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EXHIBIT 10.1
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FITZGERALDS GAMING CORPORATION
$5,882,000 Principal Amount
of
13% Priority Secured Notes Due December 31, 1998
NOTE PURCHASE AGREEMENT
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Dated as of December 30, 1996
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS................................................ 1
1.1 Terms Defined in the Indenture............................. 1
1.2 Additional Definitions..................................... 1
1.3 Rules of Construction...................................... 3
SECTION 2. PURCHASE AND SALE OF PRIORITY NOTES........................ 3
2.1 Issuance of Priority Notes................................. 3
2.2 Purchase and Sale of Priority Notes........................ 4
2.3 Registration and Transfer of Priority Notes .............. 4
2.4 Payment of the Priority Notes.............................. 5
2.5 Optional and Mandatory Prepayments; Ratable Purchases...... 6
2.7 Back-Stop Fee.............................................. 8
2.8 Taxes...................................................... 8
2.9 Indemnification............................................ 8
SECTION 3. CLOSING CONDITIONS......................................... 10
3.1 Delivery of Documents...................................... 10
3.2 Legal Investment........................................... 12
3.3 Payment of Expenses........................................ 13
3.4 Compliance with this Agreement............................. 13
3.5 Compliance with Laws....................................... 13
3.6 Representations and Warranties............................. 13
3.7 No Default................................................. 13
3.8 Proceedings Satisfactory................................... 13
3.9 No Legal Proceedings....................................... 14
3.10 No Material Adverse Change................................. 14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE SUBSIDIARY GUARANTORS.............................. 14
4.1 Organization; Corporate Power.............................. 14
4.2 Good Standing.............................................. 14
4.3 Business................................................... 15
4.4 Subsidiaries............................................... 15
4.5 Authorization of Financing................................. 15
4.6 No Conflict................................................ 15
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4.7 Governmental Approvals........................................ 16
4.8 Due Execution and Delivery; Binding Obligations............... 16
4.9 Securities Law Exemption...................................... 16
4.10 First Supplemental Indenture.................................. 17
4.11 Liens Securing Priority Note Obligations...................... 17
4.12 Financial Condition; Ownership of Property.................... 18
4.13 Litigation; Adverse Facts..................................... 18
4.14 Payment of Taxes.............................................. 19
4.15 No Indenture Defaults; Main Street Option Agreement in Effect 19
4.16 Las Vegas and Tunica Expansions............................... 19
4.17 Governmental Regulation....................................... 20
4.18 Disclosure.................................................... 20
4.19 Licenses, Permits and Authorizations.......................... 20
4.20 Hazardous Materials........................................... 20
4.21 Margin Stock.................................................. 21
4.22 Permitted Intercompany Notes.................................. 21
4.23 Brokers....................................................... 22
4.24 Solvency...................................................... 22
SECTION 5. REPRESENTATIONS AND WARRANTIES OF EACH
PURCHASER..................................................... 22
5.1 Purchase for Own Account...................................... 22
5.2 Accredited Investor........................................... 23
5.3 Authorization................................................. 23
SECTION 6. COVENANTS..................................................... 24
6.1 Additional Guarantors......................................... 24
6.2 Indenture Covenants........................................... 24
6.3 Note Documents................................................ 24
6.4 Use of Proceeds............................................... 24
6.5 Private Placement Number...................................... 25
SECTION 7. GUARANTY...................................................... 25
7.1 Guaranty...................................................... 25
7.2 Acceleration of Payment....................................... 25
7.3 Guaranty Absolute and Unconditional ......................... 25
7.4 Guaranty Irrevocable and Continuing........................... 26
7.5 Reinstatement................................................. 26
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7.6 Waiver ...................................................... 26
7.7 Subrogation................................................... 28
7.8 Fraudulent Transfer Limitation .............................. 29
7.9 Contribution among Subsidiary Guarantors .................... 29
7.10 No Limitation of Liability.................................... 30
7.11 Joint and Several Obligation.................................. 30
7.12 Condition of the Company...................................... 30
7.13 Amendment or Modification of Priority Notes Documents......... 31
7.14 Payments Free and Clear of Taxes.............................. 31
7.15 No Waiver; Remedies........................................... 32
7.16 Remedies Cumulative........................................... 32
7.17 Severally Enforceable......................................... 33
SECTION 8. DEFAULTS AND REMEDIES......................................... 33
8.1 Priority Notes Defaults....................................... 33
8.2 Acceleration.................................................. 34
8.3 Enforcement of Security....................................... 34
8.4 Right of Set-off.............................................. 35
8.5 Remedies Cumulative........................................... 35
SECTION 9. AMENDMENTS AND WAIVERS........................................ 35
SECTION 10. MISCELLANEOUS................................................. 36
10.1 Survival of Representations and Warranties.................... 36
10.2 Entire Agreement.............................................. 36
10.3 Successors and Assigns........................................ 37
10.4 Disclosure to Other Persons................................... 37
10.5 Notices....................................................... 37
10.6 Descriptive Headings.......................................... 38
10.7 Satisfaction Requirement...................................... 38
10.8 Independence of Covenants..................................... 38
10.9 Severability.................................................. 38
10.10 Waiver of Jury Trial; Consent to Jurisdiction................. 38
10.11 Waiver of Claim for Special, Indirect,
Consequential and Punitive Damages............................ 39
10.12 Governing Law................................................. 39
10.13 Counterparts.................................................. 40
10.14 Dating........................................................ 40
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ANNEX
1 Accretion Schedule
2 Purchaser Schedule
EXHIBITS
A Form of Priority Notes
B First Supplemental Indenture
C Global Amendment to Collateral Documents
D Certificate of Trustee
E-1 Amendment to Deed of Trust (Nevada)
E-2 Amendment to Deed of Trust (Mississippi)
E-3 Amendment to Preferred Ship Mortgage
F Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
G Opinion of Schreck, Jones, Bernhard, Woloson & ▇▇▇▇▇▇▇
H-1 Opinion of Mississippi counsel
H-2 Opinion of Colorado counsel
I Opinion of ▇▇▇▇ ▇▇▇▇▇, General Counsel
J Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
K Officers' Certificate
L Receipt for Funding
SCHEDULES
4.4 Issued and Outstanding Stock of Company Subsidiaries
4.7 Governmental Approvals
4.16(a) Las Vegas Project and Tunica Project Unpaid Project Costs
4.16(b) Mechanics Liens
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NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT is dated as of December 30, 1996
(this "Agreement") and entered into by and among (i) FITZGERALDS GAMING
CORPORATION, a Nevada corporation (the "Company"), (ii) FITZGERALDS SOUTH, INC.,
a Nevada corporation, FITZGERALDS RENO, INC., a Nevada corporation, FITZGERALDS
INCORPORATED, a Nevada corporation, FITZGERALDS LAS VEGAS, INC., a Nevada
corporation, FITZGERALDS FREMONT EXPERIENCE CORPORATION, a Nevada corporation,
FITZGERALDS MISSISSIPPI, INC., a Mississippi corporation formerly known as Polk
Landing Entertainment Corporation, and FITZGERALDS BLACK HAWK, INC., a Nevada
corporation (collectively, the "Subsidiary Guarantors"), and (iii) the
purchasers listed on the signature pages hereto (each a "Purchaser" and
collectively, the "Purchasers").
In consideration of the premises, mutual covenants and
agreements hereinafter contained and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:
SECTION 1. DEFINITIONS
1.1 Terms Defined in the Indenture
Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Indenture dated as of December 19, 1995
delivered by the Company and the Subsidiary Guarantors to First Interstate Bank
of Nevada, N.A., as trustee, as amended as of the Closing Date pursuant to the
First Supplemental Indenture dated as of December 30, 1996 entered into by and
among the Company, the Subsidiary Guarantors and ▇▇▇▇▇ Fargo Bank, N.A., as
successor trustee (the "Indenture"), on the terms and conditions and in the form
in effect on the Closing Date without giving effect to any subsequent amendment
thereto, waiver thereunder or discharge thereof, except any amendment or waiver
expressly approved in writing in accordance with Section 9.
1.2 Additional Definitions
As used in this Agreement:
"ACCOUNT MANAGER" means each Purchaser, if any, duly
authorized to act as attorney-in-fact on behalf of any Person in purchasing, in
the name of and using funds provided by such Person, Priority Notes thereunder.
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"ACCRETED VALUE" means, as to each Priority Note, (i) on and
after December 31, 1998, if the maturity of the Priority Notes has not been
accelerated pursuant to Section 8.2, 100% of the then Outstanding Stated Amount
of such Priority Note, (ii) as of any date of determination that occurs prior to
December 31, 1998 and is listed on the Accretion Schedule, an amount determined
by applying the percentage set forth next to such date in the Accretion Schedule
to the then Outstanding Stated Amount of such Priority Note, and (iii) as of any
date of determination that falls between any two dates listed on the Accretion
Schedule, an amount determined by applying an interpolated percentage, based on
the percentage set forth next to each of such two dates in the Accretion
Schedule and the portion of the period between them that has elapsed on such
date of determination, to the then Outstanding Stated Amount of such Priority
Note.
"ACCRETION SCHEDULE" means the schedule attached as Annex 1
hereto.
"BENEFICIARY" is defined in Section 7.1.
"CLOSING" is defined in Section 2.2(b).
"CLOSING DATE" is defined in Section 2.2(b).
"CONTINUING" means, as to any event constituting an Event of
Default, that such event occurred and has not been cured or corrected or
expressly waived in writing by the Required Priority Noteholders.
"DEFAULT PREMIUM" means, for any day when any Event of Default
has occurred and is Continuing, additional interest on the face amount of all
outstanding Priority Notes calculated at the rate of 2% per annum.
"EVENT OF DEFAULT" is not used as defined in the Indenture
and, instead, means each of the occurrences described in Section 8.1
"EFFECTIVE EQUIVALENT RATE" means 22.615% per annum.
"GUARANTEED OBLIGATIONS" is defined in Section 7.1.
"INDENTURE EVENT OF DEFAULT" means any "Event of Default," as
that term is defined in the Indenture.
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"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets or condition (financial or
otherwise) of the Company and the Subsidiary Guarantors, taken as a whole, (ii)
a material adverse effect on the ability of the Company and the Subsidiary
Guarantors to pay the Priority Notes when due or to perform their obligations
under the Priority Notes Documents, or (iii) any material adverse change, after
the Closing Date, in the enforceability of any rights purporting to be granted
under the Priority Notes Documents or on the validity, perfection, priority or
enforceability of any Liens securing Priority Note Obligations. In determining
whether any individual event would result in a Material Adverse Effect,
notwithstanding that such event does not of itself have such effect, a Material
Adverse Effect shall be deemed to have occurred if the cumulative effect of such
event and all other then existing events would result in a Material Adverse
Effect.
"OUTSTANDING STATED AMOUNT" means, as to any Priority Note,
the stated principal amount thereof, reduced as necessary to give effect to any
partial prepayment of such Priority Note that has theretofore been made pursuant
to Section 2.5(a) or Section 2.5(b).
"PRIORITY NOTES DOCUMENTS" means this Agreement, the Priority
Notes, the First Supplemental Indenture (including the amendments to the
Indenture made by the First Supplemental Indenture) and the Priority Notes
Collateral Documents.
"PURCHASE PRICE" means $5,010,464.
"PURCHASER SCHEDULE" means the schedule attached as Annex 2
hereto.
"REQUIRED PRIORITY NOTEHOLDERS" means (i) on or prior to the
Closing Date, the Purchasers, and (ii) thereafter, subject to the provisions of
Section 9, the registered holders of a majority in principal amount of Priority
Notes then outstanding.
