Exhibit 1.1
DIAMOND JO, LLC
THE OLD EVANGELINE DOWNS CAPITAL CORP.
$233,000,000 8 3/4 % SENIOR SECURED NOTES DUE 2012
PURCHASE AGREEMENT
March 25, 2004
JEFFERIES & COMPANY, INC.
11100 Santa Monica Boulevard
10th Floor
Los Angeles, California 90025
Ladies and Gentlemen:
Each of Diamond Jo, LLC, a Delaware limited liability company (the
"COMPANY"), The Old Evangeline Downs Capital Corp., a Delaware corporation
("CAPITAL" and, together with the Company, the "ISSUERS"), and each of the
entities listed on the signature pages hereto under the heading "Guarantors"
(the "GUARANTORS") hereby agrees with you as follows:
1. ISSUANCE OF SECURITIES. The Issuers propose to issue and sell to
Jefferies & Company, Inc. (the "INITIAL PURCHASER"), and the Initial Purchaser
proposes to purchase, $233,000,000 aggregate principal amount of the Issuers' 8
3/4% Senior Secured Notes due 2012, Series A (together with the Guarantees (as
defined below) endorsed thereon, the "SERIES A NOTES"). The Series A Notes will
be issued pursuant to an indenture (the "INDENTURE"), to be dated as of the
Closing Date (as defined below), by and among the Issuers, the Guarantors and
U.S. Bank National Association, as trustee (the "TRUSTEE"). The Series A Notes
and the Series B Notes (as defined below), each with the Guarantees endorsed
thereon, are collectively referred to herein as the "NOTES."
Pursuant to the Indenture, each of the Guarantors and any future
guarantor which becomes a party to the Indenture, will jointly and severally,
fully and unconditionally guarantee, on a senior secured basis, to each holder
of Notes and the Trustee, the payment and performance of the Issuers'
obligations under the Indenture, the Notes and the Security Documents (as
defined below), including the payment of principal, interest, premium, if any,
and Liquidated Damages (as defined in the Indenture), if any, on the Notes (the
"GUARANTEES").
Pursuant to the terms of the Security Documents, all of the
respective obligations of the Issuers and the Guarantors under the Indenture,
the Notes and the Guarantees will be secured by security interests in, or
pledges of (the "SECURITY INTERESTS") substantially all of the assets (other
than certain excluded assets) of, and all of the shares of capital stock of and
membership interests in (the "COLLATERAL"), the Issuers, the Guarantors and the
Issuers' future domestic restricted subsidiaries who become parties thereto, as
set forth in the Offering Circular (as defined below).
The Series A Notes will be offered and sold to the Initial Purchaser
pursuant to an exemption from the registration requirements under the Securities
Act of 1933, as amended (the "ACT"). The Issuers have prepared a preliminary
offering circular, dated March 15, 2004 (the "PRELIMINARY OFFERING CIRCULAR"),
and a final offering circular, dated March 31, 2004 (the "OFFERING CIRCULAR"),
relating to the offer and sale of the Series A Notes (the "OFFERING").
Upon original issuance thereof, and until such time as the same is
no longer required under the Indenture or the applicable requirements of the
Act, the Series A Notes shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS
(OR SUCH OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k)
UNDER THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY
NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE
ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE
ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR
SALE IN CONNECTION WITH, ANY
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DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE ISSUERS' AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE
IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY
OTHER APPLICABLE JURISDICTION.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions hereof, the Issuers shall issue and sell to the Initial
Purchaser (and, in order to induce the Initial Purchaser to purchase the Series
A Notes, the Guarantors shall enter into the Guarantees and the Issuers and the
Guarantors shall grant the Security Interests), and the Initial Purchaser agrees
to purchase from the Issuers, $233,000,000 aggregate principal amount of Series
A Notes. The purchase price for the Series A Notes shall be 95.346% of the
principal amount thereof.
3. TERMS OF OFFERING. The Initial Purchaser has advised the Issuers
that the Initial Purchaser will make offers to sell (the "EXEMPT RESALES") the
Series A Notes purchased by the Initial Purchaser hereunder on the terms set
forth in the Offering Circular, as amended or supplemented, solely to (a)
persons whom the Initial Purchaser reasonably believes to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBS"), (b)
non-U.S. persons in reliance upon Regulation S under the Act ("REGULATION S
PURCHASERS"), and (c) a limited number of institutional "accredited investors,"
as defined in Rule 501(a)(1), (2), (3) or (7) under the Act that make certain
representations and warranties to the Initial Purchaser and the Issuers
("ACCREDITED INVESTORS" and, collectively with QIBs and Regulation S Purchasers,
"ELIGIBLE PURCHASERS), which representations and warranties are set forth in the
form of Accredited Investor Letter attached as Annex A to the Offering Circular
(the "ACCREDITED INVESTOR LETTER").
Holders of the Series A Notes (including subsequent transferees)
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be executed on and dated as of the
Closing Date. Pursuant to the Registration Rights Agreement, the Issuers and the
Guarantors will agree, among other things, (a) to file with the Securities and
Exchange Commission (the "COMMISSION") under the circumstances set forth therein
(i) a registration statement under the Act (the "EXCHANGE OFFER REGISTRATION
STATEMENT") relating to, among other things, the 8 3/4% Senior Secured Notes due
2012, Series B, of the Issuers (the "SERIES B NOTES"), identical in all material
respects to the Series A Notes, including with respect to the Guarantees thereof
(except that the Series B Notes shall have been registered pursuant to such
registration statement), to be offered in exchange for the Series A Notes (such
offer to exchange being referred to as the
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"REGISTERED EXCHANGE OFFER"), and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT" and, together with the Exchange Offer Registration
Statement, the "REGISTRATION STATEMENTS") relating to the resale by certain
holders of the Series A Notes, and (b) to cause such Registration Statements to
be declared effective, as applicable, as provided in the Registration Rights
Agreement.
On the Closing Date, the Issuers and the Guarantors will enter into
certain security and pledge agreements, mortgages and certain other collateral
documents (collectively, the "SECURITY DOCUMENTS"), that will provide for the
grant of the Security Interests in the Collateral to U.S. Bank National
Association, as collateral agent for the Trustee and the holders of the Notes
(in such capacity, the "SECURED PARTY"). The Security Interests will secure the
payment and performance when due of all of the respective obligations of the
Issuers and the Guarantors under the Indenture, the Notes and the Guarantees.
REFINANCING PLAN. As described in the Offering Circular, in
connection with the Offering, the Issuers and the Guarantors are conducting the
following transactions:
Repurchase of OED Notes. The Old Evangeline Downs, L.L.C., a
Delaware limited liability company ("OED"), and Capital (together, the
"OED NOTE ISSUERS") are offering to purchase (the "TENDER OFFER") any and
all of their outstanding 13% Senior Secured Notes due 2010 with Contingent
Interest (the "OED NOTES") and are soliciting consents (the "CONSENT
SOLICITATION") from the holders of the OED Notes to (i) the adoption of
proposed amendments to the indenture governing the OED Notes (the "OED
INDENTURE"), which would, inter alia, eliminate substantially all of the
restrictive covenants and events of default under the OED Indenture (the
"PROPOSED AMENDMENTS"), and (ii) the release of the liens on the
collateral securing the OED Notes and the termination of the related
security documents (the "COLLATERAL RELEASE" and, together with the
Proposed Amendments, the "PROPOSALS"; the agreements to effect the
Collateral Release, the "COLLATERAL RELEASE AGREEMENTS"), each as more
fully described in the Offer to Purchase and Consent Solicitation
Statement and the related Consent and Letter of Transmittal, each dated
March 9, 2004, as each may be amended or supplemented from time to time
(together, the "OFFER TO PURCHASE"), and the other documents related to
the Tender Offer and the Consent Solicitation (such other documents,
collectively with the Offer to Purchase, the "TENDER OFFER DOCUMENTS"). On
March 25, 2004, the OED Note Issuers entered into a supplemental indenture
with U.S. Bank National Association, the trustee for the OED Notes, to
effectuate the Proposals (the "SUPPLEMENTAL INDENTURE"). The Tender Offer
is scheduled to expire at 5:00 p.m., New York time, on April 5, 2004,
unless earlier terminated or extended by the OED Note Issuers. A portion
of the net proceeds of the Offering will be used to pay the Tender Offer
Consideration and related Consent Payments (as such terms are defined in
the Offer to Purchase) in the Tender Offer and the Consent Solicitation.
The Tender Offer, the Consent Solicitation, the Proposals, and the
transactions contemplated by the Tender Offer Documents, the Supplemental
Indenture and the Collateral Release Agreements (including, without
limitation, the payment of the
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Tender Offer Consideration and the related Consent Payments, the
repurchase of tendered OED Notes and the Proposals becoming operative),
together with any and all other actions required to be taken, and
transactions required to be entered into, by the Issuers and the
Guarantors to consummate the Tender Offer and the Consent Solicitation and
make operative the Proposals on the Closing Date, are referred to herein
as the "OED NOTE REPURCHASE TRANSACTIONS."
Repurchase of Company Notes. On or before the Closing Date, the
Company and Peninsula Gaming Corp. (together, the "COMPANY NOTE ISSUERS")
will take all actions necessary under the indenture (the "COMPANY
INDENTURE") governing their 12 1/4% Senior Secured Notes due 2006 (the
"COMPANY NOTES") to, on the Closing Date, covenant defease, pursuant to
Section 8.3 of the Company Indenture, the Company Notes to the redemption
date (the "REDEMPTION DATE") specified in the Redemption Notice (as
defined below), have released the collateral securing the Company Notes
and have terminated the related security documents (the "COMPANY SECURITY
DOCUMENTS") and the Company's obligations thereunder, including, without
limitation, on the Closing Date, (i) calling for redemption all of the
Company Notes by mailing a notice of redemption (the "REDEMPTION NOTICE")
to all holders of the Company Notes in accordance with Article III of the
Company Indenture, (ii) depositing with U.S. Bank National Association, as
trustee for the Company Notes (the "COMPANY TRUSTEE"), a portion of the
net proceeds of the Offering in an amount sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on the outstanding Company
Notes to the Redemption Date, (iii) delivering to the Company Trustee the
other documents required by Article VIII of the Company Indenture and (iv)
redeeming the Company Notes on the Redemption Date (the "COMPANY NOTE
REDEMPTION"). The transactions described in this paragraph, together with
any and all other actions required to be taken, and transactions required
to be entered into, by the Issuers and the Guarantors to effect the
transactions described in this paragraph, are referred to herein as the
"COMPANY NOTE REPURCHASE TRANSACTIONS." The Offering, the OED Note
Repurchase Transactions and the Company Note Repurchase Transactions
collectively are referred to herein as the "REFINANCING PLAN."
Waivers Under Existing Credit Facilities. The Company and OED are
seeking from the lenders under their existing senior secured credit
facilities (the "EXISTING SENIOR SECURED CREDIT FACILITIES"), and OED is
seeking from the lenders under its existing FF&E facility (the "OED FF&E
FACILITY" and, together with the Existing Senior Secured Credit
Facilities, the "EXISTING CREDIT FACILITIES"), consents to the Refinancing
Plan and waivers of any defaults that would be triggered under such
Existing Credit Facilities upon consummation of the Refinancing Plan (the
consents and waivers with respect to the Existing Senior Secured Credit
Facilities, the "EXISTING SENIOR SECURED CREDIT FACILITY WAIVERS," and the
consents and waivers with respect to the OED FF&E Facility, the "FF&E
WAIVER" and, together with the Existing Senior Secured Credit Facility
Waivers, the "EXISTING CREDIT FACILITY WAIVERS"). The Existing Credit
Facility Waivers becoming operative are referred to herein as the "CREDIT
FACILITY TRANSACTIONS."
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Intercreditor Agreements. On the Closing Date, the lenders under
each of the Existing Credit Facilities, the Trustee, the Issuers and the
Guarantors shall enter into an Intercreditor Agreement, in a form
reasonably satisfactory to the Initial Purchaser, which form shall be
attached as an exhibit to the Indenture (the "INTERCREDITOR AGREEMENT"),
setting forth their respective rights and obligations with respect to the
Collateral.
CORPORATE TRANSACTIONS. In addition, as described in the Offering
Circular, the Issuers and the Guarantors are seeking requisite approvals from
applicable Iowa and Louisiana regulatory authorities (the "REQUISITE REGULATORY
APPROVALS") to effect the Reorganization Transactions (as defined in the
Offering Circular). If the Requisite Regulatory Approvals are received, the
Issuers, the Guarantors and the Initial Purchaser shall take the applicable
actions set forth in Section 12 hereof.
This Agreement, the Indenture, the Registration Rights Agreement,
the Notes, the Guarantees, the Security Documents and the Intercreditor
Agreement collectively are referred to herein as the "NOTE DOCUMENTS" and,
collectively with the Supplemental Indenture, the Collateral Release Agreements,
the Tender Offer Documents, the Redemption Notice and the Existing Credit
Facility Waivers, the "OPERATIVE DOCUMENTS."
The transactions contemplated by the Operative Documents (including,
without limitation, (i) the Offering and the application of the net proceeds
therefrom as described in the Offering Circular, as amended or supplemented,
(ii) the issuance and sale of the Notes and the Guarantees in accordance with
this Agreement, (iii) the creation, grant, recording and perfection of the
Security Interests, (iv) the OED Note Repurchase Transactions, (v) the Company
Note Repurchase Transactions and (vi) the Credit Facility Transactions),
collectively are referred to herein as the "TRANSACTIONS."
4. DELIVERY AND PAYMENT. Delivery to the Initial Purchaser of and
payment for the Series A Notes shall be made at a Closing (the "CLOSING") to
begin at 9:00 a.m., New York City time, on April 16, 2004, (such time and date,
the "CLOSING DATE") at the offices of Mayer, Brown, Rowe & Maw, LLP, 1675
Broadway, New York, New York 10019. The Closing Date and the location of
delivery of and the form of payment for the Series A Notes may be varied by
agreement between the Initial Purchaser and the Issuers.
The Issuers shall deliver to the Initial Purchaser one or more
certificates representing the Series A Notes (the "GLOBAL SECURITIES"), each in
definitive form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), or such other names as the Initial Purchaser
may request upon at least one Business Day's notice to the Issuers, in an amount
corresponding to the aggregate principal amount of the Series A Notes sold
pursuant to Exempt Resales to QIBs, to Regulation S Purchasers and to Accredited
Investors, respectively, in each case against payment by the Initial Purchaser
of the purchase price therefore by immediately available Federal funds bank wire
transfer to such bank account as the Issuers shall designate to the Initial
Purchaser at least two Business Days prior to the Closing. "BUSINESS DAY" means
any day other than a Saturday, a Sunday or a day on which banking institutions
in The City of New York or at a place of payment are authorized by law,
regulation or executive order to remain closed.
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The Global Securities in definitive form shall be made available to
the Initial Purchaser for inspection at the offices of Mayer, Brown, Rowe & Maw,
LLP, 1675 Broadway, New York, New York 10019 (or such other place as shall be
acceptable to the Initial Purchaser) not later than the close of business, New
York City time, one Business Day immediately preceding the Closing Date.
5. AGREEMENTS OF THE ISSUERS AND THE GUARANTORS. Each of the Issuers
and the Guarantors, jointly and severally, hereby agrees:
(a) Certain Events. To (i) advise the Initial Purchaser
promptly after obtaining knowledge (and, if requested by the Initial
Purchaser, confirm such advice in writing) of (A) the issuance by
any state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Series A
Notes for offer or sale in any jurisdiction, or the initiation of
any proceeding for such purpose by any state securities commission
or other regulatory authority, and (B) the happening of any event
that makes any statement of a material fact made in the Offering
Circular untrue or that requires the making of any additions to or
changes in the Offering Circular in order to make the statements
therein, in the light of the circumstances under which they are
made, not misleading, (ii) use its reasonable best efforts to
prevent the issuance of any stop order or order suspending the
qualification or exemption from qualification of any of the Notes
under any state securities or Blue Sky laws, and (iii) if at any
time any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of any of the Series A Notes under any such laws, use
its reasonable best efforts to obtain the withdrawal or lifting of
such order at the earliest practicable time.
(b) Offering Circular. To (i) furnish the Initial Purchaser
and those persons identified by the Initial Purchaser to the
Issuers, without charge, as many copies of the Preliminary Offering
Circular and the Offering Circular, and any amendments or
supplements thereto, as the Initial Purchaser may reasonably
request, and (ii) promptly prepare, upon the Initial Purchaser's
reasonable request, any amendment or supplement to the Offering
Circular that the Initial Purchaser, upon the advice of legal
counsel, deems may be necessary in connection with Exempt Resales
(and the Issuers and the Guarantors hereby consent to the use of the
Preliminary Offering Circular and the Offering Circular, and any
amendments and supplements thereto, by the Initial Purchaser in
connection with Exempt Resales).
(c) Notice of Amendment or Supplement. Except as set forth in
Section 5(d), not to amend or supplement the Offering Circular prior
to the Closing Date, or at any time prior to the completion of the
resale by the Initial Purchaser of all of the Series A Notes, unless
the Initial Purchaser shall previously have been advised thereof and
shall not have objected thereto within two Business Days after being
furnished a copy thereof.
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(d) Preparation of Amendments and Supplements. At any time
prior to the completion of the resale by the Initial Purchaser of
all of the Series A Notes, (i) if any event shall occur as a result
of which, in the reasonable judgment of the Issuers or the Initial
Purchaser or their respective counsel, it becomes necessary or
advisable to amend or supplement the Offering Circular in order to
make the statements therein, in the light of the circumstances under
which they were made and when such Offering Circular is delivered to
an Eligible Purchaser, not misleading, or if it is necessary to
amend or supplement the Offering Circular to comply with Applicable
Law (as defined below), forthwith to prepare an appropriate
amendment or supplement to the Offering Circular (in form and
substance reasonably satisfactory to the Initial Purchaser) so that
as so amended or supplemented, (A) the Offering Circular will not
include an untrue statement of material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made and when
such Offering Circular is so delivered, not misleading, and (B) the
Offering Circular will comply with Applicable Law, and (ii) if it
becomes necessary or advisable to amend or supplement the Offering
Circular so that the Offering Circular will contain all of the
information specified in, and meet the requirements of, Rule
144A(d)(4) under the Act, forthwith to prepare an appropriate
amendment or supplement to the Offering Circular (in form and
substance satisfactory to the Initial Purchaser) so that the
Offering Circular, as so amended or supplemented, will contain the
information specified in, and meet the requirements of, such Rule.
(e) Qualification of Securities. To cooperate with the Initial
Purchaser and the Initial Purchaser's counsel in connection with the
qualification of the Notes under the securities or Blue Sky laws of
such jurisdictions as the Initial Purchaser may request and continue
such qualification in effect so long as reasonably required for
Exempt Resales, and to file such consents to service of process or
other documents as may be necessary in order to effect such
qualification; provided, that none of the Issuers or the Guarantors
shall be required in connection therewith (i) to file any general
consent to service of process or take any action that would subject
it to service of process in suits other than those arising out of
the offer and sale of the Notes in any jurisdiction in which it is
not otherwise so subject, (ii) to register or qualify as a foreign
corporation in any jurisdiction where it is not now so qualified or
(iii) to subject itself to general taxation in respect of doing
business in any jurisdiction in which it is not otherwise so
subject.
