PURCHASE AGREEMENT

EXHIBIT 1

 

 

ISLE OF CAPRI CASINOS, INC.

(a Delaware corporation)

 

7% Senior Subordinated Notes Due 2014

 

PURCHASE AGREEMENT

 

Dated: February 19, 2004

 

 

Table of Contents

 

PURCHASE AGREEMENT

 

 

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SCHEDULES

 

 

EXHIBITS

 

Exhibit A-1 - Form of Opinion of Company’s Counsel

 

Exhibit A-2 - Form of Opinion of In-House Counsel

 

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ISLE OF CAPRI CASINOS, INC.

(a Delaware corporation)

 

$500,000,000

7% Senior Subordinated Notes due 2014

 

PURCHASE AGREEMENT

 

February 19, 2004

 

DEUTSCHE BANK SECURITIES INC.

CIBC WORLD MARKETS CORP.

as Representatives of the several Initial Purchasers

 

c/o	Deutsche Bank Securities Inc.

 

60 Wall Street

 

New York, New York 10005

 

Ladies and Gentlemen:

 

Isle of Capri Casinos, Inc., a Delaware corporation (the “ Company ”), Riverboat Corporation of Mississippi, a Mississippi corporation (“ RCM ”), Riverboat Corporation of Mississippi-Vicksburg, a Mississippi corporation (“ RCM-Vicksburg ”), Riverboat Services, Inc., an Iowa corporation (“ RSI ”), CSNO, L.L.C., a Louisiana limited liability company (“ CSNO ”), Louisiana Riverboat Gaming Partnership, a Louisiana general partnership (“ LRGP ”), St. Charles Gaming Company, Inc., a Louisiana corporation (“ SCGC ”), IOC Holdings, L.L.C., a Louisiana limited liability company (“ IOCH ”), Grand Palais Riverboat, Inc., a Louisiana corporation (“ GPRI ”), LRGP Holdings, L.L.C., a Louisiana corporation (“ LRGP Holdings ”), P.P.I., Inc., a Florida corporation (“ PPI ”), Isle of Capri Casino Colorado, Inc., a Colorado corporation (“ Isle Colorado ”), IOC-Coahoma, Inc., a Mississippi corporation (“ IOC-Coahoma ”), IOC-Natchez, Inc., a Mississippi corporation, (“ Isle-Natchez ”), IOC-Lula, Inc., a Mississippi corporation (“ Isle-Lula ”), IOC-Boonville, Inc., a Nevada Corporation (“ Isle-Boonville ”), IOC-Kansas City, Inc., a Missouri corporation (“ Isle-Kansas City ”), Isle of Capri Bettendorf, L.C., an Iowa limited liability company (“ Isle-Bettendorf ”), Isle of Capri Marquette, Inc., an Iowa corporation (“ Isle-Marquette ”), IOC-Davenport, Inc., an Iowa corporation (“ Isle-Davenport ”), LL Holding Corporation, a Nevada corporation (“ LLHC ”) and Gemini, Inc., a Nevada corporation (“ Gemini ” and together with RCM, RCM-Vicksburg, RSI, CSNO, LRGP, SCGC, IOCH, GPRI, LRGP Holdings, PPI, Isle Colorado, IOC-Coahoma, Isle-Natchez, Isle-Lula, Isle-Boonville, Isle-Kansas City, Isle-Bettendorf, Isle-Marquette, Isle-Davenport and LLHC, the “ Subsidiary Guarantors ”), confirm their agreement with Deutsche Bank Securities Inc. (“ DBSI ”), CIBC World Markets Corp. (“ CIBC ”) and each of the other Initial Purchasers named in Schedule A hereto (together with DBSI, the “Initial Purchasers,” which term shall also include any initial purchaser substituted as hereinafter provided in Section 11 hereof), for whom DBSI and CIBC are acting as representatives (in such capacity, the “ Representatives ”), with respect to the issue and sale by the

 

Company and the purchase by the Initial Purchasers, acting severally and not jointly, of the respective principal amounts set forth in said Schedule A of $500,000,000 aggregate principal amount of the Company’s Senior Subordinated Notes due 2014 (the “ Notes ”).

