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EXHIBIT 4.1
$105,000,000 OF SENIOR SECURED NOTES DUE 2003
THE MAJESTIC STAR CASINO, LLC
PURCHASE AGREEMENT
May 16, 1996
WASSERSTEIN PERELLA SECURITIES, INC.
31 West 52nd Street
New York, New York 10019
Ladies and Gentlemen:
The Majestic Star Casino, LLC, a limited liability company organized and
existing under the laws of Indiana (the "Company"), proposes, subject to the
terms and conditions stated herein, to issue and sell to Wasserstein Perella
Securities, Inc. (the "Initial Purchaser") an aggregate of $105,000,000 of its
Senior Secured Notes due 2003 (the "Senior Notes").
The Senior Notes will be issued pursuant to an Indenture dated as of May
22, 1996 (the "Indenture") between the Company and IBJ Schroder Bank & Trust
Company, as trustee (the "Trustee"). The Senior Notes will bear interest at
12-3/4% per annum plus contingent interest as described in the Indenture. The
holders of the Senior Notes will be entitled to certain registration rights
provided under a Registration Rights Agreement to be dated as of May 22, 1996
(the "Registration Rights Agreement") between the Company and the Initial
Purchaser.
The Company has prepared a preliminary offering memorandum dated April 30,
1996 (the "Preliminary Offering Memorandum") and a final offering memorandum
(the "Offering Memorandum") dated the date hereof relating to and summarizing
the terms of the Senior Notes. It is also contemplated that the Senior Notes
will be secured by or have the benefit of the provisions of the BDI Pledge
Agreement, the BHR Pledge Agreement, the Cash Collateral and Disbursement
Agreement, the Security Agreement and the Trademark Security Agreement (each as
defined
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in the Offering Memorandum and collectively referred to herein as the
"Collateral Documents").
None of the Senior Notes have been registered under the Securities Act of
1933, as amended (the "Securities Act"), and such securities are being sold in
reliance on exemptions from or in transactions not subject to the registration
requirements of the Securities Act, including sales (i) to institutional
"accredited investors" (as defined in Rule 501 (a)(1), (2), (3) or (7) under
the Securities Act); (ii) to "qualified institutional buyers" (as defined in
Rule 144A under the Securities Act or (iii) to non-U.S. persons outside the
United States in reliance upon Regulation S under the Securities Act.
1. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with, the Initial
Purchaser that:
(a) The Offering Memorandum, as of the date hereof, and as of the Closing
Date (as defined herein) is and will be accurate in all material respects and
does not and will not contain an untrue statement of a material fact and does
not or will not omit to state any material fact required to be stated therein
or necessary in the order to make the statements therein, in light of the
circumstances under which they were made, not misleading. No representation
and warranty is made in this subsection (a) with respect to any information
contained in or omitted from the Offering Memorandum or any amendment thereof
or supplement thereto furnished in writing to the Company by the Initial
Purchaser expressly for use in the Offering Memorandum.
(b) Coopers & Lybrand L.L.P. who has expressed their opinion with respect
to the financial statements for the period ended December 31, 1995 included in
the Offering Memorandum are independent accountants as required by the
Securities Act and the rules and regulations thereunder (the "Rules and
Regulations").
(c) The annual audited financial statements of the Company included in
the Offering Memorandum present fairly the financial position of the Company,
as of the respective dates of such financial statements, and the results of
operations and changes in financial position of the Company for the respective
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periods covered thereby. Such statements and related notes have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis, as certified by the independent accountants named in
subsection 1(b). The selected financial data set forth in the Offering
Memorandum under the captions "Capitalization" and "Selected Financial Data"
fairly present the information set forth therein on the basis stated in the
Offering Memorandum. The unaudited interim financial statements of the Company
included in the Offering Memorandum present fairly the financial position of
the Company, as of the date of such financial statements, and the results of
operations and changes in financial position of the Company for the period
covered thereby. Such statements and related notes have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis subject to the limitations expressed in footnote 1 thereto.
(d) The forecasts and projections contained in the Offering Memorandum
are based upon good faith estimates and assumptions believed by the Company to
be reasonable at the time made.
(e) Subsequent to the dates as of which information is given in the
Offering Memorandum, except as set forth therein, there has been no material
adverse change or any development which might reasonably be expected to result
in any material adverse change in the business, properties, operations,
condition (financial or other) or results of operations of the Company, whether
or not arising from transactions in the ordinary course of business, and since
the date of the latest balance sheet presented in the Offering Memorandum, the
Company has not incurred or undertaken any liabilities or obligations, direct
or contingent, which are material to the Company, except for liabilities or
obligations undertaken in the ordinary course of business or which are
reflected in the Offering Memorandum.
(f) The Company has the full legal right, power and authority to enter
into this Agreement and the other agreements, documents and instruments to be
executed by the Company in furtherance of the transactions contemplated hereby,
including without limitation, the Indenture, the Senior Notes, the Registration
Rights Agreement and the Collateral Documents to be executed by the Company
(collectively, the "Transaction
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Documents"), and to consummate the transactions contemplated hereby and
thereby.
(g) The execution, delivery, and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby do not and
will not, (i) except as disclosed in the Offering Memorandum, (ii) except for
the consent of the Indiana Gaming Commission ("IGC") which consent has been
obtained (A) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company pursuant to any agreement, instrument, franchise, license or permit
to which the Company is a party or by which its properties or assets may be
bound or (B) violate or conflict with any judgment, decree, order, statute,
rule or regulation of any court or any public, governmental or regulatory
agency or body applicable to the Company or any of its properties or assets.
The execution, delivery and performance of this Agreement by the Company and
the consummation of the transactions contemplated hereby and by the Offering
Memorandum do not and will not violate or conflict with any provision of the
articles of organization or operating agreement of the Company as currently in
effect. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body applicable to the Company or any of
its properties or assets is required for the execution, delivery and
performance of this agreement or the consummation of the transactions
contemplated hereby, including the issuance, sale and delivery of the Senior
Notes to be issued, sold and delivered by the Company hereunder except such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the Senior
Notes by the Initial Purchaser.
(h) The Company had, as of March 31, 1996, an authorized and outstanding
capitalization as set forth in the Offering Memorandum and the capital of the
Company conforms in all material respects to the description thereof contained
in the Offering Memorandum.
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(i) The Company does not own or control, directly or indirectly, any
corporation, association or other entity except that the Company does have a
50% ownership interest in Buffington Harbor Riverboats, L.L.C., a Delaware
limited liability company ("Buffington Harbor, L.L.C."). The Company has been
duly formed and is validly existing as a limited liability company in good
standing under the laws of Indiana. The Company is duly qualified to do
business and in good standing as a foreign limited liability company in each
jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which will not in the aggregate have a material adverse effect on
the Company or result in any material adverse change or any development
involving a material adverse change in the business, properties, operations,
condition (financial or other) or results of operations of the Company. The
Company has all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses and
permits of and from all public, regulatory or governmental agencies and bodies,
to own, lease and operate its properties and conduct its business as now being
conducted as described in the Offering Memorandum except where the failure to
possess such requisite power and authority, or the necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses and
permits, would not have a material adverse effect on the business, properties,
operations, condition (financial or other) or results of operations of the
Company, and no such consent, approval, authorization, order, registration,
qualification, license or permit contains a materially burdensome restriction
not adequately disclosed in the Offering Memorandum.
