EXHIBIT 10.54
ASSET PURCHASE AGREEMENT
dated as of October 17, 2000
by and among
AMERISTAR CASINO KANSAS CITY, INC.,
a Missouri corporation
("Purchaser"),
AMERISTAR CASINOS, INC.,
a Nevada corporation
("ACI"),
KANSAS CITY STATION CORPORATION,
a Missouri corporation
(the "Company"),
and
STATION CASINOS, INC.,
a Nevada corporation
("Parent"),
with respect to
the assets of
KANSAS CITY STATION CORPORATION,
a Missouri corporation
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which
it is attached but is inserted for convenience only.
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ASSET PURCHASE AGREEMENT..........................................................................................1
ARTICLE I SALE OF ASSETS AND CLOSING..............................................................................1
1.01 Assets................................................................................................1
1.02 Liabilities...........................................................................................6
1.03 Purchase Price; Allocation............................................................................8
1.04 Closing...............................................................................................8
1.05 Determination of Surplus or Deficiency; Post-Closing Adjustment; Real Estate Purchase Adjustment......9
1.06 Prorations...........................................................................................11
1.07 Further Assurances; Post-Closing Cooperation.........................................................11
1.08 Third-Party Consents; ACI's Gaming Compliance Program................................................12
1.09 Insurance Proceeds...................................................................................13
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND PARENT..............................................13
2.01 Corporate Existence..................................................................................13
2.02 Authority............................................................................................14
2.03 No Conflicts.........................................................................................14
2.04 Governmental Approvals and Filings...................................................................14
2.05 Financial Statements and Condition...................................................................15
2.06 Taxes................................................................................................15
2.07 Legal Proceedings....................................................................................15
2.08 Compliance With Laws and Orders......................................................................16
2.09 Benefit Plans; ERISA; Labor Matters..................................................................16
2.10 Real Property........................................................................................17
2.11 Tangible Personal Property...........................................................................18
2.12 Contracts............................................................................................18
2.13 Licenses.............................................................................................19
2.14 Affiliate Transactions...............................................................................19
2.15 Environmental Matters................................................................................19
2.16 Labor Matters........................................................................................20
2.17 Brokers..............................................................................................20
2.18 Absence of Certain Changes...........................................................................21
2.19 Sufficiency of and Title to the Assets...............................................................21
2.20 Insurance............................................................................................21
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER AND ACI..................................................22
3.01 Existence............................................................................................22
3.02 Authority............................................................................................22
3.03 No Conflicts.........................................................................................22
3.04 Governmental Approvals and Filings...................................................................23
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3.05 Legal Proceedings....................................................................................23
3.06 Brokers..............................................................................................23
3.07 Financing............................................................................................23
3.08 Purchaser's Gaming Licenses..........................................................................23
ARTICLE IV COVENANTS OF THE COMPANY AND PARENT...................................................................23
4.01 Regulatory and Other Approvals.......................................................................24
4.02 HSR Filings..........................................................................................24
4.03 Investigation by Purchaser...........................................................................24
4.04 Conduct of Business..................................................................................25
4.05 Certain Restrictions.................................................................................25
4.06 Transition Period....................................................................................26
4.07 No Solicitation......................................................................................27
4.08 Title Insurance......................................................................................27
4.09 ACI's Gaming Compliance Program......................................................................29
4.10 Fulfillment of Conditions............................................................................29
4.11 Noncompetition.......................................................................................30
4.12 No Solicitation......................................................................................31
ARTICLE V COVENANTS OF PURCHASER.................................................................................31
5.01 Regulatory and Other Approvals.......................................................................31
5.02 HSR Filings..........................................................................................32
5.03 Investigation by the Company.........................................................................32
5.04 No Solicitation......................................................................................32
5.05 Collection of Gaming Chips and Tokens................................................................32
5.06 Baggage..............................................................................................33
5.07 Safe Deposits........................................................................................33
5.08 Valet Parking........................................................................................33
5.09 Undertakings with Respect to Ground Lease............................................................33
5.10 Return of Books and Records..........................................................................34
5.11 Use of Transferred Intellectual Property.............................................................34
5.12 Fulfillment of Conditions............................................................................34
ARTICLE VI CONDITIONS TO OBLIGATIONS OF PURCHASER................................................................34
6.01 Representations and Warranties.......................................................................34
6.02 Performance..........................................................................................34
6.03 Officers' Certificates...............................................................................35
6.04 Orders and Laws......................................................................................35
6.05 Regulatory Consents and Approvals....................................................................35
6.06 Consummation of Related Transaction..................................................................35
6.07 Deliveries...........................................................................................35
6.08 Title Insurance and Environmental Reports............................................................35
6.09 Consents.............................................................................................35
6.10 Absence of Material Adverse Effect...................................................................36
ARTICLE VII CONDITIONS TO OBLIGATIONS OF THE COMPANY.............................................................36
7.01 Representations and Warranties.......................................................................36
7.02 Performance..........................................................................................36
7.03 Officers' Certificates...............................................................................36
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7.04 Orders and Laws......................................................................................36
7.05 Regulatory Consents and Approvals....................................................................36
7.06 Consummation of Related Transaction..................................................................37
7.07 Deliveries...........................................................................................37
7.08 Letter Of Credit.....................................................................................37
7.09 Required Consents....................................................................................37
ARTICLE VIII TAX MATTERS AND POST-CLOSING TAXES..................................................................37
8.01 Transfer Taxes and Transfer Fees.....................................................................37
8.02 Tax Indemnification..................................................................................37
8.03 Tax Cooperation......................................................................................38
8.04 Notification of Proceedings; Control.................................................................38
ARTICLE IX EMPLOYEE BENEFITS MATTERS.............................................................................38
9.01 Offer of Employment..................................................................................38
9.02 Welfare Plans -- Claims Incurred; Pre-Existing Conditions............................................39
9.03 Vacation.............................................................................................39
9.04 Service Credit.......................................................................................40
9.05 Company's Benefit Plans..............................................................................40
9.06 COBRA Matters........................................................................................40
ARTICLE X SURVIVAL OF REPRESENTATIONS............................................................................40
10.01 Survival of Representations, Warranties, Covenants and Agreements....................................40
10.02 No Other Representations.............................................................................40
ARTICLE XI INDEMNIFICATION.......................................................................................41
11.01 Other Indemnification................................................................................41
11.02 Method of Asserting Claim............................................................................42
11.03 Exclusivity..........................................................................................45
ARTICLE XII TERMINATION..........................................................................................45
12.01 Termination..........................................................................................45
12.02 Effect of Termination................................................................................46
ARTICLE XIII DEFINITIONS.........................................................................................46
13.01 Defined Terms........................................................................................46
13.02 Construction of Certain Terms and Phrases............................................................54
ARTICLE XIV MISCELLANEOUS........................................................................................55
14.01 Notices..............................................................................................55
14.02 Entire Agreement.....................................................................................56
14.03 Expenses.............................................................................................56
14.04 Public Announcements.................................................................................56
14.05 Waiver...............................................................................................57
14.06 Amendment............................................................................................57
14.07 Confidentiality......................................................................................57
14.08 No Third Party Beneficiary...........................................................................58
14.09 No Assignment; Binding Effect........................................................................58
14.10 Headings.............................................................................................58
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14.11 Invalid Provisions...................................................................................58
14.12 Consent to Jurisdiction and Venue....................................................................58
14.13 Governing Law........................................................................................59
14.14 Attorney's Fees......................................................................................59
14.15 Time of the Essence..................................................................................59
14.16 Counterparts.........................................................................................59
ARTICLE XV GUARANTEES............................................................................................59
15.01 Guarantee of the Company's Obligations...............................................................59
15.02 Guarantee of Purchaser's Obligations.................................................................59
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SCHEDULES
Section 1.01(a)(i)..............................................................................Owned Real Property
Section 1.01(a)(ii)............................................................................Real Property Leases
Section 1.01(a)(v).........................................................................Personal Property Leases
Section 1.01(a)(vi)..............................................................................Business Contracts
Section 1.01(a)(viii).............................................................................Business Licenses
Section 1.01(a)(ix)............................................................................Vehicles and Vessels
Section 1.01(a)(xiii).............................................................Transferred Intellectual Property
Section 2.03..............................................................................................Conflicts
Section 2.04.................................................................................Governmental Approvals
Section 2.05(a)................................................................................Financial Statements
Section 2.05(b)................................................................................Changes in Condition
Section 2.06(a)...........................................................................................Tax Liens
Section 2.06(b)............................................................................Compliance with Tax Laws
Section 2.07......................................................................................Legal Proceedings
Section 2.08........................................................................Compliance with Laws and Orders
Section 2.09(a).......................................................................................Benefit Plans
Section 2.09(e).....................................................................................Benefit Accrual
Section 2.09(f)....................................................................Collective Bargaining Agreements
Section 2.09(g)................................................................................Terminated Employees
Section 2.10(a).......................................................................................Real Property
Section 2.10(b)...............................................................................................Liens
Section 2.12(a)...........................................................................................Contracts
Section 2.12(b).................................................................................Contract Violations
Section 2.13...............................................................................................Licenses
Section 2.15..................................................................................Environmental Matters
Section 2.18........................................................................................Certain Changes
Section 2.20..............................................................................................Insurance
Section 3.04.....................................................................Purchaser's Governmental Approvals
Section 3.08............................................................................Purchaser's Gaming Licenses
Section 6.09......................................................................................Required Consents
Section 7.09.......................................................................Parent/Company Required Consents
EXHIBITS
Exhibit A.......................................................................General Assignment and Xxxx of Sale
Exhibit B......................................................................................Assumption Agreement
Exhibit C......................................................................Officer's Certificate of the Company
Exhibit D....................................................................Secretary's Certificate of the Company
Exhibit E-1......................................................................Officer's Certificate of Purchaser
Exhibit E-2............................................................................Officer's Certificate of ACI
Exhibit F-1....................................................................Secretary's Certificate of Purchaser
Exhibit F-2....................................................................Secretary's Certificate of Purchaser
Exhibit G.....................................................................................Intentionally Omitted
Exhibit H............................................................................Net Current Assets Calculation
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT dated as of October 17, 2000 (the "EFFECTIVE
DATE") is made and entered into by and among Ameristar Casino Kansas City, Inc.,
a Missouri corporation ("PURCHASER"), Ameristar Casinos, Inc., a Nevada
corporation ("ACI"), Kansas City Station Corporation, a Missouri corporation
(the "COMPANY"), and Station Casinos, Inc., a Nevada corporation ("PARENT").
Capitalized terms not otherwise defined herein have the meanings set forth in
SECTION 13.01.
WHEREAS, the Company owns and operates that certain riverboat gaming and
entertainment facility known as "Station Casino Kansas City" located in Kansas
City, Missouri (the "BUSINESS"); and
WHEREAS, Parent and the Company have entered into that certain Asset
Purchase Agreement dated as of July 19, 2000 with KC Opco, LLC, a Delaware
limited liability company (the "JULY AGREEMENT") pursuant to which the Company
has agreed to sell the Business to KC Opco, LLC; and
WHEREAS, the Company desires to enter into an agreement to sell, transfer
and assign to Purchaser, and Purchaser desires to enter into an agreement to
purchase and acquire from the Company, certain of the assets of the Company
relating to the operation of the Business, and in connection therewith,
Purchaser has agreed to assume certain of the liabilities of the Company
relating to the Business, all on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
SALE OF ASSETS AND CLOSING
1.01 ASSETS.
(a) ASSETS TRANSFERRED. On the terms and subject to the conditions set
forth in this Agreement, the Company will sell, transfer, convey, assign and
deliver to Purchaser, and Purchaser will purchase and pay for, at the Closing,
all of the Company's right, title and interest in, and to all of the properties,
assets and rights of every nature, kind and description, tangible and intangible
(including goodwill), whether real, personal or mixed, whether accrued,
contingent or otherwise, and whether now existing or hereafter acquired (other
than the Excluded Assets) used primarily in connection with the Business, except
as otherwise provided in SECTION 1.01(b), as the same shall exist on the Closing
Date including but not limited to such properties, assets and rights in the
following categories (collectively with any proceeds and awards referred to in
SECTION 1.09, the "ASSETS"):
(i) REAL PROPERTY. The real property described in SECTION 1.01(a)(i)
OF THE DISCLOSURE SCHEDULE, and all of the rights arising out of the
ownership thereof or appurtenant thereto (the "OWNED REAL PROPERTY"),
together with all buildings, structures, facilities, fixtures and other
improvements thereto (the "IMPROVEMENTS") and all transferable licenses,
permits, approvals and qualifications relating to any Owned Real Property
issued to the Company by any Governmental or Regulatory Authority;
(ii) REAL PROPERTY LEASES AND AGREEMENTS. Subject to SECTION 1.08, (A)
the leases, subleases and licenses of real property and related guarantees
described in SECTION 1.01(a)(ii)(A) OF THE DISCLOSURE SCHEDULE as to which
the Company is the lessor, sublessor or licensor together with any
agreements for use or occupancy of hotel rooms, banquet facilities or
meeting rooms, (B) the leases and subleases of real property described in
SECTION 1.01(a)(ii)(B) OF THE DISCLOSURE SCHEDULE as to which the Company
is the lessee, sublessee or licensee (including the land and buildings,
improvements and structures and all appurtenances belonging thereto) (such
real property, the "LEASED REAL PROPERTY"; and, together with the Owned
Real Property, the "REAL PROPERTY"), (C) that certain Joint Venture
Agreement between First Holdings Company and Parent dated September 25,
1993, as amended (the "JOINT VENTURE AGREEMENT"), (D) that certain
Development Agreement dated as of April 24, 1995, as amended, by and
between the Company and The Port Authority of Kansas City, Missouri (the
"DEVELOPMENT AGREEMENT") and (E) that certain Option Agreement dated
September 25, 1993, as amended, between First Holdings Company and Parent
(the "OPTION AGREEMENT"); and all other rights, subleases, licenses,
permits, deposits and profits appurtenant to or related to such leases,
subleases and licenses described in this SECTION 1.01(a)(ii) (the leases
and agreements described in subclauses (A), (B), (C), (D) and (E), the
"REAL PROPERTY LEASES") and all of the Company's interest (including the
land and buildings, improvements and structures located thereon and all
appurtenances belonging thereto) in those certain leases, subleases and
licenses as to which the Company is the lessee, sublessee or licensee as
described in SECTION 1.01(a)(ii)(B) OF THE DISCLOSURE SCHEDULE;
(iii) ACCOUNTS RECEIVABLE. All accounts receivable of the Company
existing on the Closing Date and calculated as set forth on the schedule
attached hereto as EXHIBIT H (the "ACCOUNTS RECEIVABLE");
(iv) TANGIBLE PERSONAL PROPERTY. All furniture, fixtures, equipment,
machinery, consumables, inventory, merchandise, liquor, food, supplies,
spare and replacement parts and other tangible personal property
(including, without limitation, all plans, designs and drawings for future
expansions and all Gaming Devices which shall be transferred through a
Licensed Supplier in accordance with the rules and regulations of the
Missouri Gaming Commission (the "COMMISSION")) used primarily in the
conduct of the Business (the "TANGIBLE PERSONAL PROPERTY");
(v) PERSONAL PROPERTY LEASES. Subject to SECTION 1.08, (A) the leases
or subleases of Tangible Personal Property described in SECTION
1.01(a)(v)(A) OF THE DISCLOSURE SCHEDULE as to which the Company is the
lessor or sublessor and (B) the leases of Tangible Personal Property
described in SECTION 1.01(a)(v)(B) OF THE DISCLOSURE SCHEDULE as to which
the Company is the lessee or sublessee, together with any options to
2
purchase the underlying property (the leases and subleases described in
SUBCLAUSES (A) and (B), the "PERSONAL PROPERTY LEASES");
(vi) BUSINESS CONTRACTS. Subject to SECTION 1.08, all Contracts (other
than the Real Property Leases and the Personal Property Leases) to which
the Company is a party, the terms of which permit assignment of the
Company's interest therein or with respect to which all necessary consents
to assignment of the Company's interest therein have been obtained prior to
the Closing, and which are utilized primarily in the conduct of the
Business, including, without limitation, Contracts described in SECTION
1.01(a)(vi) OF THE DISCLOSURE SCHEDULE and Contracts relating to suppliers,
sales representatives, distributors, purchase orders, marketing
arrangements and manufacturing arrangements (the "BUSINESS CONTRACTS");
(vii) PREPAID EXPENSES. All prepaid expenses of the Company existing
on the Closing Date and calculated as set forth on the schedule attached
hereto as EXHIBIT H (the "Prepaid Expenses");
(viii) LICENSES. To the extent transfer is permitted under applicable
Laws and pursuant to the terms of such Licenses and subject to SECTION
1.08, Licenses (including applications therefor) issued primarily in
connection with the conduct of the Business, including, without limitation,
the Licenses listed in SECTION 1.01(a)(viii) OF THE DISCLOSURE SCHEDULE
(the "BUSINESS LICENSES");
(ix) VEHICLES AND VESSELS. All motor vehicles, boats and barges and
related docking facilities owned or leased by the Company and used
primarily in the conduct of the Business, all of which are listed in
SECTION 1.01(a)(ix) OF THE DISCLOSURE SCHEDULE (the "VEHICLES AND
VESSELS");
(x) SECURITY DEPOSITS. All security deposits deposited by or on behalf
of the Company as lessee or sublessee under the Real Property Leases and
the Personal Property Leases existing on the Closing Date and calculated as
set forth on the schedule attached hereto as EXHIBIT H (the "LESSEE
SECURITY DEPOSITS");
(xi) OTHER RIGHTS. All third party guarantees, warranties, indemnities
and similar rights in favor of the Company with respect to any Asset, other
than claims and recoveries under litigation of the Company against third
parties arising out of or relating to events or conditions existing or
occurring prior to the Transfer Time;
(xii) HOTEL AND ENTERTAINMENT RESERVATIONS. All security deposits or
payments made to the Company prior to the Transfer Time with regard to any
hotel and entertainment reservations for events following the Transfer
Time;
(xiii) INTELLECTUAL PROPERTY. All of the Company's licensed products
or processes, patents, copyrights, trademarks, service marks, service
names, designs, know-how, processes, trade secrets, inventions, and other
proprietary data (including, without limitation, all customer lists) used
exclusively in the Business or exclusively in connection with the Assets
(other than the trade names and logos described in SECTION
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1.01(b)(ix)) (the "TRANSFERRED INTELLECTUAL PROPERTY"), which Transferred
Intellectual Property is listed in SECTION 1.01(a)(xiii) OF THE DISCLOSURE
SCHEDULE;
(xiv) EQUITY INTERESTS. Subject to SECTION 1.08, all of the Company's
right, title and interest in and to the equity interests of the JV; and
(xv) BOOKS AND RECORDS. All Books and Records used primarily in the
conduct of the Business or otherwise relating primarily to the Assets
(including, without limitation, customer lists and customer data bases
relating primarily to the Business (the "BUSINESS CUSTOMER LISTS"), all
Books and Records required by the Commission to be maintained at the
Business, other than the Excluded Books and Records (the "BUSINESS BOOKS
AND RECORDS").
To the extent any of the Business Books and Records are items susceptible
to duplication and are either (x) used in connection with any of the Company's
or its Affiliates' businesses other than the Business or (y) are required by Law
to be retained by the Company or its Affiliates, the Company may deliver
photostatic copies or other reproductions from which, in the case of Business
Books and Records referred to in clause (x), information solely concerning the
Company's businesses other than the Business has been deleted.
Subject to the terms and conditions hereof, at the Closing, the Assets
shall be transferred or otherwise conveyed to Purchaser free and clear of all
Liabilities, obligations, liens and encumbrances excepting only Assumed
Liabilities and Permitted Liens which shall be payable by Purchaser only to the
extent they are Assumed Liabilities.
