RIVIERA HOLDINGS CORPORATION
$215,000,000
11% SENIOR SECURED NOTES DUE 2010
PURCHASE AGREEMENT
June 19, 2002
XXXXXXXXX & COMPANY, INC.
00000 Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Riviera Holdings Corporation, a Nevada corporation (the "Company"),
proposes to issue and sell to Jefferies & Company, Inc. (the "Initial
Purchaser"), an aggregate of $215.0 million principal amount of its 11% Senior
Secured Notes due 2010 (the "Series A Notes"), subject to the terms and
conditions set forth herein. The Series A Notes and the Series B Notes (as
defined below) (the Series A Notes and the Series B Notes being collectively
referred to herein as the "Notes") will be issued pursuant to an Indenture dated
as of June 26, 2002 (the "Indenture"), among the Company, the Guarantors (as
defined below) and The Bank of New York, as trustee (the "Trustee"). The
Company's obligations under the Series A Notes, including the due and punctual
payment of principal, premium, interest and liquidated damages, if any, on the
Series A Notes, will be unconditionally jointly and severally guaranteed (the
"Series A Guarantees" and together with the Series B Guarantees (as defined
below), the "Subsidiary Guarantees") by the entities listed on Schedule A hereto
and any future subsidiary guarantors party to the Indenture (each a Guarantor
and, collectively the "Guarantors"). The obligations of the Company under the
Notes will be secured by security interests in or pledges of (the "Security
Interests") substantially all of the Company's assets (the "Collateral") as set
forth in the Indenture. The obligations of each of the Guarantors under the
Subsidiary Guarantees will be secured by Security Interests in substantially all
of the assets of each of the Guarantors. Capitalized terms used but not defined
herein shall have the meanings ascribed thereto in the Indenture.
1. Offering Circular.
The Series A Notes will be offered and sold to the Initial Purchaser
pursuant to one or more exemptions from the registration requirements under the
Securities Act of 1933, as amended (the "Act"). The Company and the Guarantors
have prepared a preliminary offering circular dated June 6, 2002 (the
"Preliminary Offering Circular"), and a final offering circular dated June 19,
2002 (the "Final Offering Circular" and, together with the Preliminary Offering
Circular, the "Offering Circular"), relating to the Series A Notes.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS (OR SUCH OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER
RULE 144(K) UNDER THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED
SECURITIES BY NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH EITHER OF THE ISSUER OR
ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE
ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) OUTSIDE THE
UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY
U.S. STATE OR ANY OTHER APPLICABLE JURISDICTION. THE HOLDER OF THIS SECURITY
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
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A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
2. Agreements To Sell And Purchase.
On the basis of the representations, warranties and covenants contained
in this Purchase Agreement (this "Agreement"), and subject to its terms and
conditions, the Company agrees to issue and sell to the Initial Purchaser and
the Initial Purchaser agrees to purchase from the Company, an aggregate
principal amount of $215.0 million of Series A Notes at a purchase price equal
to 94.57% of the principal amount thereof (the "Purchase Price").
3. Terms of Offering.
The Initial Purchaser has advised the Company that the Initial
Purchaser will make offers (the "Exempt Resales") of the Series A Notes
purchased hereunder on the terms set forth in the Offering Circular, as amended
or supplemented, solely to (i) persons whom the Initial Purchaser reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A under the
Act ("QIBs"), (ii) a limited number of other institutional "accredited
investors," as defined in Rule 501(a) (1), (2), (3) or (7) under the Act, that
make certain representations and agreements to the Company as set forth as Annex
A to the Offering Circular (each, an "Accredited Institution") and (iii) persons
outside the United States in offshore transactions in reliance on Regulation S
under the Act, such persons specified in clauses (i), (ii) and (iii) above being
referred to as, the "Eligible Purchasers"). The Initial Purchaser will offer the
Series A Notes to Eligible Purchasers initially at a price equal to 98.5% of the
principal amount thereof. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the Registration Rights Agreement (the
"Registration Rights Agreement") to be dated the Closing Date (as defined
below), in substantially the form of Exhibit A hereto, for so long as such
Series A Notes constitute "Transfer Restricted Securities" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company and the Guarantors will agree to file with the Securities and
Exchange Commission (the "Commission") under the circumstances set forth
therein, (i) a registration statement under the Act (the "Exchange Offer
Registration Statement") relating to the Company's 11% Series B Senior Secured
Notes due 2010 (the "Series B Notes") to be offered in exchange for the Series A
Notes and (ii) under certain circumstances a shelf registration statement
pursuant to Rule 415 under the Act (the "Shelf Registration Statement" and,
together with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the Series A Notes,
and to use its best efforts to cause such Registration Statements to be declared
and remain effective and usable for the periods specified in the Registration
Rights Agreement and to consummate the Exchange Offer.
The Notes and the Subsidiary Guarantees will be senior secured
obligations and the Company and the Guarantors will enter into the collateral
documents listed on Schedule B attached hereto (collectively the "Collateral
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Documents") dated as of the Closing Date in favor of the Trustee that will
provide for the grant of Security Interests in the Collateral to the Trustee for
the benefit of the holders of the Notes. The Security Interests will secure the
payment and performance when due of all the respective obligations of the
Company and the Guarantors under the Notes, the Subsidiary Guarantees, the
Indenture and the Collateral Documents. The following documents are hereinafter
collectively referred to as "Operative Documents": (i) this Agreement, (ii) the
Indenture, (iii) the Notes, (iv) the Registration Rights Agreement, (v) the
Subsidiary Guarantees and (vi) the Collateral Documents.
4. Delivery and Payment.
(a) Delivery of, and payment of the Purchase Price for, the Series A Notes (the
"Closing") shall be made at 7:00 a.m., Los Angeles time, on June 26, 2002 (the
"Closing Date"), at the offices of Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, or such other time or place as the
Initial Purchaser and the Company shall designate.
(b) One or more of the Series A Notes in definitive global form, registered in
the name of Cede & Co., as nominee of the Depository Trust Company ("DTC"),
having an aggregate principal amount corresponding to the aggregate principal
amount of the Series A Notes (collectively, the "Global Note"), shall be
delivered by the Company to the Initial Purchaser (or as the Initial Purchaser
directs) in each case with any transfer taxes thereon duly paid by the Company
against payment by the Initial Purchaser of the Purchase Price therefor by wire
transfer in same day funds to the order of the Company, provided that the
Company shall give at least two business days' prior written notice of the
information required to effect such wire transfer. The Global Note shall be made
available to the Initial Purchaser for inspection not later than 10:00 a.m., Los
Angeles time, on the business day immediately preceding the Closing Date.
