EXHIBIT 10.73
EXECUTION COPY
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ISLE OF CAPRI CASINOS, INC.
(formerly Casino America, Inc.)
(a Delaware corporation)
8 3/4 % Senior Subordinated Notes Due 2009
PURCHASE AGREEMENT
Dated: April 20, 1999
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TABLE OF CONTENTS
PURCHASE AGREEMENT
SECTION 1. Representations and Warranties by the Company and Subsidiary Guarantors. 3
SECTION 2. Sale and Delivery to Initial Purchasers; Closing........................ 16
SECTION 3. Covenants of the Company................................................ 17
SECTION 4. Payment of Expenses..................................................... 19
SECTION 5. Conditions of Initial Purchasers' Obligations........................... 20
SECTION 6. Subsequent Offers and Resales of the Securities......................... 22
SECTION 7. Indemnification......................................................... 25
SECTION 8. Contribution............................................................ 28
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.......... 29
SECTION 10. Termination of Agreement................................................ 29
SECTION 11. Default by One or More of the Initial Purchasers........................ 30
SECTION 12. Notices................................................................. 31
SECTION 13. Parties................................................................. 31
SECTION 14. Governing Law and Time.................................................. 31
SECTION 15. Effect of Headings...................................................... 31
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SCHEDULES
Schedule A - List of Initial Purchasers...................... Sch A-1
Schedule B - Pricing Information............................. Sch B-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel
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ISLE OF CAPRI CASINOS, INC.
(formerly Casino America, Inc.)
(a Delaware corporation)
$390,000,000
8 3/4 % Senior Subordinated Notes due 2009
PURCHASE AGREEMENT
April 20, 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
WASSERSTEIN PERELLA SECURITIES, INC.
as Representatives of the several Initial Purchasers
c/o
Merrill Lynch & Co. Wasserstein Perella Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith 31 West 52nd Street
Incorporated New York, New York 10019-6163
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Isle of Capri Casinos, Inc. (formerly Casino America, Inc.), a
Delaware corporation (the "Company"), Riverboat Corporation of Mississippi, a
Mississippi corporation ("RCM"), Riverboat Corporation of Mississippi-Vicksburg,
a Mississippi corporation ("RCM-Vicksburg"), Riverboat Services, Inc., an Iowa
corporation ("RSI"), CSNO, Inc., a Louisiana corporation ("CSNO"), Louisiana
Riverboat Gaming Partnership, a Louisiana general partnership ("LRGP"), St.
Charles Gaming Company, Inc., a Louisiana corporation ("SCGC"), LRG Hotels,
L.L.C., a Louisiana limited liability company ("LRGH"), Grand Palais Riverboat,
Inc., a Louisiana corporation ("GPRI"), LRGP Holdings, Inc., a Louisiana
corporation ("LRGP Holdings"), P.P.I., Inc., a Florida corporation ("PPI"), Isle
of Capri Casino Colorado, Inc., a Colorado corporation ("Isle Colorado"), Isle
of Capri Casino-Tunica, Inc., a Mississippi corporation ("Isle-Tunica"), Isle of
Capri Hotels-Bossier City, L.L.C., a Louisiana limited
liability company ("Isle Bossier Hotel"), and IOC-Coahoma, Inc., a Mississippi
corporation ("IOC - Coahoma" and together with RCM, RCM-Vicksburg, RSI, CSNO,
LRGP, SCGC, LRGH, GPRI, LRGP Holdings, PPI, Isle Colorado, Isle-Tunica and Isle
Bossier Hotel, the "Subsidiary Guarantors"), confirm their agreement with
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Wasserstein Perella Securities, Inc. ("Wasserstein Perella")
and each of the other Initial Purchasers named in Schedule A hereto (together
with Merrill Lynch and Wasserstein Perella, the "Initial Purchasers," which term
shall also include any initial purchaser substituted as hereinafter provided in
Section 11 hereof), for whom Merrill Lynch and Wasserstein Perella are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company and the purchase by the Initial Purchasers, acting
severally and not jointly, of the respective principal amounts set forth in said
Schedule A of $390,000,000 aggregate principal amount of the Company's Senior
Subordinated Notes due 2009 (the "Notes").
The Notes are to be issued pursuant to an indenture to be dated as of
April 23, 1999 (the "Indenture") among the Company, the Subsidiary Guarantors
and State Street Bank & Trust Company, as trustee (the "Trustee"). The Notes
will be unconditionally guaranteed by the Subsidiary Guarantors on a senior
subordinated basis pursuant to the terms of the Indenture (the "Subsidiary
Guarantees"). As used herein, the term "Securities" shall include the Notes and
the Subsidiary Guarantees. Notes issued in book-entry form will be issued to
Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant to a
letter agreement, to be dated as of the Closing Time (as defined in Section
2(b)) (the "DTC Agreement"), among the Company, the Trustee and DTC. As used
herein, the term "Operative Documents" refers to this Agreement, the Notes, the
Subsidiary Guarantees, the Indenture, that certain Registration Rights Agreement
among the parties hereto (the "Registration Rights Agreement"), and the notes
and the subsidiary guarantees to be issued in exchange for the Securities
pursuant to the Registration Rights Agreement.
The Company and the Subsidiary Guarantors understand that the Initial
Purchasers propose to make an offering of the Securities on the terms and in the
manner set forth herein and agree that the Initial Purchasers may resell,
subject to the conditions set forth herein, all or a portion of the Securities
to purchasers ("Subsequent Purchasers") at any time after this Agreement has
been executed and delivered. The Securities are to be offered and sold through
the Initial Purchasers without being registered under the Securities Act of
1933, as amended (the "1933 Act"), in reliance upon exemptions therefrom.
Pursuant to the terms of the Securities and the Indenture, investors that
acquire Securities may resell or otherwise transfer such Securities only if such
Securities are hereafter registered under the 1933 Act or if an exemption from
the registration requirements of the 1933 Act is available (including the
exemption afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation S")
of the rules and regulations promulgated under the 1933 Act by the Securities
and Exchange Commission (the "Commission")).
The Company has prepared and delivered to each Initial Purchaser
copies of a preliminary offering memorandum dated April 5, 1999 (the
"Preliminary Offering Memorandum") and has prepared and will deliver to each
Initial Purchaser, on the date hereof or the next succeeding day, copies of a
final offering memorandum dated April 20, 1999 (the "Final
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Offering Memorandum"), each for use by such Initial Purchaser in connection with
its solicitation of purchases of, or offering of, the Securities. "Offering
Memorandum" means, with respect to any date or time referred to in this
Agreement, the most recent offering memorandum (whether the Preliminary Offering
Memorandum or the Final Offering Memorandum, or any amendment or supplement to
either such document), including any documents incorporated therein by
reference, which has been prepared and delivered by the Company to the Initial
Purchasers in connection with their solicitation of purchases of, or offering
of, the Securities.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which are incorporated by reference in the Offering Memorandum; and all
references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by
reference in the Offering Memorandum.
