Exhibit 10.1


 


EXECUTION COPY


 


HARRAH’S
OPERATING COMPANY, INC.

HARRAH’S ENTERTAINMENT, INC.


 


$750,000,000


 


5.625%
Senior Notes due 2015



Payment of Principal, Interest and 

Premium, if any, Guaranteed by



Harrah’s Entertainment, Inc.


 


PURCHASE
AGREEMENT


 


New York, New York


May 19, 2005


 


Citigroup Global Markets
Inc.


Greenwich Capital
Markets, Inc.


As Representatives of the
Initial Purchasers


c/o Citigroup Global
Markets Inc.


388 Greenwich Street, 37th
Floor


New York, New York 10013


 


 


Ladies and Gentlemen:


 


Harrah’s Operating Company, Inc., a Delaware
corporation (the “Company”), proposes to issue and sell to the several
parties named below (the “Initial Purchasers”), for whom you are acting
as Representatives (the “Representatives”), $750,000,000 principal amount of
its 5.625% Senior Notes due 2015 (the “Notes”) payment of principal,
interest and premium, if any, in respect of which notes are to benefit from the
guarantee (the “Guarantee”) of Harrah’s Entertainment, Inc., a Delaware
corporation (the “Guarantor”) (such notes, together with such guarantee,
the “Securities”).  The Securities
are to be issued under an indenture (the “Indenture”) to be dated as of
May 27, 2005, among the Company, the Guarantor and U.S. Bank National
Association, as trustee (the “Trustee”). 
The Securities will have the benefit of a registration rights agreement
(the “Registration Rights Agreement”) to be dated as of May 27, 2005,
among the Company, the Guarantor and the Initial Purchasers, pursuant to which
the Company and the Guarantor have agreed to register the Securities under the
Securities Act, subject to the terms and conditions therein specified.  The sale of the Securities to the Initial
Purchasers will be made without registration of the Securities under the
Securities Act in reliance upon exemptions from the registration requirements
of the Securities Act.


 


In connection with the sale of the Securities, the
Company and the Guarantor have prepared an Offering Memorandum dated May 19,
2005 (including any information incorporated by reference therein, the “Offering
Memorandum”).  The Offering
Memorandum sets forth certain information concerning the Company, the Guarantor
and the Securities.  Unless stated to 


 





















 


the contrary, all references herein to the Offering Memorandum are to
the Offering Memorandum at the Execution Time and are not meant to include any
amendment or supplement, or any information incorporated by reference therein,
subsequent to the Execution Time.  The
Company hereby confirms that it has authorized the use of the Offering
Memorandum, and any amendment or supplement thereto, in connection with the
offer and sale of the Securities by the Initial Purchasers.


 


To the extent there are no additional parties listed
in the table below other than you, the term “Representatives” as used herein
shall mean the Initial Purchasers, and the term Representatives and Initial
Purchasers shall mean either the singular or plural as the context
requires.  The use of the neuter in this
Agreement shall include the feminine and masculine wherever appropriate.  Certain terms used herein are defined in
Section 9 of Annex I hereto.  Unless
stated to the contrary, any references herein to the terms “amend,” “amendment”
or “supplement” with respect to the Offering Memorandum shall be deemed to
refer to and include any information filed under the Exchange Act subsequent to
the Execution Time that is incorporated by reference therein.


 


Subject to the terms and conditions, and in reliance
upon the representations and warranties, set forth or incorporated by reference
herein, the Company hereby agrees to sell to the several Initial Purchasers,
and each Initial Purchasers agrees, severally and not jointly, to purchase from
the Company, the respective principal amounts of Securities set forth below
opposite its name at a purchase price of 98.803% of the principal amount of
Securities, plus accrued interest, if any, from May 27, 2005 to the date of
payment and delivery:


 


	
  Initial Purchaser

  	
   

  	
  Principal Amount of

  Securities

  to Be Purchased

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Citigroup Global
  Markets Inc.

  	
   

  	
  $

  	
  259,950,000

  	
   

  
	
  Greenwich
  Capital Markets, Inc.

  	
   

  	
  $

  	
  259,950,000

  	
   

  
	
  Wells Fargo
  Securities, LLC

  	
   

  	
  $

  	
  29,460,000

  	
   

  
	
  Bank of America
  Securities LLC

  	
   

  	
  $

  	
  29,460,000

  	
   

  
	
  Barclays Capital
  Inc.

  	
   

  	
  $

  	
  28,920,000

  	
   

  
	
  Commerzbank
  Capital Markets Corporation

  	
   

  	
  $

  	
  22,230,000

  	
   

  
	
  J.P. Morgan
  Securities Inc.

  	
   

  	
  $

  	
  22,230,000

  	
   

  
	
  Deutsche Bank
  Securities Inc.

  	
   

  	
  $

  	
  22,230,000

  	
   

  
	
  Daiwa Securities
  SMBC Europe Limited

  	
   

  	
  $

  	
  22,230,000

  	
   

  
	
  Scotia Capital
  (USA) Inc.

  	
   

  	
  $

  	
  22,230,000

  	
   

  
	
  BNP Paribas
  Securities Corp.

  	
   

  	
  $

  	
  22,230,000

  	
   

  
	
  Goldman, Sachs
  & Co.

  	
   

  	
  $

  	
  2,220,000

  	
   

  
	
  Bear, Stearns
  & Co. Inc.

  	
   

  	
  $

  	
  2,220,000

  	
   

  
	
  Morgan Stanley
  & Co. Incorporated

  	
   

  	
  $

  	
  2,220,000

  	
   

  
	
  Samuel A.
  Ramirez & Co., Inc

  	
   

  	
  $

  	
  2,220,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  750,000,000

  	
   

  



 


2





















 


 


The Initial Purchasers will pay for the Securities
upon delivery thereof at the offices of Cleary Gottlieb Steen & Hamilton
LLP, One Liberty Plaza, New York, New York at 10:00 a.m. (New York City time)
on May 27, 2005, or at such other time, not later than 5:00 p.m. (New York City
time) on June 1, 2005, as shall be designated by the Representatives. The time
and date of such payment and delivery are hereinafter referred to as the
Closing Date.


 


The Securities shall have the terms set forth in the Offering
Memorandum dated May 19, 2005, including the following:


 


Terms of
Securities


 


	
  Maturity Date:

  	
   

  	
  June 1, 2015

  
	
   

  	
   

  	
   

  
	
  Interest Rate:

  	
   

  	
  5.625%

  
	
   

  	
   

  	
   

  
	
  Optional Redemption:

  	
   

  	
  Make Whole Call at TSY + 30 basis points

  
	
   

  	
   

  	
   

  
	
  Interest Payment Dates:

  	
   

  	
  Each June 1 and December 1, commencing December 1,
  2005

  
	
   

  	
   

  	
   

  
	
  Closing Date:

  	
   

  	
  May 27, 2005

  



 


All provisions contained in the Annex I hereto,
entitled “Purchase Agreement General Provisions,” are herein incorporated by
reference in their entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein,
except that if any term defined in such document is otherwise defined herein,
the definition set forth herein shall control.