5. Agreements of the Company and the Guarantors.
The Company and the Guarantors jointly and severally agree with the
Initial Purchaser as follows:
(a) To advise the Initial Purchaser promptly and, if requested by the Initial
Purchaser, confirm such advice in writing, (i) of the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of any Series A Notes for offering or sale in any
jurisdiction designated by the Initial Purchaser pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or other federal or state regulatory authority for such purpose and (ii) of the
happening of any event during the period referred to in Section 5(c) hereof that
makes any statement of a material fact made in the Preliminary Offering Circular
or the Final Offering Circular untrue or that requires the making of any
additions to or changes in the Preliminary Offering Circular or the Final
Offering Circular in order to make the statements therein not misleading. The
Company and the Guarantors shall use their best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption of any of
the Series A Notes under any state securities or Blue Sky laws, and if at any
time any state securities commission or other federal or state regulatory
authority shall issue an order suspending the qualification or exemption of any
Series A Notes under any state securities or Blue Sky laws, the Company and the
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Guarantors shall use their best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time.
(b) To furnish the Initial Purchaser and those persons identified by the Initial
Purchaser to the Company as many copies of the Preliminary Offering Circular and
the Final Offering Circular, and any amendments or supplements thereto, as the
Initial Purchaser may reasonably request. Subject to the Initial Purchaser's
compliance with its representations and warranties and agreements set forth in
Section 7 hereof, the Company and each of the Guarantors consents to the use of
the Preliminary Offering Circular and the Final Offering Circular, and any
amendments and supplements thereto required pursuant hereto, by the Initial
Purchaser in connection with Exempt Resales.
(c) During such period as in the opinion of counsel for the Initial Purchaser an
Offering Circular is required by law to be delivered in connection with Exempt
Resales by the Initial Purchaser and in connection with market-making activities
of the Initial Purchaser for so long as any Series A Notes are outstanding, (i)
not to make any amendment or supplement to the Offering Circular of which the
Initial Purchaser shall not previously have been advised or to which the Initial
Purchaser shall reasonably object after being so advised and (ii) to prepare
promptly upon the Initial Purchaser's reasonable request, any amendment or
supplement to the Offering Circular which may be necessary or advisable in
connection with such Exempt Resales or such market-making activities.
(d) If, during the period referred to in Section 5(c) above, any event shall
occur or condition shall exist as a result of which, in the judgment of the
Company or any Guarantor or in the reasonable judgment of counsel to the Initial
Purchaser, it becomes necessary to amend or supplement the Offering Circular in
order to make the statements therein, in the light of the circumstances when
such Offering Circular is delivered to an Eligible Purchaser, not misleading, or
if, in the reasonable judgment of counsel to the Initial Purchaser, it is
necessary to amend or supplement the Offering Circular to comply with any
applicable law, forthwith to notify the Initial Purchaser and to prepare an
appropriate amendment or supplement to such Offering Circular so that the
statements therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such Offering
Circular will comply with applicable law, and to furnish to the Initial
Purchaser and such other persons as the Initial Purchaser may designate such
number of copies thereof as the Initial Purchaser may reasonably request.
(e) Prior to the sale of all Series A Notes pursuant to Exempt Resales as
contemplated hereby, to cooperate with the Initial Purchaser and counsel to the
Initial Purchaser in connection with the registration or qualification of the
Series A Notes for offer and sale to the Initial Purchaser and pursuant to
Exempt Resales under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchaser may request and to continue such qualification in effect
so long as required for Exempt Resales and to file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification; provided, however, that the Company or any of the
Guarantors shall not be required in connection therewith to register or qualify
as a foreign corporation in any jurisdiction in which it is not now so qualified
or to take any action that would subject it to general consent to service of
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process or taxation, other than as to matters and transactions relating to the
Preliminary Offering Circular, the Final Offering Circular or Exempt Resales, in
any jurisdiction in which it is not now so subject.
(f) To apply the proceeds from the sale of the Series A Notes as set forth under
the caption "Use of Proceeds" in the Offering Circular and to comply with the
provisions of the Collateral Documents concerning disbursement of funds.
(g) So long as any Notes are outstanding, (i) to mail and make generally
available as soon as practicable after the end of each fiscal year to the record
holders of the Notes a financial report of the Company and its subsidiaries on a
consolidated basis (and similar financial report of all unconsolidated
subsidiaries, if any), all such financial reports to include a consolidated
balance sheet, a consolidated statement of operations, a consolidated statement
of cash flows and a consolidated statement of shareholders' equity as of the end
of and for such fiscal year, together with comparable information as of the end
of and for the preceding year, certified by the Company's independent public
accountants and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly period of
each fiscal year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows (and similar
financial reports of all unconsolidated subsidiaries, if any) as of the end of
and for such period, and for the period from the beginning of such year to the
close of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(h) So long as the Notes are outstanding, to furnish to the Initial Purchaser as
soon as available copies of all reports or other communications furnished by the
Company and each of the Guarantors to its security holders or furnished to or
filed with the Commission or any national securities exchange on which any class
of securities of the Company or any of its Guarantors is listed and such other
publicly available information concerning the Company and each of the Guarantors
as the Initial Purchaser may reasonably request.