(j) Except as described in the Offering Memorandum, there is no
litigation or governmental proceeding to which the Company or Buffington
Harbor, L.L.C. is a party or to which any property of the Company or Buffington
Harbor, L.L.C. is subject or which is pending or, to the knowledge of the
Company, contemplated against the Company or Buffington Harbor, L.L.C. which
might reasonably be expected to result in any material adverse change in the
business, properties, operations, condition (financial or other) or, results of
operations of the Company.
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(k) The Company has not taken and will not take, directly or indirectly,
any action designed to cause or result in, or which constitutes or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the Senior Notes to facilitate the sale or resale of the Senior Notes.
(l) The Company is not (i) an "investment company" or a company
"controlled" by an investment company within the meaning of the Investment
Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary
company" of a holding company or an "affiliate" thereof within the meaning of
the Public Utility Holding Company Act of 1935, as amended, or (iii) subject to
regulation under the Federal Power Act or any federal or state statute or
regulation limiting its ability to incur indebtedness for borrowed money.
(m) None of the Company, any of its affiliates or any person acting on
its behalf (excluding the Initial Purchaser, as to which no representation is
made) has engaged in any "directed selling efforts" (as such term is defined in
Regulation S of the Securities Act) in the United States with respect to the
Notes and (ii) each of the Company and any of its affiliates and any person
acting on behalf of any of them (other than the Initial Purchaser and its
affiliates, as to whom the Company makes no representation) has complied with
the offering restrictions requirement of Regulation S.
(n) None of the Company, any of its affiliates or any person authorized
to act on its behalf (excluding the Initial Purchaser, as to which no
representation is made) has engaged in any form of general solicitation or
general advertising (as such terms are defined in Rule 502(c) under the
Securities Act).
(o) None of the Company, any of its affiliates (as defined in Rule 501(b)
under the Securities Act) or any person authorized to act on its behalf
(excluding the Initial Purchaser, as to which no representation is made) has
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of any security (as such term is defined in the Securities Act) of the
Company in a manner which would require registration under the Securities Act.
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(p) The Senior Notes are eligible for resale pursuant to Rule 144A and,
when issued, will not be of the same class as securities listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted in
a U.S. automated inter-dealer quotation system.
(q) The Company is in compliance in all material respects with the
Certificate of Suitability issued by the IGC and all applicable rules,
regulations and orders of the IGC. The Company is taking all requisite steps
to procure a gaming license from the IGC.
(r) Subject to compliance by the Initial Purchaser with the
representations and warranties set forth in Section 2 and the procedures set
forth in Section 3 hereof, it is not necessary in connection with the offer,
sale and delivery of the Senior Notes to the Initial Purchaser in the manner
contemplated by this Agreement and the Offering Memorandum to register the
Senior Notes under the Securities Act or to qualify the Indenture under the
Trust Indenture Act of 1939, as amended.
(s) The Company does not have any material liabilities or obligations
("Liabilities"), except (i) as reflected or reserved against in the balance
sheets of the Company included in financial statements for the periods ended
December 31, 1995 and March 31, 1996, and not heretofore discharged, (ii) as
specifically disclosed or specifically contemplated in the Offering Memorandum
or (iii) liabilities incurred in the ordinary course of business since December
31, 1995.
(t) Except as disclosed in the Offering Memorandum, and except as to
defaults which individually or in the aggregate would not be material to the
Company, the Company is not in violation or default of any provision of its
articles of organization, operating agreement, or other organizational
documents, or is in breach of or default with respect to any provision of any
agreement, judgment, decree, order, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which it is a party or by
which it or any of its properties are bound; and there does not exist any state
of facts which constitutes an event of default on the part of the Company as
defined in such documents or which, with notice or lapse of time or both, would
constitute such an event of default.
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(u) The Company is in compliance, and has complied in all material
respects, at all times during its existence, and all transactions involving the
issuance, offer, placement and sale, pursuant to the terms of the Transaction
Documents, of the Notes comply, in all material respects, with all applicable
federal, state and local statutes, codes, ordinances, rules and regulations of
the United States and all other countries and subdivisions thereof (the "Laws")
to the extent applicable other than violations which would not have a material
adverse effect on the Company. The Company has not received notice within the
past three (3) years of any violations of any Laws, which violations would be
material to the Company. Except as disclosed in the Offering Memorandum, the
Company and Buffington Harbor L.L.C. have all material licenses, franchises,
permits, certificates and other approvals or authorizations from all regulatory
officials and bodies that are necessary to the conduct of their respective
businesses and to the ownership or lease of their respective properties as
described or contemplated in the Offering Memorandum.
(v) The Company and Buffington Harbor, L.L.C. are each in compliance with
any and all Laws relating to the environment or health and safety except where
a failure is not reasonably likely to be material and adverse to the validity
or enforceability of any of the Transaction Documents or the businesses,
assets, financial condition or results of operations of the Company or
Buffington Harbor, L.L.C. Except as disclosed in the Offering Memorandum,
there exists no fact, and no event has occurred, which has or is reasonably
likely to result in material liability (including, without limitation, alleged
or potential liability for investigatory costs, cleanup costs, governmental
response costs, natural resource damages, property damages, personal injuries
or penalties) of the Company or Buffington Harbor, L.L.C. arising out of, based
on or resulting from the presence or release into the environment of any
hazardous material (including, without limitation, any pollutant or contaminant
or hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any Law) or any violation of any Law
relating to the environment.
(w) This Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid
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and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(x) The Senior Notes have been duly and validly authorized by the
Company, and the Senior Notes, when authenticated by the Trustee and issued,
sold and delivered in accordance with this Agreement and the Indenture, will
have been duly and validly executed, authenticated, issued and delivered and
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the benefits
provided by the Indenture except as such enforcement may be subject to or
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
remedies generally and (ii) general principles of equity (regardless of whether
such enforcement may be sought in a proceeding in equity or at law). The
Senior Notes, when executed, authenticated, issued and delivered as provided in
the Indenture, will conform in all material respects to the description thereof
contained in the Offering Memorandum.
(y) The notes to be issued under the Indenture in exchange for the Senior
Notes (the "Senior Exchange Notes") have been duly and validly authorized for
issuance by the Company, and when authenticated by the Trustee and issued and
delivered in accordance with the exchange offer and the Indenture, will have
been duly and validly executed, authenticated, issued and delivered and will
constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms and entitled to the benefits
provided by the Indenture except as such enforcement may be subject to or
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
remedies generally and (ii) general principles of equity (regardless of whether
such enforcement may be sought in a proceeding in equity or at law). The
Senior Exchange Notes, when executed, authenticated, issued and delivered as
provided in the Indenture and exchange offer will conform in all material
respects to the description thereof contained in the Offering Memorandum.
