Exhibit 1.1
THE MISSISSIPPI BAND OF CHOCTAW INDIANS
D/B/A CHOCTAW RESORT DEVELOPMENT ENTERPRISE,
AS ISSUER
$200,000,000
9 1/4% SENIOR NOTES DUE 2009
PURCHASE AGREEMENT
DATED
MARCH 22, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇ FARGO BROKERAGE SERVICES, LLC
BANC ONE CAPITAL MARKETS, INC.
Table of Contents
Page
Section 1. Representations and Warranties................................................ 2
(a) No Registration Required........................................................ 2
(b) No Integration of Offerings or General Solicitation............................. 2
(c) Eligibility for Resale Under Rule 144A.......................................... 3
(d) The Offering Memorandum......................................................... 3
(e) The Purchase Agreement.......................................................... 3
(f) The Registration Rights Agreement............................................... 3
(g) Authorization of the Securities and the Exchange Securities..................... 4
(h) Security Interest............................................................... 4
(i) Authorization of the Indenture.................................................. 4
(j) Authorization of the Pledge Agreement........................................... 4
(k) Descriptions in the Offering Memorandum......................................... 4
(l) No Material Adverse Change...................................................... 5
(m) Independent Accountants......................................................... 5
(n) Preparation of the Financial Statements......................................... 5
(o) Tribe........................................................................... 5
(p) Organization and Good Standing of the Issuer.................................... 5
(q) Capitalization and Other Matters................................................ 6
(r) Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required........................................................... 6
(s) No Material Actions or Proceedings.............................................. 7
(t) Intellectual Property Rights.................................................... 7
(u) All Necessary Permits, Etc...................................................... 7
(v) Title to Properties............................................................. 7
(w) Tax Law Compliance.............................................................. 8
(x) Issuer Not an "Investment Company".............................................. 8
(y) Insurance....................................................................... 8
(z) No Price Stabilization or Manipulation.......................................... 8
(aa) No Unlawful Contributions or Other Payments..................................... 8
(bb) Issuer's Accounting Systems..................................................... 9
(cc) Compliance with Environmental Laws.............................................. 9
(dd) Taxes; Fees..................................................................... 9
(ee) Regulation S Compliance......................................................... 10
(ff) Gaming Activities of the Tribe.................................................. 10
(gg) Government Regulation........................................................... 10
(hh) ERISA........................................................................... 10
Section 2. Purchase, Sale and Delivery of the Securities................................. 10
(a) The Securities.................................................................. 10
(b) The Closing Date................................................................ 10
(c) Delivery of the Securities...................................................... 10
(d) Delivery of Offering Memorandum to the Initial Purchasers....................... 11
(e) Initial Purchasers as Qualified Institutional Buyers............................ 11
Section 3. Additional Covenants.......................................................... 11
(a) Initial Purchasers' Review of Proposed Amendments and Supplements............... 11
(b) Amendments and Supplements to the Offering Memorandum and Other
Securities Act Matters.......................................................... 11
(c) Copies of the Offering Memorandum............................................... 12
(d) Blue Sky Compliance............................................................. 12
(e) Use of Proceeds................................................................. 12
(f) Additional Issuer Information................................................... 12
(g) Future Agreement Not to Offer or Sell Additional Securities..................... 13
(h) Future Reports to the Initial Purchasers........................................ 13
(i) No Integration.................................................................. 13
(j) Legended Securities............................................................. 13
(k) PORTAL.......................................................................... 13
(l) Rating of Securities............................................................ 13
(m) DTC............................................................................. 13
(n) Deposit of Proceeds Collateral.................................................. 14
(o) Deposit of Additional Collateral................................................ 14
Section 4. Payment of Expenses........................................................... 14
Section 5. Conditions of the Obligations of the Initial Purchasers....................... 14
(a) Accountants' Comfort Letters.................................................... 14
(b) No Material Adverse Change or Ratings Agency Change............................. 15
(c) Opinion of Counsel for the Issuer............................................... 15
(d) Opinion of Special Indian Law Counsel for the Issuer and the Tribe.............. 15
(e) Opinion of Special Counsel for the Issuer....................................... 15
(f) Opinion of Special Indian Law Counsel for the Issuer............................ 15
(g) Opinion of Counsel for the Initial Purchasers................................... 15
(h) Officers' Certificate of the Issuer............................................. 15
(i) Bring-down Comfort Letter....................................................... 16
(j) PORTAL Listing.................................................................. 16
(k) Registration Rights Agreement................................................... 16
(l) Deposit of Proceeds Collateral.................................................. 16
(m) Deposit of Additional Collateral................................................ 16
(n) Senior Secured Credit Facility and Amended Term Loan Agreement.................. 16
(o) Pledge Agreement................................................................ 16
(p) Additional Documents............................................................ 16
Section 6. Reimbursement of Initial Purchasers' Expenses................................. 16
Section 7. Offer, Sale and Resale Procedures............................................. 17
(i) Offers and Sales only to Qualified Institutional Buyers......................... 17
(ii) No General Solicitation......................................................... 17
(iii) Restrictions on Transfer........................................................ 17
Section 8. Indemnification............................................................... 18
(a) Indemnification of the Initial Purchasers...................................... 18
(b) Indemnification of the Issuer and its Directors, Managers and Officers......... 19
(c) Notifications and Other Indemnification Procedures............................. 20
(d) Settlements.................................................................... 20
Section 9. Contribution.................................................................. 21
Section 10. Termination of this Agreement................................................ 22
Section 11. Representations and Indemnities to Survive Delivery.......................... 22
Section 12. Notices...................................................................... 22
Section 13. Successors................................................................... 23
Section 14. Partial Unenforceability..................................................... 24
Section 15. Governing Law; Jurisdiction, Governing Law Provisions........................ 24
(a) Governing Law Provisions........................................................ 24
(b) Consent to Suit................................................................. 24
(c) Consent to Jurisdiction......................................................... 24
Section 16. Default of One or More Initial Purchasers.................................... 25
Section 17. General Provisions........................................................... 25
Section 18. No Personal Liability of Certain Individuals................................. 25
SCHEDULE 1 Initial Purchasers
EXHIBIT A Form of opinion of counsel for the Issuer
EXHIBIT B Form of opinion of special Indian law counsel for the
Issuer and the Tribe
EXHIBIT C Form of opinion of special counsel for the Issuer
EXHIBIT D Form of opinion of special Indian law counsel for the Issuer
ANNEX 1
PURCHASE AGREEMENT
March 22, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇ FARGO BROKERAGE SERVICES, LLC
BANC ONE CAPITAL MARKETS, INC.
as Initial Purchasers
c/o BANC OF AMERICA SECURITIES LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
INTRODUCTORY. The Mississippi Band of Choctaw Indians d/b/a
Choctaw Resort Development Enterprise (the "Issuer"), a business enterprise
of The Mississippi Band of Choctaw Indians, a federally recognized Indian
Tribe and Native American sovereign nation (the "Tribe"), proposes to issue
and sell to Banc of America Securities LLC, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., ▇▇▇▇▇
Fargo Brokerage Services, LLC and Banc One Capital Markets, Inc. (the
"Initial Purchasers"), acting severally and not jointly, $200,000,000
aggregate principal amount of the Issuers' 9 1/4% Senior Notes due April 1,
2009 (the "Securities").
The Securities will be issued pursuant to an indenture, to
be dated as of March 30, 2001 (the "Indenture"), among the Issuer, the Tribe
and Firstar Bank N.A., as trustee (the "Trustee").
The holders of the Securities will be entitled to the
benefits of a registration rights agreement, to be dated as of March 30, 2001
(the "Registration Rights Agreement"), among the Issuer and the Initial
Purchasers, pursuant to which the Issuer will agree to file, pursuant to the
circumstances set forth therein, a registration statement with the Securities
and Exchange Commission (the "Commission") registering the Exchange
Securities (as defined below) under the Securities Act of 1933, as amended
(the "Securities Act," which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder).
The Issuer understands that the Initial Purchasers propose
to make an offering of the Securities on the terms and in the manner set
forth herein and in the Offering Memorandum (as defined below) and agree that
the Initial Purchasers may resell, subject to the conditions set forth
herein, all or a portion of the Securities to purchasers (the "Subsequent
Purchasers") at any time after the date of this Agreement. The Securities are
to be offered and sold to or through the Initial Purchasers without being
registered with the Commission under the Securities Act, in reliance upon
exemptions therefrom. The terms of the Securities and the Indenture will
require that investors that acquire Securities expressly agree that
Securities may only be resold or otherwise transferred, after the date
hereof, if such Securities are registered for sale under the Securities Act
or if an exemption from the registration requirements of the
Securities Act is available (including the exemptions afforded by Rule 144A
under the Securities Act ("Rule 144A") or Regulation S under the Securities
Act ("Regulation S")).
The Issuer has prepared and delivered to the Initial
Purchasers copies of a Preliminary Offering Memorandum, dated March 6, 2001
(the "Preliminary Offering Memorandum"), and has prepared and will deliver to
the Initial Purchasers copies of the Offering Memorandum, each describing the
terms of the Securities, for use by the Initial Purchasers in connection with
their solicitation of offers to purchase the Securities. As used herein, the
"Offering Memorandum" shall mean, with respect to any date or time referred
to in this Agreement, the Issuer's Offering Memorandum, dated March 22, 2001,
including amendments, supplements or exhibits thereto, in the most recent
form that has been prepared and delivered by the Issuer to the Initial
Purchasers in connection with their solicitation of offers to purchase
Securities. Further, any reference to the Preliminary Offering Memorandum or
the Offering Memorandum shall be deemed to refer to and include any
Additional Issuer Information (as defined in Section 3(f)) furnished by the
Issuer prior to the completion of the distribution of the Securities.
The net proceeds from the issuance of the Securities,
together with $10,625,000 of additional funds to be deposited by the Issuer,
will be delivered to and held by Firstar Bank N.A., as collateral agent (the
"Collateral Agent"), pursuant to a collateral pledge and security agreement,
to be dated March 30, 2001 (the "Pledge Agreement"). In connection with the
satisfaction of certain conditions set forth in the Pledge Agreement, the
Collateral Agent will release the Collateral (as defined in the Pledge
Agreement) to or upon the order of the Issuer. In the event the conditions
for the release of the funds deposited in the collateral account pursuant to
the Pledge Agreement are not completed prior to eighty-three days after the
Closing Date, Issuer will be required to redeem the Securities in accordance
with their terms.
All references in this Agreement to financial statements
and schedules and other information which is "contained," "included" or
"stated" in the Offering Memorandum (or other references of like import)
shall be deemed to mean and include all such financial statements and
schedules and other information which are incorporated by reference in the
Offering Memorandum.
Capitalized terms used herein not otherwise defined shall
have the meanings set forth in the Offering Memorandum.
The Issuer hereby confirms its agreement with the Initial
Purchasers as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
The Issuer hereby represents, warrants and covenants to the
Initial Purchasers as follows:
(a) NO REGISTRATION REQUIRED. Subject to compliance by the
Initial Purchasers with the representations and warranties set forth in
Section 2(e) hereof and with the procedures set forth in Section 7
hereof, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers and to each
Subsequent Purchaser in the manner contemplated by this Agreement and
the Offering Memorandum to register the Securities under the Securities
Act or, until such time as the Exchange Securities are issued pursuant
to an effective registration statement, to qualify the Indenture under
the Trust Indenture Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇," which term,
as used herein, includes the rules and regulations of the Commission
promulgated thereunder).