 


3





















 


If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicate hereof, whereupon this Agreement and your acceptance shall represent
a binding agreement between the Company and the Guarantor and the Initial
Purchasers.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARRAH’S OPERATING COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Jonathan S. Halkyard

  
	
   

  	
   

  	
  Name:

  	
  Jonathan S. Halkyard

  
	
   

  	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARRAH’S ENTERTAINMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Jonathan S. Halkyard

  
	
   

  	
   

  	
  Name:

  	
  Jonathan S. Halkyard

  
	
   

  	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  



 


4





















 


	
  The foregoing Agreement
  is hereby

  	
   

  
	
  confirmed and accepted
  as of the

  	
   

  
	
  date first above
  written.

  	
   

  
	
   

  	
   

  
	
  CITIGROUP GLOBAL
  MARKETS INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Evan
  Ladouceur

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Evan Ladouceur

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  GREENWICH CAPITAL
  MARKETS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Robert
  W. Mitchell

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Robert W. Mitchell

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  for themselves and the
  other several Initial

  	
   

  
	
  Purchasers named in the
  foregoing Agreement.

  	
   

  
					



 


5





















 


ANNEX I


 


HARRAH’S
OPERATING COMPANY, INC.



Guaranteed Debt Securities



Payment of Principal, Interest and 

Premium, if any, Guaranteed by



Harrah’s Entertainment, Inc.


 


PURCHASE
AGREEMENT GENERAL PROVISIONS


 


May
19, 2005


 


The provisions set forth herein are incorporated by
reference in a Purchase Agreement of even date herewith (such agreement,
including the provisions hereof as incorporated therein, the “Purchase
Agreement”).  The Purchase Agreement
is sometimes referred to herein as this “Agreement.”  Terms defined in the Purchase Agreement are
used herein as therein defined.


 


1.             Representations and Warranties.  The Company and the Guarantor, jointly and
severally, represent and warrant to and agree with each of the Initial
Purchasers that:


 


(a)           The
Offering Memorandum does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Offering Memorandum based upon information
relating to any Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through the Representatives expressly for use therein;


 


(b)           Each
of the Company and the Guarantor has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Offering Memorandum and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on
the Company or the Guarantor and their respective subsidiaries, taken as a
whole;


 


(c)           Each
subsidiary of the Company and the Guarantor, respectively, has been duly
organized or formed, as applicable, is validly existing as a corporation,
limited 


 





















 


liability
company or partnership in good standing under the laws of the jurisdiction of
its organization or formation, as applicable, has the power and authority to
own its property and to conduct its business as described in the Offering
Memorandum and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company or the Guarantor and their respective
subsidiaries, taken as a whole; all of the issued shares of capital stock or
other equity interests of each subsidiary of the Company and the Guarantor,
respectively, have been duly and validly authorized and issued and are fully
paid and non-assessable.  Except as set
forth in or as incorporated by reference in the Offering Memorandum, all of the
shares of capital stock or other equity or partnership interests of each
subsidiary of the Company or the Guarantor that would be considered a “significant
subsidiary” for purposes of Rule 1-02 under Regulation S-X pursuant to the
Securities Act (the “Significant Subsidiaries”) are owned directly or
indirectly by the Company or the Guarantor, respectively, except that 20% of
the equity interest in Des Plaines Development Ltd. is not owned directly or
indirectly by the Company or the Guarantor. 
Except as set forth in or as incorporated by reference in the Offering
Memorandum, all of the shares of capital stock or other equity or partnership
interests of subsidiaries of the Company or the Guarantor held by the Company
or the Guarantor are held free and clear of all liens, encumbrances, equities
or claims except such liens, encumbrances, equities or claims imposed by Gaming
Laws or the terms of any partnership agreement pertaining to any partnership
that is a subsidiary of the Company or that would
not would not have a material adverse effect on the Company or the Guarantor
and their respective subsidiaries, taken as a whole;


 


(d)           This
Agreement has been duly authorized, executed and delivered by each of the
Company and the Guarantor;


 


(e)           The
Indenture has been, or will be by the Closing Date, duly authorized, executed
and delivered by each of the Company and the Guarantor and, assuming due
authorization, execution and delivery thereof by the Trustee, is, or will be by
the Closing Date, a valid and binding agreement of each of the Company and the
Guarantor, respectively, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors’ rights
generally and general principles of equity;


 


(f)            The
Registration Rights Agreement has been, or will be by the Closing Date, duly
authorized, executed and delivered by each of the Company and the Guarantor
and, assuming due authorization, execution and delivery thereof by the Representatives,
is, or will be by the Closing Date, a valid and binding agreement of each of
the Company and the Guarantor, respectively, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights generally and general principles of equity;


 


(g)           The
Securities have been duly authorized by the Company and the Guarantor and, when
executed, authenticated and issued in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchasers in 


 


I-2





















 


accordance
with the terms of the Purchase Agreement, (assuming due authorization,
execution and delivery thereof by the Trustee) will be entitled to the benefits
of the Indenture, and will be valid and binding obligations of the Company and
the Guarantor, respectively, in each case enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors’ rights generally and general principles of equity;


 


(h)           The
execution and delivery by each of the Company and the Guarantor of, and the
performance by each of the Company and the Guarantor of its respective
obligations under, this Agreement, the Indenture, the Registration Rights
Agreement and the Securities will not contravene any provision of applicable
law or the certificate of incorporation or by-laws of the Company or the
Guarantor, respectively, or any agreement or other instrument binding upon the
Company or any of its subsidiaries, or the Guarantor or any of its
subsidiaries, respectively, that is material to the Company or the Guarantor
and their respective subsidiaries, taken as a whole, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the
Company or the Guarantor and any of their respective subsidiaries, and no
consent, approval, authorization, filing with or order of, or qualification
with, any governmental body or agency is required in connection with, or prior
to the consummation of, the transactions contemplated in, or for the
performance by the Company or the Guarantor of its respective obligations
under, this Agreement, the Indenture, the Registration Rights Agreement and the
Securities, except such as will be obtained under the Securities Act, the
Exchange Act, and the Trust Indenture Act, or as may be required by the
securities or Blue Sky laws of the various states and securities laws of any
jurisdiction outside the United States in connection with the offer and sale of
the Securities, or as have been obtained pursuant to Gaming Laws;