(f) Costs and Expenses. Whether or not any of the Transactions
are consummated or this Agreement is terminated, to pay (i) all
costs, expenses, fees and taxes incident to and in connection with
the performance of the obligations of the Issuers and the Guarantors
under this Agreement, including: (A) the preparation, printing and
distribution of the Preliminary Offering Circular and the Offering
Circular and all amendments and supplements thereto (including,
without limitation, financial statements and exhibits), and all
preliminary and final Blue Sky memoranda and all other agreements,
memoranda, correspondence and other documents prepared and delivered
in connection herewith (including the
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furnishing of copies of the foregoing to the Initial Purchaser and
such other persons as the Initial Purchaser may designate), (B) the
printing, processing and distribution (including, without
limitation, word processing and duplication costs) and delivery of
each of the Operative Documents and any other agreements or
documents in connection with the Transactions, (C) the preparation,
issuance and delivery of the Notes, including the fees and expenses
of the Trustee and the Secured Party (including fees and expenses of
their respective counsel) and the cost of their respective
personnel, and all costs and expenses related to the delivery of the
Notes to the Initial Purchaser and pursuant to Exempt Resales,
including any transfer or other taxes payable thereon, and (D) the
qualification of the Notes for offer and sale under the securities
or Blue Sky laws of the several states (including, without
limitation, filing fees and fees and disbursements of the Initial
Purchaser's counsel relating to such registration or qualification
and the preparation of memoranda related thereto); (ii) all fees and
expenses of the counsel and accountants of the Issuers and the
Guarantors and their respective direct and indirect parents and
subsidiaries; (iii) all expenses and listing fees in connection with
the application for quotation of the Series A Notes in The
PORTAL(SM) Market ("PORTAL") of the National Association of
Securities Dealers, Inc. ("NASD"); (iv) all fees and expenses
(including fees and expenses of counsel) of the Issuers in
connection with approval of the Notes by DTC for "book-entry"
transfer; (v) all fees charged by rating agencies in connection with
the rating of the Notes; (vi) the costs and charges of any transfer
agent, registrar and/or depositary (including DTC); (vii) all costs
and expenses of the Registered Exchange Offer, the Exchange Offer
Registration Statement and any Shelf Registration Statement, as set
forth in the Registration Rights Agreement; (viii) all costs and
expenses in connection with the creation and perfection of the
Security Interests (including, without limitation, filing and
recording fees, search fees, taxes and costs of title policies);
(ix) all costs and expenses of the Transactions (including, without
limitation, filing and recording fees); and (x) all fees and
expenses (including reasonable fees and expenses of counsel)
incurred by the Initial Purchaser in connection with the
preparation, negotiation and execution, as applicable, of the
Operative Documents and any other agreements or documents in
connection with the Transactions and the consummation of the
Transactions.
(g) Use of Proceeds. To use the proceeds from the sale of the
Series A Notes in the manner described in the Offering Circular
under the caption "Use of Proceeds."
(h) Waiver of Certain Laws. To the extent it may lawfully do
so, not to insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension usury or other
law, wherever enacted, now or at any time hereafter in force, that
would prohibit or forgive the payment of all or any portion of the
principal of or interest on the Notes, or that may affect the
covenants or the performance of the Indenture or any of the Security
Documents (and, to the extent it may lawfully do so, each Issuer and
each Guarantor hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by
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resort to any such law, hinder, delay or impede the execution of any
power granted to the Trustee in the Indenture or to the Secured
Party in the Security Documents but shall suffer and permit the
execution of every such power as though no such law had been
enacted).
(i) Security Interests. (A) To do and perform all things
required to be done and performed under the Security Documents prior
to, on and after the Closing Date, including, without limitation,
all things that are required to be done and performed under the
Security Documents that are necessary or reasonably advisable to
obtain on or prior to the Closing Date (i) all Permits (as defined
below), other than any gaming or racing approvals required to be
obtained by a purchaser in a foreclosure sale, necessary for the
granting, perfection and enforcement of the Security Interests and
for the foreclosure by the Secured Party thereon following an Event
of Default (as defined in the Indenture), (ii) all termination
statements, mortgage releases and other documents necessary to
terminate any Liens (as defined in the Indenture) on the Collateral
(other than Liens created by the Indenture, Liens created by the
Security Documents and Permitted Liens (as defined in the
Indenture)), and (iii) subject to the terms of the Intercreditor
Agreement and any Permitted Liens, a valid and perfected, first
priority Security Interest with respect to each of the assets,
shares of capital stock and membership interests which are to
constitute, as of the Closing Date, the Collateral.
(B) To provide an updated A.L.T.A. survey, certified to all parties
designated by the Initial Purchaser in a manner satisfactory to the
Initial Purchaser, by a land surveyor duly registered and licensed
in the State in which the property described in such survey is
located and reasonably acceptable to the Initial Purchaser, within
thirty (30) days of Closing with respect to (i) the property located
in St. Landry Parish, Louisiana, and (ii) if Issuer fails to satisfy
the condition to Closing set forth in Section 9(a)(xv)(I), the
property located in Dubuque, Iowa. Additional title insurance shall
be provided or additional action shall be taken within thirty (30)
days of Closing to cure defects as may be disclosed on any such
survey as reasonably required by the Initial Purchaser or the
Trustee, provided that such defect be susceptible to cure, and
further provided that failure to so cure or insure over, whether the
defect be susceptible to cure or not, shall constitute an Event of
Default.
(j) Integration. Not to, and to ensure that no affiliate (as
defined in Rule 501(b) under the Act) of any of the Issuers or the
Guarantors will, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any "security" (as defined in the
Act) that would be integrated with the sale of the Series A Notes in
a manner that would require the registration under the Act of the
sale to the Initial Purchaser or of the offers or sales of Series A
Notes pursuant to Exempt Resales.
(k) Rule 144A Information. For so long as any of the Series A
Notes remain outstanding, during any period in which either of the
Issuers is not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended
10
(the "EXCHANGE ACT"), to make available, upon request, to any holder
of the Notes in connection with any sale thereof and any prospective
Eligible Purchaser of such Notes from such holder, the information
required by Rule 144A(d)(4) under the Act.
(l) DTC. To comply with the representation letter of the
Issuers and the Guarantors to DTC relating to the approval of the
Notes by DTC for "book entry" transfer.
(m) PORTAL. To use its reasonable best efforts to effect the
inclusion of the Series A Notes in PORTAL and to use its reasonable
best efforts to maintain the listing of the Series A Notes on PORTAL
for so long as the Series A Notes are outstanding.
(n) Reporting Requirements. For so long as any of the Notes
remain outstanding, to furnish to the Initial Purchaser copies of
all reports and other communications (financial or otherwise)
furnished to the Trustee or to the holders of the Notes and, as soon
as available, copies of any reports or financial statements
furnished to or filed by the Issuers with the Commission or any
national securities exchange on which any class of securities of the
Issuers may be listed.
(o) No Selling Efforts or General Solicitation. Except in
connection with the Registered Exchange Offer or the filing of the
Shelf Registration Statement, not to, and not to authorize or permit
any person acting on its behalf to, (i) distribute any offering
material in connection with the offer and sale of the Series A Notes
other than the Preliminary Offering Circular and the Offering
Circular and any amendments and supplements to the Offering Circular
prepared in compliance with Section 5(d), or (ii) solicit any offer
to buy or offer to sell the Series A Notes by means of any form of
general solicitation or general advertising (including, without
limitation, as such terms are used in Regulation D under the Act) or
in any manner involving a public offering within the meaning of
Section 4(2) of the Act.
(p) No Similar Offerings. Not to, directly or indirectly,
without the prior consent of the Initial Purchaser, offer, sell,
contract to sell, grant any option to purchase or otherwise dispose
of (or announce any offer or sale of, contract to sell, grant of any
option to purchase or other disposition of) any securities of any of
the Issuers or the Guarantors substantially similar to the Notes or
the Guarantees for a period of six months after the date of the
Offering Circular, except as contemplated by the Registration Rights
Agreement; provided, that the foregoing will not apply to (i) the
Notes or the Guarantees or (ii) borrowings (not constituting the
issuance of securities) from financial institutions to the extent
not prohibited by the Indenture.
(q) ERISA. At any time prior to the completion of the resale
by the Initial Purchaser of the Series A Notes, to notify the
Initial Purchaser promptly in writing if any of the Issuers or the
Guarantors or any of their Affiliates becomes a party in interest or
a disqualified person with respect to any employee benefit plan,
11
and to identify such plans. The terms "ERISA," "Affiliates," "party
in interest," "disqualified person" and "employee benefit plan"
shall have the meanings as set forth in Section 6(ll).
(r) Performance of this Agreement. To do and perform in all
material respects all things required or necessary to be done and
performed on its part under this Agreement on or prior to the
Closing Date and to satisfy in all material respects all conditions
precedent to the delivery of the Series A Notes and the granting,
perfection and enforcement of the Security Interests in the
Collateral as of the Closing Date.
(s) Performance of Other Transactions. To do and perform in
all material respects all things required or necessary to be done
and performed on its part (i) to consummate the OED Note Repurchase
Transactions, the Company Note Repurchase Transactions (other than
the consummation of the Company Note Redemption) and the Credit
Facility Transactions, in each case, in all material respects, on or
prior to the Closing Date, and (ii) to permit the Company Note
Redemption to be consummated on the Redemption Date.
6. REPRESENTATIONS AND WARRANTIES OF THE ISSUERS AND THE GUARANTORS.
Each of the Issuers and the Guarantors, jointly and severally, represents and
warrants to the Initial Purchaser that:
(a) Offering Circular. The Preliminary Offering Circular as of
its date did not, and the Offering Circular, as of its date does not
and as of the Closing Date will not, and each supplement or
amendment thereto (if any) as of its date will not, contain any
untrue statement of a material fact or omit to state any material
fact (except with respect to offers and sales of Series A Notes by
the Initial Purchaser to Accredited Investors, as to which the
Issuers and the Guarantors make no representation, and except, in
the case of the Preliminary Offering Circular, for pricing terms and
other financial or similar terms intentionally left blank) necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
foregoing representation and warranty made in this Section 6(a)
shall not apply to any statements or omissions made in reliance on
and in conformity with information relating to the Initial Purchaser
furnished to the Issuers by the Initial Purchaser specifically for
inclusion in the Preliminary Offering Circular or the Offering
Circular. The parties hereto acknowledge that for purposes of this
Agreement (including this Section 6(a) and Section 8) the only
information furnished to the Issuers by the Initial Purchaser
specifically for inclusion in Preliminary Offering Circular or the
Offering Circular is the information set forth (i) on the cover page
of the Offering Circular with respect to the price of the Notes,
(ii) in the third paragraph on page 133 of the Offering Circular
concerning the offering the Notes for resale by the Initial
Purchaser, (iii) in the fourth paragraph on page 133 of the Offering
Circular concerning market-making by the Initial Purchaser, (iv) in
the sixth paragraph on page 133 of the Offering Circular concerning
settlement of the Notes on the sixteenth business day
12
following pricing, (v) in the first full paragraph on page 134 of
the Offering Circular concerning stabilization by the Initial
Purchaser and (vi) in the second full paragraph on page 134 of the
Offering Circular concerning the affiliation of the Initial
Purchaser and its affiliates with the Issuers and their affiliates
(such information described in the immediately preceding clauses (i)
through (vi) of this Section 6(a), the "FURNISHED INFORMATION").
Each of the Preliminary Offering Circular and the Offering Circular,
as of their respective dates contained, and the Offering Circular,
as of the Closing Date and as amended or supplemented, will contain,
all of the information specified in, and meet the requirements of,
Rule 144A(d)(4) under the Act. The Offer to Purchase, as of its date
does not and as of the Closing Date will not, and each supplement or
amendment thereto (if any) as of its date will not, contain any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(b) 144A Eligibility. Other than the OED Notes and the Company
Notes, there are no securities of the same class (within the meaning
of Rule 144A) as the Notes of either of the Issuers or any of the
Guarantors registered under the Exchange Act or listed on a national
securities exchange registered under Section 6 of the Exchange Act
or quoted in a United States automated inter-dealer quotation
system. The Series A Notes are eligible for resale pursuant to Rule
144A under the Act.
(c) Due Organization; Good Standing. Each of the Issuers and
the Guarantors (i) has been duly organized, is validly existing and
is in good standing under the laws of its jurisdiction of
organization, (ii) has all requisite power and authority to conduct
and carry on its business and to own, lease, use and operate its
properties and assets as described in the Offering Circular, and
(iii) is duly qualified or licensed to do business and is in good
standing as a foreign limited liability company or corporation, as
the case may be, authorized to do business in each jurisdiction in
which the nature of its business or the ownership, leasing, use or
operation of its properties and assets requires such qualification
or licensing, except where the failure to be so qualified or
licensed would not, singly or in the aggregate, have a material
adverse effect on (A) the properties, business, prospects,
operations, earnings, assets, liabilities or condition (financial or
otherwise) of the Issuers and the Guarantors, taken as a whole, (B)
the ability of any of the Issuers or the Guarantors to perform its
obligations in all material respects under any of the Operative
Documents or to consummate in all material respects the
Transactions, (C) the enforceability of any of the Security
Documents or the attachment, perfection or priority of any of the
Security Interests intended to be created thereby in any portion of
the Collateral or (D) the validity of any of the Operative Documents
or the consummation of any of the Transactions (each, a "MATERIAL
ADVERSE EFFECT").
(d) Subsidiaries. Immediately following the Closing, (i) the
corporate structure of the Issuers and the Guarantors shall be as
set forth on Schedule 6(d) hereto, (ii) Capital will have no
subsidiaries, (iii) the only direct or
13
indirect subsidiaries of the Company (other than Capital) will be
the Guarantors, (iv) the Company will directly own 100% of the
outstanding shares of capital stock or membership interests of
Capital and of each Guarantor, free and clear of all Liens, except
for Liens created by the Indenture, Liens created by the Security
Documents and Permitted Liens, and (v) Peninsula Gaming Partners,
LLP, a Delaware limited liability partnership, will directly own
100% of the outstanding membership interests in the Company (except
for the Seller Preferred (as defined in the Indenture)), free and
clear of all Liens, except for Liens created by the Indenture and
the Security Documents. Except as disclosed in the Offering
Circular, there are no outstanding (i) securities convertible into
or exchangeable for any capital stock of or any membership interests
in, as the case may be, any of the Issuers or the Guarantors, (ii)
options, warrants or other rights to purchase or subscribe for any
capital stock of or any membership interests in, or any securities
convertible into or exchangeable for any capital stock of or any
membership interests in, as the case may be, any of the Issuers or
the Guarantors or (iii) contracts, commitments, agreements,
understandings, arrangements, undertakings, rights, calls or claims
of any kind relating to the issuance of any capital stock of or any
membership interests in, as the case may be, any of the Issuers or
the Guarantors, any such convertible or exchangeable securities or
any such options, warrants or rights. Except as set forth above,
immediately following the Closing, none of the Issuers or the
Guarantors will directly or indirectly own any capital stock of or
other equity interest in any person.
(e) Capitalization. All of the outstanding shares of capital
stock of or membership interests in, as the case may be, each of the
Issuers and the Guarantors have been duly authorized, are validly
issued, fully paid and nonassessable, and were not issued in
violation of, and are not subject to, any preemptive or similar
rights. The table under the caption "Capitalization" in the Offering
Circular (including the footnotes thereto) sets forth, as of
December 31, 2003, (i) the actual capitalization of the Company and
its subsidiaries, on a consolidated basis, and (ii) the as adjusted
capitalization of the Company and its subsidiaries, on a
consolidated basis, after giving effect to the Offering and the
application of the net proceeds therefrom and the consummation of
the other Transactions (as such term is defined in the Offering
Circular). Immediately following the Closing, except as set forth in
such table or as described in the footnotes thereto, none of the
Issuers or the Guarantors will have any liabilities, absolute,
accrued, contingent or otherwise other than: (i) liabilities that
are reflected in the Company Financial Statements (as defined below)
or (ii) liabilities incurred subsequent to December 31, 2003, in the
ordinary course of business, that would not, singly or in the
aggregate, have a Material Adverse Effect.
(f) No Other Registration Rights. Except for this Agreement
and the Registration Rights Agreement, there are no contracts,
commitments, agreements, arrangements, understandings or
undertakings of any kind to which any of the Issuers or Guarantors
is a party, or by which either of them is bound, granting to any
person the right (i) to require any of the Issuers or the Guarantors
to file a registration statement under the Act with respect to any
securities of any of the
14
Issuers or the Guarantors or requiring any of the Issuers or the
Guarantors to include such securities with the Notes registered
pursuant to any registration statement, or (ii) to purchase or offer
to purchase any securities of any of the Issuers or the Guarantors
or any of their respective affiliates.
(g) Power and Authority. Each of the Issuers and the
Guarantors has all requisite power and authority to execute and
deliver, and to perform its obligations under, the Operative
Documents to which it is a party and to consummate the Transactions
to which it is a party.
(h) Authorization of this Agreement. This Agreement and the
Transactions contemplated hereby (including, without limitation, the
Offering and the issuance and sale of the Notes in accordance with
this Agreement) have been duly authorized by each of the Issuers and
the Guarantors, and this Agreement has been validly executed and
delivered by, and is the legal, valid and binding obligation of,
each of the Issuers and the Guarantors, enforceable against each of
the Issuers and the Guarantors in accordance with its terms, except
that such enforceability may be limited by (i) applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally, (ii) any rights of acceleration and the availability of
equitable remedies and general principles of equity (whether
considered in a proceeding in equity or at law) and (iii) with
respect to rights to indemnity or contribution thereunder, by
Federal and state securities laws and public policy considerations.
(i) Authorization of Indenture. The Indenture and the
Transactions contemplated thereby have been duly authorized by each
of the Issuers and the Guarantors and, on the Closing Date, the
Indenture will have been validly executed and delivered by, and will
be the legal, valid and binding obligation of, each of the Issuers
and the Guarantors, enforceable against each of the Issuers and the
Guarantors in accordance with its terms, except that (i) such
enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (ii) any
rights of acceleration and the availability of equitable remedies
may be subject to general principles of equity (whether considered
in a proceeding in equity or at law). On the Closing Date, the
Indenture will conform to the requirements of the Trust Indenture
Act of 1939, as amended (the "TIA"), applicable to an indenture that
is required to be qualified under the TIA.
(j) Authorization of Registration Rights Agreement. The
Registration Rights Agreement and the Transactions contemplated
thereby have been duly authorized by each of the Issuers and the
Guarantors and, on the Closing Date, the Registration Rights
Agreement will have been validly executed and delivered by, and will
be the legal, valid and binding obligation of, each of the Issuers
and the Guarantors, enforceable against each of the Issuers and the
Guarantors in accordance with its terms, except that such
enforceability may be limited by (i) applicable bankruptcy,
insolvency or similar laws, (ii) any rights of acceleration and the
availability of equitable remedies and general principles of
15
equity (whether considered in a proceeding in equity or at law) and
(iii) with respect to rights to indemnity or contribution
thereunder, by Federal and state securities laws and public policy
considerations.
(k) Authorization of Series A Notes. The Series A Notes have
been duly authorized by each of the Issuers for issuance and sale to
the Initial Purchaser pursuant to this Agreement and, on the Closing
Date, will have been validly executed, authenticated, issued and
delivered by the Issuers in accordance with the terms of this
Agreement and the Indenture. When the Series A Notes have been
issued and executed by the Issuers and authenticated by the Trustee
in accordance with the terms of the Indenture and delivered to and
paid for by the Initial Purchaser in accordance with the terms of
this Agreement, the Series A Notes will be legal, valid and binding
obligations of each of the Issuers, entitled to the benefits of the
Indenture and enforceable against each of the Issuers in accordance
with their terms, except to the extent that (i) such enforceability
may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a
proceeding in equity or at law). Upon and following delivery to the
Initial Purchaser, the Notes will rank on a parity with all senior
Indebtedness (as defined in the Indenture) of each of the Issuers
that is outstanding on the date hereof or that may be incurred
hereafter and senior to all other Indebtedness of each of the
Issuers that is outstanding on the date hereof or that may be
incurred hereafter; provided, that pursuant to the Intercreditor
Agreement, the Lien on the Collateral securing the Existing Credit
Facilities will be senior to the Lien on the Collateral securing the
Notes and the Guarantees.