1.3 Rules of Construction
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) "or" is not exclusive;
(c) words in the singular include the plural, and words
in the plural include the singular;
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(d) provisions apply to successive events and
transactions;
(e) "herein," "hereof" and other words of similar import
refer to this Agreement as a whole and not to any
particular Section or other subdivision;
(f) "including" and "include" are used for purposes of
illustration or clarity and shall not qualify,
characterize or limit the class in which an item is
included; and
(g) references to a Section, when not qualified by
reference to any other document, are references to
the Sections in this Agreement.
SECTION 2. PURCHASE AND SALE OF PRIORITY NOTES
2.1 Issuance of Priority Notes
(a) Authorization. On or before the Closing Date, the
Company will have authorized the issuance of $5,882,000 aggregate principal
amount of its 13% Priority Secured Notes due December 31, 1998 in substantially
in the form attached hereto as Exhibit A and the sale of such Priority Notes on
the Closing Date for the Purchase Price on the terms and conditions set forth
herein.
(b) Form and Amount. The Priority Notes shall be issued
on the Closing Date in substantially in the form attached hereto as Exhibit A
and shall be dated as of the Closing Date. The aggregate principal amount of the
Priority Notes issued on the Closing Date shall not exceed $5,882,000, and no
Priority Notes shall thereafter be issued by the Company except pursuant to
Section 2.3.
2.2 Purchase and Sale of Priority Notes
(a) Purchase and Sale. The Company agrees to sell and,
subject to the terms and conditions set forth herein and in reliance on the
representations and warranties of the Company and the Subsidiary Guarantors set
forth herein, each Purchaser agrees, severally and not jointly, to purchase
Priority Notes in the stated principal amount set forth below such Purchaser's
name on the Purchaser Schedule, at a purchase price equal to 85.183% of such
stated principal amount and, in the aggregate for all Purchasers, equal to the
Purchase Price.
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(b) Closing. The purchase and sale of the Priority Notes
shall take place at a closing (the "Closing") at the offices of Schreck, Jones,
Bernhard, Woloson & ▇▇▇▇▇▇▇ in Las Vegas, Nevada at 10:00 a.m. on December 30,
1996, or such other business day on or prior to December 31, 1996, as may be
agreed by the Purchasers and the Company (the "Closing Date"). At the Closing,
the Company will deliver to each Purchaser the Priority Notes to be purchased by
such Purchaser (for the amount of its aggregate purchase commitment and
registered in its name or in such other permitted denominations and registered
in such other name as may be set forth as to such Purchaser in the Purchaser
Schedule), dated the Closing Date, against payment of the purchase price
therefor by intra-bank or federal funds bank wire transfer of same day funds to
such bank account as the Company shall designate at least one Business Days
prior to the Closing. If, at the Closing, the Company fails to tender any of the
Priority Notes to the Purchasers or any condition set forth in Section 3 is not
satisfied or waived by the Purchasers, each Purchaser shall be relieved of its
obligation to purchase the Priority Notes.
2.3 Registration and Transfer of Priority Notes
(a) Issued in Registered Form. The Priority Notes shall
be issued as registered notes only, each without coupons in denominations of at
least $100,000 or any smaller denomination upon transfer of any Priority Note on
which the outstanding principal amount is less than $100,000.
(b) Transfer. Subject only to applicable securities laws,
the Purchaser and each other holder of any of the Priority Notes shall have the
unqualified right freely and without any restriction or limitations whatsoever,
and both before and after the maturity of the Priority Notes, (i) to sell,
pledge or otherwise transfer any of the Priority Notes in any denomination
permitted under Section 2.3(a) and in any transaction to any Person, and (ii) to
sell or grant participations or other interests in any of the Priority Notes to
any Person while remaining a holder thereof for purposes of the Priority Notes
Documents and giving the owner of such participation or interest such approval
or consent rights as such holder and owner may privately agree.
(c) Maintenance of Office. The Company will maintain, in
The City of New York, an office where the Company shall maintain a note register
of all registered holders of Priority Notes. The Company will allow any holder
of any Priority Note to inspect and copy such note register at such office
during normal business hours, without any other restriction as to the time,
frequency or purpose thereof.
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(d) Exchange and Reissuance. Upon surrender of any
Priority Notes for registration of transfer or for exchange into other
authorized denominations at the office in The City of New York maintained by the
Company pursuant to Section 2.3(c), the Company shall at its expense execute and
deliver new Priority Notes in the same aggregate amount, dated the Closing Date
and in such denominations and registered in such name as the registered holder
of the surrendered Priority Note may direct. If the Company receives, at such
office, an affidavit of the registered holder of any Priority Note or other
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of such Priority Note, together with indemnity reasonably
satisfactory to the Company, the Company will execute and deliver at such office
a new Priority Note on the identical terms.
(e) Registered Holder Deemed Owner. Until a Priority Note
is surrendered for registration of transfer, duly endorsed, the Company may
treat the registered holder thereof as the owner and holder of such Priority
Note for all purposes, and the Company shall not be affected by notice to the
contrary.
(f) Surviving Obligations. Notwithstanding any
registration or transfer of any Priority Note, each Purchaser, each prior or
current beneficial owner and each prior or current registered holder of each
Priority Note shall be and remain entitled to enforce all obligations of the
Company and Subsidiary Guarantors under the Priority Notes Documents, including
expense reimbursement, tax and indemnification obligations, that survive the
repayment of the Priority Notes.
2.4 Payment of the Priority Notes
(a) Payment of Principal. The Company promises to pay the
stated principal amount of each Priority Note to the registered holder thereof
on December 31, 1998. If the maturity of the Priority Notes is accelerated
pursuant to Section 8.2, the Company promises to pay the Accreted Value of each
Priority Note, determined as of the date such acceleration becomes effective, to
the registered holder thereof. Presentment of the Priority Notes for payment
and, to the fullest extent permitted by law, all other demands for payment and
notices of nonpayment of the Priority Notes are hereby waived.
(b) Payment of Interest. The Company promises to pay
interest on each Priority Note (i) through and including December 31, 1998, if
the maturity of the Priority Notes has not been accelerated, at the rate of 13%
per annum applied to the Outstanding Stated Amount of such Priority Note from
time to time as interest accrues, computed on the basis of a year of 360 days
consisting of 12 months of 30 days each
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and payable semi-annually on each June 30 and December 31, commencing June 30,
1997, to the registered holder of such Priority Note on the fifteenth day of
such month, plus, for any day on which any Event of Default has occurred and is
Continuing, the Default Premium, payable on demand to the registered holder of
such Priority Note on the date such Default Premium is paid, and (ii) commencing
on the day on which the Priority Notes are due and payable in full (whether at
maturity or by acceleration or otherwise), at the Effective Equivalent Rate plus
the Default Premium, applied to the Accreted Value of such Priority Note on the
day the Priority Notes became due and payable in full, payable on demand to the
registered holder of such Priority Note on the date payment is made.
2.5 Optional and Mandatory Prepayments; Ratable Purchases
(a) Voluntary Prepayment. The Company may prepay the
Priority Notes at any time, in whole or in part, but only by paying the Accreted
Value of all outstanding Priority Notes determined as of the date on which the
prepayment is made (or, in the case of a prepayment in part, by paying a portion
of such Accreted Value) plus all interest accrued and unpaid on the Priority
Notes as of such date (or, if only a portion of such Accreted Value is prepaid,
an equivalent portion of such interest). Each prepayment in part shall be made
in accordance with this Section 2.5 and in a minimum amount of not less than
$500,000 in stated principal amount.
(b) Mandatory Prepayment. The Company shall prepay the
Priority Notes as follows:
(1) On the fifteenth Business Day after the
occurrence of any Change of Control (as that term is defined in Section
1109 of the Indenture), the Company shall prepay the Priority Notes in
full at the then Accreted Value and further shall pay all interest then
accrued and unpaid on the Priority Notes.
(2) Within 210 days after the occurrence of any Asset
Sale (as that term is defined in Section 1016(a) of the Indenture),
other than in a transaction permitted under Section 1016(b) of the
Indenture, and prior to making any Asset Sale Purchase Offer in respect
of such Asset Sale pursuant to Section 1016(a) of the Indenture, the
Company shall prepay the Priority Notes (based on their then Accreted
Value) and interest then accrued and unpaid on the portion of the
principal of the Priority Notes represented by such Accreted Value in
an amount that is equal to (i) the Net Cash Proceeds from such Asset
Sale less (ii) all such Net Cash Proceeds that have then been
reinvested in assets or property directly related to a Related Business
of the Company or a Restricted
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Subsidiary (or to be so reinvested pursuant to a binding obligation
that has then been entered into by the Company or such Restricted
Subsidiary).
(c) Notice of Prepayments. The Company shall give each
registered holder of Priority Notes written notice of each optional prepayment
of Priority Notes pursuant to Section 2.5(a) not less than ten Business Days
prior to the prepayment date, which notice shall (i) specify the prepayment date
(which shall be a Business Day), (ii) state the amount to be applied to
prepayment of the Priority Notes on such date, and (iii) set forth in reasonable
detail calculations specifying the Accreted Value of the Priority Notes as of
such date and all accrued and unpaid interest outstanding on the Priority Notes
to and including such date. Upon the giving of any such prepayment notice, such
amount shall become due and payable on such prepayment date.
(d) Partial Prepayments Made Ratably and Applied First to
Interest. No partial prepayment of Priority Notes may be made unless, in the
case of each such prepayment, the aggregate amount of principal being prepaid is
allocated ratably among all Priority Notes then outstanding in proportion to the
respective unpaid principal amount of each outstanding Priority Note. All
prepayments in part shall be applied first to pay interest required to be
prepaid.
(e) Purchase of Priority Notes. The Company shall not,
and shall not permit any of its Subsidiaries or Affiliates to, purchase, redeem
or otherwise acquire any Priority Note from any holder, except pursuant to a
payment or prepayment in accordance with the specific terms of this Agreement or
pursuant to a ratable purchase offer which is set forth in a writing submitted
on identical terms to all holders of Priority Notes at least ten Business Days
prior to the date on which such offer expires. Any Priority Note purchased,
redeemed or otherwise acquired by the Company or any of its Subsidiaries shall
immediately be retired and discharged and may not be reissued.
2.6 Costs and Expenses
Whether or not the Priority Notes are sold, the Company and
the Subsidiary Guarantors agree to bear their own costs and expenses (including
the fees and disbursements of counsel acting for any of them) and further
jointly and severally agree upon demand to pay and make reimbursement for all
expenses relating to this Agreement, including:
(a) each Purchaser's reasonable out-of-pocket
expenses incurred in connection with the transactions contemplated by
this Agreement;
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(b) the reasonable fees and other charges of the
Purchasers' counsel, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, in connection herewith;
(c) the cost of delivering to each Purchaser's
home office or the office of such Purchaser's designee, insured to such
Purchaser's satisfaction, the Priority Notes and the other documents
contemplated hereby;
(d) any reasonable out-of-pocket fees and
expenses (including the reasonable fees and expenses of counsel) in
connection with any registration or qualification of the Priority Notes
required in connection with the offer and sale of the Priority Notes at
the Closing pursuant to this Agreement under the securities or "blue
sky" laws of any jurisdiction requiring such registration or
qualification or in connection with obtaining any exemptions from such
requirements;
(e) all reasonable out-of-pocket expenses
(including all reasonable fees and expenses of counsel, advisors and
expert witnesses, subject to receipt of reasonably detailed
documentation thereof) incurred by any Purchaser or any beneficial
owner or holder of any of the Priority Notes in connection with any
amendment or modification of any of the Priority Notes Documents, or
any waiver or consent granted thereunder or while any Event of Default
is Continuing or in connection with the protection, preservation,
collection or enforcement of any rights under this Agreement, the
Priority Notes or any other Priority Notes Documents or the Priority
Notes Collateral in any debt restructuring, legal proceedings or
Bankruptcy, Insolvency or Liquidation Proceeding; and
(f) all other reasonable costs and expenses,
including reasonable counsel fees and all fees and expenses payable to
the Trustee, incurred in connection with the transactions contemplated
by this Agreement.