 

The Notes are to be issued pursuant to an indenture to be dated as of the Closing Time (as defined in Section 2(b)) (the “ Indenture ”) among the Company, the Subsidiary Guarantors and U.S. Bank National Association, as trustee (the “ Trustee ”). The Notes will be unconditionally guaranteed by the Subsidiary Guarantors on a senior subordinated basis pursuant to the terms of the Indenture (the “ Subsidiary Guarantees ”). As used herein, the term “ Securities ” shall include the Notes and the Subsidiary Guarantees. Notes issued in book-entry form will be issued to Cede & Co. as nominee of The Depository Trust Company (“ DTC ”) pursuant to a letter agreement, to be dated on or prior to the Closing Time (the “ DTC Agreement ”), between the Company and DTC. As used herein, the term “ Operative Documents ” refers to this Agreement, the Notes, the Subsidiary Guarantees, the Indenture, that certain Registration Rights Agreement among the parties hereto (the “ Registration Rights Agreement ”), and the notes and the subsidiary guarantees to be issued in exchange for the Securities pursuant to the Registration Rights Agreement.

 

Concurrently with the offering of the Securities, the Company is conducting a tender offer and consent solicitation (the “ Tender Offer ”) with respect to the Company’s outstanding 8¾% Senior Subordinated Notes due 2009 (the “ 8¾% Notes ”).

 

The Company and the Subsidiary Guarantors understand that the Initial Purchasers propose to make an offering of the Securities on the terms and in the manner set forth herein and agree that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion of the Securities to purchasers (“ Subsequent Purchasers ”) at any time after this Agreement has been executed and delivered. The Securities are to be offered and sold through the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “ 1933 Act ”), in reliance upon exemptions therefrom. Pursuant to the terms of the Securities and the Indenture, investors that acquire Securities may resell or otherwise transfer such Securities only if such Securities are hereafter registered under the 1933 Act or if an exemption from the registration requirements of the 1933 Act is available (including the exemption afforded by Rule 144A (“ Rule 144A ”) or Regulation S (“ Regulation S ”) of the rules and regulations promulgated under the 1933 Act by the Securities and Exchange Commission (the “ Commission ”)).

 

The Company has prepared and will deliver to each Initial Purchaser, prior to the Closing Time, copies of a final offering memorandum (the “ Final Offering Memorandum ”) for use by such Initial Purchaser in connection with its confirmation of purchases of, or offering of, the Securities. “ Offering Memorandum ” means, with respect to any date or time referred to in this Agreement, the most recent offering memorandum (whether the Final Offering Memorandum or any amendment or supplement to such document), including any documents incorporated therein by reference, which has been prepared and delivered by the Company to the Initial Purchasers in connection with their confirmation of purchases of, or offering of, the Securities.

 

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

 

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schedules and other information which are incorporated by reference in the Offering Memorandum; and all references in this Agreement to amendments or supplements to the Offering Memorandum shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934 (the “ 1934 Act ”) which is incorporated by reference in the Offering Memorandum.

 

SECTION 1. Representations and Warranties by the Company and Subsidiary Guarantors . The Company and the Subsidiary Guarantors represent and warrant to each Initial Purchaser as of the date hereof and as of the Closing Time referred to in Section 2(b) hereof, and agree with each Initial Purchaser, as follows:

 

(i) Offering Memorandum . The Offering Memorandum does not, and at the Closing Time 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 relating to an Initial Purchaser furnished to the Company in writing by any Initial Purchaser through the Representatives expressly for use in the Offering Memorandum.

 

(ii) Incorporated Documents . The Offering Memorandum as delivered from time to time shall incorporate by reference the most recent Annual Report of the Company on Form 10-K filed with the Commission and each Quarterly Report of the Company on Form 10-Q and each Current Report of the Company on Form 8-K filed with the Commission since the end of the fiscal year to which such Annual Report relates. The documents incorporated or deemed to be incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “ 1934 Act Regulations ”), and, when read together with the other information in the Offering Memorandum, at the time the Offering Memorandum was issued and at the Closing Time, did not and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(iii) Independent Accountants . The accountants who certified the financial statements and supporting schedules included in the Offering Memorandum are independent public accountants with respect to the Company and its subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants and its interpretations and rulings thereunder. As used herein, “subsidiaries” has the meaning ascribed thereto in Regulation S-X under the 1933 Act.

 

(iv) Financial Statements . The financial statements, together with the related notes, included in the Offering Memorandum present fairly in all material

 

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respects the financial condition of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles (“ GAAP ”) applied on a consistent basis throughout the periods involved, except (in the case of those supplying quarterly information) as to the absence of footnotes and subject to normal year-end adjustments. The selected historical financial data and the summary financial information included in the Offering Memorandum present fairly, in all material respects, the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Offering Memorandum. Except as set forth in the Offering Memorandum, the historical consolidated financial statements of the Company together with the notes thereto forming part of the Offering Memorandum comply as to form in all material respects with the requirements applicable to financial statements required to be included in registration statements on Form S-3 under the 1933 Act. The forward-looking statements contained in the Offering Memorandum are based upon good faith estimates and assumptions believed by the Company and the Subsidiary Guarantors to be reasonable at the time made.

