EXHIBIT 10.1
PRESIDENT CASINOS, INC.
AGREEMENT TO EXCHANGE SECURITIES
December 3, 1998
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AGREEMENT TO EXCHANGE SECURITIES
THIS AGREEMENT TO EXCHANGE SECURITIES (this "Agreement") is made this 3rd
day of December, 1998 by and among President Casinos, Inc., a Delaware
corporation (the "Company"), President Riverboat Casino-Iowa, Inc., President
Riverboat Casino-Missouri, Inc., The President Riverboat Casino-Mississippi,
Inc., TCG/Blackhawk, Inc., P.R.C.-Louisiana, Inc., President Riverboat Casino-
New York, Inc., President Casino New Yorker, Inc., PRC Holdings Corporation,
PRC Management, Inc., PRCX Corporation, President Riverboat Casino-
Philadelphia, Inc., Vegas, Vegas, Inc., and The ▇▇▇▇▇▇▇▇ Group, L.P. (each a
"Subsidiary Guarantor," and collectively, the "Subsidiary Guarantors") and each
holder (each a "Holder," and collectively, the "Holders") of the Company's 13%
Senior Exchange Notes due 2001 (the "Senior Exchange Notes") listed on Exhibit
A attached hereto and made a part hereof.
WHEREAS, Section 3.08 of the Indenture dated August 26, 1994 governing the
Senior Exchange Notes (the "Senior Exchange Note Indenture") requires the
Company to redeem 25% of the aggregate principal amount of the Senior Exchange
Notes issued under the Senior Exchange Note Indenture on each of September 15,
1999 and September 15, 2000 at a redemption price equal to 100% of the
principal amount thereof, together with accrued but unpaid interest to the
date of redemption (the "Redemption Obligation");
WHEREAS, under the terms of the Senior Exchange Note Indenture, the
principal amount of Senior Exchange Notes the Company is required to redeem
pursuant to the Redemption Obligation is reduced by the aggregate principal
amount of Senior Exchange Notes acquired by the Company (through purchase,
redemption or exchange);
WHEREAS, pursuant to this Agreement, the Company and each Holder wish to set
forth the terms and conditions pursuant to which the Company shall repurchase
from each Holder the aggregate principal amount of Senior Exchange Notes set
forth opposite such Holder's name on Exhibit A hereto (the "Note Repurchase"),
and the Company shall issue and sell to each Holder, and each Holder shall
purchase from the Company, the principal amount of the Company's 12% Secured
Notes due 2001 (the "Secured Notes") set forth opposite such Holder's name on
Exhibit A attached hereto (the "Secured Note Issuance");
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations and warranties hereinafter set forth, the parties
hereto, intending to be legally bound, hereby agree as follows:
1. Exchange of Securities. On the Closing Date (as defined below), the
Company shall repurchase from each Holder, and each Holder shall sell and
deliver to the Company, Senior Exchange Notes in the aggregate principal
amount set forth opposite such Holder's name on Exhibit A hereto for a
purchase price equal to 95% of such aggregate principal amount, together with
all accrued but unpaid interest to the Closing Date.
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Concurrently with the Note Repurchase, the Company shall issue and sell to
each Holder, and each Holder shall purchase from the Company, the aggregate
principal amount of Secured Notes set forth opposite such Holder's name on
Exhibit A hereto.
The Secured Notes are to be issued pursuant to an indenture substantially in
the form of Exhibit B attached hereto (the "Secured Note Indenture") to be
dated as of the Closing Date among the Company, the Subsidiary Guarantors and
United States Trust Company of Texas, N.A., as trustee (the "Trustee"). The
Secured Notes will be guaranteed in a manner substantially consistent with the
Subsidiary Guarantee attached as Exhibit B to the Secured Note Indenture (the
"Guarantees") by each of the Subsidiary Guarantors. The obligation of
President Riverboat Casino-Missouri, Inc. ("President Missouri") under the
Guarantee shall be secured by a first priority security interest in the vessel
known as the "Admiral" and related barges named "Admiral Barge One" and "Admiral
Barge Two" ("Admiral Barge Two" shall not be encumbered by a ship mortgage)
pursuant to that certain Security Agreement dated as of the date hereof and
substantially in the form attached hereto as Exhibit C and incorporated by
reference herein (the "Security Agreement") and that certain First Preferred
Fleet Mortgage dated as of the date hereof and substantially in the form
attached hereto as Exhibit D and incorporated by reference herein (the
"Mortgage" and, collectively with the Security Agreement and the Leasehold
Deed of Trust defined below, the "Security Documents"). In addition, as
provided in Sections 4(c) and (d) hereof the obligations of President Missouri
under the Guarantee shall be further secured pursuant to that certain Future
Advance Leasehold and Improvements Deed of Trust and Security Agreement and
Fixture Filing attached hereto as Exhibit E (the "Leasehold Deed of Trust"),
and the obligations of President Riverboat Casino-New York, Inc. ("PRC-NY")
under the Guarantee shall be further secured by a first priority security
interest in the vessel known as the "New Yorker." The Secured Notes are
collectively referred to herein as the "Securities" and the term "Securities"
shall also include the Guarantees thereof whenever the context permits. On
the Closing Date, the Company shall issue the Master Note (as defined below)
representing certain of the Secured Notes to be issued upon exchange
hereunder. The Master Note will be dated as of the Closing Date, will bear
interest from the Closing Date and will otherwise be in the form of Exhibit A
to the Secured Note Indenture.
Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Secured Note Indenture.
The Secured Notes will be offered to each Holder pursuant to an exemption
from the registration requirements under the Securities Act of 1933, as
amended (the "Act"). Upon original issuance thereof, and until such time as
the same is no longer required under the applicable requirements of the
Secured Note Indenture, the Secured Notes shall bear a legend in substantially
the following form:
"THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
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SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM,
OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A), (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S OR
THE REGISTRAR (AS APPLICABLE) RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION REASONABLY SATISFACTORY
TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE REGISTRAR. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE."
This Agreement, the Securities, the Guarantees, the Security Documents and
the Secured Note Indenture are hereinafter sometimes referred to collectively
as the "Operative Documents."
2. Disclosure Documents. Each Holder acknowledges receipt of the following
documents (collectively, the "Disclosure Documents"): (i) the Company's
Annual Report on Form 10-K for the fiscal year ended February 28, 1998; and
(ii) the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
August 31, 1998 delivered by the Company to each Holder in connection with the
transactions contemplated hereby. Each Holder represents that it has had
adequate time and opportunity to review the information contained in the
Disclosure Documents and to ask questions of, and request information from,
the Company and each of the Subsidiary Guarantors with respect thereto.