(b) EXCLUDED ASSETS. Notwithstanding anything in this Agreement to the
contrary, the following assets and properties of the Company (the "EXCLUDED
ASSETS") shall be excluded from and shall not constitute Assets:
(i) CASH. All cash (including checks received prior to the Transfer
Time, whether or not deposited or cleared prior to the Transfer Time)
including, without limitation, cage cash, slot fill, drop boxes, valet
register, commercial paper, certificates of deposit and other bank
deposits, treasury bills and other cash equivalents;
(ii) EQUITY INTERESTS. All of the Company's rights, title and interest
in and to the equity interests of Station Casino Kansas City Restaurants,
Inc.;
(iii) INSURANCE. Subject to SECTION 1.09, life insurance policies of
officers and other employees of the Company and all other insurance
policies relating to the operation of the Business;
(iv) EMPLOYEE BENEFIT PLANS. All assets owned or held by or under any
Benefit Plans including assets held in trust or insurance contracts for the
benefit of Benefit Plan participants or beneficiaries;
(v) TAX REFUNDS. All refunds or credits, if any, of Taxes due to or
from the Company by reason of its ownership of the Assets or operation of
the Business to the extent attributable to any time or period ending at or
prior to the Transfer Time;
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(vi) EXCLUDED BOOKS AND RECORDS. The minute books, stock transfer
books and corporate seal of the Company and any other Books and Records
relating primarily to the Excluded Assets or the Retained Liabilities
except for the Business Customer Lists and such Books and Records required
by the Commission to be maintained at the Business (the "EXCLUDED BOOKS AND
RECORDS");
(vii) LITIGATION CLAIMS. All rights (including indemnification) and
claims and recoveries under litigation of the Company against third parties
(other than rights, claims and recoveries acquired by Purchaser pursuant to
SECTION 1.01(a)(xi)), arising out of or relating to events prior to the
Transfer Time;
(viii) EXCLUDED OBLIGATIONS. The rights of the Company in, to and
under all Contracts of any nature, the obligations of the Company under
which expressly are not assumed by Purchaser pursuant to SECTION 1.02(b);
(ix) TRADE NAMES AND LOGOS. All of the Company's right, title and
interest in, to and under the names "Station Casinos, Inc.", "Station
Casino Kansas City", "The Feast", and "Boarding Pass Players Program",
including any derivative names and related marks, designs or logos, except
for the Transferred Intellectual Property;
(x) GAMING CHIPS AND TOKENS. All of the Company's gaming chips and
tokens, including, without limitation, all (A) Gaming Device tokens not
currently in circulation and (B) "reserve" chips, if any, not currently in
circulation, except that at Purchaser's written election made at any time
prior to the Closing Date (which election shall be subject to the prior
approval of the Commission), such chips and tokens may be acquired by
Purchaser at the Closing without further consideration;
(xi) INTELLECTUAL PROPERTY. All trade names, marks, designs, logos,
domain names and web sites other than the Transferred Intellectual
Property;
(xii) RIGHTS UNDER THIS AGREEMENT. The Company's rights under this
Agreement and the July Agreement;
(xiii) SIGNS. All of the Company's signs containing any trade name,
xxxx, design or logo described in clause (ix) above, which Purchaser shall,
at Purchaser's sole cost and expense and using reasonable care, not later
than promptly following the expiration of any period that Purchaser is
permitted to use such names, marks, designs or logos pursuant to SECTION
4.06 hereof, remove from the Real Property and Improvements thereto and
place in a reasonably accessible location on the Real Property for prompt
retrieval by the Company, together with all of the Company's right, title
and interest therein, and as promptly as practicable, notify the Company
and Parent that such signs have been removed and as to the location of such
signs; PROVIDED, HOWEVER, that other than as expressly provided herein,
Purchaser shall have no liability to the Company arising out of or
resulting from Purchaser's performance of its removal, storage or other
obligations with respect to such signs; and
(xiv) EXCLUDED CONTRACTS. The Administrative Services Agreement
between the Company and Parent.
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1.02 LIABILITIES.
(a) ASSUMED LIABILITIES. In connection with the sale, transfer, conveyance,
assignment and delivery of the Assets pursuant to this Agreement, on the terms
and subject to the conditions set forth in this Agreement, Purchaser shall
assume as of the Transfer Time and shall pay, perform and discharge when due the
following Liabilities of the Company, in each case to the extent arising out of
or relating to the Business or the Assets (x) in the case of items listed in
SUBSECTIONS (i), (iii) AND (iv) below, as the same shall accrue after the
Transfer Time and (y) in the case of items listed in subsections (ii) and (v)
through (ix) below, as the same shall exist at the Transfer Time (collectively,
the "ASSUMED LIABILITIES"), and no other Liabilities:
(i) REAL PROPERTY LEASE OBLIGATIONS. Subject to the provisions of
SECTION 1.08, all obligations of the Company under the Real Property
Leases;
(ii) ACCOUNTS PAYABLE. All obligations of the Company with respect to
accounts payable outstanding on the Closing Date and calculated as set
forth on the Schedule attached hereto as EXHIBIT H, but excluding any
Liability owed by the Company to any Affiliate of the Company ("ACCOUNTS
PAYABLE");
(iii) PERSONAL PROPERTY LEASE OBLIGATIONS. Subject to the provisions
of SECTION 1.08, all obligations of the Company under the Personal Property
Leases;
(iv) OBLIGATIONS UNDER CONTRACTS AND LICENSES. Subject to the
provisions of SECTION 1.08, all obligations of the Company under the
Business Contracts and Business Licenses that constitute Assets;
(v) ACCRUED EXPENSES. All obligations of the Company with respect to
accrued expenses outstanding on the Closing Date and calculated as set
forth on EXHIBIT H attached hereto ("ACCRUED EXPENSES");
(vi) RETURNED GOODS. All obligations of the Company for replacement
of, or refund for, damaged, defective or returned goods, to the extent such
goods are subject to full return privileges from the supplier thereof;
(vii) SECURITY DEPOSITS. All outstanding obligations of the Company on
the Closing Date with respect to any security deposit held by the Company
as lessor or sublessor under the Real Property Leases or Personal Property
Leases calculated as set forth on EXHIBIT H attached hereto (the "LESSOR
SECURITY DEPOSITS");
(viii) PROGRESSIVE METERS. All outstanding obligations of the Company
on the Closing Date with respect to any progressive meter on any Gaming
Device calculated as set forth on EXHIBIT H attached hereto;
(ix) RESERVATIONS. All obligations of the Company with respect to
hotel room and entertainment reservations; and
(x) POST-CLOSING LIABILITIES. All Liabilities of the Business (other
than Retained Liabilities) to the extent (A) resulting from events or
conditions occurring
6
following the Transfer Time or (B) arising out of the Assets and occurring
after the Transfer Time.
(b) RETAINED LIABILITIES. All Liabilities of the Company other than Assumed
Liabilities (the "RETAINED LIABILITIES") shall be retained and paid, performed
and discharged when due by the Company and Parent (PROVIDED, that the Company
shall have the ability to contest, in good faith, any such claim of liability
asserted in respect thereof by any Person other than Purchaser and its
Affiliates, so long as such contest does not result in a Lien upon any of the
Assets):
(i) except to the extent any such liability is reflected on the
Closing Date Balance Sheet as a current liability of the Business, any loss
or liability of the Company of any nature or description, whether
liquidated or contingent, to the extent (a) resulting from events or
conditions which occurred or existed prior to the Transfer Time, or (b)
arising out of or relating to the Excluded Assets (including those items
identified as Retained Liabilities in SECTION 1.08);
(ii) any loss or liability relating to current or former employees of
the Business (and their eligible dependents and beneficiaries), including
with respect to employment or Benefit Plans, which accrued on or prior to
the Transfer Time, except to the extent that such liability is reflected on
the Closing Balance Sheet as a current liability of the Business;
(iii) all Liabilities with respect to gaming chips and tokens issued
by the Company (but not progressive meters), except as provided otherwise
herein;
(iv) all Liabilities related to Benefit Plans, except to the extent
that such liability is reflected on the Closing Balance Sheet as a current
liability of the Business;
(v) all Indebtedness (other than current accounts payable or accrued
expenses of the Company incurred or accrued in the ordinary course of
business, but only to the extent that the accrual for such payables and
expenses has been properly reflected on the Closing Balance Sheet, and
other than to the extent arising following the Transfer Time under
Contracts that constitute Assets);
(vi) any Liability, whether currently in existence or arising
hereafter, owed by the Company to any of its Affiliates;
(vii) all Liabilities related to any fines or penalties imposed
against the Company (or with respect to the Business or any Asset) by any
Governmental or Regulatory Authority (including, without limitation, the
Commission) prior to the Transfer Time; and
(viii) all other Liabilities of the Company other than the Assumed
Liabilities.
7
1.03 PURCHASE PRICE; ALLOCATION.
(a) PURCHASE PRICE. Subject to the adjustments set forth in SECTION 1.05,
the aggregate purchase price for the Assets shall be equal to Three Hundred
Fifteen Million Dollars ($315,000,000) plus the amount of any Surplus or minus
the amount of any Deficiency, in each case, as determined in accordance with
SECTION 1.05 (the "PURCHASE PRICE"). Upon Closing, the Purchase Price shall be
payable in immediately available United States funds at the Closing in the
manner provided in SECTION 1.04.
(b) ALLOCATION OF PURCHASE PRICE. Purchaser and the Company shall negotiate
in good faith prior to the Closing Date and determine the allocation of the
consideration paid by Purchaser for the Assets and the covenant not to compete
contained in SECTION 4.11 hereof. Purchaser and the Company each agrees (i) that
any such allocation shall be consistent with the requirements of Section 1060 of
the Code and the regulations thereunder, (ii) to complete jointly and to file
separately Form 8594 with its Federal income Tax Return consistent with such
allocation for the tax year in which the Closing Date occurs and (iii) that no
party will take a position on any income, transfer or gains Tax Return, before
any Governmental or Regulatory Authority charged with the collection of any such
Tax or in any judicial proceeding, that is in any manner inconsistent with the
terms of any such allocation without the consent of the other party.
1.04 CLOSING. The Closing will take place at the offices of Milbank, Tweed,
Xxxxxx & XxXxxx LLP, 601 South Xxxxxxxx Street, 31st Floor, Los Angeles,
California, or at such other place as Purchaser and the Company mutually agree,
at 10:00 A.M. local time and shall be deemed to occur at 6:00 A.M., Central
time, on the day immediately after the Closing Date (the "TRANSFER TIME"). At
the Closing, Purchaser will pay the Estimated Purchase Price by wire transfer of
immediately available funds to such accounts as the Company may reasonably
direct by written notice delivered to Purchaser at least two (2) Business Days
before the Closing Date. Simultaneously, (a) the Company will assign and
transfer to Purchaser all of its right, title and interest in and to the Assets
(free and clear of all Liens, other than Permitted Liens) by delivery of (i) a
General Assignment and Xxxx of Sale substantially in the form of EXHIBIT A
hereto (the "GENERAL ASSIGNMENT"), duly executed by the Company, (ii) general
warranty deeds in proper statutory form for recording and otherwise in form and
substance reasonably satisfactory to Purchaser conveying title to the Owned Real
Property and (iii) such other good and sufficient instruments of conveyance,
assignment and transfer, in form and substance reasonably acceptable to
Purchaser's counsel, as shall be effective to vest in Purchaser good title to
the Assets (the General Assignment and the other instruments referred to in
clauses (ii) and (iii) being collectively referred to herein as the "ASSIGNMENT
INSTRUMENTS"), and (b) Purchaser will assume from the Company the due payment,
performance and discharge of the Assumed Liabilities by delivery of (i) an
Assumption Agreement substantially in the form of EXHIBIT B hereto (the
"ASSUMPTION AGREEMENT"), duly executed by Purchaser, and (ii) such other good
and sufficient instruments of assumption, in form and substance reasonably
acceptable to the Company's counsel, as shall be effective to cause Purchaser to
assume the Assumed Liabilities as and to the extent provided in SECTION 1.02(a)
(the Assumption Agreement and such other instruments referred to in clause (ii)
being collectively referred to herein as the "ASSUMPTION INSTRUMENTS"). At the
Closing, there shall also be delivered to the Company and Purchaser the
8
certificates and other contracts, documents and instruments required to be
delivered under ARTICLES VI and VII.
1.05 DETERMINATION OF SURPLUS OR DEFICIENCY; POST-CLOSING ADJUSTMENT; REAL
ESTATE PURCHASE ADJUSTMENT.
(a) On or before the seventh (7th) Business Day preceding the Closing Date,
the Company shall, and Parent shall cause the Company to, prepare and deliver to
Purchaser an interim balance sheet (the "ESTIMATED CLOSING BALANCE SHEET") of
the Company as of the close of business on the final day of the calendar month
immediately preceding the calendar month during which the Closing Date occurs
(the "TEST MONTH"), together with a statement of the Company's Net Current
Assets as of such date calculated in a manner consistent with the calculation
set forth on EXHIBIT H attached hereto; provided that if the Closing Date occurs
within the first seven (7) Business Days of a calendar month, the Estimated
Closing Balance Sheet shall be as of the close of business on the final day of
the second calendar month immediately preceding the calendar month during which
the Closing Date occurs (in such case, the "Test Month"). The Estimated Closing
Balance Sheet shall be accompanied by a certificate of the Chief Financial
Officer of the Company to the effect that the Estimated Closing Balance Sheet
presents fairly, in accordance with GAAP and the accounting practices of the
Company applied on a consistent basis, the financial condition of the Company as
of the close of business on the last day of the Test Month. The amount of Net
Current Assets set forth in the Estimated Closing Balance Sheet shall be final
and binding for purposes of determining the amount of any Surplus or Deficiency
used in calculating the Purchase Price (the "ESTIMATED PURCHASE PRICE"), unless
Purchaser delivers a good faith written objection to the calculation of Net
Current Assets at least three (3) Business Days prior to the anticipated Closing
Date (the "OBJECTION NOTICE"). The Company shall make available to Purchaser and
its representatives the books, records and workpapers used to prepare the
Estimated Closing Balance Sheet. In the event of an Objection Notice, the
Company and Purchaser shall negotiate in good faith during the period preceding
the Closing Date to resolve the dispute. If the dispute is not resolved by the
specified Closing Date, Purchaser shall pay an Estimated Purchase Price based
upon the amount of any Deficiency or Surplus, as applicable, resulting from the
calculation of Net Current Assets set forth in the Estimated Balance Sheet.
(b) As promptly as practicable after the Closing Date, but in no event more
than sixty (60) days after the Closing Date (such date on which the Closing
Balance Sheet is delivered, the "CLOSING FINANCIAL STATEMENTS DELIVERY DATE"),
Purchaser will prepare and deliver to the Company and Parent a balance sheet of
the Company as of the close of business on the Closing Date (the "CLOSING
BALANCE SHEET") and a calculation of Net Current Assets, in a manner consistent
with the calculation set forth on EXHIBIT H attached hereto, from such Closing
Balance Sheet. The Closing Balance Sheet shall be accompanied by a certificate
of the Chief Financial Officer of Purchaser to the effect that the Closing
Balance Sheet presents fairly, in accordance with GAAP and the accounting
practices of the Company applied on a consistent basis, the financial condition
of the Company as of the close of business on the Closing Date and that the Net
Current Assets calculation was made in accordance with the terms of this
Agreement.
(c) The Company and a firm of independent public accountants designated by
the Company (the "COMPANY'S ACCOUNTANT") will be entitled to reasonable access
during normal
9
business hours to the relevant records, personnel and working papers of the
Purchaser to aid in their review of the Closing Balance Sheet and the
calculation of Net Current Assets therefrom. The Closing Balance Sheet and the
calculation of Net Current Assets therefrom shall be deemed to be accepted by
the Company and shall be conclusive for the purposes of the adjustment described
in SECTION 1.05(d) and (e) hereof except to the extent, if any, that the Company
or Company's Accountant shall have delivered, within thirty (30) days after the
Closing Financial Statements Delivery Date, a written notice to Purchaser
setting forth objections thereto, specifying in reasonable detail any such
objection (it being understood that any amounts not disputed as provided herein
shall be paid promptly). If a change proposed by the Company is disputed by
Purchaser, then Purchaser and the Company shall negotiate in good faith to
resolve such dispute. If, after a period of thirty (30) days following the date
on which the Company gives Purchaser notice of any such proposed change, any
such proposed change still remains disputed, then Purchaser and the Company
hereby agree that the Las Vegas, Nevada office of PriceWaterhouseCoopers LLP
(the "ACCOUNTING FIRM") shall resolve any remaining disputes. The Accounting
Firm shall act as an arbitrator to make a determination with respect to the
issues that are disputed by the parties, based on presentations by the Company
and Purchaser, and by independent review of the Accounting Firm if deemed
necessary in the sole discretion of the Accounting Firm, which determination
shall be limited to only those issues still in dispute. The decision of the
Accounting Firm shall be final and binding and shall be in accordance with the
provisions of this SECTION 1.05(b). The fees and expenses of the Accounting
Firm, if any, shall be paid equally by Purchaser and the Company. The date on
which the Net Current Assets is finally determined pursuant to this SECTION 1.05
is referred to hereinafter as the "DETERMINATION DATE."
(d) If the amount of Net Current Assets used to determine the Estimated
Purchase Price pursuant to SECTION 1.05(a) above is greater than the amount set
forth in the Closing Balance Sheet, the Company shall pay to Purchaser, as an
adjustment to the Estimated Purchase Price, an aggregate amount equal to such
excess. Any payments required to be made by the Company pursuant to this SECTION
1.05(d) shall be made within ten (10) days of the Determination Date by wire
transfer of immediately available funds to an account designated by Purchaser.
(e) If the amount of Net Current Assets used to determine the Estimated
Purchase Price pursuant to SECTION 1.05(a) above is less than the amount set
forth in the Closing Balance Sheet, Purchaser shall pay to the Company, as an
adjustment to the Estimated Purchase Price, an amount equal to such difference.
Any payments required to be made by Purchaser pursuant to this SECTION 1.05(e)
shall be made within ten (10) days of the Determination Date by wire transfer of
immediately available funds to an account designated by the Company.
(f) In the event that Company or Parent exercises the right to purchase the
JV interests subject to the Option Agreement prior to the Closing Date, the
Purchase Price shall be increased in an amount equal to the exercise price paid
by Parent or Company, as applicable, with respect to the exercise of the right
to purchase the JV interests subject to the Option Agreement, provided that in
no event shall the Purchase Price be increased in an amount in excess of the
exercise price set forth in the Option Agreement in effect on the Effective
Date.
10
1.06 PRORATIONS. The following prorations relating to the Assets and the
ownership and operation of the Business will be made as of the Transfer Time,
with the Company liable to the extent such items relate to any time period prior
to the Transfer Time and are Retained Liabilities and Purchaser liable to the
extent such items relate to periods beginning with and subsequent to the
Transfer Time or are Assumed Liabilities:
(a) Real estate taxes and assessments on or with respect to the Real
Property, provided that proration with respect to Leased Real Property shall be
based upon the amounts payable by the Company in respect to such taxes under the
Real Property Leases.
(b) Rents, additional rents, taxes and other items payable by or to the
Company under the Real Property Leases and Personal Property Leases.
(c) The amount of rents, taxes and charges for sewer, water, telephone,
electricity and other utilities relating to the Real Property.
(d) All other items normally adjusted in connection with similar
transactions; provided that receipts of the Company with respect to hotel room
rentals on the Closing Date shall be retained by the Company.
Except as otherwise agreed by the parties or with respect to amounts to
adjustments to the Purchase Price made pursuant to SECTION 1.05, the net amount
of all such prorations will be settled and paid on the Closing Date. If the
Closing shall occur before a real estate tax rate is fixed, the apportionment of
taxes shall be based upon the tax rate for the preceding year applied to the
latest assessed valuation.
1.07 FURTHER ASSURANCES; POST-CLOSING COOPERATION.
(a) Subject to the terms and conditions of this Agreement, at any time or
from time to time after the Closing, at Purchaser's request and without further
consideration, the Company shall execute and deliver to Purchaser such other
instruments of sale, transfer, conveyance, assignment and confirmation, provide
such materials and information and take such other actions as Purchaser may
reasonably deem necessary or desirable in order more effectively to transfer,
convey and assign to Purchaser, and to confirm Purchaser's title to, all of the
Assets (including, without limitation, the delivery to Purchaser of fully
executed Uniform Commercial Code amendment or termination statements relating to
the Assets as Purchaser shall request), and, to the full extent permitted by
Law, to put Purchaser in actual possession and operating control of the Business
and the Assets and to assist Purchaser in exercising all rights with respect
thereto, and otherwise to cause the Company to fulfill its obligations under
this Agreement.
