WATERFORD GAMING, L.L.C.
WATERFORD GAMING FINANCE CORP.
$125,000,000
9 1/2% Senior Notes due 2010
Purchase Agreement
March 10, 1999
Bear, Xxxxxxx & Co. Inc.
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
WATERFORD GAMING, L.L.C.
WATERFORD GAMING FINANCE CORP.
$125,000,000
9 1/2% Senior Notes due 2010
PURCHASE AGREEMENT
March 10, 1999
New York, New York
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
XXXXXXX XXXXX XXXXXX INC.
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Waterford Gaming, L.L.C., a Delaware limited liability company
(the "Company"), and Waterford Gaming Finance Corp., a Delaware corporation
("Finance" and, together with the Company, the "Issuers"), propose to issue
and sell to Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx"), Xxxxxxx Xxxxx, Xxxxxx,
Xxxxxx, & Xxxxx Incorporated and Xxxxxxx Xxxxx Xxxxxx Inc. (each, an "Initial
Purchaser" and collectively, the "Initial Purchasers") $125,000,000 in
aggregate principal amount of 9-1/2% Senior Notes due 2010 (the "Notes"),
subject to the terms and conditions set forth herein. The Notes will be
issued pursuant to an indenture (the "Indenture"), to be dated the Closing
Date (as defined), among the Issuers and State Street Bank & Trust Company,
as trustee (the "Trustee"). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Indenture.
1. Issuance of Securities. The Issuers propose, upon the terms and subject
to the conditions set forth herein, to issue and sell to the Initial
Purchasers an aggregate of $125,000,000 in principal amount of the Notes.
Upon original issuance thereof, and until such time as the same is no longer
required under the applicable requirements of the Securities Act of 1933, as
amended (the "Act"), the Notes (and all securities issued in exchange
therefor or in substitution thereof) shall bear the following legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) WHICH, IN
THE CASE OF A DEALER, OWNS AND INVESTS ON A
DISCRETIONARY BASIS AT LEAST $25.0 MILLION OF
SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED WITH
THE DEALER, (2) AGREES THAT IT WILL NOT WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO WATERFORD, WATERFORD FINANCE
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER WHICH,
IN THE CASE OF A DEALER, OWNS AND INVESTS ON A
DISCRETIONARY BASIS AT LEAST $25.0 MILLION OF
SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED
WITH THE DEALER, IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
(AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT) WHICH, IN THE CASE OF
A DEALER, OWNS AND INVESTS ON A DISCRETIONARY
BASIS, AT LEAST $25 MILLION OF SECURITIES THAT
ARE NOT AFFILIATED WITH THE DEALER AND IN THE
CASE OF ALL OTHER INSTITUTIONAL ACCREDITED
INVESTORS, AT LEAST $5 MILLION, THAT, PRIOR TO
SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON
ITS BEHALF BY A U.S. BROKER-DEALER) TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE FOR THIS SECURITY), (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER
THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE, WATERFORD AND
WATERFORD FINANCE SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS ANY OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT."
2. Offering. The Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration require
ments under the Act. The Issuers have prepared a preliminary
offering memorandum, dated March 1, 1999 (the "Preliminary Offer
ing Memorandum"), and a final offering memorandum, dated March 10,
1999 (the "Offering Memorandum"), relating to the Issuers and the
Notes.
The Initial Purchasers have advised the Issuers that the
Initial Purchasers will make offers (the "Exempt Resales") of the
Notes on the terms set forth in the Offering Memorandum, as
amended or supplemented, solely to persons whom the Initial Purchasers
reasonably believe to be "qualified institutional buyers,"
as defined in Rule 144A under the Act ("QIBs"), which in the case
of dealers, own and invest on a discretionary basis at least $25.0
million of securities of issuers that are not affiliated with the
dealer. Such persons are referred to herein as the "Eligible
Purchasers." The Initial Purchasers will offer the Notes to such
Eligible Purchasers initially at a price equal to 100% of the
principal amount thereof. Such price may be changed at any time
without notice.
The Notes will be secured by cash of the Company that is deposited
in an Interest Reserve Account and invested in Investment Grade Securities
or Government Securities, on the terms set forth in the security and control
agreement (the "Security Agreement "). This Agreement, the Notes, the
Security Agreement and the Indenture are hereinafter referred to collectively
as the "Operative Documents."
3. Purchase, Sale and Delivery. (a) On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to its
terms and conditions, the Issuers agree to issue and sell to the Initial
Purchasers, and each Initial Purchaser agrees, severally and not jointly,
to purchase from the Issuers, the principal amount of Notes set forth
opposite the name of such Initial Purchaser on Exhibit A. The purchase price
for the Notes will be $973.75 per $1,000 principal amount Note. (b) Delivery
of the Notes shall be made, against payment of the purchase price therefor,
at the offices of Xxxxxx & Xxxxxxx, New York, New York or such other location
as may be mutually acceptable. Such delivery and payment shall be made at
9:00 a.m., New York City time, on March 17, 1999 or at such other time as
shall be agreed upon by the Initial Purchasers and the Issuers.
The time and date of such delivery and payment are herein called the "Closing
Date."
(c) On the Closing Date, one or more Notes in definitive global form,
registered in the name of Cede & Co., as nominee of The Depository Trust
Company ("DTC"), having an aggregate amount corresponding to the aggregate
principal amount of the Notes (the "Global Note") sold pursuant to Exempt
Resales to Eligible Purchasers shall be delivered by the Issuers to the
Initial Purchasers (or as the Initial Purchasers direct), against payment by
the Initial Purchasers of the purchase price therefor, by wire transfer of
immediately available funds, to an account or accounts designated by the
Issuers, provided that the Issuers shall give at least one business days'
prior written notice to the Initial Purchasers of the information required to
effect such wire transfer. The Global Note shall be made available to the
Initial Purchasers for inspection not later than 9:30 a.m. on the business
day immediately preceding the Closing Date.
4. Agreements of the Issuers. Each of the Issuers covenants and agrees
with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, to confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the qualification
or exemption from qualification of any Notes for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by any
state securities commission or other regulatory authority and (ii) of the
happening of any event that makes any statement of a material fact made in
the Preliminary Offering Memorandum or the Offering Memorandum untrue or that
requires the making of any additions to or changes in the Preliminary Offering
Memorandum or the Offering Memorandum in order to make the statements therein,
in the light of the circumstances under which they are made, not misleading.
The Issuers shall use their respective best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption from
qualification of any Notes under any state securities or Blue Sky laws and,
if at any time any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of any Notes under any state securities or Blue Sky laws, the
Issuers shall use their respective best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Issuers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchasers may reasonably request. The
Issuers consent to the use of the Preliminary Offering Memorandum and the
Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchasers in connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering Memorandum or
the Offering Memorandum during such period as in the opinion of counsel for
the Initial Purchasers the Preliminary Offering Memorandum or the Offering
Memorandum is required by law to be delivered in connection with Exempt
Resales and in connection with market-making activities of the Initial
Purchasers for so long as any Notes are outstanding unless the Initial
Purchasers shall previously have been advised thereof and shall not have
objected thereto within a reasonable time after being furnished a copy
thereof (except to the extent that any such amendment or supplement objected
to is necessary, in the opinion of counsel to the Issuers, to make the
statements made in the Preliminary Offering Memorandum or Offering Memorandum,
not misleading). The Issuers shall promptly prepare, upon the Initial
Purchasers' request, any amendment or supplement to the Preliminary Offering
Memorandum or the Offering Memorandum that may be necessary or advisable in
connection with such Exempt Resales or such market-making activities (except
to the extent that any such amendment or supplement requested would, in the
opinion of counsel to the Issuers, render the statements made in the
Preliminary Offering Memorandum or Offering Memorandum, as proposed to be
amended or supplemented, misleading).
(d) If, during the period referred to in 4(c) above, any event shall
occur as a result of which, in the judgment of the Issuers or in the reasonable
opinion of counsel for the Issuers or counsel for the Initial Purchasers, it
becomes necessary or advisable to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum in order to make the statements therein,
in the light of the circumstances then existing, not misleading, or if it is
necessary or advisable to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum to comply with any law, statute, or
rule or regulation of any govern mental agency or entity, (i) to notify the
Initial Purchasers and (ii) forthwith to prepare an appropriate amendment or
supplement to such Preliminary Offering Memorandum or the Offering Memorandum
so that the statements therein as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be misleading, or so that
such Preliminary Offering Memorandum or the Offering Memorandum will comply
with applicable law.
(e) To cooperate with the Initial Purchasers and counsel for the
Initial Purchasers in connection with the qualification or registration of
the Notes for offer and sale under the state securities or Blue Sky laws of
such jurisdictions as the Initial Purchasers may reasonably request and to
continue such qualification or registration in effect so long as required for
the Exempt Resales; provided, however, that neither Issuer shall be required
in connection therewith to register or qualify as a foreign corporation or
limited liability company, as applicable, where it is not now so qualified or
to take any action that would subject it to a general consent to service of
process in suits or taxation, in each case, other than as to matters and
transactions relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction where it is not now so
subject.
(f) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, to pay
all costs, expenses, fees and taxes incident to the performance of the
obligations of the Issuers hereunder, including in connection with: (i) the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation,
financial statements) and all amendments and supplements thereto required
pursuant hereto, (ii) the preparation (including, without limitation,
duplication costs) and delivery of all agreements, correspondence and all
other documents prepared and delivered in connection herewith and with the
Exempt Resales, (iii) the issuance, transfer and delivery of the Notes to the
Initial Purchasers, including any transfer or other taxes payable thereon,
(iv) the qualification or registration of the Notes and for offer and sale
under the securities or Blue Sky laws of the jurisdictions referred to in
Section 4(e) (including, without limitation, the cost of printing and mailing
a preliminary and final Blue Sky Memorandum and the reasonable fees and
disbursements of counsel for the Initial Purchasers relating thereto),
(v) furnishing such copies of the Preliminary Offering Memorandum and the
Offering Memorandum, and all amendments and supplements thereto, as may be
requested for use in connection with Exempt Resales, (vi) the preparation of
certificates for the Notes (including, without limitation, printing and
engraving thereof), (vii) the fees, disbursements and expenses of the Issuers'
counsel and accountants, (viii) all fees and expenses (including fees and
expenses of counsel) of the Issuers in connection with the approval of the
Notes by DTC for "book-entry" transfer, (ix) rating the Notes by rating
agencies, (x) any fees payable for the review of the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the initial and
continued designation of the Notes as PORTAL Securities under the PORTAL
Market Rules pursuant to NASD Rule 5322, (xi) the reasonable fees and expenses
of the Trustee and its counsel, (xii) the performance by the Issuers of their
other obligations under this Agreement and the other Operative Documents,
(xiii) any and all other additional fees and expenses incurred by the Issuers
and (xiv) one-half of the out-of-pocket expenses of the Initial Purchasers,
excluding the fees and expenses of counsel to the Initial Purchasers.
