EXHIBIT 2.1
SALE AND PURCHASE AGREEMENT
THIS SALE AND PURCHASE AGREEMENT is entered into as of this 15th day of
November, 2004, by and between The President Riverboat
Casino-Mississippi, Inc. ("PRC-Mississippi"), Vegas Vegas, Inc. ("VVI")
(each a debtor in Case No. 00-00000-000 pending in the United States
Bankruptcy Court for the Eastern District of Missouri (the "Bankruptcy
Court")), President Xxxxxxxxxx Hotel, LLC ("PBLLC") (collectively with
PRC-Mississippi and VVI, "Sellers"), on the one hand, and Xxxxxxxxxx
Properties, LLC ("Purchaser"), on the other hand, for the sale and
purchase of the owned and leased real property and businesses commonly
known as the President Casino Xxxxxxxxxx Resort in Biloxi, Mississippi
(the "Resort").
BACKGROUND
The Sellers and Purchaser have negotiated toward a sale of the Resort,
pursuant to a letter of interest furnished to Sellers by Purchaser
together with an xxxxxxx money deposit of One Million Dollars
($1,000,000) (the "Deposit"), which is held in escrow for the parties by
US Bank National Association as escrow agent (the "Escrow Agent"); and
the Sellers and Purchaser have reached an agreement concerning the sale
of the Resort, the terms of which are set forth herein, and which sale is
subject to higher and better offers for the Resort from interested third
parties.
NOW, THEREFORE, the Sellers and Purchaser hereby agree as follows:
ARTICLE 1
AGREEMENT FOR PURCHASE AND SALE
1.1 Assets to be Purchased. Subject to the terms and conditions of this
Agreement and all necessary approvals of the Bankruptcy Court and others
as set forth herein, the respective Sellers agree to sell and cause to be
conveyed and/or assigned to Purchaser, as applicable, and Purchaser
agrees to purchase and/or assume, as applicable, the following assets of
Sellers (collectively, the "Assets"):
(a) The real property (including leasehold and easement interests) of
PBLLC generally described as the President Casino Xxxxxxxxxx Resort, 0000
Xxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxx 00000, and all buildings,
improvements, appurtenances and hereditaments of PBLLC pertaining
thereto, generally consisting of an assembled 73-acre property on which
is located an 18 hole golf course ("Golf Course") and a 330-room hotel
with banquet and meeting room facilities ("Resort Hotel"), all more
particularly described as Parcels 1, 2A, 2B, 3, 5, 6, 7 and 8 on Schedule
1.1(a) (the "Land");
(b) All of PBLLC's right, title and interest, if any, as lessee of
Ocean Beach Club of Biloxi, LLC, in and to the Xxxxxxxxxx Tower Hotel
Lease and PBLLC's leasehold estate created thereby, covering the 179-room
Xxxxxxxxxx Tower Hotel (the "Tower Hotel"), as more particularly
described on Schedule 1.1(b) (the "Xxxxxxxxxx Tower Leasehold");
(c) All of PBLLC's right, title and interest, as lessee of the State
of Mississippi or agencies thereof, in and to the Fastlands Lease and the
Tidelands Lease, and PBLLC's leasehold estates created thereby, more
particularly described as Parcel 4 on Schedule 1.1(a) (the "Public
Leaseholds"), together with all improvements thereon situated, including
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not limited to a 111-slip marina, inclusive of the space occupied by the
Vessel (the "Marina");
(d) The M/V President-Casino-Xxxxxxxxxx, U.S.C.G. serial no. 995650
(the "Vessel"), owned by PRC-Mississippi and used in the operation of a
gaming casino located at the property covered by the Tidelands Lease and
Fastlands Lease as defined in Section 6.1(d) below (the "Casino", and
collectively with the Golf Course, the Resort Hotel, the Tower Hotel and
the Marina, the "Businesses");
(e) All tangible personal property of PRC-Mississippi located on,
attached or appurtenant to or used in connection with the Casino of
PRC-Mississippi (the "Casino Personal Property"), including, but not
limited to, the following:
(i) All gambling games, slot machines, tables and other gaming
equipment that are used in the operation of the Casino, together with
PRC-Mississippi's inventory of gaming chips, tokens, scrip, markers,
gaming supplies and other items held for use at the Casino in the
ordinary course of business (the "Gaming Equipment");
(ii) All cash on board the Vessel and on hand at the resort Hotel,
Tower Hotel, Marina and Golf Course as of the Closing (the "Cage Cash");
(iii) (A) all items falling within the classification of
"Inventories" in ledger accounts 13100-001 through 13180-001 as reflected
in the detail balance sheet of PRC-Mississippi as of October 31, 2004, a
copy of which is attached hereto as Schedule 1.2(b)-1 (the
"PRC-Mississippi Detail Balance Sheet"), (B) all items falling within the
classification of "Receivables" in ledger accounts 11205-001 through
11265-001 as reflected in the PRC-Mississippi Detail Balance Sheet, and
(C) all items falling within the classification of "Prepaid Expenses" in
ledger accounts 14100-001 through 14170-001 as reflected in the
PRC-Mississippi Detail Balance Sheet (together with all cash on board the
Vessel, the "PRC-Mississippi Current Assets"); and
(iv) Furniture, fixtures, equipment, including those held by Seller
in connection with its food service and dining facility located on the
Vessel; all uniforms and apparel; all shelving, racks, cash registers and
other supplies used in the operation of the gift shop on the Vessel; all
appliances, racks, trays, crockery, plates, cutlery, flatware, cookware,
serving xxxx, utensils, uniforms, napkins, linens and other tangible
personal property held by Seller for use in connection with its food
service and dining facilities on the Vessel; all courtesy vehicles; all
life saving equipment (including life boats and inflatable boats),
supplies held for consumption in the operation of the Vessel, and radio
equipment and spare parts relating to any of the foregoing;
(f) With respect to the Tower Hotel, Resort Hotel, Golf Course and
Marina, (A) all items falling within the classification of "Inventories"
in ledger accounts 00-1201 through 00-1253 as reflected in the detail
balance sheet of PBLLC as of October 31, 2004, a copy of which is
attached hereto as Schedule 1.2(b)-2 (the "PBLLC Detail Balance Sheet"),
(B) all items falling within the classification of "Accounts Receivable"
in ledger accounts 00-1101 through 00-1119 as reflected in the PBLLC
Detail Balance Sheet, and (C) all items falling within the classification
of "Current Prepaids" in ledger accounts 00-1410 through 00-1496 as
reflected in the PBLLC Detail Balance Sheet (together with the cash on
hand at the Marina, Resort Hotel, Tower Hotel and Golf Course, the "PBLLC
Current Assets");
(g) All fixed assets and supplies of PBLLC located on or used in
connection
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with the Tower Hotel and Resort Hotel (the "Hotel Personal Property"),
including, but not limited to, the following:
(i) Furniture, fixtures, equipment, including those held by Seller
for use in connection with the food service, dining, banquet and meeting
room facilities at the Tower Hotel and Resort Hotel, courtesy vehicles,
vans, maintenance equipment, audio systems, entertainment systems and
spare parts relating to any of the foregoing; and
(ii) All hospitality items, uniforms, apparel, linens, towels and
sundries; all shelving, racks, cash registers and other supplies used in
the operation of the gift shop located at the Hotels; all appliances,
racks, trays, flatware, cookware, serving xxxx, crockery, plates,
cutlery, utensils, uniforms, napkins, linens and other tangible personal
property held for use in connection with the food service, dining,
banquet and meeting room facilities.