SECTION 1. Representations and Warranties by the Company and
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Subsidiary Guarantors. The Company and the Subsidiary Guarantors represent and
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warrant to each Initial Purchaser as of the date hereof and as of the Closing
Time referred to in Section 2(b) hereof, and agree with each Initial Purchaser,
as follows:
(i) Offering Memorandum. The Offering Memorandum does not,
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and at the Closing Time will not, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation, warranty and
agreement shall not apply to statements in or omissions from the Offering
Memorandum made in reliance upon and in conformity with information
furnished to the Company in writing by any Initial Purchaser through
Merrill Lynch or Wasserstein Perella expressly for use in the Offering
Memorandum.
(ii) Incorporated Documents. The Offering Memorandum as
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delivered from time to time shall incorporate by reference the most recent
Annual Report of the Company on Form 10-K filed with the Commission and
each Quarterly Report of the Company on Form 10-Q and each Current Report
of the Company on Form 8-K filed with the Commission since the end of the
fiscal year to which such Annual Report relates. The documents incorporated
or deemed to be incorporated by reference in the Offering Memorandum at the
time they were or hereafter are filed with the Commission complied and will
comply in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), and, when read together with the other information in the
Offering Memorandum, at the time the Offering Memorandum was issued and at
the Closing Time, did not and will not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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(iii) Independent Accountants. The accountants who certified
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the financial statements and supporting schedules included in the Offering
Memorandum are independent public accountants with respect to the Company
and its subsidiaries within the meaning of Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants and its interpretations and rulings thereunder. As used herein,
"subsidiaries" has the meaning ascribed thereto in Regulation S-X under the
1933 Act.
(iv) Financial Statements. The financial statements,
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together with the related notes, included in the Offering Memorandum
present fairly in all material respects the financial condition of the
Company and its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders' equity and cash flows of the Company
and its consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved, except (in the case of those supplying quarterly
information) as to the absence of footnotes and subject to normal year-end
adjustments. The selected historical financial data and the summary
financial information included in the Offering Memorandum present fairly,
in all material respects, the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Offering Memorandum. The pro forma financial
data of the Company and its subsidiaries and the related notes thereto
included in the Offering Memorandum present fairly, in all material
respects, the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases described
therein, the assumptions used in the preparation thereof were made in good
faith and are believed by the Company to be reasonable and the adjustments
used therein are believed by the Company to be appropriate to give effect
to the transactions and circumstances referred to therein. Except as set
forth in the Offering Memorandum, the historical consolidated financial
statements of the Company together with the notes thereto forming part of
the Offering Memorandum comply as to form in all material respects with the
requirements applicable to financial statements required to be included in
registration statements on Form S-3 under the 1933 Act. The forward-looking
statements contained in the Offering Memorandum are based upon good faith
estimates and assumptions believed by the Company and the Subsidiary
Guarantors to be reasonable at the time made.
(v) No Material Adverse Change. Since the respective dates
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as of which information is given in the Offering Memorandum, except as
otherwise stated therein, (A) there has been no event or condition that
could be reasonably expected to result in a material adverse change in the
condition, financial or otherwise, or in the results of operations,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries, other
than those in the ordinary course of
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business, which are material with respect to the Company and its
subsidiaries considered as one enterprise and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
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organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Final Offering Memorandum and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified as
a foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) Good Standing of Designated Subsidiaries. Each
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Subsidiary Guarantor and each other "significant subsidiary" of the Company
(as such term is defined in Rule 1-02 of Regulation S-X) (collectively, the
"Designated Subsidiaries") has been duly organized and is validly existing
as an entity in good standing under the laws of the jurisdiction of its
incorporation, has all requisite power (corporate or otherwise) and
authority to own, lease and operate its properties and to conduct its
business as described in the Final Offering Memorandum and is duly
qualified as a foreign entity to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or to be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed in the
Offering Memorandum, all of the issued and outstanding capital stock of
each Designated Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly or
through wholly-owned subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of the Designated Subsidiaries was
issued in violation of any preemptive or similar rights of any
securityholder of such Designated Subsidiary.
(viii) Capitalization. The authorized, issued and outstanding
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capital stock of the Company is as set forth in the Offering Memorandum in
the column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations, agreements or
employee benefit plans referred to in the Offering Memorandum or pursuant
to the exercise of convertible securities or options referred to in the
Offering Memorandum). The shares of issued and outstanding capital stock of
the Company and each of its subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company or any of its
subsidiaries was issued in violation of the preemptive or other similar
rights of any securityholder of the Company or any of its subsidiaries.
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(ix) Authorization of Agreements. This Agreement has been
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duly authorized, executed and delivered by the Company and the Subsidiary
Guarantors and is a legal, valid and binding agreement of the Company and
the Subsidiary Guarantors enforceable against each of them in accordance
with its terms except as the enforcement hereof may be limited by (A)
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally, (B) general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law) and (C) with respect to rights of indemnification or
contribution, federal or state securities laws or principles of public
policy. The Registration Rights Agreement has been duly authorized and,
when duly executed and delivered in accordance with its terms by each of
the parties thereto, will constitute a legal, valid and binding agreement
of the Company and the Subsidiary Guarantors enforceable against each of
them in accordance with its terms except as the enforcement thereof may be
limited by (A) bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally, (B)
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and (C) with respect to
rights of indemnification or contribution, federal or state securities laws
or principles of public policy.
(x) Authorization of the Indenture. The Indenture has been
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duly authorized by the Company and the Subsidiary Guarantors and, when
executed and delivered by the Company, the Subsidiary Guarantors and the
Trustee, will constitute a valid and binding agreement of the Company and
the Subsidiary Guarantors, enforceable against each of them in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xi) Authorization of the Securities. The Notes and the
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Subsidiary Guarantees have been duly authorized and, at the Closing Time,
will have been duly executed by the Company and the Subsidiary Guarantors,
respectively, and, when authenticated, issued and delivered in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor as provided in this Agreement, will constitute valid and
binding obligations of the Company and the Subsidiary Guarantors,
respectively, enforceable against them in accordance with their terms, and
the notes and subsidiary guarantees to be issued in exchange for the
Securities pursuant to the Registration Rights Agreement have been duly and
validly authorized by the Company and the Subsidiary Guarantors,
respectively, and if and when duly authenticated in accordance with the
terms of the Indenture and delivered in accordance with the exchange offer
provided for in the Registration Rights Agreement, will constitute valid
and binding obligations of the Company and the Subsidiary Guarantors,
respectively, enforceable
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against them in accordance with their terms, except in each case as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture.
(xii) Description of Certain Operative Agreements. The
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Securities, the Indenture and the Registration Rights Agreement will
conform in all material respects to the respective statements relating
thereto contained in the Final Offering Memorandum.
