EXECUTION VERSION
ASSET PURCHASE AGREEMENT
dated as of September 27, 2004
by and among
SHOWBOAT MARINA CASINO PARTNERSHIP,
TUNICA PARTNERS II L.P.,
GNOC CORPORATION,
BALLY'S OLYMPIA LIMITED PARTNERSHIP,
and
RESORTS INTERNATIONAL HOLDINGS, LLC
TABLE OF CONTENTS
Page
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ARTICLE I. PURCHASE AND SALE OF ASSETS............................................................................2
Section 1.1 Purchase and Sale of Assets.............................................2
Section 1.2 Excluded Assets.........................................................3
Section 1.3 Retention of Assets.....................................................4
Section 1.4 Assignability and Consents..............................................4
Section 1.5 Removal of Excluded Assets..............................................5
ARTICLE II. ASSUMPTION OF LIABILITIES.............................................................................6
Section 2.1 Assumption of Liabilities...............................................6
ARTICLE III. PURCHASE PRICE AND DEPOSIT...........................................................................9
Section 3.1 Purchase Price..........................................................9
Section 3.2 Deposit.................................................................9
Section 3.3 Allocation of Purchase Price...........................................10
Section 3.4 Risk of Loss...........................................................10
ARTICLE IV. PRORATIONS AND ADJUSTMENTS...........................................................................11
Section 4.1 Estimated Closing Statements...........................................11
Section 4.2 Estimated Operations Settlements.......................................12
Section 4.3 Final Adjustments......................................................14
Section 4.4 Accounts Receivable; Deposits..........................................16
ARTICLE V. CLOSING...............................................................................................17
Section 5.1 Time and Place.........................................................17
Section 5.2 Deliveries at Closing..................................................18
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLERS............................................................22
Section 6.1 Organization of Seller.................................................22
Section 6.2 Authority; No Conflict; Required Filings and Consents..................22
Section 6.3 Financial Statements...................................................23
Section 6.4 No Undisclosed Liabilities.............................................24
Section 6.5 Taxes..................................................................24
Section 6.6 Title to Personal Property; Liens......................................24
Section 6.7 Real Property..........................................................25
Section 6.8 Intellectual Property..................................................27
Section 6.9 Agreements, Contracts and Commitments..................................28
Section 6.10 Litigation.............................................................28
Section 6.11 Environmental Matters..................................................29
Section 6.12 Ordinary Course of Business............................................30
Section 6.13 Sufficiency of Assets..................................................30
Section 6.14 Permits; Compliance with Gaming Laws...................................30
Section 6.15 Personnel; Labor Matters...............................................31
Section 6.16 Employee Benefits......................................................31
Section 6.17 Brokers................................................................32
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF BUYER.............................................................33
Section 7.1 Organization...........................................................33
Section 7.2 Authority; No Conflict; Required Filings and Consents..................33
Section 7.3 Brokers................................................................34
Section 7.4 Financing..............................................................34
Section 7.5 Licensability..........................................................34
Section 7.6 Compliance with Gaming Laws............................................35
Section 7.7 Litigation.............................................................35
ARTICLE VIII. COVENANTS..........................................................................................36
Section 8.1 Conduct of Business of Each Seller.....................................36
Section 8.2 Cooperation; Notice; Cure..............................................37
Section 8.3 No Solicitation........................................................38
Section 8.4 Employee Matters.......................................................38
Section 8.5 Access to Information and the Property.................................42
Section 8.6 Governmental Approvals.................................................44
Section 8.7 Publicity..............................................................46
Section 8.8 Further Assurances and Actions.........................................46
Section 8.9 Transfer Taxes; HSR Filing Fee.........................................47
Section 8.10 Financing..............................................................48
Section 8.11 Like-Kind Exchange.....................................................48
Section 8.12 Reservations; Loyalty Program; Guests; Chips...........................49
Section 8.13 Transfer of Utilities; Insurance.......................................51
Section 8.14 Certain Transactions...................................................52
Section 8.15 FCC Approvals..........................................................52
Section 8.16 Insurance; Casualty and Condemnation...................................52
Section 8.17 Certain Notifications..................................................53
Section 8.18 Use of Customer List...................................................53
Section 8.19 No Control.............................................................53
Section 8.20 Ground Lease Estoppels.................................................54
Section 8.21 Phase I and Phase II ESAs..............................................54
Section 8.22 Tunica Golf Course LLC Estoppel........................................55
Section 8.23 Letter from Mercantile Bank............................................55
Section 8.24 Title Defects and Survey Defects.......................................55
Section 8.25 Xxxxxx'x Seller Two Subleases..........................................55
Section 8.26 Caesars Seller One Lease Consents and Renewals.........................55
ARTICLE IX. CONDITIONS TO CLOSING................................................................................56
Section 9.1 Conditions to Each Party's Obligation to Effect the Closing............56
Section 9.2 Additional Conditions to Obligations of Buyer..........................56
Section 9.3 Additional Conditions to Obligations of Sellers........................57
ARTICLE X. TERMINATION AND AMENDMENT............................................................................57
Section 10.1 Termination............................................................57
Section 10.2 Effect of Termination..................................................59
ARTICLE XI. SURVIVAL; INDEMNIFICATION............................................................................60
Section 11.1 Survival of Representations, Warranties, Covenants and Agreements......60
Section 11.2 Indemnification........................................................61
Section 11.3 Procedure for Claims between Parties...................................63
Section 11.4 Defense of Third Party Claims..........................................63
Section 11.5 Limitations on Indemnity...............................................64
Section 11.6 Payment of Damages.....................................................66
Section 11.7 Exclusive Remedy.......................................................66
Section 11.8 Treatment of Indemnification Payments..................................67
ARTICLE XII. TITLE TO REAL PROPERTY..............................................................................67
Section 12.1 Title Commitments and UCC Search.......................................67
Section 12.2 Survey.................................................................67
Section 12.3 Defects................................................................67
Section 12.4 As Is..................................................................68
ARTICLE XIII. MISCELLANEOUS......................................................................................69
Section 13.1 Definitions............................................................69
Section 13.2 Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury........85
Section 13.3 Notices................................................................86
Section 13.4 Interpretation.........................................................87
Section 13.5 Headings...............................................................87
Section 13.6 Entire Agreement.......................................................87
Section 13.7 Severability...........................................................88
Section 13.8 Assignment.............................................................88
Section 13.9 Parties of Interest; No Third Party Beneficiaries......................88
Section 13.10 Counterparts...........................................................88
Section 13.11 Mutual Drafting........................................................88
Section 13.12 Amendment..............................................................89
Section 13.13 Extension; Waiver......................................................89
Section 13.14 Time of Essence........................................................89
Section 13.15 Disclosure Letters.....................................................89
EXHIBITS
Exhibit A Deposit Escrow Agreement
Exhibit B Form of Xxxx of Sale and Assignment
Exhibit C Form of Assignment and Assumption Agreement
--Assumed Contracts and Assumed Liabilities
Exhibit D Form of Non-Foreign Affidavit
Exhibit E Form of Xxxx of Sale--Vessel
Exhibit F Form of Confirmation of Transfer of Guest Items
Exhibit G Form of Assumption of Progressive Slot Machine
Post-Closing Liabilities
Exhibit H Form of Confirmation of Transfer of Guest Baggage
Exhibit I Form of Xxxx of Sale--Passenger/Delivery Vehicles
Exhibit J Form of Assignment and Assumption of FCC Licenses
Exhibit K Form of Closing Escrow Agreement
Exhibit L-1 Form of Special Warranty Deed
Exhibit L-2 Form of Bargain and Sale Deed
Exhibit M Form of Assignment of Lease
Exhibit N Form of Assignment of Membership Interests
Exhibit O Form of License Agreement
Exhibit P Form of Tunica Golf Course LLC Estoppel
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of September 27, 2004, by and among Showboat Marina Casino
Partnership, an Indiana general partnership ("Xxxxxx'x Seller One"), Tunica
Partners II L.P., a Mississippi limited partnership ("Xxxxxx'x Seller Two,"
and with Xxxxxx'x Seller One, the "Xxxxxx'x Sellers") GNOC Corporation, a New
Jersey corporation ("Caesars Seller One"), Bally's Olympia Limited
Partnership, a Delaware limited partnership ("Caesars Seller Two," and with
Caesars Seller One, the "Caesars Sellers," and with Xxxxxx'x Sellers, each a
"Seller" and collectively, the "Sellers"), and Resorts International Holdings,
LLC, a Delaware limited liability company ("Buyer"). Capitalized terms used
herein and not otherwise defined shall have the meanings set forth in Section
13.1 hereof.
WHEREAS, Xxxxxx'x Seller One owns and operates the Casino A Property
(commonly known as Xxxxxx'x East Chicago), Xxxxxx'x Seller Two owns and
operates the Casino B Property (commonly known as Xxxxxx'x Tunica and formerly
known as Xxxxxx'x Mardi Gras Casino), Caesars Seller One owns and operates the
Casino C Property (commonly known as the Atlantic City Hilton) and Caesars
Seller Two owns and operates the Casino D Property (commonly known as Bally's
Tunica);
WHEREAS, Xxxxxx'x Entertainment, Inc., a Delaware corporation
("Xxxxxx'x"), which is the ultimate parent of the Xxxxxx'x Sellers, and
Caesars Entertainment, Inc., a Delaware corporation ("Caesars"), which is the
ultimate parent of the Caesars Sellers, have entered into an Agreement and
Plan of Merger dated as of July 14, 2004, by and among Xxxxxx'x, Xxxxxx'x
Operating Company, Inc., a Delaware corporation and a wholly owned subsidiary
of Xxxxxx'x, and Caesars, as amended from time to time (the "Merger
Agreement"), pursuant to which Xxxxxx'x is acquiring Caesars;
WHEREAS, the Board of Directors of Xxxxxx'x believes that it is in
the best interests of Xxxxxx'x, its stockholders and the Xxxxxx'x Sellers to
sell such Sellers' interests in the Casino A Property and the Casino B
Property;
WHEREAS, the Board of Directors of Caesars believes that it is in the
best interests of Caesars, its stockholders and the Caesars Sellers to sell
such Sellers' interests in the Casino C Property and the Casino D Property;
and
WHEREAS, Buyer desires to purchase each Seller's interest in its
Property, and assume certain Liabilities related to the operation of the
Properties, all on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, the parties hereto, in consideration of the premises
and of the mutual representations, warranties and covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, agree as follows:
ARTICLE I.
PURCHASE AND SALE OF ASSETS
Section 1.1 Purchase and Sale of Assets. Upon the terms and subject
to the conditions set forth in this Agreement, at the Closing, each Seller
shall sell, convey, assign and transfer (and notwithstanding anything
contained in this Agreement, no Seller shall be responsible or liable for the
sale, conveyance, assignment or transfer by the other Sellers) to Buyer, and
Buyer shall purchase and acquire from each Seller, all of such Seller's right,
title and interest in and to those certain rights and assets set forth below,
but excluding the Excluded Assets (as related to each Seller, the "Purchased
Assets"):
(a) its Property;
(b) its Assumed Contracts;
(c) its Acquired Personal Property;
(d) its Tray Ledger (as provided for in Section 4.2 hereof);
(e) its House Funds (as provided for in Section 4.2 hereof),
including the Minimum Cash;
(f) its Transferred Intellectual Property;
(g) its Books and Records;
(h) its Governmental Approvals, and pending applications therefor, to
the extent transferable by Law;
(i) with respect to Caesars Seller One, all rights in respect of
payments or investments made by Caesars Seller One to the CRDA pursuant to
applicable Law which have not been committed by the CRDA as of the date
hereof;
(j) its Markers (as provided for in Section 4.2 hereof);
(k) subject to Section 8.16 hereof, its rights, claims, rebates,
discounts and credits (including all indemnities, warranties and similar
rights), performance and other bonds, security and other deposits, advance
payments, and prepaid rents in favor of such Seller or any of its Affiliates
or any of their respective Representatives to the extent relating to (x) the
operation of the business at such Seller's Property from and after the Closing
Date or (y) all Assumed Liabilities;
(l) subject to Sections 3.4 and 8.16 hereof, if, prior to the
Closing, any Property is destroyed, damaged or taken in condemnation, the
insurance proceeds or condemnation award payable to an applicable Seller, or
any transferable or assignable claim for insurance proceeds or condemnation
award payable to an applicable Seller with respect thereto;
(m) all assets to which Buyer is entitled under the proration
provisions of Article IV hereof;
(n) all rights related to the mortgages assumed under the Homebuyer
Guarantee Program, as described in Section 4.2(e) hereof;
(o) all rights under the City of East Chicago Obligations;
(p) the Customer List (subject to Sellers' rights set forth in
Section 1.3 hereof);
(q) all Affiliate Assets; and
(r) any other tangible or intangible assets of such Seller (other
than the Excluded Assets) used exclusively in the operation of any of the
Properties.
Section 1.2 Excluded Assets. Notwithstanding anything to the contrary
contained in this Agreement, from and after the Closing, each Seller shall
retain all of its right, title and interest in and to each and all of the
following assets (as related to each Seller, the "Excluded Assets"):
(a) its Excluded Contracts;
(b) any rights, claims and credits (including all indemnities,
warranties and similar rights) in favor of such Seller or any of its
Affiliates or any of its Representatives to the extent relating to (i) any
other Excluded Asset of such Seller, (ii) any Excluded Liability or (iii) the
operation of the business at such Seller's Property prior to the Closing Date;
(c) except for the Tray Ledger, the Markers and House Funds (which
shall be purchased in accordance with Section 4.2 hereof), all cash, cash
equivalents, bank deposits or similar cash items of such Seller or its
Affiliates or held at such Seller's Property as of the Closing (whether or not
reflected on the financial statements of such Seller or its Affiliates as of
the Closing Date);
(d) the corporate charter or other organizational documents, minute
and stock books and records, corporate seals, Tax Returns (including
supporting schedules) of such Seller or any of its Affiliates;
(e) its Accounts Receivable;
(f) subject to Section 4.1(a) hereof, any refund, credit, claim or
entitlement with respect to Taxes of such Seller or any of its Affiliates;
(g) all of its human resources and other employee-related files and
records, other than such files and records related to the Transferred
Employees;
(h) all indebtedness or accounts payable owing from any Affiliate of
any Seller to any such Seller;
(i) its Excluded Personal Property;
(j) its Excluded Intellectual Property;
(k) its Customer Database;
(l) all data, files and other materials located on any storage device
(including personal computers and servers) located at such Seller's Property
(other than Books and Records and the Property Specific Data);
(m) all assets and properties of such Seller not used exclusively in
connection with the business operated at such Seller's Property and all assets
and properties owned by Affiliates of such Seller (including Caesars and
Xxxxxx'x and their respective Subsidiaries and Affiliates, other than such
Seller);
(n) all assets to which such Seller is entitled under the proration
provisions of Article IV hereof;
(o) Connection Card, Total Rewards and any player loyalty or rewards
program of Caesars, Xxxxxx'x or their respective Affiliates;
(p) any assets set forth on Section 1.2 of any Seller Disclosure
Letter;
(q) with respect to Caesars Seller One, all rights in respect of
payments or investments made by Caesars Seller One to the CRDA pursuant to
applicable Law which have been committed by the CRDA as of the date hereof;
(r) with respect to Xxxxxx'x Seller One, the stock of Showboat Marina
Finance Corporation; and
(s) any other item not included in Section 1.1 hereof.
Section 1.3 Retention of Assets. Notwithstanding anything to the
contrary contained in this Agreement, each Seller and its Affiliates may
retain and use, at their own expense, archival copies of all of such Seller's
Assumed Contracts and other documents or materials conveyed hereunder
(including, without limitation, the Customer List, of which each Seller or its
Affiliates will retain copies and the right to use in connection with its
marketing and loyalty programs or otherwise), in each case, which (a) are used
in connection with such Seller's or its Affiliates' businesses, other than
such Seller's Property or (b) such Seller in good faith determines it is
reasonably likely to need access to in connection with the defense (or any
counterclaim, cross-claim or similar claim in connection therewith) of any
suit, claim, action, proceeding or investigation against or by such Seller or
any of its Affiliates pending or threatened as of the Closing Date.
Section 1.4 Assignability and Consents.
(a) Notwithstanding anything to the contrary contained in this
Agreement but subject to Section 8.15 hereof, if the sale, conveyance,
assignment, attempted sale, conveyance, assignment or transfer to Buyer of any
Contract (other than the Lease Documents, which for the purposes of this
Section 1.4 shall not include the Caesars Seller One Lease) that is part of
the Total Assets is, by its terms, nonassignable without the consent of a
third party (other than an Affiliate of any Seller, in which case the
applicable Seller covenants and agrees to cause such Affiliate to render such
consent) and such authorizations, approvals, consents or waivers shall not
have been obtained prior to the Closing Date (each, a "Non-Assignable Asset"),
in either case, the Closing shall proceed, but the Closing shall not
constitute the sale, conveyance, assignment, transfer or delivery of any such
Non-Assignable Asset, and this Agreement shall not constitute a sale,
conveyance, assignment, transfer or delivery of any such Non-Assignable Asset
unless and until such authorization, approval, consent or waiver is obtained.
After the Closing, the applicable Seller and Buyer shall use commercially
reasonable efforts to obtain any such authorizations, approvals, consents or
waivers related to the Non-Assignable Assets relating to the Property being
sold by such Seller, and Buyer and the applicable Seller shall cooperate with
each other in any arrangement commercially reasonable to provide that Buyer
shall receive the interest of the applicable Seller in the benefits under any
such Non-Assignable Asset until such time as such third party consent,
approval or waiver shall have been obtained, and each of the Buyer and the
applicable Seller shall cooperate with the other party in any such
commercially reasonable arrangement, including performance by the applicable
Seller as agent if commercially reasonable to the applicable Seller, and, in
such case, Buyer shall be liable to the applicable Seller in a fashion
equivalent to what Buyer's Liabilities would be under any such Non-Assignable
Asset as if it were assigned. Each applicable Seller shall promptly pay over
to Buyer the net amount (after out-of-pocket expenses) of all payments
received by it in respect of all of its Non-Assignable Assets. Notwithstanding
the foregoing, this Section 1.4 shall not apply to any authorizations,
approvals, consents or waivers that are conditions to consummating the
transactions under this Agreement pursuant to Article IX hereof.
(b) Once authorization, approval or waiver of or consent for the
sale, conveyance, assignment or transfer of any such Non-Assignable Asset is
obtained, the applicable Seller shall convey, assign, transfer and deliver any
such Non-Assignable Asset at no additional cost to Buyer, and such
Non-Assignable Asset shall thereafter constitute a Purchased Asset.
Notwithstanding anything to the contrary contained in this Agreement, Buyer
shall assume all Liabilities in respect of any Non-Assignable Asset if it is
receiving the benefits thereof; provided, further, that Buyer shall also be
liable to the Sellers for performing its obligations under the arrangements
described in Section 1.4(a) hereof.
(c) Buyer understands and agrees that it is solely Buyer's
responsibility to obtain any and all operating agreements (other than the
Lease Documents) necessary to conduct business at the Properties from and
after the Closing Date, including, without limitation, replacement software
license agreements for the software which will replace the Excluded Software.
Subject to the terms and conditions hereof, Buyer shall be responsible for
obtaining new licenses and permits for the operation of the Properties. Except
as set forth in Section 1.1(h) hereof, no licenses or permits will be
transferred by any Seller in connection with the sale of the Properties.
Section 1.5 Removal of Excluded Assets. All items located at each
Seller's Property that constitute such Seller's Excluded Assets may be removed
on or prior to the Closing Date and within thirty (30) days after the Closing
Date by the applicable Seller, its Affiliates, the owners of the Excluded
Assets, or their respective Representatives, with the removing party making
any repairs necessitated by such removal, but without any obligation on the
part of any Seller, any of their respective Affiliates, or any removing party
to replace any item so removed. Each Seller hereby reserves unto itself and
its Affiliates and the owners of the Excluded Assets, and their respective
Representatives, a right of entry into its Property and, with respect to the
Xxxxxx'x Sellers and Caesars Seller Two, onto and across their respective
Vessels, at reasonable times and upon reasonable notice after the Closing Date
and within such thirty (30) day period to effect such removal, and, in that
regard, Sellers shall use reasonable efforts to minimize disruption to Buyer's
operations. Each Seller recognizes that Buyer will be replacing the Excluded
Software at its Property and that Buyer desires that its replacement software
will be operational as of the Transfer Time. Subject to Section 1.4(c) hereof,
each Seller, with respect to its Property, agrees to cooperate reasonably with
Buyer in effecting the transition from Excluded Software to replacement
software, including providing Buyer with electronic copies of the Property
Specific Data; provided that: (i) there shall be no material interference with
any Seller's operation of its Property before the Closing Date; (ii) there
shall be no out-of-pocket cost or expense incurred by any Seller or any of
their Affiliates in connection with such cooperation; and (iii) no Seller
shall be required to reveal proprietary information to Buyer, other than
information that is included in the Total Assets. Each Seller will uninstall
third party Excluded Software at its Property that is now installed on
personal computers at its Property; provided, however, if Buyer is able to
obtain new licenses for any such software, each Seller will leave copies of
such software at its Property to the extent provided for in such licenses.
Buyer's agreement pursuant to this Section 1.5 shall survive the Closing and
shall be covered by Buyer's indemnification obligations in Article XI hereof
and enforceable by each Seller by any means available at Law or equity,
including injunctive relief, which Buyer hereby agrees is an appropriate
remedy. If any Seller does not remove any of such Seller's Excluded Assets
within fifteen (15) days following the Closing Date, upon ten (10) calendar
days notice to the applicable Seller, Buyer may dispose of or retain for its
own use (excluding (i) any items included in item (iv) of the definition of
"Excluded Personal Property," and (ii) any third-party software which must be
disposed of) any such remaining Excluded Assets and such Seller shall
reimburse, in each case, Buyer for any reasonable costs incurred with such
disposal.
ARTICLE II.
ASSUMPTION OF LIABILITIES
Section 2.1 Assumption of Liabilities.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, as of the Closing, Buyer agrees to assume, satisfy, perform, pay,
discharge and be solely responsible for each of the following Liabilities (the
"Assumed Liabilities"):
(i) all Liabilities relating to, or arising in respect of, (x) any of
the Total Assets accruing, arising out of, or relating to events, occurrences,
acts or omissions happening from and after the Closing (whether or not such
Liabilities are the subject of claims or pending or threatened litigation at
the time of the Closing) and (y) all Assumed Contracts of any Seller which
were not fully performed and were not required to have been so performed,
prior to the Closing, excluding any Liability resulting from any breach
thereof by a Seller on or prior to the Closing;
(ii) all Liabilities of any Seller for replacement of, or refund for,
damaged, defective or returned goods relating to any of the Total Assets from
and after the Closing, including without limitation items purchased in any
gift shop or similar facility at any Property, but not including any pending
or threatened product liability or litigation claims relating to the sale of
any goods happening prior to the Closing;
(iii) all Liabilities of any Seller with respect to entertainment and
hotel reservations relating to the Properties from and after the Closing;
(iv) except as provided for in Sections 4.1(a) and 8.9, all
Liabilities for Taxes arising from and attributable to the ownership of any
portion of the Total Assets from and after the Closing;
(v) all Liabilities relating to Transferred Employees of any Seller
accruing from and after the Closing;
(vi) all Liabilities of Buyer pursuant to the proration provisions of
Article IV hereof;
(vii) all Liabilities arising out of any Seller 401(k) Plan or
Substituted Multiemployer Pension Plan relating to the Transferred Employees
of any Seller to the extent set forth in Sections 8.4(f) and (g) hereof;
(viii) without limiting the rights and obligations of the parties set
forth in Section 8.21 and Article XI hereof, all Liabilities, including
without limitation Environmental Liabilities, under Environmental Laws
relating to, resulting from, caused by or arising out of ownership, operation
or control of any Property or the Total Assets, whether arising before or
after the Closing Date, including without limitation any Liability or relating
to contamination or exposure to Hazardous Substances at or attributable to any
Property or the Total Assets;
(ix) all Liabilities of Caesars Seller One to the CRDA related to the
gaming revenues at the Casino C Property from and after the Closing pursuant
to applicable Law;
(x) all Liabilities outstanding as of the Closing in respect of
mortgages guaranteed by Xxxxxx'x Seller One prior to the Closing relating to
the Homebuyer Guarantee Program, but subject to the Xxxxxx'x Liability Cap;
(xi) all Liabilities of Xxxxxx'x Seller One relating to the City of
East Chicago Obligations, but subject to the Xxxxxx'x Liability Cap; and
(xii) subject to Sections 8.12(e) and (f) hereof, all Liabilities
with respect to chips, tokens and plaquemines of such Seller's Property in
circulation, but subject to the Xxxxxx'x Liability Cap or the Caesars
Liability Cap, as the case may be.
Notwithstanding anything to the contrary contained herein, (a) the
Liabilities, in the aggregate, to be assumed from the Xxxxxx'x Sellers
pursuant to clauses (x), (xi) or (xii) of this Section 2.1(a) shall in no
event exceed Two Million Five Hundred Thousand Dollars ($2,500,000) (the
"Xxxxxx'x Liability Cap"), and (b) the Liabilities, in the aggregate, to be
assumed from the Caesars Sellers pursuant to clause (xii) of this Section
2.1(a) shall in no event exceed Two Million Five Hundred Thousand Dollars
($2,500,000) (the "Caesars Liability Cap").
(b) Notwithstanding anything contained in this Agreement to the
contrary, from and after the Closing Date, no Seller shall be liable for any
Liabilities of any other Seller, and other than the Assumed Liabilities, each
Seller shall retain and Buyer is not, and shall not be deemed to be, assuming,
liable or responsible for, or taking subject to any Liabilities of any Seller,
or any of their respective Affiliates, of any kind or nature whatsoever,
whether known or unknown, fixed or contingent, including without limitation
(collectively, the "Excluded Liabilities"):
(i) except as specifically listed in Section 2.1(a) hereof, all
Liabilities relating to any of such Sellers' Purchased Assets accruing,
arising out of, or relating to events, occurrences, pending or threatened
litigation, acts, omissions and claims happening prior to the Closing,
including all Liabilities arising in respect of any of such Seller's Assumed
Contracts which were not performed, but were required to be so performed,
prior to the Closing;
(ii) any Liability arising out of or relating to the employment of
such Seller's Reserved Employees from and after the Closing;
(iii) any Liability in respect of any Excluded Asset retained by such
Seller;
(iv) subject to Section 8.4 hereof, all Liabilities arising out of or
relating to the termination of any Property Employee of such Seller before the
Closing who does not become a Transferred Employee;
(v) subject to Section 8.4 hereof, all Liabilities of such Seller
pursuant to the proration provisions of Article IV hereof;
(vi) any Liability related to (A) income Taxes of any Seller and (B)
except as provided for in Sections 4.1(a) and 8.9, all Liabilities for Taxes
arising from and attributable to the ownership of any portion of the Total
Assets prior to the Closing;
(vii) all Liabilities arising out of any Seller Benefit Plan relating
to the Property Employees except as set forth in Section 2.1(a)(vii);
(viii) all Liabilities relating to the Property Employees accruing
prior to the Closing;
(ix) with respect to Xxxxxx'x Seller One, all Liabilities of Showboat
Marina Finance Corporation;
(x) all Liabilities of the type specified in Sections 2.1(a)(x), (xi)
and (xii) in excess of the Xxxxxx'x Liability Cap or the Caesars Liability
Cap, as the case may be; and
(xi) any Liability of a Seller not specifically assumed by Buyer
hereunder.
ARTICLE III.
PURCHASE PRICE AND DEPOSIT
Section 3.1 Purchase Price.
(a) As consideration for the Total Assets, at the Closing, Buyer
shall deliver or cause to be delivered by electronic transfer of immediately
available funds to an account designated by each of the Xxxxxx'x Sellers and
Caesars Sellers, as applicable, (or if an Electing Seller, its designated
"qualified intermediary") the following amount to the following parties (in
addition to any payments or adjustments to be made pursuant to Article IV):
(i) to Xxxxxx'x Sellers, the sum of Six Hundred Twenty-Seven Million
Three Hundred Thousand Dollars ($627,300,000) (the "Xxxxxx'x Sellers Purchase
Price"),
(ii) to Caesars Sellers, the sum of Six Hundred Twelve Million
Dollars ($612,000,000) (the "Caesars Sellers Purchase Price," and together
with the Xxxxxx'x Sellers Purchase Price, the "Purchase Price").
(b) At the Closing, Buyer shall deliver or cause to be delivered by
electronic transfer of immediately available funds to an account designated by
the applicable Seller (or if an Electing Seller, its designated "qualified
intermediary"):
(i) to Xxxxxx'x Sellers, the Xxxxxx'x Seller One Estimated Closing
Payment, the Xxxxxx'x Seller Two Estimated Closing Payment, the Xxxxxx'x
Seller One Estimated Operations Payment, and the Xxxxxx'x Seller Two Estimated
Operations Payment; and;
(ii) to Caesars Sellers, the Caesars Seller One Estimated Closing
Payment, the Caesars Seller Two Estimated Closing Payment, the Caesars Seller
One Estimated Operations Payment and the Caesars Seller Two Estimated
Operations Payment.
Section 3.2 Deposit.
(a) On the date hereof, Buyer shall deposit (i) Fifteen Million One
Hundred Eighty-Five Thousand Dollars ($15,185,000) with respect to the
Xxxxxx'x Sellers Purchased Assets and (ii) Fourteen Million Eight Hundred
Fifteen Thousand Dollars ($14,815,000) with respect to the Caesars Sellers
Purchased Assets (collectively with any additional amounts delivered by Buyer
pursuant to Section 5.1(a) hereof, the "Deposit") with Xxxxxxx Title Guaranty
Company (the "Escrow Agent") pursuant to an escrow agreement dated as of the
date hereof and attached hereto as Exhibit A (the "Deposit Escrow Agreement")
executed and delivered by each Seller, Buyer and the Escrow Agent. Upon the
Closing, the Deposit, and the interest accrued thereon, shall be credited
against the Purchase Price and the appropriate portion of the Deposit and the
interest accrued thereon shall be paid to the Xxxxxx'x Sellers and the Caesars
Sellers, as applicable (or if an Electing Seller, its designated "qualified
intermediary") in the amount set forth in the Deposit Escrow Agreement, and
shall be promptly released by the Escrow Agent to each applicable Seller (or
if an Electing Seller, its designated "qualified intermediary") pursuant to
this Section 3.2(a) and the terms of the Deposit Escrow Agreement. Upon the
termination of this Agreement, the Deposit and the interest accrued thereon
shall be payable pursuant to Section 10.2(c) hereof, and thereafter shall be
promptly released by the Escrow Agent to Buyer or the Sellers, as applicable,
pursuant to such Section 10.2(c) hereof and the terms of the Deposit Escrow
Agreement.
(b) Each Seller and Buyer agree to execute and be bound by such other
reasonable and customary escrow instructions as may be necessary or reasonably
required by the Escrow Agent or the parties hereto in order to consummate the
purchase and sale contemplated herein, or otherwise to distribute and pay the
funds held in escrow as provided in this Agreement and the Deposit Escrow
Agreement; provided that such escrow instructions are consistent with the
terms of this Agreement and the Deposit Escrow Agreement. In the event of any
inconsistency between the terms and provisions of such supplemental escrow
instructions and the terms and provisions of this Agreement, or any
inconsistency between the terms and provisions of the Deposit Escrow Agreement
and the terms and provisions of this Agreement, the terms and provisions of
this Agreement shall control, absent an express written agreement between the
parties hereto to the contrary which acknowledges this Section 3.2(b).