(h) All fixed assets and supplies of PBLLC used in the operation of
the Golf Course (the "Golf Course Personal Property"), including, but not
limited to, furniture, fixtures, clubhouse assets, carts, maintenance
equipment and supplies and spare parts relating thereto, all
groundskeeper tools;
(i) All tangible personal property used in the operation of the Marina
(the "Marina Personal Property"), including, but not limited to,
furniture, fixtures, equipment, tanks, pumps, lifts, hoists, boats used
in operations, supplies held for consumption in the operation of the
Marina, boathouse assets, maintenance equipment and spare parts relating
thereto;
(j) All of Sellers' rights, title and interest in and to the executory
leases and contracts of Sellers, not previously listed above, which are
either (i) leases and contracts listed on Schedule 1(i), which schedule
shall be subject to the parties' mutual agreement and attached hereto
prior to the expiration of the Inspection Period (as hereinafter defined)
and which will be assumed by Seller subject to entry of an order of the
Bankruptcy Court, (ii) post-petition leases and contracts relating to the
operation of the Businesses which will be assigned by the applicable
Seller to Purchaser at the Closing at Purchaser's request, subject to any
necessary third party consent, or (iii) contracts to which PBLLC is a
party, which will be assigned by PBLLC to Purchaser at the Closing at
Purchaser's request, subject to any applicable third-party consent
(collectively, the "Executory Contracts");
(k) [Intentionally omitted]
(l) All of Sellers' transferable rights, title and interest in and to
licenses, permits, approvals, registrations, consents and authorizations
pertaining to the Resort, including, without limitation, those listed in
Schedule 1(l);
(m) (i) All of Seller's right, title and interest in and to the Biloxi
Bucks and Crazy Quarters registered trademarks and the goodwill of
Seller's business
relating thereto, (ii) the rights to use the name "President Casino"
within a 100-mile radius of the Resort ("Territory") and/or use of the
name "Xxxxxxxxxx" in connection with the operation of the Resort and each
of the Businesses, and (iii) the rights to use within the Territory each
other trademark and service xxxx of the Businesses listed on Schedule
1(m), trade secrets, copyrights, applications therefor, intellectual
property licenses (both as licensor and licensee), franchises,
discoveries, know-how and all goodwill of the respective Businesses
associated therewith (collectively, the "Intellectual Property"; and to
the extent Seller's parent company owns any interest in such Intellectual
Property, Seller shall cause such parent company to deliver the same at
the time of the Closing;
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(n) All of Sellers' transferable rights, title and interest in and to
all post office boxes, e-mail addresses, telephone and facsimile numbers
and domain names held for use in connection with the operation of the
Resort and any of the Businesses; and
(o) To the extent relating to Sellers' marketing and operation of the
Resort or the Businesses, all books, records, files and papers, whether
in hard copy or computer format, including, without limitation, books of
account, sales and promotional literature, manuals and data, sales and
purchase correspondence, lists of present and former suppliers, personnel
and employment records of present or former employees, and documentation
developed or used for accounting or marketing purposes.
1.2 Excluded Assets. The following assets of Sellers shall be excluded
from the Assets:
(a) [Intentionally Omitted];
(b) Officer and crew personal effects;
(c) All non-assignable computer software, proprietary or otherwise,
and risk management, general ledger and fixed asset software (excluding
data and related documentation), in each case which are owned, used or
licensed by any Seller as licensee or licensor in connection with the
Assets (but excluding player tracking data and other customer information
or lists, fixed asset, general ledger and risk management data. Sellers
will provide Purchaser with technical support to incorporate the fixed
asset, general ledger and risk management data into Purchaser's computer
systems.);
(d) Any tax credits, refunds, carryforwards, operating losses and
other tax attributes, including any rights to tax refunds accruing to the
owner of the Assets for any period prior to the Closing Date;
(e) Any insurance refunds due and payable to Sellers;
(f) The Sellers' tax returns, work papers, financial statements and
ledgers, minute books, stock records and other records pertaining to the
Sellers' financial records and corporate existence;
(g) All rights of the bankrupt Sellers to claims or recoveries under
Chapter 5 of the United States Bankruptcy Code;
(h) All rights of Sellers to receive the proceeds of any pending
litigation, arbitration or other pending adversary proceeding in which
any Seller is a plaintiff or counter-plaintiff (including without
limitation proceeds of insurance maintained by such Seller or by any
third party, and rights of contribution and/or reimbursement from
responsible tortfeasors and other parties, whether or not presently
identified in any such proceeding), and proceeds obtained through
settlement, judgment and the enforcement thereof;
(i) All insurance recoveries relating or attributable to assets that
are not part of the Assets, including without limitation, returns of
premium;
(j) All executory leases and contracts of Sellers not being acquired
by Purchaser;
(k) All rights of Sellers under employee benefit plans and related
trusts and insurance policies and similar arrangements sponsored or
maintained by Sellers for current or former employees; and
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(l) All licenses, permits, authorizations, franchises and similar
items which cannot lawfully be transferred to or for the benefit of
Purchaser.
ARTICLE 2
PURCHASE PRICE
2.1 Computation of Purchase Price. The aggregate consideration to be
paid by Purchaser to Sellers for the Assets shall be the assumption of
the Assumed Liabilities as set forth in Article 3, and the payment of an
amount ("Purchase Price") equal to the sum of:
(a) Sixty Six Million Dollars ($66,000,000) (the "Base Price"),
subject to increase as set forth in Section 2.2, plus
(b) the Separate Asset Value, plus or minus
(c) the aggregate amount of the Adjustments.
The term "Separate Asset Value" means the aggregate book value as of
Closing of the PRC-Mississippi Current Assets and the PBLLC Current
Assets (subject to a post-closing adjustment to credit Purchaser for the
value of any "accounts receivable" described in Sections 1.1(e)(iii) and
1.1(f) above that remain uncollected by Purchaser by a date to be
mutually agreed upon by Purchaser and Sellers), plus the Cage Cash, in
each case determined in accordance with generally accepted accounting
principles, consistently applied. The term "Adjustments" means an amount
representing the net amount due Sellers or Purchaser after taking into
account the following: (i) the book value of the Casino Obligations (as
defined in Section 3(c) below) of PRC-Mississippi, which shall be a
credit to Purchaser; (ii) the book value of the Business Obligations (as
defined in Section 3(f) below) of PBLLC, which shall be a credit to
Purchaser; (iii) the net adjustment resulting from the apportionments set
forth in Section 2.4 below; (iv) the credit due Purchaser for unapplied
security deposits as set forth in Section 2.5 below; (v) the net amount
due Seller or Purchaser as a result of the real estate related
apportionments in Sections 5.4 and 5.5 below; (vi) the Transfer Tax
payable under Section 5.6 below, which shall be a credit to Purchaser;
and (vii) any other net credit due Sellers or Purchaser as provided in
this Agreement or another agreement executed by Sellers and Purchaser
prior to Closing.
2.2 Increase in Purchase Price. If the Purchaser increases the amount
of the consideration payable for the Assets in a successful attempt to
outbid a proponent of a higher and better offer at or after the Auction
referred to in Section 8.1, then the Purchase Price shall automatically
be increased by an equal amount and the Purchaser and Sellers shall
execute a written instrument to memorialize the increased Purchase Price.
2.3 Closing Payment. At Closing, Sellers shall deliver to Purchaser the
Sellers' good faith written estimate of the Separate Asset Value and the
net amount of the Adjustments as of Closing. Purchaser shall pay to
Sellers at Closing, by wire transfer of immediately available funds, an
amount equal to (a) the Base Price, plus (b) ninety percent (90%) of the
Sellers' estimate of the Separate Asset Value and net Adjustments.
Within thirty (30) days after Closing, Sellers shall deliver to Purchaser
the Sellers' final statement of the Separate Asset Value and the
Adjustments, and Purchaser shall have thirty (30) days to review such
statement and to object to any matter set forth therein. The Sellers
shall furnish Purchaser with such additional information and documents as
Purchaser shall reasonably request in connection with its review. If the
Purchaser does not object to such statement within thirty (30) days after
its receipt thereof, then such calculations shall be final and
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binding upon all parties of interest. If the Purchaser objects to
Sellers' calculations in writing within such thirty (30) day period, then
representatives of the parties shall meet promptly thereafter to resolve
any disputes. To the extent the parties cannot reach an agreement on the
amount of the Separate Asset Value or Adjustments, then such dispute
shall be referred to a mutually agreeable accounting firm in St. Louis,
Missouri (the "Independent Accounting Firm") for a final determination,
the cost of such determination to be divided equally between Purchaser
and Sellers, as a group, with Sellers' portion to be deducted from the
Purchase Price. Within three (3) business days after the amount of the
Separate Asset Value and Adjustments has been finally determined, whether
by the concurrence of the Purchaser, the failure of the Purchaser to
object, or the determination of the Independent Accounting Firm, the
Purchaser shall pay to Seller the balance of the Separate Asset Value and
Adjustments, or the Seller shall refund to Purchaser the amount by which
ninety percent (90%) of the estimate at Closing exceeds the actual
Separate Asset Value and Adjustments, whichever applies.