The Company shall deliver to each Purchaser or to such other
persons as such Purchaser shall direct, at the Closing, by intra-bank or federal
funds bank wire transfer of same day funds, payment for all out-of-pocket
expenses for which such Purchaser is entitled to reimbursement pursuant to this
Section 2.6 and the fees and expenses of the Purchasers' counsel payable
pursuant to this Section 2.6, or at such Purchaser's election shall authorize
such Purchaser to deduct such amount from the Purchase Price.
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The obligations set forth in this Section 2.6 shall survive
the payment of the Priority Notes and the termination of this Agreement.
2.7 Back-Stop Fee
At the Closing, the Company shall pay to TCW SHARED
OPPORTUNITY FUND II, L.P., a Delaware limited partnership ("TCW"), a fee in the
amount of $100,000, by intra-bank or federal funds bank wire transfer of same
day funds or at TCW's election shall authorize TCW to deduct such amount from
that portion of the Purchase Price payable by it. Such fee is payable solely as
compensation for an offer by TCW (which offer lapsed upon execution and delivery
of this Agreement by the Purchasers) to purchase any and all Priority Notes on
the Closing Date on the terms herein set forth and is fully earned at the
Closing and nonrefundable when paid.
2.8 Taxes
The Company and the Subsidiary Guarantors jointly and
severally agree to pay all taxes, and all interest and penalties thereon,
payable in connection with the issuance, sale, delivery or transfer of the
Priority Notes and the execution, delivery, recordation, amendment or
performance of the instruments and agreements contemplated hereby and will
indemnify and hold harmless each Purchaser and each beneficial owner and
registered holder of any of the Priority Notes against any and all liabilities
with respect to all such taxes, without limitation as to time. The obligations
set forth in this Section 2.8 shall survive the payment of the Priority Notes
and the termination of this Agreement.
2.9 Indemnification
The Company and the Subsidiary Guarantors jointly and
severally agree to defend, indemnify, pay and hold harmless the Purchasers and
each present and future beneficial owner and registered holder of the Priority
Notes, or any interest therein, and each of their respective Account Managers,
officers, directors, employees, attorneys, agents and Affiliates (collectively,
the "Indemnitees") from and against any and all actions, causes of action, suits
and claims of any nature by any Person other than the Company or a Subsidiary
Guarantor (collectively, "Claims") and all losses, liabilities, damages and
expenses (including the reasonable fees and expenses of counsel engaged by any
Indemnitee, whether or not suit is brought) in connection with any such Claim
(collectively, the "Indemnified Liabilities") incurred by any Indemnitee as a
result of, or arising out of, or relating to this Agreement, the Priority Notes,
any of the
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other Priority Notes Documents, or, in each case, any of the documents, acts or
events contemplated or referred to therein or transactions contemplated thereby
or the enforcement of any of the terms thereof; provided, however, that the
Company shall not be liable to any Indemnitee for Indemnified Liabilities
consisting of an award of damages assessed against such Indemnitee in a judicial
proceeding in which a final, non-appealable determination has been made that
such damages are directly attributable to the gross negligence or willful
misconduct of such Indemnitee.
In addition, the Company and the Subsidiary Guarantors
jointly and severally agree to defend, indemnify, pay and hold the Indemnitees
harmless from and against and shall reimburse the Indemnitees for, any and all
losses, claims, liabilities, damages, injunctive relief, injuries to person,
property or natural resources, fines, penalties, costs, expenses (including the
reasonable fees and disbursements of counsel, whether or not suit is brought and
specifically including special and local counsel and allocated costs of internal
counsel, costs of any appeal, and costs of settlement actually incurred),
actions and causes of action (collectively, "Hazardous Materials Costs and
Liabilities") arising directly or indirectly, in whole or in part, out of the
release, discharge, deposit, presence, transportation or storage or alleged
release, alleged discharge, alleged deposit, alleged presence, alleged
transportation or alleged storage of any hazardous materials at, on, under or
from any real or personal property owned or leased by the Company or any
Subsidiary or in or adjacent to any part of such property or in the soil or
groundwater on or under such property, whether or not known to the Company or
any of its Subsidiaries or to any Indemnitee, whether foreseeable or
unforeseeable, regardless of the source of such release, discharge, deposit,
presence, transportation or storage. The foregoing indemnity and the Hazardous
Materials Costs and Liabilities shall include all costs in law or in equity of
cleanup, removal, remediation and restoration of any kind and disposal of any
such hazardous materials (whether or not now existing), all costs of determining
whether any real or personal property owned or leased by the Company or any of
its Subsidiaries is in compliance and causing such property to be or become in
compliance with all applicable environmental laws, all costs and liabilities
associated with claims for damages to persons, property or natural resources,
and all environmental consultants' and attorneys' fees and costs. In no event
shall any provision of this Section 2.9 be deemed to be a waiver of or to be in
lieu of any right or claim, including any right of contribution or other right
of recovery, that any Indemnitee might otherwise have against the Company or any
of its Subsidiaries under any environmental laws or that the Company or any of
its Subsidiaries might otherwise have against any third party.
If and to the extent any indemnification obligation set forth
in this Section 2.9 is unenforceable as a matter of law for any reason or in any
particular
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circumstance, the Company and each Subsidiary Guarantor shall make
the maximum contribution to the payment and satisfaction of such obligation that
it is permitted to make under applicable law.
The obligations set forth in this Section 2.9 shall survive
the repayment of the Priority Notes.
SECTION 3. CLOSING CONDITIONS
The obligation of each Purchaser to purchase and pay for the
Priority Notes to be delivered to such Purchaser at the Closing shall be subject
to the satisfaction of the following conditions on or before the Closing Date:
3.1 Delivery of Documents
The Company shall have delivered to each Purchaser, in form
and substance satisfactory to such Purchaser, the following:
(a) Counterparts of this Agreement duly executed
and delivered by the Company, each Subsidiary Guarantor and each
Purchaser.
(b) The Priority Notes being purchased by such
Purchaser, duly executed by the Company, in the aggregate principal
amount set forth below such Purchaser's name on the signature pages
hereto.
(c) The First Supplemental Indenture, in
substantially the form of Exhibit B attached hereto, duly executed and
delivered by the Company, the Subsidiary Guarantors and the Trustee,
together with (i) all directions, certificates and legal opinions
delivered to the Trustee in connection therewith, accompanied by a
letter from the issuers thereof stating that the Purchasers shall have
the right to rely thereon, (ii) a certificate of the Trustee, addressed
to the Purchasers, certifying that an attached copy of the Indenture,
as amended by the First Supplemental Indenture, is a true, correct and
complete copy thereof and is in full force and effect, and (iii) a
certificate of the registered holder of each Note Unit Certificate or
Note Certificate that is Outstanding under the Indenture, certifying
that the legend required under Section 201 of the Indenture has been
placed thereon and attaching a copy thereof, showing such legend.
(d) A Global Amendment to Collateral Documents
in substantially the form of Exhibit C attached hereto, duly executed
by the
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Company, the Subsidiary Guarantors and the Trustee, together with (i) a
certificate of the Trustee in the form of Exhibit D attached hereto,
(ii) mortgage amendments in the form of Exhibits E-1, E-2 and E-3
attached hereto, duly executed, delivered and acknowledged by the
Trustee and Subsidiary Guarantors named therein as party thereto, and
(iii) an amendment to each financing statement on file against the
Company or any Subsidiary Guarantor in any public office that names the
Trustee as secured party, stating that ▇▇▇▇▇ Fargo Bank, N.A. is the
successor Trustee and Collateral Agent, setting forth an address of
▇▇▇▇▇ Fargo Bank, N.A. from which information concerning the security
interest may be obtained, and stating that the Trustee and Collateral
Agent also act as agent for all present and future holders of
$5,882,000 in principal amount of the Company's 13% Priority Secured
Notes due December 31, 1998 and certain related guaranties and
obligations.
(e) Legal opinion letters, dated the Closing
Date and addressed to the Purchasers, by:
(1) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel
for the Company and the Subsidiary Guarantors, in
substantially the form of Exhibit F attached hereto.
(2) Schreck, Jones, Bernhard, Woloson &
▇▇▇▇▇▇▇, Nevada counsel for the Company and the Subsidiary
Guarantors incorporated in the State of Nevada, in
substantially the form of Exhibit G attached hereto.
(3) The Company's counsel in the States
of Mississippi and Colorado, in substantially the form of
Exhibits H-1 and H-2, respectively, attached hereto.
(4) ▇▇▇▇ ▇▇▇▇▇, the Company's General
Counsel, in substantially the form of Exhibit I attached
hereto.
(5) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel
for the Purchasers, in substantially the form of Exhibit J
attached hereto.
(f) A certificate of the Chief Financial Officer
and Vice President and General Counsel of the Company, dated the
Closing Date, in substantially the form of Exhibit K attached hereto.
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(g) Certificates of the Secretary or an
Assistant Secretary of the Company and each Subsidiary Guarantor,
certifying (i) copies of resolutions of the Board of Directors of the
Company or such Subsidiary Guarantor, as in effect on the Closing Date,
authorizing the execution, delivery and performance of this Agreement
and the other Priority Notes Documents, the issuance and sale of the
Priority Notes, and the consummation of transactions contemplated
thereby, (ii) copies of the articles of incorporation and by-laws of
the Company or such Subsidiary Guarantor, as in effect on the Closing
Date, and (iii) as to the incumbency and signatures of each officer of
the Company or such Subsidiary Guarantor who executed any document or
otherwise acted for it as to the documents and matters set forth in
this Section 3.
(h) A good standing certificate for the Company
and each Subsidiary Guarantor issued by the Secretary of State for the
State of Nevada and issued by the Secretary of State of the State of
Mississippi as to the good standing of Fitzgeralds Mississippi, Inc.
(i) A Receipt for Funding in substantially the
form of Exhibit L, duly executed by an authorized officer of the
Company and each Subsidiary Guarantor.
(j) Such additional documents and materials as
any Purchaser may reasonably request, including copies of any material
contracts to which the Company or any Subsidiaries is a party.
3.2 Legal Investment
Each Purchaser's acquisition of the Priority Notes shall
constitute a legal investment as of the Closing Date under the laws and
regulations and orders of each jurisdiction to which such Purchaser may be
subject (without resort to any "basket" or "leeway" provision which permits the
making of an investment without restriction as to the character of the
particular investment being made), and such acquisition shall not subject such
Purchaser to any penalty or, in its reasonable judgment, other onerous condition
in or pursuant to any such law, regulation or order; and such Purchaser shall
have received such certificates or other evidence as such Purchaser may
reasonably request to establish compliance with this condition.
3.3 Payment of Expenses
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The Company shall have paid or reimbursed all of the
Purchasers' expenses as provided in Section 2.6, including the reasonable fees
and disbursements of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ through the date of Closing, and shall
have paid the fee payable under Section 2.7.
3.4 Compliance with this Agreement
The Company and the Subsidiary Guarantors shall have performed
and observed all obligations, covenants and conditions contained in any of the
Priority Notes Documents which are required to be performed or observed by any
of them on or before the Closing Date.
3.5 Compliance with Laws
The offering, issuance and sale of the Priority Notes under
this Agreement shall be in compliance with all applicable requirements of
federal and state securities laws and the Company and the Subsidiary Guarantors
shall in all other respects have complied with all requirements of law
applicable to the authorization, execution, delivery and performance of the
Priority Notes Documents.