Section 3.3 Allocation of Purchase Price. Buyer and the applicable
Seller shall endeavor in good faith to agree on the allocation of the Xxxxxx'x
Sellers Purchase Price or the Caesars Sellers Purchase Price, as the case may
be (as determined for federal income tax purposes, including any assumed
liabilities that are required to be treated as part of the purchase price for
federal income tax purposes) among the Purchased Assets to be sold by any such
Seller (and any other assets that are considered to be acquired for federal
income tax purposes) on or prior to the Closing Date in accordance with
Section 1060 of the Code and the Treasury Regulations thereunder and
applicable State Law (the "Purchase Price Allocation"). Buyer shall deliver to
such Seller within five (5) business days after the Determination Date a
Purchase Price Allocation ("Buyer's Allocation"). Such Seller shall accept and
agree to Buyer's Allocation unless such Seller, acting in good faith, objects
to Buyer's Allocation, in which case such Seller shall, within fifteen (15)
business days after receipt of Buyer's Allocation, deliver written notice to
Buyer of such objection. Such notice shall specify in reasonable detail the
items in Buyer's Allocation to which such Seller objects and the basis for
such objection. In the event that the parties cannot mutually agree upon a
resolution with respect to such disputed items within fifteen (15) business
days of Buyer's receipt of such notice, then the disputed matter(s) will be
finally and conclusively resolved by an independent accounting firm of
recognized national standing with no existing relationship with either party
that is mutually selected by Buyer and such Seller (the "Auditor") as promptly
as practicable, and such resolution(s) will be reflected on the Purchase Price
Allocation. The fees and expenses of the Auditor shall be borne equally by
Buyer and such Seller. Buyer and Sellers agree to (a) be bound by the Purchase
Price Allocation, (b) act in accordance with the Purchase Price Allocation in
the filing of all Tax Returns (including, without limitation, filing IRS Form
8594 (and any supplemental or amended Form 8594) with their United States
federal income Tax Return for the taxable year that includes the Closing Date)
and in the course of any Tax audit, Tax review or Tax litigation relating
thereto, and (c) take no position and cause its Affiliates to take no position
inconsistent with the Purchase Price Allocation for Tax purposes, unless
otherwise required pursuant to a "determination" within the meaning of Section
1313(a) of the Code.
Section 3.4 Risk of Loss. Subject to Section 8.16 hereof, until the
Closing, each Seller shall bear the risk of any loss or damage to its
Purchased Assets from fire, casualty or any other occurrence. Following the
Closing, Buyer shall bear the risk of any loss or damage to the Purchased
Assets from fire, casualty or any other occurrence.
ARTICLE IV.
PRORATIONS AND ADJUSTMENTS
Section 4.1 Estimated Closing Statements. The items listed in
subclauses (a) through (c) of this Section 4.1 shall, as of the Transfer Time
(or as specified below), be prorated, allocated and/or adjusted between Buyer
and the applicable Seller pursuant to a written closing statement for each
Property, as of the Transfer Time (or as specified below) (each, an "Estimated
Closing Statement"), to be prepared by the applicable Seller no less than five
(5) business days prior to the Closing Date, which shall be an estimated
accounting for such Seller's Property of the items set forth in subclauses (a)
through (c) of this Section 4.1. Any amounts determined to be due and owing to
a Seller pursuant to an Estimated Closing Statement shall be paid by Buyer at
the Closing pursuant to Section 3.1(b) (any such funds paid to Xxxxxx'x Seller
One being referred to herein as the "Xxxxxx'x Seller One Estimated Closing
Payment"; any such funds paid to Xxxxxx'x Seller Two being referred to herein
as the "Xxxxxx'x Seller Two Estimated Closing Payment"; any such funds paid to
Caesars Seller One being referred to herein as the "Caesars Seller One
Estimated Closing Payment"; any such funds paid to Caesars Seller Two being
referred to herein as the "Caesars Seller Two Estimated Closing Payment"; and
such funds being collectively referred to herein as the "Estimated Closing
Payment"). Any amounts determined to be due and owing to Buyer by a Seller
pursuant to an Estimated Closing Statement shall reduce the Purchase Price
payable to such Seller at Closing. Notwithstanding anything in this Agreement,
the Estimated Closing Payment shall be in addition to the Purchase Price.
(a) Property Taxes. As of the Closing, all real and personal property
Taxes for Tax periods beginning before and ending after the Closing Date shall
be prorated separately on a per diem basis as of the Closing Date using the
latest available rates and assessments, and the applicable Seller's
proportionate share of its property Taxes (which shall be determined on a per
diem basis from the beginning of the relevant Tax period through the day prior
to Closing) shall be credited to Buyer in the applicable Estimated Closing
Statement, subject to adjustment by the parties as promptly as practicable
after the Closing Date when each final tax xxxx becomes available. Buyer shall
promptly provide a copy of each final tax xxxx to the applicable Seller, but
in any event within seven (7) days of its receipt of such xxxx, and if the
amount credited to Buyer for such Seller's property Taxes determined at
Closing exceeds such Seller's proportionate share of property Taxes shown on
such final tax xxxx, Buyer shall pay such Seller (or if an Electing Seller,
its designated "qualified intermediary") an amount equal to such excess within
fourteen (14) days of Buyer's receipt of such xxxx. If the amount credited to
Buyer for such Seller's property Taxes determined at Closing is less than such
Seller's proportionate share thereof, such Seller (or if an Electing Seller,
its designated "qualified intermediary") shall pay Buyer the remaining balance
of its proportionate share of such property Taxes within seven (7) days of its
receipt of the copy of such xxxx. Subject to the foregoing proration
mechanism, all property Taxes relating to the Total Assets that become due and
payable on or after the Closing shall be paid solely by Buyer. Any Tax refunds
or rebates attributable to Tax periods (or portions thereof) ending before the
Closing Date shall be the property of the applicable Seller, and Buyer shall
pay promptly to such Seller any such amounts that it receives. Any Tax refunds
or rebates attributable to Tax periods (or portions thereof) beginning on or
after the Closing Date shall be the property of Buyer, and the applicable
Seller shall pay promptly to Buyer any such amounts (or portions thereof) that
it receives.
(b) Utilities. Utility meters will be read, to the extent that the
utility company will do so, during the daylight hours on the Closing Date (or
as near as practicable prior thereto), with charges to that time paid by the
applicable Seller and charges thereafter paid by Buyer. Prepaid utility
charges shall be adjusted on the applicable Estimated Closing Statement.
Charges for utilities which are un-metered, or the meters for which have not
been read on the Closing Date, will be prorated between Buyer and the
applicable Seller as of the Transfer Time. Each Seller or Buyer, as
appropriate, shall, upon receipt, submit a copy of the utility xxxxxxxx for
any such charges to the other party and such party (or if an Electing Seller,
its designated "qualified intermediary") shall pay its pro-rata share of such
charges to the other party (or if an Electing Seller, its designated
"qualified intermediary") within seven (7) days from the date of any such
request.
(c) Assumed Contracts. All income and expenses pursuant to the
Assumed Contracts will be prorated between Buyer and the applicable Seller as
of the Closing Date on the Closing Statement. Each Seller shall receive a
credit on each applicable Estimated Closing Statement for (a) the amount of
any prepaid rents or other amounts related to periods from and after the
Closing and (b) security deposits, or other deposits previously paid by such
Seller under the Assumed Contracts, less any such amounts paid to and
collected by such Seller under its Assumed Contracts. Any amounts received by
Buyer under its Assumed Contracts related to any period prior to the Closing
shall be promptly paid to the applicable Seller. Any amounts received by any
Seller under the Assumed Contracts related to any period after the Closing
shall be promptly paid to Buyer.
Section 4.2 Estimated Operations Settlements. Not less than five (5)
business days prior to the Closing Date, each Seller shall deliver to Buyer an
estimated accounting for its Property as of the Transfer Time of the items set
forth in subclauses (a) through (f) of this Section 4.2 (such accounting for
each Seller, an "Estimated Operations Settlement"). Such amounts determined to
be due and owing to a Seller or to Buyer, as applicable, pursuant to an
Estimated Operations Settlement shall be paid by Buyer or the appropriate
Seller, as applicable, at the Closing pursuant to Section 3.1(b) hereof (any
such funds paid to or from Xxxxxx'x Seller One being referred to herein as the
"Xxxxxx'x Seller One Estimated Operations Payment"; any such funds paid to or
from Xxxxxx'x Seller Two being referred to herein as the "Xxxxxx'x Seller Two
Estimated Operations Payment"; any such funds paid to or from Caesars Seller
One being referred to herein as the "Caesars Seller One Estimated Operations
Payment"; any such funds paid to or from Caesars Seller Two being referred to
herein as the "Caesars Seller Two Estimated Operations Payment"; and such
funds are collectively referred herein as the "Estimated Operations Payment").
Any amounts determined to be due and owing to Buyer by a Seller pursuant to an
Estimated Closing Statement shall reduce the Purchase Price payable to such
Seller at Closing. Notwithstanding anything in this agreement, the Estimated
Closing Payment shall be in addition to the Purchase Price. Notwithstanding
anything in this Agreement, the Estimated Operations Payment shall be in
addition to the Purchase Price.
(a) Tray Ledger. Buyer shall purchase the Tray Ledger for each
Property from the applicable Seller pursuant to the procedures set forth in
this Section 4.2 for the face amount of such Tray Ledger. The Tray Ledgers are
not included in the Purchase Price and the purchase price therefor shall be in
addition to the Purchase Price.
(b) House Funds. Buyer and the applicable Seller shall mutually agree
upon a procedure for counting and determining all House Funds as of the
Transfer Time for each Property and Buyer shall pay to the applicable Seller,
pursuant to the procedures set forth in this Section 4.2, the amount of House
Funds in excess of the Minimum Cash for such Seller's Property. Buyer shall
have no obligation to purchase chips or tokens of other casinos, all of which
shall be retained by the applicable Seller and are excluded from the
transaction contemplated herein. The House Funds in excess of the Minimum Cash
are not included in the Purchase Price and the purchase price therefor shall
be in addition to the Purchase Price.
(c) Adjustment for Progressive Liabilities. The applicable Seller (or
if an Electing Seller, its designated "qualified intermediary") shall pay to
Buyer an amount equal to the amounts shown on:
(i) the face amount of such Seller's progressive slot machine meters
as of the Transfer Time (if not removed by the vendor at or before the
Transfer Time); and
(ii) the face amount of the meters for such Seller's table games with
an in-house progressive jackpot feature as of the Transfer Time.
(d) Markers. Buyer shall purchase the Markers for each Property from
the applicable Seller pursuant to the procedures set forth in this Section 4.2
for the face amount of such Markers. The Markers are not included in the
Purchase Price and the purchase price therefor shall be in addition to the
Purchase Price.
(e) Homebuyer Guarantee Program. In connection with Xxxxxx'x Seller
One's obligations under the East Chicago Homebuyer Guarantee Program
Reimbursement Agreement by and between Xxxxxx'x Seller One and Mercantile
National Bank of Indiana ("Mercantile Bank") and that certain letter agreement
dated March 4, 2002 from Mercantile Bank and Xxxxxx'x Seller One to Xx. Xxxxx
Xxxxxxxxx regarding the East Chicago Home Guarantee Program (collectively, the
"Homebuyer Guarantee Program"), Xxxxxx'x Seller One has guaranteed certain
mortgage loans made by Mercantile Bank. Pursuant to the Homebuyer Guarantee
Program, upon a change of control, Xxxxxx'x Seller One is required to deposit
certain amounts with Mercantile Bank in connection with the guarantee of
certain mortgage loans made by Mercantile Bank (any such required deposits are
herein referred to as the "Homebuyer Guarantee Amount"). Subject to Section
2.1(a)(x) hereof, at the time of the Closing, Buyer shall deposit the
Homebuyer Guarantee Amount with Mercantile Bank pursuant to the procedures set
forth in this Section 4.2 and in satisfaction of the obligations under the
Homebuyer Guarantee Program. Subject to Section 2.1(a)(x) hereof, the
Homebuyer Guarantee Amount is not included in the Purchase Price and shall be
in addition to the Purchase Price. Any rights to the Homebuyer Guarantee
Amount or interest thereon following the Closing shall be the property of
Buyer. As of the date hereof, the Liabilities of Xxxxxx'x Seller One for
mortgages guaranteed under the Homebuyer Guarantee Program are set forth in
Section 4.2(e) of Xxxxxx'x Seller One's Seller Disclosure Letter.
Section 4.3 Final Adjustments.
(a) As soon as reasonably practicable following the Closing Date, but
in no event more than five (5) business days after the Closing Date, each
Seller shall deliver to Buyer a final accounting in the aggregate amount for
its Property of the items set forth in subclauses (b) and (c) of Section 4.1
hereof (such final accounting for each Seller, a "Final Closing Statement").
Any such amounts determined pursuant to any Final Closing Statement shall be
paid to either a Seller or Buyer pursuant to Section 4.3(d) hereof (any such
amount with respect to Xxxxxx'x Seller One being referred to herein as the
"Xxxxxx'x Seller One Final Closing Payment"; any such amount with respect to
Xxxxxx'x Seller Two being referred to herein as the "Xxxxxx'x Seller Two Final
Closing Payment"; any such amount with respect to Caesars Seller One being
referred to herein as the "Caesars Seller One Final Closing Payment"; and any
such amount with respect to Caesars Seller Two, being referred to herein as
the "Caesars Seller Two Final Closing Payment"). The final adjustments with
respect to real and personal property Taxes shall be made pursuant to the
terms set forth in Section 4.1(a) hereof.
(b) As soon as reasonably practicable following the Closing Date, but
in no event more than five (5) business days after the Closing Date, each
Seller shall deliver to Buyer a final accounting for its Property as of the
Transfer Time of the items set forth in subclauses (a) through (e) of Section
4.2 hereof (such final accounting for each Seller, a "Final Operations
Settlement"). Any such amounts determined pursuant to any Final Operations
Settlement shall be paid to either a Seller or Buyer pursuant to Section
4.3(d) hereof (any such amount with respect to Xxxxxx'x Seller One being
referred herein as the "Xxxxxx'x Seller One Final Operations Payment"; any
such amount with respect to Xxxxxx'x Seller Two being referred herein as the
"Xxxxxx'x Seller Two Final Operations Payment"; any such amount with respect
to Caesars Seller One being referred to herein as the "Caesars Seller One
Final Operations Payment"; and any such amount with respect to Caesars Seller
Two being referred herein as the "Caesars Seller Two Final Operations
Payment").
(c) If Buyer disagrees with the calculation of any amounts on any
Final Closing Statement or any Final Operations Settlement, it shall within
fifteen (15) business days after its receipt of such Final Closing Statement
or Final Operations Settlement, notify each of the Sellers of such
disagreement in writing, setting forth in detail the particulars of such
disagreement. Each Seller will provide Buyer reasonable access to any such
Seller's records not otherwise available to Buyer as a result of the
transactions contemplated hereby, to the extent reasonably related to Buyer's
review of the Final Closing Statements and the Final Operations Settlements.
If Buyer does not provide such notice of disagreement within such fifteen (15)
business day period, Buyer shall be deemed to have accepted such Final Closing
Statement or such Final Operations Settlement and the calculation of all
amounts set forth on such Final Closing Statement or such Final Operations
Settlement delivered by each Seller, which shall be final, binding and
conclusive for purposes of this Agreement and not subject to any further
recourse by Buyer under any provision hereof. If any such notice of
disagreement is timely provided, Buyer and the applicable Seller shall use
reasonable best efforts for a period of five (5) business days (or such longer
period as they may mutually agree) to resolve any disagreements with respect
to the calculation of any and all amounts set forth on such Final Closing
Statement or such Final Operations Settlement. If, at the end of such period,
they are unable to resolve such disagreements, then the Auditor shall resolve
any remaining disagreements. The Auditor shall consider only such matters to
which there is a disagreement and shall determine as promptly as practicable
whether such disputed amounts set forth on such Final Closing Statement or
such Final Operations Settlement were prepared in accordance with the
standards set forth in this Agreement. The Auditor shall promptly deliver to
Buyer and the applicable Seller its determination in writing, which
determination shall be made subject to the definitions and principles set
forth in this Agreement, and shall be consistent with either the position of
the applicable Seller or Buyer. Each Seller and Buyer shall bear its own
expenses in the preparation and review of each Estimated Closing Statement,
Final Closing Statement, Estimated Operations Settlement and Final Operations
Settlement, except that the fees and expenses of the Auditor shall be paid
one-half by Buyer and one-half by such Seller of the Property involved in the
dispute resolution process. The determination of the Auditor shall be final,
binding and conclusive for purposes of this Agreement and not subject to any
further recourse by Buyer or Seller under any provision hereof. Any dispute
with respect to any Final Closing Statement or Final Operations Settlement
will not affect any undisputed Final Closing Statement or Final Operations
Settlement or the payments contemplated by Section 4.3(d) hereof. The date on
which all amounts set forth on each Final Closing Statement or Final
Operations Settlement is finally determined in accordance with this Section
4.3(c) is hereinafter referred to, with respect to each Final Closing
Statement or Final Operations Settlement, as the "Determination Date."
(d) Any amounts determined to be due and owing to any Seller from
Buyer or to Buyer from any Seller, as applicable, pursuant to this Section 4.3
shall be paid by the applicable Seller (or if an Electing Seller, its
designated "qualified intermediary") to Buyer or by Buyer to the applicable
Seller (or if an Electing Seller, its designated "qualified intermediary")
within two (2) business days after the applicable Determination Date, in
accordance with the following provisions:
(i) With respect to Xxxxxx'x Seller One: (x) if the Xxxxxx'x Seller
One Final Closing Payment is greater than the Xxxxxx'x Seller One Estimated
Closing Payment, then Buyer shall pay Xxxxxx'x Seller One the difference
between such amounts; (y) if the Xxxxxx'x Seller One Final Closing Payment is
less than the Xxxxxx'x Seller One Estimated Closing Payment, then Xxxxxx'x
Seller One shall pay Buyer the difference between such amounts; and (z) if the
Xxxxxx'x Seller One Final Closing Payment is equal to the Xxxxxx'x Seller One
Estimated Closing Payment, then no payment shall be made.
(ii) With respect to Xxxxxx'x Seller Two: (x) if the Xxxxxx'x Seller
Two Final Closing Payment is greater than the Xxxxxx'x Seller Two Estimated
Closing Payment, then Buyer shall pay Xxxxxx'x Seller Two the difference
between such amounts; (y) if the Xxxxxx'x Seller Two Final Closing Payment is
less than the Xxxxxx'x Seller Two Estimated Closing Payment, then Xxxxxx'x
Seller Two shall pay Buyer the difference between such amounts; and (z) if the
Xxxxxx'x Seller Two Final Closing Payment is equal to the Xxxxxx'x Seller Two
Estimated Closing Payment, then no payment shall be made.
(iii) With respect to Caesars Seller One: (x) if the Caesars Seller
One Final Closing Payment is greater than the Caesars Seller One Estimated
Closing Payment, then Buyer shall pay Caesars Seller One the difference
between such amounts; (y) if the Caesars Seller One Final Closing Payment is
less than the Caesars Seller One Estimated Closing Payment, then Caesars
Seller One shall pay Buyer the difference between such amounts; and (z) if the
Caesars Seller One Final Closing Payment is equal to the Caesars Seller One
Estimated Closing Payment, then no payment shall be made.
(iv) With respect to Caesars Seller Two: (x) if the Caesars Seller
Two Final Closing Payment is greater than the Caesars Seller Two Estimated
Closing Payment, then Buyer shall pay Caesars Seller Two the difference
between such amounts; (y) if the Caesars Seller Two Final Closing Payment is
less than the Caesars Seller Two Estimated Closing Payment, then Caesars
Seller Two shall pay Buyer the difference between such amounts; and (z) if the
Caesars Seller Two Final Closing Payment is equal to the Caesars Seller Two
Estimated Closing Payment, then no payment shall be made.
(v) With respect to Xxxxxx'x Seller One: (x) if the Xxxxxx'x Seller
One Final Operations Payment is greater than the Xxxxxx'x Seller One Estimated
Operations Payment, then Buyer shall pay Xxxxxx'x Seller One the difference
between such amounts; (y) if the Xxxxxx'x Seller One Final Operations Payment
is less than the Xxxxxx'x Seller One Estimated Operations Payment, then
Xxxxxx'x Seller One shall pay Buyer the difference between such amounts; and
(z) if the Xxxxxx'x Seller One Final Operations Payment is equal to the
Xxxxxx'x Seller One Estimated Operations Payment, then no payment shall be
made.
(vi) With respect to Xxxxxx'x Seller Two: (x) if the Xxxxxx'x Seller
Two Final Operations Payment is greater than the Xxxxxx'x Seller Two Estimated
Operations Payment, then Buyer shall pay Xxxxxx'x Seller Two the difference
between such amounts; (y) if the Xxxxxx'x Seller Two Final Operations Payment
is less than the Xxxxxx'x Seller Two Estimated Operations Payment, then
Xxxxxx'x Seller Two shall pay Buyer the difference between such amounts; and
(z) if the Xxxxxx'x Seller Two Final Operations Payment is equal to the
Xxxxxx'x Seller Two Estimated Operations Payment, then no payment shall be
made.
(vii) With respect to Caesars Seller One: (x) if the Caesars Seller
One Final Operations Payment is greater than the Caesars Seller One Estimated
Operations Payment, then Buyer shall pay Caesars Seller One the difference
between such amounts; (y) if the Caesars Seller One Final Operations Payment
is less than the Caesars Seller One Estimated Operations Payment, then Caesars
Seller One shall pay Buyer the difference between such amounts; and (z) if the
Caesars Seller One Final Operations Payment is equal to the Caesars Seller One
Estimated Operations Payment, then no payment shall be made.
(viii) With respect to Caesars Seller Two: (x) if the Caesars Seller
Two Final Operations Payment is greater than the Caesars Seller Two Estimated
Operations Payment, then Buyer shall pay Caesars Seller Two the difference
between such amounts; (y) if the Caesars Seller Two Final Operations Payment
is less than the Caesars Seller Two Estimated Operations Payment, then Caesars
Seller Two shall pay Buyer the difference between such amounts; and (z) if the
Caesars Seller Two Final Operations Payment is equal to the Caesars Seller Two
Estimated Operations Payment, then no payment shall be made.
Section 4.4 Accounts Receivable; Deposits. (a) Accounts Receivable.
The collection of all Accounts Receivable of each Seller accruing prior to the
Transfer Time shall be the responsibility of each Seller. Following the
Closing, Buyer shall, to the extent requested by the applicable Seller, use
reasonable efforts to collect any such Accounts Receivable for such Seller,
and if Buyer collects same, such amounts will be paid over to such Seller
immediately. In the event a Seller receives cash or other property in respect
of accounts receivable relating to its Property arising on or after the
Closing Date, such Seller shall promptly pay such amounts to Buyer.
(b) Deposits. No Seller shall have further liability or
responsibility after Closing with respect to any deposits for post-Closing
matters and the applicable Seller shall be entitled to retain deposits to the
extent of rooms and/or services furnished by such Seller for pre-Closing
matters and relating to the pre-Closing period. Deposits include all security
and other deposits, advance or pre-paid rents or other amounts and key money
or deposits (including, without limitation, any interest thereon).
ARTICLE V.
CLOSING
Section 5.1 Time and Place.
(a) Unless this Agreement is earlier terminated pursuant to Article X
hereof, the closing of the transactions contemplated by this Agreement,
including the purchase and sale of the Total Assets and the assumption of the
Assumed Liabilities (the "Closing"), shall take place on the third business
day following satisfaction or waiver of all the conditions set forth in
Article IX hereof (other than those conditions to be satisfied or waived at
the Closing), at 12:00 noon, New York City time, at the corporate offices of
either Caesars or Xxxxxx'x (as chosen by the Sellers), unless another time or
place shall be agreed to by the parties (the "Closing Date"); provided,
however, that in the event Buyer has not obtained all required Gaming
Approvals and all the other conditions set forth in Article IX hereof have
been satisfied or waived, the Closing shall take place on the third business
day following Buyer's receipt of the Gaming Approvals, subject to Buyer's and
each of the Sellers' right to terminate this Agreement pursuant to Section
10.1 hereof; provided, further, that the Closing Date shall not be after the
date that is six (6) months after the date hereof (the "Scheduled Closing
Date"), unless:
(i) Buyer deposits with the Escrow Agent an additional Five
Million Dollars ($5,000,000) (which amount shall be included
in the Deposit for all purposes of this Agreement); and
(ii) Buyer has not received all Gaming Approvals on or before
three (3) business days before the Scheduled Closing Date,
then the Closing Date shall be extended to the earlier of:
(A) three (3) business days after Buyer receives all Gaming
Approvals; and
(B) 30 days after the Scheduled Closing Date (the
"First Extended Closing Date"); provided, further,
that the Closing Date shall not be after the First
Extended Closing Date, unless:
(i) Buyer has scheduled with the applicable
Governmental Entities final hearings for
all Gaming Approvals;
(ii) Buyer deposits with the Escrow Agent an
additional Five Million Dollars
($5,000,000) (which amount shall be
included in the Deposit for all purposes
of this Agreement); and
(iii) Buyer has not received all Gaming
Approvals on or before two (2) business
days before the First Extended Closing
Date, then the Closing Date shall be
extended to the earlier of:
(A) three (3) business days after Buyer
receives the Gaming Approvals; and
(B) 30 days after the First Extended
Closing Date (the "Second Extended
Closing Date"); provided, further,
that the Closing Date shall not be
after the Second Extended Closing
Date, unless:
(i) Buyer has scheduled with
the applicable
Governmental Entities
final hearings for all
Gaming Approvals;
(ii) Buyer deposits with the
Escrow Agent an
additional Five Million
Dollars ($5,000,000)
(which amount shall be
included in the Deposit
for all purposes of this
Agreement); and
(iii) Buyer has not received
all Gaming Approvals on
or before three (3)
business days before the
Second Extended Closing
Date, then the Closing
Date shall be extended to
the earlier of:
(A) three (3) business
days after Buyer
receives the Gaming
Approvals; and
(B) 30 days after the
Second Extended
Closing Date (the
"Third Extended
Closing Date").
(b) Any amounts delivered pursuant to this Section 5.1(a) by the
Buyer to the Escrow Agent shall be allocated pro rata between the Xxxxxx'x
Sellers and the Caesars Sellers in the same proportion as the Deposit
delivered by the Buyer to the Escrow Agent pursuant to the initial deposit set
forth in Section 3.2(a) hereof.
Section 5.2 Deliveries at Closing. The following documents will be
executed and delivered by Buyer and each applicable Seller or Sellers at or
prior to the Closing:
(a) Xxxx of Sale for Personal Property. Each Seller shall execute and
deliver to Buyer, and Buyer shall execute an acceptance of, a separate Xxxx of
Sale and Assignment in the form attached as Exhibit B, which form may be
modified to the extent required by local Law, conveying to Buyer all the
Acquired Personal Property of such Seller.
(b) Assumed Contracts; Assumed Liabilities. Buyer and each Seller
shall execute and deliver a separate Assignment and Assumption
Agreement--Assumed Contracts and Assumed Liabilities in the form attached as
Exhibit C, which form may be modified to the extent required by local Law, to
transfer the Assumed Liabilities applicable to such Seller's Property and to
such Seller's Purchased Assets to Buyer, and Buyer and each Seller agrees to
execute and deliver such other assumption agreements or other documents
required by any Person to effectuate the assumption of the Assumed Liabilities
applicable to such Seller's Property and to such Seller's Purchased Assets.
(c) Non-Foreign Affidavit. Each Seller (or the appropriate Affiliate
of such Seller) shall execute and deliver a separate Non-Foreign Affidavit in
the form attached as Exhibit D.
(d) Vessel Xxxx of Sale. Each of Xxxxxx'x Seller One, Xxxxxx'x Seller
Two and Caesars Seller Two shall execute and deliver a separate Xxxx of
Sale--Vessel in the form attached as Exhibit E, which form may be modified to
the extent required by local Law, and deliver to Buyer the original
Certificate of Documentation for each Vessel, if available, or such other
documents as necessary from the record owner thereof to have each Vessel
redocumented with the U.S. Coast Guard to the extent such documentation is
reasonably available.
(e) Transfer of Guest Safe Deposit Items. Buyer and each Seller shall
confirm the transfer of guest safety deposit box contents and the contents of
the main safe controlled by each Seller belonging to guests (excluding safes
located in guest rooms) by executing and delivering a separate Confirmation of
Transfer of Guest Items in the form attached as Exhibit F, which form may be
modified to the extent required by local Law.
(f) Assumption of Progressive Post-Closing Slot Machine Liabilities.
Buyer shall execute and deliver to each Seller a separate Assumption of
Progressive Slot Machine Post-Closing Liabilities in the form attached as
Exhibit G, which form may be modified to the extent required by local Law.
(g) Transfer of Guest Baggage. Buyer and each Seller shall confirm
the transfer of guest baggage entrusted to such Seller by executing and
delivering a separate Confirmation of Transfer of Guest Baggage in the form
attached as Exhibit H, which form may be modified to the extent required by
local Law.
(h) Vehicle Titles. Each Seller shall execute and deliver to Buyer
certificates of titles, endorsed for transfer to Buyer, for its
Passenger/Delivery Vehicles along with a separate Xxxx of
Sale--Passenger/Delivery Vehicles therefor in the form attached as Exhibit I,
which form may be modified to the extent required by local Law.
(i) FCC Licenses. As to each FCC License for which an FCC Approval
has been issued prior to the Closing, Buyer and each Seller, as applicable,
shall execute and deliver a separate Assignment and Assumption of FCC Licenses
in the form attached as Exhibit J.
(j) Closing Escrow Agreement. Each Seller, along with the Buyer and
the Escrow Agent (or its designee), shall execute and deliver not later than
two (2) business days prior to the Closing (or such other date mutually agreed
by Sellers and Buyer), the closing escrow agreement in substantially the form
attached hereto as Exhibit K (the "Closing Escrow Agreement").
(k) Buyer Certificates. Buyer shall deliver to each Seller the
certificates required by Sections 9.3(b) and (c) hereof.
(l) Seller Certificates. Each Seller shall deliver to Buyer and to
the other Sellers the certificates required by Sections 9.2(a), (b) and (c)
hereof.
(m) Customer List. Each Seller shall deliver to Buyer a copy (in
electronic form) of that portion of its Customer Database that includes the
names and certain key tendencies of customers listed in such Customer
Database, which have visited its Property during the 24 month period prior to
the Closing (but which may not include such data for the 48 hour period prior
to the Transfer Time) (as it relates to each Seller, its "Customer List"),
which Customer Lists shall be in substantially the same format and contain the
type of information set forth on Section 5.2(m) of each Seller Disclosure
Letter. Each Seller and Buyer hereto shall cooperate with each other's
reasonable requests for assistance in the solicitation of any required
customers' consents for such transfer of each Customer List, including without
limitation cooperation in a mailing approximately forty-five (45) days prior
to the Closing to solicit any consents (or "opt-out" notices to the extent
available under applicable Law) reasonably required by either such Seller or
Buyer of the customers on each Customer List.
(n) Special Warranty Deed. Each of the Caesars Sellers shall execute
and deliver to Buyer, and Buyer shall accept, (i) with respect to the Caesar's
Seller Two Land, a separate special warranty deed (or similar document)
substantially in the form attached as Exhibit L-1, and (ii) with respect to
Caesar's Seller One Land, one (1) or more Bargain and Sale Deeds with
covenants against and grantor's acts, each in the form attached hereto as
Exhibit L-2 which forms may be modified to the extent required by local Law,
conveying to Buyer all of such Seller's right, title and interest in its
Property (other than with respect to the leased portions of the Casino C
Property and the Casino D Property), in recordable form, free and clear of
Encumbrances, except the Permitted Encumbrances.
(o) Assignment of Leases. Xxxxxx'x Seller One and Buyer shall each
execute and deliver an Assignment of Lease with respect to the Casino A
Property in the form attached hereto as Exhibit M, which form may be modified
to the extent required by local Law. Xxxxxx'x Seller Two and Buyer shall each
execute and deliver an Assignment of Lease with respect to the Casino B
Property in the form attached hereto as Exhibit M, which form may be modified
to the extent required by local Law. Xxxxxx'x Seller Two and Buyer shall each
execute an Assignment of Lease in the form attached hereto as Exhibit M, in
which Xxxxxx'x Seller Two shall assign its interest as Landlord under that
certain Sublease, dated as of June 21, 1996 between Xxxxxx'x Seller Two, as
landlord, and Tunica Golf Course LLC, as tenant. The Caesars Seller Two and
Buyer shall each execute and deliver an Assignment of Lease with respect to
the leased portions of the Casino C Property and the Casino D Property in the
form attached hereto as Exhibit M, which form may be modified to the extent
required by local Law. Caesars Seller One and Buyer shall each execute and
deliver an Assignment of Lease with respect to the Space Lease Documents in
the form attached hereto as Exhibit M.
