EXHIBIT 10.2
AGREEMENT
This Agreement made and entered into on this the 30th day of March, 1999, by
and between XXXX XXXXX, Secretary of State of Mississippi in his capacity as
Land Commissioner (hereinafter known as "State"),
AND
PRESIDENT CASINOS, INC., a Delaware corporation (hereinafter known as
"President").
W I T N E S S E T H
WHEREAS, President desires to implement and develop that certain project
known as the Destination Xxxxxxxxxx Project in Biloxi, Mississippi, as further
described in Exhibit "A" attached hereto (the "Project"); and
WHEREAS, the Project requires leasing of Mississippi's Public Trust
Tidelands, and State in letters dated April 6, 1998, and December 9, 1998, has
set forth certain requirements that must be met prior to executing the
tidelands lease. State's April 6, 1998, letter to President is attached
hereto and made a part of this agreement as Exhibit "B" (the "April 6
Letter"), and State's December 9, 1998, letter to Xxxxx Xxxxx, Executive
Director of the Mississippi Department of Marine Resources is attached hereto
and made a part of this agreement as Exhibit "C" (the "December 9 Letter");
and
WHEREAS, to enhance the conservation and preservation objectives of the
Mississippi Public Trust for Tidelands, and to mitigate the impacts of the
Project, in accordance with item 11 of the April 6 Letter, President desires
to acquire for State certain property in order to provide State additional
assets of major significance for the Mississippi Public Trust for Tidelands
and for the trust beneficiaries, the people of the State of Mississippi;
NOW, THEREFORE, State and President hereby agree as follows:
1. Tidelands Lease: Subject to the terms and conditions herein set forth,
State and President agree to negotiate in good faith for a mutually acceptable
Tidelands Lease (the "Lease") for the Project.
2. Enhancement of Mississippi Public Trust for Tidelands: Provided that (i)
the conditions for Closing set forth in paragraph 3 of this Agreement are
satisfied, (ii) State agrees to accept the Property (as hereinafter defined)
upon completion of the Due Diligence Period in accordance with paragraph 4 of
this Agreement, (iii) State accepts the condition of title to the Property in
accordance with paragraph 6 of this Agreement, and (iv) State and President
successfully negotiate and obtain the fully executed tidelands Lease on
mutually acceptable terms, then at Closing, State shall deliver the Lease, and
President shall cause to be delivered deeds conveying to State certain
properties including the real property currently owned by R. Xxxxx Xxxxxxx,
Jr., Stockholders' Agent for Xxxxxx Xxxxx Xxxxxxx, Jr., Xxxxx X. Xxxxxxx,
Xxxxx Xxxxxx Xxxxxxx (formerly Xxxxxx Xxxxxxx Lively) and June Xxxxxxx
Xxxxxxx, the former Stockholders of Aponaug Development Company, a Mississippi
corporation, property owners, pursuant to the authority granted under that
certain Power of Attorney dated August 9, 1989, of record in Book at Page
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of the land records of the office of the Chancery Clerk for the Second
Judicial District of Xxxxxxxx County, Mississippi, which real property is
located on Deer Island, said Island being situated in the Second Judicial
District of Xxxxxxxx County, Mississippi, together with all appurtenances and
improvements located thereon, and more particularly described in Exhibit "D"
attached hereto (the "Property"). A summary recital of the title to the
Property is attached hereto as Exhibit "E".
3. Conditions for Closing: Closing shall occur within one hundred eighty
(180) days after the following conditions for Closing are satisfied:
A. The following permits, certifications, and licenses have been issued
to President, its affiliate or its assignee, for the Project:
(i) Mississippi Permit Permit and Coastal Zone consistency
certification from the Department of Marine Resources;
(ii) Mississippi Permit Water Quality Certification from
Department of Environmental Quality, Office of Pollution
Control;
(iii) Mississippi Department of Transportation Air Rights License for
clearance over and under Highway 90;
(iv) Mississippi Department of Transportation Right of Way Approval;
(v) Biloxi Building Permit from Site Plan Review Board;
(vi) Biloxi Master Plan Amendment Approval from City Council;
(vii) Federal Permit Section 10 Rivers and Harbors Act (fill in
navigable waters);
(viii) Federal Permit Section 404 Clean Water Act;
(ix) Federal Permit Conditional Letter of Map Revision from the
Federal Emergency Management Agency; and
(x) All other mandated Federal, State and Local authorizations,
documentations, permits, certifications and licenses required
or necessary for the Project.