(xiii) Absence of Defaults and Conflicts. None of the Company
---------------------------------
or any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture, the Registration Rights
Agreement, the Securities and any other agreement or instrument entered
into or issued or to be entered into or issued by the Company or any
Subsidiary Guarantor in connection with the transactions contemplated
hereby or and the consummation of the transactions contemplated herein and
therein (including the tender offer (the "Tender Offer") and consent
solicitation (the "Consent Solicitation") with respect to the Company's 12
1/2% Senior Secured Notes due 2003 (the "Senior Secured Notes"), the
execution and delivery of the First Supplemental Indenture pursuant to the
terms of the Consent Solicitation (the "First Supplemental Indenture"), the
defeasance of any Senior Secured Notes not tendered for repurchase by the
Company in the Tender Offer (the "Defeasance"), the execution of that
certain Credit Agreement between the Company, the Subsidiary Guarantors and
CIBC Oppenheimer Corp. (the "Bank Facility") and the incurrence of
indebtedness thereunder by the Company upon the initial funding under the
Bank Facility (the Tender Offer, the Consent Solicitation, the execution
and delivery of the First Supplemental Indenture, the Defeasance and the
execution and delivery of, and the incurrence of such indebtedness under,
the Bank Facility are collectively referred to herein as the "Related
Transactions"), the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Offering
Memorandum under the caption "Use of Proceeds") and compliance by the
Company and the Subsidiary Guarantors with their obligations hereunder and
under the Operative Agreements have been duly authorized by all necessary
action (corporate or otherwise) and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or a Repayment
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Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to the Agreements and Instruments,
except for such conflicts, breaches or defaults or liens, charges or
encumbrances that are disclosed in the Offering Memorandum or that, singly
or in the aggregate, would not result in a Material Adverse Effect, nor
will such action result in any violation of the provisions of the charter
or by-laws of the Company or any of its subsidiaries or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its subsidiaries or any of
their assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any of its
subsidiaries.
(xiv) Absence of Labor Dispute. No labor dispute with the
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employees of the Company or any subsidiary exists or, to the knowledge of
the Company, is threatened, and the Company is not aware of any existing or
threatened labor disturbance by the employees of its or any subsidiary's
principal suppliers, manufacturers or contractors, which, in either case,
may reasonably be expected to result in a Material Adverse Effect. None of
the Company and its subsidiaries has violated (i) any federal, state or
local law or foreign law relating to discrimination in hiring, promotion or
pay of employees, (ii) any applicable wage or hour laws or (iii) any
provision of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules and regulations thereunder, which in any
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such event could be reasonably expected to have a Material Adverse Effect.
(xv) Absence of Proceedings. Except as disclosed in the
----------------------
Offering Memorandum, there is no (a) action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any of its
subsidiaries, (b) statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency or that has, to the Company's
knowledge, been proposed by any governmental body and that could be
reasonably expected to be enacted, adopted or issued or (c) injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction that has been issued in each case which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets of the Company or any of its subsidiaries or the
consummation of the transactions contemplated by the Operative Documents or
the consummation of the Related Transactions or the performance by the
Company and the Subsidiary Guarantors of their obligations hereunder. The
aggregate of all pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
Offering Memorandum, including
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ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xvi) Possession of Intellectual Property. The Company and
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its subsidiaries own or possess, or can acquire on reasonable terms,
adequate licenses, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary to
carry on the business now operated by them, and neither the Company nor any
of its subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, individually or in the
aggregate, would result in a Material Adverse Effect.
(xvii) Absence of Further Requirements. No filing with, or
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authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
(including without limitation the Louisiana Gaming Control Board, the
Louisiana Riverboat Gaming Enforcement Division of the Louisiana State
Police, the Mississippi Gaming Commission, the Florida Department of
Business and Professional Regulation Division of Pari-Mutuel Wagering and
the Colorado Department of Revenue Division of Gaming (collectively the
"Gaming Authorities")) or any other person is necessary or required for the
performance by the Company and the Subsidiary Guarantors of their
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement or for the due execution, delivery or
performance of the Indenture by the Company and the Subsidiary Guarantors,
or the consummation of the Related Transactions, except such as have been
already obtained or made prior to the Closing Date or as may be required to
be obtained under the 1933 Act and state securities laws as provided in the
Registration Rights Agreement.
(xviii) Possession of Licenses and Permits. The Company and its
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subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies,
including without limitation the Gaming Authorities, necessary to conduct
the business now operated by them, except where failure to possess such
Governmental Licenses would not, individually or in the aggregate, have a
Material Adverse Effect; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, individually or in the aggregate,
have a Material Adverse Effect; all of the Governmental Licenses are valid
and in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse
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Effect; and no event has occurred which would allow, after notice or
passage of time or both, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to, the
revocation or modification of any such Governmental Licenses which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect. To
the knowledge of the Company no facts or circumstances exist that could be
reasonably expected to prevent the renewal of the existing Governmental
Licenses of the Company and its subsidiaries or result in a materially
adverse modification of such existing Governmental Licenses in connection
with the annual or other periodic gaming license renewal process undertaken
by the Louisiana Gaming Control Board and the Louisiana Riverboat Gaming
Enforcement Division of the Louisiana State Police or the renewal process
of any other Gaming Authority. Neither the Company nor any of its
subsidiaries has any reason to believe that any Governmental License
necessary to conduct their business as described in the Offering Memorandum
will not be granted or renewed upon application or that any relevant Gaming
Authority.
(xviii) Title to Property. The Company and its subsidiaries
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have good and marketable title to all real property owned by the Company
and its subsidiaries and good title to all other properties owned by them,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such as
(a) are described in the Offering Memorandum or (b) do not, individually or
in the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Offering Memorandum, are in full force
and effect, and neither the Company nor any of its subsidiaries has any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any of its subsidiaries under any
of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or any subsidiary thereof to the continued possession
of the leased or subleased premises under any such lease or sublease.
(xix) Environmental Laws. Except as described in the Offering
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Memorandum and except such matters as would not, individually or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company nor
any of its subsidiaries is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, legally binding
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of human
health, safety or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to
the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively,
-10-
"Hazardous Materials") or to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its subsidiaries have all Governmental Licenses required under any or
all applicable Environmental Laws and are each in compliance with their
requirements or such Governmental Licenses, (C) there are no pending or, to
the Company's knowledge, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating to or
arising out of any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or Environmental Laws.
(xx) Investment Company Act. The Company is not, and upon
----------------------
the issuance and sale of the Notes as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will not be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(xxi) Similar Offerings. Neither the Company nor any of its
-----------------
affiliates, as such term is defined in Rule 501(b) under the 1933 Act
(each, an "Affiliate"), has, directly or indirectly through any agent
(provided no representation is made as to the Initial Purchasers or any
person acting on their behalf), solicited any offer to buy, sold or offered
to sell or otherwise negotiated in respect of, or will solicit any offer to
buy, sell or offer to sell or otherwise negotiate in respect of, in the
United States or to any United States citizen or resident, any security
which is or would be integrated with the sale of the Securities in a manner
that would require the Securities to be registered under the 1933 Act.
(xxii) Rule 144A Eligibility. To the Company's knowledge, the
---------------------
Securities are eligible for resale pursuant to Rule 144A and will not be,
at the Closing Time, of the same class as securities listed on a national
securities exchange registered under Section 6 of the 1934 Act, or quoted
in a U.S. automated interdealer quotation system.
(xxiii) No General Solicitation. None of the Company, its
-----------------------
Affiliates or any person acting on its or any of their behalf (other than
the Initial Purchasers, as to whom the Company makes no representation) has
engaged or will engage, in connection with the offering of the Securities,
in any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the 1933 Act.