(g) To use the proceeds from the sale of the Notes in the manner
described in the Offering Memorandum (and any amendments or supplements
thereto) under the caption "Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts to
claim, the benefit of any usury laws against the holders of any Notes.
(i) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate and to cause the Trading Cove Associates, a Connecticut general
partnership (the "Manager"), not to engage in such activities in respect of
any security (as defined in the Act) that would be integrated with the sale
of the Notes in a manner that would require the registration under the Act of
the sale to the Initial Purchasers or the Eligible Purchasers of the Notes or
to take any other action and to cause the Manager not to take any other
action that would result in the Exempt Resales not being exempt from
registration under the Act.
(j) For so long as any of the Notes remain outstanding and during any
period in which the Issuers are not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
available to any holder or beneficial owner of Notes in connection with any
sale thereof and any prospective purchaser of such Notes from such holder or
beneficial owner, the information required by Rule 144A(d)(4) under the
Act.
(k) To comply with all of their agreements set forth in the
representation letters to DTC relating to the approval of the Notes by DTC
for "book-entry" transfer.
(l) To use their respective best efforts to effect the inclusion of the
Notes in PORTAL and to obtain approval of the Notes by DTC for "book-entry"
transfer.
(m) During a period of five years following the Closing Date, to deliver
without charge to the Initial Purchasers, as they may reasonably request,
promptly upon their becoming available, copies of (i) all reports or other
publicly available information that either Issuer shall mail or otherwise
make available to their respective securityholders and (ii) all reports,
financial statements and proxy or information statements filed by the Issuers
with the Securities and Exchange Commission (the "Commission") or any
national securities exchange and such other publicly available information
concerning either Issuer, including without limitation, press releases.
(n) Prior to the Closing Date, to furnish to the Initial Purchasers,
as soon as they have been prepared in the ordinary course by the Issuers,
copies of any unaudited interim financial statements for any period subsequent
to the periods covered by the financial statements appearing in the Offering
Memorandum.
(o) Not to take, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of either Issuer to facilitate the
sale or resale of the Notes. Neither Issuer will distribute prior to the
Closing Date any (i) preliminary offering memorandum, other than the
Preliminary Offering Memorandum, (ii) offering memorandum, other than the
Offering Memorandum, or (iii) other offering material in connection with
the offering and sale of the Notes.
(p) To use their reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement prior to
the Closing Date and to satisfy all conditions precedent to the delivery of
the Notes.
5. Representations and Warranties.
(a) The Issuers, jointly and severally, represent and warrant to
the Initial Purchasers that:
i. The Preliminary Offering Memorandum as of its date
does not, and the Offering Memorandum as of its date and as
of the Closing Date does not and will not, and any supplement
or amendment to them will not, contain any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading, except that the
representations and warranties contained in this paragraph shall
not apply to statements in or omissions from the Preliminary
Offering Memorandum and the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in
conformity with information relating to the Initial Purchasers
furnished to the Issuers in writing by the Initial Purchasers
expressly for use therein. No stop order preventing the use of
the Preliminary Offering Memorandum or the Offering Memorandum,
or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to
the registration requirements of the Act, has been issued.
ii. Each of the Issuers and the Manager (A) has been
duly organized or incorporated and is validly existing as a
corporation, limited liability company or partnership, as
applicable, in good standing under the laws of its jurisdiction
of incorporation or formation, as applicable, (B) has all
requisite corporate, limited liability company or partnership
power and authority, as applicable, to carry on its
business as it is currently being conducted and as described
in the Offering Memorandum and to own, lease and operate its
properties, and (C) is duly qualified and is in good standing
as a foreign corporation, limited liability company or
partnership, as applicable, authorized to do business in each
jurisdiction in which the nature of its business or its own
ership or leasing of property requires such qualification,
except where the failure to be so qualified could not reason
ably be expected to (1) result, individually or in the
aggregate, in a material adverse effect on the properties,
business, results of operations, condition (financial or other
wise), affairs or prospects of the Issuers and the Manager,
taken as a whole, (2) interfere with or adversely affect the
issuance or marketability of the Notes or (3) in any manner
draw into question the validity of this Agreement or any
other Operative Document or the transactions described in the
Offering Memorandum under the caption "Use of Proceeds" (any
of the events set forth in clauses (1), (2) or (3), a
"Material Adverse Effect").
iii. The Company directly owns all of the issued and
outstanding capital stock of Finance and 50% of the partner
ship interests of the Manager. Other than as set forth in the
previous sentence, the Company has no subsidiaries. Finance
has no subsidiaries.
iv. All of the outstanding capital stock of Finance
and 50% of the partnership interests of the Manager is owned,
directly or indirectly, by the Company, except as described
in the Offering Memorandum in connection with the buy/sell
option, free and clear of any security interest, claim, lien,
limitation on voting rights or encumbrance. All of the is
sued and outstanding shares of capital stock of Finance have
been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any
preemptive or similar rights.
v. Except as described in the Offering Memorandum in
connection with the buy/sell option relating to the partner
ship units of the Manager, there are currently no outstanding
subscriptions, rights, warrants, calls, commitments of sale
or options to acquire, or instruments convertible into or
exchangeable for, any capital stock or other equity interest
of any of the Issuers or related to or entitling any person
to purchase or otherwise acquire the Company's partnership
interest in the Manager.
vi. When the Notes are issued and delivered pursuant
to this Agreement, no Note will be of the same class (within
the meaning of Rule 144A under the Act) as securities of
either Issuer that are listed on a national securities exchange
registered under Section 6 of the Exchange Act or that
are quoted in a United States automated inter-dealer quotation
system.
vii. Each Issuer has all requisite corporate or limited
liability company power and authority, as applicable, to
execute, deliver and perform its obligations under this
Agreement and each of the other Operative Documents to which
it is a party and to consummate the transactions contemplated
hereby and thereby, including, without limitation, the corporate
or limited liability company power and authority to issue, sell
and deliver the Notes as provided herein and therein.
viii. This Agreement has been duly and validly authorized,
executed and delivered by each Issuer and (assuming the due
execution and deliver thereof by the Initial Purchasers) is the
legal, valid and binding agreement of each Issuer, enforceable
against each of them in accordance with its terms, except as such
enforceability may be (A) subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in
effect relating to or affecting the rights and remedies of creditors,
(B) subject, as to enforceability, to general principles of equity,
whether enforcement is considered in a proceeding in equity or at law,
and the discretion of the court before which any proceeding therefor may
be brought and (C) limited by securities laws prohibiting or limiting
the availability of, and public policy against, indemnification or
contribution.
ix. The Indenture has been duly and validly authorized by each
Issuer and, when duly executed and delivered by each Issuer (assuming
the due authorization, execution and delivery thereof by the Trustee),
will be the legal, valid and binding agreement of each Issuer, enforceable
against each of them in accordance with its terms, except as such
enforceability may be (A) subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in
effect relating to or affecting the rights and remedies of creditors and
(B) subject, as to enforceability, to general principles of equity,
whether enforcement is considered in a proceeding in equity or at
law, and the discretion of the court before which any proceeding
therefor may be brought. On the Closing Date, the Indenture will conform
in all material respects to the requirements of the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder. The Offering Memorandum contains a summary of
the terms of the Indenture, which is accurate in all material respects.
x. The Notes have been duly and validly authorized by each
Issuer for issuance and sale to the Initial Purchasers pursuant to this
Agreement and, when issued and authenticated in accordance with the
terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid
and binding obligations of each Issuer, enforceable against it in
accordance with their terms and entitled to the benefits of the Indenture,
except as such enforceability may be (A) subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect relating to or affecting the rights and remedies
of creditors and (B) subject, as to enforceability, to general principles
of equity, whether enforcement is considered in a proceeding in equity
or at law, and the discretion of the court before which any proceeding
therefor may be brought. The Offering Memorandum contains a summary of
the terms of the Notes, which is accurate in all material respects.
xi. The Security Agreement has been duly and validly authorized by
each Issuer and, when executed and delivered by each Issuer, will be
the legal, valid and binding agreement of each Issuer, enforceable against
each of them in accordance with its terms, except as such enforceability
may be (A) subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereinafter in effect relating to
or affecting the rights and remedies of creditors and (B) subject, as to
enforceability, to general principles of equity, whether enforcement is
considered in a proceeding in equity or at law, and the discretion of
the court before which any proceeding therefor may be brought. The
Offering Memorandum contains a summary of the terms of the Security
Agreement, which is accurate in all material respects.
xii. Each of the Development Services Agreement dated as of February 7,
1999, by and between the Mohegan Tribal Gaming Authority (the "Authority")
and the Manager; the Relinquishment Agreement dated as of February 7,
1999, by and between the Authority and the Manager; the Amended and
Restated Gaming Facility Management Agreement dated as of August 30,
1995, by and between the Authority and the Manager; the Amended and
Restated Partnership Agreement of Trading Cove Associates, as amended
by the First Amendment thereto dated October 22, 1996; the Amended and
Restated Omnibus Financing Agreement dated as of September 10, 1997, by
and among the Manager, the Company and Sun International Hotels Limited
("Sun International"); and the Memorandum of Understanding dated
as of February 7, 1998, by and among the Company, Sun Cove Ltd.,
Sun International and the Manager (collectively, the "Agreements")
has been duly and validly authorized, executed and delivered by each
Issuer or the Manager a party thereto and is the legal, valid and
binding obligation of each Issuer or the Manager a party thereto,
enforceable against each Issuer or the Manager in accordance with
its terms, except as such enforceability may be (A) subject to
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or herein after in effect relating to or
affecting the rights and remedies of creditors and (B) subject, as to
enforceability, to general principles of equity, whether enforcement
is considered in a proceeding in equity or at law, and the discretion
of the court before which any proceeding therefor may be brought.
