Re Final Modifications to Asset Purchase Agreement
September 23,
2005
Xxxxxxxxx
Xxxxx California Company
c/x
Xxxxxxxxx Xxxxx Incorporated
000
Xxxxxxx Xxxxxx
Louisville,
KY 40208
Attn:
Xxxxxxx X. Xxxx
Re Final
Modifications to Asset Purchase Agreement
Ladies
and Gentlemen:
Reference
is made to that certain Asset Purchase Agreement dated as of July 6,
2005,
as modified by those certain letter agreements dated August 1, 2005,
August 8, 2005, August 12, 2005 and September 7, 2005 (as so
amended
and assigned and as in effect on the date hereof, the "APA"),
between Hollywood Park Land Company, LLC ("Buyer")
and
Xxxxxxxxx Xxxxx California Company ("Seller").
Capitalized terms not defined herein shall have the meanings ascribed thereto
in
the APA.
Pursuant
to Section 13.4 of the APA, Xxxxx and Seller agree to amend the APA
as
follows:
Changes
to HSR Provisions
1. Deletion
of Certain HSR Provisions:
The
following provisions are hereby deleted in their entirety: (i) Section 3.7.1(f),
(ii) clause (i) of Section 4.4, (iii) Section 8.1.1 and (iv) Section
8.2.1.
2. Modification
to Section 5.4:
Section
5.4 is hereby revised, in its entirety, to read as follows:
"5.4 Approvals.
Except
as set forth in Section 5.4 of the Disclosure Schedule, no approval,
authorization, consent or order or action of or filing with any Governmental
Authority is required to be obtained by Buyer for the execution and delivery
by
Buyer of the Transaction Documents to which it is a party or the consummation
by
it of the Transactions. Buyer has received all required consents from its
lender(s) necessary for Buyer to execute this Agreement and consummate the
Transactions. To the knowledge of Buyer, there are no facts relating to the
identity or circumstances of Xxxxx that would prevent or materially delay
obtaining any of the required consents."
3. Modification
to Section 8.1.4:
Section
8.1.4 is hereby revised, in its entirety, to read as follows:
"8.1.4 Actions
or Proceedings.
There
shall not be instituted or pending any action or proceeding by any Person
before
any Governmental Authority, (i) seeking to restrain, prohibit or otherwise
interfere with the ownership or operation by Buyer or any of its Affiliates
of
all or any material portion of the Assets or the Racetrack Business or assets
of
Buyer or any of its Affiliates or to compel Buyer or any of its Affiliates
to
dispose of all or any material portion of the Assets or of Buyer or any of
its
Affiliates or (ii) seeking to require divestiture by Buyer or any of its
Affiliates of any Assets or any portion of the Racetrack Business. There
shall
not be any action taken, or any Laws enacted, enforced, promulgated, issued
or
deemed applicable to the purchase of the Assets, by any Governmental Authority,
that, in the reasonable judgment of Buyer could, directly or indirectly,
result
in any of the consequences referred to in subsections (i) and (ii) of this
Section; provided that Buyer acknowledges the application of this Section
to
Laws in effect as of the date hereof would not have such
consequences."
4. New
Buyer Representation:
A new
Section 5.11 is hereby added to the Buyer's representations:
"5.11. HSR
Representation.
The
California Public Employees Retirement System ("CalPERS"),
Buyer’s
ultimate parent entity for purposes of the HSR Act, is a unit of the State
and
Consumer Services Agency of the State of California. Counsel for XxxXXXX
confirmed a conversation between counsel and the Federal Trade Commission,
Bureau of Competition, Premerger Notification Office ("PNO"),
wherein the PNO advised counsel for CalPERS that, so long as CalPERS itself
is
not a separate corporation (which it is not), CalPERS is deemed an agency
or
political subdivision of a state government for purposes of the HSR Act and,
as
such, is not an "entity" so far as the HSR Act is concerned. As a result,
CalPERS, is not a "person" required to file notification under the HSR Act.
All
of the entities directly or indirectly controlled by CalPERS, and which will
directly or indirectly control the Assets upon consummation of the transaction,
including Buyer, are unincorporated entities."
Changes
to Purchase Price
5. Purchase
Price Reduction: Section
3.3.1(c) is hereby deleted and replaced in its entirety with the
following:
"(c)
$2,500,000, the amount of the reduction referenced in Section 12.2.
"
Changes
to Xxxxxx Box Clean-up Obligations
6. Changes
to Section 3.4.10:
Section
3.4.10 is hereby deleted and replaced in its entirety with the
following:
"3.4.10
Certain
Environmental Liabilities.
Any and
all
liabilities, claims, demands, losses, costs, damages, injuries, obligations,
judgments, actions, causes of action, fines, assessments, penalties or expenses,
including consultants’ and attorneys’ fees resulting from (a) the direct or
indirect disposal or arrangement for the disposal of Hazardous Substances
from
the Real Property to, at or onto a location other than the Real Property
from
September 10, 1999 through the Closing Date, including without
limitation to the Xxxxxxxxx Channel Watershed/Consolidated Slip, or (b) any
property owned, leased or operated by Seller (other than the Real
Property).