(xxiv) No Registration Required. Subject to compliance by the
------------------------
Initial Purchasers with the representations and warranties set forth in
Section 2 and the
-11-
procedures set forth in Section 6 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial
Purchasers and to each Subsequent Purchaser in the manner contemplated by
this Agreement and the Offering Memorandum to register the Securities under
the 1933 Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The Indenture complies as to
form, in all material respects, with the requirements of the Trust
Indenture Act and the rules and regulations of the Commission promulgated
thereunder. No stop order or similar order or decree preventing the use of
the Offering Memorandum or any order or decree asserting that any of the
transactions contemplated by this Agreement are subject to the registration
requirements of the 1933 Act has been issued or, to the knowledge of the
Company, is threatened.
(xxv) Reporting Company. The Company is subject to the
-----------------
reporting requirements of Section 13 or Section 15(d) of the 1934 Act.
(xxvi) No Directed Selling Efforts. With respect to those
---------------------------
Securities sold in reliance on Regulation S, (A) none of the Company, its
Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company makes no representation) has
engaged or will engage in any directed selling efforts within the meaning
of Regulation S and (B) each of the Company and its Affiliates and any
person acting on its or their behalf (other than the Initial Purchasers, as
to whom the Company makes no representation) has complied and will comply
with the offering restrictions requirement of Regulation S.
(xxvii) Taxes and Tax Returns. All United States federal income
---------------------
tax returns of the Company and its subsidiaries required by law to be filed
on or prior to the date hereof and, at the Closing Time, on or prior to the
Closing Time, have been filed and all taxes due pursuant to such returns or
otherwise assessed, which are due and payable, have been paid, except
assessments against which appeals have been or will be promptly taken and
as to which adequate reserves have been provided. The United States federal
income tax returns of the Company through the Company's 1996 fiscal year
have been settled and no assessment in connection therewith has been made
against the Company. The Company and its subsidiaries have filed all other
tax returns that are required to have been filed by them pursuant to any
applicable foreign, state, local or other law except insofar as the failure
to file such returns would not result in a Material Adverse Effect, and has
paid all taxes due pursuant to such returns or pursuant to any assessment
received by the Company or its subsidiaries, except for such taxes, if any,
as are being contested in good faith and as to which adequate reserves have
been provided.
(xxviii) Internal Accounting. The Company and its subsidiaries
-------------------
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization, (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
-12-
maintain accountability for assets, (C) access to assets is permitted only
in accordance with management's general or specific authorization and (D)
the recorded accounting for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxix) Insurance. The Company and its subsidiaries carry or
---------
are entitled to the benefits of insurance in such amounts and covering such
risks as the Company reasonably believes to be prudent for the business and
operations of the Company and its subsidiaries. All such insurance is in
full force and effect. None of the Company or its subsidiaries has received
notice from any insurer or agent of any insurer that substantial capital
improvements or other expenditures will be required in order to continue
such insurance coverage.
(xxx) Registration Rights. Except for those certain rights
-------------------
granted in connection with the Company's acquisition of a 100% interest in
the Isle-Bossier City and the rights granted pursuant to the Registration
Rights Agreement, there are no persons with registration rights or other
similar rights to have any securities registered pursuant to the
registration statement to be filed pursuant to the Registration Rights
Agreement or otherwise registered by the Company under the 1933 Act.
(xxxi) Solvency. The Company and the Subsidiary Guarantors
--------
are, and immediately after the Closing Time will be, Solvent. As used
herein, the term "Solvent" means, with respect to any person on a
particular date, that on such date (A) the fair market value of the assets
of such person is greater than the total amount of liabilities (including
contingent liabilities) of such person, (B) the present fair salable value
of the assets of such person is greater than the amount that will be
required to pay the probable liabilities of such person on its debts as
they become absolute and matured, (C) such person is able to realize upon
its assets and pay its debts and other liabilities, including contingent
obligations, as they mature and (D) such person does not have unreasonably
small capital. Upon the issuance of the Securities, the assets of the
Company and the Subsidiary Guarantors will not constitute unreasonably
small capital to carry out their respective businesses as described in the
Offering Memorandum, including capital needs of the Company and the
Subsidiary Guarantors taking into account projected capital requirements
and capital availability.
(xxxii) No Default on Senior Indebtedness. No event of default
---------------------------------
exists under any contract, indenture, mortgage, loan agreement, note, lease
or other agreement or instrument constituting Senior Indebtedness (as
defined in the Indenture).
(xxxiii) Market Manipulation. None of the Company, its
-------------------
subsidiaries or any of their respective officers, directors or controlling
persons has 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 any
security of the Company to facilitate the sale or resale of the Securities.
-13-
(xxxiv) Affiliate Transaction. No relationship, direct or
---------------------
indirect, exists between or among any of the Company or any Affiliate of
the Company, on the one hand, and any director, officer, stockholder,
customer or supplier of any of them, on the other hand, that would be
required to be disclosed in a registration statement on Form S-3 pursuant
to the 1933 Act or by rules and regulations promulgated thereunder by the
Commission which is not described in the Offering Memorandum or is not
described as would be so required.
(xxxv) Information. The Company has not distributed and, prior
-----------
to the later to occur of (i) the Closing Time and (ii) completion of the
distribution of the Securities, will not distribute any offering material
in connection with the offering and sale of the Securities other than the
Final Offering Memorandum, the Preliminary Offering Memorandum or other
materials, if any, permitted by the 1933 Act and approved by the
Representatives.
(xxxvi) Regulations T, U and X. None of the execution, delivery
----------------------
and performance of this Agreement, the issuance and sale of the Securities,
the application of the proceeds from the issuance and sale of the
Securities and the consummation of the transactions contemplated thereby as
set forth in the Offering Memorandum, will violate Regulations T, U or X
promulgated by the Board of Governors of the Federal Reserve System.
(xxxvii) Events of Default. Assuming that the Indenture had been
-----------------
executed and delivered prior to or as of the date hereof, there exist no
conditions that would constitute a default (or an event which with notice
or the lapse of time, or both, would constitute a default) under the
Indenture.
(xxxviii) Brokerage. Except pursuant to this Agreement, there are
---------
no contracts, agreements or understandings between either of the Company or
any of its subsidiaries and any other person that would give rise to a
valid claim against the Initial Purchasers for a brokerage commission,
finder's fee or like payment in connection with the issuance, purchase and
sale of the Securities. The Company and the Subsidiary Guarantor will hold
harmless and indemnify each of the Initial Purchasers and each person
affiliated with or under common control with Initial Purchaser for all
losses, liabilities, claims, damages and expenses incurred by the Initial
Purchasers as a result of the incurrence of a breach of the representation
contained in this paragraph (xxxviii).
(xxxix) Construction and Expansion. (a) Except as otherwise set
--------------------------
forth in the Offering Memorandum or to the extent that the failure to have
or obtain any such license, certificate, permit, authorization, approval,
franchise or other right would not have a Material Adverse Effect on the
timely completion of such Project, the Company and its subsidiaries have
all governmental licenses, certificates, permits, authorizations,
approvals, franchises or other rights (including all building permits and
all authorizations from the Gaming Authorities) necessary to permit the
construction and expansion of the Company's Bossier City hotel and the
Company's planned Tunica County casino
-14-
described in the Offering Memorandum (each a "Project"), in each case as
construction has progressed through the Closing Time. Construction of the
Projects is expected to be completed within the time frame set forth in the
Offering Memorandum and within the budgets set forth in the Offering
Memorandum, subject to such changes as the Company does not reasonably
foresee as of the date hereof.