 


(i)            There
has not occurred any material adverse change in the condition, financial or
otherwise, or in the earnings, business, operations or prospects of the Company
or the Guarantor and their respective subsidiaries, taken as a whole, from that
set forth in the Offering Memorandum (exclusive of any amendments or
supplements thereto subsequent to the Execution Time);


 


(j)            Except
as disclosed in the Offering Memorandum, there are no known legal or
governmental proceedings pending or threatened to which the Company or the
Guarantor and any of their respective subsidiaries is a party or to which any
of the properties of the Company or the Guarantor or any of their respective
subsidiaries is subject and that would, individually or in the aggregate, have
a material adverse effect on the Company or the Guarantor and their respective
subsidiaries, taken as a whole.  Neither
the Company nor the Guarantor has any reason to believe that any governmental
agency with authority pursuant to any Gaming Law is investigating the Company,
the Guarantor or any of their respective subsidiaries in any non-routine
matter, the results of which would materially affect the operations of the
Company and the subsidiaries of the Company. 
Due to the highly regulated nature of the business of the Company and
the subsidiaries of the Company, there are ongoing investigations by various
governmental agencies with authority pursuant to the various Gaming Laws;


 


I-3





















 


(k)           Neither
the Company nor the Guarantor is, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Offering Memorandum, neither will be, an “investment company” or an
entity “controlled by an investment company” as such terms are defined in the
Investment Company Act;


 


(l)            The
Company and the Guarantor and their respective subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses, and (iii) are in compliance with
all terms and conditions of any such permit, license or approval, except in
each case where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, have a material adverse effect on the Company
or the Guarantor and their respective subsidiaries, taken as a whole;


 


(m)          There
are no costs or liabilities associated with obligations under applicable
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) that
would, individually or in the aggregate, have a material adverse effect on the
Company or the Guarantor and their respective subsidiaries, taken as a whole;


 


(n)           Except
as disclosed in the Offering Memorandum, each of the Company and the Guarantor
and their respective subsidiaries has sufficient trademarks, trade names,
patent rights, copyrights, or licenses to conduct their respective businesses
as now conducted in all material respects;


 


(o)           Except
as disclosed in or specifically contemplated by the Offering Memorandum, each
of the Company and the Guarantor and their respective subsidiaries has
sufficient licenses, approvals and authorizations required pursuant to Gaming
Laws to conduct their respective current businesses, except such licenses,
approvals and authorizations required pursuant to Gaming Laws the absence of
which, either individually or in the aggregate, would not have a material
adverse effect on the Company or the Guarantor and their respective
subsidiaries, taken as a whole;


 


(p)           Each
of the Company’s and Guarantor’s and their respective subsidiaries’ controlling
persons, key employees, and, to the Company’s or the Guarantor’s knowledge,
stockholders, have all necessary permits, licenses and other authorizations
required by Gaming Laws for the Company, the Guarantor and their respective
subsidiaries to conduct their respective businesses as now conducted in all
material respects; and neither the Company nor the Guarantor has any knowledge
that any of their


 


I-4





















 


respective
stockholders is unsuitable or may be deemed unsuitable by any authorities
pursuant to Gaming Laws;


 


(q)           No
labor dispute with the employees of the Company or the Guarantor or any of
their respective subsidiaries exists, or to the knowledge of the Company or the
Guarantor, respectively, is imminent that would, individually or in the
aggregate, have a material adverse effect on the Company or the Guarantor and
their respective subsidiaries, taken as a whole;


 


(r)            Neither
the Company, nor the Guarantor, nor any of their respective affiliates, nor any
person acting on its or their behalf other than the Initial Purchasers, has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of the Securities under the Securities Act;


 


(s)           Neither
the Company, nor the Guarantor, nor any of their respective affiliates, nor any
person acting on its or their behalf has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with
any offer or sale of the Securities in the United States;


 


(t)            Assuming
the accuracy of the representations and warranties and compliance with the
agreements of the Initial Purchasers made pursuant to Section 3, and except as
described in the Offering Memorandum under “Description of Notes—Registration
Rights,” it is not necessary in connection with the offer, sale and delivery of
the Securities in the manner contemplated by this Agreement and the Offering
Memorandum to register the Securities under the Securities Act or to qualify
the Indenture under the Trust Indenture Act;


 


(u)           The
Securities satisfy the eligibility requirements of Rule 144A(d)(3) under the
Securities Act;


 


(v)           Neither
the Company, nor the Guarantor, nor any of their respective affiliates, nor any
person acting on its or their behalf has engaged in any directed selling
efforts with respect to the Securities, and each of them has complied with the
offering restrictions requirement of Regulation S.  Terms used in this paragraph have the
meanings given to them by Regulation S;


 


(w)          The
Company and Guarantor are subject to and in compliance in all material respects
with the reporting requirements of Section 13 or Section 15(d) of the Exchange
Act;


 


(x)            Neither
the Company nor the Guarantor has, within the past 12 months, paid or agreed to
pay to any person any compensation for soliciting another to purchase any
securities of the Company or Guarantor (except as contemplated by this
Agreement and the Purchase Agreements dated June 22, 2004 and February 4, 2005
between the Company and the initial purchasers as set forth therein and except
in connection with any repurchase by the Guarantor of its outstanding securities
(other than the Securities)); and


 


I-5





















 


(y)           The
Company and the Guarantor are in compliance in all material respects with all
applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
of the Commission adopted thereunder.


 


2.             Payment and Delivery.  Except as otherwise provided in this Section
2, payment for the Securities shall be made to the Company in federal or other
funds immediately available at the time and place set forth in the Purchase
Agreement, upon delivery to the Representatives for the respective accounts of
the several Initial Purchasers of the Securities registered in such names and
in such denominations as the Representatives shall request in writing not less than
one full Business Day prior to the date of delivery, with any transfer taxes
payable in connection with the transfer of the Securities to the Initial
Purchasers duly paid by the Company. 
Delivery of the Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.


 


3.             Offering by Initial Purchasers.  Each Initial Purchaser, severally and not
jointly, represents and warrants to and agrees with the Company and the
Guarantor that:


 


(a)           It
has not offered or sold, and, until the Securities are registered under the Act
as described in the Offering Memorandum under the caption “Description of
Notes—Registration Rights,” will not offer or sell, any Securities except (i)
to those it reasonably believes to be qualified institutional buyers (as
defined in Rule 144A under the Act) and that, in connection with each such
sale, it has taken or will take reasonable steps to ensure that the purchaser
of such Securities is aware that such sale is being made in reliance on Rule
144A; or (ii) in accordance with the restrictions set forth in Exhibit A
hereto.