(z) The Indenture has been duly and validly authorized by the Company,
and the Indenture, when executed and delivered by
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the Company and the Trustee, will constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as such enforcement may be subject to or limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights and remedies generally and (ii) general
principles of equity (regardless of whether such enforcement may be sought in a
proceeding in equity or at law). The Indenture, when executed and delivered by
the Company and the Trustee, will conform in all material respects to the
description thereof contained in the Offering Memorandum.
(aa) The Registration Rights Agreement has been duly and validly
authorized by the Company, and the Registration Rights Agreement, when executed
and delivered by the Company and the Initial Purchaser, will constitute a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforcement may be subject to or
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
remedies generally and (ii) general principles of equity (regardless of whether
such enforcement may be sought in a proceeding in equity or at law). The
Registration Rights Agreement, when executed and delivered by the Company and
the Initial Purchaser, will conform in all material respects to the description
thereof contained in the Offering Memorandum.
(bb) The Collateral Documents to be executed by the Company or Barden
Development, Inc., an Indiana corporation and manager of the Company ("Barden
Development"), when executed and delivered by the Company, Barden Development
and the other parties thereto, will constitute valid and binding obligations of
the Company or Barden Development, as the case may be, enforceable against the
Company or Barden Development, as the case may be, except as such enforcement
may be subject to or limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and remedies generally and (ii) general principles of equity
(regardless of whether such enforcement may be sought in a proceeding in equity
or at law). The Collateral Documents, when executed and delivered by the
parties thereto, will conform in
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all material respects to the descriptions thereof contained in the Offering
Memorandum.
(cc) All of the outstanding membership interests in the Company are duly
and validly authorized and issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and were not
issued and are not now in violation of or subject to any preemptive rights.
Except as disclosed in or contemplated by the Offering Memorandum, the
financial statements of the Company, and the related notes thereto, included in
the Offering Memorandum, the Company does not have outstanding any options to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, membership interests or any such options, rights,
convertible securities or obligations.
(dd) No preemptive rights or other rights to subscribe for or purchase
securities exist with respect to the issuance and sale of the Senior Notes by
the Company pursuant to this Agreement. No security holder of the Company has
any right which has not been satisfied or waived to require the Company to
register the sale of any securities owned by such security holder under the
Act, except as contemplated by the Registration Rights Agreement.
(ee) When issued, the Senior Notes will rank pari passu in right of
payment with all of the Company's other unsubordinated indebtedness for
borrowed money.
(ff) The Company has legal and valid title to all the properties and
assets reflected as owned in the financial statements hereinabove described (or
elsewhere in the Offering Memorandum), subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except (i) those, if any, reflected in such
financial statements (or elsewhere in the Offering Memorandum), (ii) those
which are not material in amount or do not adversely affect the use made and
proposed to be made of such property by the Company or (iii) Permitted Liens
(as defined in the Indenture). The Company holds its leased properties under
valid and binding leases, with such exceptions as are not materially
significant in relation to the business of the
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Company. Except as disclosed in the Offering Memorandum, the Company owns or
leases all such properties as are necessary to its operations as now conducted.
(gg) Except as disclosed in or specifically contemplated by the Offering
Memorandum, the Company has sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals and governmental authorizations to conduct its
business as now conducted; the expiration of any trademarks, trade names,
patent rights, copyrights, licenses, approvals or governmental authorizations
would not have a material adverse effect on the condition (financial or
otherwise), business or results of operations of the Company; and the Company
has no knowledge of any material infringement by it of trademark, trade name,
patent, copyright, licenses, trade secret or other similar rights of others,
and there is no claim being made against the Company regarding trademark, trade
name, patent, copyright, license, trade secret or other infringement which
would have a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company.
(hh) The Company has filed all necessary federal, state and foreign
income and franchise tax returns and has paid all taxes shown as due thereon;
and the Company has no knowledge of any tax deficiency which has been asserted
or threatened against the Company which could materially and adversely affect
the business, operations or properties of the Company.
(ii) The Company and Buffington Harbor, L.L.C. each maintains insurance
of the types and in the amounts generally deemed adequate for its business
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and
effect.
(jj) To the knowledge of the Company, the Company has not at any time (i)
made any unlawful contribution to any candidate for office, or failed to
disclose fully any contribution in violation of law or (ii) made any payment to
any federal, state or local governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof.
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(kk) Except as disclosed or specifically contemplated by the Offering
Memorandum, Buffington Harbor, L.L.C. has all requisite power and authority,
and all necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public, regulatory or
governmental agencies and bodies to own, lease and operate its properties and
conduct its business as now being conducted or proposed to be conducted as
described in the Offering Memorandum except where the failure to possess such
requisite power and authority would not have a material adverse effect on the
business, properties, operation, creditor (financial or other) or results of
operations of Buffington Harbor, L.L.C., and no such consent, approval,
authorization, order, registration, qualification, license or permit contains a
materially burdensome restriction not adequately disclosed in the Offering
Memorandum. The consummation of the transactions contemplated by the Offering
Memorandum would not (A) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event which with notice
or lapse of time, or both would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of Buffington Harbor, L.L.C. pursuant to any agreement, instrument,
franchise, license or permit to which Buffington Harbor, L.L.C. is a party or
by which its properties or assets may be bound or (B) violate or conflict with
any judgment, decree, order, statute, rule or regulation or any court of any
public, governmental or regulatory agency or body applicable to Buffington
Harbor, L.L.C. or any of its properties or assets.
(ll) Buffington Harbor, L.L.C. has legal and valid title to all real
properties and has legal and valid title to all personal properties purported
to the owned by Buffington Harbor, L.L.C. in each case free and clear of any
security interest, lien, charge, or encumbrance except those which are incurred
in the ordinary course of business which do not individually or in the
aggregate materially interfere with the use made or proposed to be made of such
properties.
(mm) The First Amended and Restated Operating Agreement of Buffington
Harbor, L.L.C. between the Company and Trump Indiana, Inc. dated as of October
31, 1995, as amended, the Berthing Agreement dated April 23, 1996 between the
Company and Buffington Harbor, L.L.C., and the Development Agreement dated as
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of March 26, 1996 between the Company and the City of Gary, Indiana
(collectively, the "Project Documents") have been duly authorized, executed and
delivered by the Company and constitute legal, valid and binding obligations of
the Company enforceable against the Company in accordance with their respective
terms, except as such enforcement may be subject to or limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of when such enforcement may be sought in a
proceeding in equity or at law). The Project Documents are in full force and
effect and conform in all material respects to the descriptions thereof
contained in the Offering Memorandum.