(p) Assignment of Membership Interests. Xxxxxx'x Seller Two shall
execute and deliver an Assignment of Membership Interests with respect to its
membership interests in Tunica Golf Course LLC in the form attached hereto as
Exhibit N.
(q) Owner's Affidavit. Each Seller shall execute and deliver to the
Title Insurer owner's affidavits as reasonably required by the Title Insurer,
and in a form reasonably acceptable to such Seller, as necessary to issue the
Title Policy (including causing the deletion of the standard pre-printed
exceptions).
(r) Survey and Title Policy. Seller shall deliver (or cause to be
delivered) to Buyer the updated and recertified Survey and the Title Policy
pursuant to Article XII below.
(s) License Agreement. Buyer and Xxxxxx'x Operating Company, Inc.,
and Buyer and Caesars shall execute and deliver a license agreement in the
form attached as Exhibit O.
(t) Lease Agreement. Buyer and Caesars Seller One shall execute and
deliver a leaseback agreement for an initial term of not more than three (3)
months plus three additional one (1) month renewal options (such renewal
options to be exercised in Caesars Seller One's sole discretion) and on other
commercially reasonable terms reasonably agreed to by the parties for Caesars
exclusive use of that portion of the Wellington Avenue Property not currently
used as of the date hereof for employee parking.
(u) Port Facility Lease Notice. Caesars Seller Two shall deliver to
landlord under the Port Facility Lease a notice of assignment to landlord
under the Port Facility Lease in a form reasonably acceptable to Buyer.
(v) Old River Lease Consent. Caesar Seller Two shall deliver to Buyer
a notice stating that the consent to the transfer dated September 22, 2004 and
delivered to Buyer prior to the date hereof from the ground lessor under the
Old River Lease is in effect as of the Closing.
(w) Audited Financials. Not less than five (5) days prior to the
Closing, each Seller shall have delivered the 2003 Audited Financials and the
September 30, 2004 financial information defined in Section 8.5(a)(ii);
provided, however, that delivery of the 2003 Audited Financials and the
September 30, 2004 financial information defined in Section 8.5(a)(ii) shall
not be required if the inability of Seller to deliver the 2003 Audited
Financials and such other information by such date was caused by any action,
or inaction, of Buyer or its Affiliates. If the Closing has not occurred prior
to February 15, 2005, not less than five (5) days prior to the Closing, each
Seller shall have delivered , in addition to the financial information
contemplated by the immediately preceding sentence, the 2004 Audited
Financials; provided, however, that delivery of the 2004 Audited Financials
shall not be required if (i) the Financing contemplated by the Debt Financing
Commitment would be available on the terms set forth in the Debt Financing
Commitment without the 2004 Audited Financials or (ii) the inability of Seller
to deliver the 2004 Audited Financials by such date was caused by any action,
or inaction, of Buyer or its Affiliates.
(x) Other Documents. Each party shall deliver any other documents,
instruments or agreements which are reasonably requested by another party that
are reasonably necessary to consummate the transactions contemplated hereby
and have not previously been delivered.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller, severally and not jointly, represents and warrants to
Buyer, with respect to only itself, except as set forth herein and in the
Disclosure Letter delivered by each Seller to Buyer on the date of this
Agreement (each, a "Seller Disclosure Letter" and together, the "Seller
Disclosure Letters"), as follows (it being agreed and understood that,
notwithstanding anything else contained in this Agreement, (i) neither
Xxxxxx'x, Xxxxxx'x Seller One, Xxxxxx'x Seller Two nor any of their Affiliates
is making any representations or warranties with respect to Caesars, Caesars
Seller One, Caesars Seller Two, the Casino C Property or the Casino D
Property; (ii) Xxxxxx'x Seller One is not making any representations or
warranties with respect to Xxxxxx'x Seller Two or the Casino B Property; (iii)
Xxxxxx'x Seller Two is not making any representations or warranties with
respect to Xxxxxx'x Seller One or the Casino A Property; (iv) neither Caesars,
Caesars Seller One, Caesars Seller Two nor any of their Affiliates is making
any representations or warranties with respect to Xxxxxx'x, Xxxxxx'x Seller
One, Xxxxxx'x Seller Two or the Casino A Property or the Casino B Property;
(v) Caesars Seller One is not making any representations or warranties with
respect to Caesars Seller Two or the Casino D Property and (vi) Caesars Seller
Two is not making any representations or warranties with respect to Caesars
Seller One or the Casino C Property):
Section 6.1 Organization of Seller. Seller is duly organized, validly
existing and in good standing under the laws of its state of organization and
has all requisite power and authority to own, operate and lease its properties
and assets and to carry on its business as now being conducted. Seller is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so qualified, licensed or in good
standing would not have a Seller Material Adverse Effect. Seller does not have
any Subsidiaries and except as set forth on Section 6.1 of the Seller
Disclosure Letter does not own the stock of, or any equity participation in,
any Person.
Section 6.2 Authority; No Conflict; Required Filings and Consents.
(a) Seller has all requisite power and authority to enter into this
Agreement and to consummate the transactions to which it is a party that are
contemplated by this Agreement and to perform its obligations hereunder and
the agreements contemplated hereby. The execution and delivery of this
Agreement by Seller and the consummation by Seller of the transactions to
which it is a party that are contemplated by this Agreement have been duly
authorized by all necessary action on the part of Seller. This Agreement has
been duly executed and delivered by Seller and, assuming this Agreement
constitutes the valid and binding obligation of Buyer, constitutes the valid
and binding obligation of Seller, enforceable against Seller in accordance
with its terms, subject, as to enforcement, to (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereinafter in
effect affecting creditors' rights generally and (ii) general principles of
equity.
(b) The execution and delivery of this Agreement by Seller does not,
and the consummation by Seller of the transactions to which it is a party that
are contemplated by this Agreement will not, (i) conflict with, or result in
any violation or breach of, any provision of the certificate of incorporation,
bylaws or other organization documents of Seller, (ii) result in any violation
or breach of, or constitute (with or without notice or lapse of time, or both)
a default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any material benefit) under, or
require a consent or waiver under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, Contract or obligation to which
Seller is a party or by which Seller or any of its Purchased Assets may be
bound, (iii) subject to the governmental filings and other matters referred to
in Section 6.2(c) hereof, conflict with or violate any permit, concession,
franchise, license, judgment, or Law applicable to Seller or its Purchased
Assets or (iv) result in the imposition or creation of any Lien upon or with
respect to any Property other than a Permitted Encumbrance, except in the case
of clauses (ii) and (iii) for any such breaches, conflicts, violations,
defaults, terminations, cancellations, accelerations, losses or failures to
obtain any such consent or waiver which (x) are not, individually or in the
aggregate, reasonably likely to have a Seller Material Adverse Effect or (y)
would not materially impair or materially delay the Closing.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency, commission,
gaming authority, regulatory body or other governmental authority or
instrumentality ("Governmental Entity") is required by or with respect to
Seller in connection with the execution and delivery of this Agreement by
Seller or the consummation by Seller of the transactions to which it is a
party that are contemplated hereby, except for (i) the filing of the
pre-merger notification report under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended ("HSR Act"), (ii) any approvals or filing
of notices required under the Gaming Laws, (iii) such consents, approvals,
orders, authorizations, permits, filings, declarations or registrations
related to, or arising out of, compliance with statutes, rules or regulations
regulating the consumption, sale or serving of alcoholic beverages or tobacco
products or the renaming or rebranding of the operations at the Property owned
and operated by Seller, (iv) such other filings, consents, approvals, orders,
authorizations, permits, registrations and declarations as may be required
under the Laws of any jurisdiction in which Seller conducts any business or
owns any assets, the failure of which to make or obtain would not,
individually or in the aggregate, be reasonably likely to have a Seller
Material Adverse Effect and (v) any consents, approvals, orders,
authorizations, registrations, permits, declaration or filings required by
Buyer or any of its Subsidiaries, Affiliates or key employees (including,
without limitation, under the Gaming Laws).
Section 6.3 Financial Statements. The data site as of 12:00 p.m. Las
Vegas time on September 23, 2004 or Section 6.3 of the Seller Disclosure
Letter contains a true and complete copy of the audited financial information
relating to the Property owned and operated by such Seller for the twelve (12)
months ended December 31, 2003 and the unaudited financial information related
to the Property owned and operated by such Seller for the six months ended
June 30, 2004 (collectively, the "Financial Information"). The Financial
Information was, and as of the Closing, the audited financial information
related to the Property for the twelve months ended December 31, 2004, if such
financial information is available as of the Closing, will be, prepared in
accordance with generally accepted accounting principles in effect at the time
of such preparation applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial
statements) and fairly presented in all material respects (but without
reflecting Seller as a stand alone entity) the consolidated financial position
of the Property as of such date subject, in the case of unaudited statements,
to normal year-end adjustments and the absence of footnotes. Notwithstanding
the foregoing, Buyer acknowledges that such Financial Information was prepared
by Seller or its Affiliates for internal purposes, reflects allocation of some
but not necessarily all costs incurred by Affiliates of Seller for its
benefit, and that no representation or warranty is made that Buyer will be
able to operate its Property for the costs reflected in the Financial
Information.
Section 6.4 No Undisclosed Liabilities. Except (i) as set forth in
the Financial Information, (ii) for Excluded Liabilities, (iii) for
Liabilities incurred since December 31, 2003 in the Ordinary Course of
Business or (iv) as set forth on Section 6.4 of the Seller Disclosure Letter,
Seller has no Liabilities which would, individually or in the aggregate,
reasonably be expected to cause a Seller Material Adverse Effect.
Section 6.5 Taxes.
(a) To the Seller's knowledge, Seller has timely filed with the
appropriate Governmental Entities all material Tax Returns required to be
filed, and all such Tax Returns are correct and complete in all material
respects. Seller has timely paid all Taxes (whether or not shown on any such
Tax Return) or has established an adequate reserve therefor in accordance with
GAAP, except as which would not, individually or in the aggregate, reasonably
be expected to cause a Seller Material Adverse Effect.
(b) Other than as set forth on Section 6.5(b) of the Seller
Disclosure Letter, no claims in writing, actions, audits or other proceedings
with any Governmental Entities are presently pending or, to the knowledge of
Seller, threatened in writing in respect of any Taxes of Seller, which, if
due, would, individually or in the aggregate, reasonably be expected to cause
a Seller Material Adverse Effect. There are no outstanding waivers extending
the statutory period of limitation relating to Taxes of Seller.
(c) There are no Liens for Taxes (other than Liens for Taxes not yet
due and payable) on the Purchased Assets, except as which would not,
individually or in the aggregate, reasonably be expected to cause a Seller
Material Adverse Effect. None of the assets of Seller (other than the Excluded
Assets) are required to be treated for Tax purposes as owned by any Person,
other than Seller.
(d) Seller has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, partner, or other third party, that relate
to the business and operations conducted at Seller's Property or its Purchased
Assets, except as would not, individually or in the aggregate, reasonably be
expected to cause a Seller Material Adverse Effect. All material IRS Forms W-2
and 1099 required with respect thereto have been properly completed and timely
filed.
Section 6.6 Title to Personal Property; Liens.
(a) Seller has good and valid title to, or an adequate leasehold
interest in Seller's Purchased Assets, except as would not, individually or in
the aggregate, reasonably be expected to cause a Seller Material Adverse
Effect. Other than as disclosed in the Vessel abstracts made available to
Buyer prior to the date hereof and other Permitted Encumbrances, Seller has
good and valid title to the Vessels free and clear of any and all Monetary
Encumbrances and other Encumbrances. Seller's Purchased Assets are
sufficiently free of Liens to allow Seller to conduct the businesses
undertaken at Seller's Property, and to the knowledge of Seller, the
consummation of the transactions contemplated by this Agreement will not alter
or impair such ability in any material respect.
(b) No Affiliate of Seller owns or has any rights from and after the
Closing in or to any of Seller's Purchased Assets other than as set forth on
the Caesars Seller One Disclosure Letter.
Section 6.7 Real Property.
(a) Section 6.7(a) of the Xxxxxx'x Seller One Disclosure Letter,
Xxxxxx'x Seller Two Disclosure Letter and Caesars Seller Two Disclosure Letter
identifies all real property owned or leased by such Seller, Section 6.7(a)(i)
of the Caesars Seller One Disclosure Letter identifies all real property owned
or leased by GNOC Corporation, Section 6.7(a)(ii) of the Caesars Seller One
Disclosure Letter identifies the real property owned by Bally's Park Place,
Inc. to be transferred to Buyer, and Section 6.7(a)(iii) of the Caesars Seller
One Disclosure Letter identifies the real property owned by Land Ventures
Realty LLC to be transferred to Buyer (as related to each Seller, together
with all of the Seller's rights, title and interest in and to all land,
buildings, structures, easements, appurtenances and improvements thereon,
collectively the "Real Property").
(b) Seller has a good and valid leasehold or fee simple interest in
the Real Property, free and clear of any and all Liens, Encumbrances,
restrictions, leases, subleases, assignments, occupancy agreements, options to
purchase, options to lease, covenants, assessments, defects, claims or
exceptions, except for the Permitted Encumbrances and Monetary Encumbrances.
(c) Section 6.7(c) of the Seller Disclosure Letter identifies the
following: (i) to the extent Seller's interest in the Real Property is a
leasehold interest, true and correct copies of the documents under which the
Real Property is leased or operated (together with all amendments and
modification thereof, the "Ground Lease Documents"), and (ii) to the extent
Seller subleases or licenses its interest to the Real Property to another
Person, true and correct copies of the documents under which the Real Property
is leased to such Person (together with all amendments and modification
thereof, the "Space Lease Documents" and, collectively with the Ground Lease
Documents, the "Lease Documents"). True and correct copies of the Lease
Documents have been delivered or made available for review to Buyer. The Lease
Documents are unmodified and in full force and effect, and there are no other
agreements, written or oral, for the use and occupancy of the property leased
under the Lease Documents by Seller. Neither Seller, nor to the knowledge of
Seller, any landlord or other party, is in material default under the Lease
Documents, and, to the knowledge of Seller, no defaults (whether or not
subsequently cured) by Seller or any landlord or other party have been alleged
thereunder.
(d) Except as otherwise disclosed in written materials provided or
made available to Buyer, to the knowledge of Seller, (i) the Real Property is
not in violation of any applicable Laws, except for such violations which,
individually or in the aggregate, would not be reasonably likely to have a
Seller Material Adverse Effect; (ii) there are no defects in the physical
condition of the Real Property or the improvements located on the Real
Property, except for defects which, individually or in the aggregate, would
not be reasonably likely to have a Seller Material Adverse Effect and (iii)
the Real Property located in Arkansas owned by Caesars Seller Two is vacant
undeveloped property.
(e) Seller has not received written notice of, nor does Seller have
any actual knowledge of, any action, proceeding or litigation pending (and, to
the knowledge of Seller, overtly contemplated or threatened) (i) (a) to take
all or any portion of the Real Property or the Properties, or any interest
therein, by eminent domain, (b) to modify the zoning of, or other governmental
rules or restrictions applicable to, the Real Property, the Properties or the
current use thereof, or (c) for any street widening or changes in highway or
traffic lanes or patterns in the immediate vicinity of the Real Property or
the Properties, which, in each case with respect to the items referenced in
clauses (a), (b) and (c) above, would not be reasonably likely to have a
Seller Material Adverse Effect; or (ii) otherwise relating to the Real
Property or the interests of Seller therein, which would not be reasonably
likely to have a Seller Material Adverse Effect.
(f) No condemnation or rezoning proceedings are pending or, to
Seller's knowledge, threatened with respect to the Real Property.
(g) There are no options to purchase, options to lease, Contracts,
commitments, letters of intent or other obligations outstanding for the sale,
exchange, material encumbrance (other than Permitted Encumbrances), lease,
sublease (other than that certain Sublease dated as of June 21, 1996 by and
between Xxxxxx'x Seller Two and Tunica Golf Course LLC) or transfer of the
Real Property, or any portion thereof except as set forth in the Lease
Documents or as permitted by this Agreement.
(h) To the knowledge of Seller, and except as otherwise disclosed in
written materials previously provided to Buyer, no portion of the Real
Property or the roads immediately adjacent to and currently utilized to access
the Real Property: (i) was the former site of any public or private landfill,
dump site, retention basin or settling pond; (ii) was the former site of any
oil or gas drilling operations; or (iii) was the former site of any
experimentation, processing, refining, reprocessing, recovery or manufacturing
operation for any petrochemicals.
(i) There are no material Contracts with any Governmental Entity
affecting the use or ownership of the Real Property, except (a) as listed in
Section 6.7(i) of the Seller Disclosure Letter, (b) for the City of East
Chicago Obligations, and (c) pursuant to the Gaming Approvals.
(j) Seller has not made or entered into any Contracts to sell,
mortgage, pledge or hypothecate, lease, sublease, convey, alienate, transfer
or otherwise dispose of its Vessel or its Property, or any portion thereof.
Neither Seller's Vessel (if applicable) nor its Property are subject to any
outstanding purchase options, and no Person has any right or option to
acquire, or right of first refusal with respect to, Seller's interest in its
Vessel (if applicable) or its Property or any part thereof. Seller has
obtained to date, or will obtain with respect to activities conducted by
Seller up to the Closing Date, all material Governmental Approvals required
for the lawful operation of Seller's Vessel (if applicable) and its Property.
(k) Seller has no knowledge (i) that its Property is in material
violation of any applicable Laws or that any material certificate (including,
without limitation, certificate of occupancy), permit or license from any
governmental authority having jurisdiction over its Property has not been
obtained and is not in full force and effect, or of any pending threat of
modification or cancellation of any of same, except in each case as would not
be reasonably likely to have a Seller Material Adverse Effect; or (ii) of any
written notice of any violation of any federal, state or municipal law,
ordinance, order, regulation or requirement materially adversely affecting its
Property issued by any Governmental Entity, except in each case as would not
be reasonably likely to have a Seller Material Adverse Effect.
(l) There are no agreements in effect and which will remain in effect
following the Closing relating to the management of Seller's Real Property,
Property or its Vessel (if applicable).
(m) As of the date hereof, (i) Seller has no knowledge of any
remaining work required to be performed, (ii) payments required to be made and
actions required to be taken prior to the date hereof pursuant to any
agreement entered into with a governmental body or authority in connection
with a site approval, zoning reclassification or other similar action relating
to its Property (e.g., local improvement district, road improvement district,
environmental mitigation) have been performed, paid or taken, as the case may
be, and (iii) Seller has no knowledge of any work, payments or actions that
are required after the date hereof pursuant to such agreements, other than
pursuant to its Operating Agreements and Gaming Approvals made available to
Buyer. As of the date hereof, there is no construction, renovation or
restoration work underway or contemplated (or any oral or written agreement
with respect to same) with respect to Seller's Property other than maintenance
or repair work in the Ordinary Course of Business or as disclosed on Section
6.7(m) of the Seller Disclosure Letter.
(n) True and correct copies of the Limited Liability Company
Agreement of Tunica Golf Course LLC have been delivered to Buyer. With respect
to Tunica Golf Course LLC, there are no (i) securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of any
kind to which Xxxxxx'x Seller Two is a party or by which Xxxxxx'x Seller Two
is bound, which obligate or could obligate Xxxxxx'x Seller Two to transfer any
of its membership interests in Tunica Golf Course LLC or which obligate or
could obligate Xxxxxx'x Seller Two to issue, deliver or sell additional
membership interests or other ownership interests in Tunica Golf Course LLC or
(ii) arrangements or undertakings which obligate or could obligate Xxxxxx'x
Seller Two to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. To
the knowledge of Xxxxxx'x Seller Two, Tunica Golf Course LLC holds no interest
in real property other than the real property described in Section 6.7(n) of
the Xxxxxx'x Seller Two Disclosure Letter.
(o) As of December 31, 2003, Xxxxxx'x Seller Two owned a 33?%
membership interest in Tunica Golf Course LLC and since December 31, 2003,
Xxxxxx'x Seller Two has not assigned or transferred such membership interest.
Xxxxxx'x Seller Two owns such membership interest free and clear of all Liens.
(p) To the knowledge of Xxxxxx'x Seller Two, no defaults by a member
of Tunica Golf Course LLC have been alleged under the Limited Liability
Company Agreement of Tunica Golf Course LLC.
Section 6.8 Intellectual Property. Section 6.8 of the Seller
Disclosure Letter lists all (i) trademark and service xxxx registrations and
applications and web domain urls that are included in Seller's Purchased
Assets and (ii) trademark, service xxxx and trade name license and other
agreements which are included in Seller's Purchased Assets (as related to each
Seller, its "Purchased Intellectual Property"). To Seller's knowledge, Seller
owns or possesses adequate and enforceable rights to use its Purchased
Intellectual Property as currently conducted without material restrictions or
material conditions on use and there is no conflict with the rights of the
Seller therein or any conflict by it with the rights of others therein which,
individually or in the aggregate, would be reasonably likely to have a Seller
Material Adverse Effect. To Seller's knowledge, no party to any Contract
related to the Purchased Intellectual Property is in breach or default, and to
Seller's knowledge, no event has occurred which with notice or lapse of time
would constitute a breach or default or permit termination, modification or
acceleration thereunder. Seller (a) has no knowledge that any Purchased
Intellectual Property is involved in any interference, reexamination,
cancellation, or opposition proceeding, or any currently pending or written
threat of suit, action, or proceeding arising out of a right or claimed right
of any Person with respect to any Intellectual Property right, (b) has
received no written communication that Seller is using or disclosing in an
unauthorized manner, infringing, or misappropriating in the conduct of the
business of its Property as presently conducted the right or claimed right of
any Person with respect to any Intellectual Property right which, individually
or in the aggregate, would be reasonably likely to have a Seller Material
Adverse Effect, (c) has no knowledge that any of the Purchased Intellectual
Property is being used or disclosed in an unauthorized manner, infringed, or
misappropriated by any Person, or (d) has not entered into any agreement to
indemnify any Person against any charge of unauthorized use or disclosure,
infringement, or misappropriation of any Purchased Intellectual Property.
Section 6.9 Agreements, Contracts and Commitments.
(a) Except as disclosed in the SEC Reports filed by the ultimate
parent of Seller, (i) each Seller's Assumed Contract is valid and binding upon
Seller (and, to Seller's knowledge, on all other parties thereto), in
accordance with its terms and is in full force and effect, (ii) there is no
breach or violation of or default by Seller under any of its Assumed
Contracts, whether or not such breach, violation or default has been waived,
and (iii) no event has occurred with respect to Seller, which, with notice or
lapse of time or both, would constitute a breach, violation or default of, or
give rise to a right of termination, modification, cancellation, foreclosure,
imposition of a Lien, prepayment or acceleration under, any of its Assumed
Contracts, which breach, violation, default, termination, modification,
cancellation, foreclosure, imposition of a Lien, prepayment or acceleration
referred to in clause (ii) or (iii), alone or in the aggregate with other such
breaches, violations, defaults, terminations, modifications, cancellations,
foreclosures, impositions of a Lien, prepayments or accelerations referred to
in clause (ii) or (iii), would be reasonably likely to have a Seller Material
Adverse Effect.
(b) As of 12:00 p.m. Las Vegas time on September 23, 2004, Seller has
made available (either on its electronic data site or by physical or
electronic delivery) copies of all of its material Assumed Contracts.
Section 6.10 Litigation. As of the date hereof there is no action,
suit or proceeding, claim, arbitration or investigation against Seller,
pending, or as to which Seller has received any written notice of assertion
or, to the knowledge of Seller, threatened against, Seller relating to its
Purchased Assets or Assumed Liabilities or the transactions contemplated by
this Agreement, before any court, arbitrator, or administrative, governmental
or regulatory authority or body, domestic or foreign, except for matters that
fall into any of the following three categories regardless of any overlap
among said categories (i) matters disclosed in the SEC Reports filed by the
ultimate parent of Seller, (ii) any matters listed in Section 6.10 of the
Seller Disclosure Letter, and (iii) in any event all matters that individually
or in the aggregate, would be reasonably likely to have a Seller Material
Adverse Effect.
Section 6.11 Environmental Matters. Except as that, individually or
in the aggregate, would be reasonably likely to have a Seller Material Adverse
Effect or as set forth on Section 6.11 of the Seller Disclosure Letter:
(a) Seller has all Environmental Permits and the Environmental
Permits are in full force and effect;
(b) Seller's Property and its Purchased Assets, and its ownership,
leasing, operation and use thereof, are in compliance with all applicable
Environmental Laws;
(c) there are no Environmental Liabilities of Seller;
(d) there are no Environmental Conditions;
(e) Seller has not received any written notices from any Governmental
Entity or other Person alleging Liability or Environmental Liability under or
violation of any Environmental Law related to its Property or its Purchased
Assets, or alleging responsibility for the removal, clean-up, or remediation
of any Environmental Condition or any violation, or alleged violation, of any
Environmental Law or related to any Environmental Liability;
(f) Seller is not subject to any pending or threatened enforcement or
investigatory action by any Governmental Entity regarding an Environmental
Condition;
(g) to Seller's knowledge, no friable asbestos containing materials
or polychlorinated biphenyls are contained in or stored on the Property or
Purchased Assets and there is no pending or past claim or threatened claim
relating to, or arising out of, any friable asbestos or lead containing
material or exposure to or release thereof related to any Property or
Purchased Asset, that could reasonably be expected to give rise to any
material Environmental Liability;
(h) to Seller's knowledge, no active or out-of-service underground
storage tanks, or sites from which such storage tanks have been removed, or
landfills, surface impoundments, waste piles or land disposal areas, exist in,
at or on any of the Property or the Purchased Assets, that could reasonably be
expected to give rise to any material Environmental Liability;
(i) all environmental site assessment reports (including any Phase I
or Phase II reports), and all investigation, remediation or compliance
studies, audits, assessments or similar documents which, to Seller's
knowledge, are in the possession of Seller and relate to the environmental
conditions at its Property or its Purchased Assets have been made available to
Buyer; and
(j) neither its Property nor its Purchased Assets is subject to any
current or threatened deed restriction, use restriction, institutional or
engineering control or lien pursuant to any Environmental Laws.
Section 6.12 Ordinary Course of Business. Since June 30, 2004, Seller
has conducted its operations in the Ordinary Course of Business in all
material respects.
Section 6.13 Sufficiency of Assets. As of the date hereof, the
Purchased Assets and Affiliate Assets include all of the assets that are
reasonably necessary for the operation of the Property immediately following
the Closing in substantially the same manner as currently conducted by the
Seller, other than (a) the Excluded Assets, (b) the Reserved Employees, and
(c) services provided by, or at the direction of, the ultimate Parent of
Seller and its Affiliates (other than Seller) and assets used to provide such
services and Contracts related thereto (such services, assets and Contracts in
this subclause (c), the "Non-Seller Assets"), assuming that: (i) Buyer shall
have obtained all Buyer Permits, including the Gaming Approvals and (ii) all
Assumed Contracts shall have been assigned to Buyer (it being agreed and
understood that Seller is making no representation or warranty hereunder as to
whether the amount of cash and cash equivalents included in the Property is in
an amount sufficient to operate the Property under the Gaming Laws).
Section 6.14 Permits; Compliance with Gaming Laws.
(a) Seller and, to the knowledge of Seller, each of its directors,
officers, Persons performing management functions similar to officers and
partners, hold all permits, registrations, findings of suitability, licenses,
variances, exemptions, certificates of occupancy, orders and approvals of all
Governmental Entities (including all authorizations under Gaming Laws, and in
the case of Xxxxxx'x Seller One and Caesars Seller Two, the Merchant Marine
Act of 1920 and the Shipping Act of 1916 and Certificates of Inspection issued
by the U.S. Coast Guard), necessary to conduct the business and operations
conducted at its Property or exclusively related to its Purchased Assets, each
of which is in full force and effect in all material respects (as it relates
to each Seller, its "Seller Permits") and no event has occurred which permits,
or upon the giving of notice or passage of time or both, would permit,
revocation, non-renewal, modification, suspension, limitation or termination
of any of its Seller Permits that currently are in effect, the loss of which
either, individually or in the aggregate, would be reasonably likely to have a
Seller Material Adverse Effect. Throughout the period of time each has owned
its respective Vessel, Xxxxxx'x Seller One and Caesars Seller Two have been
and now eligible to document a U.S. flag vessel under 46 USC 12102(a)(3).
Xxxxxx'x Seller Two is currently eligible to document a U.S. flag vessel under
46 USC 12102(a)(3). Seller and, to the knowledge of Seller, its directors,
officers, key employees and Persons performing management functions similar to
officers and partners, are in compliance with the terms of its Seller Permits,
except for such failures to comply would not, individually or in the
aggregate, be reasonably likely to have a Seller Material Adverse Effect. The
businesses conducted by Seller at its Property is not being conducted in
violation of any applicable Law of any Governmental Entity (including, without
limitation, any Gaming Laws), except for possible violations which,
individually or in the aggregate, do not and would not be reasonably likely to
have a Seller Material Adverse Effect. Seller has not received a notice of any
investigation or review by any Governmental Entity with respect to its
Property or its Purchased Assets that is pending, and, to the knowledge of
Seller, no investigation or review is threatened, nor has any Governmental
Entity indicated any intention to conduct the same, other than those the
outcome of which would not, individually or in the aggregate, be reasonably
likely to have a Seller Material Adverse Effect.
(b) Except as set forth on Section 6.14(b) of the Seller Disclosure
Letter, neither Seller nor, to the knowledge of Seller, any of its directors,
officers, key employees or Persons performing management functions similar to
officers or partners has received any written claim, demand, notice,
complaint, court order or administrative order from any Governmental Entity in
the past three (3) years under, or relating to any violation or possible
violation of any Gaming Laws exclusively related to actions or inactions at
such Seller's Property which did or would be reasonably likely to result in
fines or penalties of $50,000 or more. To Seller's knowledge, there are no
facts, which if known to the regulators under the Gaming Laws would be
reasonably likely to result in the revocation, limitation or suspension of a
material license, finding of suitability, registration, permit or approval
exclusively related to Seller's Property under the Gaming Laws.
Section 6.15 Personnel; Labor Matters.
(a) Seller has provided or made available to Buyer a list setting
forth (i) as of a date not more than ten (10) days prior to the date hereof,
the job titles (or positions held) of each of its Property Employees and (ii)
as of a date not more than ten (10) days prior to the date hereof, the current
annual base salary (or hourly rate) and most recent bonus paid.
(b) As of the date of this Agreement and except as set forth on
Section 6.15(b) of the Seller Disclosure Letter, with respect to the Property
Employees: (i) there are no employees who are represented by a union in their
capacity as employee of Seller, and to Seller's knowledge there is no union
organizing activity with respect to any such employment with Seller; (ii)
Seller is not party to any collective bargaining agreement, agreement to
assume a collective bargaining agreement, letter of understanding, recognition
agreement, card check agreement, or neutrality agreement with any union
(collectively "Labor Agreements"); (iii) there are no pending material
arbitrations, material demands for arbitration or grievances, or appeals from
a material arbitration under any Labor Agreements; (iv) there are no pending
unfair labor practice charges, complaints, or proceedings pending against
Seller, or filed by Seller, before, or on appeal from, the National Labor
Relations Board, or any other labor relations governmental body; (v) there are
no pending representation petitions or proceedings, de-certification petitions
or proceedings, de-authorization petitions or proceedings pending against
Seller, or filed by Seller, before, or on appeal from, the National Labor
Relations Board, or any other labor relations governmental body; (vi) there
are no pending or scheduled negotiations with any union; and (vii) there are
no strikes, slowdowns, work stoppages, picketing, union boycotts, or lockouts
(collectively "Labor Disruptions"), or, to Seller's knowledge, threats of
Labor Disruptions.