 


(b)           Neither
it nor any person acting on its behalf has made or will make offers or sales of
the Securities in the United States by means of any form of general
solicitation or general advertising (within the meaning of Regulation D) in the
United States.


 


4.             Conditions
to the Initial Purchasers’ Obligations. 
The several obligations of the Initial Purchasers are subject to the
performance by the Company and Guarantor of their obligations hereunder and to
the following conditions:


 


(a)           Subsequent
to the execution and delivery of the Purchase Agreement and prior to the
Closing Date:


 


(i)            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 of the Company’s or the Guarantor’s securities by any “nationally
recognized statistical rating organization,” as such term is defined for
purposes of Rule 436(g)(2) under the Act; and


 


(ii)           there
shall not have occurred any change, or any development involving a prospective
change, in the condition, financial or otherwise, or in the earnings, business
or operations of the Company or the Guarantor and their respective
subsidiaries, taken as a whole, from that set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent 


 


I-6





















 


to
the Execution Time) that, in the judgment of the Representatives, is material
and adverse and that makes it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Securities on the terms and in the manner contemplated in the Offering
Memorandum.


 


(b)           The
Initial Purchasers shall have received on the Closing Date a certificate, dated
the Closing Date and signed by an executive officer of each of the Company and
the Guarantor, to the effect set forth in Section 4(a)(i) above and to the
effect that the representations and warranties of the Company and the
Guarantor, respectively, contained in this Agreement are true and correct as of
the Closing Date and that the Company and the Guarantor, respectively, have
complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied hereunder on or before the Closing Date.  The officer signing and delivering such certificate
may rely upon the best of his or her knowledge as to proceedings threatened.


 


(c)           The
Initial Purchasers shall have received on the Closing Date an opinion of
Stephen H. Brammell, Senior Vice President and General Counsel of the Company
and the Guarantor, dated the Closing Date, to the effect that:


 


(i)            each
of the Company, the Guarantor and the Significant Subsidiaries has been duly
organized, is validly existing as a corporation, limited liability company or
partnership in good standing under the laws of the jurisdiction of its
organization, has the power and authority to own its property and to conduct
its business as described in the Offering Memorandum and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Company or the
Guarantor and their respective subsidiaries, taken as a whole.


 


(ii)           after
inquiry of the members of the law departments of the Company and Guarantor, to
the best of such counsel’s knowledge, (A) there are no legal or governmental
proceedings pending or threatened to which the Company or the Guarantor and any
of their respective subsidiaries is a party or to which any of the properties
of the Company or the Guarantor or any of their respective subsidiaries is
subject that are not adequately disclosed in the Offering Memorandum and that
would, individually or in the aggregate, have a material adverse effect on the
Company or the Guarantor and their respective subsidiaries, taken as a whole,
(B) there are no material statutes, regulations, contracts or other documents
that are not adequately disclosed in the Offering Memorandum, and (C) there is
no non-routine investigation of the Company, the Guarantor or any of their
respective subsidiaries, by any governmental agency with authority pursuant to
any Gaming Law, the results of which would have material adverse effect on the
Company, the Guarantor or any of their respective subsidiaries taken as a
whole.


 


I-7





















 


(iii)          each
of the Company’s, and Guarantor’s and their respective subsidiaries’
controlling persons, and key employees have all necessary permits, licenses and
other authorizations required by Gaming Laws for the Company, the Guarantor and
their respective subsidiaries to conduct their businesses as now conducted
except such licenses, approvals and authorizations required pursuant to Gaming
Laws the absence of which, either individually or in the aggregate, would not
have a material adverse effect on the Company or the Guarantor and their
respective subsidiaries, taken as a whole.


 


(iv)          the
statements (A) in the Offering Memorandum under the captions “Regulation and
Licensing,” and “Legal Matters,” (B) in “Item 1 - Business - Patents and
Trademarks,” “Item 1 - Business - Governmental Regulation” and “Item 3 - Legal
Proceedings” of the Guarantor’s most recent annual report on Form 10-K in
respect of the year ended December 31, 2004, which is incorporated by reference
in the Offering Memorandum and (C) in “Item 7 - Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Debt and Liquidity”
of the Guarantor’s most recent annual report on Form 10-K in respect of the
year ended December 31, 2004, which is incorporated by reference in the
Offering Memorandum, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to therein,
are accurate descriptions or summaries in all material respects.


 


(v)           no
consent, approval, authorization of, or qualification with any authority
pursuant to Gaming Laws is required with respect to issuance of the Securities
or the transactions contemplated by this Agreement, except as has already been
obtained or that the state of Nevada and Mississippi have not yet approved any
negative pledges that may have been made in the Notes.  Neither Nevada nor Mississippi requirements
would, individually or in the aggregate, have an adverse material effect on the
ability of the Company to issue the Notes or the transactions contemplated by this
Agreement, including, without limitation, any investor’s ability to purchase
and hold the Notes.


 


(vi)          the
execution and delivery by each of the Company and the Guarantor of the
transactions contemplated in, and the performance by the Company and the
Guarantor of its respective obligations pursuant to, this Agreement, the
Indenture, the Registration Rights Agreement and the Securities will not
contravene, to the best of such counsel’s knowledge, any agreement or other
instrument binding upon the Company or the Guarantor and any of their respective
subsidiaries that is material to the Company or the Guarantor and their
respective subsidiaries, taken as a whole, or, except for any approvals
required from the Indiana Gaming Commission for the Company to perform its
obligations under the Registration Rights Agreement, to the best of such
counsel’s knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or the Guarantor or any of
their respective subsidiaries, including without limitation, pursuant to any
Gaming Laws.


 


I-8





















 


(d)           The
Initial Purchasers shall have received on the Closing Date an opinion of Latham
& Watkins LLP, outside counsel for the Company and the Guarantor, dated the
Closing Date, to the effect that:


 


(i)            this
Agreement has been duly authorized by all necessary corporate action of the
Company and the Guarantor, and this Agreement has been duly executed and
delivered by the Company and the Guarantor;


 


(ii)           the
Indenture has been duly authorized by all necessary corporate action of the
Company and the Guarantor, and the Indenture has been duly executed and
delivered by the Company and the Guarantor and is the legally valid and binding
agreement of the Company and the Guarantor, enforceable against each of them in
accordance with its terms;


 


(iii)          the
Registration Rights Agreement has been duly authorized by all necessary
corporate action of the Company and the Guarantor, has been duly executed and
delivered by the Company and the Guarantor and is the legally valid and binding
agreement of the Company and the Guarantor, enforceable against each of them in
accordance with its terms;


 


(iv)          the
Notes have been duly authorized by all necessary corporate action of the
Company and, when executed, issued and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the Initial Purchasers
in accordance with the terms of this Agreement, will be the legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms;