(l) Authorization of Series B Notes. The Series B Notes have
been duly authorized by each of the Issuers and, when issued in the
Registered Exchange Offer, (A) will have been validly executed,
authenticated, issued and delivered in accordance with the terms of
the Indenture, the Registration Rights Agreement and the Registered
Exchange Offer and (B) will be legal, valid and binding obligations
of each of the Issuers, entitled to the benefits of the Indenture
and enforceable against each of the Issuers in accordance with their
terms, except to the extent that (i) such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a
proceeding in equity or at law).
(m) Authorization of Guarantees of Series A Notes and Series B
Notes. The Guarantee to be endorsed on the Series A Notes by each
Guarantor has been duly authorized by each such Guarantor and, on
the Closing Date, will have been validly executed and delivered by
each such Guarantor in accordance with the terms of the Indenture.
When the Series A Notes have been issued, executed and authenticated
in accordance with the terms of the Indenture and delivered to and
paid for by the Initial Purchaser in accordance with the terms of
this Agreement, the
16
Guarantee of each Guarantor endorsed on the Series A Notes will be
the legal, valid and binding obligation of each such Guarantor,
enforceable against each such Guarantor in accordance with its
terms, except to the extent that (i) such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a
proceeding in equity or at law). The Guarantee to be endorsed on the
Series B Notes by each Guarantor has been duly authorized by each
such Guarantor and, when the Series B Notes are issued, will have
been validly executed and delivered by each such Guarantor in
accordance with the terms of the Indenture, the Registration Rights
Agreement and the Registered Exchange Offer. When the Series B Notes
have been issued, executed and authenticated in accordance with the
terms of the Registered Exchange Offer and the Indenture, the
Guarantee of each Guarantor endorsed on the Series B Notes will be
the legal, valid and binding obligation of each such Guarantor,
enforceable against each such Guarantor in accordance with its
terms, except to the extent that (i) such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a
proceeding in equity or at law). The Guarantees to be endorsed on
the Notes rank and will rank on a parity with all senior
Indebtedness of the Guarantors that is outstanding on the date
hereof or that may be incurred hereafter and senior to all
subordinated Indebtedness of the Guarantors that is outstanding on
the date hereof or that may be incurred hereafter; provided, that
pursuant to the Intercreditor Agreement, the Lien on the Collateral
securing the Existing Credit Facilities will be senior to the Lien
on the Collateral securing the Notes and the Guarantees.
(n) Authorization of Security Documents. Each of the Security
Documents and the Transactions contemplated thereby (including,
without limitation, the creation, grant, recording and perfection of
the Security Interests, the execution and filing of financing
statements and the payment of any fees and taxes in connection
therewith) have been duly authorized by each of the Issuers and each
of the Guarantors which is a party thereto and, on the Closing Date,
each of the Security Documents will have been validly executed and
delivered by, and will be the legal, valid and binding obligation
of, each of the Issuers and each of the Guarantors which is a party
thereto, enforceable against each of the Issuers and each of the
Guarantors which is a party thereto in accordance with its terms,
except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) any rights of acceleration and the availability
of equitable remedies may be subject to general principles of equity
(whether considered in a proceeding in equity or at law).
(o) Authorization of Other Operative Documents and Other
Transactions.
17
(i) OED Note Repurchase Transactions. The Supplemental
Indenture has been duly authorized, and as of the second
Business Day after the date hereof, executed and delivered by
the OED Note Issuers, each of the Collateral Release
Agreements has been duly authorized, and as of Closing,
executed and delivered by the OED Note Issuers, and the
Proposals and the other OED Note Repurchase Transactions
(including the use of net proceeds from the Offering in
connection therewith) have been duly authorized by the Issuers
and the Guarantors, as applicable, and assuming the due
authorization, execution and delivery of the Supplemental
Indenture and each of the Collateral Release Agreements by
parties thereto other than the OED Note Issuers, the
Supplemental Indenture and each of the Collateral Release
Agreements constitutes the legal, valid and binding obligation
of, the OED Note Issuers, enforceable against the OED Note
Issuers in accordance with its terms, except that (i) such
enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general
principles of equity (whether considered in a proceeding in
equity or at law).
(ii) Company Note Repurchase Transactions. Each of the
Company Note Repurchase Transactions (including the use of net
proceeds from the Offering in connection therewith) has been
duly authorized by the Issuers and the Guarantors, as
applicable.
(iii) Credit Facility Documents. Each of the
Intercreditor Agreement and the transactions contemplated by
the Intercreditor Agreement and the Credit Facility Waivers
have been duly authorized by the Issuers and each Guarantor
which is a party thereto, and, on the Closing Date, each of
the Intercreditor Agreement will have been validly executed
and delivered by the Issuers and each Guarantor which is a
party thereto, and assuming the due authorization, execution
and delivery of the Intercreditor Agreement by parties thereto
other than the Issuers and each of the Guarantors which is a
party thereto, the Intercreditor Agreement will be the legal,
valid and binding obligation of, the Issuers and each
Guarantor which is a party thereto, enforceable against the
Issuers and each Guarantor which is a party thereto in
accordance with its terms, except that (i) such enforceability
may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) any rights
of acceleration and the availability of equitable remedies may
be subject to general principles of equity (whether considered
in a proceeding in equity or at law).
(p) Actions in Connection with the Transactions. Each of the Note
Documents, as executed and delivered, and each of the Transactions
described in the Offering Circular, conforms in all material respects to
the description thereof in the Offering Circular. The Supplemental
Indenture and each of the Collateral
18
Release Agreements, as executed and delivered, and each of the OED Note
Repurchase Transactions, conforms in all material respects to the
description thereof in the Offer to Purchase.
(q) No Violation. The Company is not in violation of its certificate
of formation or operating agreement (the "COMPANY CHARTER DOCUMENTS"),
Capital is not in violation of its charter or bylaws (the "CAPITAL CHARTER
DOCUMENTS"), and none of the Guarantors is in violation of its certificate
of formation, operating agreement, charter or bylaws, as applicable (the
"GUARANTOR CHARTER DOCUMENTS" and, collectively with the Company Charter
Documents and the Capital Charter Documents, the "CHARTER DOCUMENTS").
None of the Issuers or the Guarantors is (i) in violation of any Federal,
state, municipal, county, parish, local or foreign statute, law, ordinance
or standard applicable to it, or any judgment, decree, rule, regulation or
order applicable to it (including, without limitation, common law and
Chapter 99F of the Code of Iowa (1999), the Iowa Racing and Gaming
Commission, the Louisiana Pari-Mutuel Live Racing Facility Economic
Redevelopment and Gaming Control Act, the Louisiana Gaming Control Law and
the Video Draw Poker Device Control Law) in each case including the rules
and regulations promulgated thereunder (collectively, "APPLICABLE LAW"),
of any government, governmental or regulatory agency or body (including,
without limitation, the Iowa Racing and Gaming Commission, the Louisiana
Gaming Control Board, the Louisiana State Racing Commission or other
applicable gaming or racing authority) (each, a "GAMING AUTHORITY"),
court, arbitrator or self-regulatory organization, domestic or foreign
(each, a "GOVERNMENTAL AUTHORITY") or (ii) in breach of or default under
any bond, debenture, note or other evidence of indebtedness, indenture,
mortgage, deed of trust, lease or any other agreement or instrument to
which any such person is a party or by which any of them or any of their
respective property is bound (collectively, "APPLICABLE AGREEMENTS"),
other than, in the case of each of the immediately preceding clauses (i)
and (ii), violations, breaches or defaults that would not, singly or in
the aggregate, have a Material Adverse Effect. There exists no condition
that, with the passage of time or otherwise, would reasonably be expected
to (x) constitute a violation of (A) the Charter Documents or (B)
Applicable Laws or (y) constitute a breach of or default under any
Applicable Agreement or (z) result in the imposition of any penalty or the
acceleration of any indebtedness, other than, in the case of the
immediately preceding clauses (x)(B),(y) and (z), such violations,
breaches, penalties or defaults that would not, singly or in the
aggregate, have a Material Adverse Effect. All Applicable Agreements are
in full force and effect with respect to the Issuers and the Guarantors,
and are legal, valid and binding obligations of the Issuers and the
Guarantors.
(r) No Conflict. None of the execution, delivery or performance of
any of the Operative Documents, nor the compliance with the terms and
provisions thereof, nor the consummation of any of the Transactions, shall
conflict with, violate, constitute a breach of or a default (with the
passage of time or otherwise) under, result in the imposition of a Lien on
any assets of or any capital
19
stock of or membership interests in any of the Issuers or the Guarantors
(except for Liens created by the Indenture, Liens created by the Security
Documents and Permitted Liens), or result in an acceleration of
indebtedness under or pursuant to, (i) the Charter Documents, (ii) any
Applicable Agreement, or (iii) (assuming the accuracy of the
representations and warranties of the Initial Purchaser in Section 7 of
this Agreement and, if any Exempt Resales are made to Accredited
Investors, the accuracy of the representations and warranties of such
Accredited Investors contained in the Accredited Investor Letters executed
by such Accredited Investors) any Applicable Law, other than, in the case
of the immediately preceding clauses (ii) and (iii), such violations,
breaches or defaults that would not, singly or in the aggregate, have a
Material Adverse Effect. After giving effect to the Transactions, no
Default or Event of Default (each, as defined in the Indenture) will
exist.
(s) Permits. Except as disclosed in the Offering Circular and
assuming the accuracy of the representations and warranties of the Initial
Purchaser in Section 7 of this Agreement and, if any Exempt Resales are
made to Accredited Investors, the accuracy of the representations and
warranties of such Accredited Investors contained in the Accredited
Investor Letters executed by such Accredited Investors, no permit,
certificate, authorization, approval, consent, license or order of, or
filing, registration, declaration or qualification with, any Governmental
Authority or any other person (collectively, "PERMITS") is required to
own, lease, use and operate the properties and assets and to conduct and
carry on the businesses described in the Offering Circular, or in
connection with, or as a condition to, the execution, delivery or
performance of any of the Operative Documents, the compliance with the
terms and provisions thereof or the consummation of any of the
Transactions, other than (i) such Permits as have been made or obtained on
or prior to the Closing Date, which Permits are in full force and effect
on the Closing Date, (ii) as may be required for Exempt Resales under the
securities or blue sky laws of the various jurisdictions in which the
Notes are being offered by the Initial Purchaser, (iii) an order declaring
effective a registration statement filed by the Issuers with the
Commission pursuant to the Act pursuant to the Registration Rights
Agreement, and (iv) such Permits, the failure of which to make or obtain
would not, singly or in the aggregate, have a Material Adverse Effect.
(t) No Proceedings. Except as disclosed in the Offering Circular and
other than ongoing general licensing investigations conducted in the
ordinary course of business, there is no action, claim, suit, demand,
hearing, notice of violation or deficiency, or proceeding (including,
without limitation, any investigation or partial proceeding, such as a
deposition), domestic or foreign (collectively, "PROCEEDINGS"), pending
or, to the knowledge of the Issuers and the Guarantors, threatened, either
(i) in connection with, or that seeks to restrain, enjoin or prevent the
consummation of, or that otherwise objects to, any of the Operative
Documents or any of the Transactions, or (ii) that could, singly or in the
aggregate, have a Material Adverse Effect. None of the Issuers or the
Guarantors is subject to any judgment, order, decree, rule or regulation
of any Governmental Authority that could, singly or in the aggregate, have
a Material Adverse Effect. No injunction or
20
order has been issued and no Proceeding is pending or, to the knowledge of
the Issuers and the Guarantors, threatened that (i) asserts that the
offer, sale and delivery of the Series A Notes to the Initial Purchaser
pursuant to this Agreement or the initial resale of the Series A Notes by
the Initial Purchaser in the manner contemplated by this Agreement is
subject to the registration requirements of the Act, or (ii) would prevent
or suspend the issuance or sale of the Notes, including the Exempt
Resales, or the use of the Preliminary Offering Circular, the Offering
Circular, or any amendment or supplement thereto, in any jurisdiction.
(u) Regulated Persons. Except as set froth on Schedule 6(u) hereto,
each of the Issuers' and the Guarantors', respective directors, officers,
key personnel, partners, members and persons holding a five percent or
greater equity or economic interest in the Issuers (each of such persons,
a "REGULATED PERSON" and, collectively, the "REGULATED PERSONS") has all
Permits (including, without limitation, Permits with respect to engaging
in gaming or racing operations) necessary or advisable to own, lease, use
and operate the properties and assets and to conduct and carry on the
businesses described in the Offering Circular, other than such Permits the
failure of which to have would not, singly or in the aggregate, have a
Material Adverse Effect (a "MATERIAL PERMIT"). All Material Permits are
valid and in full force and effect. Each of the Regulated Persons is in
compliance with the terms and conditions of all Permits (including,
without limitation, Permits with respect to engaging in gaming or racing
operations) necessary or advisable to own, lease, use and operate the
properties and assets and to conduct and carry on the businesses described
in the Offering Circular, other than where such failure to be in
compliance would not, singly or in the aggregate, have a Material Adverse
Effect. None of the execution, delivery or performance of any of the
Operative Documents, nor the compliance with the terms and provisions
thereof, nor the consummation of any of the Transactions, will allow or
result in, and no event has occurred which allows or results in, or after
notice or lapse of time would allow or result in, the imposition of any
material penalty under, or the revocation or termination of, any Material
Permit or any material impairment of the rights of the holder of any
Material Permit. None of the Issuers or the Guarantors has received any
notice from any issuer, and the Issuers and the Guarantors have no actual
knowledge, that any issuer is considering limiting, conditioning,
suspending, modifying, revoking or not renewing any Material Permit.
(v) No Investigations of Regulated Persons. To the knowledge of the
Issuers and the Guarantors, except as disclosed in the Offering Circular,
no Gaming Authority is investigating any Regulated Person, other than
ongoing general licensing investigations conducted in the ordinary course
of business.
(w) Title to Assets. Immediately following the Closing, each of the
Issuers and the Guarantors (i) will have good and marketable title, free
and clear of all Liens (other than Liens created by the Indenture, Liens
created by the Security Documents and Permitted Liens), to all property
and assets described in the Offering Circular as being or to be owned by
it and (ii) will hold a valid leasehold interest
21
with respect to each such lease and will remain in possession of the real
property leased pursuant to those leases until the date the lease expires
in accordance with its terms. Capital has no assets, other than assets
received in payment for its capital stock.
(x) Sufficiency and Condition of Assets. The assets of each of the
Issuers and the Guarantors include all of the assets and properties
necessary or required in, or otherwise material to, the conduct of the
businesses of each of them as currently conducted and as proposed to be
conducted (as described in the Offering Circular), and such assets are in
working condition, except where the failure of such assets to be in
working condition would not, singly or in the aggregate, have a Material
Adverse Effect. Without limiting the foregoing, each of the properties of
the Issuers and the Guarantors (including, without limitation, all
buildings, structures, improvements and fixtures located thereon,
thereunder, thereover or therein, and all appurtenances thereto and other
aspects thereof) is otherwise suitable, sufficient, adequate and
appropriate in all respects (including physical, structural, operational,
legal, practical and otherwise) for its current and proposed use,
operation and occupancy, except, in each such case, for such failures to
meet such standards as would not, singly or in the aggregate, have a
Material Adverse Effect.
(y) Insurance. Each of the Issuers and the Guarantors maintains
reasonably adequate insurance covering its properties, operations,
personnel and businesses against losses and risks in accordance with
customary industry practice. All such insurance is outstanding and duly in
force.
(z) Real Property. No condemnation, eminent domain, or similar
proceeding exists, is pending or, to the knowledge of the Issuers and the
Guarantors, is threatened, with respect to or that could affect any real
properties owned by any of the Issuers or the Guarantors, except for such
proceedings as would not, singly or in the aggregate, have a Material
Adverse Effect. No real property owned by any of the Issuers or the
Guarantors is subject to any sales contract, option, right of first
refusal or similar agreement or arrangement with any third party. There is
no real property currently under contract or subject to an option in favor
of any of the Issuers or the Guarantors, except for real property which
the failure of the Issuers or the Guarantors to acquire, would not, singly
or in the aggregate, have a Material Adverse Effect.
(aa) Related Party Transactions. Except as disclosed in the Offering
Circular, there are no related party transactions that would be required
to be disclosed in the Offering Circular if the Offering Circular were a
prospectus included in a registration statement on Form S-1 filed under
the Act.
(bb) Security Interests. Upon execution and delivery of the Security
Documents and the issuance of the Notes, the Security Documents will
create, in favor of the Secured Party for the benefit of the holders of
the Notes, a
22
legal, valid and enforceable security interest in (subject to Permitted
Liens) all of the right, title and interest of the Issuers and the
Guarantors in the Collateral covered by the Security Documents and the
proceeds thereof. Upon: (i) the filing or recording of applicable Security
Documents or appropriate Uniform Commercial Code financing statements with
the appropriate filing, records, registry, and/or other public office
(with respect to filings to be made in the U.S. Patent and Trademark
Office, within three (3) months of the date of the applicable Security
Document, and with respect to filings in the U.S. Copyright Office within
one (1) month of the date of the applicable Security Document), together
with the payment of the requisite filing or recordation fees related
thereto, (ii) in the case of each Securities Account and the Investment
Related Property therein (as each such term is defined in the Security
Agreement) with respect to which a control agreement, in the form of
Exhibit B to the Security Agreement, has been executed and delivered, and
(iii) in the case of each Deposit Account (as defined in the Security
Agreement) and the cash and other funds on deposit therein with respect to
which a control agreement, in the form of Exhibit C to the Security
Agreement, has been executed and delivered, the Security Interests will
constitute first priority security interests in (subject to Permitted
Liens), such Collateral (other than insurance policies). As of the Closing
Date, the Collateral will be subject to no Liens other than Permitted
Liens.
(cc) Taxes. All material tax returns required to be filed by any of
the Issuers or the Guarantors in any jurisdiction (including foreign
jurisdictions) have been filed and, when filed, all such returns were
accurate in all material respects, and all taxes, assessments, fees and
other charges (including, without limitation, withholding taxes, penalties
and interest) due or claimed to be due from any of the Issuers or the
Guarantors have been paid, other than those being contested in good faith
by appropriate proceedings, or those that are currently payable without
penalty or interest and, in each case, for which an adequate reserve or
accrual has been established on the books and records of the Issuers or
the Guarantors, as applicable, in accordance with generally accepted
accounting principles of the United States, consistently applied ("GAAP").
There are no actual or proposed additional tax assessments for any tax
period against any of the Issuers or the Guarantors that would, singly or
in the aggregate, reasonably be expected to have a Material Adverse
Effect. The charges, accruals and reserves on the books and records of the
Issuers or the Guarantors, as applicable, in respect of any tax liability
for any tax periods not finally determined are adequate to meet any
assessments of tax or re-assessments of additional tax for any such
period.
(dd) Intellectual Property. The Issuers and the Guarantors own,
possess or are licensed under, and have the right to use, all trademarks,
service marks, trade names and other intellectual property (collectively,
"INTELLECTUAL PROPERTY") currently used in and material to the conduct of
their business, free and clear of all Liens, other than Permitted Liens.
To the knowledge of the Issuers and the Guarantors, no claims have been
asserted by any person challenging the use of any such Intellectual
Property by any of the Issuers and there is no valid basis for
23
any such claim, and the use of such Intellectual Property by the Issuers
or the Guarantors will not infringe on the Intellectual Property rights of
any other person.
(ee) Accounting Controls. Each of the Issuers and the Guarantors
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) material transactions are executed in
accordance with management's general or specific authorization, (ii)
material transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP, and to maintain asset
accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
material differences.