(b) Neither the Company nor any of its subsidiaries has any
knowledge of any factor or condition that could reasonably be expected to
result in the termination or material impairment of the completion of
either Project or the beginning of operations of either Project other than
such factors as are described in the Offering Memorandum.
(xl) Public Officials. None of the Company, any of its
----------------
subsidiaries or, to the Company's knowledge, any affiliate or
representative acting on behalf of the Company or any of its subsidiaries
has at any time (A) made any unlawful contribution relating to political
activity or (B) made any payment to any federal, state or local government
officer or official, or any other person charged with similar public or
quasi-public duties, or customers or suppliers other than payments which do
not constitute a violation of the law of the United States or any
jurisdiction thereof.
(xli) Year 2000. Except as disclosed in the Offering
---------
Memorandum, neither the Company nor any Subsidiary Guarantor has any
knowledge of any reason that the Company and the subsidiaries will fail to
timely achieve Year 2000 Compliance before the end of 1999. Except as
disclosed in the Offering Memorandum, the costs of achieving Year 2000
Compliance (as hereinafter defined) are not reasonably expected to have a
Material Adverse Effect on the results of operations or financial condition
of the Company and its subsidiaries considered as a single enterprise. As
used herein, "Year 2000 Compliance" means that the information technology
of the Company and its subsidiaries will accurately receive, provide and
process date/time data from, into and between the twentieth and twenty-
first centuries, including the years 1999 and 2000, and leap year
calculations and will not malfunction, cease to function, or provide
invalid or incorrect results as a result of date/time data. As used herein,
"Information Technology" means computer software, computer hardware
(whether general or specific purpose) or other similar or related automated
or computerized items (including such items embedded in gaming equipment)
that are owned, leased or used on by the Company and any of its
subsidiaries in their business and operations.
SECTION 2. Sale and Delivery to Initial Purchasers; Closing
------------------------------------------------
(a) Notes. On the basis of the representations and warranties herein
-----
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Initial Purchaser, severally and not jointly, and each
Initial Purchaser, severally and not jointly, agrees to purchase from the
Company, at the price set forth in Schedule B, the aggregate principal amount of
Notes set forth in Schedule A opposite the name of such Initial Purchaser, plus
any additional principal amount of Notes which such Initial Purchaser may become
obligated to
-15-
purchase pursuant to the provisions of Section 11 hereof, and the Subsidiary
Guarantors agree to execute and deliver the Subsidiary Guarantees of such Notes.
(b) Payment. Payment of the purchase price for, and delivery of
-------
certificates for, the Notes shall be made at the office of Milbank, Tweed,
Hadley & McCloy LLP, 601 South Figueroa Street, Los Angeles, California 90017,
or at such other place as shall be agreed upon by the Representatives and the
Company, at 10:00 A.M. (eastern time) on April 23, 1999 (unless postponed in
accordance with the provisions of Section 11), or such other time not later than
ten business days after such date as shall be agreed upon by the Representatives
and the Company (such time and date of payment and delivery being herein called
the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account or accounts designated by the Company, against
delivery to the Representatives for the respective accounts of the Initial
Purchasers of certificates for the Securities to be purchased by them. It is
understood that each Initial Purchaser has authorized the Representatives, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Securities which it has agreed to purchase. Merrill
Lynch or Wasserstein Perella, individually and not as representatives of the
Initial Purchasers, may (but shall not be obligated to) make payment of the
purchase price for the Securities to be purchased by any Initial Purchaser whose
funds have not been received by the Closing Time, but such payment shall not
relieve such Initial Purchaser from its obligations hereunder.
(c) Denominations; Registration. Certificates for the Notes shall be
---------------------------
in definitive form, registered in the name of Cede & Co., as nominee of DTC, or
in such denominations and registered in such names as the Representatives may
request in writing at least one full business day before the Closing Time. The
certificates representing the Securities shall be made available for examination
by the Initial Purchasers not later than 3:00 P.M. on the last business day
prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
Initial Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will,
-------------------
during the period prior to the completion of the resale of the Securities by the
Initial Purchasers, furnish to each Initial Purchaser, without charge, such
number of copies of the Preliminary Offering Memorandum, the Final Offering
Memorandum and any amendments and supplements thereto and documents incorporated
by reference therein as such Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events. The Company will
------------------------------------
immediately notify each Initial Purchaser, confirm each such notice in writing,
of (x) except for the filings made in connection with the transactions
contemplated by the Registration Rights Agreement, any filing made by the
Company of information relating to the offering of the Securities with any
securities exchange or any other securities regulatory body in the United States
or any other jurisdiction, and (y) prior to the completion of the placement of
the Securities by the Initial Purchasers as evidenced by a notice in writing
from Merrill Lynch to the Company, any material
-16-
changes in or affecting the condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise which (i) make any statement in the
Offering Memorandum false or misleading in any material respect or (ii) if not
disclosed in the Offering Memorandum would constitute a material omission
therefrom. In such event or if during such time any event shall occur as a
result of which it is necessary, in the reasonable opinion of any of the
Company, its counsel, the Initial Purchasers or counsel for the Initial
Purchasers, to amend or supplement the Final Offering Memorandum in order that
the Final Offering Memorandum not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances then existing, the
Company will forthwith amend or supplement the Final Offering Memorandum by
preparing and furnishing to each Initial Purchaser an amendment or amendments
of, or a supplement or supplements to, the Final Offering Memorandum (in form
and substance satisfactory in the reasonable opinion of counsel for the Initial
Purchasers) so that, as so amended or supplemented, the Final Offering
Memorandum will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The Company will
------------------------------------------------
advise each Initial Purchaser promptly of any proposal to amend or supplement
the Final Offering Memorandum and will not effect such amendment or supplement
without the consent of the Initial Purchasers, which consent shall not be
unreasonably withheld or delayed. Neither the consent of the Initial Purchasers,
nor the Initial Purchaser's delivery of any such amendment or supplement, shall
constitute a waiver of any of the conditions set forth in Section 5 hereof.
(d) Qualification of Securities for Offer and Sale. The Company will
----------------------------------------------
use its best efforts, in cooperation with the Initial Purchasers, to qualify the
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions as the Representatives may designate and will
maintain such qualifications in effect as long as required for the sale of the
Securities; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(e) Rating of Securities. The Company shall take all reasonable
--------------------
action necessary to enable Standard & Poor's Ratings Services, a division of
McGraw Hill, Inc. ("S&P"), and Moody's Investors Service Inc. ("Moody's") to
provide their respective credit ratings of the Notes.
(f) DTC. The Company will cooperate with the Representatives and use
---
its best efforts to permit the Notes to be eligible for clearance and settlement
through the facilities of DTC.
-17-
(g) Use of Proceeds. The Company will use the net proceeds received
---------------
by it from the sale of the Notes in the manner specified in the Final Offering
Memorandum under "Use of Proceeds".