(i) So long as any of the Series A Notes remain outstanding and during any
period in which the Company is not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
available to any holder of Series A Notes in connection with any sale thereof
and any prospective purchaser of such Series A Notes from such holder, the
information ("Rule 144A Information") required by Rule 144A(d)(4) under the Act.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of the Company and the
Guarantors under this Agreement, including: (i) the fees, disbursements and
expenses of counsel to the Company and the Guarantors and accountants of the
Company and the Guarantors in connection with the sale and delivery of the
Series A Notes and the Subsidiary Guarantees to the Initial Purchaser and
pursuant to Exempt Resales, and all other fees or expenses in connection with
the preparation, printing, filing and distribution of the Preliminary Offering
Circular, the Final Offering Circular and all amendments and supplements to any
of the foregoing (including financial statements) specified in Section 5(c) and
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5(d) prior to or during the period specified in Section 5(c), including the
mailing and delivering of copies thereof to the Initial Purchaser and persons
designated by it in the quantities specified herein, (ii) all costs and expenses
related to the transfer and delivery of the Series A Notes and the Subsidiary
Guarantees to the Initial Purchaser and pursuant to Exempt Resales, including
any transfer or other taxes payable thereon, (iii) all costs of printing or
producing this Agreement, the other Operative Documents and any other agreements
or documents in connection with the offering, purchase, sale or delivery of the
Series A Notes and the Subsidiary Guarantees, (iv) the performance by the
Company and the Guarantors of its other obligations under this Agreement and the
other Operative Documents, (v) all expenses in connection with the registration
or qualification of the Series A Notes for offer and sale under the securities
or Blue Sky laws of the several states and all costs of printing or producing
any preliminary and supplemental Blue Sky memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for the Initial
Purchaser in connection with such registration or qualification and memoranda
relating thereto), (vi) the cost of printing certificates representing the
Series A Notes and the Subsidiary Guarantees, (vii) all expenses and listing
fees in connection with the application for quotation of the Series A Notes on
the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL")
system of the National Association of Securities Dealers, Inc. ("NASD"), (viii)
the fees and expenses of the Trustee and the Trustee's counsel in connection
with the Indenture, the Notes and the Subsidiary Guarantees, (ix) the costs and
charges of any transfer agent, registrar or depositary (including DTC), (x) any
fees charged by rating agencies for the rating of the Notes, (xi) all costs and
expenses of the Exchange Offer and any Registration Statement, as set forth in
the Registration Rights Agreement, (xii) "roadshow" travel and other expenses
incurred in connection with the marketing and sale of the Notes, (xiii) all
fees, disbursements and out-of-pocket expenses incurred by the Initial Purchaser
(including, without limitation, the fees and disbursements of counsel for the
Initial Purchaser up to $400,000 unless otherwise agreed to in writing by the
Company, travel and lodging expenses, word processing charges, messenger and
duplicating services, facsimile expenses and other customary expenditures,
subject in each case to receipt of appropriate supporting documentation) and
(xiv) and all other costs and expenses incident to the performance of the
obligations of the Company and the Guarantors hereunder for which provision is
not otherwise made in this Section.
(k) To use its reasonable best efforts to effect the inclusion of the Series A
Notes in PORTAL and to maintain the listing of the Series A Notes on PORTAL for
so long as any Series A Notes are outstanding.
(l) To obtain the approval of DTC for "book-entry" transfer of the Notes, and to
comply with all agreements set forth in the representation letters of the
Company and the Guarantors to DTC relating to the approval of the Notes by DTC
for "book-entry" transfer.
(m) During the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell or otherwise
transfer or dispose of any debt securities of the Company or any of the
Guarantors or any warrants, rights or options to purchase or otherwise acquire
debt securities of the Company or any of the Guarantors substantially similar to
the Notes (other than the Notes), without the prior written consent of the
Initial Purchaser.
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(n) Not to sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any security (as defined in the Act) that would be integrated with
the sale of the Series A Notes to the Initial Purchaser or pursuant to Exempt
Resales in a manner that would require the registration of any such sale of the
Series A Notes under the Act.
(o) To the extent it may lawfully do so, not to voluntarily claim, and to
actively resist any attempts to claim, the benefit of any usury laws against the
holders of any Notes.
(p) To cause the Exchange Offer to be made in the appropriate form to permit the
Series B Notes registered pursuant to the Act to be offered in exchange for the
Series A Notes and to comply with all applicable federal and state securities
laws in connection with the Exchange Offer.
(q) To comply with all of its agreements set forth in the Registration Rights
Agreement.
(r) To use their best efforts to do and perform all things required or necessary
to be done and performed under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Series A Notes.
6. Representations and Warranties of the Company and the Guarantors.
As of the date hereof, the Company and each of the Guarantors
represents and warrants to, and agrees with, the Initial Purchaser that:
(a) The Preliminary Offering Circular as of its date does not and the Final
Offering Circular as of its date and the date hereof does not and as of the
Closing Date will not, and any supplement or amendment to either of them will
not, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties contained in this
paragraph (a) shall not apply to statements in or omissions from the Preliminary
Offering Circular or the Final Offering Circular (or any supplement or amendment
thereto) based upon information relating to the Initial Purchaser furnished to
the Company by the Initial Purchaser expressly for use therein. No stop order
preventing the use of the Preliminary Offering Circular or the Final Offering
Circular, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued and no proceeding for that
purpose has commenced or is pending or, to the knowledge of the Company or any
Guarantor, is contemplated.
(b) The Company and each of the Guarantors is duly organized, validly existing
as a corporation and in good standing under the laws of the state in which they
were incorporated and have all corporate power and authority to carry on their
business as described in the Preliminary Offering Circular and the Final
Offering Circular and to own, lease and operate their properties, and are duly
qualified and is in good standing as foreign corporations authorized to do
business in each jurisdiction in which the nature of their respective business
or their respective ownership or leasing of property requires such
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qualification, except where failure to be so qualified and in good standing
would not have a Material Adverse Effect.
(c) On the Closing Date, each of the Guarantors will be a direct or indirect
wholly-owned subsidiary of the Company and there will be no Subsidiaries of the
Company other than the Guarantors and Riviera Gaming Management-Elsinore, Inc.
(d) All outstanding shares of capital stock of the Company and the Guarantors
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights and upon Closing, will be
free and clear of any Liens other than those created in the Collateral
Documents.
(e) The Company and the Guarantors do not have any outstanding options to
purchase, or any preemptive rights or other rights to subscribe for or purchase,
any securities or obligations convertible into, or any contracts or commitments
to issue or sell, equity interests or any such options, rights, convertible
securities or obligations, except as described in the Offering Circular.
(f) This Agreement has been duly authorized, executed and delivered by the
Company and each of the Guarantors.
(g) The Indenture has been duly authorized by the Company and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Indenture has been duly executed and delivered by the Company and assuming due
authorization, execution and delivery by the Trustee, the Indenture will be a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as (A) the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting creditors' rights generally, (B) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability and (C) covenants constituting
restrictions on the transfer of and agreements not to encumber the stock of the
Nevada Guarantors will not be effective until approved by the Nevada Gaming
Commission.
(h) The Series A Notes have been duly authorized and, on the Closing Date, will
have been validly executed and delivered by the Company. When the Series A Notes
have been issued, executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement, the Series A Notes will be entitled
to the benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms,
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Series A Notes will conform in
all material respects to the description thereof contained in the Offering
Circular.
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(i) The Series B Notes have been duly authorized by the Company. When the Series
B Notes are issued, executed and authenticated in accordance with the terms of
the Exchange Offer and the Indenture, the Series B Notes will be entitled to the
benefits of the Indenture and will be the valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as (i) the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability.