Section 6.16 Employee Benefits.
(a) Section 6.16(a) of the Seller Disclosure Letter sets forth an
accurate and complete list of all (i) "employee welfare benefit plans," within
the meaning of Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder ("ERISA"); (ii)
"employee pension benefit plans," within the meaning of Section 3(2) of ERISA;
and (iii) material bonus, stock option, stock purchase, restricted stock,
incentive, fringe benefit, profit-sharing, pension or retirement, deferred
compensation, medical, life insurance, disability, accident, salary
continuation, severance, accrued leave, vacation, sick pay, sick leave,
supplemental retirement and unemployment benefit plans, programs,
arrangements, commitments and/or practices (whether or not insured) for
employees of a Seller who are located at its Property (as it relates to each
Seller, its "Property Employees") (all of the foregoing plans, programs,
arrangements, commitments, practices and Contracts referred to in (i), (ii)
and (iii) above are referred to, as it relates to each Seller, its "Seller
Benefit Plans").
(b) True and complete copies of each of the following documents have
been made available by Seller to Buyer: (i) each of its Seller Benefit Plans,
(ii) the most recent Annual Report on Form 5500 for Seller 401(k) Plan and
(iii) the most recent IRS determination letter relating to each Seller 401(k)
Plan.
(c) With respect to the Seller 401(k) Plan: (i) such plan has
received a determination letter from the Internal Revenue Service stating that
it so qualifies and that its trust is exempt from taxation under Section
501(a) of the Code, and to Seller's knowledge nothing has occurred since the
date of such determination that could reasonably be expected to result in the
loss of such qualification or exempt status; (ii) such plan has been
administered and operated in all material respects in accordance with its
terms and applicable Law (including ERISA and the Code, and all rules and
regulations promulgated thereunder); (iii) to Seller's knowledge, no fiduciary
has any Liability for breach of fiduciary duty or any other failure to act or
comply in connection with the administration or investment of the assets of
any such plan; (iv) to Seller's knowledge no disputes are pending or
threatened by any governmental agency or authority or by any participant or
beneficiary against any such plan, the assets of any trust under any such plan
or the applicable plan sponsor or the plan administrator, or against any
fiduciary of any such plan with respect to the design or operation of such
plan, other than routine claims for benefits thereunder; (v) to Seller's
knowledge no non-exempt prohibited transaction (within the meaning of Section
406 of ERISA) has occurred that gives rise to or might reasonably be expected
to give rise to material liability on the part of Seller or any ERISA
Affiliate; and (vi) all contributions required to be made by or under any such
plan (or trust or fund established thereunder or in connection therewith) or
any related collective bargaining agreement as of the date hereof (taking into
account any extensions of time for the making of such contributions) have been
made in full.
(d) Neither Seller nor any ERISA Affiliate has incurred any material
Liability pursuant to Title IV of ERISA as a result of any of them being
treated as a single employer, within the meaning of Section 414(b) or 414(c)
of the Code, with any other trade or business, and to Seller's knowledge, no
facts exist which could reasonably form the basis for any such material
Liability.
Section 6.17 Brokers. Neither Seller nor any of its Representatives
have employed any broker, financial advisor or finder or incurred any
Liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement, except as set forth in
Section 6.17 of the Seller Disclosure Letter.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to each Seller, except as set forth
herein and in the Disclosure Letter delivered by Buyer to Seller on the date
of this Agreement (the "Buyer Disclosure Letter"), as follows:
Section 7.1 Organization. Buyer is duly organized, validly existing
and in good standing under the laws of Delaware and has all requisite
corporate power and authority to carry on its business as now being conducted.
Buyer is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so qualified, licensed or in good
standing would not materially impair or delay the Closing.
Section 7.2 Authority; No Conflict; Required Filings and Consents.
(a) Buyer has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated by this Agreement.
The execution and delivery of this Agreement and the consummation by Buyer of
the transactions to which it is a party that are contemplated by this
Agreement by Buyer have been duly authorized by all necessary action on the
part of Buyer. This Agreement has been duly executed and delivered by Buyer
and constitutes the valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms, subject, as to enforcement, to (i)
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereinafter in effect affecting creditors' rights generally and (ii)
general principles of equity.
(b) The execution and delivery of this Agreement by Buyer does not,
and the consummation by Buyer of the transactions to which it is a party that
are contemplated by this Agreement will not, (i) conflict with, or result in
any violation or breach of, any provision of the certificate of incorporation,
bylaw or other organizational document of Buyer, (ii) result in any violation
or breach of, or constitute (with or without notice or lapse of time, or both)
a default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any material benefit) under, or
require a consent or waiver under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, Contract or obligation to which
Buyer is a party or by which any of them or any of its properties or assets
may be bound, or (iii) subject to the governmental filings and other matters
referred to in Section 7.2(c) hereof, conflict with or violate any permit,
concession, franchise, license, judgment, or Law applicable to Buyer or any of
its or their properties or assets, except in the case of clauses (ii) and
(iii) for any such conflicts, violations, defaults, terminations,
cancellations or accelerations which would not materially impair or delay the
Closing.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Buyer in connection with the execution and delivery of this
Agreement by Buyer or the consummation by Buyer of the transactions to which
it is a party that are contemplated hereby, except for (i) the filing of the
pre-merger notification report under the HSR Act, (ii) any approvals or filing
of notices required under the Gaming Laws, (iii) such consents, approvals,
orders, authorizations, permits, filings, declarations or registrations
related to, or arising out of, compliance with statutes, rules or regulations
regulating the consumption, sale or serving of alcoholic beverages or tobacco
or the renaming or rebranding of the operations at the Property, (iv) such
other filings, consents, approvals, orders, authorizations, permits,
registrations and declarations as may be required under the Laws of any
jurisdiction in which Buyer conducts any business or owns any assets, the
failure of which to make or obtain would not, individually or in the
aggregate, be reasonably likely to materially impair or delay the Closing and
(v) any consents, approvals, orders, authorizations, registrations, permits,
declarations or filings required by any of the Sellers or any of their
respective Subsidiaries, Affiliates or key employees (including, without
limitation, under the Gaming Laws).
Section 7.3 Brokers. Neither Buyer nor any of its Representatives
have employed any broker, financial advisor or finder or incurred any
Liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement, except as set forth on
Section 7.3 of the Buyer Disclosure Letter.
Section 7.4 Financing.
(a) Buyer will have available on the Closing Date sufficient funds to
enable Buyer to pay the Purchase Price, the Estimated Closing Payment and the
Estimated Operations Payment, all amounts due pursuant to the Operations
Settlement, and all fees and expenses necessary or related to the consummation
of the transactions contemplated by this Agreement.
(b) Buyer has delivered to each of the Sellers complete and correct
copies of fully executed commitment letters from Deutsche Bank AG Cayman
Islands Branch, Deutsche Bank Securities Inc. and Deutsche Bank Trust Company
Americas, dated as of September 27, 2004 whereby such financial institution
has committed, upon the terms and subject to the conditions set forth therein,
to provide financing in an amount of not less than $950,000,000 in connection
with the transactions contemplated by this Agreement ("Debt Financing
Commitment"). As of the date hereof, (i) the Debt Financing Commitment is in
full force and effect and (ii) Buyer has no reason to believe that (x) any of
the conditions to the Debt Financing Commitment will not be timely satisfied
or (y) that the debt financing contemplated by the Debt Financing Commitment
will not be timely consummated as contemplated therein or that the funds
thereunder will not be available to Buyer on a timely basis to consummate the
transactions contemplated by this Agreement.
(c) As of the Closing, Buyer will have a net worth of at least
Fifteen Million Dollars ($15,000,000) as provided in the Xxxxxx'x Seller Two
Lease.
Section 7.5 Licensability. Neither Buyer, nor any of its officers,
directors, principals or Affiliates which may reasonably be considered in the
process of determining the suitability of Buyer (any such Persons, the
"Licensing Affiliates") has ever been denied, or had revoked, a gaming license
by a Governmental Entity or Gaming Authority. Buyer and each of its Licensing
Affiliates which are licensed (collectively, the "Licensed Parties") are in
good standing in each of the jurisdictions in which the Licensed Parties owns
or operates gaming facilities. There are no facts, which if known to the
regulators under the Gaming Laws, that would (a) be reasonably likely to
result in the denial, revocation, limitation or suspension of a gaming license
or (b) result in a negative outcome to any finding of suitability proceedings
currently pending, or under the suitability proceedings necessary for the
consummation of this Agreement.
Section 7.6 Compliance with Gaming Laws.
(a) Each of the Licensed Parties, and to Buyer's knowledge, each of
the Licensed Parties directors, officers, key employees and Persons performing
management functions similar to officers and partners hold all permits,
registrations, findings of suitability, licenses, variances, exemptions,
certificates of occupancy, orders and approvals of all Governmental Entities
under the Gaming Laws necessary to conduct the business and operations of the
Licensed Parties, each of which is in full force and effect in all material
respects (the "Buyer Permits") and no event has occurred which permits, or
upon the giving of notice or passage of time or both would permit, revocation,
non-renewal, modification, suspension, limitation or termination of any Buyer
Permit that currently is in effect the loss of which either, individually or
in the aggregate, would not be reasonably likely to materially impair or delay
the Closing. Each of the Licensed Parties, and to Buyer's knowledge, each of
the Licensed Parties directors, officers, key employees and Persons performing
management functions similar to officers and partners are in compliance with
the terms of the Buyer Permits, except for such failures to comply, which
singly or in the aggregate, would not, individually or in the aggregate, be
reasonably likely to materially impair or delay the Closing. Neither Buyer nor
any of its Licensing Affiliates has received notice of any investigation or
review by any Governmental Entity under any Gaming Law with respect to Buyer
or any of its Licensing Affiliates that is pending, and, to the knowledge of
Buyer, no investigation or review is threatened, nor has any Governmental
Entity indicated any intention to conduct the same, other than those the
outcome of which would not impair or delay the Closing.
(b) No Licensed Parties, and no director, officer, key employee or
partner of the Licensed Parties has received any written claim, demand,
notice, complaint, court order or administrative order from any Governmental
Entity in the past three (3) years under, or relating to any violation or
possible violation of any Gaming Laws which did or would be reasonably likely
to result in fines or penalties of Fifty Thousand Dollars ($50,000) or more.
To the knowledge of Buyer, there are no facts, which if known to the
regulators under the Gaming Laws could reasonably be expected to result in the
revocation, limitation or suspension of a material license, finding of
suitability, registration, permit or approval of the Licensed Parties, or any
of their officers, directors, key employees or Persons performing management
functions similar to an officer or partner, or limited partner under any
Gaming Laws. No Licensed Parties, and no officer, director, key employee or
Person performing management function similar to an officer or partner of the
Licensed Parties, has suffered a suspension or revocation of any Buyer Permit
held under the Gaming Laws.
Section 7.7 Litigation. As of the date hereof, there are no actions,
claims, suits or proceedings pending or, to Buyer's knowledge, threatened
against Buyer before any Governmental Entity, which, if determined adversely,
could prevent or materially delay Buyer from completing any of the
transactions contemplated by this Agreement.
ARTICLE VIII.
COVENANTS
Section 8.1 Conduct of Business of Each Seller. During the period
from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Closing, subject to the limitations set
forth below, each Seller agrees (except to the extent contemplated by this
Agreement or to the extent that Buyer shall otherwise consent in writing, such
consent not to be unreasonably withheld) to carry on its business in the
Ordinary Course of Business, to pay its debts and Taxes when due (subject to
good faith disputes over such debts or Taxes), to continue to make maintenance
capital expenditures in the Ordinary Course of Business, to market and promote
each Property in the Ordinary Course of Business and to continue to make
capital expenditures in accordance with the plans approved by Xxxxxx'x,
Caesars or their respective Affiliates for 2004, as applicable, prior to the
date hereof and described on Section 8.1(a) of the applicable Seller
Disclosure Letter to Buyer (including with respect to Caesars Seller One to
continue to make fixture, furniture and equipment expenditures with respect to
the Casino C Property in accordance with the plan approved by Caesars or its
Affiliates prior to the date hereof described in Section 8.1(a) of the Caesars
Seller One Disclosure Letter) (the "Authorized Plans"), and, to the extent
consistent with the operation of its Property in the Ordinary Course of
Business, use all reasonable efforts consistent with past practices and
policies to preserve intact its present business organization, keep available
the services of its present officers and key employees and preserve its
relationships with customers, employees, suppliers, distributors, and others
having business dealings with it. Without limiting the generality of the
foregoing, except as expressly contemplated by this Agreement or as disclosed
on Section 8.1(b) of each applicable Seller Disclosure Letter, during the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Closing, without the written consent of
Buyer (which consent shall not be unreasonably withheld), each Seller agrees
that it shall not:
(i) sell, pledge, lease, license, dispose of, grant, encumber or
otherwise authorize the sale, pledge, disposition, grant or Encumbrance of any
of its Purchased Assets, except for (1) sales of current assets in the
Ordinary Course of Business in connection with operation of its Property or
(2) sales of equipment and other non-current assets in the Ordinary Course of
Business in connection with operation of its Property;
(ii) incur any material Liabilities that are Assumed Liabilities,
except in the Ordinary Course of Business;
(iii) violate, modify, amend or terminate any of its Assumed
Contracts or waive, release or assign any material rights or claims, except in
the Ordinary Course of Business or as required by applicable Law;
(iv) cause or permit any of its Purchased Assets to be subjected to a
Lien or Encumbrance, other than Permitted Encumbrances;
(v) fail to maintain its existing insurance coverage of all types
relating to its Purchased Assets (however, in the event any such coverage
shall be terminated or lapse, to the extent available at reasonable cost, such
Seller may procure substantially similar substitute insurance policies which
in all material respects are in at least such amounts and against such risks
as are currently covered by such policies);
(vi) make any changes to advertising or marketing plans or activities
of Seller, other than in the Ordinary Course of Business;
(vii) terminate any of its Property Employees (other than its
Reserved Employees), except in the Ordinary Course of Business;
(viii) transfer any of its Property Employees (other than its
Reserved Employees) to properties, casinos or hotels owned or operated by
Sellers' Affiliates (other than its Property);
(ix) other than expenditures to be made pursuant to the Authorized
Plans, authorize or make capital expenditures in the aggregate in excess of
the amount set forth in Section 8.1(ix) of each Seller Disclosure Letter;
(x) close or shut down its Property, except for such closures or
shutdowns which are (a) required by action, order, writ, injunction, judgment
or decree or otherwise required by Law, or (b) due to acts of God or other
force majeure events;
(xi) enter into any contract, or series of related contracts, to be
assumed by Buyer under this Agreement which (1) expires after the one year
anniversary of the date of this Agreement (unless such contract can be
terminated on thirty (30) days' notice or less without cause and without the
payment of any consideration for early termination) or (2) regardless of
length, involves aggregate consideration in excess of One Hundred Thousand
Dollars ($100,000) per month, (3) is between Seller and any Affiliates of
Seller or (4) contains any restrictions on the operations of a Property
following the Closing; provided, however, that a Seller may enter into the
following agreements without any consent from Buyer: (A) any advance booking
contract encompassing the time period up to and including the one year
anniversary of the date of this Agreement which does not involve a room block
commitment in excess of five hundred (500) room nights; and (B) purchase
orders in the Ordinary Course of Business;
(xii) make any payments, investments or commitments with the CRDA
except with respect to funds committed as of the date hereof or as required by
Law;
(xiii) delete, damage or erase any Property Specific Data, other than
in the Ordinary Course of Business; or
(xiv) agree, whether or not in writing, to do any of the foregoing,
or to authorize or announce an intention to do any of the foregoing.
Section 8.2 Cooperation; Notice; Cure. Subject to compliance with
applicable Law (including, without limitation, antitrust Laws and Gaming
Laws), from the date hereof until the Closing, each of the Sellers and Buyer
shall confer on a regular and frequent basis with one or more representatives
of the other parties to report on the general status of ongoing operations of
the Properties. Each Seller shall promptly notify Buyer and the other Sellers,
and Buyer shall promptly notify each of the Sellers in writing of, and will
use commercially reasonable efforts to cure before the Closing Date, any
event, transaction or circumstance, as soon as practical after it becomes
known to such party, that causes or will cause any covenant or agreement of
such Seller or of Buyer under this Agreement to be breached in any material
respect or that renders or will render untrue in any material respect any
representation or warranty of such Seller or Buyer contained in this
Agreement. Nothing contained in Section 8.1 hereof shall prevent any Seller
from giving such notice, using such efforts or taking any action to cure or
curing any such event, transaction or circumstance. No notice given pursuant
to this Section 8.2 shall have any effect on the representations, warranties,
covenants or agreements contained in this Agreement for purposes of
determining satisfaction of any condition contained herein.
Section 8.3 No Solicitation.
(a) Prior to the earlier of the Closing and the termination of this
Agreement in accordance with Section 10.1 hereof, no Seller shall, directly or
indirectly, through any of its officers, directors, employees, financial
advisors, agents or other representatives (collectively, "Representatives") or
Affiliates (i) solicit, encourage, facilitate or initiate any inquiries or
proposals that constitute, or could reasonably be expected to lead to, an
Acquisition Proposal with respect to such Seller, (ii) engage in negotiations
with any Person (or group of Persons) other than Buyer or its respective
Affiliates concerning, or provide any non-public information to any person or
entity relating to, any Acquisition Proposal or (iii) enter into an agreement
for an Acquisition Proposal.
(b) Upon execution of this Agreement, each Seller shall, and shall
cause its Representatives to, (i) cease immediately and cause to be terminated
any and all existing discussions or negotiations with any parties conducted
heretofore with respect to an Acquisition Proposal and (ii) exercise any
rights under a confidentiality agreement or similar agreement to request that
any non-public information provided by a Seller or its Representatives to any
third party (other than Buyer) in connection with an Acquisition Proposal
(including any analysis, extracts or summaries thereof) be destroyed or
returned to Xxxxxx'x, Caesars or such Seller, as the case may be to the extent
permitted under any such confidentiality agreement.
Section 8.4 Employee Matters.
(a) On or prior to the Closing Date, Buyer shall extend offers of
employment to all of each Seller's Property Employees who are employed at the
Property on the date such offer is extended, other than each Seller's Reserved
Employees. Each Property Employee who accepts Buyer's offer of employment
shall commence employment with Buyer effective as of the Closing, except that
any Property Employee who is not actively at work on the Closing Date (other
than due to a short-term absence (e.g., vacation, holiday, jury duty,
maternity leave, paternity leave or bereavement leave, illness or injury of
shorter duration than would provide for coverage under each of Seller's
long-term disability leave policies) in compliance with applicable policies of
the applicable Seller) shall commence employment with Buyer effective as of
the date such employee presents himself or herself to Buyer for active
employment following the Closing Date. Each Property Employee who so commences
employment with Buyer shall hereinafter be referred to as a "Transferred
Employee" as of the day each commences employment with Buyer. To the knowledge
of each Seller, following the Closing, each of its Transferred Employees shall
be at-will employees, other than those employees covered by a collective
bargaining agreement or whose employment agreements are set forth on Section
8.4(a) of the applicable Seller Disclosure Letter.
(b) Effective as of the Closing, Buyer shall assume the employment
agreements set forth in Section 8.4(a) of the Seller Disclosure Letter to the
extent in effect as of the Closing.
(c) Subject to the terms and conditions of any applicable collective
bargaining agreement which is currently in effect or which may be in effect at
any time in the future, (x) for a period of at least one (1) year immediately
following the Closing Date, Buyer shall provide each Transferred Employee with
base compensation which is not less than the base compensation of such
Transferred Employee immediately prior to the Closing and (y) for a period of
at least one (1) year immediately following the Closing Date, Buyer shall
provide the Transferred Employees with bonus opportunity and annual and
long-term incentive compensation (other than equity-based compensation or any
Seller Benefit Plan containing similar benefits to those plans set forth on
Section 8.4(c) of the Buyer Disclosure Letter) that are in the aggregate, on
an employee by employee basis, no less favorable than those which the
Transferred Employees were provided by the applicable Seller or its Affiliates
immediately prior to the Closing; provided, however, that the Transferred
Employees that are parties to the employment agreements which are assumed
pursuant to Section 8.4(b) hereof shall not be entitled to any rights under
this Section 8.4(c).
(d) Subject to the terms and conditions of any applicable collective
bargaining agreement which is currently in effect or which may be in effect at
any time in the future, for a period of at least one (1) year immediately
following the Closing Date, Buyer shall, pursuant to plans and arrangements
established or maintained by Buyer (the "Buyer Benefit Plans"), provide the
Transferred Employees with pension, health and welfare benefits which in the
aggregate are substantially comparable to those which the Transferred
Employees were provided under the Seller Benefit Plans (with the exception of
equity-based Seller Benefit Plans , those plans set forth on Section 8.4(c) of
the Buyer Disclosure Letter and any other Seller Benefit Plans that contains
similar benefits to those set forth on Section 8.4(c) of the Buyer Disclosure
Letter) immediately prior to the Closing. Buyer shall ensure that the Buyer
Benefit Plans treat employment with any of the Sellers or their respective
Affiliates prior to the Closing the same as employment with any of Buyer and
its Affiliates from and after the Closing Date for purposes of eligibility,
vesting, and benefit accrual under the Buyer Benefit Plans (except (x) to the
extent giving such credit would result in duplication of benefits, (y) with
respect to the benefits accruals under any defined benefit plan (whether or
not tax qualified) and (z) any Buyer Benefit Plan which provides severance
benefits).
(e) Effective immediately after the Closing, Buyer shall cause the
Transferred Employees to be covered by one or more medical benefit plans
("Buyer's Medical Plans") which shall provide benefits to the Transferred
Employees and their dependents which in the aggregate are substantially
comparable to the benefits which were provided to the Transferred Employees
and their dependents by the applicable Seller's medical plans. Buyer's Medical
Plans shall not contain any "pre-existing conditions" exclusions or
limitations or "actively at work" requirements which would cause any of the
Transferred Employees or their dependents to be excluded from Buyer's Medical
Plans immediately after the Closing. Buyer shall give effect, in determining
any deductible and maximum out-of-pocket limitations, to claims incurred and
amounts paid by, and amounts reimbursed to, such employees for the calendar
year in which the Closing occurs under any welfare benefit plans maintained or
contributed to by the applicable Seller for their benefit immediately prior to
the Closing Date.
(f) Effective as of the Closing Date, Buyer shall establish or
designate a defined contribution retirement plan which is qualified or
eligible for qualification under Section 401(a) of the Code ("Buyer's 401(k)
Plan"). Subject to the terms and conditions of any applicable collective
bargaining agreement which is currently in effect or which may be in effect at
any time in the future, each Transferred Employee who participates in the
Xxxxxx'x Entertainment, Inc. Savings and Retirement Plan, the Grand Casinos
401(k) Savings Plan or the Restated Park Place Entertainment Corporation
401(k) Savings Plan, as applicable (the applicable plan for each Seller, the
"Seller 401(k) Plan") who satisfies the eligibility requirements of Buyer's
401(k) Plan shall become eligible to participate in Buyer's 401(k) Plan on the
date he or she becomes an employee of Buyer and shall be credited with
eligibility service and vesting service for all periods of service with the
applicable Seller or any other entity if so credited with such service under
the Seller 401(k) Plan. As soon as practicable after the Closing Date, each
Seller shall cause the trustees of the applicable Seller 401(k) Plan to
transfer to the trustees or other funding agent of the Buyer's 401(k) Plan,
the amounts representing the account balances of the Transferred Employees
(including the appropriate net investment return thereon and any participant
loans made to any Transferred Employees), said amounts to be established as
account balances or accrued benefits of the Transferred Employees under
Buyer's 401(k) Plan. Each such transfer shall comply with Section 414(l) of
the Code and the requirements of ERISA and the regulations promulgated
thereunder. The assets to be transferred pursuant to this Section 8.4(f) shall
be in cash, or to the extent mutually agreed upon by Seller and Buyer or as
required by Law, in kind; provided, however, that any participant loans of a
Transferred Employee shall be transferred in kind. At the time and to the
extent that assets held in the trust with respect to the Seller 401(k) Plan
are paid to the trust under the Buyer 401(k) Plan pursuant to this Section
8.4(f), the Buyer 401(k) Plan shall assume all liabilities of the Seller
401(k) Plan, for the payment of benefits transferred to the trust under the
Buyer 401(k) Plan, and such transfer shall be in full discharge of all
obligations of the Seller 401(k) Plan in respect thereof; provided, however,
neither Buyer nor the Buyer 401(k) Plan shall assume any liability for failing
to properly value the accounts of Transferred Employees under the Seller
401(k) Plan or for any other matter relating to the administration or the
investment of the assets of the Seller 401(k) Plan.
(g) As of the Closing Date, Buyer shall be substituted for each
Seller, as applicable, as the contributing employer under each Multiemployer
Pension Plan to which such Seller contributes with respect to the business
conducted by such Seller at its Property (each, a "Substituted Multiemployer
Pension Plan"). It is the intent of the parties to satisfy the provisions of
Section 4204 of ERISA with respect to any obligation that a Seller may have
under each Substituted Multiemployer Pension Plan. Therefore, each Seller and
Buyer agree as follows: (i) from and after the Closing Date, Buyer shall
continue making contributions to each Substituted Multiemployer Pension Plan
with respect to each Seller's Property Employees in accordance with the terms
of any applicable collective bargaining agreement obligating a Seller to make
contributions to such Substituted Multiemployer Pension Plan for substantially
the same number of contribution base units for which such Seller has an
obligation to contribute to such Substituted Multiemployer Pension Plan; (ii)
unless exempt under Pension Benefit Guaranty Corporation Regulations Section
4204.11 or Section 4204.21, Buyer shall post a bond or hold in escrow in favor
of the respective Substituted Multiemployer Pension Plan for a period of five
(5) plan years commencing with the first plan year beginning after the Closing
Date in an amount and form that satisfies the requirements of Section
4204(a)(1)(B) of ERISA; (iii) in the event that Buyer withdraws in a complete
or partial withdrawal under Section 4201 of ERISA from the respective
Substituted Multiemployer Pension Plan during the first five (5) plan years
beginning after the Closing Date, and Buyer fails to make any withdrawal
liability payments when due, such Seller shall be secondarily liable for any
withdrawal liability that such Seller would have had to the respective
Substituted Multiemployer Pension Plan but for the provisions of this Section
8.4(g) and Section 4204 of ERISA; and (iv) in the event that all or
substantially all of such Seller's assets are distributed, or if such Seller
is liquidated during the first five (5) plan years beginning after the Closing
Date, then such Seller shall provide a bond or amount in escrow equal to the
present value of the withdrawal liability that such Seller would have had but
for the provisions of this Section 8.4(g) and Section 4204 of ERISA.
(h) No provision of this Agreement shall create any third party
beneficiary rights in any Transferred Employee, any beneficiary or dependent
thereof, or any collective bargaining representative thereof, with respect to
the compensation, terms and conditions of employment and/or benefits that may
be provided to any Transferred Employee by Buyer or under any benefit plan
which Buyer may maintain.
(i) Sellers and Buyer shall adopt the "standard procedure" for
preparing and filing IRS Forms W-2 (Wage and Tax Statements), as described in
Revenue Procedure 2004-53. Under this procedure, Seller as the predecessor
employer performs all the reporting duties for the wages and other
compensation it pays, including the filing of quarterly Forms 941 and the
furnishing and filing of Forms W-2 and W-3 to all Transferred Employees.
Seller will file its quarterly Form 941 for the quarter that includes the
Closing Date. Buyer as the successor employer performs all the reporting
duties for the wages and other compensation it pays. Each Seller and Buyer
shall provide all required IRS Forms W-2 to its respective employees
reflecting all wages and taxes paid and withheld before and after the Closing
Date. Sellers and Buyer also shall adopt the standard procedure of Rev. Proc.
2004-53 for purposes of filing IRS Forms W-4 (Employee's Withholding Allowance
Certificate) and W-5 (Earned Income Credit Advance Payment Certificate). Under
this procedure, Seller as the predecessor employer must keep on file the Forms
W-4 and W-5 with respect to each Transferred Employee. The Transferred
Employees will provide Buyer with new Forms W-4 and W-5 as Buyer will be
responsible for deducting and withholding tax from wages paid to the
Transferred Employees. With respect to garnishments, tax levies, child support
orders, and wage assignments in effect for a Seller on the Closing Date for
Transferred Employees (other than with respect to contributions to any Seller
Benefit Plan), Buyer shall honor such payroll deduction authorizations with
respect to Transferred Employees and will continue to make payroll deductions
and payments to the authorized payee, as specified by the court or
governmental order that was filed with the applicable Seller on or before the
Closing Date, and Seller will continue to make such payroll deductions and
payments to authorized payees with respect to all other Property Employees who
are not Transferred Employees. Each Seller shall, on or prior to the Closing
Date, provide Buyer with such information in the possession of such Seller as
may be reasonably requested by Buyer and necessary for Buyer to make the
payroll deductions and payments to the authorized payees as required by this
Section 8.4(i).
(j) Upon the Closing, Buyer shall become a successor employer and
shall assume all Liabilities and obligations under, and be bound by, the
collective bargaining agreements listed on Section 8.4(j) of any Seller
Disclosure Letter.
(k) On or following the Closing, Buyer shall comply with all
provisions of the WARN Act with respect to all Transferred Employees. As part
of its obligations under Article XI hereof, Buyer shall indemnify, defend and
hold each Seller harmless from and against any Liability to any Transferred
Employees or any Governmental Entity that may result to any such Seller based
on Buyer's failure to comply with any provision of the WARN Act as required by
this Section 8.4(k), including, but not limited to, fines, back pay and
attorneys' fees.
Section 8.5 Access to Information and the Property.
(a) Upon reasonable notice, subject to applicable Law, including
without limitation, antitrust Laws and Gaming Laws, each Seller shall afford
Buyer's Representatives reasonable access, during normal business hours during
the period from the date hereof to the Closing, to its Property, including
without limitation, its data center facilities for hardware and software
deployment, training, testing and pre-cutover systems engineering to
facilitate a timely systems transition at the Transfer Time, and to all its
personnel, properties, books, Contracts and records and, during such period,
such Seller shall furnish promptly to Buyer all (i) copies of monthly
financial reports and development reports, (ii) when available, the unaudited
financial information related to its Property for the nine (9) months ended
September 30, 2004 and all subsequent quarterly periods, (iii) when available,
the audited financial information related to its Property for the twelve
months ended December 31, 2004 (the "2004 Audited Financials") and, if
requested by Buyer, the audited financial information for the twelve months
ended December 31, 2001, 2002 and 2003 (the "2003 Audited Financials")
(subject to Buyer's payment of any costs or expenses to produce such financial
information) and (iv) all other information concerning the business and
operation of its Property and its Property Employees as Buyer may reasonably
request and Buyer shall have the right to reasonable office or other space
(which if a hotel room or rooms shall be at the expense of Buyer) at each
Property for transition purposes from the date that the waiting period under
the HSR Act has expired or been terminated and no Governmental Entity having
jurisdiction over federal competition or antitrust Laws of the United States
shall have commenced an investigation, proceeding or other action which is
continuing that could reasonably be expected to challenge or prevent the
transactions contemplated by this Agreement or delay the Closing thereof
beyond the Closing Date and no injunction shall have been obtained, on the
basis of antitrust or competition Laws of the United States in respect of the
transactions contemplated by this Agreement (collectively, the "Inspection");
provided, however, that (i) Buyer shall provide the applicable Seller with at
least twenty-four (24) hours' prior written notice of any Inspection; (ii) if
such Seller so requests, Buyer's Representatives shall be accompanied by a
Representative of such Seller; (iii) Buyer shall not initiate contact with
employees or other representatives of any Seller other than such Seller's
Representatives or other individuals designated by any of such Seller's
Representatives without the prior written consent of such Seller's
Representatives, which consent shall not be unreasonably withheld or delayed
(and, at such Seller's option, one of such Seller's Representatives, an
employer's representative or other agent of such Seller shall be present at
all Inspections); (iv) subject to Section 8.21 hereof, Buyer's Representatives
shall not be entitled to perform any physical testing of any nature with
respect to any portion of the Properties without the applicable Seller's prior
written consent, which consent may be withheld if in the reasonable judgment
of such Seller's Representatives such testing would materially interfere with
the operation of the business conducted at its Property; (v) Buyer shall not
materially interfere with the operation of the business conducted at any
Property; (vi) Buyer shall, at its sole cost and expense, promptly repair any
damage to any Property or any other property owned by a Person other than
Buyer arising from or caused by Inspection, and shall reimburse the applicable
Seller for any loss arising from or caused by any Inspection, and restore such
Property or such other third-party property to substantially the same
condition as existed prior to such Inspection, and shall indemnify, defend and
hold harmless such Seller and its Affiliates from and against any personal
injury or property damage claims, liabilities, judgments or expenses
(including reasonable attorneys' fees) incurred by any of them arising or
resulting therefrom; and (vii) without limiting the provisions of Section 8.21
hereof, in no event shall the results of any such Inspection or Buyer's
satisfaction therewith be a condition to Buyer's obligations hereunder, it
being the intent of Buyer to purchase the Properties on an "As Is, Where Is"
basis as set forth in Section 12.4 hereof. Buyer will hold and cause its
Representatives to hold any such information furnished to it by Sellers, which
is nonpublic in confidence in accordance with (a) the confidentiality
agreement dated August 6, 2004 and amended on August 25, 2004 between Xxxxxx'x
and Buyer and (b) the confidentiality agreement dated August 9, 2004 between
Caesars and Buyer (collectively, the "Confidentiality Agreements").
