have been obtained and made, in each case free of any
conditions other than those set forth in this Agreement; and all
Permits (other than the Post-Closing Permits) required to be obtained
from, and all notices or declarations required to be made with, any
Gaming Authority or other Governmental Authority to consummate the
other Transactions contemplated by the Operative Documents shall have
been obtained and made, in each case free of any conditions other than
those set forth in such Operative Documents.
(xvi) Additional Documents. Counsel to
the Initial Purchasers shall have been furnished with such documents as
they may reasonably require for the purpose of enabling them to review
or pass upon the matters referred to in this Section 9 and in order to
evidence the accuracy, completeness and satisfaction of the
representations, warranties and conditions contained in this Agreement.
(b) Conditions to Issuers' and Guarantors'
Obligations. The obligations of the Issuers to sell, and the
obligations of the Guarantors to guarantee, the Series A Notes under
this Agreement is subject to the satisfaction or waiver of each of the
following conditions:
36
(i) Payment. The Initial Purchasers
shall have delivered payment to the Issuers for the Series A Notes
pursuant to Sections 2 and 4 of this Agreement and shall have complied
with all other obligations and agreements required to be complied with
by it hereunder on or prior to the Closing Date.
(ii) Representations and Warranties. All
of the representations and warranties of the Initial Purchasers in this
Agreement shall be true and correct in all material respects at and as
of the Closing Date, with the same force and effect as if made on and
as of such date.
(iii) No Injunctions. No injunction,
restraining order or order of any nature by a Governmental Authority
shall have been issued as of the Closing Date that would prevent or
interfere with the issuance and sale of the Series A Notes; and no stop
order suspending the qualification or exemption from qualification of
any of the Series A Notes in any jurisdiction shall have been issued
and no Proceeding for that purpose shall have been commenced or be
pending or contemplated as of the Closing Date.
(iv) Satisfaction of Conditions of
Tender Offers. The conditions listed under the section captioned
"Conditions of the Offer and Consent Solicitation" in each of the
Tender Offer Documents, with the exception of the Financing Condition,
as defined in the Tender Offer Documents, shall have been satisfied.
(v) New Credit Facility. The New Credit
Facility shall have been entered into prior to or concurrently with the
Closing.
10. TERMINATION. This Agreement shall become effective upon
the execution and delivery of this Agreement by the parties hereto. The Initial
Purchasers may terminate this Agreement at any time prior to the Closing Date by
written notice to the Issuers if any of the following has occurred:
(a) Material Adverse Effect. Since the date as of
which information is given in the Offering Circular, any Material
Adverse Effect or any Material Adverse Change that would, in the
Initial Purchasers' judgment, (i) make it impracticable or inadvisable
to proceed with the Offering or delivery of the Series A Notes,
including the Exempt Resales, on the terms and in the manner
contemplated in the Offering Circular or (ii) materially impair the
investment quality of the Notes.
(b) Failure to Satisfy Conditions. The failure of the
Issuers or any of the Guarantors to satisfy the conditions contained in
Section 9(a) on or prior to the Closing Date.
(c) Outbreak of Hostilities. Any attack on or
incidences of terrorism involving the United States, any outbreak or
escalation of hostilities directly or indirectly involving the United
States, any military action or commencement or declaration of war by or
directly or indirectly involving the United States, any declaration of
a national
37
emergency, any other calamity, emergency or crisis directly or
indirectly involving the United States, any material adverse change in
economic conditions in or the financial markets of the United States or
elsewhere or any material adverse change or development involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which could make it, in
the Initial Purchasers' judgment, impracticable or inadvisable to
market or proceed with the offering or delivery of the Series A Notes
on the terms and in the manner contemplated in the Offering Circular or
to enforce contracts for the sale of any of the Series A Notes.
(d) Suspension of Trading. The suspension or
limitation of trading generally in securities on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market or
any setting of limitations on prices for securities on any such
exchange or on the Nasdaq National Market.
(e) Enactment of Adverse Law. The enactment,
publication, decree or other promulgation after the date hereof of any
Applicable Law that in the Initial Purchasers' opinion materially and
adversely affects, or could materially and adversely affect, the
properties, business, prospects, result of operations, earnings,
assets, liabilities or condition (financial or otherwise) of either of
the Issuers or any of the Subsidiaries.
(f) Downgrade of Securities. On or after the date
hereof, (i) there shall not have occurred any downgrading, suspension
or withdrawal of, nor shall any notice have been given of any potential
or intended downgrading, suspension or withdrawal of, or of any review
(or of any potential or intended review) for a possible change that
does not indicate the direction of the possible change in, any rating
of the Issuers or any of the Guarantors or any securities of the
Issuers or any of the Guarantors (including, without limitation, the
placing of any of the foregoing ratings on credit watch with negative
or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act, (ii)
there shall not have occurred any adverse change, nor shall any notice
have been given of any potential or intended adverse change, in the
outlook for any rating of Issuers or the Guarantors or any securities
of Issuers or the Guarantors (by any such rating organization and (iii)
no such rating organization shall have given notice that it has
assigned (or is considering assigning) a lower rating to the Notes than
that on which the Notes were marketed.
(g) Banking Moratorium. The declaration of a banking
moratorium by any Governmental Authority; or the taking of any action
by any Governmental Authority after the date hereof in respect of its
monetary or fiscal affairs that in the Initial Purchasers' opinion
could have a material adverse effect on the financial markets in the
United States or elsewhere.
The respective indemnities, contribution and expense
reimbursement provisions and agreements, and representations, warranties and
other statements of the Issuers and the
38
Guarantors and the Initial Purchasers set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of the Initial Purchasers or any of the Issuers or
Guarantors, or any of their respective officers, directors, members or managers
or any of their respective controlling persons, (ii) acceptance of the Notes,
and payment for them hereunder, and (iii) any termination of this Agreement
(including, without limitation, any termination pursuant to this Section 10).
Without limiting the foregoing, notwithstanding any termination of this
Agreement, the Issuers and the Guarantors shall be and shall remain jointly and
severally liable (i) for all expenses that they have agreed to pay pursuant to
Section 5(f), and (ii) pursuant to Section 8.
11. DEFAULT OF INITIAL PURCHASERS.
If one of the Initial Purchasers defaults in its obligations
to purchase Notes hereunder and the aggregate principal amount of the Notes that
such defaulting Initial Purchaser agreed but failed to purchase does not exceed
10% of the total principal amount of the Notes, the non-defaulting Initial
Purchaser may make arrangements satisfactory to the Company for the purchase of
such Notes by other persons, including the non-defaulting Initial Purchaser, but
if no such arrangements are made by the Closing Date, the non-defaulting Initial
Purchaser shall be obligated to purchase the Notes that such defaulting Initial
Purchaser agreed but failed to purchase. If one Initial Purchaser so defaults
and the aggregate principal amount of the Notes with respect to which such
default occurs exceeds 10% of the total principal amount of the Notes and
arrangements satisfactory to the non-defaulting Initial Purchaser and the
Company for the purchase of such Notes by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of the non-defaulting Initial Purchaser or the Company, except as provided
in Section 8 hereof. As used in this Agreement, the term "Initial Purchaser"
includes any person substituted for an Initial Purchaser under this Section 11.
Nothing herein will relieve a defaulting Initial Purchaser from liability for
its default.
12. MISCELLANEOUS.
(a) Notices. Notices given pursuant to any provision
of this Agreement shall be addressed as follows: (i) if to any of the
Majestic Entities, to 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, facsimile number (000) 000-0000, Attention: Chief Financial
Officer, with a copy to 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxx, XX
00000, facsimile number (000) 000-0000, Attention: Chief Financial
Officer, and an additional copy to Xxxxxx Xxxxxxx PLC, 000 Xxxxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, facsimile number (000) 000-0000,
Attention: Jin-Xxx Xxx, Esq. and (ii) if to any of the Initial
Purchasers, to c/x Xxxxxxxxx & Company, Inc., 00000 Xxxxx Xxxxxx
Xxxxxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx
Xxxxxxx, Esq., with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
facsimile number (000) 000-0000, Attention: Xxxxxxxx X. Xxxxxxx, Esq.
(provided, that any notice pursuant to Section 8 will be mailed,
delivered, telegraphed or sent by xxxxxxxxx and confirmed to the party
to be notified and
39
its counsel), or in any case to such other address as the person to be
notified may have requested in writing.
(b) Successors and Assigns. This Agreement has been
and is made solely for the benefit of and shall be binding upon each of
the Issuers, the Guarantors, the Initial Purchasers and, to the extent
provided in Section 8, the controlling persons, officers, directors,
partners, employees, representatives and agents referred to in Section
8, and their respective heirs, executors, administrators, successors
and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of
this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Series A Notes from the Initial Purchasers
merely because of such purchase. Notwithstanding the foregoing, it is
expressly understood and agreed that each purchaser who purchases
Series A Notes from the Initial Purchasers is intended to be a
beneficiary of the Issuers' covenants contained in the Registration
Rights Agreement to the same extent as if the Notes were sold and those
covenants were made directly to such purchaser by each of the Issuers,
and each such purchaser shall have the right to take action against
each of the Issuers to enforce, and obtain damages for any breach of,
those covenants.
(c) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
AND INTERPRETED, AND THE RIGHTS OF THE PARTIES SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT
LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAWS AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS
AND RULES. EACH OF THE ISSUERS AND GUARANTORS HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE MAJESTIC ENTITIES IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY
JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDINGS BROUGHT
IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE
ISSUERS AND GUARANTORS IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT
MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
40
MAIL, POSTAGE PREPAID, TO SUCH ISSUER OR SUCH GUARANTOR, AS THE CASE
MAY BE, AT THE ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE INITIAL PURCHASER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY OF THE ISSUERS AND GUARANTORS IN ANY OTHER JURISDICTION.
(d) Counterparts. This Agreement may be signed in
various counterparts which together shall constitute one and the same
instrument.
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof. When a reference is made in this Agreement to a
Section, paragraph, subparagraph, Schedule or Exhibit, such reference
shall mean a Section, paragraph, subparagraph, Schedule or Exhibit to
this Agreement unless otherwise indicated.
(f) Interpretation. The words "INCLUDE," "INCLUDES,"
and "INCLUDING" when used in this Agreement shall be deemed in each
case to be followed by the words "WITHOUT LIMITATION." The phrases "THE
DATE OF THIS AGREEMENT," "THE DATE HEREOF," and terms of similar
import, unless the context otherwise requires, shall be deemed to refer
to September 26, 2003. The words "HEREOF," "HEREIN," "HEREWITH,"
"HEREBY" and "HEREUNDER" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole
and not to any particular provision of this Agreement. The phrase "TO
THE KNOWLEDGE OF THE ISSUERS AND THE GUARANTORS" means the actual
knowledge, after due inquiry, of each of Xxx X. Xxxxxx and Xxxxxxx X.
Xxxxx. Unless the context otherwise requires, defined terms shall
include the singular and plural and the conjunctive and disjunctive
forms of the terms defined.
(g) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(h) Amendment. This Agreement may be amended,
modified or supplemented, and waivers or consents to departures from
the provisions hereof may be given, provided that the same are in
writing and signed by each of the signatories hereto.
[signature pages follow this page]
41
Please confirm that the foregoing correctly sets forth the agreement
among the Issuers, the Guarantors and the Initial Purchaser.
Very truly yours,
THE MAJESTIC STAR CASINO, LLC
By: /s/ Xxx Xxxxxxx
--------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief Financial Officer
THE MAJESTIC STAR CASINO CAPITAL CORP.
By: /s/ Xxx Xxxxxxx
---------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief Financial Officer
MAJESTIC INVESTOR, LLC
By: /s/ Xxx Xxxxxxx
--------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief Financial Officer
MAJESTIC INVESTOR HOLDINGS, LLC
By: /s/ Xxx Xxxxxxx
--------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief Financial Officer
Purchase Agreement
MAJESTIC INVESTOR CAPITAL CORP.
By: /s/ Xxx Xxxxxxx
----------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief Financial Officer
XXXXXX MISSISSIPPI GAMING, LLC
By: /s/ Xxx Xxxxxxx
----------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief Financial Officer
XXXXXX COLORADO GAMING, LLC
By: /s/ Xxx Xxxxxxx
----------------------------------
Name: Xxx Xxxxxxx
Title: Vice President and Chief Financial Officer
Purchase Agreement
ACCEPTED AND AGREED TO:
XXXXXXXXX & COMPANY, INC.
