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EXHIBIT 10(a)
AGREEMENT
AGREEMENT made November 6 , 1998 and effective November 5, 1998, between
The Sands Regent, a Nevada corporation (the "Seller"), and Xxxxx X. Xxxxx and
Xxxx X. Xxxxxx, Xx. (the "Purchasers") and the Gulfside Casino Partnership d/b/a
Copa Casino ("Gulfside Partnership").
WHEREAS, Seller owns (a) 100% of the issued and outstanding capital
stock of Gulfside Casino, Inc. ("GCI"), a Mississippi corporation, (b) 100% of
the issued and outstanding capital stock of Patrician, Inc. ("Patrician"), a
Nevada corporation, and (c) 100% of the issued and outstanding capital stock of
Artemis, Inc. ("Artemis"), a Nevada corporation; WHEREAS, GCI, Patrician and
Artemis ("the Companies") are general partners in Gulfside Casino Partnership
d/b/a Copa Casino ("Gulfside Partnership"), a Mississippi general partnership
doing business as the Copa Casino in Gulfport, Mississippi; and the respective
ownership interest of each of the Companies in Gulfside Partnership is: GCI -
.006%; Patrician - 98.744%; Artemis - 1.25%;
WHEREAS, Seller desires to sell, assign, convey and transfer the capital
stock of the Companies and Purchasers desire to purchase and acquire all of the
capital stock of the Companies, and to own, manage and operate Gulfside Casino
Partnership d/b/a Copa Casino.
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the parties AGREE:
1. Sale of Shares. Seller hereby sells, assigns, transfers and conveys
to Purchasers, 100% of the issued and outstanding shares of the capital stock of
the Companies as represented by the following share certificates:
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COMPANY CERTIFICATE NO. NUMBER OF SHARES
------- --------------- ----------------
GCI 11 800
Patrician 1 2,500
Artemis 1 2,500
With respect to each of the Companies, Seller shall transfer and convey
said shares to Purchasers as follows:
(a) GCI
(1) Xxxxxx 50% or 400 shares
(2) Green 50% or 400 shares
(b) Patrician
(1) Xxxxxx 50% or 1,250 shares
(2) Green 50% or 1,250 shares
(c) Artemis
(1) Xxxxxx 50% or 1,250 shares
(2) Green 50% or 1,250 shares
2. Payments to Seller. In consideration of its performance under this
Agreement and related Exhibits, including the release, satisfaction and
cancellation of certain lien rights as described in paragraph 4 below, and the
sale, transfer and conveyance of the share certificates, Seller shall receive at
closing: (A) a certified check in the amount of $500,000.00 drawn on the account
of Gulfside Partnership and payable to the Escrow Agent subject to the terms of
the Escrow Agreement attached hereto as Exhibit "C", and (B) a negotiable
Promissory Note payable to Seller in the form attached hereto as Exhibit "A", in
the principal
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amount of $8,000,000.00, without interest, executed by Gulfside Partnership and
guaranteed by each of the Companies. Said Promissory Note shall be paid by
payment to Seller on an ongoing basis of a monthly royalty equal to the greater
of (i) 2% of the monthly Gross Gaming Revenue of the Gulfside Partnership or any
successor to Gulfside Partnership or to its interest in the Copa Casino as set
forth in the Royalty Agreement attached as Exhibit "B" or (ii) $15,000 in cash,
in accordance with the terms and conditions of a written Royalty Agreement to be
executed by Gulfside Partnership in the form of Exhibit "B" attached hereto,
which Royalty Agreement may be recorded in memorandum form; provided, however,
that the principal amount of payments due under said Promissory Note shall not
exceed $8,000,000.00.