 


(v)           the
notation of Guarantee of the Guarantor to be endorsed on the Notes has been
duly authorized by all necessary corporate action of the Guarantor and, when
executed and delivered in accordance with the terms of the Indenture (assuming
the due execution, issuance and authentication of the Notes in accordance with
the terms of the Indenture and delivery and payment therefor by the Initial
Purchasers in accordance with the terms of this Agreement), the Guarantee will
be the legally valid and binding obligation of the Guarantor, enforceable
against the Guarantor in accordance with its terms;


 


(vi)          the
execution and delivery of this Agreement, the Indenture and the Registration
Rights Agreement, and the issuance and sale of the Notes and the Guarantee by
each of the Company and the Guarantor, respectively, to the Initial Purchasers
pursuant to this Agreement, and the performance of the respective obligations
of each of the Company and the Guarantor under this Agreement, the Indenture
and the Registration Rights Agreement required to be performed on or before the
Closing Date, do not:


 


(A)          violate
the Company’s governing documents or the Guarantor’s governing documents,
respectively;


 


I-9





















 


(B)           violate
the Delaware General Corporation Law, or any federal or New York statute, rule
or regulation applicable to the Company or the Guarantor, respectively; or


 


(C)           require
any consents, approvals, or authorizations to be obtained by the Company or the
Guarantor from, or any registrations, declarations or filings to be made by the
Company or the Guarantor with, any governmental authority under any federal or
New York statute, rule or regulation applicable to the Company or the
Guarantor, that have not been obtained or made;


 


(vii)         the
statements in the Offering Memorandum under the caption “Description of Notes,”
insofar as they purport to describe or summarize certain provisions of the
Notes and the Guarantee, are accurate descriptions or summaries in all material
respects;


 


(viii)        no
registration of the Notes or the Guarantee under the Securities Act, and no
qualification of the Indenture under the Trust Indenture Act is required for
the purchase of the Notes by the Initial Purchasers or the initial resale of
the Notes by the Initial Purchasers, in each case, in the manner contemplated
by this Agreement and the Offering Memorandum (such counsel may state that it
expresses no opinion as to when or under what circumstances the Notes initially
sold by the Initial Purchasers may be offered or resold);


 


(ix)           with
the consent of the Initial Purchasers based solely on a certificate of an
officer of the Company as to factual matters, neither the Company nor the
Guarantor is, and immediately after giving effect to the offering and sale of
the Notes in accordance with the Purchase Agreement and the application of the
proceeds as described in the Offering Memorandum under the caption “Use of
Proceeds,” will be required to be registered as an “investment company” within
the meaning of the Investment Company Act; and


 


(x)            based
on such facts and subject to the limitations set forth in the Offering
Memorandum, the statements in the Offering Memorandum under the caption “Certain
United States Federal Income Tax Consequences,” insofar as they purport to
summarize certain provisions of the statutes and regulations referred to
therein, are accurate summaries in all material respects.


 


Such
counsel may state that the primary purpose of such counsel’s professional
engagement was not to establish or confirm factual matters or financial or
quantitative information, and many determinations involved in the preparation
of the Offering Memorandum (and the documents incorporated by reference) are of
a wholly or partially non-legal character or related to legal matters outside
the scope of such counsel’s opinion letter to the Initial Purchasers of even
date herewith.  Therefore, such counsel
is not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in, or incorporated by
reference in, the Offering Memorandum (or the incorporated documents) (except
to the extent expressly set forth in 


 


I-10





















 


numbered
paragraphs (vii) and (x) above), and have not made an independent check or
verification thereof (except as aforesaid). 
However, in the course of acting as special counsel to the Company and
the Guarantor in connection with the preparation by the Company and the
Guarantor of the Offering Memorandum, such counsel reviewed the Offering
Memorandum and the incorporated documents, and participated in conferences and
telephone conversations with officers and other representatives of the Company,
counsel to the Company, the independent public accountants for the Company,
representatives of the Initial Purchasers, and counsel for the Initial
Purchasers, during which conferences and conversations the contents of the
Offering Memorandum (and portions of the incorporated documents) and related
matters were discussed.  Such counsel
also reviewed and relied upon certain corporate records and documents, letters
from counsel and accountants, and oral and written statements of officers and
other representatives of the Company and others as to the existence and
consequence of certain factual and other matters.  Such counsel considered the foregoing in
light of such counsel’s understanding of applicable U.S. federal securities
laws and such counsel’s experience gained through practice thereunder.


 


Based
on such counsel’s participation and review as described above, such counsel
shall advise the Initial Purchasers that during the course of such counsel’s
services in connection with this matter, no facts came to such counsel’s
attention that caused such counsel to believe that the Offering Memorandum,
together with the incorporated documents, as of its date or as of the Closing
Date (together with the incorporated documents at that date), contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that such counsel expresses no belief with respect to the financial statements,
schedules, or other financial data included or incorporated by reference in, or
omitted from, the Offering Memorandum or the incorporated documents.


 


The
opinion of Latham & Watkins LLP described in this Section 4(d) shall be
rendered to the Initial Purchasers at the request of the Company and the
Guarantor and shall so state therein.


 


(e)           The
Initial Purchasers shall have received from Cleary Gottlieb Steen &
Hamilton LLP counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect to
the issuance and sale of the Securities, the Indenture, the Registration Rights
Agreement, the Offering Memorandum (as amended or supplemented at the Closing Date)
and other related matters as the Representatives may reasonably require, and
the Company and the Guarantor shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.


 


(f)            At
the Execution Time and at the Closing Date, Deloitte & Touche LLP shall
have furnished to the Initial Purchasers a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Initial Purchasers, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act and
stating in effect that:


 


I-11





















 


(i)            in
their opinion the audited financial statements and financial statement
schedules included or incorporated in the Offering Memorandum (as amended or
supplemented at the date of the letter) and reported on by them comply in form
in all material respects with the applicable accounting requirements of the
Exchange Act and the related published rules and regulations;


 


(ii)           on
the basis of a reading of the latest unaudited financial statements made
available by the Company, the Guarantor and its subsidiaries; carrying out
certain specified procedures (but not an examination in accordance with
generally accepted auditing standards which would not necessarily reveal
matters of significance with respect to the comments set forth in such letter);
a reading of the minutes of the meetings of the stockholders, directors and
executive, human resources and audit committees of the Company, the Guarantor
and its subsidiaries; and inquiries of certain officials of the Company and of
the Guarantor who have responsibility for financial and accounting matters of
the Company, the Guarantor and its subsidiaries as to transactions and events
subsequent to December 31, 2004, nothing came to their attention which caused
them to believe that: with respect to the period subsequent to
December 31, 2004, there were any changes, at a specified date not
more than five Business Days prior to the date of the letter, in the
consolidated long-term debt of the Guarantor or capital stock of the Guarantor
or decreases in the stockholders’ equity of the Guarantor as compared with the
amounts shown on the March 31, 2005 consolidated balance sheet
included or incorporated in the Offering Memorandum (as amended or supplemented
at the date of the letter), or for the period from April 1, 2005 to such
specified date there were any decreases, as compared with the corresponding
period in the preceding year in consolidated total revenues or operating income
or income before income taxes or the total or per share amounts of consolidated
net income of the Guarantor and its subsidiaries, except in all instances for
changes or decreases set forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the Initial Purchasers.