By: [ILLEGIBLE]
Name:
Title:
Purchase Agreement
XXXXX FARGO SECURITIES, LLC
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
Purchase Agreement
SCHEDULE A
Principal Amount of Purchase Price of
Initial Purchaser Notes to be Purchased Notes to be Purchased
---------------------------- --------------------- ---------------------
Xxxxxxxxx & Company, Inc. $ 247,000,000 $ 244,516,662.00
Xxxxx Fargo Securities, LLC. $ 13,000,000 $ 12,878,216.00
==============================================================================
TOTAL $ 260,000,000 $ 257,394,878.00
SCHEDULE B
GUARANTORS
Name State of Formation
------------------------------- ------------------
Majestic Investor, LLC Delaware
Majestic Investor Holdings, LLC Delaware
Majestic Investor Capital Corp. Delaware
Xxxxxx Mississippi Gaming, LLC Mississippi
Xxxxxx Colorado Gaming, LLC Colorado
SCHEDULE C
SUBSIDIARIES
Name State of Formation
------------------------------- ------------------
Majestic Investor, LLC Delaware
Majestic Investor Holdings, LLC Delaware
Majestic Investor Capital Corp. Delaware
Xxxxxx Nevada Gaming, LLC Nevada
Xxxxxx Mississippi Gaming, LLC Mississippi
Xxxxxx Colorado Gaming, LLC Colorado
EXHIBIT A
FORM OF OPINION OF XXXXXX XXXXXXX PLC
1. Due Organization; Good Standing.
(a) Majestic Investor, LLC ("Majestic LLC") is a
limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware, and has all requisite
limited liability company power to conduct and carry on its business
and to own, lease, use and operate its properties and assets as
described in the Offering Circular. Based solely on certificates from
public officials, we confirm that Majestic LLC is qualified to do
business in [ ].
(b) Majestic Investor Holdings, LLC ("MIH") is a
limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware, and has all requisite
limited liability company power to conduct and carry on its business
and to own, lease, use and operate its properties and assets as
described in the Offering Circular. Based solely on certificates from
public officials, we confirm that MIH is qualified to do business in
the following states: [ ].
(c) Majestic Investor Capital Corp. ("MICC" and
collectively with Majestic LLC and MIH, the "Delaware Entities") is a
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate
power to conduct and carry on its business as described in the Offering
Circular. Based solely on certificates from public officials, we
confirm that MICC is qualified to do business in the following states:
[ ].
2. Subsidiaries. All of the outstanding shares of capital
stock of MICC and all of the outstanding membership interests in each of the
other Guarantors are owned by MIH of record and all of the outstanding
membership interests of MIH are owned by Majestic LLC of record.
3. Outstanding Shares and Interests. All of the outstanding
membership interests in Majestic LLC have been validly issued and were not
issued in violation of, and are not subject to, any preemptive or any similar
rights. All of the outstanding membership interests in MIH have been validly
issued and were not issued in violation of, and are not subject to, any
preemptive or any similar rights. All of the outstanding shares of capital stock
of Capital have been duly authorized, are validly issued, fully paid and
nonassessable, and were not issued in violation of, and are not subject to, any
preemptive or similar rights, and are owned of record by the Company free and
clear of all Liens, except for Liens created by the Indenture, the Security
Documents and the New Credit Facility.
4. No Other Registration Rights. To our knowledge, except for
the Purchase Agreement and the Registration Rights Agreement, there are no
contracts, commitments, agreements, arrangements, understandings or undertakings
of any kind to which any of the Issuers, the Parent or the Guarantors is a
party, or by which any of them is bound, granting to any person the right (i) to
require any of the Delaware Entities to file a registration statement under
the Act with respect to any securities of either of the Issuers or any
Subsidiary or requiring any of the Delaware Entities to include such securities
with the Notes and the Guarantees registered pursuant to any registration
statement, or (ii) to purchase or offer to purchase any securities of any of the
Delaware Entities or any of their respective affiliates.
5. Power. Each of the Delaware Entities has all requisite
corporate or limited liability company power to execute and deliver and to
perform its obligations under the Transaction Documents to which it is a party
and to consummate the Transactions contemplated thereby.
6. Authorization and Enforceability.
(a) Purchase Agreement. The Purchase Agreement has
been duly authorized, executed and delivered by each of the Delaware
Entities.
(b) Indenture. The Indenture has been duly authorized
by each of the Delaware Entities, and has been validly executed and
delivered by each of the Delaware Entities. The Indenture is the
legally valid and binding obligation of each of the Issuers and the
Guarantors, enforceable against each of the Issuers and the Guarantors
in accordance with its terms. The Indenture conforms to the
requirements of the TIA applicable to an indenture that is required to
be qualified under the TIA.
(c) Registration Rights Agreement. The Registration
Rights Agreement has been duly authorized by each of the Delaware
Entities, and the Registration Rights Agreement has been validly
executed and delivered by each of the Delaware Entities. The
Registration Rights Agreement is the legally valid and binding
obligation of each of the Issuers and the Guarantors, enforceable
against each of the Issuers and the Guarantors in accordance with its
terms.
(d) Series A Notes. The Series A Notes when issued
and delivered by the Issuers against payment therefor, will be legally
valid and binding obligations of each of the Issuers, entitled to the
benefits of the Indenture and enforceable against each of the Issuers
in accordance with their terms.
(e) Series B Notes. The Series B Notes when executed,
authenticated, issued and delivered in exchange for the Series A Notes
in accordance with the terms of the Indenture, the Registration Rights
Agreement and the Registered Exchange Offer, will be legally valid and
binding obligations of each of the Issuers, entitled to the benefits of
the Indenture and enforceable against each of the Issuers in accordance
with their terms.
(f) Guarantees of Series A Notes. The execution and
delivery by each of the Delaware Entities of, and the performance by
each of the Delaware Entities of its obligations under, the Guarantee
to be endorsed on the Series A Notes by each of the Delaware Entities
have been duly authorized by each of the Delaware Entities, and such
Guarantee has been validly executed and delivered by the Delaware
Entities. In addition, such Guarantee, when the Series A Notes are
issued and delivered by the Issuer against
payment therefore, will be the legally valid and binding obligation of
each such Guarantor, enforceable against each such Guarantor in
accordance with its terms.
(g) Guarantees of Series B Notes. The execution and
delivery by each of the Delaware Entities of, and the performance by
each of the Delaware Entities of its obligations under, the Guarantee
to be endorsed on the Series B Notes by each of the Delaware Entities
have been duly authorized by each of the Delaware Entities, and such
Guarantee has been validly executed and delivered by each of the
Delaware Entities. In addition, such Guarantee, when the Series B Notes
have been executed, authenticated, issued and delivered in exchange for
the Series A Notes in accordance with the terms of the Indenture, the
Registration Rights Agreement and the Registered Exchange Offer, will
be the legally valid and binding obligation of each such Guarantor,
enforceable against each such Guarantor in accordance with its terms.
(h) Security Documents. The execution and delivery by
each of the Delaware Entities of each of the Security Documents to
which such Delaware Entity is a party and the performance by each of
the Delaware Entities of the Transactions contemplated thereby
(including the creation, grant, recording and perfection of the
Security Interests), and the filing of the Financing Statements and the
payment of any fees and taxes in connection therewith have been duly
authorized by each of the Delaware Entities, and each of the Security
Documents to which such Delaware Entity is a party has been validly
executed and delivered by such Delaware Entity. Except for the
mortgages, each of the Security Documents is the legally valid and
binding obligation of each of the Majestic Entities party thereto,
enforceable against each of the Majestic Entities party thereto in
accordance with its terms.
7. No Violation. To our knowledge, none of the Majestic
Entities is in violation of its respective Charter Documents.
8. No Conflict. None of the execution and delivery of any of
the Operative Documents, nor the compliance with the terms and provisions
thereof, nor the consummation of any of the Operative Transactions contemplated
thereby will: (i) violate the Charter Documents of any of the Delaware Entities;
(ii) result in a breach of any Applicable Agreement (as defined below); (iii)
violate any Applicable Law; or (iv) require any consents, approvals,
authorizations or registrations by the Majestic Entities under any Applicable
Law, except such as may be required under state securities laws in connection
with the purchase and sale of the Notes or as may be required for the perfection
of any security interests (which is addressed in paragraph 15 below).
9. No Proceedings.
(a) To our knowledge, there is no Proceeding pending
or threatened either with respect to any of the Majestic Entities in
connection with, or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge, any of the Operative Documents
or any of the Transactions.
(b) To our knowledge, no injunction or order has been
issued and there is no Proceeding pending or threatened that (i)
asserts that the offer, sale and delivery of the Series A Notes and the
Guarantees to the Initial Purchaser pursuant to the Purchase Agreement
or the initial resale of the Series A Notes and the Guarantees by the
Initial Purchaser in the manner contemplated by the Purchase Agreement
are subject to the registration requirements of the Act, or (ii) would
prevent or suspend the issuance or sale of the Notes or the use of the
Preliminary Offering Circular, the Offering Circular, or any amendment
or supplement thereto, in any jurisdiction.
10. No Registration. Assuming the accuracy of the
representations, warranties and agreements of the Majestic Entities and of the
Initial Purchaser contained in the Purchase Agreement, it is not necessary in
connection with the offer, sale and delivery of the Series A Notes and the
Guarantees to the Initial Purchaser pursuant to the Purchase Agreement or the
initial resale of the Series A Notes and the Guarantees by the Initial Purchaser
in the manner contemplated by the Purchase Agreement and described in the
Offering Circular, to register such sales or resales of the Series A Notes and
the Guarantees under the Act, and it is not necessary, prior to the Registered
Exchange Offer or the effectiveness of the Shelf Registration Statement, to
qualify the Indenture under the TIA. We express no opinion, however, as to when
or under what circumstances any Notes initially sold by you may be reoffered or
resold.
11. Rule 144A Eligibility. There are no securities of any
Majestic Entity registered under the Exchange Act or listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted in
a United States automated inter-dealer quotation system.
12. Rule 144A(d)(4) Information. The Offering Circular as of
its date (except for the pro forma financial statements, including the notes
thereto, the financial statements, including the notes thereto, and other
financial data included therein or omitted there from, as to which we express no
opinion), contains the information specified in, and meets the requirements of,
Rule 144A(d)(4) under the Act.
13. Investment Company Act. Neither the Issuers nor any of the
Subsidiaries is, and after giving effect to the sale of the Notes in accordance
with the Purchase Agreement and the application of the proceeds as described in
the Offering Circular under the caption "Use of Proceeds," neither will be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
14. Offering Circular. Each of the Operative Documents
conforms in all material respects to the descriptions thereof contained in the
Offering Circular. The information in the Offering Circular under the headings
"Description of Credit Facility and Intercreditor Agreement," "Description of
Notes," "Notice to Investors" and "Certain United States Federal Tax
Consideration" has been reviewed by us and, to the extent that such information
constitutes statements or matters of law, summaries of legal matters, summaries
or descriptions of securities, instruments, agreements or other documents,
summaries of proceedings, or legal conclusions, such information is correct in
all material respects.
15. UCC Opinions.
(a) The Security Agreement creates a valid security
interest in favor of the Secured Party in the rights of each debtor in
the UCC Collateral to secure the Secured Obligations (as defined in the
Security Agreement).
(b) The Parent Pledge Agreement creates a valid
security interest in favor of the Secured Party in the Pledge Agreement
UCC Collateral to secure the Secured Obligations.
(c) Each of the Delaware Entities has authorized the
filing of the Financing Statement naming such Delaware Entity as debtor
for purposes of Section 9-509 of the Delaware UCC. Each Delaware Entity
is a "registered organization" under Section 9-202(a)(70) of the
Delaware UCC.
(d) Each Financing Statement includes not only all
types of information required by Section 9-502(a) of the Delaware UCC,
but also the types of information without which the Filing Office may
refuse to accept such Financing Statement pursuant to Section 9-516 of
the Delaware UCC. Upon the later of the attachment of the security
interest and the filing of each Financing Statement in the Filing
Office, the security interest in favor of the Secured Part in the UCC
Collateral will be perfected to the extent a security interest in such
UCC Collateral can be perfected under the Delaware UCC by the filing of
a financing statement.
In addition, we have participated in conferences with officers and
other representatives of the Issuers, representatives of the independent public
accountants of the Issuers, representatives of the Initial Purchaser and counsel
for the Initial Purchaser, at which the contents of the Offering Circular and
related matters were discussed and, although we are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Circular and have not made any independent
check or verification thereof, during the course of such participation, no facts
came to our attention which lead us to believe that the Offering Circular, as of
its date and as of the date hereof, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading, it being
understood that we express no opinion or belief with respect to the pro forma
financial statements, including the notes thereto, the financial statements,
including the notes thereto, or other financial data included in, or omitted
from, the Offering Circular. For purposes of the foregoing, we note that the
Offering Circular has been prepared with the intention of a Rule 144A
transaction and not as part of a registration statement under the Act and does
not contain all the information that would be required in a registration
statement under the Act.