7. Changes
to Section 3.3.2(e):
Section
3.3.2(e) of the APA is hereby amended by adding, at the end thereof, the
following clause (5) (and the word "and" is moved from the end of clause
(3) to
the end of clause (4)):
"(5)
claims for the disposal, depositing, placing, presence, storage, dumping
or
other release of any material or substance in, to, at, onto, from or under
any
waste pits located at the northeast corner of the training track on the Real
Property prior to or subsequent to the Closing Date including, without
limitation, any related investigation,
remediation, clean-up, removal, disposal, transportation of waste and closure
activities relating
to the contamination identified in the sampling conducted of the waste pits
in
July 2005."
8. Deletion
of Section 9.3.6:
Section
9.3.6
of
the
APA is hereby deleted.
Changes
to Working Capital Provisions
9. Changes
to Section 3.7.3:
Section
3.7.3 is hereby deleted and replaced in its entirety with the
following:
"3.7.3 Closing
Statement.
(a) At
least
one (1) business day prior to the Closing Date, Seller in good faith shall
prepare and deliver to Buyer a preliminary closing statement, consistent
with
the provisions of Section 3.7.2 (the “Preliminary
Closing Statement”)
and
otherwise consistent with this Agreement, that shows the working capital
needs
of the Racetrack Business (based on current assets and liabilities) (the
“Required
Working Capital”)
and
includes a statement of each component of Working Capital as of the Closing,
giving effect to the transfer of the Assets and assumption of the Assumed
Liabilities (the “Final
Working Capital”)
together with a representation that the Final Working Capital was determined
in
accordance with GAAP applied on a basis consistent with those used in
preparation of the Transaction Financial Statements and Balance Sheet (except
as
required to comply with the definition of Working Capital).
(b) The
Required Working Capital and Final Working Capital as agreed to by the parties
on the Closing Date is as set forth in Exhibit
3.7.3(b)
(attached hereto), and there shall be no further rights of dispute or
adjustments from the amounts so agreed to by the parties as of the Closing
Date,
unless arising out of any breach of a representation contained in the
APA.
At
Closing Seller will either contribute or provide a credit in immediately
available funds to working capital in the amounts of (a) $2,493,609.00 and
(b)
$100,000 for remediation costs on the waste pit, each as shown on Exhibit
3.73(b).
Changes
to Calculation Period for Withdrawal Liability
10. Modification
to Section 11.2.3:
The
last sentence of 11.2.3 is hereby revised to read as follows:
"The
Withdrawal Liability Cap shall be calculated in good faith in accordance
with
ERISA and agreed upon by Xxxxx and Seller no later than June 30,
2006."
Xxxx
Xxxxx Retention Bonus
11. Changes
to 2.2.6:
Section
2.2.6 is hereby amended by adding, at the end thereof, the
following:
"Xxxxx
agrees to make any retention payments payable to Xxxx Xxxxx promptly after
the
Closing, provided that Seller will reimburse Buyer for the unfulfilled portion
of Xx. Xxxxx'x employment agreement in the event that Xx. Xxxxx terminates
his
employment with Buyer prior to the end of the Fall 2008 racing season.
Miscellaneous
12. Confirmation
of APA:
Except
as expressly provided above, the APA is hereby ratified and confirmed and
shall
remain in full force and effect and nothing contained in this letter agreement
shall be deemed to waive, alter or otherwise amend any provision of the APA
(other than to the extent expressly provided herein).
13. Merger:
This
letter agreement and the APA constitute the entire agreement between the
parties
with respect to the subject matter of this letter agreement and supersedes
all
prior agreements and understandings, both oral and written, between the parties
with respect to the subject matter of this letter agreement.
12. Governing
Law:
This
letter agreement shall be governed by and construed in accordance with the
law
of the State of California.
13. Execution
by Counteparts.
This
letter agreement may be executed in two or more counterparts, each of which
shall be an original, but all of which shall constitute one and the same
letter
of instructions.
[Signatures
Follow on Next Page]
HOLLYWOOD
PARK LAND COMPANY, LLC,
|
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a
Delaware limited liability company
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By: /s/Xxxxxxx
Xxxxxxx
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Name:
Xxxxxxx
Xxxxxxx
|
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Title:
Vice
President
|
XXXXXXXXX
XXXXX CALIFORNIA COMPANY,
|
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a
Kentucky corporation
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By: /s/
Xxxxxxx X. Xxxxxx
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Name:
Xxxxxxx X.
Xxxxxx
|
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Title:
Vice
President
|
cc:
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Xxxxxx
Xxxxx
|
Stockbridge
Capital Partners, LLC
000
0xx
Xxxxxx, 00xx Xxxxx
New
York,
NY 10019
Xxxxxx
Xxxxxxx Xxxx, Xx., Esq.
Xxxxx
Xxxx & Xxxxxxxx
000
Xxxxxxxxx Xxxxxx
New
York,
NY 10017
X.
Xxxx
Xxxxxxxxxxxx, Esq.
Xxxxxx,
Xxxx & Xxxxxxxx, LLP
333
So.
Grand Avenue
Los
Angeles, CA 90071
In
addition, as of the closing, the parties agreed that Seller would
retain
certain immaterial liabilities and certain simulcast receivables and payables.
The
exhibits and schedules to Exhibit 10.2 have been intentionally omitted
because
they are not material. The registrant agrees to furnish such omitted exhibits
and schedules supplementally to the Commission upon
request.