3. Closing. Closing shall occur at the Copa Casino, Gulfport,
Mississippi, on or before December 31, 1998. The following transactions shall
occur at closing: (A) Seller shall endorse and deliver the shares certificates
to Purchasers; (B) Seller shall xxxx "paid" the original of all notes payable to
Seller by any of the Companies or by Gulfside Partnership; (C) Seller shall
deliver to Purchasers terminations and cancellations of all financing
statements, liens or Ship Mortgages securing the notes described above; (D)
Gulfside Partnership shall deliver to Seller a certified check, payable to the
order of Escrow Agent, for $500,000.00; and (E) Gulfside Partnership shall
deliver to Seller the Promissory Note for $8,000,000.00 executed by Gulfside
Partnership and the Companies; and (F) Gulfside Partnership shall deliver to
Seller the Royalty Agreement executed by Gulfside Partnership; (G) Gulfside
Partnership shall deliver to Seller the Escrow Agreement attached as Exhibit "C"
executed by Gulfside Partnership, Seller and Escrow Agent; and (H) Gulfside
Partnership shall deliver to Seller the Security Agreement attached as Exhibit
"D" executed by Gulfside Partnership; and (I) Purchasers shall
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deliver to Seller the General Releases, Orders of Dismissals with Prejudice of
certain litigation in the forms attached hereto as Exhibits "D", "E", "F", "G"
and "H" executed by each of the Purchasers and their attorneys. Upon execution
of this Agreement, the Purchasers, through their attorneys, shall sign and
deliver to Seller the Joint Motions to Settle and Compromise Disputed Claims in
the forms attached hereto as Exhibits "I" and "J".
4. Cancellation of Existing Debt and Lien Rights. At closing, Seller
shall xxxx "paid" and shall cancel any and all notes, obligations or debts owed
to Seller by any of the Companies or by Gulfside Partnership and shall xxxx
"satisfied" and terminate, cancel, discharge and release any liens, security
interests or Ship Mortgage which secures such notes or indebtedness.
5. Conditions Precedent. Seller shall have no obligation to close this
sale, to transfer the shares, to cancel the notes or indebtedness or to cancel
its security interests and liens unless and until the following conditions have
occurred:
(a) Entry of a Order Approving Settlement and Compromise Agreement by
the Bankruptcy Court for the Southern District of Mississippi, which order shall
have become final and not appealed or stayed pending an appeal.
(b) Approval of the Mississippi Gaming Commission to transfer ownership
and control of partners of Gulfside Partnership to Purchasers and approval of
the Mississippi Gaming Commission to effectuate this stock sale and the transfer
of the gaming license to Purchasers.
(c) Approval of the Mississippi Port Authority, if required, to transfer
ownership and control of the Companies to Purchasers, or to transfer and assign
the Copa Casino lease to
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Purchasers and to release Seller from any liability thereunder.
(d) Purchasers shall have delivered all of the documents and items
required to be delivered pursuant to Paragraph 3 above.
6. Successors: Binding Agreement. This Agreement and all exhibits,
documents, and covenants contemplated by or required pursuant to this Agreement
shall be binding upon each of the Purchasers and Gulfside Partnership d/b/a Copa
Casino and upon their respective Successors, Assigns, or Transferees. A
Successor, Assign, or Transferee of Gulfside Partnership d/b/a Copa Casino shall
mean any person(s) or entity who, directly or indirectly by sale, merger,
consolidation, operation of law or otherwise, shall acquire of otherwise succeed
to a majority or controlling ownership interest in the business and/or assets of
Gulfside Partnership d/b/a Copa Casino whether such casino remains at its
current location or is relocated, or whether the current facilities are
replaced, augmented or otherwise modified. The Purchasers and Gulfside
Partnership hereby represent and covenant that they will require each and every
such Successor, Assign or Transferee to expressly assume and agree to perform
this Agreement and all Exhibits, documents, and covenants contemplated by or
required under this Agreement including without limitation the Promissory Note
and Royalty Agreement in the same manner and to the same extent that Purchasers
and Gulfside Partnership would be required to perform if no such succession,
transfer or assignment had taken place. Failure of the Purchasers or Gulfside
Partnership to obtain such assumption agreement or the failure of any successor,
assignee or transferee to execute and deliver such assumption agreement shall
constitute an event of default under this Agreement and the Exhibits attached
hereto, unless otherwise agreed in writing by the parties.
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7. Representations, Warranties and Covenants.
A. Seller Represents and Warrants:
(1) Organization and standing. Seller and each of the Companies is duly
organized, validly existing, and in good standing.
(2) Capitalization. All issued shares of each of the Companies have been
validly issued and are fully paid and nonassessable. None of the Companies has
any outstanding subscriptions, contracts, options, warrants, or other
obligations to issue, sell or otherwise dispose of, or to purchase, redeem or
otherwise acquire any of its shares.
(3) Share ownership. Seller is the owner, free and clear of any
encumbrances, of the shares conveyed hereby. Seller has full right and authority
to transfer said shares.
(4) Valid Obligations. This Agreement and the Exhibits and documents to
which Seller is a party have been duly authorized, executed and delivered by
Seller, and will constitute valid and binding legal obligations in accordance
with their terms.