The opinions expressed in paragraphs 6(b) through 6(h) and the
opinions expressed in paragraphs 15(a) through 15(d) as to the creation,
validity and perfection of the security interests referred to therein are
subject to the following limitations, qualifications and exceptions:
(i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights or remedies of
creditors;
(ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or
at law, and the discretion of the court before which any proceeding
therefor may be brought;
(iii) the unenforceability under certain
circumstances under law or court decisions of provisions providing for
the indemnification of or contribution to a party with respect to a
liability where such indemnification or contribution is contrary to
public policy; and
(iv) we express no opinion concerning
the enforceability of the waiver of rights or defenses contained in
Section [4.6] of the Indenture.
Our opinions in paragraphs 15(a) and 15(b) are limited to Article 9 of the New
York UCC, and our opinions in paragraphs 15(c) and 15(d) are limited to Article
9 of the Delaware UCC, therefore those opinion paragraphs, among other things,
do not address (i) collateral of a type not subject to, or excluded from the
coverage of, Article 9 of the New York UCC and Article 9 of the Delaware UCC,
and (ii) under New York UCC Section 9-301 and Delaware UCC Section 9-301, what
law governs perfection of the security interests granted in the collateral
covered by this opinion. Additionally,
(v) we express no opinion with respect
to the priority of any security interest or lien;
(vi) we have assumed that the Issuers
have, or have the power to transfer, "rights" in the UCC Collateral and
the Pledge Agreement UCC Collateral and that "value" has been given, as
contemplated by Section 9-203 of the New York UCC;
(vii) we call to your attention the fact
that the perfection of a security interest in "proceeds" (as defined in
the New York UCC and the Delaware UCC) of collateral is governed and
restricted by Section 9-315 of the New York UCC and the Delaware UCC.
In addition, we call to your attention that in the case of certain
types of proceeds, other parties such as holders in due course,
protected transferees of securities, persons who obtain control over
securities entitlements and buyers in the ordinary course of business
may acquire a superior interest or may take their interest free of the
security interest of the Secured Party;
(viii) Section 552 of the federal
Bankruptcy Code limits the extent to which property acquired by a
debtor after the commencement of a case under the federal Bankruptcy
Code may be subject to a security interest arising from a security
agreement entered into by the debtor before the commencement of such
case;
(ix) we call to your attention that even
though the UCC renders anti-assignment provisions ineffective for
purposes of creation, attachment or perfection of the security interest
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC,
nonetheless, pursuant to Section 9-408(a) of the UCC, in certain cases,
the assignee of
such security interest may be unable to enforce its rights in the
collateral against an account debtor who did not consent to the
transfer;
(x) we express no opinion with respect
to the creation, perfection, or priority of the lien of any of the
Mortgages, nor do we express any opinion as to the enforceability of
any of the Mortgages;
(xi) to the extent that the Security
Documents and the Financing Statements purport to cover commercial tort
claims, the descriptions of collateral set forth therein may not
adequately describe such collateral to be effective; and
(xii) we have assumed that the exact
legal name of the Delaware Entities is as set forth in each of the
Delaware Entities' Charter Documents certified by the Delaware
Secretary of State.
We have not been requested to express and, with your consent,
do not render any opinion as to the applicability to the obligations of the
Issuers or the Guarantors under the Operative Documents of Section 548 of the
United States Bankruptcy Code or applicable state law (including, without
limitation, Article 10 of the New York Debtor and Creditor Law) relating to
fraudulent transfers and obligations.
We are opining herein as to the effect on the subject transaction only of the
federal laws of the United States, the internal laws of the State of New York,
the DGCL (in each case, other than any gaming or liquor laws, rules or
regulations) and, with respect to our opinions set forth in paragraphs 15(c) and
15(d), the Delaware UCC (as defined below), and we express no opinion with
respect to the applicability thereto, or the effect thereon, of the laws of any
other jurisdiction or, in the case of Delaware, any other laws, or as to any
matters of municipal law or the laws of any local agencies within any state.
With your permission, we have based our opinions set forth in paragraphs [ ] and
[ ], exclusively upon our review of Article 9 of the Uniform Commercial Code as
in effect on the date hereof in the State of Delaware as set forth in the
Uniform Commercial Code Reporting Service - State UCC Variations, as
supplemented through the June 2003 release (without regard to judicial
interpretations thereof or any regulations promulgated thereunder or any other
laws of the State of Delaware), and referred to herein as the "DELAWARE UCC." We
call your attention that we are not licensed to practice in the State of
Delaware.
Our opinions set forth in paragraph 8 above are based upon our consideration of
only those statutes, rules and regulations which, in our experience, are
normally applicable to private offerings of debt securities. We express no
opinion as to compliance by any of the parties to the Operative Documents with
any state or federal laws or regulations applicable to the subject transaction
because of the nature or extent of their business. Various issues concerning the
gaming laws and regulations in each jurisdiction in which the Company's
Subsidiaries operate are addressed in the opinions of Xxxxxxxxxx, Xxxxxxx &
Xxxxxx, L.L.P., Ice Miller, Xxxxxxxx Xxxxxx & X'Xxxxxxx, P.C. and Xxxxxxx
Xxxxxxxx Xxxxxxx, each separately provided to you, and we express no opinion
with respect to the matters included in those opinions.
Our opinion will be subject to standard assumptions, conditions,
exceptions and qualifications customary for transactions of this type.
Capitalized terms used but not defined herein shall have the respective
meanings assigned to such terms in the Purchase Agreement of which this Exhibit
A forms a part
The following terms have the following respective meanings:
"PARENT PLEDGE AGREEMENT" means the Pledge Agreement between
Parent and the Secured Party;
"SECURITY AGREEMENT" means the Pledge and Security Agreement
between the Issuers, the Guarantors and the Secured Party;
"TRADEMARK SECURITY AGREEMENT" means the Trademark Security
Agreement between the Issuers, the Guarantors and the Secured Party;
"SECURITY DOCUMENTS" means the Parent Pledge Agreement, the
Security Agreement and the Trademark Security Agreement;
"FINANCING STATEMENTS" means, collectively, a photocopy of
UCC-1 financing statements naming the Issuers as debtor and the Trustee
as the Secured Party, together with all schedules and exhibits to such
financing statements, to be filed in the Office of the Secretary of
State of the State of Delaware, copies of which are attached hereto as
Exhibit 1 and incorporated herein by this reference;
"UCC COLLATERAL" means that portion of the Collateral (as
defined in the Security Agreement) to the extent that the UCC governs a
security interest in such Collateral;
"PLEDGE AGREEMENT UCC COLLATERAL" means that portion of the
Collateral (as defined in the Parent Pledge Agreement) to the extent
such collateral is of a type subject to Article 9 of the UCC;
"APPLICABLE LAW" means any federal or New York statute, rule
or regulation, the General Corporation Law of the State of Delaware
(the "DGCL") and the Delaware Limited Liability Company Act (the
"DLLCA") (in each case, other than any gaming or liquor statutes ,
rules or regulations);
"APPLICABLE AGREEMENT" means the New Credit Facility, and the
Agreements listed on Schedule A.
"FILING OFFICE" means the Office of the Delaware Secretary of
State.
SCHEDULE A
[to come]
EXHIBIT B
FORM OF OPINION OF XXXXXXX XXXXXXXX
SPECIAL NEVADA COUNSEL
1. Except as set forth in qualification paragraphs (A) and (B)
below, no approval, license, permit, registration or other authorization is
required from any Nevada Governmental Authority under Applicable Nevada Law in
connection with or as a condition to the execution or delivery by any of the
Majestic Entities of the Documents to which it is a party, or for the
consummation of the transactions contemplated thereby.
2. To our knowledge, without investigation or inquiry, except as
disclosed in the Offering Circular, there are no legal or governmental
proceedings pending before any Nevada Governmental Authority to which any of the
Majestic Entities is a party in connection with or that seeks to restrain,
enjoin, prevent the consummation or otherwise challenge any of the Documents or
the Transactions or that would have a Material Adverse Effect.
3. The statements in the Offering Circular under the headings
"Risk Factors--Risks Related to the Notes--Gaming laws, bankruptcy laws and
other laws and regulations may delay or otherwise impede the trustee's ability
to foreclose on the collateral," "Risk Factors--Risks Related To Our Business
--Extensive government regulation continuously impacts our operations," "Risk
Factors--Risks Related To Our Business--You may be required to dispose of
your notes, or we may be required to redeem your notes, as a result of gaming
regulatory matters," and "Government Regulation and Licensing--Nevada Gaming
Regulation," except for financial data included therein or omitted therefrom as
to which we express no opinion, have been reviewed by us and, insofar as they
constitute summaries of matters of Nevada law or Nevada legal matters, they are
accurate in all material respects.
The opinions expressed herein are subject to and limited by the
following qualifications:
(A) We have assumed that:
(i) the sale of the Series A Notes and the Series B Notes
and the consummation of the other Transactions will not result in any person
"acquiring control" (as that term is defined in NGC Regulation 16.010(1)) of any
of the Nevada Gaming Entities without first obtaining the approval required by
NGC Regulation 16.200;
(ii) Xxxxxx Nevada will file any reports and informational
filings with respect to the Transactions that may be required by NGC Regulation
8.130 and the Order of Registration on a timely basis; and
(iii) the Nevada Gaming Entities have complied with and
will in all respects comply with the terms of the Order of Registration.
(B) If the Spin-Off is not consummated and the De-Registrations
are not approved:
(i) Any restrictions on the transfer of, and agreements
not to encumber, the member's interests of any of the Nevada Gaming Entities set
forth in any of the Documents will require the approval of the NGC upon the
recommendation of the NGCB in order to become effective, pursuant to NGC
Regulations 15.585.7-3.
(ii) The exchange of the Series A Notes for the Series B
Notes will constitute a "public offering" as defined in NGC Regulation
16.010(16) and will require the prior approval of the NGC upon the
recommendation of the NGCB before it may be consummated.
(iii) Any pledge of the member's interests of the Nevada
Gaming Entities will require the approval of the NGC upon recommendation of the
NGCB in order to become effective.
(iv) Any foreclosure on or transfer of any possessory
security interest in the pledges of the member's interests in any of the Nevada
Gaming Entities and any other resort to or enforcement of such security will
require the approval of the Nevada Gaming Authorities and the licensing of the
applicable secured party, unless such licensing requirement is waived by the
Nevada Gaming Authorities upon application therefor.
(v) Each of the Initial Purchaser and any transferee of
the Notes and Foothill Capital Corporation ("Foothill"), as a lender to a
registered gaming company under the New Credit Facility, will be subject to
being called forward by the Nevada Gaming Authorities, in their sole and
absolute discretion, for a finding of suitability and to be found suitable in
order to remain entitled to the benefits of the applicable Documents. (In this
regard, we express no opinion as to whether the Nevada Gaming Authorities would
call any Initial Purchaser or Foothill or their respective transferees forward
for such a finding and, if they did, if the Nevada Gaming Authorities would find
such party suitable.)
Our opinion will be subject to standard assumptions, conditions,
exceptions and qualifications customary for transactions of this type that are
subject to the applicable laws of the State of Nevada.
All capitalized terms in our opinion shall have the meanings given to
them in the Purchase Agreement (as defined below) except for the following
listed terms which shall have the meanings set forth below:
"Applicable Nevada Law" refers to those statutes, rules and regulations
of the State of Nevada, including the Nevada Gaming Laws, which, in our
experience, are customarily applicable both to transactions of the type
contemplated by the Documents and to general business corporations which are not
engaged in regulated business activities other than gaming and the sale of
liquor.
"Xxxxxx Nevada" means Xxxxxx Nevada Gaming, LLC, a Nevada limited
liability company.
"De-Registrations" means the termination of the registrations with the
Nevada Gaming Authorities of The Majestic Star, MI and MIH by the NGCB.
"Majestic Star" means The Majestic Star Casino, LLC, an Indiana limited
liability company.
"MI" means Majestic Investor, LLC, a Delaware limited liability
company.
"MIH" means Majestic Investor Holdings, LLC, a Delaware limited
liability company.
"Nevada Gaming Authorities" means, collectively, the NGC and the NGCB
as well as applicable local licensing authorities in this State
"Nevada Gaming Entities" means those Majestic Entities that are
licensed or registered with the Nevada Gaming Authorities, including, without
limitation, Majestic Star, MI, MIH and Xxxxxx Nevada.
"Nevada Gaming Laws" means the Nevada State Gaming Control Act,
codified as Chapter 463 of Nevada Revised Statutes, the regulations of the NGC
promulgated thereunder, and any other applicable Nevada statutes and regulations
regarding gaming.
"Nevada Governmental Authorities" shall mean the Nevada Gaming
Authorities and all other governmental and regulatory authorities, bodies,
instrumentalities and agencies and courts of the State of Nevada, excluding its
political subdivisions and local agencies.
"NGC" means the Nevada Gaming Commission.
"NGCB" means the Nevada State Gaming Control Board.
"Order of Registration" means the Revised Order of Registration of
Majestic Star and MIH issued by the NGC on April 18, 2002.