2.4 Risk of loss and apportionments.
(a) The risk of loss with respect to the Assets, and all financial,
operational and other risks and benefits associated with the Assets and
Business Obligations, shall pass from Sellers to Buyer as of (i) 1:59:59
A.M. on the Closing Date, in the case of the Casino and the Casino
Obligations, and (ii) 11:59:59 P.M. on the day immediately preceding the
Closing Date, in the case of the Resort Hotel, Tower Hotel, Marina and
Golf Course, and the respective Business Obligations relating thereto
(the "Adjustment Time").
(b) Without duplication for the Assumed Liabilities in Section 3(f),
the following apportionments shall be made as of the Adjustment Time:
(i) With respect to leases among the Executory Contracts under which
a Seller is lessor, rents and additional rents for the month in which the
Closing Date occurs (the "Closing Month") shall be allocated between
Sellers, as a group, and Purchaser on a per diem basis. If past due
rents or other sums are owing by tenants for any period prior to the
Closing (the "Rent Arrearages"), then promptly after the Closing Date
Purchaser shall xxxx all
such tenants for sums owed and shall use its reasonable efforts to
collect all Rent Arrearages. Rents collected after Closing shall be
applied first to Rent Arrearages and then to current rents due. If, as
and when the Purchaser collects payments from a tenant on account of Rent
Arrearages, Purchaser shall hold such funds as trustee for the Sellers
and shall pay an amount equal to the Rent Arrearages to Sellers within
ten days after Purchaser or its agent receives each such payment.
(ii) After the Closing, Purchaser shall deliver to Sellers a monthly
collection report showing the sum, if any, paid by each tenant with
respect to Rent Arrearages and the unpaid balance owed by such tenant
pursuant to its lease through the end of such calendar month; such
collection report shall be delivered to Sellers within ten days after the
last day of each calendar month after the Closing until Sellers has
received all Rent Arrearages. The Sellers shall have the right to review
and audit the Purchaser's records with respect to the Rent Arrearages
payable to or collected by Purchaser.
(iii) All real and personal property taxes and assessments, rental
payments, electric, gas, water, sewer and telephone charges and all other
apportionable operating costs and charges and expenses with respect to
the Assets, shall be allocated between Sellers and Purchaser as of the
Adjustment Time on a per diem basis for the period for which assessed.
(iv) All gaming revenues, food and beverage revenues, gift shop
revenues,
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vending machines, in room movies, telephone and facsimile charges, room
charges, meeting charges, event hosting fees, greens fees, tournament
receipt and deposits, and other revenues associated with the Assets,
shall be allocated between Sellers and Purchaser based on actual receipts
through the Adjustment Time.
(v) Charges under Executory Contracts (other than leases) affecting
the Assets on the Closing Date, shall be allocated between Sellers and
Purchaser on a per diem basis.
2.5 Security Deposits. Effective as of the Adjustment Time, Purchaser
will receive a credit against the Purchase Price in an amount equal to
all unapplied security deposits payable to tenants under Executory
Contracts under which any Seller is lessor in effect on the Closing Date,
and all deposits and prepayments made with respect to meetings, events
and tournaments that will not occur until after Closing, against
Purchaser's receipt and indemnification therefor. Upon making such
credit, Purchaser will be deemed to have received all such security
deposits and other deposits and shall be fully responsible for the same
as if a cash amount equal to such security deposits and other deposits
were actually delivered to Purchaser. Prior to the Closing, Sellers
reserve the right to apply all security deposits as provided under the
respective leases, and all other deposits in accordance with Sellers'
historical practice.
2.6 Allocation. The Purchase Price shall be allocated in accordance
with Internal Revenue Service ("IRS") Form Paragraph 8594 which shall be
prepared by Purchaser and delivered to Seller within forty-five (45) days
after the Closing Date for Seller's approval (not to be unreasonably
withheld) and to be filed by Seller with the IRS. After the Closing, the
parties shall make consistent use of the allocation, fair market value
and useful lives specified in IRS Form Paragraph 8594 for all tax
purposes and in all filings, declarations and reports with the IRS in
respect thereof. In the event of any action, audit, hearing,
investigation, litigation or any other proceeding in respect of this
Agreement or any of the transactions contemplated hereunder, neither
Purchaser nor Seller shall contend or represent that such allocation is
not a correct allocation.
ARTICLE 3
ASSUMPTION OF LIABILITIES
Subject to the entry by the Bankruptcy Court of the Sale Order as set
forth in Article 8 below, effective as of Closing:
(a) PRC-Mississippi and VVI (together, "Debtors") shall assume as
their obligations as provided in Section 8.2, and shall assign to
Purchaser in writing, all of Sellers' right, title and interest in and to
the Executory Contracts to which they are parties;
(b) PBLLC shall assign to the Purchaser all Executory Contracts to
which it is a party;
(c) Purchaser shall assume the accrued liability of PRC-Mississippi as
of Closing to pay the ultimate winnings owed to individuals playing
progressive slot machines, games primary progressive reserve, games
reserve for top awards, slots reserve for top awards, poker progressive
reserve, gift shop certificate liability, lost and found money, customer
safekeeping deposits, players club accrual (or other outstanding
complimentaries), outstanding chips/tokens and employee benefit accruals
for holiday, vacation, personal day, sick day and severance benefits
(collectively the "Casino Obligations").
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The progressive slot liability shall be determined by a meter reading by
Purchaser and Seller at Closing. The remainder of the Casino Obligations
shall be determined by Purchaser and Seller at Closing in accordance with
good and customary gaming practice.
(d) Purchaser shall assume all ordinary course, ongoing liabilities
and obligations of PBLLC incurred with respect to the operation of the
Tower Hotel and Resort Hotel, including but not limited to the
obligations to provide rooms to customers then staying at the hotel or
who then have confirmed or unconfirmed reservations, to host meetings,
conventions, banquets and other events then in progress or booked for
future performance, to process cash payments, credit card and other
payments for services rendered prior to and after Closing (with all
expenses and receipts to be prorated as provided in Section 2.4), to
provide continuing space and/or services to concessionaires, and
obligations relating to lost and found, safekeeping deposits, outstanding
complimentaries and discounts, and employee benefit accruals for holiday,
vacation, personal day, sick day and severance benefits (collectively,
the "Hotel Obligations").
(e) Purchaser shall assume all ordinary course, ongoing liabilities
and obligations of PBLLC incurred with respect to the operation of the
Marina, including but not limited to the obligations to provide temporary
or indefinite mooring privileges to customers then having boats at the
Marina or who have contracted for future mooring privileges, to process
cash payments, credit card and other payments for services rendered prior
to and after Closing (with all expenses and receipts to be prorated as
provided in Section 2.4), and obligations relating to lost and found,
long term storage, boat, motor and lift repairs and maintenance,
outstanding discounts, and employee
benefit accruals for holiday, vacation, personal day, sick day and
severance benefits (collectively, the "Marina Obligations").
(f) Purchaser shall assume all ordinary course, ongoing liabilities
and obligations of PBLLC incurred with respect to the operation of the
Golf Course, including but not limited to the obligations to provide tee
times and fulfill tournament reservations, to process cash payments,
credit card and other payments for services rendered prior to and after
Closing (with all expenses and receipts to be prorated as provided in
Section 2.4), and obligations relating to lost and found, equipment
rental, repairs, outstanding discounts, and employee benefit accruals for
holiday, vacation, personal day, sick day and severance benefits
(collectively, the "Golf Course Obligations," and together with the
Casino Obligations, Hotel Obligations and Marina Obligations, the
"Business Obligations").
The Purchaser shall execute written instruments of assignment and
assumption satisfactory to Sellers, by which Purchaser shall agree to
assume as Purchaser's primary obligations, and to timely pay and perform
the Business Obligations and all obligations of the Sellers arising under
the Executory Contracts, to the extent such obligations accrue from and
after the date of the Closing (collectively, the "Assumed Liabilities").