(j) When issued, the Notes will rank pari passu in rights of payment with all of
the Company's other senior indebtedness and will rank senior in right of payment
to all subordinated indebtedness of the Company.
(k) The Guarantors have all the requisite power to offer and sell the Series A
Guarantees. The Series A Guarantees have been duly and validly authorized by the
Guarantors and when duly executed and delivered by the Guarantors in accordance
with the terms of the Indenture and upon the due execution, authentication and
delivery of the Series A Notes in accordance with the Indenture and the issuance
of the Series A Notes and the sale to the Initial Purchaser contemplated by this
Agreement, will constitute valid and binding obligations of the Guarantors,
enforceable against the Guarantors in accordance with their terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability.
(l) The Guarantors have all the requisite power to offer and sell the
unconditional guarantee of the Company's obligations under the Series B Notes,
including the due and punctual payment of interest on the Series B Notes (the
"Series B Guarantees"). The Series B Guarantees have been duly and validly
authorized by the Guarantors and if and when duly executed and delivered by the
Guarantors in accordance with the terms of the Indenture and upon receipt of
approval of the Exchange Offer and the Series B Guarantees from the Nevada
Gaming Commission and upon the due execution and authentication of the Series B
Notes in accordance with the Indenture and the issuance and delivery of the
Series B Notes in the Exchange Offer contemplated by the Registration Rights
Agreement, will constitute valid and binding obligations of the Guarantors,
enforceable against the Guarantors in accordance with their terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability.
(m) When issued, the Subsidiary Guarantees will rank pari passu in rights of
payment with all of the Guarantors' other senior indebtedness and will rank
senior in right of payment to all subordinated indebtedness of the Guarantors.
(n) Each of the Company and the Guarantors has all requisite power and authority
to enter into each of the Operative Documents to which it is a party. Each of
the Operative Documents has been duly and validly authorized by the Company and
each of the Guarantors, as applicable, and upon its execution and delivery and,
assuming due authorization, execution and delivery by the Trustee and/or you, as
10
the case may be, will, subject to applicable Gaming Laws, constitute a valid and
binding obligation of the Company and/or the Guarantors, as the case may be,
enforceable against the Company and/or the Guarantors, as the case may be, in
accordance with its terms, subject to the qualification that the enforceability
of the Company's and/or the Guarantors', as the case may be, obligations
thereunder may be limited by bankruptcy, fraudulent transfer, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights generally, by general equitable principles (whether considered in a
proceeding in equity or at law) and, as to rights of indemnification and
contribution, by principles of public policy or state or federal laws relating
to the non-enforceability of the indemnification or contribution provisions. On
the Closing Date, the Registration Rights Agreement and the Collateral Documents
will conform in all material respects to the description thereof contained in
the Offering Circular.
(o) The execution, delivery and performance by the Company and the Guarantors of
the Operative Documents to which the Company and each of the Guarantors is a
party, compliance by the Company and the Guarantors with all provisions thereof
and the consummation of the transactions contemplated thereby do not and will
not (i) require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as may
be required under the securities or Blue Sky laws of the various states and
except for approval of the pledge of the stock of ROC, approval of the issuance
of a guarantee by ROC and approval of the placement of restrictions on the
transfer of and agreements not to encumber the stock of ROC by the Nevada Gaming
Commission, or such as will have been obtained as of the Closing), (ii) conflict
with or constitute a breach of any of the terms or provisions of, or a default
under, the charter or bylaws of the Company or any Guarantor, or any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company or any Guarantor, to which the Company or any Guarantor
is a party or by which the Company or any Guarantor or its property is bound,
except to the extent such conflict, breach or default will not have a Material
Adverse Effect (as defined below), (iii) violate or conflict with any applicable
law or any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company or any
Guarantor or its property (including, without limitation, any Gaming Law),
except to the extent such violation or conflict will not have a Material Adverse
Effect (iv) result in the imposition or creation of (or the obligation to create
or impose) a Lien under, any agreement or instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor or its property is
bound, except to the extent such imposition or creation will not have a Material
Adverse Effect or (v) result in the termination or revocation of any
Authorization (as defined below) of the Company or any Guarantor or result in
any other impairment of the rights of the holder of any such Authorization,
except to the extent such termination, revocation or impairment will not have a
Material Adverse Effect.
(p) The Company and each of the Guarantors is not in violation of its charter or
bylaws or in default in the performance of any obligation, agreement, covenant
or condition contained in any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to the Company or any Guarantor
to which the Company or any Guarantor is a party or by which the Company or any
Guarantor or its property is bound. There does not exist any state of facts
which constitutes an event of default on the part of the Company or any
11
Guarantor as defined in such documents or which, with notice or lapse of time or
both, would constitute such an event of default.
(q) There are no legal or governmental proceedings pending or threatened to
which the Company or any Guarantor is or could be a party or to which any of
their property is or could be subject, which could reasonably be expected to (i)
result, singly or in the aggregate, in a material adverse effect on the
business, financial condition or results of operations of the Company or any
Guarantor or (ii) draw into question the validity of any of the Operative
Documents (the occurrence of any events which causes a result described in
clause (i) or (ii) above is referred to herein as a "Material Adverse Effect").
(r) The Company and each Guarantor has not violated any foreign, federal, state
or local law or regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws") or any provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the rules and
regulations promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect.
(s) Other than as disclosed in the Offering Circular, 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 any Guarantor 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 Environmental Law) or any violation of any Environmental Law, except such as
could not reasonably be expected to have a Material Adverse Effect.
(t) The Company and each Guarantor has such permits, licenses, consents,
exemptions, franchises, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
properties and to conduct its business in the manner described in the Offering
Circular, except where the failure to have any such Authorization or to make any
such filing or notice would not have a Material Adverse Effect. No such
Authorization contains, or will upon the issuance thereof contain, a materially
burdensome restriction. Each such Authorization is valid and in full force and
effect and the Company and each Guarantor are in material compliance with all
the terms and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect thereto. No
event has occurred (including, without limitation, the receipt of any notice
from any authority or governing body) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other material impairment of the rights of the holder of any such
Authorization except to the extent that such revocation, suspension or other
impairment would not have a Material Adverse Effect. The Company and each
12
Guarantor has no reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any such Authorization.
(u) The accountants, Deloitte & Touche LLP, that have certified the financial
statements and supporting schedules included in the Preliminary Offering
Circular and the Final Offering Circular are independent public accountants with
respect to the Company and the Guarantors, as required by the Act and the
Exchange Act. The historical financial statements, together with related
schedules and notes, set forth in the Preliminary Offering Circular and the
Final Offering Circular comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under the Act.