"Purchase Agreement" means that certain Purchase Agreement, dated as of
September 26, 2003, by and among Xxxxxxxxx & Company, Inc., as the Initial
Purchaser, and Majestic Star and The Majestic Star Casino Capital Corp., as the
Issuers.
"Spin-Off" means the spin-off of Xxxxxx Nevada from MIH to Xxxxxx
Development, Inc. as described in the Offering Circular.
"statutes", generally, or "NRS" means the Nevada Revised Statutes as in
effect on the date of our opinion.
EXHIBIT C
FORM OF OPINION OF XXXXXXX XXXXXX XXXXXX & STENNIS, P.A.
SPECIAL MISSISSIPPI COUNSEL
Definitions in the opinion:
"APPLICABLE MISSISSIPPI LAW" will be defined as those statutes, rules and
regulations of the State of Mississippi, including the Mississippi Gaming
Control Act and the regulations promulgated pursuant thereto, but not any
securities laws of the State of Mississippi or blue sky laws (as to neither body
of law we express an opinion herein), which, in our experience, are normally
applicable both to transactions of the type contemplated by the Documents and to
general business companies which are not engaged in regulated business
activities other than gaming and the sale of liquor.
"APPLICABLE MISSISSIPPI PERMIT" shall mean any permit, certificate,
authorization, approval, consent, license or order of, or filing, registration,
declaration or qualification with, any Mississippi Gaming Authority required to
be made or obtained by Xxx X Xxxxxx, Xxxxxxx X. Xxxxx, the Mississippi
Guarantor, Majestic Investor Holdings, LLC, Majestic Investor, LLC, The Majestic
Star Casino, LLC, The Majestic Star Capital Corp. and Xxxxxx Development, Inc.
pursuant to Applicable Mississippi Laws.
"DOCUMENTS" will be defined as the "Operative Documents," the "Transaction
Documents," the New Credit Facility and the Intercreditor Agreement.
"OPERATIVE DOCUMENTS" will be defined as the Purchase Agreement, the Indenture,
the Member Agreement, the Registration Rights Agreement, the Notes, the
Guarantees, the Security Documents and the Tender Offer Documents.
"SECURITY DOCUMENTS" will be defined as each of the Security Agreement, the
Trademark Security Agreement, the Deed of Trust, the Vessel Mortgage, the
Assignment of Rents and the Mississippi Guarantor Financing Statements.
"TRANSACTION DOCUMENTS" will be defined as the Purchase and Sale Agreement and
the Operative Documents.
Other capitalized terms used but not defined herein shall have the respective
meanings assigned to such terms in the Purchase Agreement of which this Exhibit
C forms a part.
1. Due Organization; Good Standing of the Mississippi
Guarantor. Xxxxxx Mississippi Gaming, LLC (the "MISSISSIPPI GUARANTOR") is a
limited liability company duly organized, validly existing and, based on a
certificate of existence issued by the Mississippi Secretary of State dated
October __, 2003, in good standing under the laws of the State of Mississippi
and has all requisite limited liability company power and authority to conduct
and carry on its business and to own, lease, use and operate its properties and
assets as described in the Offering Circular.
2. Outstanding Interests. All of the outstanding membership
interests in the Mississippi Guarantor have been duly authorized and are validly
issued.
3. Power and Authority. The Mississippi Guarantor has all
requisite limited liability company power and authority to execute, deliver and
perform its obligations under the Documents to which it is a party and to
consummate the Transactions contemplated thereby.
4. Authorization and Enforceability.
(a) Purchase Agreement. The execution and
delivery by the Mississippi Guarantor of the Purchase Agreement and the
performance by the Mississippi Guarantor of the Transactions
contemplated thereby (including without limitation the Offering and the
issuance of the Guarantees in accordance with the Purchase Agreement)
have been duly authorized by the Mississippi Guarantor, and the
Purchase Agreement has been validly executed and delivered by the
Mississippi Guarantor.
(b) Indenture. The execution and delivery by the
Mississippi Guarantor of the Indenture and the performance by the
Mississippi Guarantor of the Transactions contemplated thereby have
been duly authorized by the Mississippi Guarantor, and the Indenture
has been validly executed and delivered by the Mississippi Guarantor.
(c) Registration Rights Agreement. The execution
and delivery by the Mississippi Guarantor of the Registration Rights
Agreement and the performance by the Mississippi Guarantor of the
Transactions contemplated thereby have been duly authorized by the
Mississippi Guarantor, and the Registration Rights Agreement has been
validly executed and delivered by the Mississippi Guarantor.
(d) Guarantee of the Series A Notes. The
execution and delivery by the Mississippi Guarantor of, and the
performance by the Mississippi Guarantor of its obligations under, the
Guarantee to be endorsed on the Series A Notes by the Mississippi
Guarantor have been duly authorized by the Mississippi Guarantor, and
such Guarantee has been validly executed and delivered by the
Mississippi Guarantor.
(e) Guarantee of the Series B Notes. The
execution and delivery by the Mississippi Guarantor of, and the
performance by the Mississippi Guarantor of its obligations under, the
Guarantee to be endorsed on the Series B Notes by the Mississippi
Guarantor have been duly authorized by the Mississippi Guarantor.
(f) Security Documents. With the exception of
the Mississippi Vessel Mortgage, as to which we express no opinion
herein, the execution and delivery by the Mississippi Guarantor of each
of the Security Documents to which the Mississippi Guarantor is a party
and the performance by the Mississippi Guarantor of the Transactions
contemplated thereby (including without limitation the creation, grant,
recording and perfection of the Security Interests, the execution and
filing of the Mississippi Guarantor Financing Statements and the
payment of any fees and taxes in connection therewith) have been duly
authorized by the Mississippi Guarantor, and each of the Security
Documents (with the exception of the Mississippi Vessel Mortgage, as to
which we express no opinion herein) to which the Mississippi Guarantor
is a party has been validly executed and delivered by, the Mississippi
Guarantor to the extent governed by Mississippi law, is the valid and
binding obligation of, the Mississippi Guarantor, enforceable against
the Mississippi Guarantor in accordance with its terms.
5. No Violation. None of the execution or delivery by the
Mississippi Guarantor of, or performance by the Mississippi Guarantor of any of
its obligations under, the Documents,
nor its compliance with the terms and provisions thereof, nor its consummation
of any of the Transactions violate, constitute a breach of or a default (with
the passage of time or otherwise) under, result in the imposition of a Lien on
any assets of the Mississippi Guarantor (except as created by the Indenture, the
Security Documents or the other Documents), or result in an acceleration of
indebtedness pursuant to, (i) its Charter Documents or (ii) any Applicable
Mississippi Law.
6. Permits.
(a) No Permit of the Mississippi Gaming
Commission (the "COMMISSION") or under the Mississippi Gaming Control
Act and the rules and regulations of the Mississippi Gaming Commission
promulgated under such act (the "MISSISSIPPI GAMING LAWS") is required
in connection with, or as a condition to, the execution, delivery or
performance by the Mississippi Guarantor of any of the Documents, the
compliance with the terms and provisions thereof or the consummation of
any of the Transactions, other than (i) such Permits as have been made
or obtained on or prior to the Closing Date, which Permits are in full
force and effect as of the Closing, (ii) those Permits (if any) with
respect to state securities and "blue sky" laws, as to which we express
no opinion, and (iii) those Permits required to be obtained from the
Commission as described in the Offering Circular and as set forth in
qualification paragraph I.(1) of this opinion.
(b) Each of Xxx X. Xxxxxx, Xxxxxxx X. Xxxxx, the
Mississippi Guarantor, The Issuers, Majestic Investor Holdings, LLC, a
Delaware limited liability company, Majestic Investor, LLC, a Delaware
limited liability company (collectively, the "REGULATED PERSONS") has,
to our knowledge, effective as of the Closing, all Permits from the
Commission necessary or advisable under Applicable Mississippi Law to
own an interest in or to own, lease and operate the properties and to
conduct and carry on the businesses as described in the Offering
Circular other than those the failure of which to have could not,
singly or in the aggregate, have a Material Adverse Effect. To our
knowledge, none of the Regulated Persons has received notice that the
Commission is considering limiting, conditioning, suspending,
modifying, revoking or not renewing any such Permit.
7. No Proceedings. To our knowledge, after having made inquiry
to appropriate authorities at the Commission, there are no pending regulatory
actions at the Commission which would result in any limitation, conditioning,
suspension, modification or revocation of any license, the issuance of which is
required by the State of Mississippi, for operation of gaming by the Mississippi
Guarantor at the Fitzgeralds Casino and Hotel in Mississippi. In particular,
there are no such proceedings, initiated or otherwise pending, against any of
the Regulated Persons.
8. Offering Circular. The statements in the Offering Circular
under the headings "Risk Factors--Risks Related to the Notes--Gaming laws,
bankruptcy laws and other laws and regulations may delay or otherwise impede the
trustee's ability to foreclose on the collateral," "Risk Factors--Risks Related
To Our Business--Extensive government regulation continuously impacts our
operations," "Risk Factors--Risks Related To Our Business--You may be required
to dispose of your notes, or we may be required to redeem your notes, as a
result of gaming regulatory matters," and "Government Regulation and
Licensing--Mississippi Gaming Regulation", except for financial data included
therein or omitted therefrom as to which we
express no opinion, have been reviewed by us and insofar as they constitute
summaries of matters of Mississippi law or Mississippi legal matters, they are
accurate in all material respects.
9. UCC Opinions.
(a) Upon the execution by the Mississippi
Guarantor of the Security Agreement and the filing of the Mississippi
Guarantor Financing Statement, in the office of the Chancery Clerk of
Tunica County, Mississippi, and in the office of the Secretary of State
of Mississippi, the security interest granted by the Mississippi
Guarantor in the collateral described in the Security Agreement will be
a valid perfected security interest in such collateral in accordance
with the Uniform Commercial Code as in force and effect in the State of
Mississippi (the "UCC"), and no refiling or re-recording of such
Mississippi Guarantor Financing Statements is required in order to
maintain the security interest of the Secured Party in said collateral,
except continuation statements which are required to be filed within
six (6) months prior to the expiration of five (5) years from the date
of the filing of the original Financing Statements and within six (6)
months prior to the expiration of each five year period from such date
thereafter.
(b) Each of the Deed of Trust and the Assignment
of Rents is in appropriate form for recording in the real estate
records in the Office of the Chancery Clerk of Tunica County,
Mississippi (the "RECORDING OFFICE").
(c) Upon due recordation of the Deed of Trust
and the Assignment of Rents in the Recording Office, such documents, as
applicable, will create, as security for the payment and performance of
the Mississippi Guarantor's obligations secured thereby, (i) a valid,
perfected and enforceable mortgage lien of record on the entire
interest of the Mississippi Guarantor in that portion of the trust
estate located in the State of Mississippi which constitutes real
property (including fixtures to the extent such fixtures constitute
real property) and (ii) a valid, perfected and enforceable security
interest in the Leases and Rents (each as defined in the Deed of Trust
and the Assignment of Rents).
(d) There is no mortgage, mortgage recording,
stamp, intangibles or other similar tax (other than normal filing and
recording fees) required to be paid under the laws of the State of
Mississippi or any political subdivision thereof in connection with the
execution, delivery, recordation, filing or perfection, as applicable,
of any of the Security Documents or the obligations evidenced or
secured thereby.
(e) The laws of the State of Mississippi do not
require a lienholder to make an election of remedies where such
lienholder holds security interests and liens in both the real estate
and the personal property of the debtor or require a lienholder to take
recourse first or solely against its collateral.
(f) A court of the State of Mississippi (or a
federal court sitting in the State of Mississippi) in a properly
presented case should give effect to the choice of New York law set
forth in each Security Document stated to be governed by New York law,
except (i) as to certain provisions of law that may constitute
mandatory provisions of law or that may embody a strong public policy
of the State of Mississippi or with respect to which there may exist a
strong governmental interest in the application of the laws of the
State of Mississippi, or (ii) as to matters of title or procedural
matters related to perfection and enforcement of rights and remedies in
the State of Mississippi. The foregoing opinion is based on the
assumptions that:
1) The closing of the transactions described in
the Security Documents will occur in the State of New York and
the Security Documents will be executed and delivered in the
State of New York; and
2) Payment of the obligations will be made in
New York and one or more of the Secured Parties is located in
New York.
If the law of the State of Mississippi were to apply, the
interest and other amounts to be paid with respect to the Notes would
not be usurious.
(g) It is not necessary under the laws of
Mississippi to enable the Secured Party to enforce its rights under the
Security Documents or by reason of the execution, delivery or
performance of the Security Documents, that the Secured Party be
licensed, qualified or authorized to carry on business in Mississippi;
provided that the Secured Party has no place of business in Mississippi
and that the only business activities of the Secured Party in the State
of Mississippi involve the creating or acquiring of indebtedness,
mortgages and other security interests in real or personal property or
securing or collecting debts or enforcing mortgages and security
interests in property securing the debts, and further provided that
title to any real or personal property acquired by the Secured Party as
a result of the exercise of remedies under the Security Documents and
located in the State of Mississippi will not be held for an
unreasonable period of time pending disposition.