(5) Disclosures. Seller has delivered or made available to Purchasers
and Purchasers acknowledge inspection and receipt of the following documents,
records and information related to the Gulfside Partnership and the Companies:
(a) Original General Ledger report for the year ending 6/30/96.
(b) Original General Ledger report for the year ending 6/30/97.
(c) Original General Ledger report for eleven months ending
5/31/98.
(d) Vendor Listing as of 7/8/98.
(e) Copies of Adjusting Journal Entries for the 11 months ending
5/31/98.
(f) Copies of Adjusting Journal Entries for the 12 months ending
6/30/97.
(g) Copies of Adjusting Journal Entries for the 12 months ending
6/30/96.
(h) Accounts Payable listing as of June 30, 1998.
(i) Accounts Payable Listing as of May 31, 1998.
(j) Late Accounts Payable listing as of May 31, 1998.
(k) Regular Financial Depreciation Schedule as of May 31, 1998.
(l) Impairment Depreciation Schedule as of May 31, 1998.
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(m) Copies of all insurance policies.
(n) Copies of contracts and agreements.
(o) Listing of all lawsuits.
(p) Listing of positions and salary range.
(q) Organization chart.
(r) Copa Casino Internal Audit Reports for the quarter ended
12/31/97.
(s) Copa Casino Internal Audit Reports for the quarter ended
3/31/98.
(t) Monthly Financial Statement for the month and year ending
6/30/98.
(u) Monthly Financial Statements for each 11 months from 7/31/97
to 5/31/98.
(w) Audited Financial Statement as of and for the year ended
6/30/97.
(x) Gulfside Casino Partnership 1996 (3/31/97) U.S.Partnership
Income Tax Return.
(y) Payment Schedule (Agreement) with Xxxxxx Xxxxxx.
(z) Payment Agreement with the Cornell Group, Inc.
(aa) Accounts Payable Listing as of 7/31/98.
(bb) Purchase Journal for 7/31/98.
(cc) Copies of Bank Balance report as of 8/7/98.
(dd) Monthly Financial Statement for the month of July, 1998.
(ee) Finding of Facts and Conclusion of Law in connection with
Port Authority lawsuit.
(ff) Audited Financial Statements of Gulfside Partnership for
years ended June 30, 1998 and 1997.
(gg) A Letter disclosure concerning a potential fine for alleged
currency violations.
(hh) Purchase Journal for the month ending August 31, 1998.
(ii) October 7, 1998 letter to Mississippi Port Authority
regarding Hurricane George's chronology.
(jj) May 5, 1998 Agreement with Xxxx Xxxxxx.
(kk) Monthly financial statements for the three (3) months ending
September 30, 1998.
Purchasers hereby acknowledge and represent that they have reviewed and
inspected said records, and have been given full access to and the opportunity
to inspect the records and properties of Gulfside Partnership and the Companies.
(6) Title to properties. The Gulfside Partnership has good and
marketable title to its properties and assets, real and personal, subject to no
material security interests, mortgages, pledge, lien, or encumbrance, except for
the lien of IGT on slot machines and the liens which
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are to be terminated pursuant to this Agreement.
(7) That all taxes due by Gulfside Partnership and the Companies have
been paid.
(8) There are no outstanding contracts of a material nature which have
not been disclosed.
(9) Seller has not knowingly and intentionally made any misstatement of
any material fact in connection with any documents, records or information
furnished to Purchasers in connection with this Agreement and the transactions
contemplated by this Agreement.
(10) Comply with all laws, ordinances, governmental rules and
regulations to which it is subject including, but not limited to the rules and
regulations of the Mississippi Gaming Commission.
B. Purchasers and Gulfside Partnership Represent, Warrant and Covenant:
Until the Promissory Note attached hereto as Exhibit "A" is paid in the
full in accordance with its terms, Purchasers and Gulfside Partnership shall:
(1) Business and Existence. Preserve and maintain all material
rights, privileges, licenses and franchises of Gulfside Partnership d/b/a Copa
Casino and the Companies and maintain qualification and licenses as necessary in
order to conduct its casino, restaurant and bar business.
(2) Tax Returns. File and cause Gulfside Partnership and the
Companies to file all federal, and state tax returns and other reports required
by law.
(3) Taxes and Liens. Pay and discharge, and cause Gulfside
Partnership and each Company, to pay and discharge all taxes, assessments, liens
and charges, as and when such taxes, assessments, liens and charges are due and
payable, unless in dispute.