Before the hearing on the Sale Order, Debtors shall take all appropriate
action to determine or to contest in good faith the cure amounts required
to be paid to the various other parties to the Executory Contracts in
order to permit the assumption by Debtors and assignment to Purchaser
thereof pursuant to Section 365 of the Bankruptcy Code, and Debtors at
their sole option shall either pay all such cure amounts in cash no later
than Closing, or shall direct Purchaser in writing to pay such cure
amounts out of the Cash Consideration otherwise required by this
Agreement to be paid to Sellers at Closing. Other than the Assumed
Liabilities and the Permitted Encumbrances, Purchaser is not assuming or,
agreeing to pay for any liabilities or obligations of Sellers, or to take
the Assets subject to any liability or encumbrances.
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ARTICLE 4
PHYSICAL CONDITION OF PROPERTY
Purchaser will inspect the Resort during the hereinafter described
Inspection Period to the extent Purchaser deems necessary in connection
with the transactions contemplated by this Agreement. Purchaser
acknowledges that Sellers have not made and do not make and are unwilling
to make any express or implied representations or warranties as to the
present, past or future physical condition, income, expenses, operation,
legality of occupancy or any other matter affecting or related to the
Assets except as specifically set forth in Article 6 of this Agreement,
including the schedules hereto. No representation, warranty or covenant
made by any Seller in this Agreement or any document delivered pursuant
hereto shall survive the Closing unless otherwise expressly provided in
this Agreement. Purchaser agrees to purchase the Assets in their "AS IS"
condition and acknowledges and accepts that Sellers disclaim all implied
warranties that might otherwise be applicable, including, but not limited
to, the warranty of merchantability and fitness under the Uniform
Commercial Code. Purchaser has not relied upon, and Sellers are not
liable or bound in any manner, by any verbal or written statements,
representations, real estate brokers' "setups" or information pertaining
to the Assets furnished by any real estate broker, agent, employee,
servant or other persons unless the same are expressly set forth in this
Agreement. The
execution and delivery by Sellers at Closing of deeds, bills of sale,
instruments of assignment and other documents, and the acceptance thereof
by Purchaser, shall be deemed to be the full performance and discharge of
every obligation of Sellers to be performed under this Agreement prior to
the Closing Date and the truth or waiver of every representation or
warranty made by Sellers in this Agreement or in any Schedule attached
hereto or in any document, certificate, affidavit or other instrument
delivered by Sellers or its agents at or in connection with the Closing,
except for those warranties, representations and obligations of Sellers
which this Agreement expressly provides are to survive the Closing.
ARTICLE 5
CONDITION OF TITLE, TITLE INSURANCE
5.1 Title Matters. Within ten days from the effective date of this
Agreement, Purchaser shall obtain at its sole cost and expense from First
American Title Company (the "Title Company") a preliminary title report
or commitment (the "Title Commitment") to issue an owner's policy of
title insurance (the "Title Policy") insuring Purchaser's title to the
Land to be good and indefeasible and having a policy amount of not more
than $50,000,000 (the "Land Value"), subject only to the encumbrances
listed on the schedule attached hereto as Schedule 5.1, encumbrances
reflected on the Title Commitment and not objected to by Purchaser
pursuant to this Section 5.1, and other liens and encumbrances not
constituting objections to PBLLC's title in accordance herewith
(together, the "Permitted Encumbrances"). A copy of PBLLC's existing
survey and a copy of that portion of PBLLC's latest owner's title
insurance policy relating to the Land shall be furnished by Sellers to
the Purchaser. Within the Inspection Period (as hereinafter defined),
Purchaser shall give written notice (the "Objection Notice") to Sellers
of any conditions of title to which Purchaser objects and to which
Purchaser is not obligated to take the Land pursuant to the provisions of
this Agreement (the "Objections"), separately specifying and setting
forth each of such Objections. If Sellers receive an Objection Notice,
and the exceptions referenced therein are not cured within thirty (30)
days after delivery by Purchaser of the Objections, Purchaser shall have
the right to void this Agreement and receive a refund of all of its
Deposit. If Purchaser fails to
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give Sellers an Objection Notice within such 30-day period, then all
matters disclosed on the Title Commitment shall be deemed to be Permitted
Encumbrances.
5.2 Responsibility of Sellers. Sellers shall not be required to expend
a material amount of money or bring any action or proceeding or do any
other thing in order to deliver the Assets or title to the Land as
required by this Agreement. If Sellers deliver to Purchaser written
notice (the "Response Notice") that PBLLC is unable to convey the Assets
or title to the Land as required by this Agreement, Purchaser may, as its
exclusive remedy, elect by written notice given to Sellers within five
days after the Response Notice is given, either (a) to accept such title
as PBLLC is able to convey without any reduction or abatement of the
Purchase Price or (b) to terminate this Agreement in which event the
Deposit shall be returned to Purchaser. If Purchaser fails to give
notice of its election to terminate this Agreement within such five-day
period, Purchaser shall be deemed to have waived said objections and to
have elected to proceed with the transactions contemplated by this
Agreement, but subject to any other conditions set forth herein.
5.3 Permitted Encumbrances. The existence of liens or encumbrances
other than the Permitted Encumbrances or those which are permitted by
this Agreement shall be deemed to be Permitted Encumbrances if the Title
Company will insure Purchaser's title clear of the matter or will insure
against the enforcement of such matter out of the Land, in each case
under a policy in the amount of the Land Value.
5.4 Certain Taxes. Unpaid liens for real estate and personal property
taxes for years prior to the fiscal year in which the Closing Date occurs
and any other matter which any Seller is obligated to pay and discharge
at the Closing shall not be deemed objections to title, but Seller's pro
rata share of such taxes and each Seller's other such financial
obligations, plus interest and penalties thereon, if any, shall be
deducted from the Cash Consideration on the Closing Date.
5.5 Allocation of Costs. Purchaser shall pay the cost of obtaining the
Title Commitment and Title Policy. Sellers shall pay the cost of
recording the deeds to the Resort properties. Any other recording costs
and expenses in connection with the Closing shall be allocated in
accordance with the custom of the county in which the Resort is located.
5.6 Transfer Taxes. To the extent that any sales, use, recording or
other transfer tax (the "Transfer Tax") is applicable to the conveyance
of the Assets, Purchasers shall be responsible for payment of such tax,
based on Purchaser's reasonable allocation of the Purchase Price, and
such amount shall be credited to Purchaser as provided in Section 2.1.
Purchaser hereby undertakes to timely remit all such taxes to the
applicable taxing authority and to prepare and file all proper returns
and reports with respect thereto. All fees and expenses incurred in
connection with redocumentation of the Vessel with the United States
Coast Guard shall be borne by Purchaser for its own account, and without
reduction or credit to the Purchase Price.
ARTICLE 6
REPRESENTATIONS OF SELLERS
Sellers hereby represent and warrant to Purchaser the following:
(a) Debtors have all requisite corporate power and authority necessary
to sell the Assets, but subject to the issuance of the Sale Order by the
Bankruptcy Court.
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(b) Schedule 1.1(a) attached to this Agreement sets forth the legal
description of the Land, as generally taken from the existing title
insurance policy of PBLLC with respect thereto. Except for the Land,
PBLLC does not own any other real property as fee owner.
(c) Schedule 6.1(c) attached to this Agreement sets forth a list of
leases, subleases, licenses, concessions, options or other agreements,
written or oral, under which any Seller has granted to any third party,
whether as lessee or sublessee, the right to possess, or conduct its
operations on, any portion of the Resort, except for leases of boat slips
at the Marina to individual or corporate customers which have been
entered into in the ordinary course of business for monetary rental
payments.
(d) Schedule 6.1(d) attached to this Agreement sets forth a list of
all real property leased by each Seller in connection with its ownership
and operation of any of the Businesses operated at the Resort, including
but not limited to the lease of PBLLC from the State of Mississippi for
the riparian land on which the marina and Casino are located (the
"Tidelands Lease") and the lease of PBLLC from the State of Mississippi
for the waterfront land immediately adjacent to such riparian land (the
"Fastlands Lease").