(h) Neither the State of Mississippi nor any
political subdivision thereof has any law pursuant to which a lien
against any real property of the Mississippi Guarantor superior to the
lien created by the Deed of Trust could arise as a result of a
violation of environmental laws or regulations of the State of
Mississippi or any political subdivision thereof. No environmental law
or regulation of the State of Mississippi or any political subdivision
thereof would require any remedial or removal action or certification
of nonapplicability as a condition to the granting of the Deed of Trust
or the foreclosure or the sale of any property of the Mississippi
Guarantor located in the State of Mississippi.
(i) In the event of a partial prepayment of the
Secured Obligations (as defined in the Security Agreement), such
prepayment shall not affect the validity or enforceability of the
Security Documents.
(j) Other than the Mississippi Gaming Laws, none
of the laws of the State of Mississippi will impair in any material
respect the right of the Secured Party to enter into or consummate any
of the Transactions, to take liens on real or personal property located
in the State of Mississippi or to realize upon such real or personal
property, and neither the entering into or consummation of the
Transactions, the enforcement of the Secured Party's rights under the
Deed of Trust or the other Security Documents nor the subsequent taking
of title to the encumbered property though purchase at a foreclosure
sale, pursuant to a power of sale or by taking a deed in lieu of
foreclosure shall in and of itself (a) result in the Secured Party
being deemed to be transacting business, nor (b) require the Secured
Party for the purposes of any law, rule, regulation, order, injunction,
decree or writ of any governmental authority of the State of
Mississippi to qualify to do business, in the State of Mississippi
(whether for general or limited purposes); provided the property
following acquisition of title by an exercise of
the Secured Party's remedies is not held for an unreasonable period of
time pending disposition.
A. Our opinions expressed in paragraph 9 above are
subject to the following qualifications:
1) In the case of proceeds, continuation of perfection
of the security interests therein is limited to the extent set forth in
Section 9-315 of the UCC.
2) Section 552 of the Bankruptcy Code limits the extent
to which property acquired by a debtor after the commencement of a
proceeding may be subject to a security interest arising from a
security agreement entered into by such debtor before the commencement
of such proceeding.
3) A security interest has not been created or perfected
in any property that might be included in a general catch-all category
in a description of collateral in a security agreement or in a
financing statement, such as "assets," "personal property" or "goods,"
unless such property is also described by item or type as provided in
the UCC.
4) We express no opinion as to the validity or
perfection of any security interest in any collateral which consists of
(i) claims that are or will be due from the United States or any state
of the United States or any agency or department of the United States
or any state, (ii) consumer goods, farm products, crops, timber,
minerals or the like (including oil and gas) or accounts resulting from
the sale thereof, beneficial interests in a trust or a decedent's
estate or letters of credit, and (iii) patents, patent applications,
copyrights, trademarks, or trademark applications.
5) We express no opinion as to the priority of any
security interests in any of the collateral.
6) We advise you that the perfection of the security
interests which are perfected by the filing of financing statements
will be terminated (i) under Section 9-507 of the UCC, as to any
collateral acquired by a borrower more than four months after such
borrower changes its name, identity or corporate structure so as to
make the financing statements seriously misleading, unless new
appropriate financing statements are filed before the expiration of
that time; and (ii) as to any collateral which is removed from the
State of Mississippi while subject to a security interest perfected
under the laws of the State, in the event that action is not taken to
perfect the security interest in the jurisdiction to which such
collateral is removed within four (4) months or within the time
permitted by the laws of such jurisdiction, if shorter.
7) To the extent that any of the Security Documents
purport to create a present assignment of a right to receive payment
while allowing the assignor to continue to collect such payments, we
express no opinion as to the perfection of a security interest in the
payments or the right to receive payments.
8) We express no opinion with respect to paragraph 9(a)
above concerning the validity, enforceability or perfection of any
security interest purportedly granted in property excluded from the
scope of Article 9 of the UCC including, without limitation, causes of
action in tort, unearned premiums, leases, rents, insurance and
insurance proceeds (except to the extent constituting proceeds under
the UCC), titled property and judgments.
9) We advise you that the Mississippi Gaming Laws
prohibit an assignment, in whole or in part, of a state gaming license.
To the extent, therefore, that any provision of the Documents purports
to create a security interest in a state gaming license or purports to
provide the secured party with any remedies with respect to such state
gaming license upon default, we express no opinion as to the
enforceability of such security interest or the availability of
remedies with respect to the same. Furthermore, the foreclosure sale of
alcohol is restricted by the Mississippi Alcoholic Beverage Control
Commission and resale may be limited to a state agency.
10) We advise you that, to continue perfection of the
security interest perfected by filing financing statements, a
continuation statement must be filed with the appropriate filing
offices within six (6) months prior to the expiration of five (5) years
from the date of the original filings or last continuations thereof.
B. The enforceability of any party's obligations under
any of the Documents referenced hereinabove is subject to the following:
1) The effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally (including such limitations as may deny giving effect to
waivers of a debtor's or guarantor's rights) and the effect of any
statutory or other law regarding fraudulent conveyances.
2) General principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law)
and no opinion is expressed as to whether any provision is specifically
enforceable in equity.
3) The obligation of the Secured Party to act
reasonably, in good faith and with fairness in exercising rights under
the Documents.
4) Certain applicable laws and judicial rulings that may
limit, impair or delay the enforcement of certain remedies, waivers or
other provisions of the documents referenced hereinabove, but which
will not in our opinion substantially interfere with the practical
realization of the benefits intended to be conferred thereby.
5) Limitations on repossession of property without
judicial process requiring that such action be taken without a breach
of the peace.
6) The statutory right of reinstatement prior to
foreclosure as set forth in Sections 89-1-59 and 75-9-623 of the
Mississippi Code of 1972, as amended, which provide that, upon payment
of the amounts due prior to acceleration with all accrued costs,
attorney's fees and trustee's fees and all taxes and insurance premiums
then due, the indebtedness so accelerated shall be reinstated in
accordance with its original terms.
7) A debtor's rights in property or collateral may be
voluntarily or involuntarily transferred notwithstanding a provision in
a security agreement prohibiting any such transfer or making the
transfer a default, pursuant to Section 75-9-401 of the Mississippi
Code of 1972, as amended.
8) The appointment of a party, such as a lender as
attorney-in-fact or proxy for an adverse party, such as a borrower, may
not be enforceable under principles of equity or as a result of a
conflict between the obligations of an attorney-in-fact or proxy holder
and the adverse interests of the parties.
9) The appointment of a receiver for the property of any
debtor will not be authorized, except as an ancillary part of a
separate action on the debt, whether the debt is secured or unsecured.
10) Either party to an arbitration agreement may revoke
the agreement to arbitrate at any time before an award has been made.
11) To the extent that any of the Security Documents
purport to waive or to affect the rights of third parties who are not
signatories to the Security Documents, such provisions of the Security
Documents are not enforceable against such third parties.
12) The waiver of any applicable statute of limitations
is not enforceable.
13) We express no opinion as to the validity, binding
effect, enforceability or performance of any provision in any of the
Documents to the extent that such provision (i) purports to select the
jurisdiction or venue for litigation in any state or court, purports to
alter or waive requirements for valid service of process or purports to
waive the right to a jury trial, (ii) purports to waive any requirement
of reasonable or diligent performance or other care on the part of the
lenders or holders with respect to the recognition or preservation of
the rights of the lenders or holders to or interest in any property
subject to any security interest or lien granted thereby, (iii)
provides that delays by the lenders or holders will not operate as a
waiver; or (iv) attempts to modify or waive any requirements of
commercial reasonableness or notice.
14) To the extent that any of the Documents or Security
Documents purport to create a present assignment of a right to receive
payment while allowing the assignor to continue to collect such
payments, we express no opinion as to the perfection of a security
interest in the payments or the right to receive payments. Furthermore,
we express no opinion on the irrevocability of licenses or of powers of
attorney, regardless of whether "coupled with an interest".
C. We express no opinion as to compliance with any
environmental laws; ERISA or other pension and employee benefit laws and
regulations; federal and state securities laws and regulations; federal reserve
board margin regulations; any federal admiralty or maritime laws; or federal and
state anti-trust and unfair competition laws and regulations.
D. We have made no examination of any restrictions in
underlying documents on transfer or pledge, and we express no opinion with
respect to (i) the status of title to such property, (ii) the priority of the
liens of the Security Documents or of any advances made pursuant to the Security
Documents, or (iii) the enforceability of the liens of the Security Documents to
the extent enforceability depends upon title to the property described therein.
We advise you that, if the principal amount secured by the Deed of Trust is paid
in full and the Mississippi Guarantor requests cancellation, the liens of the
Deed of Trust will be released and will no longer be enforceable. We further
advise you that, since the three year statutory period for enforcement of the
Deed of Trust will commence on the due dates shown on the Deed of Trust, any
extension or renewal of the indebtedness secured by the Deed of Trust beyond the
original due date must be noted on the margin of the Deed of Trust or amended or
supplemented deeds of trust filed noting the extended date prior to expiration
of the statute of limitations for enforcing the Deed of Trust. We further advise
you that a claim for a deficiency judgment against a borrower will be barred in
a court of the State of Mississippi if not sought within twelve
(12) months after any foreclosure sale.
E. We express no opinion as to the effect of any
regulation, law, covenant or agreement relating to zoning, building codes, use,
occupancy, subdivision or environmental control requirements.
F. Except as provided in paragraph 5 hereof, we express
no opinion as to whether the making of the loans by the Secured Party or whether
the execution, delivery and performance of the Documents and other documents
related thereto violates any law, rule or regulation of any governmental
authority having regulatory jurisdiction over the Secured Party or any legal or
regulatory status or the nature of the business of any Secured Party or because
of any facts specifically pertaining to the Secured Party. Except as provided in
paragraph 6 hereof, we express no opinion as to whether the making of the loans
by the Secured Party or whether their execution, delivery or performance of the
Security Documents requires the consent or approval of, or the giving of notice
to, any such governmental authority.
G. We advise you of the following: In at least one
instance in the past, the Mississippi State Tax Commission (the "TAX
COMMISSION") applied a broad interpretation to the Finance Company Privilege Tax
Law as codified in Sections 27-21-1 through 27-21-19 of the Mississippi Code of
1972. The aforesaid Law levies a statewide privilege tax on any lender other
than a national or state bank lending money secured by a lien on any tangible
personal property and certain specifically listed items located in the State of
Mississippi. The tax is one-fourth of one percentage of the total indebtedness
secured by tangible property located in the State of Mississippi and is payable
annually. If any lender fails to pay the tax, access to the courts of the State
of Mississippi is denied. A twenty-five percent penalty is imposed and failure
to pay also constitutes a misdemeanor subject to a fine. The current position of
the Tax Commission is that the tax is due without regard to traditional "doing
business" issues and the making of any loan secured by personal property located
in the State of Mississippi is sufficient for imposition of the tax and control
of access to the courts. If the Tax Commission is correct in its position, as to
which we give no opinion, certain provisions of this opinion must be construed
in accordance with such position. We are aware of at least one instance in which
the Tax Commission has applied a broad interpretation of the Finance Company
Privilege Tax Law; however, we are not aware of any other instance in which the
Tax Commission has applied such an interpretation of the statute.
H. We advise you of the following:
1) Pursuant to Commission Regulations, certain
transactions such as loan transactions, extensions of credit and
guaranties involving licensees of the Commission must be reported to
the Commission within thirty (30) days after the transaction is
consummated. If, after investigation as the Executive Director of the
Commission deems appropriate, the Commission finds that a reported
transaction is inimical to the public safety, health, welfare, morals,
good order or general welfare of the people of the State of
Mississippi, or would reflect, or tend to reflect, discredit upon the
State of Mississippi or the gaming industry, the Commission may order
the transaction rescinded within such time and upon such terms and
conditions as it deems appropriate.
2) The Mississippi Gaming Laws grant broad powers to the
Commission to require persons directly or indirectly involved with
licensees, such as holders of indebtedness of a gaming licensee, to
apply for a license or finding of suitability.
3) The Mississippi Gaming Laws require approval by the
Commission prior to obtaining possession of or effecting the sale of
gaming devices, or operating gaming facility or of the proceeds from
such sale.
4) The Mississippi Gaming Laws may require the filing of
applications with, and the approval of, the Commission prior to (a) any
re-registration or action similar to re-registration of any securities
of or ownership interests in a licensee of the Commission or a holding
company registered with the Commission pledged as collateral under the
Documents (or any distribution in respect of, in addition to, in
substitution of, or in exchange for, such collateral or any part
thereof); (b) any foreclosure, sale, transfer or other disposition of
the collateral pledged under the Documents; or (c) a change of control
of the Mississippi Guarantor or any other entity registered with the
Commission with respect to the Mississippi Guarantor.