B. All conditions set forth in the April 6 Letter and the December 9
Letter shall be met to the satisfaction of the Secretary of State prior to
Closing. Determination of whether any one or all of the conditions specified
in said letters have been satisfied shall be within the sole discretion of the
Secretary of State, and State shall not be liable to President for any direct
or indirect consequences or damages arising out of or in any way connected
with the exercise of his discretion.
C. President recognizes that State may require the acquisition of lands
in addition to the Property in satisfaction of item 11 of the April 6 Letter.
However, in the event that the Secretary of State, in his sole discretion,
should elect to execute the Lease before all privately owned parcels on Deer
Island are acquired, then President agrees to make annual contributions to a
private trust created for the sole purpose of the preservation, maintenance
and improvement of Deer Island for purposes consistent with permitted uses set
forth in paragraph 6 B of this agreement. The first annual payment shall be
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due at Closing, and the amount of such payment shall be equal to the fair
market value of all unacquired private parcels. Like payments shall
thereafter be made on each anniversary of the Closing date and shall be equal
to the fair market value of any remaining unacquired privately owned parcels
on the date the payment is due. Both the principal and income of this private
trust may be expended for trust purposes. The private trust shall terminate
upon exhaustion of its assets. If at the time of Closing, condemnation
proceedings are pending on the unacquired, privately owned parcels on Deer
Island, then the Secretary of State may waive all or a portion of the required
payments to said private trust.
D. President shall have sole responsibility for the satisfaction of all
items and conditions contained in the April 6 Letter and December 9 Letter and
shall submit credible documentary evidence in support thereof. State may, but
shall not be required to, conduct its own investigation into the status of any
of the conditions contained in said letters. In the event State does elect to
conduct investigations into the status of any of the conditions contained in
said letters, State may retain outside counsel or expert advice, and President
shall pay the reasonable costs thereof. State shall not retain outside
counsel or expert advice without first advising President and furnishing
estimates of the cost of such services. As each condition has been resolved to
State's satisfaction, State will promptly notify President in writing. No
condition shall be deemed waived or satisfied unless or until State
affirmatively so indicates in writing. After State has given written notice
of the satisfaction of any condition contained in said letters, the Secretary
of State may, by written notice, withdraw a prior notice of satisfaction if
any permit or license expires or is revoked, withdrawn or otherwise determined
to be invalid or if any other evidence submitted by President is determined to
be misleading or inaccurate where such evidence was material to the original
decision on the satisfaction of a condition.
E. If the foregoing conditions to Closing are not satisfied within three
(3) years after March 30, 1999, this Agreement shall terminate, in which event
State and President shall be released from any further liability to each other
hereunder.
4. Condition of Property and Due Diligence Inspections:
A. President represents that it has acquired the right of complete access
to the Property for inspection thereof by agents and experts including, but
not limited to, engineers, contractors, inspectors, and architects, to inspect
the Property for any conditions as to matters concerning, but not limited to,
survey, topography, geology, mineral rights, environmental hazards, toxic
substances and all other conditions. The experts and inspectors shall perform
Phase I and, if necessary, Phase II environmental assessments covering RCRA
and CERCLA regulations as well as Mississippi Department of Environmental
Quality regulations, and all other necessary environmental testing as may be
required by State. President shall select, subject to approval by State, such
agents, experts, engineers, contractors, inspectors, and architects to be used
in performing such surveys, tests, inspections, investigations, audits, and
assessments. All such surveys, tests, inspections, investigations, audits and
assessments shall be contracted for and paid for by President. In the event
that President refuses to contract for or pay for any such surveys, tests,
inspections, investigations, audits, and assessments as may be required by
State, then State may contract for such services at its own expense, or State
in its sole discretion may immediately terminate this Agreement without
further obligation or liability to President.