(ff) Financial Statements. The audited historical consolidated
financial statements and related notes of Company and its subsidiaries
contained in the Offering Circular (the "COMPANY FINANCIAL STATEMENTS")
present fairly the consolidated financial position, results of operations
and cash flows of Company and its subsidiaries as of the respective dates
and for the respective periods to which they apply, and have been prepared
in accordance with GAAP consistently applied throughout the periods
involved and the requirements of Regulation S-X that would be applicable
if the Offering Circular were a prospectus included in a registration
statement on Form S-1 filed under the Act (the "S-X REQUIREMENTS"). The
selected historical consolidated financial data included in the Offering
Circular for Company and its subsidiaries has been prepared on a basis
consistent with that of the Company Financial Statements and present
fairly the consolidated financial position and results of operations of
Company and its subsidiaries, as of the respective dates and for the
respective periods indicated. Deloitte & Touche, LLP are independent
public accountants with respect to Company and its subsidiaries.
(gg) No Material Adverse Change. Subsequent to the respective dates
as of which information is given in the Offering Circular, except as
disclosed in the Offering Circular, (i) none of the Issuers or the
Guarantors has incurred any liabilities, direct or contingent, that are
material, singly or in the aggregate, to any of them, or has entered into
any material transactions not in the ordinary course of business, (ii)
there has not been any material decrease in the capital stock or
membership interests, as the case may be, or any material increase in
long-term indebtedness or any material increase in short-term indebtedness
of any of the Issuers or the Guarantors, or any payment of or declaration
to pay any dividends or any other distribution with respect to any of the
Issuers or the Guarantors, and (iii) there has not been any material
adverse change in the properties, business, prospects, operations,
earnings, assets, liabilities or condition (financial or otherwise) of the
Issuers and the Guarantors taken as a whole (each of clauses (i) and
(iii), a "MATERIAL ADVERSE CHANGE"). To the actual knowledge of the
Issuers after reasonable inquiry, there is no event that is reasonably
likely to occur, which if it were to occur, could, singly or in the
aggregate, reasonably be expected to have a
24
Material Adverse Effect, except such events that have been disclosed in
the Offering Circular.
(hh) Ratings. No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Act (i) has imposed (or has informed any of the Issuers or the
Guarantors that it is considering imposing) any condition (financial or
otherwise) on the Issuers' or the Guarantors' retaining any rating
assigned to any securities of any of the Issuers or the Guarantors, or
(ii) has indicated to any of the Issuers or the Guarantors that it is
considering (A) the downgrading, suspension, or withdrawal of, or any
review for a possible change that does not indicate the direction of the
possible change in, any rating so assigned, or (B) any change in the
outlook for any rating of any securities of any of the Issuers or the
Guarantors.
(ii) Solvency. Each of the Issuers and the Guarantors is incurring
its respective indebtedness under the Series A Notes for proper purposes
and in good faith. Immediately before and after giving effect to the
issuance of the Series A Notes, for the Issuer (on a consolidated basis
with the Guarantors) and for each of the Guarantors, in all cases
considered as going concerns, (i) its assets at a fair valuation, exceeds
the sum of its debts; (ii) the present fair salable value of its assets is
not less than the amount that will be required to pay its probably
liability on its existing debts as they become absolute and matured, (iii)
it has and will have adequate capital with which to conduct the business
it is presently conducting and presently anticipates conducting; and (iv)
it does not intend to incur, and does not believe and reasonably should
not believe that it will incur, debts beyond its ability to pay as those
debts become due. Neither the Issuers or any Guarantor is aware of any
reason why it would be inappropriate to consider the Issuer or the
Guarantors as a going concern. For purposes of this paragraph, "debts"
includes contingent and unliquidated debts, at a fair valuation.
(jj) No Solicitation. None of the Issuers or the Guarantors nor any
of their affiliates nor anyone acting on their behalf has (i) taken,
directly or indirectly, any action designed to cause or to result in, or
that has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of the Notes or to
facilitate the sale or resale of any of the Notes, (ii) sold, bid for,
purchased, or paid anyone any compensation for soliciting purchases of,
any of the Notes, or (iii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of
either of the Issuers.
(kk) No Registration. Without limiting Sections 6(r) and 6(s), no
registration under the Act, and no qualification of the Indenture under
the TIA is required for the sale of the Series A Notes to the Initial
Purchaser as contemplated hereby or for the Exempt Resales, assuming (i)
that the purchasers in the Exempt Resales are Eligible Purchasers, (ii)
the accuracy of the Initial Purchaser's representations contained in
Section 7 of this Agreement and (iii) if any Exempt Resales are made to
Accredited Investors, the accuracy of the representations and
25
warranties of such Accredited Investors contained in the Accredited
Investor Letters executed by such Accredited Investors. No form of general
solicitation or general advertising (including, without limitation, as
such terms are defined in Regulation D under the Act) was used by either
of the Issuers, any of the Guarantors or any of their respective
affiliates or any of their respective representatives in connection with
the offer and sale of any of the Series A Notes or in connection with
Exempt Resales. No securities of the same class as the Series A Notes have
been offered, issued or sold by either of the Issuers, any of the
Guarantors or any of their respective affiliates within the six-month
period immediately prior to the date hereof. Without limiting Sections
6(r) and 6(s), no registration under the Act, or filing under the Exchange
Act, or qualification under the TIA is required in connection with the OED
Note Repurchase Transactions.
(ll) ERISA. Neither of the Issuers or any of the Guarantors nor any
of their respective "Affiliates" maintains a plan that is intended to
qualify under Section 401(a) of the Code, or is a "party in interest" or a
"disqualified person" with respect to any employee benefit plans. No
condition exists or event or transaction has occurred in connection with
any employee benefit plan that could result in either of the Issuers or
any such "Affiliate" incurring any liability, fine or penalty that could,
singly or in the aggregate, have a Material Adverse Effect. Neither of the
Issuers or any of the Guarantors nor any trade or business under common
control with the Issuers or the Guarantors (for purposes of Section 414(c)
of the Code) maintains any employee pension benefit plan that is subject
to Title IV of the Employee Retirement Income Act of 1974, as amended, or
the rules and regulations promulgated thereunder ("ERISA").
The terms "employee benefit plan," "employee pension benefit
plan," and "party in interest" shall have the meanings assigned to such
terms in Section 3 of ERISA. The term "Affiliate" shall have the meaning
assigned to such term in Section 407(d)(7) of ERISA, and the term
"disqualified person" shall have the meaning assigned to such term in
section 4975 of the Internal Revenue Code of 1986, as amended, or the
rules, regulations and published interpretations promulgated thereunder
(collectively the "CODE").
(mm) Investment Company Act and Other Federal Regulations. None of
the Issuers or the Guarantors has taken, and none of them will take, any
action that may cause this Agreement or the issuance of the Series A Notes
to violate or result in a violation of Section 7 of the Exchange Act
(including, without limitation, Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System). None of the Issuers
or the Guarantors is subject to regulation, or shall become subject to
regulation upon the consummation of the Offering and sale of the Series A
Notes and the application of the net proceeds thereof as described in the
Offering Circular, under the Investment Company Act of 1940, as amended,
and the rules and regulations and interpretations promulgated thereunder.
26
(nn) No Brokers. None of the Issuers or the Guarantors has dealt
with any broker, finder, commission agent or other person (other than the
Initial Purchaser) in connection with the Offering and none of the Issuers
or the Guarantors is under any obligation to pay any broker's fee or
commission in connection with the Offering (other than commissions and
fees to the Initial Purchaser).
(oo) No Labor Disputes. Except as would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect, none
of the Issuers or the Guarantors is engaged in any unfair labor practice.
There is (i) no unfair labor practice complaint or other proceeding
pending or, to the knowledge of the Issuers and the Guarantors, threatened
against any of the Issuers or the Guarantors before the National Labor
Relations Board or any state, local or foreign labor relations board or
any industrial tribunal, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
or, to the knowledge of the Issuers and the Guarantors, threatened, (ii)
no strike, labor dispute, slowdown or stoppage pending or, to the
knowledge of the Issuers and the Guarantors, threatened against any of the
Issuers or the Guarantors, and (iii) no union representation question
existing with respect to the employees of any of the Issuers or the
Guarantors, and, to the knowledge of the Issuers and the Guarantors, no
union organizing activities are taking place except, in the case of each
of clauses (i), (ii) and (iii) above, as would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(pp) Environmental Laws. Except as disclosed in the Offering
Circular or as otherwise would not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect or otherwise require
disclosure in the Offering Circular, (i) none of the Issuers or the
Guarantors has been or is in violation of any Federal, state or local laws
and regulations relating to pollution or protection of human health or the
environment, including, without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of toxic or
hazardous substances, materials or wastes, or petroleum and petroleum
products ("MATERIALS OF ENVIRONMENTAL CONCERN"), or otherwise relating to
the protection of human health and safety, or the use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern
(collectively, "ENVIRONMENTAL LAWS"), which violation includes, but is not
limited to, noncompliance with, or lack of, any permits or other
environmental authorizations; (ii) to the knowledge of the Issuers and the
Guarantors, there are no circumstances, either past, present or that are
reasonably foreseeable, that may lead to any such violation in the future;
(iii) none of the Issuers or the Guarantors has received any communication
(written or oral), whether from a Governmental Authority or otherwise,
alleging any such violation; (iv) there is no pending or, to the knowledge
of the Issuers and the Guarantors, threatened claim, action,
investigation, notice (written or oral) or other Proceeding by any person
or entity alleging potential liability of any of the Issuers or the
Guarantors (or against any person or entity for whose acts or omissions
any of the Issuers or the Guarantors is or may reasonably be expected to
be liable, either contractually or by operation of law) for investigatory,
cleanup, or other response
27
costs, or natural resources or property damages, or personal injuries,
attorney's fees or penalties relating to (A) the presence, or release into
the environment, of any Materials of Environmental Concern at any
location, or (B) circumstances forming the basis of any violation or
potential violation, of any Environmental Law (collectively,
"ENVIRONMENTAL CLAIMS"); and (v) to the knowledge of the Issuers and the
Guarantors, there are no past or present actions, activities,
circumstances, conditions, events or incidents that could reasonably be
expected to form the basis of any Environmental Claim.
Each of the Issuers and the Guarantors, as appropriate, has
conducted environmental investigations of, and have reviewed reasonably
available information regarding, the business, properties and operations
of each of the Issuers and the Guarantors, and of other properties within
the vicinity of their business, properties and operations, as appropriate
for the circumstances of each such property and operation; on the basis of
such reviews, investigations and inquiries, the Issuers and the Guarantors
have reasonably concluded that any costs and liabilities associated with
such matters would not have, singularly or in the aggregate, a Material
Adverse Effect or otherwise require disclosure in the Offering Circular.
(qq) Market Data. All statistical and market and industry related
data included in the Offering Circular are based on or derived from
sources which the Issuers and the Guarantors believe to be reliable and
accurate.
(rr) Directed Selling Efforts. None of the Issuers or the Guarantors
nor any of their respective affiliates or any person acting on its or
their behalf (other than the Initial Purchaser, as to whom the Issuers and
the Guarantors make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S under the Act
("REGULATION S") with respect to the Series A Notes.
(ss) Offshore Transactions. The Series A Notes offered and sold in
reliance on Regulation S have been and will be offered and sold only in
offshore transactions, as such term is defined in Regulation S ("OFFSHORE
TRANSACTIONS").
(tt) No Plan or Scheme. The sale of the Series A Notes pursuant to
Regulation S is not part of a plan or scheme to evade the registration
provisions of the Act.
(uu) Regulation S Offering Restrictions. The Issuers and the
Guarantors, their respective affiliates and all persons acting on their
behalf (other than the Initial Purchaser, as to whom the Issuers and the
Guarantors make no representation) have complied with and will comply with
the offering restrictions requirements of Regulation S in connection with
the offering of the Series A Notes outside the United States.
28
(vv) Restricted Period. The Series A Notes sold in reliance on
Regulation S will be represented upon issuance by a temporary global
security that may not be exchanged for definitive securities until the
expiration of the 40-day restricted period referred to in Rule 903(b)(3)
of the Act and only upon certification of beneficial ownership of such
Series A Notes by non-U.S. persons or U.S. persons who purchased such
Series A Notes in transactions that were exempt from the registration
requirements of the Act.
(ww) Representations and Warranties. Each certificate signed
pursuant to Section 9(a)(viii) by any officer of any of the Issuers or the
Guarantors and delivered to the Initial Purchaser or counsel for the
Initial Purchaser pursuant to this Agreement shall be deemed to be a
representation and warranty by such Issuer or Guarantor to the Initial
Purchaser as to the matters covered thereby.
7. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASER. The
Initial Purchaser represents and warrants to the Issuers that:
(a) QIB. It is a QIB with such knowledge and experience in financial
and business matters as is necessary in order to evaluate the merits and
risks of an investment in the Series A Notes.
(b) Eligible Purchasers. It (i) is not acquiring the Series A Notes
with a view to any distribution thereof that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction, and (ii) will be soliciting offers for the Series A Notes
only from, and will be offering and selling the Series A Notes only to,
(A) persons in the United States whom it reasonably believes to be QIBs in
reliance on the exemption from the registration requirements of the Act
provided by Rule 144A under the Act, (B) Accredited Investors that execute
and deliver to the Issuers and the Initial Purchaser an Accredited
Investor Letter and (C) Regulation S Purchasers in Offshore Transactions
in reliance upon Regulation S under the Act.
(c) No General Solicitation. No form of general solicitation or
general advertising within the meaning of Rule 502(c) under the Act or in
any manner involving a public offering within the meaning of Section 4(2)
of the Act has been or will be used by the Initial Purchaser or any of its
representatives in connection with the offer and sale of any of the Series
A Notes.
(d) Representations of Eligible Purchasers. In connection with the
Exempt Resales, it will solicit offers to buy the Series A Notes only
from, and will offer and sell the Series A Notes only to, persons whom it
reasonably believes to be Eligible Purchasers in accordance with this
Agreement and on the terms contemplated by the Offering Circular.
(e) Power and Authority. It has all requisite power and authority to
enter into, deliver and perform its obligations under this Agreement and
29
the Registration Rights Agreement and each of this Agreement and the
Registration Rights Agreement has been duly authorized by it.
(f) Directed Selling Efforts. The Initial Purchaser and its
affiliates or any person acting on its or their behalf have not engaged
and will not engage in any directed selling efforts within the meaning of
Regulation S with respect to the Series A Notes.
(g) Offshore Transactions. The Series A Notes offered and sold by
the Initial Purchaser pursuant hereto in reliance on Regulation S have
been and will be offered and sold only in Offshore Transactions.
(h) No Plan or Scheme. The sale of the Series A Notes offered and
sold by the Initial Purchaser pursuant hereto in reliance on Regulation S
is not part of a plan or scheme to evade the registration provisions of
the Act.
(i) Regulation S Offering Restrictions. The Initial Purchaser agrees
that it has not offered or sold and will not offer or sell the Series A
Notes in the United States or to, or for the benefit or account of, a U.S.
Person (other than a distributor), in each case, as defined in Rule 902
under the Act (i) as part of its distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the
offering of the Series A Notes pursuant hereto and the Closing Date, other
than in accordance with Regulation S of the Act or another exemption from
the registration requirements of the Act. The Initial Purchaser agrees
that, during such 40-day restricted period, it will not cause any
advertisement with respect to the Series A Notes (including any
"tombstone" advertisement) to be published in any newspaper or periodical
or posted in any public place and will not issue any circular relating to
the Series A Notes, except such advertisements as permitted by and include
the statements required by Regulation S.
(j) Notice Required. The Initial Purchaser agrees that, at or prior
to confirmation of a sale of Series A Notes by it to any distributor,
dealer or person receiving a selling concession, fee or other remuneration
during the 40-day restricted period referred to in Rule 903(b)(3) under
the Act, it will send to such distributor, dealer or person receiving a
selling concession, fee or other remuneration a confirmation or notice to
substantially the following effect:
"The Series A Notes covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered and sold within the
United States or to, or for the account or benefit of, U.S.
persons (i) as part of your distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of
the Offering and the Closing Date, except in either case in
accordance with Regulation S under the Securities Act (or Rule
144A under the Securities Act or to institutional "accredited
investors," as defined in Rule 501(a)(1), (2), (3) or (7)
30
under the Securities Act) in transactions that are exempt from
the registration requirements of the Securities Act, and in
connection with any subsequent sale by you of the Series A
Notes covered hereby in reliance on Regulation S during the
period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you
must deliver a notice to substantially the foregoing effect.
Terms used above have the meanings assigned to them in
Regulation S."
(k) Regulation S Security. The Initial Purchaser agrees that the
Series A Notes offered and sold in reliance on Regulation S will be
represented upon issuance by a global security that may not be exchanged
for definitive securities until the expiration of the 40-day restricted
period referred to in Rule 903(b)(3) of the Act and only upon
certification of beneficial ownership of such Series A Notes by non-U.S.
persons or U.S. persons who purchased such Series A Notes in transactions
that were exempt from the registration requirements of the Act.
8. INDEMNIFICATION.
(a) Indemnification of Initial Purchaser. Each of the Issuers and
the Guarantors shall, jointly and severally, without limitation as to
time, indemnify and hold harmless the Initial Purchaser and each person,
if any, who controls (within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) the Initial Purchaser (any of such
persons being hereinafter referred to as a "CONTROLLING PERSON"), and the
respective officers, directors, partners, employees, representatives and
agents of the Initial Purchaser and any such controlling person
(collectively with the Initial Purchaser, the "PURCHASER INDEMNIFIED
PARTIES"), to the fullest extent lawful, from and against any and all
losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and reasonable attorneys' fees) and
expenses (including, without limitation, costs and expenses incurred in
connection with investigating, preparing, pursuing or defending against
any of the foregoing) (collectively, "LOSSES"), as incurred, directly or
indirectly caused by, related to, based upon, arising out of or in
connection with (i) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Circular or the
Offering Circular (or any amendment or supplement thereto) or (ii) any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, that neither of the Issuers nor any Guarantor shall be liable
under the indemnity provided in this Section 8(a) to any Purchaser
Indemnified Party for any Losses that (A) result solely from an untrue
statement of a material fact contained in, or the omission of a material
fact from, any Preliminary Offering Circular, which untrue statement or
omission was completely corrected in the Offering Circular (as then
amended or supplemented) if it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (1) such
Purchaser Indemnified Party sold the Notes to the person
31
alleging such Loss and failed to send or give, at or prior to the written
confirmation of such sale, a copy of the Offering Circular (as then
amended or supplemented), if required by law to have so delivered it, and
(2) the Issuers had previously furnished copies of the corrected Offering
Circular to such Purchaser Indemnified Party within a reasonable amount of
time prior to such sale or such confirmation, and (3) the corrected
Offering Circular, if delivered, would have been a complete defense
against the person asserting such Loss; or (B) are based on an untrue
statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with the Furnished Information. None of the
Issuers and the Guarantors shall be liable under this Section 8 for any
settlement of any claim or action (other than settlements permitted by
Section 8(b)(3)) effected without its prior written consent, which consent
shall not be unreasonably withheld. The Issuers shall notify the Initial
Purchaser promptly of the institution, threat or assertion of any
Proceeding of which either of the Issuers is aware in connection with the
matters addressed by this Agreement which involves either of the Issuers,
any of the Guarantors or any of the Purchaser Indemnified Parties.
(b) Actions Against Parties; Notification. (1) If any Proceeding
shall be brought or asserted against any person entitled to
indemnification hereunder (an "INDEMNIFIED PARTY"), such Indemnified Party
shall give prompt written notice to the party or parties from which such
indemnification is sought (the "INDEMNIFYING PARTIES" and each, an
"INDEMNIFYING PARTY"); provided, that the failure to so notify the
Indemnifying Parties shall not relieve any of the Indemnifying Parties
from any obligation or liability except to the extent (but only to the
extent) that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal) that such
Indemnifying Party has been prejudiced materially by such failure.