The Offering Memorandum contains a summary of the terms of the
Agreements, which is accurate in all material respects.
xiii. Each of the Issuers and the Manager is not and, after giving
effect to the Offering, will not be, (A) in violation of its charter or
certificate of formation, as applicable, or bylaws, limited liability
company agreement or partnership agreement, as applicable, (B) in default
in the performance of any bond, debenture, note, indenture, mortgage,
deed of trust or other agreement or instrument to which it is a party or
by which it is bound or to which any of its properties is subject, which
singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or (C) in violation of any local, state, federal,
tribal or foreign law, statute, ordinance, rule, regulation, requirement,
judgment or court decree (including, without limitation, environmental
laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to it or any of its assets or properties (whether
owned or leased), which singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. To the best knowledge of
the Issuers, there exists no condition that, with notice, the passage of
time or otherwise, would constitute a default under any such document or
instrument.
xiv. None of (A) the execution, delivery or performance by either
Issuer of this Agreement or any of the other Operative Documents to
which it is a party, (B) the issuance and sale of the Notes and (C)
consummation by the Issuers of the transactions described in the Offering
Memorandum under the caption "Use of Proceeds," violates, conflicts with
or constitutes a breach of any of the terms or provisions of, or will
violate, conflict with or constitute a breach of any of the terms or
provisions of, or a default under (or an event that with notice or the
lapse of time, or both, would constitute a default under), or require
consent under, or result in the imposition of a lien or encumbrance on
any properties of any of the Issuers or the Manager, or an acceleration
of any indebtedness of any of the Issuers or the Manager pursuant
to, (1) the charter or certificate of formation, as applicable, or bylaws,
limited liability company agreement or partnership agreement, as
applicable, of any of the Issuers and the Manager, (2) any material bond,
debenture, note, indenture, mortgage, deed of trust or other agreement
or instrument to which any of the Issuers or the Manager is a party or
by which they or their property is or may be bound, (3) any statute,
rule or regulation applicable to any of the Issuers or the Manager or
any of their assets or properties or (4) any judgment, order or decree
of any court or governmental or tribal agency or authority having
jurisdiction over any of the Issuers or the Manager or any of their
assets or properties (including, without limitation, the gaming regulators
of the State of Connecticut, the Bureau of Indian Affairs of the
Department of the Interior, the Secretary of the Interior, the
National Indian Gaming Commission, the Authority Director of Regulation
or the Gaming Disputes Court of the Mohegan Tribe (collectively, the
"Gaming Authorities")). No consent, approval, authorization or order of,
or filing, registration, qualification, license or permit of or with, (A)
any court or governmental or tribal agency, body or administrative agency
(including, but not limited to, any Gaming Authorities, but except as the
securities or Blue Sky laws of various states may require) or (B) any
other person is required for (1) the execution, delivery and performance
by each Issuer of this Agreement or any of the other Operative Documents
to which it is a party or (2) the issuance and sale of the Notes and the
transactions contemplated hereby and thereby, except such as have been
or will be obtained and made on or prior to the Closing Date.
xv. There is (A) no action, suit, investigation or proceeding
before or by any court, arbitrator or governmental or tribal agency, body
or official, domestic or foreign (including, but not limited to, any
Gaming Authorities), now pending or, to the best knowledge of the Issuers,
threatened or contemplated to which any of the Issuers or the Manager is
or may be a party or to which the business or property of any of the
Issuers or the Manager, is or may be subject, (B) no statute, rule,
regulation or order that has been enacted, adopted or issued by any
governmental or tribal agency (including, but not limited to, any Gaming
Authorities) or, to the best knowledge of the Issuers, that has been
proposed by any governmental or tribal body (including, but not limited
to, any Gaming Authorities) and (C) no injunction, restraining order or
order of any nature by a federal, tribal or state court or foreign court
of competent jurisdiction to which any of the Issuers or the Manager is
or may be subject or to which the business, assets or property of any of
the Issuers or the Manager is or may be subject, that, in the case of
clauses (A), (B) and (C) above, (1) is required to be disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum and that is
not so disclosed or (2) could reasonably be expected to have a Material
Adverse Effect.
xvi. No action has been taken with respect to the Issuers or the
Manager and no statute, rule, regulation or order has been enacted,
adopted or issued by any governmental or tribal agency that prevents the
issuance of the Notes or prevents or suspends the use of the Offering
Memorandum; no injunction, restraining order or order of any nature by a
federal, tribal or state court of competent jurisdiction has been issued
that prevents the issuance of the Notes or prevents or suspends the sale
of the Notes in any jurisdiction referred to in Section 4(e) hereof; and
every request of any securities authority or agency of any jurisdiction
for additional information has been complied with in all material
respects.
xvii. There is (A) no significant unfair labor practice complaint
pending against any of the Issuers or the Manager or, to the best
knowledge of the Issuers, threatened against any of them, before the
National Labor Relations Board, any state, local or tribal labor
relations board or any foreign labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or under
any collective bargaining agreement is so pending against any of the
Issuers or the Manager or, to the best knowledge of the Issuers,
threatened against any of them and (B) no material strike, labor dispute,
slowdown or stoppage pending against any of the Issuers or the Manager
nor, to the best knowledge of the Issuers, threatened against any of
them. None of the Issuers or the Manager has violated (1) any federal,
tribal, state or local law or foreign law relating to discrimination
in hiring, promotion or pay of employees, (2) any applicable wage or
hour laws or (3) any provision of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or the rules and regulations
thereunder, except those violations that could not reasonably be expected
to have a Material Adverse Effect.
xviii. Except as would not have a Material Adverse Effect or otherwise
require disclosure in the Offering Memorandum, (A) none of the Issuers or
the Manager has been or is in violation of any federal, state or local
laws and regulations relating to pollution or protection of human health
or the environment, including, without limitation, laws and regulations
relating to emissions, discharges, releases or threatened releases of
toxic or hazardous substances, materials or wastes, or petroleum and
petroleum products ("Materials of Environmental Concern"), or otherwise
relating to the protection of human health and safety, or the use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, "Environmental Laws"),
which violation includes, but is not limited to, noncompliance with, or
lack of, any permits or other environmental authorizations; (B) there
are no circumstances, either past, present or that are reasonably
foreseeable, that may lead to any such violation in the future; (C) none
of the Issuers or the Manager has received any communication (written or
oral), whether from a governmental authority or otherwise, alleging
any such violation; (D) there is no pending or threatened claim,
action, investigation or notice (written or oral) by any person or
entity alleging potential liability of the Issuers or the Manager (or
against any person or entity for whose acts or omissions the Issuers or
the Manager is or may reasonably be expected to be liable, either
contractually or by operation of law) for investigatory, cleanup, or
other response costs, or natural resources or property damages, or
personal injuries, attorney's fees or penalties relating to (1) the
presence, or release into the environment, of any Materials of
Environmental Concern at any location, or (2) circumstances forming the
basis of any violation or potential violation, of any Environmental Law
(collectively, "Environmental Claims"); and (E) there are no past or
present actions, activities, circumstances, conditions, events or
incidents that could form the basis of any Environmental Claim.
xix. In the ordinary course of business, the Issuers and the
Manager, as appropriate, (A) conduct a periodic review of the effect of
Environmental Laws on the business, operations and properties of the
Issuers and the Manager, in the course of which, or as a result of which,
the Issuers and the Manager have identified and evaluated associated costs
and liabilities (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities, and any potential liabilities to
third parties); and (B) have conducted environmental investigations of,
and have reviewed reasonably available information regarding, the
business, properties and operations of the issuers and the Manager, and
of other properties within the vicinity of their business, properties
and operations, as appropriate for the circumstances of each such
property and operation; on the basis of such reviews, investigations
and inquiries, the Issuers and the Manager have reasonably concluded
that any costs and liabilities associated with such matters would not
have, singularly or in the aggregate, a Material Adverse Effect, or
otherwise require disclosure in the Offering Memorandum.
xx. Each of the Issuers, the Manager and their respective
key employees has such permits, licenses, franchises and authorizations
of governmental, tribal or regulatory authorities ("permits"), including,
without limitation, under any applicable Environmental Laws and any
applicable gaming laws, as are necessary to own, lease and operate the
properties and to conduct businesses of each of the Issuers and the
Manager, except where the failure to have such permits could not
reasonably be expected to have a Material Adverse Effect; each of the
Issuers, the Manager and their respective key employees has fulfilled
and performed all of its material obligations with respect to such
permits and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or results
in any other material impairment of the rights of the holder of any such
permit; and, except as described in the Offering Memorandum, such permits
contain no restrictions that are materially burdensome to any of the
Issuers, the Manager or their respective key employees, as the case may
be. Neither of the Issuers has any reason to believe that the Issuers,
the Manager, the Authority and their respective key employees will
not obtain the permits necessary for the completion of the expansion of
the Mohegan Sun Casino as described in the Offering Memorandum on a
timely basis.
xxi. Each of the Issuers and the Manager has (A) good and marketable
title to all of the properties and assets described in the Offering
Memorandum as owned by it, free and clear of all liens, charges,
encumbrances and restrictions (except for Permitted Liens and taxes not
yet payable), (B) peaceful and undisturbed possession under all material
leases to which any of them is a party as lessee and each of which lease
is valid and binding and no default exists thereunder, except for defaults
that could not reasonably be expected to have a Material Adverse Effect,
(C) all permits and has made all declarations and filings with, all
federal, tribal, state and local authorities, all self-regulatory
authorities and all courts and other tribunals necessary to engage in
the business conducted by any of them in the manner described in the
Offering Memorandum and (D) no reason to believe that any governmental
body or agency is considering limiting, suspending or revoking any such
permits. All such permits are valid and in full force and effect
and each of the Issuers and the Manager is in compliance in all
material respects with the terms and conditions of all such permits
and with the rules and regulations of the regulatory authorities having
jurisdiction with respect thereto. All material leases to which any of
the Issuers or the Manager is a party are valid and binding and no default
by any of the Issuers or the Manager, as the case may be, has occurred
and is continuing thereunder and, to the best knowledge of the Issuers,
no material defaults by the landlord are existing under any such lease,
except those defaults that could not reasonably be expected to have a
Material Adverse Effect.
xxii. Each of the Issuers and the Manager owns, possesses or has the
right to employ all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, software,
systems or procedures), trademarks, service marks and trade names,
inventions, computer programs, technical data and information
(collectively, the "Intellectual Property") presently employed by it in
connection with the businesses now operated by it or that are proposed
to be operated by it, free and clear of and without violating any right,
claimed right, charge, encumbrance, pledge, security interest, restriction
or lien of any kind of any other person, and none of the Issuers or the
Manager has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing. The use of
the Intellectual Property in connection with the business operations of
any of the Issuers or the Manager does not infringe on the rights of
any person, except such in fringements as could not reasonably be
expected to have a Material Adverse Effect.
xxiii. All material tax returns required to be filed by any of the
Issuers or the Manager in all jurisdictions have been so filed and all
such returns are true, complete and correct in all material respects.