 


(iii)          the statements and information contained in the
letter or letters are of the type ordinarily included in accountants’ “comfort
letters” to Initial Purchasers with respect to the financial statements and
certain financial information contained in or incorporated by reference into the
Offering Memorandum.


 


(g)           Subsequent
to the Execution Time or, if earlier, the dates as of which information is
given in the Offering Memorandum, there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (f)
of this Section 4 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the Company
and the Guarantor and its subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the Initial
Purchasers, so material and adverse as to make it impractical or inadvisable to
proceed with the offering, sale or delivery of the Securities as contemplated
by the Offering Memorandum.


 


I-12





















 


(h)           As
of the Closing Date the Securities shall be rated not lower than BBB- by
Standard & Poor’s Corporation and Baa3 by Moody’s Investors Service, Inc.


 


(i)            The
Securities shall be eligible for clearance and settlement through The
Depositary Trust Company.


 


(j)            Prior
to the Closing Date, the Company shall have furnished to the Initial Purchasers
such further information, certificates and documents as the Representatives may
reasonably request.


 


5.             Covenants of the Company and the
Guarantor.  In further consideration
of the agreements of the Initial Purchasers herein contained, each of the
Company and the Guarantor covenants with each Initial Purchaser as follows
that:


 


(a)           The
Company and the Guarantor shall furnish the Representatives, without charge,
prior to 10:00 a.m. New York City time on the second Business Day next
succeeding the date of this Agreement and during the period mentioned in
Section 5(c) below, as many copies of the Offering Memorandum, any documents
incorporated by reference therein and any supplements and amendments thereto as
the Representatives may reasonably request.


 


(b)           The
Company and the Guarantor shall not amend or supplement the Offering Memorandum
without the prior written consent of the Representatives, which shall not be
unreasonably withheld or delayed and the Company and the Guarantor shall not
file any document under the Exchange Act that is incorporated by reference in
the Offering Memorandum unless, prior to such proposed filing, they have
furnished the Representatives with a copy of such document for review by the
Representatives and the Representatives has not reasonably objected to the
filing of such document.  The Company or
the Guarantor, as the case may be, shall promptly advise the Representatives
when any document filed under the Exchange Act that is incorporated by
reference in the Offering Memorandum shall have been filed with the Commission.


 


(c)           If,
at any time prior to the completion of the sale of the Securities by the
Initial Purchasers (as determined by the Representatives), 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
light of the circumstances when the Offering Memorandum is delivered to an
Initial Purchaser, not misleading, or if, in the opinion of counsel for the
Initial Purchasers, it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, forthwith to notify the Representatives
of such event or condition and prepare and furnish, at its own expense, to the
several Initial Purchasers and counsel for the Initial Purchasers as they may
reasonably request, either amendments or supplements to the Offering Memorandum
(in such quantities as the Initial Purchasers may reasonably request) so that
the statements in the Offering Memorandum as so amended or supplemented will
not, in light of the circumstances when the Offering Memorandum is delivered to
an Initial Purchaser, be misleading or so that the Offering Memorandum, as
amended or supplemented, will comply with applicable law.


 


I-13





















 


(d)           The
Company and Guarantor shall endeavor to qualify the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and promptly advise the Initial
Purchasers of the receipt by the Company or the Guarantor of any notification
with respect to the suspension of the qualification of the Securities for sale
in any jurisdiction or the initiation or threatening-of any proceeding for such
purpose.


 


(e)           The
Company and Guarantor shall not, and shall not permit any of their Affiliates
to, resell any Securities that have been acquired by any of them, except, in
the case of a Controlled Affiliate, until the earlier of (i) the consummation
of the Registered Exchange Offer and (ii) the declaration of effectiveness of a
Shelf Registration Statement pursuant to the Registration Rights Agreement.


 


(f)            Neither
the Company, nor the Guarantor, nor any of their respective Affiliates, nor any
person acting on behalf of any of the foregoing, will, directly or indirectly,
make offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the Securities under
the Act.


 


(g)           Neither
the Company, nor the Guarantor, nor any of their respective Affiliates, nor any
person acting on behalf of any of the foregoing, will engage in any form of
general solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United States.


 


(h)           So
long as any of the Securities are “restricted securities” within the meaning of
Rule 144(a)(3) under the Act, each of the Company and the Guarantor will,
during any period in which it is not subject to and in compliance with Section
13 or 15(d) of the Exchange Act or it is not exempt from such reporting
requirements pursuant to and in compliance with Rule 12g3-2(b) under the
Exchange Act, to 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 Act.  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.


 


(i)            Neither
the Company, nor the Guarantor, nor any of their respective Affiliates, nor any
person acting on behalf of any of the foregoing, will engage in any directed
selling efforts with respect to the Securities, and each of them will comply
with the offering restrictions requirement of Regulation S.  Terms used in this paragraph have the
meanings given to them by Regulation S.


 


(j)            To
cooperate with the Representatives and use its best efforts to permit the
Securities to be eligible for clearance and settlement through The Depository
Trust Company.


 


(k)           During
the period beginning at the Execution Time and continuing until the date which
is 30 days after the Closing Date, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company or warrants to purchase
debt 


 


I-14





















 


securities
of the Company substantially similar to the Securities (other than (i) the
Securities, (ii) commercial paper issued in the ordinary course of business and
(iii) borrowings under our credit facility as described in the Offering
Memorandum), without the prior written consent of the Representatives.


 


(l)            Not
to take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation of the price of any
security of the Company or the Guarantor to facilitate the sale or resale of
the Securities.