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(4) Compliance with Laws. Comply and cause Gulfside Partnership
and each Company to comply with all laws, ordinances, governmental rules and
regulations to which it is subject including, but not limited to the rules and
regulations of the Mississippi Gaming Commission and obtain and maintain all
licenses, permits, franchises, leases or other authorizations necessary to the
conduct of its business.
(5) Business Records. Keep and maintain, and cause Gulfside
Partnership and each Company to keep and maintain, adequate records and books of
account with respect to its business activities in which proper entries are made
in accordance with GAAP reflecting all financial transactions of Gulfside
Partnership or the Companies.
(6) Royalties. Pay and cause Gulfside Partnership or any
successor, assignee or transferee of Gulfside Partnership or its interest in the
Copa Casino to timely pay Seller or Escrow Agent the monthly royalty required
hereunder.
8. Conduct of business pending closing. Seller covenants that, pending
the closing:
(a) Gulfside Partnership business will be conducted in the ordinary
course.
(b) No change will be made in any of the Certificates of Incorporation
or Bylaws.
(c) No change will be made in any of the authorized or issued shares.
(d) No dividend, distribution or payment will be made or declared with
respect to any of the shares.
(e) No material increase will be made in the compensation payable or to
become payable by Gulfside Partnership or any of the Companies to any officer or
employee.
(f) No contract or commitment will be entered into by or on behalf of
Gulfside Partnership or any of the Companies outside of the ordinary course of
business.
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(g) Gulfside Partnership debts will be paid as they become due to the
extent funds are available to do so.
(h) No material contract right of Gulfside Partnership will be waived.
(i) No material obligations outside of in the ordinary course of
business will be incurred.
(j) Advise the Purchasers of any proposed expenditure or incurrance of a
liability in excess of $25,000.00 and allow Purchasers a reasonable time to make
comments with regard to such proposed liability.
9. Access to Books and Records. From the date of the execution of this
Agreement to the closing, Seller will give Purchasers or their representatives
reasonable access to the offices, records, files, books of account, and tax
returns of Gulfside Partnership and each of the Companies; provided, however,
that such access and inspection shall not unreasonably interfere with normal
business operations and shall be subject to the terms and conditions of that
certain Confidentiality Agreement dated April 7, 1998 between Purchasers and
Seller.
10. Indemnity. Gulfside Partnership hereby agrees to defend, indemnify
and hold harmless, and to cause each of the Companies to defend, indemnify and
hold harmless, Sellers and its directors, officers, employees and agents from
and against any and all claims, causes of action, losses, damages, liabilities,
costs and expenses, including attorney, expert and accounting fees, court costs
and expenses, which may be filed or asserted by or on behalf of Xxxx Xxxxxxxxx,
Xxx Xxxxxx or Venue Development Company or their successors or assigns arising
from, related to or connected with that certain letter agreement dated June 3,
1996 or any rights, duties or liabilities arising therefrom.
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11. Royalty Payments. Gulfside Partnership shall timely pay and
Purchasers shall cause Gulfside Partnership or its successor, assignee or
transferee to timely pay to Seller or Escrow Agent the monthly royalty payments
provided for hereunder.
12. Security Interest and Collateral. To secure the prompt payment and
performance to Seller of the obligation to pay the Promissory Note as described
herein, Purchasers and Gulfside Partnership hereby grant to Seller a continuing
Security Interest and Lien as described in that certain Security Agreement of
even date herewith upon the following assets and properties, whether now owned
or existing or hereafter acquired or arising, and wherever located, together
with all accessions, substitutions and replacements thereof:
(A) A first priority lien not subject to subordination on 10% of the
Gross Gaming Revenues as defined in the Royalty Agreement of Gulfside
Partnership d/b/a Copa Casino.
(B) A lien, subject to subordination as described below, on 90% of the
Gross Gaming Revenues of Gulfside Partnership d/b/a Copa Casino.
(C) A lien second only to the lien of IGT, but subject to subordination
as provided below, on all slot machines owned by Gulfside Partnership d/b/a Copa
Casino.
(D) A lien, subject to subordination as described below upon the
following property and assets of Gulfside Partnership:
(1) All accounts and accounts receivable.
(2) All Inventory.
(3) All equipment, furniture and fixtures including without
limitation the M/V "Copa", Official No. 1027120.
(4) General intangibles.
