EXHIBIT 1.01
PARK PLACE ENTERTAINMENT CORPORATION
(a Delaware corporation)
$ 400,000,000
8.875% Notes due 2008
PURCHASE AGREEMENT
September 12, 2000
DEUTSCHE BANK SECURITIES INC.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
BNY CAPITAL MARKETS, INC.
COMMERZBANK CAPITAL MARKETS CORPORATION
FIRST UNION SECURITIES, INC.
SCOTIA CAPITAL (USA) INC.
S.G. COWEN SECURITIES CORPORATION
FLEET SECURITIES, INC.
BEAR, STEARNS & CO. INC.
WASSERSTEIN PERELLA SECURITIES, INC.
c/o Deutsche Bank Securities Inc.
130 Liberty Street
New York, New York 10006
Ladies and Gentlemen:
Park Place Entertainment Corporation, a Delaware corporation (the
"COMPANY"), confirms its agreement with Deutsche Bank Securities Inc.
("DEUTSCHE") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), with
respect to the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective principal
amounts set forth in said Schedule A of the Company's 8.875% Senior
Subordinated Notes due 2008 (the "SECURITIES") pursuant to this Purchase
Agreement (the "AGREEMENT"). The Securities are to be issued pursuant to an
indenture dated as of November 9, 1999 (the "INDENTURE") between the Company
and Wells Fargo Bank Minnesota, N.A. (formerly, Norwest Bank Minnesota,
N.A.), as trustee (the "TRUSTEE"). The Securities are more fully disclosed in
the Prospectus and Prospectus Supplement, both as defined below.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-70853) relating to
the Securities and the offering thereof from time to time in accordance with
Rule 415 under the Securities Act of 1933 (the "1933 ACT") and has filed such
amendments thereto as may have been required to
the date hereof. Such registration statement as amended has been declared
effective by the Commission, and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended (the "1939 ACT"). Such registration
statement as amended and the prospectus relating to the sale of Securities by
the Company constituting a part thereof, including all documents incorporated
therein by reference, as from time to time amended or supplemented pursuant
to the Securities Exchange Act of 1934 (the "1934 ACT"), the 1933 Act or
otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus", respectively; PROVIDED, HOWEVER, that a supplement to the
Prospectus prepared pursuant to Section 3(a) hereof (a "Prospectus
Supplement") shall be deemed to have supplemented the Prospectus with respect
to the offering of Securities.
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, the Prospectus or the Prospectus Supplement (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, the Prospectus or the Prospectus
Supplement, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the "1934 ACT") which is incorporated by reference
therein.
Section 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter as of the date hereof and as of the
Closing Time referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Registration
Statement and the Prospectus, at the time the Registration Statement became
effective complied in all material respects with the requirements of the
1933 Act, the rules and regulations thereunder (the "1933 ACT REGULATIONS")
and the 1939 Act. The Registration Statement, at the time the Registration
Statement became effective, did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, at the time the Registration Statement became effective and,
together with the Prospectus Supplement, as of the date hereof, did not
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement,
Prospectus or Prospectus Supplement made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter
through Deutsche expressly for use in the Registration Statement,
Prospectus or Prospectus Supplement or to that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification under the 1939 Act (Form T-1), of the Trustee under the
Indenture. The parties hereto acknowledge that for purposes of this
Agreement, including Section 6 hereof, the only information furnished to
the Company in writing by the Underwriters
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expressly for use in the Registration Statement, Prospectus and Prospectus
Supplement is the information set forth (i) on the cover page of the
Prospectus Supplement with respect to price and commissions of the offering
and (ii) under the caption "Underwriting" in the Prospectus Supplement in
the table, paragraph four, paragraph five, the second sentence of paragraph
six and paragraph seven. No stop order preventing the use of the
Registration Statement, Prospectus or Prospectus Supplement has been
issued.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 ACT REGULATIONS"), and, when read together
with the other information in the Prospectus, at the time the Registration
Statement became effective, and, together with the Prospectus Supplement,
at the time the Prospectus was issued and at the Closing Time, did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules, if any, included in the
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements of the Company
included in the Registration Statement and the Prospectus, together with
the related schedules and notes, present fairly the financial position of
the Company at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved (except as may be indicated in the
notes thereto). The pro forma financial statements and the related notes
thereto included in the Registration Statement and the Prospectus, have
been prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled
on the bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement, the
Prospectus and the Prospectus Supplement neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, which are material to the Company and its subsidiaries, taken
as a whole, nor entered into any transaction not in the ordinary course of
business and there has not been, singly or in the aggregate, any material
adverse change or any development which would involve a material adverse
change, in the business, results of operations, condition (financial or
otherwise), or prospects of the Company and its subsidiaries, taken as a
whole (a "MATERIAL ADVERSE CHANGE").
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(vi) GOOD STANDING OF THE COMPANY. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a material adverse
effect on the business results of operations, condition (financial or
otherwise) or prospects of the Company and its subsidiaries, taken as a
whole ("MATERIAL ADVERSE EFFECT").
(vii) GOOD STANDING OF SUBSIDIARIES. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each
a "SUBSIDIARY" and, collectively, the "SUBSIDIARIES") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement or the Prospectus, all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
Subsidiary.
(viii) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(ix) AUTHORIZATION OF THE INDENTURE. The Indenture has been duly
authorized by the Company and duly qualified under the 1939 Act and, is a
valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except (a) as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law)
and (b) the enforceability of any provision requiring the payment of
attorney's fees, except to the extent that a court determines such fees to
be reasonable.
(x) AUTHORIZATION OF THE SECURITIES. The Securities have been duly
authorized and, at the Closing Time, will have been duly executed by the
Company and, when authenticated, executed, issued and delivered in the
manner provided for in the Indenture and delivered against payment of the
purchase price therefor as provided in this
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Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture.
(xi) DESCRIPTION OF THE SECURITIES AND THE INDENTURE. The Securities
and the Indenture will conform in all material respects to the respective
statements relating thereto contained in the Prospectus and the Prospectus
Supplement and will be in substantially the respective forms previously
delivered to the Underwriters.