3.6 Representations and Warranties
Each statement, representation or warranty made in Section 4
or in any document delivered pursuant to Section 3.1 shall be true and correct
on and as of the Closing Date.
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3.7 No Default
No event which constitutes, or which upon the giving of notice
or lapse of time (or both) would constitute, an Event of Default shall have
occurred and be Continuing or would result from the issuance, sale or purchase
of the Priority Notes.
3.8 Proceedings Satisfactory
All proceedings taken in connection with the sale of the
Priority Notes, the transactions contemplated hereby, and all documents and
papers relating thereto, shall be reasonably satisfactory to each Purchaser.
Each Purchaser and its counsel shall have received copies of such documents and
papers as they may reasonably request in connection therewith, or that are
relied on or referred to in any certificates or opinions delivered at the
Closing, all of which shall be in form and substance reasonably satisfactory to
such Purchaser. Any document annexed to this Agreement or any other document
contemplated by this Agreement not approved by any Purchaser in writing as to
form and substance on the date this Agreement is executed shall be satisfactory
in form and substance to such Purchaser.
3.9 No Legal Proceedings
There shall be no action, suit, investigation or proceeding
pending or, the knowledge of the Company, any of its Subsidiaries or any
Purchaser, threatened against or affecting the Company or any of its
Subsidiaries or any Purchaser or any of their respective properties or rights or
any of their respective Affiliates, Account Managers, associates, funds,
officers or directors, before any court, arbitrator, administrative agency or
governmental authority which (i) seeks to restrain, enjoin, prevent the
consummation of or otherwise affect the transactions contemplated hereby or (ii)
questions the validity or legality of any such transactions or seeks to recover
damages or obtain other relief relating to any such transactions.
3.10 No Material Adverse Change
No event or series of events shall have occurred since
December 31, 1995, other than events disclosed in the Company's Quarterly
Reports on Form 10-Q (or Form 10Q/A) filed for the first three quarters of 1996,
that have had, or could reasonably be expected to have, a Material Adverse
Effect.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SUBSIDIARY
GUARANTORS
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Each of the Company and the Subsidiary Guarantors represents
and warrants, jointly and severally, as follows:
4.1 Organization; Corporate Power
Each of the Company and Subsidiary Guarantors is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada or, in the case of Fitzgeralds Mississippi, Inc., the State of
Mississippi, and has all requisite corporate power and authority to own or lease
and operate its property, to carry on its business as now conducted and to enter
into this Agreement and the other Priority Notes Documents and to issue and sell
the Priority Notes and to carry out the transactions contemplated hereby and
thereby.
4.2 Good Standing
The Company and each of its Subsidiaries is in good standing
wherever necessary to carry on its present business and operations, except in
jurisdictions in which the failure to be in good standing has not had, would not
have, and could not reasonably be expected to have, a Material Adverse Effect.
4.3 Business
The Company and its Subsidiaries are engaged only in the
businesses described in the Prospectus or the Company's Annual Report on Form
10-K for the year ended December 31, 1995, have conducted and are conducting
such business in substantial compliance with all applicable laws and own or hold
under lease all property, have entered into all contracts and agreements, and
hold all required Gaming Licenses, necessary to conduct such businesses as
presently conducted.
4.4 Subsidiaries
All of the Company's existing Subsidiaries are identified on
Schedule 4.4. All of the outstanding capital stock of each such Subsidiary has
been duly authorized and validly issued and is fully paid and nonassessable and
such shares of capital stock are free and clear of any claim, Lien, encumbrance
or agreement with respect thereto, other than the Liens granted to the Trustee
or Collateral Agent pursuant to the Collateral Documents. Schedule 4.4 correctly
sets forth the ownership of the stock of the Company and each of its
Subsidiaries.
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4.5 Authorization of Financing
The execution, delivery and performance of this Agreement and
the other Priority Notes Documents, the issuance, sale, delivery and payment of
the Priority Notes, and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action by the
Company and each Subsidiary Guarantor.
4.6 No Conflict
The execution, delivery and performance by the Company and
each Subsidiary Guarantor of each Priority Notes Document to which it is a party
and the issuance, sale, delivery and payment of the Priority Notes and, in each
case, the consummation of the transactions contemplated thereby, do not and will
not (i) violate the certificate of incorporation or bylaws of the Company or any
of its Subsidiaries, or any order, judgment or decree of any court or other
agency of government binding upon any the Company or any of its Subsidiaries,
(ii) violate any provision of law, or any rules or regulations of any
governmental authority, applicable to the Company or any of its Subsidiaries,
(iii) violate, conflict with, result in a material breach of or constitute (with
notice or lapse of time or both) a default under (A) any Gaming License, (B) any
indenture, mortgage or agreement governing or relating to the terms on which any
Indebtedness of the Company or any Restricted Subsidiary was incurred, is
secured or must be repaid, (C) any ground lease or other lease by which the
Company or a Restricted Subsidiary has the right to possess casino or hotel
space, (D) any lease of slot machines or gaming equipment, (E) the Main Street
Option Agreement, or (F) any other agreement to which the Company or any of its
Subsidiaries is a party or by which any of their property is bound, other than
agreements ("Immaterial Agreements") under which it acquires readily replaceable
goods or services or the loss of which and any liability on which could not
reasonably be expected to have a Material Adverse Effect, (iv) other than Liens
granted to the Trustee or Collateral Agent pursuant to the Priority Notes
Collateral Documents, result in or require the creation or imposition of any
Lien (other than Permitted Liens) upon any property of the Company or any of its
Subsidiaries, or (v) require any approval or consent of stockholders of the
Company or any of its Subsidiaries or require any approval or consent of any
Person under any indenture, mortgage, instrument, contract or other agreement,
except Immaterial Agreements, to which the Company or any of its Subsidiaries is
a party or by which any of their property is bound.
4.7 Governmental Approvals
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Except as otherwise set forth on Schedule 4.7, the execution,
delivery and performance by the Company and each Subsidiary Guarantor of each
Priority Notes Document to which it is a party and the issuance, sale, delivery
and payment of the Priority Notes by the Company and the consummation of the
transactions contemplated hereby and thereby and the creation, perfection, and
prioritization of Liens upon all Collateral to secure Priority Note Obligations
pursuant to the Priority Notes Collateral Documents, do not and will not require
any registration or filing with, consent or approval of, or notice to, or other
action to, with or by, any foreign or domestic federal, state or other
governmental authority or regulatory body.
4.8 Due Execution and Delivery; Binding Obligations
This Agreement has been duly executed and delivered by the
Company and the Subsidiary Guarantors and, at the Closing, each other Priority
Notes Document then delivered pursuant to Section 3.1 will have been duly
executed and delivered by the Company and the Subsidiary Guarantors and each
other Person identified therein as a signatory party thereto, other than the
Purchasers. This Agreement is, and, at the time of the Closing, the Priority
Notes and each such other Priority Notes Document will be, the legal, valid and
binding obligation of the Company, the Subsidiary Guarantors and each such other
signatory party thereto, other than the Purchasers, enforceable against each of
them in accordance with their respective terms, except for (i) the effect
thereon of bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting the rights of creditors generally, (ii)
limitations imposed by federal or state law or equitable principles upon the
specific enforceability of any of the remedies, covenants or other provisions
thereof and upon the availability of injunctive relief or other equitable
remedies and (iii) the effect of general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing, regardless
of whether considered in a proceeding in equity or at law.
4.9 Securities Law Exemption
The offering, issuance and sale of the Priority Notes
hereunder are exempt from the registration and prospectus delivery requirements
of the Securities Act and from all registration and qualification requirements
under applicable state securities laws. With respect to the offering, issuance
and sale of the Priority Notes, no form of general solicitation or general
advertising was used by the Company or any Person acting for it as agent,
broker, dealer or otherwise in connection with the offering or sale of the
Priority Notes, including advertisements, 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
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by any general solicitation or general advertising. The Purchasers are the sole
purchasers of the Priority Notes. No securities of the same class as the
Priority Notes have been issued and sold by the Company within the six-month
period immediately prior to the date hereof. The Company understands that, for
purposes of rendering the legal opinions to be delivered pursuant to Section
3.1, the Company's counsel and special counsel to the Purchasers will rely on
the accuracy and truth of the foregoing representations, and the Company hereby
consents to such reliance.
4.10 First Supplemental Indenture
As of the Closing, the amendments made to the Indenture
pursuant to the First Supplemental Indenture are in full force and effect and
binding upon the Company, the Subsidiary Guarantors, the Trustee and all present
and future Holders of all Outstanding Notes.
4.11 Liens Securing Priority Note Obligations
As of the Closing, (i) the provisions of the Indenture and all
Priority Notes Collateral Documents delivered at the Closing are effective to
create legally enforceable Liens upon all of the Collateral to secure the
Priority Note Obligations, except as otherwise set forth in the last paragraph
of Section 1202(b) of the Indenture, (ii) such Liens are duly perfected as
against all subsequent Lien creditors and bona fide purchasers of the Collateral
or any such other property, except that mortgage amendments in the forms of
Exhibits E-1, E-2 and E-3 must be filed for record in order to perfect the Liens
created thereby (and will be filed promptly after the Closing) and except for
buyers of inventory in the ordinary course of business, (iii) no further actions
are required in order to perfect and maintain the perfection of such Liens upon
any and all of the Collateral or such other property, except for (x) the filing
of such mortgages for record, (y) maintenance of possession of pledged
Collateral by the Trustee or Collateral Agent or an agent acting for either of
them, and (z) the filing of continuation statements when required under the
Uniform Commercial Code, (iv) such Liens are first and prior Liens, and (v) the
provisions added to Section 1202(b) of the Indenture pursuant to the First
Supplemental Indenture are enforceable in accordance with their terms.
4.12 Financial Condition; Ownership of Property
The consolidated balance sheets of the Company and its
Subsidiaries at December 31, 1995 and the related consolidated statements of
income and cash flows, which have been examined by Deloitte & Touche, LLP, who
delivered an unqualified
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opinion with respect thereto, and the unaudited consolidated balance sheets and
related statements of income and cash flows of the Company and its Subsidiaries
as at the last day of each of the first three fiscal quarters of 1996 and the
related consolidated statements of income and cash flows for periods then ended
contained in the Company's Quarterly Reports on Form 10-Q (or Form 10-Q/A) for
such periods, were prepared in conformity with GAAP. All such financial
statements fairly present the consolidated financial position of the Company and
its Subsidiaries as at the respective dates thereof and the consolidated results
of operations and cash flows of the Company and its Subsidiaries for each of the
periods covered thereby, subject, in the case of any unaudited interim financial
statements, to changes resulting from normal year-end adjustments. Neither the
Company nor any of its Subsidiaries has any contingent liability or any
liability for taxes, long-term lease or forward or long-term commitment that is
not reflected in such financial statements or the notes thereto. The Company and
its Subsidiaries have good and valid fee title to its real property owned in fee
and a valid leasehold interest in its leased real property and valid title to or
beneficial ownership of all their other respective property reflected in such
financial statements, or the notes thereto, except for assets acquired or
disposed of in transactions that are permitted under the Indenture and except
for such defects to title that are disclosed in the title insurance policies
delivered to the Trustee to secure the Liens granted under the Collateral
Documents or that have not had, do not have, and could not reasonably be
expected to have a Material Adverse Effect. All such properties and assets are
free and clear of Liens other than Permitted Liens. The Company and its
Subsidiaries have quiet enjoyment, as sole lessee, under all of their real
property leases. All of such leases are in full force and effect and are valid
and enforceable in accordance with their terms (except for (i) the effect
thereon of bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting the rights of creditors generally, (ii)
limitations imposed by federal or state law or equitable principles upon the
specific enforceability of any of the remedies, covenants or other provisions
thereof and upon the availability of injunctive relief or other equitable
remedies and (iii) the effect of general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing, regardless
of whether considered in a proceeding in equity or at law), and no monetary or
other material default exists under any of them.