(nn) The Company does not intend to, not does it believe that it will,
incur debts beyond its ability to pay such debts as they mature. The assets of
the Company do not constitute unreasonably small capital to carry out the
business of the Company, as conducted or as proposed to be conducted. Upon the
issuance of the Senior Notes, the assets of the Company will not constitute
unreasonably small capital to carry out its business as now conducted,
including the capital needs of the Company, taking into account the projected
capital requirements and capital availability.
(oo) No action has been taken and no law, statute, rule or regulation or
order has been enacted, adopted or issued by any governmental agency or body
which prevents the issuance of the Senior Notes, prevents or suspends the use
of any Preliminary Offering Memorandum or the Offering Memorandum, or suspends
the sale of the Senior Notes in any jurisdiction referred to in Section 4(c)
hereof; no injunction, restraining order or other order or relief of any nature
by a federal or state court or other tribunal of competent jurisdiction has
been issued with respect to the Company that would prevent or suspend the
issuance or sale of the Senior Notes or the use of any Preliminary Offering
Memorandum or the Offering Memorandum in any jurisdiction referred to in
Section 4(c) hereof; no action, suit or proceeding is pending or threatened
against or affecting the Company before any court or arbitrator or any
governmental body, agency or official, domestic or foreign, which, if adversely
determined, would materially interfere with or adversely affect the issuance of
the Senior Notes or in any manner draw into
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question the validity of the Transaction Documents, the Project Documents or
the Senior Notes; and every request of any securities authority or agency of
any jurisdiction for additional information (to be included in the Offering
Memorandum or otherwise) has been complied with.
(pp) All roads, easements and rights of way necessary for the full
utilization of and access to the vessel to be operated by the Company and the
conduct of its business have been completed or the necessary steps have been
taken by the Company to assure the complete construction and installation
hereof as contemplated in the Offering Memorandum. All utility services
necessary for the operation of the business of the Company will be available at
the scheduled time for commencent of operation of the vessel to be operated by
the Company.
(qq) The Initial Purchaser has been furnished with a copy of the material
plans and specifications for the construction of the improvements at Buffington
Harbor, the equipment of the chartered vessel and other necessary capital
expenditures, except those associated with the Permanent Vessel. Such plans
and specifications are satisfactory to the Company. The anticipated cost of
such improvements (including interest, legal, architectural, engineering,
planning, zoning and other similar costs) does not exceed the amount set forth
under the caption "Use of Proceeds" in the Offering Memorandum. The Company is
not aware of any material defects in such improvements.
2. Purchase, Sale and Delivery of the Senior Notes. (a) On the basis
of the representations, warranties, covenants and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company agrees to
sell to the Initial Purchaser and the Initial Purchaser agrees to purchase from
the Company $105,000,000 principal amount of Senior Notes in the amount set
forth on Schedule 1 hereto at a purchase price equal to 96.9301% of their
principal amount plus accrued interest, if any.
(b) Payment of the purchase price for, and delivery of, the Senior Notes
shall be made at the offices of Sidley & Austin, 875 Third Avenue, New York,
New York 10022 at 9:30 a.m. (New York City time) unless postponed in
accordance with Section 9 hereof on May 22, 1996 or such other time and date as
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shall be mutually agreed between the Company and the Initial Purchaser (such
time and date of such payment and delivery being herein called the "Closing
Date"). At or prior to the Closing Date, the Company shall execute and deliver
for authentication one or more certificates in global or definitive form for
the Senior Notes in such denominations and registered in such names as the
Initial Purchaser requests upon notice to the Company at least two business
days prior to the Closing Date. Against such delivery of the Senior Notes, the
Initial Purchaser shall pay or cause to be paid to the Company the purchase
price for the Senior Notes. Payment shall be made to the Company by certified
or official bank check or checks drawn in New York Clearing House funds or
similar next day funds payable to the order of the Company. The Initial
Purchaser shall have the right to deduct from the purchase price payable to the
Company hereunder the selling concession and any expenses payable pursuant to
the Letter Agreement dated February 27, 1996 among the Company, Barden
Development and the Initial Purchaser.
(c) The Initial Purchaser hereby represents and warrants to, and agrees
with, the Company that it (i) is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act or an "accredited investor" as
defined in Rule 501(a)(1), (2), (3), or (7) under the Securities Act; (ii) has
not and will not solicit offers for, or offer or sell, Notes by means of any
general solicitation or general advertising within the meaning of Rule 502(c)
under Regulation D under the Securities Act; and (iii) will otherwise act in
accordance with the terms and conditions set forth in this Agreement and in the
Offering Memorandum in connection with the placement of the Senior Notes
contemplated hereby.
3. Subsequent Offers and Resales of the Senior Notes.
The Initial Purchaser and the Company hereby establish and agree to
observe the following procedures in connection with the offer and resale by the
Initial Purchaser of the Senior Notes:
(a) Offers and sales of the Senior Notes will be made by the Initial
Purchaser only (i) to institutional investors that are reasonably believed to
qualify as accredited investors (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities
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Act) (each such institutional investor being hereinafter referred to as an
"institutional accredited investor") or, (ii) in the case of Senior Notes
resold or otherwise transferred pursuant to Rule 144A under the Securities Act,
to institutional investors that are reasonably believed to qualify as
"qualified institutional buyers" (as therein defined) (each such institutional
investor being hereinafter referred to as a "qualified institutional buyer") or
(iii) to non-U.S. persons outside the United States in reliance upon Regulation
S under the Securities Act, in transactions meeting the requirements of
Regulation S.
(b) The Senior Notes will be offered by the Initial Purchaser only by
approaching prospective purchasers on an individual basis. No general
solicitation or general advertising (as such terms are used in Regulation D
under the Securities Act) will be used in connection with the offering of the
Senior Notes.
(c) In the case of a non-bank purchaser of a Senior Note acting as a
fiduciary for one or more third parties, in connection with an offer and sale
to such purchaser pursuant to clause (a) above, each third party shall, in the
judgment of the Initial Purchaser, be an institutional accredited investor or a
non-U.S. person outside the United States.
(d) In connection with sales outside the United States, the Initial
Purchaser agrees that it will not offer, sell or deliver Senior Notes (i) as
part of its distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering or last closing date with respect to
the Senior Notes, to, or for the account or benefit of, U.S. persons.
Accordingly, the Initial Purchaser represents and agrees that neither it, its
affiliates nor any person acting on its behalf has engaged or will engage in
any directed selling efforts with respect to the Senior Notes, and further that
each such person has complied and will comply with the offering restrictions
requirement of Regulation S under the Securities Act. The Initial Purchaser
also agrees that, at or prior to confirmation of sale of the Senior Notes, it
will send to each dealer to which it sells Senior Notes during the restricted
period a confirmation or other notice setting forth the restrictions on offers,
sales and deliveries of the Senior Notes
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within the United States or to, or for the account or benefit of U.S. persons.