(b) NO INTEGRATION OF OFFERINGS OR GENERAL SOLICITATION. The
Issuer has not, directly or indirectly, solicited any offer to buy or
offered to sell, and will not, directly or indirectly, solicit any
offer to buy or offer to sell, in the United States or to any United
States citizen or
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resident, any security which is or would be integrated with the sale
of the Securities in a manner that would require the Securities to
be registered under the Securities Act. None of the Issuer, its
respective affiliates (as such term is defined in Rule 501(b) under
the Securities Act (each, an "Affiliate")), or any person acting on
their behalf (other than the Initial Purchasers, as to whom the
Issuer makes no representation or warranty) has engaged or will
engage, in connection with the offering of the Securities, in any
form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act. With respect to
those Securities sold in reliance upon Regulation S, (i) none of the
Issuer, its Affiliates or any person acting on their behalf (other
than the Initial Purchasers, as to whom the Issuer makes no
representation or warranty) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S and (ii)
each of the Issuer, its Affiliates and any person acting on their
behalf (other than the Initial Purchasers, as to whom the Issuer
makes no representation or warranty) has complied and will comply
with the offering restrictions set forth in Regulation S.
(c) ELIGIBILITY FOR RESALE UNDER RULE 144A. The Securities are
eligible for resale pursuant to Rule 144A and will not be, at the
Closing Date, of the same class as securities listed on a national
securities exchange registered under Section 6 of the Exchange Act of
1934, as amended (the "Exchange Act," which term, as used herein,
includes the rules and regulations of the Commission promulgated
thereunder) or quoted in a U.S. automated interdealer quotation system.
(d) THE OFFERING MEMORANDUM. The Offering Memorandum does not,
and at the Closing Date will not, include an untrue statement of a
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; provided that this
representation, warranty and agreement shall not apply to statements in
or omissions from the Offering Memorandum made in reliance upon and in
conformity with information furnished to the Issuer in writing by the
Initial Purchasers expressly for use in the Offering Memorandum. Each
of the Preliminary Offering Memorandum and the Offering Memorandum, as
of its date, contains all the information specified in, and meeting the
requirements of Rule 144A(d)(4). The Issuer has not distributed and
will not distribute, prior to the later of the Closing Date and the
completion of the Initial Purchasers' distribution of the Securities,
any offering material in connection with the offering and sale of the
Securities other than the Preliminary Offering Memorandum or the
Offering Memorandum.
(e) THE PURCHASE AGREEMENT. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Issuer, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(f) THE REGISTRATION RIGHTS AGREEMENT. At the Closing Date the
Registration Rights Agreement will have been duly authorized, executed
and delivered by, and will be a valid and binding agreement of, the
Issuer, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles. Pursuant to the Registration Rights Agreement, the Issuer
will agree to file with the Commission, under the circumstances set
forth therein, (i) a registration statement under the Securities Act
relating to another series of debt securities of the Issuer with terms
substantially identical to the Securities (the "Exchange Securities")
to be offered in exchange for the Securities
3
(the "Exchange Offer") and (ii) to the extent required by the
Registration Rights Agreement, a shelf registration statement
pursuant to Rule 415 of the Securities Act relating to the resale by
certain holders of the Securities, and in each case, to use its best
efforts to cause such registration statements to be declared
effective. The Registration Rights Agreement will conform in all
material respects to the statements relating thereto contained in
the Offering Memorandum.
(g) AUTHORIZATION OF THE SECURITIES AND THE EXCHANGE
SECURITIES. (i) The Securities to be purchased by the Initial
Purchasers from the Issuer are in the form contemplated by the
Indenture, have been duly authorized for issuance and sale pursuant to
this Agreement and the Indenture and, at the Closing Date will have
been duly executed by the Issuer and, when authenticated in the manner
provided for in the Indenture and delivered against payment of the
purchase price therefor, will constitute valid and binding agreements
of the Issuer, enforceable in accordance with their terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles, and will be entitled to the benefits of the Indenture; and
(ii) the Exchange Securities have been duly and validly authorized for
issuance by the Issuer, and when issued and authenticated in accordance
with the terms of the Indenture, the Registration Rights Agreement and
the Exchange Offer, will constitute valid and binding obligations of
the Issuer, enforceable against the Issuer in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or
affecting enforcement of the rights and remedies of creditors or by
general principles of equity and will be entitled to the benefits of
the Indenture.
(h) SECURITY INTEREST. As of the Closing Date, all actions
necessary to perfect and protect the security interest in the
Collateral (as defined in the Pledge Agreement) created under the
Pledge Agreement have been duly made or taken and will be in full force
and effect, and the Pledge Agreement creates in favor of the Trustee
and the holders of the Securities, together with such actions, a
perfected first priority security interest in the Collateral,
enforceable as against all creditors of Issuer (and any persons
purporting to purchase any of the Collateral from the Issuer).
(i) AUTHORIZATION OF THE INDENTURE. The Indenture has been
duly authorized by each of the Issuer and the Tribe and, at the Closing
Date will have been duly executed and delivered by each of the Issuer
and the Tribe and will constitute a valid and binding agreement of each
of the Issuer and the Tribe, enforceable against each of the Issuer and
the Tribe in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights
and remedies of creditors or by general equitable principles.
(j) AUTHORIZATION OF THE PLEDGE AGREEMENT. The Pledge
Agreement has been duly authorized by Issuer and (assuming due
authorization, execution and delivery by other parties thereto) will
constitute a valid and binding agreement of Issuer, enforceable against
Issuer in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(k) DESCRIPTIONS IN THE OFFERING MEMORANDUM. The Securities,
the Indenture and the Pledge Agreement will conform in all material
respects to the respective statements relating thereto contained in the
Offering Memorandum. The Exchange Securities will conform in all
material respects to the respective statements relating thereto
contained in the Offering
4
Memorandum and the Registration Statement, at the time such
Registration Statement becomes effective.
(l) NO MATERIAL ADVERSE CHANGE. Subsequent to the respective
dates as of which information is given in the Offering Memorandum (i)
there has been no material adverse change, or any development that
could reasonably be expected to result in a material adverse change, in
the condition, financial or otherwise, or in the earnings, business,
operations or prospects (including, but not limited to, with respect to
the ownership and operation of the Silver Star Hotel and Casino and the
business thereof) of the Issuer (any such change is called a "Material
Adverse Change"); (ii) the Issuer has not incurred any material
liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction
or agreement not in the ordinary course of business; and (iii) except
for $9,534,372 and $7,591,070 distributed by the Issuer to the Tribe on
January 23, 2001 and February 23, 2001, respectively, and $9,764,906 to
be distributed by the Issuer to the Tribe on March 26, 2001, there has
been no dividend or distribution of any kind declared, paid or made by
the Issuer on any class of capital stock or any other type of equity
interests, as the case may be, or repurchase or redemption by the
Issuer of any other type of equity interests, as applicable.
(m) INDEPENDENT ACCOUNTANTS. (i) PricewaterhouseCoopers LLP
(collectively, the "Independent Accountants"), who have expressed their
opinion with respect to the financial statements (which term as used in
this Agreement includes the related notes thereto) and supporting
schedules included in the Offering Memorandum, are independent public
or certified public accountants, with respect to the Issuer within the
meaning of Regulation S-X under the Securities Act and the Exchange
Act; and (ii) Ernst & Young LLP (collectively, "Ernst & Young"), who
have expressed their opinion with respect to the financial statements
and supporting schedules of the Silver Star Resort and Casino for the
fiscal years ended 1996 and 1997, are independent public or certified
public accountants with respect to the Issuer within the meaning of
Regulation S-X under the Securities Act and the Exchange Act.
(n) PREPARATION OF THE FINANCIAL STATEMENTS. The financial
statements of the Issuer (including those relating exclusively to the
Silver Star Resort and Casino), together with the related schedules and
notes, included in the Offering Memorandum present fairly the
consolidated financial position of the Issuer as of and at the dates
indicated and the results of its operations and cash flows for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles as applied in
the United States applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto. The financial data with respect to the Issuer set forth in the
Offering Memorandum under the captions "Offering Memorandum
Summary--Summary Historical Financial and Other Data" and "Selected
Historical Financial and Other Data" fairly present the information set
forth therein on a basis consistent with that of the audited and
unaudited financial statements contained in the Offering Memorandum.
(o) TRIBE. The Tribe is a federally recognized Indian Tribe,
with authority to enter into and perform its obligations under the
Indenture. The Constitution of the Tribe dated March 28, 1975 (the
"Constitution") was validly adopted by the Tribe, is effective
according to its terms, and is the law of the Tribe.
(p) ORGANIZATION AND GOOD STANDING OF THE ISSUER. The Issuer
has been duly established and is validly existing under Tribal
Ordinance 56 as an unincorporated business enterprise of the Tribe, and
is in good standing under the laws of the jurisdiction of its
organization, and has the requisite power and authority to own, lease
and operate its properties and to conduct its business as described in
the Offering Memorandum and to enter into and
5
perform its obligations under each of this Agreement, the
Registration Rights Agreement, the Securities, the Exchange
Securities, the Indenture and the Pledge Agreement. The Issuer is
duly qualified as a foreign entity to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property
or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse
Change. The Issuer does not own or control any direct or indirect
subsidiaries or other enterprises or business entities.
(q) CAPITALIZATION AND OTHER MATTERS. At December 31, 2000,
after giving effect to the issuance and sale of the Securities pursuant
hereto, the entering into of the Senior Secured Revolving Credit
Facility dated December 19, 2000 (the "Senior Secured Credit Facility")
and the Amended and Restated Term Loan Agreement dated as of December
19, 2000 (the "Amended Term Loan Agreement"), (each as further
described in the Offering Memorandum), and the application of the
proceeds from the sale of the Securities, the Issuer would have an
authorized and outstanding capitalization as set forth in the Offering
Memorandum under the caption "Capitalization". All of the outstanding
equity interests of the Issuer have been duly authorized and validly
issued and are fully paid. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any equity interests of the Issuer or
any subsidiary other than those accurately described in the Offering
Memorandum.
(r) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER
AUTHORIZATIONS OR APPROVALS REQUIRED. The Issuer is not in violation of
any of the organizational, statutory or legal documents of the Issuer
or the Tribe, or in default (or, with the giving of notice or lapse of
time, would be in default) ("Default") under any indenture, mortgage,
loan or credit agreement, note, contract, franchise, lease or other
agreement or instrument to which it is a party or by which it may be
bound or to which any of its property or assets is subject (each, an
"Existing Instrument"), or in violation of any local, tribal, state or
federal law, statute, ordinance, rule, regulation, requirements,
judgement or court decree (including, without limitation, any
requirement, regulation or decree under the Indian Gaming Regulatory
Act of 1988), except for such Defaults or violations as would not,
individually or in the aggregate, result in a Material Adverse Change.