4.13 Litigation; Adverse Facts
Except as described in the Company's Annual Report on Form
10-K for the year ended December 31, 1995 or Quarterly Reports on Form 10-Q (or
Form 10-Q/A) for the first three quarters of 1996, there is no governmental
investigation of which the Company or any of its Subsidiaries has or could
reasonably be expected to have knowledge, and there is no action, suit,
proceeding, governmental arbitration
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(whether or not purportedly on behalf of the Company or any of its Subsidiaries)
at law or in equity or before or by any federal, state, municipal or
governmental department, court, tribunal, commission, board, bureau, agency or
instrumentality, domestic or foreign, threatened and about which the Company or
any of its Subsidiaries has or could reasonably be expected to have knowledge,
or pending against or affecting any the Company or any of its Subsidiaries or
any of their respective properties which in the aggregate have or, if determined
adversely to the Company or its Subsidiaries (except where, in the opinion of
the Company's counsel, an adverse determination is improbable), would have a
Material Adverse Effect. No such investigation, proceeding or matter is pending
or has been overtly threatened by any Gaming Authority which considers or seeks,
or (if adversely determined) might be expected to lead to, denial, revocation or
suspension of any Gaming License. Neither the Company nor any of its
Subsidiaries has received any notice of default under, or notice of termination
of, any material contract, lease or other agreement or suffered any material
damage, destruction or loss (whether or not covered by insurance) or had any
employee strike, work-stoppage, slow-down or lock-out or received any overt
threat thereof that in any case, individually or in the aggregate, would have or
could reasonably be expected to have a Material Adverse Effect.
4.14 Payment of Taxes
All tax returns and reports of the Company and each of its
Subsidiaries required to be filed by any of them have been duly and timely
filed. All taxes, assessments, fees and other governmental charges upon the
Company and each of its Subsidiaries and upon any of their respective
properties, income and franchises that are due and payable have been paid when
due and payable, and there is no tax assessment pending against any of them.
4.15 No Indenture Defaults; Main Street Option Agreement in Effect.
No Default or Indenture Event of Default has occurred at any
time since December 19, 1995. The Main Street Option Agreement has not been
amended since the date of the Indenture and remains in full force and effect and
Fitzgeralds Black Hawk, Inc. owns and holds all rights thereunder, subject to
the Liens created by the Collateral Documents. Fitzgeralds Black Hawk, Inc. owns
22% of the membership interests in Main Street, subject only to the Liens
created by the Collateral Documents. Such membership interests are duly issued,
fully paid and nonassessable.
4.16 Las Vegas and Tunica Expansions
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The Fitzgeralds Las Vegas Expansion and the Fitzgeralds Tunica
Expansion have been completed, except for punchlist items which require the
completion or correction of minor aspects of the construction work. Except for
the unpaid costs listed on Schedule 4.16(a), all Project Costs at any time
incurred for the Fitzgeralds Las Vegas Expansion and the Fitzgeralds Tunica
Expansion have been paid and appropriate lien waivers therefor have been
delivered by the payee. Except for the claims and liens described on Schedule
4.16(b), no mechanics or materialsmens liens have been filed against any
property that is part of Fitzgeralds Las Vegas or Fitzgeralds Tunica. There
remains available for funding of Project Costs the sum of $4,520,947 in cash in
reserve for payment of Project Costs.
4.17 Governmental Regulation
Neither the Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1934, the Federal
Power Act, or the Investment Company Act of 1940, each as amended, or to any
other foreign or domestic federal or state statute or regulation (including any
applicable laws or regulations under the Interstate Commerce Act) limiting its
ability to incur Indebtedness or to create Liens on any of its properties or
assets to secure debt, except gaming laws.
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4.18 Disclosure
The statements made in the Prospectus, in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995 and Quarterly Reports
on Form 10-Q (or Form 10-Q/A) for the first three quarters of 1996, and in the
Company's Solicitation of Consents of Holders dated December 23, 1996 were true
in all material respects on the date such statements were made. No such
statements, and no other statement, representation or warranty of the Company or
any of its Subsidiaries contained in this Agreement, any Priority Notes Document
or any other document, certificate, schedule or other writing furnished to the
Purchasers at the Closing by or on behalf of the Company or any of its
Subsidiaries, contained or will contain any untrue statement of a material fact
or omitted to state a material fact at the time it was or is made or furnished,
as the case may be, necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same were
or are made and, to the best knowledge of each of the Company, no such
representation or warranty contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. There is no fact known to the Company or any of its
Subsidiaries that has had, would have or could reasonably be expected to have a
Material Adverse Effect that has not been disclosed therein or herein.
4.19 Licenses, Permits and Authorizations
The Company and its Subsidiaries have all approvals, licenses
and other permits of all governmental or regulatory agencies, whether foreign,
domestic, federal, state or local, including Gaming Licenses, the absence of
which could materially impair the operations of any business of the Company or
any such Subsidiary as it is presently being conducted or would have or could
reasonably be expected to have a Material Adverse Effect.
4.20 Hazardous Materials
Neither the Company nor any of its Subsidiaries and, to the
best of their knowledge, after due inquiry, no predecessor in title to any of
their property, nor any third person at any time occupying, adjacent to or
present on any property owned or leased by any of them has at any time used,
generated, disposed of, discharged, stored, transported to or from, released or
threatened the release of any hazardous materials, in any form, quantity or
concentration, on, from, under or affecting such property, and no
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hazardous materials are present or existing on, from, under or affecting any
such property.
4.21 Margin Stock
None of the Collateral consists of "margin stock," and no
proceeds of the issuance and sale of the Priority Notes will be used to purchase
or carry "margin stock," as that term is defined in or for purposes of
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System.
4.22 Permitted Intercompany Notes
As of the Closing Date, (i) Fitzgeralds Las Vegas, Inc. is
indebted to the Company (without defense, offset or counterclaim) in a principal
amount of $43,998,501, which includes $16,000,000 in Permitted Intercompany
Loans made to Fitzgeralds Las Vegas, Inc. by funding disbursed from and
available for disbursement from the Las Vegas Collateral Account, and such
indebtedness is evidenced by that certain Permitted Intercompany Note dated
December 19, 1995 pledged to and held by the Trustee as part of the Priority
Notes Collateral and is secured by Liens upon the real and personal property
comprising the assets of Fitzgeralds Las Vegas (other than Excluded Assets)
which are held and enforceable by the Trustee as security for the Priority Note
Obligations on a first and prior basis, and (ii) Fitzgeralds Mississippi, Inc.
is indebted to the Company (without defense, offset or counterclaim) in a
principal amount of $70,875,828, which includes $34,000,000 in Permitted
Intercompany Loans made to Fitzgeralds Mississippi, Inc. by funding disbursed
from and available for disbursement from the Tunica Collateral Account, and such
indebtedness is evidenced by that certain Permitted Intercompany Note dated
December 19, 1995 pledged to and held by the Trustee as part of the Collateral
and is secured by Liens upon the real and personal property comprising the
assets of Fitzgeralds Tunica (other than Excluded Assets) which are held and
enforceable by the Trustee as security for the Priority Note Obligations on a
first and prior basis.
4.23 Brokers
The Company has not dealt with any broker, finder, commission
agent or other Person in connection with the sale of the Priority Notes and the
transactions contemplated by this Agreement and the Company is not under any
obligation to pay any broker's or finder's fee or commission or similar payment
in connection with such transactions. The Company has not paid and is not
obligated to pay any fee or compensation to any Person for soliciting the
consent of Holders to the First
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Supplemental Indenture. The Company agrees to indemnify and hold the Purchasers
harmless from and against any and all actions, suits, claims, costs, expenses,
losses, liabilities and obligations in connection with or relating to any
broker's or finder's fee or commission or similar payment in connection with
such transactions, except with respect to such fees or commissions contracted by
any Purchaser for its account.
4.24 Solvency
Neither the Company nor any of its Subsidiaries is or will be,
after giving effect to the issuance of the Priority Notes and the execution,
delivery and performance of the Priority Notes Documents, insolvent or left with
unreasonably small capital with which to engage in its anticipated business.
Based on Company management's reasonable future projections as to the financial
performance of the Company and its Subsidiaries, neither the Company nor any of
its Subsidiaries has, or will have after giving effect to the issuance of the
Priority Notes and the execution, delivery and performance of the Priority Notes
Documents, incurred debts beyond its ability to pay such debts as they mature.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER
Each Purchaser represents and warrants to the Company,
severally as to such Purchaser only and not jointly with any other Purchaser,
that:
5.1 Purchase for Own Account
Such Purchaser or its Account Manager is purchasing the
Priority Notes to be purchased by it solely for such Purchaser's own account (or
in the case of Account Managers, on behalf of managed accounts) and not as
nominee or agent for any other person (other than for any such managed accounts)
and not with a view to, or for offer or sale in connection with, any
distribution thereof (within the meaning of the Securities Act) that would be in
violation of the securities laws of the United States of America or any state
thereof, without prejudice, however, to its right at all times to sell or
otherwise dispose of all or any part of the Priority Notes pursuant to a
registration statement under the Securities Act or pursuant to an exemption from
the registration requirements of the Securities Act, and subject, nevertheless,
to the disposition of its property being at all times within its control.
5.2 Accredited Investor
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Such Purchaser or such Account Manager is knowledgeable,
sophisticated and experienced in business and financial matters. It previously
invested in securities similar to the Priority Notes. It acknowledges that the
Priority Notes have not been registered under the Securities Act and understands
that the Priority Notes must be held indefinitely unless they are subsequently
registered under the Securities Act or such sale is permitted pursuant to an
available exemption from such registration requirement. It (or, in the case of
an Account Manager, the managed account on behalf of which the Account Manager
is acting) is able to bear the economic risk of its investment in the Priority
Notes and is presently able to afford the complete loss of such investment. It
is an "accredited investor" as defined in Regulation D promulgated under the
Securities Act. It has been afforded access to information about the Company's
financial condition, results of operations, business, property, management and
prospects sufficient to enable it to evaluate its investment in the Priority
Notes. Such Purchaser or such Account Manager acknowledges that it has conducted
its own analysis of the Company's financial condition and other foregoing
factors and such Purchaser has not relied upon the analysis of any other
Purchaser in determining to make an investment in the Priority Notes.
5.3 Authorization
Such Purchaser has taken all actions necessary to authorize it
(or, in the case of an Account Manager, such Account Manager is duly authorized
by the managed account for which it is acting) to execute, deliver and perform
its obligations under this Agreement. This Agreement is a legally valid and
binding obligation of each Purchaser enforceable against it in accordance with
its terms, except for (i) the effect thereon of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting the
rights of creditors generally, (ii) limitations imposed by federal or state law
or equitable principles upon the specific enforceability of any of the remedies,
covenants or other provisions thereof and upon the availability of injunctive
relief or other equitable remedies and (iii) the effect of general principles of
equity, including concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law.