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(5) All accessions, substitutions or replacements of such
products or proceeds.
(E) Purchasers and Gulfside Partnership shall execute Financing
Statements as provided for by the Uniform Commercial Code and agree to take all
such action as may be required to perfect or continue the perfection of Seller's
security interest in and to the collateral and hereby authorize Seller to sign
and file necessary Financing Statements on behalf of Gulfside Partnership or its
successors, assignees or transferees.
13. Agreement to Subordinate. To enable Gulfside Partnership or its
successor to obtain loans from banks or commercial lenders (to include
investment bankers, insurance companies or other persons or entities regularly
engaged in the business of making loans for commercial purposes) for capital
improvements, for operating capital, to refinance loans, or for other necessary
business purposes, Seller hereby agrees to subordinate its lien rights in and to
the collateral, except and excluding its lien rights in and to 10% of the Gross
Gaming Revenues, to the lien of such bank or commercial lender where such lien
is to secure a loan to Gulfside Partnership d/b/a Copa Casino or its successor
for capital improvements, operating capital, to refinance an indebtedness
incurred for the business or operations of Gulfside Partnership or for other
necessary business purposes; provided, however, that Seller shall not be
required to subordinate its liens except upon reasonable notice and opportunity
to verify that said loan is made and said loan proceeds shall be used solely for
the purposes described above.
14. Events of Default; Rights and Remedies upon Default.
(a) Events of Default. The following shall constitute Events of Default
by Purchasers:
(1) Royalty Payments. Failure to make any royalty payment due
hereunder within ten (10) days of the date on which such royalty payment becomes
due and payable.
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(2) Misrepresentation. If any warranty or representation
contained in this Agreement, or any other material warranty, representation, or
other statement made or furnished to Seller by or on behalf of Purchaser in the
other documents or in any instrument, certificate or statement furnished in
compliance with or in reference to this Agreement or the other documents proves
to have been false or misleading in any material respect when made or furnished.
(3) Breach of Covenant. Purchaser fails or neglects to perform,
keep or observe any term, provision, condition, covenant, warranty or
representation contained in this Agreement or in the other documents, which is
required to be performed, kept or observed by Purchaser, and the same is not
cured to Seller's satisfaction within thirty (30) days after written notice
thereof; provided, however, that any default arising from the failure to pay the
royalty payments shall be governed by the provisions of the Royalty Agreement,
Exhibit "B" and paragraph 14(a)(1) above.
(4) Bankruptcy, Insolvency, etc. The commencement of a voluntary
proceeding under any bankruptcy or similar laws by Gulfside Partnership or its
successor entity, the failure to cause any involuntary bankruptcy proceeding to
be promptly dismissed, the appointment of a receiver, trustee, custodian or
similar fiduciary, or any assignment for the benefit of creditors.
(5) Transfer or conveyance of the principal assets, property or
equipment of Gulfside Partnership out of the ordinary course of business.
(6) Transfer, loss, cancellation or revocation of the license to
own and operate the Copa Casino or its successor entity.
(7) Failure to comply with the provisions of the succession
clause, Paragraph 6, under this Agreement.
(b) Rights and Remedies Upon Default.
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Upon the occurrence of any Event of Default, Seller shall have the
following rights and remedies:
(1) All of the rights and remedies of a secured party under the
Uniform Commercial Code or other applicable law, and all other legal and
equitable rights to which Seller may be entitled, all of which shall be
cumulative and none of which shall be exclusive, in addition to any other rights
or remedies contained in this Agreement or the Security Agreement.
(2) After three (3) days written notice to Gulfside Partnership
and Purchasers by facsimile, the right to take possession of the Collateral, and
(i) require Purchasers and Gulfside Partnership or its successor to assemble the
Collateral, at their expense, and make it available to Seller at a place to be
designated by Seller which is reasonably convenient, and (ii) enter the premises
wherever the Collateral shall be located, without process of law, to take
possession of and secure the collateral, and to keep and store the collateral on
such premises until sold.
(3) The right to foreclose the liens and security interests
created under this Agreement and the Security Agreement or under any other
agreement relating to the Collateral;
(4) The right to sell or to otherwise dispose of all or any
Collateral in its then condition, at public or private sale with such notice as
may be required by law, in lots or in bulk, for cash or on credit, all as
Seller, in its sole discretion, may deem advisable, and the right to apply the
first sales proceeds to the cost of selling the collateral. Purchasers and
Gulfside Partnership agree that twenty (20) days written notice of any public or
private sale or other disposition of the Collateral shall be reasonable notice
thereof, and such sale shall be at such location(s) as Seller shall designate in
said notice; provided, however, that said sale shall be conducted in compliance
with applicable law, and in a manner reasonably calculated to bring maximum
value.