(h) Restriction on Sale of Securities. During a period of ninety (90)
---------------------------------
days from the date of the Offering Memorandum, the Company will not, without the
prior written consent of Merrill Lynch, directly or indirectly, issue, sell,
offer or agree to sell, grant any option for the sale of, or otherwise dispose
of, any other debt securities of the Company or securities of the Company that
are convertible into, or exchangeable for, the Notes or such other debt
securities, other than the Bank Facility and the notes to be issued pursuant to
the terms of the Registration Rights Agreement.
(i) PORTAL Designation. The Company will use its best efforts to
------------------
permit the Notes to be designated PORTAL securities in accordance with the rules
and regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL Market.
(j) Reporting Requirements. The Company, during the period when the
----------------------
Final Offering Memorandum is required to be delivered pursuant to Section
6(a)(vii) hereof, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by the 1934
Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses
-------------------
(a) Expenses. The Company will pay all expenses (other than fees and
--------
expenses of counsel for the Initial Purchasers, except for such fees and
expenses as are described in clause (iv) below which shall be paid by the
Company) incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing, delivery to the Initial Purchasers and
any filing of the Offering Memorandum (including financial statements and any
schedules or exhibits and any document incorporated therein by reference) and of
each amendment or supplement thereto, (ii) the preparation, issuance and
delivery of the certificates for the Securities to the Initial Purchasers,
including any transfer taxes, any stamp or other duties payable upon the sale,
issuance and delivery of the Securities to the Initial Purchasers and any
charges of DTC in connection therewith, (iii) the fees and disbursements of the
Company's counsel, accountants and other advisors, (iv) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Initial Purchasers in connection therewith and in connection
with the preparation of the Blue Sky Survey, any supplement thereto, (v) the
fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture and the Securities,
(vi) any fees payable in connection with the rating of the Notes and (vii) any
fees and expenses payable in connection with the initial and continued
designation of the Notes as PORTAL securities under the PORTAL Market Rules
pursuant to NASD Rule 5322.
(b) Termination of Agreement. If this Agreement is terminated by the
------------------------
Representatives in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the
-18-
Company shall reimburse the Initial Purchasers for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Initial Purchasers.
SECTION 5. Conditions of Initial Purchasers' Obligations. The
---------------------------------------------
obligations of the several Initial Purchasers hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions.
(a) Opinion of Counsel for Company. At the Closing Time, the
------------------------------
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Mayer, Brown & Platt, counsel for the Company, and Phelps
Dunbar, L.L.P., Brownstein, Hyatt, Farber & Strickland, P.C. and Allan B.
Solomon, Esq. in form and substance satisfactory to counsel for the Initial
Purchasers, together with signed or reproduced copies of such letter for each of
the other Initial Purchasers substantially to the effect set forth in Exhibit A
hereto, and the opinion of Becker & Poliakoff, P.A. as to such matters of
Florida law as the Initial Purchasers may reasonably request and the opinion of
Boles, Boles & Ryan as to such Louisiana gaming regulation matters as the
Initial Purchasers may reasonably request.
(b) Opinion of Counsel for Initial Purchasers. At the Closing Time,
-----------------------------------------
the Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Milbank, Tweed, Hadley & McCloy LLP, counsel for the Initial
Purchasers, together with signed or reproduced copies of such letter for each of
the other Initial Purchasers with respect to the matters set forth in paragraphs
(i), (ii), (iii), (v), (vi), (vii), (xiv) and the penultimate paragraph of
Exhibit A-1 hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
New York and the federal law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(c) Officers' Certificate. At the Closing Time, there shall not have
---------------------
been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the results of operations, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the President or a Vice
President of the Company and the Subsidiary Guarantors and of the chief
financial or chief accounting officer of the Company, dated as of the Closing
Time, to the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties in Section 1 hereof are true and correct
with the same force and effect as though expressly made at and as of the Closing
Time, and (iii) the Company and the Subsidiary Guarantors have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Time.
(d) Accountants' Comfort Letter. On the date hereof, the
---------------------------
Representatives shall have received from Ernst & Young LLP a letter dated such
date, in form and substance
-19-
satisfactory to the Representatives, together with signed or reproduced copies
of such letter for each of the other Initial Purchasers containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to Initial Purchasers with respect to the financial statements and
certain financial information contained in the Final Offering Memorandum.
(e) Bring-down Comfort Letter. At the Closing Time, the
-------------------------
Representatives shall have received from Ernst & Young LLP a letter, dated as of
the Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (d) of this Section, except that the
date as to when such accounting procedures have been performed shall be a date
not more than three business days prior to the Closing Time.
(f) Maintenance of Rating. At the Closing Time, the Notes shall be
---------------------
rated at least B3 by Moody's and B by S&P, and the Company shall have delivered
to the Representatives a letter dated the Closing Time, from each such rating
agency, or other evidence satisfactory to the Representatives, confirming that
the Notes have such ratings; and since the date of this Agreement, there shall
not have occurred a downgrading in the rating assigned to the Notes or any of
the Company's other debt securities by any "nationally recognized statistical
rating agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such securities rating agency shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Notes or any of the Company's other
debt securities.
(g) PORTAL. At the Closing Time, the Notes shall have been designated
------
for trading on PORTAL.
(h) Related Transactions. At the Closing Time, the Company and its
--------------------
subsidiaries shall have consummated the Related Transactions upon terms and
conditions satisfactory to the Initial Purchasers.
(i) Additional Documents. At the Closing Time, counsel for the
--------------------
Initial Purchasers shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company
and the Subsidiary Guarantors in connection with the issuance and sale of the
Securities as herein contemplated shall be reasonably satisfactory in form and
substance to the Representatives and counsel for the Initial Purchasers.
(j) Termination of Agreement. If any condition specified in this
------------------------
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 7, 8 and 9 shall survive any such termination and remain
in full force and effect.
-20-
SECTION 6. Subsequent Offers and Resales of the Securities.
-----------------------------------------------
(a) Offer and Sale Procedures. Each of the Initial Purchasers and the
-------------------------
Company hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Securities:
(i) Offers and Sales only to Qualified Institutional Buyers. Offers
-------------------------------------------------------
and sales of the Securities shall only be made (A) to persons whom the
offeror or seller reasonably believes to be qualified institutional buyers,
as defined in Rule 144A under the 1933 Act ("Qualified Institutional
Buyers") or (B) to non-U.S. persons outside the United States, as defined
in Regulation S under the 1933 Act, to whom the offeror or seller
reasonably believes offers and sales of the Securities may be made in
reliance upon Regulation S under the 1933 Act. Each Initial Purchaser
severally agrees that it will not offer, sell or deliver any of the
Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws
thereof, and that it will take at its own expense whatever action is
required to permit its purchase and resale of the Securities in such
jurisdictions.
(ii) No General Solicitation. No general solicitation or general
-----------------------
advertising (within the meaning of Rule 502(c) under the 1933 Act) will be
used in the United States in connection with the offering or sale of the
Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
---------------------------------
Subsequent Purchaser of Securities acting as a fiduciary for one or more
third parties, each third party shall, in the judgment of the applicable
Initial Purchaser, be a Qualified Institutional Buyer or a non-U.S. person
outside the United States.
(iv) Subsequent Purchaser Notification. Each Initial Purchaser will
---------------------------------
take reasonable steps to inform, and cause each of its U.S. Affiliates to
take reasonable steps to inform, persons acquiring Securities from such
Initial Purchaser or affiliate, as the case may be, in the United States
that the Securities (A) have not been and will not be registered under the
1933 Act, (B) are being sold to them without registration under the 1933
Act in reliance on Rule 144A or in accordance with another exemption from
registration under the 1933 Act, as the case may be, and (C) may not be
offered, sold or otherwise transferred except (1) to the Company, (2)
outside the United States in accordance with Regulation S, or (3) inside
the United States in accordance with (x) Rule 144A to a person whom the
seller reasonably believes is a Qualified Institutional Buyer that is
purchasing such Securities for its own account or for the account of a
Qualified Institutional Buyer to whom notice is given that the offer, sale
or transfer is being made in reliance on Rule 144A or (y) pursuant to
another available exemption from registration under the 1933 Act.
(v) Restrictions on Transfer. The transfer restrictions and the
------------------------
other provisions set forth in the Final Offering Memorandum under the
heading
-21-
"Notice to Investors", including the legend required thereby, shall apply
to the Securities except as otherwise agreed by the Company and the Initial
Purchasers.
(vi) Delivery of Final Offering Memorandum. Each Initial
-------------------------------------
Purchaser will, prior or simultaneously with the confirmation of the sale
of the Securities, deliver to each purchaser of the Securities from such
Initial Purchaser, in connection with its original distribution of the
Securities, a copy of the Final Offering Memorandum, as amended and
supplemented at the date of such delivery.
(b) Covenants of the Company. The Company covenants with each
------------------------
Initial Purchaser as follows:
(i) Integration. The Company agrees that it will not and will
-----------
cause its Affiliates not to, directly or indirectly, solicit any offer to
buy, sell or make any offer or sale of, or otherwise negotiate in respect
of, securities of the Company of any class if, as a result of the doctrine
of "integration" referred to in Rule 502 under the 1933 Act, such offer or
sale would render invalid (for the purpose of (i) the sale of the
Securities by the Company to the Initial Purchasers, (ii) the resale of the
Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the
resale of the Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the 1933 Act provided by
Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or
otherwise.
(ii) Rule 144A Information. The Company agrees that, in order
---------------------
to render the Securities eligible for resale pursuant to Rule 144A under
the 1933 Act, while any of the Securities remain outstanding, it will make
available, upon request, to any holder of Securities or prospective
purchasers of Securities the information specified in Rule 144A(d)(4),
unless the Company furnishes information to the Commission pursuant to
Section 13 or 15(d) of the 1934 Act.
(iii) Restriction on Repurchases. Until the expiration of two
--------------------------
years after the original issuance of the Securities, the Company will not,
and will cause its Affiliates not to, resell any Securities which are
"restricted securities" (as such term is defined under Rule 144(a)(3) under
the 1933 Act), whether as beneficial owner or otherwise (except as agent
acting as a securities broker on behalf of and for the account of customers
in the ordinary course of business in unsolicited broker's transactions).
(c) Qualified Institutional Buyer. Each Initial Purchaser severally
-----------------------------
and not jointly represents and warrants to, and agrees with, the Company that it
is a Qualified Institutional Buyer within the meaning of Rule 144A under the
1933 Act and an "accredited investor" within the meaning of Rule 501(a) under
the 1933 Act (an "Accredited Investor").
(d) Resale Pursuant to Rule 903 of Regulation S or Rule 144A. Each
--------------------------------------------------------
Initial Purchaser understands that the Securities have not been and will not be
registered under the 1933
-22-
Act and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the 1933 Act or pursuant to an exemption from the registration requirements of
the 1933 Act. Each Initial Purchaser severally represents and agrees, that,
except as permitted by Section 6(a) above, it has offered and sold Securities
and will offer and sell Securities (i) as part of their distribution at any time
and (ii) otherwise until forty days after the later of the date upon which the
offering of the Securities commences and the Closing Time, only in accordance
with Rule 903 of Regulation S, Rule 144A under the 1933 Act or another
applicable exemption from the registration requirements of the 1933 Act.
Accordingly, neither the Initial Purchasers, their affiliates nor any persons
acting on their behalf have engaged or will engage in any directed selling
efforts with respect to Securities sold hereunder pursuant to Regulation S, and
the Initial Purchasers, their affiliates and any person acting on their behalf
have complied and will comply with the offering restriction requirements of
Regulation S. Each Initial Purchaser severally agrees that, at or prior to
confirmation of a sale of Securities pursuant to Regulation S, it will have sent
to each distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases Securities from it or through it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the
United States Securities Act of 1933 (the "Securities Act") and may
not be offered or sold within the United States or to or for the
account or benefit of U.S. persons (i) as part of their distribution
at any time and (ii) otherwise until forty days after the later of the
date upon which the offering of the Securities commenced and the date
of closing, except in either case in accordance with Regulation S or
Rule 144A under the Securities Act. Terms used above have the meaning
given to them by Regulation S."
Terms used in the above paragraph have the meanings given to them by
Regulation S.
-23-
(e) Each Initial Purchaser, severally and not jointly, represents and
warrants to and agrees with the Company that (i) it has not offered or
sold, and prior to the date six months after the Closing Date will not
offer or sell, any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations
1995; (ii) it has complied and will comply with all applicable provisions
of the Financial Services Act 1986 and the Public Offers of Securities
Regulations 1995 with respect to anything done by it in relation to the
Securities in, from or otherwise involving the United Kingdom; and (iii) it
has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1996 or is a person to whom such document may otherwise lawfully be issued
or passed on.
(f) Additional Representations and Warranties of Initial Purchasers.
---------------------------------------------------------------
Each Initial Purchaser severally represents and agrees that it has not entered
and will not enter into any contractual arrangements with respect to the
distribution of the Securities, except with its affiliates or with the prior
written consent of the Company.
SECTION 7. Indemnification.
---------------
(a) Indemnification of Initial Purchasers. The Company and the
-------------------------------------
Subsidiary Guarantors, jointly and severally, agree to indemnify and hold
harmless each Initial Purchaser and each person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act, and each person who is an affiliate of or under common control
with an Initial Purchaser, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Preliminary Offering Memorandum or the Final Offering Memorandum (or
any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 7(d) below) any such
settlement is effected with the written consent of the Company; and
-24-
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch) reasonably in investigating, preparing to defend or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to
-------- -------
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Initial Purchaser through Merrill Lynch or Wasserstein Perella
expressly for use in the Offering Memorandum (or any amendment thereto); and
provided, further, that neither the Company nor any Subsidiary Guarantor shall
- -------- -------
be liable to any Initial Purchaser or any person who controls an Initial
Purchaser under this subsection (a) with respect to any loss, liability, claim,
damage or expense resulting from any such untrue statement or alleged untrue
statement or omission or alleged omission if such Initial Purchaser did not send
or give to the person to whom it sold Securities, at or prior to the written
confirmation of such sale, a Final Offering Memorandum or revised Final Offering
Memorandum (in each case excluding documents incorporated by reference), as the
case may be, if such Final Offering Memorandum or revised Final Offering
Memorandum contained a correction of such untrue statement or alleged untrue
statement or omission or alleged omission and if the Company has made available
copies thereof to such Initial Purchaser prior to the confirmation of such sale.