(b) Following the Closing, the Company and Purchaser will afford the other
party, its counsel and its accountants, during normal business hours, reasonable
access to the books, records and other data relating to the Business in its
possession with respect to periods prior to the Closing and the right to make
copies and extracts therefrom, to the extent that such access may be reasonably
required by the requesting party in connection with (i) the preparation of Tax
Returns, (ii) the determination or enforcement of rights and obligations under
this Agreement, (iii) compliance with the requirements of any Governmental or
Regulatory Authority including without limitation the Commission, (iv) the
determination or enforcement of the rights
11
and obligations of any party to this Agreement and (v) in connection with any
actual or threatened Action or Proceeding. Further, the Company and Purchaser
agree for a period extending six (6) years after the Closing Date not to destroy
or otherwise dispose of any such books, records and other data unless such party
shall first offer in writing to surrender such books, records and other data to
the other party and such other party shall not agree in writing to take
possession thereof during the ten (10) day period after such offer is made.
(c) If, in order properly to prepare its Tax Returns, other documents or
reports required to be filed with Governmental or Regulatory Authorities or its
financial statements or to fulfill its obligations hereunder, it is necessary
that the Company or Purchaser be furnished with additional information,
documents or records relating to the Business not referred to in paragraph (b)
above, and such information, documents or records are in the possession or
control of the other party, such other party shall use its commercially
reasonable efforts to furnish or make available such information, documents or
records (or copies thereof) at the recipient's request, cost and expense.
(d) Notwithstanding anything to the contrary contained in this Section, if
the Company and Purchaser are in an adversarial relationship in litigation or
arbitration, the furnishing of information, documents or records in accordance
with paragraphs (b) and (c) of this Section shall be subject to applicable rules
relating to discovery.
1.08 THIRD-PARTY CONSENTS; ACI'S GAMING COMPLIANCE PROGRAM.
(a) To the extent that any Real Property Lease, Personal Property Lease,
Business Contract or Business License is not assignable without the consent of
another party, this Agreement shall not constitute an assignment or an attempted
assignment thereof if such assignment or attempted assignment would constitute a
breach thereof or a default thereunder. The Company and Purchaser shall use
commercially reasonable efforts to obtain the consent of such other party to the
assignment of any such Real Property Lease, Personal Property Lease, Business
Contract or Business License to Purchaser in all cases in which such consent is
required for such assignment, PROVIDED, HOWEVER, that in the event any such
consent, other than any required consent of the Commission or any consent that
is listed in SECTION 6.09 OF THE DISCLOSURE SCHEDULE (each a "REQUIRED
CONSENT"), is not obtained on or prior to the Closing Date, such event shall not
cause the Closing to be delayed or constitute a default by the Company of any
obligation hereunder or result in a reduction of the Purchase Price. If any such
consent, other than a Required Consent, shall not be obtained, the Company shall
cooperate with Purchaser in any reasonable arrangement designed to provide for
Purchaser the benefits intended to be assigned to Purchaser under the relevant
Real Property Lease, Personal Property Lease, Business Contract or Business
License, including enforcement at the cost and for the account of Purchaser of
any and all rights of the Company against the other party thereto arising out of
the breach or cancellation thereof by such other party or otherwise, provided
that if Purchaser does not receive the benefits intended to be assigned to
Purchaser pursuant to a Real Property Lease, Personal Property Lease, Business
Contract or Business License because a consent is not obtained and an
arrangement transferring such benefit is not entered into, such Real Property
Lease, Personal Property Lease, Business Contract or Business License, as
applicable, shall constitute an Excluded Asset and the obligations pursuant
thereto shall constitute a Retained Liability.
12
(b) In the event that any background investigation with respect to any
party (and its respective owners and management) to any Real Property Lease,
Personal Property Lease or Business Contract to which Purchaser will become a
party by virtue of the consummation of the transactions contemplated hereby
results in a finding by ACI that such party is an "Unsuitable Person" (as
defined in ACI's Gaming Compliance Program in the form provided to Parent), then
such Real Property Lease, Personal Property Lease or Business Contract shall not
be assumed by Purchaser and shall constitute an Excluded Asset and a Retained
Liability. ACI shall notify Parent and the Company no later than forty-five (45)
days following the Effective Date if such investigation reveals that any such
party is an "Unsuitable Person," which notice shall specify the identity of the
person that has been determined to be unsuitable and shall also indicate if any
person that is subject to a background investigation required pursuant to ACI's
Gaming Compliance Program has not responded to inquiries made pursuant to such
background investigation.
1.09 INSURANCE PROCEEDS. If any of the Assets is destroyed or damaged or
taken in condemnation following the Effective Date, the insurance proceeds or
condemnation award with respect thereto shall be an Asset. At the Closing, the
Company shall pay or credit to Purchaser any such insurance proceeds or
condemnation awards received by it on or prior to the Closing (along with the
amount of any deductible or retention withheld therefrom) and shall assign to or
assert for the benefit of Purchaser all of its rights against any insurance
companies, Governmental or Regulatory Authorities and others with respect to
such damage, destruction or condemnation. As and to the extent that there is
available insurance under policies maintained by the Company and its Affiliates,
predecessors and successors in respect of any Assumed Liability, except for any
such insurance proceeds with respect to which the insured is directly or
indirectly self-insured or has agreed to indemnify the insurer, the Company
shall cause such insurance to be applied toward the payment of such Assumed
Liability.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND PARENT
The Company and Parent hereby jointly and severally represent and warrant
to Purchaser as follows as of the Effective Date and as of the Closing Date,
except, to the extent any such representation or warranty is made as of a
specified date earlier than the Closing Date, such earlier date:
2.01 CORPORATE EXISTENCE.
(a) The Company is a corporation duly incorporated, validly existing and in
good standing under the Laws of the State of Missouri, and has full corporate
power and authority to conduct its business as and to the extent now conducted
and to own, use and lease its Assets and enter into and perform this Agreement
and consummate the transactions contemplated hereby.
(b) SUBSIDIARIES. The Company does not have any equity investment in any
entity, nor does it own any other securities with respect to any entity, other
than Station/First Joint Venture and Station Casino Kansas City Restaurants,
Inc. Station Casino Kansas City
13
Restaurants, Inc. does not own any assets or conduct any operations related to
the Business or otherwise.
2.02 AUTHORITY. The execution and delivery by the Company of this
Agreement, and the performance by the Company and Parent of their obligations
hereunder, have been duly and validly authorized by the Board of Directors and
the stockholder of the Company and the Board of Directors of Parent, no other
action on the part of the Company or Parent or their stockholders being
necessary. This Agreement has been duly and validly executed and delivered by
the Company and Parent and constitutes a legal, valid and binding obligation of
the Company and Parent enforceable against the Company and Parent in accordance
with its terms, except to the extent such enforceability (a) may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally, and (b) is subject to general
principles of equity.
2.03 NO CONFLICTS. Except as set forth in SECTION 2.03 OF THE DISCLOSURE
SCHEDULE, the execution, delivery and performance by the Company of this
Agreement do not and the consummation of the transactions contemplated hereby
will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the articles of incorporation or bylaws (or other
comparable charter documents) of the Company;
(b) subject to obtaining the consents, approvals and actions, making the
filings and giving the notices disclosed in SECTION 2.04 OF THE DISCLOSURE
SCHEDULE, conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to the Company or any of the Assets
(other than such conflicts, violations or breaches (i) which could not in the
aggregate reasonably be expected to materially and adversely affect the validity
or enforceability of this Agreement or to have a Material Adverse Effect or (ii)
as would occur solely as a result of the identity or the legal or regulatory
status of Purchaser or any of its Affiliates); or
(c) except as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or to materially and adversely affect
the ability (i) of the Company to consummate the transactions contemplated
hereby or to perform its obligations hereunder or (ii) Purchaser to operate the
Business after the Transfer Time in a manner substantially consistent with the
Company's past practice, (A) conflict with or result in a violation or breach
of, (B) constitute (with or without notice or lapse of time or both) a default
under, (C) require the Company to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of, (D) result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, or (E) result
in the creation or imposition of any Lien upon the Company or any of the Assets
under, any Contract or License to which the Company is a party or by which any
of its Assets is bound.
2.04 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed in SECTION
2.04 OF THE DISCLOSURE SCHEDULE, no consent, approval, action, order or
authorization of, or registration, declaration or filing with or notice to any
Governmental or Regulatory Authority on
14
the part of the Company is required in connection with the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby, except (a) where the failure to obtain any such consent,
approval or action, to make any such filing or to give any such notice could not
reasonably be expected to materially and adversely affect the ability of the
Company to consummate the transactions contemplated by this Agreement or to
perform its obligations hereunder, or to have a Material Adverse Effect, and (b)
those as would be required solely as a result of the identity or the legal or
regulatory status of Purchaser or any of its Affiliates.
2.05 FINANCIAL STATEMENTS AND CONDITION.
(a) Prior to the execution of this Agreement, the Company has delivered to
Purchaser true and complete copies of (i) the unaudited combined balance sheets
and the related combined statements of operations, stockholder's equity and cash
flows of the Company and St. Xxxxxxx Riverfront Station, Inc. for the fiscal
year ended December 31, 1999, and (ii) the unaudited combined balance sheets of
the Company and St. Xxxxxxx Riverfront Station, Inc. as of March 31, 2000 and
June 30, 2000 and the related unaudited statement of operations for the portion
of the fiscal year then ended. Except as set forth in the notes thereto and as
disclosed in SECTION 2.05(a) OF THE DISCLOSURE SCHEDULE, all such financial
statements were prepared in accordance with GAAP and fairly present in all
material respects the combined financial condition and results of operations of
the Company and St. Xxxxxxx Riverfront Station, Inc., in each case, as of the
respective dates thereof and for the respective periods covered thereby.
(b) Except for the execution and delivery of this Agreement and the
transactions to take place pursuant hereto on or prior to the Closing Date and
except as disclosed in SECTION 2.05(b) OF THE DISCLOSURE SCHEDULE, during the
period beginning on the Financial Statement Date and ending on the Effective
Date there has not been any change with respect to the Business or the Assets
that could reasonably be expected to have a Material Adverse Effect.
2.06 TAXES.
(a) TAX LIENS. Except as set forth in SECTION 2.06(a) OF THE DISCLOSURE
SCHEDULE, there are no Tax Liens upon the assets of the Company except liens for
Taxes not yet due.
(b) COMPLIANCE WITH TAX LAWS. Except as set forth in SECTION 2.06(b) OF
THE DISCLOSURE SCHEDULE, the Company has complied (and, with respect to all
amounts due with respect to periods through and including the Closing Date,
will comply) with all applicable laws, rules, and regulations relating to the
filing of Tax Returns and the payment and withholding of Taxes (including,
without limitation, withholding and reporting requirements under Code
Sections 1441 through 1464, 3401 through 3406, 6041 and 6049 and similar
provisions under any other laws) and have, within the time and in the manner
prescribed by law, withheld from employee wages and paid over to the proper
governmental authorities all required amounts.
2.07 LEGAL PROCEEDINGS. Except as disclosed in SECTION 2.07 OF THE
DISCLOSURE SCHEDULE, there are no Orders outstanding and no Actions or
Proceedings pending or, to the Knowledge of the Company, threatened against,
relating to or affecting the Company or any of
15
its Assets which could reasonably be expected individually or
in the aggregate to have a Material Adverse Effect, or which seek to enjoin,
rescind or otherwise prevent the consummation of the transactions contemplated
hereby.
2.08 COMPLIANCE WITH LAWS AND ORDERS. To the Knowledge of the Company,
except as disclosed in SECTION 2.08 OF THE DISCLOSURE SCHEDULE or in the filings
of Parent with the Securities and Exchange Commission, the Company is not in
violation of or in default under any Law or Order applicable to the Company or
any of its Assets the effect of which, individually or in the aggregate with
other such violations and defaults, could reasonably be expected to have a
Material Adverse Effect.
2.09 BENEFIT PLANS; ERISA; LABOR MATTERS.
SECTION 2.09(a) OF THE DISCLOSURE SCHEDULE contains a true and complete
list of each Benefit Plan and "employee benefit plan" (within the meaning of
section 3(3) of ERISA, including, without limitation, multiemployer plans within
the meaning of ERISA section 3(37)), stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or not,
under which any employee or former employee of the Company has any present or
future right to benefits or under which the Company has any present or future
liability. All such plans, agreements, programs, policies and arrangements shall
be collectively referred to as the "COMPANY PLANS".
(c) With respect to each Company Plan, the Company has delivered to
Purchaser a current, accurate and complete copy (or, to the extent no such copy
exists, an accurate description) thereof.
(d) No Lien has arisen on the Assets by reason of Section 302 of ERISA,
Section 412 of the Code or Title IV of ERISA.
(e) Except as set forth in SECTION 2.09(e) OF THE DISCLOSURE SCHEDULE, no
individual shall accrue or receive additional benefits, service or accelerated
rights to payments of benefits under any Benefit Plan, as defined in Section
280G of the Code, or become entitled to severance, termination allowance or
similar payments as a direct result of the transactions contemplated by this
Agreement.
(f) There are no controversies pending or, to the Knowledge of the Company,
threatened between the Company and any of its employees which controversies
would have a Material Adverse Effect. The Company is not a party to any
collective bargaining agreement or other labor union Contract applicable to
persons employed by the Company except as disclosed in SECTION 2.09(f) OF THE
DISCLOSURE SCHEDULE. To the Knowledge of the Company there are no strikes,
slowdowns, work stoppages, lockouts or threats thereof by or with respect to any
of the employees of the Company.
16
(g) SECTION 2.09(g) OF THE DISCLOSURE SCHEDULE lists the number of
employees terminated by the Company at each site of employment of the Business
in the 90-day period ending on the date hereof, and the date of such
termination, with respect to each such termination which would be required to be
taken into account in determining whether a "plant closing" or "mass layoff"
subject to the Worker Adjustment and Retraining Notification Act (the "WARN")
could occur based on subsequent terminations; provided that this sentence shall
not apply with respect to any site of employment at which sufficient employees
have not been employed at any time in such 90-day period for terminations of
employment at such site to be subject to WARN.
2.10 REAL PROPERTY.
(a) SECTION 2.10(a) OF THE DISCLOSURE SCHEDULE contains a list of (i) each
parcel of real property currently owned by the Company and (ii) each parcel of
real property leased by the Company.
(b) The Company has good and marketable title to each parcel of real
property described in CLAUSE (i) of PARAGRAPH (a) above free and clear of Liens,
except for Permitted Liens or as disclosed in SECTION 2.10(b) OF THE DISCLOSURE
SCHEDULE, and has a valid and subsisting leasehold estate in the real properties
referred to in CLAUSE (ii) of PARAGRAPH (a) above free and clear of Liens,
except for Permitted Liens or as disclosed in SECTION 2.10(b) OF THE DISCLOSURE
SCHEDULE. To the Knowledge of the Company, all of the Real Property Leases are
valid, binding, and enforceable in accordance with their terms, and are in full
force and effect as of the date hereof. To the Knowledge of the Company, except
as disclosed in SECTION 2.10(b) OF THE DISCLOSURE SCHEDULE there are no existing
material defaults by the Company beyond any applicable grace periods under such
leases and the Company has not received any notice of default under any of such
leases.
(c) Without limiting the generality of the foregoing, as to leasehold
estates under the Real Property Leases, the Company warrants that it has quiet
and peaceful possession of each of the properties leased by it.
(d) To the Knowledge of the Company, the Real Property is not subject to
any deferred or rollback taxes on account of any change in zoning or land use
classification, and to the Knowledge of the Company there are no pending
assessments affecting the Real Property.
(e) Except as could not be reasonably expected to have a Material Adverse
Effect, all water, sewer, gas, electric, telephone and drainage facilities and
all other utilities required by law or for the present normal use and operation
of the Business are all connected and operating pursuant to valid permits, are
adequate to service the Business, and such facilities are connected by means of
one or more public or private easements extending from a property line to one or
more public streets, public rights-of-way or utility facilities.
(f) There are no pending or, to the Knowledge of the Company, threatened
condemnation, eminent domain or similar proceedings affecting the Real Property
or any portion thereof.
(g) The Company is not a "foreign person" within the meaning of Section
1445 ET SEQ. of the Internal Revenue Code of 1986, as amended.
17
(h) The mechanical equipment located in any improvements located on the
Real Property, including but not limited to air conditioning and heating systems
and the electrical and plumbing systems, are in sufficient condition to permit
the operation of the Business as it is currently conducted.
2.11 TANGIBLE PERSONAL PROPERTY. The Company is in possession of and has
good title to, or has valid leasehold interests in or valid rights under
Contract to use, all tangible personal property used in and, individually or in
the aggregate with other such property, material to the Business or Condition of
the Company, except for such tangible personal property sold, consumed or
otherwise disposed of in the ordinary course of business since the Financial
Statement Date. All tangible Assets, taken as a whole, are in sufficient
condition to permit the operation of the Business as it is currently conducted.
2.12 CONTRACTS.
(a) SECTION 2.12(a) OF THE DISCLOSURE SCHEDULE (with paragraph references
corresponding to those set forth below) contains a true and complete list of
each of the following Contracts that constitute Assets as of the Effective Date:
(i) all Contracts (excluding Benefit Plans) providing for a commitment
of employment or consultation services for a specified term and payments at
any one time or in any one year in excess of One Hundred Thousand Dollars
($100,000);
(ii) all Contracts with any Person containing any provision or
covenant prohibiting or materially limiting the ability of the Company to
engage in any business activity or compete with any Person;
(iii) all Contracts relating to Indebtedness of the Company included
as an Assumed Liability;
(iv) all Contracts (other than this Agreement) providing for (A) the
future disposition or acquisition of any assets or properties individually
or in the aggregate material to the Business, other than dispositions or
acquisitions in the ordinary course of business, and (B) any merger or
other business combination;
(v) all Contracts between the Company, on the one hand, and any
Affiliate of the Company, on the other hand and which is included as an
Assumed Liability;
(vi) all Contracts (other than this Agreement) that limit or contain
restrictions on the ability of the Company to incur Indebtedness or incur
or suffer to exist any Lien, to purchase or sell any Assets, to change the
lines of business in which it participates or engages or to engage in any
merger or other business combination and which is included as an Assumed
Liability;
(vii) all other Contracts that (A) involve the payment, pursuant to
the terms of any such Contract, by or to the Company of more than One
Hundred Thousand Dollars ($100,000) annually or (B) cannot be terminated
within ninety (90) days after giving
18
notice of termination without resulting in any material cost or penalty to
the Company; and
(viii) all Real Property Leases.
(b) As of the Effective Date, each Contract required to be disclosed in
SECTION 2.12(a) OF THE DISCLOSURE SCHEDULE, true and complete copies of which
have been delivered to Purchaser, is in full force and effect and constitutes a
legal, valid and binding agreement, enforceable in accordance with its terms, of
the Company and, to the Knowledge of the Company, of each other party thereto;
and except as disclosed in SECTION 2.12(b) OF THE DISCLOSURE SCHEDULE neither
the Company nor, to the Knowledge of the Company, any other party to such
Contract is in violation or breach of or default under any such Contract (or
with notice or lapse of time or both, would be in violation or breach of or
default under any such Contract) as of the Effective Date, the effect of which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(c) As of the Effective Date, the July Agreement has been terminated by the
parties thereto and is of no further force or effect.
2.13 LICENSES. As of the Effective Date, the Company has all Licenses
required for the conduct of the Business as presently conducted (other than
Licenses, the absence of which could not reasonably be expected to have a
Material Adverse Effect). Except as set forth on SECTION 2.13 OF THE DISCLOSURE
SCHEDULE, each such License is valid, binding and in full force and effect as of
the Effective Date. Except as set forth on SECTION 2.13 OF THE DISCLOSURE
SCHEDULE, to the Knowledge of the Company, as of the Effective Date the Company
is not in default (or with the giving of notice or lapse of time or both, would
be in default) under any such License in any respect that could reasonably be
expected to have a Material Adverse Effect. The Licenses listed in SECTION 2.13
OF THE DISCLOSURE SCHEDULE are not transferable.
2.14 AFFILIATE TRANSACTIONS. There is no Liability between the Company, on
the one hand, and any officer, director or Affiliate of the Company, on the
other, that will constitute an Assumed Liability.