(e) Schedule 6.1(e) attached to this Agreement sets forth a list or
description of contracts, agreements, licenses and commitments, other
than those involving annual payments of $50,000 or less in the aggregate,
to which a Seller is a party or by which a Seller, or any of the Assets
is bound or affected of the type described below (each, a "Material
Contract" and collectively, the "Material Contracts"):
(i) employment agreements; collective bargaining agreements,
multiemployer plan adoption agreements and other agreements affecting any
union employee of such Seller; and deferred compensation agreements,
relocation agreements and other agreements affecting any nonunion
employee of such Seller;
(ii) leases of any personal property, including but not limited to
gaming equipment, food service machinery and equipment, and office,
printing or computer equipment;
(iii) license agreements, whether as licensor or licensee (excluding
licenses from third parties implied by the sale of a product and paid up
licenses for commonly available shrink wrap software applications);
(iv) joint venture agreements, affiliation and endorsement
agreements, advertising agreements with minimum purchase provisions or
other undertakings which have not yet been satisfied by the applicable
Seller, and public relations contracts;
(v) contracts by which any material product or service offered by a
Seller or any material operating function of a Seller (including without
limitation gaming, food service, hotel service, personnel and security)
have been outsourced to a third party;
(vi) any guarantee or other pledging of the Sellers' credit or
financial resources for the obligations of officers, directors, employees
or affiliates of such Seller or any other person or entity;
(vii)any contract that has been entered into outside of the ordinary
course of a Seller's business (other than contracts incurred in
connection with the sale of the Assets); and
(viii) any other contract, agreement, commitment, understanding or
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instrument which is material to a Seller or to the operation of the
Assets.
(f) Schedule 6.1(f) attached to this Agreement contains a complete and
accurate list and summary description of all registered trademarks and
service marks owned by Sellers or their affiliates, and all licenses and
rights of use granted by Sellers to any third party. All copyrights,
trademarks and service marks that have been registered are currently in
compliance with all formal legal requirements (including the timely
post-registration filing of affidavits of use and incontestability and
renewal applications), are valid and enforceable, and are not subject to
any maintenance fees or taxes or actions falling due within 90 days after
the Closing Date. No such copyright, trademark or service xxxx has been
or is now involved in any interference, reissue, reexamination or
opposition proceeding. To Sellers' knowledge, none of the Registered
Intellectual Property Rights of Sellers infringes, or has been alleged to
infringe, any copyright, trademark, service xxxx or other proprietary
right of any other person or entity.
(g) Schedule 6.1(g) attached to this Agreement sets forth a list of
all permits, licenses, franchises, zoning rights, privileges and other
governmental authorizations (collectively, the "Governmental Permits")
held by Sellers in connection with the operation of the Businesses. To
Sellers' knowledge, no other such items are required for the operation of
the Businesses except for such incidental licenses, permits and other
authorizations which would be readily obtainable by any qualified
applicant without undue burden in the event of any lapse, termination,
cancellation or forfeiture thereof. Copies of all of the Governmental
Permits have heretofore been delivered to Purchaser by Sellers.
(h) Schedule 6.1(h) attached to this Agreement lists the names,
addresses, dates of hire and current wage and salary rates of all of
Sellers' employees and officers as of the date indicated therein.
Sellers have paid in full to all employees and officers, as and when such
amounts have become due, or made appropriate accruals therefor on its
books of account, all salary, wages, commissions, bonuses and other
direct compensation for all services performed by them. Sellers have
withheld or collected from each payment made to each of its employees the
amount of all taxes required to be withheld or collected therefrom, and
Sellers have paid the same when due to the proper authorities. Except as
disclosed in Schedule 6.1(h), there are no controversies, grievances or
claims pending with any Seller by any of Sellers' employees, former
employees or beneficiaries of employees of Sellers with respect to their
employment or benefits incident thereto, including, but not limited to,
sexual harassment and discrimination claims and claims arising under
workers' compensation laws ("Employee Claims") which have not been
resolved and, to the best of the applicable Seller's knowledge, no basis
exists therefor. Except as listed in Schedule 6.1(h), there is no union
representation of any of the Sellers' employees, and, to each Seller's
knowledge, there has been no attempt by a labor organization to organize
such Seller's employees into a collective bargaining unit.
(i) Except as set forth in Schedule 6.1(i), no Seller is a party to,
nor has any Seller established, any pension, profit-sharing, cafeteria,
medical reimbursement, 401(k), retirement, deferred compensation, stock
option, incentive, vacation, hospitalization, medical, disability or life
insurance, severance, termination, bonus or other employee benefit plan,
contract, arrangement or understanding of such Seller or any person,
corporation, partnership, or other entity required to be aggregated with,
or treated as the same employer as such Seller under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the
Internal Revenue Code of 1986, as amended ("Code") (collectively
hereinafter referred to as an "ERISA Affiliate"), whether or not covered
by ERISA or qualified within the meaning
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of Section 401(a) of the Code, and whether single-employer or
multi-employer, which is presently in force or which has been terminated
within the six calendar year period prior to this year. Each Seller
represents that the employee benefit and welfare plans set forth in
Schedule 6.1(i) applicable to such Seller do not qualify for the special
provisions for multi-employer plans set forth in 29 U.S.C. Paragraph 1384
and this Agreement does not invoke a complete or partial withdrawal as
contemplated by 29 U.S.C. Paragraph 1384, or the attendant penalties and
liabilities to Purchaser as set forth therein.
(j) The execution, delivery and performance by PBLLC of this Agreement
and other documents to be executed by PBLLC pursuant hereto, (i) are
within the corporate or other powers of PBLLC, (b) have been duly
authorized by all requisite action of the board of managers or other
governing body of PBLLC, and (c) do not violate, conflict with or
constitute a breach or default under (i) any provision of the articles of
organization, operating agreement or other charter document of PBLLC,
(ii) any federal, state, county or municipal law or regulation, (iii) any
judgment, decree or other order of a court of competent jurisdiction
applicable to PBLLC or affiliates of PBLLC, or (iv) any contract,
agreement or other instrument to which PBLLC or any affiliate of PBLLC is
a party, except where any such violation, conflict, breach or default
will not have a material adverse effect on the transactions contemplated
by this Agreement or on the ability of PBLLC to perform its obligations
hereunder and under each other agreement, instrument and document to be
executed and delivered by PBLLC pursuant to this Agreement.
ARTICLE 7
REPRESENTATIONS OF PURCHASER
Purchaser hereby represents and warrants to Sellers the following:
(a) Purchaser is a limited liability company, duly organized, validly
existing and in good standing under the laws of Mississippi, and is duly
qualified to transact its business in Mississippi as a foreign limited
liability company;
(b) Purchaser has all requisite power and authority necessary to
purchase the Assets and to execute, deliver and perform this Agreement;
(c) Purchaser is a citizen of the United States within the meaning of
46 U.S.C. Paragraph 2, authorized to own and operate the Vessel in the
coastwise trade;
(d) Purchaser has had full opportunity to inspect the Resort, its
various components and systems, and Purchaser is relying solely on the
representations of Sellers in Article 6 and on Purchaser's own evaluation
of the seaworthiness of the Vessel and the condition and suitability of
the Businesses at the Resort in connection with Purchaser's agreement to
purchase the Assets;
(e) all documents and information furnished by Purchaser to any of the
Sellers with respect to Purchaser's financial condition, financing from
BancCorp South and capability of operating a gaming establishment are
true, correct and complete in all material respects;
(f) neither Purchaser, any affiliate of Purchaser nor any person
providing financing for the acquisition of the Assets or Purchaser's
operation of the Businesses, is now or was previously under indictment
for or convicted of any criminal offense that could reasonably be
expected to have a material adverse effect on Purchaser's relicensing of
the Casino; and
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(g) The execution, delivery and performance by Purchaser of this
Agreement, the Purchaser Note, each security document to which Purchaser
is a party that secures the Purchaser Note, and other documents to be
executed by Purchaser pursuant hereto, (i) are within the corporate or
other powers of the Purchaser, (b) have been duly authorized by all
requisite action of the board of managers or other governing body of
Purchaser, and (c) do not violate, conflict with or constitute a breach
or default under (i) any provision of the articles of organization,
operating agreement or other charter document of Purchaser, (ii) any
federal, state, county or municipal law or regulation, (iii) any
judgment, decree or other order of a court of competent jurisdiction
applicable to Purchaser or affiliates of Purchaser, or (iv) any contract,
agreement or other instrument to which Purchaser or any affiliate of
Purchaser is a party, except where any such violation, conflict, breach
or default will not have a material adverse effect on the transactions
contemplated by this Agreement or on the ability of Purchaser to perform
its obligations hereunder and under each other agreement, instrument and
document to be executed and delivered by Purchaser pursuant to this
Agreement.