 

(v) No Material Adverse Change . Since the respective dates as of which information is given in the Offering Memorandum, except as otherwise stated therein, (A) there has been no event or condition that could be reasonably expected to result in a material adverse change in the condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a “ Material Adverse Effect ”) (it being understood that the Company not being selected as a finalist by the Illinois Gaming Board pursuant to its pending application shall not be considered such a material adverse change), (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.

 

(vi) Good Standing of the Company . The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Final Offering Memorandum and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.

 

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(vii) Good Standing of Designated Subsidiaries . Each Subsidiary Guarantor and each other “significant subsidiary” of the Company (as such term is defined in Rule 1-02 of Regulation S-X) (collectively, the “ Designated Subsidiaries ”) has been duly organized and is validly existing as an entity in good standing under the laws of the jurisdiction of its incorporation, has all requisite power (corporate or otherwise) and authority to own, lease and operate its properties and to conduct its business as described in the Final Offering Memorandum and 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 where the failure to so qualify or to be in good standing would not result in a Material Adverse Effect; except as otherwise disclosed in the Offering Memorandum, all of the issued and outstanding capital stock of each Designated Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through wholly-owned subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of the Designated Subsidiaries was issued in violation of any preemptive or similar rights of any securityholder of such Designated Subsidiary.

 

(viii) Capitalization . The shares of issued and outstanding capital stock of the Company and each of its subsidiaries have been duly authorized and validly issued and are fully paid and non-assessable; none of the outstanding shares of capital stock of the Company or any of its subsidiaries was issued in violation of the preemptive or other similar rights of any securityholder of the Company or any of its subsidiaries.

 

(ix) Authorization of Agreements . This Agreement has been duly authorized, executed and delivered by the Company and the Subsidiary Guarantors and is a legal, valid and binding agreement of the Company and the Subsidiary Guarantors enforceable against each of them in accordance with its terms except as the enforcement hereof may be limited by (A) bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally, (B) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and (C) with respect to rights of indemnification or contribution, federal or state securities laws or principles of public policy. The Registration Rights Agreement has been duly authorized and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a legal, valid and binding agreement of the Company and the Subsidiary Guarantors enforceable against each of them in accordance with its terms except as the enforcement thereof may be limited by (A) bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally, (B) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and (C) with respect to rights of

 

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indemnification or contribution, federal or state securities laws or principles of public policy.

 

(x) Authorization of the Indenture . The Indenture has been duly authorized by the Company and the Subsidiary Guarantors and, when executed and delivered by the Company, the Subsidiary Guarantors and the Trustee, will constitute a valid and binding agreement of the Company and the Subsidiary Guarantors, enforceable against each of them in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

 

(xi) Authorization of the Securities . The Notes and the Subsidiary Guarantees have been duly authorized and, at the Closing Time, will have been duly executed by the Company and the Subsidiary Guarantors, respectively, and, when authenticated, issued, executed and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in this Agreement, will constitute valid and binding obligations of the Company and the Subsidiary Guarantors, respectively, enforceable against them in accordance with their terms, and the notes and subsidiary guarantees to be issued in exchange for the Securities pursuant to the Registration Rights Agreement have been duly and validly authorized by the Company and the Subsidiary Guarantors, respectively, and if and when duly authenticated in accordance with the terms of the Indenture and delivered in accordance with the exchange offer provided for in the Registration Rights Agreement, will constitute valid and binding obligations of the Company and the Subsidiary Guarantors, respectively, enforceable against them in accordance with their terms, except in each case as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture.

 

(xii) Description of Certain Operative Agreements . The Securities, the Indenture and the Registration Rights Agreement will conform in all material respects to the respective statements relating thereto contained in the Final Offering Memorandum.