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B. The surveys, tests, inspections, investigations, audits, and
assessments provided for in paragraph 4 A above shall be performed within one
hundred twenty (120) days commencing with the full execution of this agreement
(the "Due Diligence Period"). If President, after using its best efforts, is
unable to complete the surveys, tests, inspections, investigations, audits,
and assessments provided for in paragraph 4 A above within one-hundred twenty
(120) days from the full execution of this agreement, then President and State
may by mutual agreement extend the Due Diligence Period for an additional
time.
C. Within sixty (60) days after President furnishes written results and
reports of the surveys, tests, inspections, investigations, audits, and
assessments provided for in paragraph 4.A. above, State shall provide written
notice to President whether it will accept the Property "as is, where is," or
whether it will reject the Property. If requested by State, President shall
make available to State, all agents, experts, engineers, contractors and
architects for consultations concerning matters pertaining to the
investigations and inspections which they conducted and concerning matters
contained in their written reports. President shall pay the reasonable cost
of such consultations with State. If State accepts the Property, such
acceptance shall be binding on the parties. If State rejects the Property, it
shall specify in writing the reasons for the rejection. President shall then
have sixty (60) days after the receipt of such notice to remedy to State's
satisfaction such objections (or to commence to remedy such objections,
provided that President thereafter proceeds to complete such remedy with due
diligence).
D. If State agrees to accept the Property, the Property shall be conveyed
to State at Closing in its "as is, where is" condition as of the time of the
surveys, tests, inspections, investigations, audits, and assessments provided
for in paragraph 4.A. above. President makes no representations of any kind
or nature as to the physical condition of the Property.
E. In the event of catastrophic destruction of the Property after State
has given notice of acceptability under paragraph 3 C above, State may
terminate this agreement by giving written notice to President, and State
shall have no further liability to President under this Agreement,
5. Disclosure:
A. Historical Data Disclosure: Within fifteen (15) days after request in
writing by State, President shall cause the property owners to disclose to
State any information about the Property within the knowledge of the property
owners and its employees, agents and representatives.
B. Third Party Disclosure: Any party hereto shall be permitted to
disclose as necessary the terms of this transaction, documentary evidence
supporting satisfaction of conditions noted in paragraph 3, the results of any
investigations, or inspections or any information pertaining to the Property
or this Agreement, without further notice to any party.
6. Title:
A. If State agrees to accept title to the Property and Closing occurs,
President shall convey or cause to be conveyed to State good and marketable
title to the Property by Warranty Deed free and clear of all mortgages, liens,
encumbrances or special assessments. The grant in the Warranty Deed shall be
in substantially the following form: "to the Secretary of State and the
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Department of Marine Resources in trust for the State of Mississippi."
Immediately after the description of the properties conveyed, the Warranty
Deed shall contain in substantially the following form language: "Management
of said land for the State of Mississippi shall be under the Mississippi
Coastal Preserves Program pursuant to MISS. CODE XXX. Sections 49-27-3 and 49-
27-65(c) and successor programs."
B. The deed conveying title to State shall contain a covenant in
substantially the following form: "The Property shall be used for the
conservation and preservation of its natural features, in recognition of the
public benefits in protecting it as a coastal area in the interest of present
and future generations. The Property shall be used and maintained forever as
a State public natural area for the preservation, protection, restoration and
sustenance of its natural characteristics and features, and of its ecological
integrity and associated habitats. Grantee acknowledges that the Property is
being acquired for preservation and public use purposes only. Grantee shall
not directly or indirectly convey the Property to any person or entity for use
as a casino, hotel or other commercial enterprise or non-public use. Grantee
shall make no use of the Property that is inconsistent with the restrictions
and uses contemplated by this covenant. The Property shall be managed and
maintained in its natural state, except for public outdoor recreational
purposes consistent with the preservation of the Property in its natural
state, including, but not necessarily limited to, the undertaking of
scientific and educational research, education and nature study, aesthetic
enjoyment, ecological management, boat landings, piers, foot bridges, foot
trails, utilities and concessions appropriate to effectuate the foregoing
purposes without impairing the essential natural character of the Property.