SECTION 6. COVENANTS
The Company and each of the Subsidiary Guarantors covenant and
agree that, until Discharge of the Priority Obligations:
6.1 Additional Guarantors
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Whenever any Subsidiary of the Company which is not, on the
Closing Date, a Subsidiary Guarantor, becomes required (under the Indenture) to
execute and deliver an Addendum to Subsidiary Guarantee, such Subsidiary will at
the same time execute and deliver to the then registered holders of the Priority
Notes an addendum to this Agreement by which such Subsidiary guarantees the
Guaranteed Obligations as set forth in Section 7 (subject, in the case of Main
Street, to the provisions of Section 1309 of the Indenture) and agrees to be
bound by each and all of the representations, warranties, covenants and
obligations binding on a Subsidiary Guarantor hereunder. Such addendum shall be
accompanied (if and to the extent requested by any holder of Priority Notes) by
each and all of the documents and assurances delivered by or relating to such
Subsidiary which would have been required to be delivered at the Closing
pursuant to Section 3.1, if such Subsidiary Guarantor had been a Subsidiary
Guarantor on the Closing Date. After delivery of such addendum, the term
"Subsidiary Guarantor" shall extend to and include such Subsidiary.
6.2 Indenture Covenants
The Company and each Subsidiary Guarantor will duly and
punctually perform and observe each and all of the covenants, agreements and
obligations set forth in Article Eight, Article Ten, Article Twelve and Article
Sixteen of the Indenture, on the terms and conditions and in the form in effect
at the Closing Date without giving effect to any subsequent amendment thereto,
waiver thereunder or discharge thereof, except any amendment or waiver expressly
approved in writing in accordance with Section 9.
6.3 Note Documents
Neither the Company nor any Subsidiary Guarantor will agree to
any modification, amendment, termination, release or other discharge of or
change in the Indenture, the Collateral Documents or any other Note Documents
except upon express prior written consent of the Required Priority Noteholders,
given in accordance with Section 9.
6.4 Use of Proceeds
The proceeds of the Purchase Price will be delivered to and
used as set forth in the Receipt for Funding delivered pursuant to Section
3.1(i).
6.5 Waivers of Defenses and Setoff Rights
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Each of Fitzgeralds Las Vegas, Inc., Fitzgeralds Mississippi,
Inc. and any other Subsidiary Guarantor which is the obligor on a Permitted
Intercompany Note acknowledges and agrees that (for as long as the Permitted
Intercompany Notes are pledged to secure Priority Note Obligations or any
Secured Obligations) it will not plead, interpose or otherwise in any manner
assert or enforce any defense, setoff, counterclaim or any other right, claim or
interest enforceable by it against the Company or any of the Company's
Subsidiaries or Affiliates (whether based on a contract, tort, duty imposed by
law, fiduciary duty or other legal obligation or any other theory of liability
and whether related to any breach, crime, wrongful conduct or any other act,
omission, event or circumstance of any and every type and description whenever
occurring), in any action by the Trustee or Collateral Agent (or the successor
or transferee of either of them) to collect any Permitted Intercompany Note or
Permitted Intercompany Loan or to foreclose upon or enforce any Lien securing
any Permitted Intercompany Note or Permitted Intercompany Loan or in any other
action or proceeding (whether for declaratory judgment or otherwise) by or
against the Trustee or Collateral Agent (or any such successor or transferee) in
any manner relating to the Collateral or the foreclosure or enforcement of any
Lien thereon.
6.6 Private Placement Number
The Company consents to the filing of copies of this Agreement
with Standard & Poor's Corporation to obtain a private placement number and with
the National Association of Insurance Commissioners.
SECTION 7. GUARANTIES
7.1 Subsidiary Guaranties
The Subsidiary Guarantors unconditionally and jointly and
severally guaranty and promise to pay to the holders of Priority Note
Obligations and Senior Claims (each a "Beneficiary"), on demand made at any time
while any Event of Default is Continuing, in lawful money of the United States
of America, any and all Guaranteed Obligations of the Company from time to time
owed to the Beneficiaries. The term "Guaranteed Obligations" means any and all
present and future obligations and liabilities of the Company of every type and
description to the Beneficiaries under the Priority Notes, the Priority Notes
Agreenent or any of the other Priority Notes Documents, whether for principal,
premium (if any), interest, expenses, indemnities or other amounts, in each case
whether due or not due, absolute or contingent, voluntary or involuntary,
liquidated or unliquidated, determined or undetermined, now or hereafter
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existing, renewed or restructured, whether or not from time to time decreased or
extinguished and later increased, created or incurred, whether or not arising
after the commencement of a proceeding under the Bankruptcy Code (including
post-petition interest) and whether or not allowed or allowable as a claim in
any such proceeding, and whether or not recovery of any such obligation or
liability may be barred by a statute of limitations or such obligation or
liability may otherwise be unenforceable. All Guaranteed Obligations shall be
conclusively presumed to have been created in reliance on the foregoing
guaranty, which is a continuing guaranty of the Guaranteed Obligations and,
except as otherwise provided in Section 1019(f) of the Indenture, may not be
revoked and shall not otherwise terminate unless and until any and all
Guaranteed Obligations have been indefeasibly paid and performed in full.
7.2 Nature of Guaranty
The liability of each Subsidiary Guarantor under Section 7.1
(or any addendum delivered by it pursuant to Section 6.1) is independent of and
not in consideration of or contingent upon the liability of the Company or any
other Obligor and a separate action or actions may be brought and prosecuted
against any Subsidiary Guarantor, whether or not any action is brought or
prosecuted against the Company or any other obligor or whether the Company or
any other obligor is joined in any such action or actions. The guaranty given by
each Subsidiary Guarantor pursuant to Section 7.1 (or such addendum) shall be
construed as a continuing, absolute and unconditional guaranty of payment (and
not merely of collection) without regard to:
(a) the legality, validity or enforceability of the
Priority Notes, this Agreement or any other Priority Notes Document,
any of the Guaranteed Obligations, any Lien or Collateral or the
guaranty given by any other Subsidiary Guarantor;
(b) any defense (other than payment), set-off or
counterclaim that may at any time be available to the Company or any
other obligor against, and any right of setoff at any time held by, any
Beneficiary; or
(c) any other circumstance whatsoever (with or
without notice to or knowledge of any Subsidiary Guarantor or any other
obligor), whether or not similar to any of the foregoing, that
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Company or any other obligor, in bankruptcy or in any
other instance.
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Any payment by the Company or any Subsidiary Guarantor or any
other Person obligated in respect of any of the Guaranteed Obligations or any
other circumstance that operates to toll any statute of limitations applicable
to the Company, any Subsidiary Guarantor or any such other Person shall also
operate to toll the statute of limitations applicable to the Company and each
Subsidiary Guarantor.
7.3 Authorization
Each Subsidiary Guarantor authorizes each Beneficiary, without
notice to or further assent by such Subsidiary Guarantor, and without affecting
any Subsidiary Guarantor's liability hereunder (regardless of whether any
subrogation or similar right that such Subsidiary Guarantor may have or any
other right or remedy of such Subsidiary Guarantor is extinguished or impaired),
from time to time to do any or all of the following:
(a) permit the Company to increase or create
Guaranteed Obligations, or terminate, release, compromise, subordinate,
extend, accelerate or otherwise change the amount or time, manner or
place of payment of, or rescind any demand for payment or acceleration
of, the Guaranteed Obligations or any part thereof, consent or enter
into supplemental indentures or otherwise amend the terms and
conditions of the Priority Notes Documents or any provision thereof;
(b) take and hold Collateral from the Company or any
other Person, perfect or refrain from perfecting a Lien on such
Collateral, and exchange, enforce, subordinate, release (whether
intentionally or unintentionally), or take or fail to take any other
action in respect of, any such Collateral or Lien or any part thereof;
(c) exercise in such manner and order as it elects in
its sole discretion, fail to exercise, waive, suspend, terminate or
suffer expiration of, any of the remedies or rights of such Beneficiary
against the Company or any other obligor in respect of any Guaranteed
Obligations or any Collateral;
(d) release, add or settle with the Company, any
Subsidiary Guarantor or any other obligor in respect of any of the
Guaranteed Obligations or any guaranty thereof or other obligation in
respect thereof;
(e) accept partial payments on the Guaranteed
Obligations and apply any and all payments or recoveries from any
obligor or Collateral to such of
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the Guaranteed Obligations as any Beneficiary may elect in its sole
discretion, whether or not such Guaranteed Obligations are secured or
guaranteed;
(f) refund at any time, at such Beneficiary's
sole discretion, any payments or recoveries received by such
Beneficiary in respect of any Guaranteed Obligations or Collateral; and
(g) otherwise deal with the Company, any other
Subsidiary Guarantor, any other Person obligated in respect of the
Guaranteed Obligations and any Collateral as such Beneficiary may elect
in its sole discretion.
7.4 Certain Waivers
Each Subsidiary Guarantor waives:
(a) the right to require the Beneficiaries to
proceed against the Company, any other Subsidiary Guarantor or any
other Person obligated in respect of the Guaranteed Obligations or to
proceed against or exhaust any Collateral or to pursue any other remedy
in any Beneficiary's power whatsoever and the right to have the
property of the Company, any other Subsidiary Guarantor or any such
other obligor first applied to the discharge of the Guaranteed
Obligations;
(b) all rights and benefits under applicable law
purporting to reduce a guarantor's obligations in proportion to the
obligation of the principal or providing that the obligation of a
surety or guarantor must neither be larger nor in other respects more
burdensome than that of the principal;
(c) the benefit of any statute of limitations
affecting the Guaranteed Obligations or any Subsidiary Guarantor's
liability hereunder;
(d) any requirement of marshaling or any other
principle of election of remedies;
(e) any right to assert against any Beneficiary
any defense (legal or equitable), set-off, counterclaim and other right
that any Subsidiary Guarantor may now or any time hereafter have
against the Company, any other Subsidiary Guarantor or any such other
obligor;
(f) presentment, demand for payment or
performance (including diligence in making demands hereunder), notice
of dishonor or nonperformance,
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protest, acceptance and notice of acceptance of this Subsidiary
Guarantee, and, except to the extent expressly required by the Priority
Notes Documents, all other notices of any kind, including (i) notice of
any action taken or omitted by the Beneficiaries in reliance hereon,
(ii) notice of any default by the Company, any other Subsidiary
Guarantor or any such other obligor, (iii) notice that any portion of
the Guaranteed Obligations is due, (iv) notice of any action against
the Company, any other Subsidiary Guarantor or any such other obligor,
or any enforcement of other action with respect to any Collateral, or
the assertion of any right of any Beneficiary hereunder;
(g) all defenses that at any time may be
available to any Subsidiary Guarantor by virtue of any valuation, stay,
moratorium or other law now or hereafter in effect; and
(h) to the extent provided under Section 40.495
of Nevada Revised Statutes ("N.R.S."), the applicable provisions of
N.R.S. Section 40.430 and applicable laws of the State of Mississippi.
7.5 No Subrogation; Certain Agreements
(a) EACH SUBSIDIARY GUARANTOR WAIVES ANY AND ALL
RIGHTS OF SUBROGATION, INDEMNITY OR REIMBURSEMENT, AND ANY AND ALL
BENEFITS OF AND RIGHTS TO ENFORCE ANY POWER, RIGHT OR REMEDY THAT ANY
BENEFICIARY MAY NOW OR HEREAFTER HAVE IN RESPECT OF THE GUARANTEED
OBLIGATIONS AGAINST THE COMPANY OR ANY OTHER OBLIGOR (OTHER THAN RIGHTS
OF CONTRIBUTION FROM OTHER SUBSIDIARY GUARANTORS), ANY AND ALL BENEFITS
OF AND RIGHTS TO PARTICIPATE IN ANY COLLATERAL, WHETHER REAL OR
PERSONAL PROPERTY, NOW OR HEREAFTER HELD BY ANY BENEFICIARY, AND ANY
AND ALL OTHER RIGHTS AND CLAIMS (AS DEFINED IN THE BANKRUPTCY CODE) ANY
SUBSIDIARY GUARANTOR MAY HAVE AGAINST THE COMPANY, UNDER APPLICABLE LAW
OR OTHERWISE, AT LAW OR IN EQUITY, BY REASON OF ANY PAYMENT UNDER THE
SUBSIDIARY GUARANTEE, UNLESS AND UNTIL THE GUARANTEED OBLIGATIONS SHALL
HAVE BEEN PAID IN FULL.