(v) The historical financial statements, together with related schedules and
notes forming part of the Offering Circular (and any amendment or supplement
thereto), present fairly in all material respects the financial position,
results of operations and changes in financial position of the Company and each
of the Guarantors on the basis stated in the Offering Circular at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data set forth in the Offering Circular (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company. The forward-looking statements contained in the Offering
Circular are based upon good faith estimates and assumptions believed by the
Company and each of the Guarantors to be reasonable when made.
(w) The Company and each of the Guarantors is not and, after giving effect to
the offering and sale of the Series A Notes and the application of the net
proceeds thereof as described in the Offering Circular, will not be, an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
(x) There are no contracts, agreements or understandings between the Company or
any Guarantor and any person granting such person the right to require the
Company or any Guarantor to file a registration statement under the Act with
respect to any securities of the Company or such Guarantor or to require the
Company to include such securities with the Notes registered pursuant to any
Registration Statement.
(y) Neither the Company nor any of the Guarantors nor any agent thereof acting
on their behalf has taken, and none of them will take, any action that might
cause this Agreement or the issuance or sale of the Series A Notes to violate
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal
Reserve System.
(z) Since the respective dates as of which information is given in the Offering
Circular other than as set forth in the Offering Circular (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change in the financial condition,
or the earnings, business, management or operations of (a) the Company, (b) RBH
13
or (c) the Guarantors, other than RBH, taken as a whole, (ii) there has not been
any material adverse change in the capital stock or in the long-term debt of the
Company or any Guarantor and (iii) the Company or any Guarantor has not incurred
any material liability or obligation, direct or contingent which has not been
disclosed therein.
(aa) Each of the Preliminary Offering Circular and the Final Offering Circular,
as of its date, contains all the information specified in, and meeting the
requirements of, Rule 144A(d)(4) under the Act.
(bb) When the Series A Notes and the Series A Guarantees are issued and
delivered pursuant to this Agreement, the Series A Notes and the Series A
Guarantees will not be of the same class (within the meaning of Rule 144A under
the Act) as any security of the Company that is listed on a national securities
exchange registered under Section 6 of the Exchange Act or that is quoted in a
United States automated inter-dealer quotation system.
(cc) No form of general solicitation or general advertising (as defined in
Regulation D under the Act) was used by the Company, the Guarantors, or any of
their representatives (other than the Initial Purchaser, as to whom the Company
and the Guarantors make no representation) in connection with the offer and sale
of the Series A Notes contemplated hereby, including, but not limited to,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Series A Notes have been
issued and sold by the Company or any of the Guarantors within the six-month
period immediately prior to the date hereof.
(dd) Prior to the effectiveness of any Registration Statement, the Indenture is
not required to be qualified under the TIA.
(ee) Assuming (i) that the Series A Notes are issued, sold and delivered under
the circumstances contemplated by the Offering Circular and this Agreement, (ii)
that the Initial Purchaser's representations and warranties in Section 7 hereof
are true, (iii) that the representations of the Accredited Institutions in the
form set forth in Annex A to the Offering Circular are true, (iv) compliance by
the Initial Purchaser with its covenants set forth in Section 7 hereof and (v)
that each of the Eligible Purchasers is a QIB, an Accredited Institution or a
person who acquires the Series A Note in an "offshore transaction" and is not a
"U.S. Person" (within the meaning of Regulation S under the Act), the purchase
of the Series A Notes by the Initial Purchaser pursuant hereto and the initial
resale of the Series A Notes pursuant hereto pursuant to the Exempt Resales is
exempt from the registration requirements of the Act. No form of general
solicitation, general advertising or any direct selling efforts within the
meaning of Regulation S was used by the Company, the Guarantors or any of their
representatives (other than you, as to whom the Company and the Guarantors make
no representation) in connection with the offer and sale of the Series A Notes,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
14
(ff) No "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or has
informed the Company or any Guarantor that it is considering imposing) any
condition (financial or otherwise) on the Company's or any Guarantor's retaining
any rating assigned as of the date hereof to it or any securities of the Company
or such Guarantor or (ii) has indicated to the Company or any Guarantor that it
is considering (A) the downgrading, suspension or withdrawal of, or any review
for a possible change that does not indicate the direction of the possible
change in, any rating so assigned or (B) any change in the outlook for any
rating of the Company or any Guarantor or any Securities of theirs.
(gg) Each certificate signed by any officer of the Company or any Guarantor and
delivered to the Initial Purchaser or counsel for the Initial Purchaser shall be
deemed to be a representation and warranty of the Company or such Guarantor to
the Initial Purchaser as to the matters covered thereby.
(hh) The Company and each of the Guarantors have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by the Company and each Guarantor which is material to the
business of the Company and each Guarantor, free and clear of Liens and defects,
except such as are described in the Offering Circular, or such as are
contemplated under the Operative Documents, or such as do not materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company or Guarantor. Any real property held
under lease or sublease by the Company and each Guarantor is held under valid,
subsisting and enforceable leases or subleases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property by the Company and each Guarantor, except as described in the Offering
Circular. Except as would not, singly or in the aggregate, have a Material
Adverse Effect, the Company and each Guarantor does not have any notice of any
default or material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any Guarantor under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the Company
or any Guarantor to the continued possession of the leased or subleased premises
under any such lease or sublease.
(ii) The Company and each Guarantor owns or possesses all patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names ("Intellectual
Property") currently employed by it in connection with the operation of its
business in the manner described in the Offering Circular, except where the
failure to own or possess or license such intellectual property would not,
singly or in the aggregate, have a Material Adverse Effect; and the Company and
each Guarantor has not received any notice of infringement of or conflict with
asserted rights of others with respect to any such Intellectual Property.
(jj) The Company and the Guarantors are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are engaged. The
Company and the Guarantors have no reason to believe that they will not be able
to renew their existing insurance coverage as and when such coverage expires or
15
to obtain similar coverage from similar insurers at a cost that would not have a
Material Adverse Effect.
(kk) The Company and each Guarantor maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ll) All material tax returns required to be filed by the Company and the
Guarantors in any jurisdiction have been filed, other than those filings being
contested in good faith, and all material taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company and the Guarantors
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided.
(mm) Upon execution and delivery of the Collateral Documents by the parties
thereto and completion of the filings and recordings contemplated thereby, the
security interests created for the benefit of the Trustee and the holders of the
Notes pursuant to the Collateral Documents will constitute valid, perfected
first priority security interests in the collateral subject thereto subject to
"Permitted Liens" as defined in the Indenture, other than with respect to the
Pledge Agreement and the Pledge and Assignment Agreement which will create first
priority security interests in the collateral described therein (subject to
Permitted Liens) upon receipt of the required regulatory approvals of the Nevada
Gaming Commission and the Nevada State Gaming Control Board.