ARTICLE 8
BANKRUPTCY COURT APPROVALS
8.1 Expense Reimbursement and Auction Procedures. Promptly following
the execution of this Agreement (and in no event later than three
business days thereafter), PRC-Mississippi and VVI shall file a joint
motion with the Bankruptcy Court seeking an order authorizing the
reimbursement to Purchaser of its reasonable out-of-pocket expenses
incurred in connection with the negotiation of this Agreement and the
investigation of the Resort, not to exceed $500,000 (the "Expense
Reimbursement") in the event that the Closing fails to occur due to the
acceptance by Sellers, or any trustee acting on behalf of Sellers, of a
competing offer for the Resort or any material portion of the Resort of
any person other than Purchaser or an affiliate of Purchaser. The
Expense Reimbursement shall be an administrative expense claim under 11
U.S.C. Paragraph 503(b) and a surcharge under 11 U.S.C. Paragraph 506(c),
payable in full by Sellers to Purchaser concurrently with the closing of
the transaction with such competing party; and upon acceptance of such
offer, the Sellers shall instruct the Escrow Agent to return the Deposit
to Purchaser. In addition, Debtors may seek further orders of the
Bankruptcy Court authorizing and directing PRC-Mississippi and VVI to
sell the Resort to Purchaser, subject to higher and better offers to be
solicited in accordance with the following bidding guidelines in this
Section 8.1. Promptly following the execution of this Agreement, the
Sellers shall instruct their professional advisors to advertise the
availability of the Assets for purchase through such advertising and
media as such advisors deem appropriate to attract competing bidders at
an outcry auction ("Auction") to be held at the office of Sellers'
counsel on or about December 16, 2004. To the extent any other bidder
desires to make an offer to purchase the Assets, such bidder shall, at
least five (5) days prior to the Auction (or such shorter time as Sellers
may allow in their sole discretion), deliver to the Sellers (i) a
refundable cash deposit of $1,000,000, (ii) proof of such bidder's
financial ability to consummate a purchase of the Assets, (iii) a markup
of this Agreement, reflecting the changes required by such third party as
a condition to its offer; and (iv) a written irrevocable offer, subject
to no unperformed due diligence or conditions for an expense
reimbursement, specifying the amount of cash or other consideration
offered by such bidder for the Assets. The determination of which bidder
has submitted the highest and best offer for the Assets at the auction
shall be made by PRC-Mississippi or the Bankruptcy Court after
consultation with other interested parties, subject to final
determination by the Bankruptcy Court. No written offer will be
considered unless the aggregate consideration to the Sellers under such
bid is at least $700,000
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more than the Purchase Price, and thereafter each successively higher bid
must be $100,000 greater than the then prevailing bid. Each person
submitting an offer in compliance with this section shall be a "Qualified
Bidder." The Sellers shall use their commercially reasonable efforts to
obtain, within thirty (30) days after the execution of this Agreement, an
order of the Bankruptcy Court approving, at a minimum, the Expense
Reimbursement identified in the first sentence of this Section 8.1. Both
Purchaser's and Sellers' obligations to complete the sale and purchase of
the Assets are conditioned upon the Bankruptcy Court's entry of such
order.
8.2 Sale Order. Promptly following the Auction, and in no event later
than three business days thereafter, PRC-Mississippi and VVI will file a
joint motion for an order of the Bankruptcy Court in form reasonably
satisfactory to the Purchaser (and for purposes of this Section 8.2 and
other provisions of this Agreement to be performed after the Auction, the
term "Purchaser" shall mean the successful bidder for the Assets) and
consistent with this Agreement (the "Sale Order"). The Sale Order shall
(i) order the sale of the Assets to the Purchaser pursuant to Section
363(b) of the Bankruptcy Code, on the terms and conditions set forth in
this Agreement and authorize PRC-Mississippi and VVI to proceed with this
transaction, (ii) approve the assumption by PRC-Mississippi and VVI and
assignment to Purchaser (subject to Purchaser's consent, where
applicable) of the Executory Contracts under Section 365 of the
Bankruptcy Code, (iii) order that the sale of the Assets shall be free
and clear of all liens, claims, interests and encumbrances other than
Permitted Encumbrances; (iv) include specific findings that: (a)
Purchaser is a good faith purchaser of the Assets and under 11 U.S.C.
Paragraph 363(m) is entitled to all protections thereby; that Purchaser
is not a successor to PRC-Mississippi or VVI and this Agreement does not
constitute a de facto merger or consolidation; Purchaser is not a mere
consolidation or substantial continuation of the Businesses; Purchaser
is entering the sale in good faith; (b) any objections to the Agreement
and related transactions are overruled; (c) any subsequent bankruptcy
proceedings by PRC-Mississippi or VVI (or reorganized entities succeeding
thereto) or dismissal of the Chapter 11 proceeding shall not affect the
Agreement or related transactions; (d) that PRC-Mississippi and VVI have
full authority to execute the Agreement; all necessary corporate action
has been taken; no consents or approvals other than those expressly
provided in the Agreement are required for consummation of the Agreement
and related transactions; (e) approval of the Agreement and consummation
of the transactions contemplated hereby are in the best interest of
PRC-Mississippi and VVI and their creditors and estates; (f)
PRC-Mississippi and VVI have demonstrated both good, sufficient and sound
business purpose and justification for the sale pursuant to 11 U.S.C.
Paragraph 363 prior to, and outside of a Plan of Reorganization; (g)
reasonable opportunity to object or be heard with respect to the Sale
Motion has been afforded to all interested entities; (h) the Agreement
was negotiated, proposed and entered into by the parties hereto, without
collusion, in good faith, and from arms-length bargaining positions with
parties represented by counsel and financial advisors; (i) the terms and
conditions of the Agreement and related transaction are fair and
reasonable; (j) the Bankruptcy Court retains exclusive jurisdiction to
enforce the Sale Order; and (k) such other items as are reasonably
acceptable to Purchaser. Both Purchaser's and Sellers' obligations to
complete the sale and purchase of the Resort are conditioned upon the
Bankruptcy Court's entry of the Sale Order.
ARTICLE 9
APPROVAL
9.1 Modification of Fastlands Lease. Promptly after the entry of the
Sale
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Order, Purchaser shall seek approval from the State of Mississippi of an
amendment to the Fastlands Lease, or a new lease with economic terms and
duration identical to the Fastlands Lease in all material respects, which
grants to Purchaser the right to construct a condominium development on
the property covered by the Fastlands Lease, subject to compliance with
all applicable state and local laws affecting such development. From
time to time at any Seller's written request, Purchaser shall deliver a
written update of the status of such modification and the most recent
communications between Purchaser and the State of Mississippi. It shall
be a condition to Purchaser's obligation to proceed with Closing that
such modification shall have been granted by the State of Mississippi.
9.2 HSR Act Notification. Within five (5) business days after the entry
of the Sale Order, each of Seller and Purchaser shall file or cause to be
filed an appropriate notification and report form with the Federal Trade
Commission and the Department of Justice, Antitrust Division under The
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 ("HSR Act"), and
shall request early termination of the waiting period thereunder. Each
party shall cooperate with the other to exchange all information
reasonably requested by the other party in order to complete its form,
and otherwise shall take all action required by the HSR Act and
regulations thereunder (including payment of the filing fee, in the case
of Purchaser). It shall be a condition to each party's obligation to
proceed with Closing that the waiting period under the HSR Act shall have
expired or been terminated by the Federal Trade Commission.
ARTICLE 10
CLOSING
The consummation of the transactions described in this Agreement (the
"Closing") shall occur on or before March 31, 2005 (the "Closing Date")
at a location to be mutually agreed upon by the parties.
ARTICLE 11
DOCUMENTS TO BE DELIVERED ON CLOSING DATE
11.1 By Sellers. At or prior to the Closing, each Seller, as
applicable, shall execute and/or deliver the following to Purchaser, each
in form and substance reasonably satisfactory to Purchaser and consistent
with the terms of this Agreement:
(a) Special Warranty Deeds in form sufficient to convey the Resort to
Purchaser and to enable Purchaser to obtain an owner's policy of title
insurance as described in Section 5.1.