 


(m)          Whether
or not the transactions contemplated in this Agreement are consummated or this
Agreement is terminated, to pay or cause to be paid all expenses incident to
the performance of the Company’s and the Guarantor’s obligations under this
Agreement, including:


 


(i)            the
fees, disbursements and expenses of the Company’s and Guarantor’s counsel and
the Company’s and Guarantor’s accountants in connection with the registration
and delivery of the Securities under the Act and all other fees or expenses in
connection with the preparation of the Offering Memorandum and amendments and
supplements or amendments to either of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies thereof to
the Initial Purchasers and dealers, in the quantities hereinabove specified,


 


(ii)           all
costs and expenses related to the transfer and delivery of the Securities to
the Initial Purchasers, including any transfer or other taxes payable thereon
(but excluding any transfer taxes on resale of any of the Securities by the
Initial Purchasers),


 


(iii)          the
cost of printing or producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Securities under state law and all
expenses in connection with the qualification of the Securities for offer and
sale under state law as provided in Section 5(d) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Initial Purchasers
in connection with such qualification and in connection with the Blue Sky or legal
investment memorandum,


 


(iv)          the
fees and disbursements of the Trustee and its counsel,


 


(v)           any
fees charged by the rating agencies for the rating of the Securities,


 


(vi)          the
costs and expenses of the Company and the Guarantor relating to investor presentations
on any “road show” undertaken in connection with the marketing of the offering
of the Securities, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging 


 


I-15





















 


expenses
of the representatives and officers of the Company and the Guarantor and any
such consultants, and the cost of any aircraft chartered in connection with the
road show, and


 


(vii)         all
other costs and expenses incident to the performance of the obligations of the
Company and the Guarantor hereunder for which provision is not otherwise made
in this Section.  It is understood,
however, that except as provided in this Section, Section 6 entitled “Indemnity
and Contribution,” and the last paragraph of Section 8 below, the Initial
Purchasers will pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer payable on resale of the
Securities and any advertising expenses connected with any offers they may
make.


 


(n)           Each
of the Company and the Guarantor agrees to use its best efforts to have the
Securities approved for listing on the Luxembourg Stock Exchange and to
maintain such listing so long as any of the Securities are outstanding,
provided, however, that if it is impracticable or unduly burdensome, in the
good faith determination of the Company and the Guarantor, to maintain such
listing due to changes in listing requirements (including, but not limited to,
the requirement that the Company or the Guarantor publish financial information
according to accounting principles that are different from United States
generally accepted accounting principles), the Company and the Guarantor may
de-list the Securities from the Luxembourg Stock Exchange.  The Company and the Guarantor shall have no
further obligation in respect of any listing, trading or quotation for the
Securities.


 


6.             Indemnity and Contribution.


 


(a)           The
Company and the Guarantor, jointly and severally, agree to indemnify and hold
harmless each Initial Purchaser and each person, if any, who controls any
Initial Purchaser within the meaning of either Section 15 of the Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Offering Memorandum or amendment or supplement
thereto (if the Company or the Guarantor shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Initial Purchaser furnished to the Company in writing by such Initial Purchaser
through the Representatives expressly for use therein.


 


(b)           Each
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company and the Guarantor, and each person, if any, who controls
the Company or the Guarantor, respectively, within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity 


 


I-16





















 


from
the Company and the Guarantor to such Initial Purchaser, but only with
reference to information relating to such Initial Purchaser furnished to the
Company in writing by such Initial Purchaser through the Representatives
expressly for use in the Offering Memorandum or any amendments or supplements
thereto.


 


(c)           In
case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either Section 6(a) or 6(b), such person (the “indemnified party”)
shall promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding.  In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the
Representatives, in the case of parties indemnified pursuant to Section 6(a)
above, and by the Company, in the case of parties indemnified pursuant to
Section 6(b) above. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph,
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 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) 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 of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.


 


(d)           To
the extent the indemnification provided for in Section 6(a) or 6(b) is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, 


 


I-17





















 


damages
or liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchasers on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause 6(d)(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 6(d)(i) above but also the
relative fault of the Company and the Guarantor on the one hand and of the Initial
Purchasers on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Initial Purchasers on the other hand in
connection with the offering of the Securities shall be deemed to be in the
same respective proportions as the net proceeds from the offering of such
Securities (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Initial Purchasers bear
to the aggregate public offering price of the Securities. The relative fault of
the Company and the Guarantor on the one hand and the Initial Purchasers on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Guarantor or by the Initial Purchasers and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Initial Purchasers’ respective
obligations to contribute pursuant to this Section 6 are several in proportion
to the respective principal amounts of Securities they have purchased
hereunder, and not joint.


 


(e)           The
Company, the Guarantor and the Initial Purchasers agree that it would not be
just or equitable if contribution pursuant to this Section 6 were determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 6(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Initial Purchaser shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.


 


I-18





















 


(f)            The
indemnity and contribution provisions contained in this Section 6 and the
representations, warranties and other statements of the Company and the
Guarantor contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Initial Purchaser or any person
controlling any Initial Purchaser or the Company or the Guarantor, or their
respective officers or directors or any person controlling the Company or the
Guarantor, respectively, and (iii) acceptance of and payment for any of the
Securities.


 


7.             Termination.  This Agreement shall be subject to
termination by notice given by the Representatives to the Company, if (a) after
the execution and delivery of the Purchase Agreement and prior to the Closing
Date (i) trading generally shall have been suspended or materially limited on
or by, as the case may be, any of the New York Stock Exchange, the American
Stock Exchange, the National Association of Securities Dealers, Inc., the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company or the
Guarantor shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either federal or New York State authorities or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Representatives, is material and adverse and (b) in the case of any of the
events specified in clauses 7(a)(i) through 7(a)(iv), such event, individually
or together with any other such event, makes it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the offering,
sale or delivery of the Securities on the terms and in the manner contemplated
in the Offering Memorandum.


 


8.             Defaulting Initial Purchasers.  If, on the Closing Date, any one or more of
the Initial Purchasers shall fail or refuse to purchase Securities that it has
or they have agreed to purchase hereunder on such date, and the aggregate
amount of Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase is not more than one-tenth
of the aggregate amount of the Securities to be purchased on such date, the
other Initial Purchasers shall be obligated severally in the proportions that
the amount of Securities set forth opposite their respective names in the
Purchase Agreement bears to the aggregate amount of Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as the Representatives may specify, to purchase the
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase on such date; provided that in no event shall
the amount of Securities that any Initial Purchaser has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 8 by an amount
in excess of one-ninth of such amount of Securities without the written consent
of such Initial Purchaser. If, on the Closing Date, any Initial Purchaser or
Initial Purchasers shall fail or refuse to purchase Securities and the
aggregate amount of Securities with respect to which such default occurs is
more than one-tenth of the aggregate amount of Securities to be purchased on
such date, and arrangements satisfactory to the Representatives and the Company
for the purchase of such Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser, the Company or the Guarantor. In any such
case either the Representatives or the Company shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required 


 


I-19





















 


changes, if any, in the
Offering Memorandum or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting Initial
Purchaser from liability in respect of any default of such Initial Purchaser
under this Agreement.