Notwithstanding anything to the contrary, Buyer and each Seller agree that
following the Closing Date the limitations on confidentiality herein and in
the Confidentiality Agreements shall not apply to any information that is a
part of the Total Assets. The Confidentiality Agreements shall survive the
Closing and continue in full force and effect thereafter. Notwithstanding
anything to the contrary, Buyer and each Seller agree that in the event any
proprietary information or knowledge relating to an Excluded Asset of such
Seller is obtained, revealed or otherwise made known to Buyer in effecting (i)
the transition from Excluded Software to replacement software pursuant to
Section 1.5 hereof, specifically, or (ii) the removal of the Excluded Assets,
generally, Buyer shall not reveal, disclose, employ or otherwise use any such
proprietary information and will hold such information in confidence in
accordance with the Confidentiality Agreements. No information or knowledge
obtained in any investigation pursuant to this Section 8.5 shall affect or be
deemed to modify any representation or warranty contained in this Agreement or
the conditions to the obligations of the parties to consummate the
transactions contemplated herein.
(b) Following the Closing, upon reasonable notice, Buyer shall (and
shall cause its Subsidiaries, and its and their respective Representatives,
to) provide the applicable Seller and its Affiliates and Representatives with
reasonable access and duplicating rights, during normal business hours and on
reasonable notice, to all of Buyer's personnel, properties, books, contracts,
commitments and records related solely to the Purchased Assets and shall
cooperate with the applicable Seller, as reasonably necessary for such Seller
to pursue any suit, claim, action, proceeding or investigation relating to the
claims in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, any suit, claim, action, proceeding or
investigation related to the Excluded Assets; provided, however, that (i) the
applicable Seller shall provide Buyer with at least twenty-four (24) hours'
prior written notice; (ii) if Buyer so requests, the applicable Seller's
Representatives shall be accompanied by a Representative of Buyer; (iii) the
applicable Seller shall not materially interfere with the operation of the
business conducted at any Property; and (iv) Buyer shall not be required to
incur any costs in connection with the rights granted to any Seller in this
Section 8.5(b). Notwithstanding the foregoing, Buyer shall not be required to
provide any information which (i) it reasonably believes it may not provide to
Sellers and their respective Affiliates and Representatives by reason of
applicable Law or by a confidentiality agreement with a third party if, in the
case of a confidentiality agreement, Buyer has used reasonable efforts to
obtain the consent of such party to such disclosure, or (ii) constitutes
information protected by the attorney/client and/or attorney work product
privilege. If any material is withheld by Buyer pursuant to the immediately
preceding sentence, Buyer shall inform the applicable Seller as to the general
nature of the material which is being withheld.
Section 8.6 Governmental Approvals.
(a) Buyer and the applicable Seller or Sellers shall cooperate with
each other and use their reasonable best efforts to (i) as promptly as
practicable, take, or cause to be taken, all appropriate action, and do or
cause to be done, all things necessary, proper or advisable under applicable
Law or otherwise to consummate and make effective the transactions governed by
this Agreement as promptly as practicable, (ii) obtain from any Governmental
Entities any consents, licenses, permits, waivers, approvals, authorizations
or orders required (A) to be obtained or made by the applicable Seller or
Buyer or any of their respective Affiliates or any of their respective
Representatives and (B) to avoid any action or proceeding by any Governmental
Entity (including, without limitation, those in connection with the HSR Act
and antitrust and competition Laws of any other applicable jurisdiction), in
connection with the authorization, execution and delivery of this Agreement
and the consummation of the transactions governed herein, and (iii) make all
necessary filings, and thereafter make any other required submissions with
respect to this Agreement, as required under (A) any applicable federal or
state securities Laws, (B) the HSR Act and antitrust and competition Laws of
any other applicable jurisdiction, (C) the Gaming Laws and (D) any other
applicable Law (collectively, the "Governmental Approvals"), and to comply
with the terms and conditions of all such Governmental Approvals. Buyer and
the applicable Seller or Sellers and their respective Representatives and
Affiliates shall file (x) within fifteen (15) days after the date hereof, all
required initial applications and documents in connection with obtaining the
approvals under applicable Gaming Laws and the HSR Act and (y) as soon as
reasonably practicable after the date hereof, all Governmental Approvals other
than those set forth in subclause (x) and shall act diligently and promptly to
pursue the Governmental Approvals and shall cooperate with each other in
connection with the making of all filings referenced in the preceding
sentence, including providing copies of all such documents to the non-filing
parties hereto and their advisors prior to filing and, if requested, to accept
all reasonable additions, deletions or changes suggested in connection
therewith. Buyer and each applicable Seller shall use reasonable best efforts
to schedule and attend any hearings or meetings with Governmental Entities to
obtain the Governmental Approvals as promptly as possible. Buyer and each
Seller shall have the right to review in advance and, to the extent
practicable, each will consult all of the parties hereto on, in each case,
subject to applicable Laws relating to the exchange of information (including,
without limitation, antitrust laws and any Gaming Laws), all the information
relating to Buyer or each applicable Seller, as the case may be, and any of
their respective Affiliates or Representatives which appear in any filing made
with, or written materials submitted to, any third party or any Governmental
Entity in connection with the transactions governed by this Agreement. Without
limiting the foregoing, Buyer and each applicable Seller will notify all of
the other parties hereto promptly of the receipt of comments or requests from
Governmental Entities relating to Governmental Approvals, and will supply all
of the other parties hereto with copies of all correspondence between the
notifying party or any of its Representatives and Governmental Entities with
respect to Governmental Approvals; provided, however, that with respect to
comments, requests and communications from Governmental Entities other than
the FCC, Federal Trade Commission, Department of Justice and Gaming
Authorities the requirements of this sentence shall apply only to material
comments, requests and communications.
(b) Without limiting Section 8.6(a) hereof, Buyer and each applicable
Seller shall:
(i) each use its reasonable best efforts to avoid the entry of, or to
have vacated or terminated, any decree, order, or judgment that would
restrain, prevent or delay the Closing, on or before the Outside Date,
including defending through litigation on the merits any claim asserted in any
court by any Person; and
(ii) each use its reasonable best efforts to avoid or eliminate each
and every impediment under any antitrust, competition or trade regulation Law
that may be asserted by any Governmental Entity with respect to the Closing so
as to enable the Closing to occur as soon as reasonably possible (and in any
event no later than the Outside Date), including implementing, contesting or
resisting any litigation before any court or quasi-judicial administrative
tribunal seeking to restrain or enjoin the Closing;
(c) Buyer and each Seller shall promptly advise each of the other
parties hereto upon receiving any communication from any Governmental Entity
whose consent or approval is required for consummation of the transactions
governed by this Agreement which causes such party to reasonably believe that
there is a reasonable likelihood that such consent or approval from such
Governmental Entity will not be obtained or that the receipt of any such
approval will be materially delayed. Buyer and each applicable Seller shall
use its reasonable best efforts to take, or cause to be taken, all actions
reasonably necessary to defend any lawsuits or other legal proceedings
challenging this Agreement or the consummation of the transactions governed by
this Agreement, seeking to prevent the entry by any Governmental Entity of any
decree, injunction or other order challenging this Agreement or the
consummation of the transactions governed by this Agreement, appealing as
promptly as possible any such decree, injunction or other order and having any
such decree, injunction or other order vacated or reversed.
(d) From the date of this Agreement until the Closing, each party
shall promptly notify all other parties hereto in writing of any pending or,
to the knowledge of Buyer or the applicable Seller, as appropriate, threatened
action, suit, arbitration or other proceeding or investigation by any
Governmental Entity or any other Person (i) challenging or seeking damages in
connection with the Closing or any of other transaction governed by this
Agreement or (ii) seeking to restrain or prohibit the consummation of the
Closing. For the avoidance of doubt, nothing in this Agreement shall in any
way require any Seller or any party to the Merger Agreement to in any way
advise, inform, include or provide anything to Buyer in any matter relating to
the Merger Agreement, including, without limitation, the obtaining of
necessary governmental or regulatory approvals or non-action in connection
with the Merger Agreement.
(e) Buyer agrees to consider in good faith any amendment, waiver or
alteration to this Agreement (or any schedule or exhibit to this Agreement)
reasonably requested by Seller if, in the reasonable discretion of such
Seller, any such amendment, waiver or alteration is required to consummate the
transactions set forth in the Merger Agreement.
(f) Notwithstanding anything else contained in this Section 8.6 or
elsewhere in this Agreement, all of the parties hereto agree that (i) with
respect to any matter that arises from, or is related to, either the Casino B
Property, the Casino C Property or the Casino D Property, Xxxxxx'x Seller One
is not required to take any action, cause any action to be taken, obtain any
consent, license, permit, waiver, approval, authorization or order, or make
any filing or submission; (ii) with respect to any matter that arises from, or
is related to, either the Casino A Property, the Casino C Property or the
Casino D Property, Xxxxxx'x Seller Two is not required to take any action,
cause any action to be taken, obtain any consent, license, permit, waiver,
approval, authorization or order, or make any filing or submission; (iii) with
respect to any matter that arises from, or is related to, either the Casino A
Property, the Casino B Property or the Casino D Property, the Caesars Seller
One is not required to take any action, cause any action to be taken, obtain
any consent, license, permit, waiver, approval, authorization or order, or
make any filing or submission; and (iv) with respect to any matter that arises
from, or is related to, either the Casino A Property, the Casino B Property or
the Casino C Property, the Caesars Seller Two is not required to take any
action, cause any action to be taken, obtain any consent, license, permit,
waiver, approval, authorization or order, or make any filing or submission.
Section 8.7 Publicity. Each Seller and Buyer shall agree on the form
and content of the initial press release regarding the transactions
contemplated hereby and thereafter shall consult with all of the other parties
hereto before issuing, provide each other the opportunity to review and
comment upon and use all reasonable efforts to agree upon, any press release
or other public statement with respect to any of the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement prior to such consultation and prior to considering in good faith
any such comments, except as may be required by applicable Law (including
without limitation the Securities Act, the Exchange Act and any Gaming Laws)
or any listing agreement with the New York Stock Exchange or public statement
or filing made in connection with the transactions contemplated by the Merger
Agreement, including without limitation in any proxy statement or registration
statement relating thereto. Notwithstanding anything to the contrary herein,
Buyer, any Seller or any of their respective Affiliates may make any public
statement in response to specific questions by the press, analysts, investors
or those attending industry conferences or financial analyst conference calls,
so long as any such statements are not inconsistent with previous press
releases, public disclosures or public statements made jointly by Buyer and
the Sellers and do not reveal non-public information regarding Buyer or any
Seller.
Section 8.8 Further Assurances and Actions.
(a) Subject to the terms and conditions herein, each of the parties
hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be done, all things
reasonably necessary, proper or advisable under applicable Laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including, without limitation, using their respective
reasonable best efforts to (i) obtain all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Entities
and parties to Contracts with each party hereto as are necessary for
consummation of the transactions contemplated by this Agreement, (ii) fulfill
all conditions precedent applicable to such party pursuant to this Agreement
and (iii) terminate or allow to expire all obligations and Liabilities of
Xxxxxx'x Seller One or its Affiliates pursuant to the Homebuyer Guarantee
Program and the City of East Chicago Obligations. To the knowledge of Xxxxxx'x
Seller One, it has performed, and will perform, all of its obligations then
due under the Homebuyer Guarantee Program and the City of East Chicago
Obligations in all material respects.
(b) In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement or to vest Buyer with
title to the Total Assets and the assumption of the Assumed Liabilities, the
proper officers and/or directors of Buyer and the appropriate Seller or
Sellers, and their Affiliates as applicable, shall take all action reasonably
necessary (including (i) executing and delivering further affidavits,
instruments, notices, assumptions, releases and acquisitions and (ii)
transferring its Purchased Assets from an Affiliate of a Seller to such
Seller, as applicable) and the applicable Seller shall bear the cost of any
such necessary action; provided, that if such action is necessary due to
events or circumstances particular to Buyer or any of its assigns, Buyer shall
bear the cost of such action.
(c) After the Closing, each Seller shall refer to Buyer all inquiries
relating to the Purchased Assets and as soon as reasonably practicable deliver
to Buyer (i) any mail, packages and other communications addressed to such
Seller relating to the Purchased Assets and (ii) any cash or other property
that such Seller receives and that properly belongs to Buyer pursuant to the
terms hereof, including any insurance proceeds, payments and interest payable
thereon.
(d) The parties hereto acknowledge that Affiliates of a Seller may
hold certain assets used exclusively in the operation of, or employs certain
Persons that work at, its respective Property (collectively, the "Affiliate
Assets"). The applicable Seller shall cause its Affiliate to take such actions
as are necessary to cause such Affiliates at the Closing to transfer to Buyer
the Affiliate Assets, and the Liabilities associated therewith that would be
Assumed Liabilities if such Liabilities were Liabilities of a Seller
("Affiliate Liabilities"). In addition, such Affiliate Assets shall be deemed
to be Purchased Assets or Property Employees, as applicable, of a Seller for
purposes of this Agreement and such Affiliate Liabilities shall be deemed to
be Assumed Liabilities for purposes of this Agreement. Sellers represent that
the Affiliate Assets (other than the Persons that work at the Properties), and
any Affiliate Liabilities, are not material in amount, other than the Real
Property set forth in Section 6.7(a) of a Seller Disclosure Letter.
(e) Each of the Sellers agrees that it shall use its reasonable best
efforts to have House Funds at its Property as of the Transfer Time in an
amount equal to the minimum cash amounts on hand at each Property as required
by Law; provided, however, that nothing in this Section 8.8(e) shall impact
(i) Buyer's obligations set forth in Section 4.2 hereof to reimburse Seller
for all House Funds in excess of the Minimum Cash or (ii) Sellers obligation
to deliver to Buyer the Minimum Cash at the Closing.
Section 8.9 Transfer Taxes; HSR Filing Fee.
(a) All transfer, documentary, sales, use, stamp, registration and
other such Taxes (including all applicable real estate transfer or gains
Taxes) and related fees (including any penalties, interest and additions to
Tax) incurred with respect to the purchase and sale of Total Assets pursuant
to this Agreement shall be borne one-half by Buyer and one-half by the
Sellers. Buyer and the Sellers shall cooperate in preparing, executing and
filing all Tax Returns and other documentation on a timely basis as may be
required to comply with the provisions of any such Tax Laws.
(b) The filing fees pursuant to the pre-merger notifications under
the HSR Act shall be borne by Buyer.
Section 8.10 Financing.
(a) Prior to the Closing, Buyer will use its best efforts to obtain
financing necessary to pay the Purchase Price, the Estimated Closing Payment
and the Estimated Operations Payment, all payments to be made pursuant to the
Final Closing Statement and Final Operations Settlement, and all fees and
expenses necessary or related to the consummating of the transactions
contemplated by this Agreement (collectively, the "Financing").
(b) Xxxxxx'x, Caesars and each Seller hereby agree to (i) reasonably
cooperate with Buyer to enable Buyer to consummate the Financing (including
without limitation using reasonable best efforts to provide access to the
independent accountants of Sellers and their Affiliates to prepare financial
statements for the Financing), (ii) use reasonable best efforts to cause to be
delivered the 2003 Audited Financials and the September 30, 2004 financial
information defined in Section 8.5(a)(ii) not later than ninety (90) days
after the date hereof and (iii) use reasonable best efforts to cause to be
delivered the 2004 Audited Financials as promptly as practicable; provided,
however, that (i) Buyer shall be solely responsible for all out of pocket
costs and expenses incurred by any Seller in regard to such Seller's
cooperation under this Section 8.10(b), (ii) all financing materials,
including offering circulars and amendments thereto, used prior to the Closing
Date shall include disclaimers that no Seller is responsible for any of the
contents therein, and (iii) Buyer shall (x) provide copies to each applicable
Seller of financing materials, including offering circulars and amendments
thereto used prior to the Closing Date, that contain information about any
such Seller, within a reasonable time prior to the filing or distribution of
such financing materials; provided, however, that Buyer shall only be required
to provide Seller with copies of those sections of the financing materials
that relate to such Seller and (y) to the extent reasonably practicable, shall
allow each applicable Seller an opportunity to comment thereon. If the Closing
occurs prior to February 15, 2005, Xxxxxx'x, Xxxxxx'x and each Seller shall
take all reasonable actions in their power (including, without limitation,
making available to Buyer and its representatives reasonable access to any
books, records, work papers and other information not included in the
Purchased Assets and to any employees of any of them or their respective
Affiliates, signing any customary management representation letters to
Seller's independent public accountant and instructing its independent public
accountants to cooperate with Buyer) and otherwise to use reasonable best
efforts to cause to be delivered the 2004 Audited Financials and any other
financial information relating to its Property for any other period ending on
or prior to the Closing Date as promptly as practicable after the Closing ,
and Buyer shall reasonably cooperate with each Seller with respect to the
foregoing (including without limitation authorizing Buyer's independent public
accountant to cooperate with Seller's independent public accountant with
respect to any certification of such financial statements by Seller's
independent accountant, and providing reasonable access, to the extent
relevant, to Property personnel, documents and materials reasonably required
for such Seller to prepare the 2004 Audited Financials and such other
financial information (if any).
Section 8.11 Like-Kind Exchange.
(a) Any Seller may elect to effect the transfer and conveyance of the
Purchased Assets as part of a tax-deferred exchange under Section 1031 of the
Code (a "Section 1031 Exchange"). If any Seller so elects (an "Electing
Seller"), such Electing Seller shall provide notice to Buyer of its election,
with a copy of such notice to the other Sellers, and thereafter such Electing
Seller:
(i) may at any time at or prior to Closing assign its rights and
obligations under this Agreement to a "qualified intermediary" as defined in
Treasury Regulation Section 1.1031(k)-1(g)(4), subject to all of Buyer's
rights and obligations hereunder; and
(ii) shall promptly provide written notice of such assignment to
Buyer, with a copy of such notice to the other Sellers.
(b) Buyer shall cooperate with an Electing Seller's reasonable
requests intended to allow such Electing Seller to effect the Section 1031
Exchange; provided, however, that Buyer's obligation to cooperate with such
Electing Seller shall be limited and conditioned as follows:
(i) Buyer shall receive written notice from the Electing Seller at
least three (3) business days prior to the Closing Date, which shall identify
the parties involved in such Section 1031 Exchange, enclose all documents for
which Buyer's signature shall be required, and instruct Buyer as to any
changed manner of payment of the Purchase Price (including having such payment
be made to a "qualified intermediary");
(ii) the Electing Seller shall pay for any and all reasonable
additional costs and expenses incurred by Buyer in connection with
accommodating the Section 1031 Exchange; (iii) the Electing Seller shall not
be relieved of any of its obligations under this Agreement by reason of the
Section 1031 Exchange; and
(iv) the Electing Seller's failure to effectuate any intended Section
1031 Exchange shall not relieve such Electing Seller from its obligations to
consummate the transactions contemplated by this Agreement and the
consummation of such Section 1031 Exchange shall not be a condition precedent
to such Electing Seller's obligations under this Agreement.
(c) The Electing Seller hereby indemnifies and agrees to defend, and
hold Buyer harmless from and against any claims, costs, damages, expenses,
liabilities and losses incurred by, claimed against or suffered by it arising
out of such Electing Seller's Section 1031 Exchange.
Section 8.12 Reservations; Loyalty Program; Guests; Chips.
(a) Reservations. Buyer will honor the terms and rates of all
pre-Closing reservations (in accordance with their terms) made in the Ordinary
Course of Business at the Properties by guests or customers, including advance
reservation cash deposits, for rooms or services confirmed by any of the
Sellers for dates after the Closing Date. Each of the Sellers may continue to
accept reservations for periods after the Closing in the Ordinary Course of
Business in operating its Property. Buyer recognizes that such reservations
may include discounts or other benefits, including, without limitation,
benefits extended under the Connection Card or Total Rewards programs, as
applicable, or any other frequent player or casino awards programs, group
discounts, other discounts or requirements that food, beverage or other
benefits be delivered by Buyer to the guest(s) holding such reservations.
Buyer will honor all room allocation agreements and banquet facility and
service agreements which have been granted to groups, persons or other
customers for periods after the Closing Date at the rates and terms provided
in such agreements; provided that such agreements were made in the Ordinary
Course of Business. Buyer agrees that none of the Sellers can make and have
not made any representation or warranty that any party holding a reservation
or agreement for rooms, facilities or services will utilize such reservation
or honor such agreement. Buyer, by the execution hereof, solely assumes the
risk of non-utilization of reservations and non-performance of such agreements
from and after the Closing.
(b) Frequent Player Award Programs.
(i) Buyer agrees to honor all awards extended by Xxxxxx'x Sellers or
its Affiliates to members of Xxxxxx'x Total Rewards or any other frequent
player award program on terms consistent with the Xxxxxx'x Sellers' or their
Affiliates' past practice in the Ordinary Course of Business or Xxxxxx'x
nationwide programs, and Buyer authorizes the Xxxxxx'x Sellers to extend such
awards that expire after the Closing Date in the Ordinary Course of Business.
(ii) Buyer agrees to honor all awards extended by Caesars Sellers or
their Affiliates to members of Caesars' Connection Card frequent player award
program on terms consistent with the Caesars Sellers' or their Affiliates'
past practice in the Ordinary Course of Business or Caesars' nationwide
programs, and Buyer authorizes each of the Caesars Sellers to extend such
awards that expire after the Closing Date in the Ordinary Course of Business.
(c) Guests' Safe Deposit Boxes. Not later than thirty (30) days prior
to the anticipated Closing Date, each Seller shall use reasonable efforts to
send a notice by certified mail to the last known address of each Person who
has stored personal property in safe deposit boxes located at its Property,
advising them that they must make arrangements with Buyer to continue use of
their safe deposit box and that if they should fail to do so within fifteen
(15) days after the date of such notice is sent, the box will be opened in the
presence of a Representative of the applicable Seller, a Representative of
Buyer, a representative of the applicable Gaming Authority or its
Representative (if required by applicable Law) and a Notary Public (if
required by applicable Law, who may also be a Representative of Buyer or a
Seller); and the contents of such box will be sealed in a package by the
Notary Public, who shall write on the outside the name of the Person who
rented the safe deposit box and the date of the opening of the box in the
presence of the Representatives of the applicable Seller and Buyer,
respectively. The Notary Public and the Representatives of each of the
applicable Seller and Buyer shall then execute a certificate reciting the name
of the Person who rented the safe deposit box, the date of the opening of the
box and a list of its contents. The certificate shall be placed in the package
and a copy of it sent by certified mail to the last known address of the
person who rented the safe deposit box. The package will then be placed in a
vault arranged by Buyer. Pursuant to Article XI hereof, the applicable Seller
shall be responsible for and indemnify Buyer against claims of alleged missing
items not contained on the certificate, and Buyer shall be responsible for and
indemnify the applicable Seller against claims of alleged missing items listed
on the certificate.
(d) Guests' Baggage. Prior to the Closing, the applicable Seller, on
the one hand, and Buyer, on the other hand, shall take inventory of: (a) all
baggage, suitcases, luggage, valises and trunks of hotel guests checked or
left in the care of such Seller at its Property; (b) all luggage or other
property of guests retained by such Seller as security for unpaid accounts
receivable; and (c) the contents of the baggage storage room; provided,
however, that no such baggage, suitcases, luggage, valises or trunks shall be
opened. Except for the property referred to in (b) above, which shall be
removed from the Properties by the applicable Seller or their Affiliates
within ten (10) days after the Closing, all such baggage and other items shall
be sealed in a manner to be agreed upon by the parties and listed in an
inventory prepared and signed jointly by said representatives of the
applicable Seller and Buyer as of the Closing. Said baggage and other items
shall be stored as Buyer shall choose, and Buyer shall be solely responsible
for claims with respect thereto.
(e) Destruction of Chips. Pursuant to the Indiana, Mississippi and
New Jersey Gaming Regulations, each Seller shall, at least thirty (30) days
prior to the Closing, submit for approval of the all applicable Gaming
Authorities a plan for the redemption and destruction of all chips, tokens and
plaquemines at its Property (both as of the Closing Date and at the conclusion
of the redemption period provided in Section 8.12(f) below). Buyer agrees to
cooperate fully with the applicable Seller in effectuating the plan that is
approved by the Gaming Authorities.
(f) Post-Closing Redemption of Chips. Pursuant to the Indiana,
Mississippi and New Jersey Gaming Regulations Gaming Regulations and as
approved and directed by the Gaming Authorities, the applicable Seller shall,
for a period of not less than six (6) months after the Closing, redeem for
cash all of such Seller's gaming chips, tokens and plaquemines issued prior to
the Closing at its Property. The procedures implemented by such Seller shall
be those approved by the Gaming Authorities, a copy of which shall be supplied
to Buyer as soon as reasonably practicable. Buyer acknowledges and agrees that
to the extent the Gaming Authorities allow, at the request of the applicable
Seller, Buyer shall redeem said chips, tokens and plaquemines and such Seller
shall reimburse Buyer for said redemption for amounts that constitute Excluded
Liabilities not less than once per week. After the date hereof through the
Closing, each Seller shall manage the chip Liability in the Ordinary Course of
Business. After the Closing, Buyer will only use its own chips at each of the
Properties.
(g) Front Money.
(i) Pursuant to the Indiana, Mississippi and New Jersey Gaming
Regulations, each Seller shall, at least thirty (30) days prior to the
Closing, to the extent legally required, submit for approval to all applicable
Gaming Authorities a plan containing customary terms for the inventory of the
Front Money at its Property. Buyer and Seller agree to cooperate fully with
each other in effectuating the plan that is approved by the applicable Gaming
Authorities.
(ii) Effective as of the Closing, Representatives of each of Buyer
and the applicable Seller shall take inventory of all Front Money and identify
what Persons are entitled to what portions of such Front Money. All such Front
Money shall be retained in each Property cage and listed in an inventory
prepared and signed jointly by Representatives of Buyer and the applicable
Seller no later than the Transfer Time. Buyer shall be responsible from and
after the Transfer Time for all Front Money and shall distribute Front Money
only to the Persons and only in the amounts as determined pursuant to this
Section 8.12(g).
Section 8.13 Transfer of Utilities; Insurance.
(a) Utilities. Prior to the Closing, each Seller shall notify all
utility companies servicing its Property of the anticipated change in
ownership of its Property and request that all xxxxxxxx after the Closing be
made to Buyer at such Property address. Buyer shall be responsible for paying,
before the Closing, all deposits required by utility companies in order to
continue service at the Property for periods after the Transfer Time and shall
take any other action and make any other payments required to assure
uninterrupted availability of utilities at the Property for all periods after
Closing. Following Closing, all utility deposits made by a Seller will be
refunded directly to such Seller by the utility company holding same.
(b) Insurance. Any Seller's fire and casualty insurance and other
insurance policies may be cancelled by such Seller as of the Closing Date, and
any refunded premiums shall be retained by such Seller. Buyer will be
responsible for acquiring and placing its casualty insurance, business
interruption insurance, liability insurance and other insurance policies for
periods after the Closing.
Section 8.14 Certain Transactions. Prior to the Closing, Buyer shall
not, and shall not permit any of its Affiliates to, take, or agree to commit
to take, (i) any action that would or is reasonably likely to materially delay
the receipt of, or materially impact the ability of a party to obtain, any
Governmental Approval necessary for the consummation of the transactions
contemplated by this Agreement or (ii) any action that would or is reasonably
likely to cause any Governmental Entity having jurisdiction over federal
antitrust or competition Laws of the United States to commence or re-open a
proceeding or investigation that could reasonably be expected to challenge or
prevent the transactions contemplated by this Agreement or delay the Closing
thereof beyond the Outside Date.
Section 8.15 FCC Approvals.
(a) Each Seller and Buyer will, as applicable, not later than fifteen
(15) days after the execution of this Agreement by the parties, execute and
file FCC applications to seek the consent of the FCC to the assignment of the
FCC Licenses to Buyer ("FCC Approval"), or Buyer will apply for licenses
comparable to the FCC licenses to be issued by the FCC in the name of Buyer,
as appropriate ("FCC Application"). The applicable Seller and Buyer agree to
use their respective reasonable best efforts to cooperate with any requests
for information, filing of forms, communications with the FCC or other actions
which are reasonably necessary in order to obtain FCC Approval.
(b) If FCC Approval has not been obtained on or before the Closing
Date and no special temporary authority has been granted by the FCC that
allows Buyer to operate under the FCC Licenses or the FCC Application has not
been granted, then (i) the Closing shall nevertheless occur as scheduled, and
(ii) the parties will comply with any applicable requirements of the FCC or
applicable Law (including without limitation Seller tendering for cancellation
the FCC Licenses). Buyer agrees that it will not use or operate the equipment
which is the subject of the FCC Licenses, FCC Approval or FCC Application
after the Closing in violation of any requirements of the FCC or any
applicable Law.
Section 8.16 Insurance; Casualty and Condemnation. If, before the
Closing, one or more Properties is damaged by fire or other casualty, and such
damage together with all other casualties occurring prior to the Closing do
not individually or in the aggregate result in a Total Material Adverse
Effect, then the Closing shall proceed as scheduled and the applicable Seller
shall, at the Closing, (i) pay to Buyer all insurance proceeds received by
such Seller to date with respect to such damage, destruction or other loss,
less any proceeds applied to the physical restoration of such Property;
provided, that if such insurance proceeds are not sufficient to fully repair
or restore such Property, such Seller shall pay Buyer an additional amount
equal to such shortfall (the "Shortfall Amount") and (ii) assign to Buyer all
rights of such Seller against third parties (other than against its insurance
carriers) with respect to any causes of action, whether or not litigation has
commenced as of the Closing Date, in connection with such damage, destruction
or other loss; provided, however, that any recovery of money from any third
Person pursuant to the rights conveyed under this subsection (ii) shall be
paid, following the payment of Buyer's out of pocket fees and expenses, to the
applicable Seller until such Seller has been repaid the Shortfall Amount. The
obligations of each Seller pursuant to the prior sentence shall constitute
full compensation for the damage to such Property, and after the Closing such
Seller shall have no responsibility for restoration or repair of its Property
or any resultant loss, directly, by subrogation, or otherwise. In the event
that any casualty or casualties occurring prior to the Closing individually or
in the aggregate, results in a Total Material Adverse Effect, then Buyer shall
have fifteen (15) days to exercise its termination right under Section 10.1(h)
hereof; provided, however, that, if requested by Buyer, the applicable
Seller(s) and Buyer shall discuss and consult in good faith for a period of up
to thirty (30) days after any such casualty to discuss whether such casualty
(individually or together with any prior casualties) constitutes to a Total
Material Adverse Effect, and after any such period expires, Buyer shall have
fifteen (15) days to exercise its termination right pursuant to Section
10.1(h) hereof with respect to such casualty.