 

(xiii) Absence of Defaults and Conflicts . None of the Company or any of its subsidiaries is in violation of its charter or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which any of them may be bound, or to which

 

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any of the property or assets of the Company or any of its subsidiaries is subject (collectively, “ Agreements and Instruments ”) except for such defaults that would not, individually or in the aggregate, result in a Material Adverse Effect; and the execution, delivery and performance of this Agreement, the Indenture, the Registration Rights Agreement, the Securities and any other agreement or instrument entered into or issued or to be entered into or issued by the Company or any Subsidiary Guarantor in connection with the transactions contemplated hereby and the consummation of the transactions contemplated herein and therein (including the issuance and sale of the Securities, the conducting and consummation of the Tender Offer and the use of the proceeds from the sale of the Securities as described in the Offering Memorandum under the caption “ Use of Proceeds ”) and compliance by the Company and the Subsidiary Guarantors with their obligations hereunder and under the Operative Agreements have been duly authorized by all necessary action (corporate or otherwise) and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or a Repayment 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 Company or any of its subsidiaries pursuant to the Agreements and Instruments, except for such conflicts, breaches or defaults or liens, charges or encumbrances that are disclosed in the Offering Memorandum or that, singly or in the aggregate, would not result in a Material Adverse Effect, nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any of its subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their assets, properties or operations. As used herein, a “Repayment Event” means any event or condition which gives 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 Company or any of its subsidiaries.

 

(xiv) Absence of Labor Dispute . No labor dispute with the employees of the Company or any subsidiary exists or, to the knowledge of the Company, is threatened, and the Company is not aware of any existing or threatened labor disturbance by the employees of its or any subsidiary’s principal suppliers, manufacturers or contractors, which, in either case, may reasonably be expected to result in a Material Adverse Effect. None of the Company and its subsidiaries has violated (i) any federal, state or local law or foreign law relating to discrimination in hiring, promotion or pay of employees, (ii) any applicable wage or hour laws or (iii) any provision of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), or the rules and regulations thereunder, which in any such event could be reasonably expected to have a Material Adverse Effect.

 

(xv) Absence of Proceedings . Except as disclosed in the Offering Memorandum, there is no (a) action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or

 

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affecting the Company or any of its subsidiaries, (b) statute, rule, regulation or order that has been enacted, adopted or issued by any governmental agency or that has, to the Company’s knowledge, been proposed by any governmental body and that could be reasonably expected to be enacted, adopted or issued or (c) injunction, restraining order or order of any nature by a federal or state court of competent jurisdiction that has been issued in each case which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the properties or assets of the Company or any of its subsidiaries or the consummation of the transactions contemplated by the Operative Documents or the performance by the Company and the Subsidiary Guarantors of their obligations hereunder. The aggregate of all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective property or assets is the subject which are not described in the Offering Memorandum, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Material Adverse Effect.

 

(xvi) Possession of Intellectual Property . The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate licenses, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “ Intellectual Property ”) necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, individually or in the aggregate, would result in a Material Adverse Effect.

 

(xvii) Absence of Further Requirements . Except as disclosed in the Offering Memorandum, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency (including without limitation the Louisiana Gaming Control Board, the Louisiana Riverboat Gaming Enforcement Division of the Louisiana State Police, the Mississippi Gaming Commission, the Florida Department of Business and Professional Regulation Division of Pari-Mutuel Wagering, the Colorado Department of Revenue Division of Gaming, the Colorado Limited Control Gaming Commission, the Missouri Gaming Commission and the Iowa Racing and Gaming Commission (collectively the “ Gaming Authorities ”)) or any other person is necessary or required for the performance by the Company and the Subsidiary Guarantors of their obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement or for the due execution, delivery or performance of the Indenture by the Company and the Subsidiary Guarantors, except such as

 

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have been already obtained or made prior to the Closing Time or as may be required to be obtained under the 1933 Act and state securities laws as provided in the Registration Rights Agreement.

 

(xviii) Possession of Licenses and Permits . The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “ Governmental Licenses ”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies, including without limitation the Gaming Authorities, necessary to conduct the business now operated by them, except where failure to possess such Governmental Licenses would not, individually or in the aggregate, have a Material Adverse Effect; the Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, individually or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; and no event has occurred which would allow, after notice or passage of time or both, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to, the revocation or modification of any such Governmental Licenses which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. To the knowledge of the Company no facts or circumstances exist that could be reasonably expected to prevent the renewal of the existing Governmental Licenses of the Company and its subsidiaries or result in a materially adverse modification of such existing Governmental Licenses in connection with the annual or other periodic gaming license renewal process undertaken by any Gaming Authority. Neither the Company nor any of its subsidiaries has any reason to believe that any Governmental License necessary to conduct their business as described in the Offering Memorandum will not be granted or renewed upon application therefore or that any relevant Gaming Authority is considering any suspension, revocation, limitation or modification of any such Governmental License.