(2) The Indemnifying Parties shall have the right, exercisable by
giving written notice to an Indemnified Party, within 20 Business Days
after receipt of written notice from such Indemnified Party of such
Proceeding, to assume, at their expense, the defense of any such
Proceeding; provided, that an Indemnified Party shall have the right to
employ separate counsel in any such Proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or parties unless: (i) the Indemnifying
Parties have agreed to pay such fees and expenses; (ii) the Indemnifying
Parties shall have failed promptly to assume the defense of such
Proceeding or shall have failed to employ counsel reasonably satisfactory
to such Indemnified Party; or (iii) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party and one or more Indemnifying Parties (or any affiliates or
controlling persons of any of the Indemnifying Parties), and such
Indemnified Party shall have been advised by counsel that there may be one
or more defenses available to such Indemnified Party that are in addition
to, or in conflict with, those defenses available to the indemnifying
party or such affiliate or controlling person (in which case, if such
Indemnified Party notifies the Indemnifying Parties in writing that it
elects to employ separate counsel at the expense of the Indemnifying
Parties,
32
the Indemnifying Parties shall not have the right to assume the defense
thereof and the reasonable fees and expenses of such counsel shall be at
the expense of the Indemnifying Parties; it being understood, however,
that, the Indemnifying Parties shall not, in connection with any one such
Proceeding or separate but substantially similar or related Proceedings in
the same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (together with appropriate local counsel) at
any time for such Indemnified Party).
(3) None of the Issuers, the Guarantors, the Initial Purchaser,
their respective controlling persons nor any of their respective officers,
directors, partners, employees, representatives and agents shall consent
to entry of any judgment in or enter into any settlement of any pending or
threatened Proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not any Indemnified Party is a party
thereto) unless such judgment or settlement includes, as an unconditional
term thereof, the giving by the claimant or plaintiff to each Indemnified
Party of a release, in form and substance satisfactory to the Indemnified
Party, from all Losses that may arise from such Proceeding or the subject
matter thereof (whether or not any Indemnified Party is a party thereto).
(c) Indemnification of Issuers and Guarantors. The Initial Purchaser
agrees to indemnify and hold harmless each of the Issuers and the
Guarantors and each of their controlling persons and the respective
members, managers, officers, directors, partners, employees,
representatives and agents of the Issuers and any such controlling person
to the same extent as the foregoing indemnity from the Issuers and the
Guarantors to each of the Purchaser Indemnified Parties stated in Section
8(a), but only with respect to Losses that are caused by an untrue
statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with the Furnished Information. The Initial
Purchaser shall not be liable under this Section 8(c) for any settlement
of any claim or action (other than settlements permitted by Section
8(b)(3)) effected without its prior written consent, which consent shall
not be unreasonably withheld. Notwithstanding the foregoing, any liability
of the Initial Purchaser hereunder shall be limited to an amount not to
exceed the excess (such excess, the "AGGREGATE AMOUNT") of (i) the
aggregate gross proceeds received by the Initial Purchaser from the sale
of the Series A Notes over (ii) the sum of (A) the aggregate price at
which the Initial Purchaser purchased the Series A Notes from the Issuers
and (B) the amount of any Losses that the Purchaser Indemnified Parties
otherwise have been required to pay by reason of such untrue or alleged
untrue statement of such omission or alleged omission.
(d) Contribution. If the indemnification provided for in this
Section 8 is unavailable to an Indemnified Party or is insufficient to
hold such Indemnified Party harmless for any Losses in respect of which
this Section 8 would otherwise apply by its terms (other than by reason of
exceptions provided in this Section 8), then each indemnifying party, in
lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
Losses (i) in such proportion as is appropriate to reflect the relative
33
benefits received by the Issuers and the Guarantors, on the one hand, and
the Initial Purchaser, on the other hand, from the Offering or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Issuers and the Guarantors, on the one hand, and the Initial
Purchaser, on the other hand, in connection with the actions, statements
or omissions that resulted in such Losses, as well as any other relevant
equitable considerations. The relative benefits received by the Issuers
and the Guarantors, on the one hand, and the Initial Purchaser, on the
other hand, shall be deemed to be in the same proportion as the total net
proceeds from the Offering (before deducting expenses) received by the
Issuers and the Guarantors, on the one hand, and the total discounts and
commissions received by the Initial Purchaser, on the other hand, bear to
the total price of the Series A Notes in Exempt Resales as set forth on
the cover page of the Offering Circular. The relative fault of the Issuers
and the Guarantors, on the one hand, and the Initial Purchaser, on the
other hand, shall be determined by reference to, among other things,
whether any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Issuers and the Guarantors, on the one hand,
or the Initial Purchaser, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by an
Indemnified Party as a result of any Losses shall be deemed to include any
legal or other fees or expenses incurred by such party in connection with
any Proceeding, to the extent such party would have been indemnified for
such fees or expenses if the indemnification provided for in this Section
8 was available to such party.
Each party hereto agrees that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 8(d), the
Initial Purchaser shall not be required to contribute, in the aggregate,
any amount in excess of the Aggregate Amount. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
(e) Nonexclusive Remedy. The indemnity and contribution agreements
contained in this Section 8 are in addition to any liability that any of
the Indemnifying Parties may otherwise have to the Indemnified Parties,
and do not limit in any way rights or remedies which may otherwise be
available at law or in equity.
9. CONDITIONS.
(a) Conditions to Obligations of Initial Purchaser. The obligations
of the Initial Purchaser to purchase the Series A Notes under this
34
Agreement are subject to the satisfaction or waiver of each of the
following conditions:
(i) Representations and Warranties of the Issuers and
Guarantors. All the representations and warranties of each of the
Issuers and the Guarantors in this Agreement and in each of the
other Operative Documents to which it is a party shall be true and
correct in all material respects (other than representations and
warranties with a Material Adverse Effect qualifier or other
materiality qualifier, which shall be true and correct as written)
at and as of the Closing Date after giving effect to the
Transactions consummated on or prior to the Closing Date with the
same force and effect as if made on and as of such date. On or prior
to the Closing Date, each of the Issuers and the Guarantors and, to
the knowledge of the Issuers and the Guarantors, each other party to
the Operative Documents (other than the Initial Purchaser) shall
have performed or complied in all material respects with all of the
agreements and satisfied in all material respects all conditions on
their respective parts required to be performed, complied with or
satisfied as of or prior to the Closing Date pursuant to the
Operative Documents.
(ii) Availability of Offering Circular. The Offering Circular
shall have been printed and copies made available to the Initial
Purchaser not later than 12:00 noon, New York City time, on the
third Business Day following the date of this Agreement or at such
later date and time as the Initial Purchaser may approve.
(iii) No Injunction. No injunction, restraining order or order
of any nature by a Governmental Authority shall have been issued as
of the Closing Date that would prevent or materially interfere with
the issuance and sale of the Series A Notes or the consummation of
any of the other Transactions; and no stop order suspending the
qualification or exemption from qualification of any of the Series A
Notes in any jurisdiction shall have been issued and no Proceeding
for that purpose shall have been commenced or, to the knowledge of
the Issuers and the Guarantors, be pending or contemplated as of the
Closing Date.
(iv) No Proceedings. No action shall have been taken and no
Applicable Law shall have been enacted, adopted or issued that
would, as of the Closing Date, prevent the consummation of any of
the Transactions. Except as disclosed in the Offering Circular, no
Proceeding shall be pending or, to the knowledge of the Issuers and
the Guarantors, threatened, other than Proceedings that (A) if
adversely determined would not, singly or in the aggregate,
adversely affect the issuance or marketability of the Series A
Notes, and (B) could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(v) No Material Adverse Change. Since the date as of which
information is given in the Offering Circular (without giving effect
to any amendment thereto or supplement thereto), there shall not
have been any Material Adverse Change.
35
(vi) PORTAL. The Notes shall have (A) been designated
PORTAL securities in accordance with the rules and regulations
adopted by the NASD relating to trading in the PORTAL market,
and (B) received a rating of "B+" and "B2" from Standard &
Poor's Corporation and Moody's Investors Services, Inc.,
respectively.
(vii) Maintenance of Rating. As of the Closing Date, (i)
there shall not have occurred any downgrading, suspension or
withdrawal of, nor shall any notice have been given of any
potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review)
for a possible change that does not indicate the direction of
the possible change in, any rating of any securities of any of
the Issuers and the Guarantors (including, without limitation,
the placing of any of the foregoing ratings on credit watch
with negative or developing implications or under review with
an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for
purposes of Rule 436(g)(2) under the Act, (ii) there shall not
have occurred any change, nor shall any notice have been given
of any potential or intended change, in the outlook for any
rating of any securities of any of the Issuers and the
Guarantors by any such rating organization and (iii) no such
rating organization shall have given notice that it has
assigned (or is considering assigning) a lower rating to the
Notes than that on which the Notes were marketed.
(viii) Officers', Secretary's and Solvency Certificates.
The Initial Purchaser shall have received on the Closing Date:
(A) certificates dated the Closing Date, signed by
(1) the Chief Executive Officer, and (2) the principal
financial or accounting officer of each of the Issuers
and the Guarantors, on behalf of the Issuers and the
Guarantors, confirming the matters set forth in
paragraphs (i), (iii), (iv), (v), (vii), (xii) and
(xiii) of this Section 9(a),
(B) a certificate, dated the Closing Date, signed
by the (1) Chief Executive Officer and (2) the principal
financial or accounting officer of each of the Issuers
and the Guarantors, on behalf of the Issuers and the
Guarantors, stating that the industry, statistical and
market-related data included in the Offering Circular
has been reviewed by such persons and, to the knowledge
of such persons, subject to the risks and limitations
described in the Preliminary Offering Circular and the
Offering Circular, is true and accurate in all material
respects and is based on or derived from sources which
the Issuers and the Guarantors believe to be reliable
and accurate, which certificate shall be in form and
substance reasonably satisfactory to counsel for the
Initial Purchaser and may specifically reference certain
industry, statistical and market-related data contained
in the Offering Circular,
(C) a certificate, dated the Closing Date, signed
by the Secretary or Secretaries of each of the Issuers
and the Guarantors, certifying
36
such matters as the Initial Purchaser may reasonably
request, and
(D) a certificate of solvency, dated the Closing
Date, signed by the principal financial or accounting
officer of the Issuers and the Guarantors substantially
in the form previously approved by the Initial
Purchaser.
(ix) Opinions of Counsel. The Initial Purchaser shall have
received, a favorable opinion (in form and substance satisfactory to
the Initial Purchaser and counsel to the Initial Purchaser), dated
the Closing Date, of each of the following:
(A) Mayer, Brown, Rowe & Maw LLP, special counsel to the
Issuers and the Guarantors, containing opinions substantially
to the effect of the opinions set forth in Exhibit 9(a)(x)(A)
hereto;
(B) Lane & Waterman, special Iowa counsel and special
Iowa gaming counsel to the Issuers and the Guarantors,
containing opinions substantially to the effect of the
opinions set forth in Exhibit 9(a)(x)(B) hereto;
(C) McGlinchey Stafford PLLC, special Louisiana counsel
and Special Louisiana gaming counsel to the Issuers and the
Guarantors, containing opinions substantially to the effect of
the opinions set forth in Exhibit 9(a)(x)(C) hereto; and
(D) Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to the Initial Purchaser.
(x) Accountants' Comfort Letters. The Initial Purchaser shall
have received from Deloitte & Touche, LLP, independent public
accountants with respect to the Company:
(A) a customary comfort letter, dated as of the date of
the Offering Circular, in form and substance satisfactory to
the Initial Purchaser, containing the information and
statements of the type ordinarily included in accountants'
"comfort letters," with respect to the consolidated financial
statements of Company and its subsidiaries and certain
financial information with respect to the Issuers and the
Guarantors contained in the Offering Circular, and
(B) a customary "bring down" comfort letter, dated the
Closing Date, in form and substance satisfactory to the
Initial Purchaser, to the effect that Deloitte & Touche, LLP
reaffirms the statements made in its letter furnished pursuant
to clause (A) above, except that the specified date referred
to shall be a date not more than five days prior to the
Closing Date.
37
(xi) Permits. All Permits required to be obtained from, and
all notices or declarations required to be made with, any Gaming
Authority or other Governmental Authority to permit the issuance and
sale of the Series A Notes in accordance with the terms of, and in
the aggregate principal amount set forth in, this Agreement and to
permit the consummation of the other Transactions shall have been
obtained and made, in each case free of any conditions other than
those set forth in this Agreement.
(xii) Execution and Delivery of Note Documents and
Consummation of Transactions. The Note Documents shall have been
executed and delivered by all parties thereto, and the Initial
Purchaser shall have received a fully executed original of each Note
Document. The terms of each of the Note Documents shall conform in
all material respects to the description thereof in the Offering
Circular, and the transactions contemplated by the Note Documents
shall have been consummated on terms that conform in all material
respects to the description thereof in the Offering Circular.
(xiii)Execution and Delivery of Other Operative Documents and
Consummation of Other Transactions.
(A) The Supplemental Indenture and each of the
Collateral Release Agreements shall have been executed and
delivered by all parties thereto, and the Initial Purchaser
shall have received a fully executed original of the
Supplemental Indenture, a copy of each of the Collateral
Release Agreements and a copy of the Tender Offer Documents.
The terms of the Supplemental Indenture and each of the
Collateral Release Agreements shall conform in all material
respects to the description thereof, and the Supplemental
Indenture and the Proposals shall have become operative and
the OED Note Repurchase Transactions shall have been
consummated on terms that conform in all material respects to
the description thereof, in the Offer to Purchase and the
Offering Circular.
(B) The Company Note Transactions (other than the
Company Note Redemption but including the mailing of the
Redemption Notice) shall have been consummated in accordance
with the Company Indenture, and the Initial Purchaser shall
have received a copy of the Redemption Notice.
(C) The Credit Facility Waivers shall have been executed
and delivered by all parties thereto, and shall have become
operative, and the Initial Purchaser shall have received a
copy of the executed Credit Facility Waivers.
(xiv) Additional Documents. The Initial Purchaser or its
counsel shall have received copies of all opinions, certificates,
letters and other documents delivered under or in connection with
the Transactions consummated on
38
or prior to the Closing Date, including without limitation, copies
of duly executed payoff letters, UCC-3 termination statements,
mortgage releases and other collateral releases and terminations,
each in form and substance satisfactory to the Initial Purchaser
evidencing, as the case may be, the OED Note Repurchase Transactions
and the Company Note Repurchase Transactions, including, without
limitation, the release of the related Liens and termination of the
related security documents, and each such payoff letter, release and
termination shall be in full force and effect.
(xv) Security Documents. The Issuers and the Guarantors shall
have furnished to the Initial Purchaser the Security Documents duly
executed by the respective Issuers and the Guarantors party thereto,
together with:
(A) proper financing statements, each in the form to be
filed on the Closing Date under the Uniform Commercial Code of
all jurisdictions that may be necessary in order to perfect
the Liens created by the Security Documents, covering the
Collateral and naming the Secured Party as secured party,
which financing statements shall be so filed on or about the
Closing Date;
(B) proper instruments to be filed in the U.S. Patent
and Trademark Office that may be necessary in order to perfect
the liens granted on trademarks, which liens have been created
by the Security Documents;
(C) contemplated requests for information and lien
search results, listing as of a recent date all effective
financing statements filed in Louisiana, Iowa and Delaware
that name any of the Issuers, the Guarantors or the Issuers
and the Guarantors as debtor, together with copies of such
financing statements;
(D) copies of duly executed payoff letters, UCC-3
termination statements, mortgage releases, intellectual
property releases and other collateral releases and
terminations, each in form and substance reasonably
satisfactory to the Initial Purchaser evidencing the release
of any Liens on any of the Collateral (other than Liens
created by the Indenture and the Security Documents or
Permitted Liens), and each such payoff letter, release and
termination shall be in full force and effect.
(E) the original membership interest certificates and
stock certificates pledged to the Secured Party pursuant to
the Security Documents, together with undated stock powers or
endorsements duly executed in blank in connection therewith;
(F) mortgages and fixture filings in form and substance
approved by the Initial Purchaser, to be recorded on or about
the Closing Date in all jurisdictions that may be deemed
necessary or desirable in order to perfect the liens created
by the Security Documents, covering the Collateral, which
mortgages and fixture filings shall be so recorded on or
39
about the Closing Date;
(G) irrevocable commitment by one or more title
insurance companies approved by the Initial Purchaser in the
Initial Purchaser's reasonable discretion to issue one or more
lender's policies of title insurance insuring the liens
created by the Security Documents, subject only to those title
matters and exceptions approved by the Initial Purchaser,
together with fully executed reinsurance agreements in form
and substance reasonably approved by the Initial Purchaser,
providing for reinsurance in the amounts required by the
Initial Purchaser with title insurance companies approved by
the Initial Purchaser in its reasonable discretion;
(H) Such consents and agreements of lessors and other
third parties, as the Trustee may deem reasonably necessary or
desirable;
(I) a lender's title insurance policy for the property
located in Dubuque, Iowa that does not take exception for
items that would be displayed by an updated A.L.T.A. survey,
and an affidavit and indemnification in favor of the Initial
Purchaser and the Trustee, in a form acceptable to the Initial
Purchaser and the Trustee: (a) deposing and stating that (I)
the lines of the property, buildings, fences, driveways and
other improvements shown on the most recent existing survey
provided to them by Issuers have not changed; (II) no
additional easements or changes to any easements located on
the property and shown on the most recent existing survey
exist; (III) no buildings, fences, driveways or other
improvements constructed on adjoining premises since the date
of the most recent existing survey encroach on the property;
and (IV) the property conforms in all particulars with the
state of facts shown on the most recent existing survey; and
(b) indemnifying the Initial Purchaser and the Trustee from
and against all loss, liability, damages and attorney's fees
and costs incurred in the event the affidavit proves
inaccurate; provided, however, if Issuer is unable to satisfy
the Closing requirement set forth in this Section 9(a)(xv)(I),
then such requirement shall be deemed waived on the condition
that Issuer shall comply with the covenant set forth in
Section 5(i)(B) with respect to the property located in
Dubuque, Iowa; and
(J) any other documents required to be delivered to the
Secured Party pursuant to the Security Documents and
reasonable evidence that all other actions necessary to
perfect and protect the Liens created by the Security
Documents have been taken.
(xvi) Additional Documents. Counsel to the Initial Purchaser
shall have been furnished with such documents as they may reasonably
require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 9 and in order to evidence the
accuracy, completeness and satisfaction of the representations,
warranties and conditions contained in this Agreement.
40
(b) Conditions to the Issuers' and the Guarantors' Obligations. The
obligations of the Issuers to sell, and the Guarantors to guarantee, the
Series A Notes under this Agreement are subject to the satisfaction or
waiver of each of the following conditions:
(i) Payment. The Initial Purchaser shall have delivered
payment to the Issuers for the Series A Notes pursuant to Sections 2
and 4 of this Agreement.
(ii) Representations and Warranties. All of the
representations and warranties of the Initial Purchaser in this
Agreement shall be true and correct in all material respects at and
as of the Closing Date, with the same force and effect as if made on
and as of such date.
(iii) No Injunctions. No injunction, restraining order or
order of any nature by a Governmental Authority shall have been
issued as of the Closing Date that would prevent or interfere with
the issuance and sale of the Series A Notes; and no stop order
suspending the qualification or exemption from qualification of any
of the Series A Notes in any jurisdiction shall have been issued and
no Proceeding for that purpose shall have been commenced or be
pending or contemplated as of the Closing Date.
(iv) Execution and Delivery of Note Documents. The Note
Documents shall have been executed and delivered by all parties
thereto (other than the Issuers and the Guarantors), and the Issuers
and the Guarantors shall have received a fully executed original of
each Note Document. On or prior to the Closing Date, the Initial
Purchaser and each other party to the Note Documents (other than the
Issuers and the Guarantors) shall have performed or complied in all
material respects with all of the agreements and satisfied in all
material respects all conditions on their respective parts to be
performed, complied with or satisfied pursuant to the Note
Documents.
(v) Execution and Delivery of Other Operative Documents and
Consummation of Other Operative Transactions.
(A) The conditions listed under the section captioned
"Conditions of the Tender Offer and the Consent Solicitation"
in the Offer to Purchase, with the exception of the Financing
Condition, as defined in the Offer to Purchase, shall have
been satisfied.