(e) The Initial Purchaser agrees that (i) it has not offered or sold (and
will not, for so long as Part III of the Companies Act 1985 remains in force in
relation to Notes which are not listed on the London Stock Exchange, offer or
sell) any Senior Notes, other than to persons whose ordinary business it is to
buy or sell shares or debentures, whether as principal or agent, or in
circumstances which do not constitute an offer to the public within the meaning
of the Companies Act 1985; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect of
anything done by it in relation to the Senior Notes in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on, and
will only issue or pass on, in the United Kingdom any document received by it
in connection with the issue of the Senior Notes to a person who is of a kind
described in Article 9(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1988 (as amended).
(f) The Initial Purchaser agrees that it has not, directly or indirectly,
offered or sold and will not, directly or indirectly, offer or sell any Senior
Notes in Japan, except pursuant to an exemption from the registration
requirements of, and otherwise in compliance with, the Securities and Exchange
Law and in compliance with other applicable requirements of Japanese Law.
(g) The Initial Purchaser agrees that it will not offer or sell any
Senior Notes directly or indirectly in any province of Canada except in
compliance with all requirements of applicable securities laws.
(h) No sale of the Senior Notes to any one purchaser will be for less
than $250,000 principal amount, and no Senior Note will be issued in a smaller
principal amount. If the purchaser is a non-bank fiduciary acting on behalf of
others, each person for whom it is acting must purchase at least $250,000
principal amount of the Senior Notes.
(i) The transfer restrictions and the other provisions set forth in the
Indenture, including the legend required
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thereby, shall apply to the Senior Notes except as otherwise agreed by the
Company and the Initial Purchaser. Following the sale of the Senior Notes by
the Initial Purchaser to subsequent purchasers (the "Subsequent Purchasers")
pursuant to the terms hereof, the Initial Purchaser shall not be liable or
responsible to the Company for any losses, damages or liabilities suffered or
incurred by the Company, including any losses, damages or liabilities under the
Securities Act, arising from or relating to any resale or transfer of any
Senior Notes.
(j) The Initial Purchaser will deliver to each purchaser of the Senior
Notes from the Initial Purchaser, in connection with its original distribution
of the Senior Notes, a copy of the Offering Memorandum, as amended and
supplemented at the date of such delivery.
(k) In connection with its original distribution of the Senior Notes, the
Company agrees that, prior to any offer or resale of the Senior Notes by the
Initial Purchaser, the Initial Purchaser and Counsel for the Initial Purchaser
shall have the right to make reasonable due diligence inquiries into the
business of the Company. The Company also agrees to provide answers to
questions from each prospective Subsequent Purchaser concerning the Company (to
the extent that such information is available to prospective Subsequent
Purchasers without unreasonable effort or expense and to the extent the
provision thereof is not prohibited by applicable law) and the terms and
conditions of the offering of the Senior Notes, as provided in the Offering
Memorandum.
4. Convenants of the Company. The Company covenants and agrees with the
Initial Purchaser that:
(a) If at any time prior to the Closing Date any event shall have
occurred as a result of which the Offering Memorandum as then amended or
supplemented would in the judgment of the Initial Purchaser or the Company
include an 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,
in the light of the circumstances under which they were made, not misleading,
the Company will notify the Initial Purchaser promptly and prepare and deliver
to the Initial Purchaser an
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amendment or supplement (in form and substance satisfactory to you) which will
correct such statement or omission.
(b) The Company will promptly deliver to the Initial Purchaser such
number of copies of the Offering Memorandum and all amendments of and
supplements thereto as the Initial Purchaser may reasonably request.
(c) The Company will endeavor in good faith, in cooperation with the
Initial Purchaser, to qualify the Senior Notes for offering and sale under the
securities laws relating to the offering or sale of the Senior Notes in such
jurisdictions as the Initial Purchaser may designate and to maintain such
qualification in effect for so long as required for the distribution thereof;
except that in no event shall the Company be obligated in connection therewith
to qualify as a foreign corporation or to execute a general consent to service
of process.
(d) The Company will apply the proceeds from the sale of the Senior Notes
as set forth under "Use of Proceeds" in the Offering Memorandum. The Company
will comply with the provisions of the Collateral Documents concerning
disbursement of funds.
(e) The Company will use its best efforts to cause the Senior Notes to be
designated Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") market securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc., relating to
trading in the PORTAL market.
(f) During the period of 90 days from the date hereof, the Company will
not, without prior written consent of the Initial Purchaser or as permitted in
the Indenture, issue, sell, offer or contract to sell, grant any option for the
sale of, or otherwise dispose of, directly or indirectly, any debt securities
in any such case for cash, other than the Company's sale of Senior Notes
hereunder.
(g) None of the Company, its affiliates (as defined in Rule 501(b) of the
Securities Act) or any person acting on their behalf (other than the Initial
Purchaser and its affiliates) will solicit any offer to buy or offer or sell
the Senior Notes by means of any form of general solicitation or general
advertising
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(as those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(h) None of the Company, its affiliates (as defined in Rule 501(b) of the
Securities Act) or any person acting on their behalf will offer, sell or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) of the Company in a manner that would require
the registration of the Senior Notes under the Securities Act.
(i) During the period from the Closing Date to three years after the
Closing Date, the Company and its Subsidiaries will not, and will not permit
any of their "affiliates" (as defined in Rule 144 under the Securities Act) to,
resell any of the Senior Notes that have been reacquired by them, except for
Senior Notes purchased by the Company or any of its affiliates and resold in a
transaction registered under the Securities Act.
(j) None of the Company, its affiliates and any person acting on their
behalf (other than the Initial Purchaser) will engage in any directed selling
efforts (as that term is defined in Regulation S) with respect to the Senior
Notes sold pursuant to Regulation S, and the Company and its affiliates and
each person acting on their behalf (other than the Initial Purchaser) will
comply with the offering restrictions of Regulation S with respect to those
Senior Notes sold pursuant thereto.
(k) The Company will, so long as the Senior Notes are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, either (i) file reports and other information with the
Commission under Section 13 or 15(d) of the Exchange Act, or (ii) in the event
it is not subject to Section 13 or 15(d) of the Exchange Act, make available to
holders of the Senior Notes and prospective purchasers of the Senior Notes
designated by such holders, upon request of such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act to permit compliance with Rule 144A in connection with resales
of the Senior Notes.
(l) The Company will, if requested by the Initial Purchaser, use its best
efforts on cooperation with the Initial
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Purchaser to permit the Senior Notes to be eligible for clearance and
settlement through The Depository Trust Company ("DTC").
(m) Each of the Senior Notes will bear the legend contained in "Notice to
Investors" in the Offering Memorandum for the time period and upon the other
terms stated therein, except after such Senior Note is resold pursuant to a
registration statement effective under the Securities Act.
5. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the Offering
Memorandum and any amendments or supplements thereto (including, without
limitation, fees and expenses of the Initial Purchaser's counsel and the
Company's accountants and counsel), the Transaction Documents (including this
Agreement) and all other documents related to the offering of the Senior Notes
(including those supplied to the Initial Purchaser in quantities as hereinabove
stated), (ii) the issuance, transfer and delivery of the Senior Notes to the
Initial Purchaser, including any transfer or other taxes payable thereon, (iii)
the qualification of the Senior Notes under state or foreign securities or Blue
Sky laws, including the costs of printing and mailing a preliminary and final
"Blue Sky Survey" and the fees of counsel for the Initial Purchaser and such
counsel's disbursements and expenses in relation thereto, (iv) the cost of
printing the Senior Notes, (v) the cost and charges of any transfer agent,
registrar, trustee or fiscal paying agent and (vi) the cost and charges of DTC,
Euroclear and CEDEL.
6. Conditions of Initial Purchaser's Obligations. The obligations of the
Initial Purchaser to purchase and pay for the Senior Notes as provided herein,
shall be subject to the accuracy of the representations and warranties of the
Company herein contained, as of the date hereof and as of the Closing Date, to
the absence from any certificates, opinions, written statements or letters
furnished to you or to Sidley & Austin ("Initial Purchaser's Counsel") pursuant
to this Section 6 of any misstatement or omission, to the performance by the
Company of
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its obligations hereunder, and to the following additional conditions:
(a) At the Closing Date you shall have received
the opinion of Dykema Gossett PLLC, counsel for the Company, addressed to the
Initial Purchaser and dated the Closing Date, to the effect that:
(1) The Company has been duly formed and is existing as a limited
liability company in good standing under the laws of its jurisdiction of
formation and is duly qualified to do business as a foreign limited
liability company and is in good standing in all other jurisdictions
where the ownership or leasing of properties or the conduct of its
business requires such qualification, except for jurisdictions in which
the failure to so qualify would not have a material adverse effect on the
Company taken as a whole. The Company has all requisite power and
authority to own, lease and license its respective properties and conduct
its business as described in the Offering Memorandum;
(2) The Company has the requisite power and authority to enter into
this Agreement and to sell and deliver the Senior Notes to the Initial
Purchaser; this Agreement has been duly authorized, executed and
delivered by or on behalf of the Company; and no approval, authorization,
order or consent of any court or governmental authority or agency is
required under the laws of State of Indiana or the United States of
America in connection with the transactions contemplated by this
Agreement, except such as have been obtained or made or as may be
required under applicable Blue Sky laws in connection with the purchase
and distribution of the Senior Notes by the Initial Purchaser;
(3) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby by the Company
do not and will not (A) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to, any agreement,
instrument,
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franchise, license or permit known to such counsel to which the Company
is a party or by which the Company or its properties or assets may be
bound or (B) violate or conflict with any provision of the articles of
organization or operating agreement of the Company, or, to the best
knowledge of such counsel, any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency
or body in the United States or any other country having jurisdiction
over the Company or any of its properties or assets;
(4) The Senior Notes have been duly authorized by requisite action
on the part of the Company, and the Senior Notes, when executed, paid for
by (assuming they have been duly authenticated in accordance with the
terms of the indenture) and delivered to the Initial Purchaser in
accordance with the terms of this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms and will be entitled to the benefits provided
for by the Indenture, except that enforcement may be subject to or
limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights and remedies generally and (ii) general principles of equity
(regardless of whether such enforcement may be sought in a proceeding in
equity or at law);
(5) The Senior Exchange Notes have been duly and validly authorized
for issuance by the Company, and when authenticated by the Trustee and
issued and delivered in accordance with the exchange offer and the
Indenture, will have been duly and validly executed, authenticated,
issued and delivered and will constitute valid and binding obligations of
the Company, enforceable against the Company in accordance with their
terms and entitled to the benefits provided by the Indenture except as
such enforcement may be subject to or limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and remedies generally
and (ii) general principles of equity (regardless of whether such
enforcement may be sought in a proceeding in equity or at law);
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(6) The Indenture has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution and
delivery thereof by the Trustee) constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except that enforcement may be subject to or limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights and
remedies generally and (ii) general principles of equity (regardless of
whether such enforcement may be sought in a proceeding in equity or at
law);
(7) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and (assuming the due
authorization, execution and delivery thereof by the Initial Purchaser)
constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except that (a)
enforcement may be subject to or limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and remedies generally and (ii)
general principles of equity (regardless of whether such enforcement may
be sought in a proceeding in equity or at law) and (b) the
indemnification and contribution provisions contained in the Registration
Rights Agreement may be limited by federal or state securities laws or
the public policy underlying such laws;
(8) The Collateral Documents and the Project Documents have been
duly authorized, executed and delivered by the Company or Barden
Development and (assuming the due authorization, execution and delivery
by the other parties thereto) constitute valid and binding obligations of
the Company or Barden Development, as the case may be, enforceable
against the Company or Barden Development, as the case may be, except
that enforcement may be subject to or limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and remedies generally
and (ii) general principles of equity (regardless of whether such
enforcement may be sought in a proceeding in equity or at law).
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(9) The Collateral Agreements are effective to create valid
security interests in favor of the Trustee or the Collateral Agent in the
collateral defined in such agreements to secure the Senior Notes and the
other obligations set forth therein.
(10) Based upon such counsel's understanding that the UCC Financing
Statements will be filed in the offices indicated thereon, upon such
filings there will be created under the Security Agreement and the
Trademark Security Agreement, and the Company will have granted to the
Trustee for the benefit of the Holders, an enforceable and perfected
security interest in all of the Company's chattel paper and general
intangibles and other property (with the exception of those items
explicitly excluded from the Collateral under the Security Agreement) and
all of the Borrower's inventory and equipment located or deemed located
in the State of Indiana, in each case to the extent a security interest
therein may be perfected by filing.
(11) Based upon such counsel's understanding that (a) the UCC
Financing Statements will be filed in the offices indicated thereon and
(b) the pledges of limited liability company interests will be registered
to the Trustee in the records of the Company and the BHR Joint Venture,
upon such filings and registrations there will be created under the BHR
Pledge Agreement and the BDI Pledge Agreement, and each of the Company
and Barden Development, respectively, will have granted to the Trustee,
for the benefit of the Holders, an enforceable and perfected security
interest in all of the Company's and Barden Development's right, title
and interest in and to all of the pledged collateral under the BHR Pledge
Agreement and the BDI Pledge Agreement.