2.15 ENVIRONMENTAL MATTERS. Except as disclosed in SECTION 2.15 OF THE
DISCLOSURE SCHEDULE or as could not be reasonably expected to have a Material
Adverse Effect, to the Knowledge of the Company:
(a) the Company holds and is in compliance with all Licenses which are
required under applicable Environmental Laws for the Company to own and operate
the Business (the "ENVIRONMENTAL PERMITS") and will use commercially reasonable
efforts to provide copies of such Environmental Permits to Purchaser and to
facilitate the transfer of those Environmental Permits which are transferable to
Purchaser;
(b) the Company and all real property owned, operated or leased by the
Company are in compliance with applicable Environmental Laws;
(c) the Company has not been notified by any Governmental or Regulatory
Authority or third party of any pending or threatened claim arising under
Environmental Laws
19
(an "ENVIRONMENTAL CLAIM") against the Business or the Company in connection
with the Business;
(d) the Company has not been notified by any Governmental or Regulatory
Authority or third party of any pending claim that either the Business or the
Company in connection with the Business may be a potential responsible party for
environmental contamination or any Release of Hazardous Material, nor has the
Company been notified that any site or facility now or previously owned or
leased by the Company is listed or proposed for listing on the NPL or any
similar state or local list of sites requiring investigation or clean-up;
(e) the Company in connection with the Business has not entered into or
agreed to any consent decree or order with respect to or affecting the Assets
relating to compliance with any Environmental Law or to investigation or cleanup
of Hazardous Material under any Environmental Law;
(f) there are no aboveground or underground storage tanks located on, in or
under any properties currently or formerly owned, operated or leased by the
Company in connection with the Business or any predecessor of the Business or
the Company in connection with the Business;
(g) no Releases of Hazardous Material have occurred at, from, in, on, to or
under any property currently or formerly owned, operated or leased by the
Company in connection with the Business or any predecessor of the Business or
the Company, and no Hazardous Material is present in, on or about or is
migrating to or from any such property that could give rise to an Environmental
Claim by a Governmental or Regulatory Authority or third party against the
Business or the Company;
(h) neither the Company in connection with the Business, nor any
predecessors thereof, has transported or arranged for the treatment, storage,
handling, disposal or transportation of any Hazardous Substance to any location
that could result in an Environmental Claim against or liability to the Business
or the Company;
(i) there is no amount of asbestos, ureaformaldehyde material,
polychlorinated biphenyl containing equipment or lead paint containing materials
in, at or on any property owned, leased or operated by the Company in connection
with the Business; and
(j) there have been no environmental investigations, studies, audits or
tests with respect to any property currently or formerly owned, leased or
operated by the Company in connection with the Business thereof which have not
been delivered to Purchaser prior to execution of this Agreement.
2.16 LABOR MATTERS. To the Knowledge of the Company, the Company is in
compliance in all material respects with all Laws respecting employment and
employment practices, terms and conditions of employment and wages and hours.
2.17 BROKERS. Except for Xxxxxxxxxxx Xxxxxxx & Co., Inc., whose fees,
commissions and expenses are the sole responsibility of the Company, all
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried out by the Company
20
directly with Purchaser without the intervention of any other Person on behalf
of the Company in such manner as to give rise to any valid claim by any Person
against Purchaser for a finder's fee, brokerage commission or similar payment.
2.18 ABSENCE OF CERTAIN CHANGES. Except as set forth in SECTION 2.18 OF THE
DISCLOSURE SCHEDULE, since the Financial Statement Date, the Business has been
conducted in the ordinary course, and there has not been:
(a) any event, occurrence, state of circumstances or facts or change in the
Company, the Assets or the Business that has had or that may be reasonably
expected to have, either alone or together, a Material Adverse Effect;
(b) any change by the Company in its accounting principles, methods or
practices other than changes required pursuant to GAAP or in the manner it keeps
its books and records or any change by the Company of its current practices with
regards to sales, receivables, payables or accrued expenses;
(c) the entering into of any Contract (other than the July Agreement) or
other arrangement between the Company and any officer, director, stockholder or
Affiliate of the Company; or
(d) any (i) single commitment for capital expenditures that has not been
performed prior to the Effective Date in excess of $1,000,000 for additions to
property, plant, equipment or intangible capital assets, (ii) commitments for
capital expenditures that has not been performed prior to the Effective Date in
an aggregate amount in excess of $5,000,000 for additions to property, plant,
equipment or intangible capital assets or capital expenditures, (iii) sale,
assignment, transfer, lease or other disposition of or agreement to sell,
assign, transfer, lease or otherwise dispose of any asset or property outside
the ordinary course of business having a value of $2,000,000 in the aggregate.
2.19 SUFFICIENCY OF AND TITLE TO THE ASSETS. Upon consummation of the
transactions contemplated by this Agreement, the Company will have sold,
assigned, transferred and conveyed to Purchaser, free and clear of all Liens,
other than Permitted Liens, all of the Assets, which constitute all of the
properties and assets now held or employed by the Company primarily in
connection with the Business (other than the Excluded Assets).
2.20 INSURANCE. As of the Effective Date, the assets, properties and
operations of the Business are insured under various policies of insurance, all
of which are described in SECTION 2.20 OF THE DISCLOSURE SCHEDULE, which
discloses for each policy the type of coverage and the amounts of coverage. As
of the Effective Date, all such policies are in full force and effect, no notice
of cancellation has been received, and there is no existing material default, or
event which the giving of notice or lapse of time or both, would constitute a
material default, by any insured thereunder.
21
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER and aci
Purchaser and ACI, jointly and severally represent and warrant to the
Company as follows as of the Effective Time and as of the Closing Date, except,
to the extent any such representation or warranty is made as of a specified date
earlier than the Closing Date, such earlier date:
3.01 EXISTENCE. Purchaser is a corporation duly organized, validly existing
and in good standing under the Laws of the State of Missouri. ACI is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Nevada. Each of Purchaser and ACI has full corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
3.02 AUTHORITY. The execution and delivery by Purchaser and ACI of this
Agreement, and the performance by Purchaser and ACI of their respective
obligations hereunder, have been duly and validly authorized by the respective
boards of directors of Purchaser and ACI, no other corporate action on the part
of Purchaser or ACI or their respective shareholders being necessary. This
Agreement has been duly and validly executed and delivered by each of Purchaser
and ACI and constitutes a legal, valid and binding obligation of each of
Purchaser and ACI enforceable against each of them in accordance with its terms,
except to the extent such enforceability (a) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally and (b) is subject to general principles of equity.
3.03 NO CONFLICTS. The execution and delivery by each of Purchaser and ACI
of this Agreement do not and the consummation of the transactions contemplated
hereby will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the articles of incorporation (or other comparable
corporate charter document) of Purchaser or ACI, as applicable;
(b) subject to obtaining the consents, approvals and actions, making the
filings and giving the notices disclosed in SECTION 3.04 OF THE DISCLOSURE
SCHEDULE, conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to Purchaser or ACI or any of the
Assets (other than such conflicts, violations or breaches which could not in the
aggregate reasonably be expected to adversely affect the validity or
enforceability of this Agreement); or
(c) except as could not, individually or in the aggregate, reasonably be
expected to adversely affect the ability of Purchaser or ACI to consummate the
transactions contemplated hereby or to perform its obligations hereunder, (i)
conflict with or result in a violation or breach of, (ii) constitute (with or
without notice or lapse of time or both) a default under, (iii) require
Purchaser or ACI to obtain any consent, approval or action of, make any filing
with or give any notice to any Person as a result or under the terms of, or (iv)
result in the
22
creation or imposition of any Lien upon Purchaser or ACI or any of their
respective assets or properties under, any Contract or License to which
Purchaser or ACI is a party or by which any of their respective assets and
properties is bound.
3.04 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed in SECTION
3.04 OF THE DISCLOSURE SCHEDULE, no consent, approval, action, order or
authorization of, or registration, declaration or filing with or notice to any
Governmental or Regulatory Authority on the part of Purchaser or ACI is required
in connection with the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby, except where the
failure to obtain any such consent, approval or action, to make any such filing
or to give any such notice could not reasonably be expected to adversely affect
the ability of Purchaser or ACI to consummate the transactions contemplated by
this Agreement or to perform its obligations hereunder.
3.05 LEGAL PROCEEDINGS. There are no Orders outstanding and no Actions or
Proceedings pending or, to the Knowledge of Purchaser or ACI, as applicable,
threatened against, relating to or affecting Purchaser or ACI, as the case may
be, which could reasonably be expected to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement.
3.06 BROKERS. Except for Deutsche Bank Securities Inc., whose fees,
commissions and expenses are the sole responsibility of Purchaser and/or ACI,
all negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by Purchaser and ACI without the intervention of
any Person on behalf of Purchaser or ACI in such manner as to give rise to any
valid claim by any Person against the Company for a finder's fee, brokerage
commission or similar payment.
3.07 FINANCING. Purchaser has sufficient cash and/or available credit
facilities (and has provided the Company with evidence thereof) to pay the
Purchase Price and to make all other necessary payments of fees and expenses in
connection with the transactions contemplated by this Agreement.
3.08 PURCHASER'S GAMING LICENSES. Neither Purchaser nor any of its
directors or executive officers has ever been denied a gaming license by any
Governmental or Regulatory Authority. ACI and the directors and executive
officers of Purchaser are currently licensed or hold findings of suitability to
conduct gaming activities in the States of Nevada, Mississippi and Iowa. A list
of such directors, officers and each such state in which such Person is licensed
or holds a finding of suitability is set forth in SECTION 3.08 OF THE DISCLOSURE
SCHEDULE.
ARTICLE IV
COVENANTS OF THE COMPANY AND PARENT
The Company and Parent covenant and agree with Purchaser that, at all times
from and after the Effective Date until the Closing, and in the case of SECTIONS
4.06, 4.11 and 4.12 for the period set forth therein, Parent and the Company
will, and Parent will cause the Company to, comply with all covenants and
provisions of this ARTICLE IV, except to the extent
23
creation or imposition of any Lien upon Purchaser or ACI or any of their
respective assets or properties under, any Contract or License to which
Purchaser or ACI is a party or by which any of their respective assets and
properties is bound.
3.04 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed in SECTION
3.04 OF THE DISCLOSURE SCHEDULE, no consent, approval, action, order or
authorization of, or registration, declaration or filing with or notice to any
Governmental or Regulatory Authority on the part of Purchaser or ACI is required
in connection with the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby, except where the
failure to obtain any such consent, approval or action, to make any such filing
or to give any such notice could not reasonably be expected to adversely affect
the ability of Purchaser or ACI to consummate the transactions contemplated by
this Agreement or to perform its obligations hereunder.
3.05 LEGAL PROCEEDINGS. There are no Orders outstanding and no Actions or
Proceedings pending or, to the Knowledge of Purchaser or ACI, as applicable,
threatened against, relating to or affecting Purchaser or ACI, as the case may
be, which could reasonably be expected to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement.
3.06 BROKERS. Except for Deutsche Bank Securities Inc., whose fees,
commissions and expenses are the sole responsibility of Purchaser and/or ACI,
all negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by Purchaser and ACI without the intervention of
any Person on behalf of Purchaser or ACI in such manner as to give rise to any
valid claim by any Person against the Company for a finder's fee, brokerage
commission or similar payment.
3.07 FINANCING. Purchaser has sufficient cash and/or available credit
facilities (and has provided the Company with evidence thereof) to pay the
Purchase Price and to make all other necessary payments of fees and expenses in
connection with the transactions contemplated by this Agreement.
3.08 PURCHASER'S GAMING LICENSES. Neither Purchaser nor any of its
directors or executive officers has ever been denied a gaming license by any
Governmental or Regulatory Authority. ACI and the directors and executive
officers of Purchaser are currently licensed or hold findings of suitability to
conduct gaming activities in the States of Nevada, Mississippi and Iowa. A list
of such directors, officers and each such state in which such Person is licensed
or holds a finding of suitability is set forth in SECTION 3.08 OF THE DISCLOSURE
SCHEDULE.
ARTICLE IV
COVENANTS OF THE COMPANY AND PARENT
The Company and Parent covenant and agree with Purchaser that, at all times
from and after the Effective Date until the Closing, and in the case of SECTIONS
4.06, 4.11 and 4.12 for the period set forth therein, Parent and the Company
will, and Parent will cause the Company to, comply with all covenants and
provisions of this ARTICLE IV, except to the extent
23
Purchaser may otherwise consent in writing. Purchaser acknowledges and agrees
that the actions taken, or failed to be taken, by Parent and the Company
prior to or following the Effective Date with respect to the investigation by
the Commission or any other Governmental or Regulatory Authority into the
activities of Xxxxxxx Xxxxxxxx and the involvement of Parent and the Company
therewith, and any related matters, shall not constitute a breach of the
obligations of Parent and the Company pursuant to this ARTICLE IV; PROVIDED,
HOWEVER, that Purchaser shall have no liability with respect to any
obligations resulting from such investigation and all liabilities arising out
of, or with respect to, such investigation shall be considered a "Retained
Liability" for the purposes of this Agreement.
4.01 REGULATORY AND OTHER APPROVALS. The Company will, as promptly as
reasonably practicable (a) take all commercially reasonable steps necessary or
desirable to obtain all consents, approvals, actions, orders or authorizations
of, or make all registrations, declarations or filings with and give all notices
to Governmental or Regulatory Authorities or any other Person required of the
Company to consummate the transactions contemplated hereby (including, without
limitation, the Required Consents), (b) provide such other information and
communications to such Governmental or Regulatory Authorities or other Persons
as such Governmental or Regulatory Authorities or other Persons may reasonably
request in connection therewith and (c) provide reasonable cooperation to
Purchaser in connection with the performance of its obligations under SECTIONS
5.01 and 5.02 below. The Company will provide, or cause to be provided,
notification to Purchaser when any such consent, approval, action, order,
authorization, registration, declaration, filing or notice referred to in clause
(a) above is obtained, taken, made or given, as applicable, and will advise
Purchaser of any communications (and, unless precluded by Law, provide copies of
any such communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by this
Agreement.
4.02 HSR FILINGS. In addition to and not in limitation of the Company's
covenants contained in SECTION 4.01 above, the Company will (a) take promptly
all actions necessary to make the filings required of the Company or its
Affiliates under the HSR Act, (b) comply at the earliest practicable date with
any request for additional information received by the Company or its Affiliates
from the Federal Trade Commission or the Antitrust Division of the Department of
Justice pursuant to the HSR Act and (c) cooperate with Purchaser in connection
with Purchaser's filing under the HSR Act and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement commenced by either the Federal Trade Commission or the Antitrust
Division of the Department of Justice or state attorneys general.
4.03 INVESTIGATION BY PURCHASER. The Company will (a) provide Purchaser and
its officers, employees, counsel, accountants, financial advisors, consultants
and other representatives (together, "REPRESENTATIVES") with full access, upon
reasonable prior notice and during normal business hours, to all officers,
employees, agents and accountants of the Company and its Assets and Books and
Records, but only to the extent that such access does not unreasonably interfere
with the business operations of the Company and (b) furnish Purchaser and such
other Persons with all such information and data (including, without limitation,
copies of Contracts, Benefit Plans and other Books and Records) concerning the
business and operations of the Company as Purchaser or any of such other Persons
reasonably may request in
24
connection with such investigation, except to the extent that furnishing any
such information or data would violate any Law, Order, Contract or License
applicable to the Company or by which any of its Assets is bound.
4.04 CONDUCT OF BUSINESS. Subject to SECTION 4.05 below, the Company will
conduct business only in the ordinary course consistent with past practice and
shall:
(a) take all actions to be in compliance with, and to maintain the
effectiveness of, all Licenses, it being acknowledged and agreed that actions
taken, or failed to be taken, by Parent and the Company prior to or following
the Effective Date with respect to the investigation by the Commission or any
other Governmental or Regulatory Authority into the activities of Xxxxxxx
Xxxxxxxx and the involvement of Parent and the Company therewith shall not
constitute a breach of this clause (a);
(b) preserve the goodwill of those of its suppliers, customers and
distributors having material business relationships with the Business, unless
such failure to preserve such goodwill would not be commercially unreasonable;
(c) maintain policies of insurances with substantially the same insurance
coverage as exists as of the Effective Date against loss or damage to the
Assets;
(d) use commercially reasonable efforts to maintain the Assets, in the
aggregate, in a condition comparable to their current condition, reasonable
wear, tear and depreciation excepted, and except for Assets disposed of, sold or
consumed in the ordinary course of business in accordance with SECTION 4.05(a)
below;
(e) continue and maintain its dredging operations in material compliance
with the requirements of applicable Laws; and
(f) unless precluded by law, notify Purchaser in writing if to the
Knowledge of the Company there is any event, condition, circumstance or group of
actions, events, conditions or circumstances that could be reasonably expected
to have a Material Adverse Effect, provided that nothing contained herein shall
be deemed to require the Company to disclose any information that is privileged.
4.05 CERTAIN RESTRICTIONS. The Company shall not:
(a) other than in the ordinary course of business or pursuant to the
exercise of the rights to purchase the JV interests subject to the Option
Agreement, acquire, lease, dispose of or otherwise transfer, any Assets;
(b) engage with any Person in any merger or other business combination; or
(c) amend or modify in any material respect or terminate any material
Contract that could be reasonably expected to have a Material Adverse Effect, it
being agreed that amendments to the Option Agreement that do not increase the
exercise price to Purchaser of the option that is the subject of the Option
Agreement and amendments to the Joint Venture Agreement and/or the Ground Lease
to permit the assignment thereof to Purchaser and the
25
novation of the Company and Parent or the acceleration of the exercise of the
option under the Option Agreement shall not be deemed to have a Material Adverse
Effect;
(d) make any material changes in the Company's staffing levels that could
be reasonably expected to have a Material Adverse Effect;
(e) without Purchaser's prior written approval, which approval shall not be
unreasonably withheld, materially increase the salary, bonus or other
compensation of any of the Company's current employees that are department heads
of the Business, other than pursuant to bonus plans that have been approved
prior to the Effective Date, increases pursuant to employment agreements entered
into prior to the Effective Date and increases consistent with past practices in
an amount not to exceed five percent (5%) of the applicable employee's most
recent annual salary and bonus
(f) enter into any Contract to do or engage in any of items listed in
clauses (a) through (g) above; or
(g) except as expressly permitted elsewhere in this Agreement, enter into
or commit or propose to enter into any Contract obligating the Company to make
payments thereunder in excess of $100,000 in any twelve-month period that can
not be cancelled upon thirty days notice; and
(h) amend its articles of incorporation or bylaws in any manner that would
have an adverse effect on the transactions contemplated hereby.
4.06 TRANSITION PERIOD.
(a) Subject to the prior approval of the Commission, the Company and Parent
will, beginning at the Transfer Time and for a period of twelve (12) months
after the Transfer Time, permit Purchaser to use and employ, solely in
connection with the operation of the Business and pursuant to a non-exclusive,
non-transferable, royalty-free license and right to use, the "Station Casino"
name and logo (the "XXXX") in connection with the operation of the Business
following the Closing; provided that Purchaser shall conduct the Business under
the Xxxx in a manner that is of a quality which at all times comports with the
quality of the goods and services previously offered by the Company and its
Affiliates under the Xxxx at the acquired property. The Company or its designee
shall have the right, upon reasonable notice to Purchaser and during reasonable
business hours, to inspect the premises of the Business to ensure that the
quality of the Business is being maintained. In the event Purchaser fails to
carry out or comply with such quality standards, the Company may immediately
terminate this non-exclusive, non-transferable, royalty-free license upon
written notice to Purchaser.
(b) Each of the Company and Parent will, beginning at the Effective Date
and for a period of twelve (12) months after the Transfer Time, upon reasonable
request from Purchaser and at the sole cost and expense of Purchaser, promptly
provide Purchaser any and all information regarding the Assets and the Business,
including but not limited to financial, accounting, tax and related data,
reasonably necessary for the preparation by Purchaser of applications, reports
and filings with any Governmental or Regulatory Authority.
26
(c) Each of the Company and Parent will, following the Effective Date and
at the sole cost and expense of Purchaser, provide reasonable assistance to
Purchaser with respect to the transfer of the Assets, including, without
limitation, the transition and integration of payroll and benefit processing,
accounting systems and other similar administrative systems and software systems
constituting Assets. In addition, the Company and Parent will reasonably
cooperate with Purchaser with respect to any permitted transfer of any rating
experience with respect to unemployment and workers' compensation, and such
other processes and procedures with respect to the operation of the Business as
Purchaser may reasonably request.