Section 8.17 Certain Notifications. From the date of this Agreement
until the Closing, each party hereto shall promptly notify all of the other
parties hereto in writing regarding any:
(a) breach of any covenant or obligation of such party hereunder, as
applicable; and
(b) fact, circumstance, event or action which will result in, or
would reasonably be expected to result in, the failure of such party to timely
satisfy any of the closing conditions specified in Article IX hereof of this
Agreement, as applicable.
Section 8.18 Use of Customer List. Neither Buyer nor any of its
Affiliates or Representatives shall (a) resell any Customer List (it being
agreed and understood that the sale of all or substantially all of a Property
shall not be a violation of this clause (a)), (b) publish any Customer List,
or (c) use any Customer List to offer, solicit or promote any illegal, obscene
or pornographic material or activity. In the event Buyer or any of its
Representatives or Affiliates takes any of the foregoing actions, the
applicable Seller shall have the right to the immediate return of its Customer
List, and Buyer shall have no rights to use such Customer List after such
date. Buyer further agrees not to use any Customer List in any illegal manner,
nor use it to engage in any activity that would constitute spamming under any
applicable jurisdiction's regulations.
Section 8.19 No Control. Except as permitted by the terms of this
Agreement, prior to the Closing, Buyer shall not directly or indirectly
control, supervise, direct or interfere with, or attempt to control,
supervise, direct or interfere with, any of the Properties or the Total
Assets. Until the Closing, the operations and affairs of a Seller's Property
and a Seller's Purchased Assets are the sole responsibility of and under the
complete control of such Seller, except as provided for in this Agreement or
in the Merger Agreement.
Section 8.20 Ground Lease Estoppels. Each applicable Seller agrees to
use its reasonable efforts to obtain an estoppel (dated (or updated) not
earlier than thirty (30) days prior to the Closing Date) in a form reasonably
acceptable to Buyer and otherwise acceptable to each ground lessor under the
Xxxxxx'x Seller One Lease, the Xxxxxx'x Seller Two Lease, the Caesars Seller
One Lease, the Caesars Seller Two Lease and the Tunica Golf Course Leases;
provided, however, that no Seller shall be required to pay money to any ground
lessor or any other third party in connection with obtaining such estoppels.
Section 8.21 Phase I and Phase II ESAs.
(a) Within forty five (45) days after the date hereof, each Seller
shall deliver to Buyer copies of new Phase I ESA reports for its Property,
prepared by ENVIRON International Corporation, or such other qualified
consulting firm reasonably acceptable to Buyer. All matters contained in the
new Phase I ESA reports shall be deemed disclosed to Buyer on Section 6.11 of
the applicable Seller Disclosure Letter as if included therein on the date
hereof.
(b) If the applicable new Phase I ESA identifies reasons to believe
that any Property is contaminated with Hazardous Substances, and if the new
Phase I ESA recommends a Phase II ESA to further investigate any such
potential contamination, then the applicable Seller shall use commercially
reasonable efforts to deliver such Phase II ESA as soon as reasonably
practicable, and shall use commercially reasonable efforts to cause such
delivery within ninety (90) days from delivery to such Seller of the
corresponding Phase I ESA.
(c) If the Phase II ESA for any Property describes contamination of
such Property by Hazardous Substances that requires Remediation, the Sellers
shall obtain a written estimate from the Phase II ESA consultant (or such
other consultant as Sellers may reasonably select, subject to Buyer's consent
that shall not be unreasonably withheld) of the cost to Remediate (and shall
deliver to Buyer a copy of such written estimate). Within 20 days after
receiving such estimate, Seller may, at its option but subject to the first
sentence of Section 8.21(d) hereof, elect to either (1) reduce such Seller's
pro rata portion of the Purchase Price (as set forth in Section 3.1(a)) by the
amount of such estimate, or (2) to use commercially reasonable efforts to
Remediate such Hazardous Substances, if any, prior to the Closing Date, at
such Seller's sole cost and expense. If such Seller elects to provide such
reduction to Buyer rather than perform any Remediation, then upon the Closing
(and notwithstanding any other provision of this Agreement) Seller shall have
no further responsibility, obligation or liability to Buyer with respect to
such matters. If such Seller elects to perform the Remediation, then upon
completion of such Remediation (and notwithstanding any other provision of
this Agreement), Seller shall have no further responsibility, obligation or
liability to Buyer with respect to such matters.
(d) Seller may not elect to perform the Remediation unless such
Remediation may be performed without unreasonably interfering with the
operations of the business conducted at the relevant Property. To the extent
that any Seller elects to perform a Remediation and cannot reasonably complete
such Remediation prior to the Closing Date, Buyer shall cooperate with and
provide the applicable Seller with reasonable access to the relevant Property,
personnel, documents and materials reasonably required for such Seller (and
shall otherwise cooperate reasonably with such Seller) to complete such
Remediation and Seller agrees that it shall use all commercially reasonable
efforts to minimize any interference with the operation of the business
conducted at the relevant Property.
(e) Each Seller shall promptly provide copies to Buyer of all
notices, correspondence, draft reports, submissions, work plans and final
reports for the Phase I ESA and the Phase II ESAs (and shall instruct the
environmental consultant to provide such drafts) and shall give Buyer a
reasonable opportunity to comment in advance on such documents and on any
submissions such Seller intends to deliver or submit to Buyer or to the
appropriate Governmental Entity prior to said submission. Buyer may, at its
own expense, hire its own consultants, attorneys or other professionals to
monitor the Phase I ESA or Phase II ESA investigations and Remediation,
including field work undertaken, and each Seller shall reasonably cooperate
with Buyer's monitoring and Seller shall promptly provide Buyer with the
results of all field work for the Phase II ESA investigations and Remediation,
if any.
Section 8.22 Tunica Golf Course LLC Estoppel. Xxxxxx'x Seller Two
agrees to use its reasonable efforts to obtain an estoppel substantially in
the same form as Exhibit P from Tunica Golf Course LLC; provided, however,
that Xxxxxx'x Seller Two shall not be required to pay money to any Person in
connection with obtaining such estoppel.
Section 8.23 Letter from Mercantile Bank. Xxxxxx'x Seller One agrees
to use its reasonable efforts to obtain a letter from Mercantile Bank
confirming that Xxxxxx'x Seller One is not in default under the Homebuyer
Guarantee Program and confirming the Homebuyer Guarantee Amount; provided,
however, that Xxxxxx'x Seller One shall not be required to pay money to
Mercantile Bank or any other third party in connection with obtaining such
letter.
Section 8.24 Title Defects and Survey Defects. Each Seller agrees to
use its reasonable efforts to assist Buyer and Title Insurer in curing all
title defects and survey defects that are not Major Title Defects or Major
Survey Defects; provided, however, that, other than with respect to the
delivery of the owner's affidavits in accordance with Section 5.2(q) hereof,
such assistance shall be at no material cost or liability to Seller.
Section 8.25 Xxxxxx'x Seller Two Subleases. Xxxxxx'x Seller Two
agrees to use its reasonable efforts to obtain and deliver to Buyer copies of
consents to assignment of lease from the parties set forth on Section 8.25 of
the Xxxxxx'x Seller Two Seller Disclosure Letter; provided, however, that in
each case, Xxxxxx'x Seller Two shall not be required to pay money to the
landlord under such leases or any third party in connection with obtaining
such consents.
Section 8.26 Caesars Seller One Lease Consents and Renewals. Caesars
Seller One agrees to use its reasonable efforts to obtain consents to
assignment of lease from the landlords under the Caesar Seller One Lease;
provided, however, that Caesars Seller One shall not be required to pay money
to such landlords or any third party in connection with obtaining such
consents. Additionally, Caesars Seller One shall, in the Ordinary Course of
Business, elect to renew the Caesars Seller One Lease, in accordance with the
terms of such leases; provided, however, if the consent is not provided by the
applicable landlord under the Caesars Seller One Lease, Caesars Seller One
shall not be obligated to seek such renewal.
ARTICLE IX.
CONDITIONS TO CLOSING
Section 9.1 Conditions to Each Party's Obligation to Effect the
Closing. The respective obligations of each party to this Agreement to effect
the Closing is subject to the satisfaction of each of the following conditions
on or prior to the Closing Date, any of which may be waived in whole or in
part in a writing executed by all of the parties hereto:
(a) No Injunctions. No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any order, executive order, stay,
decree, judgment or injunction or statute, rule, regulation which is in effect
(whether temporary, preliminary or permanent) and which prevents or prohibits
the consummation of any of the transactions contemplated by the Agreement or
that makes it illegal for either party hereto to perform its obligations
hereunder.
(b) HSR Act. Any applicable waiting periods, together with any
extensions thereof, under the HSR Act and the antitrust or competition Laws of
any other applicable jurisdiction shall have expired or been terminated.
Section 9.2 Additional Conditions to Obligations of Buyer. The
obligation of Buyer to effect the Closing is subject to the satisfaction of
each of the following conditions on or prior to the Closing Date which may be
waived in whole or in part in writing exclusively by Buyer:
(a) Representations and Warranties. The representations and
warranties of the Sellers contained in this Agreement shall be true and
correct (without giving effect to any limitation as to "materiality" or
"Seller Material Adverse Effect" set forth therein) at and as of the Closing
as if made at and as of such time (except to the extent expressly made as of
an earlier date, in which case as of such earlier date), except where the
failure of such representations and warranties to be true and correct would
not, individually or in the aggregate, result in a Total Material Adverse
Effect. Buyer shall have received a certificate signed on behalf of each
Seller by an officer of such Seller to such effect to such officer's
knowledge.
(b) Performance of Obligations of Seller. Each Seller shall have
performed in all material respects all covenants, agreements and obligations
required to be performed by it or them under this Agreement at or prior to the
Closing, including without limitation delivery of the items listed in Section
5.2 hereof; provided, however, that notwithstanding the foregoing, each
Seller's covenants, agreements and obligations to (a) Remediate Hazardous
Substances (as described in Section 8.21 hereof) and (b) cure any Monetary
Encumbrances, Major Title Defects or Major Survey Defects (as described in
Article XII hereof) shall have been performed in all respects, except in the
case of clause (a), where the failure of the performance of such covenants,
agreements and obligations do not, individually or in the aggregate, result in
a Total Material Adverse Effect, and in the case of clause (b), where the
failure of the performance of such covenants, agreements and obligations do
not, individually or in the aggregate, result in a Seller Material Adverse
Effect. Buyer shall have received a certificate signed on behalf of each
Seller by an officer of such Seller to such effect to such officer's
knowledge.
(c) Release of Liens. All Liens (other than Permitted Encumbrances)
on the Real Property, Properties, or the Vessels (other than any Liens which
are not Monetary Encumbrances which shall be cured in accordance with Article
XII hereof) shall be in a position to be released of record concurrently with
the Closing except where failure to release such Liens would not, individually
or in the aggregate, result in a Seller Material Adverse Effect and any
Monetary Encumbrances shall have been cured in accordance with Article XII
hereof. Buyer shall have received a certificate signed on behalf of each
Seller by an officer of such Seller to such effect to such officer's
knowledge.
Section 9.3 Additional Conditions to Obligations of Sellers. The
obligations of each of the Sellers to effect the Closing are subject to the
satisfaction of each of the following conditions on or prior to the Closing
Date, any of which may be waived in whole or in part in writing exclusively by
all of the Sellers:
(a) Governmental Consents. Buyer shall have obtained all consents,
approvals, findings of suitability, licenses, permits, orders or
authorizations of and registrations, declarations or filings with any
Governmental Entity with jurisdiction in respect of the Gaming Laws required
or necessary in connection with the transactions contemplated by this
Agreement and necessary for ownership and operation of the Property
(including, without limitation, approval, licensing or registration of Buyer
and its (i) officers, executive directors, key employees or Persons performing
management functions similar to officers, (ii) partners and (iii) limited
partners, each, as required by any Governmental Entity) shall have been
obtained and made and shall be in full force and effect.
(b) Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement that are qualified as to
materiality (or any variation thereof) shall be true and correct and such
representations and warranties that are not qualified shall be true in all
material respects at and as of the Closing as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case as
of such earlier date). Each Seller shall have received a certificate signed on
behalf of Buyer by its chief executive officer or chief financial officer to
such effect to such officer's knowledge.
(c) Performance of Obligations of Buyer. Buyer shall have performed
in all material respects all covenants, agreements and obligations required to
be performed by it under this Agreement at or prior to the Closing, including
without limitation delivery of items listed in Section 5.2 hereof. Each Seller
shall have received a certificate signed on behalf of Buyer by the chief
executive officer or chief financial officer of Buyer to such effect to such
officer's knowledge.
ARTICLE X.
TERMINATION AND AMENDMENT
Section 10.1 Termination. This Agreement may be terminated at any
time prior to the Closing (with respect to Sections 10.1(b) through 10.1(g)
hereof, by written notice by the terminating party to the other parties):
(a) by mutual agreement of the Sellers (acting together) and Buyer;
(b) by any of the Sellers or the Buyer, if the transactions
contemplated hereby shall not have been consummated on or prior to the Outside
Date; provided, however, that the right to terminate this Agreement under this
Section 10.1(b) shall not be available to any party whose failure to fulfill
any obligation under this Agreement has been the primary cause of or resulted
in the failure of the Closing to occur on or before the Outside Date;
(c) by any of the Sellers or Buyer, if any Gaming Authority has made
a final non-appealable written determination that such Gaming Authority will
not issue to Buyer all Gaming Approvals;
(d) by any of the Sellers or the Buyer, if a court of competent
jurisdiction or other Governmental Entity shall have issued a nonappealable
final order, decree or ruling or taken any other nonappealable final action,
in each case, having the effect of permanently restraining, enjoining or
otherwise prohibiting the Closing and one or more of the transactions
contemplated hereby; provided, however, that the right to terminate this
Agreement under this Section 10.1(d) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of,
or materially contributed to, such action;
(e) by Buyer, if any Seller has breached any representation,
warranty, covenant or agreement on the part of such Seller set forth in this
Agreement which (i) would result in a failure of a condition set forth in
Sections 9.2(a) or (b) hereof and (ii) is not cured in all material respects
within thirty (30) calendar days after written notice thereof; provided,
however, that if such breach cannot reasonably be cured within such thirty
(30) day period but can be reasonably cured prior to the Outside Date, and
such Seller is diligently proceeding to cure such breach, this Agreement may
not be terminated pursuant to this Section 10.1(e); provided, further, that
Buyer's right to terminate this Agreement under this Section 10.1(e) shall not
be available if, at the time of such intended termination, any Seller has the
right to terminate this Agreement under Sections 10.1(b), (c), (d), or (f)
hereof; provided, further, that Buyer shall not have the right to terminate
this Agreement under this Section 10.1(e) if the failure to satisfy the
conditions set forth in Section 9.2(b) solely relates to Seller's obligations
under Section 8.10(b) hereof;
(f) by any of the Sellers, if Buyer has breached any representation,
warranty, covenant or agreement on the part of Buyer set forth in this
Agreement which (i) would result in a failure of a condition set forth in
Sections 9.3(b) or (c) hereof and (ii) is not cured in all material respects
within thirty (30) calendar days after written notice thereof; provided,
however, that if such breach cannot reasonably be cured within such thirty
(30) day period but can be reasonably cured prior to the Outside Date, and
Buyer is diligently proceeding to cure such breach, this Agreement may not be
terminated pursuant to this Section 10.1(f); provided, further, that Sellers'
right to terminate this Agreement under this Section 10.1(f) shall not be
available if, at the time of such intended termination, Buyer has the right to
terminate this Agreement under Sections 10.1(b), (d) or (e) hereof;
(g) by Buyer, if any Seller fails to cure a Major Title Defect or
Major Survey Defect that it is obligated to cure in accordance with Article
XII hereof; provided, however, that Buyer may only exercise this right of
termination (i) for a period of ten (10) calendar days after the end of the
applicable Cure Period and (ii) if such failure to cure results, individually
or in the aggregate, in a Seller Material Adverse Effect; and
(h) by Buyer, in the event that any casualty or casualties occurring
prior to the Closing results, individually or in the aggregate, in a Total
Material Adverse Effect; provided, however, that the termination right set
forth in this Section 10.1(h) is subject to the terms and conditions set forth
in Section 8.16 hereof.
Section 10.2 Effect of Termination.
(a) Liability. In the event of termination of this Agreement as
provided in Section 10.1 hereof, this Agreement shall immediately become void
and there shall be no Liability on the part of Buyer or any Seller, or their
respective Affiliates or Representatives, other than pursuant to Sections 8.5,
10.2, 11.2 and Article XIII hereof; provided, however, that nothing contained
in this Section 10.2 shall relieve or limit the Liability of either party to
this Agreement for any fraudulent or willful breach of this Agreement.
(b) Fees and Expenses. Except as otherwise expressly provided in this
Agreement, all fees and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such expenses, whether or not the Closing is consummated.
(c) Application of the Deposit.
(i) Upon the termination of this Agreement pursuant to Sections
10.1(b) or (d) hereof, and if (x) at or prior to such termination (A) all
Gaming Approvals shall not have been obtained or (B) the waiting period under
the HSR Act shall have not expired or been terminated (or any Governmental
Entity having jurisdiction over federal antitrust or competition Laws of the
United States shall have commenced an investigation, proceeding or other
action which is continuing at the time of such termination of this Agreement,
or an injunction shall have been obtained, on the basis of antitrust or
competition Laws of the United States in respect of the transactions
contemplated by the Agreement), the Deposit, together with any interest earned
thereon, shall be paid to the Sellers (and the Sellers shall split the Deposit
(and any interest earned thereon) among themselves as such Deposit is
allocated between the Properties as set forth in Section 3.2(a) hereof) and if
(y) at or prior to such termination (A) all Gaming Approvals shall have been
obtained and not revoked and (B) the waiting period under the HSR Act shall
have expired or been terminated (and no Governmental Entity having
jurisdiction over federal antitrust or competition Laws of the United States
shall have commenced an investigation, proceeding or other action which is
continuing at the time of such termination of this Agreement, and no
injunction shall have been obtained, on the basis of antitrust or competition
Laws of the United States in respect of the transactions contemplated by the
Agreement), the Deposit, together with interest earned thereon, shall be paid
in equal amounts to Buyer, on the one hand and the Sellers, on the other hand
(and the Sellers shall split the Deposit (and any interest earned thereon)
among each Seller pro rata based as such Deposit is allocated between the
Properties as set forth in Section 3.2(a) hereof); provided, however, that
Buyer shall be paid the Deposit if any Seller's failure to perform its
obligations under the Agreement was the primary cause of the reason for the
termination set forth in Section 10.1(d) hereof.
(ii) Upon the termination of this Agreement pursuant to Sections
10.1(a), (e), (g) or (h) hereof the Deposit, together with interest earned
thereon, shall be paid to Buyer.
(iii) Upon the termination of this Agreement pursuant to Sections
10.1(c) or (f) hereof, the Deposit, together with any interest earned thereon,
shall be paid to the Sellers (and the Sellers shall split the Deposit (and any
interest earned thereon) among themselves as such Deposit is allocated between
the Properties as set forth in Section 3.2(a) hereof).
(d) Sole and Exclusive Remedy. The parties hereto agree that the
provisions contained in this Section 10.2 are an integral part of the
transactions contemplated by this Agreement, that the damages resulting from
the termination of this Agreement as set forth in this Section 10.2 are
uncertain and incapable of accurate calculation and that the amounts payable
pursuant to Section 10.2 hereof are reasonable forecasts of the actual damages
which may be incurred by the parties under such circumstances. The amounts
payable pursuant to Section 10.2 hereof constitute liquidated damages and not
a penalty and shall be the sole and exclusive remedy in the event of
termination of this Agreement on the bases specified in such section or as a
result of the Buyer not obtaining the Financing (it being agreed and
understood that nothing in this Section 10.2 is intended to limit (other than
a breach of Section 8.14 hereof) (i) any Seller's remedy in the event of a
willful breach by Buyer or (ii) Buyer's remedy in the event of a willful
breach by any Seller).
ARTICLE XI.
SURVIVAL; INDEMNIFICATION
Section 11.1 Survival of Representations, Warranties, Covenants and
Agreements.
(a) Except as set forth in Article X and Section 11.1(b) hereof, the
representations, warranties, covenants and agreements of each party hereto
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto, any Person
controlling any such party or any of their Representatives whether prior to or
after the execution of this Agreement.
(b) The representations and warranties made by each of the Sellers
and Buyer in this Agreement shall survive the Closing until (and claims based
upon or arising out of such representations and warranties may be asserted at
any time before) nine months after the Closing Date; provided, however, that
the representations made in Sections 6.2(a) and 6.5 hereof shall survive until
the expiration of the applicable statute of limitations. The period of time a
representation or warranty survives the Closing pursuant to the preceding
sentence shall be the "Survival Period" with respect to such representation or
warranty. The parties intend for the preceding two sentences to shorten the
otherwise applicable statute of limitations and agree that, subject to the
last sentence of this Section 11.1(b), no claim may be brought based upon,
directly or indirectly, any of the representations and warranties contained in
this Agreement after the Survival Period with respect to such representation
or warranty. The covenants and agreements of the parties hereto in this
Agreement shall survive the Closing without any contractual limitation on the
period of survival (other than those covenants and agreements that are
expressly required to remain in full force and effect for a specified period
of time). The termination of the representations and warranties provided
herein shall not affect a party in respect of any claim made by such party in
reasonable detail in a writing received by the indemnifying party prior to the
expiration of the Survival Period provided herein.
Section 11.2 Indemnification.
(a) From and after the Closing, Xxxxxx'x Seller One shall solely and
exclusively indemnify, save and hold harmless Buyer and its Affiliates and
their respective Representatives (each, a "Buyer Indemnified Party" and
collectively, the "Buyer Indemnified Parties") from and against any and all
costs, losses, Liabilities, obligations, damages, claims, demands and expenses
(whether or not arising out of third-party claims), including interest,
penalties, reasonable attorneys' fees and all amounts paid in investigation,
defense or settlement of any of the foregoing (herein, "Damages"), incurred in
connection with, arising out of or resulting from:
(i) any breach of any representation or warranty made by Xxxxxx'x
Seller One in this Agreement or in any certificate, instrument or agreement
provided for in this Agreement, in either case without regard to any reference
to materiality or Seller Material Adverse Effect;
(ii) any breach of any covenant or agreement made, or to be
performed, by Xxxxxx'x Seller One in this Agreement or in any certificate,
instrument or agreement provided for in this Agreement;
(iii) the Excluded Liabilities retained by Xxxxxx'x Seller One; and
(iv) the Excluded Assets retained by Xxxxxx'x Seller One
(collectively, with the items covered in clauses (i), (ii) and (iii) of this
Section 11.2(a), the "Xxxxxx'x Seller One Items").
(b) From and after the Closing, Xxxxxx'x Seller Two shall solely and
exclusively indemnify, save and hold harmless the Buyer Indemnified Parties
from and against any and all Damages incurred in connection with, arising out
of or resulting from:
(i) any breach of any representation or warranty made by Xxxxxx'x
Seller Two in this Agreement or in any certificate, instrument or agreement
provided for in this Agreement, in either case without regard to any reference
to materiality or Seller Material Adverse Effect;
(ii) any breach of any covenant or agreement made, or to be
performed, by Xxxxxx'x Seller Two in this Agreement or in any certificate,
instrument or agreement provided for in this Agreement;
(iii) the Excluded Liabilities retained by Xxxxxx'x Seller Two; and
(iv) the Excluded Assets retained by Xxxxxx'x Seller Two
(collectively, with the items covered in clauses (i), (ii) and (iii) of this
Section 11.2(b), the "Xxxxxx'x Seller Two Items").
(c) From and after the Closing, Caesars Seller One shall solely and
exclusively indemnify, save and hold harmless the Buyer Indemnified Parties
from and against any and all Damages incurred in connection with, arising out
of or resulting from:
(i) any breach of any representation or warranty made by Caesars
Seller One in this Agreement or in any certificate, instrument or agreement
provided for in this Agreement, in either case without regard to any reference
to materiality or Seller Material Adverse Effect;
(ii) any breach of any covenant or agreement made, or to be
performed, by Caesars Seller One in this Agreement or in any certificate,
instrument or agreement provided for in this Agreement;
(iii) the Excluded Liabilities retained by Caesars Seller One; and
(iv) the Excluded Assets retained by Caesars Seller One
(collectively, with the items covered in clauses (i), (ii) and (iii) of this
Section 11.2(c), the "Caesars Seller One Items").
(d) From and after the Closing, Caesars Seller Two shall solely and
exclusively indemnify, save and hold harmless the Buyer Indemnified Parties
from and against any and all Damages incurred in connection with, arising out
of or resulting from:
(i) any breach of any representation or warranty made by Caesars
Seller Two in this Agreement or in any certificate, instrument or agreement
provided for in this Agreement, in either case without regard to any reference
to materiality or Seller Material Adverse Effect;
(ii) any breach of any covenant or agreement made, or to be
performed, by Caesars Seller Two in this Agreement or in any certificate,
instrument or agreement provided for in this Agreement;
(iii) the Excluded Liabilities retained by Caesars Seller Two; and
(iv) the Excluded Assets retained by Caesars Seller Two
(collectively, with the items covered in clauses (i), (ii) and (iii) of this
Section 11.2(d), the "Caesars Seller Two Items").
(e) From and after the Closing, Buyer shall indemnify, save and hold
harmless each of the Sellers and their Affiliates and their respective
Representatives (each, a "Seller Indemnified Party" and collectively, the
"Seller Indemnified Parties") from and against any and all Damages of such
Seller incurred in connection with, arising out of or resulting from:
(i) any breach of any representation or warranty made by Buyer in
this Agreement or in any certificate, instrument or agreement provided for in
this Agreement, in either case without regard to any reference to materiality;
(ii) any breach of any covenant or agreement made, or to be
performed, by Buyer in this Agreement or in any certificate, instrument or
agreement provided for in this Agreement;
(iii) the Assumed Liabilities;
(iv) the ownership, use, operation or maintenance of the Total Assets
from and after the Closing or the conduct of business of the Properties from
and after the Closing; and
(v) any assistance offered to Buyer by Sellers and their respective
Affiliates and Representatives pursuant to Section 8.10(b) hereof.
(f) Interpretation.
(i) Notwithstanding anything in this Agreement to the contrary, the
term Damages shall not include any consequential, special or incidental
damages, claims for lost profits, or punitive or similar damages.
(ii) Notwithstanding anything contained in this Agreement, (a)
Xxxxxx'x Seller One shall in no event be obligated to indemnify, save or hold
harmless any Buyer Indemnified Party from and against any Damages incurred in
connection with, arising out of or resulting from any Xxxxxx'x Seller Two
Items, any Caesars Seller One Items or any Caesars Seller Two Items; (b)
Xxxxxx'x Seller Two shall in no event be obligated to indemnify, save or hold
harmless any Buyer Indemnified Party from and against any Damages incurred in
connection with, arising out of or resulting from any Xxxxxx'x Seller One
Items, any Caesars Seller One Items or any Caesars Seller Two Items; (c)
Caesars Seller One shall in no event be obligated to indemnify, save or hold
harmless any Buyer Indemnified Party from and against any Damages incurred in
connection with, arising out of or resulting from any Xxxxxx'x Seller One
Items, any Xxxxxx'x Seller Two Items or any Caesars Seller Two Items; and (d)
Caesars Seller Two shall in event be obligated to indemnify, save or hold
harmless any Buyer Indemnified Party from and against any Damages incurred in
connection with, arising out of or resulting from any Xxxxxx'x Seller One
Items, any Xxxxxx'x Seller Two Items or any Caesars Seller One Items.
Section 11.3 Procedure for Claims between Parties. If a claim for
Damages is to be made by a Buyer Indemnified Party or Seller Indemnified Party
(each, an "Indemnified Party" and collectively, the "Indemnified Parties")
entitled to indemnification hereunder, such party shall give written notice
briefly describing the claim and the total monetary damages sought (each, a
"Notice") to the indemnifying party hereunder (the "Indemnifying Party" and
collectively, the "Indemnifying Parties") and to all the other parties hereto
as soon as practicable after such Indemnified Party becomes aware of any fact,
condition or event which may give rise to Damages for which indemnification
may be sought under this Article XI. Any failure to submit any such notice of
claim to the Indemnifying Party shall not relieve any Indemnifying Party of
any Liability hereunder, except to the extent that the Indemnifying Party was
actually prejudiced by such failure.
Section 11.4 Defense of Third Party Claims. If any lawsuit or
enforcement action is filed against an Indemnified Party by any third party
(each, a "Third Party Claim") for which indemnification under this Article XI
may be sought, Notice thereof shall be given to the Indemnifying Party and to
all the other parties hereto as promptly as practicable. The failure of any
Indemnified Party to give timely Notice hereunder shall not affect rights to
indemnification hereunder, except to the extent that the Indemnifying Party
was actually prejudiced by such failure. The Indemnifying Party shall be
entitled, if it so elects at its own cost, risk and expense, (i) to take
control of the defense and investigation of such Third Party Claim, (ii) to
employ and engage attorneys of its own choice (provided that such attorneys
are reasonably acceptable to the Indemnified Party) to handle and defend the
same, unless the named parties to such action or proceeding include both one
or more Indemnifying Parties and an Indemnified Party, and the Indemnified
Party has been advised in writing by counsel that there may be one or more
legal defenses available to such Indemnified Party that are different from or
additional to those available to an applicable Indemnifying Party, in which
event such Indemnified Party shall be entitled, at the Indemnifying Parties'
reasonable cost, risk and expense, to separate counsel (provided that such
counsel is reasonably acceptable to the Indemnifying Party), and (iii) to
compromise or settle such claim, which compromise or settlement shall be made
only (x) with the written consent of the Indemnified Party, such consent not
to be unreasonably withheld or (y) if such compromise or settlement contains
an unconditional release of the Indemnified Party in respect of such claim. If
the Indemnifying Party elects to assume the defense of a Third Party Claim,
the Indemnified Party shall cooperate in all reasonable respects with the
Indemnifying Party and its attorneys in the investigation, trial and defense
of such Third Party Claim and any appeal arising therefrom; provided, however,
that the Indemnified Party may, at its own cost, participate in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom. The parties shall cooperate with each other in any
notifications to insurers. If the Indemnifying Party fails to assume the
defense of such claim within fifteen (15) calendar days after receipt of the
Notice, the Indemnified Party against which such claim has been asserted will
have the right to undertake, at the Indemnifying Parties' reasonable cost,
risk and expense, the defense, compromise or settlement of such Third Party
Claim on behalf of and for the account and risk of the Indemnifying Parties;
provided, however, that such claim shall not be compromised or settled without
the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld. If the Indemnified Party assumes the defense of the
claim, the Indemnified Party will keep the Indemnifying Party reasonably
informed of the progress of any such defense, compromise or settlement.
Section 11.5 Limitations on Indemnity.
(a) No Buyer Indemnified Party shall seek, or be entitled to,
indemnification from Xxxxxx'x Seller One pursuant to Section 11.2(a)(i) and
Section 11.2(a)(ii) (solely with respect to the failure by Seller to fulfill
its obligations pursuant to Section 8.17(b) hereof with respect to any breach
of a representation or warranty) to the extent the aggregate claims for
Damages of the Buyer Indemnified Parties for which indemnification is sought
pursuant to such sections hereof is less than Five Million Five Hundred Thirty
Five Thousand Dollars ($5,535,000) (the "Xxxxxx'x One Threshold") or exceeds
an amount equal to Twenty Two Million One Hundred Forty Thousand Dollars
($22,140,000) (the "Xxxxxx'x One Cap"); provided, that, if the aggregate of
all claims for Damages for which indemnification is sought pursuant to Section
11.2(a)(i) and Section 11.2(a)(ii) (solely with respect to the failure by
Seller to fulfill its obligations pursuant to Section 8.17(b) hereof with
respect to any breach of a representation or warranty) equals or exceeds the
Xxxxxx'x One Threshold, then Buyer shall be entitled to recover for such
Damages subject to the limitations in this Section 11.5(a) only to the extent
such Damages exceed the Xxxxxx'x One Threshold, but in any event not to exceed
the Xxxxxx'x One Cap. Notwithstanding anything to the contrary herein, solely
with respect to any breach by Xxxxxx'x Seller One of the representations or
warranties set forth in Section 6.11 hereof, the Xxxxxx'x Seller One Threshold
shall be deemed to be One Million Dollars ($1,000,000) but any Damages within
such threshold shall also be applicable to the Xxxxxx'x Seller One Threshold.
(b) No Buyer Indemnified Party shall seek, or be entitled to,
indemnification from Xxxxxx'x Seller Two pursuant to such Section 11.2(b)(i)
and Section 11.2(b)(ii) (solely with respect to the failure by Seller to
fulfill its obligations pursuant to Section 8.17(b) hereof with respect to any
breach of a representation or warranty) to the extent the aggregate claims for
Damages of the Buyer Indemnified Parties for which indemnification is sought
pursuant to such sections is less than Two Million Fifty Six Thousand Dollars
($2,056,000) (the "Xxxxxx'x Two Threshold") or exceeds an amount equal to
Eight Million Two Hundred Twenty Six Thousand Dollars ($8,226,000) (the
"Xxxxxx'x Two Cap"); provided, that, if the aggregate of all claims for
Damages for which indemnification is sought pursuant to Section 11.2(b)(i) and
Section 11.2(b)(ii) (solely with respect to failure by Seller to fulfill its
obligations pursuant to Section 8.17(b) hereof with respect to any breach of a
representation or warranty) equals or exceeds the Xxxxxx'x Two Threshold, then
Buyer shall be entitled to recover for such Damages subject to the limitations
in this Section 11.5(b) only to the extent such Damages exceed the Xxxxxx'x
Two Threshold, but in any event not to exceed the Xxxxxx'x Two Cap.
Notwithstanding anything to the contrary herein, solely with respect to any
breach by Xxxxxx'x Seller Two of the representations or warranties set forth
in Section 6.11 hereof, the Xxxxxx'x Seller Two Threshold shall be deemed to
be One Million Dollars ($1,000,000) but any Damages within such threshold
shall also be applicable to the Xxxxxx'x Seller Two Threshold.
(c) No Buyer Indemnified Party shall seek, or be entitled to,
indemnification from Caesars Seller One pursuant to Section 11.2(c)(i) and
Section 11.2(c)(ii) (solely with respect to the failure by Seller to fulfill
its obligations pursuant to Section 8.17(b) hereof with respect to any breach
of a representation or warranty) to the extent the aggregate claims for
Damages of the Buyer Indemnified Parties for which indemnification is sought
pursuant to such sections is less than Five Million Eight Hundred Sixty Five
Thousand Dollars ($5,865,000) (the "Caesars One Threshold") or exceeds an
amount equal to Twenty Three Million Four Hundred Sixty Thousand Dollars
($23,460,000) (the "Caesars One Cap"); provided, that, if the aggregate of all
claims for Damages for which indemnification is sought pursuant to Section
11.2(c)(i) and Section 11.2(a)(ii) (solely with respect to the failure by
Seller to fulfill its obligations pursuant to Section 8.17(b) hereof with
respect to any breach of a representation or warranty) hereof equals or
exceeds the Caesars One Threshold, then Buyer shall be entitled to recover for
such Damages subject to the limitations in this Section 11.5(c) only to the
extent such Damages exceed the Caesars One Threshold, but in any event not to
exceed the Caesars One Cap. Notwithstanding anything to the contrary herein,
solely with respect to any breach by Caesars Seller One of the representations
or warranties set forth in Section 6.11 hereof, the Caesars Seller One
Threshold shall be deemed to be One Million Dollars ($1,000,000) but any
Damages within such threshold shall also be applicable to the Caesars Seller
One Threshold.
(d) No Buyer Indemnified Party shall seek, or be entitled to,
indemnification from Caesars Seller Two pursuant to Section 11.2(d)(i) and
Section 11.2(d)(ii) (solely with respect to the failure by Seller to fulfill
its obligations pursuant to Section 8.17(b) hereof with respect to any breach
of a representation or warranty) to the extent the aggregate claims for
Damages of the Buyer Indemnified Parties for which indemnification is sought
pursuant to such sections is less than One Million Five Hundred Forty Four
Thousand Dollars ($1,544,000) (the "Caesars Two Threshold") or exceeds an
amount equal to Six Million One Hundred Seventy Four Thousand ($6,174,000)
(the "Caesars Two Cap"); provided, that, if the aggregate of all claims for
Damages for which indemnification is sought pursuant to Section 11.2(d)(i) and
Section 11.2(d)(ii) (solely with respect to the failure by Seller to fulfill
its obligations pursuant to Section 8.17(b) hereof with respect to any breach
of a representation or warranty) (ii) hereof equals or exceeds the Caesars Two
Threshold, then Buyer shall be entitled to recover for such Damages subject to
the limitations in this Section 11.5(d) only to the extent such Damages exceed
the Caesars Two Threshold, but in any event not to exceed the Caesars Two Cap.
Notwithstanding anything to the contrary herein, solely with respect to any
breach by Caesars Seller Two of the representations or warranties set forth in
Section 6.11 hereof, the Caesars Seller Two Threshold shall be deemed to be
One Million Dollars ($1,000,000) but any Damages within such threshold shall
also be applicable to the Caesars Seller Two Threshold.
(e) In calculating the amount of any Damages payable to a Buyer
Indemnified Party or a Seller Indemnified Party hereunder, the amount of the
Damages (i) shall not be duplicative of any other Damage for which an
indemnification claim has been made, (ii) shall be computed net of any amounts
actually recovered by such Indemnified Party under any insurance policy with
respect to such Damages (net of any costs and expenses incurred in obtaining
such insurance proceeds) and (iii) shall be computed net of any Tax benefit
obtained or obtainable by the Indemnified Party with respect to such Damages.
If an Indemnifying Party pays an Indemnified Party for a claim and
subsequently insurance proceeds in respect of such claim is collected by the
Indemnified Parties, then the Indemnified Party promptly shall remit the
insurance proceeds (net of any costs and expenses incurred in obtaining such
insurance proceeds) to the Indemnifying Party. The Indemnified Parties shall
use best efforts to obtain from any applicable insurance company any insurance
proceeds in respect of any claim for which the Indemnified Parties seek
indemnification under this Article XI.
Section 11.6 Payment of Damages. An Indemnified Party (or if an
Electing Seller, its designated "qualified intermediary") shall be paid in
cash by an Indemnifying Party the amount to which such Indemnified Party (or
if an Electing Seller, its designated "qualified intermediary") may become
entitled by reason of the provisions of this Article XI, within fifteen (15)
days after such amount is determined either by mutual agreement of the parties
or on the date on which both such amount and an Indemnified Party's obligation
to pay such amount have been determined by a final judgment of a court or
administrative body having jurisdiction over such proceeding.
Section 11.7 Exclusive Remedy.
(a) After the Closing, the indemnities provided in this Article XI
shall constitute the sole and exclusive remedy of any Indemnified Party for
Damages arising out of, resulting from or incurred in connection with any
claims regarding matters arising under or otherwise relating to this
Agreement; provided, however, that this exclusive remedy for Damages does not
preclude a party from bringing an action for specific performance or other
equitable remedy to require a party to perform its obligations under this
Agreement. Without limiting the foregoing, Buyer and each of the Sellers each
hereby waive (and, by their acceptance of the benefits under this Agreement,
each Buyer Indemnified Party and Seller Indemnified Party hereby waives), from
and after the Closing, any and all rights, claims and causes of action (other
than claims of, or causes of action arising from, fraud or willful misconduct)
such party may have against the other parties hereto arising under or based
upon this Agreement or any schedule, exhibit, Disclosure Letter, document or
certificate delivered in connection herewith, and no legal action sounding in
tort, statute or strict liability may be maintained by any party (other than a
legal action brought solely to enforce the provisions of this Article XI).
Notwithstanding anything to the contrary in this Section 11.7, in the event of
a fraudulent breach of the representations, warranties, covenants or
agreements contained herein by Buyer or any Seller, any Indemnified Party
shall have all remedies available at law or in equity with respect thereto.
(b) Without limiting the foregoing, the Buyer Indemnified Parties
hereby waive and agree not to seek (whether under any Environmental Law or
otherwise) any statutory or common law remedy (whether for contribution,
equitable indemnity or otherwise) against any Indemnifying Party with regard
to any Environmental Condition or Environmental Liability.
Section 11.8 Treatment of Indemnification Payments. All
indemnification payments made pursuant to this Article XI shall be treated by
the parties for income Tax purposes as adjustments to the Purchase Price,
unless otherwise required by applicable Law.
ARTICLE XII.
TITLE TO REAL PROPERTY
Section 12.1 Title Commitments and UCC Search. Buyer has received and
reviewed Schedule B to each title commitment delivered by the Title Insurer
prior to the date hereof to the extent marked and attached to Section 12.1 of
each Seller Disclosure Letter (as related to each Seller such Schedule B shall
mean, its "Title Commitment") and each UCC-11 Search delivered by the Title
Insurer prior to the date hereof to the extent set forth in Section 12.1 of
each Seller Disclosure Letter (as related to each Seller, its "UCC Search") as
evidence of the status of each Seller's title to its Property as of the dates
thereof. Buyer acknowledges and agrees that the Title Commitments (as marked)
do not contain or reflect any Major Title Defects. Each Seller shall cause the
Title Insurer to deliver the Title Policy to Buyer at the Closing insuring
that Buyer has leasehold or fee simple title to the Properties (with such
coinsurance and reinsurance reasonably satisfactory to Buyer), and Buyer
agrees to accept title to the Properties subject only to the Permitted
Encumbrances. Buyer shall pay the premium for each Title Policy and all
endorsements thereto. Seller shall execute any and all owner's affidavits as
reasonably required by the Title Insurer as necessary to issue the Title
Policy.
Section 12.2 Survey. Buyer agrees to accept each Property subject to
all matters shown by the surveys to the extent such surveys are listed in
Section 12.2 of each Seller Disclosure Letter (as it relates to each Seller,
its "Surveys").
Section 12.3 Defects.
(a) Each Seller may provide Buyer with an updated Title Commitment
and UCC Search from time to time prior to Closing at such Seller's election,
and each Seller shall provide Buyer and its counsel with an updated Title
Commitment and UCC Search not earlier than forty (40) business days and not
later than ten (10) business days prior to the Closing, all at Buyer's cost
and expense. To the extent not delivered as of the date hereof, each Seller
shall provide Buyer with a new title commitment and/or UCC-11 searches for all
Properties within thirty (30) days after the date hereof at Seller's sole cost
and expense.
(b) Each Seller shall provide Buyer and its counsel with a new or an
updated and certified Survey, as applicable, within ninety (90) calendar days
after the date hereof at Buyer's sole cost and expense.
(c) If any new or updated Title Commitment, UCC Search or Survey
shows defects not shown by the applicable Title Commitment, UCC Search, or
Survey provided as of the date hereof that are Major Survey Defects or Major
Title Defects, and Buyer has delivered to the applicable Seller and its
counsel an itemized written notice of such Major Survey Defects or Major Title
Defects ("Buyer's Title Notice") within ten (10) business days after the date
of delivery of the applicable new or updated Title Commitment, UCC Search or
Surveys to Buyer, then such Seller shall, within thirty (30) calendar days
after receipt of Buyer's Title Notice (the "Cure Period"), begin the process
to cure the Major Survey Defects or Major Title Defects identified in Buyer's
Title Notice and to continue to diligently prosecute such cure. If necessary,
the Cure Period and the Closing Date may be extended for a reasonable amount
of time (as determined in Seller's reasonable discretion) to accommodate the
amount of time necessary to allow Seller to cure such Major Survey Defects or
Major Title Defects identified in Buyer's Title Notice; provided, however,
that (i) the Closing Date shall not be extended beyond the Outside Date other
than any extension thereof pursuant to this Section 12.3(c) without the mutual
agreement of Buyer and Seller and (ii) Buyer shall not be obligated to deposit
any additional Deposit amounts in connection with an extension of the Closing
Date pursuant to this Section 12.3(c) if all of the conditions to Closing set
forth in Sections 9.1 and 9.3 have been satisfied. In addition, Seller shall
have the obligation to cure any Monetary Encumbrances on or prior to the
Closing Date. Notwithstanding anything to the contrary contained herein, under
no circumstances shall any Permitted Encumbrance be considered a Major Survey
Defect or Major Title Defect for purposes of this Article XII.
(d) Failure to provide Seller with Buyer's Title Notice within the
ten (10) business day period following delivery of the applicable updated
Title Commitment, UCC Search or Survey shall be deemed a waiver of Buyer's
right to disapprove of any matters disclosed by any such updated Title
Commitment, UCC Search or Survey, and Buyer shall then be deemed to have
accepted all matters as described in each Title Commitment, UCC Search and
Surveys, as updated, without reserving any claim against such Seller for title
defects or Survey defects, and all such matters shall be deemed to be
Permitted Encumbrances.
(e) For purposes of this Section 12.3, "cure" of a Monetary
Encumbrance, a Major Survey Defect or a Major Title Defect must consist of one
of the following (at Seller's election): (a) in the case of Major Survey
Defects, delivery of an updated survey showing the absence of such Major
Survey Defect or (b) in the case of a Monetary Encumbrance, a Major Survey
Defect or Major Title Defect, delivery of an updated Title Commitment (or
endorsement thereto) showing the deletion from Schedule B of, or endorsement
(in a form reasonably acceptable to Buyer) over, such Monetary Encumbrance,
Major Survey Defect or Major Title Defect.
Section 12.4 As Is. Buyer acknowledges that it is familiar with each
of the Properties and has had the opportunity, directly or through its
representatives to inspect each of the Properties and conduct due diligence
activities. Without limitation of the foregoing, Buyer acknowledges that the
Purchase Price has been negotiated based on Buyer's express agreement that
there would be no contingencies (financial or otherwise) to Closing other than
the conditions set forth in Article IX hereof. Buyer or its Representatives
shall have fully examined and inspected the Properties prior to the execution
of this Agreement, and subject to the provisions of this Article XII and each
Seller's representations, warranties and covenants expressly set forth herein
or any certificate, instrument or agreement delivered pursuant hereto and
subject to the conditions set forth herein, Buyer agrees to accept the
Properties in an "AS IS" condition as of the Closing. Buyer agrees that,
except as provided in this Agreement or any certificate, instrument or
agreement delivered pursuant to this Agreement, Buyer is not relying upon any
representations, statements, or warranties (oral or written, implied or
express) of any officer, employee, agent or Representative of any Seller, or
any salesperson or broker (if any) involved in this transaction as to the
Properties, including, but not limited to: (a) any representation, statements
or warranties as to the physical condition of the Properties, (b) the fitness
and/or suitability of the Properties for use as a hotel and casino, (c) the
financial performance of the Properties, (d) the compliance of the Properties
with applicable building, zoning, subdivision, environmental, or land use
Laws, codes, ordinances, rules or regulations, (e) the state of repair of the
Properties, (f) the value of the Properties, (g) the manner or quality of
construction of the Properties, (h) the income derived or to be derived from
the Properties, or (i) the fact that the Properties may be located on
earthquake faults or in seismic hazardous zones. Other than in accordance with
Article XI hereof, Buyer, for itself and its successors and assigns, waives
any right to assert any claim against any Seller, at Law or in equity,
relating to any such matter, whether latent or patent, disclosed or
undisclosed, known or unknown, in contract or tort, now existing or hereafter
arising.
ARTICLE XIII.
MISCELLANEOUS
Section 13.1 Definitions.
(a) For purposes of this Agreement, the term:
"Accounts Receivable" means, as it relates to each Seller, all
accounts receivable (including receivables and revenues for food, beverages,
telephone and casino credit), notes receivable and indebtedness for borrowed
money or overdue accounts receivable to such Seller, in each case, due and
owing by any third party, but not including the Tray Ledger and the Markers.
"Acquired Personal Property" means, as it relates to each Seller, the
Personal Property of such Seller, excluding the Excluded Personal Property of
such Seller.
"Acquisition Proposal" means (a) any proposal or offer from any
Person relating to any direct or indirect acquisition or purchase of assets
(including capital stock) of a Seller comprising 25% or more of such Seller's
consolidated assets (by book or by fair market value) or of over 25% of any
class of equity securities of such Seller, (b) any tender offer or exchange
offer that if consummated would result in any Person beneficially owning 25%
or more of any class of equity securities of a Seller, or (c) any merger,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving a Seller and a third party, in
each case, other than the transactions contemplated by this Agreement. The
parties agree and acknowledge that notwithstanding anything in the previous
sentence, none of the transactions or actions contemplated by the Merger
Agreement shall be deemed to be an Acquisition Proposal.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first-mentioned Person.
"Assumed Contracts" means, as it relates to each Seller, the
Operating Agreements of such Seller; provided, that "Assumed Contracts" shall
not be deemed to include any Excluded Contracts.
"ASTM Phase I Standard" means the American Society of Testing and
Materials Practice E1527-00 for Phase I ESAs.
"Books and Records" means, as it relates to each Seller, (i) all
books and records of such Seller relating to its respective Property (except
(x) to the extent related to such Seller's Excluded Liabilities, such Seller's
Excluded Assets or otherwise proprietary to Xxxxxx'x, Caesars or their
respective Affiliates (other than such Seller) and (y) such Seller's Customer
Database), including without limitation, all architectural, structural,
service manuals, engineering and mechanical plans, electrical, soil, wetlands,
environmental, and similar reports, studies and audits, (ii) all plans and
specifications for a Seller's Property, and (iii) all human resources and
other employee-related files and records relating to the Transferred
Employees, except to the extent prohibited by Law.
"Caesars Seller One" shall have the meaning provided in the preamble
hereto; provided, however, solely for purposes of Sections 1.1(q), 1.4 (but
only in respect of its Purchased Assets) 4.1, 4.3, 5.1, 5.2(n), 5.2(q),
5.2(r), 5.2(w), 6.1, 6.2, 6.5(c) (but only in respect of the Purchased Assets
and Assumed Liabilities, as applicable), 6.6 (but only in respect of its
Purchased Assets and Assumed Liabilities, as applicable), 6.7 (but only in
respect of its Purchased Assets and Assumed Liabilities, as applicable), 6.11
(but only in respect of its Purchased Assets and Assumed Liabilities, as
applicable), 6.17 (but only in respect of its Purchased Assets and Assumed
Liabilities, as applicable), 8.1 (but only in respect of its Purchased Assets
and Assumed Liabilities, as applicable, for the following phrase "During the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Closing, subject to the limitations set
forth below, each Seller agrees (except to the extent contemplated by this
Agreement or to the extent that Buyer shall otherwise consent in writing, such
consent not to be unreasonably withheld) to carry on its business in the
Ordinary Course of Business, to pay its debts and Taxes when due (subject to
good faith disputes over such debts or Taxes), to continue to make maintenance
capital expenditures in the Ordinary Course of Business"), 8.1(i) through
8.1(v) (but only in respect of its Purchased Assets and Assumed Liabilities,
as applicable), 8.1(x) (but only in respect of the Purchased Assets and
Assumed Liabilities, as applicable), 8.1(xiv) (but only with respect to 8.1(i)
though 8.1(v) and 8.1(x) as listed above), 8.2, 8.3, 8.5, 8.8, 8.9, 8.10
(provided, that only the Caesars Sellers set forth in the preamble hereto
shall be required to deliver the 2003 Audited Financials, the 2004 Financials
and the September 30, 2004 financial information defined in Section
8.5(a)(ii)), 8.13, 8.16, 8.17, 8.21 (but only in respect of the Purchased
Assets and Assumed Liabilities, as applicable), 8.24, 9.2, 12.1, 12.2 and
12.3, Article XI and Article XIII and the definition of "Caesars Seller One
Land" hereof (the "Multi-Party Sections"), "Caesars Seller One" shall mean,
one or more of the following: (i) GNOC Corporation, a New Jersey corporation;
or (ii) Bally's Park Place, Inc., a New Jersey corporation; or (iii) Land
Ventures Realty LLC, a New Jersey limited liability company, as required by
the context of the applicable Multi-Party Section based on such entities'
ownership of the relevant portion of the Real Property. When the context of
any such Multi-Party Section refers to: (i) the Real Property set forth on
Section 6.7(a)(i) of the Caesars Seller One Seller Disclosure Letter, Caesars
Seller One shall be deemed to include GNOC Corporation; (ii) the Real Property
set forth on Section 6.7(a)(ii) of the Caesars Seller One Seller Disclosure
Letter, Caesars Seller One shall be deemed to include Bally's Park Place, Inc.
and/or (iii) the Real Property set forth on Section 6.7(a)(iii) of the Caesars
Seller One Seller Disclosure Letter, Caesars Seller One shall be deemed to
include Land Ventures Realty LLC.
"Caesars Seller One Land" means the real property owned or leased by
Caesars Seller One, as more particularly described in Sections 6.7(a)(i),
6.7(a)(ii) and 6.7(a)(iii) of Caesars Seller One's Seller Disclosure Letter.
"Caesars Seller One Lease" means, collectively, the ground leases set
forth on Section 6.7(c) of Caesars Seller One's Disclosure Letter.
"Caesars Seller Two Land" means the real property leased pursuant to
the Caesars Seller Two Lease and the real property owned by Caesars Seller
Two, as more particularly described in Section 6.7(a) of Caesars Seller Two's
Seller Disclosure Letter.
"Caesars Seller Two Lease" means, collectively, the Port Facility
Lease and the Old River Lease.
"Casino A Property" means, collectively, the Xxxxxx'x Seller One
Land, the hotel and casino located at the Land and the Fixtures at such
Property.
"Casino B Property" means, collectively, the Xxxxxx'x Seller Two
Land, the hotel and casino located at the Land and the Fixtures at such
Property.
"Casino C Property" means, collectively, the Caesars Seller One Land,
the hotel and casino located at the Land and the Fixtures at such Property.
"Casino D Property" means, collectively, the Caesars Seller Two Land,
the hotel and casino located at the Land and the Fixtures at such Property.
"City of East Chicago Obligations" means all obligations of Xxxxxx'x
Seller One to the City of East Chicago pursuant to (i) that certain Economic
Development Agreement between the City of East Chicago and Showboat Marina
Partnership dated April 8, 1994 and Xxxxx 00, 0000, (xx) that certain
Certificate of Suitability to Xxxxxx'x Seller One directed to be issued by the
Indiana Gaming Commission on January 8, 1996, (iii) that certain Memorandum of
Understanding resulting from a meeting on August 25, 2000 in the Office of the
Mayor of East Chicago, and (iv) that certain letter from the Mayor of East
Chicago to Xxxxxx'x Entertainment, Inc. and Xxxxxx'x Seller One dated February
25, 1999.
"Code" means the Internal Revenue Code of 1986, as amended.
"Colony" means Colony Capital, LLC, a Delaware limited liability
company.
"Connection Card" means the player loyalty program of Caesars.
"Contract" means any agreement, contract, lease, power of attorney,
note, loan, evidence of indebtedness, purchase order, letter of credit,
settlement agreement, franchise agreement, undertaking, covenant not to
compete, employment agreement, license, instrument, obligation, commitment,
understanding, policy, purchase and sales order, quotation and other executory
commitment to which any Person is a party or to which any of the assets of
such Person are subject, whether oral or written, express or implied.
"CRDA" means the Casino Reinvestment Development Authority, a
component unit of the State of New Jersey.
"Customer Database" means, as it relates to each Seller, all customer
databases, customer lists, historical records of customers and any other
customer information collected and used by such Seller or its Affiliates in
connection with marketing and promoting its Property.
"Encumbrances" means Liens, covenants, conditions, restrictions,
agreements, easements, title defects, options, rights of first offer, rights
of first refusal, restrictions on transfer, rights of other parties,
limitations on use, limitations on voting rights, or other encumbrances of any
kind or nature.
"Environmental Condition" means, as relating exclusively to the
Purchased Assets of each Seller, the release into the environment of any
Hazardous Substance as a result of which such Seller (i) has or may become
liable to any Person for an Environmental Liability, (ii) is or was in
violation of any Environmental Law, (iii) has or may be required to incur
response costs for investigation or remediation, or (iv) by reason of which
any Real Property or other assets of a Seller, may be subject to any Lien
under Environmental Laws; provided, however, that none of the foregoing shall
be an Environmental Condition if such matter was Remediated or otherwise
corrected prior to the date hereof in accordance with Environmental Law.
"Environmental Laws" means all applicable and legally enforceable
foreign, federal, state and local statutes or laws, judgments, orders,
regulations, licenses, permits, rules and ordinances relating to pollution or
protection of health, safety or the environment, including, but not limited to
the Federal Water Pollution Control Act (33 U.S.C. ss.1251 et seq.), Resource
Conservation and Recovery Act (42 U.S.C. ss.6901 et seq.), Safe Drinking Water
Act (42 U.S.C. ss.3000(f) et seq.), Toxic Substances Control Act (15 U.S.C.
ss.2601 et seq.), Clean Air Act (42 U.S.C. ss.7401 et seq.), Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. ss.9601 et
seq.) and other similar state and local statutes, in effect as of the date
hereof.
"Environmental Liabilities" means, as it relates to each Seller, all
Liabilities (including, without limitation, all reasonable fees, disbursements
and expenses of counsel, expert and consulting fees and costs of
investigations and feasibility studies and responding to government requests
for information or documents), fines, penalties, restitution and monetary
sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future, resulting from any claim or demand, by
any person or entity, under any Environmental Law, or arising from
Environmental Conditions relating exclusively to any of such Seller's
Purchased Assets.
"Environmental Permits" means any permit, license, authorization or
approval required under applicable Environmental Laws.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Contracts" means (a) all Contracts listed on Section 13.2
of each Seller Disclosure Letter, (b) the Non-Seller Assets and (c) any
employment agreement which is not set forth on Section 8.4(a) of a Seller
Disclosure Letter.
"Excluded Intellectual Property" means any Intellectual Property
owned, licensed to, or used by Xxxxxx'x, Caesars or any of their respective
Affiliates, except (i) the Intellectual Property owned exclusively by any of
the Sellers and (ii) the Customer List.
"Excluded Personal Property" means, as it relates to each Seller, the
following:
(i) any personal property covered by equipment leases from third
parties (including Affiliates of any Seller) or other agreements by which
property owned by third parties (including Affiliates of any Seller) is
located at such Seller's Property or its Land and used in connection with the
operation of the Property (including, without limitation, vending machines);
(ii) the Excluded Software;
(iii) all point of sale credit card verification terminals or imprint
plates owned by third parties;
(iv) any and all signs, menus, stationery, telephone numbers, gift
shop inventory or other items indicating that the Properties are owned and/or
operated by or on behalf of such Seller or identifying the Properties as a
Xxxxxx'x Property, a Caesars Property or bearing the System Xxxx "Xxxxxx'x(R)"
or "Caesars(R)" or any other System Xxxx of Sellers' Affiliates, except for
those items that Buyer and such Seller agree may be modified by Buyer to
remove such System Marks or identification, and as to which, on or before
thirty (30) days after the date of execution of this Agreement, Buyer and
Sellers have agreed in writing as to: (a) the manner of modification of such
items by Buyer; and (b) the time within which such modification shall be
effected by Buyer;
(v) all records, files and memorabilia pertaining to such Seller,
Xxxxxx'x or Caesars and any past or present corporate affiliates or
predecessors of such Seller, Xxxxxx'x or Caesars;
(vi) any gaming licenses, liquor licenses or other licenses or
permits pertaining to the Properties, unless transferable by Law;
(vii) any personal property of such Seller's Property's employees,
and all personal property, trade fixtures, signs, inventory or equipment of
any lessee or concessionaire of such Property;
(viii) any of such Seller's insurance policies, rights thereto and
proceeds thereof;
(ix) all chips (including "reserve" chips not currently in
circulation) and tokens; and
(x) any personal property held as prizes.
"Excluded Software" means, as it relates to each Seller, all computer
software owned by or licensed for use by such Seller or its Affiliates,
including, without limitation, all source codes, user codes and data, whether
on tape, disc or other computerized format, and all related user manuals,
computer records, service codes, programs, stored materials and databases
(including, without limitation, all access codes and instructions needed to
obtain access to and to utilize the information contained on such computer
records), together with any and all updates and modifications of all of the
foregoing and all copyrights related to the computer software, including
without limitation the Customer Database and any customer tracking system;
provided, however, Excluded Software shall not be deemed to include (i) the
Customer List, (ii) the Property Specific Data or (iii) any software for which
Buyer has received a license prior to Closing.
"FCC" means the Federal Communications Commission.
"FCC Licenses" means the licenses to operate a base station, two way
security radios, and/or a ship radio at the Properties as described in Section
13.3 of each Seller Disclosure Letter for each Property.
"Fixtures" means, as it relates to each Seller, all fixtures owned by
such Seller and placed on, attached to, or located at and used in connection
with the operation of its Property.
"Front Money" means, as it relates to each Seller, all money stored
on deposit at such Seller's Property cage belonging to, and stored in an
account for, any Person.
"GAAP" means United States generally accepted accounting principles,
consistently applied.
"Gaming Approvals" means all licenses, permits, approvals,
authorizations, registrations, findings of suitability, franchises,
entitlements, waivers and exemptions issued by any Gaming Authority necessary
for or relating to the conduct of activities by any party hereto or any of its
Affiliates, including, without limitation, the ownership, operation,
management and development of any of the Total Assets and Assumed Liabilities.
"Gaming Authorities" means any governmental authority or agency with
regulatory control or jurisdiction over the conduct of lawful gaming or
gambling, including, without limitation, the Indiana Gaming Commission; the
Indiana State Police, Gaming Division; the Mississippi Gaming Commission; the
New Jersey Casino Control Commission and the New Jersey Division of Gaming
Enforcement.
"Gaming Laws" means any federal, state, local or foreign statute,
ordinance, rule, regulation, permit, consent, registration, finding of
suitability, approval, license, judgment, order, decree, injunction or other
authorization, including any condition or limitation placed thereon, governing
or relating to the current or contemplated casino and gaming activities and
operations and manufacturing and distributing operations of any of the Total
Assets, any of the Sellers, Buyer or any of their respective Affiliates.
"Xxxxxx'x Seller One Land" means the real property leased pursuant to
the Xxxxxx'x Seller One Lease.
"Xxxxxx'x Seller One Lease" means that certain Redevelopment and
Project Lease by and between the City of East Chicago, Indiana, Department of
Redevelopment and Showboat Marina Partnership, dated October 25, 1995 (as
amended by the First Amendment dated March 28, 1996, an Acknowledgment of
Commencement Date of Redevelopment Project Lease and Notice dated March 28,
1996 and the Second Amendment dated January 20, 1999) and as assigned by a
lease assignment and assumption agreement between Showboat Marina Partnership,
as assignor and the Xxxxxx'x Seller One, assignee, dated March 28, 1996.
"Xxxxxx'x Seller Two Land" means the real property leased pursuant to
the Xxxxxx'x Seller Two Lease.
"Xxxxxx'x Seller Two Lease" means that certain Ground Lease, dated as
of September 28, 1993 between X.X. Xxxxxxxxxx and Xxxx X. Xxxxxxxx, as
landlords, and Mississippi Riverboat Amusement, Ltd., as tenant (predecessor
to Xxxxxx'x Seller Two), as amended by (i) Lessor's Acknowledgment of
Assignment and Lease Modification Agreement, dated as of October 7, 1993,
among X.X. Xxxxxxxxxx and Xxxx X. Xxxxxxxx, as landlords, Mississippi
Riverboat Amusement, Ltd., as tenant, and Biloxi Casino Belle Inc.,
(predecessor to Xxxxxx'x Seller Two) as assignee and (ii) Second Lease
Modification Agreement between X.X. Xxxxxxxxxx and Xxxx X. Xxxxxxxx, as
landlords, and Xxxxxx'x Seller Two, as tenant.