I. We express no opinion as to the enforceability of
Impounds (as defined in the Deed of Trust) on Impositions (as defined in the
Deed of Trust) consisting of penalties and other charges imposed by any Nevada
Gaming Authority.
Our opinion will be subject to standard assumptions, conditions,
exceptions and qualifications customary for transactions of this type that are
subject to the applicable laws of the State of Mississippi.
EXHIBIT D
FORM OF OPINION OF XXXXXXXX XXXXXX & X'XXXXXXX
1. Due Organization; Good Standing of Colorado Guarantor. Xxxxxx
Colorado Gaming, LLC ("COLORADO GUARANTOR") is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Colorado and has all requisite limited liability company power and authority to
conduct and carry on its business and to own, lease, use, and operate its
properties and assets as described in the Offering Circular.
2. Outstanding Interests. All of the outstanding membership
interests in Colorado Guarantor have been duly authorized and are validly
issued.
3. Power and Authority. Colorado Guarantor has all requisite
limited liability company power and authority to execute, deliver and perform
its obligations under the Documents (as defined on the attached Schedule) to
which it is a party and to consummate the Transactions contemplated thereby.
4. Authorization and Enforceability.
(a) Purchase Agreement. The execution and delivery by Colorado
Guarantor of the Purchase Agreement and the performance by
Colorado Guarantor of the Transactions contemplated thereby
(including without limitation the Offering and the issuance of
the Guarantee by Colorado Guarantor in accordance with the
Purchase Agreement) have been duly authorized by Colorado
Guarantor, and the Purchase Agreement has been validly
executed and delivered by Colorado Guarantor.
(b) Indenture. The execution and delivery by Colorado Guarantor of
the Indenture and the performance by Colorado Guarantor of the
Transactions contemplated thereby have been duly authorized by
Colorado Guarantor, and the Indenture has been validly
executed and delivered by Colorado Guarantor.
(c) Registration Rights Agreement. The execution and delivery by
Colorado Guarantor of the Registration Rights Agreement and
the performance by Colorado Guarantor of the Transactions
contemplated thereby have been duly authorized, and the
Registration Rights Agreement has been validly executed and
delivered by Colorado Guarantor.
(d) Guarantee of the Series A Notes. The execution and delivery by
Colorado Guarantor of, and the performance by Colorado
Guarantor of its obligations under, the Guarantee to be
endorsed on the Series A Notes by Colorado Guarantor have been
duly authorized by Colorado Guarantor, and such Guarantee has
been validly executed and delivered by Colorado Guarantor.
(e) Guarantee of the Series B Notes. The execution and delivery by
Colorado Guarantor of, and the performance by Colorado
Guarantor of its obligations
under, the Guarantee to be endorsed on the Series B Notes by
Colorado Guarantor have been duly authorized by Colorado
Guarantor.
(f) Security Documents. The execution and delivery by Colorado
Guarantor of each of the Security Documents (identified on the
attached Schedule) to which Colorado Guarantor is a party and
the performance by Colorado Guarantor of the Transactions
contemplated thereby (including without limitation the
creation, grant, recording, and perfection of the Security
Interests, the execution and filing of financing statements,
and the payment of any fees and taxes in connection therewith)
have been duly authorized by Colorado Guarantor; and each of
the Security Documents to which Colorado Guarantor is a party
has been validly executed and delivered by Colorado Guarantor;
and each of those Security Documents, to the extent subject to
Colorado law (the "COLORADO SECURITY DOCUMENTS"), is the valid
and binding obligation of Colorado Guarantor, enforceable
against Colorado Guarantor in accordance with its terms,
subject to the qualifications set forth in this letter.
5. No Conflict. None of the execution or delivery by Colorado
Guarantor of, or the performance by Colorado Guarantor of any of its obligations
under, the Documents, nor the compliance by Colorado Guarantor with the terms
and provisions thereof, nor the consummation of any of the Transactions
contemplated thereby, will conflict with, violate, constitute a breach of or a
default (with the passage of time or otherwise) under, result in the imposition
of a Lien on any assets of Colorado Guarantor except as created by the
Indenture, the Security Documents or other Documents, or result in an
acceleration of indebtedness pursuant to, (i) the Charter Documents of Colorado
Guarantor or (ii) any Applicable Colorado Law. "APPLICABLE COLORADO LAW" means
those statutes, rules, and regulations of the State of Colorado, including the
Colorado Gaming Laws, which, in our experience, are normally applicable both to
transactions of the type contemplated by the Documents and to general business
companies which are not engaged in regulated business activities other than
limited gaming and the sale of liquor.
6. Permits.
(a) No Permit (including without limitation any Permit of
the Colorado Gaming Commission and any Permit under the statutes and regulations
of the State of Colorado pertaining to the conduct of limited gaming within the
State) which is required under Applicable Colorado Law in connection with, or as
a condition to, the execution, delivery or performance by Colorado Guarantor of
any of the Documents, the compliance with the terms and provisions thereof or
the consummation of any of the Transactions (i) other than such Permits, which
will be in full force and effect on the Closing Date, and (ii) expressly
excluding those Permits (if any) with respect to state securities or "blue sky"
laws, as to which we express no opinion.
(b) With respect to the operation of the limited gaming
casino known as Fitzgeralds and the ownership, occupancy and control of the
Premises within which limited gaming is conducted, each of Colorado Guarantor,
Xxx X. Xxxxxx, Xxxxxxx X. Xxxxx, and the Majestic Entities (as defined below)
(collectively, the "REGULATED PERSONS") has been approved and have all Permits
necessary for the conduct of limited gaming under the applicable gaming laws of
the State of Colorado and the conduct of the activities set forth in the
Offering Circular
relating to the operation of the Fitzgeralds Casino. To our knowledge, none of
the Regulated Persons has received notice that the Colorado Gaming Commission is
considering limiting, conditioning, suspending, modifying, revoking or not
renewing any such Permit. The term "MAJESTIC ENTITIES " means Majestic Investor
Holdings, LLC, a Delaware limited liability company; Majestic Investor, LLC, a
Delaware limited liability company; The Majestic Star Casino, LLC, an Indiana
limited liability company; The Majestic Star Casino Capital Corp., an Indiana
corporation; and Xxxxxx Development, Inc., an Indiana corporation.
(c) [The Colorado Guarantor has been issued a permanent
Liquor License].
7. No Proceedings. To our knowledge, after having made inquiry to
appropriate Colorado gaming regulatory authorities, there are no pending
regulatory actions which would result in any limitation, conditioning,
suspension, modification or revocation of any license, the issuance of which is
required by the State of Colorado, for operation of limited gaming in the
Fitzgeralds Casino. In particular, there are no proceedings, initiated or
otherwise pending, against any of the Regulated Persons.
8. Offering Circular. The information in the Offering Circular
under the headings "Risk Factors--Risks Related to the Notes--Gaming laws,
bankruptcy law and other laws and regulations may delay or otherwise impede the
trustee's ability to foreclose on the collateral," "Risk Factors--Risks Related
To Our Business--Extensive government regulation continuously impacts our
operations," "Risk Factors--Risks Related To Our Business--You may be required
to dispose of your notes, or we may be required to redeem your notes, as a
result of gaming regulatory matters," and "Government Regulation and
Licensing--Colorado Gaming Regulation" has been reviewed by us and, to the
extent such information constitutes statements or matters of Colorado law or
legal conclusions, such information is accurate in all material respects. Our
opinion with reference to the cited sections of the Offering Circular is
strictly limited to matters pertaining to the application of Colorado laws and
regulations concerning the conduct of limited gaming in Colorado. We do not
opine on any financial projection or statements of historical performance of the
gaming property.
9. UCC Opinions.
(a) [The provisions of the authorization letter dated [______],
2003 (the "AUTHORIZATION LETTER "), to the Secured Party, are
sufficient to constitute authorization by Colorado Guarantor
of the filing of the financing statements for purposes of
Section 9-509 of the Uniform Commercial Code of the State of
Colorado (the "COLORADO UCC").]
(b) The provisions of the Deed of Trust are sufficient to
constitute authorization by Colorado Guarantor of the filing
of the fixture financing statement for purposes of Section
9-509 of the Colorado UCC.
(c) By virtue of the Security Agreement, assuming it is effective
under New York law to create in favor of the Secured Party a
valid security interest in the UCC Collateral that is of a
type in which a security interest can be created under Article
9 of the Uniform Commercial Code in effect in the State of New
York (the "NEW
YORK UCC"), under the Colorado UCC, the security interest of
the Secured Party will be perfected in Colorado Guarantor's
rights in that portion of the UCC Collateral pledged by it
upon the later of the attachment of the security interest and
the filing of the Colorado Financing Statement in the Office
of the Secretary of State of Colorado (the "COLORADO FILING
OFFICE"). We express no opinion with respect to (i) money;
(ii) deposit accounts; (iii) letter of credit rights; (iv)
goods covered by a certificate of title statute; (v)
as-extracted collateral, timber to be cut; (vi) any property
subject to a statute, regulation, or treaty of the United
States whose requirements for a security interest's obtaining
priority over the rights of a lien creditor with respect to
the property preempt Section 9-310(a) of the Colorado UCC;
(vii) any patents, copyrights, or trademarks; or (viii) any
goods subject to a negotiable document of title.
(d) By virtue of the Deed of Trust, under the Colorado UCC, the
security interest of the Secured Party will be perfected in
Colorado Guarantor's rights in any Fixture Collateral located
on the real property described on Exhibit _____ to the
Colorado Fixture Financing Statement upon the later of the
attachment of the security interest and the filing of the
Colorado Fixture Financing Statement in the Office of the
Clerk and Recorder of Xxxxxx County, Colorado (the "RECORDING
OFFICE").
(e) You have asked whether Colorado Guarantor is a "registered
organization" as defined in Section 9-102 of the Colorado UCC
for purposes of Section 9-503 of the Colorado UCC. Pursuant to
Sections 7-80-205, 7-80-208, and 7-80-309 of the Colorado
Limited Liability Company Act, once the Secretary of State of
the State of Colorado has "filed" the articles of organization
of a limited liability company, such filing is deemed notice
of the existence of such limited liability company. Based on
our review of the Secretary of State Certificates, we are of
the opinion that under the Colorado UCC and the Colorado
Limited Liability Company Act, Colorado Guarantor is a
"registered organization."
(f) The Deed of Trust and the Assignment of Leases and Rents are
each in appropriate form for recording with the Recording
Office.
(g) Upon due recordation of the Deed of Trust in the Recording
Office, such document will create, as security for the payment
and performance of Colorado Guarantor's obligations secured
thereby, a valid, perfected, and enforceable mortgage lien of
record on real property (including fixtures to the extent such
fixtures constitute real property). Under Colorado law, the
security interest in the Rents (as defined in the Deed of
Trust) is inchoate until a default under the Deed of Trust and
the institution of proceedings by Beneficiary to enforce its
remedies under the Deed of Trust.
(h) There is no mortgage, mortgage recording, stamp, intangibles
or other similar tax (other than normal filing and recording
fees) required to be paid under the laws of the State of
Colorado or any political subdivision thereof in connection
with the execution, delivery, recordation, filing or
perfection, as applicable, of any of the Deed of Trust or the
obligations evidenced or secured thereby.
(i) The laws of the State of Colorado do not require a lienholder
to make an election of remedies where such lienholder holds
security interests and liens in both the real estate and the
personal property of the debtor or require a lienholder to
take recourse first or solely against its collateral.
(j) Colorado has accepted the approach of the Restatement (Second)
Conflicts of Laws Section 187, which provides generally that
the parties to a contract may choose the law that will govern
their contractual rights and duties, provided the chosen state
has a substantial connection to the Transaction. The Colorado
Supreme Court has not addressed directly the question of
whether the parties can choose different law to apply to the
same contract. Colorado law would certainly control the
formation, perfection, and enforcement of the security
interest in real property located in the State of Colorado. It
is not clear whether Colorado would require its usury statute
to apply to the Transactions. However, if Colorado law were
applied to the Security Documents and if the "loan finance
charge" does not exceed an annual percentage rate of 45%, the
loan finance charge would not be usurious. A "loan finance
charge" includes all charges payable by the debtor as an
incident to or condition of the extension of credit.
(k) The Secured Party is not required to register as a foreign
corporation or to qualify to do business in the State of
Colorado solely in order to create or acquire indebtedness,
mortgages, or other security interests in real or personal
property or to enforce such mortgages or security interests in
the property securing such debts.
(l) Neither the State of Colorado nor any political subdivision
thereof has any law pursuant to which a lien against any real
property of Colorado Guarantor superior to the lien created by
the Deed of Trust could arise as a result of a violation of
environmental laws or regulations of the State of Colorado or
any political subdivision thereof.