 

(xix) Title to Property . The Company and its subsidiaries have good and marketable title to all real property owned by the Company and its subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (a) are described in the Offering Memorandum or (b) do not, individually or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds properties described in the Offering Memorandum, are in full force and effect, and neither the Company nor any of its subsidiaries has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of its subsidiaries under any of the leases or subleases mentioned

 

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above, or affecting or questioning the rights of the Company or any subsidiary thereof to the continued possession of the leased or subleased premises under any such lease or sublease.

 

(xx) Environmental Laws . Except as described in the Offering Memorandum and except such matters as would not, individually or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, legally binding policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, safety 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 the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “ Hazardous Materials ”) or to the generation, manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “ Environmental Laws ”), (B) the Company and its subsidiaries have all Governmental Licenses required under any or all applicable Environmental Laws and are each in compliance with their requirements or such Governmental Licenses, (C) there are no pending or, to the Company’s knowledge, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations or proceedings relating to or arising out of any Environmental Law against the Company or any of its subsidiaries and (D) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or Environmental Laws.

 

(xxi) Investment Company Act . The Company is not, and upon the issuance and sale of the Notes as herein contemplated and the application of the net proceeds therefrom as described in the Offering Memorandum will not be, an “investment company” or an entity “controlled” by an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended (the “ 1940 Act ”).

 

(xxii) Similar Offerings . Neither the Company nor any of its affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each, an “ Affiliate ”), has, directly or indirectly through any agent (provided no representation is made as to the Initial Purchasers or any person acting on their behalf), solicited any offer to buy, sold or offered to sell or otherwise negotiated in respect of, or will solicit any offer to buy, sell or offer to sell or otherwise negotiate in respect of, in the United States or to any United States citizen or 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 1933 Act.

 

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(xxiii) Rule 144A Eligibility . The Securities are eligible for resale pursuant to Rule 144A (assuming the accuracy of and compliance by the Initial Purchasers with their representations, warranties and covenants in Section 6 hereof) and will not be, at the Closing Time, of the same class as securities listed on a national securities exchange registered under Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer quotation system.

 

(xxiv) No General Solicitation . None of the Company, its Affiliates or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) 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 1933 Act.

 

(xxv) No Registration Required . Subject to compliance by the Initial Purchasers with the representations and warranties set forth in Section 2 and the procedures set forth in Section 6 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 1933 Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”). The Indenture complies as to form, in all material respects, with the requirements of the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder. No stop order or similar order or decree preventing the use of the Offering Memorandum or any order or decree asserting that any of the transactions contemplated by this Agreement are subject to the registration requirements of the 1933 Act has been issued or, to the knowledge of the Company, is threatened.

 

(xxvi) Reporting Company . The Company is subject to the reporting requirements of Section 13 or Section 15(d) of the 1934 Act.

 

(xxvii) No Directed Selling Efforts . With respect to those Securities sold in reliance on Regulation S, (A) none of the Company, its Affiliates or any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (B) each of the Company and its Affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) has complied and will comply with the offering restrictions requirement of Regulation S.

 

(xxviii) Taxes and Tax Returns . All United States federal income tax returns of the Company and its subsidiaries required by law to be filed on or prior to the date hereof and, at the Closing Time, on or prior to the Closing Time, have been filed and all taxes due pursuant to such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. The United States federal income tax returns of the Company through

 

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the Company’s 1998 fiscal year have been settled and no assessment in connection therewith has been made against the Company. The Company and its subsidiaries have filed all other tax returns that are required to have been filed by them pursuant to any applicable foreign, state, local or other law except insofar as the failure to file such returns would not result in a Material Adverse Effect, and has paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company or its subsidiaries, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided.

 

(xxix) Internal Accounting . The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (C) access to assets is permitted only in accordance with management’s general or specific authorization and (D) the recorded accounting for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(xxx) Insurance . The Company and its subsidiaries carry or are entitled to the benefits of insurance in such amounts and covering such risks as the Company reasonably believes to be prudent for the business and operations of the Company and its subsidiaries. All such insurance is in full force and effect. None of the Company or its subsidiaries has received notice from any insurer or agent of any insurer that substantial capital improvements or other expenditures will be required in order to continue such insurance coverage.

 

(xxxi) Registration Rights . Except for the rights to be granted pursuant to the Registration Rights Agreement, there are no persons with registration rights or other similar rights to have any securities registered pursuant to the registration statement to be filed pursuant to the Registration Rights Agreement or otherwise registered by the Company under the 1933 Act.

 

(xxxii) Solvency . The Company and the Subsidiary Guarantors are, and immediately after the Closing Time will be, Solvent. As used herein, the term “Solvent” means, with respect to any person on a particular date, that on such date (A) the fair market value of the assets of such person is greater than the total amount of liabilities (including contingent liabilities) of such person, (B) the present fair salable value of the assets of such person is greater than the amount that will be required to pay the probable liabilities of such person on its debts as they become absolute and matured, (C) such person is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (D) such person does not have unreasonably small capital. Upon the issuance of the Securities, the assets of the Company and the Subsidiary Guarantors will not constitute unreasonably small capital to carry out their respective businesses as described in the Offering Memorandum, including capital needs of

 

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the Company and the Subsidiary Guarantors taking into account projected capital requirements and capital availability.

 

(xxxiii) No Default on Senior Indebtedness . No event of default exists under any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument constituting Senior Indebtedness (as defined in the Indenture).

 

(xxxiv) Market Manipulation . None of the Company, its subsidiaries or any of their respective officers, directors or controlling persons has taken, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.

 

(xxxv) Affiliate Transaction . No relationship, direct or indirect, exists between or among any of the Company or any Affiliate of the Company, on the one hand, and any director, officer, stockholder, customer or supplier of any of them, on the other hand, that would be required to be disclosed in a registration statement on Form S-3 pursuant to the 1933 Act or by rules and regulations promulgated thereunder by the Commission which is not described in the Offering Memorandum or is not described as would be so required.

 

(xxxvi) Information . The Company has not distributed and, prior to the later to occur of (i) the Closing Time and (ii) completion of the distribution of the Securities, will not distribute any offering material in connection with the offering and sale of the Securities other than the Final Offering Memorandum or other materials, if any, permitted by the 1933 Act and approved by the Representatives.

 

(xxxvii) Regulations T, U and X . None of the execution, delivery and performance of this Agreement, the issuance and sale of the Securities, the application of the proceeds from the issuance and sale of the Securities and the consummation of the transactions contemplated thereby as set forth in the Offering Memorandum, will violate Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System.

 

(xxxviii) Events of Default . Assuming that the Indenture had been executed and delivered prior to or as of the date hereof, there exist no conditions that would constitute a default (or an event which with notice or the lapse of time, or both, would constitute a default) under the Indenture.

 

(xxxix) Brokerage . Except pursuant to this Agreement, there are no contracts, agreements or understandings between either of the Company or any of its subsidiaries and any other person that would give rise to a valid claim against the Initial Purchasers for a brokerage commission, finder’s fee or like payment in connection with the issuance, purchase and sale of the Securities. The Company and the Subsidiary Guarantor will hold harmless and indemnify each of the Initial Purchasers and each person affiliated with or under common control with Initial

 

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Purchaser for all losses, liabilities, claims, damages and expenses incurred by the Initial Purchasers as a result of the incurrence of a breach of the representation contained in this paragraph (xxxix).

 

(xl) Public Officials . None of the Company, any of its subsidiaries or, to the Company’s knowledge, any affiliate or representative acting on behalf of the Company or any of its subsidiaries has at any time (A) made any unlawful contribution relating to political activity or (B) made any payment to any federal, state or local government officer or official, or any other person charged with similar public or quasi-public duties, or customers or suppliers other than payments which do not constitute a violation of the law of the United States or any jurisdiction thereof.

 

SECTION 2. Sale and Delivery to Initial Purchasers; Closing .

 

(a) Notes . On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Initial Purchaser, severally and not jointly, and each Initial Purchaser, severally and not jointly, agrees to purchase from the Company, at the price set forth in Schedule B, the aggregate principal amount of Notes set forth in Schedule A opposite the name of such Initial Purchaser, plus any additional principal amount of Notes which such Initial Purchaser may become obligated to purchase pursuant to the provisions of Section 11 hereof, and the Subsidiary Guarantors agree to execute and deliver the Subsidiary Guarantees of such Notes.

 

(b) Payment . Payment of the purchase price for, and delivery of certificates for, the Notes shall be made at the office of Cahill Gordon & Reindel LLP , 80 Pine Street, New York 10005, or at such other place as shall be agreed upon by the Representatives and the Company, at 10:00 A.M. (eastern time) on March 3, 2004 (unless postponed in accordance with the provisions of Section 11), or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company (such time and date of payment and delivery being herein called the “ Cl