The Issuer's execution, delivery and performance of this Agreement, the
Registration Rights Agreement, the Indenture and the Pledge Agreement
and the issuance and delivery of the Securities or the Exchange
Securities, and consummation of the transactions contemplated hereby
and thereby and by the Offering Memorandum (i) will not result in any
violation of the provisions of the organizational, statutory or legal
documents of the Issuer or the Tribe, (ii) will not conflict with or
constitute a breach of, or Default or a Debt Repayment Triggering Event
(as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Issuer or the Tribe pursuant to, or require the consent of any other
party to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually or
in the aggregate, result in a Material Adverse Change and (iii) will
not result in any violation of any law, administrative regulation or
administrative or court decree (including, without limitation, any
requirement, regulation or decree under the Indian Gaming Regulatory
Act of 1988) applicable to the Issuer or the Tribe or any of their
respective properties or assets. No consent, approval, authorization or
other order of, or registration or filing with, any court or other
governmental or regulatory authority or agency (including, without
limitation, any Gaming Authority, as such term is defined in the
Indenture) is required for the Issuer's or the Tribe's, as applicable,
execution, delivery and performance of this Agreement, the Registration
Rights Agreement, the Indenture or the Pledge Agreement or the issuance
and delivery of the Securities or the Exchange Securities, or
consummation of the
6
transactions contemplated hereby and thereby and by the Offering
Memorandum, except (i) such as will be obtained under the Act and
such as may be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the Securities
by the Initial Purchasers in the manner contemplated herein and in
the Offering Memorandum and the Registration Rights Agreement, and
(ii) such as will not result in a Material Adverse Change or have a
material adverse effect on the offering and sale of the Securities
and the transactions contemplated hereby. As used herein, a "Debt
Repayment Triggering Event" means any event or condition which
gives, or with the giving of notice or lapse of time would give, the
holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Issuer or the Tribe.
(s) NO MATERIAL ACTIONS OR PROCEEDINGS. There are no legal or
governmental actions, suits or proceedings pending or, to the best of
the Issuer's knowledge, threatened (i) against or affecting the Issuer
or the Tribe, (ii) which has as the subject thereof any property owned
or leased by the Issuer or used by the Issuer in the operation of its
business, where in any such case (A) there is a reasonable possibility
that such action, suit or proceeding might be determined adversely to
the Issuer or the Tribe and (B) any such action, suit or proceeding, if
so determined adversely, would reasonably be expected to result in a
Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. No material labor dispute
with the employees of the Issuer exists or, to the best of the Issuer's
knowledge, is threatened or imminent.
(t) INTELLECTUAL PROPERTY RIGHTS. The Issuer owns or possesses
sufficient trademarks, trade names, patent rights, copyrights,
licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") necessary to conduct its
business as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse
Change. The Issuer has not received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision,
would result in a Material Adverse Change.
(u) ALL NECESSARY PERMITS, ETC. The Issuer possesses such
valid and current licenses, certificates, authorizations or permits
(except for the tribal gaming licenses required upon the construction
and operation of the Golden Moon Hotel and Casino) issued by the
appropriate municipal, state, federal or foreign regulatory agencies or
bodies (including any gaming authority) necessary to conduct its
business as now conducted and as contemplated to be conducted in the
Offering Memorandum, and the Issuer has not received any notice of
proceedings relating to the revocation or modification of, or
non-compliance with, any such license, certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a Material
Adverse Change. The Issuer has no reason to believe that it will not
acquire the tribal gaming licenses required when the Golden Moon Hotel
and Casino is constructed and operating and when additional gaming
equipment is acquired as contemplated by the Offering Memorandum.
(v) TITLE TO PROPERTIES. At the Closing Date the Issuer will
have good and marketable title to all its properties and assets,
including those set forth on the balance sheet of the Issuer contained
in the Offering Memorandum or reflected as owned in the Offering
Memorandum (except for real property held in trust by the United States
of America for the benefit of the Tribe), in each case free and clear
of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except such as are disclosed in the Offering
Memorandum or as do not materially and adversely affect the value of
such property and do not materially interfere with the use made or
proposed to be made of such property by the Issuer.
7
Any real property, improvements, equipment and personal property
held under lease by the Issuer are held under valid and enforceable
leases, with such exceptions as are not material or do not
materially interfere with the use made or proposed to be made of
such real property, improvements, equipment or personal property by
the Issuer. Additionally, the sites of the proposed Golden Moon
Hotel and Casino and the Silver Star Hotel and Casino are on lands
the fee title to which is held by the United States of America in
trust for the Tribe and over which the Tribe exercises "governmental
power" within the meaning of IGRA. Such lands have been held in
trust by the United States of America for the Tribe since prior to
October 17, 1988 and constitute "Indian Lands" within the meaning of
25 U.S.C. Section 2703(4). These lands also constitute a part of the
Mississippi Choctaw Indian Reservation under Public Law 106-228, ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ of June 29, 2000.
(w) TAX LAW COMPLIANCE. The Issuer has filed all federal,
state, tribal and foreign income and franchise tax returns required to
be filed and has paid all taxes shown on such returns required to be
paid by the Issuer which are due and payable and, if due and payable,
any related or similar assessment, fine or penalty levied against the
Issuer. The Issuer has made adequate charges, accruals and reserves in
the applicable financial statements referred to in Section 1(m) above
in respect of all federal, state, tribal and foreign income and
franchise taxes for all periods as to which the tax liability of the
Issuer has not been finally determined, except where such failure would
not result in a Material Adverse Change.
(x) ISSUER NOT AN "INVESTMENT COMPANY". The Issuer has been
advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the "Investment Company Act"). The Issuer is not,
nor after receipt of payment for the Securities will it be, an
"investment company" within the meaning of Investment Company Act and
will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(y) INSURANCE. The Issuer is, and at the Closing Date will be,
insured by recognized, financially sound institutions with policies in
such amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for its business including, but
not limited to, policies covering real and personal property owned or
leased by the Issuer against theft, damage, destruction, acts of
vandalism and earthquakes. The Issuer has no reason to believe that it
will not be able (i) to renew its existing insurance coverage as and
when such policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a
Material Adverse Change. The Issuer has not been denied any insurance
coverage which it has sought or for which it has applied and there are
no claims by the Issuer under any current policy as to which any
insurance company is denying liability or defending under a reservation
of rights clause.
(z) NO PRICE STABILIZATION OR MANIPULATION. The Issuer has not
taken and will not take, directly or indirectly, any action designed to
or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the
Issuer to facilitate the sale or resale of the Securities.
(aa) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Neither of
the Issuer nor, to the best of the Issuer's knowledge, any employee or
agent of the Issuer, has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in
violation of any law or of the character necessary to be disclosed in
the Offering Memorandum in order to make the statements therein not
misleading.
8
(bb) ISSUER'S ACCOUNTING SYSTEMS. The Issuer maintains a
system of accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles as applied in
the United States and to maintain accountability for assets; (iii)
access to material assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(cc) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as would not,
individually or in the aggregate, result in a Material Adverse Change
(i) the Issuer is not in violation of any federal, state, tribal, local
or foreign law or regulation relating to pollution or protection of
human health or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products (collectively, "Materials
of Environmental Concern"), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Materials of Environmental Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Issuer under
applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Issuer received any written
communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Issuer is in violation of
any Environmental Law; (ii) there is no claim, action or cause of
action filed with a court or governmental authority, no investigation
with respect to which the Issuer has received written notice, and no
written notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries,
attorneys' fees or penalties arising out of, based on or resulting from
the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the
Issuer, now or in the past (collectively, "Environmental Claims"),
pending or, to the best of the Issuer's knowledge, threatened against
either of the Issuer or any person or entity whose liability for any
Environmental Claim the Issuer has retained or assumed either
contractually or by operation of law; and (iii) to the best of the
Issuer's knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that reasonably could result in
a violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Issuer, or against any person or entity
whose liability for any Environmental Claim the Issuer has retained or
assumed either contractually or by operation of law.
(dd) TAXES; FEES. There are no stamp or other issuance or
transfer taxes or duties or other similar fees or charges required to
be paid in connection with the execution and delivery of this Agreement
or the issuance or sale by the Issuer of the Securities.
9
(ee) REGULATION S COMPLIANCE. The Issuer and its affiliates
and all authorized persons acting on its behalf (other than the Initial
Purchasers, as to whom the Issuer makes no representation) have
complied with and will comply with the offering restrictions
requirements of Regulation S in connection with the offering of the
Securities outside the United States and, in connection therewith, the
Offering Memorandum will contain the disclosure required by Rule
902(h).
(ff) GAMING ACTIVITIES OF THE TRIBE. All gaming activities of
the Tribe constituting or relating to the ownership and operation of
the Silver Star Hotel and Casino and the Golden Moon Hotel and Casino
(including all Class II Class III gaming activities within the meaning
of IGRA) are conducted on behalf of the Tribe by the Issuer and not
through any agency or instrumentality.
(gg) GOVERNMENT REGULATION. Except for the Tribe's Ordinance
56, the provisions of which have been complied with, the Issuer is not
subject to regulation under any law limiting or regulating its ability
to incur indebtedness for money borrowed or to otherwise perform its
obligations hereunder.
(hh) ERISA. Neither the Issuer nor any "ERISA Affiliate" (as
defined below), maintains, contributes to or is required to contribute
to any "employee pension benefit plan" that is subject to Title IV of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). For purposes of this subsection, "ERISA Affiliate" is
defined to mean, with respect to the Issuer, any member of any group or
organization described in Section 414 of the Internal Revenue Code of
1986, as amended, of which the Issuer is a member.
Any certificate signed by an officer of the Issuer and
delivered to the Initial Purchasers or to counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Issuer to each
Initial Purchaser as to the matters set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES.
(a) THE SECURITIES. The Issuer agrees to issue and sell to the
Initial Purchasers all of the Securities on the basis of the
representations, warranties and agreements, and upon the terms herein
set forth. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the
conditions herein set forth, each Initial Purchaser agrees, severally
and not jointly, to purchase from the Issuer the respective principal
amount of Securities as set forth on Schedule I opposite such Initial
Purchaser's name at a purchase price of 98% of the principal amount
thereof payable on the Closing Date.
(b) THE CLOSING DATE. Delivery of certificates for the
Securities in definitive form to be purchased by the Initial Purchasers
and payment therefor shall be made at the offices of Shearman &
Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (or such other
place as may be agreed to by the Issuer and the Initial Purchasers) at
9:00 a.m., New York City time, on March 30, 2001 or such other time and
date as the Initial Purchasers shall designate by notice to the Issuer
(the time and date of such closing are called the "Closing Date"). The
Issuer hereby acknowledges that circumstances under which the Initial
Purchasers may provide notice to postpone the Closing Date as
originally scheduled include, but are in no way limited to, any
determination by the Issuer or the Initial Purchasers to recirculate to
investors copies of an amended or supplemented Offering Memorandum or a
delay as contemplated by the provisions of Section 16.
(c) DELIVERY OF THE SECURITIES. The Issuer shall deliver, or
cause to be delivered, to Banc of America Securities LLC, for the
account of the Initial Purchasers, certificates for the
10
Securities at the Closing Date against the irrevocable release of a
wire transfer of immediately available funds for the amount of the
purchase price therefor, which will be immediately deposited in the
account established under the Pledge Agreement. The certificates for
the Securities shall be in such denominations and registered in the
name of the Depositary as its nominee, pursuant to the DTC Letter of
Representations to be entered into in connection with the purchase
and sale of the Securities, and shall be made available for
inspection on the business day preceding the Closing Date at a
location in New York City, as the Initial Purchasers may designate.
Time shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the
obligations of the Initial Purchasers.