(b) Bills of Sale, vehicle title certificates and other instruments of
transfer requested by Purchaser consistent with the terms of this
Agreement, for personal property covered by this Agreement.
(c) Instruments of assignment and assumption, pursuant to which the
applicable Seller assigns and conveys to Purchaser the leasehold interest
in and to (i) the Public Leaseholds; (ii) the Xxxxxxxxxx Tower Leasehold;
and (iii) the Executory Contracts; in each case together with or subject
to the consent of any third party whose consent is required for the
effectiveness of such assignment (the "Assignment and Assumption
Instruments").
(d) A rent roll for the Resort (the "Rent Roll"), listing each lessee,
the monthly base rent payable, lease expiration date and unapplied
security deposit as of the Closing Date.
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(e) The originals or copies of the leases described in the Rent Roll,
possession of which shall be delivered to Purchaser at the Resort.
(f) The original Certificate of Documentation of the Vessel to be
delivered to the United States Coast Guard, National Vessel Documentation
Center.
(g) A non foreign affidavit for Sellers complying with the
requirements of Internal Revenue Code Section 1445(f)(3) and the
regulations promulgated thereunder.
(h) Such other documents and instruments as may be required in this
Agreement or reasonably requested by Purchaser or its title insurer in
order to consummate the transactions described in this Agreement.
11.2 By Purchaser. At or prior to the Closing, Purchaser shall execute
and/or deliver the following to Sellers:
(a) The Purchase Price (net of the Deposit which shall be distributed
by the Escrow Agent to Sellers for application to the Purchase Price)
plus 90% of Seller's estimate of the Separate Asset Value and the Net
Adjustments, by wire transfer of immediately available funds.
(b) The Assignment and Assumption Instruments.
(c) Organization and authority documents of Purchaser satisfactory to
the Sellers, including copies (certified by the secretary of Purchaser)
of the resolutions of the Purchaser's Board of Directors or other
documentation authorizing the execution, delivery and performance of this
Agreement and the transactions and documents contemplated herein;
(d) A written notice of the acquisition of the Assets by Purchaser,
originally executed by Sellers and Purchaser, copies of which Sellers
shall transmit to all tenants and to other parties affected by the sale
and purchase of the Assets. Such notice shall be prepared by the
Sellers, and shall inform the addressees of the sale and transfer of the
Assets to Purchaser and contain appropriate instructions relating to the
payment of future rentals, the giving of future notices, and other
matters reasonably required by Purchaser. The said notices shall (i)
specify that unapplied security deposits under the tenant leases have
been delivered to the Purchaser and that the Purchaser is responsible for
the refund thereof and (ii) be adequate under local law to relieve
Sellers of all liability for return of such deposits.
(e) Such other documents and instruments as may be required in this
Agreement or by the Title Company in order to consummate the transactions
described in this Agreement.
ARTICLE 12
BREACHES AND REMEDIES
12.1 Breach by Purchaser. If the sale of Assets contemplated by this
Agreement is not consummated because of Purchaser's breach or failure to
perform its obligations hereunder, which failure is not remedied within
ten (10) days after written notice demanding performance, each Seller
shall be entitled to pursue any remedy at law or in equity. Escrow Agent
shall release the Deposit to Sellers upon request, and such Deposit shall
be credited toward any damages to which any Seller may be entitled.
12.2 Breach by Sellers. If the sale contemplated by this Agreement is
not consummated because of a Seller's breach or failure to perform its
obligations
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hereunder, which failure is not remedied within ten (10) days after
written notice demanding performance, Purchaser shall be entitled, as its
exclusive remedies, to elect either (a) to terminate this Agreement and
have the Deposit returned to it or (b) to enforce specific performance of
such Seller's obligations under this Agreement; provided, however, that
no Seller shall be required to expend any money other than the amounts
provided in this Agreement, or to take any action other than delivery of
the items provided in this Agreement, in connection with such specific
performance.
12.3 Enforcement Costs. The non-breaching party in any legal action to
enforce this Agreement shall be entitled to recover against the breaching
party its costs and expenses, including reasonable attorneys fees and
court costs, incurred by such non-breaching party in enforcing its
remedies hereunder.
ARTICLE 13
DAMAGE, DESTRUCTION OR CONDEMNATION
13.1 Insurance. Each Seller, as applicable, agrees to maintain its
present policies of casualty, hazard, flood and public liability
insurance covering the Resort in full force and effect from the date of
this Agreement through and including the Closing Date.
13.2 Substantial Damage. If on or before the Closing Date either (a)
all or a substantial part of the Resort is damaged or destroyed by fire
or the elements or by any other cause and such damage is not repaired, or
(b) all or a substantial part of the Land is taken by condemnation or
other power of eminent domain, Purchaser or Sellers may, by written
notice given to the other within ten days after Purchaser shall have
notice of the occurrence or the taking (but in no event after the Closing
Date), elect to terminate this Agreement.
13.3 Other Damage. If either (a) a substantial part of the Resort is
damaged or destroyed or a substantial part of the Land is taken by
condemnation or other power of eminent domain but this Agreement is not
canceled as provided in Section 13.2, or (b) on or before the Closing
Date, an insubstantial part of the Resort is damaged or destroyed and
such damage is not repaired, or an insubstantial part of the Land is so
taken, then neither Purchaser nor Sellers shall have the right to
terminate this Agreement based upon such damage, destruction or taking,
and on the Closing Date,
(i) Sellers shall credit the Purchase Price with an amount equal to
any sums of money collected by any Seller under its policies of insurance
or renewals thereof insuring against the loss in question (after
deducting (1) any expenses incurred by such Seller in collecting such
insurance and (2) any amount that such Seller shall have paid, agreed to
pay, or shall have been obligated to pay for repairs or restoration of
the damage), and Sellers shall assign, transfer and set over to Purchaser
all of Sellers' right, title and interest in and to said policies with
respect to the Land or Resort and any further sums payable under said
policies (provided that in no event shall the credits and insurance
proceeds assigned exceed the cost of unrepaired damage), and
(ii) Sellers shall assign, transfer and set over to Purchaser all of
Sellers' right, title and interest in and to any awards that may be made
for any taking by condemnation or other power of eminent domain.
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ARTICLE 14
BROKERS
14.1 For Purchaser. Purchaser represents and warrants to Sellers that
neither Purchaser nor any entity related to Purchaser has dealt with any
broker or other person or entity who would be entitled to a commission or
other brokerage fee from a Seller claiming by, through or under
Purchaser, in connection with the transactions described in this
Agreement. Purchaser agrees to indemnify, defend and hold each Seller
harmless of and from any loss, cost, damage or expense (including
reasonable attorneys' fees and court costs) arising out of any inaccuracy
in the representation or warranty made by Purchaser in the preceding
sentence.
14.2 For Sellers. Sellers represent and warrant to Purchaser that
(except for Innovation Capital Holding LLC and Harbour Financial, LLC, as
business consultants), none of the Sellers has dealt with any broker or
other person or entity who would be entitled to a commission or other
brokerage fee from Purchaser claiming by, through or under such Seller,
in connection with the transactions described in this Agreement. Each
Seller agrees to indemnify, defend and hold Purchaser harmless of and
from any loss, cost, damage or expense (including reasonable attorneys'
fees and court costs) arising out of any inaccuracy in the representation
or warranty made by such Seller in the preceding sentence.
14.3 Survival. Notwithstanding any other provision of this Agreement to
the contrary, the provisions of this Article shall survive the Closing
and any prior termination of this Agreement for any reason whatsoever.
ARTICLE 15
NOTICES
Any notice given or required to be given pursuant to any provision of
this Agreement shall be in writing and shall either be personally
delivered or sent by telecopy or by a reputable commercial courier
service guaranteeing overnight delivery, and shall be deemed to have been
given upon receipt if personally delivered or sent by telecopy, or upon
delivery to such courier, with delivery charges prepaid, if sent by such
a courier, in either case addressed as follows:
Purchaser: Xxxxxxxxxx Properties, LLC
00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxx Xxxxxxxx, III
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to: Xxxx & Wiser
000 Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Fax:000-000-0000
Phone:000-000-0000
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Seller: President Riverboat Casino-Mississippi, Inc.