3. Delivery and Payment. Unless otherwise agreed to the contrary, delivery
of the Senior Exchange Notes to the Company and of the Secured Notes to the
Holders (the "Closing") shall be made at 9:00 a.m., Eastern time, on December
3, ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇ ▇▇▇▇") ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company of
New York in New York, New York.
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The Company shall deliver to each Holder Secured Notes in an aggregate
principal amount equal to the aggregate principal amount of Secured Notes set
forth opposite each Holder's name on Exhibit A hereto. All such Secured Notes
shall be in definitive form and registered in the name of the Holder (or in
such other name as the Holder may request upon at least two business days'
notice to the Company). Each Holder shall deliver to the Company Senior
Exchange Notes having an aggregate principal amount set forth next to such
Holder's name on Exhibit A hereto, with the Assignment Form attached thereto
duly executed to the order of the Company. One or more of the Secured Notes
(the "Master Note") may be registered in the name of Cede & Co., as the
nominee of The Depository Trust Company. The Secured Notes or the Master Note
in definitive form shall be made available to each Holder for inspection on
the business day immediately preceding the Closing Date.
If the Closing shall not have occurred on or before December 3, 1998, this
Agreement may be terminated by any party to this Agreement so long as such
party is, at the time of making such election to terminate, ready, willing and
able to perform all of its respective obligations under this Agreement.
4. Agreements of the Company and the Subsidiary Guarantors. The Company
and each of the Subsidiary Guarantors, jointly and severally, agrees with each
Holder as follows:
(a) For so long as any of the Secured Notes remain outstanding and during
any period in which the Company is not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
available to any Qualified Institutional Buyer (as such term is defined under
Rule 144A under the Act) (a "QIB") or "accredited investor" (within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Act) (an
"Institutional Accredited Investor") which beneficially owns Secured Notes,
prior to the registration thereof in connection with any sale thereof, and to
any prospective purchaser of such Secured Notes from such QIB or Institutional
Accredited Investor, the information required by Rule 144A(d)(4) under the
Act. The Company shall also keep available the "current public information"
referred to in Rule 144(c).
(b) During the period from the date hereof to the Closing Date, to take
all actions reasonably necessary or appropriate to cause their representations
and warranties contained in this Agreement and the other Operative Documents
to be true and correct in all material respects as of the Closing Date, after
giving effect to the transactions contemplated by this Agreement and the other
Operative Documents, as if made on and as of such date.
(c) Following the Closing Date, the Company and President Missouri shall
comply with each of the Security Documents and each use their commercially
reasonable best efforts to cause the obligations of President Missouri under
its Guarantee to be secured by the Leasehold Deed of Trust with respect to the
real property related to the vessel known as the "Admiral."
(d) Following the Closing Date, each of the Company and PRC-NY shall use
their respective commercially reasonable best efforts to cause the obligations
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of PRC-NY to be secured by a first priority security interest in the vessel
known as the "New Yorker" as soon as practicable following the expiration of
all applicable restrictions under the charter agreement dated July 1, 1998,
between PRC-NY and Sterling Shipping Two (the "Charter Agreement") pursuant to
which the "New Yorker" is currently chartered. The applicable fleet mortgage
therefor shall be substantially in the form attached as Exhibit D hereto.
PRC-NY shall not consent to the extension of any such restrictions.
(e) Until such time as a first preferred fleet mortgage is granted as to
the vessel "New Yorker," PRC-NY agrees to comply with its obligations under
Section 9 of the Charter Agreement currently in effect and to use its best
efforts to cause the charterer to preserve and maintain such vessel in as good
condition, working order and repair as the same is on the date hereof,
ordinary wear and tear excepted.
(f) PRC-NY will not sell or change the flag of the vessel "New Yorker"
without the prior written consent of a 60% majority-in-interest of the
Holders.
(g) PRC-NY covenants and agrees that it will use its best efforts to
cause the charterer, at its expense, to maintain or cause to be maintained in
effect for the vessel "New Yorker," in form, amount and with insurance
companies, underwriters, clubs or funds of recognized responsibility, all
reasonably acceptable to Holders, insurance of a kind, amount and character
customarily carried by persons operating like properties against risk of loss
and damage. When PRC-NY holds the "New Yorker" free of any charter, Holders
shall be named as additional loss payees on each policy.
5. Representations and Warranties. (a) The Company and each of the
Subsidiary Guarantors, jointly and severally, represents and warrants to each
Holder as of the date hereof and as of the Closing Date that:
(i) The Disclosure Documents do 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 necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
All financial statements contained therein comply with all applicable rules
and regulations of the Securities and Exchange Commission and generally
accepted accounting principles, consistently applied. No order has been
issued asserting that any of the transactions contemplated by this Agreement
are subject to the registration requirements of the Act. The Disclosure
Documents contain all the information specified in, and meeting the
requirements of, Rule 144A(d) (4) under the Act.
(ii) The Company and each of its Subsidiaries (as defined in the
Secured Note Indenture) has been duly organized, is validly existing as a
corporation, partnership, limited partnership or limited liability company, as
applicable, in good standing under the laws of its respective jurisdiction of
formation, has all requisite corporate or partnership power and authority to
carry on its business as it is currently being conducted and to own, lease and
operate its properties, and is duly qualified and in good standing as a
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foreign corporation or partnership authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing
of property requires such qualification except where the failure to so qualify
could not be reasonably expected to result in a material adverse effect on the
properties, business, operations, earnings, assets, liabilities or financial
condition of the Company and its Subsidiaries taken as a whole or on the
ability of the Company and its Subsidiaries taken as a whole to perform their
respective obligations under this Agreement or any of the Operative Documents
(a "Material Adverse Effect").
(iii) The entities listed on Schedule I hereto are the only
subsidiaries, direct or indirect, of the Company and the only entities in
which the Company, directly or indirectly, owns any equity interest. Except
as disclosed in the Security Documents or on Schedule I, the Company owns,
directly or indirectly through other subsidiaries, 100% of the outstanding
capital stock or other securities evidencing equity ownership of such
Subsidiaries or other entities, free and clear of any security interest,
claim, lien or encumbrance; and all of such securities have been duly
authorized, validly issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights. Except as disclosed
on Schedule I, there are no outstanding subscriptions, rights, warrants,
calls, commitments of sale or options to acquire, or instruments convertible
into or exchangeable for, any such shares of capital stock or other equity
interest of such Subsidiaries. As of the date hereof, there are no
Unrestricted Subsidiaries except ▇▇▇▇▇▇▇▇▇▇ Hotel, Inc., President ▇▇▇▇▇▇▇▇▇▇,
LLC and President Mississippi Charter Corporation. The Company has invested
no more than $5,000,000 in ▇▇▇▇▇▇▇▇▇▇ Hotel, Inc., President ▇▇▇▇▇▇▇▇▇▇, LLC
and President Mississippi Charter Corporation, which entities are permitted,
and qualify as, "Unrestricted Subsidiaries" under the Senior Exchange Note
Indenture.
(iv) The Company and each of the Subsidiary Guarantors has all
requisite corporate, partnership or limited liability company power and
authority to execute, deliver and perform its obligations under this
Agreement, the Secured Note Indenture, the Security Documents and the other
Operative Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, with respect
to the Company, the corporate power and authority to issue, exchange and
deliver the Securities as provided herein and therein and no further
shareholder action or consent is required therefor.
(v) This Agreement has been duly and validly authorized, executed and
delivered by the Company and each of the Subsidiary Guarantors and is the
legally valid and binding agreement of each such person, enforceable against
each such person in accordance with its terms except as such enforceability
may be limited by the laws of bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and general
equitable principles.
(vi) The Secured Note Indenture has been duly and validly authorized by
the Company and each of the Subsidiary Guarantors and, when duly executed and
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delivered by each such person, will be the legally valid and binding
obligation of each such person, enforceable against each such person in
accordance with its terms except as such enforceability may be limited by the
laws of bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and general equitable principles.
(vii) The Secured Notes have been duly and validly authorized for
issuance to the Holders by the Company pursuant to this Agreement and, when
issued and authenticated in accordance with the terms of the Secured Note
Indenture and delivered against payment therefor in accordance with the terms
hereof, will be the legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled to
the benefits of the Secured Note Indenture except as such enforceability may
be limited by the laws of bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and general equitable
principles.
(viii) The Subsidiary Guarantees have been duly and validly authorized
by each of the Subsidiary Guarantors and, when duly executed and delivered by
each such Subsidiary Guarantor, will be the legally valid and binding
obligation of each such Subsidiary Guarantor, enforceable against each such
Subsidiary Guarantor in accordance with its terms except as such
enforceability may be limited by the laws of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws affecting
creditors' rights generally and general equitable principles.
(ix) The Security Documents have been duly and validly authorized and,
when duly executed and delivered by President Missouri (assuming the due
execution and delivery thereof by the Trustee), will be the legally valid and
binding obligation of President Missouri, enforceable against President
Missouri in accordance with its terms except as such enforceability may be
limited by the laws of bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and general equitable
principles. The Company reasonably believes that assuming the execution by
PRC Holdings Corporation and PRC Management, Inc. of that certain letter
agreement dated the date hereof with respect thereto, and that such letter
agreement constitutes a valid and enforceable agreement, neither the execution
and delivery by President Missouri of its Guarantee and the Security
Documents, nor the commitment of PRC-NY to grant a mortgage on the "New
Yorker," constitutes a "fraudulent transfer" or "fraudulent conveyance" under
applicable law.
(x) Neither Company nor any of its Subsidiaries is in violation of its
respective charter, bylaws or other organizational documents and, except as
disclosed in the Disclosure Documents, and except as to defaults and
violations that, individually or in the aggregate, could not be reasonably
expected to have a Material Adverse Effect, is 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, or is in violation of any law,
statute, rule, regulation, judgment or court decree applicable to the Company,
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any of its Subsidiaries or their assets or properties. There exists no
condition that, with notice, the passage of time or otherwise, would
constitute a default under any such document or instrument other than defaults
that, individually or in the aggregate, could not be reasonably expected to
have a Material Adverse Effect.
(xi) The execution, delivery and performance by the Company and each of
the Subsidiary Guarantors of this Agreement and the other Operative Documents
to which it is a party, the issuance and exchange of the Securities, and the
consummation of the transactions contemplated hereby and thereby will not
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), or require consent under, or
result in the imposition of a lien or encumbrance on any properties of the
Company or any of its Subsidiaries, or an acceleration of indebtedness
pursuant to, (A) the charter, bylaws or other organizational documents of the
Company or any of its Subsidiaries, (B) any bond, debenture, note, indenture
(including, without limitation, the Senior Exchange Note Indenture), mortgage,
deed of trust or other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which any of them or their property is or
may be bound except for such conflicts, breaches, violations or defaults or
liens, charges or encumbrances which, individually or in the aggregate, could
not be reasonably expected to have a Material Adverse Effect, (C) any statute,
rule or regulation applicable to the Company, any of its Subsidiaries or any
of their assets or properties except for such conflicts, breaches, violations
or defaults or liens, charges or encumbrances which, individually or in the
aggregate, could not be reasonably expected to have a Material Adverse Effect,
or (D) any judgment, order or decree of any court or governmental agency or
authority having jurisdiction over the Company, any of its Subsidiaries or
their assets or properties. No consent, approval, authorization or order of,
or filing, registration, qualification, license or permit of or with, any
court or governmental agency, body or administrative agency that has not
already been obtained is required for the execution, delivery and performance
of this Agreement and the other Operative Documents (other than the Leasehold
Deed of Trust) and the consummation of the transactions contemplated hereby
and thereby, except such as have been obtained. No consents or waivers from
any other person that has not already been obtained are required for the
execution, delivery and performance of this Agreement and the other Operative
Documents (other than the Leasehold Deed of Trust) and the consummation of the
transactions contemplated hereby and thereby, other than such consents and
waivers as have been obtained.
(xii) Except as disclosed in the Disclosure Documents, there is (A) no
action, suit or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or threatened or
contemplated to which the Company or any of its Subsidiaries is or may be a
party or to which the business or property of the Company or any of its
Subsidiaries is or may be subject, (B) no statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency or that
has been proposed by any governmental body, (C) no injunction, restraining
order or order of any nature issued by a federal or state court or foreign
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court of competent jurisdiction to which the Company or any of its
Subsidiaries is or may be subject, that, in the case of clauses (A), (B) and
(C) above, (x) except as disclosed in the Disclosure Documents, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect, (y) would interfere with or adversely affect the issuance of
the Securities or (z) in any manner draw into question the validity of this
Agreement, the Secured Note Indenture or any other Operative Document.
(xiii) To the best of each of the Company's and such Subsidiary
Guarantor's knowledge, no action has been taken and no statute, rule or
regulation or order has been enacted, adopted or issued by any governmental
agency that prevents the issuance of the Securities; no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction has been issued that prevents the issuance of the
Securities or suspends the exchange of the Securities in any jurisdiction in
which the Company intends to exchange Securities, and no action, suit or
proceeding is pending against or affecting or, to the best knowledge of the
Company and any of its Subsidiaries, threatened against, the Company or any of
its Subsidiaries before any court or arbitrator or any governmental body,
agency or official which, if adversely determined, would prohibit, interfere
with or adversely affect the issuance or marketability of the Securities or in
any manner draw into question the validity of any Operative Document; and
every request of any securities authority or agency of any jurisdiction for
additional information has been complied with in all material respects.
(xiv) Except as disclosed in the Disclosure Documents, there is (A) no
significant unfair labor practice complaint pending against the Company or any
of its Subsidiaries nor, to the best knowledge of the Company and its
Subsidiaries, threatened against any of them, before the National Labor
Relations Board, any state or local 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 the Company or any or its Subsidiaries or, to the best
knowledge of the Company and its Subsidiaries, threatened against any of them,
(B) no significant strike, labor dispute, slowdown or stoppage pending against
the Company or any of its Subsidiaries nor, to the best knowledge of the
Company and its Subsidiaries, threatened against the Company or any of its
Subsidiaries and (C) to the best knowledge of the Company and its
Subsidiaries, no union representation question existing with respect to the
employees of the Company and its Subsidiaries and, to the best knowledge of
the Company and its Subsidiaries, no union organizing activities are taking
place, in the case of clauses (A), (B) or (C) above that, individually or in
the aggregate, could be reasonably expected to result in a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries has violated any
federal, state or local law or foreign law relating to discrimination in
hiring, promotion or pay of employees, nor any applicable wage or hour laws,
nor any provision of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules and regulations thereunder, or analogous
foreign laws and regulations, that, individually or in the aggregate, could be
reasonably expected to result in a Material Adverse Effect.
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(xv) Each of the Company and its Subsidiaries has (A) good and marketable
title to all of the properties and assets described in the Disclosure
Documents as owned by it, free and clear of all liens, charges, encumbrances
and restrictions, (B) except as disclosed in the Disclosure Documents and
except for such exceptions which, individually or in the aggregate, could not
be reasonably expected to have a Material Adverse Effect, peaceful and
undisturbed possession under all leases to which it is party as lessee, (C)
except for such exceptions which, individually or in the aggregate, could not
be reasonably expected to have a Material Adverse Effect, all licenses,
certificates, permits, authorizations, approvals, franchises and other rights
from, and has made all declarations and filings with, all federal, state and
local authorities (including the gaming regulatory authorities in the States
of Iowa, Missouri and Mississippi), all self-regulatory authorities and all
courts and other tribunals (each an "Authorization") necessary to engage in
the business currently conducted by it in the manner described in the
Disclosure Documents and (D) except for such exceptions which, individually or
in the aggregate, could not be reasonably expected to have a Material Adverse
Effect, no reason to believe that any governmental body or agency (including
the gaming regulatory authorities in the States of Iowa, Missouri and
Mississippi) is considering limiting, suspending or revoking any such
Authorization in any material respect. All such Authorizations are valid and
in full force and effect and the Company and its Subsidiaries are in
compliance in all material respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto.
(xvi) Each of the Company and its Subsidiaries owns or possesses all
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks
and trade names (collectively, the "Intellectual Property") presently employed
by it in connection with the businesses now operated by it, and neither the
Company nor any of its Subsidiaries has received any notice of infringement of
or conflict with asserted rights of others with respect to any of the
foregoing except for such infringement or conflict which, individually or in
the aggregate, could not be reasonably expected to have a Material Adverse
Effect. The use of the Intellectual Property in connection with the business
and operations of the Company and its Subsidiaries does not infringe on the
rights of any person except for such infringement which could not be
reasonably expected to have a Material Adverse Effect.
(xvii) All tax returns required to be filed by the Company or any of
its Subsidiaries, in all jurisdictions, have been so filed except where the
failure to so file could not be reasonably expected to result in a Material
Adverse Effect. All taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due from
such entities or that are due and payable have been paid, other than those
being contested in good faith and for which adequate reserves have been
provided or those currently payable without penalty or interest other than
such taxes which the failure to pay, individually or in the aggregate, could
not be reasonably expected to have a Material Adverse Effect. Neither the
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16
Company nor any of its Subsidiaries knows of any material proposed additional
tax assessments against it or any of its Subsidiaries.
(xviii) Neither the Company nor any of its Subsidiaries is (i) 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"), or analogous foreign laws and regulations, or (ii) a "holding
company" or a "subsidiary company" or an "affiliate" of a holding company within
the meaning of the Public Utility Holding Company Act of 1935, as amended, or
analogous foreign laws and regulations.
(xix) The authorized, issued and outstanding capital stock of the
Company and each of the Subsidiary Guarantors has been duly and validly
authorized and issued, is fully paid and nonassessable and was not issued in
violation of or subject to any preemptive or similar rights. As of the date
hereof, the Company had authorized capital stock consisting of 100,000,000
shares of Common Stock par value $.06 per share (of which 5,032,926 shares
were issued and outstanding as of the date hereof and 5,032,926 shares were
outstanding on a fully diluted basis (calculated in accordance with generally
accepted accounting principles) as of October 31, 1998) and 10,000,000 shares
of Preferred Stock, $.01 par value, of which no shares were issued or
outstanding.
(xx) Each certificate signed by any officer of the Company or any of
the Subsidiary Guarantors and delivered to the Holders or counsel for the
Holders shall be deemed to be a representation and warranty by such Company or
Guarantor to each Holder as to the matters covered thereby.
(xxi) The Company and each of its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that:
(A) transactions are executed in accordance with management's general or
specific authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect thereto.
(xxii) The Company and each of its Subsidiaries maintains insurance
covering their properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in accordance
with customary industry practice to protect the Company and its Subsidiaries
and their businesses. To the best of their knowledge, neither the Company nor
any of its Subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will have
to be made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and will be outstanding and
duly in force on the Closing Date.
(xxiii) Neither the Company nor any of its Subsidiaries has (A) taken,
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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 the Company or any of its Subsidiaries to facilitate the sale
or resale of the Securities or (B) sold, bid for, purchased or paid any person
(other than Libra Investments, Inc. and the Holders) any compensation for
soliciting purchases of, the Securities.
(xxiv) No registration under the Act of any of the Secured Notes is
required for the sale of the Secured Notes to the Holders as contemplated
hereby. The representation made by the Company and the Subsidiary Guarantors
in the preceding sentence is made in reliance upon and subject to the accuracy
of, and compliance with, the representations and covenants made by the Holders
in Section 5(b). No form of general solicitation or general advertising was
used by the Company or the Subsidiary Guarantors or any of their
representatives in connection with the offer and exchange of any of the
Secured 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. No
offers have been made by the Company or the Subsidiary Guarantors or any of
their respective officers, directors or employees other than to the Holders
herein. No securities of the same class as any of the Secured Notes have been
issued and sold by the Company or the Subsidiary Guarantors within the six-
month period immediately prior to the date hereof.
(xxv) There is no employee pension, benefit or health plan with respect
to which the Company or any corporation considered an affiliate of the Company
within the meaning of Section 407(d)(7) of ERISA (an "Affiliate") is a party
in interest or disqualified person. The execution and delivery of this
Agreement, the other Operative Documents and the exchange of the Secured Notes
to be purchased by the QIBs or Institutional Accredited Investors 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 Company and the Subsidiary Guarantors in the preceding sentence is made
in reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made by the Holders in Section 5(b).
(xxvi) Subsequent to the respective dates as of which information is
given in the Disclosure Documents and up to the Closing Date, (A) neither the
Company nor any of its Subsidiaries has incurred any liabilities or
obligations, direct or contingent, which are material to the Company and its
Subsidiaries taken as a whole, nor entered into any transaction not in the
ordinary course of business; (B) there has not been, individually or in the
aggregate, any development which could reasonably be expected to have a
Material Adverse Effect; (C) neither the Company nor any Subsidiary Guarantor
has paid or declared any dividends or distributions of any kind on any class
of its capital stock; and (D) the Disclosure Documents disclose all of the
Company's and its Subsidiaries' material liabilities as of their respective
dates. Assuming the execution by PRC Holdings Corporation and PRC Management,
Inc. of that certain letter agreement dated the date hereof, and that such
letter agreement constitutes a valid and enforceable agreement, the Company
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18
reasonably believes that (i) the fair saleable value of the assets of each of
the Company and the Subsidiary Guarantors exceeds the amount that will be
required to be paid in respect of the existing debts of each such person as
they become due, (ii) each of the Company and the Subsidiary Guarantors is not
"insolvent" (as such term is defined under the Uniform Fraudulent Transfer
Act) and will not be so rendered by the transactions contemplated by this
Agreement and the other Operative Documents, and (iii) the transactions
contemplated by this Agreement and the other Operative Documents are being
made in exchange for reasonably equivalent value.
(xxvii) None of the Company, the Subsidiary Guarantors or any agent
thereof acting on the behalf of any of them has taken, and none of them will
take, any action that might cause this Agreement or the transactions
contemplated herein to violate, Regulation T (12 C.F.R. Part 220), Regulation
U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System or analogous foreign laws and
regulations.
(xxviii) The accountants which certified the financial statements and
supporting schedules included in the Company's Annual Report on Form 10-K for
the fiscal year ended February 28, 1998 are independent accountants. The
consolidated historical statements included in the Disclosure Documents fairly
present the consolidated financial condition and results of operations of the
Company and its Subsidiaries at the respective dates and for the respective
periods indicated, in accordance with generally accepted accounting principles
consistently applied throughout such periods, except as stated therein.
(xxix) Neither the Company nor the Subsidiary Guarantors have dealt
with any broker, finder, commission agent or other person in connection with
the exchange of the Securities and the transactions contemplated by this
Agreement and the other Operative Documents other than Libra Investments, Inc.
Neither the Company nor the Subsidiary Guarantors are under any obligation to
pay any broker's fee or commission in connection with such transactions, other
than a fee payable to Libra Investments, Inc. for financial advisory services
rendered in connection with such transactions.
(xxx) None of the Company nor its affiliates or agents has taken and
will not take, directly or indirectly, any actions designed to, or which has
constituted or which might reasonably be expected to, cause or result in the
stabilization or manipulation of the price of any security of the Company in
connection with the transactions contemplated by this Agreement.
(xxxi) The Company has filed all reports, schedules, forms and other
documents required to be filed by it with the Securities and Exchange
Commission. To the best of its knowledge, the Company has not provided to any
Holder any material nonpublic information.
(xxxii) The term "hazardous waste," "hazardous substance," "disposal,"
"release," and "threatened release," as used in this Agreement, shall have the
same meanings as set forth in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601,
15
19
et. seq., the Superfund Amendments and Reauthorization Act of 1986, Pub. L.
No. 99-499, the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et. seq., the Resource Conservation and Recovery Act, 49 U.S.C. Section
6901, et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant to any of the foregoing. Except as disclosed in
the Disclosure Documents, each of the Company and each Subsidiary Guarantor
represents and warrants that: (i) to the best of its knowledge, during the
period of its ownership of (or leasehold interest in, as applicable) its
properties, there has been no use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any hazardous waste or
substance by any person on or under any of the properties, except in strict
compliance with all applicable federal, state and local laws, regulations and
ordinances ("Environmental Laws"); (ii) it has no knowledge of, or reason to
believe that there has been (A) any use, generation, manufacture, storage,
treatment, disposal, release, or threatened release of any hazardous waste or
substance by any prior owners or occupants of any of the properties in
violation of any Environmental Laws, or (B) any actual or threatened
litigation or claims of any kind by any person relating to such matters; and
(iii) it shall not use, generate, manufacture, store, treat, dispose of, or
release any hazardous waste or substance on, under, or about any of the
properties, except in compliance with all Environmental Laws.
(xxxiii) PRC-NY represents that it is lawfully possessed of and is the
sole and lawful owner of the vessel "New Yorker" (with good and marketable
title thereto), and such vessel is and shall remain free and clear of any and
all liens, claims and encumbrances other than the Charter Agreement between
PRC-NY and Sterling Shipping Two, LLC and maritime liens for salvage, crew's
and stevedores' wages arising from time to time in the ordinary course of
business.
(b) Each Holder severally represents and warrants to the Company, the
Subsidiary Guarantors and the other Holders as of the date hereof and as of
the Closing Date and agrees that:
(i) Holder has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby, including, without limitation, the corporate
power and authority to exchange and deliver the Senior Exchange Notes as
provided herein;
(ii) This Agreement has been duly and validly authorized, executed and
delivered by the Holder and are the legally valid and binding agreements of
each such Holder, enforceable against each such Holder in accordance with its
terms except as such enforceability may be limited by the laws of bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and general equitable principles;
(iii) The execution, delivery and performance of this Agreement by
Holder, and the consummation of the transactions contemplated hereby, will not
violate or conflict with (A) any of the terms or provisions of Holder's
charter, bylaws or other formation documents, (B) any agreement or instrument
16
20
to which Holder is a party, or (C) any statute, rule or regulation applicable
to Holder;
(iv) Holder has good and marketable title to Senior Exchange Notes in
the aggregate principal amount set forth opposite such Holder's name on
Exhibit A hereto and upon delivery of and payment for such Senior Exchange
Notes as contemplated by this Agreement, the Company will acquire good and
marketable title thereto, free and clear of all liens, charges, encumbrances
and restrictions whatsoever;
(v) Holder has not taken and will not take, directly or indirectly, any
action designed to, or which has constituted or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company in connection with the transactions contemplated
by this Agreement;
(vi) Holder understands and acknowledges that the transactions
contemplated by this Agreement are of a confidential nature and that it will
use its best efforts (subject to applicable law) not to disclose any of the
terms of this Agreement or of any of the Operative Documents (other than (i)
to any principal it represents and (ii) those terms set forth in a press
release mutually acceptable to both Holder and the Company) until such time as
the Company publicly announces the consummation of the exchange of the Secured
Notes for Senior Exchange Notes as contemplated hereby;
(vii) Holder understands and acknowledges that the Secured Notes have
not been registered under the Act or any other applicable securities law and
unless so registered, the Secured Notes may not be offered, sold or otherwise
transferred except in compliance with the registration requirements of the Act
or any other applicable securities laws, pursuant to an exemption therefrom or
in a transaction not subject thereto and in each case in compliance with the
conditions for transfer set forth in subsection (x) below.
(viii) Holder is either a QIB or an Institutional Accredited Investor.
In the normal course of its business, it invests in or purchases securities
similar to the Secured Notes and it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the transactions contemplated by this Agreement. It is aware that it
(or any investor account) may be required to bear the economic risk of an
investment in the Secured Notes for an indefinite period of time and it (or
such account) is able to bear risk for an indefinite period;
(ix) Holder understands and acknowledges that neither the Company, any
Subsidiary Guarantor or any person representing the Company or any Subsidiary
Guarantor has made any representation to it with respect to the Company, any
Subsidiary Guarantor or the transactions contemplated by this Agreement, other
than the information contained in this Agreement, the Operative Documents and
the Disclosure Documents, all of which have been delivered to it and upon
which it is relying in making its investment decision with respect to the
Secured Notes. It has received all of the Disclosure Documents. It has had
access to such financial and other information concerning the Company, the
17
21
Subsidiary Guarantors and the Secured Notes as it has deemed necessary in
connection with its decision to enter into this Agreement and to exchange its
Senior Exchange Notes for the Secured Notes, including an opportunity to ask
questions of and request information from the Company and the Subsidiary
Guarantors.
(x) Holder is acquiring the Secured Notes for its own account (or the
account of any principal it represents in acquiring the Secured Notes), for
investment, and not with a view to, or for offer or sale in connection with,
any distribution thereof in violation of the Act, subject to any requirement
of law that the disposition of its property or the property of such investor
account or accounts be at all times within its or their control and subject to
its or their ability to resell the Secured Notes pursuant to Rule 144A or to
resell the Secured Notes pursuant to any other applicable exemption from
registration available under the Act. It agrees, and each subsequent holder
of the Secured Notes by its acceptance thereof will agree, to offer, sell or
otherwise transfer such Securities only (A) to the Company, (B) pursuant to a
registration statement which has been declared effective under the Act, (C) in
the case of the Secured Notes, for so long as the Secured Notes are eligible
for resale pursuant to Rule 144A, to a person it reasonably believes is a QIB
that purchases for its own account or for the account of a QIB to whom notice
is given that the transfer is being made in reliance on Rule 144A, (D) to an
Institutional Accredited Investor that is purchasing for his own account or
for the account of such an Institutional Accredited Investor or (E) pursuant
to any other available exemption from the registration requirements of the
Act, subject in each of the foregoing cases to any requirement of law that the
disposition of its property or the property of such investor account or
accounts be at all times within its or their control. The foregoing
restrictions on resale will not apply to the transfer of Secured Notes
subsequent to the date which is two years after the later of the date of
original issue and the last date that the Company or any affiliate of the
Company was the owner of such Secured Notes (the "Resale Restriction
Termination Date"). If any resale or other transaction of the Secured Notes
is proposed to be made pursuant to clause (D) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of Exhibit F hereto to the Company and
the Trustee, which shall provide, among other things, that the transferee is
an "accredited investor" within the meaning of subparagraph (a) (1), (2), (3)
or (7) of Rule 501 under the Act and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Act. Each
Holder acknowledges that the Company and the Trustee reserve the right prior
to any offer, sale or other transfer (prior to the Resale Restriction
Termination Date, in the case of the Secured Notes) of Securities pursuant to
clauses (D) or (E) above to require the delivery of an opinion of counsel,
certifications and/or other information reasonably satisfactory to the Company
and the Trustee. Each Holder acknowledges that each Secured Note will contain
a legend substantially to the effect set forth in Section 1 hereof.
(xi) Holder represents that the exchange of the Senior Exchange Notes
and the acquisition of the Secured Notes pursuant to the terms of this
Agreement will either (a) not constitute a violation by Holder of Section 406
18
22
of ERISA or a prohibited transaction, as such term is defined in Section 4975
of the Code, which could result in either a civil penalty assessed pursuant to
section 502 of ERISA or a tax imposed by Section 4975 of the Code, or (b) be
exempt from the prohibited transaction penalties or taxes as the result of a
prohibited transaction class exemption issued by the Department of Labor.
Such Holder acknowledges that the Company, each of the Subsidiary
Guarantors, counsel for the Company and the Subsidiary Guarantors and others
will rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements of such Holder and agrees that, if any of the
acknowledgments, representations or warranties made herein are no longer
accurate prior to Closing, it shall promptly notify the Company in writing.
If a signatory on behalf of a Holder selling Senior Exchange Notes pursuant to
the terms of this Agreement is acting as a fiduciary or agent for one or more
investor accounts, it represents that it has sole investment discretion with
respect to each such account and that it has full power to make the foregoing
acknowledgments, representations and agreements on behalf of each such
account, in which case such Holder and not such signatory shall be responsible
for compliance therewith.
6. Conditions of Holders' Obligations. The several obligations of each
Holder under this Agreement are subject to the satisfaction of each of the
following conditions:
(a) All of the representations and warranties of the Company and the
Subsidiary Guarantors contained in this Agreement and all Operative Documents
shall be true and correct in all material respects 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. The Company and the
Subsidiary Guarantors shall have performed or complied in all material
respects with all of the agreements herein contained and required to be
performed or complied with by them at or prior to the Closing Date.
(b) No action shall have been taken and no statute, rule, regulation,
judgment or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the issuance
of any of the Secured Notes; no action, suit or proceeding shall be pending
against or affecting or, to the knowledge of the Company or any Subsidiary
Guarantor, threatened against, the Company or any Subsidiary Guarantor or any
of their respective Subsidiaries before any court or arbitrator or any
governmental body, agency or official that, if adversely determined, would
prohibit, interfere with or materially and adversely affect the issuance of
the Secured Notes or would have a Material Adverse Effect, or in any manner
draw into question the validity of this Agreement, the Secured Note Indenture,
the Securities or any other Operative Document; and no order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act shall have been issued.
(c) Since August 31, 1998, (i) there shall not have been any material
change or any development that is reasonably likely to result in a material
change, in the capital stock or the long-term debt, or material increase in
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23
the short-term debt, of the Company or any of its Subsidiaries from that set
forth in the Disclosure Documents (as they may be amended or supplemented),
(ii) no dividend or distribution of any kind shall have been declared, paid or
made by the Company or any if its Subsidiaries on any class of its capital
stock (other than dividends or distributions payable or made to the Company or
a Restricted Subsidiary), and (iii) neither the Company nor any of its
Subsidiaries shall have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the
Company and its Subsidiaries, taken as a whole, and that are required to be
disclosed on a balance sheet in accordance with generally accepted accounting
principles and are not disclosed in the Disclosure Documents. Since the date
hereof and since the dates as of which information is given in the Disclosure
Documents (as they may be amended or supplemented), there shall not have been
any other change in the business, prospects, properties or management of the
Company and its Subsidiaries which, individually or in the aggregate, could be
reasonably expected to have a Material Adverse Effect.
(d) The Company and each Subsidiary Guarantor shall deliver to each
Holder certificates, dated the Closing Date, signed by (i) the President or
any Vice President and (ii) a principal financial or accounting officer of the
Company and each of the Subsidiary Guarantors confirming, as of the Closing
Date, the matters set forth in paragraphs (a), (b) and (c) of this Section 7.
(e) The Company shall deliver to each Holder on the Closing Date an
opinion, dated the Closing Date, of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, counsel for the Company
and the Subsidiary Guarantors, substantially in the form attached hereto as
Exhibit G.
(f) The Company, the Subsidiary Guarantors and the Trustee shall have
entered into the Secured Note Indenture and delivered to each Holder a
counterpart, conformed as executed, thereof.
(g) The Company, the Subsidiary Guarantors and the Trustee shall have
entered into the Security Documents (other than the Leasehold Deed of Trust)
and delivered to each Holder a counterpart, conformed as executed, thereof and
shall have taken all actions so that Holders' delivery to the Company of the
Senior Exchange Notes to be delivered hereunder, the Holders shall receive a
valid, perfected security interest in the collateral referred to therein.
(h) The Company and the Subsidiary Guarantors shall have received all
consents, permits and other authorizations, and made all such filings and
declarations, as may be required pursuant to any law, statute, regulation or
rule (Federal, state, local or foreign), contemplated by this Agreement and
the other Operative Documents, including the issuance and transfer of the
Securities to the Holders, and pursuant to all other agreements, orders and
decrees to which any of them is a party or to which any of them is subject, in
connection with the transactions to be consummated on or prior to the Closing
Date contemplated by this Agreement and the other Operative Documents.
(i) All corporate, partnership and limited liability company proceedings
taken in connection with the exchange of the Securities and all Operative
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Documents, shall be reasonably satisfactory in form and substance to the
Holders.
7. Conditions of Company's and Subsidiary Guarantors' Obligations. The
obligations of the Company and each of the Subsidiary Guarantors under this
Agreement with respect to any Holder are subject to the satisfaction of each
of the following conditions:
(a) All of the representations and warranties of such Holder contained in
this Agreement shall be true and correct in all material respects 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. Holder shall
have performed or complied in all material respects 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) No action shall have been taken 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 any of the
Secured Notes; no action, suit or proceeding shall be pending against or
affecting or, to the knowledge of the Company or any Subsidiary Guarantor,
threatened against, the Company or any Subsidiary Guarantor or any of their
respective Subsidiaries before any court or arbitrator or any governmental
body, agency or official that, if adversely determined, would prohibit,
interfere with or materially and adversely affect the issuance of the Secured
Notes or would have a Material Adverse Effect, or in any manner draw into
question the validity of this Agreement, the Secured Note Indenture, the
Securities or any other Operative Document; and no order asserting that any of
the transactions contemplated by this Agreement are subject to the
registration requirements of the Act shall have been issued.
8. Effective Date of Agreement. This Agreement shall become effective upon
execution hereof.
9. Miscellaneous.
(a) Notices given pursuant to any provision of this Agreement shall be
addressed as follows and sent by overnight courier or certified or registered
mail, return receipt requested: (a) if to either Company or any Guarantor,
President Casinos, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
Attention: President, with a facsimile copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (314-552-
7104), and (b) if to a Holder, the address of such Holder indicated on Exhibit
A hereto, or in any case to such other address as the person to be notified
may have requested in writing, with a facsimile copy to Kleinberg, Kaplan,
▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇, Esq. (212-986-8866).
(b) This Agreement shall not be cancelled, altered, modified or amended
in any way except by an instrument in writing signed by authorized
representatives of the Company, the Subsidiary Guarantors and each Holder of
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25
the Senior Exchange Notes to be repurchased pursuant to this Agreement. All
amendments or modifications of this Agreement shall be binding upon the
parties despite any lack of consideration so long as the same shall be in
writing and executed by the parties hereto.
(c) Performance of any obligation required of a party hereunder may be
waived only by a written waiver signed by the party for whose benefit such
obligation was to be performed, which waiver shall be effective only with
respect to the specific obligation described therein. The waiver by any party
of any breach of this Agreement in any one or more instances by another party
shall in no way be construed as a waiver of any subsequent breach (whether or
not of a similar nature) of this Agreement by any other party.
(d) If any provision contained in this Agreement is found void, invalid
or unenforceable, it will not affect the validity or enforceability of any
other provision of this Agreement which shall remain valid and enforceable
according to its terms, and such provision shall be deemed rewritten to the
extent necessary to eliminate such voidness, invalidity or unenforceability.
(e) Titles and headings of Sections of this Agreement are for convenience
of reference only and shall not affect the construction of any provision of
this Agreement.
(f) Each of the Schedules and Exhibits referred to herein and attached
hereto is an integral part of this Agreement and is incorporated herein by
this reference.
(g) The representations and warranties of the parties contained herein
shall survive the Closing hereunder.
(h) This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties, and their respective heirs,
personal representatives, successors and assigns and no other persons shall
acquire or have any right under or by virtue of this Agreement.
(i) This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(j) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW. FOR PURPOSES OF THIS AGREEMENT THE COMPANY AND THE SUBSIDIARY GUARANTORS
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE COUNTY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE COUNTY
OF NEW YORK IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF ANY HOLDERS TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY OR THE SUBSIDIARY
GUARANTORS IN ANY OTHER JURISDICTION.
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(k) This Agreement, together with the other Operative Documents and the
Securities are intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
and therein. This Agreement, together with the other Operative Documents and
the Securities, supersedes all prior agreement and understandings between the
parties with respect to such subject matter.
(l) The Company agrees to reimburse the Holders for their reasonable
legal and due diligence fees related to the preparation and negotiation of
this Agreement and related documents, in an amount not to exceed $50,000 in
the aggregate. Such expenses incurred through the Closing Date shall be
reimbursed on the Closing Date.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their proper and duly authorized officers as of the date
first above written.
COMPANY: PRESIDENT CASINOS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
SUBSIDIARY GUARANTORS: PRESIDENT RIVERBOAT CASINO-IOWA, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
PRESIDENT RIVERBOAT CASINO-MISSOURI, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
THE PRESIDENT RIVERBOAT CASINO-
MISSISSIPPI, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
TCG/BLACKHAWK, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
[Signature pages continued on next page]
24
28
P.R.C.-LOUISIANA, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
PRESIDENT RIVERBOAT CASINO-NEW YORK, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
PRC HOLDINGS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
PRC MANAGEMENT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
PRCX CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
PRESIDENT CASINO NEW YORKER, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
[Signature pages continued on next page]
25
29
PRESIDENT RIVERBOAT CASINO-
PHILADELPHIA, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
VEGAS, VEGAS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
THE ▇▇▇▇▇▇▇▇ GROUP, L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name:
Title:
[Signature pages continued on next page]
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THE MAINSTAY FUNDS, ON BEHALF OF ITS
STRATEGIC INCOME FUND SERIES
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Corporation
Its: Investment Advisor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
THE ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ MASTER
RETIREMENT TRUST
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Corporation
Its: Investment Advisor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
HIGHBRIDGE CAPITAL CORPORATION
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Corporation
Its: Investment Advisor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
THE MAINSTAY FUNDS, ON BEHALF OF ITS
HIGH YIELD CORPORATE BOND FUND
SERIES
[Signature pages continued on next page]
27
31
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Corporation
Its: Investment Advisor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
MAINSTAY VP SERIES FUND INC., ON
BEHALF OF ITS HIGH YIELD CORPORATE
BOND PORTFOLIO
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Corporation
Its: Investment Advisor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
POLICE OFFICERS PENSION SYSTEM OF THE
CITY OF HOUSTON
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Corporation
Its: Investment Advisor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
VULCAN MATERIALS COMPANY HIGH
YIELD ACCOUNT
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Corporation
Its: Investment Advisor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
[Signature pages continued on next page]
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SUNAMERICA CBO LIMITED
By: /s/ ▇▇▇▇▇ Buckle
---------------------------------------
Name: ▇▇▇▇▇ Buckle
Title: Vice President,
SunAmerica Investment Advisors
SUNAMERICA LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ Buckle
---------------------------------------
Name: ▇▇▇▇▇ Buckle
Title: Authorized Agent
LIBRA INVESTMENTS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman & Co-CEO
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SCHEDULE I
SUBSIDIARIES
1. President Riverboat Casino-Iowa, Inc .(1)
2. TCG/Blackhawk, Inc. (1)
3. President Riverboat Casino-Missouri, Inc. (1)
4. The President Riverboat Casino-Mississippi, Inc. (1)
5. P.R.C.-Louisiana, Inc. (1)
6. PRCX Corporation (1)
7. President Riverboat Casino-New York, Inc. (1)
8. PRC Management, Inc. (1)
9. PRC Holdings Corporation (1)
10. The ▇▇▇▇▇▇▇▇ Group, L.P. (1) (2)
11. President Riverboat Casino-Philadelphia, Inc. (1)
12. President Casino New York, Inc. (1)
13. Vegas, Vegas, Inc. (1)
14. President Casino New Yorker, Inc. (1)
15. ▇▇▇▇▇▇▇▇▇▇ Hotel, Inc.
16. President ▇▇▇▇▇▇▇▇▇▇, LLC (3)
17. Mississippi Charter Corporation
-----------------------------------
(1) The Company's interest in such entity is pledged to secure the
obligations of the Company under the Senior Exchange Notes.
(2) President Riverboat Casino-Iowa, Inc. is the General Partner and the
holder of a 95% Interest (as defined in the Amended and Restated
Agreement of Limited Partnership of The ▇▇▇▇▇▇▇▇ Group, L.P.). An
unrelated third party holds the remaining 5% Interest.
(3) President Casinos, Inc. owns all of the issued and outstanding Class A
membership interest of this entity.
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EXHIBIT A
Holders
Principal Amount of Principal Amount
Name and Address Senior Exchange Notes of Secured Notes
---------------- --------------------- ----------------
Sun America CBO Limited $12,850,000 --
SunAmerica Life Insurance
Company -- $13,150,000
Libra Investments, Inc. $575,000 --
The ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ $197,000 $202,000
Master Retirement Trust
c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Highbridge Capital Corporation $115,000 $118,000
c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Police Officers Pension $175,000 $179,000
System of the City of Houston
c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Vulcan Materials Company Master $26,000 $27,000
Trust High Yield Account
c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The Mainstay Funds, on behalf $9,864,000 $10,097,000
of its High Yield Corporate
Bond Fund Series
c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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35
The Mainstay Funds, on behalf $46,000 $47,000
of its Strategic Income
Fund Series
c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Mainstay VP Series Fund, Inc., $1,152,000 $1,180,000
on behalf of its High Yield
Corporate Bond Fund Portfolio
c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