(b) Indemnification of Company. Each Initial Purchaser severally
--------------------------
agrees to indemnify and hold harmless the Company, the Subsidiary Guarantors and
each person, if any, who controls the Company or a Subsidiary Guarantor within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Offering Memorandum in reliance upon and in conformity
with written information furnished to the Company by such Initial Purchaser
through Merrill Lynch or Wasserstein Perella expressly for use in the Offering
Memorandum.
(c) Actions against Parties; Notification. Each indemnified party
-------------------------------------
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 7(a)
above, counsel to the indemnified parties shall be selected by Merrill Lynch,
and, in the case of parties indemnified pursuant to Section 7(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such
-25-
action; provided, however, that counsel to the indemnifying party shall not
-------- -------
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section or Section 8 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
--------------------------------------------------
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 7(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 8. Contribution. If the indemnification provided for in Section 7
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Subsidiary Guarantors on the one hand and the Initial Purchasers on the other
hand from the offering of the Securities pursuant to this Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Subsidiary Guarantors on the one hand and of the Initial Purchasers on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Subsidiary
Guarantors on the one hand and the Initial Purchasers on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Subsidiary Guarantors and the total
-26-
underwriting discount received by the Initial Purchasers, bear to the aggregate
initial offering price of the Securities.
The relative fault of the Company and the Subsidiary Guarantors on the
one hand and the Initial Purchasers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or a Subsidiary Guarantor or
by the Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Subsidiary Guarantors and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to this
Section were determined by pro rata allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing to defend or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities purchased and sold by it hereunder exceeds
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act, and each person who is an affiliate of or under common control
with an Initial Purchaser, shall have the same rights to contribution as such
Initial Purchaser, and each person, if any, who controls the Company or a
Subsidiary Guarantor within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
such Subsidiary Guarantor. The Initial Purchasers' respective obligations to
contribute pursuant to this Section are several in proportion to the principal
amount of Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 9. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
-27-
Initial Purchaser or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Initial Purchasers.
SECTION 10. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may terminate this
--------------------
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representatives, impracticable to market the Securities
or to enforce contracts for the sale of the Securities, or (iii) if trading in
any securities of the Company has been suspended or materially limited by the
Commission or the NASDAQ National Market, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the NASDAQ National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the NASD
or any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
-----------
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7, 8 and 9 shall survive such termination and remain in full force and
effect.
SECTION 11. Default by One or More of the Initial Purchasers. If
------------------------------------------------
one or more of the Initial Purchasers shall fail at the Closing Time to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Initial Purchasers, or any other initial purchasers, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed
10% of the aggregate principal amount of the Notes to be
purchased hereunder, each of the non-defaulting Initial
Purchasers shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Initial
Purchasers, or
-28-
(b) if the number of Defaulted Securities exceeds 10% of
the aggregate principal amount of the Notes to be purchased
hereunder, this Agreement shall terminate without liability on
the part of any non-defaulting Initial Purchaser.
No action taken pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Offering Memorandum or in
any other documents or arrangements. As used herein, the term "Initial
Purchaser" includes any person substituted for an Initial Purchaser under this
Section.
-29-
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchasers shall be directed to Merrill Lynch at North Tower, World Financial
Center, New York, New York 10281, attention of General Counsel and to
Wasserstein Perella at 31 West 52nd Street, New York, New York 10019-6163,
attention of General Counsel, with a copy to Milbank, Tweed, Hadley & McCloy LLP
at 601 South Figueroa St, 31st Floor, Los Angeles, California 90017, attention
of Kenneth J. Baronsky. Notices to the Company and the Subsidiary Guarantors
shall be directed to it at 711 Washington Loop, Second Floor, Biloxi,
Mississippi, attention of Rexford A. Yeisley, with a copy to Mayer, Brown &
Platt, 190 LaSalle Street, Chicago, Illinois 60602, attention of Paul W. Theiss.
SECTION 13. Parties. This Agreement shall inure to the benefit of
-------
and be binding upon the Initial Purchasers, the Company and the Subsidiary
Guarantors and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Initial Purchasers, the Company and the Subsidiary
Guarantors and their respective successors and the controlling persons and
officers and directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Initial Purchasers, the Company and the Subsidiary
Guarantors and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED
----------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
-30-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all other counterparts, will become a binding
agreement between the Initial Purchasers and the Company and Subsidiary
Guarantors in accordance with its terms.
Very truly yours,
ISLE OF CAPRI CASINOS, INC.
By: ____________________________________
Title:
RIVERBOAT CORPORATION OF MISSISSIPPI
By: ____________________________________
Title:
RIVERBOAT CORPORATION OF MISSISSIPPI-VICKSBURG
By: ____________________________________
Title:
RIVERBOAT SERVICES, INC.
By: ____________________________________
Title:
CSNO, INC.
By: ____________________________________
Title:
LOUISIANA RIVERBOAT GAMING PARTNERSHIP
By: ____________________________________
Title:
ST. CHARLES GAMING COMPANY, INC.
By: ____________________________________
Title:
LRG HOTELS, L.L.C.
By: ____________________________________
Title:
GRAND PALAIS RIVERBOAT, INC.
By: ____________________________________
Title:
LRGP HOLDINGS, INC.
By: ____________________________________
Title:
PPI, INC.
By: ____________________________________
Title:
ISLE OF CAPRI CASINO COLORADO, INC.
By: ____________________________________
Title:
ISLE OF CAPRI CASINO-TUNICA, INC.
By: ____________________________________
Title:
-2-
IOC-COAHOMA, INC.
By: ____________________________________
Title:
ISLE OF CAPRI HOTELS-BOSSIER CITY, L.L.C.
By: ____________________________________
Title:
-3-
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _________________________________
Authorized Signatory
BY: WASSERSTEIN PERELLA SECURITIES, INC.
By: _________________________________
For themselves and as Representatives of the other Initial
Purchasers named in Schedule A hereto.
-4-
SCHEDULE A
Principal
Amount of
Name of Initial Purchaser Notes
----------
Merrill Lynch, Pierce, Fenner & Smith Incorporated $146,250,000
Wasserstein Perella Securities, Inc. $146,250,000
CIBC Oppenheimer Corp. $ 78,000,000
Jefferies & Company, Inc. $ 19,500,000
------------
Total $390,000,000
============
Sch A-1
SCHEDULE B
ISLE OF CAPRI CASINOS, INC.
$390,000,000 Senior Subordinated Notes due 2009
1. The initial public offering price of the Securities shall be 100%
of the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the
Securities shall be 97.50% of the principal amount thereof.
3. The interest rate on the Securities shall be 8 3/4% per annum.
4. The Notes are redeemable, in whole in part, at the option of the
Company, at any time on or after April 15, 2004 at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest to the applicable redemption date, if redeemed during the 12-
month period beginning on April 15 of the years indicated below.
Year Percentage
---- ----------
2004 104.375%
2005 102.917%
2006 101.458%
2007 100.000%
5. On or before April 15, 2002, the Company may, at its option, use
the net proceeds of a Public Equity Offering to redeem up to 35% of the Notes at
108.750% of the principal amount thereof.