All material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due and payable or claimed to be due
from such entities have been paid, other than (A) those being contested
in good faith by appropriate proceedings, timely instituted, and
diligently pursued and for which adequate reserves have been provided on
the books and records of the relevant entity, in accordance with
generally accepted accounting principles or (B) those currently payable
without penalty or interest.
xxiv. Except as disclosed in the Offering Memorandum, no relationship,
direct or indirect, exists between any of the Issuers or the Manager on
the one hand, and the directors, officers, stockholders or members,
customers or suppliers of any of the Issuers or the Manager on the other
hand, which would be required by the Act to be described in the Offering
Memorandum if the Offering Memorandum were a prospectus included in a
registration statement on Form S-1 filed with the Commission.
xxv. The Issuers and the Manager have (A) initiated a review and
assessment of all areas within their business and operations (including
those affected by suppliers, vendors and customers) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by either Issuer (or suppliers, vendors and
customers) may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December
31, 1999), (B) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis and (C) to date, has implemented that
plan in accordance with that timetable. Based on the foregoing, to the
best knowledge of the Issuers, the Issuers believe that all computer
applications (including those of the Authority and the Mohegan Sun
Casino) that are material to their business and operations are reasonably
expected on a timely basis to be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000 (that is, be
"Year 2000 Compliant"), except to the extent that a failure to do so
could not reasonably be expected to have Material Adverse Effect.
xxvi. None of the Issuers or the Manager is an "investment company"
or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "Investment
Company Act").
xxvii. There are no holders of securities of any of the Issuers or
the Manager who, by reason of the execution by either Issuer of this
Agreement or any other Operative Document to which they are a party or
the consummation by either Issuer of the transactions contemplated hereby
and thereby, have the right to request or demand that either Issuers
register under the Act or analogous foreign laws and regulations
securities held by them.
xxviii. None of the Issuers or the Manager has (A) taken, directly or
indirectly, any action designed to, or that might reasonably be expected
to, cause or result in stabilization or manipulation of the price of any
security of any of the Issuers or the Manager to facilitate the sale or
resale of the Notes or (B) since the date of the Preliminary Offering
Memorandum (1) sold, bid for, purchased or paid any person any
compensation for soliciting purchases of the Notes or (2) paid or agreed
to pay to any person any compensation for soliciting another to purchase
any other securities of any of the Issuers or the Manager.
xxix. The accountants who have certified or will certify the
financial statements included or to be included as part of the Offering
Memorandum are independent accountants as required by the Act. The
historical financial statements, together with related schedules and
notes thereto, comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under the
Act and present fairly in all material respects the financial position
results of operations of the Issuers at the dates and for the periods
indicated. Such financial statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent
basis throughout the periods presented. The as adjusted financial
statements included in the Offering Memorandum have been prepared on a
basis consistent with such historical statements of the Issuer, except
for the adjustments specified therein, and give effect to assumptions
made on a reasonable basis and present fairly in all material respects
the historical and proposed transactions contemplated by this Agreement
and the other Operative Documents; and such as adjusted financial
statements comply as to form in all material respects with the
requirements applicable to as adjusted financial statements included in
registration statements on Form S-1 under the Act, except as expressly
stated therein. The other financial and statistical information and
data included in the Offering Memorandum derived from the historical and
as adjusted financial statements, are accurately presented in all
material respects and prepared on a basis consistent with the financial
statements, historical and as adjusted, included in the Offering
Memorandum and the books and records of the Issuers.
xxx. No registration under the Act of the Notes is required for the
sale of the Notes to the Initial Purchasers as contemplated hereby or for
the Exempt Resales assuming (A) that the purchasers who buy the Notes in
the Exempt Resales are Eligible Purchasers and (B) that the
representations and warranties of the Initial Purchasers in Section 5(b)
hereof are true and that the Initial Purchasers have complied with
the covenants set forth in Section 5(b) hereof and (C) that none of the
Initial Purchasers is an affiliate of any Issuer. No form of general
solicitation or general advertising (as defined in Regulation D under
the Act) was used by any of the Issuers or the Manager or their respective
representatives (other than the Initial Purchasers, as to which the
Issuers make no representation or warranty) in connection with the
offer and sale of any of the Notes or in connection with Exempt Resales,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising. No securities
of the same class as the Notes have been issued and sold by any of the
Issuers or the Manager within the six-month period immediately prior to
the date hereof.
xxxi. The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Notes to be purchased by Eligible
Purchasers will not involve any prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Internal Revenue Code of
1986. The representation made by the Issuers in the preceding sentence
is made in reliance upon and subject to the accuracy of, and compliance
with, the representations and covenants made or deemed made by Eligible
Purchasers as set forth in the Offering Memorandum under the caption
"Transfer Restrictions."
xxxii. The statistical and market-related data included in the Offering
Memorandum are based on or derived from sources which the Issuers believe
are reliable and accurate in all material respects.
xxxiii. Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as
of its date, contains the information specified in, and meets the
requirements of, Rule 144A(d)(4) under the Act.
xxxiv. The Indenture is not required to be qualified under the Trust
Indenture Act.
xxxv. Subsequent to the respective dates as of which information is
given in the Offering Memorandum and up to the Closing Date, except as
set forth in the Offering Memorandum, (A) none of the Issuers or the
Manager has incurred any liabilities or obligations, direct or
contingent, which are material, individually or in the aggregate, to
the Issuers and the Manager, taken as a whole, nor entered into any
transaction not in the ordinary course of business, (B) there has not
been any change or development which, singly or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, (C) there
has been no dividend or distribution of any kind declared, paid or made
by any of the Issuers or the Manager on any class of their capital stock,
membership units or partnership units, as applicable and (D) there has
been decision or judgment in the nature of litigation adverse to any of
the Issuers or the Manager.
xxxvi. None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Notes, the application of the
proceeds from the issuance and sale of the Notes and the consummation of
the transactions contemplated thereby as set forth in the Offering
Memorandum, will violate Regulations T, U or X promulgated by the Board
of Governors of the Federal Reserve System or analogous foreign laws and
regulations.
xxxvii. Neither Issuer intends to, nor believes that it will, incur
debts beyond its ability to pay such debts as they mature. The present
fair saleable value of the assets of the Issuers exceeds the amount that
will be required to be paid on or in respect of its existing debts and
other liabilities (including contingent liabilities) as they become
absolute and matured. The assets of the Issuers do not constitute
unreasonably small capital to carry out its business as conducted or as
proposed to be conducted. Upon the issuance of the Notes, the present
fair saleable value of the assets of the Issuers will exceed the amount
that will be required to be paid on or in respect of its existing debts
and other liabilities (including contingent liabilities) as they become
absolute and matured. Upon the issuance of the Notes, the assets of the
Issuers will not constitute unreasonably small capital to carry out their
business as now conducted, including the capital needs of the Issuers,
taking into account the projected capital requirements and capital
availability.
xxxviii. Except pursuant to this Agreement, there are no contracts,
agreements or understandings between either Issuer and any other person
that would give rise to a valid claim against either Issuer or the Initial
Purchasers for a brokerage commission, finder's fee or like payment in
connection with the issuance, purchase and sale of the Notes.
xxxix. There exist no conditions that would constitute a default (or
an event which with notice or the lapse of time, or both, would constitute
a default) under any of the Operative Documents.
xl. Each certificate signed by any officer of either Issuer and
delivered to the Initial Purchasers or counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by such Issuer, as
the case may be, to the Initial Purchasers as to the matters covered
thereby.
Each Issuer acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section
8 hereof, counsel for the Issuers and counsel for the Initial Purchasers,
will rely upon the accuracy and truth of the foregoing representations and
hereby consent to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to the Issuers and agrees that:
i. Such Initial Purchaser is a QIB which owns and
invests on a discretionary basis at least $25.0 million of
securities of issuers that are not affiliated with the
dealer, with such knowledge and experience in financial and
business matters as are necessary in order to evaluate the
merits and risks of an investment in the Notes.
ii. Such Initial Purchaser (A) is not acquiring the
Notes with a view to any distribution thereof that would
violate the Act or the securities laws of any state of the
United States or any other applicable jurisdiction and (B)
will be reoffering and reselling the Notes only to QIBs
which, in the case of dealers, own and invest on a discretionary
basis at least $25.0 million of securities of issuers that
are not affiliated with the dealer, in reliance on the
exemption from the registration requirements of the Act provided
by Rule 144A.
iii. No form of general solicitation or general
advertising (within the meaning of Regulation D under the Act)
has been or will be used by such Initial Purchaser or any
of its representatives in connection with the offer and
sale of any of the Notes, including, but not limited to,
articles, notices or other communications published in
any newspaper, magazine, or similar medium or broadcast
over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or
general advertising.
iv. Such Initial Purchaser agrees that, in connection
with the Exempt Resales, it will solicit offers to buy the
Notes only from, and will offer to sell the Notes only to,
Eligible Purchasers. Such Initial Purchaser further (A)
agrees that it will offer to sell the Notes only to, and
will solicit offers to buy the Notes only from Eligible
Purchasers that the Initial Purchaser reasonably believes
are QIBs which, in the case of dealers, own and invest on a
discretionary basis at least $25.0 million of securities of
issuers that are not affiliated with the dealer, and (B)
acknowledges and agrees that, in the case of such QIBs, that
such Notes will not have been registered under the Act and
may be resold, pledged or otherwise transferred only to (1)
the Company, Finance or any of their respective subsidiaries,
(2) inside the United States to a QIB which, in the case of
dealer, own and invest on a discretionary basis at least
$25.0 million of securities of issuers that are not affiliated
with the dealer, in a transaction meeting the require
ments of Rule 144A, (3) inside the United States to an
"Institutional Accredited Investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the Act that, which in the
case of a dealer, owns and invests on a discretionary basis,
at least $25 million of securities that are not affiliated
with the dealer and in the case of all other Institutional
Accredited Investors, at least $5 million that, prior to such
transfer, furnishes (or has furnished on its behalf by U.S.
broker-dealer) to the Trustee, a signed letter containing
certain representations and agreements relating to the
registration of transfer of such Notes (the form of which can be
obtained from the Trustee), (4) pursuant to an exemption from
registration provided by Rule 144 under the Act (if available)
or (5) pursuant to an effective registration statement
under the Act and (C) acknowledges that it will, and each
subsequent holder is required to, notify any purchaser of the
security evidenced thereby of the resale restrictions set
forth in (B) above.
v. Such Initial Purchaser has not offered or sold, and,
prior to the date six months after the date of the issue
of the Notes, will not offer or sell any Notes to persons in the
United Kingdom except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or other
wise in circumstances which do not constitute an offer to the public
in the United Kingdom for the purposes of the Public Offers of
Securities Regulations 1995; it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Notes in, from or otherwise
involving the United Kingdom; and it has only issued or passed on and
will only issue or pass on in the United Kingdom any document
received by it in connection with the issue or sale of the Notes to a
person who is a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
(as amended) or is a person to whom such documents may otherwise law
fully be issued or passed on.
The Initial Purchasers acknowledge that the Issuers and, for
purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel for the Issuers and counsel
for the Initial Purchasers will rely upon the accuracy and truth
of the foregoing representations and hereby consents to such
reliance.
6. Indemnification.
(a) The Issuers, jointly and severally, agree to indemnify
and hold harmless (i) each of the Initial Purchasers, (ii) each
person, if any, who controls such Initial Purchaser within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act and (iii) the officers, directors, partners, employees,
representatives and agents of such Initial Purchaser or any controlling
person to the fullest extent lawful, from and against any and all
losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to reasonable attorneys' fees and any
and all expenses whatsoever incurred in investigating, preparing
or defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities,
claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that neither Issuer will
be liable in any such case to the extent, but only to the extent,
that any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance
upon and in conformity with information relating to such Initial
Purchaser furnished to the Issuers in writing by or on behalf of
such Initial Purchaser expressly for use therein. This indemnity
agreement will be in addition to any liability which the Issuers
may otherwise have, including under this Agreement; provided,
however, that the indemnification contained in this paragraph (a)
with respect to the Preliminary Offering Memorandum shall not
inure to the benefit of any Initial Purchaser (or to the benefit
of any person controlling any Initial Purchaser) on account of any
such loss, liability, claim, damage or expense arising from the
sale of the Notes by such Initial Purchaser to any person if a
copy of the Offering Memorandum, as it may be amended or supplemented
shall have not been delivered or sent to such person, at or
prior to the written confirmation of such sale, and the untrue
statement or alleged untrue statement or omission or alleged
omission of a material fact contained in the Preliminary Offering
Memorandum was corrected in the Offering Memorandum, as it may
have been amended or supplemented; provided that the Issuers have
delivered the Offering Memorandum, as it may be amended or supplemented,
to such Initial Purchaser in requisite quantity on a timely basis to permit
such delivery or sending.
(b) Each of the Initial Purchasers, severally and not
jointly, agrees to indemnify and hold harmless (i) the Issuers,
(ii) each person, if any, who controls the Issuers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, and (iii) the respective officers, directors, partners,
employees, representatives and agents of the Issuers, against any
losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to reasonable attorneys' fees and any
and all expenses whatsoever incurred in investigating, preparing
or defending against any investigation or litigation, commenced
or threatened, or any claim whatsoever and any and all amounts
paid in settlement of any claim or litigation), joint or several,
to which they or any of them may become subject under the Act,
the Exchange Act or otherwise, insofar as such losses, liabilities,
claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any amendment
thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, in each case to the extent, but
only to the extent, that any such loss, liability, claim, damage
or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with information relating
to such Initial Purchaser (and not with respect to the information
provided by the other Initial Purchaser) furnished to the Issuers in
writing by or on behalf of such Initial Purchaser expressly for use
therein; provided, however, that in no case shall such Initial Purchaser
be liable or responsible for any amount in excess of the discounts and
commissions received by such Initial Purchaser, as set forth on the cover
page of the Offering Memorandum. This indemnity will be in addition to any
liability which such Initial Purchaser may otherwise have, including under
this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such
subsection, notify each party against whom indemnification is to
be sought in writing of the commencement thereof (but the failure
so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the
extent that it has been prejudiced in any material respect by
such failure or from any liability which it may otherwise have).
In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless
(i) the employment of such counsel shall have been authorized in writing by
the indemnifying parties in connection with the defense of such action, (ii)
the indemnifying parties shall not have employed counsel to take charge of
the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it
or them which are different from or additional to those available to one
or all of the indemnifying parties (in which case the indemnifying party or
parties shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such
fees and expenses of counsel shall be borne by the indemnifying parties;
provided, however, that the indemnifying party under subsection (a) or (b)
above shall only be liable for the legal expenses of one counsel
(in addition to any local counsel) for all indemnified parties in
each jurisdiction in which any claim or action is brought. Any
thing in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any
claim or action effected without its prior written consent, provided that
such consent was not unreasonably withheld.
7. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 6 is for any reason held
to be unavailable from an indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Issuers, on the one hand, and
the Initial Purchasers, on the other hand, shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but
after deducting in the case of losses, liabilities, claims, damages and
expenses suffered by the Issuers, any contribution received by the Issuers
from persons, other than the Initial Purchasers, who may also be liable for
contribution, including persons who control the Issuers within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act) to which the
Issuers and the Initial Purchasers may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Issuers, on the
one hand, and the Initial Purchasers, on the other hand, from the offering of
the Notes or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 6, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Issuers, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Issuers, on the one hand, and the Initial
Purchasers, on the other hand, shall be deemed to be in the same proportion
as (a) the total proceeds from the offering of Notes (net of discounts but
before deducting expenses) received by the Issuers and (b) the discounts
and commissions received by the Initial Purchasers, respectively,
in each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of the Issuers, on the one hand, and of the
Initial Purchasers, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuers or the Initial Purchasers and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Issuers and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if
the Initial Purchasers were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to above. Notwithstanding the provisions of this
Section 7, (i) in no case shall any Initial Purchaser be required to
contribute any amount in excess of the amount by which the discounts and
commissions applicable to the Notes purchased by such Initial Purchaser
pursuant to this Agreement exceeds the amount of any damages which such
Initial Purchaser has otherwise been required to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
Section 7, (a) each person, if any, who controls the Initial Purchasers
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act and (b) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchasers or any controlling
person shall have the same rights to contribution as the Initial Purchasers,
and (a) each person, if any, who controls the Issuers within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and (b) the
respective officers, directors, partners, employees, representatives and
agents of the Issuers shall have the same rights to contribution as the
Issuers, subject in each case to clauses (i) and (ii) of this Section
7. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another
party or parties under this Section 7, notify such party or parties from whom
contribution may be sought, but the failure to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought
from any obligation it or they may have under this Section 7 or otherwise.
No party shall be liable for contribution with respect to any action or claim
settled without its prior written consent, provided that such written consent
was not unreasonably withheld. The Initial Purchasers' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amount of Notes purchased by each of the Initial
Purchasers hereunder and not joint.
8. Conditions of Initial Purchasers' Obligations. The several obligations
of the Initial Purchasers to purchase and pay for the Notes, as provided
herein, shall be subject to the satisfaction of the following conditions:
(a) All of the representations and warranties of the Issuers
contained in this Agreement shall be true and correct on the
date hereof and on the Closing Date with the same force and effect
as if made on and as of the date hereof and the Closing
Date, respectively. Each Issuer shall have performed or complied
with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and
copies distributed to the Initial Purchasers not later than 2:00
p.m., New York City time, on the day following the date of this
Agreement or at such later date and time as to which the Initial
Purchasers may agree, and no stop order suspending the qualification
or exemption from qualification of the Notes thereof in any
jurisdiction referred to in Section 4(e) shall have been issued
and no proceeding for that purpose shall have been commenced or
shall be pending or threatened.
(c) No action shall have been taken with respect to the
Issuers or the Manager and no statute, rule, regulation or order
shall have been enacted, adopted or issued by any governmental
agency which would, as of the Closing Date, prevent the issuance
of the Notes thereof; no action, suit or proceeding shall have
been commenced and be pending against or affecting or, to the
best knowledge of the Issuers, threatened against, any of the
Issuers or the Manager before any court or arbitrator or any
governmental or tribal body, agency or official (including, but
not limited to, any Gaming Authorities) that, if adversely
determined, could reasonably be expected to result in a Material
Adverse Effect; and no stop order shall have been issued prevent
ing the use of the Offering Memorandum, or any amendment or
supplement thereto, or which could reasonably be expected to have a
Material Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum, (i) there shall not have been any material
adverse change, whether or not arising in the ordinary course of
business, or any change or any development that is reasonably
likely to result in a material adverse change, in the capital
stock, membership units or partnership units, as applicable, or
the long-term debt, or material increase in the short-term debt,
of any of the Issuers or the Manager from that set forth in the
Offering Memorandum, (ii) no dividend or distribution of any kind
shall have been declared, paid or made by any of the Issuers or
the Manager on any class of its capital stock, membership units
or partnership units, as applicable and (iii) none of the Issuers
or the Manager shall have incurred any liabilities or obligations,
direct or contingent, that are material, individually or in the
aggregate, to the Issuers, taken as a whole, or the Manager,
taken as a whole, respectively, and that are required to be disclosed
on a balance sheet or notes thereto in accordance with generally
accepted accounting principles and are not disclosed on the latest
balance sheet or notes thereto included in the Offering Memorandum.
Since the date hereof and since the dates as of which information
is given in the Offering Memorandum, there shall not have occurred
any material adverse change, or any development that is reasonably
likely to result in a material adverse change, in the business, prospects,
financial condition or results of operation of the Issuers and the
Manager, taken as a whole.
(e) The Issuers' 12-3/4% Senior Notes due 2003 (the "Senior
Notes") tendered pursuant to the tender offer and consent solicitation
for the Senior Notes shall have been accepted for purchase by the
Issuers in compliance with the Offer to Purchase and Consent
Solicitation Statement, as in effect on the date hereof (the
"Statement"). The supplemental indenture to the indenture under
which the Senior Notes were issued (the "Supplemental Indenture")
containing the Proposed Amendments, including the Change of Control
Amendment (each, as defined in the Statement) shall have been
executed and be effective as of the date hereof. The Officers'
Certificate referred to Section 3(b) of the Supplemental
Indenture shall have been delivered by each of the Issuers and
the Supplemental Indenture shall be operative prior to Closing.
(f) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed on behalf of each Issuer,
in form and substance satisfactory to the Initial Purchasers,
confirming, as of the Closing Date, the matters set forth in
paragraphs (a), (b), (c) and (d) of this Section 8 and that, as
of the Closing Date, the obligations of the such Issuer to be
performed hereunder on or prior thereto have been duly performed.
(g) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers and counsel for the
Initial Purchasers, of Xxxxxx & Xxxxxxx ("Xxxxxx"), special counsel
for the Issuers; Xxxxxx & Xxxxxxx, special Indian gaming
counsel to the Issuers; Rome XxXxxxxx Sabonosh P.C., special
Connecticut counsel to the Issuers; and an opinion of Xxxxxx
relating to certain tax matters to the effect set forth in Exhibits
B-1, B-2, B-3 and B-4, respectively, hereto.
(h) At the time this Agreement is executed and at the Closing
Date, the Initial Purchasers shall have received from
PricewaterhouseCoopers LLP, independent public accountants, dated
as of the date of this Agreement and as of the Closing Date,
comfort letters addressed to the Initial Purchasers and in form
and substance satisfactory to the Initial Purchasers and counsel
for the Initial Purchasers with respect to the financial state
ments and certain financial information of the Issuers contained
in the Offering Memorandum.
(i) The Initial Purchasers shall have received an opinion,
dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchasers, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
("Skadden"), counsel for the Initial Purchasers, covering such matters
as are customarily covered in such opinions.
(j) Skadden shall have been furnished with such documents,
in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon
the matters referred to in this Section 8 and in order to evidence
the accuracy, completeness or satisfaction in all material
respects of any of the representations, warranties or conditions
herein contained.
(k) Prior to the Closing Date, the Issuers shall have
furnished to the Initial Purchasers such further information,
certificates and documents as the Initial Purchasers may reasonably
request.
(l) The Issuers and the Trustee shall have entered into the
Indenture and the Security Agreement and the Initial Purchasers
shall have received counterparts, conformed as executed, thereof.
(m) The Notes shall have been approved for trading on PORTAL.
(n) All opinions, certificates, letters and other documents
required by this Section 8 to be delivered by the Issuers will be
in compliance with the provisions hereof only if they are reason
ably satisfactory in form and substance to the Initial Purchasers.
The Issuers shall furnish the Initial Purchasers with such
conformed copies of such opinions, certificates, letters and
other documents as it shall reasonably request.
(o) On the Closing Date, an amount of the net proceeds from
the Offering equal to two semi-annual interest payments on the
Notes shall paid directly to the Securities Intermediary (as
defined the Security Agreement) to fund the Interest Reserve
Account and the Senior Notes shall be accepted for purchase.
(p) All proceeding taken in connection with the sale of the
Notes as herein contemplated shall be reasonably satisfactory in
form and substance to the Initial Purchasers and to Skadden.
9. Initial Purchasers' Information. The Issuers acknowledge
that the statements with respect to the offering of the Notes
set forth in the fourth full paragraph on page ii, the first
clause of the fifth sentence of the first paragraph under the
caption "Risk Factor Trading Market for the Notes " and the fifth
sentence of the fifth paragraph and the sixth paragraph under the
caption "Plan of Distribution " in the Offering Memorandum
constitute the only information relating to any of the Initial
Purchasers furnished to the Issuers by or on behalf of the Initial
Purchasers for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements of the Initial Purchasers
and the Issuers contained in this Agreement, including the
agreements contained in Sections 4(f) and 11(d), the indemnity
agreements contained in Section 6 and the contribution
agreements contained in Section 7, shall remain operative and in
full force and effect regardless of any investigation made by or
on behalf of any Initial Purchaser, any controlling person
thereof, or by or on behalf of the Issuers or any controlling
person thereof, and shall survive delivery of and payment for the
Notes to and by the Initial Purchasers. The representations
contained in Section 5 and the agreements contained in Sections
4(f), 6, 7 and 11(d) shall survive the termination of this
Agreement, including any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution
and delivery of a counterpart hereof by each of the parties
hereto.
(b) The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice by
telephone, telex, or telegraph, confirmed in writing by letter, to
the Issuers from the Initial Purchasers, without liability (other
than with respect to Sections 6 and 7) on the Initial Purchasers'
part to the Issuers if, on or prior to such date, (i) the Issuers
shall have failed, refused or been unable to perform in any
material respect any agreement on their part to be performed
hereunder, (ii) any other condition to the obligations of the
Initial Purchasers hereunder as provided in Section 8 which is
qualified as to the materiality is not fulfilled when and as required
and any condition not so qualified is not fulfilled when and as
required in any material respect, (iii) in the reasonable judgment
of the Initial Purchasers, any material adverse change shall have
occurred since the respective dates as of which information is
given in the Offering Memorandum in the condition (financial or
otherwise), business, properties, assets, liabilities, prospects,
net worth, results of operations or cash flows of the Issuers,
taken as a whole, other than as set forth in the Offering
Memorandum, or (iv)(A) any domestic or international event
or act or occurrence has materially disrupted, or in the
opinion of the Initial Purchasers will in the immediate future
materially disrupt, the market for the Issuers' securities
or for securities in general; or (B) trading in securities gener-
ally on the New York Stock Exchange, the American Stock Exchange,
the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National
Market shall have been suspended or materially limited, or minimum
or maximum prices for trading shall have been established, or
maximum ranges for prices for securities shall have been
required, on such exchange or the Nasdaq National Market, or by
such exchange or other regulatory body or governmental authority
having jurisdiction; or (C) a banking moratorium shall have been
declared by federal or state authorities, or a moratorium in
foreign exchange trading by major international banks or persons
shall have been declared; or (D) there is an outbreak or escala-
tion of armed hostilities involving the United States on or after
the date hereof, or if there has been a declaration by the United
States of a national emergency or war, the effect of which shall
be, in the Initial Purchasers' judgment, to make it inadvisable
or impracticable to proceed with the offering or delivery of the
Notes on the terms and in the manner contemplated in the Offering
Memorandum; or (E) there shall have been such a material adverse
change in general economic, political or financial conditions or
if the effect of international conditions on the financial markets
in the United States shall be such as, in the Initial Purchasers'
judgment, makes it inadvisable or impracticable to proceed with the
delivery of the Notes as contemplated hereby.
(c) If on the Closing Date one or more of the Initial Purchasers
shall fail or refuse to purchase the Notes which it or they has agreed
to purchase hereunder on such date and the aggregate principal amount
of the Notes which such defaulting Initial Purchaser or Initial Purchasers,
as the case may be, agreed but failed or refused to purchase is not more
than one-tenth of the aggregate principal amount of the Notes to be
purchased on such date by all Initial Purchasers, each non-defaulting
Initial Purchaser shall be obligated severally, in the proportion which the
principal amount the Notes set forth opposite its name in Exhibit A
bears to the aggregate principal amount of the Notes which all the
non-defaulting Initial Purchasers have agreed to purchase or
in such other proportion as Bear Xxxxxx may specify, to purchase
the Notes which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the aggregate
principal amount of the Notes which any Initial Purchaser
has agreed to purchase pursuant to Section 3 hereof be increased
pursuant to this Section 11 by an amount in excess of one-ninth
of such principal amount of the Notes without the written consent
of such Initial Purchaser. If on the Closing Date any Initial
Purchaser or Initial Purchasers shall fail or refuse to purchase
the Notes and the aggregate principal amount of the Notes with
respect to which such default occurs is more than one-tenth of
the aggregate principal amount of the Notes to be purchased by
all Initial Purchasers and arrangements satisfactory to the Initial
Purchasers and the Issuers for purchase of such the Notes
are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any
non-defaulting Initial Purchaser and the Issuers. In any such
case which does not result in termination of this Agreement,
either Bear Xxxxxxx or the Issuers shall have the right to postpone
the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Offering
Memorandum or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve
a defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.
(d) Any notice of termination pursuant to this Section 11
shall be by telephone or facsimile and, in either case, confirmed
in writing by letter.
(e) If this Agreement shall be terminated pursuant to any
of the provisions hereof (otherwise than pursuant to clause (iv)
of Section 11(b), in which case each party will be responsible
for its own expenses), or if the sale of the Notes provided for
herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth herein is not satisfied
or because of any refusal, inability or failure on the part of
the Issuers to perform any agreement herein or comply with any
provision hereof, the Issuers shall reimburse the Initial Purchasers
for all out-of-pocket expenses (including the reasonable fees and
expenses of the Initial Purchasers' counsel), incurred by the Initial
Purchasers in connection herewith.
12. Notice. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and,
if sent to the Initial Purchasers shall be mailed, delivered,
telecopied and confirmed in writing or sent by a nationally recognized
overnight courier service guaranteeing delivery on the
next business day to Bear, Xxxxxxx & Co. Inc., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxxx Xxxxx Xxxxxx
Inc., c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Finance Department, telecopy
number: (000) 000-0000, with a copy to Skadden, Arps, Slate,
Xxxxxxx & Xxxx, LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxxxxxx Xxxxxxx, Esq., telecopy number:
(000) 000-0000; and if sent to the Issuers, shall be mailed,
delivered, telecopied and confirmed in writing or sent by a
nationally recognized overnight courier service guaranteeing
delivery on the next business day to Waterford Gaming, L.L.C. and
Waterford Gaming Finance Corp., 000 Xxxxxxxx Xxxxxxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000, Attention: Chief Financial Officer, telecopy
number: (000) 000-0000, with a copy to Xxxxxx & Xxxxxxx, 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx Xxx, Esq., telecopy number: (000) 000-0000.
13. Parties. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Initial Purchasers and the
Issuers and the controlling persons and agents referred to in
Sections 6 and 7, and their respective successors and assigns,
and no other person shall have or be construed to have any legal
or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in
its capacity as such, of Notes from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance
with the internal laws of the State of New York, including,
without limitation, Section 5-1401 of the New York General Obligation
Law. TIME IS OF THE ESSENCE IN THIS AGREEMENT.
15. Captions. The captions included in this Agreement are in
cluded solely for convenience of reference and are not to be
considered a part of this Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same
instrument.
[Signature page to follow]
If the foregoing correctly sets forth the understanding among
the Initial Purchasers and the Issuers please so indicate in the
space provided below for that purpose, whereupon this letter shall
constitute a binding agreement among us.
Very truly yours,
WATERFORD GAMING, L.L.C.
By: __________________________
Name:
Title:
WATERFORD GAMING FINANCE CORP.
By: __________________________
Name:
Title:
Accepted and agreed to as of
the date first above written:
BEAR, XXXXXXX & CO. INC.
By:_________________________________
Name:
Title:
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX INCORPORATED
By:_________________________________
Name:
Title:
XXXXXXX XXXXX XXXXXX INC.
By:_________________________________
Name:
Title:
Exhibit A
Principal
Amount of
Initial Purchaser
Notes
Bear, Xxxxxxx & Co. Inc. $78,125,000
Xxxxxxx, Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated 40,625,000
Xxxxxxx Xxxxx Xxxxxx Inc. 6,250,000
Total 125,000,000
Exhibit B-1
Form of Opinion of Xxxxxx & Xxxxxxx
1. Each Issuer is duly incorporated or organized, as
applicable, and is validly existing as a corporation or limited
liability company, as applicable, and in good standing under the
laws of the State of Delaware, with all corporate or limited
liability company power and authority to own, lease and operate
its properties, and to conduct its business as described in the
Offering Memorandum and is duly qualified and in good standing or
in existence as a foreign limited liability company or foreign
corporation, as applicable, and is authorized to do business in
each jurisdiction in which such Issuer owns or leases property or
conducts business.
2. Each Issuer has all requisite corporate or limited liability
company power and authority, as applicable, to enter into and
perform its obligations under this Agreement and each of the
other Operative Documents to which it is a party and to
consummate the transactions on the Closing Date contemplated
hereby and thereby, including, without limitation, the corporate
power and authority to issue, sell and deliver the Notes provided
herein.
3. All of the shares of capital stock of Finance have been duly
authorized, validly issued, and are fully paid and nonassessable
and, to the knowledge of such counsel, none of the issued and
outstanding shares of capital stock of Finance were issued in
violation of any preemptive or similar rights. All of the shares
of capital stock of Finance and the Company's partnership
interest in the Manager are owned by the Company, to the
knowledge of such counsel, free and clear of any perfected
security interests, claims, liens, limitation on voting rights or
encumbrances, except as provided in the Partnership Agreement or
the agreement dated March [ ], 1999, relating to the termination
of the Omnibus Agreement as contemplated in the Memorandum of
Understanding.
4. This Agreement has been duly authorized, executed and
delivered by each Issuer.
5. The Indenture has been duly authorized, executed and
delivered by each Issuer, and is (assuming the due authorization,
execution and delivery of the Indenture by the Trustee) the
legally valid and binding agreement of each Issuer, enforceable
against each of them in accordance with its terms, except to the
extent that (a) enforcement thereof may be limited by (i) the
effect of bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors and (ii) the
effect of general principles of equity whether enforcement is
considered in a proceeding at law or in equity and the discretion
of the court before which any proceeding therefore may be
brought; and (b) the waiver of rights and defenses contained in
Section 4.16 of the Indenture may be deemed unenforceable.
6. The Notes have been duly authorized and when executed,
issued and authenticated in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers
in accordance with the terms hereof and thereof, the Notes will
be legally valid and binding obligations of each Issuer,
enforceable against each Issuer in accordance with their terms,
except to the extent that (a) enforcement thereof may be limited
by (i) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights and remedies of creditors and
(ii) the effect of general principles of equity whether
enforcement is considered in a proceeding at law or in equity and
the discretion of the court before which any proceeding therefore
may be brought; and (b) the waiver of rights and defenses
contained in Section 4.16 of the Indenture may be deemed
unenforceable.
7. The Security Agreement has been duly authorized, executed
and delivered by each Issuer, and is the legally valid and
binding agreement of each Issuer, enforceable against each of
them in accordance with its terms, except to the extent that (a)
enforcement thereof may be limited by (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting
the rights and remedies of creditors and (ii) the effect of
general principles of equity whether enforcement is considered in
a proceeding at law or in equity and the discretion of the court
before which any proceeding therefore may be brought; and (b) the
enforceability of indemnification and contribution provisions may
be limited by federal and state securities laws and policies
underlying such laws. Such counsel may state that no opinion is
given in this paragraph 7 with respect to the creation or
perfection of a security interest which is covered by Paragraph
13.
8. The Notes and the Indenture conform in all material respects
to the descriptions thereof contained in the Offering Memorandum
under the heading "Description of Notes."
9. Neither (a) the issuance of the Notes, (b) the performance
by the Issuers of their respective obligations under the
Operative Documents nor (c) consummation by the Issuers of the
transactions described in the Offering Memorandum under the
caption "Use of Proceeds," conflicts with, results in a breach
of, or constitutes a default under (or an event that with notice
or the lapse of time, or both would constitute a default under)
or requires a consent under, or results in an imposition of a
lien or incumbrance on any indebtedness of either Issuer pursuant
to (A) the terms of any indenture or other material agreement or
instrument that has been filed as an exhibit to the Issuers' 10-K
and to which either of the Issuers is a party or bound, (B) any
federal or New York statute, rule or regulation or Delaware
General Corporate Law or the Delaware Limited Liability Company
Act to which either of the Issuers is subject or by which either
of them is bound, or to which any of the properties of the
Issuers is subject, which statute, rule or regulation, in the
experience of such counsel, is normally applicable to
transactions of the type contemplated under the Operative
Documents, or to our knowledge, any order of any federal, New
York or Delaware court or governmental agency or body having
jurisdiction over the Issuers or any of their properties, except
that such counsel need express no opinion with respect to gaming
or Indian consents, approvals, authorizations or orders, or (C)
any of the provisions of the certificate of incorporation,
certificate of formation, by-laws, limited liability company
agreement or partnership agreement of the Issuers or the Manager
as in effect on the date of the opinion or (iv) to the best of
such counsel's knowledge, any judgment, order or decree of any
court or governmental agency or authority having jurisdiction
over either Issuer or any of their assets or properties, except
in the case of (A) and (B), for consents, violations, defaults
and breaches as would not have a Material Adverse Effect.
Assuming compliance with applicable state securities and Blue Sky
laws, as to which such counsel need express no opinion, no
consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, (a)
any federal or New York court or governmental agency, body or
administrative agency or the Delaware Court of chancery or (b)
any other person is required for (i) the execution, delivery and
performance by the Issuers of this Agreement or any of the other
Operative Documents to which it is a party or (ii) the issuance
and sale of the Notes and the transactions contemplated hereby
and thereby, except such as have been obtained and made or have
been disclosed in the Offering Memorandum provided, however that
such counsel need express no opinion with respect to laws
governing gaming activities or any tribal law.
10. To the best of such counsel's knowledge, there is no
current, pending or threatened action, suit or proceeding before
any court or governmental agency, authority or body or any
arbitrator involving the Issuers or the Manager or to which any
of their respective property is subject of a character required
to be disclosed in the Offering Memorandum which is not
adequately disclosed therein.
11. The offer, issuance, sale and delivery of the Notes to the
Initial Purchasers and assuming compliance with the transfer
restrictions, the reoffer, resale and delivery by the Initial
Purchasers in the manner and to the persons contemplated by the
Purchase Agreement and the Offering Memorandum do not require
registration under the Act or qualification of the Indenture
under the Trust Indenture Act of 1939.
12. Neither Issuer is, and upon the receipt of the proceeds of
the Offering will be, an "investment company" within the meaning
of the Investment Company Act. Waterford Group L.L.C. is not,
and following the distribution of the proceeds of the Offering in
accordance with the section of the Final Offering Memorandum
caption "Use of Proceeds" will not be an "investment company"
with the meaning of the Investment Company Act.
13. The Security Agreement is sufficient to create in favor of
the Trustee for the benefit of the holders of the Notes, to
secure the performance by the Issuers of the Obligations (as
defined in the Security Agreement), a valid security interest in
all of the Issuers' right, title and interest in and to all
"security entitlements" arising from the Pledged Collateral (as
defined in the Security Agreement) (such security entitlements,
the "Pledged Security Entitlements") and the "proceeds" (as
defined in Section 9-306 of the Uniform Commercial Code as in
effect in the State of New York (the "NY UCC")) thereof. The
provisions of the Security Agreement are effective to perfect the
security interest of the Trustee in the Pledged Security
Entitlements and assuming that the Trustee, on behalf of the
Holders, has obtained the Pledged Security Entitlement to the
Pledged Collateral without notice of any "adverse claim" (as
defined in Section 8-102 of the NY UCC) in respect of the Pledged
Security Entitlements, such a perfected security interest in
favor of the Trustee under the Security Agreement in the Issuers'
right, title and interest in and to the Pledged Security
Entitlements will have priority over any other security interest
in the Pledged Security Entitlements under the NY UCC, except as
hereafter stated. Such counsel may assume that the Securities
Account exists, that each Issuer has sufficient rights therein
for the security interest to attach, and that "value" has been
given, as defined in Section 1-201(44) of the NY UCC; such
counsel need express no opinion as to the nature or extent of
each Issuer's rights in, or title to, any of the Pledged Security
Entitlements; or as to the nature or extent of the rights of the
"securities intermediary" (as defined in the NY UCC) in, or title
to, any financial assets underlying the Pledged Security
Entitlements; such counsel may state that the perfection of a
security interest in "proceeds" (as defined in the NY UCC) of
collateral is governed and restricted by Section 9-306 of the NY
UCC; such counsel may state that the law of a "securities
intermediary's jurisdiction" governs, among other things, the
rights and duties of a "securities intermediary" and the
"entitlement holder" arising out of a "security entitlement" and
whether an adverse claim can be asserted against a person who
acquired a "security entitlement" from a "securities
intermediary" (as each such term is defined in the NY UCC; such
counsel may assume that the Securities Intermediary will comply
with its obligations under Section 9 of the Security and Control
Agreement; such counsel may state that an entitlement holder's
property interests with respect to financial assets are subject
to Sections 8-503 and 8-511 of the NY UCC(g); such counsel need
express no opinion with respect to the security interest of the
Secured Party in any of the following types of property: (i) any
option or similar obligation issued by a clearing corporation to
its participants, (ii) any commodity contract; such counsel's
opinion may be limited to the NY UCC and Federal Book Entry
Regulations, and such opinion need not address (I) laws of
jurisdictions other than New York and the Federal Book Entry
Regulations, (II) collateral of a type not subject to the NY UCC
or the Federal Book Entry Regulations, (III) under NY UCC Section
9-103 or 8-110, what law governs perfection or priority of the
security interests granted in the collateral and (IV) what law
governs perfection or priority of security interests granted in
Federal Security Entitlements; such counsel need express no
opinion except to the extent that the Securities Account
constitutes a "securities account" within the meaning of NY UCC
Section 8-501(a) and with respect to each security entitlement,
may assume that the underlying security or other financial asset
has been endorsed to the securities intermediary or in blank or
has been credited to a securities account in the name of the
securities intermediary; such counsel need express no opinion
with respect to the priority of the security interest of the
Trustee in the Pledged Security Entitlements against any of the
following: (I) pursuant to Section 9-301(1) of the NY UCC, a
lien creditor who attached or levied prior to the perfection of
the security interest of the Trustee, (II) pursuant to Section 9-
301(4) of the NY UCC, a lien creditor with respect to future
advances, (III) pursuant to Section 9-312(7) of the NY UCC,
another secured creditor to the extent that provision limits the
priority afforded future advances, (IV) pursuant to Section 9-
312(6) of the NY UCC, another secured party with a prior
perfected security interest in other property of either Issuer to
the extent that the Pledged Security Entitlements are proceeds of
such other property; such counsel may state that pursuant to
Section 9-115 of the NY UCC, the security interest of the Trustee
will be subordinate to any security interest now or hereafter
granted by the Company in favor of a "securities intermediary"
and will be of equal priority with any other secured party who
has or obtains control; if and to the extent the securities
intermediary is a "clearing corporation" as defined in Section 8-
102(a)(5), such counsel may state that pursuant to Section 8-111
of the NY UCC, any rule adopted by a clearing corporation
governing the rights and obligations among the clearing
corporation and its participants is effective even if the rule
conflicts with the NY UCC and affects the rights of the Trustee.
To the extent that the opinions expressed in numbered
paragraph 13 relate to Federal Security Entitlements, such
opinion may be subject to the following limitations,
qualifications and exceptions:
(a) such counsel may state that pursuant to the Federal
Book-Entry Regulations, the Secretary of the Treasury may
waive provisions of the Federal Book-Entry Regulations and
express no opinion on the effect of any such waiver on the
opinions expressed therein;
(b) such counsel's opinion may be limited to Federal
Book-Entry Regulations as published in the Code of Federal
Regulations or the Federal Register, without regard to any
interpretations, operating circulars or other communications
from the Department of the Treasury, the Board of Governors
of the Federal Reserve System or any Federal Reserve Bank.
(c) such counsel may state that pursuant to Section 9-
115 of the UCC, the security interest of the Trustee may be
subordinate to any security interest now or hereafter
granted by the Company in favor of a "securities
intermediary" and will be of equal priority with any other
secured party who has or obtains control and pursuant to
section 357.12(C) of the Federal Book-Entry Regulations, the
security interest of the Trustee will be subordinate to a
security interest in favor of the United States or in favor
of any other person if it is marked on the books and records
of a federal reserve bank;
(d) such counsel may state that its opinion with
respect to the security interest of the Trustee is limited
to the Federal Book-Entry Regulations and the UCC and
pursuant to Section 357.11 of the Book-Entry Regulations,
the law of any securities intermediaries' jurisdiction
governs, among other things, the rights and duties of the
securities intermediary and the entitlement holder arising
out of a security entitlement and whether an adverse claim
can be asserted against a person who acquires a security
entitlement from the securities intermediary.
14. In addition, such counsel shall state that it has
participated in conferences with officers and other
representatives of the Issuers, representatives of the
independent certified public accountants of the Issuers and the
Initial Purchasers and their representatives at which the
contents of the Offering Memorandum and related matters were
discussed and, although it did not independently verify such
information and is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum during the course
of such participation, no facts have come to its attention which
led it to believe that the Offering Memorandum, as of its date or
the Closing Date, contained an untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading
(it being understood that such counsel need express no belief or
opinion with respect to financial statements and other financial
and statistical data included therein).
Exhibit B-2
Form of Opinion of Xxxxxx & Xxxxxxx
1. None of the issuance and sale of the Notes or the
performance of the Issuers' obligations pursuant to this Agree-
ment, the Security Agreement or the Indenture will violate any
Federal Indian Law or Tribal Law to which either Issuer is sub-
ject or by which either of them is bound or to which any of the
properties of the Issuers are subject.
2. Except as such as have been obtained or made pursuant to
Federal Indian Law or Tribal Law, no authorization, approval,
consent or order of any federal or tribal authority with
jurisdiction over gaming is required to be obtained by the Issu-
ers in connection with the sale by the Issuers of the Notes to
the Initial Purchasers or the pledge of the collateral pursuant
to the Security Agreement.
3. There is no requirement under Federal Indian Law or Tribal
Law that any holder of the Notes, solely in its capacity as a
holder of the Notes, to apply for or receive any individual
license, any individual certificate or any other authorization
from any federal or tribal authority to acquire or hold Notes
under the Indenture.
4. To the best of our knowledge, each of the Issuers and the
Manager has such Permits as are required under Federal Indian Law
and Tribal Law to conduct their operations in the manner
described in the Offering Memorandum.
5. The statements contained in the Offering Memorandum under
the captions "Risk Factors Highly Regulated Industries" and
"Government Regulation" insofar as they purport to summarize Fed-
eral Indian Law or Tribal Law, are accurate in all material re-
spects.
6. None of the Agreement, the Security Agreement, the
Indenture, the Notes, the Development Services Agreement dated as
of February 7, 1999, by and between the Authority and the Manager
(the "Development Services Agreement"), the Relinquishment
Agreement dated as of February 7, 1999, by and between the
Authority and the Manager (the "Relinquishment Agreement"), and
Note Purchase Agreement dated as of September 29, 1995, by and
between the Authority and Sun International does not violate any
Federal Indian Law or Tribal Law. On February 4, 1999, Judge X.
Xxxxxxxx of the Gaming Disputes Court of the Mohegan Tribe of
Indians of Connecticut entered on Order for Declaratory Judgment
with determined, inter alia, that the Development Services
Agreement and the Relinquishment Agreement "...constitute the
laws of the Tribe, are in proper form and are binding, the
Development Services Agreement has been approved by the Secretary
of the Interior pursuant to 25 USC Sec. 81 and both Agreements
are valid and enforceable against the Tribe and the [Authority]
under Xxxxxx and Federal law, without any further action by the
[National Indian Gaming Commission] or the [Bureau of Indian
Affairs] or the Secretary of the Interior."
Exhibit B-3
Form of Opinion of Rome XxXxxxxx Sabonosh P.C.
1. None of the issuance and sale of the Notes or the
performance of the Issuers' obligations pursuant to the
Agreement, the Security Agreement, the Notes or the Indenture will
violate any Connecticut statute, rule or regulation with respect
to gaming to which either of the Issuers is subject or by which
either of them is bound or to which any of the properties of the
Issuers are subject.
2. No authorization, approval, consent or order of any
Connecticut authority with jurisdiction over gaming is required
to be obtained by the Issuers, which has not been obtained, in
connection with the sale by the Issuers of the Notes to the
Initial Purchasers or the pledge of the collateral pursuant to
the Security Agreement.
3. There is no requirement under any Connecticut statute, rule
or regulation with respect to gaming which requires that any
holder of the Notes, solely in its capacity as a holder of the
Notes, to apply for or to receive any individual license, any
individual certificate or any other authorization from any
Connecticut authority to acquire or hold Notes under the
Indenture.
4. Each of the Issuers and the Manager has such Permits from
all Connecticut regulatory or governmental officials, bodies and
tribunals, with respect to engaging in gaming operations, as are
necessary to own, lease and operate its respective properties and
to conduct its business in the manner described in the Offering
Memorandum.
5. The statements contained under the captions "Government
Regulation" and "Risk Factors Highly Regulated Industries" in
the Offering Memorandum, insofar as they purport to summarize
Connecticut law, are correct in all material respects.
6. Each of the Agreement, the Indenture, the Notes, the
Security Agreement, the Restated Partnership Agreement of Trading
Cove Associates, as amended by the First Amendment thereto dated
October 22, 1996; the Amended and Restated Omnibus Financing
Agreement dated as of September 10, 1997, by and among the
Manager, the Company and Sun International, as amended to the
date of such opinion, does not violate any Connecticut statute,
rule or regulation with respect to gaming.
Exhibit B-4
Form of Opinion of Xxxxxx & Xxxxxxx Regarding Certain Tax
Matters
1. The Company will, for federal income tax purposes, be
disregarded as an entity separate from its owner and not treated
as an association, or a publicly traded partnership, taxable as a
corporation.