 


If this Agreement shall be terminated by the Initial
Purchasers, or any of them, because of any failure or refusal on the part of
the Company or the Guarantor to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company or the Guarantor
shall be unable to perform its obligations under this Agreement, the Company
and the Guarantor will reimburse the Initial Purchasers or such Initial
Purchasers as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) reasonably incurred by such Initial Purchasers
in connection with this Agreement or the offering contemplated hereunder.


 


9.             Definitions.  The terms which follow, when used in this
Agreement, shall have the meanings indicated.


 


“Affiliate” shall have the meaning specified in
Rule 501(b) of Regulation D.


 


“Business Day” shall mean any day other than a
Saturday, a Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in The City of New
York.


 


“Commission”
shall mean the Securities and Exchange Commission.


 


“Controlled Affiliate” means any person or
entity that is directly, or indirectly through one or more intermediaries,
controlled by the Company, the Guarantor, or both.


 


“Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder.


 


“Execution Time” shall mean, the date and time
that this Agreement is executed and delivered by the parties hereto.


 


“Gaming Laws” means any foreign, federal, state
or local law and the rules and regulations thereunder and any similar laws and
regulations governing any aspect of legalized gambling in any foreign, federal,
state or local jurisdiction applicable to the Company, the Guarantor or any of
their respective subsidiaries.


 


“Investment Company Act” shall mean the
Investment Company Act of 1940, as amended, and the rules and regulations of
the Commission promulgated thereunder.


 


“Registered
Exchange Offer” shall have the meaning ascribed thereto by the Registration
Rights Agreement.


 


“Regulation
D” shall mean Regulation D under the Act.


 


“Regulation
S” shall mean Regulation S under the Act.


 


I-20





















 


“Securities Act” shall mean the Securities Act
of 1933, as amended, and the rules and regulations of the Commission
promulgated thereunder.


 


“Shelf Registration Statement” shall have the
meaning ascribed thereto by the Registration Rights Agreement.


 


“Trust Indenture Act” shall mean the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission promulgated thereunder.


 


10.           Counterparts.  This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.


 


11.           Applicable Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.


 


12.           Headings. The headings of the
sections of this Agreement have been inserted for convenience of reference only
and shall not be deemed a part of this Agreement. 


 


I-21





















 


EXHIBIT A


 


Selling Restrictions for
Offers and


Sales outside the United
States


 


(1)           (a)  The Securities have not been and will not be
registered under the Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act. 
Each Initial Purchaser represents and agrees that, except as otherwise
permitted by Section 3(a)(i) of the Agreement to which this is an exhibit, it
has offered and sold the Securities, and will offer and sell the Securities,
(i) as part of their distribution at any time; and (ii) otherwise until 40 days
after the later of the commencement of the offering and the Closing Date, only
in accordance with Rule 903 of Regulation S under the Act.  Accordingly, each Initial Purchaser
represents and agrees that neither it, nor any of its Affiliates nor any person
acting on its or their behalf has engaged or will engage in any directed
selling efforts with respect to the Securities, and that it and they have
complied and will comply with the offering restrictions requirement of
Regulation S.  Each Initial Purchaser
agrees that, at or prior to the confirmation of sale of Securities (other than
a sale of Securities pursuant to Section 3(a)(i) of the Agreement to which this
is an exhibit), it shall have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the distribution compliance period 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 (the “Securities Act”)
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the commencement of the
offering and May 27, 2005, except in either case in accordance with Regulation
S or Rule 144A under the Act.  Terms used
above have the meanings given to them by Regulation S.”


 


(b)           Each
Initial Purchaser also represents and agrees that it has not entered and will
not enter into any contractual arrangement with any distributor with respect to
the distribution of the Securities, except with its Affiliates or with the
prior written consent of the Company.


 


(c)           Terms
used in this section have the meanings given to them by Regulation S.


 


(2)           Each
Initial Purchaser represents, warrants and agrees that:


 


(a)           it
has not offered or sold and, prior to the expiry of a period of six months from
the Closing Date, will not offer or sell any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an 


 





















 


offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995;


 


(b)           it
has only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the Financial Services and
Markets Act 2000 (the “FSMA”)) received by it in connection with the
issue or sale of any Securities in circumstances in which section 21(1) of the
FSMA does not apply to the Company or the Guarantor;


 


(c)           it
has complied and will comply with all applicable provisions of the FSMA with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom;


 


(d)           the
offer in The Netherlands of the Securities is exclusively limited to persons
who trade or invest in securities in the conduct of a profession or business
(which include banks, stockbrokers, insurance companies, pension funds, other
institutional investors and finance companies and treasury departments of large
enterprises);


 


(e)           (1)
it has not offered or sold and will not offer or sell the Securities in Hong
King SAR by means of this prospectus or any other document, other than to
persons whose ordinary business involves buying or selling shares or
debentures, whether as principal or gent or in circumstances which do not
constitute an offer to the public within the meaning of the Companies Ordinance
(Cap. 32 of the laws of Hong Kong SAR), and (2) unless it is a person who is
permitted to do so under the securities laws of Hong Kong SAR, it has not
issued or held for the purpose of issue in Hong Kong SAR and will not issue or
hold for the purpose of issue in Hong Kong SAR the Offering Memorandum, any
other offering material or any advertisement, invitation or document relating
to the Securities, otherwise than with respect to the Securities intended to be
disposed of to persons outside Hong Kong SAR or only to persons whose business
involves the acquisition, disposal, or holding of securities, whether as
principal or as agent;


 


(f)            the
Securities have not been registered under the Securities and Exchange Law of
Japan, and it has not offered or sold and will not offer or sell, directly or
indirectly, the Securities in Japan or to or for the account of any resident of
Japan, except (1) pursuant to an exemption from the registration requirements
of the Securities and Exchange Law and (2) in compliance with any other
applicable requirements of Japanese law; and


 


(g)           the
Offering Memorandum has not been registered as a prospectus with the Monetary
Authority of Singapore.  Accordingly, the
Offering Memorandum or any other document or material in connection with the
offer or sale, or invitation for subscription or purchase, of the Securities,
may not be circulated or distributed, nor may the Securities be offered or
sold, or be made the subject of an invitation for subscription or purchase,
whether directly or indirectly, to the public or any member of the public in
Singapore other than (1) to an institutional investor or other person specified
in Section 


 


2





















 


274 of the Securities and Futures Act, Chapter 289 of
Singapore (the “SFA”), (2) to a sophisticated investor, and in accordance with
the conditions, specified in Section 275 of the SFA or (3) otherwise pursuant
to, and in accordance with the conditions of, any other applicable provision of
the SFA.


 


3