President Xxxxxxxxxx Hotel, LLC
Vegas Vegas, Inc.
c/o President Casinos, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Attn: Xx. Xxxx X. Xxxxxxxxx
Fax:000-000-0000
Phone:000-000-0000
with a copy to: Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx, Xx.
Xxxxxxxx Xxxxxx LLP
One XX Xxxx Xxxxx
Xx. Xxxxx, XX 00000
fax:000-000-0000
phone:000-000-0000
Either party may, by giving notice to the other in the manner set forth
above, change the address to which notices shall be sent to it, provided
that any such change of address shall be effective three days after it is
given. The legal counsel for each party to this Agreement may give
notices on behalf of its client with the same force and effect as if such
notice was given directly by such party.
ARTICLE 16
ASSIGNMENT
Neither the rights of Purchaser hereunder, nor any portion thereof, may
be assigned; provided, however, that by written notice to Sellers given
at least ten days prior to Closing, Purchaser may assign all of its
interest in this Agreement and the Deposit to an entity controlled by
Purchaser or Purchaser's principals, but such assignment shall not relive
Purchaser of its obligation to proceed with Closing and to perform its
other obligations hereunder if such assignee fails to do so. In
addition, Purchaser or such assignee may collaterally assign all of its
rights under this Agreement to a financial institution providing
financing to Purchaser or such assignee for the purchase of the Assets.
ARTICLE 17
INSPECTION
17.1 Inspection Period. Within ten business days after the effective
date of this Agreement, Sellers shall deliver to Purchaser all documents
in their possession regarding the Assets, including (but not limited to)
site plans, building plans, surveys, permits, studies (including all
environmental and wetlands phases), reports, leases, contracts, and other
agreements which affect the Resort. Purchaser shall complete its
physical inspection of the Resort, at its sole cost and expense on or
before the date which is the earlier of (a) thirty (30) days after the
date of this Agreement, and (b) 48 hours in advance of the Bankruptcy
Court hearing on the motion to approve the Expense Reimbursement (the
"Inspection Period"). During the Inspection Period, Purchaser has the
right to terminate this Agreement for any reason, upon written notice
delivered to Sellers or their counsel. If Purchaser elects to terminate
this Agreement during the Inspection Period, then the Deposit shall
promptly be refunded to Purchaser. If Purchaser does not give Sellers
written notice during the Inspection Period of Purchaser's election to
terminate this Agreement, the Deposit of Purchaser shall become
non-refundable
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except as otherwise provided in Section 8.1 above.
17.2 Purchaser's Entry. At any time during the Inspection Period,
Purchaser, and its agents and representatives, shall have the right at
reasonable times and subject to rights of tenants under existing leases,
to enter the Resort for the purpose of making inspections and tests
specified in this Agreement. Following any such entry or work, unless
otherwise directed in writing by a Seller, Purchaser shall return the
Resort to the condition each was in prior to such entry or work,
including the recompaction or removal of any disrupted soil or material
as a Seller may reasonably direct. All such inspections and tests and
any other work conducted or materials furnished with respect to the
Resort by or for Purchaser shall be paid for by Purchaser as and when due
and Purchaser shall indemnify, defend, protect and hold harmless Sellers
and the Resort of and from any and all claims, liabilities, demands,
losses, costs, expenses (including reasonable attorneys' fees), damages
or recoveries, including those for injury to person or property, arising
out of or relating to any such work or materials or the acts or
commissions of Purchaser, its agents or employees in connection
therewith.
ARTICLE 18
INDEMNIFICATION
The Purchaser hereby agrees, from and after the Closing (if the Closing
occurs), to indemnify and hold harmless each Seller and its directors,
officers, employees, agents, stockholders and affiliates from, against
and in respect of any and all damages, costs, liabilities, losses,
judgments, penalties, fines, expenses and other costs (including but not
limited to reasonable attorney's fees) arising from or relating to (a)
any and all of the Assumed Liabilities, and (b) the Sellers' enforcement
of this obligation and the other obligations of the Purchaser to be
performed from and after the Closing.
ARTICLE 19
MISCELLANEOUS
19.1 Successors and Assigns. This Agreement is binding upon and shall
inure to the benefit of the parties hereto, and their respective
successors, trustees and permitted assigns.
19.2 Time. Wherever under the terms and provisions of this Agreement
the time for performance falls upon a Saturday, Sunday or legal holiday,
such time for performance shall be extended to the first business day
thereafter.
19.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which when taken together shall constitute one and
the same agreement, and shall become effective when one or more
counterparts have been executed by each of the parties hereto and
delivered to each of the other parties hereto.
19.4 Captions and References. The captions at the beginning of the
several paragraphs, Sections and Articles are for convenience in
determining the context, but are not part of this contract. Unless
otherwise specifically set forth in this Agreement to the contrary, all
references to Exhibits contained in this Agreement refer to the Exhibits
which are attached to this Agreement, all of which Exhibits are
incorporated in, and made a part of, this Agreement by reference. Unless
otherwise specifically set forth in this Agreement to the contrary, all
references to Articles, Sections, paragraphs and clauses refer to
portions of this Agreement.
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19.5 Severability. If any term or provision of this Agreement shall
be held to be illegal, invalid, unenforceable or inoperative as a matter
of law, the remaining terms and provisions of this Agreement shall not be
affected thereby, but each such remaining term and provision shall be
valid and shall remain in full force and effect.
19.6 Integration Clause. This Agreement and the other writings referred
to in, or delivered pursuant to, this Agreement, embody the entire
understanding and contract between the parties hereto with respect to the
Assets and supersede any and all prior agreements and understandings
between the parties hereto, whether written or oral, formal or informal,
with respect to the subject matter of this Agreement. This Agreement has
been entered into after full investigation by each party and its
professional advisors, and neither party is relying upon any statement,
representation or warranty made by or on behalf of the other which is not
expressly set forth in this Agreement.
19.7 Amendments. No extensions, changes, waivers, modifications or
amendments to or of this Agreement, of any kind whatsoever, shall be made
or claimed by Sellers or Purchaser, and no notices of any extension,
change, waiver, modification or amendment made or claimed by Sellers or
Purchaser shall have any force or effect whatsoever, unless the same is
contained in a writing and is executed by the party against whom such
matter is asserted.
19.8 Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Missouri.
19.9 Expenses. Each party hereto shall pay all charges specified to be
paid by them pursuant to the provisions of this Agreement and their own
attorney's fees in connection with the negotiation, drafting and closing
of this Agreement, unless otherwise set forth herein.
19.10 No Third Party Beneficiaries. Purchaser and Sellers agree that
this Agreement has been entered into solely for the benefit of Purchaser
and Sellers and no other person or entity, it being the intention of
Purchaser and Sellers that no person or entity not a party to this
Agreement shall have any right or standing to (a) bring any action
against Purchaser or Sellers based on this Agreement, or (b) assume that
any provision of this Agreement will be enforced or remain unmodified or
unwaived, or (c) assert that it or he is or should be or was intended to
be a beneficiary of any provision of this Agreement.
19.11 Jurisdiction. Each party hereby submits to the jurisdiction of
the Bankruptcy Court for the determination of any and all disputes
arising under the terms of this Agreement; provided, however, at such
time, if any, as PRC-Mississippi and VVI may be reorganized or may have
their respective bankruptcy cases dismissed, the parties at their
election may enforce the provisions of this Agreement in any court of
competent jurisdiction, or in the Bankruptcy Court if and to the extent
it has continuing jurisdiction over the party or parties involved in such
dispute.
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IN WITNESS WHEREOF, the parties have caused this Sale and Purchase
Agreement to be executed by their duly authorized representatives as of
the day and year first above written.
SELLERS:
PRESIDENT RIVERBOAT CASINO-MISSISSIPPI,
INC.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Sr. VP & CFO
VEGAS VEGAS, INC.
By: /s/ Xxxxx X.Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Sr. VP & CFO
PRESIDENT XXXXXXXXXX HOTEL, LLC
By XXXXXXXXXX HOTEL, INC., its
Managing Member
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Sr. VP & CFO
PURCHASER:
XXXXXXXXXX PROPERTIES, LLC
By: /s/ Xxx Xxxxxxxx III
Name: Xxx Xxxxxxxx III
Title: Partner
By: /s/ X.X. Xxxx
Name: X.X. Xxxx
Title: Partner
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