4.07 NO SOLICITATION. From and after the Effective Date, neither the
Company nor Parent shall, directly or indirectly, through any officer, director,
employee, financial advisor, representative or agent of such party (i) solicit,
initiate, or encourage (including by way of furnishing information) or take any
other action to facilitate knowingly any inquiries or proposals that constitute,
or could reasonably be expected to lead to, a proposal or offer for a merger,
consolidation, business combination, sale of substantial assets, sale of shares
of capital stock (including, without limitation, by way of a tender or exchange
offer) or similar transaction involving the Company or the Business, other than
the transactions contemplated by this Agreement (an "ACQUISITION PROPOSAL"),
(ii) engage in negotiations or discussions with any person (or group of persons)
other than Purchaser or its affiliates (a "THIRD PARTY") concerning, or provide
any non-public information to any person or entity relating to, any Acquisition
Proposal, (iii) continue any prior discussions or negotiations with any Third
Party concerning any Acquisition Proposal or (iv) accept, or enter into any
agreement concerning, any Acquisition Proposal with any Third Party or
consummate any Acquisition Proposal other than as contemplated by this
Agreement.
4.08 TITLE INSURANCE.
(a) On the Closing Date, the Company shall, at the Company's expense
(except as provided hereinafter), cause to be issued and delivered to Purchaser
a policy of title insurance (the "Title Policy") with respect to the Real
Property and conforming to the following specifications:
(i) The form of the policy will be ALTA Owner's Policy Form B 1970
(amended 10/17/70), with appropriate modifications for leasehold estates,
or the current approved form for the jurisdiction in which the Real
Property is located, with an endorsement deleting any exclusion or
exception for creditors' rights;
(ii) The Title Policy will be issued by Assured Quality Title Company
(the "Title Company") and shall be underwritten by First American Title
Insurance Company;
(iii) Reinsurance (with direct access) of all amounts in excess of
$100,000,000, if any, shall be underwritten by Chicago Title Insurance
Company;
(iv) The insured will be Purchaser and the JV;
(v) The Title Policy shall be in an amount equal to that portion of
the Purchase Price allocated to the Real Property;
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(vi) The Title Policy shall contain an affirmative statement of the
insurer to the effect that the knowledge of the Company and First Holdings
Company prior to the Closing shall not be imputed to Purchaser;
(vii) The Title Policy will be dated concurrent with or subsequent to
the Closing;
(viii) There will be no exceptions to coverage other than the
Permitted Liens. Without limiting the generality of the foregoing
provisions hereof, the Title Policy shall not contain any exceptions with
respect to:
(A) Rights or claims of parties in possession other than tenants,
as tenants only, under the leases and subleases described in SECTIONS
1.01(a)(ii)(A) AND 1.01(a)(ii)(B) OF THE DISCLOSURE SCHEDULE;
(B) Encroachments, overlaps, boundary line disputes or any other
matters which would be disclosed by an accurate survey and inspection;
(C) Easements or claims of easements not shown by the public
records;
(D) Any lien, or right to a lien, for services, labor or
materials heretofore or hereafter furnished; and
(E) Any other exceptions which may be designated or included as
standard exceptions in the area where the Real Property is located.
(ix) The Title Policy, at Purchaser's request and expense, shall
contain a zoning endorsement in the form of ALTA Form 3.1 showing the
zoning classification of the Real Property and confirming that the current
use of the Real Property is in conformance with the applicable zoning laws
and use restrictions; and
(x) The Title Policy, at Purchaser's request, will contain an
assignment endorsement whereby the insurer agrees to consent to the
assignment of the policy to, and to issue without charge an endorsement to
the policy to show as an insured under the policy, any of the following:
(i) any successor to Purchaser, by dissolution, liquidation, merger,
consolidation, reorganization or otherwise; (ii) any stockholder of
Purchaser to whom the Real Property, or any part thereof, is distributed;
and (iii) any Affiliate of Purchaser, including any entity controlled by,
in control of or under common control with Purchaser and to whom an
interest in the Real Property, or any part thereof, is transferred by
Purchaser. In the event that the Real Property, or any part thereof,
consists of more than one parcel, the Title Policy shall, at Purchaser's
request, contain an affirmative statement of insurance to the effect that
all parcels of land constituting the Real Property, or such part thereof,
are contiguous. The policy also shall contain such other affirmative
statements of insurance and endorsements (for example, but not by way of
limitation, an "access endorsement") as Purchaser may reasonably require.
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(xi) The fee or premium for any endorsements to the Title Policy
whether identified in this Section 4.08 or otherwise requested by
Purchaser, shall be for the account of and paid by Purchaser.
(b) The Company shall within ten (10) days after the date hereof deliver to
Purchaser (i) a current commitment from the Title Company setting forth the
basis upon which the Title Company is willing to insure title to the Real
Property (the "Title Commitment"), and all documents referenced in Schedule B
thereto, and (ii) a copy of each survey (the "Survey") of each parcel of the
Real Property in the Company's possession, which Purchaser acknowledges and
agrees shall be delivered without any representation or warranty of any kind as
to the accuracy or completeness thereof by the Company or Parent. The cost of
any survey work performed or ordered by the Company prior to the date hereof
shall be paid for by the Company. If Purchaser requires any revisions or updates
to the Survey delivered by the Company or requires a new survey, all such work
shall be at the cost and expense of Purchaser. If the Title Commitment or the
Survey discloses any liens, easements, restrictions, reservations or other
defects or any other matters objectionable to Purchaser ("Title Objections"),
other than Permitted Liens, Purchaser shall advise the Company of the same in
writing within ten (10) days after last receipt by Purchaser of the Title
Commitment (with all documents referred to in Schedule B thereto) and the Survey
(as revised or updated as may be required by Purchaser within 30 days after
receipt of the Title Commitment and Survey). Matters not objected to by
Purchaser within said period shall be deemed to be additional Permitted Liens.
As to any Title Objections, the Company may, but shall not be obligated to,
remedy such matters as are susceptible of being remedied and shall, within ten
(10) days after Purchaser gives the Company notice of its Title Objections,
deliver written notice to Purchaser of those Title Objections which it shall
remedy and those which it shall not remedy. Unless Purchaser elects to terminate
this Agreement in accordance with clause 4.08(b)(y) below, the Company shall, as
a condition to Purchaser's obligation to close hereunder, deliver to Purchaser a
Title Commitment and Survey revised to reflect that any Title Objections which
the Company has committed to remedy have been remedied to Purchaser's reasonable
satisfaction. If the Company elects not to remedy any Title Objection, Purchaser
shall have the option, which it shall exercise in writing within ten (10) days
of its receipt of the written notice from the Company, of (x) consummating the
transaction contemplated hereby and accepting such title as the Company holds,
without change in or to the terms hereof, unless such matters are encumbrances
or liens for an ascertainable amount, in which case the Company shall pay the
amount thereof to Purchaser in cash at the Closing, or (y) terminating this
Agreement and receiving a refund of all monies deposited hereunder. If Purchaser
fails to deliver the written notice required in the immediately preceding
sentence within the period prescribed thereby, such failure shall be deemed an
irrevocable election by Purchaser to proceed to close the purchase and sale
contemplated by this Agreement in accordance with clause 4.08(b)(x) above.
4.09 ACI'S GAMING COMPLIANCE PROGRAM. The Company, Parent and their
respective executive officers, directors and principal stockholders shall fully
cooperate with any background investigation with respect to each of them
required to be conducted by ACI pursuant to its Gaming Compliance Program to the
extent required by the Nevada Gaming Control Board.
4.10 FULFILLMENT OF CONDITIONS. The Company (a) will execute and deliver at
the Closing each certificate, document and instrument that the Company is hereby
required to
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execute and deliver as a condition to Closing, (b) will take all commercially
reasonable steps necessary or desirable and proceed diligently and in good faith
(i) to satisfy each condition to the obligations of Purchaser contained in this
Agreement and (ii) to consummate all of the transactions contemplated by this
Agreement, and (c) will not take or fail to take any action that could
reasonably be expected to result in the nonfulfillment of any obligation of the
Company or Purchaser contained in this Agreement.
4.11 NONCOMPETITION.
(a) TERM. The Company and Parent hereby covenant with Purchaser that from
the Closing Date until the date that is three (3) years following the Closing
Date, none of the Company, Parent or their respective subsidiaries shall (except
as otherwise specifically permitted herein), directly or indirectly, for their
own account, or as a partner, member, advisor or agent of any partnership or
joint venture, or as a trustee, officer, director, shareholder, advisor or agent
of any corporation, trust, or other business organization or entity, own,
manage, join, participate in, encourage, support, finance, be engaged in, have
an interest in, give financial assistance or advice to, permit Parent's name to
be used in connection with or be concerned in any way in the ownership,
management, operation or control of any casino gaming operation within one
hundred (100) miles of the facilities of the Business as of the Effective Date
other than a Currently Existing Gaming Operation (as such operations may be
expanded from time to time) PROVIDED that (i) such operation shall not conduct
casino gaming under the "Station Casinos" name, or any derivative thereof, (ii)
such entity is acquired by or becomes affiliated with Parent or its subsidiaries
as a result of a transaction between an entity that has assets other than such
Currently Existing Gaming Operation (the "COMPETING GROUP") and Parent or such
subsidiary and (iii) either (A) EBITDA of such operation for the immediately
preceding four fiscal quarters shall not be greater than 30% of the consolidated
EBITDA of the Competing Group for the immediately preceding four fiscal quarters
or (B) Parent or the Competing Group pays Purchaser an amount equal to $10
million no later than ten (10) Business Days following consummation of the
transaction between Parent and the Competing Group. For purposes of this
Agreement, "Currently Existing Gaming Operation" shall mean a gaming operation
that is owned or operated by third parties prior to the acquisition of ownership
or commencement of operations thereof by the Company, Parent or their
Affiliates. Each of the Company and Parent also hereby covenants that it shall
not, for a period of eighteen (18) months after the Closing Date, solicit or
encourage any employee, agent, consultant or independent contractor of Purchaser
to terminate or curtail his or her relationship with Purchaser.
(b) REMEDIES. The parties agree that the remedy of the Purchaser at law for
any actual or threatened breach of this SECTION 4.11 by the Company or Parent
would be inadequate and that, in the event of such actual or threatened breach,
in addition to any other remedy available to it, Purchaser shall be entitled to
specific performance hereof, injunctive relief, or both, by temporary or
permanent injunction or other appropriate judicial remedy, writ or order. The
remedies provided for in this SECTION 4.11 are non-exclusive and are in addition
to each other and to any other remedy available elsewhere in this Agreement or
available generally at law or in equity.
(c) DIVISIBILITY. If any portion of this SECTION 4.11 is held to be
unreasonable, arbitrary or against public policy, provisions of this SECTION
4.11 shall be considered divisible
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both as to time and as to geographical areas; and each month of each year of the
specified period shall be deemed to be a separate period of time. In the event
any court determines the specified time period or geographical area to be
unreasonable, arbitrary or against public policy, the lesser time period or
geographical area which is determined to be reasonable, non-arbitrary and not
against public policy may be enforced. Notwithstanding the foregoing, the
Company and Parent agree to honor the terms of this SECTION 4.11 for the time
periods and areas specified herein and not to contest the enforceability of such
periods or areas.
(d) PERMITTED OWNERSHIP. Notwithstanding any language to the contrary
contained in this SECTION 4.11, it shall be permissible for the Company and
Parent to own stock or securities of any company which may be deemed competitive
with Purchaser providing such shares or securities held by the Company or Parent
are issued by a company listed on a national securities exchange or the NASDAQ
Automated Quotation System and represent less than a five percent (5%) interest
in such company.
4.12 NO SOLICITATION. For a period of twelve (12) months following the
Closing Date, Parent, the Company and their respective Affiliates shall refrain
from, either alone or in conjunction with any other Person, directly or
indirectly, soliciting for hire any employee of Purchaser or any Affiliate of
Purchaser, except as contemplated pursuant to the terms of that certain Asset
Purchase Agreement dated as of October 17, 2000, by and among Lake Xxxx Station,
Inc., Parent, Ameristar Casino Las Vegas, Inc. and ACI; provided, however, that
the Company shall not be prohibited from soliciting for employment any Person
whose employment with Purchaser or any of its Affiliates terminated prior to
such solicitation.
ARTICLE V
COVENANTS OF PURCHASER
Purchaser covenants and agrees with the Company that, at all times from and
after the date hereof until the Closing and, in the case of SECTIONS 5.04, 5.05,
5.06, 5.07, 5.08, 5.10 and 5.11 below, thereafter, Purchaser will comply with
all covenants and provisions of this ARTICLE V, except to the extent the Company
may otherwise consent in writing.
5.01 REGULATORY AND OTHER APPROVALS. Purchaser will as promptly as
practicable (a) take all steps necessary or desirable to obtain all consents,
approvals, actions, orders or authorizations of, or make all registrations,
declarations or filings with and give all notices to Governmental or Regulatory
Authorities or any other Person required of Purchaser to consummate the
transactions contemplated hereby and will diligently and in good faith strive to
obtain the same including, without limitation, (i) making all necessary filings
under the HSR Act with the Federal Trade Commission and the Department of
Justice no later than seven (7) days following the date hereof (ii) making all
necessary filings with the Commission no later than fifteen (15) days following
the date hereof, and (iii) no later than ten (10) days following the Effective
Date, making all necessary filings and requesting consents from and, to the
extent required to obtain consents, hearings with The Port Authority of Kansas
City, Missouri and the Birmingham Drainage District, (b) provide such other
information and communications to such Governmental or Regulatory Authorities or
other Persons as such Governmental or Regulatory Authorities or other Persons
may request in connection therewith and (c) provide cooperation to
31
the Company in connection with the performance of their obligations under
SECTIONS 4.01 and 4.02 above. The parties acknowledge and agree that so long as
the Purchaser complies with clauses (a) and (b) of the foregoing sentence, any
failure or refusal by the Commission to grant to Purchaser a Class A gaming
license to operate the Business shall not be deemed to be a breach of the
obligations of Purchaser or Parent hereunder; provided that nothing contained
herein shall limit the obligations of Purchaser to comply with any other
covenant or agreement contained in this Agreement or shall relieve Purchaser
from liability for any breach of a representation or warranty contained in this
Agreement. Purchaser will provide prompt written notification to the Company
when any such consent, approval, action, order, authorization, registration,
declaration, filing or notice referred to in clause (a) above is obtained,
taken, made or given, as applicable, and will advise the Company of any
communications (and, unless precluded by Law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by this
Agreement.
5.02 HSR FILINGS. In addition to and without limiting Purchaser's covenants
contained in SECTION 5.01 above, Purchaser will (a) take promptly all actions
necessary to make the filings required of Purchaser or its Affiliates under the
HSR Act and in any event no later than seven (7) days following the date hereof,
(b) comply at the earliest practicable date with any request for additional
information received by Purchaser or its Affiliates from the Federal Trade
Commission or the Antitrust Division of the Department of Justice pursuant to
the HSR Act and (c) cooperate with the Company in connection with the Company's
filing under the HSR Act and in connection with resolving any investigation or
other inquiry concerning the transactions contemplated by this Agreement
commenced by either the Federal Trade Commission or the Antitrust Division of
the Department of Justice or state attorneys general. Purchaser shall pay the
Filing Fee, if any, required under the HSR Act.
5.03 INVESTIGATION BY THE COMPANY. Purchaser will provide the Company and
their respective Representatives with such documentation, data and other
information as the Company may reasonably request in order to verify Purchaser's
representations and warranties set forth in SECTION 3.07 above, but only to the
extent that furnishing any such documentation, data or information would not
violate any Law, Order, Contract or License applicable to Purchaser.
5.04 NO SOLICITATION. Purchaser will, for a period of eighteen (18) months
following the Closing Date, except as expressly permitted or required by ARTICLE
IX of this Agreement, refrain from, either alone or in conjunction with any
other Person, directly or indirectly, through its present of future Affiliates,
soliciting for hire any employee of the Company or any Affiliate of the Company;
provided, however, that Purchaser shall not be prohibited from soliciting for
employment any Person whose employment with the Company or any of its Affiliates
terminated prior to such solicitation.
5.05 COLLECTION OF GAMING CHIPS AND TOKENS. Purchaser shall redeem, in its
capacity as the Company's agent if Purchaser has not elected to acquire such
chips and tokens pursuant to SECTION 1.01(b)(x) hereof, any gaming chips or
tokens (from any series in use as of or prior to the Transfer Time) of the
Company relating to the use and operation of the Business, which are presented
by patrons of the Business or Purchaser for payment within the applicable
Missouri statutory time periods for such redemptions. The Company's gaming chips
and tokens
32
redeemed by Purchaser shall be reimbursed, at Purchaser's election, as often as
weekly for the first 30 Business Days following the Closing Date, and thereafter
as often as monthly, by the Company, upon delivery by Purchaser to the Company
of such gaming chips and tokens being redeemed. The Company agrees to make
arrangements for the additional redemption of its gaming chips and tokens as may
be required by Missouri law.
5.06 BAGGAGE. At the Transfer Time, an authorized representative of the
Company shall perform the following functions for all baggage, trunks and other
property that was checked and placed in the care of the Company: (i) seal all
pieces of baggage with tape: (ii) prepare an inventory ("INVENTORIED BAGGAGE")
of such items indicating the check number applicable thereto; and (iii) deliver
the Inventoried Baggage to an authorized representative of Purchaser and secure
a receipt for the Inventoried Baggage. Thereafter, Purchaser shall be
responsible for such Inventoried Baggage, PROVIDED that the Company shall be
liable to the owners of such Inventoried Baggage with respect to any missing or
damaged contents of such Inventoried Baggage and such liability shall be a
Retained Liability for the purposes of this Agreement to the extent that
Purchaser is able to prove that such contents were missing or damaged prior to
the Transfer Time.
5.07 SAFE DEPOSITS. Safe deposit boxes in use by customers at the Transfer
Time will be sealed in a reasonable manner mutually agreeable to Purchaser and
the Company. At the Transfer Time, Purchaser and the Company shall designate in
writing their initial safe deposit representatives. Representatives of Purchaser
are to be present when a seal is broken. The Company will have no further
responsibility for seals broken without the presence of the Company's
representative. Purchaser will have no responsibility for loss or theft from a
safe deposit box whose seal was broken in the presence of the Company
representative. The Company will make a representative available within one (1)
hour after Purchaser notifies a person or persons whom the Company will from
time to time designate. All safe deposit keys, combinations and records shall be
delivered at the Transfer Time to Purchaser.
5.08 VALET PARKING. At the Transfer Time, an authorized representative of
the Company shall perform the following functions for all motor vehicles that
were checked and placed in the care of the Company: (i) xxxx all motor vehicles
with a sticker or tape; (ii) prepare a report with respect to any damages to
such vehicles; (iii) prepare an inventory of such vehicles ("INVENTORIED
VEHICLES") indicating the check number applicable thereto; and (iv) transfer
control of the Inventoried Vehicles to an authorized representative of Purchaser
and secure a receipt for the Inventoried Vehicles. Thereafter, Purchaser shall
be responsible for the Inventoried Vehicles, PROVIDED that the Company shall be
liable to the owners of such Inventoried Vehicles with respect to any damages
occurring as a result of actions taken by the Company and its employees prior to
the Transfer Time (including, without limitation, damages (as a result of
actions taken by the Company and its employees) set forth in the damage report)
or items missing from or damaged in such Inventoried Vehicles and such liability
shall be a Retained Liability for the purposes of this Agreement, to the extent
that Purchaser is able to prove that such items were missing or damaged prior to
the Transfer Time.
5.09 UNDERTAKINGS WITH RESPECT TO GROUND LEASE. In the event that all
necessary consents to the assignment of the Ground Lease, the Option Agreement
and the Joint Venture Agreement have not been received prior to the date that
all other conditions to the
33
obligations of Purchaser (other than deliveries to be made at the Closing)
hereunder have been satisfied, Purchaser shall undertake to exercise the option
to purchase the joint venture interest in the Station/First Joint Venture held
by First Holdings Company at the earliest possible time pursuant to the terms of
the Option Agreement, as the same may be amended following the date hereof to
accelerate the exercise period of the option set forth in the Option Agreement.
5.10 RETURN OF BOOKS AND RECORDS. Following the Closing Date, upon the
request of the Company, Purchaser shall return to the Company all Books and
Records relating to the Company that are not used primarily in the conduct of
the Business, including, without limitation, the Books and Records relating to
the businesses of Parent or its Affiliates (other than the Company).