(B) The Credit Facility Waivers shall have been executed
and delivered by all parties thereto (other than the Issuers
and the Guarantors) and shall have become operative, and the
Issuers and the Guarantors shall have received a fully
executed original of each of the Credit Facility Waivers.
41
(vii) Accredited Investor Side Letter. The Initial Purchaser
shall have delivered to the Issuers a letter, dated as of the
Closing Date, listing as of such date any and all Accredited
Investors to whom the Initial Purchaser will make Exempt Resales of
the Notes and the aggregate principal amount of Notes to be sold by
the Initial Purchaser to each such Accredited Investor in such
Exempt Resales.
10. TERMINATION. This Agreement shall become effective upon the
execution and delivery of this Agreement by the parties hereto. The Initial
Purchaser may terminate this Agreement at any time prior to the Closing Date by
written notice to the Issuers if any of the following has occurred:
(a) Material Adverse Effect. Since the date as of which information
is given in the Offering Circular, any Material Adverse Effect or any
Material Adverse Change that could, in the Initial Purchaser's judgment,
be reasonably expected to (i) make it impracticable or inadvisable to
proceed with the Offering or delivery of the Series A Notes, including the
Exempt Resales, on the terms and in the manner contemplated in the
Offering Circular or (ii) materially impair the investment quality of the
Notes.
(b) Failure to Satisfy Conditions. The failure of any of the Issuers
or the Guarantors to satisfy the conditions contained in Section 9(a) on
or prior to the Closing Date.
(c) Outbreak of Hostilities. Any outbreak or escalation of
hostilities, any declaration of war by the United States, any other
calamity, emergency or crisis, any material adverse change in economic
conditions in or the financial markets of the United States or elsewhere
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 could make it, in the Initial Purchaser's judgment,
impracticable or inadvisable to market or proceed with the offering or
delivery of the Series A Notes on the terms and in the manner contemplated
in the Offering Circular or to enforce contracts for the sale of any of
the Series A Notes.
(d) Suspension of Trading. The suspension or limitation of trading
generally in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market or any setting of limitations on
prices for securities on any such exchange or on the Nasdaq National
Market.
(e) Enactment of Adverse Law. The enactment, publication, decree or
other promulgation after the date hereof of any Applicable Law that in the
Initial Purchaser's opinion materially and adversely affects, or could
materially and adversely affect, the properties, business, prospects,
operations, earnings, assets, liabilities or condition (financial or
otherwise) of any of the Issuers or the Guarantors.
42
(f) Downgrade of Securities. On or after the date hereof, (i) there
shall not have occurred any downgrading, suspension or withdrawal of, nor
shall any notice have been given of any potential or intended downgrading,
suspension or withdrawal of, or of any review (or of any potential or
intended review) for a possible change that does not indicate the
direction of the possible change in, any rating of any of the Issuers or
Guarantors or any securities of any of the Issuers or Guarantors
(including, without limitation, the placing of any of the foregoing
ratings on credit watch with negative or developing implications or under
review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes of
Rule 436(g)(2) under the Act, (ii) there shall not have occurred any
adverse change, nor shall any notice have been given of any potential or
intended adverse change, in the outlook for any rating of any of the
Issuers or Guarantors or any securities of any of Issuers or Guarantors
(by any such rating organization and (iii) no such rating organization
shall have given notice that it has assigned (or is considering assigning)
a lower rating to the Notes than that on which the Notes were marketed.
(g) Banking Moratorium. The declaration of a banking moratorium by
any Governmental Authority; or the taking of any action by any
Governmental Authority after the date hereof in respect of its monetary or
fiscal affairs that in the Initial Purchaser's opinion could reasonably be
expected to have a material adverse effect on the financial markets in the
United States or elsewhere.
The respective indemnities, contribution and expense reimbursement
provisions and agreements, and representations, warranties and other statements
of the Issuers and the Guarantors and the Initial Purchaser set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Initial Purchaser or any of the
Issuers or the Guarantors, or any of their respective officers, directors,
members or managers or any of their respective controlling persons, (ii)
acceptance of the Notes, and payment for them hereunder, and (iii) any
termination of this Agreement (including, without limitation, any termination
pursuant to this Section 10). Without limiting the foregoing, notwithstanding
any termination of this Agreement, (i) the Issuers and the Guarantors shall be
and shall remain jointly and severally liable (x) for all expenses that they
have agreed to pay pursuant to Section 5(f), and (y) for their obligations
pursuant to Section 8, and (ii) Initial Purchaser shall be and shall remain
liable for its obligations pursuant to Section 8.
11. MISCELLANEOUS.
(a) Notices. Notices given pursuant to any provision of this
Agreement shall be delivered or sent by mail or facsimile transmission as
follows:
(i) if to any of the Issuers and the Guarantors, to Diamond
Jo, LLC, 400 East Third Street, P.O. Box 1750, Dubuque, Iowa 52004,
facsimile number (563) 557-0549, Attention: Chief Financial Officer,
with a copy
43
to Peninsula Gaming Partners, LLC, 7137 Mission Hills Drive, Las
Vegas, Nevada 89113, facsimile number (702) 247-6822, Attention:
Michael S. Luzich, and another copy to Mayer, Brown, Rowe & Maw,
1675 Broadway, New York, New York 10019, facsimile number (212)
262-1910, Attention: Nazim Zilkha, Esq., and
(ii) if to the Initial Purchaser, to Jefferies & Company,
Inc., 11100 Santa Monica Boulevard, 10th Floor, Los Angeles,
California 90025, Attention: Lloyd Feller, Esq., with a copy to
Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue,
Suite 3400, Los Angeles, California 90071, facsimile number (213)
687-5600, Attention: Nicholas P. Saggese, Esq.
(provided, that any notice pursuant to Section 8 hereof will be mailed,
delivered, telegraphed or sent by facsimile and confirmed to the party to
be notified and its counsel), or in any case to such other address as the
person to be notified may have requested in writing.
(b) Successors and Assigns. This Agreement has been and is made
solely for the benefit of and shall be binding upon each of the Issuers
and the Guarantors, the Initial Purchaser and, to the extent provided in
Section 8, the controlling persons, officers, directors, partners,
employees, representatives and agents referred to in Section 8, and, to
the extent provided in Section 12, the Parent Issuer (as defined below)
and their respective heirs, executors, administrators, successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser
of any of the Series A Notes from the Initial Purchaser merely because of
such purchase. Notwithstanding the foregoing, it is expressly understood
and agreed that each purchaser who purchases Series A Notes from the
Initial Purchaser is intended to be a beneficiary of the Issuers'
covenants contained in the Registration Rights Agreement to the same
extent as if the Notes were sold and those covenants were made directly to
such purchaser by each of the Issuers, and each such purchaser shall have
the right to take action against each of the Issuers to enforce, and
obtain damages for any breach of, those covenants.
(c) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
INTERPRETED, AND THE RIGHTS OF THE PARTIES SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT
LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAWS AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES. EACH
OF THE ISSUERS AND THE GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN
44
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF
THE AFORESAID COURTS. EACH OF THE ISSUERS AND THE GUARANTORS IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE
LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDINGS
BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF
THE ISSUERS AND THE GUARANTORS IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO SUCH ISSUER OR SUCH GUARANTOR, AS THE CASE MAY BE, AT THE
ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE INITIAL
PURCHASER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OF THE ISSUERS
OR THE GUARANTORS IN ANY OTHER JURISDICTION.
(d) Counterparts. This Agreement may be signed in various
counterparts which together shall constitute one and the same instrument.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
When a reference is made in this Agreement to a Section, paragraph,
subparagraph, Schedule or Exhibit, such reference shall mean a Section,
paragraph, subparagraph, Schedule or Exhibit to this Agreement unless
otherwise indicated.
(f) Interpretation. The words "INCLUDE," "INCLUDES," and "INCLUDING"
when used in this Agreement shall be deemed in each case to be followed by
the words "WITHOUT LIMITATION." The phrases "THE DATE OF THIS AGREEMENT,"
"THE DATE HEREOF," and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to March 25, 2004. The words
"HEREOF," "HEREIN," "HEREWITH," "HEREBY" and "HEREUNDER" and words of
similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole and not to any particular provision of this
Agreement. The phrase "TO THE KNOWLEDGE OF THE ISSUERS AND THE GUARANTORS"
means the actual knowledge, after due inquiry, of any of the members,
managers, directors or officers of any of the Issuers or the Guarantors,
respectively, or any of their respective controlling persons. For purposes
of this Agreement and the representations, warranties, covenants and
agreements herein, the Initial Purchaser shall not be deemed to be an
affiliate of the Issuers or the Guarantors. Unless the context otherwise
requires,
45
defined terms shall include the singular and plural and the conjunctive
and disjunctive forms of the terms defined.
(g) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(h) Amendment. This Agreement may be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may be given, provided that the same are in writing and signed by
each of the signatories hereto.
12. RECEIPT OF REQUISITE REGULATORY APPROVALS.
(a) If the Requisite Regulatory Approvals are received prior to
Closing, then concurrently with the consummation of the Reorganization
Transactions, this Agreement will cease to be effective and the purchase
agreement by and among Peninsula Gaming, LLC, a Delaware limited liability
company (the "PARENT ISSUER"), The Old Evangeline Downs Capital Corp., a
Delaware corporation, each of the entities listed on the signature pages
thereto under the heading "Guarantors" and the Initial Purchaser, attached
as Exhibit A hereto shall automatically become effective.
(b) If the Requisite Regulatory Approvals are received following the
Closing, then concurrently with the consummation of the Reorganization
Transactions, the Parent Issuer shall execute and deliver a joinder to
this Agreement substantially in the form of Exhibit B attached hereto (the
"JOINDER") and become a party to all other provisions of this Agreement.
Effective upon execution of the Joinder, all references in this Agreement
to the "Issuers" shall include the Parent Issuer.
[signature pages follow]
46
Please confirm that the foregoing correctly sets forth the agreement
among the Issuers, the Guarantors and the Initial Purchaser.
Very truly yours,
"Issuers"
DIAMOND JO, LLC
By: /S/ M. BRENT STEVENS
----------------------------------------
Name: M. Brent Stevens
Title: Chief Executive Officer
THE OLD EVANGELINE DOWNS CAPITAL CORP.
By: /S/ M. BRENT STEVENS
----------------------------------------
Name: M. Brent Stevens
Title: Chief Executive Officer
"Guarantors"
PENINSULA GAMING CORP.
By: /S/ M. BRENT STEVENS
---------------------------------------
Name: M. Brent Stevens
Title: Chief Executive Officer
THE OLD EVANGELINE DOWNS, L.L.C.
By: /S/ M. BRENT STEVENS
---------------------------------------
Name: M. Brent Stevens
Title: Chief Executive Officer
OED ACQUISITION, LLC
By: /s/ M. BRENT STEVENS
---------------------------------------
Name: M. Brent Stevens
Title: Chief Executive Officer
With respect to Section 12
PENINSULA GAMING, LLC
By: /S/ M. BRENT STEVENS
---------------------------------------
Name: M. Brent Stevens
Title: Chief Executive Officer
Accepted and Agreed to:
JEFFERIES & COMPANY, INC.
By: /s/ STEVE CROXTON
------------------------------
Name: Steve Croxton
Title: Managing Director
SCHEDULE 6(d)
DJL
Diamond Jo
Issuer of
DJL Notes
|
___________|____________
| |
| |
OEDA PGC Corp.
Unrestricted Co-Issuer of
Subsidiary DJL Notes
|
|
OED
Racino OTBs
Issuer of
OED Notes
|
|
OED Corp.
Co-Issuer of
OED Notes
S-1
SCHEDULE 6(u)
The following individual is still being investigated by the Louisiana
Gaming Commission as to suitability:
Natalie Schramm
S-2
EXHIBIT A
PENINSULA GAMING, LLC PURCHASE AGREEMENT
A-1
EXHIBIT B
DIAMOND JO, LLC
THE OLD EVANGELINE DOWNS CAPITAL CORP.
$233,000,000 8 3/4% SENIOR SECURED NOTES DUE 2012
JOINDER TO THE PURCHASE AGREEMENT
__________________, 2004
JEFFERIES & COMPANY, INC.
11100 Santa Monica Boulevard
10th Floor
Los Angeles, California 90025
Ladies and Gentlemen:
Reference is made to (a) the Purchase Agreement, dated March 25,
2004 (the "PURCHASE AGREEMENT"), by and among Diamond Jo, LLC, a Delaware
limited liability company (the "COMPANY"), The Old Evangeline Downs Capital
Corp., a Delaware corporation ("CAPITAL" and, together with the Company, the
"ISSUERS"), the Guarantors listed on the signature pages thereto under the
heading "Guarantors," and, with respect to Section 12 thereto only, Peninsula
Gaming, LLC, a Delaware limited liability company (the "PARENT ISSUER") on the
one hand, and Jefferies & Company, Inc. (the "INITIAL PURCHASER"), on the other
hand, and (b) the Indenture, dated as of the Closing Date (the "INDENTURE"), by
and among the Issuers and U.S. Bank National Association, as Trustee.
Capitalized terms used herein but not defined herein shall have the respective
meanings assigned to such terms in the Purchase Agreement.
The Issuers have received the Requisite Regulatory Approvals for the
Reorganization Transactions. The Purchase Agreement and the Indenture require
that this Joinder to the Purchase Agreement (this "JOINDER") be executed and
delivered as part of, and concurrently with the consummation of, the
Reorganization Transactions.
1. Joinder. The Parent Issuer hereby agrees to become bound by the
terms, conditions and other provisions of the Purchase Agreement with all
attendant rights, duties and obligations stated therein, with the same force and
effect as if originally named as an "Issuer" therein and as if the Parent Issuer
had executed the Purchase Agreement on the date thereof.
2. GOVERNING LAW. THIS JOINDER SHALL BE CONSTRUED AND INTERPRETED,
AND THE RIGHTS OF THE PARTIES SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION, SECTIONS 5 1401 AND 5 1402
OF
B-1
THE NEW YORK GENERAL OBLIGATIONS LAW AND RULE 327(b) OF NEW YORK CIVIL PRACTICE
LAWS AND RULES. EACH ISSUER AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS JOINDER, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. EACH ISSUER AND EACH GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. EACH ISSUER AND EACH GUARANTOR IRREVOCABLY CONSENTS, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
SUCH ISSUER OR SUCH GUARANTOR, AS THE CASE MAY BE, AT ITS ADDRESS SET FORTH
HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO THIS JOINDER TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY OTHER PARTY TO THIS JOINDER IN ANY OTHER JURISDICTION.
3. Counterparts. This Joinder may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
4. Amendments. No amendment or waiver of any provision of this
Joinder, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
5. Headings. The headings in this Joinder are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
[signature pages follow]
B-2
If the foregoing is in accordance with your understanding of this
Joinder, kindly sign and return to us a counterpart thereof, whereupon this
instrument will become a binding agreement between the Parent Issuer and the
Initial Purchaser in accordance with its terms.
Very truly yours,
PENINSULA GAMING, LLC
By:___________________________________
Name:
Title:
B-3
Accepted and Agreed to:
JEFFERIES & COMPANY, INC.
By:_____________________________
Name:
Title:
B-4
EXHIBIT 9(a)(x)(A)
FORM OF OPINION OF MAYER, BROWN, ROWE & MAW
If the Requisite Regulatory approvals are received and the Reorganization
Transactions are consummated prior to Closing, "Delaware Guarantors" will refer
to DJL and PGC. If the Requisite Regulatory approvals are not received and the
Reorganization Transactions are not consummated prior to Closing, "Delaware
Guarantors" will refer to OEDA and PGC.
1. Due Organization; Good Standing. Each of the Issuers and the
Delaware Guarantors is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware or is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, as applicable.
2. No Other Registration Rights. To our knowledge, except for the
Purchase Agreement and the Registration Rights Agreement, there are no
contracts, commitments, agreements, arrangements, understandings or undertakings
of any kind to which any of the Issuers or the Guarantors is a party, or by
which any of the Issuers or the Guarantors is bound, granting to any person the
right (i) to require any of the Issuers or the Guarantors to file a registration
statement under the Act with respect to any securities of any of the Issuers or
the Guarantors or requiring any of the Issuers or the Guarantors to include such
securities with the Notes registered pursuant to any registration statement, or
(ii) to purchase or offer to purchase any securities of any of the Issuers or
the Guarantors or any of their respective affiliates.
3. Power. Each of the Issuers and the Delaware Guarantors has all
requisite corporate power and authority or limited liability company power and
authority, as applicable, to execute and deliver, and to perform its obligations
under, each of the Opinion Documents to which it is a party and to consummate
the transactions contemplated thereby.
4. Authorization and Enforceability.
(a) Purchase Agreement. The Purchase Agreement has been duly
authorized, validly executed and delivered by each of the Issuers and the
Delaware Guarantors. The issuance and sale of the Series A Notes in
accordance with the Purchase Agreement have been duly authorized by the
Issuers.
(b) Indenture. The Indenture has been duly authorized, validly
executed and delivered by each of the Issuers and the Delaware Guarantors.
The Indenture is the legal, valid and binding obligation of each of the
Issuers and the Guarantors, enforceable against each of the Issuers and
the Guarantors in accordance with its terms. The Indenture conforms to the
requirements of the TIA applicable to an indenture that is required to be
qualified under the TIA.
Exhibit 9A-1
(c) Registration Rights Agreement. The Registration Rights Agreement
has been duly authorized by each of the Issuers and the Delaware
Guarantors, and the Registration Rights Agreement has been validly
executed and delivered by each of the Issuers and the Delaware Guarantors.
The Registration Rights Agreement is the legal, valid and binding
obligation of each of the Issuers and the Guarantors, enforceable against
each of the Issuers and the Guarantors in accordance with its terms.
(d) Series A Notes. The Series A Notes are in the form contemplated
by the Indenture, have been duly authorized by each of the Issuers for
issuance and sale to the Initial Purchaser pursuant to the Purchase
Agreement and have been validly executed and delivered by each of the
Issuers. The Series A Notes, when authenticated by the Trustee in the
manner provided in the Indenture and delivered by the Issuers against
payment therefor, will be legal, valid and binding obligations of each of
the Issuers, entitled to the benefits of the Indenture and enforceable
against each of the Issuers in accordance with their terms.
(e) Series B Notes. The Series B Notes and the issuance thereof have
been duly authorized by each of the Issuers. The Series B Notes, when
validly executed by the Issuers, authenticated by the Trustee in the
manner provided in the Indenture, issued by the Issuers and delivered in
exchange for the Series A Notes in accordance with the terms of the
Indenture, the Registration Rights Agreement and the Registered Exchange
Offer, will be legal, valid and binding obligations of each of the
Issuers, entitled to the benefits of the Indenture and enforceable against
each of the Issuers in accordance with their terms.
(f) The Guarantee to be endorsed on the Series A Notes by each of
the Delaware Guarantors has been duly authorized, executed and delivered
by each of the Delaware Guarantors. When the Series A Notes have been
issued and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Initial Purchaser in accordance with the
terms of the Indenture, the Guarantee endorsed on the Series A Notes by
each of the Guarantors will constitute the valid and legally binding
obligation of each such Guarantor, enforceable against each such Guarantor
in accordance with its terms.
(g) The Guarantee to be endorsed on the Series B Notes by each of
the Delaware Guarantors has been duly authorized by each of the Delaware
Guarantors. When the Series B Notes have been executed, authenticated and
delivered in the manner provided for in the Indenture and issued upon
consummation of the Registered Exchange Offer in the manner of provided in
the Registration Rights Agreement and the Indenture and the Guarantees
endorsed thereon executed and delivered by the Guarantors, the Guarantee
endorsed on the Series B Notes by each of the Guarantors will constitute
the valid and legally binding obligation of each such Guarantor,
enforceable against each such Guarantor in accordance with its terms.
Exhibit 9A-2
(h) Security Documents. Each of the security documents (other then
the Iowa Security Documents)(the "Security Documents") to which the
Issuers or the Delaware Guarantors is a party and the transactions
contemplated thereby (including, without limitation the creation, grant,
recording and perfection of the Security Interests, the execution and
filing of financing statements and the payment of any fees and taxes in
connection therewith) have been duly authorized by the Issuers or the
Delaware Guarantors, as applicable, and each of the Security Documents to
which the Issuers or the Delaware Guarantors is a party has been duly
executed and delivered by the Issuers or the Delaware Guarantors, as
applicable. Each of the Security Documents (other than the Mortgage) which
is governed by New York Law and the Mortgage (solely with respect to those
specific provisions thereof governed by New York law) is the legal, valid
and binding obligation of each of the Issuers and the Guarantors party
thereto, enforceable against each of the Issuers and the Guarantors party
thereto in accordance with its terms.
(i) OED Note Repurchase Transactions. The Supplemental Indenture and
each of the OED Note Repurchase Transactions has been duly authorized by
each of the Issuers and the Delaware Guarantors to the extent it is a
party thereto, and the Supplemental Indenture has been validly executed
and delivered by Capital. The Supplemental Indenture is the legal, valid
and binding obligation of each of the OED Note Issuers, enforceable
against each of the OED Note Issuers in accordance with its terms.
(j) Company [DJL] Note Repurchase Transactions. Each of the Company
[DJL] Note Repurchase Transactions has been duly authorized by each of the
Issuers and the Delaware Guarantors to the extent it is a party thereto.
(k) Credit Facility Documents. The Intercreditor Agreement has been
duly authorized by each of the Issuers and the Delaware Guarantors party
thereto, and the Intercreditor Agreement has been validly executed and
delivered by each of the Issuers and the Delaware Guarantors. The
Intercreditor Agreement is the legal, valid and binding obligation of the
Issuers and the Delaware Guarantors party thereto, enforceable against
each of the Issuers and the Delaware Guarantors party thereto in
accordance with its terms.
5. No Conflict. Neither the execution, delivery or performance of
any of the Opinion Documents will conflict with, violate, constitute a breach of
or a default (with the passage of time or otherwise) under, (i) the Charter
Documents; (ii) any Applicable Agreements (as defined on Schedule I hereto) or
(iii) any Applicable Laws (excluding the federal securities laws); or require
any consents, approvals, authorizations or registrations by the Issuers or the
Delaware Guarantors under any Applicable Laws except such as may be required
under federal securities laws (which we address exclusively in paragraph 10
hereof) and state securities laws (as to which we express no opinion) in
connection with the purchase and sale of the Notes or as may be required for the
perfection of any security interests (which we address exclusively in paragraphs
12).
Exhibit 9A-3
6. No Registration. Assuming (i) the accuracy of the
representations, warranties and agreements of the Issuers and the Guarantors and
of the Initial Purchaser contained in the Purchase Agreement, (ii) the due
performance by the Issuers and the Guarantors and the Initial Purchaser of their
respective covenants and agreements under the Purchase Agreement, (iii) the
accuracy of the representations and warranties made by each Accredited Investor
that purchases the Series A Notes pursuant to Exempt Resales, as set forth in
the letters of representation executed by each of such Accredited Investors in
the form of Annex A to the Offering Circular, (iv) your compliance with the
offering and transfer procedures and restrictions described in the Offering
Circular and (v) the purchasers to whom you initially resell the Notes receive a
copy of the Offering Circular prior to such sale, it is not necessary in
connection with the offer, sale and delivery of the Series A Notes to the
Initial Purchaser as contemplated in the Offering Memorandum and the Purchase
Agreement or the initial resale of the Series A Notes by the Initial Purchaser
in the manner contemplated by the Purchase Agreement and described in the
Offering Circular, to register such sales or resales of the Series A Notes under
the Act, and it is not necessary, prior to the Registered Exchange Offer or the
effectiveness of the Shelf Registration Statement, to qualify the Indenture
under the TIA. We express no opinion, however, as to when or under what
circumstances any Notes initially sold by you may be reoffered or resold.
7. Rule 144A(d)(4) Information. The Offering Circular as of its date
(except for the financial statements, including the notes thereto, and other
financial and statistical data included therein or omitted therefrom, as to
which we express no opinion), contains the information specified in, and meets
the requirements of, Rule 144A(d)(4) under the Act.
8. Investment Company Act. None of the Issuers or the Guarantors is,
and after giving effect to the sale of the Series A Notes in accordance with the
Purchase Agreement and the application of the proceeds as described in the
Offering Circular under the caption "Use of Proceeds," none will be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
9. Offering Circular.
(a) Each of the Opinion Documents and the terms of the Notes conform
in all material respects to the descriptions thereof contained in the
Offering Circular.
(b) The statements in the Offering Circular under each of the
headings (i) "Risk Factors--Risks Related to this Offering--Value of
Collateral," (ii) "Risk Factors--Risks Related to this
Offering--Subordination," (iii) the second paragraph of "Risk
Factors--Risks Related to this Offering--Ability to Realize on
Collateral," (iv) "Risk Factors--Risks Related to this
Offering--Fraudulent Transfer," (v) "The Transactions" and (vi) "Notice to
Investors" has been reviewed by us and, solely to the extent that such
statements constitute matters of law, summaries of legal matters,
summaries of proceedings, or legal conclusions
Exhibit 9A-4
(exclusive of the laws of any jurisdiction other than Applicable Laws),
such information is correct in all material respects.
10. UCC Opinions.
(a) The Security Agreement creates a valid security interest in
favor of the Trustee in the Collateral (as that term is defined in the
Security Agreement) in which a security interest may be created under the
Uniform Commercial Code as now in effect in the State of New York (the
"NEW YORK UCC") or, to the extent such a security interest may not be
created under the New York UCC, under the applicable laws of the United
States of America with respect to any copyrights, patents or trademarks
that are part of such Collateral in which a security interest may be
created under such laws (that portion of the Collateral constituting the
assets and properties of the Issuers and the Delaware Guarantors
(together, the "UCC COLLATERAL").
(b) Pursuant to the provisions of the Security Agreement, each of
the Issuers and the Delaware Guarantors has authorized the filing of a
financing statement in the form attached hereto as Annex 14(c) naming each
of the Issuers and the Delaware Guarantors as debtors for purposes of
Section 9-509 of the Uniform Commercial Code as now in effect in the State
of Delaware (the "DELAWARE UCC").
(c) Each of the Financing Statements includes not only all of the
types of information required by Section 9-502(a) of the Delaware UCC but
also the types of information without which the Office of the Secretary of
State of the State of Delaware may refuse to accept such financing
statement pursuant to Section 9-516 of the Delaware UCC. Each of the
Financing Statements is in appropriate form for filing in the Office of
the Secretary of State of the State of Delaware. Upon the later of the
attachment of the security interest and the proper filing of the Financing
Statement with respect to each of the Issuers and the Delaware Guarantors
in the Office of the Secretary of State of the State of Delaware, the
security interest in favor of the Trustee in the UCC Collateral described
in each said financing statement will be perfected to the extent a
security interest in such UCC Collateral can be perfected under the
Delaware UCC by the filing of a financing statement in that office.
(d) The provisions of the [Account Control Agreement(s)] are
effective to perfect the security interest of the Trustee in the Company's
rights in the Securities Accounts (as defined in the Securities Account
Control Agreement).
(e) Assuming (i) the delivery to, and the continued possession by,
[Foothill], as representative (as defined in Section 1-201(35) of the New
York UCC) for the Trustee, the Holders and [Foothill and the other lenders
under the Credit Agreement] (in such capacity, the "Collateral
Sub-Agent"), in the State of New York of the stock certificates and
membership interest certificates specified
Exhibit 9A-5
on Schedule II hereto (the "Pledged Shares"), together with stock powers
or other instruments of transfer executed in blank, and (ii) none of the
Collateral Sub-Agent, the Trustee, any Holder or [Foothill or any other
lender under the Credit Agreement] has notice of any adverse claim to the
Pledged Shares, the Collateral Sub-Agent will have the status of a
"protected purchaser" for the benefit of the Trustee, the Holders and
[Foothill and the other lenders under the Credit Agreement] with respect
to the Pledged Shares under (and as defined in) Section 8-303(a) of the
New York UCC.
11. We confirm that the statements made in the Offering Circular
under the heading "Certain Federal Income Tax Considerations," to the extent
that they describe matters of law or legal conclusions, are correct in all
material respects.
In addition, we have participated in conferences with officers and
other representatives of the Issuers and the Guarantors, representatives of the
independent public accountants of the Issuers, representatives of the Initial
Purchaser and counsel for the Initial Purchaser, at which the contents of the
Offering Circular and related matters were discussed and, although we are not
passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Offering Circular
and have not made any independent check or verification thereof, during the
course of such participation, no facts came to our attention which lead us to
believe that the Offering Circular, as of its date and as of the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading, it being understood that we express no belief with
respect to the pro forma financial statements, including the notes thereto, the
financial statements, including the notes thereto, or other financial and
statistical data included in, or omitted from, the Offering Circular. For
purposes of the foregoing, we note that the Offering Circular was prepared in
the context of a Rule 144A transaction and not as part of a registration
statement under the Securities Act and does not contain all of the information
that would be required in a registration statement under the Securities Act.
Opinion Documents is defined as the Purchase Agreement, the Registration
Rights Agreement, the Indenture, the Notes, the Guarantees, the Security
Documents, the Supplemental Indenture, the Collateral Release Agreements and the
Intercreditor Agreement.
Exhibit 9A-6
SCHEDULE 1
Loan and Security Agreement, dated September 22, 2003, by and among The Old
Evangeline Downs, L.L.C., The Old Evangeline Downs Capital Corp. and Wells Fargo
Foothill, Inc., as amended. [Only if the Corporate Transactions are not
effected]
FF&E Loan and Security Agreement, by and among The Old Evangeline Downs, L.L.C.,
The Old Evangeline Downs Capital Corp. and Wells Fargo Foothill, Inc., as
amended.
Loan and Security Agreement, dated February 23, 2001, by and between Foothill
Capital Corporation and Peninsula Gaming Company, LLC, as amended. [Only if the
Corporate Transactions are not effected]
Amended and Restated Management Services Agreement, dated February 25, 2003, by
and among Diamond Jo, LLC, OED Acquisition LLC and The Old Evangeline Downs,
L.L.C.
Indenture, dated February 25, 2003, by and among The Old Evangeline Downs,
L.L.C., The Old Evangeline Downs Capital Corp., as Issuers, and U.S. Bank
National Association, as trustee, as amended by the Supplemental Indenture.
[Loan and Security Agreement, dated [April 16, 2004], by and among Peninsula
Gaming, LLC, The Old Evangeline Downs Capital Corp. and Wells Fargo Foothill,
Inc., as amended. [Only if the Corporate Transactions are effected].
Exhibit 9A-7
EXHIBIT 9(a)(x)(B)
FORM OF OPINION OF LANE & WATERMAN, SPECIAL IOWA COUNSEL AND SPECIAL IOWA
REGULATORY COUNSEL
Our opinions expressed below are limited to the laws of the State of Iowa, and
to the extent applicable, the Federal Law of the United States, and only to the
Iowa operations and activities of DJL.
1. Assuming the due authorization, execution and delivery of each of
Ship Mortgage, the Shore Mortgage and any other Security Document governed by
Iowa Law (the "Iowa Security Documents") by the Issuers and the Guarantors, each
of the Iowa Security Documents constitutes a valid and binding agreement of the
Issuers and the Guarantors, enforceable against the Issuers and the Guarantors
in accordance with its terms, except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency, fraudulent conveyance, equitable
subordination, reorganization, readjustment of debt, moratorium or other similar
laws affecting creditor's rights generally, (ii) the effect of general
principles of equity (regardless of whether considered in a proceeding at law or
in equity); or (iii) limitations on the availability or enforceability of the
remedies of specific performance or injunctive relief contained in the Operative
Documents, all of which may be limited by equitable principles or applicable
laws, rules, regulations, court decisions and constitutional requirements.
2. Except as disclosed in the Offering Circular, there is no
Proceeding before or by any Governmental Authority now pending or to the best of
our knowledge, without special inquiry beyond that stated in the opinion,
threatened either (a) that seeks to restrain, enjoin, prevent the consummation
of or otherwise challenge any of the Operative Documents or any of the
Transactions or (b) that could, singly or in the aggregate, have a Material
Adverse Effect.
3. The terms of the Security Documents conform in all material
respects to the descriptions thereof contained in the Offering Circular. The
information in the Offering Circular under "Offering Circular Summary- The
Company- Limited Competition," "Risk Factors--Risks Relating to Our
Business--Competition," "Risk Factors--Risks Relating to Our
Business--Requirement of a Certificate of Inspection," "Risk Factors--Risks
Relating to Our Business--Governmental Regulation," "Risk Factors--Risks
Relating to the Offering--Required Regulatory Redemption," "Risk Factors--Risks
Relating to Our Business--Reauthorization of Gaming in Dubuque County, Iowa,"
"Risk Factors--Risks Relating to Our Business--Liquor Regulation," "Risk
Factors--Risks Relating to Our Business--Environmental Matters," "Risk
Factors--Risks Relating to Our Business--Taxation," "Risk Factors--Risks
Relating to the Offering--Ability to Realize on Collateral," "The Transactions,"
"Business--Competition--Diamond Jo," "Business-- Properties," "Regulatory
Matters" and "Certain Relationships and Related Transactions- Relationship with
Dubuque Racing Association" to the extent that it constitutes matters of law,
summaries of legal matters, summaries of securities, instruments, agreements or
other documents, summaries of proceedings or legal conclusions, is complete and
correct in all material respects.
Exhibit 9B-1
4. None of the Issuers or the Guarantors is in violation of or is in
default under, to the best of our knowledge, any Applicable Law, except for such
violations or defaults that could not, singly or in the aggregate, have a
Material Adverse Effect.
5. No authorization, approval, consent, license or order of, or
filing, registration or qualification with, any Governmental Authority
(including, without limitation, any Iowa gaming authority or regulatory body),
other than have been obtained on or before the Closing Date, is required in
connection with, or as a condition to, the execution, delivery or performance of
the Operative Documents or for the consummation of the Transactions.
6. Neither the execution or delivery of any of the Operative
Documents nor the consummation of any of the Transactions will conflict with,
violate, constitute a breach of or a default under (with the passage of time or
otherwise), require the consent of any person under (other than consents already
obtained), or result in the imposition of a Lien on any properties of any of the
Issuers or the Guarantors (other than as contemplated by the Offering Circular
or the Security Documents) or an acceleration of indebtedness pursuant to, any
Applicable Law (including, without limitation any applicable provision of law or
regulation of the State of Iowa and Title 46 of the United States Code or the
regulations thereunder (the "SHIP ACT")).
7. Each of the Issuers and the Guarantors possesses all Permits
required or necessary to own or lease, as appropriate, and to operate its
properties and to carry on its business as now or proposed to be conducted as
set forth in the Offering Circular, except where the failure to obtain such
Permits would not, individually or in the aggregate, have a Material Adverse
Effect. Each of the Issuers and the Guarantors has fulfilled and performed all
of its obligations with respect to such Permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the holder
of any such Permit. To the best of our knowledge, none of the Issuers or the
Guarantors has received any notice of any proceeding relating to revocation or
modification of any such Permit, except where such revocation or modification
would not, individually or in the aggregate, have a Material Adverse Effect. The
execution, delivery and performance by each of the Issuers and the Guarantors of
the Operative Documents, to the extent they are a party thereto, and the
consummation by each of the Issuers and the Guarantors of the Operative
Transactions will not result in the condition, termination, suspension or
revocation of any Permit of any of the Issuers and the Guarantors or result in
any other impairment of the rights of the holder of any such Permit.
8. Each of DJL and the DRA possesses a validly authorized and issued
riverboat gaming license from the State of Iowa and is in good standing with
Iowa gaming regulators.
9. Neither the Trustee nor any present or future owner of a Note is
or will be required to qualify to do business as a foreign corporation in the
State of Iowa or to comply with the requirements of any foreign lender statute,
or is or will become
Exhibit 9B-2
subject to any income, franchise or similar tax imposed by the State of Iowa or
any subdivision thereof, solely by reason of the execution, delivery and
performance of the Operative Documents and the acquisition and retention of the
Liens created and perfected under the Security Documents.
10. The Shore Mortgage creates in favor of the Trustee a valid and
enforceable mortgage lien on, and security interest in, the right, title and
interest of DJL in the Mortgaged Property (as defined in the Shore Mortgage),
all as security for the payment of the Obligations (as such term is defined in
the Shore Mortgage). The Shore Mortgage is in appropriate form for recording in
the office of the County Recorder of Dubuque County, Iowa (the county in which
the Land (as such term is defined in the Shore Mortgage) is located), both as a
mortgage and as a "fixture filing" within the meaning of the Iowa UCC (as
defined below). Upon such recordation, the mortgage Lien of the Shore Mortgage
will be perfected with respect to DJL's right, title and interest in and to the
Land and Improvements (as such terms is defined in the Shore Mortgage) and
Proceeds (as such terms is defined in the Shore Mortgage), and no other filing
or recording of the Shore Mortgage or any other instrument will be necessary to
continue the perfection of the mortgage Lien of the Shore Mortgage. Upon such
recordation, the security interest in Fixtures (as such term is defined in the
Shore Mortgage), and Proceeds of Fixtures (as such term is defined in the Shore
Mortgage) will be perfected, and no other filing or recording of the Shore
Mortgage or any other instrument will be necessary to continue the perfection of
such security interest of the Shore Mortgage in Fixtures and Proceeds of
Fixtures.
11. The Security Agreement creates a valid security interest in
favor of the Trustee in all right, title and interest of DJL in the Collateral
under Article 9 of the Iowa Uniform Commercial Code (the "IOWA UCC"), all as
security for the payment of the Secured Obligations (as such term is defined in
the Security Agreement). The Financing Statement (as such term in defined in the
Shore Mortgage), is in appropriate form for filing with the Iowa Secretary of
State pursuant to the Iowa UCC. Upon the filing of the Financing Statement in
the office of the Iowa Secretary of State, the security interest created by the
Security Agreement in those items and types of such Collateral in which a
security interest may be perfected by filing Iowa UCC financing statements with
the Iowa Secretary of State will be perfected.
12. DJL is a citizen of the United States within the meaning of
Section 2 of the Shipping Act of 1916, as amended, and is qualified to engage in
operating its Vessel (as defined in the Ship Mortgage) in the coastwise trade of
the United States.
13. DJL is the sole owner of the whole of the Vessel and has good
and marketable title to the Vessel; DJL is eligible under the relevant laws of
the United States to own and document the Vessel under the laws and flag of the
United States of America, and to operate the Vessel in the trade in which it is
authorized to engage; the Vessel is free and clear of any Lien except the Ship
Mortgage and such Liens of the character permitted under the Ship Mortgage; the
Vessel is documented in the name set forth opposite its official number
specified in the Ship Mortgage.
Exhibit 9B-3
14. Upon due filing of the Ship Mortgage with the United States
Coast Guard National Vessel Document Center, the Ship Mortgage will constitute a
valid first "preferred mortgage" on the Vessel within the meaning of the Ship
Act in favor of the Trustee. No other filing, recordings, re-filing (periodic or
otherwise) or other action will be necessary under the Ship Act to create,
perfect or maintain the Ship Mortgage as a "preferred mortgage" within the
meaning of the Ship Act.
15. No documentary, stamp or intangible tax, transfer tax or similar
charge is payable under Iowa law in connection with the execution, delivery,
filing, recordation or performance of the Security Documents in the State of
Iowa. However, such counsel advises you that statutory filing fees are payable,
calculated on a per document or per page basis, or a combination thereof.