These conditions shall run with the land in perpetuity and the Grantor or any
citizen of the State of Mississippi shall have standing to enforce these
conditions and covenants using all remedies available at law or equity,
including injunctive relief."
C. President shall cause to be provided to State a title opinion signed
by an attorney listed on the approved attorney's list of one or more title
insurance companies licensed to do business in the State of Mississippi and a
commitment for title insurance within thirty (30) days after the full
execution of this Agreement. President shall further cause to be provided a
supplemental title opinion and a supplemental commitment for title insurance
at Closing covering the period from the date of the original title commitment
and opinion to the date of Closing. Ninety (90) days prior to Closing,
President will provide State with a survey of all parcels to be acquired for
State. President shall be responsible for the cost of the State' counsel for
Closing, survey, title search, title opinion, title insurance commitment,
title insurance premium, and document preparation fees, filing fees and all
other closing costs. The title commitment shall contain no exceptions to the
title to the Property except the following:
(i) ad valorem taxes for the year of Closing, which taxes President
shall cause to be paid in full at Closing;
(ii) unpaid ad valorem taxes for any previous years, if any, which
President shall cause to be paid in full at Closing;
(iii) reservations or conveyances of minerals by prior owners. It is
understood and agreed that any oil, gas or other minerals owned
by the Grantor of any kind and in any form, whether of like or
unlike nature, shall be conveyed to State;
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(iv) deeds of trust or any other encumbrances which shall be paid in
full or otherwise fully released at Closing;
(v) recorded rights-of-way for utilities which do not materially
affect the title or surface rights to the Property;
(vi) easements of record which do not materially affect the title or
surface rights to the Property;
(vii) special assessments, if any, which President shall cause to be
paid in full at Closing; and
(viii) Tidelands Title Exception Subject to the rights of the State
in and to all properties as may be owned by it under the Public
Trust for Tidelands Doctrine within the Property.
In the event that said title insurance commitment shows defects in title
other than those listed above which are not acceptable to State, President
shall have sixty (60) days to cure such defects. If President fails or is
unable to cure such defects within such sixty (60) day period, State may
nevertheless elect to take conveyance of title as it then exists, which
election shall be made in writing. If State elects to take conveyance of
title subject to such defects, such election shall be binding upon the
parties. If State elects not to accept title subject to any uncured defects,
then this agreement will immediately terminate, and State shall have no
further liability or obligation to President.
D. At Closing, the fully executed Lease and all deeds conveying title to
parcels acquired for the state shall be delivered to an Escrow Agent selected
by mutual agreement of State and President. Upon notification by State that
it is satisfied with title to all parcels acquired by President for State's
benefit, the Escrow Agent will deliver the Lease to President and deeds to
State. State will notify Escrow Agent of Satisfaction with title within five
(5) working days after Closing. State shall have possession of all parcels
acquired for State upon delivery of deeds.
7. Closing: Subject to the satisfaction of all of the terms and conditions
of this Agreement, Closing shall take place at a time, date and location
mutually agreeable to State and President, provided such Closing date is
within the time limits set by this Agreement or within any agreed extensions
of such time limits. President shall pay the reasonable attorney's fees and
costs incurred by State should State desire representation by outside counsel
in connection with the Closing.
8. Breach of Contract: In the event of a breach of this Agreement by any
party, no party shall be liable to any other party for lost profits,
consequential damages or punitive damages.
9. Time: Time is of the essence with respect to all aspects of this
Agreement.