(d) DELIVERY OF OFFERING MEMORANDUM TO THE INITIAL PURCHASERS.
Not later than 12:00 p.m. on the second business day following the date
of this Agreement, the Issuer shall deliver or cause to be delivered
copies of the Offering Memorandum in such quantities and at such places
as the Initial Purchasers shall reasonably request.
(e) INITIAL PURCHASERS AS QUALIFIED INSTITUTIONAL BUYERS. Each
Initial Purchaser represents and warrants to, and agrees with, the
Issuer that (i) it is a "qualified institutional buyer" within the
meaning of Rule 144A (a "Qualified Institutional Buyer"), and (ii) with
respect to those Securities sold in reliance on Regulation S, (A) it
has not engaged and will not engage in any direct selling efforts
within the meaning of Regulation S and (B) it has complied and will
comply with the offering restrictions requirement of Regulations S.
SECTION 3. ADDITIONAL COVENANTS. The Issuer covenants and
agrees with each Initial Purchaser as follows:
(a) INITIAL PURCHASERS' REVIEW OF PROPOSED AMENDMENTS AND
SUPPLEMENTS. Prior to amending or supplementing the Offering Memorandum
(including any amendment or supplement through incorporation by
reference of any report filed under the Exchange Act), the Issuer shall
furnish to the Initial Purchasers and their counsel for review and
comment a copy of each such proposed amendment or supplement, and the
Issuer shall not use any such proposed amendment or supplement to which
the Initial Purchasers reasonably object.
(b) AMENDMENTS AND SUPPLEMENTS TO THE OFFERING MEMORANDUM AND
OTHER SECURITIES ACT MATTERS. If, prior to the completion of the
placement of the Securities by the Initial Purchasers with the
Subsequent Purchasers, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Offering
Memorandum in order to make the statements therein, in the light of the
circumstances when the Offering Memorandum is delivered to a purchaser,
not misleading, or if in the opinion of an Initial Purchaser or counsel
for an Initial Purchaser it is otherwise necessary to amend or
supplement the Offering Memorandum to comply with law, the Issuer
agrees to promptly prepare (subject to Section 3(a) hereof), and
furnish at its own expense to the Initial Purchasers, amendments or
supplements to the Offering Memorandum so that the statements in the
Offering Memorandum as so amended or supplemented will not, in the
light of the circumstances when the Offering Memorandum is delivered to
a purchaser, be misleading or so that the Offering Memorandum, as
amended or supplemented, will comply with law.
Following the consummation of the Exchange Offer or the
effectiveness of an applicable shelf registration statement and for so
long as the Securities are outstanding if, in the reasonable judgment
of an Initial Purchaser, such Initial Purchaser or any of its
affiliates (as such term is defined in the rules and regulations under
the Securities Act) is required to deliver a prospectus in connection
with sales of, or market-making activities with respect to, such
Securities, the Issuer agrees (A) to periodically amend the applicable
registration statement so that the information
11
contained therein complies with the requirements of Section 10(a) of
the Securities Act, (B) to amend the applicable registration
statement or supplement the related prospectus or the documents
incorporated therein when necessary to reflect any material changes
in the information provided therein so that the registration
statement and the prospectus will not contain any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances existing as of the date the prospectus is so
delivered, not misleading and (C) to provide the Initial Purchasers
with copies of each amendment or supplement filed and such other
documents as the Initial Purchasers may reasonably request.
The Issuer hereby expressly acknowledges that the
indemnification and contribution provisions of Sections 8 and 9 hereof
are specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to
in this Section 3(b).
(c) COPIES OF THE OFFERING MEMORANDUM. The Issuer agrees to
furnish the Initial Purchasers, without charge, as many copies of the
Offering Memorandum and any amendments and supplements thereto as they
shall have reasonably requested.
(d) BLUE SKY COMPLIANCE. The Issuer shall cooperate with the
Initial Purchasers and counsel for the Initial Purchasers to qualify or
register the Securities for sale under (or obtain exemptions from the
application of) the Blue Sky or state securities laws of those
jurisdictions designated by the Initial Purchasers, shall comply with
such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the
Securities. The Issuer shall not be required to qualify as a foreign
entity or to take any action that would subject it to general service
of process in any such jurisdiction where it is not presently qualified
or where it would be subject to taxation as a foreign entity. The
Issuer will advise the Initial Purchasers promptly of the suspension of
the qualification or registration of (or any such exemption relating
to) the Securities for offering, sale or trading in any jurisdiction or
any initiation or threat of any proceeding for any such purpose, and in
the event of the issuance of any order suspending such qualification,
registration or exemption, the Issuer shall use its reasonable best
efforts to obtain the withdrawal thereof at the earliest possible
moment.
(e) USE OF PROCEEDS. The Issuer shall apply the net proceeds
from the sale of the Securities in the manner described under the
caption "Use of Proceeds" in the Offering Memorandum.
(f) ADDITIONAL ISSUER INFORMATION. As long as any of the
Securities are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, the Issuer will, during any period
in which it is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, provide to each holder of such restricted
securities and to each prospective purchaser (as designated by such
holder) of such restricted securities, upon the request of such holder
or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Securities Act ("Additional Issuer
Information"). Such information, at the date of its provision by the
Issuer to such holders or prospective purchasers, when such information
is taken together with the Offering Memorandum and read in conjunction
therewith as a whole, will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. This covenant is intended to be
for the benefit of the holders and the prospective purchasers
designated by such holders from time to time of such restricted
securities.
12
(g) FUTURE AGREEMENT NOT TO OFFER OR SELL ADDITIONAL
SECURITIES. During the period of 180 days following the date of the
Offering Memorandum, the Issuer shall not, without the prior written
consent of Banc of America Securities LLC (which consent may be
withheld at the sole discretion of Banc of America Securities LLC),
directly or indirectly, sell, offer, contract or grant any option to
sell, pledge, transfer or establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of or transfer, or announce the offering of, or file
any registration statement under the Securities Act in respect of, any
debt securities of the Issuer or securities exchangeable for or
convertible into debt securities of the Issuer (other than as
contemplated by this Agreement and to register the Exchange
Securities).
(h) FUTURE REPORTS TO THE INITIAL PURCHASERS. For so long as
any Securities or Exchange Securities remain outstanding, the Issuer
will furnish to the Initial Purchasers (i) as soon as practicable after
the end of each fiscal year, copies of the Annual Report of the Issuer
containing its balance sheet as of the close of such fiscal year and
statements of income, owner's equity and cash flows for the year then
ended and the opinion thereon of the Issuer' independent public or
certified public accountants and including such information and
financial statements as would be required if the Issuer were filing
such Annual Report with the Commission pursuant to the Exchange Act;
(ii) as soon as practicable after the filing thereof, copies of each
proxy statement, Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Current Report on Form 8-K or other report filed by the Issuer
with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Issuer
mailed generally to owners of its debt securities (including the
holders of the Securities).
(i) NO INTEGRATION. The Issuer agrees that it will not and
will cause its Affiliates not to make any offer or sale of securities
of the Issuer of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 under the Securities Act, such
offer or sale would render invalid (for the purpose of (i) the sale of
the Securities by the Issuer to the Initial Purchasers, (ii) the resale
of the Securities by the Initial Purchasers to Subsequent Purchasers or
(iii) the resale of the Securities by such Subsequent Purchasers to
others) the exemption from the registration requirements of the
Securities Act provided by Section 4(2) thereof or by Rule 144A or by
Regulation S thereunder or otherwise.
(j) LEGENDED SECURITIES. Each certificate for a Security will
bear the legend contained in "Notice to Investors" in the Offering
Memorandum for the time period and upon the other terms stated in the
Offering Memorandum.
(k) PORTAL. The Issuer will use its reasonable best efforts to
cause such Securities when issued to be eligible for the National
Association of Securities Dealers, Inc. PORTAL market (the "PORTAL
market").
(l) RATING OF SECURITIES. The Issuer shall take all reasonable
action necessary to enable Standard & Poor's Ratings Services, a
division of McGraw Hill, Inc. ("S&P"), and ▇▇▇▇▇'▇ Investors Services
Inc. ("Moody's"), to provide the credit ratings of BB- and B1,
respectively, to the Securities.
(m) DTC. The Issuer will cooperate with the Initial Purchasers
and use its best efforts to permit the Securities to be eligible for
clearance and settlement through the facilities of DTC.
13
(n) DEPOSIT OF PROCEEDS COLLATERAL. Issuer shall direct the
deposit of the net proceeds of the issuance and sale of the Securities
with the Collateral Agent in accordance with the terms of the Pledge
Agreement.
(o) DEPOSIT OF ADDITIONAL COLLATERAL. Prior to the closing of
the issuance and sale of the Notes, Issuer shall deposit $10,625,000
(in addition to the amounts required to be deposited pursuant to clause
(n) above) with the Collateral Agent in accordance with the terms of
the Pledge Agreement.
The Initial Purchasers, may, in their sole discretion, waive
in writing the performance by the Issuer of any one or more of the foregoing
covenants or extend the time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Issuer agrees to pay all
costs, fees and expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance
and delivery of the Securities (including all printing costs), (ii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Securities to the Initial Purchasers, (iii) all fees and
expenses of the Issuer's counsel, independent public or certified public
accountants and other advisors, (iv) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
each preliminary Offering Memorandum and the Offering Memorandum (including
financial statements and exhibits), and all amendments and supplements thereto,
this Agreement, the Registration Rights Agreement, the Indenture and the
Securities, (v) all filing fees, reasonable attorneys' fees and expenses
incurred by the Issuer or the Initial Purchasers in connection with qualifying
or registering (or obtaining exemptions from the qualification or registration
of) all or any part of the Securities for offer and sale under the Blue Sky laws
and, if requested by an Initial Purchaser, preparing and printing a "Blue Sky
Survey" or memorandum, and any supplements thereto, advising such Initial
Purchaser of such qualifications, registrations and exemptions, (vi)/ the fees
and expenses of the Trustee, including the fees and disbursements of counsel for
the Trustee in connection with the Indenture, the Securities and the Exchange
Securities, (vii) fees and expenses of the Collateral Agent, including fees and
disbursements of counsel for the Collateral Agent in connection with the Pledge
Agreement, (viii) any fees payable in connection with the rating of the
Securities or the Exchange Securities with the ratings agencies and the initial
listing of the Securities with the PORTAL market, and (ix) the performance by
the Issuer of its other obligations under this Agreement. Except as provided in
this Section 4, Section 6, Section 8 and Section 9 hereof, the Initial
Purchasers shall pay their own expenses.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL
PURCHASERS. The obligations of the Initial Purchasers to purchase and pay for
the Securities as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Issuer set
forth in Section 1 hereof as of the date hereof and as of, the Closing Date, as
though then made and to the timely performance by the Issuer of its covenants
and other obligations hereunder, and to each of the following additional
conditions:
(a) ACCOUNTANTS' COMFORT LETTERS. On the date hereof, the
Initial Purchasers shall have received from: (i) the Independent
Accountants, a letter dated the date hereof addressed to the Initial
Purchasers, in form and substance satisfactory to the Initial
Purchasers, containing statements and information of the type
ordinarily included in accountant's "comfort letters" to the Initial
Purchasers, delivered according to Statement of Auditing Standards Nos.