(m) In the event of a partial prepayment of the Secured
Obligations (as defined in the Security Agreement), such
prepayment shall not affect the validity or enforceability of
the Security Documents.
Based on the foregoing, and subject to the qualifications and
exceptions herein contained, we are of the opinion that there are available to
you adequate remedies for the practical realization of the benefits and security
contemplated by the Colorado Security Documents, assuming appropriate and timely
assertion of rights thereunder, and except for the economic consequences of any
procedural delay or the possibility of expenditure for additional enforcement
costs prior to realization on your security, since a public trustee foreclosure
is probably not possible, given that C.R.S. Sections 00-00-000 and 00-00-000
require the presentation of the original evidence of indebtedness in order to
foreclose or release the lien of the Deed of Trust. In the event of reissuance
of any note for the original notes when the outstanding indebtedness evidenced
thereby is increased or decreased or otherwise modified, the public trustee may
still require presentation of the original notes in addition to any amendments
or
extensions thereof prior to commencing foreclosure or granting a release of the
lien of the Deed of Trust.
Our opinions set forth above are further limited by the following
qualifications:
(i) Enforcement of the Colorado Security Documents may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, or other similar laws of general application
affecting the enforcement of creditors' rights;
(ii) We express no opinion as to the availability of the
remedies of specific performance, injunctive relief or any other equitable
remedy, all of which are subject to the discretion of the court before which
proceedings therefore may be brought;
(iii) With respect to any provisions of the Colorado
Security Documents pursuant to which the Beneficiary (as defined in the Deed of
Trust) attempts to hold itself exempt from liability for or requires Colorado
Guarantor to indemnify and hold Beneficiary harmless from Beneficiary's own
negligence or bad faith, such provisions may not be enforced by a court as being
against public policy or lacking good faith or commercial reasonableness.
(iv) A court might not enforce payment pursuant to the
Colorado Security Documents upon accelerated maturity thereof if such
accelerated maturity is declared as a consequence of the failure of Colorado
Guarantor to perform or observe any provision of the Colorado Security Documents
that a court determines not to be material.
(v) Certain terms and provisions of the Colorado Security
Documents pursuant to which Colorado Guarantor purportedly waives rights
affirmatively granted to it under law may be found by a court to be unreasonable
and/or unenforceable.
(vi) With respect to any provision of a Colorado Security
Document which purports or attempts to constitute a legally binding consent to
the appointment of a receiver or the creation of a receivership upon ex parte
application, such provision may not be enforced by a court in the exercise of
its equity powers.
(vii) With respect to any provision of a Colorado Security
Document which states or implies that the Beneficiary shall not be a "mortgagee
in possession" when it exercises remedies available to it, that provision may
not be enforceable because it is subject to a factual determination by a
reviewing court if challenged.
(viii) The determination as to whether or not a waiver of a
party's rights under the Colorado Security Documents exists is a factual one,
and therefore any provisions of the Colorado Security Documents which require
all waivers to be in writing may not be enforceable.
(ix) Notwithstanding the absolute language contained in
the Deed of Trust and/or Assignment of Leases with respect to the assignment of
rents, the provisions contained therein may only create an inchoate lien which
may have to be perfected subsequent to the occurrence of a default by taking
affirmative action, such as the appointment of a receiver or the taking
possession by the assignee of the rents where permitted under applicable
statutes.
(x) C.R.S. Section 4-9-610 does not permit a secured
party to purchase at a private sale of personal property unless the collateral
is of a type customarily sold in a recognized market or is the subject of widely
distributed standard price quotations. To the extent the provisions of the
Colorado Security Documents give the Beneficiary the right to become the
purchaser at any foreclosure sale, such provisions may be unenforceable for the
foregoing reason.
(xi) The Deed of Trust provides that it is security for
additional indebtedness for which Colorado Guarantor may become liable to
Beneficiary. Although these provisions may be effective as between Beneficiary
and Colorado Guarantor, they are probably not enforceable for those advances
which are not mandatory and not expressly set forth in the Deed of Trust as to
third parties who have perfected their liens or security interests.
(xii) Any provisions of the Colorado Security Documents
that provide for the divestiture of Colorado Guarantor's interest in the
Premises after sale thereof may not be enforceable if they purport to cut off or
convey Colorado Guarantor's right of redemption. Any provisions of the Colorado
Security Documents which provide for a waiver of any statutory redemption
periods are unenforceable.
(xiii) In reviewing the provisions of the Colorado Security
Documents, a court, under Colorado law, will likely apply a good faith and fair
dealing standard.
(xiv) To the extent provisions of the Colorado Security
Documents appoint the Beneficiary an attorney-in-fact for Colorado Guarantor, or
purport to permit the Beneficiary to avoid compliance with its duties and
responsibilities as a mortgagee in possession once it has taken care, custody
and control of the Premises, or to avoid compliance with the duties of a secured
creditor set forth in the Colorado UCC, such provisions may not be enforceable.
(xv) To the extent the Colorado Security Documents purport
to authorize a disposition of personal property (whether either tangible or
intangible) in a manner that is not commercially reasonable, taking into account
all facts and circumstances which exist at the time of such disposition, a court
may require that such disposition be made in a commercially reasonable manner.
(xvi) To the extent that the Colorado Security Documents
permit the Beneficiary to dispose of collateral for an amount less than the fair
market value thereof, such provision may not be enforceable.
(xvii) To the extent the Colorado Security Documents purport
to set forth provisions for the valuation and appraisal of the Premises in the
event of foreclosure, the same may be unenforceable if such provisions conflict
with C.R.S. Section 00-00-000, which requires the Beneficiary to bid at the
foreclosure sale the lesser of the amount of the debt or "at least such owner's
good faith estimate of the fair market value of the property being sold . . .,"
less certain expenses and other statutory exceptions.
(xviii) With respect to any "self-help" rights granted to the
Beneficiary under the Colorado Security Documents, certain of the rights
described therein may not be permitted under
Colorado law. Typically, Colorado law permits a mortgagee to exercise such
self-help remedies if the same can be accomplished without disturbance of the
peace and limits the rights of a lender to the care, custody, control,
safekeeping and preservation of its collateral.
(xix) No opinion is given on the enforceability of any
due-on-encumbrance provisions contained in the Colorado Security Documents.
(xx) With respect to any provisions of the Colorado
Security Documents stating that the same may only be amended or modified in
writing, or stating that the consent of the Beneficiary to any action will only
be effective if in writing, the same may not be enforceable, in that a court in
reviewing the relevant facts and circumstances may determine that a course of
conduct has effected such amendment, modification or consent.
(xxi) Enforcement of any remedy by Beneficiary to take
possession of any collateral secured by the Colorado Security Documents is
subject to the approval of the Colorado Gaming Commission and may require that a
license be issued by the Commission before possession of any of such collateral
can be transferred.
Our opinion will be subject to standard assumptions, conditions,
exceptions and qualifications customary for transactions of this type that are
subject to the applicable laws of the State of Colorado.
The following terms shall have the following respective meanings:
(i) the Pledge Agreement, of even date herewith, between
Xxxxxx Development, Inc., an Indiana corporation
("PARENT"), as pledgor, and the Trustee, as secured
party (the "PLEDGE AGREEMENT");
(ii) the Pledge and Security Agreement, of even date
herewith, among certain of the Majestic Entities,
including the Colorado Guarantor, as pledgors, and
the Trustee, as secured party (the "SECURITY
AGREEMENT");
(iii) the Trademark Security Agreement, of even date
herewith, among certain of the Majestic Entities,
including the Colorado Guarantor, and the Trustee
(the "TRADEMARK SECURITY AGREEMENT");
(iv) the Deed of Trust, Security Agreement and Fixture
Filing with Assignment of Rents, of even date
herewith, among the Colorado Guarantor, as Trustor,
the Public Trustee of the County of Xxxxxx, State of
Colorado, as Trustee, and the Trustee, as Beneficiary
(the "DEED OF TRUST");
(v) the Assignment of Rents, Leases and Profits, of even
date herewith, between the Colorado Guarantor, as
assignor, and the trustee, as assignee (the
"ASSIGNMENT OF LEASES AND RENTS");
(vi) the financing statement on Form UCC-1 listing the
Colorado Guarantor as debtor and Trustee as secured
party (the "COLORADO UCC-1 FINANCING STATEMENT") to
be filed in the Colorado Filing Office.
Capitalized terms used but not defined herein shall have the respective meanings
assigned to such terms in the Purchase Agreement of which this Exhibit D forms a
part.
OPERATIVE DOCUMENTS
Purchase Agreement
Indenture
Member Agreement
Registration Rights Agreement
Notes
Guarantee of Series A Notes
Guarantee of Series B Notes
Security Documents (defined below)
Tender Offer Documents
DOCUMENTS
Operative Documents
Intercreditor Agreement
New Credit Facility
SECURITY DOCUMENTS
Deed of Trust*
Assignment of Leases and Rents*
Pledge Agreement
Security Agreement
Trademark Security Agreement
Colorado UCC-1 Financing Statement*
[Authorization Letter*]
* Colorado Security Documents
EXHIBIT E
FORM OF OPINION OF XXXXXXXXXX, XXXXXXX & XXXXXX, L.L.P.
SPECIAL MARITIME COUNSEL
The Mortgagor is eligible under the relevant laws of the United States
to own and document the Vessel under the laws and flag of the United States of
America, and to operate the Vessel in the coastwise trade of the United States,
and the Mortgagee is eligible under such laws to be a Mortgagee of the Vessel.
The Vessel has been duly documented in the name of the Mortgagor under
the laws of the United States of America. As of the time of issuance of the
Certificate of Ownership dated, the Vessel was subject to no prior recorded
maritime liens or encumbrances.
The Mortgage is a legal, valid and binding obligation of the Mortgagor,
enforceable in accordance with its terms, except (i) as limited by the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally; (ii) as limited by
general principles of equity, whether enforcement is considered in a proceeding
in equity or at law, and the discretion of the court before which any proceeding
therefore may be brought; and (iii) as subject to principles of equitable
subordination. The provisions of the Mortgage are effective to create in favor
of the Mortgagee a valid, perfected and enforceable preferred mortgage lien on
the Vessel pursuant to Chapter 313 of Title 46 of the United States Code (the
"Act").
Upon filing and due recording of the Mortgage in the United States
Coast Guard, National Vessel Documentation Center, the Mortgagee will have a
valid first preferred mortgage lien under Subtitle III of the Act, United State
Code on the Vessel, entitled to all of the benefits and priorities accorded a
first "preferred mortgage" under 46 USC Section 31322, prior to all Liens other
than those expressly granted priority under the Vessel Mortgage Act over the
lien of a first "preferred mortgage," enforceable against the Mortgagor in
accordance with its terms. The National Vessel Documentation Center is the only
office where filing is necessary in order to perfect the Lien of the Mortgage on
the Vessel and the Mortgage is in appropriate form for recording under Subtitle
III of the Act to create, perfect or maintain the Mortgage as a "preferred
mortgage" within the meaning of the Act. The Mortgage secures the payment and
performance of the Secured Obligations (as defined in the Mortgage) and is in
compliance with and does not violate the Act.
Our opinion is subject to the further following qualifications:
(a) We have expressed no opinion as to the legality, validity or
enforceability of any waiver of the right to receive notice,
or the right to demand formal foreclosure in the event of
default, or any waiver of any legal or equitable defense.
Additionally, the enforceability of all rights, remedies and
obligations is subject to compliance with the requirements of
procedural due process.
(n) While the Mortgage applies to the Vessel, her appurtenances,
appliances, etc., certain of the items which are described in
the Granting Clause of the Mortgage as
appurtenances of the Vessel may not be deemed to be vessel
appurtenances, appliances, furniture, etc., and accordingly
may not be the proper subjects of a preferred ship mortgage.
(o) Although the Vessel subject to the Mortgage has been and is
currently documented as a vessel of the United States, some
federal and state court decisions have held that permanently
moored gaming structures are not vessels as a matter of law.
If the Vessel is deemed not to be a vessel under the Act as of
the time of execution of the Mortgage, then the Mortgage would
not have the status of a preferred ship mortgage.
(p) We have relied upon the Mortgagor's representation that as of
this date no action has been taken as to the Vessel which
would have resulted in a change in the dimensions or tonnage
of the Vessel since the time the Vessel was documented.
(q) In the event that the Mortgagee should be holding the Mortgage
for the use and benefit of that percentage of foreign citizens
which would disqualify the Mortgagee from owning or operating
a vessel in the coastwise trade of the United States, the use
of the self help provisions in the Mortgage would not be
available to the Mortgagee, and the Mortgagee would have to
foreclose through a federal court foreclosure action.
(r) Our opinion is based solely on the statutory laws of the
United States of America and the general maritime law of the
United States of America.
The following terms shall have the following respective meanings:
"VESSEL" means the barge FITZGERALDS TUNICA (O.N. 262757).
