EXHIBIT B
November 15, 2001
CONFIDENTIAL
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Gameco, Inc.
1001 North US Highway One, No. 710
Jupiter, FL 33477
Attention: Jeffrey P. Jacobs
Dear Jeff:
You have advised CIBC World Markets Corp. ("CIBC") that you or any of
your affiliated entities, including Gameco, Inc. (the "Company"), intend to
consummate a transaction (the "Transaction") whereby (i) the Company would
acquire all the outstanding capital stock of (a) Black Hawk Gaming &
Development, Inc. ("BHWK"), (b) Colonial Holdings, Inc. ("CHLD"), and (c)
certain Louisiana-based truck stop video poker operations (collectively,
"Jalou"). The Company intends to sell or place up to $115,000,000 of senior
secured notes (the "Securities") to consummate the Transaction.
As you know, we have participated in substantial due diligence to date
regarding the Transaction, including meeting with management, visiting locations
and reviewing financial information. In connection with the Transaction, CIBC is
pleased to confirm that, based on current market conditions and subject to the
terms and conditions referenced herein, we are highly confident of our ability
to sell or place the Securities. The structure, covenants, and economic and
other terms of the Securities will be based on market conditions at the time of
sale, placement or underwriting of the Securities and the ultimate structure of
the Transaction.
Our ability to consummate the sale or placement of the Securities is
subject to:
(i) execution and delivery of documentation necessary to effect
the Transaction, all in form and substance satisfactory to us
and our counsel;
(ii) agreement as to the terms of the Securities and execution and
delivery of definitive debt financing agreements and related
documents, all on terms and conditions for the documentation
being reasonably satisfactory in form and substance to CIBC
and its counsel and customary for the type of financing
contemplated;
Gameco, Inc. November 15, 2001
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(iii) satisfactory completion of CIBC's financial, legal and
accounting due diligence;
(iv) the absence of any material adverse change in the business,
condition (financial or otherwise), results of operations,
assets, liabilities or prospects of the Company, BHWK, CHLD or
Jalou;
(v) the receipt of all necessary governmental, regulatory and
third-party approvals and consents on terms satisfactory to us
and there being no legal, regulatory, financial or other
restrictions or legal proceedings which may impact the
Company's ability to consummate the issuance of the Securities
or the Transaction;
(vi) there not existing any pending or threatened claim, suit or
proceeding by any governmental or regulatory authority which
CIBC shall reasonably determine could have a materially
adverse effect on the business, condition (financial or
otherwise), results of operations, assets, liabilities or
prospects of the Company, BHWK, Colonial or Jalou;
(vii) the availability of audited and unaudited historical financial
statements of the Company, BHWK, Colonial and Jalou and such
other entities as may be required if the Securities were
offering pursuant to a registration statement under the
Securities Act of 1933 (the "Securities Act") and pro forma
financial statements of the Company after giving effect to the
Transaction, in each case reasonably acceptable to CIBC and in
form and presentation as required by the Securities Act
thereunder applicable to registration statements filed
thereunder;
(viii) there not having been any disruption or material adverse
change in the market for new issues of high yield securities
or the financial or capital markets in general, in the
judgment of CIBC; and
(ix) CIBC having been engaged to market, and having a reasonable
time to market, the Securities based on CIBC's experience in
comparable transactions.
This letter and the terms and conditions hereof are confidential. This
letter is being delivered to the Company based on the understanding that no
disclosure of, or reference to, this letter shall be made to any person or
entity other than the Company and any director and officer who is directly
involved in the Transaction (collectively and individually, a "Recipient") and
who agrees to be bound by this confidentiality provision; provided however that
the Company may disclose this letter to the Boards of Directors of BHWK and CHLD
provided that, members of such Boards are apprised of the confidential nature of
this letter and agree to treat this letter as confidential. In the event that
any Recipient is required by law or regulation to disclose this letter or any
term or condition hereof, such Recipient shall provide us with notice prior to
such disclosure.
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Gameco, Inc. November 15, 2001
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If this letter is not accepted by you by 5:00 p.m. on November 16,
2001, you are to immediately return this letter (and any copies hereof) to the
undersigned. We look forward to working with you on the Transaction.
Sincerely,
/s/ Bruce Spohler /s/ Carter Harned
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Bruce Spohler Carter Harned
Managing Director Executive Director
AGREED TO AND ACCEPTED as of
the date first written above:
GAMECO, INC
By: /s/ Jeffrey P. Jacobs
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Name: Jeffrey P. Jacobs
Title: Chief Executive Officer
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