(b) Each Subsidiary Guarantor assumes the
responsibility for being and keeping itself informed of the financial
condition of the Company, each
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other Subsidiary Guarantor and each other Person at any time obligated
in respect of the Guaranteed Obligations and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations or
the Subsidiary Guarantee of any other Subsidiary Guarantor that
diligent inquiry would reveal, and agrees that the Beneficiaries shall
have no duty to advise any Subsidiary Guarantor of information
regarding such condition or any such circumstances.
7.6 Bankruptcy No Discharge
(a) Without limiting Section 7.2, the liability
of any Subsidiary Guarantor under Section 7.1 (or any addendum executed
and delivered by it pursuant to Section 6.1) shall not be discharged or
otherwise affected by any bankruptcy, reorganization or similar
proceeding commenced by or against the Company or any other Subsidiary
Guarantor or any other Person obligated in respect of the Guaranteed
Obligations, including (i) any discharge of, or bar or stay against
collecting, all or any part of the Guaranteed Obligations in or as a
result of any such proceeding, whether or not assented to by any
Beneficiary, (ii) any disallowance of all or any portion of any
Beneficiary's claim for repayment of the Guaranteed Obligations, (iii)
any use of cash or other collateral in any such proceeding, (iv) any
agreement or stipulation as to adequate protection in any such
proceeding, (v) any failure by any Beneficiary to file or enforce a
claim against the Company, any Subsidiary Guarantor or any such other
obligor or its estate in any bankruptcy or reorganization case, (vi)
any amendment, modification, stay or cure of any Beneficiary's rights
that may occur in any such proceeding, (vii) any election by any
Beneficiary under Section 1111(b)(2) of the Bankruptcy Code, or (viii)
any borrowing or grant of a Lien under Section 364 of the Bankruptcy
Code. Each Subsidiary Guarantor understands and acknowledges that by
virtue of its guaranty of the Guaranteed Obligations, it has
specifically assumed any and all risks of any such proceeding with
respect to the Company, any other Subsidiary Guarantor or any such
other obligor.
(b) Notwithstanding anything in this Section 7
to the contrary, any Event of Default shall render all Guaranteed
Obligations automatically due and payable for purposes of the liability
of each Subsidiary Guarantor under Section 7.1 (or any addendum
executed and delivered by it pursuant to Section 6.1), without demand
on the part of any Beneficiary, the Trustee, the Collateral Agent or
any other Person.
(c) Notwithstanding anything to the contrary
herein contained, the liability of each Subsidiary Guarantor under
Section 7.1 (or any addendum
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executed and delivered by it pursuant to Section 6.1), and all Liens on
the Collateral securing the Guaranteed Obligations, shall continue to
be effective or be reinstated, as the case may be, if at any time (i)
any payment, or any part thereof, of any or all of the Guaranateed
Obligations is rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be restored or returned by any
Beneficiary in connection with any bankruptcy, reorganization or
similar proceeding involving the Company, any other Subsidiary
Guarantor or any other Person or otherwise, (ii) the proceeds of any
Collateral are required to be returned by any Beneficiary under any
such circumstances, or (iii) any Beneficiary elects to return any such
payment or proceeds or any part thereof in its sole discretion, all as
though such payment had not been made or such proceeds not been
received.
7.7 Severability of Void Obligations under Subsidiary Guarantee
The obligations of any Subsidiary Guarantor hereunder shall be
limited to the maximum amount that would not render its obligations hereunder
subject to avoidance under Section 548 of the Bankruptcy Code or any applicable
provisions of comparable state law.
7.8 Right of Contribution
In order to provide for just and equitable contribution among
the Subsidiary Guarantors in connection with their guaranties of the Guaranteed
Obligations, the Subsidiary Guarantors have agreed among themselves that if any
Subsidiary Guarantor satisfies some or all of the Guaranteed Obligations (a
"Funding Subsidiary Guarantor"), the Funding Subsidiary Guarantor shall be
entitled to contribution from the other Subsidiary Guarantors that have positive
Maximum Net Worth (as defined below) for all payments made by the Funding
Subsidiary Guarantor in satisfying the Guaranteed Obligations, so that each
Subsidiary Guarantor that remains obligated under the Subsidiary Guarantee at
the time that a Funding Subsidiary Guarantor makes such payment (a "Remaining
Subsidiary Guarantor") and has a positive Maximum Net Worth shall bear a portion
of such payment equal to the percentage that such Remaining Subsidiary
Guarantor's Maximum Net Worth bears to the aggregate Maximum Net Worth of all
Remaining Subsidiary Guarantors that have positive Maximum Net Worth.
As used herein, "Net Worth" means, with respect to any
Subsidiary Guarantor, the amount, as of any date of calculation, by which the
sum of a Person's assets (including subrogation, indemnity, contribution,
reimbursement and similar rights that such Subsidiary Guarantor may have),
determined on the basis of a "fair valuation" or their "fair salable value"
(whichever is the applicable test under Section 548 and other
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relevant provisions of the Bankruptcy Code and the relevant state fraudulent
conveyance or transfer laws) is greater than the amount that will be required to
pay all of such Person's debts, in each case matured or unmatured, contingent or
otherwise, as of the date of calculation, but excluding liabilities arising
under the Subsidiary Guarantee and excluding, to the maximum extent permitted by
Applicable Law with the objective of avoiding rendering such Person insolvent,
liabilities subordinated to the Guaranteed Obligations arising out of loans or
advances made to such Person by any other Person. "Maximum Net Worth" means,
with respect to any Subsidiary Guarantor, the greatest of the Net Worths
calculated as of the following dates: (A) the date on which the Subsidiary
Guarantor becomes a Subsidiary Guarantor hereunder, (B) the date on which such
Subsidiary Guarantor expressly reaffirms the Subsidiary Guarantee, (C) the date
on which demand for payment is made on such Subsidiary Guarantor hereunder, (D)
the date on which payment is made by such Subsidiary Guarantor hereunder or (E)
the date on which any judgment, order or decree is entered requiring such
Subsidiary Guarantor to make payment hereunder or in respect hereof. The meaning
of the terms "fair valuation" and "fair salable value" and the calculation of
assets and liabilities shall be determined and made in accordance with the
relevant provisions of the Bankruptcy Code and applicable state fraudulent
conveyance or transfer laws.
7.9 Additional Subsidiary Guarantors
Each Subsidiary of the Company that executes and delivers an
addendum pursuant to Section 6.1 shall be a Subsidiary Guarantor as if such
Subsidiary had been a signatory to this Agreement, and no such addendum must be
executed and delivered by any other Subsidiary Guarantor or any other Person.
Each of the Company and the Subsidiary Guarantors hereby consents to any such
addendum, whether or not it receives notice thereof.
SECTION 8. DEFAULTS AND REMEDIES
8.1 Events of Default
Each of the following occurrences shall constitute an Event of
Default:
(1) Any Indenture Event of Default occurs, whether or not such
Indenture Event of Default is effectively waived by or on behalf of the Trustee
or the Holders of Outstanding Notes.
(2) The Company fails to pay when due the principal of the
Priority Notes, or any interest thereon, or any mandatory prepayment required
under Section
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2.5(b), or any optional prepayment of which the Company has given notice
pursuant to Section 2.5(c).
(3) Any statement, representation or warranty made in Section
4 proves to have been inaccurate, untrue or misleading in any material respect
when it was made.
(4) A Subsidiary of the Company fails to execute and deliver
any addendum which it is required to execute and deliver pursuant to Section
6.1, and such failure continues for ten Business Days after notice thereof is
given to the Company and the Trustee.
(5) The Company or any Subsidiary Guarantor fails to perform
any obligation set forth in this Agreement (other than those referred to
elsewhere in this Section 8.1) and such failure continues for ten Business Days
after notice thereof is given to the Company and the Trustee.
(6) The Trustee or Collateral Agent fails to hold lawful,
enforceable, duly perfected first priority Liens, as first and prior security
for the Priority Note Obligations, on (i) the Permitted Intercompany Note issued
by Fitzgeralds Las Vegas, Inc., secured by Liens on all of its property (except
Excluded Assets) that are effectively reprioritized pursuant to Section 1202(b)
of the Indenture, (ii) the Permitted Intercompany Note issued by Fitzgeralds
Mississippi, Inc., secured by Liens on all of its property (other than Excluded
Assets) that are effectively reprioritized pursuant to Section 1202(b) of the
Indenture, (iii) all interest of Fitzgeralds Black Hawk, Inc. in the membership
interests in Main Street and under the Main Street Option Agreement, or (iv) any
other Collateral having a value in excess of $10,000,000, and such failure
continues for ten Business Days after notice thereof is given to the Company and
the Trustee.
(7) The guaranty given by any Subsidiary Guarantor in Section
7, or in an addendum to this Agreement delivered pursuant to Section 6.1, shall
be held invalid or unenforceable in any judicial proceedings, or the payment of
the Guaranteed Obligations under such guaranty in accordance with the terms of
Section 7 or such addendum shall for any reason cease to be valid and binding on
such Subsidiary Guarantor, or the validity or enforceability of such guaranty
shall be contested or disavowed by such Subsidiary Guarantor.
8.2 Acceleration
Upon and at any time after the occurrence of any Event of
Default, for as long as such Event of Default may be Continuing, the Required
Priority Noteholders may
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declare the Priority Notes to be immediately due and payable and thereupon (and,
in the case of any Event of Default consisting of the commencement or
continuation of any Bankruptcy, Insolvency or Liquidation Proceeding,
automatically and without any need for such declaration) the Priority Notes
shall immediately become and be fully due and payable, in an amount equal to the
then Accreted Value thereof, together with (i) all unpaid interest then accrued
thereon and (ii) additional interest then and thereafter accruing on such
Accreted Value at the Effective Equivalent Rate plus the Default Premium.
Each registered holder of any Priority Note may enforce
collection of the payment of such Priority Note or any Subsidiary Guarantor's
guarantee thereof by any lawful means, acting independently, whether or not
enforcement is also sought by any other holder.
8.3 Enforcement of Security
At any time after the Company fails to pay the Priority Notes
in full and in cash at their scheduled maturity or after the maturity of the
Priority Notes is accelerated pursuant to Section 8.2, the Required Priority
Noteholders may deliver to the Trustee or Collateral Agent such notice thereof
and such direction with respect to the foreclosure and enforcement of the Liens
securing Priority Note Obligations as may be permitted under the Indenture.
8.4 Right of Set-off
Whenever any Event of Default is Continuing, each beneficial
owner and each registered holder of any Priority Note (and each holder of a
participation or other interest therein) and each of their transferees and
successors shall have the right, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other liability at any time owing by
such owner, holder, participant, transferee or successor to or for the credit or
the account of the Company or any Subsidiary Guarantor against any and all
liability of the Company or such Subsidiary Guarantor for Priority Note
Obligations, whether or not any demand for payment has then been made or any
notice has then been given under this Agreement and whether or not such deposit
or liability is then due or unmatured. Prompt notice of any such setoff shall be
given by the Person effectuating such setoff to the Company and any affected
Subsidiary Guarantor, but the failure to give such notice shall not affect the
validity of such set-off and application. The rights of such owners, holders,
participants, transferees and successors under this Section 8.4 are in addition
to
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all other rights and remedies (including other rights of set-off) granted or
available to any of them.