5.11 USE OF TRANSFERRED INTELLECTUAL PROPERTY. Purchaser agrees that
neither it nor any of its Affiliates shall use any portion of the Transferred
Intellectual Property that prior to the Closing Date constituted proprietary
property of the Company in its operations in Xxxxx County, Nevada.
5.12 FULFILLMENT OF CONDITIONS. Purchaser (a) will execute and deliver at
the Closing each certificate, document and instruments that Purchaser is hereby
required to execute and deliver as a condition to the Closing, (b) will as
promptly as practicable affirmatively take all steps necessary or desirable and
proceed diligently and in good faith (i) to satisfy each other condition to the
obligations of the Company contained in this Agreement and (ii) to consummate
all of the transactions contemplated in this Agreement, and (c) will not take or
fail to take any action that could reasonably be expected to result in the
nonfulfillment of any obligation of the Company or Purchaser contained in this
Agreement.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder to purchase the Assets are subject
to the fulfillment, at or before the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by Purchaser
in its sole discretion):
6.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Company and Parent in this Agreement shall be true and correct, in
all respects, on and as of the Closing Date as though made on and as of the
Closing Date or, in the case of representations and warranties made as of a
specified date earlier than the Closing Date, on and as of such earlier date,
except in each case as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; PROVIDED, HOWEVER,
that for the purposes of determining the accuracy of such representations and
warranties, all "Material Adverse Effect" qualifications and other materiality
qualifications, and any similar qualifications, contained in such
representations and warranties shall be disregarded.
6.02 PERFORMANCE. The Company and Parent shall have performed and complied
with the agreements, covenants and obligations required by this Agreement to be
so performed or complied with by the Company, as the case may be, at or before
the Closing,
34
except in each case as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
6.03 OFFICERS' CERTIFICATES. The Company and Parent shall have delivered to
Purchaser a certificate, dated the Closing Date and executed in the name and on
behalf of the Company by an executive officer of the Company and on behalf of
the Parent by an executive officer of the Parent, substantially in the form and
to the effect of EXHIBIT C hereto, and certificates, dated the Closing Date and
executed by the Secretary of the Company and the Secretary of Parent,
substantially in the form and to the effect of EXHIBIT D hereto.
6.04 ORDERS AND LAWS. There shall not be in effect at the time of Closing
any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement.
6.05 REGULATORY CONSENTS AND APPROVALS. All consents, approvals, actions,
orders or authorizations of, all registrations, declarations or filings with and
all notices to any Governmental or Regulatory Authority necessary to permit
Purchaser and the Company to perform their respective obligations under this
Agreement and to consummate the transactions contemplated hereby shall have been
duly obtained, made or given and shall be in full force and effect, and all
terminations or expirations of waiting periods imposed by any Governmental or
Regulatory Authority necessary for the consummation of the transactions
contemplated by this Agreement, including under the HSR Act, shall have
occurred, except for such consents, approvals, actions, orders or authorizations
the failure of which to obtain could not be reasonably expected to have a
Material Adverse Effect.
6.06 CONSUMMATION OF RELATED TRANSACTION. The transactions contemplated by
the St. Xxxxxxx Riverfront Station, Inc. Agreement shall be consummated
substantially concurrently with the consummation of the transactions
contemplated hereby.
6.07 DELIVERIES. The Company shall have delivered to Purchaser the General
Assignment and other Assignment Instruments.
6.08 TITLE INSURANCE AND ENVIRONMENTAL REPORTS. Purchaser shall have
received (a) the Title Policy (as defined and described in SECTION 4.08 hereof)
and (b) recently completed Phase I environmental assessment reports with respect
to the Real Property.
6.09 CONSENTS.
With respect to each Contract set forth in SECTION 6.09 OF THE DISCLOSURE
SCHEDULE, the Company shall have obtained and delivered to Purchaser a consent
from the relevant third parties to the extent required for the assignment of
such Contract to Purchaser or, in the case of the Ground Lease, the Option
Agreement or Joint Venture, if the consents required pursuant to the terms
thereof shall not have been obtained the Company and Purchaser shall have
entered into a sublease on terms satisfactory to Purchaser with respect to the
real property leased pursuant to the Ground Lease, which sublease shall contain
representations and warranties regarding the ability of the Company and Parent
to sublease the real property subject to such Sublease.
35
6.10 ABSENCE OF MATERIAL ADVERSE EFFECT. Since the date hereof, there shall
not have occurred any Material Adverse Effect or any events or series of events
that constitute a Material Adverse Effect.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company hereunder to sell the Assets are subject to
the fulfillment, at or before the Closing, of each of the following conditions
(all or any of which may be waived in whole or in part by the Company in its
sole discretion):
7.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Purchaser in this Agreement shall be true and correct in all material
respects on and as of the Closing Date as though made on and as of the Closing
Date or, in the case of representations and warranties made as of a specified
date earlier than the Closing Date, on and as of such earlier date, except in
each case as could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; PROVIDED, HOWEVER, that for the
purposes of determining the accuracy of such representations and warranties, all
"Material Adverse Effect" qualifications and other materiality qualifications,
and any similar qualifications, contained in such representations and warranties
shall be disregarded.
7.02 PERFORMANCE. Purchaser shall have performed and complied with, in all
material respects, the agreements, covenants and obligations required by this
Agreement to be so performed or complied with by Purchaser at or before the
Closing.
7.03 OFFICERS' CERTIFICATES. Purchaser and ACI shall have delivered to the
Company certificates, dated the Closing Date and executed in the name and on
behalf of Purchaser and ACI by the executive officer of Purchaser and ACI,
respectively, substantially in the form and to the effect of EXHIBIT E-1 and
EXHIBIT E-2 hereto, and certificates, dated the Closing Date and executed by the
Secretary of Purchaser and ACI, respectively, substantially in the form and to
the effect of EXHIBIT F-1 and EXHIBIT F-2 hereto.
7.04 ORDERS AND LAWS. There shall not be in effect at the time of Closing
any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement.
7.05 REGULATORY CONSENTS AND APPROVALS. All consents, approvals and actions
of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit the Company and Purchaser to materially perform their
obligations under this Agreement and to consummate the transactions contemplated
hereby, shall have been duly obtained, made or given, shall be in full force and
effect and shall be in form and substance satisfactory to the Company and not
subject to any material condition or contingency and all terminations or
expirations of waiting periods imposed by any Governmental or Regulatory
Authority necessary for the consummation of the transactions contemplated by
this Agreement, including under the HSR Act, shall have occurred.
36
7.06 CONSUMMATION OF RELATED TRANSACTION. The transactions contemplated by
the St. Xxxxxxx Riverfront Station, Inc. Agreement shall be consummated
substantially concurrently with the consummation of the transactions
contemplated hereby.
7.07 DELIVERIES. Purchaser shall have delivered the Assumption Agreement
and other Assumption Instruments.
7.08 LETTER OF CREDIT. At the Closing, Purchaser shall deliver to the
Company an irrevocable standby letter of credit substantially in the form of,
and in the same amount and with the same terms as, the Company's existing letter
of credit, which amount may change from time to time, and in form and substance
satisfactory to the Company, which may be drawn upon only by the Company in
accordance with the terms of such letter of credit in the event that the Company
becomes liable for payments or other obligations, at any time on or after the
Closing Date, under the terms of that certain Guaranty Agreement executed by the
Company guaranteeing payment obligations pursuant to the Bond Trust Indenture,
dated July 5, 1999, by and between The 000 Xxxxxxx Xxxxxxxxxxxxxx Xxxxxxxxxxx
Xxxxxxxx and American National Bank and Trust Company of Chicago, as Trustee,
and the standby letter of credit relating thereto; (ii) an irrevocable standby
letter of credit in form and substance satisfactory to the Company and Parent
and in an amount equal to the payment obligations of the Company and Parent
remaining as of the Closing Date pursuant to Sections VI and VII of the
Development Agreement, as amended.
7.09 REQUIRED CONSENTS. The third party consents listed in SECTION 7.09 OF
THE DISCLOSURE SCHEDULE shall have been obtained and shall not have been
revoked.
ARTICLE VIII
TAX MATTERS AND POST-CLOSING TAXES
8.01 TRANSFER TAXES AND TRANSFER FEES. The Company shall pay all sales,
use, transfer, real property transfer, recording, stock transfer and other
similar taxes and fees (other than Taxes of Purchaser and its Affiliates based
upon or measured by net income or gains) ("TRANSFER TAXES") arising out of or in
connection with the transactions effected pursuant to this Agreement, and shall
indemnify, defend, and hold harmless Purchaser and its Affiliates with respect
to such Transfer Taxes. The Company and Purchaser shall equally share the costs
of Gaming Device transfer fees. The Company shall file all necessary
documentation and Tax Returns with respect to such Transfer Taxes.
8.02 TAX INDEMNIFICATION.
(a) Subject to SECTION 1.06, after the Closing Date, the Company and Parent
will indemnify and hold harmless Purchaser from and against any and all claims,
actions, causes of action, liabilities, losses, damages, and reasonable
out-of-pocket expenses and costs resulting from, arising out of or relating to
any Taxes of, or with respect to, the Company (including, without limitation,
any Tax liability that arises solely by reason of Company being severally liable
for any Tax of any federal or state or local consolidated or combined group of
which it is a
37
member pursuant to Treasury Regulation Section 1.1502-6 or any analogous
state or local Tax provision) or with respect to the income, assets or
operation of the Business or the Assets for all taxable periods ending on or
before the Closing Date and that portion of any taxable period including and
ending on the Closing Date that ends on or after the Closing Date (determined
as if the relevant period ended on the Closing Date) in excess of the amount
of such Taxes shown as Accrued Expenses on the Closing Balance Sheet.
(b) Purchaser will be responsible for and indemnify and hold the Company
harmless against any all liabilities with respect to Taxes relating to the
Assets for all taxable periods beginning on the Closing Date and ending after
the Closing Date other than to the extent such Taxes relate to or result from a
breach of a representation set forth in Section 2.06, and other than Taxes for
which the Company is responsible pursuant to SECTIONS 1.06, 8.01 and 8.02(a)
above.
(c) For purposes of clarification, the obligations of the Company, Parent
and Purchaser pursuant to this SECTION 8.02 shall not be subject to the limits
contained in SECTION 11.01(c)(i) hereof.
8.03 TAX COOPERATION.
(a) After the Closing Date, the Company and Parent will cooperate with
Purchaser, and Purchaser will cooperate with the Company and Parent, in the
preparation of all Tax Returns and will provide (or cause to be provided) any
records and other information the other so requests, and will provide access to,
and the cooperation of its auditors. The Company and Parent will cooperate with
Purchaser and Purchaser will cooperate with the Company and Parent in connection
with any Tax investigation, audit or other proceeding.
(b) At Parent's request, Purchaser shall cooperate with the Company and
Parent in structuring the transactions contemplated by this Agreement so as to
enable the Company to qualify such transactions as part of a "like-kind
exchange" within the meaning of Code Section 1031 and the Treasury Regulations
promulgated thereunder including assigning this Agreement to an intermediary
selected by Parent.
8.04 NOTIFICATION OF PROCEEDINGS; CONTROL. The Company shall have the right
to control any audit or examination relating to Taxes by any taxing authority,
initiate any claim for refund, file any amended return, contest, resolve and
defend against any assessment, notice of deficiency or other adjustment or
proposed adjustment relating or with respect to any Taxes of any company for
which the Company is responsible pursuant to SECTION 8.02 and shall be entitled
to all refunds with respect to such taxes.
ARTICLE IX
EMPLOYEE BENEFITS MATTERS
9.01 OFFER OF EMPLOYMENT.
(a) The parties hereto intend that there shall be continuity of employment
with respect to all of the employees of the Business. Subject to Purchaser's (or
its Affiliates')
38
ordinary ninety-day orientation period, Purchaser shall offer employment at
will, commencing on the Closing Date, to all employees, including those on
vacation, leave of absence or disability, who were employed by the Business
immediately prior to Closing, on substantially the same terms in the aggregate
(including salary, fringe benefits, job responsibility and location but
excluding employee stock ownership and incentive plans) as those provided to
similar employees of Purchaser (or its Affiliates) immediately prior to Closing
to the extent permitted under applicable law. Those persons who accept
Purchaser's offer of employment and commence working with Purchaser on the
Closing Date shall hereafter be referred to as "TRANSFERRED EMPLOYEES." The
parties hereto agree that nothing in this Agreement shall limit Purchaser's
ability after the Closing Date to modify or terminate (i) the employment of any
Transferred Employee or (ii) any benefit policy, plan or program offered to or
covering any Transferred Employee.
(b) Prior to, or in connection with, the Closing, Purchaser shall take no
action to cause the Company or the Business to terminate the employment of any
employee of the Business, and neither the Company nor the Business shall be
under any obligation to terminate any employee of the Business prior to or on
the Closing Date. Purchaser shall be liable for any amounts to which any
employee of the Business may become entitled pursuant to any employment or
severance contract as a result of, or in connection with, the sale of the
Business hereunder. Purchaser agrees that it will not take any action which
would give rise to liability under WARN or any similar state, local or federal
Law or regulation.
9.02 WELFARE PLANS -- CLAIMS INCURRED; PRE-EXISTING CONDITIONS.
(a) Notwithstanding any provision of this Agreement to the contrary, the
Company shall retain responsibility for and continue to pay all medical, life
insurance, disability and other welfare plan expenses and benefits for each
Transferred Employee with respect to claims incurred by such Transferred
Employees or their covered dependents prior to the Closing Date. Notwithstanding
any provision of this Agreement to the contrary, expenses and benefits with
respect to claims incurred by Transferred Employees or their covered dependents
on or after the Closing Date shall be the responsibility of Purchaser. For
purposes of this paragraph, a claim is deemed incurred when the services that
are the subject of the claim are performed; in the case of life insurance, when
the death occurs, in the case of long-term disability benefits, when the
disability occurs and, in the case of a hospital stay, when the employee first
enters the hospital.
(b) With respect to any welfare benefit plans (as defined in Section 3(1)
of ERISA) maintained by Purchaser for the benefit of Transferred Employees on
and after the Closing Date, Purchaser shall (i) use commercially reasonable
efforts to cause there to be waived any pre-existing condition limitations
(other than those limitations existing under the Company's welfare benefit
plans) and (ii) give effect, in determining any deductible and maximum
out-of-pocket limitations, to claims incurred and amounts paid by, and amounts
reimbursed to, such employees with respect to similar plans maintained by the
Company (and its Affiliates) for their benefit immediately prior to the Closing
Date.
9.03 VACATION. With respect to any accrued but unused vacation time to
which any Transferred Employee is entitled pursuant to the vacation policy
applicable to such employee immediately prior to the Closing Date (the "VACATION
POLICY"), Purchaser shall allow
39
such Transferred Employee to use such accrued vacation, subject to the terms and
conditions of Purchaser's vacation policy; PROVIDED, HOWEVER, that if Purchaser
deems it necessary to disallow such Transferred Employee from taking such
accrued vacation, Purchaser shall be liable for and pay in cash to each such
Transferred Employee an amount equal to such vacation time in accordance with
terms of the Vacation Policy; PROVIDED, FURTHER, that Purchaser shall be liable
for and pay in cash an amount equal to any remaining accrued vacation time to
any Transferred Employee whose employment terminates for any reason prior to the
close of business on the last calendar day of the year during which the Closing
Date occurs.
9.04 SERVICE CREDIT. Purchaser will provide, for the purposes of
eligibility and vesting (but not for benefit accrual) each Transferred Employee
with credit for all service with the Company and its Affiliates to the extent
possible under each employee benefit plan, program, or arrangement of Purchaser
or its Affiliates in which such employee is eligible to participate; provided,
however, that in no event shall any employee be entitled to any credit to the
extent that it would result in a duplication of benefits with respect to the
same period of service.
9.05 COMPANY'S BENEFIT PLANS. Except as provided in this Agreement, the
parties hereto agree that Purchaser shall not assume any Benefit Plan and the
Company shall retain and be responsible for any cost, expense, liability, damage
or obligation relating to any Benefit Plan, whether arising before, on or after
the Closing Date.
9.06 COBRA MATTERS. The Company agrees to provide and be fully responsible
for the continuation coverage required by Section 4980B of the Code and Sections
601 through 608 of ERISA ("COBRA") for all employees and former employees of the
Company and their covered beneficiaries who incurred or will incur a qualifying
event prior to the Closing Date, or will incur a qualifying event as a result of
the consummation of the transactions contemplated herein, and who are entitled
to COBRA coverage as a result thereof.
ARTICLE X
SURVIVAL OF REPRESENTATIONS
10.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
Except for (i) this ARTICLE X, SECTIONS 2.06, 5.05, 5.06, 5.07, 5.08, 5.10 and
5.11 above, ARTICLES VIII and IX above, SECTIONS 14.03, 14.04 and 14.07 below
and the Company's agreements and covenants with respect to Retained Liabilities,
which shall survive and remain enforceable indefinitely, (ii) SECTIONS 4.06,
4.11 AND 5.04 which shall survive for the period set forth therein, and (iii)
SECTIONS 2.10 and 2.15 which shall survive and remain enforceable for a period
of five (5) years following the Closing Date, the representations, warranties,
agreements and covenants contained in this Agreement shall survive the Closing
for a period of eighteen (18) months following the Closing Date, after which
time there shall be no liability in respect thereof on the part of either party
or its officers, directors, employees, agents and Affiliates.
10.02 NO OTHER REPRESENTATIONS. Notwithstanding anything to the contrary
contained in this Agreement, but subject to SECTION 10.01 above, it is the
explicit intent of each party hereto that the Company and Purchaser are making
no representation or warranty whatsoever, express or implied, except those
representations and warranties contained in
40
ARTICLE II above and in any certificate delivered pursuant to SECTION 6.03
above. It is understood that, except to the extent otherwise expressly provided
herein, Purchaser takes the Assets "as is" and "where is." In particular, the
Company and Parent make no representation or warranty to Purchaser with respect
to the information set forth in the Xxxxxxxxxxx Xxxxxxx & Co., Inc. offering
memorandum relating to the Company, or (y) any financial projection or forecast
relating to the Company. With respect to any projection or forecast delivered by
or on behalf of the Company to Purchaser, Purchaser acknowledges that (i) there
are uncertainties inherent in attempting to make such projections and forecasts,
(ii) it is familiar with such uncertainties, (iii) it is taking full
responsibility for making its own evaluation of the adequacy and accuracy of all
such projections and forecasts furnished to it and (iv) it shall have no claim
against the Company or Parent with respect thereto.