10. Assignment: President shall not assign this Agreement in whole or in part
without the prior written consent of State. Any proposed assignee shall hold
a valid Mississippi gaming license or shall be qualified to hold such a gaming
license. No assignment will become effective until President has furnished to
State a true and correct, fully executed counterpart of such assignment and
until President has fully disclosed the terms and conditions of the
transaction between itself and its assignee. Notwithstanding a full or
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partial assignment of this Agreement, President shall remain liable to fulfill
all obligations of this Agreement in the same manner as though no assignment
was made unless State by writing, signed by the Secretary of State, releases
President, in whole or in part, from such liability and obligations. No
assignment shall be permitted which does not further the development of the
Project or which is attempted for the purpose of delay, termination or
expiration of this Agreement. If President at any time prior to the
conveyance of the Property to State accepts, agrees to accept or receives
cash, credit, or other economic benefit from any person, entity, competitor or
potential competitor for the alteration, abandonment, partial abandonment or
delay of the Project, President agrees that it will immediately pay all sums
due for the purchase of the Property and cause the Property to be conveyed to
State subject to State's right to accept or reject the Property after
inspection and evaluation as provided herein.
11. Entire Agreement and Interpretation: This document constitutes the final
and entire agreement between the parties hereto and incorporates all prior
agreements, representations, warranties and covenants between the parties and
cannot be changed except by writing, signed by all parties hereto. No party
shall be bound by any terms, conditions, oral statements, warranties or
representations not set forth herein. Each party acknowledges that it has
read and understands this Agreement. The provisions of this Agreement shall
apply to and bind the heirs, executors, administrators, successors and assigns
of the respective parties hereto. When used herein, the singular includes the
plural and the masculine includes the feminine, as the context may require.
The laws of the State of Mississippi shall control all interpretations of this
Agreement and the respective rights of the parties hereto.
12. Notices: All notices and other correspondence required or permitted to be
given hereunder shall be validly given, made or served if in writing and
delivered personally or sent by certified mail, return receipt requested, or
by overnight courier delivery (e.g. Federal Express). Notice shall be deemed
given when received or refused. Notice shall be addressed as follows:
If to State: Xxxx Xxxxx, Secretary of State
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone No. (000) 000-0000
with copy to: Xxxxxx XxXxxxxxx, Asst. Secretary of State
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone No. (000) 000-0000
If to President: Xxxx Xxxxxxxxx,
President and Chief Operating Officer
President Casinos, Inc.
000 X. Xxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Telephone No. (000) 000-0000
with copy to: Xxxxx Xxxxxxxx, Vice President
President Casinos, Inc.
0 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telephone No. (000) 000-0000
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and copy to: Xxxxx Xxxxx, Esquire
Xxxxxxxx & Xxxxx, L.L.P.
0000 Xxxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Telephone No. (000) 000-0000
13. Headings: The headings of the paragraphs of this Agreement are for the
convenience of reference only and do not form a part hereof and in no way
modify, interpret or construe the meaning of the parties hereto.
14. Enforceability: In the event that any provision of this Agreement is
determined by a court of competent jurisdiction to be illegal, invalid or
unenforceable under any laws or regulations, such provision shall be severed
from this Agreement and the remaining provisions of this Agreement shall be
unaffected thereby except that any determination by a court of competent
jurisdiction that the State may not acquire or hold the Property as provided
in this Agreement shall void the entire agreement.
15. Contracts for Services: Where under any provision of this Agreement
surveys, inspections or evaluations by agents or experts may be required, or
where State may obtain or require expert advice or counsel, legal or
otherwise, President agrees to contract for and bear all reasonable costs and
expenses thereof. For such services, President will contract only with firms
or individuals designated by State. The scope and control of services under
any such contract shall be subject only to the direction and control of State.
If President fails or refuses to contract for services requested by State,
State may in its sole discretion either contract for such services at its
expense or State may terminate this Agreement, in which event President shall
not have any claim against State as a result of such termination.
WITNESS OUR SIGNATURES, on this the 30th day of March, 1999.
MISSISSIPPI SECRETARY OF STATE
AS LAND COMMISSIONER
By: /s/ Xxxx Xxxxx
------------------------------------
Xxxx Xxxxx, Secretary of State
PRESIDENT CASINOS, INC.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Xxxx X. Xxxxxxxxx, President and Chief
Operating Officer
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