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EXHIBIT 10.42
RELEASE AGREEMENT
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THIS RELEASE AGREEMENT (the "Agreement") is made and entered into by
and between Xxxxx Xxxxxx ("Xxxxxx") and Horseshoe Gaming, L.L.C. (the
"Company"). All capitalized terms used but not defined herein shall have the
meanings set forth in the Unit Option Agreement (as defined below).
W I T N E S S E T H:
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WHEREAS, the parties entered into a Unit Option Agreement dated
February 1, 1997 ("Unit Option Agreement") whereby the Company granted Xxxxxx an
Option to purchase 126,245 units of the Company (the "Units") at a price of
$3.47 per Unit, or .134334% of the Company at a purchase price of $470,169;
WHEREAS, pursuant to paragraph 13 of the Unit Option Agreement Xxxxxx
has the right to require the Company to purchase back his Units in the Company
(the "Put Right"); and
WHEREAS, the Company is party to an agreement pursuant to which it may
acquire (the "Acquisition") Empress Casino Xxxxxxx Corporation, an Indiana
corporation ("Empress Hammond"), and Empress Casino Joliet Corporation, an
Illinois corporation ("Empress Joliet"), both of which are subsidiaries of
Empress Entertainment, Inc., a Delaware corporation (collectively, "Empress").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and the consideration of the monies paid and other
representations made in conjunction herewith, the parties to this Agreement
agree as follows:
1. Xxxxxx hereby exercises his option to purchase all of the Units
pursuant to the Unit Option Agreement.
2. Simultaneously with Xxxxxx'x exercise of the Option, Xxxxxx hereby
exercises his Put Right pursuant to paragraph 13 of the Unit Option Agreement.
The Company hereby waives any requirements of written notice set forth in the
Unit Option Agreement, and further waives the condition that the Put Right can
be exercised only in the event of termination of Xxxxxx'x employment.
3. The Company shall purchase the Units owned by Xxxxxx for an amount
determined as follows:
Percentage interest is .134334%
Fair market value of Company $470 m multiplied by .134334% = $ 631,370.00
Less initial minimum value $350 m multiplied by .134334% = $(470,169.00)
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$ 161,201.00
Such fair market value of the Company has been fully negotiated between the
parties and which price the parties agree constitutes the Fair Market Value of
the Units (all as set forth in and required by Paragraph 13 of the Unit Option
Plan).
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4. Xxxxxx hereby unconditionally releases and discharges the Company
from any and all claims, known or unknown, directly or indirectly related to or
in any way connected with (i) the Unit Option Agreement, (ii) Xxxxxx'x exercise
of the Option; (iii) Xxxxxx'x exercise of the Put Right, (iv) Xxxxxx'x ownership
of the Units, and (v) this Agreement and all of the agreements, documents and
instruments to be executed and delivered in connection with this Agreement.
Xxxxxx acknowledges and agrees that following the consummation of the
transaction contemplated by this Agreement, he shall have no rights of any kind
to acquire units in the Company or any of its affiliates or subsidiaries;
provided however, that Xxxxxx shall have the rights, if any, afforded to him
under the Company's option plan to be first effective on or after January 1,
1999.
5. If the Acquisition is closed (the date of such closing being
referred to as the "Acquisition Closing Date"), the Company shall pay Xxxxxx in
addition to the Purchase Price an amount equal to $40,300 (the "Additional
Amount"). The parties hereto agree that the Acquisition shall be deemed to have
closed in any of the following circumstances: (i) the Acquisition is consummated
in accordance with its terms or as may be amended by the parties to the
Acquisition agreement, or their successors, assignees or transferees; (ii) the
Company renegotiates the agreement relating to the Acquisition so as to allow
the merger to be consummated as to either Empress Xxxxxxx or Empress Joliet and
the merger is then consummated with either Empress Xxxxxxx or Empress Joliet;
(iii) the Company combines with another party such that the Acquisition is
consummated with the Company obtaining Empress Xxxxxxx or Empress Joliet and the
other party obtaining the other; (iv) the Company consummates the Acquisition in
accordance with its terms or as may be amended by the parties to that agreement,
but either Empress Xxxxxxx or Empress Joliet is spun off such that the Company
is combined with only one; or (v) the Company sells or transfers its interest in
the Acquisition agreement to an unrelated third party. The Additional Amount
shall be paid, together with the final payment, within forty-five (45) days of
Acquisition Closing Date.
6. This Agreement shall be construed under and governed by the laws of
the State of Delaware without regard to the conflict of law provisions thereof.
7. This Agreement may be executed in counterparts, each of which shall
be deemed an original and both of which together shall be deemed one Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of this
_____ day of July, 1999.
"XXXXXX"
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Xxxxx Xxxxxx
"COMPANY"
HORSESHOE GAMING, L.L.C.
By: Horseshoe Gaming, Inc.,
its Manager
By:
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Xxxx Xxxxxx, Chief Financial
Officer
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