(12) The summary of the provisions of the contracts and agreements
summarized in the Offering Memorandum under the captions "Description of
Senior Notes" and "Material Agreements", fairly and accurately summarize
such matters in all material respects;
(13) The information in the Offering Memorandum under each of the
headings "Regulation" and "Material
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Federal Income Tax Considerations," insofar as it purports to constitute
a summary of matters of law referred to therein, fairly and accurately
summarizes such matters in all material respects;
(14) It is not necessary in connection with (a) the offer, sale and
delivery of the Senior Notes to the Initial Purchaser in the manner
contemplated by the Purchase Agreement and the Offering Memorandum or (b)
the initial resale of the Senior Notes by the Initial Purchaser in the
manner contemplated in the Purchase Agreement and the Offering Memorandum
to (i) register the Senior Notes under the Securities Act, it being
understood that no opinion need be expressed as to any subsequent resale
of any Senior Note, or (ii) qualify the Indenture under the Trust
Indenture Act of 1939, as amended. In rendering the opinion set forth in
this paragraph, such counsel may assume without independent investigation
(1) the accuracy of the representations and warranties of the Company set
forth in Section 1 of the Purchase Agreement and of the Initial Purchaser
in Section 2 of the Purchase Agreement, (2) the compliance of the Initial
Purchaser with the offering and transfer procedures and restrictions
described in the Offering Memorandum, (3) the due performance by the
Company of the covenants and agreements set forth in Sections 4(h) and
4(j) of the Purchase Agreement, (4) the accuracy of the representations
and warranties made in accordance with the Purchase Agreement and the
Offering Memorandum by purchasers to whom the Initial Purchaser initially
resells Senior Notes and (5) that purchasers to whom the Initial
Purchaser initially resells Senior Notes receive a copy of the Offering
Memorandum prior to such sale;
(15) To counsel's knowledge there is no litigation or governmental
or other action, suit, proceeding or investigation before any court or
before or by any public, regulatory or governmental agency or body
pending or threatened against, or involving the properties or business
of, the Company, which is material to the Company which has not been
properly disclosed in the Offering Memorandum;
(16) Such counsel has participated in conferences with officers and
other representatives of the Company,
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representatives of the independent accountants of the Company,
representatives of the Initial Purchaser and representatives of the
Initial Purchaser's Counsel at which the contents of the Offering
Memorandum and related matters were discussed and, although such counsel
is not passing upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Offering Memorandum and has made no independent check or verification
thereof (other than to the extent specified in paragraphs 7 and 8 above),
on the basis of the foregoing, no facts have come to the attention of
such counsel which would lead such counsel to believe that the Offering
Memorandum, as of its date and as of the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading (it being understood that such
counsel need express no belief or opinion with respect to the financial
statements and schedules and other financial data included therein or
excluded therefrom); and
(17) Counsel shall also render an opinion as to such other matters
as the Initial Purchaser or its legal counsel may reasonably request.
In rendering such opinion, such counsel may rely (i) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Initial
Purchaser's counsel) of other counsel reasonably acceptable to Initial
Purchaser's Counsel, familiar with the applicable laws; (ii) as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company or Barden Development and certificates or other written
statements of officers of departments of various jurisdictions having custody
of documents respecting the existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to
Initial Purchaser's counsel. The opinion of such counsel for the Company shall
state that the opinion of any such other counsel is
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in form satisfactory to such counsel and, in his opinion, you and the Initial
Purchaser's Counsel are justified in relying thereon.
(b) All proceedings taken in connection with the sale of the Senior Notes
as herein contemplated shall be satisfactory in form and substance to you and
to Initial Purchaser's Counsel, and the Initial Purchaser shall have received
from said Initial Purchaser's Counsel a favorable opinion, dated the Closing
Date with respect to the issuance and sale of the Senior Notes, the Offering
Memorandum and such other related matters as you may reasonably require, and
the Company shall have furnished to Initial Purchaser's Counsel such documents
as they request for the purpose of enabling them to pass upon such matters.
(c) At the Closing Date you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of the
Company, dated the Closing Date, to the effect that (i) as of the date hereof
and as of the Closing Date, the representations and warranties of the Company
set forth in Section 1 hereof are accurate, (ii) as of the Closing Date, the
obligations of the Company to be performed hereunder on or prior thereto have
been duly performed and (iii) subsequent to the respective dates as of which
information is given in the Offering Memorandum, the Company has not sustained
any material loss or interference with its business or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
and there has not been any material adverse change, or any development
involving a material adverse change, in the business, properties, operations,
condition (financial or otherwise), or results of operations of the Company,
except in each case as described in or contemplated by the Offering Memorandum.
(d) At the time this Agreement is executed and at the Closing Date, you
shall have received a letter from Coopers & Lybrand, L.L.P., independent
accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date, addressed to the Initial Purchaser in
form and substance satisfactory to the Initial Purchaser.
(e) Prior to the Closing Date, the Company shall have furnished to the
Initial Purchaser or the Initial Purchaser's
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counsel such further information, certificates and documents as the Initial
Purchaser or the Initial Purchaser's counsel may reasonably request.
(f) At the Closing Date, the Senior Notes shall have been approved for
quotation in the PORTAL market.
(g) The Company, Barden Development and Buffington Harbor, L.L.C. shall
have executed and delivered the Transaction Documents and Project Documents and
the Initial Purchaser shall have received counterparts, conformed as executed,
thereof. The Transaction Documents and the Project Documents shall be in full
force and effect. The Company shall have received the requisite governmental
and regulatory approval in connection with each of the Transaction Documents
and Project Documents and the transactions contemplated by the Offering
Memorandum to be completed on or before the Closing Date.
If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
the Initial Purchaser's Counsel pursuant to this Section 6 shall not be in all
material respects reasonably satisfactory in form and substance to the Initial
Purchaser and to the Initial Purchaser's Counsel, all obligations of the
Initial Purchaser hereunder may be canceled by you at, or at any time prior to,
the Closing Date. Notice or such cancellation shall be given to the Company in
writing, or by telephone, telex or telegraph, confirmed in writing.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any and all losses, liabilities, claims, damages and expenses
whatsoever as incurred (including but not limited to attorneys' fees and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several,
to which they or any of
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them may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Offering
Memorandum or the Preliminary Offering Memorandum or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
or arise out of or are based upon any inaccuracy in the representations and
warranties of the Company contained herein or any failure of the Company to
perform its obligations hereunder or under applicable law; and will reimburse
the Initial Purchaser and each such controlling person for any legal and other
expenses as such expenses are reasonably incurred by the Initial Purchaser or
such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable in any such case
to the extent but only to the extent that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchaser expressly for use therein; and
provided, further, that this indemnity agreement with respect to the
Preliminary Offering Memorandum shall not inure to the benefit of the Initial
Purchaser from whom the person asserting any such losses, liabilities, claims,
damages or expenses purchased Notes, or any person controlling the Initial
Purchaser, if a copy of the Offering Memorandum (as then amended or
supplemented if the Company shall have furnished any such amendments or
supplements thereto) was not sent or given by or on behalf of the Initial
Purchaser to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Senior Notes to such person and if the
Offering Memorandum (as so amended or supplemented) would have corrected the
defect giving rise to such loss, liability, claim, damage or expense. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have, including under this Agreement.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company, the Company's Manager, each of the officers
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of the Company and each other person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, against any losses, liabilities, claims, damages and expenses
whatsoever as incurred (including but not limited to attorneys' fees and any
and all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), jointly or
severally, to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, liabilities,
claims, damages or expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Offering Memorandum or the Preliminary Offering Memorandum,
or in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Initial Purchaser
expressly for use therein and will reimburse the Company, or any such director,
officer, or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that
in no case shall the Initial Purchaser be liable or responsible for any amount
in excess of the selling concession applicable to the Senior Notes purchased by
the Initial Purchaser hereunder. This indemnity will be in addition to any
liability which the Initial Purchaser may otherwise have, including under this
Agreement. The Company acknowledges that the statements set forth in the first
paragraph under the caption "Plan of Distribution" in the Offering Memorandum
constitutes the only information furnished in writing by or on behalf of the
Initial Purchaser expressly for use in the Offering Memorandum or amendment
thereof or supplement thereto, as the case may be.