"MORTGAGOR" means Xxxxxx Mississippi Gaming LLC, a Mississippi limited
liability company.
"MORTGAGE" means that certain first preferred ship mortgage granted by
Xxxxxxxxx on the barge XXXXXXXXXXX TUNICA in favor of the Bank of New York, a
New York banking association, having an address of 000 Xxxxxxx Xxxxxx - 00X, Xxx
Xxxx, XX 00000, as Trustee under the Indenture.
"MORTGAGEE" means The Bank of New York, Trustee.
Capitalized terms used herein without definition shall have the meaning
specified in the Mortgage, or, if not defined in the Mortgage, in the Indenture.
EXHIBIT F
FORM OF OPINION OF ICE MILLER
SPECIAL INDIANA COUNSEL
1. Due Organization; Good Standing.
(a) The Parent is a corporation validly existing as a
corporation under the laws of the State of Indiana and has all
requisite corporate power to conduct and carry on its business and to
own, lease, use and operate its properties and assets as described in
the Offering Circular. Based solely on certificates from public
officials, we confirm that the Parent is qualified to do business in
[ ].
(b) The Company has been duly organized and is
validly existing as a limited liability company under the laws of the
State of Indiana and has all requisite limited liability company power
to conduct and carry on its business and to own, lease, use and operate
its properties and assets as described in the Offering Circular. Based
solely on certificates from public officials, we confirm that the
Company is qualified to do business in [ ].
(c) Capital has been duly organized and is validly
existing as a corporation under the laws of the State of Indiana and
has all requisite corporate power to conduct and carry on its business
as described in the Offering Circular. Based solely on certificates
from public officials, we confirm that Capital is qualified to do
business in [ ].
2. Subsidiaries. All of the outstanding shares of capital stock
of Capital are owned by the Company of record and all of the outstanding
membership interests in the Company are owned by Parent of record.
3. Outstanding Shares and Interests. All of the outstanding
membership interests in the Company have been validly issued and were not issued
in violation of, and are not subject to, any preemptive or any similar rights.
All of the outstanding shares of capital stock of Capital have been duly
authorized, are validly issued, fully paid and nonassessable, and were not
issued in violation of, and are not subject to, any preemptive or similar
rights, and are owned of record by the Company free and clear of all Liens,
except for Liens created by the Indenture, the Security Documents and the New
Credit Facility.
4. No Other Registration Rights. To our knowledge, except for the
Purchase Agreement and the Registration Rights Agreement, there are no
contracts, commitments, agreements, arrangements, understandings or undertakings
of any kind to which any of the Issuers, the Parent or the Guarantors is a
party, or by which any of them is bound, granting to any person the right (i) to
require either of the Issuers or any Subsidiary to file a registration statement
under the Act with respect to any securities of either of the Issuers or any
Subsidiary or requiring either of the Issuers or any Subsidiary to include such
securities with the Notes and the Guarantees registered pursuant to any
registration statement, or (ii) to purchase or offer to purchase any securities
of either of the Issuers or any of their respective affiliates.
5. Power.
(a) The Parent has the corporate power to perform its obligations
under the Transaction Documents to which it is a party and to
consummate the Transactions contemplated thereby.
(b) The Company has the limited liability company power to (i)
own, lease and operate its properties and conducts its
business as currently conducted and as proposed to be
described in the Offering Circular, and (ii) to perform its
obligations under the Transaction Documents to which it is a
party and to consummate the Transactions contemplated thereby.
(c) Capital has the corporate power to (i) own, lease and operate
its properties and conducts its business as currently
conducted and as proposed to be described in the Offering
Circular, and (ii) to perform its obligation under the
Transaction Documents to which it is a party and to consummate
the Transactions contemplated thereby.
6. Authorization and Enforceability.
(a) Purchase Agreement. The Purchase Agreement
has been duly authorized, executed and delivered by each of the
Issuers.
(b) Indenture. The Indenture has been duly
authorized by each of the Issuers, and has been validly executed and
delivered by each of the Issuers.
(c) Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized by each of the
Issuers, and the Registration Rights Agreement has been validly
executed and delivered by each of the Issuers.
(d) Series A Notes. The Series A Notes have been
duly authorized by each of the Issuers for issuance and sale to the
Initial Purchaser pursuant to the Purchase Agreement and have been
validly executed by each of the Issuers.
(e) Series B Notes. The Series B Notes and the
issuance thereof have been duly authorized by each of the Issuers
validly executed by each of the Issuers.
(f) Security Documents. The execution and
delivery by each of the Issuers and the Parent of each of the Security
Documents to which the Issuers or the Parent is a party and the
performance by each of the Issuers and the Parent of the Transactions
contemplated thereby (including the creation, grant, recording and
perfection of the Security Interests), and the filing of the Financing
Statement and the payment of any fees and taxes in connection therewith
have been duly authorized by each of the Issuers and the Parent, and
each of the Security Documents to which the Issuers and the Parent is a
party has been validly executed and delivered by such Issuer.
7. No Violation. None of the execution or delivery by either
Issuer or the Parent of, or performance by the Issuers or the Parent of any of
its obligations under, the Operative
Documents, nor its compliance with the terms and provisions thereof, nor its
consummation of any of the Transactions violate, constitute a breach of or a
default (with the passage of time or otherwise) under, result in the imposition
of a Lien on any assets of the Issuers or the Parent (except as created by the
Indenture, the Security Documents or the other Documents), or result in an
acceleration of indebtedness pursuant to, (i) its respective Charter Documents
or (ii) any Applicable Indiana Law.
8. No Conflict. None of the execution and delivery of any of the
Operative Documents, nor the compliance with the terms and provisions thereof,
nor the consummation of any of the Operative Transactions contemplated thereby
will: (i) violate the Charter Documents of any of the Issuers or Parent; (ii)
result in a breach of any Applicable Agreement (as defined below); (iii) violate
any Applicable Law; or (iv) require any consents, approvals, authorizations or
registrations by the Majestic Entities under any Applicable Law, except such as
may be required under state securities laws in connection with the purchase and
sale of the Notes or as may be required for the perfection of any security
interests (which is addressed in paragraph 14 below).
9. Permits.
(a) No Permit (including any Permit of the
Indiana Gaming Commission (the "COMMISSION") or under the Indiana
Gaming statute and the rules and regulations of the Commission
promulgated under such statute (the "INDIANA GAMING LAWS")) is required
under Applicable Indiana Law in connection with, or as a condition to,
the execution, delivery or performance by the Issuers or the Parent of
any of the Operative Documents, the compliance with the terms and
provisions thereof or the consummation of any of the Transactions,
other than (i) such Permits as have been made or obtained on or prior
to the Closing Date, which Permits are in full force and effect as of
the Closing, (ii) those Permits (if any) with respect to state
securities and "blue sky" laws, as to which we express no opinion, and
(iii) those Permits required to be obtained from the Commission as
described in the Offering Circular.
(b) Each of Xxx X. Xxxxxx, Xxxxxxx X. Xxxxx, the
Issuers, the Parent, Majestic Investor Holdings, LLC, a Delaware
limited liability company and Majestic Investor, LLC, a Delaware
limited liability company, Majestic Investor Capital Corporation, a
Delaware corporation, Xxxxxx Mississippi Gaming, LLC, a Mississippi
limited liability company and Xxxxxx Colorado Gaming, LLC, a Colorado
limited liability company (collectively, the "REGULATED PERSONS") has,
to our knowledge, effective as of the Closing, all Permits from the
Commission necessary or advisable under Applicable Indiana Law to own
an interest in or to own, lease and operate the properties and to
conduct and carry on the businesses as described in the Offering
Circular other than those the failure of which to have could not,
singly or in the aggregate, have a Material Adverse Effect. To our
knowledge, none of the Regulated Persons has received notice that the
Commission is considering limiting, conditioning, suspending,
modifying, revoking or not renewing any such Permit.
10. No Proceedings. To our knowledge, after having made inquiry to
appropriate authorities at the Commission, there are no pending regulatory
actions at the Commission which would result in any limitation, conditioning,
suspension, modification or revocation of any
license, the issuance of which is required by the State of Indiana, for
operation of gaming by the Company of The Majestic Star Casino. In particular,
there are no such proceedings, initiated or otherwise pending, against any of
the Regulated Persons.
11. Offering Circular. The statements in the Offering Circular
under the headings "Risk Factors--Risks Related to the Notes--Gaming laws,
bankruptcy laws and other laws and regulations may delay or otherwise impede the
trustee's ability to foreclose on the collateral," "Risk Factors--Risks
Related To Our Business--Extensive government regulation continuously impacts
our operations," "Risk Factors--Risks Related To Our Business--You may be
required to dispose of your notes, or we may be required to redeem your notes,
as a result of gaming regulatory matters," and "Government Regulation and
Licensing--Indiana Gaming Regulation", except for financial data included
therein or omitted therefrom as to which we express no opinion, have been
reviewed by us and insofar as they constitute summaries of matters of Indiana
law or Indiana legal matters, they are accurate in all material respects.
The Company holds a valid riverboat owner's license issued by the
Commission under Indiana Code 4-33-6.
The Trustee is not required to qualify to do business as a foreign
corporation in the State of Indiana solely by reason of its execution and
delivery of, and its performance of its obligations under the Indenture and the
Security Documents and its acquisition and retention of any security interests
created and perfected thereunder.
12. UCC Opinions.
(a) Each of the Issuers and the Parent (the "INDIANA GRANTORS")
has authorized the filing of the financing statements attached
hereto (the "FINANCING STATEMENTS") naming such Indiana
Grantor as debtor for purposes of Section 9-509 of the Uniform
Commercial Code as now in effect in the State of Indiana (the
"INDIANA UCC").
(b) Each of the Financing Statements includes not only all of the
types of information required by Section 9-502(a) of the
Indiana UCC, but also the types of information without which
the Office of the Secretary of State of the State of Indiana
may refuse to accept such financing statement pursuant to
Section 9-516 of the Indiana UCC.
(c) Each of the Indiana Grantors is a "registered organization"
for purposes of Section 9-102(a)(70) of the Indiana UCC.
(d) Upon the later of the attachment of the security interest and
the filing of the Financing Statements in the Office of the
Secretary of State of the State of Indiana, the security
interest of the Secured Party in the Indiana Grantors' rights
in the Collateral will be perfected to the extent a security
interest in such Collateral can be perfected by the filing of
a financing statement.
(e) No documentary, stamp or intangible tax, transfer tax or
similar charge is payable under Indiana law in connection with
the execution, delivery, filing, recordation or performance of
the Security Documents or the Financing Statements in the
State of Indiana, except filing fees payable in connection
therewith, calculated on a per document or per page basis, or
a combination thereof.
Although certain of the Operative Documents contain choice of law
provisions which state that they are to be governed by and construed in
accordance with the laws of the State of New York, in the event that the laws of
the State of Indiana were applied to govern such Operative Documents, such
Operative Documents will not violate any applicable usury laws of the State of
Indiana.
EXHIBIT G
FORM OF OPINION OF ICE XXXXXX
SPECIAL INDIANA VESSEL COUNSEL
1. The Majestic Star Casino, LLC is a citizen of the United States within
the meaning of 46 USC Section 802, as amended.
2. The Majestic Star Casino, LLC is qualified to own and document the
"MAJESTIC STAR" under the laws of the United States and engage in
operating the "MAJESTIC STAR" in the coastwise trade of the United
States.
3. The Majestic Star Casino, LLC is the sole owner of the whole of the
"MAJESTIC STAR."
4. The "MAJESTIC STAR" is documented with the United States Coast Guard,
Official Number 1057517 in the name of "MAJESTIC STAR."
5. Upon due filing of the Mortgage with the United States Coast Guard,
National Vessel Documentation Center and due execution and filing of
the Satisfaction of Mortgage (a copy of which is attached hereto as
Exhibit B) and payment of the underlying indebtedness related to the
mortgage dated [June 18, 1999] and recorded with the National Vessel
Documentation Center at Book [ ], Page [ ], the "MAJESTIC STAR" will be
free and clear of any lien which is filed or recorded with the United
States Coast Guard National Vessel Documentation Center except the
Mortgage, and the Mortgage will constitute a preferred mortgage on the
"MAJESTIC STAR" in favor of Mortgagee within the meaning of 46 USC
Section 31322 enforceable against the "MAJESTIC STAR" in accordance
with its terms. The National Vessel Documentation Center is the only
office where filing is necessary in order to perfect the lien of the
Mortgage on the "MAJESTIC STAR." No other filing, recordings, re-filing
or other action is necessary under Chapter 313 of Subtitle III of Title
46, United States Code to create, perfect or maintain the Mortgage as a
"Preferred Mortgage" within the meaning of Chapter 313.
6. The Mortgage secures the payment and performance of the Secured
Obligations (as defined in the Mortgage) and is in compliance with and
does not violate Chapter 313 of Subtitle III of Title 46, United States
Code.