(xii) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any
of its Subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any Subsidiary is subject (collectively, "AGREEMENTS AND
INSTRUMENTS") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement, the Indenture and the Securities and the consummation of the
transactions contemplated herein and in the Prospectus Supplement and
compliance by the Company with its obligations hereunder and under the
Indenture and the Securities have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any Subsidiary pursuant to,
the Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any Subsidiary
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any Subsidiary or any of
their assets, properties or operations. As used herein, a "REPAYMENT EVENT"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any Subsidiary.
(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit or proceeding
before or by any court or governmental agency or body, domestic or foreign,
pending against or affecting any of the Company or its subsidiaries, or any
of their respective assets or properties, which is required to be disclosed
in the Registration Statement, Prospectus and Prospectus Supplement and is
not so disclosed, or which has, or which would result
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in, singly or in the aggregate, a Material Adverse Effect, or which could
reasonably be expected to materially and adversely affect the Company's
performance of its obligations pursuant to this Agreement or the
transactions contemplated hereby, and to the best of the Company's
knowledge, no such action, suit, or proceeding is contemplated or
threatened.
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "INTELLECTUAL PROPERTY") necessary to carry on the
businesses now operated by them, other than those which would not, singly
or in the aggregate, have a Material Adverse Effect, and neither the
Company nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xv) ABSENCE OF FURTHER REQUIREMENTS. Except as disclosed in the
Prospectus or the Prospectus Supplement, no authorization, approval or
consent or order of, or filing with, any court or governmental body, agency
or official, including, without limitation, the Nevada Gaming Commission
(the "NGC"), the Nevada State Gaming Control Board ("NGCB"), the Clark
County Liquor and Gaming Licensing Board ("CCLB"), the City of Reno
("RENO"), the New Jersey Casino Control Commission (the "NJC"), the Casino
Reinvestment Development Authority (the "CRDA"), the Mississippi Gaming
Commission (the "MGC"), the Mississippi State Tax Commission (the "MTC"),
the Louisiana Gaming Control Board ("LGCB"), the Delaware State Lottery
Office, the Indiana Gaming Commission, the authorities governing casino
gaming in Queensland, Australia (the "QUEENSLAND AUTHORITIES"), the
Internal Auditors Bureau of Uruguay (the "IABU"), the Executive Power of
the Oriental Republic of Uruguay, the Ontario Alcohol and Gaming
Commission, the Ontario Casino Corporation, the Nova Scotia Gaming Control
Commission and the Gauteng Gambling Board (hereinafter collectively
referred to as the "GAMING AUTHORITIES"), is necessary or required for the
performance by the Company of its obligations hereunder, in connection with
the offering, issuance or sale of the Securities hereunder or for the due
execution, delivery or performance of the Indenture by the Company, except
(i) such as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or have been obtained and made under any state
securities or Blue Sky laws or regulations; (ii) such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws and except for the qualification of
the Trustee under the 1939 Act, (iii) such as may have been obtained under
the Nevada Gaming Control Act, the New Jersey Casino Control Act, the
Mississippi Gaming Control Act and the respective regulations promulgated
thereunder, the Louisiana Riverboat Economic Development and Gaming Control
Act, Title 29 of the Delaware code, the Indiana Riverboat Gambling Act and
the applicable laws governing casino gaming in Ontario, Nova Scotia and
South
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Africa; and (iv) where the failure to obtain the authorization, approval,
consent or order of, or filing with any court or governmental body, agency
or official, does not result in a Material Adverse Effect.
(xvi) POSSESSION OF LICENSES AND PERMITS. Except as disclosed in the
Registration Statement, the Prospectus and the Prospectus Supplement, (i)
the Company, its subsidiaries and each of the Company's directors and
executive officers has all certificates, consents, exemptions, orders,
permits, licenses, authorizations, or other approvals or rights (each, an
"Authorization") of and from, and has made all declarations and filings
with, all Federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals,
including, without limitation, all such Authorizations with respect to
engaging in gaming operations in the States of Nevada, Louisiana, New
Jersey, Mississippi, Delaware or Indiana or in Queensland, Australia,
Uruguay, Ontario, Nova Scotia or South Africa, if such person is required
to be licensed in such jurisdictions, necessary or required to own, lease,
license and use its properties and assets and to conduct its business in
the manner described in the Registration Statement, except as would not
have, singly or in the aggregate, a Material Adverse Effect, (ii) all such
Authorizations are valid and in full force and effect, except as would not
have, singly or in the aggregate, a Material Adverse Effect, (iii) each of
the Company and its subsidiaries and each member of the Company's
Management is in compliance in all material respects with the terms and
conditions of all such Authorizations and with the rules and regulations of
the regulatory authorities and governing bodies having jurisdiction with
respect thereto, except as would not have, singly or in the aggregate, a
Material Adverse Effect, and (iv) except as disclosed in the Registration
Statement, Prospectus or Prospectus Supplement, none of the Company or its
subsidiaries and no member of the Company Management has received any
notice of proceedings relating to the revocation or modification of any
such Authorization and no such Authorization contains any restrictions that
are materially burdensome to any of them. Except as disclosed in the
Registration Statement, Prospectus or Prospectus Supplement, none of the
Company or its subsidiaries has any reason to believe that any Gaming
Authorities are considering modifying, limiting, conditioning, suspending,
revoking or not renewing any such Authorizations of any of the Company or
its subsidiaries or any member of the Company Management or that either the
Gaming Authorities or any other governmental agencies are investigating any
of the Company or its subsidiaries or related parties (other than normal
overseeing reviews of the Gaming Authorities incident to the gaming,
riverboat or casino activities, as the case may be, of any of the Company
and its subsidiaries). Except with respect to facts disclosed in the
Registration Statement, Prospectus or Prospectus Supplement, none of the
Company or its subsidiaries has any reason to believe that there exists a
reasonable basis for the Gaming Authorities to deny the renewal of the
current casino and gaming licenses held by any of the Company or its
subsidiaries.
(xvii) TITLE TO PROPERTY. Except as would not result in a Material
Adverse Effect, the Company and its subsidiaries have good and marketable
title to all real property owned by the Company and its subsidiaries and
good title to all other properties owned by them, in each case, free and
clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are
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described in the Prospectus or the Prospectus Supplement or (b) do not,
singly or in the aggregate, materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; and all of the leases
and subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any subsidiary has any notice
of any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xviii) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
Supplement will not be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 ACT").