16. The Security Documents contain terms and provisions necessary to
permit the Trustee, following the occurrence of an Event of Default (as such
term is defined in the Indenture), to exercise the rights and remedies commonly
and customarily available to secured lenders in the State of Iowa holding
mortgages and security interests in properties similar to the Mortgaged Property
and Collateral under the laws of the State of Iowa in transactions involving
substantial amounts of credit.
17. Certain of the Operative Documents provide that they are
governed by the laws of the State of New York. An Iowa court or a federal court
in Iowa applying Iowa principles of choice of law, in a properly presented case,
would uphold the aforesaid choice-of-law provision. Moreover, in the event that
the laws of the State of Iowa were applied to govern such Operative Documents,
such Operative Documents will not violate any applicable laws (including usury
laws) of the State of Iowa.
18. In our capacity as special counsel to the Issuers and the
Guarantors, we have participated in conferences with representatives of the
Issuers and the Guarantors, representatives of the Issuers' and the Guarantors'
accountants, the Initial Purchaser's representatives and counsel for the Initial
Purchaser, at which conferences the contents of the Preliminary Offering
Circular and the Offering Circular and related matters were discussed, and,
although we have not independently verified and are not passing upon and assume
no responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Circular (except as set forth above), nothing has come
to our attention which causes us to believe that the Offering Circular, as of
its date or on the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements contained therein, in the light of
the circumstances under which they were made, not misleading (it being
understood that we express no view with respect to the financial statements and
notes thereto or other financial data included in the Offering Circular).
Exhibit 9B-4
EXHIBIT 9(A)(X)(C)
FORM OF OPINION OF MCGLINCHEY STAFFORD PLLC, LOUISIANA REGULATORY COUNSEL
Corporate Opinions
1. Based on the Certificate of Status, OED is a limited liability company
under the Louisiana Limited Liability Company Law.
2. Based upon our review of OED's stock record book, all of the outstanding
membership interests in OED have been duly authorized and are validly
issued.
3. OED has all requisite limited liability company power and authority to
conduct and carry on its business and to own, lease, use and operate its
properties and assets.
4. OED has all requisite limited liability company power and authority to
execute, deliver and perform its obligations under each of the Documents
to which it is a party and to consummate the transactions contemplated
thereby.
5. (a) The Purchase Agreement has been duly authorized, validly executed
and delivered by OED.
(b) The Indenture has been duly authorized, validly executed and
delivered by OED.
(c) The Registration Rights Agreement and the transactions contemplated
thereby have been duly authorized by OED, and the Registration
Rights Agreement has been validly executed and delivered by OED.
(d) The Guarantee to be endorsed on the Series A Notes by OED has been
duly authorized, executed and delivered by OED.
(e) The Guarantee to be endorsed on the Series B Notes by OED has been
duly authorized by OED.
(f) Each of the Security Documents to which OED is a party (including
without limitation the creation, grant, recording and perfection of
the Security Interests, the execution and filing of financing
statements and the payment of any fees and taxes in connection
therewith) and the transactions contemplated thereby (including,
without limitation the creation, grant, recording and perfection of
the Security Interests, the execution and filing of financing
statements and the payment of any fees and taxes in connection
therewith) have been duly authorized by OED, and each of the
Security Documents to which OED is a party has been duly executed
and delivered by OED. Although the Security Documents (excluding the
Mortgage) to which OED is a party provide that each is governed by
the laws of the State of
Exhibit 9C-1
New York, and although the Mortgage provides that it shall be
governed by the laws of the State of New York applicable to
contracts made and performed in the State of New York but that the
provisions of the Mortgage relating to the creation, perfection and
enforcement of the Liens and Security Interests created by the
Mortgage with respect to the Mortgaged Property (as defined in the
Mortgage) shall be governed by the laws of the State of Louisiana to
the extent necessary for the validity and enforcement thereof, in
the event that Louisiana law were applied to govern such Security
Documents (including the Mortgage in its entirety), each such
Security Document is the legal, valid and binding obligation of OED,
enforceable against OED in accordance with its terms. No opinion is
expressed herein as to the effectiveness under Louisiana law of the
choice of New York law in the Mortgage.
(g) The Supplemental Indenture and each of the OED Note Repurchase
Transactions has been duly authorized by OED, and the Supplemental
Indenture has been validly executed and delivered by OED.
(h) Each of [the Intercreditor Agreement] [the Applicable Intercreditor
Agreements] and the transactions contemplated thereby and the Credit
Facility Waivers] have been duly authorized by OED, and [the
Intercreditor Agreement] [the Applicable Intercreditor Agreements]
has been validly executed and delivered by OED. To our knowledge,
OED is not in violation of its Organizational Documents.
6. If a court were to disregard the choice of law provisions of the Notes,
the Indebtedness represented by the Notes, as the case may be, would not
be found usurious under Louisiana law; provided, however, we point out
that under the usury laws of the State of Louisiana it would be unlawful
for any obligee under the Notes or the other Documents (assuming the usury
laws of the State of Louisiana are applied to the Notes and the other
Documents) to increase prospectively the fixed simple interest rate
provided thereunder, following a default under any of said obligations, to
a rate greater than (a) twenty-one percent (21%) per annum or (b) three
(3) percentage points over the original rate fixed in any such obligation
prior to default, whichever is greater, absent a written agreement by the
obligor or obligors under such obligation entered into following such
default.
7. None of the execution, delivery or performance of any of the Documents,
nor the compliance with the terms and provisions thereof, nor the
consummation of any of the transactions contemplated thereby will conflict
with, violate, constitute a breach of or a default (with the passage of
time or otherwise) under, result in the imposition of a Lien on any
membership interests in or assets of OED (including the capital stock of
Capital owned by OED) (except for Liens created by the Indenture, Liens
created by the Security Documents and Permitted Liens) or result in an
acceleration of indebtedness pursuant to, (i) the Organizational
Documents, or (ii) any laws of the State of Louisiana.
Exhibit 9C-2
8. To the best of our knowledge, no Permits from a Governmental Authority for
OED are required under Louisiana law in connection with, or as a condition
to, the execution, delivery or performance of any of the Documents or the
consummation of any of the Transactions other than (i) such Permits as
have been made or obtained on or prior to the Closing Date, which Permits
are, to the best of our knowledge, in full force and effect on the Closing
Date, (ii) such Permits, the failure of which to make or obtain would not,
singly or in the aggregate have a Material Adverse Effect, and (iii)
Permits from a Governmental Authority that may be required by any Gaming
Laws (as defined under the Indenture).
9. To our knowledge, based solely upon a review of our litigation docket and
without further inquiry, there is no Proceedings pending or, to our
knowledge, threatened against OED either (i) in connection with, or that
seeks to restrain, enjoin, prevent the consummation of or otherwise
challenge any of the Documents or any of the Transactions, or (ii) that
could, singly or in the aggregate, have a Material Adverse Effect.
10. The information in the Offering Circular under "Risk Factors--Risks
Relating to this Offering--Lien Subordination," has been reviewed by us
and, to the extent that it constitutes statements or matters of Louisiana
law, it is correct in all material respects.
11. Although the Security Agreement provides that it is governed by the laws
of the State of New York, in the event that the laws of the State of
Louisiana were applied to govern the Security Agreement, the Security
Agreement creates a valid security interest in favor of the Secured Party
in that portion of the Collateral (as defined in the Security Agreement)
constituting "accounts," "chattel paper," "documents", "investment
property", "general intangibles," "instruments," "inventory" and
"equipment" (as such terms are defined under Chapter 9 of the UCC), and
any identifiable proceeds thereof.
12. If the laws of the State of Louisiana are applied, the provisions of the
Security Agreement are sufficient to constitute authorization by OED of
the filing of the financing statements for purposes of Chapter 9 of the
UCC.
13. The provisions of the Mortgage in favor of U.S. Bank National Association,
as Mortgagee, are sufficient to constitute authorization by OED of the
filing of the fixture financing statement for purposes of Section 9-509 of
the UCC.
14. The Financing Statement includes not only all of the types of information
required by Section 9-502(a) of the UCC but also the types of information
without which a Louisiana filing office may refuse to accept such
financing statements pursuant to Section 9-516 of the UCC.
15. The Fixture Filing includes not only all of the types of information
required by Section 9-502(a) and (b) of the Louisiana UCC but also the
types of information without which a Louisiana filing office may refuse to
accept such fixture
Exhibit 9C-3
financing statements pursuant to Section 9-516 of the UCC.
16. Each of the Financing Statement and the Fixture Filing is in appropriate
form for filing in the Filing Office.
17. Filing the Financing Statement in the Filing Office will perfect the
security interest in the Filing Collateral in favor of the secured party
described therein.
18. Filing of the Fixture Filing in the Filing Office will perfect the
security interests in the fixtures as defined in the UCC in favor of the
secured party described therein.
19. You have asked whether OED is a "registered organization" for purposes of
Section 9-307 of the UCC. Section 9-102(a)(70) of the UCC states that a
Louisiana limited liability company that is registered with the Louisiana
Secretary of State is a registered organization for purposes of the UCC.
Under Section 1304 (La. R.S. 12:1304) of the Louisiana Limited Liability
Company Law, the Secretary of State of the State of Louisiana is required
to maintain a public record showing OED to have been organized. Based on
our review of the Certificate of Statute, we are of the opinion that under
the Louisiana UCC and the Louisiana Limited Liability Company Law, OED is
a registered organization.
20. The Mortgage creates (i) a valid mortgage lien on the portions of the Real
Property, (ii) a valid pledge lien of the right to receive proceeds
attributable to the insurance loss of such Mortgaged Property and (iii) a
valid collateral assignment lien on the presently existing and anticipated
future leases of such Real Property and the rents therefrom (collectively,
the "Louisiana Mortgage Lien"), all in favor of the Trustee for the
ratable benefit of the holders of the Notes, as security for the payment
of the obligations of OED under the Indenture and the Notes up to the
maximum amount of $[246,400,000.00]. The Mortgage is in appropriate form
for recording in the immovable property records of a Louisiana parish. The
Mortgage should be filed in the mortgage records of the Real Property
Filing Office(s). Such recordation is the only action, recording or filing
necessary to perfect the validity of the Louisiana Mortgage Lien described
in clauses (i), (ii) and (iii) of this paragraph (j) and upon such
recordation the Louisiana Mortgage Lien described in clauses (i), (ii) and
(iii) of this paragraph (j) created by the Mortgage will be duly
perfected.
21. There is no mortgage, mortgage recording, stamp, intangibles or other
similar tax (other than normal filing and recording fees) required to be
paid under the laws of the State of Louisiana or any political subdivision
thereof in connection with the execution, delivery, recordation, filing or
perfection, as applicable, of any of the Security Documents or the
obligations evidenced or secured thereby.
22. The laws of the State of Louisiana do not require a lienholder to make an
election of remedies where such lienholder holds security interests and
liens in both the real estate and the personal property of the debtor or
require a lienholder to take recourse first or solely against its
collateral.
Exhibit 9C-4
23. The Secured Party is not required to register as a foreign entity or
qualify to do business in the State of Louisiana solely by reason of the
Documents, the execution and delivery of the Documents and the acquisition
and retention of the liens created and perfected under the Security
Documents. The Secured Party will not become subject to any fees, charges
or income, franchise or other tax imposed by the State of Louisiana solely
by reason of the Operative Transactions. We have assumed for the purposes
of the opinions expressed in this paragraph, that U.S. Bank National
Association, in its capacity as Secured Party, (a)(i) is an entity of the
type described in La. R.S. 12:302(K) and (ii) has limited (and will
continue to limit) its activities in Louisiana to one or more of the
activities enumerated in clauses (1) through (6) of La. R.S. 12:302(K) and
(b) as a result enjoys the benefits of La. R.S. 12:302(L).
24. Except as provided in La. R.S. 30:2195.F(2), La. R.S. 30:2225.F(l), La.
R.S. 30:2281 and La. Admin.Code 33:VI.305, with respect to the priority of
the State of Louisiana or any political subdivision thereof upon
remediation, neither the State of Louisiana nor any political subdivision
thereof has any law pursuant to which a lien against any real property of
OED superior to the lien created by the Mortgage could arise as a result
of a violation of environmental laws or regulations of the State of
Louisiana or any political subdivision thereof. No environmental law or
regulation of the State of Louisiana or any political subdivision thereof
would require any remedial or removal action or certification of
nonapplicability as a condition to the granting of the Mortgage or the
foreclosure or the sale of any property of OED located in the State of
Louisiana.
25. In the event of a partial prepayment of the Obligations (as defined in the
Mortgage) or of the Secured Obligations (as defined in the Security
Agreement), such prepayment shall not affect the validity or
enforceability of the Security Documents.
26. Although this opinion may be subject in all instances to the qualification
that certain remedies (including without limitation, specific performance,
injunction and certain indemnification or contribution provisions)
provided for in the Security Documents may be qualified or limited by, or
unavailable under, applicable law or public policy, the unavailability of
such remedies will not prevent the Trustee, on behalf of the note holders,
from realizing the practical benefits intended to be conferred by such
documents, excluding the economic consequences of any delay that may
result therefrom.
27. The Security Documents contain the terms and provisions necessary to
enable the Secured Party, following a material default under the Security
Documents, to foreclose judicially by ordinary process under the laws of
the State of Louisiana, to the extent that the holder satisfies all
procedural requirements applicable to such proceeding.
Subject to customary qualifications.
Exhibit 9C-5
Documents shall be defined as the Operative Documents in the Purchase Agreement
and Transactions shall have the same meaning as in the Purchase Agreement.
Exhibit 9C-6
Corporate Opinions
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1. No Violation.
To the best of our knowledge, and except as specified in Exhibit "1",
after due inquiry, neither The Old Evangeline Downs, LLC nor Evangeline Downs
Capital Corp is in violation of any Gaming Law.
2. Gaming and Racing Licenses.
(a) OED has obtained and currently holds a valid license to conduct slot machine
operations at the Racino (the "Racino Gaming License"). The Racino Gaming
License was issued on January 21, 2003 and is for a term of five years, subject
to the need to establish live racing at the new facility on or before January
21, 2005. Each of OED, its directors, officers, key personnel, partners, and
persons holding a five percent or greater equity or economic interest in OED,
the spouses of such directors, officers, key personnel, partners, and persons
holding a five percent or greater equity or economic interest in OED has been
found suitable by the Louisiana Gaming Control Board, except Natalie Schramm,
CFO, whose application for suitability is pending.
(b) OED has obtained and currently holds valid licenses to operate a pari-mutuel
facility and to operate off-track wagering facilities, as defined in the
Louisiana Horse Racing Act and pari-mutuel wagering laws, to conduct racing
activities at the Racino and pari-mutuel wagering activities at its off-track
betting parlors in Port Allen and New Iberia, Louisiana (each, a "Racing
License"). The Racing License for the Racino was issued on August 18, 2002 and
is for a term of ten years. The Racing Licenses for the off-track betting
parlors in Port Allen and New Iberia were each issued on August 18, 2002, each
for a term of ten years.
(c) [Based on the March 24, 2004 letter of Hillary J. Crain, Chairman of the
Louisiana Gaming Control Board (copies of which are attached hereto), the
$230,000,000 bond offering contemplated by the Offering Circular has been
exempted from the requirements of prior Gaming Control Board approval pursuant
to the provisions of LAC 42:VII.2524 and LAC 42:VII.2523 and no further action
of the Gaming Control Board is needed as of the Closing Date with respect to the
approval of the bond offering.] To the extent we have participated in
conferences with officers and other representatives of the Issuers and the
Guarantors with respect to information provided to the Gaming Control Board upon
which such letters were issued, and to the best of our knowledge, all
information and documents provided to the Gaming Control Board by this firm
and/or by the Issuers and the Guarantors were accurate and complete and
contained no untrue statement of material fact nor omitted to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
3. Permits.
(a) No Permit is required from any Gaming Authority or under any Gaming Law or
Racing Law (any such Permit, a "Gaming Permit" or a "Racing Permit,"
respectively) in connection with, or as a condition to, the execution, delivery
or performance of any of the Operative Documents, the compliance with the terms
and provisions thereof or the consummation of any of the Transactions, other
than Gaming Permits and Racing Permits as have been made or obtained on or prior
to the Closing Date, which Permits are in full force and effect on the Closing
Date.
(b) Each of the Regulated Persons has, and, to our knowledge after due inquiry,
is in compliance with the terms and conditions of, all Gaming Permits and Racing
Permits necessary
Exhibit 9C-7
or advisable to own, lease, use and operate the properties and to conduct and
carry on the businesses described in the Offering Circular. All currently issued
Gaming Permits and Racing Permits are valid and in full force and effect. To our
knowledge after due inquiry, no Regulated Person has received notice that any
issuer is considering limiting, conditioning, suspending, modifying, revoking or
not renewing any Gaming Permit or Racing Permit. Part A applications are
currently pending for Peninsula Gaming, LLC and the Old Evangeline Downs, Corp.
It is anticipated that PGP advisors and Cambridge Capital Corp will also be
required to file Part A Suitability Applications. [Lets talk about what a Part A
application is]
(c) None of the execution, delivery or performance of any of the Operative
Documents, nor the compliance with the terms and provisions thereof, nor the
consummation of any of the Transactions will allow or result in, and, to our
knowledge after due inquiry, no event has occurred which allows or results in,
or after notice or lapse of time would allow or result in, the imposition of any
material penalty under, or the revocation or termination of, any Gaming Permit
or Racing Permit or any material impairment of the rights of the holder of any
Gaming Permit or Racing Permit, except as noted on Exhibit "1" .
4. Proceedings. There is no Proceeding pending or, to our knowledge after due
inquiry, threatened, before any Gaming Authority, under any Gaming Law or Racing
Law or under any Gaming Permit or Racing Permit either (i) in connection with,
or that seeks to restrain, enjoin, prevent the consummation of, or otherwise
challenge, any of the Operative Documents or any of the Transactions, or (ii)
that could, singly or in the aggregate, have a Material Adverse Effect.
5. Offering Circular. The information in the Offering Circular under the
headings (i) "Risk Factors--Risks Relating to this Offering--Ability to Realize
on Collateral," (ii) "Risk Factors--Risks Relating to Our Business--Licensing,"
(iii) "Risk Factors--Risks Relating to Our Business--Competition," (iv) "Risk
Factors--Risks Relating to Our Business--Liquor Regulation," (v) "Risk
Factors--Risks Relating to Our Business--Governmental Regulation," (vi) "Risk
Factors--Risks Relating to this Offering-- Required Regulatory Redemption,"
(vii) Business--Properties--OTBs," and (viii) "Regulatory Matters" has been
reviewed by us and, to the extent that it constitutes statements or matters of
Gaming Law or Racing Law, summaries of legal matters relating to Gaming Law or
Racing Law, summaries or descriptions of gaming documents or proceedings, or
legal conclusions relating to Louisiana gaming or racing matters, it is correct
in all material respects.
We have participated in conferences with officers and other representatives of
the Issuers and the Guarantors, counsel for the Issuers and the Guarantors,
representatives of the Gaming Authorities, representatives of the Initial
Purchaser and counsel for the Initial Purchaser, at which the contents of the
Offering Circular and related matters were discussed. Although we are not
passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Offering Circular
and, except as set forth above, have made no independent check or verification
thereof, nothing has come to our attention which lead us to believe that the
Preliminary Offering Circular, as of its date, the Offering Circular, as of its
date and as of the date hereof, and any amendment or supplement thereto, as of
its date and as of the date hereof, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact (except, in the
case of the Preliminary Offering Circular, for pricing terms and other financial
terms intentionally left blank) required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading.
Exhibit 9C-8
EXHIBIT "1"
1. On _________________, 2004 we received a SAR regarding the failure to
notice the Board and failure to obtain appropriate approval of the second
amendment of the $15,000,000 foothill facility. This matter is pending.
2. On ________________, 2004, we self disclosed failure to obtain approval
for a credit purchase of the "Warner" track in the amount of $3.8,000,000 . This
matter is subject to review by the Louisiana State Police.
Exhibit 9C-9