ARTICLE XI
INDEMNIFICATION
11.01 OTHER INDEMNIFICATION.
(a) Subject to PARAGRAPH (c) of this Section and the other Sections of this
ARTICLE XI, the Company and Parent shall jointly and severally indemnify the
Purchaser Indemnified Parties in respect of, and hold it harmless from and
against, any and all Losses suffered, incurred or sustained by any of them or to
which any of them becomes subject, resulting from, arising out of or relating to
(i) any breach of representation or warranty or nonfulfillment of or failure to
perform any covenant or agreement on the part of the Company or Parent contained
in this Agreement, (ii) a Retained Liability, (iii) the First Holdings
Litigation, (iv) if the parties hereto enter into a sublease with respect to the
property subject to the Ground Lease, any termination of such sublease or the
Ground Lease for any reason other than a termination or breach of the sublease
by Purchaser or a breach by the landlord under the Ground Lease, or (v) if the
Company exercises its option to purchase the JV interest from First Holdings
Company, any failure of the Company to deliver good and marketable title,
subject to Permitted Liens, to the real property that is subject to the Ground
Lease;
(b) Subject to the other Sections of this ARTICLE XI, Purchaser shall
indemnify the Company Indemnified Parties in respect of, and hold each of them
harmless from and against, any and all Losses suffered, incurred or sustained by
any of them or to which any of them becomes subject, resulting from, arising out
of or relating to (i) any breach of representation or warranty or nonfulfillment
of or failure to perform any covenant or agreement on the part of Purchaser
contained in this Agreement or (ii) an Assumed Liability;
(c) Notwithstanding anything to the contrary contained in this Agreement,
no amounts of indemnity shall be payable as a result of any claim in respect of
a Loss arising under PARAGRAPH (a)(i) or (b)(i), as applicable, of SECTION 11.01
(other than a claim based on fraud or willful misconduct or for or with respect
breaches of SECTION 2.06 hereof or claims under ARTICLE VIII hereof):
41
(i) unless, until and then only to the extent that the Purchaser
Indemnified Parties or the Company Indemnified Parties, as applicable, have
suffered, incurred, sustained or become subject to Losses referred to in such
paragraph in excess of one hundred thousand dollars ($100,000) in the
aggregate;
(ii) unless and to the extent that the Purchaser Indemnified
Parties and the Purchaser Indemnified Parties as defined in the St. Xxxxxxx
Riverfront Station, Inc. Agreement or the Company Indemnified Parties and the
Company Indemnified Parties as defined in the St. Xxxxxxx Riverfront Station,
Inc. Agreement, as applicable, have not received payments in respect of
claims made under Section 11.01(a)(i) of this Agreement and the St. Xxxxxxx
Riverfront Station, Inc. Agreement or Section 11.01(b)(i) of this Agreement
and the St. Xxxxxxx Riverfront Station, Inc. Agreement, respectively, in
excess of Twenty Million Dollars ($20,000,000) in the aggregate;
(iii) unless the Indemnified Party has given the Indemnifying Party
a Claim Notice or Indemnity Notice, as applicable, with respect to such
claim, setting forth in reasonable detail the specific facts and
circumstances pertaining thereto, (A) as soon as practical following the time
at which the Indemnified Party discovered or reasonably should have
discovered such claim (except to the extent the Indemnifying Party is not
prejudiced by any delay in the delivery of such notice) and (B) in any event
prior to the applicable Cut-off Date; or
(iv) to the extent that the Indemnified Party had a reasonable
opportunity, but failed, in good faith to mitigate such Loss, including,
without limitation, to the failure to use commercially reasonable efforts to
recover under a policy of insurance or under a contractual right of set off
or indemnity.
11.02 METHOD OF ASSERTING CLAIM. All claims for indemnification by any
Indemnified Party under SECTION 11.01 will be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which an Indemnified
Party might seek indemnity under SECTION 11.01 is asserted against or sought to
be collected from such Indemnified Party by a Person other than the Company,
Parent, ACI, Purchaser or any Affiliate of the Company or of Purchaser (a "THIRD
PARTY CLAIM"), the Indemnified Party shall deliver a Claim Notice with
reasonable promptness to the Indemnifying Party. The Indemnifying Party will
notify the Indemnified Party as soon as practicable within the Dispute Period
whether the Indemnifying Party disputes its liability to the Indemnified Party
under SECTION 11.01 and whether the Indemnifying Party desires, at its sole cost
and expense, to defend the Indemnified Party against such Third Party Claim,
PROVIDED that failure to give such notice shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent it shall have been
prejudiced by such failure.
(i) If the Indemnifying Party notifies the Indemnified Party within
the Dispute Period that the Indemnifying Party desires to defend the
Indemnified Party with respect to the Third Party Claim pursuant to this
SECTION 11.02(a), then the Indemnifying Party will have the right to
defend, at the sole cost and expense of the Indemnifying Party, such Third
Party Claim by all appropriate proceedings, which proceedings will be
vigorously and diligently prosecuted by the Indemnifying Party to a final
conclusion or
42
will be settled at the discretion of the Indemnifying Party. The
Indemnifying Party will have full control of such defense and proceedings,
including that if requested by the Indemnifying Party, the Indemnified
Party will, at the sole cost and expense of the Indemnifying Party,
reasonably cooperate with the Indemnifying Party and its counsel in
contesting any Third Party Claim that the Indemnifying Party elects to
contest, or, if appropriate and related to the Third Party Claim in
question, in making any counterclaim against the Person asserting the Third
Party Claim, or any cross-complaint against any Person (other than the
Indemnified Party or any of its Affiliates); PROVIDED that the Indemnified
Party may participate in such settlement or defense through counsel chosen
by such Indemnified Party and paid at its own expense; and PROVIDED FURTHER
that, if in the opinion of counsel for such Indemnified Party, there is a
reasonable likelihood of a conflict of interest between the Indemnifying
Party and the Indemnified Party, the Indemnifying Party shall be
responsible for reasonable fees and expenses of one counsel to such
Indemnifying Party in connection with such defense. Notwithstanding the
foregoing, the Indemnified Party may retain or take over the control of the
defense or settlement of any Third Party Claim the defense of which the
Indemnifying Party has elected to control if the Indemnified Party
irrevocably waives its right to indemnity under SECTION 11.01 with respect
to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified Party
within the Dispute Period that the Indemnifying Party desires to defend the
Third Party Claim pursuant to SECTION 11.02(a), then the Indemnified Party
will have the right to defend, at the sole cost and expense of the
Indemnifying Party, the Third Party Claim by all appropriate proceedings,
which proceedings will be vigorously and diligently prosecuted by the
Indemnified Party to a final conclusion or will be settled at the
discretion of the Indemnified Party (with the consent of the Indemnifying
Party, which consent will not be unreasonably withheld). The Indemnified
Party will have full control of such defense and proceedings, including
(except as provided in the immediately preceding sentence) any settlement
thereof; PROVIDED, HOWEVER, that if requested by the Indemnified Party, the
Indemnifying Party will, at the sole cost and expense of the Indemnifying
Party, cooperate with the Indemnified Party and its counsel in contesting
any Third Party Claim which the Indemnified Party is contesting, or, if
appropriate and related to the Third Party Claim in question, in making any
counterclaim against the Person asserting the Third Party Claim, or any
cross-complaint against any Person (other than the Indemnifying Party or
any of its Affiliates). Notwithstanding the foregoing provisions of this
clause (ii), if the Indemnifying Party has notified the Indemnified Party
within the Dispute Period that the Indemnifying Party disputes its
liability hereunder to the Indemnified Party with respect to such Third
Party Claim and if such dispute is resolved in favor of the Indemnifying
Party in the manner provided in clause (iii) below, the Indemnifying Party
will not be required to bear the costs and expenses of the Indemnified
Party's defense pursuant to this clause (ii) or of the Indemnifying Party's
participation therein at the Indemnified Party's request, and the
Indemnified Party will reimburse the Indemnifying Party in full for all
reasonable costs and expenses incurred by the Indemnifying Party in
connection with such litigation. The Indemnifying Party may retain separate
counsel to represent it in, but not control, any defense or settlement
controlled by the Indemnified Party pursuant to this clause (ii), and the
Indemnifying Party will bear its own costs and expenses with respect to
such participation.
43
(iii) If the Indemnifying Party notifies the Indemnified Party that it
does not dispute its liability to the Indemnified Party with respect to the
Third Party Claim under SECTION 11.02 or fails to notify the Indemnified
Party within the Dispute Period whether the Indemnifying Party disputes its
liability to the Indemnified Party with respect to such Third Party Claim,
the Loss arising from such Third Party Claim will be conclusively deemed a
liability of the Indemnifying Party under SECTION 11.01 and the
Indemnifying Party shall pay the amount of such Loss to the Indemnified
Party on demand following the final determination thereof. If the
Indemnifying Party has timely disputed its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party will proceed in
good faith to negotiate a resolution of such dispute, and if not resolved
through negotiations within the Resolution Period, such dispute shall be
resolved by arbitration in accordance with paragraph (c) of this SECTION
11.02.
(b) In the event any Indemnified Party should have a claim under SECTION
11.02 against any Indemnifying Party that does not involve a Third Party Claim,
the Indemnified Party shall deliver an Indemnity Notice with reasonable
promptness to the Indemnifying Party. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim described in such Indemnity
Notice or fails to notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes the claim described in such Indemnity
Notice, the Loss arising from the claim specified in such Indemnity Notice will
be conclusively deemed a liability of the Indemnifying Party under SECTION 11.01
and the Indemnifying Party shall pay the amount of such Loss to the Indemnified
Party on demand following the final determination thereof. If the Indemnifying
Party has timely disputed its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party will proceed in good faith to
negotiate a resolution of such dispute, and if not resolved through negotiations
within the Resolution Period, such dispute shall be resolved by arbitration in
accordance with paragraph (c) of this SECTION 11.02.
(c) Any dispute submitted to arbitration pursuant to this SECTION 11.02
shall be finally and conclusively determined by the decision of a panel of three
arbitrators (hereinafter sometimes called the "BOARD OF ARBITRATION") selected
as herein provided. Each of the Indemnified Party and the Indemnifying Party
shall select one (1) member and the third member shall be selected by mutual
agreement of the other members, or if the other members fail to reach agreement
on a third member within twenty (20) days after their selection, such third
member shall thereafter be selected by the American Arbitration Association (the
"AAA") upon application made to it jointly by the Indemnified Party and the
Indemnifying Party for a third member possessing expertise or experience
appropriate to the dispute. Within 120 days of the selection of the Board of
Arbitration, the Indemnified Party and the Indemnifying Party shall meet in Las
Vegas, Nevada with such Board of Arbitration at a place and time designated by
such Board of Arbitration after consultation with such parties and present their
respective positions on the dispute. The arbitration proceeding shall be held in
accordance with the rules for commercial arbitration of the AAA in effect on the
date of the initial request for appointment of the Board of Arbitration, that
gave rise to the dispute to be arbitrated (as such rules are modified by the
terms of this Agreement or may be further modified by mutual agreement of the
parties). Each party shall have no longer than five (5) days to present its
position, the entire proceedings before the Board of Arbitration shall be no
more than ten consecutive days, and the decision of the Board of Arbitration
shall be made in writing no more than thirty (30) days
44
following the end of the proceeding. Such an award shall be a final and binding
determination of the dispute and shall be fully enforceable as an arbitration
decision in any court having jurisdiction and venue over such parties. The
prevailing party (as determined by the Board of Arbitration) shall in addition
be awarded by the Board of Arbitration such party's own attorneys' fees and
expenses in connection with such proceeding. The non-prevailing party (as
determined by the Arbitrator) shall pay the Board of Arbitration's fees and
expenses.
(d) In the event of any claim for indemnity under SECTION 11.02(a),
Purchaser agrees to give the Company and its Representatives reasonable access
to the Books and Records and employees of the Company in connection with the
matters for which indemnification is sought to the extent the Company reasonably
deems necessary in connection with its rights and obligations under this ARTICLE
XI.
11.03 EXCLUSIVITY. After the Closing, to the extent permitted by Law, the
indemnities set forth in ARTICLE VIII and this ARTICLE XI shall be the exclusive
remedies of Purchaser, Parent and the Company and their respective officers,
directors, employees, agents and Affiliates for any misrepresentation, breach of
warranty or nonfulfillment or failure to be performed of any covenant or
agreement contained in this Agreement, and the parties shall not be entitled to
a rescission of this Agreement or to any further indemnification rights or
claims of any nature whatsoever in respect thereof, all of which the parties
hereto hereby waive; PROVIDED, HOWEVER, that no party hereto shall be deemed to
have waived any rights, claims, causes of action or remedies if and to the
extent such rights, claims, causes of action or remedies may not be waived under
applicable law or actual fraud or intentional misrepresentation is proven on the
part of a party by another party hereto.
ARTICLE XII
TERMINATION
12.01 TERMINATION. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written agreement of the
Company and Purchaser;
(b) at any time before the Closing without liability to the terminating
party, by the Company or Purchaser, in the event that any Order or Law becomes
effective restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement upon
notification of the non-terminating party by the terminating party and the
terminating party is not then in material breach of this Agreement;
(c) at any time before the Closing, by Company or Purchaser in the event of
a material breach of this Agreement by the non-terminating party if such
non-terminating party fails to cure such non-compliance or breach within ten
(10) Business Days following notification thereof by the terminating party;
(d) at any time after the date that is ninety (90) days following the
Effective Date (the "Initial Term"), without liability to the terminating party,
upon notification of the non-
45
terminating party by the terminating party if the Closing shall not have
occurred on or before such date and such failure to consummate is not caused by
a breach of this Agreement by the terminating party; PROVIDED that the Company
may in its sole and absolute discretion extend such period for up to three
additional thirty (30) day extension periods upon five (5) Business days'
written notice to Purchaser prior to the then applicable termination date; and
PROVIDED, further, that if the sole condition that remains unsatisfied as of the
expiration of the then applicable term (other than deliveries of closing
certificates and other Closing documents) is the receipt of a Class A license
from the Commission and Purchaser demonstrates to the reasonable satisfaction of
the Company that (x) it has sufficient cash on hand and/or available credit
facilities to pay the Purchase Price and make all other necessary payments of
fees and expenses in connection with the transactions contemplated by this
Agreement and (y) it is using commercially reasonable efforts to obtain such
license and there are no facts known to Purchaser or the Company that could be
reasonably expected to result in the failure to obtain such license, Purchaser
may extend such period for up to three additional thirty (30) day extension
periods by providing written notice to the Company on or before the date that is
no more than ten (10) Business Days and no less than five (5) Business Days
prior to the then applicable termination date.
12.02 EFFECT OF TERMINATION. If this Agreement is validly terminated
pursuant to the provisions of SECTION 12.01 above, this Agreement will forthwith
become null and void, and, except as set forth in the next sentence, there will
be no liability or obligation on the part of Parent, the Company, Purchaser or
ACI (or any of their respective officers, directors, employees, agents or other
representatives or Affiliates), except that the provisions of SECTIONS 14.02,
14.03, 14.04 and 14.07 below will continue to apply following any such
termination. Notwithstanding any other provision in the Agreement to the
contrary, upon any termination of this Agreement by any party pursuant to
SECTION 12.01(c), the non-terminating party shall remain liable to the
terminating party for any and all willful breaches of this Agreement and the
terminating party may seek such remedies, including damages and attorneys' fees,
as are provided in this Agreement or as are otherwise available at Law or in
equity.
ARTICLE XIII
DEFINITIONS
13.01 DEFINED TERMS. As used in this Agreement, the following defined terms
have the meanings indicated below:
"ACCOUNTS PAYABLE" has the meaning ascribed to it in SECTION 1.02(a).
"ACCOUNTS RECEIVABLE" has the meaning ascribed to it in SECTION 1.01(a).
"ACCRUED EXPENSES" has the meaning ascribed to it in SECTION 1.02(a).
"ACI" has the meaning ascribed to it in the forepart of this Agreement.
"ACQUISITION PROPOSAL" has the meaning ascribed to it in SECTION 4.07.
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding, arbitration or
Governmental or Regulatory Authority investigation.
46
"AFFILIATE" means any Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by Contract or otherwise and, in
any event and without limitation of the previous sentence, any Person owning ten
percent (10%) or more of the voting securities of another Person shall be deemed
to control that Person.
"AGREEMENT" means this Asset Purchase Agreement and the Exhibits, the
Disclosure Schedule and the Schedules hereto and the certificates delivered in
accordance with SECTIONS 6.03 and 7.03, as the same shall be amended from time
to time.
"ASSETS" has the meaning ascribed to it in SECTION 1.01(a).
"ASSIGNMENT INSTRUMENTS" has the meaning ascribed to it in SECTION 1.04.
"ASSUMED LIABILITIES" has the meaning ascribed to it in SECTION 1.02(a).
"ASSUMPTION AGREEMENT" has the meaning ascribed to it in SECTION 1.04.
"ASSUMPTION INSTRUMENTS" has the meaning ascribed to it in SECTION 1.04.
"BENEFIT PLAN" means any Plan established by the Company, or any
predecessor or Affiliate of any of the foregoing, existing at the Closing Date
or at any time since December 31, 1997, to which the Company contributes or has
contributed, or under which any employee, former employee or director of the
Company or any dependent or beneficiary thereof is covered, is eligible for
coverage or has benefit rights.
"BOARD OF ARBITRATION" has the meaning ascribed to it in SECTION 11.02(c).
"BOOKS AND RECORDS" means all files, documents, instruments, papers, books
and records relating primarily to the Business or Condition of the Company,
including, without limitation, financial statements, Tax Returns and related
work papers and letters from accountants, budgets, pricing guidelines, ledgers,
journals, deeds, title policies, minute books, stock certificates and books,
stock transfer ledgers, Contracts, Licenses, customer lists, computer files and
programs, retrieval programs, operating data and plans, environmental studies,
audits, plans, surveys, designs, models and specifications.
"BUSINESS" has the meaning ascribed to it in the forepart of this
Agreement.
"BUSINESS BOOKS AND RECORDS" has the meaning ascribed to it in SECTION
1.01(a).
"BUSINESS CONTRACTS" has the meaning ascribed to it in SECTION 1.01(a).
"BUSINESS CUSTOMER LISTS" has the meaning ascribed to it in SECTION
1.01(a).
47
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on which
banks located in the States of location of the Company's principal executive
offices are authorized or obligated to close.
"BUSINESS LICENSES" has the meaning ascribed to it in SECTION 1.01(a).
"BUSINESS OR CONDITION OF THE COMPANY" means the business, financial
condition or results of operations of the Company.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.
"CLAIM NOTICE" means written notification pursuant to SECTION 11.02(a) of a
Third Party Claim as to which indemnity under SECTION 11.01 is sought by an
Indemnified Party, enclosing a copy of all papers served, if any, and specifying
the nature of and basis for such Third Party Claim and for the Indemnified
Party's claim against the Indemnifying Party under SECTION 11.01, together with
the amount or, if not then reasonably determinable, the estimated amount,
determined in good faith, of the Loss arising from such Third Party Claim.
"CLOSING" means the closing of the transactions contemplated by SECTION
1.04.
"CLOSING BALANCE SHEET" has the meaning ascribed to it in SECTION 1.05(a).
"CLOSING DATE" means (a) the second Business Day after the day on which the
last of the conditions described in Articles VI and VII hereof above has been
obtained, made or given or has expired, as applicable, or (b) such other date as
Purchaser and the Company mutually agree upon in writing.
"CLOSING FINANCIAL STATEMENTS DELIVERY DATE" has the meaning ascribed to it
in SECTION 1.05(a).
"CODE" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"COMMISSION" has the meaning ascribed to it in SECTION 1.01(a)(iv).
"COMMON STOCK" means the common stock, no par value, of the Company.
"COMPANY" has the meaning ascribed to it in the forepart of this Agreement.
"COMPANY INDEMNIFIED PARTIES" means Parent, the Company and their
respective officers, directors, employees, agents and Affiliates.
"COMPANY PLANS" has the meaning ascribed to it in SECTION 2.09(a).
"COMPANY'S ACCOUNTANT" has the meaning ascribed to it in SECTION 1.05(c).
"CONTRACT" means any agreement, lease, license, evidence of Indebtedness,
mortgage, indenture, security agreement or other contract.
48
"CUT-OFF DATE" means, with respect to any representation, warranty,
covenant or agreement contained in this Agreement, the date on which such
representation, warranty, covenant or agreement ceases to survive as provided in
SECTION 11.01, as applicable.
"DEFICIENCY" means the amount, if any, by which the Net Current Assets as
determined in accordance with SECTION 1.05 is a negative number.
"DETERMINATION DATE" has the meaning ascribed to it in SECTION 1.05(c).
"DEVELOPMENT AGREEMENT" has the meaning ascribed to in SECTION 1.01(a)(ii).
"DISCLOSURE SCHEDULE" means the record delivered to Purchaser by the
Company herewith and dated as of the date hereof, containing all lists,
descriptions, exceptions and other information and materials as are required to
be included therein by the Company pursuant to this Agreement, as said record
may be amended, supplemented or modified by the Company at any time prior to the
Closing without any liability to the Company other than that Purchaser shall
have the right for five (5) Business Days after such amendment, supplement or
modification of the Disclosure Schedule to terminate the Agreement based upon
such amendment, supplement or modification of the Disclosure Schedule if such
amendment, supplement or modification of the Disclosure Schedule reveals a
matter which would have a Material Adverse Effect. Reference herein to the
Disclosure Schedule shall mean and refer not only to the record itself, but to
all items, documents, agreements and instruments referenced therein and to the
content of each such item, document, agreement and instrument. Likewise,
reference herein to a certain Section of the Disclosure Schedule shall refer not
only to that portion of the Disclosure Schedule, but to the items, documents,
agreements and instruments referenced in that Section and the contents of each
such item, document, agreement and instrument. Further, matters disclosed for
the purpose of one Section of the Disclosure Schedule shall constitute
disclosure of such matters for the purposes of all other Sections of the
Disclosure Schedule. The duplication or cross-referencing of any disclosures
made in the Disclosure Schedule shall not, in any instance or in the aggregate,
effect a waiver of the foregoing sentence.