(xix) ENVIRONMENTAL LAWS. Except as described in the Registration
Statement, Prospectus or Prospectus Supplement and except as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A) none
of the Company or its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "HAZARDOUS MATERIALS") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "ENVIRONMENTAL LAWS"), (B) each of the
Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there is no investigation known to us and
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation or proceedings relating to any Environmental Law
against any of the Company or its subsidiaries and (D) there are no events
or circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting any of
the Company or its subsidiaries relating to Hazardous Materials or
Environmental Laws.
(xx) TAXES. All United States federal income tax returns of each of
the Company and its subsidiaries required by law to be filed have been
filed and all taxes shown by such returns or otherwise assessed, which are
due and payable, have been paid, except assessments against which appeals
have been or will be promptly taken and as to
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which adequate reserves have been provided. The United States federal
income tax returns of each of the Company and its subsidiaries through the
fiscal year ended 1990 have been settled and no assessment in connection
therewith has been against any of them. Each of the Company and its
subsidiaries has filed all other tax returns that are required to have been
filed by it pursuant to applicable foreign, state, local or other law
except insofar as the failure to file such returns would not result in a
Material Adverse Effect, and has paid all taxes due pursuant to such
returns or pursuant to any assessment received by it, except for such
taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. The charges, accruals and reserves on
the books of the Company in respect of any income and corporation tax
liability for any years not finally determined are adequate to meet any
assessments or re-assessments for additional income tax for any years not
finally determined, except to the extent of any inadequacy that would not
result in a Material Adverse Effect.
(xxi) ACCOUNTING CONTROLS. The Company and its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization, (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxii) MISCELLANEOUS. None of the Company or any agent acting on
behalf of the Company has taken, and none of them will take, any action
that might cause this Agreement or the issuance or sale of the Securities
to violate 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.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Underwriters or to counsel
for the Underwriters shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
Section 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) SECURITIES. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company at
the price set forth in Schedule B, the aggregate principal amount of Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 11 hereof.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the office of Cadwalader,
Wickersham & Taft, 100 Maiden Lane,
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New York, New York 10038, or at such other place as shall be agreed upon by the
Underwriters and the Company, at 9:00 A.M. (New York time) on the fifth business
day after the date hereof (unless postponed in accordance with the provisions of
Section 11), or such other time not later than ten business days after such date
as shall be agreed upon by the Underwriters and the Company (such time and date
of payment and delivery being herein called the "CLOSING TIME").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Underwriters for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized the Underwriters, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Securities
which it has agreed to purchase. Deutsche may (but shall not be obligated to)
make payment of the purchase price for the Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) DENOMINATIONS; REGISTRATION. Certificates for the Securities shall
be in such denominations and registered in such names as the Underwriters may
request in writing at least one full business day before the Closing Time.
The Securities will be made available for examination and packaging by the
Underwriters in The City of New York not later than 10:00 A.M. (Eastern time)
on the last business day prior to the Closing Time.
Section 3. COVENANTS OF THE COMPANY.
The Company covenants with each Underwriter as follows:
(a) PROSPECTUS SUPPLEMENT. Immediately following the execution of this
Agreement, the Company will prepare a Prospectus Supplement setting forth the
principal amount of Securities covered thereby and their terms not otherwise
specified in the Indenture, the names of the Underwriters participating in the
offering and the principal amount of Securities which each severally has agreed
to purchase, the price at which the Securities are to be purchased by the
Underwriters from the Company, the initial public offering price, the selling
concession and reallowance, if any, any delayed delivery arrangements, and such
other information as the Underwriters and the Company deem appropriate in
connection with the offering of the Securities. The Company will promptly
transmit copies of the Prospectus Supplement to the Commission for filing
pursuant to Rule 424 of the Regulations and will use its best efforts to furnish
to the Underwriters named therein as many copies of the Prospectus and such
Prospectus Supplement as the Underwriters shall reasonably request, prior to
10:00 a.m. New York City time on the fourth business day next succeeding the
date of this Agreement. Thereafter, the Company will furnish to the Underwriters
as many copies of the Prospectus and the Prospectus Supplement as the
Underwriters may from time to time reasonably request.
(b) FILING OF AMENDMENTS. If at any time when the Prospectus is required
by the 1933 Act to be delivered in connection with sales of the Securities any
event shall occur or condition exist as a result of which it is necessary, in
the reasonable opinion of counsel for the Underwriters or counsel for the
Company, to further amend or supplement the Prospectus in order that the
Prospectus, together with the Prospectus Supplement, will not include an untrue
-10-
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in the light of circumstances
existing at the time it is delivered to a purchaser or if it shall be necessary,
in the opinion of either such counsel, at any such time to amend or supplement
the Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission such amendment or supplement,
whether by filing documents pursuant to the 1934 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement comply with such requirements. The Company will give the
Underwriters notice of its intention to file any amendment to the Registration
Statement or any amendment or supplement to the Prospectus, whether pursuant to
the 1934 Act, the 1933 Act, or otherwise, will furnish the Underwriters with
copies of any such amendment or supplement or other documents proposed to be
filed a reasonable time in advance of filing, and will not file any such
amendment or supplement or other documents in a form in which the Underwriters
or counsel for the Underwriters shall reasonably object.
(c) EFFECTIVENESS AND STOP ORDERS. The Company will notify each of the
Underwriters immediately, and confirm the notice in writing, (i) of the
effectiveness of any amendment to the Registration Statement, (ii) of the
mailing or the delivery to the Commission for filing of any supplement to the
Prospectus or any document to be filed pursuant to the 1934 Act, (iii) of the
receipt of any comments from the Commission with respect to the Registration
Statement, the Prospectus or any Prospectus Supplement, (iv) of any request by
the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, and (v) of the
issuance by the Commission of any order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(d) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or will
deliver to the Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Underwriters,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations and the 1939 Act and the 1939 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus Supplement.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
as the Underwriters may
-11-
designate and to maintain such qualifications in effect for a period of not less
than one year from the date hereof; PROVIDED, HOWEVER, that the Company shall
not be obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the Company
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the date hereof. The Company will also supply the
Underwriters with such information as is necessary for the determination of the
legality of the Securities for investment under the laws of such jurisdictions
as the Underwriters may request.
(g) RULE 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus
Supplement under "Use of Proceeds".
(i) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
Section 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey, any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of the
Prospectus and Prospectus Supplement and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriters of copies of
the Blue Sky Survey and any supplement thereto, and any Legal Investment Survey,
(viii) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities, and (ix) any fees payable in connection with the rating of the
Securities.
-12-
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company of the covenants and other obligations hereunder, and to the
following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. At Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters. The Prospectus Supplement shall have been filed
with the Commission in accordance with Rule 424(b).
(b) OPINIONS OF COUNSEL FOR THE COMPANY. At the Closing Time, the
Underwriters shall have received the favorable opinion, dated as of the
Closing Time, of (i) Latham & Watkins, counsel to the Company, (ii) Clive
Cummis, General Counsel to the Company, (iii) Phelps Dunbar, special
Louisiana gaming counsel to the Company, (iv) Schreck Morris, special Nevada
gaming counsel to the Company, (v) Sills Cummis Radin Tischman Epstein &
Gross, P.A., special New Jersey counsel to the Company, (vi) Watkins Ludlam
Winter & Stennis, P.A., special Mississippi counsel to the Company and (vii)
Baker & Daniels, special Indiana counsel to the Company, each in form and
substance satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibits A-1, A-2, A-3, A-4, A-5 and A-6 hereto,
respectively, and to such further effect as counsel to the Underwriters may
reasonably request.
(c) OPINION OF COUNSEL FOR UNDERWRITERS. (i) At the Closing Time, the
Underwriters shall have received the favorable opinions, dated as of the Closing
Time, of Cadwalader, Wickersham & Taft, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters, with respect to the matters set forth in paragraphs (1), (2), (3),
(4), (5), (12) and (13) and the penultimate paragraph of Exhibit A-1 hereto. In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York, the federal
law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Underwriters. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries, as appropriate, and certificates of public
officials.
(d) OFFICERS' CERTIFICATE. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus and
-13-
Prospectus Supplement (excluding any amendment or supplement thereto after
the date hereof), any Material Adverse Change, whether or not arising in the
ordinary course of business, and the Underwriters shall have received a
certificate of the President or a Vice President of the Company, and of the
chief financial or chief accounting officer of the Company, each dated as of
the Closing Time, to the effect that (i) there has been no such Material
Adverse Change, (ii) the representations and warranties in Section 1 hereof
were true and correct as of the date hereof and are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
and (iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied under this Agreement at
or prior to the Closing Time and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(e) ACCOUNTANTS' COMFORT LETTER. As of the date hereof and at the Closing
Time, the Underwriters shall have received from each of Arthur Andersen LLP and
Deloitte & Touche LLP a letter or letters dated such date, in form and substance
satisfactory to the Underwriters, together with signed or reproduced copies of
such letters for each of the other Underwriters containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(f) MAINTENANCE OF RATING. At the Closing Time, the Securities shall be
rated at least Ba2 by Moody's and BB+ by S&P, and the Company shall have
delivered to the Underwriters a letter dated the Closing Time, from each such
rating agency, or other evidence satisfactory to the Underwriters (which
evidence may include oral representations), confirming that the Securities have
such ratings; and since the date of this Agreement, there shall not have
occurred a downgrading in the rating assigned to the Securities or any of the
Company's other debt securities by any "nationally recognized statistical rating
agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such securities rating agency shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Securities or any of the Company's
other debt securities.
(g) ADDITIONAL DOCUMENTS. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and sale
of the Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(h) TERMINATION OF AGREEMENT. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Underwriters by notice to the Company at any
time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 4, 6, 7, 8, 9(b) and this Section 5(h) shall survive any
such termination and remain in full force and effect.
-14-
Section 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus, or the omission
or alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Deutsche), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
(iv) against any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials based upon
information provided by the Company used in connection with the marketing
of the Securities, including without limitation, slides, videos, films and
tape recordings;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Deutsche expressly for use in the Registration Statement or
the Prospectus.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or
-15-
omissions, or alleged untrue statements or omissions, made in the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Deutsche
expressly for use in the Registration Statement or the Prospectus.
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Deutsche, and, in the
case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; PROVIDED,
HOWEVER, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
Section 7. CONTRIBUTION. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on
-16-
the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer
-17-
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the principal amount of Securities set
forth opposite their respective names in Schedule A hereto and not joint.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriters.
Section 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Underwriters may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any Material Adverse
Change, or (ii) if there has occurred any material adverse change in the
financial markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Underwriters, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission, or if trading generally on the American Stock Exchange or the New
York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
Section 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of
the Underwriters shall fail at Closing Time to purchase the Securities which it
or they are obligated to purchase under this Agreement (the "DEFAULTED
SECURITIES"), the Underwriters shall have the right, within 24 hours thereafter,
to make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Underwriters shall not have completed such arrangements
within such 24-hour period, then:
-18-
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities to be purchased hereunder, each of
the non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities to be purchased hereunder, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Underwriters or the Company shall have the right to
postpone Closing Time for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
Section 11. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters at Deutsche Bank Securities
Inc., 130 Liberty Street, 25th Floor, New York, New York 10006, (fax number:
212-669-5133) to the attention of Paul Whyte; notices to the Company shall be
directed to it at 3930 Howard Hughes Parkway, Las Vegas, Nevada 89109, (fax
number: 702-699-5133) to the attention of Clive Cummis, Esq.
Section 12. PARTIES. This Agreement shall each inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
Section 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 14. EFFECT OF HEADINGS. The Article and Section headings herein are
for convenience only and shall not affect the construction hereof.
-19-
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
PARK PLACE ENTERTAINMENT
CORPORATION
By: /s/ SCOTT A. LAPORTA
-----------------------------------
Name: Scott A. LaPorta
Title: Executive Vice President
and Chief Financial
Officer
CONFIRMED AND ACCEPTED,
as of the date first above written
DEUTSCHE BANK SECURITIES INC.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
BNY CAPITAL MARKETS, INC.
COMMERZBANK CAPITAL MARKETS CORPORATION
FIRST UNION SECURITIES, INC.
SCOTIA CAPITAL (USA) INC.