8.5 Remedies Cumulative
Each right and remedy granted or available to any owner or
holder of Priority Notes upon the occurrence of an Event of Default may be
exercised and enforced either before or concurrently with or after, and
independently of, any exercise or enforcement of any other right or remedy of
any such owner or holder (or any holder of a participation) against any Person
or property. All such rights and remedies shall be cumulative, and no one of
them shall exclude or preclude any other.
SECTION 9. AMENDMENTS AND WAIVERS
This Agreement and the other Priority Notes Documents may not
be changed orally, but (subject to the provisions of this Section 9) only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought. Any term, covenant, agreement or
condition of this Agreement or any of the other Priority Notes Documents may,
with the consent of the Company, be amended or compliance therewith may be
waived (either generally or in a particular instance and either retroactively or
prospectively), if the Company shall have obtained the consent in writing of the
Required Priority Noteholders and, in the case of any matter governed by clause
(iii) in Section 902(a) of the Indenture, the consent in writing of the holders
of at least 66 2/3% in principal amount of outstanding Priority Notes; provided,
however, that:
(a) Without the written consent of the holders of all
of Priority Notes then outstanding, no such amendment or waiver shall
be effective that (i) extends the time of payment or mandatory
prepayment on any Priority Note or changes the definition of "Accreted
Value" or reduces the principal amount or Accreted Value of any
Priority Note or the rate of interest thereon, (ii) alters any of the
prepayment provisions of Section 2.5, (iii) changes the currency in
which the Priority Notes are payable, (iv) directs the Trustee to
release or subordinate, or amends the Indenture or Priority Notes
Collateral Documents so as to release or subordinate, all or
substantially all of the Priority Notes Collateral, (v) changes the
definition of "Required Priority Noteholders" or (vi) alters the
provisions of this Section 9, and
(b) For the purposes of this Section 9 and the
definition of "Required Priority Noteholders," no Priority Note in
which the Company, any
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Subsidiary of the Company or any shareholder, director or Affiliate of
the Company or any Subsidiary of the Company owns any beneficial
interest shall be deemed (to the extent of such beneficial interest) to
be outstanding.
The Company shall promptly send copies of any request for
consent, amendment or waiver (and any request for any such amendment, consent or
waiver) relating to this Agreement or the Priority Notes to the registered
holder of each Priority Note. No waiver of any right or remedy hereunder shall
be effective unless in writing and then only with the written concurrence of the
Required Priority Noteholders or all holders as set forth above. No fee or other
consideration of any kind may be paid in connection with any amendment,
modification or waiver under any Priority Notes Document unless such fee or
other consideration is offered on a ratable basis to all holders of Priority
Notes who give their timely consent thereto.
Any such waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No course of
dealing between the Company and any holder and no failure to exercise or delay
in exercising any rights or remedies hereunder or under any Priority Note or any
other Priority Notes Document shall operate as a waiver of any rights or
remedies of any holder, and no single or partial exercise by any holder of any
right or remedy under this Agreement or any other Priority Notes Document shall
preclude any other or further exercise thereof or the exercise of any right or
remedy.
SECTION 10. MISCELLANEOUS
10.1 Survival of Representations and Warranties
All representations and warranties contained herein or made in
writing by or on behalf of the Company and the Subsidiary Guarantors in
connection herewith shall survive the execution and delivery of this Agreement,
the Priority Notes Documents and the Priority Notes, the transfer of any
Priority Notes or portion thereof or interest therein and the payment of any
Priority Note, and may be relied upon by the Purchasers, each present and future
holder of the Priority Notes and present and future owner of any beneficial
interest in the Priority Notes, regardless of any investigation made at any time
by or on behalf of the Purchasers or any holders of any Priority Note or any
beneficial interest therein.
10.2 Entire Agreement
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This Agreement, the Priority Notes and the other Priority
Notes Documents embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings, if any,
relating to the subject matter hereof.
10.3 Successors and Assigns
All covenants and agreements in this Agreement and each other
Priority Notes Document by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including all future holders of Priority Notes and owners of a
beneficial interest therein), whether so expressed or not; provided, however,
that the Company may not transfer or assign any of its rights or obligations
under this Agreement or any other Priority Notes Document (except in a
transaction permitted under Section 801 of the Indenture), without the prior
written consent of all holders of Priority Notes.
10.4 Disclosure to Other Persons
Each holder of Priority Notes agrees to hold in confidence and
not disclose any written information (other than information (i) that was
publicly known or otherwise known to such holder at the time of disclosure,
except pursuant to disclosure in connection with this Agreement, (ii) that
subsequently becomes publicly known through no act or omission by such holder,
or (iii) that otherwise becomes known to such holder, other than through
disclosure by the Company or any of its Subsidiaries) delivered or made
available by or on behalf of the Company or any of its Subsidiaries to such
holder in connection with or pursuant to this Agreement that is proprietary in
nature and clearly marked or labeled as being confidential information;
provided, however, that nothing herein shall prevent the holder of any Priority
Notes from delivering copies of any financial statements and other documents
delivered to such holder, and disclosing any other proprietary and confidential
information disclosed to such holder by or on behalf of the Company or any of
its Subsidiaries to (a) the owner of a beneficial interest in such holder's
Priority Notes, if bound in writing by the terms of this Section 10.4, (b) such
holder's or beneficial owner's directors, officers, employees, agents and
professional consultants, if so bound, (c) any other holder or beneficial owner
of any Priority Notes that is so bound, (d) any Person, so bound, to which such
holder or beneficial owner sells or offers to sell such Priority Notes or any
part thereof, (e) any Person, so bound, to which such holder or beneficial owner
sells or offers to sell a participation in all or any part of such Priority
Notes, (f) any federal or state regulatory authority having jurisdiction over
such holder, (g) the National Association of Insurance Commissioners or any
similar organization or (h) any other Person to which such delivery or
disclosure may be necessary or appropriate (1) in compliance with any law, rule,
regulation or order
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applicable to such holder, (2) in response to any subpoena or other legal
process, (3) in connection with any litigation to which such holder or
beneficial owner is a party or (4) in order to protect such holder's or
beneficial owner's investment in such Priority Notes.
10.5 Notices
All communications provided for hereunder shall be in writing
and sent by telecopier, certified or registered first class mail or nationwide
overnight delivery service (with charges prepaid) and (i) if to a Purchaser,
addressed to it at the address specified for such communications on the
Purchaser Schedule, or to such other address as such Purchaser may then most
recently have designated to the Company in writing, (ii) if to any other holder
of any Priority Notes, addressed to such holder at the registered address of
such holder as set forth in the register kept by the Company at its office as
provided in Section 2.3, and (iii) if to the Company or any Subsidiary of the
Company, addressed to it at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
(telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: Chief Financial Officer.
10.6 Descriptive Headings
Descriptive headings of sections of this Agreement are for
convenience of reference only, do not constitute a part of this Agreement, and
shall not be used to construe, interpret, limit or expand the provisions herein.
10.7 Satisfaction Requirement
If any agreement, certificate or other writing, or any action
taken or to be taken, is by the terms of this Agreement required to be
satisfactory to any party, the determination of such satisfaction shall be made
by such party in its own independent judgment exercised in good faith and
without regard to what others may consider reasonable unless a different
standard is required by law or provided by agreement in any specific instance.
10.8 Independence of Covenants
All covenants hereunder shall be given independent effect.
10.9 Severability
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In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all rights and privileges of each Purchaser and each other
holder of Priority Note Obligations shall be enforceable to the fullest extent
permitted by law.
10.10 Waiver of Jury Trial; Consent to Jurisdiction
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE COMPANY,
SUBSIDIARY GUARANTORS AND PURCHASERS HEREBY IRREVOCABLY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY
OTHER PRIORITY NOTES DOCUMENTS. EACH OF THE COMPANY, SUBSIDIARY GUARANTORS AND
PURCHASERS FURTHER IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS
TO SERVICE OF PROCESS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
AGREES THAT ANY JUDICIAL PROCEEDING BROUGHT BY OR AGAINST THE COMPANY, ANY
SUBSIDIARY GUARANTOR OR ANY PURCHASER WITH RESPECT TO ANY OF THE PRIORITY NOTE
OBLIGATIONS, THIS AGREEMENT, ANY OTHER PRIORITY NOTES DOCUMENT OR ANY RELATED
AGREEMENT, BREACH, ACT, OMISSION, TRANSACTION OR EVENT MAY BE BROUGHT IN ANY
COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, UNITED STATES OF
AMERICA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, ACCEPTS FOR ITSELF
AND IN CONNECTION WITH ITS AND THEIR PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY FINAL, NON-APPEALABLE JUDGMENT RENDERED THEREBY. EACH OF THE
COMPANY, SUBSIDIARY GUARANTORS AND PURCHASERS FURTHER IRREVOCABLY WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED IN THE AFORESAID
COURTS AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OF VENUE
OR BASED UPON FORUM NON CONVENIENS. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE
COMPANY, SUBSIDIARY GUARANTORS AND PURCHASERS TO BRING PROCEEDINGS AGAINST THE
COMPANY, SUBSIDIARY GUARANTORS AND PURCHASERS IN THE COURTS OF ANY OTHER
JURISDICTION.
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10.11 Waiver of Claim for Special, Indirect, Consequential and Punitive Damages
Neither the Purchasers nor any of the Purchasers' affiliates,
Account Managers, directors, officers, employees, attorneys or agents shall ever
be liable under or in respect of this Agreement or any other Priority Notes
Document or the financing transactions contemplated hereby or any act, omission,
breach, tort, wrongful conduct, occurrence or event in any manner related
hereto, on any theory of liability (whether contract, tort, duty imposed by law,
or otherwise), for any special, indirect or consequential damages or, to the
fullest extent a claim for punitive damages may be waived by law, for punitive
damages, and the Company and each Subsidiary Guarantor hereby waive, release and
agree never to ▇▇▇ upon any claim for any such damages.
10.12 Governing Law
THIS AGREEMENT AND THE PRIORITY NOTES SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).
10.13 Counterparts
This Agreement and any amendments, waivers, consents, or
supplements hereto or hereunder may be executed in any number of counterparts,
and by different parties hereto or thereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. This
Agreement shall become effective upon the execution and delivery of a
counterpart hereof by each of the parties hereto; provided, however, that any
Purchaser may deliver its counterpart signature page hereto by telecopy to the
special counsel to the Purchasers, which delivery shall be binding on such
Purchaser, and provided further, that any such Purchaser shall promptly provide
such special counsel with an adequate number (as determined by such special
counsel) of originally executed signature pages hereto.
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IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties set forth below as of the date first written above.
FITZGERALDS GAMING CORPORATION, a Nevada corporation
By:
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President & Secretary
FITZGERALDS SOUTH, INC., a Nevada corporation
By:
---------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President & Secretary
FITZGERALDS RENO, INC., a Nevada corporation
By:
---------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President & Secretary
FITZGERALDS INCORPORATED, a Nevada corporation
By:
---------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President & Secretary
52
FITZGERALDS LAS VEGAS, INC., a Nevada corporation
By:
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President & Secretary
FITZGERALDS FREMONT EXPERIENCE CORPORATION, a Nevada corporation
By:
---------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President & Secretary
FITZGERALDS MISSISSIPPI, INC., a Mississippi corporation
formerly known as Polk Landing Entertainment Corporation
By:
---------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President & Secretary
FITZGERALDS BLACK HAWK, INC., a Nevada corporation
By:
---------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President & Secretary
53
THE NOTE PURCHASERS
TCW SHARED OPPORTUNITY FUND II, L.P.
By: TCW INVESTMENT MANAGEMENT COMPANY,
its Investment Advisor
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ HIGH YIELD ADVANTAGE FUND
By:
-----------------------------------
Name:
Title:
