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EXHIBIT 1
FITZGERALDS GAMING CORPORATION
$205,000,000 12 1/4% Senior Secured Notes due 2004
PURCHASE AGREEMENT
December 19, 1997
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
c/o JEFFERIES & COMPANY, INC.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Each of Fitzgeralds Gaming Corporation, a Nevada corporation (the
"ISSUER"), and each other Fitzgeralds Entity (as defined below) hereby agrees
with you as follows:
1. ISSUANCE OF SECURITIES. The Issuer proposes to issue and sell
to Jefferies & Company, Inc. ("JEFFERIES") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (collectively, the "INITIAL
PURCHASERS"), and the Initial Purchasers, acting severally and not jointly,
propose to purchase $205,000,000 aggregate principal amount of the Issuer's
12-1/4% Senior Secured Notes due 2004, Series A (the "SERIES A NOTES"). The
Series A Notes will be issued pursuant to an indenture (the "INDENTURE"), to be
dated as of December 19, 1997, among the Issuer, the guarantors named therein
(the "GUARANTORS") and The Bank of New York, as trustee (the "TRUSTEE"). The
Guarantors will unconditionally guarantee the obligations under the Notes
(defined below) and the Indenture (collectively, the "GUARANTY"). The
obligations under the Notes and the Guaranty will be secured by security
interests in or pledges of (the "SECURITY INTERESTS") certain assets (the
"COLLATERAL") of the Issuer and certain of its subsidiaries (collectively, the
"GRANTORS"), respectively, as set forth in the Offering Circular (defined
below).
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The Series A Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "ACT"). The Issuer has prepared a
preliminary offering circular, dated December 12, 1997 (the "PRELIMINARY
OFFERING CIRCULAR"), and a final offering circular, dated December 19, 1997 (the
"OFFERING CIRCULAR"), relating to the offer and sale of the Series A Notes (the
"OFFERING").
Upon original issuance thereof, and until such time as the same
is no longer required under the applicable requirements of the Act, the Series A
Notes shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE THAT IS TWO YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER
BE PROVIDED UNDER RULE 144(k) AS PERMITTING RESALES BY
NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH FITZGERALDS GAMING CORPORATION (THE "COMPANY") OR
ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF SUCH SECURITY) EXCEPT (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 UNDER
THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) 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) PURSUANT TO OFFERS AND
SALES TO
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NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURI TIES ACT THAT IS
PURCHASING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions hereof, the Issuer shall issue and sell to the Initial
Purchasers (and, in order to induce the Initial Purchasers to purchase the
Notes, the Guarantors shall issue the Guaranty and the Grantors shall grant the
Security Interests), and each of the Initial Purchasers, acting severally and
not jointly, shall purchase from the Issuer, the respective principal amount set
forth opposite such Initial Purchaser's name on Annex A hereto, of $205,000,000
aggregate principal amount of Series A Notes. The purchase price for the Series
A Notes shall be 96.3748% of the principal amount thereof.
3. TERMS OF OFFERING. The Initial Purchasers have advised the
Issuer that the Initial Purchasers will make offers to sell (the "EXEMPT
RESALES") some or all of the Series A Notes purchased by the Initial Purchasers
hereunder on the terms set forth in the Offering Circular, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A under the
Act ("QIBS"), (ii) a limited number of institutional "accredited investors," as
defined in Rule 501(a)(1), (2), (3) or (7) under the Act ("ACCREDITED
INVESTORS"), and (iii) certain persons outside the United States in reliance on
Regulation S ("REGULATION S") under the Act ("REG S INVESTORS," and, together
with QIBs and Accredited Investors, "ELIGIBLE PURCHASERS").
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Holders of the Series A Notes (including subsequent transferees)
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be executed on and dated as of the
Closing Date (as defined below). Pursuant to the Registration Rights Agreement,
the Issuer and the Guarantors will agree, among other things, to file with the
Securities and Exchange Commission (the "COMMISSION") (i) a registration
statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating
to, among other things, the 12 1/4% Senior Secured Notes due 2004, Series B, of
the Issuer (the "SERIES B NOTES" and, together with the Series A Notes, each
with the Guaranty endorsed thereon, the "NOTES"), identical in all material
respects to the Series A Notes (except that the Series B Notes shall have been
registered pursuant to such registration statement) to be offered in exchange
for the Series A Notes (such offer to exchange being referred to as the
"REGISTERED EXCHANGE OFFER") and/or (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT") relating to the resale by certain holders of the Series
A Notes.
On the Closing Date, the Grantors will enter into certain
security and pledge agreements, mortgages and certain other documents
(collectively, the "SECURITY DOCUMENTS") that will provide for the grant of the
Security Interests in the Collateral to the Trustee, as collateral agent (in
such capacity, the "COLLATERAL AGENT"), for the benefit of the holders of the
Notes. The Security Interests will secure the payment and performance when due
of all of the obligations of the Issuer, the Guarantors and the Grantors under
the Indenture, the Notes, and the Security Documents.
In connection with the offering of the Series A Notes
contemplated hereby, the Issuer is seeking the consent (the "CONSENT
SOLICITATION") to certain amendments to and/or waivers under (the "AMENDMENTS")
the (i) Note Purchase Agreement, dated as of December 30, 1996, among the
Issuer, as issuer, Fitzgeralds South, Inc. ("FSI"), Fitzgeralds Reno, Inc.
("FRI"), Fitzgeralds Incorporated ("FI"), Fitzgeralds Las Vegas, Inc. ("FLVI"),
Fitzgeralds Fremont Experience Corporation ("FFEC"), Fitzgeralds Mississippi,
Inc. ("FMI"), and Fitzgeralds Black Hawk, Inc. ("FBHI"), as subsidiary
guarantors, and the purchasers listed on the signature pages thereto (the "NOTE
PURCHASE AGREEMENT"); (ii) Indenture, dated as of December 19, 1995, among the
Issuer, as issuer, FSI, FRI, FI, FLVI, FFEC, FMI, and FBHI, as subsidiary
guarantors, and The Bank of New York (as successor to ▇▇▇▇▇ Fargo Bank, N.A.),
as trustee (the "1995 INDENTURE"); (iii) Indenture, dated as of August 13, 1997,
among ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Limited Liability Company ("101 MAIN"), as issuer,
Fitzgeralds Black Hawk II, Inc. ("FBH-II"), as guarantor, and The Bank of New
York, as trustee (the "1997 INDENTURE," and, together with the 1995 Indenture,
the "OLD INDENTURES"); and (iv) Warrant Agreement, dated as of December 19,
1995, between the Issuer and The Bank of New
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York, as warrant agent (the "WARRANT AGREEMENT"); each, as more fully described
in the documents and instruments related thereto (the "CONSENT SOLICITATION
DOCUMENTS").
This Agreement, the Indenture, the Guaranty, the Registration
Rights Agreement, the Security Documents, the Notes, the Consent Solicitation
Documents and all other documents or instruments executed by the Issuer or any
of the Subsidiaries (as defined below) in connection with the transactions
contemplated hereby and thereby are referred to herein as the "DOCUMENTS." The
Issuer, the Guarantors and the Grantors are collectively referred to herein as
the "FITZGERALDS ENTITIES." The transactions contemplated by the Documents,
including without limitation, the Consent Solicitation, the Amendments, the
Offering and the use of the proceeds therefrom as described in the Offering
Circular, are collectively referred to herein as the "TRANSACTIONS."
4. DELIVERY AND PAYMENT. Delivery to the Initial Purchasers of
and payment for the Series A Notes shall be made at a Closing (the "CLOSING") to
be held at 10:00 a.m., New York City time, on December 30, 1997 (the "CLOSING
DATE") at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. The Closing Date and the location of delivery of and
the form of payment for the Series A Notes may be varied by agreement between
the Initial Purchasers and the Issuer.
The Issuer shall deliver to the Initial Purchasers one or more
certificates, representing the Series A Notes (the "GLOBAL SECURITIES"), each in
definitive form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), or such other names as the Initial Purchasers
may request upon at least one business day's notice to the Issuer, in an amount
corresponding to the aggregate principal amount of the Series A Notes sold
pursuant to Exempt Resales to QIBs, to Accredited Investors and to Reg S
Investors, respectively, in each case against payment by the Initial Purchasers
of the purchase price therefor by immediately available Federal funds bank wire
transfer to such bank account as the Issuer shall designate at least two
business days prior to the Closing. In compensation of delivery of payment by
the Initial Purchasers in same day funds, the Issuer hereby acknowledges that
the Initial Purchasers will deduct from the purchase price an amount equal to
the Initial Purchasers' cost of funds with respect thereto.
The Global Securities in definitive form shall be made available
to the Initial Purchasers for inspection at the New York offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP (or such other place as shall be acceptable to the Initial
Purchasers) not later than 9:30 a.m. one business day immediately preceding the
Closing Date.
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5. AGREEMENTS OF THE FITZGERALDS ENTITIES. Each Fitzgeralds
Entity, jointly and severally, hereby agrees:
(a) To (i) advise the Initial Purchasers promptly after
obtaining knowledge (and, if requested by the Initial Purchasers,
confirm such advice in writing) of (A) the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of any of the Notes for offer or sale in
any jurisdiction, or the initiation of any proceeding for such purpose
by any state securities commission or other regulatory authority, or (B)
the happening of any event that makes any statement of a material fact
made in the Offering Circular untrue or that requires the making of any
additions to or changes in the Offering Circular in order to make the
statements therein, in the light of the circumstances under which they
are made, not misleading, (ii) use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or
exemption from qualification of any of the Notes under any state
securities or Blue Sky laws, and (iii) 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 of
the Notes under any such laws, use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To (i) furnish the Initial Purchasers, without charge,
as many copies of the Offering Circular, and any amendments or
supplements thereto, as the Initial Purchasers may reasonably request
and (ii) promptly prepare, upon the Initial Purchasers' request, any
amendment or supplement to the Offering Circular that the Initial
Purchasers deem may be reasonably necessary in connection with Exempt
Resales (and the Fitzgeralds Entities hereby consent to the use of the
Preliminary Offering Circular and the Offering Circular, and any
amendments and supplements thereto, by the Initial Purchasers in
connection with Exempt Resales).
(c) Not to amend or supplement the Offering Circular prior
to the Closing Date unless the Initial Purchasers shall previously have
been advised thereof and shall not have objected thereto within one
business day after being furnished a copy thereof.
(d) So long as the Initial Purchasers shall hold any Notes
other than for their own account for investment purposes, (i) if any
event shall occur as a result of which, in the reasonable judgment of
the Issuer or the Initial Purchasers, it becomes necessary or advisable
to amend or supplement the Offering Circular in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary to amend or supplement
the Offering Circular to comply with Applicable Law (as defined below),
forthwith to prepare an appropriate amendment
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or supplement to the Offering Circular (in form and substance
satisfactory to the Initial Purchasers) so that (A) as so amended or
supplemented the Offering Circular will not include an untrue statement
of material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (B) the Offering Circular will
comply with Applicable Law, and (ii) if it becomes necessary or
advisable to amend or supplement the Offering Circular so that the
Offering Circular will contain all of the information specified in, and
meet the requirements of, Rule 144A(d)(4) of the Act, forthwith to
prepare an appropriate amendment or supplement to the Offering Circular
(in form and substance satisfactory to the Initial Purchasers) so that
the Offering Circular, as so amended or supplemented, will contain the
information specified in, and meet the requirements of, such Rule.
(e) To cooperate with the Initial Purchasers and the
Initial Purchasers' counsel in connection with the qualification of the
Notes under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may request and continue such qualification in effect
so long as reasonably required for Exempt Resales; provided, that no
Fitzgeralds Entity shall be required in connection therewith to file any
general consent to service of process or to qualify as a foreign
corporation in any jurisdiction where it is not now so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(f) Whether or not any of the Transactions are consummated
or this Agreement is terminated, to pay (i) all costs, expenses, fees
and taxes incident to and in connection with: (A) the preparation,
printing and distribution of the Preliminary Offering Circular and the
Offering Circular and all amendments and supplements thereto (including,
without limitation, financial statements and exhibits), and all other
agreements, memoranda, correspondence and other documents prepared and
delivered in connection herewith, (B) the printing, processing and
distribution (including, without limitation, word processing and
duplication) costs of the Company with respect to, and delivery of, and
performance under, each of the Documents, (C) the issuance and delivery
of the Notes, including the fees of the Trustee and the cost of its
personnel, (D) the qualification of the Notes for offer and sale under
the securities or Blue Sky laws of the several states (other than the
fees and disbursements of the Initial Purchasers' counsel relating to
such registration or qualification), (E) furnishing such copies of the
Preliminary Offering Circular and the Offering Circular, and all
amendments and supplements thereto, as may reasonably be requested for
use by the Initial Purchasers, and (F) the preparation of the Notes,
(ii) all fees and expenses of the counsel and accountants of the
Fitzgeralds Entities, (iii) all expenses and listing fees in connection
with the application for quotation of the Notes in the National
Association of Securities Dealers, Inc. ("NASD") Automated
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Quotation System - PORTAL ("PORTAL"), (iv) all fees and expenses
(including fees and expenses of counsel) of the Fitzgeralds Entities in
connection with approval of the Notes by DTC for "book-entry" transfer
and (v) all fees charged by rating agencies in connection with the
rating of the Notes.
(g) To use the proceeds from the sale of the Series A
Notes in the manner described in the Offering Circular under the caption
"Use of Proceeds."
(h) To the extent it may lawfully do so, not to insist
upon, plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension, usury or other law, wherever enacted,
now or at any time hereafter in force, that would prohibit or forgive
the payment of all or any portion of the principal of or interest on the
Notes, or that may affect the covenants or the performance of the
Indenture (and, to the extent it may lawfully do so, each Fitzgeralds
Entity hereby expressly waives all benefit or advantage of any such law,
and covenants that it shall not, by resort to any such law, hinder,
delay or impede the execution of any power granted to the Trustee in the
Indenture or the Collateral Agent in the Security Documents but shall
suffer and permit the execution of every such power as though no such
law had been enacted).
(i) To do and perform all things required to be done and
performed under the Documents prior to and after the Closing Date
(including, without limitation, (1) all things necessary or advisable to
obtain (i) the consent of the Nevada Gaming Authorities (as defined in
the Offering Circular) to the pledge of, and the negative pledge on, the
stock of FRI, FSI and FLVI prior to the Registered Exchange Offer, and
(ii) on the Closing Date, all termination statements, mortgage releases
and other documents necessary to terminate the Liens (as defined in the
Indenture) of record with respect to Indebtedness (as defined in the
Indenture) that is being repaid with the net proceeds of the Offering;
and (2) using its best efforts to obtain the consent from the respective
lessors to the grant of a first priority Lien on the Issuer's and the
Guarantors' interest in the Nevada Ground Leases (as defined in the
Offering Circular) and to the foreclosure by the Collateral Agent
thereon following an Event of Default (as defined in the Indenture) as
promptly as practicable following the Closing Date).
(j) Not to, and to ensure that no affiliate (as defined in
Rule 501(b) of the Act) of any of them will, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) that would be integrated with the
sale of the Series A Notes in a manner that would require the
registration under the Act of the sale to the Initial Purchasers or to
the Eligible Purchasers of the Series A Notes.
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(k) For so long as any of the Notes remain outstanding,
during any period in which the Issuer is not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), to make available, upon request, to any owner of the Notes in
connection with any sale thereof and any prospective Eligible Initial
Purchasers of such Notes from such owner, the information required by
Rule 144A(d)(4) under the Act.
(l) To comply with the representation letter of the Issuer
to DTC relating to the approval of the Notes by DTC for "book entry"
transfer.
(m) To use its best efforts to effect the inclusion of the
Notes in PORTAL.
(n) For so long as the Notes are outstanding, and whether
or not required to do so by the rules and regulations of the Commission,
(1) to furnish to the Trustee and deliver or cause to be delivered to
the holders of the Notes and the Initial Purchasers (i) all quarterly
and annual financial information that would be required to be contained
in a filing with the Commission on Forms 10-Q and 10-K if the Issuer
were required to file such Forms, including for each a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report
thereon by the Issuer's independent certified public accountants and
(ii) all reports that would be required to be filed with the Commission
on Form 8-K if the Issuer were required to file such reports and (2)
from and after the time the Exchange Offer Registration Statement or the
Shelf Registration Statement (or such other registration statement with
respect to the Notes) is filed with the Commission, to file such
information with the Commission so long as the Commission will accept
such filings.
(o) Except in connection with the Registered Exchange
Offer or the filing of the Shelf Registration Statement, not to, and not
to authorize or permit any person acting on its behalf to, (i)
distribute any offering material in connection with the offer and sale
of the Notes other than the Preliminary Offering Circular and the
Offering Circular and any amendments and supplements to the Offering
Circular prepared in compliance with Section 5(c) hereof, or (ii)
solicit any offer to buy or offer to sell the Notes by means of any form
of general solicitation or general advertising (including, without
limitation, as such terms are used in Regulation D under the Act) or in
any manner involving a public offering within the meaning of Section
4(2) of the Act.
(p) Not to, directly or indirectly, without the prior
consent of Jefferies, which consent shall not be unreasonably withheld,
offer, sell, grant any option to purchase, or otherwise dispose (or
announce any offer, sale, grant of any option to
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purchase or other disposition) of any debt securities of any of them for
a period of six months after the date of the Offering Circular, except
as contemplated by the Registration Rights Agreement.
(q) For so long as the Initial Purchasers shall hold any
Notes, to notify the Initial Purchasers promptly in writing if any
Fitzgeralds Entity or any of their Affiliates becomes a party in
interest or a disqualified person with respect to any employee benefit
plan. The terms "ERISA," "Affiliates," "party in interest,"
"disqualified person" and "employee benefit plan" shall have the
meanings as set forth in Section 6(aa) hereof.
6. REPRESENTATIONS AND WARRANTIES OF THE FITZGERALDS ENTITIES.
The Fitzgeralds Entities, jointly and severally, represent and warrant to the
Initial Purchasers that:
(a) The Preliminary Offering Circular as of its date did
not, and each of the Offering Circular and the Consent Solicitation
Documents, as of its date does not and as of the Closing Date will not,
and each supplement or amendment thereto as of its date will not,
contain any untrue statement of a material fact or omit to state any
material fact (except, in the case of the Preliminary Offering Circular,
for pricing terms and other financial terms intentionally left blank)
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. No injunction
or order has been issued that either (i) asserts that any of the
Transactions is subject to the registration requirements of the Act or
(ii) would prevent or suspend the issuance or sale of the Notes or the
use of the Preliminary Offering Circular, the Offering Circular, or any
amendment or supplement thereto, in any jurisdiction. Each of the
Preliminary Offering Circular and the Offering Circular, as of their
respective dates contained, and the Offering Circular as amended or
supplemented as of the Closing Date will contain, all the information
specified in, and meet the requirements of, Rule 144A(d)(4) under the
Act. Except as adequately disclosed in the Offering Circular, there are
no related party transactions that would be required to be disclosed in
the Offering Circular if the Offering Circular were a prospectus
included in a registration statement on Form S-1 filed under the Act.
(b) Other than the Issuer's 13% Senior Secured Notes due
2002, there are no securities of any Fitzgeralds Entity registered under
the Exchange Act or listed on a national securities exchange registered
under Section 6 of the Exchange Act or quoted in a United States
automated inter-dealer quotation system. The Series A Notes are eligible
for resale pursuant to Rule 144A.
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(c) Each of the Issuer and each Subsidiary (defined below)
(i) has been duly organized, is validly existing and is in good standing
under the laws of its jurisdiction of organization, (ii) has all
requisite power and authority to carry on its business and to own, lease
and operate its properties and assets as described in the Offering
Circular and (iii) is duly qualified or licensed to do business and is
in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of such businesses or the
ownership or leasing of such properties requires such qualification,
except where the failure to be so qualified could not reasonably be
expected, singly or in the aggregate, to have a material adverse effect
on (i) the properties, business, prospects, operations, earnings,
assets, liabilities or condition (financial or otherwise) of the Issuer
and the Subsidiaries, taken as a whole, (ii) the ability of any
Fitzgeralds Entity to perform its obligations under any of the Documents
or (iii) the perfection or priority of any Security Interest in any
portion of the Collateral (each, a "MATERIAL ADVERSE EFFECT").
(d) Immediately following the Closing, (i) the only direct
or indirect subsidiaries of the Issuer (collectively, the
"SUBSIDIARIES") will be the entities identified on Schedule 6(d), and
(ii) except as set forth on Schedule 6(d), the Issuer will directly or
indirectly beneficially own 100% of the outstanding shares of capital
stock or other equity interests of each Subsidiary, free and clear of
Liens, except for Liens securing the Notes, and all of such shares of
capital stock or other equity interests will be duly authorized and
validly issued, fully paid and nonassessable and not issued in violation
of, or subject to, any preemptive or similar rights. Except as
adequately disclosed in the Offering Circular, there are no outstanding
(x) securities convertible into or exchangeable for any capital stock of
the Issuer or any of the Subsidiaries, (y) options, warrants or other
rights to purchase or subscribe to capital stock of the Issuer or any of
the Subsidiaries or securities convertible into or exchangeable for
capital stock of the Issuer or any of the Subsidiaries or (z) contracts,
commitments, agreements, understandings, arrangements, calls or claims
of any kind relating to the issuance of any capital stock of the Issuer
or any of the Subsidiaries, any such convertible or exchangeable
securities or any such options, warrants or rights. Except as adequately
disclosed in the Offering Circular, immediately following the Closing,
the Issuer will not directly or indirectly own any capital stock or
other equity interest in any person other than the Subsidiaries.
(e) All of the outstanding shares of capital stock of the
Issuer have been duly authorized and validly issued, are fully paid and
nonassessable, and were not issued in violation of, and are not subject
to, any preemptive or similar rights. The table under the caption
"Capitalization" in the Offering Circular (including the footnotes
thereto) sets forth, as of its date, (i) the capitalization of the
Issuer and its Subsidiaries on a consolidated basis, (ii) the pro forma
capitalization of the Issuer and its Subsidiaries on a
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consolidated basis after giving effect to the elimination of the assets
and liabilities of Nevada Club, Inc. and (iii) the pro forma as adjusted
capitalization of the Issuer and its Subsidiaries on a consolidated
basis after giving effect to the Transactions. Except as set forth in
such table, immediately following the Closing, neither the Issuer nor
any of the Subsidiaries will have any liabilities, absolute, accrued,
contingent or otherwise other than (w) liabilities that are reflected in
the Financial Statements (defined below), (x) liabilities that are not
reflected in the Financial Statements because such liabilities are not
required to be included therein in accordance with GAAP (defined below)
or (z) liabilities incurred subsequent to September 28, 1997 that could
not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(f) Except for this Agreement and the Registration Rights
Agreement (and agreements relating to securities to be redeemed at the
Closing), and as adequately disclosed in the Offering Circular, neither
the Issuer nor any of the Subsidiaries has entered into any agreement
(i) to register its securities under the Act or (ii) to purchase or
offer to purchase any securities of the Issuer, any of the Subsidiaries
or any of their respective affiliates.
(g) Each Fitzgeralds Entity has all requisite power and
authority to enter into, deliver and perform its obligations under the
Documents to which it is a party and to consummate the Transactions.
Each of the Documents has been duly and validly authorized by each
Fitzgeralds Entity that is, or will be, a party hereto or thereto, and
this Agreement is, and when executed and delivered on the Closing Date
each other Document will be, a legal, valid and binding obligation of
each Fitzgeralds Entity that is a party hereto or thereto, enforceable
against each such person in accordance with its terms. When executed and
delivered, each Document will conform to the description thereof in the
Offering Circular. Except as adequately disclosed in the Offering
Circular, the Guaranty ranks and will rank on a parity with all senior
Indebtedness of the applicable Guarantor that is outstanding on the date
hereof or that may be incurred hereafter, and senior to all other
Indebtedness of the applicable Guarantor that is outstanding on the date
hereof or that may be incurred hereafter. On the Closing Date, the
Indenture will conform to the requirements of the Trust Indenture Act of
1939, as amended (the "TIA"), applicable to an indenture that is
required to be qualified under the TIA.
(h) The Series A Notes have been duly and validly
authorized by the Issuer for issuance and sale to the Initial Purchasers
pursuant to this Agreement and, when executed 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, will be
legal, valid and binding obligations of the Issuer, enforceable against
the Issuer in accordance
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with their terms. The Series B Notes have been duly and validly
authorized by the Issuer and, when executed, authenticated and delivered
in accordance with the terms of the Indenture and the Registration
Rights Agreement, will be legal, valid and binding obligations of the
Issuer, enforceable against the Issuer in accordance with their terms.
Each Guaranty has been duly and validly authorized by the applicable
Guarantor and, when issued in accordance with the terms of the
Indenture, will be a legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its
terms. Except as adequately disclosed in the Offering Circular, the
Notes rank and will rank on a parity with all senior Indebtedness of the
Issuer that is outstanding on the date hereof or that may be incurred
hereafter, and senior to all other indebtedness of the Issuer that is
outstanding on the date hereof or that may be incurred hereafter.
(i) Neither the Issuer nor any of the Subsidiaries is (i)
in violation of its respective charter or by-laws (collectively,
"CHARTER DOCUMENTS"), (ii) in violation of any federal, state, local or
foreign statute, law (including, without limitation, common law and the
Nevada Gaming Control Act, the Mississippi Gaming Control Act and the
Colorado Limited Gaming Control Act of 1991, in each case including the
rules and regulations promulgated thereunder) or ordinance, or any
judgment, decree, rule, regulation or order (collectively, "APPLICABLE
LAW") of any government, governmental or regulatory agency or body
(including, without limitation, the Nevada Gaming Commission, the Nevada
State Gaming Control Board, the Mississippi Gaming Commission, the
Colorado Limited Gaming Control Commission and the Colorado Department
of Revenue Gaming Division (collectively, "GAMING AUTHORITIES")), court,
arbitrator or self-regulatory organization, domestic or foreign (each, a
"GOVERNMENTAL AUTHORITY"), other than violations that could not
reasonably be expected to, singly or in the aggregate, result in a
Material Adverse Effect, or (iii) in breach of or default under any
bond, debenture, note or other evidence of indebtedness, indenture,
mortgage, deed of trust, lease or any other agreement or instrument to
which any such person is a party or by which any of them or their
respective property is bound (collectively, "APPLICABLE AGREEMENTS"),
other than breaches or defaults that could not reasonably be expected
to, singly or in the aggregate, result in a Material Adverse Effect.
There exists no condition that, with the passage of time or otherwise,
would constitute a violation of such Charter Documents or Applicable
Laws or a breach of or default under any Applicable Agreement or result
in the imposition of any penalty or the acceleration of any
indebtedness, other than breaches, violations, penalties, defaults or
conditions which could not reasonably be expected, singly or in the
aggregate, to have a Material Adverse Effect. All Applicable Agreements
are in full force and effect and are legal, valid and binding
obligations, and no default has occurred or is continuing thereunder,
other than such defaults that could not reasonably be expected to,
singly or in the aggregate, have a Material Adverse Effect.
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(j) Except as adequately disclosed in the Offering
Circular, neither the execution, delivery or performance of the
Documents nor the consummation of the Transactions shall conflict with,
violate, constitute a breach of or a default (with the passage of time
or otherwise) under, require the consent of any person (other than
consents already obtained) under, result in the imposition of a Lien on
any assets of the Issuer or any of the Subsidiaries (except pursuant to
the Documents), or result in an acceleration of indebtedness pursuant to
(i) the Charter Documents of the Issuer or any of the Subsidiaries,
(ii) any Applicable Agreement, other than such breaches, violations or
defaults that could not, singly or in the aggregate, result in a
Material Adverse Effect or (iii) any Applicable Law. After giving effect
to the Transactions, no Default (as defined in the Indenture) or Event
of Default will exist.
(k) No permit, certificate, authorization, approval,
consent, license or order of, or filing, registration, declaration or
qualification with, any Governmental Authority (collectively, "PERMITS")
and no approval or consent of any other person, is required in
connection with, or as a condition to, the execution, delivery or
performance of any of the Documents or the consummation of any of the
Transactions, other than such Permits (i) as have been made or obtained
on or prior to the Closing Date, (ii) as are not required to be made or
obtained on or prior to the Closing Date that will be made or obtained
when required, or (iii) the failure of which to make or obtain could not
reasonably be expected, singly or in the aggregate, to result in a
Material Adverse Effect.
(l) Except as adequately disclosed in the Offering
Circular, there is no action, claim, suit, demand, hearing, notice of
violation or deficiency, or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), domestic
or foreign (collectively, "PROCEEDINGS"), pending or threatened, that
either (i) seeks to restrain, enjoin, prevent the consummation of, or
otherwise challenge any of the Documents or any of the Transactions, or
(ii) could, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Neither the Issuer nor any of the Subsidiaries
is subject to any judgment, order, decree, rule or regulation of any
Governmental Authority that could, singly or in the aggregate, have a
Material Adverse Effect.
(m) The Issuer, each of the Subsidiaries and each
director, officer, employee and agent of the Issuer or any of its
Subsidiaries (each of the Issuer, each of its Subsidiaries and each such
other person, a "REGULATED PERSON") has, and is in compliance with the
terms and conditions of, all Permits (including, without limitation,
Permits with respect to engaging in gaming operations and the
manufacture of gaming machines)
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necessary or advisable to own, lease and operate the properties and to
conduct the businesses described in the Offering Circular other than
those the failure of which to have could not reasonably be expected,
singly or in the aggregate, to have a Material Adverse Effect. All such
Permits are valid and in full force and effect. No event has occurred
which allows, or after notice or lapse of time would allow, the
imposition of any material penalty, revocation or termination by the
issuer thereof or which results, or after notice or lapse of time would
result, in any material impairment of the rights of the holder of any
such Permits. Neither the Issuer nor any of the Subsidiaries has any
reason to believe that any issuer is considering limiting, conditioning,
suspending, modifying, revoking or not renewing any such Permit.
(n) To the best knowledge of the Fitzgeralds Entities, (i)
no Governmental Authority is investigating any Regulated Person (other
than normal overseeing reviews of the Gaming Authorities incident to the
gaming activities of the Issuer and the Subsidiaries), and (ii) there is
no basis for any of the Gaming Authorities to deny the renewal of the
current Permits held by any of them.
(o) Immediately following the Closing, the Issuer and the
Subsidiaries (i) will have good and marketable title, free and clear of
all Liens (except for Permitted Liens (as defined in the Indenture)), to
all property and assets described in the Offering Circular as being
owned by them and (ii) will enjoy peaceful and undisturbed possession
under all leases to which any of them is a party as lessee.
(p) The Issuer and the Subsidiaries maintain insurance
(including self-insurance consistent with prior practice as adequately
disclosed in the Offering Circular) covering their properties,
operations, personnel and businesses against such losses and risks as
they reasonably deem adequate in accordance with customary industry
practice. Any such insurance is outstanding and duly in force.
(q) Upon execution and delivery of the Security Documents
and the issuance of the Notes, the Security Documents will create, in
favor of the Collateral Agent, for the benefit of the holders of the
Notes, a valid security interest in the Collateral and the proceeds
thereof and, upon the filings or the recording required by the Security
Documents, the Collateral Agent will have a first priority perfected
security interest in the Collateral, except as adequately disclosed in
the Offering Circular.
(r) All tax returns required to be filed by the Issuer and
the Subsidiaries in any jurisdiction (including foreign jurisdictions)
have been filed and, when filed, all such returns were accurate in all
material respects, and all taxes, assessments, fees and
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other charges (including, without limitation, withholding taxes,
penalties and interest) due or claimed to be due from such entities have
been paid, other than those being contested in good faith by appropriate
proceedings, or those that are currently payable without penalty or
interest and, in each case, for which an adequate reserve or accrual has
been established on the books and records of the Issuer in accordance
with generally accepted accounting principles of the United States,
consistently applied ("GAAP"). There are no actual or proposed
additional tax assessments for any fiscal period against the Issuer or
any of the Subsidiaries that could, singly or in the aggregate, have a
Material Adverse Effect. The charges, accruals and reserves on the books
of each of the Issuer and the Subsidiaries in respect of any income and
tax liability for any years not finally determined are adequate to meet
any assessments or re-assessments for additional income tax for any
years not finally determined.
(s) The Issuer and the Subsidiaries own, or are licensed
under, and have the right to use, 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, "INTELLECTUAL PROPERTY") currently used in, or necessary
for the conduct of, their businesses, free and clear of all Liens, other
than Permitted Liens. No claims have been asserted by any person
challenging the use of any such Intellectual Property by the Issuer or
any of the Subsidiaries or questioning the validity or effectiveness of
any license or agreement related thereto, there is no valid basis for
any such claim (other than any claims that could not, singly or in the
aggregate, have a Material Adverse Effect), and the use of such
Intellectual Property by the Issuer and the Subsidiaries will not
infringe on the Intellectual Property rights of any other person.
(t) Each of the Issuer and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) material transactions are executed in accordance with
management's general or specific authorization, (ii) material
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP, and to maintain asset
accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any material differences.
(u) Each of (i) the audited consolidated financial
statements and related notes of (A) the Issuer and (B) 101 Main, in each
case contained in the Offering Circular (the "AUDITED FINANCIAL
STATEMENTS") and (ii) the unaudited consolidated financial
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statements and related notes of (A) the Issuer and (B) 101 Main, in each
case contained in the Offering Circular (the "INTERIM FINANCIAL
STATEMENTS" and, together with the Audited Financial Statements, the
"FINANCIAL STATEMENTS") present fairly the consolidated financial
position, results of operations and cash flows of the applicable person
(and in the case of the Issuer, its subsidiaries), as of the respective
dates and for the respective periods to which they apply, and have been
prepared in accordance with GAAP and the requirements of Regulation S-X
that would be applicable if the Offering Circular were a prospectus
included in a registration statement on Form S-1 filed under the Act
(the "S-X REQUIREMENTS"). The summary historical financial data included
in the Offering Circular have been prepared on a basis consistent with
that of the Financial Statements and present fairly the consolidated
financial position and results of operations of the Issuer and its
subsidiaries as of the respective dates and for the respective periods
indicated. The pro forma consolidated financial statements and related
notes included in the Offering Circular (w) comply with the S-X
Requirements and all other rules and guidelines of the Commission with
respect to pro forma financial statements, (x) present fairly the pro
forma financial position, results of operations and cash flow of the
Issuer and its subsidiaries as of the dates and for the periods
indicated, after giving effect to the Transactions, (y) have been
prepared on a basis consistent with the Financial Statements, except for
the pro forma adjustments specified therein, and (z) are based on good
faith, reasonable estimates and assumptions of the Issuer. The summary
pro forma financial information included in the Offering Circular have
been derived from such pro forma financial statements and present fairly
the pro forma consolidated financial position and results of operation
of the Issuer and its subsidiaries as of the respective dates and for
the respective periods indicated. All other financial and statistical
data included in the Offering Circular are fairly and accurately
presented. Deloitte & Touche, LLP and Ernst & Young, LLP are independent
public accountants with respect to the Issuer and the Subsidiaries
within the meaning of Regulation S-X under the Act.
(v) Subsequent to the respective dates as of which
information is given in the Offering Circular, except as adequately
disclosed in the Offering Circular, (i) neither the Issuer nor any of
the Subsidiaries has incurred any liabilities, direct or contingent,
that are material, singly or in the aggregate, to any of them, or has
entered into any material transactions not in the ordinary course of
business, (ii) there has not been any decrease in the capital stock or
any increase in long-term indebtedness or any material increase in
short-term indebtedness of any of them, or any payment of or declaration
to pay any dividends or any other distribution with respect to any of
them, and (iii) there has not been any material adverse change in the
properties, business, prospects, operations, earnings, assets,
liabilities or condition (financial or otherwise) of the Issuer and the
Subsidiaries taken as a whole (each of clauses (i), (ii) and (iii), a
"MATERIAL ADVERSE CHANGE"). There
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is no event that is reasonably likely to occur, which if it were to
occur, could reasonably be expected, singly or in the aggregate, to have
a Material Adverse Effect, except such events that have been adequately
disclosed in the Offering Circular.
(w) Immediately following the Closing, after giving effect
to the Transactions, (i) the present fair salable value of the assets of
each Fitzgeralds Entity will exceed the amount that will be required to
be paid on or in respect of the then existing debts and other
liabilities (including contingent liabilities) of such Person as they
become absolute and matured and (ii) no Fitzgeralds Entity will have
unreasonably small capital to carry out its businesses as conducted or
as proposed to be conducted. Neither the Issuer nor any of the
Subsidiaries intends to, or believes that it will, incur debts beyond
its ability to pay such debts as they mature.
(x) Neither the Issuer nor any of its affiliates has (i)
taken, directly or indirectly, any action designed to cause or to result
in, or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of any of them to facilitate the sale or resale of any of the
Notes, (ii) sold, bid for, purchased, or paid anyone any compensation
for soliciting purchases of, any of the Notes or (iii) except as
disclosed in the Offering Circular, paid or agreed to pay to any person
any compensation for soliciting another to purchase any other securities
of any of them.
(y) Without limiting clause (k) above, no registration
under the Act, and no qualification of the Indenture under the TIA, is
required for the sale of the Series A Notes to the Initial Purchasers as
contemplated hereby or for the Exempt Resales, assuming (i) that the
purchasers in the Exempt Resales are Eligible Purchasers, (ii) the
accuracy of the Initial Purchasers' representations contained herein
regarding the absence of general solicitation in connection with the
sale of the Series A Notes to the Initial Purchasers and in the Exempt
Resales, and (iii) the accuracy of the representations made by each
Accredited Investor who purchases the Series A Notes pursuant to an
Exempt Resale as set forth in the letters of representation in the form
of Annex A to the Offering Circular. No form of general solicitation or
general advertising was used by the Issuer or any of its affiliates or
any of their representatives in connection with the offer and sale of
any of the Series A Notes or in connection with Exempt Resales. No
securities of the same class as any of the Notes have been offered,
issued or sold by the Issuer or any of its affiliates within the
six-month period immediately prior to the date hereof. With respect to
those Series A Notes sold in reliance on Regulation S, (i) none of the
Issuer, its affiliates or any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Issuer makes no
representation) has engaged or will engage in any directed
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selling efforts within the meaning of Regulation S and (ii) each of the
Issuer and its affiliates and any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Issuer makes no
representation) has complied with the offering restrictions requirement
of Regulation S.
(z) Without limiting clause (k) above, no registration
under the Act, or filing under the Exchange Act or the TIA, is required
in connection with the commencement or consummation of the Consent
Solicitation and the Amendments. The Consent Solicitation and the
Amendments will comply with the terms of the Note Purchase Agreement,
the Old Indentures and the Warrant Agreement, as the case may be, and,
upon consummation of the Amendments, the Old Indentures, as amended,
will comply with the TIA.
(aa) No condition exists or event or transaction has
occurred in connection with any employee benefit plan that could result
in the Issuer or any such "Affiliate" incurring any liability, fine or
penalty that could, singly or in the aggregate, have a Material Adverse
Effect. With respect to any employee pension benefit plan that is
subject to Title IV of the Employee Retirement Income Act of 1974, as
amended, or the rules and regulations promulgated thereunder ("ERISA"),
(i) the fair market value of the assets of such employee pension benefit
plan equals or exceeds the present value of the liabilities of such
pension plan (as determined in accordance with the actuarial methods and
assumptions set forth in the latest actuarial report for such employee
pension benefit plan), except where the failure to so equal or exceed
would not, singly or in the aggregate, have a Material Adverse Effect
and (ii) there exists no accumulated funding deficiency which could,
singly or in the aggregate, have a Material Adverse Effect. The terms
"employee benefit plan," "employee pension benefit plan," and "party in
interest" shall have the meanings assigned to such terms in Section 3 of
ERISA. The term "Affiliate" shall have the meaning assigned to such term
in Section 407(d)(7) of ERISA, and the term "disqualified person" shall
have the meaning assigned to such term in section 4975 of the Internal
Revenue Code of 1986, as amended, or the rules, regulations and
published interpretations promulgated thereunder (the "CODE").
(ab) None of the Transactions will violate or result in a
violation of Section 7 of the Exchange Act (including, without
limitation, 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). Neither the Issuer nor any of the
Subsidiaries is subject to regulation, or shall become subject to
regulation upon the consummation of the Transactions, under the
Investment Company Act of 1940, as amended, and the rules and
regulations and interpretations promulgated thereunder, the
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Public Utility Holding Company Act of 1935, as amended, the Federal
Power Act, the Interstate Commerce Act, the Commodity Exchange Act or
any Federal or state statute or regulation limiting its ability to incur
or assume indebtedness for borrowed money.
(ac) Neither the Issuer nor any of the Subsidiaries has
dealt with any broker, finder, commission agent or other such person
(other than the Initial Purchasers) in connection with the Transactions
and neither the Issuer nor any of the Subsidiaries is under any
obligation to pay any broker's fee or commission in connection with such
transactions (other than commissions and fees to the Initial Purchasers
as set forth in the Offering Circular).
(ad) Neither the Issuer nor any Subsidiary is engaged in
any unfair labor practice. Except as adequately disclosed in the
Offering Circular, there is:
(i) no unfair labor practice complaint or other
proceeding pending or, to the knowledge of the Issuer after due
inquiry, threatened against the Issuer or any of the Subsidiaries
before the National Labor Relations Board or any state, local or
foreign labor relations board or any industrial tribunal, and no
grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending or threatened,
(ii) no strike, labor dispute, slowdown or stoppage
pending or, to the knowledge of the Issuer after due inquiry,
threatened against the Issuer or any of the Subsidiaries, and
(iii) no union representation question existing
with respect to the employees of the Issuer or any of the
Subsidiaries, and, to the Issuer's knowledge after due inquiry,
no union organizing activities are taking place,
which, in the case of clause (i), (ii) or (iii), singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
(ae) In the ordinary course of their businesses, the
Issuer and each of the Subsidiaries conduct periodic reviews of the
effect of Environmental Laws (as defined below) on the business,
operations and properties of the Issuer and each of the Subsidiaries in
the course of which they identify and evaluate 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, any related constraints on
operating activities and any potential liabilities to third parties). On
the basis of such
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review, the Issuer and the Subsidiaries have reasonably concluded that
such associated costs and liabilities could not reasonably be expected,
singly or in the aggregate, to have a Material Adverse Effect. Except as
adequately disclosed in the Offering Circular or as otherwise could not
reasonably be expected, singly or in the aggregate, to have a Material
Adverse Effect:
(1) each of the Issuer and the Subsidiaries (i) has
obtained all Permits that are required with respect to the
operation of its business, property and assets under the
Environmental Laws (as defined below) and are in compliance with
all terms and conditions of such required Permits, and (ii) is in
compliance with all Environmental Laws (including, without
limitation, compliance with standards, schedules and timetables
therein);
(2) no real property or facility owned, used,
operated, leased, managed or controlled by the Issuer or any of
the Subsidiaries, or any predecessor in interest, is listed or
proposed for listing on the National Priorities List or the
Comprehensive Environmental Response, Compensation, and Liability
Information System, both promulgated under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), or on any other state or local list
established pursuant to any Environmental Law, and neither the
Issuer nor any of the Subsidiaries has received any notification
of potential or actual liability or request for information under
CERCLA or any comparable state or local law;
(3) no underground storage tank or other
underground storage receptacle, or related piping, is located on
a facility or property currently owned, operated, leased, managed
or controlled by the Issuer or any of the Subsidiaries in
violation of any Environmental Law;
(4) there have been no releases (i.e., any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing
or dumping, on-site or, to the knowledge of the Issuer and the
Subsidiaries after due inquiry, off-site) of Hazardous Materials
(as defined below) by the Issuer, any of the Subsidiaries or any
predecessor in interest or any person or entity whose liability
for any release of Hazardous Materials the Issuer or any of the
Subsidiaries has retained or assumed either contractually or by
operation of law at, on, under, from or into any facility or real
property owned, operated, leased, managed or controlled by any
such person;
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(5) neither the Issuer, the Subsidiaries nor any
person or entity whose liability the Issuer or any of the
Subsidiaries has retained or assumed either contractually or by
operation of law has any liability, absolute or contingent, under
any Environmental Law, and there is no Proceeding pending or
threatened against any of them under any Environmental Law; and
(6) there are no events, activities, practices,
incidents, actions, conditions, circumstances or plans that may
interfere with or prevent compliance by the Issuer or any of the
Subsidiaries with any Environmental Law, or that may give rise to
any liability under any Environmental Laws.
"ENVIRONMENTAL LAWS" means all Applicable Laws
relating to pollution or protection of human health and the
environment, including, without limitation, laws relating to (i)
emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous constituents, substances or wastes, including, without
limitation, asbestos or asbestos-containing materials,
polychlorinated biphenyls, petroleum or any constituents relating
to or arising out of any oil production activities, including
crude oil or any fraction thereof, or any petroleum product or
other wastes, chemicals or substances (collectively referred to
as "HAZARDOUS MATERIALS"), into the environment (including,
without limitation, ambient air, surface water, ground water,
land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of Hazardous Materials and (iii)
underground storage tanks, and related piping, and emissions,
discharges, releases or threatened releases therefrom.
(af) No statement, representation or warranty made by the
Issuer, any of the Subsidiaries, or any other person in any of the
Documents or in any certificate or document required by any of the
Documents to be delivered to the Initial Purchasers was or will be, when
made, inaccurate, untrue or incorrect in any material respect. Each
certificate signed by any officer of the Issuer or any Guarantor and
delivered to the Initial Purchasers or counsel for the Initial
Purchasers in connection with the Transactions shall be deemed to be a
representation and warranty by the Issuer and such Guarantor to each
Initial Purchaser as to the matters covered thereby.
7. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS. Each
of the Initial Purchasers severally represents and warrants with respect to
itself that:
(a) It is a QIB.
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(b) It, either directly or through its selling agent, (i)
is not acquiring the Series A 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 (ii) will
be soliciting offers for the Series A Notes only from, and will be
reoffering and reselling the Series A Notes only to (A) persons in the
United States whom it reasonably believes to be QIBs in reliance on the
exemption from the registration requirements of the Act provided by Rule
144A, (B) a limited number of Accredited Investors that execute and
deliver to the Issuer and the Initial Purchasers a letter containing
certain representations and agreements in the form attached as Annex A
to the Offering Circular or (C) certain persons outside the United
States in reliance on Regulation S.
(c) No form of general solicitation or general advertising
in violation of the Securities Act has been or will be used by such
Initial Purchasers or any of its representatives in connection with the
offer and sale of any of the Series A Notes.
(d) In connection with the Exempt Resales, it will solicit
offers to buy the Series A Notes only from, and will offer and sell the
Series A Notes only to, Eligible Purchasers who, in purchasing such
Series A Notes, will be deemed to have represented and agreed (i) if
such Eligible Purchasers are QIBs, that they are purchasing the Series A
Notes for their own accounts or accounts with respect to which they
exercise sole investment discretion and that they or such accounts are
QIBs, (ii) that such Series A Notes will not have been registered under
the Act and may be resold, pledged or otherwise transferred only (A)
inside the United States to a person who the seller reasonably believes
is a QIB in a transaction meeting the requirements of Rule 144A or in
accordance with another exemption from the registration requirements of
the Act, (B) to the Issuer, (C) pursuant to an effective registration
statement, and (D) outside the United States to a foreign person in a
transaction meeting the requirements of Regulation S and, in each case,
in accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction, and (iii) that the
holder will, and each subsequent holder is required to, notify any
Initial Purchasers from it of the security evidenced thereby of the
resale restrictions set forth in (ii) above.
(e) It has all requisite power and authority to enter
into, deliver and perform its obligations under this Agreement and the
Registration Rights Agreement. Each of this Agreement and the
Registration Rights Agreement has been duly and validly authorized by
it, and this Agreement is, and when executed and delivered on the
Closing Date the Registration Rights Agreement will be, a legal, valid
and binding obligation of it, enforceable against it in accordance with
its terms.
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8. INDEMNIFICATION.
(a) Each Fitzgeralds Entity shall, jointly and severally,
without limitation as to time, indemnify and hold harmless each Initial
Purchaser and each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act) any Initial
Purchaser (any of such persons being hereinafter referred to as a
"controlling person"), and the respective officers, directors, partners,
employees, representatives and agents of any Initial Purchaser and any
such controlling person, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, costs of
preparation and reasonable attorneys' fees) and expenses (including,
without limitation, costs and expenses incurred in connection with
investigating, preparing, pursuing or defending against any of the
foregoing) (collectively, "LOSSES"), as incurred, directly or indirectly
caused by, related to, based upon, arising out of or in connection with
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Circular or the Offering Circular
(or any amendment or supplement thereto), or any 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 or (ii) any
act, omission, transaction or event contemplated by the Documents;
provided, that no Fitzgeralds Entity shall be liable to the extent that
(1) any Losses under clause (ii) above are found by a court of competent
jurisdiction, in a final non-appealable judgment, to have arisen from
the gross negligence or willful misconduct of such person to be so
indemnified and (2) any Losses under clauses (i) or (ii) above result
from an untrue statement or omission or an alleged untrue statement or
omission made in reliance on and in conformity with the written
information supplied to the Issuer by any Initial Purchaser for use in
the Offering Circular. The parties hereto agree that the only
information supplied by any Initial Purchaser to the Issuer for use in
the Offering Circular is the information relating to such Initial
Purchaser in the last paragraph of text on the cover page thereof and in
the information contained in the third paragraph under the heading "Plan
of Distribution." The Issuer shall notify each of the Initial Purchasers
promptly of the institution, threat or assertion of any Proceeding of
which the Issuer or any Subsidiary is aware in connection with the
matters addressed by this Agreement that involves the Issuer, any of the
Subsidiaries or any person to be so indemnified.
(b) Each Initial Purchaser severally agrees to indemnify
and hold harmless the Issuer, its directors, officers, and each person,
if any, who controls the Issuer (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) against any and all Losses, as
incurred, directly arising out of any untrue statements or omissions, or
alleged untrue statements or omissions, made in the Offering Circular in
reliance upon and
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in conformity with written information furnished to the Company by such
Initial Purchaser expressly for use therein.
(c) If any Proceeding shall be brought or asserted against
any person entitled to indemnification hereunder, such indemnified party
shall give prompt written notice to the indemnifying party; provided,
that the failure to so notify the indemnifying party shall not relieve
such indemnifying party from any obligation or liability except to the
extent (but only to the extent) that it shall be finally determined by a
court of competent jurisdiction (which determination is not subject to
appeal) that the indemnified party has been prejudiced materially by
such failure.
No indemnifying party shall consent to entry of any
judgment in or enter into any settlement of any pending or threatened
Proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not any indemnified party is a party
thereto) unless such judgment or settlement includes, as an
unconditional term thereof, the giving by the claimant or plaintiff to
each indemnified party of a release, in form and substance satisfactory
to the indemnified party, from all Losses that may arise from such
Proceeding or the subject matter thereof (whether or not any indemnified
party is a party thereto and does not contain a statement as to fault,
culpability or failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8
is unavailable to an indemnified party or is insufficient to hold such
indemnified party harmless for any Losses in respect of which this
Section 8 would otherwise apply by its terms (other than by reason of
exceptions provided in this Section 8), then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Fitzgeralds Entities, on the one hand, and the
Initial Purchasers, on the other hand, from the offering of the Series A
Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Fitzgeralds Entities, on the one
hand, and the Initial Purchasers, on the other hand, in connection with
the actions, statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations. The relative
benefits received by the Fitzgeralds Entities, on the one hand, and the
Initial Purchasers, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Fitzgeralds Entities, and the total discounts
and commissions received by the Initial Purchasers, bear to the total
price of the Series A Notes to investors, in each case as set
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forth in the table on the cover page of the Offering Circular. The
relative fault of the Fitzgeralds Entities, on the one hand, and the
Initial Purchasers, on the other hand, shall be determined by reference
to, among other things, whether any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Fitzgeralds Entities, on the
one hand, or the Initial Purchasers, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or
payable by an indemnified party as a result of any Losses shall be
deemed to include any legal or other fees or expenses incurred by such
party in connection with any Proceeding, to the extent such party would
have been indemnified for such fees or expenses if the indemnification
provided for in this Section 8 was available to such party.
Each party hereto agrees that it would not be just and
equitable if contribution pursuant to this Section 8(d) 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 that
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 8(d), neither of the Initial Purchasers shall be required to
contribute, in the aggregate, any amount in excess of the amount by
which the total discounts and commissions received by such Initial
Purchaser with respect to the Series A Notes purchased by it exceeds the
amount of any damages that such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in
this Section 8 are in addition to any liability that an indemnifying
party may otherwise have to an indemnified party.
(f) Neither the Company nor any Fitzgeralds Entity will be
liable to any indemnified party under Section 8(a)(i) for any Losses
caused by an untrue statement or omission or alleged untrue statement or
omission that was contained or made in the Preliminary Offering Circular
or the Offering Circular, as the case may be, and was corrected in the
Offering Circular or any amendment or supplement thereto, as the case
may be, if (i) the Offering Circular, or such amendment or supplement
thereto, as the case may be, does not contain any other untrue statement
or omission or alleged untrue statement or omission of a material fact
that was the subject matter of a related proceeding, (ii) such Losses
resulted from an action, claim or suit by any Person who purchased the
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Series A Notes that are the subject thereof from such indemnified party
and (iii) it is finally judicially determined in a related proceeding
that such indemnified party failed to deliver or provide a copy of the
Offering Circular or such amendment or supplement thereto, as the case
may be, to such Person with or prior to the confirmation of the sale of
such Series A Notes sold to such Person if required by Applicable Law.
9. CONDITIONS.
(a) The respective obligations of each Initial Purchaser
to purchase the Series A Notes under this Agreement are subject to the
satisfaction or waiver of each of the following conditions:
(i) All the representations and warranties of each
Fitzgeralds Entity in each of the Documents to which it is a party shall
be true and correct in all material respects (other than representations
and warranties with a materiality qualifier, which shall be true and
correct as written) at and as of the Closing Date after giving effect to
the Transactions with the same force and effect as if made on and as of
such date. On or prior to the Closing Date, each of the Fitzgeralds
Entities and, to the knowledge of the Issuer after due inquiry, each
other party to the Documents (other than the Initial Purchasers) shall
have performed or complied in all material respects with all of the
agreements and satisfied in all material respects all conditions on
their respective parts to be performed, complied with or satisfied
pursuant to the Documents.
(ii) The Offering Circular shall have been printed
and copies made available to the Initial Purchasers not later than 12:00
noon, New York City time, on the first business day following the date
of this Agreement or at such later date and time as the Initial
Purchasers may approve.
(iii) No injunction, restraining order or order of
any nature by a Governmental Authority shall have been issued as of the
Closing Date that would prevent or interfere with the consummation of
any of the Transactions; and no stop order suspending the qualification
or exemption from qualification of any of the Series A Notes in any
jurisdiction shall have been issued and no Proceeding for that purpose
shall have been commenced or be pending or contemplated.
(iv) No action shall have been taken and no
Applicable Law shall have been enacted, adopted or issued that would, as
of the Closing Date, prevent the consummation of any of the
Transactions. No Proceeding shall be pending or threatened other than
Proceedings that (A) if adversely determined could not, singly or in the
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aggregate, adversely affect the issuance or marketability of the Series
A Notes and (B) could not reasonably be expected to have a Material
Adverse Effect.
(v) Since the date as of which information is given
in the Offering Circular, there shall not have been any Material Adverse
Change.
(vi) The Notes shall have received a rating of B-
and B3 from Standard & Poor's Corporation and ▇▇▇▇▇'▇ Investors
Services, Inc., respectively.
(vii) The Initial Purchasers shall have received on
the Closing Date (A) certificates dated the Closing Date, signed by (1)
the Chief Executive Officer and (2) the principal financial or
accounting officer of the Issuer, on behalf of the Issuer, (x)
confirming the matters set forth in paragraphs (i) through (v) of this
Section 9(a) and (y) certifying as to such other matters as the Initial
Purchasers may reasonably request, (B) a certificate, dated the Closing
Date, signed by the Secretary of each Fitzgeralds Entity, certifying
such matters as the Initial Purchasers may reasonably request and (C) a
certificate of solvency, dated the Closing Date, signed by the principal
financial or accounting officer of the Issuer substantially in the form
previously approved by the Initial Purchasers.
(viii) The Initial Purchasers shall have received:
(1) an opinion (in form and substance satisfactory
to the Initial Purchasers and counsel to the Initial Purchasers)
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to the Issuer,
dated the Closing Date, in the form of Exhibit A hereto;
(2) the opinions (in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers), dated the Closing Date, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇▇,
Shaiman & ▇▇▇▇▇▇, P.C.; ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.; Farris, Mathews,
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.L.C.; and ▇▇▇▇▇ & ▇▇▇▇▇▇▇, in each
case substantially in the form of the relevant opinions in
Exhibit B hereto;
(3) reliance letters from each counsel or special
counsel to any Fitzgeralds Entity (in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers), dated the Closing Date, permitting the Initial
Purchasers to rely on all other opinions rendered by such counsel
in connection with the Transactions; and
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(4) an opinion, dated the Closing Date, of Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, in form and substance reasonably
satisfactory to the Initial Purchasers covering such matters as
are customarily covered in such opinions.
(ix) The Initial Purchasers shall have received
from Deloitte & Touche LLP with respect to the Issuer and its
Subsidiaries (other than 101 Main), and from Ernst & Young LLP with
respect to 101 Main, (A) a customary comfort letter, dated the date of
the Offering Circular, in form and substance reasonably satisfactory to
the Initial Purchasers, with respect to the financial statements and
certain financial information contained in the Offering Circular, and
(B) a customary comfort letter, dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to clause (A), except that the specified date referred to shall
be a date not more than five days prior to the Closing Date.
(x) The Documents shall have been executed and
delivered by all parties thereto and the Initial Purchasers shall have
received a fully executed original of each Document.
(xi) On or prior to the Closing Date, the Initial
Purchasers shall have received copies of all opinions, certificates,
letters and other documents delivered under or in connection with the
Transactions and all other conditions precedent to the Transactions
shall have been satisfied or waived.
(xii) The Initial Purchasers shall have received
copies of duly executed payoff letters, UCC-3 termination statements,
mortgage releases and other collateral releases and terminations, each
in form and substance satisfactory to the Initial Purchasers, which,
upon the Closing, shall evidence (1) the repayment of the Issuer's 13%
Senior Secured Notes due 2002 with Contingent Interest, the Issuer's 13%
Priority Secured Notes due 1998, 101 Main's 13% First Mortgage Notes due
2000, and $20.1 million aggregate principal amount of other secured
Indebtedness of the Issuer and the Subsidiaries; (2) the termination of
each agreement or instrument relating thereto; and (3) the release of
each item of collateral securing such Indebtedness and the termination
of all Liens created thereunder, and each such payoff letter, release
and termination shall be in full force and effect.
(xiii) The Collateral Agent shall have received (A)
executed copies of each UCC-1 financing statement signed by the Issuer
and each Subsidiary, naming the Collateral Agent as secured party and
filed in such jurisdictions as the Initial Purchasers
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may reasonably require, (B) bailee letters, in form and substance
reasonably satisfactory to the Initial Purchasers, executed by the
Issuer or the appropriate Grantors for delivery to each of the Persons
identified in the Security Documents as holding Collateral, and (C) the
original stock certificates pledged to the Collateral Agent pursuant to
the Documents, together with undated stock powers or endorsements duly
executed in blank in connection therewith.
(xiv) Counsel to the Initial Purchasers shall have
been furnished with such documents as they may reasonably require for
the purpose of enabling them to review or pass upon the matters referred
to in this Section 9 and in order to evidence the accuracy, completeness
or satisfaction in all material respects of any of the representations,
warranties or conditions herein contained.
(b) The obligation of the Issuer to sell the Series A
Notes under this Agreement is subject to the satisfaction or waiver of
each of the following conditions:
(i) The Initial Purchasers shall have delivered
payment to the Issuer for the Series A Notes pursuant to Sections 2 and
4 of this Agreement.
(ii) All of the representations and warranties of
the Initial Purchasers in this Agreement shall be true and correct in
all material respects at and as of the Closing Date, with the same force
and effect as if made on and as of such date.
(iii) No injunction, restraining order or order of
any nature by a Governmental Authority shall have been issued as of the
Closing Date that would prevent or interfere with the issuance and sale
of the Series A Notes; and no stop order suspending the qualification or
exemption from qualification of any of the Series A Notes in any
jurisdiction shall have been issued and no Proceeding for that purpose
shall have been commenced or be pending or contemplated as of the
Closing Date.
10. TERMINATION AND SURVIVAL.
(a) The Initial Purchasers may terminate this Agreement at
any time prior to the Closing Date by written notice to the Issuer if
any of the following has occurred:
(i) since the date as of which information is given
in the Offering Circular, any Material Adverse Effect or development
involving a prospective Material Adverse Effect, whether or not arising
in the ordinary course of business, that could, in the judgment of the
Initial Purchasers, (i) make it impracticable or inadvisable
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to proceed with the offering or delivery of the Series A Notes on the
terms and in the manner contemplated in the Offering Circular or (ii)
materially impair the investment quality of any of the Notes;
(ii) the failure of the Issuer to satisfy the
conditions contained in Section 9(a) hereof on or prior to the third
business day following the date of this Agreement, except to the extent
that such failure is due to the act or failure to act of an Initial
Purchaser;
(iii) any outbreak or escalation of hostilities or
other national or international calamity or crisis or material adverse
change in economic conditions in or the financial markets of the United
States or elsewhere, if the effect of such outbreak, escalation,
calamity, crisis or material adverse change in the economic conditions
in or in the financial markets of the United States or elsewhere could
make it, in the judgment of the Initial Purchasers, impracticable or
inadvisable to market or proceed with the offering or delivery of the
Series A Notes on the terms and in the manner contemplated in the
Offering Circular or to enforce contracts for the sale of any of the
Series A Notes;
(iv) the suspension or limitation of trading
generally in securities on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market or any setting of
limitations on prices for securities on any such exchange or NASDAQ
National Market;
(v) the enactment, publication, decree or other
promulgation after the date hereof of any Applicable Law that in the
opinion of the Initial Purchasers materially and adversely affects, or
could materially and adversely affect, the properties, business,
prospects, operations, earnings, assets, liabilities or condition
(financial or otherwise) of the Issuer or any Subsidiary;
(vi) any securities of any Fitzgeralds Entity shall
have been downgraded or placed on any "watch list" for possible
downgrading by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 431(g)(2)
under the Act; or
(vii) the declaration of a banking moratorium by
any Governmen tal Authority; or the taking of any action by any
Governmental Authority after the date hereof in respect of its monetary
or fiscal affairs that in the opinion of the Initial Purchasers could
have a material adverse effect on the financial markets in the United
States or elsewhere.
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(b) The indemnities and contribution and expense
reimbursement provisions and other agreements, representations and
warranties set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive, regardless of
(i) any investigation, or statement as to the results thereof, made by
or on behalf of the Initial Purchasers, (ii) acceptance of the Notes,
and payment for them hereunder, and (iii) any termination of this
Agreement. Without limiting the foregoing, notwithstanding any
termination of this Agreement, the Fitzgeralds Entities shall be jointly
and severally liable (i) for all expenses that they have agreed to pay
pursuant to Section 5(f) hereof, and (ii) pursuant to Section 8 hereof.
11. DEFAULT BY INITIAL PURCHASERS. If any of the Initial
Purchasers shall fail or refuse to purchase the Series A Notes that it has
agreed to purchase hereunder on the Closing Date and arrangements satisfactory
to the Issuer for the purchase of such Series A Notes are not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of the Issuer, except as otherwise provided in Section 10 hereof.
Nothing herein shall relieve any of the Initial Purchasers from liability for
its default.
12. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Issuer, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive
Officer, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Esq. and (ii) if to the Initial Purchasers, to ▇▇▇▇▇▇▇▇▇ &
Company, Inc., ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., with a copy to
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Esq. (provided that any notice pursuant to Section 8 hereof will be
mailed, delivered, telegraphed or telecopied and confirmed to the party
to be notified and its counsel), or in any case to such other address as
the person to be notified may have requested in writing.
(b) This Agreement has been and is made solely for the
benefit of and shall be binding upon the Issuer, the Initial Purchasers
and, to the extent provided in Section 8 hereof, the controlling persons
officers, directors, partners, employees, representatives and agents
referred to in Section 8 and their respective heirs, executors,
administrators, successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have
any right under or by virtue of this Agreement. The term
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"successors and assigns" shall not include a purchaser of any of the
Series A Notes from the Initial Purchasers merely because of such
purchase. Notwithstanding the foregoing, it is expressly understood and
agreed that each purchaser who purchases Series A Notes from the Initial
Purchasers is intended to be a beneficiary of the Issuer's covenants
contained in the Registration Rights Agreement to the same extent as if
the Notes were sold and those covenants were made directly to such
purchaser by the Issuer, and each such purchaser shall have the right to
take action against the Issuer to enforce, and obtain damages for any
breach of, those covenants.
(c) THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND THE
RIGHTS OF THE PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
EACH FITZGERALDS ENTITY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE
CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH FITZGERALDS
ENTITY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH FITZGERALDS ENTITY IRREVOCABLY CONSENTS, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ANY FITZGERALDS ENTITY AT THE
ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE INITIAL
PURCHASERS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY FITZGERALDS
ENTITY IN ANY OTHER JURISDICTION.
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(d) This Agreement may be signed in various counterparts
which together shall constitute one and the same instrument.
(e) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(f) If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best efforts to find
and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of
the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such
that may be hereafter declared invalid, illegal, void or unenforceable.
(g) This Agreement may be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may be given, provided that the same are in writing and signed by
each of the signatories hereto.
(h) The indemnities and contribution and expense
reimbursement provisions set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive
delivery and payment for the Series A Notes, regardless of (i) any
investigation, or statement as to the results thereof, made by or on
behalf of any party hereto, (ii) acceptance of the Series A Notes, and
payment for them hereunder, and (iii) any termination of this Agreement.
34
35
PURCHASE AGREEMENT
SIGNATURES
Please confirm that the foregoing correctly sets forth the
agreement between the Issuer and the Initial Purchasers.
Very truly yours,
FITZGERALDS GAMING CORPORATION
FITZGERALDS SOUTH, INC.
FITZGERALDS RENO, INC.
FITZGERALDS INCORPORATED
FITZGERALDS MISSISSIPPI, INC.
FITZGERALDS LAS VEGAS, INC.
FITZGERALDS BLACK HAWK, INC.
FITZGERALDS BLACK HAWK II, INC.
FITZGERALDS FREMONT EXPERIENCE
CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ LIMITED LIABILITY
COMPANY,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
of each of the above named entities
S-1
36
Accepted and Agreed to:
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
By: /s/ M. ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: M. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
--------------------------------
Name:
Title:
S-2
37
Accepted and Agreed to:
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
By:
--------------------------------
Name:
Title:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ MAY ▇▇▇▇▇▇
--------------------------------
Name: ▇. ▇▇▇▇▇▇
Title: Vice President
S-3
38
ANNEX A
Principal
Amount
Initial Purchaser of Series A Notes
----------------- -----------------
▇▇▇▇▇▇▇▇▇ & Company, Inc............................... $ 136,667,000
Merrill, Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated............................... $ 68,333,000
=============
TOTAL.................................................. $ 205,000,000
▇▇▇-1
39
EXHIBIT A
[Form of Opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP]
1. Fitzgeralds New York, Inc. (i) has been duly incorporated and
is validly existing and in good standing under the laws of its jurisdiction of
the State of New York, and (ii) has all requisite power and authority to carry
on its business as it is currently being conducted, and to own, lease and
operate its properties as described in the Offering Circular.
2. To the best of our knowledge, immediately following the
Closing, (i) the only direct or indirect subsidiaries of the Issuer will be the
Subsidiaries; (ii) except as set forth in clause (i), above, the Issuer will not
directly or indirectly own any capital stock or other equity interest in, or be
a partner of, any other person; and (iii) except for Fitzgeralds Arizona
Management, Inc. and Fitzgeralds New York, Inc., the Issuer will directly and
indirectly beneficially own 100% of the outstanding shares of capital stock or
other equity interests of each Subsidiary, free and clear of all Liens, except
as granted pursuant to the Collateral Agreements.
3. Except for warrants to purchase 5,358 shares of common stock
of Fitzgeralds South, Inc. and warrants to purchase ___________ shares of common
stock of the Issuer, to the best of our knowledge, there are no outstanding (i)
securities convertible into or exchangeable for any capital stock of the Issuer
or any of the Subsidiaries, (ii) options, warrants or other rights to purchase
or subscribe to capital stock of any of Issuer or the Subsidiaries, or (iii)
contracts, commitments, agreements, understandings, arrangements, calls or
claims of any kind relating to the issuance of any capital stock of the Issuer
or the Subsidiaries, any such convertible or exchangeable securities, or any
such options, warrants or rights.
4. Each of the Indenture, the Series A Notes, the Guaranty, the
Purchase Agreement, the Registration Rights Agreement, the Security and Pledge
Agreement, the Mortgages and the Consent Solicitation Documents (collectively,
the "Documents") is a legal, valid and binding obligation of each Fitzgeralds
Entity that is a party thereto, enforceable against each such Person in
accordance with its terms, except that such enforcement may be subject to (A)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally, (B) general principles of equity,
including the possible unavailability of specific performance or the
unenforceability of waivers of certain rights or defenses (regardless of whether
such enforcement is considered in a proceeding in equity or at law), and (C)
limitations imposed upon the enforceability of indemnification provisions, under
certain circumstances, by federal or state securities laws or the policies
underlying such laws.
A-1
40
5. The Series A Notes have been duly and validly authorized,
issued, executed and delivered by the Issuer, and when paid for in accordance
with the terms of the Purchase Agreement, will be legal, valid and binding
obligations of the Issuer, enforceable against the Issuer in accordance with
their terms, except that such enforcement may be subject to (A) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent
transfer or other similar laws now or hereafter in effect affecting creditors'
rights generally, and (B) general principles of equity, including the possible
unavailability of specific performance or the unenforceability of waivers of
certain rights or defenses (regardless of whether such enforcement is considered
in a proceeding in equity or at law). The Series B Notes have been duly and
validly authorized by the Issuer and, when issued, authenticated and delivered
in accordance with the terms of the Indenture and delivered in the Registered
Exchange Offer contemplated by the Registration Rights Agreement, will be legal,
valid and binding obligations of the Issuer, enforceable against the Issuer in
accordance with their terms, except that such enforcement may be subject to (A)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer, preferential transfer or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally, and
(B) general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
6. The Guaranty is a legal, valid and binding obligation of each
Guarantor, enforceable against each Guarantor in accordance with its terms,
except that such enforcement may be subject to (A) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other
similar laws now or hereafter in effect relating to or affecting creditors'
rights generally, and (B) general principles of equity, including the possible
unavailability of specific performance or the unenforceability of waivers of
certain rights or defenses (regardless of whether such enforcement is considered
in a proceeding in equity or at law)
7. A California court to which the issue is properly presented
should conclude that the express choice of New York law as the governing law for
the Documents purporting to be governed by New York law is enforceable as a
matter of California choice-of-law rules.
8. No Permits are required in connection with, or as a condition
to, the execution, delivery or performance of the Documents or for the
consummation of the Transactions. Without limiting the foregoing, (a) no
registration under the Securities Act is required for the sale of the Notes and
the Guaranty to the Initial Purchasers as contemplated by the Purchase Agreement
or for the Exempt Resales, assuming (i) that the purchasers in the Exempt
Resales are QIBs, Accredited Investors or Reg S Investors, (ii) the accuracy of
the representations and warranties of the Initial Purchasers and the Issuer
contained in the Purchase Agreement and (iii) the accuracy of the
representations made by each Accredited Investor that purchases the Notes
pursuant to an Exempt Resale as set forth in the letters of representation in
the form of Annex A to the Offering Circular, (b) prior to the Registered
Exchange Offer or the effectiveness of the
A-2
41
Shelf Registration Statement, the Indenture is not required to be qualified
under the TIA and (c) no registration under the Act, or filing under the
Exchange Act or the TIA is required in connection with the commencement or
consummation of the Consent Solicitation and the Amendments.
9. Each of the Preliminary Offering Circular and the Offering
Circular, as of its date (except for the financial statements, including the
notes and schedules thereto, and other financial or statistical data included
therein or omitted therefrom, as to which we express no opinion), contains all
the information specified in, and meets the requirements of, Rule 144A(d)(4)
under the Act.
10. No Fitzgeralds Entity is in violation of or in default under
(i) its Charter Documents, (ii) any Applicable Law that a lawyer exercising
customary professional diligence would reasonably recognize as being binding on
ir applicable to a ▇▇▇▇▇▇▇▇▇▇ Entity or (iii) any Applicable Agreement known to
us, in the case of clause (ii) or (iii) except for such violations or defaults
that would not, singly or in the aggregate, have a Material Adverse Effect.
11. Neither the execution or delivery of any of the Documents nor
the consummation of any of the Transactions will conflict with, violate,
constitute a breach of or a default (with the passage of time or otherwise)
under, require the consent of any Person (other than consents already obtained)
under, or result in the imposition of a Lien on any properties or assets of the
Issuer or the Subsidiaries or an acceleration of indebtedness pursuant to, (i)
the Charter Documents of any Fitzgeralds Entity, (ii) any Applicable Agreement
known to us or (iii) any Applicable Law that a lawyer exercising customary
professional diligence would reasonably recognize as being applicable to the
Transactions (including, without limitation, Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System).
12. There is no Proceeding before or by any Governmental
Authority now pending, or to the best of our knowledge threatened, that either
(i) seeks to restrain, enjoin, prevent the consummation of or otherwise
challenge any of the Documents or any of the Transactions or (ii) would, singly
or in the aggregate, have a Material Adverse Effect.
13. None of the Issuer nor any of the Subsidiaries is subject to
regulation, or shall become subject to regulation solely by reason of the
consummation of the transactions contemplated by the Documents, under the
Investment Company Act of 1940, as amended, and the rules and regulations and
interpretations promulgated thereunder, the Public Utility Holding Company Act
of 1935, as amended, the Federal Power Act, the Interstate Commerce Act, the
Commodity Exchange Act or any Federal or state statute or regulation limiting
its ability to incur or assume indebtedness for borrowed money.
▇-▇
▇▇
▇▇. The terms of the Notes, the Guaranty, the Indenture, the
Registration Rights Agreement, the Intercreditor Agreement and the Security
Documents conform in all material respects to the descriptions thereof contained
in the Offering Circular under the caption "Description of Notes." We have
reviewed the information in the Offering Circular under the captions
"Description of Notes," "Certain Federal Income Tax Consequences," "Notice to
Investors," and "Plan of Distribution" and to the extent such information
constitutes matters of law, summaries of legal matters, summaries of securities,
instruments, agreements or other documents, summaries of proceedings or legal
conclusions, it is complete and correct in all material respects.
15. The Consent Solicitation and the Amendments complied with the
terms of the Note Purchase Agreement, the Old Indentures, the Warrant Agreement
and all Applicable Law; and the Amendments have been duly and validly adopted.
16. To the extent that Federal law applies to the perfection of
security interests in Patents, Trademarks, and Copyrights (each as defined in
the Security Agreement), upon recordation of the [Patent Security Agreement],
the Trademark Security Agreement and the Copyright Security Agreement in the
U.S. Patent and Trademark Office and the U.S. Copyright Office, respectively,
the security interests will be perfected in the [patents], registrations and
applications set forth on the schedules to the [Patent Security Agreement,] the
Trademark Security Agreement and the Copyright Security Agreement.
17. The provisions of the Security Agreement are effective to
create in favor of the Collateral Agent to secure the Secured Obligations (as
defined in the Security Agreement) a valid security interest in each Grantor's
rights in that portion of the Collateral (as defined in the Security Agreement)
which is subject to Article 9 of the New York UCC.
18. The provisions of the Security Agreement are effective to
create in favor of the Collateral Agent to secure the Secured Obligations (as
defined in the Security Agreement) a valid security interest in each Grantor's
rights in the certificates representing the shares of stock identified on
Schedule I to the Security Agreement (the "Pledged Stock") pledged by such
Grantor. Upon delivery of the Pledged Stock to the Collateral Agent, the
Collateral Agent will have a perfected interest in each Grantor's rights in the
Pledged Stock. Upon such delivery, no interest of any other creditor of the
respective Grantor will be equal or prior to the security interest of the
Collateral Agent in the Pledged Stock pledged by the respective Grantor.
19. We have participated in conferences with representatives of
the Issuer, representatives of the accountants of the Issuer, your
representatives and counsel, at which conferences the contents of the Offering
Circular and related matters were discussed and, although we have not
independently verified and are not passing upon and assume no responsibility for
the accuracy, completeness or fairness of the statements contained in the
Offering Circular (except
A-4
43
as set forth above), nothing has come to our attention that causes us to believe
that the Offering Circular as of its date contained, or on the date hereof
contains, an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
contained therein, in the light of the circumstances under which they were made,
not misleading (it being understood that we express no view with respect to the
financial statements, including the notes and schedules thereto, and other
financial or statistical data included therein or omitted therefrom or the
statements contained under the caption "Regulation and Licensing" included in
the Offering Circular).
A-5
44
EXHIBIT B
[Form of Local Counsel Opinions]
1. [Each appropriate Fitzgeralds Entity](1) (i) has been duly
[organized/incorporated] and is validly existing and in good standing under the
laws of the State of [state], (ii) has all requisite power and authority to
carry on its business as it is currently being conducted and as proposed to be
conducted, and to own, lease and operate its properties, as described in the
Offering Circular, and (iii) is duly qualified and licensed to do business and
is in good standing under the laws of [state], and is duly qualified or licensed
to do business and is in good standing as a foreign corporation authorized to do
business in each jurisdiction set forth on Annex I hereto.
2. The authorized capital stock of [each appropriate Fitzgeralds
Entity] consists of [ ]. Each share of capital stock of [each appropriate
Fitzgeralds Entity] that is issued and outstanding is duly authorized and
validly issued, fully paid and nonassessable. There is no outstanding
subscription, option, warrant or other right calling for the issuance of any
share of capital stock of the Issuer or any security convertible into,
exercisable for, or exchangeable for stock of the Issuer.
3. [Each appropriate Fitzgeralds Entity] has all requisite
corporate power and authority to enter into, deliver and perform all of its
obligations under each of the Documents to which it is a party. [Each
appropriate Fitzgeralds Entity] has duly authorized, executed and delivered each
of the Documents to which it is a party.
4. Each Document to which [each appropriate Fitzgeralds Entity]
is a party, to the extent governed by the laws of the State of [state], is a
legal, valid and binding obligation of such person, enforceable against such
person in accordance with its terms, except that such enforcement may be subject
to (A) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, fraudulent transfer or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally, (B) general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law), and (C) limitations imposed
----------
(1) The appropriate Fitzgeralds Entities are: (a) for Nevada counsel:
Fitzgeralds Gaming Corporation, Fitzgeralds South, Inc., Fitzgeralds
Reno, Inc., Fitzgeralds Incorporated, Fitzgeralds Arizona Management,
Inc., Fitzgeralds Black Hawk, Inc., Fitzgeralds Fremont Experience
Corporation, Fitzgeralds Las Vegas, Inc. and Fitzgeralds Management
Corporation; (b) for Colorado counsel: Fitzgeralds Black Hawk II, Inc.
and ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Limited Liability Company; and (c) for Mississippi
counsel: Fitzgeralds Mississippi, Inc.
B-1
45
upon the enforceability of indemnification provisions, under certain
circumstances, by federal or state securities laws or the policies underlying
such laws.
5. Neither the execution, delivery or performance of any of the
Documents (including the Guaranty) nor the consummation of the Transactions will
conflict with, violate, constitute a breach of or a default (with the passage of
time or otherwise) under, or require the consent of any Person (other than
consents that have already been obtained) under, or result in the imposition of
a Lien on any property or assets of the [appropriate Fitzgeralds Entity], or an
acceleration of any indebtedness pursuant to (i) the Charter Documents of the
[appropriate Fitzgeralds Entity], or (ii) any Applicable Law of the State of
[state].
6. No Permits, including, without limitation, Permits with
respect to engaging in gaming operations and the manufacture of gaming machines
(other than those that have been obtained or taken and are in full force and
effect), are required under the Applicable Laws of the State of [state] in
connection with, or as a condition to, the execution, delivery or performance of
the Document or for the consummation of the Transactions.
7. Each Regulated Person has, and to the best of our knowledge is
in compliance with the terms and conditions of, all Permits (including, without
limitation, Permits with respect to engaging in gaming operations and the
manufacture of gaming machines) necessary under the Applicable Laws of the State
of [state] to own, operate, lease and license its assets and properties and to
conduct its business as described in the Offering Circular. All of such Permits
are in full force and effect.
8. To the best of our knowledge, no Governmental Authority of the
State of [state] is investigating any Regulated Person (other than normal
overseeing reviews), and (b) there is no basis for any of such Gaming
Authorities to deny the renewal of the current Permits held by any of them.
9. We have reviewed the information in the Offering Circular
under the captions "Risk Factors - Government Regulation and Licensing,"
["Description of Capital Stock"] and "Regulation and Licensing - [Nevada Gaming
Regulation] [Mississippi Gaming Regulation] [Colorado Gaming Regulation] [Indian
Gaming Regulation]," and to the extent such information constitutes matters, or
summaries of matters, of the laws of the State of [state] or federal law, it is
complete and correct in all material respects.
10. There is no Proceeding before or by any Governmental
Authority in the State of [state] now pending, or to the best of our knowledge
threatened, that either (i) seeks to restrain, enjoin, prevent the consummation
of or otherwise challenge any of the Documents or any of the Transactions or
(ii) could, singly or in the aggregate, have a Material Adverse Effect.
▇-▇
▇▇
▇▇. The [define financing statements] Financing Statement[s]
[is][are] in appropriate form for filing in the [define filing offices] Filing
Office[s] under the State of [state] UCC. With respect to that portion of the
Collateral as to which the filing of a financing statement is a permissible
method of perfection under the State of [state] UCC (the "UCC Filing
Collateral"), the security interest in favor of the Collateral Agent in that
portion of the UCC Filing Collateral which is described in the Financing
Statement[s] will be perfected upon filing of the Financing Statements in the
Filing Office[s].
12. [Maritime only.] Fitzgeralds Mississippi, Inc. ("FMI") is the
documented owner of the "Fitzgeralds Tunica" (Official #262757); and (ii) upon
filing and due recording of the [described ship mortgage] (the "Ship Mortgage")
in the National Vessel Documentation Center, The Bank of New York, as
Trustee-Mortgagee, will have a valid first preferred mortgage lien under the
Ship Mortgage Act on the vessel described in the Ship Mortgage, entitled to all
of the benefits and priorities accorded a first "preferred mortgage" under the
Ship Mortgage Act, prior to all Liens other than those expressly granted
priority under the Ship Mortgage Act over the lien of a first "preferred
mortgage," securing the Obligations.
13. (a) The [describe mortgage] (the "Mortgage") is in
appropriate form for recording in the recording offices indicated on Schedule
[] (the "Recording Offices") and is in appropriate form for filing as a "fixture
filing" under Article 9 of the Applicable UCC in the Filing Offices.
(b) Upon due recordation of the Mortgage in the Recording
Offices, the Mortgage will create, as security for the payment and performance
of the Obligations, (i) a valid, perfected and enforceable mortgage lien of
record on the entire interest of [each appropriate ▇▇▇▇▇▇▇▇▇▇ Entity] in that
portion of the trust estate located in the State of [state] which constitutes
real property (including fixtures to the extent such fixtures constitute real
property) and (ii) a valid, perfected and enforceable security interest in the
leases and rents described in the Mortgage.
(c) The provisions of the Mortgage are effective to create
in favor of the Collateral Agent to secure the Secured Obligations (as defined
in the Security Agreement) a valid security interest in each Grantor's rights in
that portion of the Collateral described in the Mortgage that is subject to
Article 9 of the Applicable UCC (the "UCC Collateral").
(d) The Financing Statement[s] [is][are] in appropriate form
for filing in the Filing Office[s] under the State of [state] UCC. With respect
to that portion of the trust estate described in the Mortgage as to which the
filing of a financing statement is a permissible method of perfection under the
State of [state] UCC (the "UCC Filing Collateral"), the security interest in
favor of the Collateral Agent in that portion of the UCC Filing Collateral which
is described in the Financing Statement[s] will be perfected upon filing of the
Financing Statements in the Filing Office[s].
B-3
47
(e) After the recordings and filings specified in the
foregoing paragraphs have been effected, no instruments need to be recorded,
registered or filed or re-recorded, re-registered or re-filed in any public
office in the State of [state], and no other act need be performed in order to
maintain the perfection and priority of the liens and security interests created
by the Mortgage, except for the filing of continuation statements at 5-year
intervals in respect of the Financing Statements in accordance with the
Applicable UCC.
14. [Nevada only.] Each of the leasehold mortgages identified on
Annex __ hereto is in form sufficient to create a lien on the leases described
therein and the fixtures located on the real property that is the subject of
such lease in favor of the Collateral Agent, and upon its execution,
acknowledgment and attestation, will be in proper form for recordation in real
estate records, and assuming the leases described therein or memoranda of leases
with respect thereto have been duly recorded in the applicable Filing or
Recording Offices, upon recordation of such liens, such liens are perfected by
the recordation of each leasehold mortgage in such offices.
15. There is no mortgage, mortgage recording, stamp, intangibles
or other similar tax (other than normal filing and recording fees) required to
be paid under the laws of the United States of America or the State of [state]
or any political subdivision thereof in connection with the execution, delivery,
recordation, filing or perfection, as applicable, of any of the Security
Documents or the obligations evidenced or secured thereby.
16. The law of the State of [state] does not require a lienholder
to make an election of remedies where such lienholder holds security interests
and liens in both the real estate and the personal property of the debtor or
require a lienholder to take recourse first or solely against its collateral.
17. In any action to enforce the security interests in the
Collateral in the State of [state], the law of the State of New York should
govern the legality of the interest and the other amounts to be paid and
received with respect to the Notes. If the law of the State of [state] were to
apply, the interest and other amounts to be paid with respect to the Notes would
not be usurious.
18. The Collateral Agent is not required to register as a foreign
entity or qualify to do business in the State of [state] solely by reason of the
Transactions.
19. The State of [state] has no law pursuant to which a lien
against any real property of [each appropriate ▇▇▇▇▇▇▇▇▇▇ Entity] superior to
the lien created by the Mortgage could arise as a result of a violation of
environmental laws or regulations of the State of [state]. No environmental law
or regulation of the State of [state] would require any remedial or removal
action or certification of nonapplicability as a condition to the granting of
the Mortgage or the
B-4
48
foreclosure or the sale of any property of [each appropriate ▇▇▇▇▇▇▇▇▇▇ Entity]
located in the State of [state].
20. Based upon facts of which we have actual knowledge, the
transactions contemplated by the Security Documents do not constitute a
fraudulent conveyance or fraudulent transfer or a preferential transfer under
the laws of the State of [state], so long as the conveyances are made in good
faith.
21. Although we have not independently verified and are not
passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Offering Circular (except as set
forth above), nothing has come to our attention that causes us to believe that
the "Risk Factors - Government Regulation and Licensing" and "Regulation and
Licensing - [Nevada Gaming Regulation] [Mississippi Gaming Regulation] [Colorado
Gaming Regulation] [Indian Gaming Regulation]" sections of the Offering Circular
as of its date contained, or on the date hereof contains, an untrue statement of
a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that we express no view with respect to any other portion of the
Offering Circular).
B-5
49
Schedule 6(d)
-------------
Issuer's Direct
or Indirect Percentage Jurisdiction of
Subsidiaries of the Issuer Beneficial Ownership Organization
-------------------------- -------------------- ------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Limited Liability Company 100% Colorado
Fitzgeralds Black Hawk, Inc. 100% Nevada
Fitzgeralds Black Hawk II, Inc. 100% Colorado
Fitzgeralds Freemont Experience Corporation 100% Nevada
Fitzgeralds Incorporated 100% Nevada
Fitzgeralds Las Vegas, Inc. 100% Nevada
Fitzgeralds Management Corporation 100% Nevada
Fitzgeralds Mississippi, Inc. 100% Mississippi
Fitzgeralds Reno, Inc. 100% Nevada
Fitzgeralds South, Inc. 100% Nevada
Fitzgeralds New York, Inc. 85% New York
Fitzgeralds Arizona Management, Inc. 85% Nevada
B-6