S.G. COWEN SECURITIES CORPORATION
FLEET SECURITIES, INC.
BEAR, STEARNS & CO. INC.
WASSERSTEIN PERELLA SECURITIES, INC.
By: /s/ CLAY DES JARDINES
--------------------------------------
Authorized Signatory
SCHEDULE A
LIST OF UNDERWRITERS
Principal Amount
Name of Underwriter of Securities
- ------------------------------------------------------------------------------- -----------------
Deutsche Bank Securities Inc.................................................... $120,000,000
Merrill Lynch, Pierce Fenner & Smith Incorporated............................... 80,000,000
Banc of America Securities LLC.................................................. 60,000,000
BNY Capital Markets, Inc........................................................ 20,000,000
CommerzBank Capital Markets Corporation......................................... 20,000,000
First Union Securities, Inc..................................................... 20,000,000
Scotia Capital (USA) Inc........................................................ 20,000,000
SG Cowen Securities Corporation................................................. 20,000,000
Fleet Securities, Inc........................................................... 16,000,000
Bear, Stearns & Co. Inc......................................................... 12,000,000
Wasserstein Perella Securities, Inc............................................. 12,000,000
Total.................................................................. $400,000,000
------------
Sch A-1
SCHEDULE B
PRICING INFORMATION
PARK PLACE ENTERTAINMENT CORPORATION
8.875% Senior Subordinated Notes due 2008
Initial Public Underwriters'
Offering Price(1) Purchase Price(1)
----------------- ----------------
8.875% Senior Subordinated Notes 100% 98.25%
- -------------------------------------
(1) Expressed as a percentage of the face amount.
Sch B-1
Exhibit A-1
FORM OF OPINION OF LATHAM & WATKINS
(1) The Company is a corporation duly incorporated and validly existing in
good standing as a corporation under the laws of the State of Delaware and has
the corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and to enter into and
perform its obligations under the Agreement and the Indenture.
(2) The Agreement has been duly authorized, executed and delivered by the
Company.
(3) The Securities have been duly authorized by the Company for
issuance and sale to the Underwriters pursuant to the Agreement. The
Securities, when executed by the Company and authenticated by the Trustee in
the manner provided for in the Indenture and delivered to the Underwriters
against payment of the purchase price therefor specified in the Agreement,
will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by (a) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to or affecting the rights or remedies of creditors; (b)
the effect of general principles of equity, whether enforcement is considered
in a proceeding in equity or at law, and the discretion of the court before
which any proceeding therefor may be brought; (c) the unenforceability under
certain circumstances under law or court decisions of provisions providing
for the indemnification of or contribution to a party with respect to a
liability where such indemnification or contribution is contrary to public
policy; and (d) the unenforceability of any provision requiring the payment
of attorney's fees, except to the extent that a court determines such fees to
be reasonable. The Securities are in the form contemplated by the Indenture.
(4) The Indenture has been authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent the enforcement thereof may be limited by (a) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting the rights or remedies of
creditors; (b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought;
(c) the unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of or contribution
to a party with respect to a liability where such indemnification or
contribution is contrary to public policy; (d) the unenforceability of any
provision requiring the payment of attorney's fees, except to the extent that
a court determines such fees to be reasonable; and (e) we express no opinion
regarding the enforceability of the waiver of rights or defenses contained in
Section 5.15 of the Indenture. The Indenture is qualified under the 1939 Act.
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(5) The Securities and the Indenture conform in all material respects
to the descriptions thereof contained in the Registration Statement and
Prospectus.
(6) The Company is not an "investment company" within the meaning of
the 1940 Act.
(7) The execution, delivery and performance of the Agreement and the
Indenture by the Company and the offering, issuance or sale of the Securities
under the Agreement and the use of the proceeds therefrom as described in the
Prospectus Supplement will not, to our knowledge, require any consent,
approval, authorization or other order of, or qualification with, any court
or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of various states).
(8) The Indenture complies as to form in all material respects with the
requirements of the 1939 Act, and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(9) The execution and delivery by the Company of the Agreement, the
Indenture and the Securities and the offering, issuance or sale of the
Securities under the Agreement and the use of the proceeds therefrom as
described in Prospectus Supplement do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Company Repayment Event under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its subsidiaries pursuant to
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument to which the Company, or any
of its subsidiaries is a party or by which it is or any of them may be bound,
or to which any of the assets, properties or operations of the Company or any
of its subsidiaries is subject that is identified by an officer of the
Company as being material to the Company and its subsidiaries, taken as a
whole, and that is listed as an attachment to such counsel's opinion
("APPLICABLE CONTRACTS"), except for such conflicts, breaches, defaults or
Company Repayment Events or liens, charges or encumbrances that would not
result in a Material Adverse Effect, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or, to
such counsel's knowledge, any Applicable Law (as defined below) or any
Applicable Order (as defined below). No opinion is expressed in the foregoing
opinion, however, as to the application of any antifraud, antitrust or gaming
laws, or as to the perfection or priority of any security interest. For
purposes of the foregoing, (a) the term "APPLICABLE LAW" shall mean only the
Delaware General Corporation Law and those laws, rules and regulations of the
State of New York and of the United States of America, in each case, that, in
such counsel's experience, are normally applicable to the transactions of the
type provided for by the Agreement, but without such counsel having made any
special investigation with respect to any other laws, rules or regulations,
(b) the term "APPLICABLE ORDER" shall mean those court orders and orders of
governmental authorities or governmental bodies (if any) disclosed to such
counsel and set forth in an officer's certificate attached to such opinion.
(10) The documents of the Company incorporated by reference in the
Registration Statement and Prospectus (other than the financial statements
and notes thereto, schedules and other financial data included in,
incorporated by reference in or omitted therefrom,
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as to which such counsel expresses no opinion), when they became effective or
were filed with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder.
(11) Based solely on certificates from public officials, such counsel
confirms that the Company is qualified to do business and is in good standing
in Florida, Louisiana, Maryland, Mississippi, Nevada and New Jersey.
(12) The Registration Statement is effective under the 1933 Act, and to
the best of our knowledge and information, no proceedings for a stop order
have been instituted or threatened under Section 8(d) of the 1933 Act.
(13) At the time the Registration Statement became effective, the
Registration Statement (other than the financial statements included or
incorporated by reference therein, as to which such counsel need express no
opinion) complied as to form in all material respects with the requirements for
registration statements on Form S-3 under the 1933 Act, the rules and
regulations of the Commission under the 1933 Act, and the 1939 Act.
In addition, we have participated in conferences with officers and other
representatives of the Company, counsel to the Underwriters, representatives of
the independent public accountants of the Company and representatives of the
Underwriters at which the contents of the Registration Statement, the
Prospectus, the Prospectus Supplement and related matters were discussed.
Although we have not verified, are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Prospectus or the Prospectus
Supplement, and have not made any independent verification thereof, in the
course our participation, nothing has come to our attention that caused us to
believe that the Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus as supplemented by the Prospectus
Supplement, as of its date or at the date hereof, contained or contains an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (it being
understood that we have not been requested to, and do not, express any belief
with respect to the financial statements and schedules and other financial data
included in or incorporated by reference in the Registration Statement,
Prospectus or Prospectus Supplement).
Such opinion may be limited to the federal laws of the United States, the
internal laws of the State of New York, and the General Corporation Law of the
State of Delaware.
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Exhibit A-2
FORM OF OPINION OF CLIVE CUMMIS
(1) Based solely on my review of and in reliance upon certifications of
relevant corporate officers of the Company, GNOC, Corp., Bally's Park Place,
Inc. and Bally's Olympia Limited Partnership, of which Bally's Operator, Inc., a
Delaware corporation, is the general partner (hereinafter referred to
collectively as the "RELEVANT GAMING SUBSIDIARIES"), each of the Relevant Gaming
Subsidiaries is validly existing as a corporation or limited partnership, as the
case may be, in good standing under the laws of the jurisdiction of its
incorporation or formation, has corporate or partnership power and authority to
own, lease and operate its properties and to conduct its business to the extent
described in the Prospectus or the Prospectus Supplement.
(2) Based solely on my review of and in reliance upon certifications of
relevant corporate officers of the Company, each Relevant Gaming Subsidiary is
in good standing in each foreign jurisdiction (to the extent such foreign
jurisdiction is the State of New Jersey or the State of Delaware) in which such
qualification is required, whether by reason of the ownership, operation or
leasing of property or the conduct of business, except where the failure to so
qualify or to be in good standing would not result in a Material Adverse Effect
on the Company and its subsidiaries and affiliates, taken as a whole.
(3) Based solely on my review and in reliance upon the certifications of
relevant corporate officers of the Company, all of the issued and outstanding
capital stock of each Relevant Gaming Subsidiary (other than Bally's Olympia
Limited Partnership) has been duly authorized and is validly issued, fully paid
and non-assessable. Based solely on my review and in reliance upon the
certifications of relevant corporate officers of the Company, all of the issued
and outstanding limited partnership interests of Bally's Olympia Limited
Partnership, to the extent applicable under the Delaware Revised Limited Uniform
Partnership Act, has been duly authorized, validly issued, fully paid and
non-assessable.
(4) To my knowledge, and in reliance upon certifications of relevant
corporate officers of the Company, all of the issued and outstanding capital
stock or limited partnership interests of each Relevant Gaming Subsidiary is
owned by the Company directly or through subsidiaries free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(5) The execution and delivery by the Company of the Agreement, the
Indenture and the Securities and the offering, issuance or sale of the
Securities under the Agreement and the use of the proceeds therefrom as
described in the Prospectus or the Prospectus Supplement do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Company Repayment Event
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to any Applicable Contracts (as defined below), except for
such conflicts, breaches, defaults or Company Repayment Events or liens, charges
or encumbrances that would not result in a
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Material Adverse Effect. No opinion is expressed in the foregoing opinion,
however, as to the application of any antifraud or antitrust laws, or as to the
perfection or priority of any security interest.
For purposes of the foregoing, the term "Applicable Contracts" shall mean
each contract that the Company filed as an Exhibit 10 to its Annual Report on
Form 10-K for the year ended December 31, 1999 and its Quarterly Reports on Form
10-Q for the three months ended March 31, 2000 and the three months ended June
30, 2000.
(6) To the best of my knowledge, except as disclosed in the Registration
Statement and Prospectus, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation to which the Company or any of its
subsidiaries thereof is a party or to which the assets, properties or operations
of the Company or any of its subsidiaries thereof is subject, before or by any
court or governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect or which would
reasonably be expected to materially and adversely affect the consummation of
the transactions contemplated by this Agreement and the Indenture or the
performance by the Company of its material obligations thereunder.
Such opinion shall be limited to the Delaware General Corporation Law, the
Delaware Revised Limited Uniform Partnership Act and the internal laws of the
State of New Jersey.
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Exhibit A-3
FORM OF OPINION OF PHELPS DUNBAR
(1) The statements in the Prospectus or the Prospectus Supplement under
the caption "Regulation and Licensing-Louisiana Gaming Laws" insofar as such
statements, at the time they were made, constitute a summary of certain
provisions of the laws and regulations governing riverboat gaming in
Louisiana, have been reviewed by us and are accurate in all material respects
(except for financial data included therein or omitted therefrom, as to which
counsel express no opinion) and we do not know of any legal or governmental
proceedings in the State of Louisiana where the Company conducts, or proposes
to conduct, gaming operations required to be described in the Prospectus or
the Prospectus Supplement which are not described as required.
(2) No facts have come to our attention that would lead us to believe
that the statements referred to in paragraphs (1) above contained, on the
date of the Prospectus or the Prospectus Supplement, any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make such statements, in light of the circumstances
under which they are made, not misleading.
(3) (a) No consent, approval, authorization or other order, or filing with,
any state executive, legislative, judicial, administrative or regulatory body
(including any gaming regulatory body) or under the laws, rules and regulations
of the State of Louisiana is legally required in connection with the
commencement or consummation of the transactions contemplated by the Agreement,
and (b) the execution, delivery and performance of the Agreement and the
Indenture and the execution and delivery of the Securities by the Company and
the consummation of the transactions contemplated thereby will not conflict with
or violate any of the gaming laws, rules and regulations of the State of
Louisiana or orders or decrees known to us of any State of Louisiana
legislative, judicial, administrative or regulatory body as to which the Company
is bound. Further, the recipients of this opinion understand and acknowledge
that the transactions contemplated by the Agreement, the Indenture and the
Securities, and each of these documents themselves, are subject to review by the
Louisiana Gaming Control Board and are subject to the continuing review of the
Board in connection with any gaming licenses issued to the Company.
(4) Based solely upon our review of the records of the Louisiana Secretary
of State and the truth and veracity of an Officer's Certificate in the form
attached hereto as Exhibit A, Belle of Orleans, L.L.C. is a duly organized and
validly existing limited liability company in good standing under the laws of
the jurisdiction of its organization, has the limited liability company power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus or the Prospectus Supplement and is duly
qualified as a foreign limited liability company to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership, operation or leasing of property or the
conduct of business.
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(5) Except as described in the Prospectus or the Prospectus Supplement,
Belle of Orleans, L.L.C. has such gaming Authorizations from the Louisiana
Gaming Control Board as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described in the Prospectus
or the Prospectus Supplement, except where the failure to obtain such gaming
Authorizations would not have, singly or in the aggregate, a Material Adverse
Effect. Notwithstanding the foregoing, you recognize that the suitability of
Belle of Orleans, L.L.C. and its members to conduct gaming operations is subject
to continuous review, and Belle of Orleans, L.L.C. and its members are subject,
from time to time, to administrative proceedings or investigations. The
foregoing opinion relates only to the authorization to conduct gaming operations
on the date hereof, and we do not express or imply that such suitability or
authorization will continue, or that such matters will not be affected by facts
and circumstances known to us on the date hereof.
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Exhibit A-4
FORM OF OPINION OF SCHRECK MORRIS
(1) The statements in the Prospectus or the Prospectus Supplement under
the heading "Regulation and Licensing-Nevada Gaming Laws" (except for financial
data included therein or omitted therefrom, as to which we express no opinion),
have been reviewed by us and insofar as such statements constitute summaries of
the statutes, laws and applicable regulations of the State of Nevada regarding
gaming (the "NEVADA GAMING LAWS"), they are accurate and correct in all material
respects and fairly summarize the information called for.
(2) Insofar as the following relate to the Nevada Gaming Laws, no
authorization, approval, consent or license issued by any Nevada Gaming
Authority or any other governmental body, agency or official of the State of
Nevada is necessary in connection with the issuance of the Securities and the
due authorization, execution, delivery and performance by the Companies of the
Agreement, the Indenture, the Securities and the Acquisition Agreement, except
(a) such as have been obtained and are in full force and effect, (b) such as may
be required under Nevada state securities laws (as to which we express no
opinion) and (c) such as are required under the Nevada Gaming Laws, as set forth
in the Prospectus or the Prospectus Supplement.
(3) The execution, delivery and performance of the Agreement, the
Indenture, the Securities and the Acquisition Agreement by the Companies that
are parties thereto and the consummation of the transactions contemplated
thereby will not violate any of the Nevada Gaming Laws or any orders or decrees
of any executive, legislative, judicial, administrative or regulatory body of
the State of Nevada known to us to be binding upon the Company and any of the
Gaming Subsidiaries.
(4) Each of Flamingo Hilton-Laughlin, Inc., Parball Corporation, BI Gaming
Corporation, FHR Corporation and LVH Corporation (the "NEVADA SUBSIDIARIES") has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Nevada and has corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus or the Prospectus Supplement.
(5) All of the issued and outstanding capital stock of each of the Nevada
Subsidiaries has been duly authorized and is validly issued, fully paid and
non-assessable and is owned by the Company directly or through subsidiaries.
None of the outstanding shares of capital stock of any of the Nevada
Subsidiaries was issued in violation of statutory preemptive or, to our
knowledge, non-statutory preemptive or other similar rights of any security
holder.
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Exhibit A-5
FORM OF OPINION OF
SILLS CUMMIS RADIN TISCHMAN EPSTEIN & GROSS, P.A.
(1) As at the time such statements were made, the statements in the
Prospectus or the Prospectus Supplement under the caption "New Jersey Gaming
Laws" found under the heading "Regulation and Licensing" (except for financial
data included therein or omitted therefrom, as to which we express no opinion),
to the extent the same pertain solely to N.J.S.A. 5:12-1 et seq. and the
regulations promulgated pursuant thereto (collectively, the "NEW JERSEY GAMING
LAWS"), contain no untrue statement of a material fact or omitted or omit to
state any material fact required to be stated therein or necessary to make such
statements, in light of the circumstances under which they were or are made, not
misleading; and except as may be described in the Prospectus or the Prospectus
Supplement, we have no knowledge of any material legal or governmental
proceedings in the State of New Jersey to which the Company or any affiliate
that has licensed gaming operations in the State of New Jersey (a "NEW JERSEY
GAMING AFFILIATE") is a named party wherein a claim of a violation of the New
Jersey Gaming Laws is asserted. The New Jersey Gaming Affiliates include GNOC,
Corp. and Bally's Park Place, Inc.
(2) Solely with respect to the New Jersey Gaming Laws, no authorization,
approval, consent or license issued by the "Casino Control Commission" or the
"Division of Gaming Enforcement" (as such governmental authorities are
referenced in the New Jersey Gaming Laws, hereinafter referred to as the "NEW
JERSEY REGULATORS") is necessary in connection with the issuance of the
Securities or for the due authorization, execution and delivery by the Company
and/or any New Jersey Gaming Affiliate of the Agreement and the consummation of
the transactions contemplated thereby, except such as have been obtained and are
in full force in effect, and subject to the additional limitations,
qualifications and exceptions set forth on Schedule 1 attached hereto and made a
part hereof.
(3) Subject to the limitations, qualification and exceptions set forth on
Schedule 1 attached hereto and made a part hereof, the execution and delivery of
the Agreement, the Indenture and the Securities by the Company and by any New
Jersey Gaming Affiliate and the consummation of the transactions contemplated
thereby will not conflict with or violate (a) any New Jersey Gaming Laws or (b)
any order or decree of the New Jersey Regulators of which we have knowledge as
to which the Company or any New Jersey Gaming Affiliate is bound.
(4) Except as described in the Prospectus or the Prospectus Supplement,
solely with respect to New Jersey Gaming Laws, and in reliance upon the
certifications of relevant corporate officers of the Company, to our knowledge,
each of the Company and any New Jersey Gaming Affiliate has such authorizations
from the New Jersey Regulators as are necessary to own, lease and operate its
respective properties and to conduct its business in the manner described in the
Prospectus or the Prospectus Supplement, subject to the additional limitations,
qualifications and exceptions set forth on Schedule 1 attached hereto and made a
part
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hereof, and except where the failure to obtain such authorizations would not
have, singly or in the aggregate, a Material Adverse Effect.
Such opinion shall be limited to the New Jersey Gaming Laws.
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Exhibit A-6
FORM OF OPINION OF
WATKINS LUDLAM WINTER & STENNIS, P.A.
(1) Except (a) as disclosed in the Prospectus or the Prospectus
Supplement, (b) for consents, approvals, authorizations, orders and filings that
have been obtained prior to the date of the opinion or for those required under
state securities or Blue Sky laws or regulations (as to which such state
securities or Blue Sky laws or regulations such counsel need express no
opinion), and (c) for the periodic and other filings and reporting requirements
to which any of the Company and the Mississippi Gaming Subsidiaries (as defined
in this opinion) are subject generally, to the best knowledge of such counsel,
no action has been taken and no statute, rule or regulation (including, without
limitation, any gaming statutes and regulations) or order has been enacted,
adopted or issued by any Mississippi governmental agency (including, without
limitation, the Mississippi Gaming Commission) or body which prevents the
issuance of the Securities, prevents or suspends the use of any Prospectus or
the Prospectus Supplement or suspends the sale of Securities; to the best
knowledge of such counsel, no action, suit or proceeding is pending against or
threatened against or affecting the Company or any of the Mississippi Gaming
Subsidiaries before any Mississippi court or arbitrator or any Mississippi
governmental body, agency (including, without limitation, the Mississippi Gaming
Commission) or official, that, if adversely determined, would draw into question
the validity of the Agreement.
(2) Subject to the qualifications as set forth in paragraph (1) above, the
execution and delivery of the Agreement, the performance of the Agreement,
compliance by the Companies with provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby, including
those included in the Prospectus or the Prospectus Supplement (including the
Transactions), in each case, as applicable, will not contravene any order of any
Mississippi court or governmental agency (including, without limitation, the
Mississippi Gaming Commission).
(3) The statements in the Prospectus or the Prospectus Supplement under
the captions "Risk Factors-Gaming referenda have been voted on or are being
proposed in Mississippi and California and adoption of these referenda could
have a material adverse effect on our business" and "Regulation and
Licensing-Mississippi Gaming Laws" have been reviewed by such counsel and to the
extent such statements constitute summaries of the statutes, laws and applicable
regulations of the State of Mississippi regarding the casino industry and
gaming, fairly summarize the information called for with respect to such
Mississippi legal matters and are correct and accurate in all material respects.
(4) None of the Underwriters, the Trustee or the holders of the Securities
(collectively referred to as "PARTICIPANTS") is required, solely by reason of
the transactions contemplated by the Agreement, to be found suitable or to be
licensed by the Mississippi Gaming Commission; PROVIDED, HOWEVER, the
Mississippi Gaming Commission retains discretion to require any Participant to
file an application for a finding of suitability and be found suitable in order
to remain a Participant.
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(5) Insofar as the following relate to the statutes, laws and applicable
regulations of the State of Mississippi regarding the casino industry and gaming
and subject to the qualifications set forth in paragraph (1) above, no consent,
approval, authorization or other order, or filing with, any state executive,
legislative, judicial, administrative or regulatory body (including any gaming
regulatory body) or under the laws, rules and regulations of the State of
Mississippi is legally required in connection with the commencement or
consummation of the transactions contemplated by the Agreement.
(6) Subject to the qualifications as set forth in paragraph (1) above, the
execution, delivery and performance of the Agreement, the Indenture, the
Securities and the Acquisition Agreement by the Company and the consummation of
the transactions contemplated thereby will not conflict with or violate any of
the gaming laws, rules and regulations of the State of Mississippi or orders or
decrees of any State of Mississippi executive, legislative, judicial,
administrative or regulatory body known to us to be binding upon the Company or
any of the Mississippi Gaming Subsidiaries.
(7) Each of Grand Casinos of Mississippi, LLC-Gulfport, Grand Casinos of
Mississippi, Inc.- Biloxi, BL Development Corp. and Bally's Olympia Limited
Partnership, of which Bally's Operator, Inc., a Delaware corporation, is the
general partner (the "MISSISSIPPI GAMING SUBSIDIARIES"), has received a gaming
operator's license from the Mississippi Gaming Commission, subject to the terms
and conditions under which each such license was issued, which is necessary to
own lease and operate each of their respective properties and to conduct each of
their respective businesses in the manner described in the Prospectus or the
Prospectus Supplement, and to the knowledge of such counsel, there are no
proceedings pending before the Mississippi Gaming Commission to suspend or
terminate any of such licenses.
The opinion of Watkins Ludlam Winter & Stennis, P.A. shall be rendered to
the Underwriters at the request of the Company and shall so state therein. Such
opinion shall be subject to standard exceptions, qualifications and assumptions,
including the retained discretion of the Mississippi Gaming Commission to
require a finding of suitability with respect to any Participant, the authority
of the Mississippi Gaming Commission to require rescission of any loan
transaction which is inimical to the public health, safety, morals, good order
or general welfare of the people of the State of Mississippi or would reflect,
or tend to reflect, discredit upon the State of Mississippi or the gaming
industry and required filings with and approvals of the Mississippi Gaming
Commission with respect to the Securities and the approval of the Mississippi
Gaming Commission to any restrictions on the transfer of, and agreements not to
encumber, the stock or other equity securities of the Mississippi Gaming
Subsidiaries that are licensed or that are registered in the State of
Mississippi (without which such restrictions and agreements will not be
effective pursuant to Mississippi Gaming Commission Regulations II.E. Section 5
and II.G. section 5). While the Company has received a waiver from the prior
approval requirements under the Mississippi Gaming Control Act and Mississippi
Gaming Commission regulations with respect to private placements and public
offerings of its securities, the Mississippi Gaming Commission staff retains the
ability to issue a "stop order" with respect to such offerings.
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