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(c) Promptly after receipt by an indemnified party, under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party, under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent that it
has been prejudiced in any material respect by such failure). In case any such
action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent it may elect by written
notice delivered to the indemnified party, promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
take charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party
or parties) in any of which events such fees and expenses shall be borne by the
indemnifying parties; provided, however, that the indemnifying party under
subsection (a) or (b) above shall only be liable for the legal expenses of one
counsel (and any local counsel) for all indemnified parties and that all such
fees and expenses of counsel shall be reimbursed as they are incurred.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent; provided, however, that such consent was not
unreasonably withheld.
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8. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 7 hereof is for any reason
held by a court to be unavailable to any indemnifying party, the Company and
the Initial Purchaser shall contribute to the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, labilities and expenses suffered by the
Company any contribution received by the Company from persons other than the
Initial Purchaser, who may also be liable for contribution, including persons
who control the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, officers and managers of the Company) as incurred to
which the Company and one or more of the Initial Purchaser may be subject, in
such proportions as is appropriate to reflect the relative benefits received by
the Company and the Initial Purchaser from the offering of the Senior Notes or,
if such allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 7 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and the Initial Purchaser in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Initial Purchaser shall be deemed to be in the same
proportion as (x) the total proceeds from the offering (net of selling
concessions but before deducting expenses) received by the Company and (y) the
selling concessions received by the Initial Purchaser respectively. The
relative fault of the Company and of the Initial Purchaser shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact or the inaccurate or the alleged inaccurate representation or
warranty relates to information supplied by the Company or the Initial
Purchaser and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
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The Company and the Initial Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 8, (i) in no case shall the Initial Purchaser be
liable or responsible for any amount in excess of the selling concession
applicable to the Notes purchased by the Initial Purchaser hereunder and (ii)
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding the provisions of
this Section 8, the Initial Purchaser shall not be required to contribute any
amount in excess of the amount by which the total price at which the Notes sold
hereunder and distributed to the public were offered to the public exceeds the
amount of any damages that such Initial Purchaser has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. For purposes of this Section 8, each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
the Initial Purchaser, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer and each manager of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 8. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
another party or parties, notify each party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.
9. Default by the Initial Purchaser. If the Initial Purchaser shall fail
at Closing Date to purchase the Senior Notes it is obligated to purchase under
this Agreement, then this
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Agreement shall terminate subject to the provisions of Section 10 hereof.
Nothing in this Section shall relieve the Initial Purchaser from its liability
to reimburse the Company for its costs, expenses and damages resulting from
Initial Purchaser's default.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchaser and the Company
contained in this Agreement, including the agreements contained in Section 5,
the indemnity agreements contained in Section 7 and the contribution
agreements contained in Section 8, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Initial
Purchaser or any controlling person thereof or on behalf of the Company, any of
its officers and managers or any controlling person thereof, and shall survive
delivery of and payment for the Senior Notes to and by the Initial Purchaser.
The representations contained in Sections 1 and 2(c) and the agreements
contained in Sections 5, 7, 8 and 11(c) hereof shall survive the termination of
this Agreement, including termination pursuant to Section 9 or 11 hereof.
11. Termination.
(a) The Initial Purchaser shall have the right to terminate this Agreement
at any time prior to the Closing Date if (A) any domestic or international
event or act or occurrence has materially disrupted, or in your opinion will in
the immediate future materially disrupt the United States or international
securities markets; or (B) if trading on the New York Stock Exchange or the
Nasdaq National Market shall have been suspended or materially limited; or (C)
if a banking moratorium has been declared by any United States federal or New
York State authority or if any new restriction materially adversely affecting
the sale of the Senior Notes shall have become effective; or (D) (i) if the
United States becomes engaged in hostilities or there is an escalation of
hostilities involving the United States or there is a declaration of a national
emergency or war by the United States or (ii) if there shall have been such
change in political, financial or economic conditions if the effect of any such
event in (i) or (ii) in your judgment makes it impracticable or inadvisable to
proceed with the offering, sale and delivery of the Notes on the terms
contemplated by the Offering Memorandum.
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(b) Any notice of termination pursuant to this Section 11 shall be by
telephone, telex, or telegraph, confirmed in writing by letter.
(c) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to section 9 (b) or 11 (a) hereof),
or if the sale of the Senior Notes provided for herein is not consummated
because any condition to the obligations of the Initial Purchaser set forth
herein is not satisfied or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply with any
provision hereof, the Company will, subject to demand by you, reimburse the
Initial Purchaser for all out-of-pocket expenses (including the fees and
expenses of its counsel), incurred by the Initial Purchaser in connection
herewith.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchaser, shall be mailed, delivered, or telexed or telegraphed and confirmed
in writing, to Wasserstein, Perella Securities, Inc. 31 West 52nd Street, New
York, New York 10019-6163, Attention: Andrew Schupak; if sent to the Company,
shall be mailed, delivered, or telegraphed and confirmed in writing to the
Company, 400 Renaissance Center, Suite 2400, Detroit, Michigan 48243,
Attention: Vice President and Chief Financial Officer.
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Initial Purchaser and the Company and the
controlling persons, directors, managers, officers, employees and agents
referred to in Section 7 and 8, and their respective successors and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement or
any provision herein contained. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of Notes from any of the Initial
Purchaser.
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14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
[SIGNATURES ON FOLLOWING PAGE]
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If the foregoing correctly sets forth the understanding between you and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
THE MAJESTIC STAR CASINO, LLC
By: Barden Development, Inc.
By: Don H. Barden
--------------------------
Name: Don H. Barden
Title: President
Accepted as of the date first above written
WASSERSTEIN PERELLA SECURITIES, INC.
By: James C. Kingsley
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SCHEDULE 1
Initial Purchaser Principal Amount
- ----------------- ----------------
Wesserstein Perella Securities, Inc. $105,000,000
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