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(c) Disposition of Net Proceeds. In the event of foreclosure and sale of
the collateral as provided for herein, Seller agrees that, after deducting the
reasonable costs of said foreclosure and sale, Seller shall apply fifty percent
(50%) of the net proceeds to the balance due under the Promissory Note of even
date herewith and shall pay the remaining fifty percent (50%) to Purchasers
jointly; and if Seller shall elect to credit bid, then such credit bid shall be
jointly submitted on behalf of Seller and Purchasers and, in the event said
credit bid is successful, Seller and Purchasers shall own the collateral on a
fifty-fifty (50%-50%) basis; it being the intention of the parties to divide any
net proceeds of a foreclosure, sale or liquidation of the collateral or own the
collateral on the basis of fifty percent (50%) to Seller and fifty percent (50%)
to Purchasers jointly. Seller acknowledges that Purchasers are not now, and
shall not become at any time, personally liable for repayment of the
$8,000,000.00 Promissory Note; provided, this acknowledgment shall not be
construed to release Purchasers from any act of fraud or breach of this
Agreement.
(d) Covenant Not to Xxx and Further Assurance. In consideration of the
covenants contained herein including the agreement to equally divide the net
proceeds in the event of foreclosure and liquidation of collateral as described
above, Gulfside Partnership and Purchasers agree that they will not institute
any lawsuit, or other action, legal or otherwise, to challenge, set aside or
otherwise effect the validity of the security interest granted hereby to Seller
or to set aside, void or terminate said security interests including any suit or
action to set aside or challenge the validity of Seller's security interest in
the M/V "Copa", Official No. 1027120; nor will they assign any such right or
claim or allow another to xxx in their name(s), or assist anyone else in
commencing, filing or prosecuting any such action or proceeding; and further
agree that they will execute and deliver any additional security documents as
may be reasonably requested by Seller in its judgment to perfect and enforce
said security interests including without limitation a Ship Mortgage and/or Deed
of Trust with fixture filing.
15. Assumption of Employee Contracts. Purchasers and Gulfside
Partnership expressly agree to assume and comply with all terms and conditions
of that certain Employment Agreement dated May 5, 1998 by and between Gulfside
Casino Partnership and Xxxx Xxxxxx.
16. Payment and Indemnification for Civil Penalty. The Parties hereby
acknowledge that the Financial Crimes Enforcement Network ("FINCEN"), Department
of the Treasury has made a
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preliminary determination to impose a civil penalty upon Gulfside Partnership in
the amount of $1,321,622.00 for the alleged failure to timely file reportable
currency transactions between the period September 1, 1993 through December 31,
1994 allegedly in violation of the Bank Secrecy Act of 1970, 31 U.S.C. '5311 et
seq. as described in a letter from FINCEN dated June 24, 1998 and the schedule
of alleged violations attached thereto; that Gulfside Partnership has retained
Deloitte & Touche, LLP, 00 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx to protest
and/or negotiate said civil penalty; and that Gulfside Partnership has accrued
or will accrue $200,000.00 in an anticipation of payment of a negotiated civil
penalty and payment of professional fees necessary to protest and/or negotiate
said penalty. Therefore, as among themselves and in consideration of the
promises and covenants contained in this Agreement, the Parties further agree:
(a) Gulfside Partnership shall continue to employ Deloitte & Touche to
protest and/or negotiate said civil penalty until such penalty is finally
resolved;
(b) To the extent it may become necessary to retain other professionals
including attorneys in connection with said proposed penalty, such other
professionals shall be retained and employed by Gulfside Partnership only upon
the written agreement of both Seller and Purchasers;
(c) To the extent a civil penalty is imposed as a result of the
violations alleged in the letter of June 24, 1998, Gulfside Partnership shall
pay, when and as due, said penalty and all future professional fees associated
therewith up to $200,000.00;
(d) To the extent of any sums which Sands Regent is actually paid at
closing or in monthly royalties pursuant to this Agreement, the Royalty
Agreement and Promissory Note, and to the extent the penalty imposed pursuant to
the violations alleged in the letter of June 24, 1998 and the related
professional fees therefor shall exceed $200,000.00, The Sands Regent shall pay
when and as due and
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shall indemnify and hold harmless Gulfside Partnership for payment of such
penalty and related expenses in excess of $200,000.00; it being the express
agreement and understanding of the Parties that the liability of Sands Regent to
pay any indemnity hereunder shall be limited to and shall not exceed the amount
it actually receives at closing or in monthly royalties under this Agreement,
the Royalty Agreement, and the Promissory Note and that the liability of The
Sands Regent to so indemnify Gulfside Partnership is limited to a penalty
imposed and future professional fees incurred as a result of the violations
alleged in the letter of June 24, 1998.
(e) The Parties agree that for the purpose of assuring the promise of
The Sands Regent to indemnify Gulfside Partnership with regard to any such civil
penalty or related future professional fees in excess of $200,000.00, the
$500,000.00 payment due at closing and the monthly royalty payments due
hereunder shall be escrowed in accordance with the terms and conditions of the
Escrow Agreement attached hereto as Exhibit "C".
(f) The Parties agree that Gulfside Partnership shall continue to
utilize and employ Deloitte & Touche to protest and negotiate said penalty, and
that all Parties will exercise their best efforts to avoid entirely or reduce
the final amount of any such penalty.
(g) The Parties further agree that, in the event said penalty has not
been finally resolved prior to the closing described in paragraph 3 above, the
President of The Sands Regent and a CPA or an attorney designated by Purchasers
shall be jointly responsible for and shall have sole authority to negotiate and
settle the final amount of such penalty, and further agree that until such
penalty is finally resolved all Parties will be advised of the status of the
protest and the negotiations.
17. Brokerage. Purchasers and Seller jointly represent and warrant that
all negotiations relative to this Agreement have been carried on by them
directly without the intervention of any
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Broker or Agent other than their respective attorneys. Each party shall
indemnify and hold the other party harmless against and in respect of any claim
for brokerage fees or other commissions relative to this Agreement, or of the
transactions contemplated hereby.
18. Survival of Representations. All statements contained in this
Agreement and in any exhibit, document, certificate or other instrument
delivered by any party to this Agreement, or in connection with the transaction
contemplated hereby, shall be deemed representations and warranties. All
representations and warranties made in this Agreement, or pursuant hereto, shall
be deemed joint and several, and except as otherwise expressly stated, and shall
survive the closing.
19. Entire Agreement. This Agreement and the exhibits and documents
contemplated or required hereby constitute the entire agreement among the
parties with respect to the subject matter and supersede all prior agreements
and negotiations pertaining to the subject matter. The parties expressly
acknowledge that they have not relied and are not relying upon any
representations other than those set forth in this Agreement.
20. Binding Effect; Benefit. This Agreement shall insure to the benefit
of and be binding upon the parties hereto and their respective successors,
assigns, executors, administrators, heirs, or legatees, trustees and legal
representatives.
21. Attachments. All Exhibits and Schedules mentioned in this Agreement
shall be attached to this Agreement and shall form an integral part hereof.
22. Governing Law. This Agreement has been executed in and shall be
construed in accordance with the laws of Mississippi.
23. Notices. All notices, requests, demands, and other communications
hereunder shall be in writing, and shall be deemed to have been duly given if
delivered by facsimile or mailed, first class
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postage prepaid, if to Seller: The Sands Regent
000 Xxxxx Xxxxxxxxx
Xxxx, Xxxxxx, 00000
Attention: Xxxx Xxxx
Facsimile no. (000) 000-0000
or at such other address as may be designated in writing with copy to:
Xxxx Xxxx, Esquire
Dove & Chill
0000 Xxxxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Facsimile no. (000) 000-0000
or, if to the Purchasers: Xx. Xxxx X. Xxxxxx, Xx.
P. O. Xxx 00
Xxxxxxxx, Xxxxxxxxxxx 00000
Facsimile no. (000) 000-0000
Xx. Xxxxx X. Xxxxx
X. X. Xxx 000000
Xxxxxxx, Xxxxx 00000-0000
Facsimile no. (000) 000-0000
Gulfside Casino Partnership d/b/a Copa Casino
P. O. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000
Facsimile no. (000) 000-0000
or, at such other address as may be designated in writing with a copy to:
Xxxxxxx Xxx Xxxxx, III
Xxxxxxx & Xxxxx
P. X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx 00000
Facsimile no. (000) 000-0000
Xxxxxxx X. Xxxxxxxx, Esquire
Xxxxxxxx, Xxxxxx, Xxxxxxxx & Xxxxxxx, L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile no. (000) 000-0000
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24. Counterparts. This agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement.
THE SANDS REGENT
DATED: 11/6/98 , 1998 BY: /s/ Xxxxxx X. Xxxxx
--------------- --------------------------------
President
GULFSIDE CASINO PARTNERSHIP
d/b/a COPA CASINO, a Mississippi
General Partnership
By: Gulfside Casino, Inc., Its
General Partner
DATED: 11/6/98 , 1998 BY: /s/ Xxxxx X. Xxxx
--------------- --------------------------------
Vice-President of Gulfside
Casino, Inc.
XXXXX X. XXXXX
DATED: 11/4/98 , 1998 /s/ Xxxxx X. Xxxxx
--------------- --------------------------------
XXXX X. XXXXXX, XX.
DATED: 11/5/98 , 1998 /s/ Xxxx X. Xxxxxx Xx.
--------------- --------------------------------
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STATE OF MISSISSIPPI
-----------
COUNTY OF XXXXXXXX
--------
PERSONALLY came and appeared before me, the undersigned authority in and
for the aforesaid County and State, the within named Xxxxxx X. Xxxxx , who
acknowledged to me that he is the President of THE SANDS REGENT, a Nevada
corporation, and that for and on behalf of said corporation and as its act and
deed, he signed, executed and delivered the above and foregoing Agreement on the
day and year therein mentioned and for the purposes therein stated, after having
first duly read and understood said Agreement and having been duly authorized by
said corporation so to do.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 6th day of November, 1998.
/s/ Xxxxxxxxx Xxxxxxxx
----------------------------
NOTARY PUBLIC
"Notary Seal"
My Commission Expires:
"Notary Public State of Mississippi at Large
MY COMMISSION EXPIRES: Nov. 17, 2000
Bonded Thru Notary Public Underwriters"
STATE OF MISSISSIPPI
-----------
COUNTY OF XXXXXXXX
--------
PERSONALLY came and appeared before me, the undersigned authority in and
for the aforesaid County and State, the within named Xxxxx X. Xxxx , who
acknowledged to me that he is the Vice-President of GULFSIDE CASINO, INC., a
Mississippi corporation and a General Partner of GULFSIDE CASINO PARTNERSHIP
D/B/A COPA CASINO, a Mississippi general partnership, and that for and on behalf
of said corporation and as its act and deed, as General Partner, and as its act
and deed on behalf of said partnership, he signed, executed and delivered the
above and foregoing Agreement on the day and year therein mentioned and for the
purposes therein stated, after having first duly read and understood said
Agreement and having been duly authorized by said corporation so to do.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 6th day of November, 1998.
/s/ Xxxxxxxxx Xxxxxxxx
----------------------------
NOTARY PUBLIC
"Notary Seal"
My Commission Expires:
"Notary Public State of Mississippi at Large
MY COMMISSION EXPIRES: Nov. 17, 2000
Bonded Thru Notary Public Underwriters"
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STATE OF Texas
-----
COUNTY OF Xxxxxx
------
PERSONALLY came and appeared before me, the undersigned authority in and
for the aforesaid County and State, the within named XXXXX X. XXXXX, who
acknowledged to me that he signed, executed and delivered the above and
foregoing Agreement on the day and year therein mentioned and for the purposes
therein stated, after having first duly read and understood said Agreement.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 4th day of November, 1998.
/s/ Xxxxx Xxxxxx
-----------------------------
NOTARY PUBLIC
My Commission Expires: "Notary Seal"
5-21-2000
---------
STATE OF MISSISSIPPI
-----------
COUNTY OF XXXXXXXX
--------
PERSONALLY came and appeared before me, the undersigned authority in and
for the aforesaid County and State, the within named XXXX X. XXXXXX, who
acknowledged to me that he signed, executed and delivered the above and
foregoing Agreement on the day and year therein mentioned and for the purposes
therein stated, after having first duly read and understood said Agreement.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 5 day of Nov., 1998.
/s/ Xxxxx X. Xxxx
-----------------------------
NOTARY PUBLIC
"Notary Seal"
My Commission Expires:
"Notary Public State of Mississippi at Large
MY COMMISSION EXPIRES: Nov. 11, 2001
Bonded Thru Notary Public Underwriters"
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