(nn) All notice filings to be made pursuant to the Collateral Documents
(including without limitation all financing statements) are in proper form to be
filed in order to perfect a security interest in the collateral described
therein.
(oo) The Company acknowledges that the Initial Purchaser and, for purposes of
the opinions to be delivered to the Initial Purchaser pursuant to Section 9
hereof, counsel to the Company and the Guarantors and counsel to the Initial
Purchaser, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. Representations and Warranties of the Initial Purchaser.
The Initial Purchaser represents and warrants to, and agrees with, the
Company and the Guarantors that:
(a) The Initial Purchaser is either a QIB or an Accredited Institution with such
knowledge and experience in financial and business matters as are necessary in
order to evaluate the merits and risks of an investment in the Series A Notes.
16
(b) The Initial Purchaser (i) is not acquiring the Series A Notes with a view to
any distribution thereof or with any present intention of offering or selling
any of the Series A Notes in a transaction that would violate the Act or the
securities laws of any State of the United States or any other applicable
jurisdiction and (ii) will be reoffering and reselling the Series A Notes only
to QIBs in reliance on the exemption from the registration requirements of the
Act provided by Rule 144A, to a limited number of Accredited Institutions that
execute and deliver a letter containing certain representations and agreements
in the form attached as Annex A to the Offering Circular and in offshore
transactions meeting the requirements of Regulation S.
(c) The Initial Purchaser agrees that no form of general solicitation or general
advertising (within the meaning of Regulation D under the Act) has been or will
be used by the Initial Purchaser or any of its representatives in connection
with the offer and sale of any of the Series A Notes pursuant hereto, including,
but not limited to, articles, notices or other communications published in any
newspaper, magazine or similar medium, or broadcast over television or radio, or
transmitted over the internet, or communicated in any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
(d) The Initial Purchaser agrees that, in connection with Exempt Resales, it
will solicit offers to buy the Series A Notes only from, and will offer to sell
the Series A Notes only to, Eligible Purchasers. The Initial Purchaser further
agrees that it will offer to sell the Series A Notes only to, and will solicit
offers to buy the Series A Notes only from (i) Eligible Purchasers that the
Initial Purchaser reasonably believes are QIBs (ii) Accredited Institutions who
make the representations contained in, and execute and return to the Initial
Purchaser, a certificate in the form of Annex A attached to the Offering
Circular and (iii) persons outside the United States in offshore transactions
meeting the requirements of Regulation S, in each case, that agree that (A) the
Series A Notes purchased by them may be resold, pledged or otherwise transferred
within the time period referred to under Rule 144(k) (taking into account the
provisions of Rule 144(d) under the Act, if applicable) under the Act, as in
effect on the date of the transfer of such Series A Notes, only (1) to the
Company, (2) to a person whom the seller reasonably believes is a QIB purchasing
for its own account or for the account of a QIB in a transaction meeting the
requirements of Rule 144A under the Act, (3) in a transaction meeting the
requirements of Rule 144 under the Act, (4) to an Accredited Institution that,
prior to such transfer, furnishes the Trustee a signed letter containing certain
representations and agreements relating to the registration of transfer of such
Series A Note (the form of which is substantially the same as Annex A to the
Offering Circular) and, based upon an opinion of counsel acceptable to the
Company and the Trustee, (5) outside the United States to a Non-U.S. Person in a
transaction meeting the requirements of Rule 904 under the Securities Act (6) in
accordance with another exemption from the registration requirements of the Act
and based upon an opinion of counsel acceptable to the Company and the Trustee
or (7) pursuant to an effective registration statement and, in each case, in
accordance with the applicable securities laws of any state of the United States
or any other applicable jurisdiction and (B) they will deliver to each person to
whom such Series A Notes or an interest therein is transferred a notice
substantially to the effect of the foregoing.
17
(e) None of such Initial Purchaser nor any of its affiliates or any person
acting on its or their behalf has engaged or will engage in any directed selling
efforts within the meaning of Regulation S with respect to the Series A Notes.
(f) The sale of the Series A Notes offered and sold by such Initial Purchaser
pursuant hereto in reliance on Regulation S is not part of a plan or scheme to
evade the registration provisions of the Act.
(g) The Initial Purchaser agrees that the Series A Notes have not been
registered under the Act and that neither it nor its affiliates has offered or
sold and will not offer or sell the Series A Notes in the United States or to,
or for the benefit or account of, a U.S. Person (other than a distributor) (a)
as part of its distribution at any time and (b) otherwise until 40 days after
the later of the commencement of the offering of the Series A Notes pursuant
hereto and the Closing Date (the "distribution compliance period"), other than
in accordance with Regulation S or another exemption from the registration
requirements of the Act. The Initial Purchaser agrees that, during such 40-day
distribution compliance period, it will not cause any advertisement with respect
to the Series A Notes (including any "tombstone" advertisement) to be published
in any newspaper or periodical or posted in any public place and will not issue
any circular relating to the Series A Notes, except such advertisements as
permitted by and include the statements required by Regulation S. The Initial
Purchaser also agrees that, at or prior to confirmation of a sale of Series A
Notes offered and sold pursuant to Regulation S, it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration in respect of the Series A Notes from it during the restricted
period a confirmation or notice substantially to the following effect:
"The Notes covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold within the United States
or to, or for the account or benefit of, United States persons
(i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of
the offering and the closing date, except in either case in
accordance with Regulation S or Rule 144A under the Securities
Act. Terms used in this paragraph shall have the meanings
given to them by Regulation S under the Securities Act."
The Initial Purchaser acknowledges that the Company and, for purposes
of the opinions to be delivered to the Initial Purchaser pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchaser will rely
upon the accuracy and truth of the foregoing representations and the Initial
Purchaser hereby consents to such reliance.
8. Indemnification.
(a) The Company and each Guarantor, jointly and severally, agree to indemnify
and hold harmless the Initial Purchaser, its directors, its officers and each
person, if any, who controls such Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
18
and all losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Final Offering Circular (or any amendment or supplement thereto), the
Preliminary Offering Circular or any Rule 144A Information provided by the
Company to any holder or prospective purchaser of Series A Notes pursuant to
Section 5(i) hereof or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to the Initial Purchaser furnished in writing to the Company by such Initial
Purchaser.
(b) The Initial Purchaser agrees to indemnify and hold harmless the Company and
the Guarantors, their respective directors and officers and each person, if any,
who controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company or any Guarantor, to the same extent as the foregoing
indemnity from the Company and each Guarantor to the Initial Purchaser but only
with reference to information relating to the Initial Purchaser furnished in
writing to the Company by the Initial Purchaser expressly for use in the
Preliminary Offering Circular or the Final Offering Circular, it being
understood and agreed that the only such information furnished by the Initial
Purchaser consists of information (i) in the third paragraph on page 112 of the
Offering Circular concerning offering the Notes for resale by the Initial
Purchaser, (ii) in the fifth and sixth paragraphs on page 112 of the Offering
Circular concerning the filing of an application with the NASD and market-making
by the Initial Purchaser, (iii) in the second full paragraph on page 113 of the
Offering Circular concerning stabilization by the Initial Purchaser and (iv) in
the third full paragraph on page 113 of the Offering Circular concerning the
affiliation of the Initial Purchaser and its affiliates with the Company and its
affiliates.
(c) In case any action shall be commenced involving any person in respect of
which indemnity may be sought pursuant to Section 8(a) or 8(b) (the "indemnified
party"), the indemnified party shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party shall assume the defense of such action, including the
employment of counsel reasonably satisfactory to the indemnified party and the
payment of all fees and expenses of such counsel, as incurred (except that in
the case of any action in respect of which indemnity may be sought pursuant to
both Sections 8(a) and 8(b), the Initial Purchaser shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Initial Purchaser). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
19
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by the Initial Purchaser, in the case of the parties indemnified
pursuant to Section 8(a), and by the Company, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party) and, prior to the
date of such settlement, the indemnifying party shall have failed to comply with
such reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchaser on the other hand from the
offering of the Series A Notes or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company, on the one hand, and
the Initial Purchaser, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand and the Initial Purchaser, on
the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Series A Notes (after underwriting discounts
and commissions, but before deducting expenses) received by the Company, and the
total discounts and commissions received by the Initial Purchaser bear to the
total price to investors of the Series A Notes. The relative fault of the
Company, on the one hand, and the Initial Purchaser, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
20
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one hand,
or the Initial Purchaser, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company, the Guarantors and the Initial Purchaser agree that it would
not be just and equitable if contribution pursuant to Section 8(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such indemnified party in connection with investigating or defending any
matter, including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. 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 discounts and commissions received by
such Initial Purchaser exceeds the amount of any damages which the Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The remedies provided for in this Section 8 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
9. Conditions of Initial Purchaser's Obligations.
The obligations of the Initial Purchaser to purchase the Series A Notes
under this Agreement are subject to the satisfaction of each of the following
conditions:
(a) All the representations and warranties of the Company and the Guarantors
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(b) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Company,
any Guarantor, or any securities of the Company or any Guarantor (including,
without limitation, the placing of any of the foregoing ratings on credit watch
with negative or developing implications or under review with an uncertain
direction) by any "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act, (ii) there
shall not have occurred any change, nor shall notice have been given of any
potential or intended change, in the outlook for any rating of the Company or
any Guarantor by any such rating organization and (iii) no such rating
21
organization shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Notes than that on which the Notes were
marketed.
(c) Since the respective dates as of which information is given in the Offering
Circular other than as set forth in the Offering Circular (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change in the financial condition, earnings,
business, management or operations of (a) the Company, (b) RBH or (c) the
Guarantors, other than RBH, taken as a whole, (ii) there shall not have been any
change in the equity interests or in the long-term debt of the Company or any
Guarantor and (iii) the Company and the Guarantors shall not have incurred any
liability or obligation, direct or contingent, the effect of which, in any such
case described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in your reasonable
judgment, is material and adverse and, in your reasonable judgment, makes it
impracticable to market the Series A Notes on the terms and in the manner
contemplated in the Offering Circular.
(d) You shall have received on the Closing Date a certificate dated the Closing
Date, signed by the President and the Chief Financial Officer of the Company (i)
stating that the representations and warranties of the Company and the
Guarantors contained in this Agreement are true and correct with the same force
and effect as if made on and as of the Closing Date; (ii) confirming the matters
set forth in clause 9(b) and 9(c) hereof and (iii) stating that the Company and
the Guarantors have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Closing Date.
(e) You shall have received on the Closing Date an opinion (satisfactory to you
and counsel for the Initial Purchaser), dated the Closing Date, of Xxxxxx &
Silver Ltd., counsel for the Company, substantially the form of Exhibit C
hereto.
(f) You shall have received on the Closing Date an opinion (satisfactory to you
and counsel for the Initial Purchaser), dated the Closing Date, of Xxxxxxxx,
Waters & X'Xxxxxxx, Colorado counsel for the Company, substantially the form of
Exhibit D hereto.
(g) You shall have received on the Closing Date an opinion (satisfactory to you
and counsel for the Initial Purchaser), dated the Closing Date, of Xxxxxxx
Xxxxxxxx Xxxxxxx, Nevada counsel for the Company, substantially the form of
Exhibit E hereto.
(h) You shall have received on the Closing Date an opinion, dated the Closing
Date, of Xxxxxx & Xxxxxxx, counsel for the Initial Purchaser, in form and
substance reasonably satisfactory to the Initial Purchaser.
(i) You shall have received, at the time this Agreement is executed and at the
Closing Date, letters dated the date hereof or the Closing Date, as the case may
be, in form and substance satisfactory to the Initial Purchaser from Deloitte &
Touche LLP, independent public accountants, containing the information and
statements of the type ordinarily included in accountants' "comfort letters" to
the Initial Purchaser with respect to the financial statements and certain
financial information contained in the Offering Circular.
22
(j) The Series A Notes shall have been approved by the NASD for trading and duly
listed in PORTAL.
(k) The Company and each Guarantor shall each have executed and delivered the
Operative Documents to which each is a party and the Initial Purchaser shall
have received fully executed copies thereof. The Operative Documents shall be in
full force and effect, with the exception of the Series B Notes and the Series B
Guarantees, which will not be issued or become effective until the Exchange
Offer. The Company and each Guarantor shall have received the requisite
governmental and regulatory approval in connection with each of the Operative
Documents and transactions contemplated by the Offering Circular to be completed
on or before the Closing Date.
(l) Neither the Company nor any Guarantor shall have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Company or any Guarantor at
or prior to the Closing Date.
(m) The Trustee shall have received (i) a certificate of insurance demonstrating
insurance coverages of types, in amounts, with insurers and with other terms
required by the terms of the Operative Documents and (ii) executed copies of
each UCC-1 financing statement signed by the Company and each Guarantor, as
applicable, naming the Trustee as secured party and filed in such jurisdictions
as the Initial Purchaser may reasonably require.
(n) All documents and agreements shall have been filed, and other actions shall
have been taken, as may be required to perfect the Security Interests of the
Trustee in the Collateral, and to accord the Trustee the priorities over other
creditors of the Company and the Guarantors as contemplated by the Offering
Circular and the Operative Documents.
(o) The Trustee shall have received irrevocable commitments for title insurance
from Nevada Title Company, in a form and substance reasonably satisfactory to
the Initial Purchaser, subject only to Liens permitted under the Indenture.
10. Effective Date of Agreement and Termination.
This Agreement shall become effective upon the execution and delivery
of this Agreement by the parties hereto.
This Agreement may be terminated at any time prior to the Closing Date
by the Initial Purchaser by written notice to the Company if any of the
following has occurred: (i) Any outbreak or escalation of hostilities, any
declaration of war by the United States, any other calamity, emergency or
crisis, any material adverse change in economic conditions in or the financial
markets of the United States or elsewhere or any change or development involving
a prospective change in national or international political, financial or
economic conditions, in each case the effect of which could make it, in the
Initial Purchaser's judgment, impracticable or inadvisable to market or proceed
with the offering or delivery of the Series A Notes on the terms and in the
manner contemplated in the Offering Circular or to enforce contracts for the
sale of any of the Series A Notes, (ii) the suspension or limitation of trading
23
generally in securities or other instruments on the New York Stock Exchange, the
American Stock Exchange, the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange, the Chicago Board of Trade or the Nasdaq National Market or
any setting of limitations on prices for securities or other instruments on any
such exchange or on the Nasdaq National Market, (iii) the suspension of trading
of any securities of the Company on any exchange or in the over-the-counter
market, (iv) the enactment, publication, decree or other promulgation after the
date hereof of any federal or state statute, regulation, rule or order of any
court or other governmental authority that in the Initial Purchaser's reasonable
opinion materially and adversely affects, or could materially and adversely
affect, the properties, business, prospects, operations, earnings, assets,
liabilities or condition (financial or otherwise) of (a) the Company, (b) RBH or
(c) the Guarantors, other than RBH, taken as a whole, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your reasonable opinion has a
material adverse effect on the financial markets in the United States.
11. Representations and Indemnities to Survive.
The respective indemnities, contribution agreements, representations,
warranties and other statements of each of the Company, the Guarantors and the
Initial Purchaser set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Series A Notes, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of the Initial Purchaser, the officers
or directors of the Initial Purchaser, any person controlling the Initial
Purchaser, the Company, the Guarantors, the officers or directors of each of
them, or any person controlling any of them, (ii) acceptance of the Series A
Notes and payment for them hereunder and (iii) termination of this Agreement.
12. Notices.
Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. All statements, requests notices and agreements
(each a "Notice") hereunder shall be in writing, and:
(a) If to the Initial Purchaser, Notices shall be delivered or sent by mail,
telex or facsimile transmission to the Initial Purchaser as follows:
Xxxxxxxxx & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Fax: (000) 000-0000
(b) If to the Company or any Guarantor, Notices shall be delivered or sent by
mail, telex, or facsimile transmission to the address of the Company as follows:
Riviera Holdings Corporation
24
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: President
Fax: (000) 000-0000
13. Applicable Law.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
14. Counterparts.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
15. Third Parties.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Guarantors,
the Initial Purchaser, the Initial Purchaser's directors and officers, any
controlling persons referred to herein, the directors of the Company and its
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Series A Notes from the Initial Purchaser merely because of such
purchase.
16. Other Fees and Expenses.
If for any reason the Series A Notes and Series A Guarantees are not
delivered by or on behalf of the Company as provided herein (other than as a
result of any termination of this Agreement pursuant to Section 10 hereof), the
Company agrees to reimburse the Initial Purchaser for all out-of-pocket expenses
(including the fees and disbursements of counsel) incurred by it.
Notwithstanding any termination of this Agreement, the Company and the
Guarantors shall be liable for all expenses which it has agreed to pay pursuant
to Section 5(j) hereof. The Company and the Guarantors also agree to reimburse
the Initial Purchaser and its officers, directors and each person, if any, who
controls such Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act for any and all fees and expenses (including
without limitation the fees and expenses of counsel) incurred by them in
connection with enforcing their rights under this Agreement (including without
limitation its rights under Section 8 hereof).
[Signature Page Follows]
25
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Very truly yours,
RIVIERA HOLDINGS CORPORATION
By:________________________________________
Name: Xxxxx X. Xxxxx
Title: Treasurer
RIVIERA OPERATING CORPORATION
By:________________________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: Secretary
RIVIERA GAMING MANAGEMENT, INC.
By:________________________________________
Name: Xxxxx X. Xxxxx
Title: Secretary
RIVIERA GAMING MANAGEMENT OF COLORADO, INC.
By:________________________________________
Name: Xxxxx X. Xxxxx
Title: Secretary
RIVIERA BLACK HAWK, INC.
By:________________________________________
Name: Xxxxx X. Xxxxx
Title: Secretary
Accepted and Agreed to:
Xxxxxxxxx & Company, Inc.
By:_________________________________________
Name:____M. Xxxxx Xxxxxxx
Title: __Managing Director
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
SCHEDULE A
o Riviera Operating Corporation
o Riviera Gaming Management, Inc.
o Riviera Gaming Management of Colorado, Inc.
o Riviera Blackhawk, Inc.
SCHEDULE B
Deed of Trust, Assignment of Rents, Leases, Fixture Filing and Security
Agreement (2901 Las Vegas Blvd. South)
Deed of Trust to Public Trust, Security Agreement, Fixture Filing and
Assignment of Rents, Leases and Leasehold Interests (444 Main Street,
Black Hawk)
Assignment of Leases and Rents (444 Main Street, Black Hawk)
Security Agreement;
Stock Pledge Agreement (RHC);
Stock Pledge Agreement (ROC);
Stock Pledge Agreement (RGM);
Stock Pledge Agreement (RGMC);
Environmental Indemnity Agreement (0000 Xxx Xxxxx Xxxx. Xxxxx);
Environmental Indemnity Agreement (444 Main Street, Black Hawk);
Collateral Assignment of Trademark(s).
UCC-1 Financing Statements (Colorado)
UCC-1 Financing Statements (Nevada)
E-2