"Hazardous Substance" means any pollutant, chemical, substance and
any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or
flammable chemical, or chemical compound, or hazardous substance, material or
waste, whether solid, liquid or gas, that is subject to regulation, control or
remediation under applicable Environmental Laws, including without limitation,
any quantity of friable asbestos, urea formaldehyde foam insulation, PCBs,
crude oil or any fraction thereof, all forms of natural gas, petroleum
products or by-products or derivatives.
"House Funds" means, as it relates to each Seller, all cash and cash
equivalents located at its Property, including, without limitation, cash,
negotiable instruments, and other cash equivalents located in cages, drop
boxes, slot machines and other gaming devices, cash on hand for such Property
manager's xxxxx cash fund and cashiers' banks, coins and slot hoppers,
carousels, slot vault and poker bank and cash in the registration, retail,
restaurant and other non-gaming areas of its Property (in each case, only to
the extent owned by Seller), but shall not include Front Money, which shall be
treated in accordance with Section 8.12(g) hereof or the Tray Ledger which
shall be treated in accordance with Section 4.2(a) hereof.
"Intellectual Property" means all intellectual property or other
proprietary rights of every kind, foreign or domestic, including all patents,
patent applications, inventions (whether or not patentable), processes,
products, technologies, discoveries, copyrightable and copyrighted works,
apparatus, trade secrets, trademarks, trademark registrations and
applications, domain names, trade dress, service marks, service xxxx
registrations and applications, trade names, and all goodwill associated with
the foregoing; trade secrets, know-how, copyright registrations, databases and
software and object codes, customer lists, confidential marketing and customer
information, and all licenses, confidential technical information, and all
documentation thereof.
"IRS" means the Internal Revenue Service, a division of the United
States Treasury Department, or any successor thereto.
"knowledge" means, (a) when used in the phrase "knowledge of Seller"
or "Seller's knowledge" and words of similar import, (i) in reference to the
Caesars Seller One, the actual knowledge of: Xxxxxxx X. Xxxx, Xxxxxxx X.
XxXxxx, Xx., Xxx Xxxxxxx and Xxxxx Xxxxxx, (ii) in reference to the Caesars
Seller Two, the actual knowledge of: Xxxxxxx X. Xxxx, Xxxxxxx X. XxXxxx, Xx.,
Xxx Xxxxxxx and Xxxx Xxxxx, (iii) in reference to Xxxxxx'x Seller One, the
actual knowledge of: Xxxxxxx Xxxxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxxx St. Pierre and Xxxxxx Xxxxxx, or (iv) in reference to Xxxxxx'x Seller
Two, the actual knowledge of: Xxxxxxx Xxxxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxx Xxxxxx and Xxx Xxxxxxx; or (b) when used in the phrase
"knowledge of Buyer" or "Buyer's knowledge" and words of similar import the
actual knowledge of: Xxxxxx X. Xxxxxxx, Xx. and Xxxxxxxx X. Xxxxx.
"Land" means one of the following, as applicable: Xxxxxx'x Seller One
Land, Xxxxxx'x Seller Two Land, the Caesars Seller One Land and the Caesars
Seller Two Land.
"Law" means any foreign or domestic law, statute, code, ordinance,
rule, regulation, order, judgment, writ, stipulation, award, injunction,
decree or arbitration award, policies, guidance, court decision, rule of
common law or finding.
"Leases" means leases, subleases, occupancy and concession agreements
affecting the Properties.
"Liabilities" mean any direct or indirect liability, indebtedness,
obligation, commitment, expense, claim, deficiency, guaranty or endorsement of
or by any Person of any type, whether accrued, absolute, contingent, matured,
unmatured, liquidated, unliquidated, known or unknown.
"Liens" means any mortgage, pledge, lien, security interest,
conditional or installment sale agreement, exaction, imposition, charge or
other claims of third parties of any kind or nature.
"Major Survey Defects" means matters disclosed on an ALTA/ACSM Survey
received by Buyer after the date hereof which (a) would reasonably be expected
to cause a Seller Material Adverse Effect on the ability to generate revenue
at the Property as presently constructed and used by the applicable Seller and
(b) was not disclosed to Buyer in the Surveys listed on Section 12.2 of the
Seller Disclosure Letter.
"Major Title Defects" means matters disclosed on a Title Commitment
received by Buyer after the date hereof which are (a) title defects which
would be reasonably expected to cause a Seller Material Adverse Effect on the
ability to generate revenue at the Property as presently constructed and used
by the applicable Seller and (b) not disclosed to Buyer in the Title
Commitments attached to Section 12.1 of the Seller Disclosure Letter.
"Markers" means, as it relates to each Seller, any amounts owed by
any Person that is not an Affiliate of such Seller to such Seller related to
its Property for gaming chips, tokens or similar cash equivalents used at such
Property delivered to such Person on credit or otherwise.
"Minimum Cash" means, for each Seller, the amounts set forth on
Section 13.4 of the Seller Disclosure Letter, which in the aggregate is equal
to Twenty Seven Million Dollars ($27,000,000).
"Monetary Encumbrances" means monetary Encumbrances, including,
without limitation, all mortgages or other monetary encumbrances of record
that are not disclosed by the Seller Disclosure Letter or other exhibits to
this Agreement as they relate to such Seller (other than Taxes and assessments
and the Encumbrances created or suffered by Buyer pursuant to such Taxes or
assessments ) which are unpaid and liquidated. For purposes of the definition
of "Monetary Encumbrances," an Encumbrance is "liquidated" only if it is fixed
either by agreement of a Seller and the party asserting the Encumbrance or by
operation of Law.
"Multiemployer Pension Plan" means a "multiemployer pension plan," as
that term is defined in Section 3(37) of ERISA, to which a Seller contributes
for the benefit of Property Employees.
"Old River Lease" means that certain Lease dated as of September 13,
1993, by and between Xxxxx Xxxxxx Xxxxxx, Xxxxx X. Xxxxxxxx, Tempe Xxxxx Xxxxx
and Xxx X. Xxxxx, Xx., as trustee, and Old River Development, Inc (as
predecessor-in-interest to Caesars Seller Two) as the same has been amended,
modified or assigned as set forth in Section 6.7(b) of Caesars Seller Two
Seller Disclosure Letter.
"Operating Agreements" means, as it relates to each Seller, all
service contracts, equipment leases, software license agreements, sign leases,
Leases and other Contracts affecting its Property, other than Contracts that
relate to the Excluded Assets.
"Ordinary Course of Business" shall describe any action taken by a
Person if such action is consistent with such Person's past practices and is
taken in the ordinary course of such Person's normal day to day operations.
"Outside Date" means March 27, 2004; provided, however, that such
date shall be extended by the number of days that the Closing Date has been
extended pursuant to Section 5.1 and/or Section 12.3(c) hereof.
"Passenger/Delivery Vehicles" means, as it relates to each Seller,
those certain passenger or delivery vehicles and recreational vessels
identified in Section 13.5 of each Seller Disclosure Letter.
"Permitted Encumbrances" means, with respect to any Seller,
(i) Liens or Encumbrances for mechanics' and materialmen's Liens or
Encumbrances not filed of record and charges assessments and other
governmental charges not delinquent or which are currently being contested in
good faith by appropriate proceedings or for which the applicable Seller shall
have provided bond or other security satisfactory to the Title Company;
(ii) Liens or Encumbrances for Taxes not yet due and payable;
(iii) Liens or Encumbrances in respect of judgments or awards with
respect to which such Seller shall in good faith currently be prosecuting an
appeal or other proceeding for review and with respect to which such Seller
shall have secured a stay of execution pending such appeal or such proceeding
for review;
(iv) general real estate and tangible personal property Taxes and
assessments for the year of the Closing and thereafter;
(v) subject to Section 4.1(a) hereof, special Taxes and assessments
payable and becoming a Lien after the Closing Date;
(vi) Liens and Encumbrances created or approved by Buyer;
(vii) all matters shown by a Title Commitment and UCC Search;
(viii) all matters disclosed by a Survey delivered to Buyer listed on
Section 12.2 of each Seller Disclosure Letter and all Survey defects which are
not Major Survey Defects;
(ix) zoning and subdivision ordinances;
(x) terms and conditions of licenses, permits and approvals for the
Real Property and Laws of any Governmental Entity having jurisdiction over the
Properties;
(xi) the Lease Documents and any exceptions described therein (to the
extent they are an Assumed Contract);
(xii) rights of tenants under operating leases, to the extent they
are an Assumed Contract and are listed on Section 6.7(c) of the Seller
Disclosure Letter;
(xiii) any Assumed Liability; and
(xiv) all restrictions, easements, reservations, leases, agreements,
reversions, covenants and other matters of record which are not Major Title
Defects.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
"group" (as defined in Rule 13d-5(b)(1) under the Exchange Act).
"Personal Property" means, as it relates to each Seller, all office,
hotel, casino, showroom, restaurant, bar, convention, meeting and other
furniture, furnishings, appliances, equipment, equipment manuals, slot
machines, gaming tables and gaming paraphernalia (including parts or
inventories thereof), Passenger/Delivery Vehicles, computer hardware,
software, point of sale equipment, telephone numbers, two-way security radios
and base station, maintenance equipment, tools, signs and signage, office
supplies, cleaning supplies in unopened cases or bulk containers or packages;
linens (sheets, towels, blankets, napkins), uniforms, silverware, glassware,
chinaware, pots, pans and utensils, and food, beverage, and alcoholic beverage
inventories owned by such Seller and located at its Property on the Closing
Date.
"Phase I ESAs" means those Phase I Environmental Site Assessments
performed at the Properties in accordance with the scope and recommendations
of the ASTM Phase I Standard.
"Phase II ESA" means a Phase II Environmental Site Assessment, if
any, performed at a Property in accordance with the scope and recommendations
of the applicable guidelines and standards for such site assessments issued by
the ASTM.
"Port Facility Lease" means the Port Facility Lease Agreement, dated
April 24, 1995, by and between the Board of Levee Commissioners for the Yazoo
Mississippi Delta and Caesars Seller Two.
"Properties" means, collectively, the Casino A Property, the Casino B
Property, the Casino C Property and the Casino D Property.
"Property" means one of the following, as applicable: the Casino A
Property, the Casino B Property, the Casino C Property or the Casino D
Property.
"Property Specific Data" means, as it relates to each Seller, all
property-specific software computer records or data (such as future
reservations and booking information), whether on tape, disc or other
computerized format that is (i) owned by such Seller (ii) used exclusively in
connection with such Seller's Property, (iii) non-proprietary, and (iv) not
part of the Customer Database.
"Remediation" or "Remediate" means a cleanup or other method used to
remove or contain a release of any Hazardous Substances at, on or under a
Property, but only to the extent required under applicable Environmental Laws
for the Property as it is currently being used as of the date hereof.
"Reserved Employees" means, as it relates to each Seller, the
employees of such Seller's Property that are listed on Section 8.4 of each
Seller Disclosure Letter.
"Room Revenues" means, as it relates to each Seller, all revenues
from the rental of guest rooms at such Seller's Property, together with any
sales or other taxes thereon.
"SEC Reports" means any registration statements, prospectuses, forms,
reports, definitive proxy statements, schedules and documents required to be
filed by Xxxxxx'x or Caesars, as applicable, under (i) the Securities Act or
(ii) the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Material Adverse Effect" means, as it relates to each Seller,
changes, events or effects that are materially adverse to the business,
condition (financial or otherwise) or results of operations of such Seller's
Property; provided, that the following, individually and in the aggregate,
shall be excluded from the definition of Seller Material Adverse Effect and
from any determination as to whether a Seller Material Adverse Effect has
occurred: (A) any change, event or effects arising out of or resulting from
changes in or affecting the (x) travel, hospitality or gaming industries
generally, (y) travel, hospitality or gaming industries in the markets or
jurisdictions where the properties are located or (z) the financial, banking,
currency or capital markets in general, (B) any change, event or effect
resulting from the entering into or public announcement of the transactions
contemplated by this Agreement or developments with respect to the
transactions contemplated by the Merger Agreement, (C) any change, event or
effect resulting from any act of terrorism, commencement or escalation of
armed hostilities in the U.S. or internationally or declaration of war by the
U.S. Congress, and (D) a Property's prospects or the failure of such Property
to meet any financial or other projections.
"Subsidiary" means, with respect to any party, any corporation or
other organization, whether incorporated or unincorporated, of which (i) such
party or any other Subsidiary of such party is a general partner or managing
member or (ii) at least 50% of the securities or other equity interests having
by their terms voting power to elect a majority of the board of directors or
others performing similar functions with respect to such corporation or other
organization that is, directly or indirectly, owned or controlled by such
party or by any one or more of its Subsidiaries, or by such party and one or
more of its Subsidiaries.
"System Xxxx" means service marks, trademarks, copyrights, trade
names, patents, fictitious firm names, color arrangements, designs, logos and
other registrations now or hereafter held or applied for in connection
therewith.
"Taxes" means any and all taxes, charges, fees, levies, tariffs,
duties, liabilities, impositions or other assessments of any kind (together
with any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any Tax authority or other
Governmental Entity, including, without limitation, income, gross receipts,
profits, gaming, excise, real or personal property, environmental, sales, use,
value-added, ad valorem, withholding, social security, retirement, employment,
unemployment, workers' compensation, occupation, service, license, net worth,
capital stock, payroll, franchise, gains, stamp, transfer and recording taxes,
and shall include any Liability for the Taxes of any other Person under
Treasury Regulation Section 1.1502-6 (or any similar provision of state,
local, or foreign Law), or as a transferee or successor, by contract, or
otherwise.
"Tax Return" any report, return (including any information return),
claim for refund, election, estimated Tax filing or payment, request for
extension, document, declaration or other information or filing required to be
supplied to any Governmental Entity with respect to Taxes, including
attachments thereto and amendments thereof.
"Title Insurer" means Xxxxxxx Title Guaranty Company, provided,
however, that if Buyer reasonably believes that Xxxxxxx Title Guaranty Company
will not agree to deliver a Title Policy in a form or on terms reasonably
acceptable to Buyer, then Buyer may, with the consent of Seller, not to be
unreasonably withheld, replace Xxxxxxx Title Guaranty Company with such other
nationally recognized title insurer that Buyer may select.
"Title Policy" means, with respect to each Property, that certain
policy of title insurance or signed pro-forma to be issued by the Title
Insurer for the benefit of Buyer pursuant to the terms of the Title Commitment
applicable to such Property, including customary endorsements to the Title
Policy as requested by Buyer in its reasonable discretion and available from
the Title Insurer.
"Total Assets" means, collectively, the Purchased Assets of all of
the Sellers.
"Total Material Adverse Effect" means, as applied to the Sellers in
the aggregate, changes, events or effects that have been materially adverse to
the business, financial condition or results of operations of the Properties;
provided, that the following, individually and in the aggregate, shall be
excluded from the definition of Total Material Adverse Effect and from any
determination as to whether a Total Material Adverse Effect has occurred: (A)
any change, event or effects arising out of or resulting from changes in or
affecting the (x) travel, hospitality or gaming industries generally, (y)
travel, hospitality or gaming industries in the markets or jurisdictions where
the properties are located or (y) the financial, banking, currency or capital
markets in general, (B) any change, event or effect resulting from the
entering into or public announcement of the transactions contemplated by this
Agreement, (C) any change, event or effect resulting from any act of
terrorism, commencement or escalation of armed hostilities in the U.S. or
internationally or declaration of war by the U.S. Congress, and (D) the
Properties' prospects or the failure of the Properties to meet any financial
or other projections.
"Total Rewards" means the player loyalty program of Xxxxxx'x.
"Transferred Intellectual Property" means, as it relates to each
Seller, all Intellectual Property used exclusively in the operation of such
Seller's Property (other than the Excluded Intellectual Property), including
the Purchased Intellectual Property.
"Transfer Time" means 11:59:59 p.m., New York City time, on the day
prior to the Closing Date.
"Tray Ledger" means, as it relates to each Seller, any accounts
receivable of registered guests who have not checked out and who are occupying
rooms at such Seller's Property on the evening of the Closing Date, including
without limitation the Room Revenues.
"Tunica Golf Course Leases" means (a) that certain Ground Lease dated
as of June 19, 1996 between Nineteenth Hole, LLC and Tunica Golf Course LLC
and (b) that certain Sublease dated as of June 19, 1996 between HWCC - Tunica,
Inc. and Tunica Golf Course LLC.
"Vessel" means with respect to Xxxxxx'x Seller One, the vessel known
as M.V. Winstar, with respect to Xxxxxx'x Seller Two, the vessels known as
Mobil 331, Mobil 332, Mobil 333, and Mobil 334, and with respect to Caesars
Seller Two, the vessel known as Xxxxx Xxx, in each case, including: (i) all
superstructure currently constructed thereon; (ii) plans and specifications
therefor, if owned by and in the possession of the applicable Seller; (iii)
existing warranties therefor, if assignable; and (iv) tools, appliances,
supplies therefor, parts, ramps, generators and related equipment (including,
but not limited to, existing walkways), if any, located at the applicable
Property.
"WARN Act" means the Worker Adjustment and Retraining Notification
Act of 1988 and analogous state and local Law.
"Wellington Avenue Property" means that certain parcel of land known
as Parcel 303-2 located on Wellington Avenue, Atlantic City, New Jersey.
(b) The following are defined elsewhere in this Agreement, as
indicated below:
Cross Reference
Terms in Agreement
----- ------------
2003 Audited Financials Section 8.5(a)
2004 Audited Financials Section 8.5(a)
Affiliate Assets Section 8.8(d)
Affiliate Liabilities Section 8.8(d)
Agreement Preamble
Assumed Liabilities Section 2.1(a)
Auditor Section 3.3
Authorized Plans Section 8.1
Buyer Preamble
Buyer Benefit Plans Section 8.4(d)
Buyer Disclosure Letter Article VII
Buyer Indemnified Parties Section 11.2(a)
Buyer Permits Section 7.6(a)
Buyer's 401(k) Plan Section 8.4(f)
Buyer's Allocation Section 3.3
Buyer's Medical Plans Section 8.4(e)
Buyer's Title Notice Section 12.3(c)
Caesars Recitals
Caesars Liability Cap Section 2.1(a)
Caesars One Cap Section 11.5(c)
Caesars One Threshold Section 11.5(c)
Caesars Seller One Preamble
Caesars Seller One Estimated Closing Payment Section 4.1
Caesars Seller One Estimated Operations Payment Section 4.2
Caesars Seller One Final Closing Payment Section 4.3(a)
Caesars Seller One Final Operations Payment Section 4.3(b)
Caesars Seller One Items Section 11.2(c)(iv)
Caesars Seller Two Preamble
Caesars Seller Two Estimated Closing Payment Section 4.1
Caesars Seller Two Estimated Operations Payment Section 4.2
Caesars Seller Two Final Closing Payment Section 4.3(a)
Caesars Seller Two Final Operations Payment Section 4.3(b)
Caesars Seller Two Items Section 11.2(d)(iv)
Caesars Sellers Purchase Price Section 3.1(a)(ii)
Caesars Sellers Preamble
Caesars Two Cap Section 11.5(d)
Caesars Two Threshold Section 11.5(d)
Closing Section 5.1(a)
Closing Date Section 5.1(a)
Closing Escrow Agreement Section 5.2(j)
Confidentiality Agreements Section 8.5(a)
Cure Period Section 12.3(c)
Customer List Section 5.2(m)
Damages Section 11.2(a)
Debt Financing Commitment Section 7.4(b)
Deposit Section 3.2
Deposit Escrow Agreement Section 3.2
Determination Date Section 4.3(c)
Electing Seller Section 8.11(a)
ERISA Section 6.16(a)
Escrow Agent Section 3.2(a)
Estimated Closing Payment Section 4.1
Estimated Closing Statement Section 4.1
Estimated Operations Payment Section 4.2
Estimated Operations Settlement Section 4.2(a)
Excluded Assets Section 1.2
Excluded Liabilities Section 2.1(b)
FCC Application Section 8.15(a)
FCC Approval Section 8.15(a)
Final Closing Statement Section 4.3(a)
Final Operations Settlement Section 4.3(b)
Financial Information Section 6.3
Financing Section 8.10(a)
First Extended Closing Date Section 5.1
Governmental Approvals Section 8.6(a)
Governmental Entity Section 6.2(c)
Ground Lease Documents Section 6.7(c)
Xxxxxx'x Recitals
Xxxxxx'x Liability Cap Section 2.1(a)
Xxxxxx'x One Cap Section 11.5(a)
Xxxxxx'x One Threshold Section 11.5(a)
Xxxxxx'x Seller One Preamble
Xxxxxx'x Seller One Estimated Closing Payment Section 4.1
Xxxxxx'x Seller One Estimated Operations Payment Section 4.2
Xxxxxx'x Seller One Final Closing Payment Section 4.3(a)
Xxxxxx'x Seller One Final Operations Payment Section 4.3(b)
Xxxxxx'x Seller One Items Section 11.2(a)(iv)
Xxxxxx'x Sellers Purchase Price Section 3.1(a)(i)
Xxxxxx'x Seller Two Preamble
Xxxxxx'x Seller Two Estimated Closing Payment Section 4.1
Xxxxxx'x Seller Two Estimated Operations Payment Section 4.2
Xxxxxx'x Seller Two Final Closing Payment Section 4.3(a)
Xxxxxx'x Seller Two Final Operations Payment Section 4.3(b)
Xxxxxx'x Seller Two Items Section 11.2(b)(iv)
Xxxxxx'x Sellers Preamble
Xxxxxx'x Two Cap Section 11.5(b)
Xxxxxx'x Two Threshold Section 11.5(b)
Homebuyer Guarantee Amount Section 4.2(f)
Homebuyer Guarantee Program Section 4.2(e)
HSR Act Section 6.2(e)
Indemnified Party Section 11.3
Indemnifying Party Section 11.3
Inspection Section 8.5(a)
Labor Agreements Section 6.15(b)
Labor Disruptions Section 6.15(b)
Lease Documents Section 6.7(c)
Licensed Parties Section 7.5
Licensing Affiliates Section 7.5
Mercantile Bank Section 4.2(e)
Merger Agreement Recitals
Multi-Party Sections Section 13.1
Non-Assignable Asset Section 1.4(a)
Non-Seller Assets Section 6.13
Notice Section 11.3
Property Employees Section 6.16(a)
Purchase Price Section 3.1(a)(iv)
Purchase Price Allocation Section 3.3
Purchased Assets Section 1.1
Purchased Intellectual Property Section 6.8
Real Property Section 6.7(a)
Representatives Section 8.3
Scheduled Closing Date Section 5.1(a)
Second Extended Closing Date Section 5.1(a)
Section 1031 Exchange Section 8.11(a)
Seller Preamble
Seller 401(k) Plan Section 8.4(f)
Seller Benefit Plans Section 6.16(a)
Seller Disclosure Letter Article VI
Seller Indemnified Parties Section 11.2(e)
Seller Permits Section 6.14(a)
Shortfall Amount Section 8.16
Space Lease Documents Section 6.7(c)
Substituted Multiemployer Pension Plan Section 8.4(g)
Surveys Section 12.2
Survival Period Section 11.1(b)
Third Extended Closing Date Section 5.1(a)
Third Party Claim Section 11.4
Title Commitment Section 12.1
Transferred Employee Section 8.4(a)
UCC Search Section 12.1
Section 13.2 Governing Law; Consent to Jurisdiction; Waiver of Trial
by Jury.
(a) This Agreement and the transactions contemplated hereby, and all
disputes between the parties under or related to the Agreement or the facts
and circumstances leading to its execution, whether in contract, tort or
otherwise, shall be governed by and construed in accordance with the Laws of
the State of Delaware, applicable to contracts executed in and to be performed
entirely within the State of Delaware, without regard to the conflicts of laws
principles thereof.
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any
Delaware State court, or Federal court of the United States of America,
sitting in Delaware, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated hereby or
thereby or for recognition or enforcement of any judgment relating thereto,
and each of the parties hereby irrevocably and unconditionally (A) agrees not
to commence any such action or proceeding except in such courts, (B) agrees
that any claim in respect of any such action or proceeding may be heard and
determined in such Delaware State court or, to the extent permitted by Law, in
such Federal court, (C) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding in any such Delaware State or
Federal court, (D) waives, to the fullest extent permitted by Law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in
any such Delaware State or Federal court, and (E) to the extent such party is
not otherwise subject to service of process in the State of Delaware, appoints
Corporation Service Company as such party's agent in the State of Delaware for
acceptance of legal process and agrees that service made on any such agent
shall have the same legal force and effect as if served upon such party
personally within such state. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law. Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 13.3 hereof. Nothing
in this Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by Law.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE
AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS
VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
13.2(c).
Section 13.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) if to Buyer, to
Resorts International Holdings, LLC
c/o Colony Capital, LLC
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
Fax: (000) 000-0000
with a copy to:
Colony Capital, LLC
0000 Xxxxxx xx xxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Fax: (000) 000-0000
and
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
(b) if to the Sellers, to
Showboat Marina Casino Partnership
Tunica Partners II L.P.
c/x Xxxxxx'x Entertainment, Inc.
Xxx Xxxxxx'x Xxxxx
Xxx Xxxxx, XX 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
GNOC Corporation
Bally's Olympia Limited Partnership
c/o Caesars Entertainment, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx Xx., Xxxxx 0000
Xxxxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxx
Fax: (000) 000-0000
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. XxXxxxx
Fax: (000) 000-0000
Section 13.4 Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section or Exhibit or Schedule of this Agreement unless otherwise indicated.
All Exhibits and Schedules of this Agreement are incorporated herein by
reference. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation." The phrase "made available" in this Agreement
shall mean that the information referred to has been made available if
requested by the party to whom such information is to be made available. Buyer
and Seller will be referred to herein individually as a "party" and
collectively as "parties" (except where the context otherwise requires).
Section 13.5 Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 13.6 Entire Agreement. This Agreement and all documents and
instruments referred to herein constitute the entire agreement and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof, including, without
limitation, that certain letter agreement dated August 27, 2004, between
Xxxxxx'x, Caesars and Buyer; provided that the Confidentiality Agreements
shall remain in full force and effect after the Closing. Each party hereto
agrees that, except for the representations and warranties contained in this
Agreement, the certificates and other agreements delivered in accordance with
this Agreement and the respective Disclosure Letters, none of the Sellers nor
Buyer makes any other representations or warranties, and each hereby disclaims
any other representations and warranties made by itself or any of its
respective Representatives or other representatives, with respect to the
execution and delivery of this Agreement or the transactions contemplated
hereby, notwithstanding the delivery or disclosure to any of them or their
respective representatives of any documentation or other information with
respect to any one or more of the foregoing.
Section 13.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
Law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
Section 13.8 Assignment. Except as provided in Section 8.11 hereof,
without the prior written consent of all of the parties hereto, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by operation of Law (including, without limitation, by merger or
consolidation) or otherwise. Notwithstanding the prior sentence, Buyer may
assign, in its sole discretion, any of or all of its rights, interests and
(except with respect to clause (i) below) obligations under this Agreement (i)
to the banks or other lenders (or any agent therefor) providing the debt
financing to be incurred by Buyer in connection with the Closing for security
purposes, or (ii) to either (A) any controlled Affiliate of Colony (so long as
such Affiliate remains at all times thereafter an Affiliate of Colony) or (B)
any controlled Affiliate of Xxxxxx Xxxxxxx (so long as such Affiliate remains
at all times thereafter an Affiliate of Xxxxxx Xxxxxxx); provided, however,
that such assignment shall not be valid under this Agreement unless (a) such
Affiliate assumes all of Buyer's agreements and obligations hereunder, (b) no
such assignment shall relieve Buyer from any of its agreements and obligations
hereunder, and (c) no such assignment in any way (x) shall adversely effect
the ability to receive, or delay the receipt of, the Gaming Approvals or
antitrust approvals contemplated by this Agreement or (y) shall adversely
affect or delay the Closing of the transactions contemplated by this
Agreement. Any assignment in violation of this Section 13.8 shall be void.
Section 13.9 Parties of Interest; No Third Party Beneficiaries. This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto and their respective successors and assigns, and nothing in this
Agreement, express or implied is intended to or shall confer upon any other
Person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
Section 13.10 Counterparts. This Agreement may be executed by
facsimile and/or in one or more counterparts, and by the different parties
hereto in separate counterparts, each of which when executed shall be deemed
to be an original but all of which taken together shall constitute one and the
same agreement.
Section 13.11 Mutual Drafting. Each party hereto has participated in the
drafting of this Agreement, which each party acknowledges is the result of
extensive negotiations between the parties. In the event of any ambiguity or
question of intent arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.
Section 13.12 Amendment. This Agreement may be amended by Buyer and
each Seller. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of Buyer and each Seller.
Section 13.13 Extension; Waiver. At any time prior to the Closing,
Buyer, on the one hand, and all of the Sellers, on the other hand, by action
taken or authorized by their respective boards of directors may, to the extent
legally allowed (i) extend the time for or waive the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant herein and (iii) waive compliance with any of the
agreements or conditions contained here. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party.
Section 13.14 Time of Essence. Time is of the essence with respect to
this Agreement and all terms, provisions, covenants and conditions herein.
Section 13.15 Disclosure Letters. The Seller Disclosure Letters shall
be arranged in paragraphs corresponding to the numbered and lettered
paragraphs contained in this Agreement and the disclosure in any paragraph
shall qualify other paragraphs in this Agreement to the extent it is
reasonably apparent from the face of the statement that it is applicable. The
Buyer Disclosure Letter shall be arranged in paragraphs corresponding to the
numbered and lettered paragraphs contained in this Agreement and the
disclosure in any paragraph shall, to the extent applicable, qualify other
paragraphs in this Agreement to the extent it is reasonably apparent from the
face of the statement that it is applicable. The Seller Disclosure Letters and
the Buyer Disclosure Letter may only be amended by an instrument in writing
signed on behalf of Buyer and each Seller.
[SIGNATURE PAGES FOLLOW]
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
signed by their respective duly authorized officers as of the date first
written above.
SHOWBOAT CASINO MARINA PARTNERSHIP,
an Indiana general partnership
By: SHOWBOAT MARINA PARTNERSHIP,
an Indiana general partnership,
its general partner
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP,
a Nevada partnership,
its general partner
By: SHOWBOAT INDIANA, INC.,
a Nevada corporation,
its general partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------------------
Title: Senior Vice President and Treasurer
---------------------------------------------
TUNICA PARTNERS II L.P., a Mississippi limited partnership
By: XXXXXX'X TUNICA CORPORATION,
a Nevada corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
---------------------------------------
Its: Senior Vice President and Treasurer
----------------------------------------
GNOC CORPORATION, a New Jersey corporation
By: /s/ Xxxxxxx XxXxxx
--------------------------------------------------
Name: Xxxxxxx XxXxxx
------------------------------------------------
Its: Senior Vice President
-------------------------------------------------
BALLY'S OLYMPIA LIMITED PARTNERSHIP, a Delaware limited
partnership
By: /s/ Xxxxxxx XxXxxx
--------------------------------------------------
Name: Xxxxxxx XxXxxx
------------------------------------------------
Its: Senior Vice President
-------------------------------------------------
RESORTS INTERNATIONAL HOLDINGS, LLC, a Delaware limited liability
company
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
--------------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
------------------------------------------------
Its: President
-------------------------------------------------
The following parties are
signatories hereto solely for
purposes of the sections and
provisions listed in the definition
of "Caesars Seller One"
BALLY'S PARK PLACE, INC., a New Jersey corporation
By: /s/ Xxxxxxx XxXxxx
-------------------------------------------------
Name: Xxxxxxx XxXxxx
-----------------------------------------------
Its: Senior Vice President
------------------------------------------------
LAND VENTURES REALTY, LLC, a New Jersey limited
liability company
By: /s/ Xxxxxxx XxXxxx
-------------------------------------------------
Name: Xxxxxxx XxXxxx
-----------------------------------------------
Its: Member's Secretary
------------------------------------------------