71, 72 and 76 (or any successor bulletins), with respect to the audited
and unaudited financial statements and certain financial information
contained in the Offering Memorandum; and (ii) from Ernst & Young, a
letter dated the date hereof addressed to the Initial Purchasers, in
form and substance satisfactory to the Initial Purchasers, containing
statements and information of the type ordinarily included in
accountant's "comfort letters" to the Initial Purchasers, delivered
according to
14
Statement of Auditing Standards Nos. 71, 72 and 76 (or any successor
bulletins), with respect to certain financial information contained
in the Offering Memorandum.
(b) NO MATERIAL ADVERSE CHANGE OR RATINGS AGENCY CHANGE. For
the period from and after the date of this Agreement and prior to the
Closing Date:
(i) in the judgment of the Initial Purchasers there
shall not have occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any securities of the Issuer by any
"nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act.
(c) OPINION OF COUNSEL FOR THE ISSUER. On the Closing Date,
the Initial Purchasers shall have received a favorable opinion of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Issuer, dated as of such
Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers and their counsel and including the opinions set
forth in EXHIBIT A.
(d) OPINION OF SPECIAL INDIAN LAW COUNSEL FOR THE ISSUER AND
THE TRIBE. On the Closing Date, the Initial Purchasers shall have
received a favorable opinion of ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, Rogers, Ortiz,
Fairbanks & Yepa, LLP, special Indian law counsel, dated as of such
Closing Date, the form of which is attached as EXHIBIT B.
(e) OPINION OF SPECIAL COUNSEL FOR THE ISSUER. On the Closing
Date, the Initial Purchasers shall have received a favorable opinion of
Rome ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, P.C., special Indian law counsel, dated as of
such Closing Date, the form of which is attached as EXHIBIT C.
(f) OPINION OF SPECIAL INDIAN LAW COUNSEL FOR THE ISSUER. On
the Closing Date, the Initial Purchasers shall have received a
favorable opinion of Hobbs, Strauss, ▇▇▇▇ & ▇▇▇▇▇▇, LLP, special Indian
law counsel, dated as of such Closing Date, the form of which is
attached as EXHIBIT D.
(g) OPINION OF COUNSEL FOR THE INITIAL PURCHASERS. On the
Closing Date, the Initial Purchasers shall have received the favorable
opinion of Shearman & Sterling, counsel for the Initial Purchasers,
dated as of such Closing Date, with respect to such matters as may be
reasonably requested by the Initial Purchasers.
(h) OFFICERS' CERTIFICATE OF THE ISSUER. On the Closing Date,
the Initial Purchasers shall have received a written certificate
executed by the Chairman of the Board of the Issuer and the
Secretary-Treasurer of the Issuer, dated as of such Closing Date, to
the effect set forth in subsection (b)(ii) of this Section 5, and
further to the effect that:
(i) for the period from and after the date of this
Agreement and prior to the Closing Date, there has not
occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of
the Issuer set forth in Section 1 of this Agreement are true
and correct with the same force and effect as though expressly
made on and as of the Closing Date; and
15
(iii) the Issuer has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date.
(i) BRING-DOWN COMFORT LETTER. On the Closing Date, the
Initial Purchasers shall have received from the Independent
Accountants, a letter dated such date, in form and substance
satisfactory to the Initial Purchasers, to the effect that they
reaffirm the statements made in the letter furnished by them pursuant
to subsection (a) of this Section 5, except that the specified date
referred to therein for the carrying out of procedures shall be no more
than three business days prior to the Closing Date.
(j) PORTAL LISTING. At the Closing Date, the Securities shall
have been designated for trading on the PORTAL market.
(k) REGISTRATION RIGHTS AGREEMENT. The Issuer shall have
entered into the Registration Rights Agreement, in form and substance
reasonably satisfactory to the Initial Purchasers, and the Initial
Purchasers shall have received executed counterparts thereof.
(l) DEPOSIT OF PROCEEDS COLLATERAL. Issuer shall have
deposited, or shall have directed the deposit of the net proceeds of
the offering with the Collateral Agent, as contemplated in the Pledge
Agreement (it being understood that this condition shall be deemed
satisfied to the extent it occurs simultaneously with the purchase and
payment of the Securities).
(m) DEPOSIT OF ADDITIONAL COLLATERAL. Prior to the closing of
the issuance and sale of the Notes, the Issuer shall have deposited
$10,625,000 with the Collateral Agent, as contemplated by the Pledge
Agreement.
(n) SENIOR SECURED CREDIT FACILITY AND AMENDED TERM LOAN
AGREEMENT. Each of the Senior Secured Credit Facility and the Amended
Term Loan Agreement shall be in full force and effect on the Closing
Date.
(o) PLEDGE AGREEMENT. Issuer shall have entered into the
Pledge Agreement, in form and substance reasonably satisfactory to the
Initial Purchasers, and the Initial Purchasers shall have received
executed counterparts thereof.
(p) ADDITIONAL DOCUMENTS. On or before the Closing Date, the
Initial Purchasers and counsel for the Initial Purchasers shall have
received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Securities as contemplated herein, or in order
to evidence the accuracy of any of the representations and warranties,
or the satisfaction of any of the conditions or agreements, herein
contained.
If any condition specified in this Section 5 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Initial Purchasers by notice to the Issuer at any time on or prior to the
Closing Date, which termination shall be without liability on the part of any
party to any other party, except that Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination.
SECTION 6. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES.
Regardless of whether the transactions contemplated hereby are completed, the
Issuer agrees to reimburse the Initial Purchasers out of the net proceeds of the
sale of the Securities on the Closing Date, for all reasonable out-of-pocket
expenses that shall have been incurred by the Initial Purchasers in connection
with the proposed purchase and the offering and sale of the Securities,
including but not limited to, fees and disbursements of counsel,
16
the allocated cost of in-house counsel, printing expenses, travel, postage,
facsimile and telephone charges; PROVIDED, HOWEVER, that so long as the
issuance and sale of the Securities is consummated as contemplated by this
Agreement, (i) the aggregate amount of such reimbursement will not exceed
$400,000 and (ii) the Issuer will not be required to reimburse the Initial
Purchasers for "road show" expenses.
The Initial Purchasers agree that they shall provide to the
Issuer a credit equal in amount to 10% of the discount afforded to the
Initial Purchasers pursuant to Section 2(a) hereof. Such credit may be
applied by the Issuer to any fees and expenses that are due and payable by
the Issuer to the Initial Purchasers pursuant to the terms hereof.
SECTION 7. OFFER, SALE AND RESALE PROCEDURES. The Initial
Purchasers, on the one hand, and the Issuer, on the other hand, hereby
establish and agree to observe the following procedures in connection with
the offer and sale of the Securities:
(i) OFFERS AND SALES ONLY TO QUALIFIED INSTITUTIONAL BUYERS.
Offers and sales of the Securities will be made only by the Initial
Purchasers or Affiliates thereof qualified to do so in the
jurisdictions in which such offers or sales are made. Each such offer
or sale shall only be made (A) to persons whom the offeror or seller
reasonably believes to be qualified institutional buyers (as defined in
Rule 144A under the Securities Act) or (B) non-U.S. persons outside the
United States to whom the offeror or seller reasonably believes offers
and sales of the Securities may be made in reliance upon Regulation S
under the Securities Act, upon the terms and conditions set forth in
ANNEX I hereto, which ANNEX I is hereby expressly made a part hereof.
(ii) NO GENERAL SOLICITATION. The Securities will be offered
by approaching prospective Subsequent Purchasers on an individual
basis. No general solicitation or general advertising (within the
meaning of Rule 502(c) under the Securities Act) will be used in the
United States in connection with the offering of the Securities.
(iii) RESTRICTIONS ON TRANSFER. Upon original issuance by the
Issuer, and until such time as the same is no longer required under the
applicable requirements of the Securities Act, the Securities (and all
securities issued in exchange therefor or in substitution thereof,
other than the Exchange Securities) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT
OF THE ISSUER THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY
(i) (a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF
17
RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF THE SECURITIES ACT (AN
"INSTITUTIONAL ACCREDITED INVESTOR")) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH
CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS
IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO
REQUESTS),
(ii) TO THE ISSUER, OR
(iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
Following the sale of the Securities by the Initial Purchasers to
Subsequent Purchasers pursuant to the terms hereof, the Initial
Purchasers shall not be liable or responsible to the Issuer for any
losses, damages or liabilities suffered or incurred by the Issuer,
including any losses, damages or liabilities under the Securities Act,
arising from or relating to any resale or transfer of any Security.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE INITIAL PURCHASERS. The Issuer
agrees to indemnify and hold harmless each Initial Purchaser, its
directors, officers and employees, and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which such Initial
Purchaser or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory
law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the
written consent of the Issuer), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; or (ii) in whole or in part upon any inaccuracy in the
representations and warranties of the Issuer contained herein; or (iii)
in whole or in part upon any failure of the Issuer to perform its
obligations hereunder or under law; or (iv) any act or failure to act
or any alleged act or failure to act by any Initial Purchaser in
connection with, or relating in any manner to, the offering
18
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based
upon any matter covered by clause (i) above to the extent such expenses
are not covered in items (i) through (iv) above (subject to the
limitations set forth below), provided that the Issuer shall not be
liable under this clause (iv) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts
or failures to act undertaken or omitted to be taken by such Initial
Purchaser through its negligence or willful misconduct; and to
reimburse the Initial Purchaser and each such controlling person for
any and all expenses (including the fees and disbursements of counsel
chosen by the Initial Purchaser) as such expenses are reasonably
incurred by the Initial Purchaser or such controlling person in
connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action to
the extent such expenses are not covered in items (i) through (iv)
above (subject to the limitations set forth below); provided, however,
that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Issuer by
the Initial Purchasers expressly for use in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto); and provided, further, that the Issuer will not be liable to
the Initial Purchasers or any person controlling such Initial
Purchasers with respect to any such untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Offering Memorandum to the extent that the Issuer shall sustain the
burden of proving that any such loss, liability, claim, damage or
expense resulted from the fact that the Initial Purchaser sold
securities to a person to whom such Initial Purchaser failed to send or
give, at or prior to the written confirmation of the sale of such
Securities, a copy of the Offering Memorandum (as amended or
supplemented) if the Issuer has previously furnished copies thereof to
the Initial Purchasers (sufficiently in advance of the Closing Date to
allow for distribution of the Offering Memorandum in a timely manner)
and complied with its obligations under Sections 3(a) and 3(b) hereof
and the loss, liability, claim, damage or expense of the Initial
Purchasers resulted from an untrue statement or omission or alleged
untrue statement or omission of a material fact contained in or omitted
from such Preliminary Offering Memorandum (as amended or supplemented)
which was corrected in the Offering Memorandum (as amended or
supplemented). The indemnity agreement set forth in this Section 8(a)
shall be in addition to any liabilities that the Issuer may otherwise
have.
(b) INDEMNIFICATION OF THE ISSUER AND ITS DIRECTORS, MANAGERS
AND OFFICERS. Each Initial Purchaser agrees to indemnify and hold
harmless the Issuer and each person, if any, who controls the Issuer
within the meaning of the Securities Act or the Exchange Act, against
any loss, claim, damage, liability or expense, as incurred, to which
the Issuer or any such director, or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal
or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is
effected with the written consent of the Initial Purchasers), insofar
as such loss, claim, damage, liability or expense (or actions in
respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in
any Preliminary Offering Memorandum or the Offering Memorandum (or any
amendment or supplement thereto), or arises out of or is based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Offering Memorandum or the
Offering Memorandum (or any amendment or supplement thereto), in
reliance upon and in conformity with written information furnished to
the Issuer by the Initial Purchasers expressly for use therein; and to
reimburse the Issuer, or any such
19
director or controlling person for any legal and other expenses
reasonably incurred by the Issuer, or any such director or
controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Issuer hereby acknowledges that
the only information that the Initial Purchasers have furnished to
the Issuer expressly for use in any Preliminary Offering Memorandum
or the Offering Memorandum (or any amendment or supplement thereto)
are the statements set forth (A) in the last full paragraph on
introductory page ii of the Offering Memorandum concerning
stabilization by the Initial Purchasers and (B) in the first eight
sentences of the fifth paragraph under the caption "Plan of
Distribution" in the Offering Memorandum; and the Initial Purchasers
confirm that such statements are correct. The indemnity agreement
set forth in this Section 8(b) shall be in addition to any
liabilities that the Initial Purchasers may otherwise have.
(c) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES.
Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying
party under this Section 8, notify the indemnifying party in writing of
the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it
is not prejudiced as a proximate result of such failure. In case any
such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in and, to the extent that it shall elect, jointly with all
other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that a conflict may arise between
the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel
(together with local counsel), approved by the indemnifying party (the
Initial Purchasers in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying party.
(d) SETTLEMENTS. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against
any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an
20
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by Section 8(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the final terms of such proposed settlement
as soon as practicable prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date
of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or
could have been sought hereunder by such indemnified party, unless
such settlement, compromise or consent includes an unconditional
release of such indemnified party from all liability on claims that
are the subject matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION. If the indemnification provided for
in Section 8 is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims, damages,
liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Issuer, on the one
hand, and the Initial Purchasers, on the other hand, from the offering of the
Securities pursuant to this Agreement 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 Issuer, on the one hand, and the
Initial Purchasers, on the other hand, in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Issuer, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Issuer, and the total discount received by the Initial
Purchasers bear to the aggregate initial offering price of the Securities. The
relative fault of the Issuer, on the one hand, and the Initial Purchasers, on
the other hand, shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Issuer, 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 a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; PROVIDED, HOWEVER,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Issuer and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
21
Notwithstanding the provisions of this Section 9, the Initial
Purchasers shall not be required to contribute any amount in excess of the total
discount received by the Initial Purchasers in connection with the Securities
distributed by them. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each director, officer and
employee of the Initial Purchasers and each person, if any, who controls either
of the Initial Purchasers within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Initial
Purchasers, and each director of the Issuer, and each person, if any, who
controls the Issuer within the meaning of the Securities Act and the Exchange
Act, shall have the same rights to contribution as the Issuer.
SECTION 10. TERMINATION OF THIS AGREEMENT. Prior to the
Closing Date, this Agreement may be terminated by the Initial Purchasers by
notice given to the Issuer, if at any time (i) a general banking moratorium
shall have been declared by any of federal, Mississippi or any other state
authorities; (ii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United
States' or international political, financial or economic conditions, as in the
judgment of the Initial Purchasers is material and adverse and makes it
impracticable to market the Securities in the manner and on the terms described
in the Offering Memorandum or to enforce contracts for the sale of securities;
(iii) in the judgment of the Initial Purchasers there shall have occurred any
Material Adverse Change or any material adverse change, or any development that
could reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business operations or
prospects of the Tribe; or (iv) the Issuer shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Initial Purchasers may interfere materially with the
conduct of the business and operations of the Issuer regardless of whether or
not such loss shall have been insured. Any termination pursuant to this Section
10 shall be without liability on the part of (a) the Issuer to any Initial
Purchaser, except that the Issuer shall be obligated to reimburse the expenses
of the Initial Purchasers pursuant to Sections 4 and 6 hereof, (b) any Initial
Purchaser to the Issuer, or (c) of any party hereto to any other party except
that the provisions of Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
SECTION 11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE
DELIVERY. The respective indemnities, agreements, representations, warranties
and other statements of the Issuer and its officers and of the Initial Purchaser
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Initial
Purchasers, the Issuer or any of its partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Securities sold hereunder and any termination of this Agreement.
SECTION 12. NOTICES. All communications hereunder shall be in
writing and shall be mailed, hand delivered or telecopied and confirmed to the
parties hereto as follows:
If to the Initial Purchaser:
Banc of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: High Yield Capital Markets
22
with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to the Issuer:
Choctaw Resort Development Enterprise
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chairman of the Board
and
Attorney General of Mississippi Band of Choctaw Indians
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Attorney General
with copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, Rogers, Ortiz, Fairbanks & Yepa, LLP
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Rome ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Any party hereto may change the address for receipt of
communications by giving written notice to the others.
SECTION 13. SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto, including any substitute
Initial Purchasers pursuant to Section 16 hereof, and to the benefit of the
employees, officers and directors and controlling persons referred to in Section
8 and Section 9, and in each case their respective successors, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Securities as such from any of the Initial
Purchasers by reason of such purchase.
23
SECTION 14. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 15. GOVERNING LAW; JURISDICTION, GOVERNING LAW
PROVISIONS.
(a) GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND PERFORMED IN SUCH STATE.
(b) CONSENT TO SUIT. The Issuer irrevocably waives, to the
fullest extent permitted by applicable law, its sovereign immunity from
unconsented suit, whether such suit be brought in law or in equity, or in
administrative proceedings or proceedings in arbitration, to permit the
commencement, maintenance, and enforcement of any action, by the Trustee (or by
the holders of Securities or their respective representatives), to interpret or
enforce the terms of this Agreement and to enforce and execute any judgment
resulting therefrom against any assets of the Issuer. Notwithstanding any
provisions of law or canon of construction, the Issuer intends this waiver to be
interpreted liberally to permit the full litigation of disputes arising under or
out of this Agreement. Without limiting the generality of the foregoing, the
Issuer waives its immunity from unconsented suit to permit any court of
competent jurisdiction or arbitrators, appointed and acting under the commercial
arbitration rules of the American Arbitration Association to: (i) enforce and
interpret the terms of this Agreement and award and enforce the award of damages
owing as a consequence of a breach thereof, whether such award is the product of
litigation, administrative proceedings or arbitration; (ii) determine whether
any consent or approval of the Issuer has been improperly granted or
unreasonably withheld; (iii) enforce any judgment prohibiting the Issuer from
taking any action, or mandating or obligating the Issuer to take any action,
including a judgment compelling the Issuer to submit to binding arbitration; and
(iv) as to a court only but not arbitrators, adjudicate any claim under the
Indian Civil Rights Act of 1968, 25 U.S.C. Section 1302 (or any successor
statute).
(c) CONSENT TO JURISDICTION. Any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the federal
courts of the United States of America located in the City of New York or the
courts of the State of New York in each case located in the City of New York
(collectively, the "Specified Courts"), and each party irrevocably submits to
the exclusive jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "Related Judgment"), as to which
such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court has been
brought in an inconvenient forum.
SECTION 16. DEFAULT OF ONE OR MORE INITIAL PURCHASERS. If any
one or more of the several Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on the Closing Date
and the aggregate number of Securities that such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase does not exceed 10%
of the aggregate number of the Securities to be purchased on such date, the
other Initial Purchasers shall be obligated, severally, in the proportions that
the number of Securities set forth opposite their respective names on SCHEDULE A
bears to the aggregate number of Securities set forth opposite the names of all
such non-defaulting Initial Purchasers, or in such other proportions as may be
specified by the Initial
24
Purchasers with the consent of the non-defaulting Initial Purchasers, to
purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on such date. If any one
or more of the Initial Purchasers shall fail or refuse to purchase Securities
and the aggregate number of Securities with respect to which such default
occurs exceeds 10% of the aggregate number of Securities to be purchased on
the Closing Date and arrangements satisfactory to the Initial Purchasers and
the Issuer for the purchase of such Securities are not made within 48 hours
after such default, this Agreement shall terminate without liability of any
party to any other party except that the provisions of Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive
such termination. In any such case either the Initial Purchasers or the
Issuer shall have the right to postpone the Closing Date as the case may be,
but in no event for longer than seven days in order that the required
changes, if any, to the Offering Memorandum or any other documents or
arrangements may be effected.
As used in this Agreement, the term "Initial Purchaser"
shall be deemed to include any person substituted for a defaulting Initial
Purchaser under this Section 16. Any action taken under this Section 16 shall
not relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes
the entire agreement of the parties to this Agreement and supersedes all
prior written or oral and all contemporaneous oral agreements, understandings
and negotiations with respect to the subject matter hereof. This Agreement
may be executed in two or more counterparts, each one of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement may not be amended or modified
unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party
whom the condition is meant to benefit. The Table of Contents and the section
headings herein are for the convenience of the parties only and shall not
affect the construction or interpretation of this Agreement.
If the foregoing is in accordance with your understanding
of our agreement, kindly sign and return to the Issuer the enclosed copies
hereof, whereupon this instrument, along with all counterparts hereof, shall
become a binding agreement in accordance with its terms.
SECTION 18. NO PERSONAL LIABILITY OF CERTAIN INDIVIDUALS.
No official, agent, director, officer, employee, incorporator or stockholder
of the Issuer or holder of an ownership interest of the Issuer or any of its
Subsidiaries shall have any liability for any of the Issuer's obligations
under this Agreement, or for any claim based on, in respect of, or by reason
of, these obligations or their creation. The Initial Purchasers waive and
release these individuals from this liability. The waiver may not be
effective to waive liabilities under the federal securities laws. Other than
as specifically set forth in this Agreement, nothing contained herein shall
constitute a waiver of the sovereign immunity of the Issuer.
25
Very truly yours,
THE MISSISSIPPI BAND OF CHOCTAW INDIANS
D/B/A CHOCTAW RESORT DEVELOPMENT ENTERPRISE
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman of the Board
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary-Treasurer
26
The foregoing Purchase Agreement is hereby confirmed and
accepted by the Initial Purchasers as of the date first above written.
BANC OF AMERICA SECURITIES LLC,
for themselves and the other Initial Purchaser named
in Schedule I.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
27
SCHEDULE 1
PRINCIPAL AMOUNT
OF SECURITIES TO BE
INITIAL PURCHASER PURCHASED
----------------- -------------------
Banc of America Securities LLC......................................... $ 120,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc............................................... 50,000,000
▇▇▇▇▇ Fargo Brokerage Services, LLC.................................... 20,000,000
Banc One Capital Markets, Inc.......................................... 10,000,000
-------------
Total.............................. $ 200,000,000
=============
EXHIBIT A
FORM OF OPINION OF COUNSEL FOR THE ISSUER
(i) The Indenture is the legally valid and binding agreement of the
Issuer and the Tribe, enforceable against the Issuer and the Tribe in
accordance with its terms.
(ii) The Registration Rights Agreement is the legally valid and
binding agreement of the Issuer, enforceable against the Issuer in accordance
with its terms.
(iii) The Pledge Agreement is the legally valid and binding
agreement of the Issuer, enforceable against the Issuer in accordance with
its terms.
(iv) The Securities are in the form contemplated by the Indenture
and, when executed, issued and authenticated in accordance with the terms of
the Indenture and delivered to and paid for by you in accordance with the
terms of the Purchase Agreement, will be legally valid and binding
obligations of the Issuer, enforceable against the Issuer in accordance with
their terms and will be entitled to the benefits of the Indenture.
(v) The Exchange Securities, when executed, issued and authenticated
in accordance with the terms of the Indenture and delivered in accordance
with the Registration Rights Agreement, will be legally valid and binding
obligations of the Issuer, enforceable against the Issuer in accordance with
their terms.
(vi) The Securities, the Indenture and the Registration Rights
Agreement conform in all material respects to the descriptions thereof in the
Offering Memorandum.
(vii) The statements in the Offering Memorandum under the caption
"United States Federal Income Tax Considerations," insofar as such statements
constitute a summary of the federal tax laws of the United States, are
accurate in all material respects.
(viii) No consent, approval, authorization or other order of, or
registration or filing with any federal or New York court or governmental or
regulatory authority or agency, is necessary or required in connection with
(a) the due authorization, execution, delivery and performance of the
Purchase Agreement by the Issuer, (b) the due authorization, execution,
delivery and performance of the Registration Rights Agreement by the Issuer,
(c) the due authorization, execution, delivery and performance of the
Collateral Pledge and Security Agreement by the Issuer, (d) the due
authorization, execution, delivery and performance of the Indenture by the
Issuer and the Tribe, (e) the offering issuance and delivery of the
Securities to the Initial Purchasers, (f) the resale of the Securities by the
Initial Purchasers in accordance with the Purchase Agreement, (g) the
issuance and sale of the Exchange Securities, (h) the performance by the
Issuer and the Tribe of their respective obligations under the Operative
Documents in connection with the offering, issuance or sale of the Securities
pursuant to the Purchase Agreement or (i) consummation of the transactions
contemplated by the Purchase Agreement, Registration Rights Agreement,
Collateral Pledge and Security Agreement, Indenture or by the Offering
Memorandum (including the issuance and sale of the Securities and the use of
the proceeds from the sale of the Securities as described in the Offering
Memorandum under the caption "Use of Proceeds"), except in each case, such as
may be required under state "Blue Sky" laws, other New York or federal law
relating to Indian matters or BIA or NIGC rules and regulations.
(ix) The execution, delivery and performance on the date hereof of
each of the Operative Documents by the Issuer and of the Indenture by the
Tribe, and the issuance and delivery of the Securities or the Exchange
Securities and the consummation of the transactions contemplated thereby on
the date hereof (i) will not conflict with or constitute a breach of, or
default or a Debt Repayment Triggering Event under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets
of the Issuer pursuant to, or required the consent of any other party to, any
material agreements listed on Schedule I to such opinion (the "Material
Agreements"), except for such conflicts, breaches or defaults, liens, charges
or encumbrances as would not, individually or in the aggregate, result in a
Material Adverse Change, and (ii) will not result in any violation of any
federal or New York law or administrative regulation, applicable to the
Issuer or the Tribe (other than antitrust laws, state "Blue Sky" laws, New
York or federal law relating to Indian matters, BIA or NIGC rules and
regulations and, except to the extent otherwise covered by such opinion, any
antifraud laws).
(x) The Issuer is not, and, after giving effect to the offering and
the sale of the Securities and the application of the proceeds thereof as
described in the Offering Memorandum, will not be required to register as an
"investment company", as such term is defined by the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission
thereunder.
(xi) It is not necessary in connection with the Issuer's offer, sale
and delivery of the Securities to the Initial Purchasers pursuant to the
Purchase Agreement or the initial resale of the Securities by the Initial
Purchasers in the manner contemplated by the Purchase Agreement and the
Offering Memorandum, to register the Securities under the Securities Act of
1933, as amended, or, to qualify the Indenture under the Trust Indenture Act
of 1939, as amended. Such counsel need not express any opinion, however, as
to when or under what circumstances any Securities initially sold by the
Initial Purchasers may be reoffered or resold.
(xii) The Securities are eligible for resale pursuant to Rule 144A
of the Securities Act and will not be, at the Closing Date, of the same class
as securities listed on a national securities exchange registered under
Section 6 of the Exchange Act of 1934, as amended, or quoted in a U.S.
automated inter-dealer quotation system.
(xiii) The provisions of the Collateral Pledge and Security
Agreement are effective to create valid security interests in favor of the
Collateral Agent for the benefit of the Secured Parties in that portion of
the collateral described in the Collateral Pledge and Security Agreement in
which a security interest may be created under Article 9 of the UCC (the
"Collateral") as security for the payment, to the extent set forth therein,
of the Secured Obligations of the Borrower to the Secured Parties under the
Financing Documents.
(xiv) Upon execution and delivery of the Collateral Pledge and
Security Agreement regarding the Securities Account and the Securities
Entitlements carried therein, the security interest in favor of the
Collateral Agent for the benefit of the Secured Parties, to the extent set
forth therein, in the Securities Accounts and the Securities Entitlements
carried therein will be perfected.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Issuer and the
Tribe, counsel to the Issuer and the Tribe, representatives of the
independent public accountants for the Issuer and the Tribe, and
representatives of the Initial Purchasers, at which the contents of the
Offering Memorandum and related matters were discussed and, although such
counsel is not passing upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Offering Memorandum (other than as specified in opinion paragraphs (vi) and
(vii) above), and has not made any independent check or verification thereof,
during the course of such participation, no facts came to such counsel's
attention that caused them to believe that the Offering Memorandum, as of its
date or as of the date of such opinion, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, it being understood that such counsel
2
need not express any belief with respect to the financial statements or other
financial data included in, or omitted from, the Offering Memorandum.
3
EXHIBIT B
FORM OF SPECIAL INDIAN LAW COUNSEL FOR THE ISSUER AND THE TRIBE
(i) The Issuer has been duly established by Resolution CHO-00-010
authorizing its creation under Ordinance 56 and is validly existing as an
unincorporated business enterprise of the Tribe and is in good standing in
each case under the laws of the jurisdiction of its organization.
(ii) The Issuer has the requisite power and authority to own, lease
and operate its properties and to conduct its business as described in the
Offering Memorandum and to enter into and perform its obligations under the
Purchase Agreement, the Registration Rights Agreement, the Collateral Pledge
and Security Agreement, the Indenture, the Securities and, when issued, the
Exchange Securities.
(iii) The Issuer is a wholly owned business entity of the Tribe.
(iv) The Tribe is a federally recognized Indian tribe with authority
to enter into and perform its obligations under the Indenture. The
Constitution of the Tribe was validly adopted by the Tribe, is effective
according to its terms and is the governing law of the Tribe.
(v) The Tribal Chief and the Tribal Council of the Mississippi Band
of Choctaw Indians (the "Tribal Council") are the governing body of the
Tribe, with full power to bind the Tribe and to cause the Tribe to enter into
the Indenture. The Board of Directors of the Issuer (the "Board of
Directors") is the governing body of the Issuer with power to bind the Issuer
and cause the Issuer to enter into the Operative Documents, subject to
approval of the Tribal Council as to certain matters. The Tribal Chief,
Tribal Council, Board of Directors, and other officers of the Tribe and other
officers of the Issuer that have approved, authorized and executed the
Operative Documents, possess authority to execute the Operative Documents and
to bind the Tribe and the Issuer thereto, in accordance with the capacity in
which and the entity for which those documents are executed.
(vi) The Compact has been duly entered into and validly authorized
by the State of Mississippi and the Tribe, has been duly approved by the
Secretary of the Interior of the United States, such approval has been duly
published in the Federal Register, and no further action is required to make
the Compact effective.
(vii) The Gaming Code was validly adopted by the Tribal Council, and
was validly approved by the National Indian Gaming Commission, and is part of
the law of the Tribe.
(viii) The Choctaw Tribal Courts (the "Tribal Courts"), created by
the 1980 Ordinance (the "Tribal Courts Ordinance"), are validly established
judicial entities of the Tribe, and are the only tribal courts having
jurisdiction for the Tribe over all disputes (including those related to
gaming) on the lands of the Tribe. The adoption by the Tribal Council in the
Tribal Courts Ordinance (as amended) of the rules of civil and appellate
procedure, and professional and judicial conduct, to govern the Tribal Courts
and appeals to the Tribal Supreme Court are valid and effective acts of the
Tribal Council, and those rules and procedures are part of the law of the
Tribe.
(ix) There is no requirement under the Compact, or the Gaming
Ordinance, or any other law of the Tribe, that any holder of securities,
solely in his or her capacity as a holder of securities, apply for or receive
any individual license, any individual certificate, or any other individual
authorization from any federal, state, or tribal governmental authority, to
acquire or retain the rights of a holder of Securities under the Indenture.
(x) The Purchase Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Issuer, and is
enforceable against the Issuer in accordance with its terms, except as rights
to indemnification thereunder may be limited by applicable law and except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(xi) The Registration Rights Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the
Issuer, and is enforceable against the Issuer in accordance with its terms,
except as rights to indemnification thereunder may be limited by applicable
law and except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(xii) The Collateral Pledge and Security Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement
of, the Issuer, and is enforceable against the Issuer in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(xiii) The Indenture has been duly authorized, executed and
delivered by each of the Issuer and the Tribe, and constitutes a valid and
binding agreement of both the Issuer and the Tribe, enforceable against each
in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general principles of equity.
(xiv) The Securities are in the form contemplated by the Indenture,
have been duly authorized by the Issuer for issuance and sale pursuant to the
Purchase Agreement and the Indenture and, when executed by the Issuer and
authenticated by the Trustee in the manner provided in the Indenture and
delivered against payment by you of the purchase price therefor, will
constitute valid and binding obligations of the Issuer, enforceable against
the Issuer in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general principles of equity, and will
be entitled to the benefits of the Indenture.
(xv) The Exchange Securities have been duly and validly authorized
for issuance by the Issuer, and when issued and authenticated in accordance
with the terms of the Indenture and delivered in accordance with the
Registration Rights Agreement, will constitute valid and binding obligations
of the Issuer, enforceable against the Issuer in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
principles of equity.
(xvi) The statements in the Offering Memorandum under the captions
"Business--Legal Proceedings," "Business--Property," "Description of Material
Agreements," and "Description of Certain Indebtedness" insofar as such
statements constitute a description of matters of law, the Issuer's or the
Tribe's organizational documents, summaries of legal proceedings, or legal
conclusions contained in the Offering Memorandum, have been reviewed by such
counsel and fairly present and summarize, in all material respects, the
matters referred to therein.
(xvii) Except as noted in the proviso at the close of this
paragraph, no consent, approval, authorization or other order of, or
registration or filing with, any court or governmental or regulatory
authority or agency, domestic or foreign, is necessary or required in
connection with (a) the
2
due authorization, execution, delivery and performance of the Purchase
Agreement by the Issuer, (b) the due authorization, execution, delivery and
performance of the Registration Rights Agreement by the Issuer, (c) the due
authorization, execution, delivery and performance of the Collateral Pledge
and Security Agreement by the Issuer, (d) the due authorization, execution,
delivery and performance of the Indenture by the Issuer and the Tribe, (e)
the offering, issuance and delivery of the Securities to the Initial
Purchasers, (f) the resale of the Securities by the Initial Purchasers in
accordance with the Purchase Agreement, (g) the issuance and sale of the
Exchange Securities, (h) the performance by the Issuer and the Tribe of their
respective obligations under the Operative Documents in connection with the
offering, issuance and sale of the Securities pursuant to the Purchase
Agreement, or (i) consummation of the transactions contemplated by the
Purchase Agreement, Registration Rights Agreement, the Collateral Pledge and
Security Agreement, Indenture, or by the Offering Memorandum (including the
issuance and sale of the Securities and the use of the proceeds from the sale
of the Securities as described in the Offering Memorandum under the caption
"Use of Proceeds"), provided that pursuant to the Gaming Code and 25 U.S.C.
Section 2701 et. seq., the Issuer will have to secure additional tribal
gaming licenses and clearances for the Issuer, its new personnel and new
gaming machines upon completion of the Golden Moon.
(xviii) The execution, delivery and performance of each of the
Purchase Agreement, the Registration Rights Agreement, the Collateral Pledge
and Security Agreement, and the Indenture by the Issuer and of the Indenture
by the Tribe, and the issuance and delivery of the Securities or the Exchange
Securities by the Issuer and the consummation of the transaction contemplated
thereby and by the Offering Memorandum (i) will not result in any violation
of the provisions of the organizational, statutory or legal documents of the
Issuer or the Tribe, (ii) will not conflict with or constitute a breach of,
or Default or a Debt Repayment Triggering Event under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Issuer pursuant to, or require the consent of any other
party to, any Existing Instrument, except for such conflicts, breaches,
defaults, liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and (iii) will not result in
any violation of any law, administrative regulation or administrative or
court decree (including any gaming laws) applicable to the Issuer or the
Tribe.
(xix) To the best of such counsel's knowledge, the Issuer is not in
violation of its organizational documents or any law, administrative
regulation or administrative or court decree applicable to the Issuer and is
not in Default in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to which the
Issuer is a party or by which it may be bound or to which any of the property
or assets of the Issuer is subject, except in each such case for such
violations or Defaults as would not, individually or in the aggregate, result
in a Material Adverse Change.
(xx) There are no legal or governmental actions, suits or
proceedings pending or, to the best of such counsel's knowledge, threatened
(i) against or affecting the Issuer, (ii) which has as the subject thereof
any property owned or leased by the Issuer, where in any such case (A) there
is a reasonable possibility that such action, suit or proceeding might be
determined adversely to the Issuer and (B) any such action, suit or
proceeding if so determined adversely, would reasonably be expected to result
in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. To the best of such counsel's
knowledge, no material labor dispute with the employees of the Issuer exists
or, to the best of such counsel's knowledge, is threatened or imminent.
(xxi) All descriptions in the Offering Memorandum of contracts and
other documents to which the Issuer is a party are accurate in all material
respects; to the best of such counsel's knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, securities, leases or
other instruments that would be required to be described in the Offering
Memorandum that are not described or
3
referred to in the Offering Memorandum other than those described or referred
to therein, and the descriptions thereof or references thereto are correct in
all material respects.
(xxii) The waiver of sovereign immunity from unconsented suit by the
Tribe and/or the Issuer contained in each of the Operative Documents is in
compliance in all material respects with applicable federal and Tribal Law
and constitutes a valid and binding obligation of the Tribe and the Issuer,
as applicable, enforceable against the Tribe and the Issuer in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditor's rights (including, without limitation, the effect
of statutory and other laws regarding fraudulent conveyances, fraudulent
transfers and preferential transfers) and as may be limited by the exercise
of judicial discretion and the application of principles of equity including,
without limitation, requirements of good faith, fair dealing, conscionability
and materiality (regardless of whether the Operative Document is considered
in a proceeding of law or in equity).
(xxiii) The choice of governing law by the Tribe and the Issuer
contained in each of the applicable Operative Documents is in compliance in
all material respects with applicable federal and Tribal Law and constitutes
a valid and binding obligation of the Tribe and the Issuer, enforceable
against the Tribe and the Issuer in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditor's
rights (including, without limitation, the effect of statutory and other laws
regarding fraudulent transfers and preferential transfers) and as may be
limited by the exercise of judicial discretion and the application of
principles of equity including, without limitation, requirements of good
faith, fair dealing, conscionability and materiality (regardless of whether
the Operative Agreement is considered in a proceeding at law or in equity).
4
EXHIBIT C
FORM OF SPECIAL COUNSEL FOR THE ISSUER
(i) The Indenture, the Collateral Pledge and Security Agreement and
the Securities do not contain any provisions that effect changes or additions
to the forms of such documents authorized by the Tribe and the Issuer that
are materially adverse to the interests of the Tribe or the Issuer.
EXHIBIT D
FORM OF SPECIAL INDIAN LAW COUNSEL FOR THE ISSUER
(i) With respect to federal Indian law, no consent, approval,
authorization or other order of, or registration or filing with, any court or
governmental or regulatory authority or agency, domestic or foreign, is
necessary or required in connection with (a) the due authorization,
execution, delivery and performance of the Purchase Agreement by the Issuer,
(b) the due authorization, execution, delivery and performance of the
Registration Rights Agreement by the Issuer, (c) the due authorization,
execution, delivery and performance by the Issuer of the Collateral Pledge
and Security Agreement, (d) the due authorization, execution, delivery and
performance of the Indenture by the Issuer and the Tribe, (e) the offering,
issuance, and delivery of the Securities to the Initial Purchasers, (f) the
resale of the Securities by the Initial Purchasers in accordance with the
Purchase Agreement, (g) the issuance and the sale of the Exchange Securities,
(h) the performance by the Issuer and the Tribe of their respective
obligations under the Operative Documents, in connection with the offering,
issuance and sale of the Securities pursuant to the Purchase Agreement, or
(i) consummation of the transactions contemplated by the Purchase Agreement,
Registration Rights Agreement, the Collateral Pledge and Security Agreement,
Indenture, or by the Offering Memorandum (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the Securities as
described in the Offering Memorandum under the caption "Use of Proceeds").
(ii) The execution, delivery and performance as of the date hereof
by the Issuer and the Tribe, as applicable, of the Indenture, the Purchase
Agreement, the Registration Rights Agreement, the Collateral Pledge and
Security Agreement, the issue and sale of the Securities and the consummation
as of the date hereof by the Issuer and the Tribe of the transactions
contemplated thereby and by the Offering Memorandum do not to such counsel's
knowledge, violate any federal statute or regulation applicable to the Issuer
or the Tribe (other than with respect to federal securities statues and
regulations, certain matters with respect to which are addressed in the
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇).
(iii) The waiver of sovereign immunity from unconsented suit by the
Tribe and/or the Issuer contained in each of the Operative Documents is in
compliance in all material respects with applicable federal Indian law.
(iv) There is no requirement under the Indian Gaming Regulatory Act
of 1988 that any holder of Securities, solely in his or her capacity as a
holder of Securities, apply for or receive any individual license,
certificate or other authorization from any federal authority to acquire or
retain the rights of a holder of Securities under the Indenture.
(v) No consent, approval, authorization or other order of, or
registration or filing with the Department of the Interior or the National
Indian Gaming Commission is necessary or required in connection with (a) the
due authorization, execution, delivery and performance of the Purchase
Agreement by the Issuer, (b) the due authorization, execution, delivery and
performance of the Registration Rights Agreement by the Issuer, (c) the due
authorization, execution, delivery and performance by the Issuer of the
Collateral Pledge and Security Agreement, (d) the due authorization,
execution, delivery and performance of the Indenture by the Issuer and the
Tribe, (e) the offering, issuance, sale and delivery of the Securities to the
Initial Purchasers, (f) the resale of the Securities by the Initial
Purchasers in accordance with the Purchase Agreement, (g) the issuance and
the sale of the Exchange Securities, (h) the performance by the Issuer and
the Tribe of their respective obligations under the Operative Documents in
connection with the offering, issuance and sale of the Securities pursuant to
the Purchase Agreement, or (i) consummation of the transactions contemplated
by the Purchase
Agreement, Registration Rights Agreement, the Collateral Pledge and Security
Agreement, Indenture, or by the Offering Memorandum (including the issuance
and sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Offering Memorandum under the caption "Use of
Proceeds").
(vi) Nothing contained in the Gaming Regulations would prevent the
Purchase Agreement, the Securities, the Indenture or the Registration Rights
Agreement from being the valid and binding obligation of the Issuer and the
Tribe, as applicable, enforceable against the Issuer in accordance with its
terms.
(vii) No taxes, fees and other charges are required under the Gaming
Regulations or other laws to be paid in connection with the execution,
delivery and performance of the Operative Documents.
(viii) Neither the Trustee nor any holder of the Securities
(collectively referred to as "Persons") is required, solely by reason of the
transactions referred to in the Operative Documents, or the exercise of the
remedies provided for the Operative Documents, to be found suitable to or be
licensed under the Gaming Regulations.
(ix) The statements in the Offering Memorandum under the captions
"Risk Factors - A change in our current non-taxable status could have a
material adverse effect on our cash flow and our ability to fulfill our
obligations under the Notes," "Risk Factors - Any adverse changes in the laws
regulating our gaming operations could have a material adverse effect on our
ability to conduct gaming operations and to fulfill our obligations under the
Notes," "Risk Factors - Your ability to enforce your rights against us or the
Tribe is limited by the Tribe's sovereign immunity and internal dispute
resolution process. If you are unable to enforce your rights, you may loose
your entire investment in the Notes," "Risk Factors - Neither the Tribe nor
we may be subject to the United States Bankruptcy Code, which could impair
the ability of the holders to realize on our assets," and "Government
Regulation," insofar as such statements constitute a description of matters
of law, summaries of legal proceedings, or legal conclusions contained in the
Offering Memorandum, have been reviewed by such counsel and fairly present
and summarize, in all material respects, the matters referred to therein.
2
Annex A
Resale Pursuant to Regulation S of Rule 144A
Each Initial Purchaser understands that:
(i) The Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Securities in the United States or
to, or for the benefit or account of, a U.S. Person (other than a
distributor), in each case, as defined in Rule 902 under the Securities
Act (A) as part of its distribution at any time and (B) otherwise until
40 days after the later of the commencement of the offering of the
Securities pursuant hereto and the Closing Date, other than in
accordance with Regulation S of the Securities Act or another exemption
from the registration requirements of the Securities Act. Such Initial
Purchaser agrees that, during such 40-day restricted period, it will
not cause any advertisement with respect to the Securities (including
any "tombstone" advertisement) to be published in any newspaper or
periodical or posted in any public place and will not issue any
circular relating to the Securities, except such advertisements as
permitted by and include the statements required by Regulation S.
(ii) The Initial Purchaser agrees that, at or prior to
confirmation of a sale of Securities by it to any distributor, dealer
or person receiving a selling concession, fee or other remuneration
during the 40-day restricted period referred to in Rule 903(c)(3) under
the Securities Act, it will send to such distributor, dealer or person
receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered and sold within the United
States or to, or for the account or benefit of, U.S. persons
(i) as part of your distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the
Offering and the Closing Date, except in either case in
accordance with Regulation S under the Securities Act (or Rule
144A or to Accredited Institutions in transactions that are
exempt from the registration requirements of the Securities
Act), and in connection with any subsequent sale by you of the
Securities covered hereby in reliance on Regulation S during
the period referred to above to any distributor, dealer or
person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the
foregoing effect. Terms used above have the meanings assigned
to them in Regulation S."