"DISPUTE PERIOD" means the period ending sixty (60) days following receipt
by an Indemnifying Party of either a Claim Notice or an Indemnity Notice.
"EBITDA" means, with respect to any Person for any period, the earnings
before interest, taxes, depreciation and amortization of such Person for such
period.
"EFFECTIVE DATE" has the meaning ascribed to it in the forepart of this
Agreement.
"ENVIRONMENTAL CLAIM" has the meaning ascribed to it in SECTION 2.15(c).
"ENVIRONMENTAL LAW" means any federal, state, or local law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, writ, edict,
award, authorization, or other legally binding and enforceable requirement by
any Governmental or Regulatory Authority relating to any environmental, health
or safety matters.
"ENVIRONMENTAL PERMITS" has the meaning ascribed to it in SECTION 2.15(a).
49
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"EXCLUDED ASSETS" has the meaning ascribed to it in SECTION 1.01(b).
"EXCLUDED BOOKS AND RECORDS" has the meaning ascribed to it in SECTION
1.01(b).
"FINANCIAL STATEMENT DATE" means December 31, 1999.
"FINANCIAL STATEMENTS" means the combined financial statements of the
Company delivered to Purchaser pursuant to SECTION 2.05.
"FIRST HOLDINGS LITIGATION" means that legal action by First Holdings
Company and Kansas City Station Joint Venture against the Company and Parent
filed on September 8, 2000 in the Circuit Court of Xxxxxxx County, Missouri.
"GAAP" means generally accepted accounting principles, consistently applied
throughout the specified period and in the immediately prior comparable period.
"GAMING DEVICES" means any gambling games or implements of gaming (as such
terms are used in the applicable gaming statutes and regulations of the State of
Missouri) that is an asset or property of the Company and is not an Excluded
Asset.
"GENERAL ASSIGNMENT" has the meaning ascribed to it in SECTION 1.04.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, administrative or other agency, commission, gaming
authority, official or other authority or instrumentality of the United States
or any state, county, city or other political subdivision.
"GROUND LEASE" means that certain Lease Agreement dated as of April 1,
1994, as amended, by and between Station/First Joint Venture and the Company.
"HAZARDOUS MATERIAL" means any chemical, or other material, or substance
regulated under any Environmental Law including, without limitation, any which
are defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "infectious waste," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," or "toxic
pollutants" or words of similar import under any Environmental Law.
"HSR ACT" means Section 7A of the Xxxxxxx Act (Title II of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.
"IMPROVEMENTS" has the meaning ascribed to it in SECTION 1.01(a).
"INDEBTEDNESS" of any Person means all obligations of such Person (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the
50
deferred purchase price of goods or services (other than trade payables or
accruals incurred in the ordinary course of business), (iv) under capital leases
and (v) in the nature of guarantees of the obligations described in clauses (i)
through (iv) above of any other Person.
"INDEMNIFIED PARTY" means any Person claiming indemnification under any
provision of ARTICLE XI.
"INDEMNIFYING PARTY" means any Person against whom a claim for
indemnification is being asserted under any provision of ARTICLE XI.
"INDEMNITY NOTICE" means written notification pursuant to SECTION 11.02(b)
of a claim for indemnity under ARTICLE XI by an Indemnified Party, specifying
the nature of and basis for such claim, together with the amount or, if not then
reasonably determinable, the estimated amount, determined in good faith, of the
Loss arising from such claim.
"INVENTORIED BAGGAGE" has the meaning ascribed to it in SECTION 5.06.
"INVENTORIED VEHICLES" has the meaning ascribed to it in SECTION 5.08.
"JV" means the Station/First Joint Venture, a Missouri partnership.
"JOINT VENTURE AGREEMENT" has the meaning ascribed to it in SECTION
1.01(a)(ii).
"JULY AGREEMENT" has the meaning ascribed to it in the forepart of this
Agreement.
"KNOWLEDGE OF THE COMPANY" means the actual knowledge of the directors and
executive officers of Parent or the Company, Parent's President of Midwest
Operations, Parent's General Counsel for Midwest Operations or the General
Manager of the Business.
"KNOWLEDGE OF PURCHASER" means the actual knowledge of the members,
directors and officers of Purchaser and its Affiliates.
"LAWS" means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States or any state,
county, city or other political subdivision or of any Governmental or Regulatory
Authority.
"LEASED REAL PROPERTY" has the meaning ascribed to it in SECTION 1.01(a).
"LESSEE SECURITY DEPOSITS" has the meaning ascribed to it in SECTION
1.01(a).
"LESSOR SECURITY DEPOSITS" has the meaning ascribed to it in SECTION
1.02(a).
"LIABILITIES" means all Indebtedness, obligations and other liabilities of
a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or to become due).
"LICENSED SUPPLIER" means a licensed supplier of Gaming Devices in the
State of Missouri.
51
"LICENSES" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"LIENS" means any mortgage, pledge, assessment, security interest, lease,
lien, adverse claim, levy, charge or other encumbrance of any kind, or any
conditional sale Contract, title retention Contract or other Contract to give
any of the foregoing.
"LOSS" or "LOSSES" means any and all damages, fines, penalties,
deficiencies, losses and expenses (including without limitation interest, court
costs, reasonable fees of attorneys, accountants and other experts or other
reasonable expenses of litigation or other proceedings or of any claim, default
or assessment).
"XXXX" has the meaning ascribed to it in SECTION 4.06(a).
"MATERIAL ADVERSE EFFECT" means any event or circumstance that has or will
have, or could reasonably be expected to have, a material adverse effect on the
Business or Condition of the Company after the Closing Date, it being understood
that in no event shall any of the following shall be deemed by itself or by
themselves, either individually or in the aggregate, to constitute a Material
Adverse Effect: (a) a failure by the Company to meet internal earnings, revenue
or other projections or earnings, revenue or other predictions of any analyst,
(b) any event, circumstance or market condition occurring as a general economic
or financial conditions or other developments which are not unique to the
Company but also is applicable to the gaming industry generally, or the Missouri
gaming industry in particular, or (c) the appointment of a receiver to operate
the Business, the operation of the Business by such a receiver and the results
of operations of the Business during such period of operation, the imposition of
monetary penalties which shall constitute Retained Liabilities, or any Permitted
Interruption; it being further understood that any cessation of operation of the
Business other than a Permitted Interruption shall conclusively be deemed to be
a Material Adverse Effect.
"NET CURRENT ASSETS" means for any date of determination the net current
assets of such Person at such date of determination calculated as set forth on
Exhibit H attached hereto.
"NPL" means the National Priorities List under CERCLA.
"OPTION AGREEMENT" has the meaning ascribed to it in SECTION 1.01(a)(ii).
"ORDER" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether preliminary
or final).
"OWNED REAL PROPERTY" has the meaning ascribed to it in SECTION 1.01(a).
"PARENT" has the meaning ascribed to it in the forepart of this Agreement.
"PERMITTED INTERRUPTION" shall mean a cessation of the operation of the
Business for a period not to exceed fifteen days, provided that during such
period of interruption the Company shall continue to pay its employees pursuant
to its compensation policies in effect immediately prior to the cessation of
operations and for each day of such interruption shall
52
compensate employees that receive compensation in the form of tips an additional
amount equal to the average daily tip compensation received by such employees.
"PERMITTED LIEN" means (i) any Lien for Taxes not yet due or delinquent or
being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, (ii) any statutory Lien
arising in the ordinary course of business by operation of Law with respect to a
Liability that is not yet due or delinquent and (iii) any minor imperfection of
title, easements of public record or similar Liens which individually or in the
aggregate with other such Liens would not have a Material Adverse Effect.
"PERSON" means any natural person, corporation, limited liability company,
general partnership, limited partnership, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority.
"PERSONAL PROPERTY LEASES" has the meaning ascribed to it in SECTION
1.01(a).
"PLAN" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workers' compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, including, without limitation, any "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
"PREPAID EXPENSES" has the meaning ascribed to it in SECTION 1.01(a).
"PURCHASE PRICE" has the meaning ascribed to it in SECTION 1.03(a).
"PURCHASER" has the meaning ascribed to it in the forepart of this
Agreement.
"PURCHASER INDEMNIFIED PARTIES" means Purchaser and its officers,
directors, employees, agents and Affiliates.
"REAL PROPERTY" has the meaning ascribed to it in SECTION 1.01(a).
"REAL PROPERTY LEASES" has the meaning ascribed to it in SECTION 1.01(a).
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment.
"REPRESENTATIVES" has the meaning ascribed to it in SECTION 4.03.
"REQUIRED CONSENTS" has the meaning ascribed to it in SECTION 1.08.
"RESOLUTION PERIOD" means the period ending ninety (90) days following
receipt by an Indemnified Party of a written notice from an Indemnifying Party
stating that it disputes all or any portion of a claim set forth in a Claim
Notice or an Indemnity Notice.
53
"RETAINED LIABILITIES" has the meaning ascribed to it in SECTION 1.02(b).
"ST. XXXXXXX RIVERFRONT STATION, INC. AGREEMENT" means that certain
agreement dated as of October 17, 2000 by and among Ameristar Casino St.
Xxxxxxx, Inc., Ameristar Casinos, Inc., a Nevada corporation, St. Xxxxxxx
Riverfront Station, Inc., a Missouri corporation and Station Casinos, Inc. a
Nevada corporation.
"SURPLUS" means the amount, if any, by which Net Current Assets as
determined in accordance with SECTION 1.05 is a positive number.
"TANGIBLE PERSONAL PROPERTY" has the meaning ascribed to it in SECTION
1.01(a).
"TAX RETURN" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"TAXES" means (i) any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss.59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not and any expenses incurred in
connection with the determination, settlement or litigation of any Tax liability
and (ii) any liability for payment of amounts described in clause (i) above as a
result of any express or implied agreement to pay or indemnify another Person
with respect to such amounts or any liability for such amounts, any joint and/or
several liability for such amounts, and any such amounts for which a Person is
liable by operation of Law (including but not limited to successor liability).
"THIRD PARTY CLAIM" has the meaning ascribed to it in SECTION 11.02(a).
"TRANSFER TAXES" has the meaning ascribed to it in SECTION 8.01.
"TRANSFER TIME" has the meaning ascribed to it in SECTION 1.04.
"TRANSFERRED EMPLOYEES" has the meaning ascribed to it in SECTION 9.01(a).
"TRANSFERRED INTELLECTUAL PROPERTY" has the meaning ascribed to it in
SECTION 1.01(a).
"VACATION POLICY" has the meaning ascribed to it in SECTION 9.03.
"VEHICLES AND VESSELS" has the meaning ascribed to it in SECTION 1.01(a).
"WARN" means the Worker Adjustment Retraining and Notification Act of 1988.
13.02 CONSTRUCTION OF CERTAIN TERMS AND PHRASES. Unless the context of this
Agreement otherwise requires, (i) words of any gender include each other gender;
(ii) words
54
using the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Agreement; (iv) the terms "Article" or
"Section" refer to the specified Article or Section of this Agreement; and (v)
the phrase "ordinary course of business" refers to the business of the Company.
Whenever this Agreement refers to a number of days, such number shall refer to
calendar days unless Business Days are specified. All accounting terms used
herein and not expressly defined herein shall have the meanings given to them
under GAAP. Any representation or warranty contained herein as to the
enforceability of a Contract shall be subject to the effect of any bankruptcy,
insolvency, reorganization, moratorium or other similar law affecting the
enforcement of creditors' rights generally and to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law).
ARTICLE XIV
MISCELLANEOUS
14.01 NOTICES. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally, by facsimile transmission, by registered or certified mail (postage
prepaid, return receipt requested) or by overnight express courier to the
parties at the following addresses or facsimile numbers:
If to Purchaser, to:
Ameristar Casino Kansas City, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 000 Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, President & CEO
Facsimile No. (000) 000-0000
with copies to:
Xxxxxx X. Xxxxxxxx, Esq.
Senior Vice President of Legal Affairs
Ameristar Casinos, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
Facsimile No. (000) 000-0000
and
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Facsimile No. (000) 000-0000
55
If to the Company, to:
Kansas City Station Corporation
c/o Station Casinos, Inc.
0000 Xxxx Xxxxxx Xxx.
Xxx Xxxxx, Xxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X Xxxxxxx, Esq.
with copies to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
000 Xxxxx Xxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
All such notices, requests and other communications will (a)
if delivered personally to the address as provided in this SECTION 14.01, be
deemed given upon delivery, (b) if delivered by facsimile transmission to the
facsimile number as provided in this SECTION 14.01, be deemed given upon
receipt, and (c) if delivered by mail in the manner described above to the
address as provided in this SECTION 14.01, be deemed given upon receipt (in each
case regardless of whether such notice, request or other communication is
received by any other Person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this SECTION 14.01). Any party from
time to time may change its address, facsimile number or other information for
the purpose of notices to that party by giving notice specifying such change to
the other party hereto.
14.02 ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.
14.03 EXPENSES. Whether or not the transactions contemplated
hereby are consummated, Purchaser and the Company each shall pay the costs and
expenses incurred by such party in connection with the negotiation, execution
and closing of this Agreement and the transactions contemplated hereby.
14.04 PUBLIC ANNOUNCEMENTS. At all times at or before the
Closing, the Company and Parent, on the one hand, and Purchaser and ACI, on the
other, will not issue or make any reports, statements or releases to the public
or generally to the employees, customers, suppliers or other Persons to whom the
Company sells goods or provides services or with whom the Company otherwise has
significant business relationships with respect to this Agreement or the
transactions contemplated hereby without the consent of the other, which consent
shall not be unreasonably withheld. If either party is unable to obtain the
approval of its public report, statement or release from the other party and
such report, statement or release is, in the opinion of legal counsel to such
party, required by Law in order to discharge such party's disclosure
56
obligations, then such party may make or issue the legally required report,
statement or release and promptly furnish the other party with a copy thereof.
Purchaser and ACI will obtain the Company's prior approval of any press release
to be issued immediately following execution of this Agreement or the Closing
announcing execution of this Agreement or the consummation of the transactions
contemplated by this Agreement, which approval shall not be unreasonably
withheld. The Company and Parent will obtain Purchaser's prior approval of any
press release to be issued immediately following execution of this Agreement or
the Closing announcing this Agreement or the consummation of the transactions
contemplated by this Agreement.
14.05 WAIVER . Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by or
on behalf of the party waiving such term or condition. No waiver by any party of
any term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
14.06 AMENDMENT. Except for amendments, supplements and modifications to
the Disclosure Schedule by the Company prior to the Closing (which shall be made
in accordance with the terms and provisions set forth in the definition of the
term "Disclosure Schedule"), this Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of
Purchaser, on the one hand, and the Company, on the other hand.
14.07 CONFIDENTIALITY. Each party hereto will hold, and will use its best
efforts to cause its Affiliates , and in the case of Purchaser, any Person who
has provided, or who is considering providing, financing to Purchaser to finance
all or any portion of the Purchase Price, and their respective Representatives
to hold, in strict confidence from any Person (other than any such Affiliate,
Person who has provided, or who is considering providing, financing or
Representative), unless (i) compelled to disclose by judicial or administrative
process (including, without limitation, in connection with obtaining the
necessary approvals of this Agreement and the transactions contemplated hereby
of Governmental or Regulatory Authorities) or by other requirements of Law or
(ii) disclosed in an Action or Proceeding brought by a party hereto in pursuit
of its rights or in the exercise of its remedies hereunder, all documents and
information concerning the other party or any of its Affiliates furnished to it
by the other party or such other party's Representatives in connection with this
Agreement or the transactions contemplated hereby, except to the extent that
such documents or information can be shown to have been (a) previously known by
the party receiving such documents or information, (b) in the public domain
(either prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) later acquired by the
receiving party from another source if the receiving party is not aware that
such source is under an obligation to another party hereto to keep such
documents and information confidential; provided that following the Closing the
foregoing restrictions will not apply to Purchaser's use of documents and
information concerning the Business, the Assets or the Assumed Liabilities
furnished by Seller hereunder. In the event the transactions contemplated hereby
are not consummated, upon the request of the other party, each party hereto
will, and will cause its Affiliates, any Person who has provided, or who is
considering providing, financing to such party and their respective
Representatives to,
57
promptly (and in no event later than five (5) Business Days after such request)
redeliver or cause to be redelivered all copies of documents and information
furnished by the other party in connection with this Agreement or the
transactions contemplated hereby and destroy or cause to be destroyed all notes,
memoranda, summaries, analyses, compilations and other writings related thereto
or based thereon prepared by the party furnished such documents and information
or its Representatives.
14.08 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity pursuant to ARTICLE XI hereof.
14.09 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by any party hereto without the
prior written consent of the other party hereto and any attempt to do so will be
void, except (a) for assignments and transfers by operation of Law and (b) that
Purchaser may assign any or all of its rights, interests and obligations
hereunder (including, without limitation, its rights under ARTICLE XI) to (i) a
wholly-owned subsidiary, provided that any such subsidiary agrees in writing to
be bound by all of the terms, conditions and provisions contained herein and
Purchaser remains liable for its obligations under this Agreement, (ii) any
post-Closing purchaser of the Business or a substantial part of the Assets or
(iii) any financial institution or other entity providing purchase money or
other financing to Purchaser from time to time as collateral security for such
financing. Subject to the preceding sentence, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
14.10 HEADINGS. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
14.11 INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, and (c)
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom.
14.12 CONSENT TO JURISDICTION AND VENUE. Each party hereby irrevocably
submits to the exclusive jurisdiction of the United States District Court for
the District of Nevada or any court of the State of Nevada located in Xxxxx
County in any action, suit or proceeding arising out of or relating to this
Agreement or any of the transactions contemplated hereby, and agrees that any
such action, suit or proceeding shall be brought only in such court; PROVIDED,
HOWEVER, that such consent to jurisdiction is solely for the purpose referred to
in this SECTION 14.12 and shall not be deemed to be a general submission to the
jurisdiction of said courts or in the State of Nevada other than for such
purpose. Each party hereby irrevocably waives, to the fullest extent permitted
by Law, any objection that it may now or hereafter have to the laying of the
venue of any such action, suit or proceeding brought in such a court. Each party
further
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irrevocably waives and agrees not to plead or claim that any such action, suit
or proceeding brought in such a court has been brought in an inconvenient forum.
14.13 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Nevada applicable to a Contract
executed and performed in such State, without giving effect to the conflicts of
laws principles thereof.
14.14 ATTORNEY'S FEES. In the event of a dispute between the parties hereto
relating to this Agreement, the prevailing party to such dispute will be
entitled to recover its reasonable attorneys fees and other costs and expenses
relating to such dispute from the non-prevailing party.
14.15 TIME OF THE ESSENCE. Time is of the essence in performing covenants
and agreements hereunder.
14.16 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
ARTICLE XV
GUARANTEES
15.01 GUARANTEE OF THE COMPANY'S OBLIGATIONS. Parent hereby, to the fullest
extent permitted by applicable law, irrevocably and unconditionally guarantees
(the "PARENT GUARANTEE") to Purchaser and its successors and assigns the prompt
performance and payment in full when due of all obligations of the Company to
Purchaser under this Agreement and hereby agrees to take all reasonably
necessary action as the sole shareholder of the Company to cause the Company to
perform its obligations hereunder.
15.02 GUARANTEE OF PURCHASER'S OBLIGATIONS. ACI hereby, to the fullest
extent permitted by applicable law, irrevocably and unconditionally guarantees
(the "ACI GUARANTEE") to the Company and its successors and assigns the prompt
performance and payment in full when due of all obligations of Purchaser to the
Company under this Agreement and hereby agrees to take all reasonably necessary
action as the sole shareholder of Purchaser to cause Purchaser to perform its
obligations under this Agreement.
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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officer or trustee, as applicable, of each party hereto as
of the date first above written.
"PURCHASER"
AMERISTAR CASINO KANSAS CITY, INC.,
a Missouri corporation
By:
---------------------------------
Name:
Title:
"THE COMPANY"
KANSAS CITY STATION CORPORATION,
a Missouri corporation
By:
---------------------------------
Name:
Title:
"PARENT"
STATION CASINOS, INC.,
a Nevada corporation
By:
---------------------------------
Name:
Title:
"ACI"
AMERISTAR CASINOS, INC.
a Nevada corporation
By:
---------------------------------
Name:
Title:
