[Conformed as Executed]
EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
dated as of
April 23, 2003
by and between
OPBIZ, L.L.C., A NEVADA LIMITED LIABILITY COMPANY
and
ALADDIN GAMING, LLC,
a Nevada limited-liability company
TABLE OF CONTENTS
Page
----
Article I. Definitions........................................................................................... 1
Section 1.01 Defined Terms.................................................................................. 1
Section 1.02 Construction of Certain Terms and Phrases...................................................... 18
Article II. Sale of Assets and Closing............................................................................ 18
Section 2.01 Assets......................................................................................... 18
Section 2.02 Liabilities.................................................................................... 23
Section 2.03 Consideration; Credit Bids; Deposits; Allocation............................................... 24
Section 2.04 Closing; Escrow................................................................................ 25
Section 2.05 As-Is Condition................................................................................ 27
Section 2.06 Further Assurances; Post-Closing Cooperation................................................... 28
Section 2.07 Insurance Proceeds............................................................................. 29
Section 2.08 Third-Party Consent............................................................................ 30
Section 2.09 Bankruptcy Court Approvals and Protections for Purchaser....................................... 30
Section 2.10 Working Capital-Related True-Ups............................................................... 35
Section 2.11 Post-Closing Audit and Payment................................................................. 36
Section 2.12 Indemnity Escrow Account....................................................................... 37
Section 2.13 Post-Closing Obligations Regarding Promotional Vehicles........................................ 37
Section 2.14 Effect of Appellate Proceeding................................................................. 38
Section 2.15 Treatment of Rejectable Contracts.............................................................. 38
Article III. Representations and Warranties of Seller.............................................................. 39
Section 3.01 Organization of Seller......................................................................... 39
Section 3.02 Authority...................................................................................... 39
Section 3.03 Governmental Approvals and Filings............................................................. 39
Section 3.04 Financial Statements........................................................................... 39
Section 3.05 Absence of Changes............................................................................. 40
Section 3.06 Taxes.......................................................................................... 41
Section 3.07 Real Property.................................................................................. 42
Section 3.08 Certain Assets and Properties and Contracts.................................................... 44
Section 3.09 Intellectual Property Rights................................................................... 44
Section 3.10 Contracts...................................................................................... 45
Section 3.11 Licenses....................................................................................... 45
Section 3.12 Foreign Person................................................................................. 46
Section 3.13 Brokers........................................................................................ 46
Section 3.14 Labor Matters; Employees....................................................................... 46
Section 3.15 No Other Agreements to Sell.................................................................... 47
Section 3.16 Insurance...................................................................................... 47
Section 3.17 No Conflicts................................................................................... 48
Section 3.18 Complaints..................................................................................... 48
Section 3.19 Accounts Receivable............................................................................ 49
Section 3.20 Legal Proceedings.............................................................................. 49
i
Section 3.21 Reservations................................................................................... 49
Section 3.22 Compliance With Laws........................................................................... 49
Section 3.23 Reports........................................................................................ 49
Section 3.24 Environmental Laws............................................................................. 49
Section 3.25 Delivery of Documents.......................................................................... 50
Section 3.26 Sufficiency of the Transferred Assets.......................................................... 50
Article IV. Representations and Warranties of Purchaser........................................................... 50
Section 4.01 Organization................................................................................... 50
Section 4.02 Authority...................................................................................... 50
Section 4.03 No Conflicts................................................................................... 50
Section 4.04 Governmental Approvals and Filings............................................................. 51
Section 4.05 Legal Proceedings.............................................................................. 51
Section 4.06 Brokers........................................................................................ 51
Article V. Covenants of Seller................................................................................... 51
Section 5.01 Regulatory and Other Approvals................................................................. 51
Section 5.02 HSR Filings.................................................................................... 52
Section 5.03 Investigation by Purchaser..................................................................... 52
Section 5.04 Conduct of Business............................................................................ 52
Section 5.05 Financial Statements and Reports; Filings...................................................... 53
Section 5.06 Delivery of Books and Records, etc.; Removal of Property....................................... 53
Section 5.07 Title Insurance Policies and Exceptions........................................................ 54
Section 5.08 Developments and Notifications................................................................. 55
Section 5.09 Fulfillment of Conditions...................................................................... 56
Section 5.10 Baggage........................................................................................ 56
Section 5.11 Safe Deposits.................................................................................. 56
Section 5.12 Valet Parking.................................................................................. 56
Section 5.13 Cure Obligations............................................................................... 57
Section 5.14 Maintenance.................................................................................... 57
Section 5.15 Representations and Warranties................................................................. 57
Section 5.16 Plan........................................................................................... 57
Section 5.17 Injunctions.................................................................................... 57
Section 5.18 Notices. ...................................................................................... 57
Section 5.19 Press Release.................................................................................. 58
Section 5.20 Accounts Receivable............................................................................ 58
Section 5.21 Plan and Disclosure Statement.................................................................. 58
Section 5.22 Updates of Employee and Accounts Receivable Information........................................ 58
Section 5.23 Access to Hotel Information.................................................................... 59
Section 5.24 Closing the Due Diligence Room................................................................. 59
Article VI. Covenants of Purchaser................................................................................ 59
Section 6.01 Regulatory and Other Approvals and Notifications............................................... 59
Section 6.02 HSR Filings.................................................................................... 60
Section 6.03 Representations and Warranties................................................................. 60
Section 6.04 Notice and Cure................................................................................ 61
Section 6.05 Fulfillment of Conditions...................................................................... 61
ii
Section 6.06 Injunctions.................................................................................... 61
Section 6.07 Notices........................................................................................ 61
Section 6.08 Press Release.................................................................................. 62
Section 6.09 Intentionally Omitted.......................................................................... 62
Section 6.10 Employment of Purchaser's Chief Executive Officer or Execution of Hotel Management and
Subordination Agreements....................................................................... 62
Section 6.11 Planet Hollywood Agreement..................................................................... 62
Section 6.12 Notification of Amendments..................................................................... 62
Section 6.13 Financial Projections.......................................................................... 62
Section 6.14 Provision of Status Reports Respecting Gaming Licensure........................................ 62
Section 6.15 Bankruptcy Case Involvement.................................................................... 63
Article VII. Conditions to Obligations of Purchaser................................................................ 63
Section 7.01 Representations and Warranties................................................................. 63
Section 7.02 Performance.................................................................................... 63
Section 7.03 Orders and Laws................................................................................ 63
Section 7.04 Regulatory Consents and Approvals.............................................................. 64
Section 7.05 Third Party Consents........................................................................... 64
Section 7.06 Deliveries..................................................................................... 64
Section 7.07 Title Policy................................................................................... 64
Section 7.08 Restated Credit Agreement...................................................................... 64
Section 7.09 Effectiveness of Plan.......................................................................... 65
Section 7.10 Execution of Confirmation Order by GECC........................................................ 65
Article VIII. Conditions to Obligations of Seller................................................................... 65
Section 8.01 Representations and Warranties................................................................. 65
Section 8.02 Performance.................................................................................... 65
Section 8.03 Orders and Laws................................................................................ 65
Section 8.04 Regulatory Consents and Approvals.............................................................. 65
Section 8.05 Restated Credit Agreement...................................................................... 66
Section 8.06 Organizational Documents....................................................................... 66
Section 8.07 Renovation Capital Expenditure................................................................. 66
Section 8.08 Effectiveness of Plan.......................................................................... 66
Article IX. Tax Matters and Post-Closing Taxes.................................................................... 66
Section 9.01 Taxes.......................................................................................... 66
Section 9.02 Pre-Closing Tax Returns and Taxes.............................................................. 66
Section 9.03 Tax Indemnification............................................................................ 67
Section 9.04 Tax Cooperation................................................................................ 67
Section 9.05 Notification of Proceedings; Control........................................................... 67
Section 9.06 Debt Restructuring Taxes....................................................................... 68
Article X. Post-Closing Employment Obligations of Purchaser...................................................... 68
Section 10.01 Hiring and Retaining Employees................................................................. 68
Section 10.02 Purpose and Intent............................................................................. 69
Section 10.03 Enforcement of Obligations..................................................................... 69
Section 10.04 Exception to Hiring Obligations................................................................ 69
iii
Article XI. Survival of Representations, Warranties, Covenants and Agreements..................................... 69
Article XII. Indemnification and Other Remedies.................................................................... 70
Section 12.01 Indemnification by Seller...................................................................... 70
Section 12.02 Indemnification by Purchaser................................................................... 70
Section 12.03 Limitations on Seller's Liability.............................................................. 70
Section 12.04 Exculpation.................................................................................... 71
Article XIII. Casualties and Taking................................................................................. 71
Section 13.01 Casualties..................................................................................... 71
Section 13.02 Taking......................................................................................... 72
Article XIV. Termination........................................................................................... 73
Section 14.01 Termination.................................................................................... 73
Section 14.02 Extension of Expiration Date................................................................... 75
Section 14.03 Effect of Termination.......................................................................... 75
Article XV. Miscellaneous......................................................................................... 75
Section 15.01 Notices........................................................................................ 75
Section 15.02 Entire Agreement............................................................................... 77
Section 15.03 Expenses....................................................................................... 78
Section 15.04 Waiver; Remedies............................................................................... 78
Section 15.05 Amendment...................................................................................... 78
Section 15.06 No Third Party Beneficiary..................................................................... 78
Section 15.07 No Assignment; Binding Effect.................................................................. 78
Section 15.08 Directors and Officers......................................................................... 78
Section 15.09 Headings....................................................................................... 79
Section 15.10 Consent to Jurisdiction; Venue................................................................. 79
Section 15.11 Invalid Provisions............................................................................. 79
Section 15.12 Governing Law.................................................................................. 79
Section 15.13 Counterparts................................................................................... 79
Section 15.14 Employees and Independent Contractors.......................................................... 79
Section 15.15 Recordation.................................................................................... 79
iv
EXHIBITS
A Confirmation Order Provisions
B Form of Sales Process Order
C Form of Escrow Agreement
D Form of General Assignments and Bills of Sale
E Form of Assumption Agreement
F Sample Balance Sheet
G Form of Press Release
H Form of Estoppel Certificates
I Form of Indemnity Escrow Agreement
J Form of Intellectual Property Assignments
K Assignment and Assumption of REA
v
SCHEDULES
Schedule 1.01(I) Persons Having Knowledge on Behalf of Purchaser
Schedule 1.01(II) Property
Schedule 2.01(a)(i) Real Property
Schedule 2.01(a)(ii)(A) Real Property Leases - Seller as Lessor
Schedule 2.01(a)(ii)(B) Real Property Leases - Seller as Lessee
Schedule 2.01(a)(iv) Assumed Pre-Existing Contracts
Schedule 2.01(a)(v) Intangible Personal Property
Schedule 2.01(a)(vi) Licenses
Schedule 2.01(a)(vii) Vehicles
Schedule 2.01(a)(xiii) Prepaid Expenses
Schedule 2.01(b)(vi) Insurance Claims
Schedule 2.01(b)(vii)(A) Deposits With Governmental or Regulatory Authorities
Schedule 2.01(b)(vii)(B) Non-transferable Prepaid Expenses and Assets that are
Current Assets
Schedule 2.01(b)(viii) Equity Interests
Schedule 2.01(b)(ix) Insurance Policies
Schedule 2.01(b)(x) Excluded Licenses
Schedule 2.02(a)(ii)(C) Assumed Employee Plans
Schedule 2.02(a)(ii)(D) Taxes
Schedule 2.02(b)(iv) Pending Actions or Proceedings
Schedule 2.15 Rejectable Contracts
Schedule 3.01 Other Entities
Schedule 3.03 Seller's Governmental Approvals and Filings
Schedule 3.04(a) Financial Statements
Schedule 3.04(b) Sample Balance Sheet
Schedule 3.05 Absence of Changes
Schedule 3.05(b)(i)(C) Permitted Dispositions
Schedule 3.06(a) Tax Return Filings
Schedule 3.06(b) Payment and Withholding of Taxes
Schedule 3.06(e) Taxes of Other Persons
Schedule 3.06(f) Tax Proceedings
Schedule 3.07(a) Real Property Title Matters
Schedule 3.07(b) Rent Roll for Tenant Leases
Schedule 3.07(c) Violations of Law
Schedule 3.07(d) Utilities
Schedule 3.07(e) Licenses and Permits
Schedule 3.07(g) Tax Assessments
Schedule 3.07(h) Other Real Property
Schedule 3.07(i) Plans and Eminent Domain Proceedings
Schedule 3.07(k) Easements
Schedule 3.08(a) Tangible Personal Property Title Matters
Schedule 3.08(b) Exceptions to Vesting of Title in Purchaser
Schedule 3.09(a) Intellectual Property Exceptions
Schedule 3.09(b) Intellectual Property Compensation Obligations and
Grants
vi
Schedule 3.09(d) Intellectual Property Assignments
Schedule 3.09(e) Assignments and Transfers Affecting Title to
Trademarks, Copyrights and Domain Names
Schedule 3.10(b)(I) Contracts Not Cured or Transferred
Schedule 3.10(b)(II) Non-Debtor Defaults in Respect of Assumed Contracts
Schedule 3.11 License Defaults
Schedule 3.14(a) Labor Matters
Schedule 3.14(b) Employee Information
Schedule 3.14(c) Notice of Violations
Schedule 3.14(e) Employee Claims
Schedule 3.14(f) Employee Plans
Schedule 3.16 Insurance
Schedule 3.17(c) Seller's Conflicts
Schedule 3.19 Accounts Receivable Customer Listing
Schedule 3.20 Legal Proceedings
Schedule 3.21 Reservations
Schedule 3.22 Compliance With Laws
Schedule 3.24 Environmental Laws
Schedule 4.03 Purchaser's Conflicts
Schedule 4.04 Purchaser's Governmental Approvals and Filings
Schedule 4.05 Purchaser's Legal Proceedings
Schedule 5.04 Maintenance and Capital Expenditure Payments
Schedule 5.07(b) Permitted Exceptions
Schedule 7.05 Third Party Consents - Purchaser's Condition
Precedent
vii
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement, dated as of April 23, 2003, is
entered into by and between OpBiz, L.L.C., a Nevada limited liability company
("Purchaser") and Aladdin Gaming, LLC, a Nevada limited-liability company
("Seller"). Capitalized terms not defined elsewhere herein have the meanings set
forth in Article I.
PRELIMINARY STATEMENTS
A. Seller is engaged in the business of owning and operating the
hotel/casino known as the Aladdin Resort & Casino (the "Hotel/Casino"), located
in Las Vegas, Nevada, and conducting various related activities including,
without limitation: (i) the rental of guest, conference or banquet rooms at the
Hotel/Casino; (ii) the operation of the casino at the Hotel/Casino; (iii) the
operation of restaurant, bar or banquet services at the Hotel/Casino; (iv) the
rental of certain commercial, entertainment or retail space to tenants at the
Hotel/Casino; and (v) the operation of the Theatre for the Performing Arts
(collectively, the "Business").
B. Seller desires to sell, transfer and assign to Purchaser, and
Purchaser desires to purchase and acquire from Seller, certain of the assets of
Seller relating to the Business and, in consideration thereof, Purchaser agrees
to assume certain liabilities of Seller relating to the Business, all on the
terms set forth herein.
C. Seller is a debtor and debtor-in-possession under the United
States Bankruptcy Code (11 U.S.C. Section 101 et seq.), as amended, and any
successor statute applicable to the Bankruptcy Case (the "Bankruptcy Code"), in
proceedings (the "Bankruptcy Case") before the United States Bankruptcy Court
for the District of Nevada, Southern Division (the "Bankruptcy Court").
D. In addition to other conditions set forth in this Agreement,
the consummation of the purchase and sale transaction contemplated by this
Agreement is subject to confirmation of the Plan by the Bankruptcy Court.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE I. DEFINITIONS.
1.01 Defined Terms. As used in this Agreement, the following
defined terms have the meanings indicated below:
"Acceptance Election Date" has the meaning ascribed to it in Section
2.15.
"Accounts Receivable" means all accounts receivable owed to Seller in
connection with the Business including, without limitation, charges for the use
or occupancy of guest, conference or banquet rooms or other facilities at the
Hotel/Casino, restaurant, bar or banquet services, or
1
other goods or services provided by or on behalf of Seller at the Hotel/Casino,
any payments received with respect thereto after the Closing Date, and unpaid
interest accrued on any Accounts Receivable.
"Action or Proceeding" means any action, suit, proceeding, arbitration
or Governmental or Regulatory Authority investigation or audit.
"Advance Reservations and Similar Deposits" means all cash or
cash-equivalent deposits for advance reservations, bookings, room and banquet
deposits applicable to any period following the Closing (other than any such
deposits which have been forfeited by the depositing party as of the Transfer
Time), and originals of casino credit files with respect to the casino
operations.
"Adversary Proceeding" has the meaning ascribed to it in Section 9.05.
"Affiliate" of a specified Person has the meaning set forth in Section
101(2) of the Bankruptcy Code, except that all references in that section to
"debtor" shall be deemed references to such specified Person, regardless of
whether that Person is a debtor under the Bankruptcy Code.
"Agreement" means this Purchase and Sale Agreement and the Exhibits and
the Schedules hereto, as the same may be amended from time to time; provided,
however, that as to any representations or warranties which are given as of the
date of this Agreement, "Agreement" in that context means this Purchase and Sale
Agreement and the Exhibits and the Schedules hereto as originally executed,
without regard to subsequent amendments except to the extent (if any) that such
amendments specifically provide otherwise.
"AICPA Statement of Position 90-7" means the statement of position
which presents the recommendations of the American Institute of Certified Public
Accountants Task Force on Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code on reporting for entities that have filed petitions
with the United States Bankruptcy Court and expect to reorganize as going
concerns under Chapter 11 of the Bankruptcy Code.
"ALTA" means the American Land Title Association.
"Alternative Arrangement" has the meaning ascribed to it in Section
2.08.
"Alternative Event" means Seller's or the Bank Group's seeking,
supporting or failing to oppose, any of the following actions that cause the
Transferred Assets not to be sold to Purchaser pursuant to this Agreement: (A)
dismissal of the Bankruptcy Case, (B) confirmation of a plan of reorganization
or liquidation, dissolution, merger or substantially similar transaction that is
inconsistent with the sale of the Transferred Assets to Purchaser pursuant to
this Agreement, except as permitted by the Sales Process Order and Purchaser
Selection Order, (C) the appointment of a trustee, receiver, liquidator or
similar Person for the purpose of liquidating the Transferred Assets, (D)
liquidation of the Transferred Assets pursuant to a proceeding under Chapter 11
of the Bankruptcy Code or conversion of the Bankruptcy Case to a proceeding
under Chapter 7 of the Bankruptcy Code, (E) the Bankruptcy Court's approval of
any course of action materially inconsistent with the sale of the Transferred
Assets to Purchaser in accordance with this Agreement, except as permitted by
the Sales Process Order and Purchaser Selection Order,
2
or (F) the Bank Group's direct or indirect acquisition of the Hotel/Casino;
provided, however, that if (x) the Bankruptcy Court enters an Order inconsistent
with, or fails to enter an Order necessary for, conclusion of the transactions
which are the subject of this Agreement or (y) if any of the events listed in
clauses (A) through (F) of this paragraph occur and do not constitute an
Alternative Event, then neither Seller's nor the Bank Group's thereafter
seeking, supporting or failing to oppose any of the events in clauses (A)
through (F) of this paragraph shall not be deemed an "Alternative Event."
"Alternative Offer Deadline" means the Business Day established by the
Sales Process Order as the deadline for submission of a Qualified Offer to
Seller.
"Alternative Transaction" means a sale of the Business or a sale of all
or substantially all of the Transferred Assets pursuant to a Qualified Offer
which is (i) approved by the Bankruptcy Court at the Purchaser Selection Hearing
and as a modification to the Plan, (ii) confirmed by the Confirmation Order and
(iii) memorialized in a definitive purchase and sale agreement.
"Alternative Transaction Order" has the meaning ascribed to it in
Section 2.09(c)(i).
"Appellate Proceeding" means a timely appeal, petition for certiorari
or request for reargument or rehearing with respect to the Purchaser Selection
Order or the Confirmation Order, or any appeal with respect to any of the
foregoing proceedings.
"Appellate Proceeding Election" has the meaning ascribed to it in
Section 2.14.
"Appellate Proceeding Election Date" has the meaning ascribed to it in
Section 2.14.
"Assets and Properties" of any Person means all assets and properties
of every kind, nature, character and description (whether real, personal or
mixed, whether tangible or intangible, whether absolute, accrued, contingent,
fixed or otherwise and wherever situated), including the goodwill related
thereto, operated, owned, used, held for use or leased by such Person, including
without limitation, cash, accounts and notes receivables, chattel paper,
documents, instruments, general intangibles, real estate, fixtures, furniture,
equipment, inventory, goods and Intellectual Property.
"Assignment Instruments" has the meaning ascribed to it in Section
2.04(c)(i).
"Assumed Contract" means an Assumed Pre-Existing Contract or an Assumed
Future Contract.
"Assumed Future Contract" has the meaning ascribed to it in Section
2.01(a)(x).
"Assumed Liabilities" has the meaning ascribed to it in Section
2.02(a).
"Assumed Pre-Existing Contract" has the meaning ascribed to it in
Section 2.01(a)(iv).
"Assumption Instruments" has the meaning ascribed to it in Section
2.04(c)(ii).
3
"Balance Sheet" means an unaudited consolidated balance sheet of Seller
prepared in accordance with GAAP, except to the extent that such balance sheet
or the notes thereto specify non-GAAP principles in accordance with which the
balance sheet was prepared.
"Bank Group" means collectively the following: AG Capital Funding
Partners LP, AIMCO CDO Series 2000-A, Allstate Life Insurance Company, BDCM
Opportunity Fund, LP, Bear, Xxxxxxx & Co. Inc., BFC Capital Inc., Blue Square
Funding Limited Series 3, Xxxxx Xxx Commercial Bank, Debt Strategies Fund II,
Elf Funding Trust I, Event Partners Debt Acquisition, LLC, Foothill Partners IV,
L.P., Gleneagles Trading LLC, Highland Legacy Limited, International Commercial
Bank of China, Xxxxxxx National Life Insurance Company, Liberty-Xxxxx Xxx
Advisor Floating Rate Advantage Fund, ML CLO Pilgrim XV Pilgrim America (Cayman)
Ltd., XX Xxxxxxx CLO XX Pilgrim America (Cayman) Ltd., Oaktree Capital
Management LLC, OCM Real Estate Opportunities Fund II, L.P., Pacifica Partners
I, LP, Xxx Capital Funding LP, Pilgrim Prime Rate Trust, Silver Oak Capital,
LLC, SRV-Highland, Inc., Xxxxx Xxx Floating Rate Limited Liability Company, The
Bank of Nova Scotia, The ING Capital Senior Secured High Income Holdings Fund,
Xxx Xxxxxx CLO I Limited, Xxx Xxxxxx CLO II, Ltd., Xxx Xxxxxx Prime Rate Income
Trust, Xxx Xxxxxx Senior Floating Rate Fund, Xxx Xxxxxx Senior Income Trust,
General Electric Capital Corporation and GMAC Commercial Mortgage Corporation
(and their successors-in-interest with respect to claims against Seller).
"Bank Group Approval" means, subject to the conditions precedent that
the Confirmation Order has been entered, that: (i) the Restated Credit Agreement
has been executed and delivered and has become effective, unless Purchaser is
otherwise in breach of this Agreement and (ii) the condition set forth in
Section 5.1(y) of the Restated Credit Agreement has been satisfied.
"Bankruptcy Case" has the meaning ascribed to it in the Preliminary
Statements.
"Bankruptcy Code" has the meaning ascribed to it in the Preliminary
Statements.
"Bankruptcy Court" has the meaning ascribed to it in the Preliminary
Statements.
"Bankruptcy Rules" means, collectively, the Federal Rules of Bankruptcy
Procedure promulgated pursuant to 28 U.S.C. Section 2075 and the Local Rules of
Practice of the Bankruptcy Court as amended from time to time during the
Bankruptcy Case.
"Base Amount" has the meaning ascribed to it in Section 2.10(a).
"Bazaar" means Aladdin Bazaar, LLC, a Delaware limited-liability
company.
"Bazaar Note" has the meaning ascribed to it in Section 2.01(a)(xv).
"Books and Records" of any Person means all files, documents,
instruments, papers, books and records (whether in electronic, tangible or other
form) relating to the business, operations, condition, results of operations or
Assets and Properties of such Person, including without limitation financial
statements, Tax Returns and related work papers and letters from accountants,
budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute
books, stock certificates and books, stock transfer ledgers, Contracts,
Licenses, customer lists, computer
4
files and programs, retrieval programs, operating data and plans and
environmental studies and plans, but excluding medical and workers' compensation
records and files relating to personnel.
"Breakup Fee" has the meaning ascribed to it in Section 2.09(a).
"Business" has the meaning ascribed to it in the Preliminary
Statements.
"Business Books and Records" has the meaning ascribed to it in Section
2.01(a)(ix).
"Business Day" means a day other than Saturday, Sunday or any day on
which banks located in New York City or Nevada are authorized or obligated to
close.
"Casualty" has the meaning ascribed to it in Section 13.01(a).
"Certificate of Occupancy" means a final certificate of occupancy (and
not a temporary or partial certificate of occupancy) for the Hotel/Casino issued
by the applicable governmental authority with jurisdiction for the completed
building improvements constituting the Hotel/Casino and evidencing that such
improvements may be occupied for the purpose(s) intended. For purposes of this
Agreement, "Certificate of Occupancy" shall include such a certificate of
occupancy as described in Section 22.02.908 of the Xxxxx County, Nevada Code.
"Chief Executive Officer" means the chief executive officer hired by
Purchaser in accordance with Section 6.10 of this Agreement.
"Closing" means the closing of the transactions as contemplated by this
Agreement.
"Closing Date" has the meaning ascribed to it in Section 2.04(a).
"CLTA" means the California Land Title Association.
"Code" means the Internal Revenue Code of 1986, as amended, 26 U.S.C.
Section 1 et seq.
"Common Parking Area Use Agreement" means that certain Common Parking
Area Use Agreement, dated February 26, 1998, by and among Seller and Bazaar.
"Condemnation Notice" has the meaning ascribed to it in Section 13.02.
"Condition of the Business" means the financial condition and results
of operations of the Business or the Transferred Assets.
"Confirmation Order" means the Bankruptcy Court Order confirming the
Plan, which such Order shall contain the provisions set forth in Exhibit A and
shall otherwise be reasonably acceptable to Purchaser with respect to matters
that affect Purchaser's interest in any of the Transaction Documents or the
transactions contemplated thereby.
"Consideration" has the meaning ascribed to it in Section 2.03(a).
"Contract" means any Assumed Contract, Real Property Lease, personal
property lease, agreement, lease (including the Real Property Leases), license,
evidence of indebtedness, mortgage, indenture, security agreement or other
contract (whether written or oral).
5
"Credit Agreement" shall mean that certain Credit Agreement, dated as
of February 26, 1998, between Seller, as borrower, and The Bank of Nova Scotia
and the other Pre-Petition Lenders (as identified therein) as amended from time
to time. The Credit Agreement was amended seven times from January 29, 1999 to
July 30, 2001, which included the increases of the credit facility by
$50,000,000 in July of 2000 and $5,000,000 in December of 2000.
"Credit Facility Notes" means the Term A Notes, Term B Notes, Term C
Notes and Term D Notes issued by Seller under the Credit Agreement.
"Current Assets" means, as of the date of a Balance Sheet, the total
amount of current assets reported on such Balance Sheet.
"Current Liabilities" means, as of the date of a Balance Sheet, the
total amount of current liabilities reported on such Balance Sheet.
"Deed" has the meaning ascribed to it in Section 2.04(c)(i)(C).
"Development" has the meaning ascribed to it in Section 5.08(a).
"Development Notification" has the meaning ascribed to it in Section
5.08(a).
"Disclosure Statement" means the written disclosure statement that
relates to the Plan, as approved by the Bankruptcy Court pursuant to Section
1125 of the Bankruptcy Code and Bankruptcy Rule 3017, as such disclosure
statement may be amended, modified or supplemented from time to time.
"Dispute Notice" has the meaning ascribed to it in Section 2.11.
"DOJ" means the Antitrust Division of the United States Department of
Justice.
"Xxxxxxx Money Deposit" means collectively the Initial Xxxxxxx Money
Deposit, the Second Xxxxxxx Money Deposit, the Extension Xxxxxxx Money Deposits
and the Rejection Damages Deposit to the extent that Purchaser has paid them.
"Effective Date" means the last to occur of: (i) the first Business Day
that is at least 11 days after the date upon which the Bankruptcy Court dockets
the Confirmation Order confirming the Plan and on which no stay of the
Confirmation Order is in effect and (ii) the Business Day on which all of the
conditions set forth in Article 9 to the Plan have been satisfied or waived.
"Employee" means each employee or officer of Seller engaged in the
conduct of any part of the Business, but shall specifically exclude independent
contractors.
"Employee Plan" means any (i) employee pension benefit plan (as defined
in Section 3(2) of ERISA) or employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which is subject to ERISA and which Seller or any ERISA
Affiliate, maintains, contributes to or is obligated to contribute to on behalf
of current or former Employees, or otherwise has any present or contingent
liability with respect to; or (ii) severance, stock option, payroll taxes, sick
pay, profit
6
sharing, bonus, deferred compensation, equity appreciation plan or any other
plan, practice or arrangement providing benefits or compensation to current or
former Employees.
"Employment Loss" has the meaning ascribed to it under WARN.
"Entitlement Date" means the date on which Seller has become entitled
to the Breakup Fee under Section 2.09(c).
"Environmental Claim" means a claim, however asserted, by any
Governmental or Regulatory Authority or other Person alleging potential
liability on the part of Seller or any of its subsidiaries for violation of, or
liability under, any Environmental Laws or for release or injury to the
environment or threat to public health, personal injury (including sickness,
disease or death), property damage, natural resources damage, or otherwise
alleging liability for damages, punitive damages, cleanup costs, removal costs,
remedial costs, response costs, restitution, civil or criminal penalties,
injunctive relief or other type of relief, resulting from or based on (i) the
presence, placement, discharge, emission or release (including intentional or
unintentional, negligent or non-negligent, sudden or non-sudden, accidental or
non-accidental placement, spill, leak, discharge, emission or release) of any
Hazardous Material at, in or from property, whether or not owned by Seller or
any of its subsidiaries, or (ii) any other circumstances forming the basis of
any violation, or alleged violation, of any Environmental Laws.
"Environmental Laws" means all federal, state and local laws, rules,
regulations, ordinances, and consent decrees relating to health, hazardous
substances, and environmental matters applicable to the Business or the
Transferred Assets. Such laws and regulations include but are not limited to the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., as
amended; the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601 et seq., as amended; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., as amended; the Oil Pollution Act, 33
U.S.C. Section 2701 et seq., as amended; the Clean Air Act, 42 U.S.C. Section
7401 et seq., as amended; the Water Pollution Control Act, 33 U.S.C. Section
1251 et seq., as amended; the Occupational Safety and Health Act, 29 U.S.C.
Section 651 et seq., as amended; NRS Chapter 459; NRS Sections 444.440 to
444.650, inclusive; NRS Chapters 445A and 445B; NRS Sections 590.700 to 590.920,
inclusive; NRS Sections 618.750 to 618.850, inclusive; NRS Sections 533.324 to
533.4385, inclusive; and NRS Section 502.390.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means a corporation, trade or business which is
treated with Seller as a member of a controlled group of corporations, trades or
businesses under common control pursuant to Code Sections 414(b), (c), (m) or
(o).
"ESA" means that certain Energy Service Agreement, dated as of
September 24, 1998 by and between Seller and Northwind, as amended and modified
by, inter alia, the terms of that certain Settlement Agreement and Order of the
Bankruptcy Court dated December 10, 2002.
"ESCA" means that certain Energy Services Coordination Agreement, dated
as of May 28, 1999, by and between Seller and Bazaar as amended and modified by,
inter alia, the terms of that certain Settlement Agreement and Order of the
Bankruptcy Court dated December 10, 2002.
7
"Escrow Account" means the account established and maintained by the
Escrow Agent pursuant to the Escrow Agreement.
"Escrow Agent" means United Title Company of Nevada.
"Escrow Agreement" means that certain Escrow Agreement, substantially
in the form of Exhibit C, pursuant to which the Xxxxxxx Money Deposit shall be
escrowed.
"Escrow Fees" means the fees and other amounts payable to the Escrow
Agent pursuant to the Escrow Agreement and the Indemnity Escrow Agreement.
"Estoppel Certificates" has the meaning ascribed to it in Section
2.04(g)(v).
"Excluded Assets" has the meaning ascribed to it in Section 2.01(b).
"Excluded Books and Records" has the meaning ascribed to it in Section
2.01(b)(ii).
"Excluded Licenses" has the meaning ascribed to it in Section
2.01(b)(x).
"Expense Reimbursement" has the meaning ascribed to it in Section
2.09(b).
"Expiration Date" has the meaning ascribed to it in Section 14.01(k).
"Extension Xxxxxxx Money Deposit" has the meaning ascribed to it in
Section 2.03(c).
"Extension Notice" means a written notice from Purchaser to Seller
extending the Expiration Date by one month pursuant to Section 14.02.
"FAS" means Financial Accounting Standards issued by the Financial
Accounting Standards Board.
"Final Balance Sheet" has the meaning ascribed to it in Section
2.10(a).
"Final Order" means an order, judgment or other decree of the
Bankruptcy Court that has not been vacated, reversed, modified, amended or
stayed, and for which the time to appeal or seek review or rehearing has
expired.
"Financial Projections" means financial projections that (i) relate to
the Business, the Transferred Assets or the Assumed Liabilities and (ii) are
provided to Purchaser, any Sponsors or any of their respective Affiliates by
Seller or on Seller's behalf.
"FTC" means the United States Federal Trade Commission.
"GAAP" means generally accepted accounting principles in the United
States, consistently applied throughout the specified period and in the
immediately prior comparable period.
8
"Gaming Authorities" means the applicable gaming and liquor licensing
and regulatory authorities of the State of Nevada and Xxxxx County, including
the Nevada Gaming Commission, the State Gaming Control Board and the Xxxxx
County Liquor and Gaming Licensing Board.
"GECC" means General Electric Capital Corporation, for itself and as
agent for certain assigns and participants, and its successors and assigns.
"GECC Facilities Agreement" means that certain Facilities Agreement
between GECC, for itself and as agent for certain assigns and participants, and
Seller, dated as of June 26, 1998, as amended, and all operative documents
relating thereto including, but not limited to, the Master Lease Agreement, Term
Loan Note, Lease Equipment Schedules and Collateral Schedules (as such terms are
used in the GECC Facilities Agreement).
"GECC Term Loan Agreement" means that certain Facilities Agreement,
dated as of June 26, 1998, as amended, by and between GECC, for itself and as
agent for certain participants named therein, and Seller.
"GECC Term Note" means the note executed by Seller on June 26, 1998
evidencing the obligation due GECC pursuant to the GECC Term Loan Agreement.
"Governmental or Regulatory Authority" means any Gaming Authority,
court, tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.
"Group Health Plans" means all group health plans, as defined in
Section 5000(b)(1) of the Code, that are maintained by Seller.
"Xxxxxx Intersection Plan" means a plan for improvement, realignment,
relocation, construction and/or expansion of Xxxxxx Avenue, including the
removal and relocation of sidewalks, curbs, gutters, medians, landscaping,
irrigation systems, storm drains, utilities, traffic signals, traffic signing
and striping, lighting, traffic controls, waterlines, bridges, and masonry
retaining walls, as shown in the "2002 Improvement Plans for Xxxxxx Avenue from
Polaris Avenue to Las Vegas Blvd." from the Xxxxx County, Nevada Department of
Public Works, conformed and issued for construction as of December 18, 2002.
"Hazardous Material" means any of those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including, without limitation, all substances identified under any Environmental
Law as a pollutant, contaminant, waste, solid waste, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous material, or toxic
substance, or petroleum or petroleum derived substance or waste, and including,
without limitation, any petrochemical or petroleum products, radioactive
materials, asbestos in any form which is friable, UREA formaldehyde foam
insulation, transformers or other equipment that contains dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas.
"Hollywood Casino Challenge" means an Action or Proceeding, or a
threatened Action or Proceeding, by or on behalf of Hollywood Casino
Corporation, a Delaware corporation, or
9
any of its Affiliates challenging or disputing Purchaser's use of the Planet
Hollywood name or xxxx or the Planet Hollywood Agreement.
"Hotel" means the hotel portion of the Hotel/Casino.
"Hotel/Casino" has the meaning ascribed to it in the Preliminary
Statements.
"HSR Act" means Section 7A of the Xxxxxxx Act (Title II of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.
"Improvements" has the meaning ascribed to it in Section 2.01(a)(i).
"Indebtedness" of any Person means all obligations of such Person (i)
for the deferred purchase price of goods or services (other than trade payables
or accruals incurred in the ordinary course of business) or (ii) in the nature
of guarantees of the obligations described in clause (i) above of any other
Person.
"Indemnified Party" means any Person claiming indemnification under
Article XII.
"Indemnity Escrow Account" means the account established and maintained
by the Escrow Agent pursuant to the Indemnity Escrow Agreement.
"Indemnity Escrow Agreement" means that certain Indemnity Escrow
Agreement, substantially in the form of Exhibit I, pursuant to which the
Indemnity Escrow Amount shall be escrowed.
"Indemnity Escrow Amount" has the meaning ascribed to it in Section
2.12.
"Indemnity Escrow Period" has the meaning ascribed to it in Section
2.12.
"Indemnity Notice" means written notification by an Indemnified Party
of a claim for indemnity under Article XII, specifying in reasonable detail (to
the extent known by the Indemnified Party) the nature of and basis for such
claim, together with the amount or, if not then reasonably determinable, the
estimated amount, determined in good faith, of the Loss arising from such claim.
"Initial Xxxxxxx Money Deposit" has the meaning ascribed to it in
Section 2.03(c).
"Intangible Personal Property" has the meaning ascribed to it in
Section 2.01(a)(v).
"Intellectual Property" shall mean all of the following: (i) trademarks
and service marks (registered or unregistered), trade dress, trade names and
slogans, business and product names, all applications or registrations in any
jurisdiction pertaining to the foregoing and all goodwill associated therewith;
(ii) patentable inventions, discoveries, improvements, ideas, know-how, formula
methodology, processes, technology, computer programs and software (including
source code, object code, documentation, programming tools, drawings,
specifications and data) and applications and patents in any jurisdiction
pertaining to the foregoing, including re-issues, continuations, divisions,
continuations-in-part, renewals or extensions; (iii) trade secrets,
10
including confidential and other non-public information, and the right in any
jurisdiction to limit the use or disclosure thereof; (iv) copyrights in
writings, designs, software programs and software, applications or registrations
in any jurisdiction for the foregoing and moral rights related thereto; (v)
databases and database rights; and (vi) Internet Web sites, domain names and
applications and registrations pertaining thereto and all intellectual property
used in connection with or contained in all versions of such Internet Web sites.
"Intellectual Property Assignments" means the Assignment of Federal Use
Trademark, Assignment of Federal Intent to Use Trademark, Assignment of State of
Nevada Trademark, Copyright Assignment and Registrant Name Change Agreement,
each of which is substantially in the respective form contained in Exhibit J.
"Inventoried Baggage" has the meaning ascribed to it in Section 5.10.
"Inventoried Vehicles" has the meaning ascribed to it in Section 5.12.
"Inventory" has the meaning ascribed to it in Section 2.01(a)(xi).
"IRS" means the United States Internal Revenue Service.
"Knowledge of Purchaser" means, except as otherwise stated herein, the
actual, current knowledge of the Persons identified on Schedule 1.01(I), without
further inquiry, as of Purchaser's original execution of this Agreement (without
regard to subsequent amendments).
"Knowledge of Seller" means the actual, current knowledge of Seller's
Officers, without further inquiry, as of Seller's original execution of this
Agreement (without regard to subsequent amendments).
"Laws" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"Leased Real Property" has the meaning ascribed to it in Section
2.01(a)(ii).
"Liabilities" means all indebtedness, obligations and other liabilities
of a Person (whether absolute, accrued, contingent, fixed or otherwise, or
whether due or to become due).
"Licenses" means all licenses (including gaming licenses), permits,
certificates of authority, authorizations, certificates, approvals,
registrations, franchises and similar consents granted or issued by any
Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security interest,
lease, lien, levy or other encumbrance of any kind, or any conditional sale
Contract, title retention device arrangement or Contract or other Contract to
give any of the foregoing.
"Loss" or "Losses" means any and all damages, fines, fees, penalties,
deficiencies, losses, liabilities, obligations, costs and expenses (including
without limitation, interest, court costs, fees
11
of attorneys, accountants and other experts or other expenses of litigation or
other proceedings) and any claim, default or assessment.
"Non-Solicitation Period" has the meaning ascribed to it in Section
2.09(f)(i).
"Northwind" means Northwind Aladdin, LLC, a Nevada limited-liability
company.
"Northwind Lease" means that certain Lease, dated December 3, 1997, by
and between Northwind and Seller, as amended.
"Northwind Obligations" means the obligations (excluding Seller's cure
obligations) of Seller under the ESA, the Northwind Lease, the Northwind
Settlement Agreement and the ESCA.
"Northwind Settlement Agreement" means that certain Settlement
Agreement and Releases, dated as of November 6, 2002, by and among Seller,
Northwind, Xxxx Xxxxxxx Life Insurance Company, Xxxx Xxxxxxx Variable Life
Insurance Company, Xxxx Xxxxxxx Reassurance Company, Ltd., State Street Bank and
Trust Company and Bazaar, as amended by that certain First Amendment to
Settlement Agreement and Releases, dated as of December 23, 2002.
"Northwind SNDA" means that certain Subordination, Non-Disturbance and
Attornment Agreement and Consent, dated as of June 7, 1999, by and between The
Bank of Nova Scotia, a Canadian chartered bank, Northwind, Seller, State Street
Bank and Trust Company, a Massachusetts trust company, Aladdin Music, LLC, a
Nevada limited liability company and Aladdin Music Holdings, LLC, a Nevada
limited liability company.
"NRS" means the Nevada Revised Statutes, as may be amended from time to
time.
"Operating Agreements" means Contracts to which Seller is a party and
that relate to Seller's ownership, operation or maintenance of the Transferred
Assets.
"Operating Supplies" has the meaning ascribed to it in Section
2.01(a)(xii).
"Operative Agreements" means, collectively, the Assignment Instruments,
the Assumption Instruments and the Escrow Agreement.
"Order" means any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"Owned Real Property" has the meaning ascribed to it in Section
2.01(a)(i).
"Parties" means collectively all parties to this Agreement.
"Party" means a party to this Agreement.
12
"Permitted Exceptions" means those items set forth on Schedule 5.07(b)
hereto and other title exceptions deemed to be Permitted Exceptions pursuant to
Section 5.07(b), all of which, for purposes of this Agreement, Purchaser has
approved.
"Permitted Lien" means (i) any Lien for Taxes not yet due or delinquent
or being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP; (ii) any statutory Lien
(other than for Taxes) arising in the ordinary course of business by operation
of Law with respect to a Liability that is not yet due or delinquent; (iii) any
minor imperfection of title or similar Lien which individually or in the
aggregate with other such Liens does not materially impair the value of the
property subject to such Lien or the use of such property in the conduct of the
Business; and (iv) with respect to Assumed Contracts, the rights of
counter-parties under such Assumed Contracts.
"Person" means any natural person, corporation, limited-liability
company, general partnership, limited partnership, proprietorship, other
business organization, trust, union, association or Governmental or Regulatory
Authority.
"Plan" means the plan of reorganization to be filed by Seller in the
Bankruptcy Case, as such plan may be amended or modified, having such form and
content as are reasonably acceptable to Purchaser with respect to matters that
would adversely affect Purchaser's interest in any of the Transaction Documents
or the transactions contemplated thereby.
"Plan Supplement" means the Plan supplement to be filed with the
Bankruptcy Court, having such form and content as are reasonably acceptable to
Purchaser with respect to matters that would adversely affect Purchaser's
interest in any of the Transaction Documents or the transactions contemplated
thereby, no later than the date the Disclosure Statement is approved by the
Bankruptcy Court, to which are attached the additional exhibits to the Plan
(which exhibits shall have such form and content as are reasonably acceptable to
Purchaser with respect to matters that would adversely affect Purchaser's
interest in any of the Transaction Documents or the transactions contemplated
thereby). The exhibits may be subsequently amended, modified or supplemented in
accordance with the Plan, provided that any such amendment, modification or
supplement is reasonably acceptable to Purchaser with respect to matters that
would adversely affect Purchaser's interest in any of the Transaction Documents
or the transactions contemplated thereby. The Plan Supplement shall be a part of
the Plan as if the Plan Supplement and the attached exhibits were set forth more
fully in the Plan.
"Planet Hollywood" means Planet Hollywood International, Inc., a
Delaware corporation.
"Planet Hollywood Agreement" means the agreement between Planet
Hollywood and Purchaser for the grant by Planet Hollywood to Purchaser of a
license that gives Purchaser the right to (i) use the "Planet Hollywood" trade
name/service xxxx with respect to the Hotel/Casino and for marketing of the
Hotel/Casino and (ii) display or otherwise use certain sports, motion picture
and Hollywood-themed memorabilia with respect to the Hotel/Casino.
"Post-Closing True-Up" has the meaning ascribed to it in Section
2.10(d).
"Post-Petition" means after the commencement of the Bankruptcy Case.
13
"Pre-Closing Balance Sheet" has the meaning ascribed to it in Section
2.10(a).
"Pre-Closing Tax Returns" has the meaning ascribed to it in Section
9.02(a).
"Pre-Closing Taxes" has the meaning ascribed to it in Section 9.02(a).
"Pre-Closing Working Capital" has the meaning ascribed to it in Section
2.10(b).
"Preliminary Statements" means the Preliminary Statements commencing on
page 1 of this Agreement.
"Pre-Petition" means prior to the commencement of the Bankruptcy Case.
"Pre-Petition Agent" means BNY Asset Solutions LLC, as successor to The
Bank of Nova Scotia, as administrative agent for the Pre-Petition Lenders under
the Credit Agreement.
"Pre-Petition Lenders" means the lenders from time to time under the
Credit Agreement.
"Promotional Vehicles" means the Vehicles that Seller owns, uses or
holds for promotional purposes.
"Property" means the property set forth in Schedule 1.01(II).
"Purchaser" has the meaning ascribed to it in the preamble to this
Agreement.
"Purchaser Indemnified Parties" means Purchaser and its officers,
directors, employees and agents.
"Purchaser Selection Hearing" has the meaning ascribed to it in Section
2.09(d).
"Purchaser Selection Order" has the meaning ascribed to it in the Sales
Process Order.
"Purchaser's Applicants" means the Persons who are identified on
Schedule 1.01(I) and have applied or are required to apply for gaming licensing
(which includes findings of suitability).
"Qualified Offer" means an offer to acquire Seller or the Transferred
Assets and Assumed Liabilities, which offer meets the requirements set forth in
the Sales Process Order and is submitted to Seller by the Alternative Offer
Deadline, as more fully described in the Sales Process Order.
"REA" has the meaning ascribed to it in Section 2.04(g)(vii).
"Real Property" means, collectively, the Owned Real Property and the
Leased Real Property.
"Real Property Leases" has the meaning ascribed to it in Section
2.01(a)(ii).
"Rejectable Contracts" has the meaning ascribed to it in Section 2.15.
14
"Rejected Contracts" has the meaning ascribed to it in Section 2.15.
"Rejection Damages" has the meaning ascribed to it in Section 2.15.
"Rejection Damages Deposit" has the meaning ascribed to it in Section
2.03(c).
"Regulatory Action" has the meaning ascribed to it in Section
6.01(a)(i).
"Renovation Commitment" has the meaning ascribed to it in Section 8.07.
"Rent Roll" has the meaning ascribed to it in Section 3.07(b).
"Representation or Warranty Breach" has the meaning ascribed to it in
Section 14.01(e).
"Representatives" has the meaning ascribed to it in Section 5.03.
"Restated Credit Agreement" means the Amended and Restated Loan and
Facilities Agreement, as amended with such amendments reported in writing to
Seller, and executed by Purchaser and the Restated Credit Agreement Agent to
restate the Credit Agreement and the GECC Facilities Agreement (it being
understood and agreed that any reference in this Agreement to a section or
provision of the Restated Credit Agreement shall be references to whatever
section or provision of the Restated Credit Agreement corresponds to the
referenced section or provision in the last draft of the Restated Credit
Agreement that was provided to Seller and Purchaser and their counsel by the
Bank Group prior to the execution of this Agreement by Purchaser and Seller).
"Restated Credit Agreement Agent" means the Pre-Petition Agent as the
administrative and collateral agent under the Restated Credit Agreement.
"Restated Credit Facility Notes" means, collectively, the Restated Term
A Notes and the Term B Notes issued by Purchaser pursuant to the Restated Credit
Agreement.
"Restated Credit Facility Security Instruments" means, collectively,
all of the security documents executed pursuant to the Restated Credit
Agreement.
"Restated Term A Notes" means the Term A Notes issued by Purchaser
pursuant to the Restated Credit Agreement.
"Restoration Cost" has the meaning ascribed to it in Section 13.01(b).
"Retained Liabilities" means the Liabilities of Seller that Purchaser
is not assuming under this Agreement.
"Sales Process and Approval Motion" has the meaning ascribed to it in
Section 2.09(d).
"Sales Process and Purchaser Protection Hearing" means the initial
hearing before the Bankruptcy Court held pursuant to the Sales Process and
Approval Motion to consider the sales process and procedures and protection for
Purchaser sought to be approved by the Sales Process and Approval Motion.
15
"Sales Process Order" means the Final Order, having substantially the
form and content set forth in Exhibit B, of the Bankruptcy Court approving the
procedures for soliciting Qualified Offers and approving the sales protections
for Purchaser as provided for in Section 2.09(d), together with amendments
thereof to which the Parties stipulate and agree.
"Sample Balance Sheet" has the meaning ascribed to it in Section
2.10(a).
"Schedules" means the numbered Schedules to this Agreement.
"Second Xxxxxxx Money Deposit" has the meaning ascribed to it in
Section 2.03(c).
"Selection of Purchaser" means the Bankruptcy Court's selection of
Purchaser as the purchaser of the Transferred Assets at the Purchaser Selection
Hearing.
"Seller" has the meaning ascribed to it in the preamble to this
Agreement, and shall include Seller before and after the Effective Date.
"Seller Board" has the meaning ascribed to it in Section 2.09(f)(i).
"Seller Indemnified Parties" means Seller and its officers, directors,
managers, employees and agents.
"Seller Representatives" has the meaning ascribed to it in Section
2.09(f)(i).
"Seller's Officers" means Xxxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxx or
Xxxxxxxx X. Xxxxxx.
"Sponsors" means Bay Harbour Management, LC; Starwood; Xxxxxx Xxxx; and
any Affiliate or other entity associated with any of the foregoing.
"Sprint" means the Nevada Division of Central Telephone Company, d/b/a
Sprint of Nevada, and its successors under the Sprint Agreement.
"Sprint Agreement" means the Revenue Share Agreement dated April 12,
2000, as amended, by and between Sprint and Seller.
"Starwood" means Starwood Hotels and Resorts Worldwide, Inc., a
Maryland corporation or an Affiliate thereof.
"Straddle Period" means any taxable period beginning before and ending
after the Closing Date.
"Subject Employers" has the meaning ascribed to it in Section 15.15.
"Survey" means that certain ALTA survey dated March 24, 2003, prepared
by Horizon Surveys for the Owned Real Property, as may be amended or modified.
"Swap Agreement" means the ISDA Master Agreement dated February 28,
1998, as amended, between The Bank of Nova Scotia and Seller, and all other
related documents and agreements providing for interest rate collars relating to
the Credit Facility Notes.
"Tangible Personal Property" has the meaning ascribed to it in Section
2.01(a)(iii).
16
"Tax" or "Taxes" means any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, gaming, transfer, registration, value added, alternative
or add-on minimum, estimated or other tax of any kind whatsoever, including any
interest, penalty or addition thereto, whether disputed or not and any expenses
incurred in connection with the determination, settlement or litigation of any
Tax liability and shall include any liability for such amounts as a result
either of being (or having been) a member of a combined, consolidated, unitary
or affiliate group or of a contractual obligation to indemnify any Person, and
shall include any liability for such amounts relating to any other Person if
such liability is imposed by reason of law (including transferee or successor
liability).
"Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Tenant Leases" has the meaning ascribed to it in Section 2.01(a)(ii).
"Termination Event" has the meaning ascribed to it in Section 2.09(d).
"Title Company" means Chicago Title Insurance Company.
"Title Policy" has the meaning ascribed to it in Section 5.07(d).
"Title Report" means that certain Preliminary Title Report dated as of
September 27, 2002, as amended by that certain First Amended Preliminary Title
Report dated January 31, 2003, and by that certain Second Amended Preliminary
Title Report dated February 27, 2003, and by that certain Third Amended
Preliminary Title Report dated March 7, 2003, and by that certain Fourth Amended
Preliminary Title Report dated March 11, 2003, prepared by United Title Company
for the Owned Real Property, as may be further amended or modified.
"Transaction Documents" means collectively this Agreement, the Restated
Credit Agreement, the Restated Credit Facility Notes, the Restated Credit
Facility Security Instruments and the Operative Agreements.
"Transfer Taxes" has the meaning ascribed to it in Section 9.01(a).
"Transfer Time" has the meaning ascribed to it in Section 2.04(a).
"Transferred Assets" has the meaning ascribed to it in Section 2.01(a).
"Transferred Assets Insurance Proceeds" has the meaning ascribed to it
in Section 2.07.
"Transferred Cash" has the meaning ascribed to it in Section
2.01(a)(xvi).
"Transferred Policies" has the meaning ascribed to it in Section 3.16.
17
"Triggering Date" means the date of the occurrence of the relevant
Development unless the representation or warranty in question is made as of a
date or dates prior to such occurrence, in which case "Triggering Date" means
such prior date or dates.
"Union" has the meaning ascribed to it in Section 10.01(a).
"Vehicles" has the meaning ascribed to it in Section 2.01(a)(vii).
"WARN" means the Worker Adjustment and Retraining Notification Act of
1988, as amended, and the regulations promulgated thereunder.
"Working Capital" has the meaning ascribed to it in Section 2.10(a).
1.02 Construction of Certain Terms and Phrases. Unless the context
of this Agreement otherwise requires, (i) words of any gender include each other
gender; (ii) words using the singular or plural number also include the plural
or singular number, respectively; (iii) the terms "hereof," "herein," "hereby"
and derivative or similar words refer to this entire Agreement; (iv) the terms
"Article" or "Section" refer to the specified article or section of this
Agreement; and (v) the phrases "ordinary course of business" and "ordinary
course of business consistent with past practice" refer to the business and
practice of Seller in connection with the Business. Whenever this Agreement
refers to a number of days, such number shall refer to calendar days unless
Business Days are specified.
ARTICLE II. SALE OF ASSETS AND CLOSING.
2.01 Assets.
(a) Transfer, Assumption and Assignment. On the terms and
subject to the conditions set forth in this Agreement, at the Closing, Seller
will sell, transfer, convey, assign and deliver to Purchaser, and Purchaser will
purchase all of the Property and all of Seller's rights, title and interests in,
to and under all of the Assets and Properties of Seller, or used or held for use
by Seller in the conduct of the Business, free and clear of all Liens other than
Liens granted pursuant to the Restated Credit Agreement, Restated Credit
Facility Notes, and Restated Credit Facility Security Instruments and all other
Permitted Liens (collectively with any proceeds and awards referred to in
Section 2.07, but excluding the Excluded Assets, and subject to the provisions
of Section 2.03(b) for substitutions in the event of certain credit bids, the
"Transferred Assets"). The Transferred Assets shall include, without limitation,
the following:
(i) Real Property. The real property, legal
descriptions of which are set forth in Schedule 2.01(a)(i), and all of the
rights arising out of the ownership thereof or appurtenant thereto (including
without limitation, any and all appurtenant easements and all other rights and
interests appurtenant thereto) (the "Owned Real Property"), together with all
buildings, structures, facilities, fixtures and other improvements located
thereon or affixed to the Owned Real Property (collectively, the
"Improvements");
(ii) Real Property Leases. (A) Leases and
subleases of real property described in Schedule 2.01(a)(ii)(A) as to which
Seller is the lessor or sublessor (the "Tenant Leases"), and (B) the leases and
subleases of real property described in Schedule 2.01(a)(ii)(B)
18
relating to the real property described in such leases (the "Leased Real
Property") as to which Seller is the lessee or sublessee, together with any
options held by Seller to purchase the underlying property and leasehold
improvements thereon, and in each case all other rights, subleases, licenses,
permits, deposits and profits appurtenant to or related to such leases and
subleases (the leases and subleases described in subclauses (A) and (B) of this
clause (ii) are collectively referred to herein as the "Real Property Leases");
(iii) Tangible Personal Property. All furniture,
fixtures, equipment (including computer hardware, software and other
computer-related equipment), supplies, parts, machinery, artwork and other
tangible personal property owned by Seller or used or held for use by Seller in
the conduct of the Business (including without limitation, (A) any and all
tangible "gaming devices" (as defined in NRS Section 463.0155), gaming device
parts, inventory and other related gaming equipment and supplies used in
connection with the operation of the casino included in the Business, including
without limitation, slot machines, gaming tables, cards, dice and tangible
"associated equipment" (as defined in NRS Section 463.0136) and (B) all food and
beverage service equipment, cleaning service equipment and laundry and dry
cleaning equipment), but excluding, however, property owned by guests, employees
or other Persons furnishing goods or services to Seller in the conduct of the
Business including any of the foregoing purchased subject to any conditional
sales or title retention agreement in favor of any other Person, so long as such
agreement is either a Permitted Lien or an Assumed Contract (collectively, the
"Tangible Personal Property");
(iv) Assumed Pre-Existing Contracts. All
Contracts related to the Transferred Assets and the Business listed in Schedule
2.01(a)(iv) (but excluding Contracts (other than Contracts that Seller has an
option to extend) that terminate, by their terms (other than as a result of a
breach thereof), prior to the Closing), including all warranties and guarantees
thereunder to the extent transferable, and specifically including: (A)
Pre-Petition Contracts listed on Schedule 2.01(a)(iv) as assumable and
assignable under Bankruptcy Code Section 365; (B) Pre-Petition Contracts listed
on Schedule 2.01(a)(iv) as requiring prior written consent to assignment
(subject to receipt of such consent); (C) Post-Petition Contracts listed on
Schedule 2.01(a)(iv) as requiring prior written consent to assignment (subject
to receipt of such consent); and (D) other Post-Petition Contracts (including
blanket purchase orders) listed on Schedule 2.01(a)(iv) as not being a Contract
described under any of the preceding clauses (A), (B) and (C) (collectively, the
"Assumed Pre-Existing Contracts");
(v) Intangible Personal Property. Subject to
Section 2.08, all Intellectual Property owned by Seller or used or held for use
by Seller in the conduct of the Business (including without limitation,
intangible "gaming devices" (as defined in NRS Section 463.0155), player
tracking systems, "cashless wagering systems" (as defined in NRS Section
463.014), intangible "associated equipment" (as defined in NRS Section
463.0136), and all goodwill associated therewith), all licenses respecting the
Intellectual Property and all rights, privileges, claims, causes of action and
options relating or pertaining to the Intellectual Property, the Business or the
Transferred Assets, including those listed in Schedule 2.01(a)(v) (with such
listing to include the application serial number or registration number, the
class of goods covered and the expiration date of each registered trademark,
trade name, service xxxx, service name, brand name or registered rights to any
of the foregoing that are included in the Intellectual Property) (collectively,
the "Intangible Personal Property");
19
(vi) Licenses. Subject to Section 2.08 and
excluding the Excluded Licenses, all Licenses (and applications therefor)
utilized by Seller in, or necessary to conduct and promote, the Business as
presently conducted, each of which is listed in Schedule 2.01(a)(vi);
(vii) Vehicles. All motor vehicles owned or,
subject to Section 2.08, leased by Seller and used or held for use in the
conduct of the Business, including those listed in Schedule 2.01(a)(vii) (the
"Vehicles"), with such list separately identifying the Promotional Vehicles;
(viii) Customer Lists. All customer lists and
databases owned by Seller or used or held for use by Seller in the conduct of
the Business;
(ix) Books and Records. All Books and Records
owned by Seller or used or held for use by Seller in the conduct of the Business
or otherwise relating to the Transferred Assets or Assumed Liabilities
(including without limitation, such books and records required by Gaming
Authorities to be maintained at the Business), other than the Excluded Books and
Records (collectively, the "Business Books and Records"). Purchaser shall
cooperate and afford Seller, its counsel, accountants and other representatives
(subject to reasonable and customary requirements on their part), during normal
business hours, reasonable access to the Business Books and Records after the
Closing Date as required under Section 2.06;
(x) Assumed Future Contracts. All Contracts that
are entered into, or the expiration dates of which are extended by Seller in
accordance with this clause (x) in the ordinary course of business, between
April 11, 2003 and the Closing Date and that do not by their terms (other than
as a result of a breach thereof) expire before the Closing; provided, however,
that (A) prior notice of such Contracts or such extension of the expiration
dates, as the case may be, is given to Purchaser (unless in the case of an
extension of such Contract, (I) after giving effect to such extension, the
economics of the extended Contract do not materially differ from the Contract
prior to its extension and the extended Contract is terminable by Seller on not
more than 30 days' notice at no termination cost to Purchaser, or (II) the
extension occurs automatically by the terms of such Contract, in either of which
cases no such prior notice or approval specified in the following clause (B) is
required) and (B) Purchaser approves such Contracts or such extensions, as the
case may be, which approval shall be deemed granted if Purchaser does not
reasonably object within five Business Days after receiving such prior notice
(the "Assumed Future Contracts");
(xi) Inventory. All inventories of office,
restaurant, bar, hotel, casino and other supplies (including all foods and
alcoholic and non-alcoholic beverages), parts, packaging materials and other
accessories related thereto, all maintenance and housekeeping supplies and
inventory, including without limitation, soap, toiletries, cleaning materials
and matches, stationery, pencils and other supplies of all kinds, whether used,
unused or held in reserve storage for future use in connection with the
maintenance and operation of the Business, which are owned by Seller or used or
held for use by Seller in the conduct of the Business and are on hand or in
transit from or to the Business at the Transfer Time (excluding, however, all
items of property owned by guests, employees or other persons furnishing goods
or services to the Business) including any of the foregoing purchased subject to
any conditional sales or title
20
retention agreement in favor of any other Person, together with all rights of
Seller against suppliers of such inventories, as these shall exist at the
Transfer Time (collectively, "Inventory");
(xii) Operating Supplies. All china, glassware,
linens, silverware and uniforms owned by Seller or used or held for use by
Seller in the conduct of the Business, which are on hand at the Transfer Time
("Operating Supplies");
(xiii) Prepaid Expenses. All prepaid expenses
relating to the Business or the Transferred Assets which are owned by Seller or
used or held for use by Seller in the conduct of the Business and are
transferable or assignable by Seller, as listed in Schedule 2.01(a)(xiii);
(xiv) Accounts Receivable. All Accounts Receivable
that are outstanding as of the Transfer Time, subject to decrease pursuant to
Section 2.10(b);
(xv) Bazaar Note. That certain Subordinated
Non-Negotiable Promissory Note dated as of November 20, 2000, by Bazaar in favor
of Seller, as amended (the "Bazaar Note");
(xvi) Transferred Cash. Cash of Seller in the
aggregate amount of $10,000,000, subject to increase pursuant to Section
2.10(b), comprised of any combination designated by Seller of casino bankroll,
cash on the casino premises and in gaming equipment and elsewhere in the
Business (the "Transferred Cash"); and
(xvii) Plans and Specifications. All plans and
specifications, blueprints, architectural drawings, engineering diagrams and
similar items owned by Seller or used or held for use by Seller in the conduct
of the Business, which relate to the construction of the Hotel/Casino or the
operation of the Business.
To the extent any of the Business Books and Records are items
susceptible to duplication and (i) are required by Law or otherwise necessary to
wind up the affairs of Seller or the affairs of any of Seller's Affiliates or
(ii) could reasonably be expected to be used by Seller to review or audit the
Final Balance Sheet pursuant to Section 2.11, Seller may deliver photostatic
copies or other reproductions from which information solely concerning any of
Seller's Affiliates' businesses other than the Business has been deleted;
provided, however, that to the extent that any Laws or evidentiary rules
applicable to Purchaser would require Purchaser to produce the original Business
Books and Records, Seller will make such originals available to Purchaser for
the purpose of compliance with such Laws or rules.
(b) Excluded Assets. The following Assets and Properties
of Seller (the "Excluded Assets") shall be excluded from, and shall not
constitute, Transferred Assets:
(i) Tax Refunds. All refunds or credits, if any,
of federal, state, local or foreign Taxes due Seller;
(ii) Excluded Books and Records. The minute books
and membership transfer books of Seller, medical and workers' compensation
records and files relating to personnel, and any Books and Records relating
solely to the Excluded Assets or the Retained
21
Liabilities, other than any such Books and Records required by any Gaming
Authority or other Governmental or Regulatory Authority to be maintained at the
Real Property or in connection with the Business (the "Excluded Books and
Records");
(iii) Litigation Claims. Except solely with
respect to Assumed Liabilities as of the Closing Date, Seller's rights
(including indemnification), claims and recoveries under litigation against
third parties arising out of, or relating to, events prior to the Closing Date
or which arise under the Bankruptcy Code, including avoidance actions;
(iv) Excluded Rights. The respective rights of
Seller in, to and under all Contracts which are not assigned or required to be
assigned to, and assumed by, Purchaser pursuant to Section 2.01(a);
(v) Cash. Cash other than the Transferred Cash;
(vi) Insurance Claims. Seller's rights, claims
and recoveries under insurance claims that are listed in Schedule 2.01(b)(vi);
(vii) Certain Deposits and Prepaid Expenses. Funds
deposited by Seller with any Governmental or Regulatory Authority as set forth
in Schedule 2.01(b)(vii)(A) and prepaid expenses and assets that are Current
Assets but are not transferable and are listed on Schedule 2.01(b)(vii)(B);
(viii) Equity Interests. All of Seller's equity
interests in its subsidiaries and other business entities, which are identified
in Schedule 2.01(b)(viii) with a listing in that Schedule of the number of
employees and the business activities of each such subsidiary or other entity;
(ix) Insurance Policies. All of Seller's
insurance policies listed in Schedule 2.01(b)(ix) (which Schedule contains a
general description of the type of coverage provided under each of such
policies);
(x) Excluded Licenses. The Xxxxx County Business
License for the conduct of advertising business held by Magic Carpet Media, LLC,
a Nevada limited-liability company, which does business under the name
"In-Genie-us" and is a subsidiary of Seller, and, to the extent their transfer
or assignment to Purchaser is not permitted under applicable Laws, other
Licenses that are held or utilized by Seller, each of which is listed in
Schedule 2.01(b)(x) (collectively, the "Excluded Licenses");
(xi) Rights to Payments Under True-Ups. Seller's
rights to payments from Purchaser pursuant to the Closing Date True-Up or the
Post-Closing True-Up under Section 2.10;
(xii) Employee Plans. All Employee Plans other
than the Employee Plans listed in Schedule 2.02(a)(ii)(C); and
(xiii) Other Rights. Seller's respective rights
under this Agreement and the Operative Agreements.
22
2.02 Liabilities.
(a) Assumed Liabilities. In connection with the sale,
transfer, conveyance, assignment and delivery of the Transferred Assets pursuant
to this Agreement, at the Closing, Purchaser will assume and agree to pay,
perform and discharge, as and when due, (i) the Northwind Obligations, (ii) all
Liabilities of Seller arising under any of the (A) Assumed Pre-Existing
Contracts, (B) Assumed Future Contracts, (C) to the extent accrued as a Current
Liability on the Final Balance Sheet, accrued but unpaid Liabilities under the
Group Health Plans and other Employee Plans listed in Schedule 2.02(a)(ii)(C)
and (D) to the extent accrued as a Current Liability on the Final Balance Sheet,
all Taxes on Schedule 2.02(a)(ii)(D); and (iii) to the extent included on the
Final Balance Sheet, Current Liabilities associated with Advance Reservations
and Similar Deposits and any other Current Liabilities incurred by Seller in the
ordinary course of business that are outstanding on the Closing Date, except
Retained Liabilities (collectively, the "Assumed Liabilities").
(b) Retained Liabilities. Purchaser shall not assume
under this Agreement any Liabilities other than the Assumed Liabilities. Without
limiting the generality of the foregoing, under this Agreement Purchaser shall
not assume any of the following:
(i) contingent Liabilities except to the extent
they (A) are reflected on the Pre-Closing Balance Sheet (and ultimately the
Final Balance Sheet) as a Current Liability, (B) arise under the express terms
of an Assumed Contract (other than with respect to a breach thereof by Seller or
an act or omission that, with the giving of notice or the passage of time (or
both), would be a breach thereof by Seller) or (C) are part of the Northwind
Obligations;
(ii) Liabilities arising as a result of an
acceleration of Seller's obligations or a right to accelerate Seller's
obligations under any Contract due to a breach or default (or an event that
would be a breach or default with the giving of notice, the passage of time or
both) by Seller prior to the Closing Date;
(iii) Liabilities relating to Seller's obligations
to cure defaults, as provided in Sections 2.08 and 5.13;
(iv) pending Actions or Proceedings brought
against Seller prior to the Closing Date unless set forth on Schedule
2.02(b)(iv);
(v) all Taxes for which Seller is liable, except
to the extent provided in Section 9.03(b) or scheduled on Schedule
2.02(a)(ii)(D);
(vi) Liabilities under or relating to any
Employee Plan (other than the Group Health Plans and other Employee Plans listed
in Schedule 2.02(a)(ii)(C)) or employment, employee retention or similar
agreement or contract, including without limitation, present or contingent
liabilities under ERISA or the Code; and
(vii) any Liability not specifically assumed by
Purchaser hereunder; and
(viii) any Liability of Seller under this Agreement
or any Operative Agreement.
23
2.03 Consideration; Credit Bids; Deposits; Allocation.
(a) The aggregate consideration for the Transferred
Assets (the "Consideration") shall consist of the following:
(i) the execution and delivery by Purchaser of
the Restated Credit Facility Notes, the Restated Credit Agreement and the
Restated Credit Facility Security Instruments as provided in the Plan;
(ii) the assumption by Purchaser of the Assumed
Liabilities; and
(iii) the aggregate amount of the Rejection
Damages (if any).
(b) If the Bankruptcy Court accepts a credit bid on
secured collateral by the holder, other than Sprint with respect to the claims
under the Sprint Agreement, of an allowed claim secured by such collateral, then
Seller shall pay such holder the amount of the credit bid (but not exceeding the
amount of the secured claim) or shall include in the Transferred Assets
reasonably equivalent substitutes for such secured collateral, in either case so
Purchaser is not adversely affected by the credit bit. Notwithstanding anything
in this Agreement to the contrary, if the Bankruptcy Court accepts a credit bid
by Sprint on its secured collateral, such acceptance (i) shall relieve Seller of
its obligations under this Agreement to include such collateral in the
Transferred Assets and (ii) shall not (A) obligate Seller to pay Sprint the
amount of such credit bid with respect to claims under the Sprint Agreement or
to include reasonably equivalent substitutes for such collateral in the
Transferred Assets or (B) constitute grounds for (I) termination of this
Agreement or abandonment of the transactions contemplated hereunder or (II)
adjustment of the Consideration.
(c) Simultaneously with the execution of this Agreement
by Purchaser and Seller, Purchaser shall pay $5,000,000 as a deposit (the
"Initial Xxxxxxx Money Deposit"). By not later than the first Business Day after
the Bankruptcy Court enters the Purchaser Selection Order selecting Purchaser as
the purchaser of the Transferred Assets pursuant to this Agreement, Purchaser
shall pay an additional deposit equal to the greater of $3,000,000 or the amount
(if any) of the Breakup Fee authorized by the Sales Process Order (the "Second
Xxxxxxx Money Deposit"); provided, however, that the Second Xxxxxxx Money
Deposit shall not exceed $5,000,000. If Purchaser elects to extend the
Expiration Date pursuant to Section 14.02, then Purchaser shall pay a further
deposit of $833,333.33 for each one-month extension so elected (each such
further deposit, an "Extension Xxxxxxx Money Deposit"). Each Extension Xxxxxxx
Money Deposit shall be paid by not later than one Business Day after Purchaser
delivers the corresponding Extension Notice to Seller. In the event the
Rejection Damages are greater than the aggregate amount of the Initial Xxxxxxx
Money Deposit and the Second Xxxxxxx Money Deposit, less the amounts due to be
paid by Purchaser pursuant to Section 5.07(g), then on the Acceptance Election
Date, Purchaser shall pay an additional deposit equal to the difference between
the (i) Initial Xxxxxxx Money Deposit plus the Second Xxxxxxx Money Deposit less
the amounts due to be paid by Purchaser pursuant to Section 5.07(g) and (ii)
Rejection Damages (the "Rejection Damages Deposit"). The Initial Xxxxxxx Money
Deposit, the Second Xxxxxxx Money Deposit (if any), the Extension Xxxxxxx Money
Deposits (if any) and the Rejection Damages Deposit (if any) shall be paid by
Purchaser by wire transfer of immediately available funds to the
24
Escrow Account maintained by the Escrow Agent at the address or to the account
number specified in the Escrow Agreement. The Xxxxxxx Money Deposit less the
amount necessary to pay the Rejection Damages (if any) shall be released to
Purchaser at the Closing pursuant to the instruction of Purchaser. The amount
necessary to pay the Rejection Damages shall be released to Seller at the
Closing.
(d) Prior to the Closing Date, Purchaser shall prepare a
schedule that sets forth an initial allocation of the Consideration among the
Transferred Assets, and the Parties shall negotiate in good faith to determine
the final allocation of the Consideration among the Transferred Assets. If the
Parties are unable to agree upon an allocation of the Consideration prior to the
Closing, the Parties shall continue to cooperate in the preparation of, and use
their reasonable best efforts to agree upon, the allocation, provided that any
material issues with respect to the allocation which have not been finally
resolved within 30 days following the Closing shall be referred for resolution
to a nationally recognized independent public accounting firm as to which the
Parties mutually agree, whose determination shall be final and binding on the
Parties. The costs of such accounting firm shall be shared equally by the
Parties. Any subsequent adjustments to the Consideration shall be allocated in a
manner consistent with the final Consideration allocation and Section 1060 of
the Code. Each Party agrees (i) that any allocation pursuant to this Section
2.03(d) shall be consistent with the requirements of Section 1060 of the Code
and the regulations thereunder, (ii) to complete jointly and to file separately
IRS Form 8594 as part of such Party's federal income Tax Return consistently
with such allocation for the tax year in which the Closing occurs, and (iii)
that no Party will take a position on any income, transfer or gains Tax Return,
before any Governmental or Regulatory Authority charged with the collection of
any Tax or in any judicial or administrative proceeding, that is in any manner
inconsistent with the terms of any such allocation without the written consent
of the other Party unless required to do so pursuant to a determination (as
defined in Section 1313(a) of the Code or any similar provision of applicable
state, local or foreign law).
(e) At the Closing, Seller shall deposit the Indemnity
Escrow Amount into the Indemnity Escrow Account maintained by the Escrow Agent
at the address or into the account number specified in the Indemnity Escrow
Agreement. The Indemnity Escrow Amount shall be distributed pursuant to the
Indemnity Escrow Agreement.
2.04 Closing; Escrow.
(a) Unless otherwise provided in Section 2.14 or unless
this Agreement is terminated and the transactions contemplated hereby are
abandoned pursuant to Section 14.01, the Closing will commence on (i) the last
Business Day of the calendar month in which the conditions precedent to the
Closing have been satisfied or waived or (ii) such other date to which the
Parties agree in writing (the "Closing Date"), at the office of Xxxxxx & Silver,
Ltd., 3960 Xxxxxx Xxxxxx Parkway, 9th Floor, Las Vegas, Nevada, 89109, or at
such other place as the Parties agree in writing, at 9:00 a.m., Nevada time, on
the Closing Date and shall be deemed to have occurred at 11:59 p.m., Nevada
time, on the Closing Date (the "Transfer Time"), giving effect to tabulations of
Transferred Assets and Assumed Liabilities allocable to Seller for the period
prior to the Transfer Time that will commence at 12:00 a.m. Nevada time, at the
Business location on the day after the Closing Date.
25
(b) At the Closing, Purchaser will (i) deliver to the
Escrow Agent: (x) the Restated Credit Agreement (if Purchaser has not executed
and delivered it to the Restated Credit Agreement Agent prior to the Closing);
(y) the Restated Credit Facility Security Instruments; and (z) the Restated
Credit Facility Notes, all duly and validly executed by Purchaser, and (ii)
deliver the Renovation Commitment as required by the Restated Credit Agreement.
One half of the Escrow Fees shall be paid by Seller to the Escrow Agent and the
other half of the Escrow Fees shall be paid by Purchaser to the Escrow Agent.
(c) At the Closing and simultaneously with the delivery
by Purchaser of the Restated Credit Agreement (if not executed and delivered to
the Restated Credit Agreement Agent prior to the Closing), Restated Credit
Facility Security Instruments and Restated Credit Facility Notes to the Escrow
Agent, (i) Seller will assign and transfer to Purchaser all of the Property and
all of Seller's rights, title and interests in, to and under the Transferred
Assets as contemplated by Section 2.01(a) by delivery of (A) General Assignments
and Bills of Sale substantially in the form of Exhibit D, duly executed by
Seller, (B) Intellectual Property Assignments, duly executed by Seller, (C) a
grant, bargain and sale deed in proper statutory form for recording and
otherwise in form and substance reasonably satisfactory to Purchaser, conveying
Seller's title to the Owned Real Property (the "Deed") and (D) subject to
Section 2.08, such other instruments of conveyance, assignment and transfer, in
form and substance reasonably acceptable to Purchaser, as shall be effective to
vest in Purchaser all rights, title and interests in and to the Property and all
of Seller's rights, title and interests in and to the Transferred Assets (the
instruments referred to in subclauses (A) through (D) of this clause (i) are
collectively referred to herein as the "Assignment Instruments"), and (ii)
Purchaser will pay to Seller in cash one-half of the cost of the Survey and will
assume from Seller the due payment, performance and discharge of the Assumed
Liabilities by delivery of (A) an Assumption Agreement substantially in the form
of Exhibit E, duly executed by Purchaser, and (B) such other instruments of
assumption, in form and substance reasonably acceptable to Seller, as shall be
effective to cause Purchaser to assume the Assumed Liabilities as provided in
Section 2.02(a) (the instruments referred to in subclauses (A) and (B) of this
clause (ii) are collectively referred to herein as the "Assumption
Instruments"). Notwithstanding the foregoing provisions of this paragraph (c),
the Parties' respective obligations under this Section 2.04 are subject to the
provisions of Section 2.08 and, with respect to the Promotional Vehicles,
Seller's obligations are subject to the provisions of Section 2.13.
(d) Seller shall deliver to Purchaser (if not located in
the Improvements in locations specifically identified to Purchaser) at the
Closing all combinations to safes, keys, codes and passcards relating to the
operation of the Transferred Assets and the Business.
(e) Notwithstanding the foregoing provisions of this
Section 2.04, the Parties' respective obligations to proceed with the Closing
are subject to the Parties' respective termination rights under Section 14.01.
(f) At the Closing, there shall also be delivered to
Seller and Purchaser the certificates and other contracts, documents and
instruments required to be delivered under Articles VII and VIII.
26
(g) Additionally, at the Closing, Seller shall deliver to
Purchaser the following documents, each of which shall have been duly executed
by Seller and acknowledged (if required by applicable Laws):
(i) subject to Section 2.13, certificates of
title for any Vehicles or other Tangible Personal Property that is included in
the Transferred Assets, is owned by Seller, and for which such certificates are
required;
(ii) an allonge to the Bazaar Note, recognizing
that the Bazaar Note has been endorsed and delivered to Purchaser, as payee
thereunder, pursuant to this Agreement and the Plan;
(iii) such agreements, affidavits or other
documents as may be reasonably required by the Title Company from Seller to
issue the Title Policy;
(iv) any real estate transfer tax declaration or
similar documents required under applicable Laws in connection with the
conveyance of the Real Property;
(v) if and solely to the extent that by not
later than the 65th day prior to the then-scheduled Closing Date, Seller has
been advised that Purchaser is required to furnish to the Restated Credit
Agreement Agent estoppel certificates from tenants under the Tenant Leases or
from counter-parties under any Operating Agreements ("Estoppel Certificates"),
Estoppel Certificates in the forms prescribed by the applicable Tenant Leases or
Operating Agreements or, if no such forms are prescribed therein, in the form
set forth in Exhibit H;
(vi) if and solely to the extent that by not
later than the 65th day prior to the then-scheduled Closing Date, Seller has
been advised that Purchaser is required to furnish to the Restated Credit
Agreement Agent subordination agreements from any tenants under the Tenant
Leases, subordination agreements meeting such requirements under the Restated
Credit Agreement; and
(vii) an assignment and assumption of the
Construction, Operation and Reciprocal Easement Agreement, dated as of February
26, 1998, among Seller, Bazaar and Aladdin Music Holdings, LLC, as amended by
that certain Amendment and Ratification of Construction, Operation and
Reciprocal Easement Agreement, dated as of November 20, 2000, between Seller and
Bazaar and as amended by that certain Second Amendment of Construction,
Operation and Reciprocal Easement Agreement, dated as of February __, 2003,
between Seller and Bazaar (as amended, the "REA"), in the form of Exhibit K,
assigning Seller's rights under the REA to Purchaser on the terms set forth
therein (which need not be signed, acknowledged or consented to by any other
party to the REA).
2.05 "As Is" Condition. Except as specifically set forth in this
Agreement to the contrary, (A) all of the Transferred Assets are being sold to
Purchaser in "as is" condition, and (B) Seller does not make any representations
or warranties of any kind and disclaims any and all implied warranties with
respect to any of the Transferred Assets. Without limiting the generality of the
foregoing, Purchaser acknowledges and agrees that: (i) Seller has not made any
representation or warranty with respect to the transferability of any
Transferred Assets other than as specifically set forth in this Agreement; (ii)
Purchaser has been given an adequate opportunity
27
to make such investigations as Purchaser deemed appropriate with respect to the
Business, the Transferred Assets and the Assumed Liabilities; and (iii)
Purchaser has been provided with the Title Report as it exists on the date of
this Agreement and all documents of record listed therein as title exceptions,
has reviewed such Title Report and has knowledge of all easements, restrictions
and other exceptions to title listed therein.
2.06 Further Assurances; Post-Closing Cooperation.
(a) From time to time after the Closing, at Purchaser's
request and without further consideration, Seller shall execute and deliver to
Purchaser such other instruments of sale, transfer, conveyance, assignment and
confirmation, provide such materials and information and take such other actions
consistent with this Agreement as Purchaser may reasonably deem necessary or
desirable in order to more effectively transfer, convey and assign to Purchaser,
and to confirm Purchaser's title to the Transferred Assets and, to the full
extent permitted by Law, to put Purchaser in actual possession and operating
control of the Business and the Transferred Assets and to assist Purchaser in
exercising all rights with respect thereto, and otherwise to cause Seller to
fulfill its obligations under this Agreement and the Operative Agreements.
(b) Following the Closing, each Party will afford the
other Party, its counsel and its accountants, during normal business hours,
reasonable access to the books, records and other data relating to the Business
in its possession with respect to periods prior to the Transfer Time and the
right to make copies and extracts therefrom at the cost of the requesting Party,
to the extent that such access may be reasonably required by the requesting
Party in connection with (i) the preparation of Tax Returns, (ii) the
determination or enforcement of rights or obligations under this Agreement,
(iii) compliance with the requirements of any Governmental or Regulatory
Authority, (iv) the determination or enforcement of the rights or obligations of
any Party or any party to the Operative Agreements or (v) in connection with any
actual or threatened Action or Proceeding. Each Party further agrees for a
period of five years commencing on the Closing Date not to destroy or otherwise
dispose of any such books, records and other data unless such Party first offers
in writing to surrender such books, records and other data to the other Party
and such other Party does not agree in writing to take possession thereof within
ten days after such offer is made.
(c) For a period of 120 days following the Closing,
Purchaser shall allow Seller and its counsel and accountants (i) unrestricted
access to, and use of, Owned Real Property, office space and facilities that are
substantially the same as the office space and facilities that Seller generally
made available to its independent accountants during their annual audits of
Seller or its Affiliates prior to the Closing and (ii) during normal business
hours and upon reasonable notice, reasonable access to Employees who are then
employed by Purchaser or its Affiliates for purposes of Seller's review or audit
of the Final Balance Sheet, post-Closing resolution of any outstanding issues
under this Agreement or the Operative Agreements, preparation of Tax Returns
covering the period prior to the Closing and any other post-Closing matters
reasonably related to this Agreement or the consummation of the transactions
contemplated hereunder; provided, however, that neither Seller nor its
employees, agents or representatives shall unreasonably interfere with the
normal management, operations or business of any part of the Hotel/Casino; all
Books and Records or other information provided to or obtained by Seller or its
employees, agents or representatives pursuant to this paragraph (c) shall
28
be subject to the confidentiality provisions of Section 15.04 (without limiting
the generality of those provisions); Seller, at its cost and expense, shall
promptly repair, replace and restore any damage to the Transferred Assets or the
Hotel/Casino caused, directly or indirectly, by Seller or its employees, agents
or representatives in their activities under this paragraph (c); and Seller
shall reimburse Purchaser for any post-Closing out-of-pocket costs or expenses
actually incurred by Purchaser in connection with Seller's activities under this
paragraph (c). Such access shall be at no charge to Seller except as specified
in the preceding sentence.
(d) If, in order to properly prepare its Tax Returns,
other documents or reports required to be filed with Governmental or Regulatory
Authorities or its financial statements or to fulfill its obligations hereunder,
a Party needs to be furnished with additional information, documents or records
relating to the Business not referred to in paragraph (b) of this Section 2.06,
and such information, documents or records are in the possession or control of
the other Party, such other Party shall make commercially reasonable efforts to
furnish or make available such information, documents or records (or copies
thereof) at the recipient's request, cost and expense; provided, however, that
such costs shall be limited to such other Party's out-of-pocket costs incurred
in providing such information, documents or records.
(e) Notwithstanding anything to the contrary in this
Section 2.06 or Section 9.04, if the Parties are in an adversarial relationship
in litigation or arbitration, the furnishing of information, documents or
records shall be governed by applicable rules relating to discovery and
evidentiary procedures or by a Bankruptcy Court Order, rather than by paragraphs
(b) and (d) of this Section 2.06.
(f) If a Party fails to take any of the actions specified
in paragraphs (a) through (e) of this Section 2.06 or fails to do or cause to be
done any of the above things or fails to execute any of the above documents,
instruments or conveyances within a reasonable time after a reasonable request
therefor is made by the other Party, then the requesting Party may move the
Bankruptcy Court for an Order directing the provision of such items on an
emergency basis upon not less than ten Business Days' notice by telecopy or
other electronic facsimile transmission received by the other Party. The Parties
further agree that the Bankruptcy Court shall retain jurisdiction to adjudicate
any such obligations.
2.07 Insurance Proceeds. Except as otherwise provided in Article
XIII or with respect to insurance claims listed in Schedule 2.01(b)(vi), if
after execution of this Agreement and prior to the Closing, any Transferred
Assets are destroyed, damaged or taken in condemnation, the insurance proceeds
or condemnation award, or any transferable or assignable claim for insurance
proceeds or condemnation award with respect thereto shall constitute a
Transferred Asset (the "Transferred Assets Insurance Proceeds"), but shall not
be counted as Transferred Cash or Current Assets (except to the extent the
destroyed, damaged or taken Transferred Assets would have been so counted). At
the Closing, Seller shall pay to Purchaser any Transferred Assets Insurance
Proceeds received by Seller on or prior to the Closing Date and shall assign to
or assert for the benefit of Purchaser all of its rights against any insurance
companies, Governmental or Regulatory Authorities and others with respect to
such damage, destruction or condemnation related solely to the Transferred
Assets Insurance Proceeds.
29
2.08 Third-Party Consent. To the extent that any Real Property
Lease, Assumed Contract or License is not assignable pursuant to the Bankruptcy
Code or otherwise without the consent of another party, this Agreement shall not
constitute an assignment or an attempted assignment thereof if such assignment
or attempted assignment would constitute a violation or breach thereof or a
default thereunder. Seller shall make reasonable efforts (including without
limitation, prosecution of appropriate motions pursuant to Section 365 of the
Bankruptcy Code) to obtain the consent by such other party to the assignment to
Purchaser of any such Real Property Lease, Assumed Contract or License in all
cases in which such consent is required if such Real Property Lease, Assumed
Contract or License is marked with an asterisk on Schedule 2.01(a)(iv). In this
regard, Seller shall be required to pay the following (but not more than the
following): nominal expenses to obtain any necessary consents plus amounts
required to cure any defaults under the Real Property Lease, Assumed Contract or
License in question. If any such consent is not obtained, Seller shall cooperate
with Purchaser in any reasonable arrangement (an "Alternative Arrangement")
designed to provide for Purchaser the benefits intended to be assigned to
Purchaser under the relevant Real Property Lease, Assumed Contract or License,
including enforcement at the cost and for the account of Purchaser of any and
all rights of Seller against the other party thereto arising out of the breach
or cancellation thereof by such other party or otherwise. Solely with respect to
any consents that are listed in Schedule 7.05 and are not obtained (and not with
respect to any other consents that are not obtained), any incrementally higher
costs (excluding professional fees) associated with Alternative Arrangements, as
compared with the aggregate costs that would have been incurred under the
applicable Real Property Leases, Assumed Contracts or Licenses had the consents
been obtained, shall be paid by Seller up to a $250,000 maximum aggregate
payment obligation. At or prior to Closing, Seller shall cause any breach of any
Real Property Lease, Assumed Contract or License to be cured, waived or deemed
waived and this $250,000 limitation shall not apply to such cure obligations;
provided, however, that any payments necessary to cure any such Real Property
Lease, Assumed Contract or License may be paid by Seller at the "Distribution
Date" as defined in the Plan. If and to the extent that an Alternative
Arrangement cannot be made, Purchaser shall have no obligation with respect to
any such Real Property Lease, Assumed Contract or License and any liabilities
relating to any such Real Property Lease, Assumed Contract or License shall be a
Retained Liability. Seller shall have no obligations under this Section with
respect to Excluded Licenses.
2.09 Bankruptcy Court Approvals and Protections for Purchaser.
(a) Breakup Fee Definition and Requirements. For purposes
of this Agreement, "Breakup Fee" means $5,000,000 or such lower amount approved
by the Bankruptcy Court pursuant to the Sales Process Order. If Purchaser has
become entitled to payment of the Breakup Fee pursuant to paragraph (c) of this
Section, it shall be paid by wire transfer not later than one year after the
Entitlement Date to an account designated in writing by Purchaser concurrently
with the entry of the Confirmation Order; provided, however, that if the Breakup
Fee is not paid by the 150th day after the Entitlement Date, Purchaser shall be
entitled to interest on the Breakup Fee, at a rate equal to 30-day LIBOR (as
defined in the Restated Credit Agreement) plus 3.00% per annum, for the period
from the 150th day after the Entitlement Date through the date immediately prior
to the date that Seller pays the Breakup Fee. Seller shall pay such interest
together with Seller's payment of the Breakup Fee.
30
(b) Expense Reimbursement Definition and Requirements.
For purposes of this Agreement, "Expense Reimbursement" means the amount paid or
to be paid to Purchaser in immediately available funds, but subject to the
minimum and maximum entitlements specified in clauses (i), (ii) and (iii) of
this paragraph (b), equaling the amounts incurred by Purchaser or any of the
Sponsors as actual out-of-pocket expenses in connection with the negotiation,
preparation, execution, delivery and attempted performance of this Agreement,
the Restated Credit Agreement, the Restated Credit Facility Notes and the
Restated Credit Facility Instruments and the matters contemplated hereby and
thereby. The Expense Reimbursement shall include, without limitation, all
reasonable, documented out-of-pocket costs, fees and expenses incurred by
Purchaser or any of the Sponsors in connection with their due diligence review,
negotiation and documentation of this Agreement, the Restated Credit Agreement,
the Restated Credit Facility Notes and the Restated Credit Facility Security
Instruments, any of the expenses contemplated under Section 2.09(d) and the
transactions contemplated hereby and thereby, including reimbursement of all
filing fees paid in connection with filings under the HSR Act and all fees and
expenses paid to Purchaser's or the Sponsors' lawyers, accountants and other
professional or financial advisers and shall include any fees and expenses paid
to, or relating to, the person hired in a binding written agreement by Purchaser
to be its Chief Executive Officer (including any termination fees). If Purchaser
has become entitled to the Expense Reimbursement pursuant to paragraph (c) of
this Section, it shall be paid by wire transfer to an account designated in
writing by Purchaser not later than ten Business Days after the delivery by
Purchaser to Seller of a written request for payment of the Expense
Reimbursement and reasonably detailed and accurate supporting documentation for
such request, except to the extent, if any, that Seller disputes the requested
amount. If Seller disputes the amount of the requested Expense Reimbursement, it
shall so advise Purchaser in writing and in reasonable detail within ten
Business Days after Seller's receipt of the request and related supporting
documentation. Any undisputed amount shall be timely paid by Seller to Purchaser
and the balance of the amount requested by Purchaser or the Sponsors shall be
paid to the Escrow Agent to be held in escrow and the dispute shall be resolved
in good faith by the Parties, if possible. If such disputes have not been
resolved by the Parties within ten Business Days after Seller notifies Purchaser
that it disputes the amount of the requested Expense Reimbursement, then Seller
or Purchaser shall be entitled to ask the Bankruptcy Court to resolve such
disputes promptly. If the Expense Reimbursement is payable to Purchaser, then
the amount of the Expense Reimbursement shall be subject to the following
provisions:
(i) If this Agreement is terminated and the
transactions contemplated hereby are abandoned pursuant to paragraphs (e) or (f)
of Section 14.01, the Expense Reimbursement shall not be less than $1,500,000.
(ii) If this Agreement is terminated and the
transactions contemplated hereby are abandoned pursuant to paragraph (c) of
Section 14.01, the Expense Reimbursement shall be exactly $1,500,000.
(iii) Under no circumstances shall the Expense
Reimbursement exceed $2,500,000.
31
(c) Entitlement to Breakup Fee and Expense Reimbursement.
(i) Except as provided in clauses (ii) and (iii)
of this paragraph (c), Purchaser shall be entitled to the Breakup Fee if and
only if (x) an Alternative Transaction is approved by Order of the Bankruptcy
Court at the Purchaser Selection Hearing (the "Alternative Transaction Order")
and the Alternative Transaction Order has become a Final Order or (y) an
Alternative Event occurs. Except as provided in clauses (ii) and (iii) of this
paragraph (c), Purchaser shall be entitled to the Expense Reimbursement if and
only if (A) the Bankruptcy Court enters the Alternative Transaction Order or an
Alternative Event occurs; (B) this Agreement is terminated and the transactions
contemplated hereby are abandoned pursuant to paragraphs (c), (d), (g), (i) or
(j) of Section 14.01; (C) this Agreement is terminated and the transactions
contemplated hereby are abandoned pursuant to Section 14.01(k) and (I) on the
Expiration Date Purchaser is entitled to exercise its termination and
abandonment rights under paragraphs (i) or (j) of Section 14.01 or (II) the
failure of any condition precedent to the Closing to have been satisfied as of
the Expiration Date is the result of a breach of this Agreement by Seller or
(III) the Bank Group Approvals have not occurred and the failure to close was
directly caused by the Bank Group Approvals not having been given; (D) this
Agreement is terminated and the transactions contemplated hereby are abandoned
pursuant to paragraphs (e) or (f) of Section 14.01; or (E) this Agreement is
terminated and the transactions contemplated hereby are abandoned pursuant to
paragraphs (a) or (b) of Section 14.01 and the event giving rise to such
termination was directly caused by the failure of the Bank Group Approvals to
have been given.
(ii) Purchaser shall not be entitled to the
Breakup Fee or the Expense Reimbursement if the Sales Process Order has not been
entered.
(iii) Purchaser shall not be entitled to the
Breakup Fee if, at the time of the Bankruptcy Court's entry of the Alternative
Transaction Order or the occurrence of the Alternative Event, as the case may
be, Purchaser has not yet satisfied the requirements of Sections 6.10 and 6.11.
Purchaser shall not be entitled to the Breakup Fee if there is a Closing.
Purchaser shall not be entitled to the Expense Reimbursement if, at the time
this Agreement is terminated and the transactions contemplated hereby are
abandoned, Purchaser has not yet satisfied the requirements of Sections 6.10 or
6.11. Purchaser shall not be entitled to the Expense Reimbursement if there is a
Closing.
(iv) This paragraph (c) sets forth the sole and
exclusive circumstances under which Purchaser shall be entitled to, or Seller
can be held liable for, the Breakup Fee or the Expense Reimbursement.
(d) Conduct of the Bankruptcy Case; Approval of
Protections for Purchaser; Approval of Sale of Transferred Assets. Within three
Business Days after the execution of this Agreement, Seller shall file or cause
to be filed (and shall diligently pursue an Order on shortened time if permitted
by the Bankruptcy Court) (i) a motion in the form agreed by Seller and Purchaser
prior to the original execution of this Agreement (without regard to subsequent
amendments) (the "Sales Process and Approval Motion") seeking entry of the Sales
Process Order that provides for, among other things, (A) approval of the Breakup
Fee, the Expense Reimbursement and the Non-Solicitation Period protection
specified in Section 2.09(f), (B) the authorization and procedures for Seller to
solicit, evaluate and accept Qualified Offers and the
32
highest and best offer, (C) a time, date and place of the hearing to select a
purchaser of Seller or of all or substantially all of the Assets and Properties
of Seller used or held for use by Seller in the conduct of the Business (the
"Purchaser Selection Hearing") and the form of sale notice and (D) the
requirement that all credit bids from secured creditors of Seller occur at the
Purchaser Selection Hearing; and (ii) one or more other motions or other papers
with the Bankruptcy Court, which other motions or papers shall not be
inconsistent with any of the Parties' respective rights or obligations under
this Agreement. Purchaser shall, at Purchaser's cost and expense, provide Seller
with reasonable information and documentation providing adequate assurances of
Purchaser's ability to perform its obligations under this Agreement, and shall
reasonably cooperate with Seller in providing any other information or
documentation the Bankruptcy Court might request or require in connection with
the efforts of Seller to obtain the Sales Process Order. The Sales Process Order
shall be substantially in the form that is attached as Exhibit B.
If any of the following events (each, a "Termination Event")
occur, then within the applicable time period specified in paragraph (e) of this
Section, Purchaser may, but shall not be obligated to, terminate this Agreement
and abandon the transactions contemplated hereby by giving written notice of
such termination and abandonment to Seller, whereupon this Agreement shall be
terminated, the transactions contemplated hereby shall be abandoned and the
Xxxxxxx Money Deposit and all interest thereon shall be returned to Purchaser.
The Termination Events are:
(i) Seller's failure to file the Sales Process
and Approval Motion within the time period provided for in this Section 2.09(d);
(ii) the Bankruptcy Court's failure or refusal to
enter the Sales Process Order on or prior to 15 days following execution of
Agreement;
(iii) the Bankruptcy Court's entry of a Sales
Process Order that provides for no Breakup Fee or a Breakup Fee of less than
$5,000,000;
(iv) the Bankruptcy Court's failure or refusal to
enter the Purchaser Selection Order on or prior to 45 days following entry of
the Sales Process Order;
(v) the Bankruptcy Court's entry of the
Confirmation Order earlier than the 45th day following entry of the Purchaser
Selection Order;
(vi) the Bankruptcy Court's failure or refusal to
enter the Confirmation Order on or prior to the 70th day following entry of the
Purchaser Selection Order; or
(vii) any material change to, or Order materially
inconsistent with, the Sales Process Order or Confirmation Order not reasonably
acceptable to Purchaser with respect to matters that would adversely affect
Purchaser's interest in any of the Transaction Documents or the transactions
contemplated thereby.
(e) Deadline for Exercise of Termination Rights Due to a
Termination Event. Purchaser's right to terminate this Agreement and abandon the
transactions contemplated hereby on the grounds of a Termination Event shall
expire and become null and void if not exercised by the applicable deadline
specified in clauses (i) through (v) of this paragraph (e):
33
(i) with respect to a Termination Event
described in clause (i), (iii) or (v) of Section 2.09(d), the 15th day after the
occurrence of such Termination Event;
(ii) with respect to a Termination Event
described in clause (ii) of Section 2.09(d), the earlier of (A) the 15th day
after the occurrence of such Termination Event or (B) immediately prior to the
Bankruptcy Court's entry of the Sales Process Order;
(iii) with respect to a Termination Event
described in clause (iv) of Section 2.09(d), the earlier of (A) the 15th day
after the occurrence of such Termination Event or (B) immediately prior to the
Bankruptcy Court's entry of the Purchaser Selection Order;
(iv) with respect to a Termination Event
described in clause (vi) of Section 2.09(d), the earlier of (A) the 15th day
after the occurrence of such Termination Event or (B) immediately prior to the
Bankruptcy Court's entry of the Confirmation Order; or
(v) with respect to a Termination Event
described in clause (vii) of Section 2.09(d), the 15th day after Purchaser is
notified of the change or Order specified in that clause.
(f) No-Shop.
(i) From the time of the Parties' execution of
this Agreement until the earlier of (A) the Bankruptcy Court's entry of the
Sales Process Order or (B) the 15th day following the original execution of this
Agreement (without regard to subsequent amendments) (the "Non-Solicitation
Period"), Seller shall not, nor shall it authorize or permit any Affiliate or
subsidiary of Seller to, nor shall it authorize or permit any officer, director,
manager or employee of, or any investment banker, attorney or other advisor,
agent or representative of, Seller or any subsidiary (collectively, "Seller
Representatives") to, solicit or otherwise proactively encourage any Person with
respect to the submission of a Qualified Offer or negotiate the terms of a
Qualified Offer; provided, however, that during the Non-Solicitation Period so
long as Seller is not otherwise in breach of this Section 2.09, nothing in this
Agreement shall prohibit Seller, Seller Representatives or the Board of Managers
of Seller (the "Seller Board") from entering into confidentiality agreements
with any Person or furnishing to any Person any information relating to the
Business, the Hotel/Casino, the Assets and Properties of Seller or the
Liabilities of Seller with respect to any proposal or expression of interest
that constitutes, or which may lead to, a Qualified Offer; and, provided
further, however, that if the Bankruptcy Court has not entered the Sales Process
Order by the expiration of the Non-Solicitation Period, then Seller shall not
execute any Qualified Offer prior to the earlier of the (x) Bankruptcy Court's
entry of the Sales Process Order or (y) 16th day after the expiration of the
Non-Solicitation Period. In the event Seller receives a Qualified Offer during
the Non-Solicitation Period, Seller shall as promptly as practicable (and in any
event within three Business Days after receipt) advise Purchaser in writing of
the details of such Qualified Offer and the identity of the Person submitting
the Qualified Offer (and, to the extent known by Seller, the principals who are
backing such Person). At the Sales Process and Purchaser Protection Hearing,
Seller shall be permitted to disclose to the Bankruptcy Court information
concerning all Qualified Offers received.
34
(ii) Following the entry of the Sales Process
Order until the Alternative Offer Deadline, Seller, the Seller Board and Seller
Representatives shall not be subject to any restrictions with respect to the
solicitation or encouragement of any Person concerning the potential or actual
submission of a Qualified Offer; provided, however, that by not later than the
42nd day after the entry of the Sales Process Order, Seller must deliver to
Purchaser by facsimile transmission or send by a nationally recognized courier
service for delivery to Purchaser by the morning of the next Business Day true
and complete copies of all Qualified Offers that Seller has received by such
42nd day.
2.10 Working Capital-Related True-Ups.
(a) Set forth as Exhibit F is an unaudited Balance Sheet
as of December 31, 2002 (the "Sample Balance Sheet"). Not less than 10 days
prior to the scheduled Closing Date, Seller will deliver to Purchaser a Balance
Sheet as of the end of the most recent calendar month preceding the scheduled
Closing Date for which it is then practicable to report the Business' financial
position (the "Pre-Closing Balance Sheet"). Within 30 days after the Closing,
Purchaser will deliver to Seller a Balance Sheet as of the Closing Date (giving
effect to the Closing Date True-Up specified in paragraph (b) of this Section
2.10 but without giving effect to the Closing in any other respect) (the "Final
Balance Sheet"). The Pre-Closing Balance Sheet and the Final Balance Sheet will
be prepared as if Seller is a going concern and on a basis consistent with the
Sample Balance Sheet; provided, however, that the Pre-Closing Balance Sheet and
the Final Balance Sheet shall exclude all Excluded Assets, all Retained
Liabilities and the Current Liabilities listed parenthetically in the next
sentence. The total of Current Assets minus the total of Current Liabilities
(excluding Current Liabilities that consist of portions of long-term debt,
capital lease obligations or other interest-bearing debt maturing within 12
months of the date of the applicable Balance Sheet) reported on each of the
Pre-Closing Balance Sheet and Final Balance Sheet shall constitute and be
defined as "Working Capital" (which could be a negative amount) as of such
Balance Sheet date. As provided in paragraphs (b), (c) and (d) of this Section
2.10, the difference between (i) the amount of Working Capital as of the
respective dates of the Pre-Closing Balance Sheet and the Final Balance Sheet
and (ii) $15,000,000 (the "Base Amount") shall form the basis for
dollar-for-dollar Closing and post-Closing true-ups.
(b) At the Closing, the net amount of Working Capital
that Seller shall be required to deliver to Purchaser pursuant to this Agreement
will be (i) decreased by the amount, if any, by which Working Capital reported
on the Pre-Closing Balance Sheet ("Pre-Closing Working Capital") exceeds the
Base Amount or (ii) increased by the amount, if any, by which the Base Amount
exceeds Pre-Closing Working Capital (giving effect to any negative balance of
Pre-Closing Working Capital). The amount of such increase or decrease is defined
as the "Closing Date True-Up." If the Closing Date True-Up requires a decrease
in the Working Capital to be delivered by Seller to Purchaser at the Closing,
such decrease shall be effected through a dollar-for-dollar decrease in the
amount of Transferred Cash, provided that such decrease does not reduce the
amount of Transferred Cash below $10,000,000. Any remaining portion of such
decrease in the Working Capital to be delivered by Seller pursuant to the
Closing Date True-Up shall be effected through post-Closing payments by
Purchaser to Seller of cash collected on Accounts Receivable, as provided in
paragraph (c) of this Section. If the Closing Date True-Up requires an increase
in the Working Capital to be delivered by Seller to Purchaser,
35
such increase shall be effected through a dollar-for-dollar increase in the
amount of Transferred Cash that Seller shall deliver to Purchaser at the
Closing.
(c) In connection with any payment obligations owed by
Purchaser to Seller in respect of post-Closing Accounts Receivable collections
pursuant to paragraphs (b) or (d) of this Section, Purchaser shall perform the
servicing of all Accounts Receivable at no charge to Seller, and all cash
collections on Accounts Receivable shall be paid promptly by Purchaser to Seller
(but not before Purchaser delivers the Final Balance Sheet to Seller) until the
amount of such payments equals the amount that is owed to Seller under
paragraphs (b) or (d) of this Section, as the case may be.
(d) Within ten days after Purchaser delivers the Final
Balance Sheet to Seller (except with respect to any (i) disputed amounts that
are subject to the provisions of Section 2.11, as to which payment may be
delayed until the time specified in Section 2.11, or (ii) payments that are to
be made by Purchaser to Seller from cash collections on Accounts Receivable as
provided below in this paragraph (d) and in paragraph (c) of this Section, which
payments shall be made as provided in those paragraphs), Seller shall pay
Purchaser in cash the amount of a Post-Closing True-Up (as defined below in this
paragraph (d)) that is a negative number or Purchaser shall pay Seller the
amount of a Post-Closing True-Up that is a positive number. Such payment by
Purchaser to Seller shall be in cash to the extent (if any) that the amount of
Transferred Cash exceeded $10,000,000. Any such payment by Purchaser that is not
made in cash as and when provided in the preceding sentence shall be made
through a subsequent payment by Purchaser to Seller out of, and in an aggregate
amount not to exceed, cash collections on Accounts Receivable as provided in
paragraph (c) of this Section. The "Post-Closing True-Up" equals: Working
Capital reported on the Final Balance Sheet minus the Base Amount.
(e) The Parties acknowledge that in view of the
transactions provided for in paragraphs (b), (c) and (d) of this Section 2.10,
no prorations relating to the Transferred Assets or to the ownership and
operation of the Business as of the Transfer Time, which otherwise would
customarily be made and settled as of the closing of transactions of this
nature, are necessary or appropriate.
(f) The Parties acknowledge that as of the date of the
Sample Balance Sheet, Working Capital reported on the Sample Balance Sheet
equals $23,656,611.
2.11 Post-Closing Audit and Payment. Seller will have the right to
review or audit the Final Balance Sheet. Any appropriate corrections or
restatements resulting from such review or audit that affect the payment
obligations specified in Section 2.10(d) will require a corresponding cash
payment by the Party determined to be liable for such payment to the Party
determined to be entitled to such payment as a result of such review or audit.
If Seller disagrees with the Final Balance Sheet, it shall notify Purchaser of
such disagreement in writing, specifying in detail the particulars of such
disagreement, within 15 Business Days after Seller's receipt of the Final
Balance Sheet (the "Dispute Notice"). The Parties shall use commercially
reasonable efforts for a period of 30 days after Seller's delivery of the
Dispute Notice (or such longer period to which the Parties mutually agree) to
resolve any disagreements raised by Seller with respect to the Final Balance
Sheet. If, at the end of such period, the Parties are unable to resolve such
36
disagreements, Seller and Purchaser shall jointly select an independent auditor
from a recognized, national-standing accounting firm to resolve the
disagreements. The determination by such independent auditor shall be final,
binding and conclusive on the Parties. The Parties shall use commercially
reasonable efforts to cause such independent auditor to make its determination
within 30 days after it accepts its selection. If Seller determines that a delay
in this dispute resolution mechanism threatens to delay the closing of its case
in the Bankruptcy Case, then Seller may seek means from the Bankruptcy Court to
select the independent auditor or to enforce such independent auditor's
determination, as the case may be. The Parties and the independent auditor shall
agree to be subject to the jurisdiction of the Bankruptcy Court for this
purpose. Within ten days after the date of such determination by the independent
auditor, Purchaser shall pay Seller, or Seller shall pay Purchaser, as the case
may be, the amount of cash that is determined to be due and payable; provided,
however, that if (i) it is determined that Purchaser is required to make such
payment, (ii) such payment is to be made from cash collections on Accounts
Receivable under paragraphs (c) and (d) of this Section and (iii) Purchaser has
not made such collections by the tenth day after the independent auditor's
determination, then Purchaser shall make such payment when and as provided in
paragraph (c) of this Section. Fees and expenses of such independent auditor
shall be borne equally by Purchaser and Seller.
2.12 Indemnity Escrow Account. Pursuant to the terms of the
Indemnity Escrow Agreement, to secure Seller's obligations under Article XII, at
the Closing Seller shall deposit $1,000,000 (the "Indemnity Escrow Amount") into
escrow with the Escrow Agent for a period of six months (the "Indemnity Escrow
Period"). Upon the termination of the Indemnity Escrow Period, the Escrow Agent
will pay to Seller the Indemnity Escrow Amount and all interest earned thereon,
less any amounts paid in respect of claims made in accordance with Article XII;
provided, however, if any claim for indemnification pursuant to Article XII has
been made by Purchaser and has not been finally resolved prior to expiration of
the Indemnity Escrow Period, the Escrow Agent will withhold from payment to
Seller the amount of funds subject to the claim for indemnification, until such
claim has been settled or finally adjudicated and, when settled or adjudicated,
will distribute the funds to the appropriate Party.
2.13 Post-Closing Obligations Regarding Promotional Vehicles. The
Parties acknowledge that although the transfer by Seller to Purchaser of
Seller's rights, title and interests in and to the Vehicles is an integral part
of the transactions contemplated by this Agreement, certain documentation
requirements to complete such transfer with respect to the Promotional Vehicles
might not be fully satisfied by the Closing. Seller covenants to deliver to
Purchaser at the Closing certificates of title, duly endorsed by Seller, for all
Vehicles owned by Seller other than the Promotional Vehicles. Seller further
covenants to make commercially reasonable efforts to deliver to Purchaser at the
Closing certificates of title for the Promotional Vehicles, duly endorsed in
favor of Purchaser, or other documentation reasonably acceptable to Purchaser to
complete the transfer of the Promotional Vehicles to Purchaser. If and to the
extent that, notwithstanding such commercially reasonable efforts, any such
requirements applicable to the Promotional Vehicles have not been satisfied by
the Closing, Seller shall continue to make commercially reasonable efforts from
and after the Closing to satisfy such requirements as soon thereafter as
practicable.
37
2.14 Effect of Appellate Proceeding. If an Appellate Proceeding is
pending (but there is no stay of the Purchaser Selection Order or the
Confirmation Order), after the 30th day following the date on which Purchaser is
notified that both the Purchaser Selection Order and Confirmation Order have
become Final Orders (such 30th day, the "Appellate Proceeding Election Date"),
Purchaser may make an election ("Appellate Proceeding Election") to delay the
Closing until the last Business Day of the calendar month in which the last of
the following three events have occurred: (i) the conditions precedent to the
Closing have been satisfied or waived, (ii) the Appellate Proceeding has been
completed without a reversal, vacation or material modification of the Purchaser
Selection Order or Confirmation Order and (iii) the time for bringing any
further Appellate Proceeding has expired. Purchaser must make the Appellate
Proceeding Election by delivering written notice thereof to Seller by not later
than 60 days following the Appellate Proceeding Election Date. If Purchaser has
made a timely Appellate Proceeding Election, then Seller shall have the option
to terminate this Agreement and abandon the transactions contemplated hereby as
provided in Section 14.01(c). If Seller does not exercise this termination and
abandonment right, the Appellate Proceeding Election shall have the effect of
delaying the Closing as provided above in this Section (subject to the exercise
by either Party, at any time prior to such delayed Closing, of any other rights
to terminate this Agreement and abandon the transactions contemplated hereby
under Section 14.01).
2.15 Treatment of Rejectable Contracts. Schedule 2.15 sets forth a
list of Contracts that may be accepted or rejected by Purchaser prior to the
Closing (the "Rejectable Contracts"). On or before the 30th day prior to the
Closing (the "Acceptance Election Date"), Purchaser shall provide to Seller a
list of those Contracts from the list of Rejectable Contracts that Purchaser
desires to have Seller (i) assume and assign to Purchaser, which such Contracts
shall be deemed to be Assumed Contracts and shall be treated as Assumed
Liabilities pursuant to Section 2.02(a); or (ii) reject. To the extent Purchaser
does not provide written instruction to accept any or all of the Rejectable
Contracts, then those Rejectable Contracts shall be deemed to be rejected and
shall not be Assumed Contracts or Assumed Liabilities and Seller shall reject
such contracts as of the Closing Date (the "Rejected Contracts"). Purchaser
shall be responsible to pay to Seller an amount in respect of the damages
determined by the Bankruptcy Court in connection with confirmation of the Plan
(or absent such determination, as set forth below in this Section 2.15) due to
the rejection of the Rejected Contracts such that the creditors who would have
an unsecured claim arising from the rejection of the Rejected Contracts shall be
entitled to a distribution under the Plan pari passu with other unsecured
creditors (the "Rejection Damages"). It is the intent of the Parties that the
payment of the Rejection Damages shall in no way adversely affect Seller's
bankruptcy estate or distributions to be made under the Plan. To the extent the
Rejection Damages are greater than the aggregate of the Initial Xxxxxxx Money
Deposit and Second Xxxxxxx Money Deposit less the costs to be paid by Purchaser
pursuant to Section 5.07(g), Purchaser shall pay the Rejected Damages Deposit to
the Escrow Agent to be held in escrow and released to Seller at the Closing
pursuant to Section 2.03(c). If Purchaser disputes the amount of the Rejection
Damages, it shall so advise Seller in writing and in reasonable detail within
five days after Purchaser's receipt of the amount of the Rejection Damages and
related supporting documentation and the dispute shall be resolved in good faith
by the Parties, if possible. If such disputes have not been resolved by the
Parties by the 10th day prior to the Closing, then Seller or Purchaser shall be
entitled to ask the Bankruptcy Court to resolve such disputes promptly.
38
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Purchaser as set forth in this
Article III. In addition to the express limitation on certain of Seller's
representations and warranties herein as being to the Knowledge of Seller, (i)
all of Seller's representations and warranties in this Agreement, other than
those in Sections 3.01, 3.02, 3.08 and 3.10(a), are limited and qualified by
matters which prior to the execution of this Agreement were disclosed to
Purchaser, came to the Knowledge of Purchaser, or should, based upon a
reasonably prudent diligence examination in view of an "as is, where is" sale,
have come to the Knowledge of Purchaser during Purchaser's due diligence
examination of Seller, the Business, the Transferred Assets and the Assumed
Liabilities (including all matters disclosed in Seller's "due diligence room")
or by a reasonable physical inspection of the Hotel/Casino by Purchaser, (ii) no
representations or warranties by Seller herein apply to Financial Projections or
to the physical or structural condition of any Real Property or Improvements and
(iii) all of Seller's representations and warranties herein are made only as of
the date of the original execution of this Agreement (without regard to
subsequent amendments).
3.01 Organization of Seller. Seller is a limited-liability company
duly organized, existing and in good standing under the Laws of the State of
Nevada and, subject to the Bankruptcy Code, has full company power and authority
to conduct the Business as and to the extent now conducted and to own, use or
lease the Transferred Assets as and to the extent now owned, used or leased. At
all times since September 28, 2001, Seller has conducted, or contracted for the
conduct of, the Business directly and not through any Affiliate of Seller or
through any other corporation, partnership or other entity, except as disclosed
in Schedule 3.01.
3.02 Authority. Seller has full company power and authority to
execute and deliver this Agreement. Subject to entry of the Confirmation Order
or other approval of the Bankruptcy Court, Seller will have full power and
authority under NRS Chapter 86 to execute and deliver the Operative Agreements
to which it is or is intended to be a Party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby, including without limitation, to sell and transfer (pursuant to
this Agreement) the Transferred Assets. This Agreement has been duly and validly
executed and delivered by Seller. Subject to the entry of the Confirmation Order
(except as to Sections 2.08, 2.09, 5.02, 5.03, 5.04, 5.05, 5.07, 5.18, 5.19,
5.21, 5.22 and 5.23,) and upon execution by Purchaser, this Agreement
constitutes, and upon the execution and delivery by Seller of the Operative
Agreements to which it is or is intended to be a Party, such Operative
Agreements will constitute, legal, valid and binding obligations of Seller
enforceable against Seller in accordance with their terms.
3.03 Governmental Approvals and Filings. Except as disclosed in
Schedule 3.03, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority on the part of Seller is required in
connection with the execution, delivery and performance by Seller of this
Agreement or any of the Operative Agreements to which it is or is intended to be
a Party or the consummation of the transactions contemplated hereby or thereby.
3.04 Financial Statements. Prior to the execution of this
Agreement, Seller has delivered to Purchaser true and complete copies of the
following financial statements:
39
(a) the audited balance sheets of Seller as of December
31, 2000 and 2001 and the related audited statements of operations and cash
flows for each of the fiscal years then ended, together with a true and complete
copy of the report on such audited information by its independent public
accountants, and all letters received by Seller from such independent
accountants with respect to the results of such audits; and
(b) the Sample Balance Sheet.
Except as set forth in the notes thereto, the accompanying accountants'
reports (if any) or as disclosed in Schedule 3.04(a), the financial statements
described in Section 3.04(a) were (i) prepared in accordance with GAAP, (ii)
fairly present the financial condition and results of operations and cash flows
of Seller as of the respective dates thereof and for the respective periods
covered thereby, and (iii) were compiled from books and records of Seller
regularly maintained by management and used to prepare the financial statements
of Seller in accordance with the principles stated therein. Seller has
maintained the Business Books and Records in a manner sufficient to permit the
preparation of financial statements in accordance with GAAP, except as set forth
in Schedule 3.04(a). Schedule 3.04(b) sets forth the basis on which the Sample
Balance Sheet was prepared and the accounting principles used in such
preparation, all of which shall be applied consistently by Seller for the
preparation of the Pre-Closing Balance Sheet and by Purchaser for the
preparation of the Final Balance Sheet as provided in Section 2.10(a).
3.05 Absence of Changes. Except for the execution and delivery of
this Agreement, the filing of and events occurring in the Bankruptcy Case and
the transactions contemplated by this Agreement, and except as disclosed in
Schedule 3.05, from the date of the Sample Balance Sheet through the date of
this Agreement there has not been any material adverse change, event or
development relating to the Business or, to the Knowledge of Seller, any other
material adverse change, event or development which, individually or together
with other such events, could reasonably be expected to result in a material
adverse change in the Condition of the Business. In all material respects,
Seller has operated the Business in the ordinary course since the date of the
Sample Balance Sheet through the date of this Agreement, except as required by
the Bankruptcy Case or permitted under Section 5.04. Without limiting the
foregoing, except as disclosed in Schedule 3.05, there has not occurred, between
the date of the Sample Balance Sheet and the date of this Agreement, any of the
following:
(a) other than as a result of adopting financial
reporting guidance as provided in AICPA Statement of Position 90-7 or any
impairment loss recorded resulting from the application of FAS 121, 142 and/or
144, material change in any (i) pricing, investment, accounting, financial
reporting, inventory, credit, allowance or Tax practice or policy of the
Business or (ii) method of calculating any bad debt, contingency or other
reserve of the Business for accounting, financial reporting or Tax purposes; or
(b) (i) disposition of any Assets and Properties used or
held for use in the conduct of the Business, other than dispositions of (A)
Inventory in the ordinary course of business consistent with past practice, (B)
non-Inventory Assets and Properties for which Seller acquires substantially
similar replacements and (C) non-Inventory Assets and Properties that do not
exceed $1,000,000 in the aggregate and are identified in Schedule 3.05(b)(i)(C)
or
40
(ii) creation or incurrence of a Lien, other than a Permitted Lien, on any
Assets and Properties used or held in the conduct of the Business.
3.06 Taxes.
(a) Tax Return Filings and Taxes Paid. Seller does not,
and is not required to, file federal income Tax Returns. Except as disclosed in
Schedule 3.06(a), Seller has filed all Tax Returns (or such Tax Returns have
been filed on its behalf) required to be filed by applicable law with the proper
Governmental or Regulatory Authorities that are due (including extensions) on or
before the date of this Agreement. All Tax Returns are true, complete and
correct in all material respects. Seller has delivered or made available to
Purchaser complete and accurate copies of all such Tax Returns for all open tax
years of Seller. Except as otherwise provided by the Bankruptcy Code, Seller has
timely paid, will timely pay, or has made provision for the payment of, all
Taxes that have or may become due in respect of periods (or portions thereof)
ending on or before the Closing Date, except such Taxes, if any, as are listed
in Schedule 3.06(a) or as to which adequate reserves have been established.
(b) Withholding Taxes. Except as disclosed in Schedule
3.06(b), Seller has complied in all material respects with all applicable laws,
rules and regulations relating to the payment and withholding of Taxes and has,
within the time and in the manner prescribed by law, withheld from Employee
wages and paid to the proper Governmental or Regulatory Authorities all required
amounts. Seller has properly requested, received and retained all necessary
exemption certificates and other documentation supporting any claimed exemption
or waiver of sales, use or other similar Taxes as to which Seller would have
otherwise been obligated to collect or withhold.
(c) Liens. There are no Liens for Taxes (other than for
current Taxes not yet due and payable) on the Transferred Assets. None of the
Transferred Assets is property that is required to be treated for Tax purposes
as being owned by any other Person.
(d) Withholding Provisions. The transactions contemplated
herein are not subject to the Tax withholding provisions of Section 3406 or of
Subchapter A of Chapter 3 of the Code or of any other tax withholding provisions
of federal, state, local or foreign law.
(e) Transferee or Successor Liability. Except as
disclosed in Schedule 3.06(e), Seller does not have 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), as a transferee or successor, by
contract (including any Tax sharing or allocation agreement) or otherwise.
Seller is not a party to any Tax sharing agreement.
(f) Claims or Proceedings. Except as disclosed in
Schedule 3.06(f), (i) there is no claim, action, audit or other proceeding now
pending or threatened relating to the Taxes of Seller; and (ii) no extension or
waiver of a statute of limitations relating to Taxes is in effect or, to the
Knowledge of Seller, has been requested with respect to Seller.
41
3.07 Real Property.
(a) Except as disclosed in Schedule 3.07(a), Seller has
good and marketable fee simple title to the Owned Real Property and Improvements
(excluding trade fixtures, tenant fixtures and automated teller machines) free
and clear of all Liens other than Permitted Liens. Subject to the Tenant Leases
described in Schedule 2.01(a)(ii)(A) and Schedule 2.15, Seller is in possession
of the Owned Real Property with adequate rights of vehicular and pedestrian
ingress and egress.
(b) A true, correct and complete rent roll for the Tenant
Leases dated as of February 28, 2003 is set forth in Schedule 3.07(b) (the "Rent
Roll"). There are no Tenant Leases with respect to the Owned Real Property other
than the Tenant Leases which are set forth on the Rent Roll. Except as set forth
in the Rent Roll or elsewhere in Schedule 3.07(b), as of the date of this
Agreement: (i) each Tenant Lease is in full force and effect; (ii) the tenants
have accepted possession of, and are in occupancy of, all of their respective
demised premises and have commenced the payment of rent under the Tenant Leases
to the extent set forth on the Rent Roll, and to the Knowledge of Seller there
are no offsets, claims or defenses to the enforcement thereof presently
outstanding; (iii) all rents due and payable under the Tenant Leases have been
paid and no portion of any rent has been paid for any period more than 30 days
in advance; (iv) the rent payable under each Tenant Lease is the amount of rent
set forth in the Rent Roll, and to the Knowledge of Seller there is no claim or
basis for a claim by the tenant thereunder for an adjustment to such rent; (v)
no tenant or other party in possession of any of the real property subject to
the Tenant Leases has any right to purchase, or holds any right of first refusal
to purchase, such properties; (vi) no Tenant Lease letter of credit has been
delivered to Seller as a security deposit, or in lieu of a cash security
deposit, under any Tenant Lease, (vii) there is no tenant improvement work
remaining to be done under any Tenant Lease, (viii) there are no sums remaining
to be paid by Seller to any tenant with respect to any Tenant Lease, whether on
account of any tenant improvement work or otherwise and (ix) there are no
remaining rent concessions, tenant allowances or abatements with respect to any
Tenant Lease. All security deposits under the Tenant Leases are as set forth on
the Rent Roll and Seller is in compliance with all Laws with respect to all
security deposits. The Rent Roll sets forth the scheduled expiration date of
each Tenant Lease and any arrearages in the payment of rent thereunder as of the
date of the Rent Roll. Each Real Property Lease is a legal, valid and binding
agreement of Seller and, to the Knowledge of Seller, of each other Person that
is a party thereto, enforceable in accordance with its terms. Seller has
delivered to Purchaser a true, correct and complete copy of each Real Property
Lease. Except as set forth in Schedule 3.07(b), Seller does not owe and will not
owe any brokerage commission in respect of the Real Property Leases. Except as
set forth in Schedule 3.07(b), to the Knowledge of Seller, the other party to
any Real Property Lease has not (i) subleased, licensed or assigned its interest
therein to any other Person or granted to any Person the right to use or occupy
the premises demised under the Real Property Lease, or any portion thereof, or
(ii) collaterally assigned or granted a security interest in the Real Property
Lease to any Person.
(c) Except as disclosed in Schedule 3.07(c), to the
Knowledge of Seller, all of the Owned Real Property, and the use and operation
thereof, is a permitted use under all applicable zoning ordinances and
regulations and does not contravene or violate any zoning, subdivision, land
use, administrative or other applicable Law in any material respect. Seller has
42
not received any written notice from any Governmental or Regulatory Authority
advising Seller of, (i) a violation of any such Laws or (ii) any action which
must be taken to avoid a violation thereof. To the Knowledge of Seller, there
are no pending actions, suits or proceedings to revoke, attach, invalidate,
rescind or modify the ordinances and regulations currently in effect and to
which the Owned Real Property is subject.
(d) Except as disclosed in Schedule 3.07(d), all water,
sewer, gas, electric, telephone and drainage facilities and all other utilities
required by law for Purchaser's use and operation of the Owned Real Property as
a hotel and/or casino as presently used and operated are installed across public
property or valid easements to the boundary lines of the Owned Real Property
(including easements and agreements with Bazaar and Northwind).
(e) Except as disclosed in Schedule 3.07(e), Seller has
all licenses, permits, easements and rights-of-way, including a use permit,
required from all Governmental or Regulatory Authorities having jurisdiction
over the Owned Real Property or from private parties for the use and operation
of the Owned Real Property as a hotel and/or casino with all of the amenities
necessary for the operation of the Business and to assure vehicular and
pedestrian ingress to and egress from the Owned Real Property, and all such
licenses, permits, easements and rights-of-way are in full force and effect.
(f) There are no pending or, to the Knowledge of Seller,
threatened condemnation proceedings relating to the Real Property or any part
thereof, and Seller has not received written notice of any such threatened or
contemplated condemnation action.
(g) Except as disclosed in Schedule 3.07(g), Seller has
not received written notice of any special tax assessment relating to the Real
Property or any portion thereof.
(h) Except as disclosed in Schedule 3.07(h), the Real
Property (including the Improvements) constitutes all of the real property and
buildings, structures, facilities, fixtures and other improvements thereon used
in connection with the Business or in which Seller owns any rights, title or
interests.
(i) To the Knowledge of Seller, except as disclosed in
Schedule 3.07(i), (i) there are no existing or pending (A) plans to widen,
modify or realign any street or highway adjacent or appurtenant to the Owned
Real Property, except for the Xxxxxx Intersection Plan, (B) eminent domain
proceedings that would materially affect the Owned Real Property, or (C) plans
for, or proceedings which could result in, denial of access to the Owned Real
Property from any point of access (public or private), by any Governmental
Authority or any other Person, and (ii) Seller has not received any written
notice of, and to the Knowledge of Seller there are no, intended public
improvements which would result in any material charge being levied or assessed
against, or in the creation of any lien upon, the Owned Real Property.
(j) To the Knowledge of Seller, except as shown on the
Survey, the Owned Real Property does not (i) encroach upon any building line,
setback line or side yard line of which Seller has knowledge or (ii) violate any
recorded or visible easement or restrictive covenant, or other easement or
restrictive covenant.
43
(k) Except as disclosed in Schedule 3.07(k) or as
disclosed as a title exception in the Title Report, to the Knowledge of Seller
no easements are required or necessary for the full access and use of the Owned
Real Property.
3.08 Certain Assets and Properties and Contracts.
(a) Subject to entry of the Confirmation Order and any
necessary consents to assume and assign the Assumed Contracts, on the Closing
Date Seller will be in possession of and (i) have valid right to use pursuant to
an Assumed Contract or (ii) have good and valid title free and clear of Liens
other than Permitted Liens to all Tangible Personal Property and Inventory
except as disclosed in Schedule 3.08(a). Seller's use of the Tangible Personal
Property and Inventory complies in all material respects with all applicable
Laws.
(b) Except as disclosed in Schedule 3.08(b) or any other
Schedule and subject to entry of the Confirmation Order, the delivery to
Purchaser at the Closing of the Operative Agreements will vest good and valid
title to the Transferred Assets (other than the Owned Real Property) free and
clear of all Liens, except for Permitted Liens or Liens created by Purchaser.
3.09 Intellectual Property Rights.
(a) Seller has good and valid title to, owns, has
interests in or licenses to use the Intellectual Property disclosed in Schedule
2.01(a)(v) and Schedule 2.15 in connection with the conduct of the Business. No
other Intellectual Property is used by Seller or necessary for use by Seller in
the conduct of the Business. Seller's owned Intellectual Property is owned free
and clear of Liens other than Permitted Liens. Seller is not in default, nor has
it received any written notice asserting that it is in default (or with the
giving of notice or lapse of time or both, would be in default) under any
license, sublicense, agreement or contract to use such Intellectual Property. To
the Knowledge of Seller, no licensor, grantor or counter-party is in default
under the terms of any such license, sublicense, agreement or contract. To the
Knowledge of Seller, no such Intellectual Property is being infringed upon by
any other Person, except as disclosed in Schedule 3.09(a). Seller has not
received written notice asserting that Seller is or may be infringing on or
misappropriating, and to the Knowledge of Seller, Seller is not infringing on or
misappropriating, any Intellectual Property of any other Person in connection
with the conduct of the Business. Seller has received no notice of any claim or
lawsuit to such effect that has not been resolved.
(b) Except as disclosed in Schedule 3.09(b), Seller (i)
does not have any obligation to compensate any Person for the use of any
Intellectual Property and (ii) has not granted to any Person any license, option
or other rights to use in any manner any of its Intellectual Property, whether
requiring the payment of royalties or not.
(c) Seller owns or has a valid right to use the
Intellectual Property pursuant to Assumed Pre-Existing Contracts, and except for
the transfer of the Intellectual Property to Purchaser as contemplated by this
Agreement, the Intellectual Property will not be forfeited, terminated or give
rise to a right of forfeiture or termination, or otherwise cease to be valid
rights of Seller by reason of the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby.
44
(d) Except as set forth in Schedule 3.09(d), all
personnel, employees, agents, and contractors, who have contributed to or
participated in the conception and development of any Intellectual Property on
behalf of Seller, have been parties to "work-for-hire" arrangements or
agreements with Seller that have accorded Seller full, effective, exclusive and
original ownership of all tangible and intangible property thereby arising, or
have executed appropriate instruments of assignment in favor of Seller as
assignee that have conveyed to Seller effective and exclusive ownership of all
tangible and intangible property thereby arising.
(e) Except as set forth in Schedule 3.09(e), Seller has
duly recorded all assignments and transfers affecting title to the patents,
trademarks, copyrights and domain names, in the U.S. Patent and Trademark
Office, U.S. Copyright Office or appropriate agency, as applicable.
3.10 Contracts.
(a) Schedule 2.01(a)(iv) and Schedule 2.15 contain true,
correct and complete lists of all of the Assumed Pre-Existing Contracts related
to the Transferred Assets and the Business, true and complete copies of which
have been provided or made available to Purchaser.
(b) As of the later of the Closing or the distribution
date set forth in the Plan and the Confirmation Order, all defaults and breaches
by Seller in respect of the Assumed Contracts will be duly cured, and all of
Seller's rights thereunder will have been duly transferred to Purchaser, except
as disclosed on Schedule 3.10(b)(I). To the Knowledge of Seller, no other party
to an Assumed Contract has breached such Assumed Contract nor is any such other
party in default under such Assumed Contract and there exists no condition or
event which, after notice or lapse of time or both, would constitute any such
breach or default, except as disclosed on Schedule 3.10(b)(II).
3.11 Licenses. Schedule 2.01(a)(vi) and Schedule 2.01(b)(x) contain
true and complete lists of all material Licenses used or held for use in the
Business (and all pending applications for any such Licenses), setting forth the
grantor, the grantee, the function and the expiration and renewal date of each.
Prior to the execution of this Agreement, Seller has delivered to Purchaser true
and complete copies of all such Licenses. Except as disclosed in Schedule 3.11:
(a) Seller owns or validly holds in its name all Licenses
that are material, individually or in the aggregate, to the Business and the
ownership, use, occupation and operation of the Real Property;
(b) each License is valid, binding and in full force and
effect and, to the Knowledge of Seller, no Governmental or Regulatory Authority
has instituted any proceedings for the cancellation, non-renewal or modification
of any of the Licenses and no such proceedings are threatened and no event
(including, without limitation, any material violation of any law) has occurred
which would be reasonably likely to lead to the revocation or termination of any
such License or the imposition of any material restriction thereon;
(c) Seller is in compliance with all such Licenses in all
material respects;
45
(d) the operation of the Business complies with all such
Licenses in all material respects;
(e) Seller is not, nor has it received any written notice
that it is, in default (or with the giving of notice or lapse of time or both,
would be in default) under any License; and
(f) the execution, delivery and performance by Seller of
this Agreement and the Operative Agreements to which it is a party, and the
consummation of the transactions contemplated hereby and thereby, will not (A)
result in or give to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (B) result in or give to any
Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under or (C) result in the creation or
imposition of any Lien upon Seller or any of its Assets and Properties under,
any License.
3.12 Foreign Person. Seller is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Code, and Seller will furnish to Purchaser
at or prior to the Closing an affidavit to that effect.
3.13 Brokers. To the Knowledge of Seller, no Person has any valid
claim against Purchaser or Seller for a finder's fee, brokerage commission or
similar payment in connection with this Agreement or the transactions
contemplated hereby. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Seller with Purchaser
without the intervention of any Person on behalf of Seller in such manner as to
give rise to any valid claim by any Person against Purchaser or Seller for a
finder's fee, brokerage commission or similar payment in connection with this
Agreement or the transactions contemplated hereby.
3.14 Labor Matters; Employees.
(a) Except as listed in Schedule 3.14(a), (i) Seller is
not a party to any collective bargaining agreement or labor agreement with
respect to its Employees with any labor organization, union, group or
association, (ii) no such collective bargaining agreement or labor agreement is
scheduled to expire during the term of this Agreement, (iii) to the Knowledge of
Seller, no union or other collective labor organization is seeking to organize,
or to be recognized as, a collective bargaining unit of Employees, (iv) to the
Knowledge of Seller, there is no labor strike, labor disturbance, material
unfair labor practice claim, or other material labor dispute pending nor is any
material grievance currently being asserted, (v) since August 18, 2000, Seller
has not experienced a work stoppage or other material labor difficulty or
engaged in any unfair labor practice and (vi) Seller has neither given nor
received notice of any material breach or default under any collective
bargaining agreement, labor agreement or Employee Plan which has not been cured,
and to the Knowledge of Seller, no event has occurred or circumstance exists
which, with notice or the passage of time, would result in a material breach or
default by Seller or the other party thereunder.
(b) Purchaser has been provided with a list of the names,
titles and compensation of all Employees, excluding Seller's executive officers
and probationary employees, as of April 4, 2003. Except as disclosed in Schedule
3.14(b), Seller is neither a party
46
to nor bound by, and does not have any present or contingent liability with
respect to, any oral or written employment agreement, consulting agreement,
independent contractor agreement, deferred compensation agreement, covenant not
to compete or similar agreement. Seller has delivered to Purchaser a correct and
complete copy of each of the aforementioned agreements. Seller has neither given
nor received any notice of any breach or default under any employment agreement
with any such Employees which has not been cured and, to the Knowledge of
Seller, no event has occurred or circumstance exists which, with notice or the
passage of time, would result in a breach or default by Seller or the other
party thereunder.
(c) Except as disclosed in Schedule 3.14(c), to the
Knowledge of Seller, there is no charge, complaint, investigation, arbitration
or grievance pending or threatened before any Governmental or Regulatory
Authority or arbitrator against Seller with respect to the Hotel/Casino, or any
Employees, officers or managers of Seller, alleging a violation of any
applicable Laws or breach of contract relating to the employment by Seller of
any Employees or prospective Employees or independent contractors or
consultants.
(d) Seller is not subject to any settlement or
conciliation agreement, consent decree or other order of any Governmental or
Regulatory Authority relating to any employment issue or claim.
(e) Except as disclosed in Schedule 3.14(e), to the
Knowledge of Seller, no Employee, Employee representative or former Employee has
asserted any material claim or threatened in writing any material claim against
Seller for any compensation (excluding compensation for current payroll periods)
which has not been resolved.
(f) Schedule 3.14(f) sets forth a correct and complete
list of all Employee Plans maintained by or on behalf of Seller. Neither Seller
nor any ERISA Affiliate is now or has been obligated to contribute to, or has
any liability with respect to, an employee pension benefit plan, as defined in
Section 3(2) of ERISA, that is subject to Title IV of ERISA or to a
multiemployer pension plan, as defined in Section 3(37) of ERISA. Each Employee
Plan assumed by Purchaser and listed in Schedule 2.02(a)(ii)(C) has been
administered in all material respects in accordance with its terms and with the
provisions of applicable Law.
3.15 No Other Agreements to Sell. Except as may be permitted under
the Sales Process Order or required under the Purchaser Selection Order, Seller
has no commitment or legal obligation, absolute or contingent, (i) to any other
Person other than Purchaser, to sell, assign, transfer or effect a sale of all
or substantially all of the Transferred Assets, (ii) to sell or effect a sale of
any equity interest in Seller to any Person, (iii) to effect any merger,
consolidation, liquidation, dissolution or other reorganization of Seller or
(iv) to enter into any agreement or cause the entering into of an agreement with
respect to any of the foregoing. Notwithstanding the foregoing, Purchaser
acknowledges and accepts that transactions described in those clauses could be
required in the Bankruptcy Case. The representations and warranties in this
Section 3.15 shall not be deemed to have been breached as a result of any such
requirements in the Bankruptcy Case.
3.16 Insurance. Schedule 3.16 contains a complete and accurate list
of any and all policies or binders of fire, liability, title, worker's
compensation, product liability and other
47
forms of insurance (showing as to each policy or binder the carrier, policy
number, expiration dates, annual premiums, a general description of the type of
coverage provided and loss experience history by line of coverage) that are (i)
maintained by Seller on the Business, the Transferred Assets or the Employees
and (ii) being transferred to Purchaser pursuant to this Agreement (the
"Transferred Policies"). To the Knowledge of Seller, there is no default under
any such coverage nor has there been any failure to give notice or present any
claim under any such coverage in a due and timely fashion. There are no
outstanding unpaid premiums due under such policies or binders except in the
ordinary course of business and no notice of cancellation or non-renewal of any
such coverage has been received by Seller with respect to the Transferred
Policies. Schedule 2.01(b)(ix) contains a complete and accurate list of all
insurance policies maintained by Seller on the Business, the Transferred Assets
and the Employees not contained on Schedule 3.16.
3.17 No Conflicts. The execution and delivery by Seller of this
Agreement and the Operative Agreements to which it is a party and the
performance by Seller of its obligations contemplated hereby and thereby do not
and will not, in any manner that would have a material adverse effect on the
Transferred Assets, the Business or the ability of Seller to consummate the
transactions contemplated hereby and thereby:
(a) conflict with or result in a violation or breach
(with or without notice or lapse of time or both) of any of the terms,
conditions or provisions of the articles of organization or operating agreement
of Seller;
(b) to the Knowledge of Seller and subject to obtaining
the consents, approvals and actions, making the filings and giving the notices
described in Schedule 3.03, conflict with or result in a violation or breach
with or without notice or lapse of time or both) of any term or provision of any
Laws or Order applicable to Seller; or
(c) except as disclosed in Schedules 3.10(b)(I) or
3.17(c), (i) conflict with or result in a violation or breach (with or without
notice or lapse of time or both) of, (ii) constitute (with or without notice or
lapse of time or both) a default under, (iii) require Seller to obtain any
consent, approval or action of, make any filing with or give any notice to any
Person as a result or under the terms of, (iv) give rise to a right of
termination, cancellation or acceleration of any obligation under, or (v) result
in the creation or imposition of any Lien on the Transferred Assets under, any
Contract (including the Assumed Contracts) to which Seller is a party or by
which any of the Assets and Properties of Seller are bound.
3.18 Complaints. To the Knowledge of Seller, there is not any
Governmental or Regulatory Authority investigation, notice of violation, notice
of apparent liability or Order of forfeiture pending or outstanding against
Seller or the Hotel/Casino or the other Transferred Assets respecting any
violation, or allegation thereof, of any Laws or any complaint before a
Governmental or Regulatory Authority as a result of which an investigation,
notice of apparent liability or Order of forfeiture may issue from a
Governmental or Regulatory Authority relating to Seller or the Hotel/Casino or
the other Transferred Assets. To the Knowledge of Seller, no event has occurred
which permits, or after notice or lapse of time or both would permit, the
revocation or termination of any Licenses relating to the Business, the
Hotel/Casino or the other
48
Transferred Assets, or the imposition of any restriction thereon of such a
nature as may materially limit the conduct of the Business as presently
conducted and operated.
3.19 Accounts Receivable. Schedule 3.19 sets forth an aged listing
by customer of the Accounts Receivable that are outstanding as of March 31,
2003.
3.20 Legal Proceedings. Except for the Bankruptcy Case or as set
forth on Schedule 3.20, Seller is not subject to any Order of, or written
agreement or memorandum or understanding with, any Governmental Authority and,
except as set forth on Schedule 3.20, to the Knowledge of Seller, there is no
litigation, action, suit, claim, investigation or proceeding pending or
threatened against or affecting Seller, the Business, the Transferred Assets, or
any Employee associated with the Business or the Transferred Assets, any of the
foregoing of which would materially affect Purchaser's interest in the
transactions contemplated by this Agreement, at law or in equity or before any
Governmental Authority.
3.21 Reservations. Schedule 3.21 sets forth a correct list of all
reservations (and deposits with respect thereto) for the Hotel/Casino as of a
date not earlier than five days prior to execution of this Agreement. At the
Closing, Seller will deliver to Purchaser a complete and correct list of all
reservations (and deposits with respect thereto) as of a date that is not more
than five days prior to the Closing Date.
3.22 Compliance With Laws. Except as set forth in Schedule 3.22, to
the Knowledge of Seller, neither (i) Seller nor (ii) the use, condition or any
other aspect of any Transferred Asset, is, or between October 18, 2002 and the
date of this Agreement has been, in violation in any material respect of any
applicable Law.
3.23 Reports. To the Knowledge of Seller, all material returns,
notices, reports, statements and other filings currently required to be filed by
Seller with a Governmental or Regulatory Authority with respect to Seller, the
Business, the Hotel/Casino or the other Transferred Assets have been filed and
complied with in all material respects and will continue to be filed and be in
compliance on a current basis in all material respects through the Closing Date.
To the Knowledge of Seller, all such reports, returns and statements are (or
will be, in the case of future reports) materially complete and correct as
filed.
3.24 Environmental Laws. Except as set forth in Schedule 3.24,
Seller and each of its subsidiaries have (i) fully complied with all
Environmental Laws applicable to transfer of, construction on, and operation of,
the Hotel/Casino and the Business (including, without limitation, those relating
to generation, handling, use, storage and disposal of Hazardous Materials),
except where noncompliance is not reasonably likely to have a material adverse
effect on the Condition of the Business; (ii) notified Purchaser of any
Environmental Claim, or event or circumstance on the basis of which an
Environmental Claim involving material liability could reasonably be expected to
be made, in each case which is reasonably likely to have a material adverse
effect on the Condition of the Business, upon Seller's becoming aware thereof;
(iii) taken prompt and appropriate action to respond to any Environmental Claim,
and reported to Purchaser on such response with respect to any Environmental
Claim which would reasonably be expected to have a material adverse effect on
the Condition of the Business; and (iv) paid when due all fines and penalties
assessed against them for violations of Environmental Laws, except
49
any such fine or penalty that they are contesting in good faith by appropriate
proceedings diligently pursued or which is not reasonably likely to have a
material adverse effect on the Condition of the Business.
3.25 Delivery of Documents. Seller has delivered to Purchaser true
and complete copies of the Northwind Settlement Agreement, ESA, ESCA, Northwind
Lease, Northwind SNDA, REA, Common Parking Area Use Agreement and the related
Orders of the Bankruptcy Court, including any and all amendments to the
foregoing documents.
3.26 Sufficiency of the Transferred Assets. The Transferred Assets,
together with the Excluded Assets, constitute all of the properties, assets and
rights required for Seller's conduct of the Business as presently conducted.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
As of the date of this Agreement and as of the Closing (as if made anew
at and as of the Closing), Purchaser represents and warrants to Seller as
follows:
4.01 Organization. Purchaser is a limited liability company, duly
organized, existing and in good standing under the Laws of the State of Nevada.
Purchaser has full limited liability company power and authority to enter into
this Agreement and the Operative Agreements to which it is or intends to be a
party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. Prior to execution of this
Agreement, Purchaser has delivered to Seller true and correct copies of its
articles of organization and operating agreement.
4.02 Authority. The execution and delivery by Purchaser of this
Agreement and the Operative Agreements to which it is a party, and the
performance by Purchaser of its obligations hereunder and thereunder, have been
duly and validly authorized by the managing member of Purchaser, no other
limited liability company action on the part of Purchaser or its equity owners
being necessary. This Agreement has been duly and validly executed and delivered
by Purchaser and constitutes, and upon the execution and delivery by Purchaser
of the Operative Agreements to which it is or intends to be a party, such
Operative Agreements will constitute, legal, valid and binding obligations of
Purchaser enforceable against Purchaser in accordance with their terms.
4.03 No Conflicts. The execution and delivery by Purchaser of this
Agreement and the Operative Agreements to which it is a party do not, and the
performance by Purchaser of its obligations under this Agreement and such
Operative Agreements and the consummation of the transactions contemplated
hereby and thereby will not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the Articles of Organization or
Operating Agreement of Purchaser;
(b) subject to obtaining the consents, approvals and
actions, making the filings and giving the notices disclosed in Schedule 4.04,
conflict with or result in a violation or breach of any term or provision of any
Law or Order applicable to Purchaser, its Affiliates or any of their respective
Assets and Properties; or
50
(c) except as disclosed in Schedule 4.03, (i) conflict
with or result in a violation or breach of, (ii) constitute (with or without
notice or lapse of time or both) a default under, or (iii) require Purchaser or
any of its Affiliates to obtain any consent, approval or action of, or make any
filing with or give any notice to any Person as a result or under the terms of,
any Contract or License to which Purchaser or any of its Affiliates is a party
or by which any of its Assets and Properties are bound.
4.04 Governmental Approvals and Filings. Except as disclosed in
Schedule 4.04, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority on the part of Purchaser is required in
connection with the execution, delivery and performance of this Agreement or the
Operative Agreements to which it is a party or the consummation of the
transactions contemplated hereby or thereby.
4.05 Legal Proceedings. Except as set forth in Schedule 4.05,
Purchaser is not subject to any Order of, or written agreement or memorandum or
understanding with, any Governmental Authority and to the Knowledge of
Purchaser, (i) there is no litigation, action, suit, claim, investigation or
proceeding pending, or threatened against or affecting Purchaser or any Person
associated with Purchaser which would materially affect the transactions
contemplated by this Agreement, at law or in equity or before any Governmental
Authority and (ii) no Person has valid grounds to assert any such litigation,
action, suit, claim, investigation or proceeding.
4.06 Brokers. To the Knowledge of Purchaser, no Person has any
valid claim against Seller or Purchaser for a finder's fee, brokerage commission
or similar payment in connection with this Agreement or the transactions
contemplated hereby. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Purchaser or its
Affiliates with Seller without the intervention of any Person on behalf of
Purchaser or its Affiliates in such manner as to give rise to any valid claim by
any Person against Seller or Purchaser for a finder's fee, brokerage commission
or similar payment in connection with this Agreement or the transactions
contemplated hereby.
ARTICLE V. COVENANTS OF SELLER.
Seller covenants and agrees with Purchaser that, at all times from and
after the date hereof until the Closing and, with respect to any covenant or
agreement herein that, by its terms, is required to be performed in whole or in
part after the Closing, for the period specified therein (or for the period
necessary to complete the required performance in the event that no period is
specified or such covenant or agreement has not been complied with during the
specified period), Seller will comply with all covenants and provisions of this
Article V except to the extent Purchaser may otherwise consent in writing.
5.01 Regulatory and Other Approvals. Until the Closing Date, Seller
will, as promptly as practicable, (i) take all reasonable steps necessary or
desirable to obtain all consents, approvals or actions of, make all filings
with, and give all notices to, Governmental or Regulatory Authorities or any
other Person required of Seller to consummate the transactions contemplated
hereby and by the Operative Agreements, including without limitation, those
described in Schedule 3.03, (ii) provide such other information and
communications to such Governmental or Regulatory Authorities or other Persons
as Purchaser or such Governmental or
51
Regulatory Authorities or other Persons may reasonably request in connection
therewith and (iii) cooperate with Purchaser in connection with the performance
of its obligations under Sections 6.01 and 6.02.
5.02 HSR Filings. In addition to and not in limitation of Seller's
covenants in Sections 5.01 and 5.09, from and after the Selection of Purchaser,
Seller will (i) take promptly all actions necessary to make the filings required
of Seller or its Affiliates under the HSR Act, (ii) comply at the earliest
practicable date with any request made to Seller or its Affiliates by the FTC or
the DOJ for additional information pursuant to the HSR Act and (iii) cooperate
with Purchaser in connection with Purchaser's filing under the HSR Act and in
connection with resolving any investigation or other inquiry concerning the
transactions contemplated by this Agreement by either the FTC or the DOJ or
state attorneys general.
5.03 Investigation by Purchaser. Until the Closing Date, Seller
will (i) provide Purchaser and its officers, directors, managers, employees,
agents, counsel, accountants, financial advisors, consultants and other
representatives (collectively, "Representatives") with reasonable access, upon
reasonable prior notice, during normal business hours and subject to reasonable
scheduling, to the Transferred Assets and to such Employees and agents of Seller
who have significant responsibility for the conduct of the Business and to the
Transferred Assets for such purposes relating to the transactions contemplated
by this Agreement and Purchaser's post-Closing plans for the Hotel/Casino as
Purchaser may reasonably request (including making environmental evaluations),
and (ii) furnish Purchaser and its Representatives with all such information and
data (including without limitation, copies of Assumed Contracts, Licenses and
other Business Books and Records, other than the Excluded Books and Records)
concerning the Business, the Transferred Assets and the Assumed Liabilities as
Purchaser or any of its Representatives reasonably request in connection with
such investigation.
5.04 Conduct of Business. Until the Closing Date, Seller will
operate the Business in the ordinary course, consistent with past practice and
in compliance with all Bankruptcy Court Orders entered into with respect to the
Bankruptcy Case, except as required under the Bankruptcy Case or as otherwise
permitted or required under this Agreement. Without limiting the generality of
the foregoing, until the Closing Date Seller shall (i) maintain all insurance
policies insuring the Business as of the date of this Agreement (including
business interruption, fire and casualty coverage) or insurance policies
substantially similar to those in effect as of the date of this Agreement, (ii)
maintain the Inventory and Operating Supplies at normal operating levels for the
Hotel/Casino, (iii) perform maintenance and repairs for the Hotel/Casino in the
ordinary course of business and (iv) prior to the Closing make all of the
maintenance and capital expenditure payments described on Schedule 5.04. Subject
to Purchaser's compliance with its obligations under Section 6.15 and subject to
Seller seeking approval of a severance and retention plan for Seller's
management (which shall be a Retained Liability), prior to the Closing Date
Seller will not seek any Order or other affirmative relief from the Bankruptcy
Court that would permit or require Seller to operate the Business otherwise than
in the ordinary course, consistent with past practice and in compliance with all
Bankruptcy Court Orders to which Seller is then subject, except to the extent
(if any) that such operation would be reasonably necessary to avoid or remedy
any of the conditions described in clause (i) of Section 14.01(j).
52
5.05 Financial Statements and Reports; Filings.
(a) As promptly as practicable and in any event not later
than 120 days after the end of each fiscal year ending after the date of this
Agreement and before the Closing Date, Seller shall deliver to Purchaser true
and complete copies of the audited balance sheet and the related audited
statements of operations and cash flows of Seller for each such fiscal year,
together with a true and complete copy of the report on such audited information
by Seller's independent public accountants, and all letters received by Seller
from such accountants with respect to the results of such audits. As promptly as
practicable and in any event not later than 45 days after the end of each of the
first three quarters of each fiscal year ending after the date hereof and before
the Closing Date, Seller shall deliver to Purchaser true and complete copies of
the unaudited balance sheet of Seller and the related unaudited statement of
operations of Seller as of and for such quarter and for the portion of the
fiscal year then ended, together with the notes, if any, relating thereto. Such
audited and unaudited financial statements shall be prepared on a basis
consistent with the audited financial statements specified in Section 3.04(a).
In addition, until the Closing Date Seller shall make Representatives of
Seller's management reasonably available upon request of Purchaser to discuss
Seller's operation of the Business.
(b) Until the Closing Date, Seller will deliver to
Purchaser true and complete copies of such other financial statements, reports
and analyses relating to the Business as may be prepared or received by Seller
or as Purchaser may otherwise reasonably request. Purchaser shall reimburse
Seller for actual out-of-pocket costs incurred for fees and expenses of outside
professionals in the preparation of such items as are requested by Purchaser
unless the requested items are otherwise required of Seller under this Agreement
or such items were prepared by or for Seller prior to Purchaser's request for
them.
(c) Seller will deliver promptly to Purchaser, and in any
event within ten Business Days after filing, copies of all License applications
and other filings made by Seller with, or notices given by Seller to, any
Governmental or Regulatory Authority after the date of this Agreement and before
the Closing Date (other than routine, recurring filings made in the ordinary
course of business consistent with past practice) or the Bankruptcy Court.
(d) Seller will deliver to Purchaser (with a copy to
Purchaser's counsel) copies of each Disclosure Statement (and any supplement or
amendment thereto) not later than five Business Days after it is filed with the
Bankruptcy Court (or such shorter time as is practicable under the
circumstances).
5.06 Delivery of Books and Records, etc.; Removal of Property.
(a) On the Closing Date, Seller will deliver or make
available to Purchaser all of the Transferred Assets at the location where such
assets are located on the date of the Closing (either at the Owned Real Property
or Seller's temporary storage facility located in Xxxxx County, Nevada),
excluding any such assets that will be delivered in the ordinary course that are
subject to outstanding purchase orders. If at any time after the Closing, Seller
discovers in its possession or under its control any other Transferred Assets,
it will forthwith deliver such Transferred Assets to Purchaser at the Owned Real
Property. From and after the Closing,
53
Purchaser shall cooperate and afford Seller, its counsel and its accountants,
during normal business hours, reasonable access to the Business Books and
Records.
(b) Within 120 days after the Closing Date, Seller shall
remove, at its sole cost and expense, all tangible Excluded Assets from the Real
Property and Improvements. Seller shall provide Purchaser reasonable advance
notice of such removal and shall perform or cause such removal to be performed
in accordance with all applicable Laws and in a manner that minimizes disruption
to the Business.
5.07 Title Insurance Policies and Exceptions.
(a) Purchaser acknowledges receipt of the Title Report,
all documents of record listed as title exceptions in the Title Report and the
Survey as they exist on the date of this Agreement. Seller will deliver promptly
to Purchaser, and in any event within ten Business Days after Seller's receipt
thereof, copies of any further amendments or modifications to the Title Report.
(b) In addition to the Permitted Exceptions identified on
Schedule 5.07(b), Permitted Exceptions include title exceptions which meet all
of the following criteria: they (i) are disclosed or become apparent to
Purchaser after the date of the original execution of this Agreement (without
regard to any subsequent amendments), (ii) are not already Permitted Exceptions,
(iii) cannot be removed by the payment of a sum of money, (iv) are not caused by
the intentional act of Seller or an Affiliate of Seller after the date specified
in subclause (i) above and (v) do not materially and adversely affect the value
of the Owned Real Property or Improvements, or the continued use thereof as
currently conducted or as re-themed as a Planet Hollywood Hotel & Casino.
(c) Seller shall cause all title exceptions shown on the
Title Report (other than Permitted Exceptions) not approved by Purchaser to be
removed on or before the Closing. In lieu of removing them, however, Seller
shall have the right to (i) cause the Title Company to remove any Liens by
bonding (or causing the bonding) over such Liens or (ii) obtain the commitment
of the Title Company to insure Purchaser against loss or damage that may be
occasioned by such exceptions that are not Permitted Exceptions.
(d) At the Closing, Seller shall cause the Title Company
to issue an ALTA extended coverage owner's policy of title insurance and an ALTA
extended coverage mortgagee's policy of title insurance in favor of the Restated
Credit Agreement Agent covering the Owned Real Property, with gap coverage for
any Owned Real Property that will be conveyed to Purchaser at the Closing before
the Deed is recorded in the Official Records of Xxxxx County, Nevada, insuring
that Purchaser has fee title to the Owned Real Property, subject only to (i) the
Permitted Exceptions, (ii) liens for taxes not yet due and payable and (iii) all
standard exceptions, exclusions, conditions and stipulations from coverage (the
"Title Policy").
(e) Seller and Purchaser shall cooperate diligently
through the Closing Date to provide customary documents required by the Title
Company as a condition to the issuance of the Title Policy, including, without
limitation, all affidavits and indemnities reasonably required by the Title
Company for the issuance of the Title Policy.
54
(f) Seller shall pay the following costs: (i) the premium
for a CLTA standard coverage title policy with a limit of liability equal to
$600,000,000; (ii) the real property transfer tax imposed on the Deed pursuant
to NRS Chapter 375 (to the extent Seller is not exempt from paying such transfer
tax); (iii) one-half of the Escrow Fee; and (iv) the cost of the Survey, subject
to Purchaser's obligation to reimburse Seller for one-half of the cost of the
Survey if and when the Closing takes place.
(g) Purchaser shall pay the following costs: (i) the
difference in cost between the premium for a CLTA standard coverage title policy
and the ALTA extended coverage; (ii) the costs of any and all endorsements
requested by Purchaser; (iii) the costs of reinsurance (if any); (iv) fees for
recording and filing the Deed and Restated Credit Facility Security Instruments;
(v) one-half of the Escrow Fee; and (vi) one-half of the cost of the Survey, by
reimbursement to Seller of such cost, if and when the Closing takes place.
5.08 Developments and Notifications.
(a) Seller shall notify Purchaser and the Restated Credit
Agreement Agent in writing (where appropriate, through updates to the Schedules)
of, contemporaneously will provide Purchaser and the Restated Credit Agreement
Agent with true and complete copies of any and all information or documents
relating to, and will make all reasonable efforts to cure before the Closing,
any development, event, transaction or circumstance occurring or coming to the
actual, current knowledge of Seller's Officers (without further inquiry) after
Seller's original execution of this Agreement (without regard to subsequent
amendments) (each, a "Development") that renders untrue in any material respect
any representation or warranty of Seller contained in this Agreement. The
notification required by this paragraph (a) (the "Development Notification")
shall be given to Purchaser (with a copy to the Restated Credit Agreement Agent)
within ten days after the Development comes to the actual, current knowledge of
Seller's Officers as provided above in this paragraph (a).
(b) If Seller gives Purchaser a Development Notification
with respect to a Development that renders untrue in any material respect any
representation or warranty of Seller in Sections 3.04 through 3.11, 3.14 and
3.16 through 3.25, then unless Purchaser has the right to terminate this
Agreement and abandon the transactions contemplated hereby pursuant to Section
14.01(f) by reason thereof and exercises that right by giving written notice to
Seller within 30 days after Purchaser's receipt of such Development
Notification, such Development Notification will be deemed to have amended the
Schedules, to have qualified the representations and warranties contained in
Sections 3.04 through 3.11, 3.14 and 3.16 through 3.25, and to have cured any
misrepresentation or breach of representation or warranty that otherwise might
have existed hereunder by reason of such Development.
(c) Seller shall notify Purchaser and the Restated Credit
Agreement Agent in writing of, and contemporaneously will provide Purchaser and
the Restated Credit Agreement Agent with true and complete copies of any and all
information or documents relating to, and will make all reasonable efforts to
cure before the Closing, any development, event, transaction or circumstance
that causes any covenant or agreement of Seller under this Agreement to be
breached in any material respect. The notification required by this paragraph
(c) shall be given to Purchaser (with a copy to the Restated Credit Agreement
Agent) within ten days after the
55
breach comes to the actual, current knowledge of Seller's Officers (without
further inquiry). No notification given pursuant to this paragraph (c) shall
have any effect on the covenants or agreements contained in this Agreement for
purposes of determining satisfaction of any condition contained herein nor shall
such notification in any way limit Purchaser Indemnified Parties' right to seek
indemnity under Article XII for breach of such covenant or agreement.
5.09 Fulfillment of Conditions. Subject to the provisions of the
Sales Process Order and the Purchaser Selection Order, Seller shall execute and
deliver at the Closing each Operative Agreement that Seller is required to
execute and deliver as a condition to the Closing, shall take all reasonable
steps necessary or desirable and proceed diligently and in good faith to satisfy
each other condition to the obligations of Purchaser contained in this Agreement
and will not take or fail to take any action that could reasonably be expected
to result in the non-fulfillment of any such condition, including, but not
limited to, adopting any plan of liquidation, dissolution, merger or
substantially similar transaction that is inconsistent with this Agreement.
Notwithstanding anything in this Agreement to the contrary, if by the 42nd day
after the Bankruptcy Court enters the Sales Process Order, Purchaser has not
reported to Seller in writing and in reasonable detail the economic and
financial terms that shall apply to Purchaser's employment of its Chief
Executive Officer for the one year period from the commencement of the Closing,
then Seller's support of this Agreement before the Bankruptcy Court may be
predicated on only the desires of the Bank Group, GECC and the committee of
Seller's unsecured creditors in the Bankruptcy Case.
5.10 Baggage. At or within 12 hours before the Transfer Time,
authorized representatives of Seller shall perform the following functions for
all baggage, trunks and other property that were checked and placed in the care
of Seller at the Property: (i) seal all pieces of baggage with tape; (ii)
prepare an inventory ("Inventoried Baggage") of such items indicating the check
number applicable thereto; and (iii) deliver the Inventoried Baggage to an
authorized representative of Purchaser and secure a receipt for the Inventoried
Baggage. Thereafter, Purchaser shall be responsible for such Inventoried
Baggage.
5.11 Safe Deposits. At or within 12 hours before the Transfer Time,
Seller shall remove all items stored by Seller or any of its respective
Affiliates in safe deposit boxes located at the Hotel/Casino, and all such safe
deposit boxes shall be made available for Purchaser's use thereafter. Safe
deposit boxes in use by customers at the Hotel/Casino at the Transfer Time will
be sealed in a reasonable manner mutually agreeable to Purchaser and Seller. At
the Transfer Time, Purchaser and Seller shall designate in writing their initial
safe deposit representatives. Representatives of both Seller and Purchaser are
to be present when a seal is broken. Seller will make a representative available
within one hour after Purchaser notifies Seller that the representative is
required. Purchaser shall have no responsibility for loss or theft from a safe
deposit box whose seal was broken in the presence of Seller's representatives.
All safe deposit keys, combinations and records shall be delivered at the
Transfer Time to Purchaser.
5.12 Valet Parking. At or within 12 hours before the Transfer Time,
authorized representatives of Seller shall perform the following functions for
all motor vehicles that were checked and placed in the care of Seller at the
Property: (i) prepare an inventory of such vehicles ("Inventoried Vehicles")
indicating the check number applicable thereto; and (ii) transfer control of the
Inventoried Vehicles to an authorized representative of Purchaser and secure a
receipt for
56
the Inventoried Vehicles. Thereafter, Purchaser shall be responsible for the
Inventoried Vehicles.
5.13 Cure Obligations. Prior to the Closing, Seller shall comply
with its obligations under Section 2.08 including without limitation, payment of
amounts required to cure defaults as provided in Section 2.08.
5.14 Maintenance. Until the Closing Date, Seller will maintain the
Real Property, Tangible Personal Property, Vehicles and Operating Supplies in
good repair and condition, subject to reasonable wear and tear, and shall
prevent waste and/or dissipation of the Real Property, Tangible Personal
Property, Vehicles and Operating Supplies, all in the ordinary course of
business consistent with past practices.
5.15 Representations and Warranties. Except as required due to the
Bankruptcy Case, Seller shall not take any actions or obligate itself to take
any actions that would make it impossible or impracticable with Seller's use of
reasonable efforts for any of Seller's representations or warranties in this
Agreement to be true and correct in all material respects on and as of the
Closing Date as though such representations or warranties were made on and as of
the Closing Date (other than such representations or warranties which are
expressly limited to a date or dates prior to the Closing Date, as to which
Seller's obligations in this Section shall apply to such prior date or dates).
With respect to Seller's representations or warranties herein that are limited
to the Knowledge of Seller, Seller's obligations set forth in the preceding
sentence shall apply to such representations and warranties as if they were not
limited to the Knowledge of Seller.
5.16 Plan. Except as required under the Bankruptcy Case, Seller
shall not propose, support or sponsor a plan of reorganization that is
inconsistent with the terms of this Agreement.
5.17 Injunctions. If any court or other Governmental or Regulatory
Authority having jurisdiction over any Party, the Transferred Assets or the
Assumed Liabilities issues or otherwise promulgates any Order prior to the
Closing which prohibits the consummation of the transactions contemplated
hereby, the Parties will use their respective reasonable efforts to seek to have
such injunction dissolved or otherwise eliminated as promptly as possible prior
to the Closing.
5.18 Notices. From the date hereof through the Closing Date, Seller
will notify Purchaser promptly (and in any event within five Business Days of
obtaining knowledge thereof) of any of the following:
(i) any pending or threatened action, suit or
proceeding challenging this Agreement or any of the transactions contemplated
hereby;
(ii) any notice or other communication from any
third party alleging that the consent of such third party (other than a consent
the necessity of which is disclosed on any Schedule) is or may be required in
connection with the transactions contemplated by this Agreement;
(iii) any other development that would prevent or
raise a substantial doubt regarding the satisfaction of any condition set forth
in Article VII; and
57
(iv) any notice or other communication from any
Governmental or Regulatory Authority regarding the transactions contemplated by
this Agreement.
5.19 Press Release. Upon execution of this Agreement, Seller
(together with Purchaser) will issue a press release substantially in the form
of Exhibit G.
5.20 Accounts Receivable. In the event that Seller or any of its
Affiliates receives any payment on any Accounts Receivable outstanding after the
Closing Date, such payment shall be the property of, and shall be promptly
forwarded and remitted to, Purchaser (except as otherwise contemplated under
Sections 2.10(b), (c) and (d)). Seller or such Affiliate will promptly endorse
and deliver to Purchaser any cash, checks or other documents received by Seller
on account of any such Accounts Receivable (except as otherwise contemplated
under Sections 2.10(b), (c) and (d)).
5.21 Plan and Disclosure Statement. As soon as practicable, but not
later than 20 days after the execution of this Agreement, Seller shall file, or
cause to be filed, the Disclosure Statement and the Plan. The Disclosure
Statement shall comply with the requirements of Section 1125 of the Bankruptcy
Code (it being understood that the adequacy of the Disclosure Statement, at the
time of filing, shall be subject to the resolution of any objections entertained
by the Bankruptcy Court) and the Plan shall comply with the requirements of
Section 1123 of the Bankruptcy Code and shall be capable of being confirmed
pursuant to Section 1129 of the Bankruptcy Code (it being understood that the
confirmability of the Plan, at the time of filing, shall be subject to the
resolution of any objections entertained by the Bankruptcy Court). Purchaser
shall have the opportunity to review and comment on the Plan and Disclosure
Statement prior to their filing to confirm the Plan is not inconsistent with the
terms of the Transaction Documents and the transactions contemplated thereby.
Seller shall request that the Bankruptcy Court set a hearing for approval of the
Disclosure Statement on not more than 30 days notice, provided that Seller may
continue such hearing until the Purchaser Selection Order has been entered by
the Bankruptcy Court, at which xxxx Xxxxxx shall seek to have the hearing set
for a date that is not later than five days after the entry of the Purchaser
Selection Order. Seller shall diligently and in good faith pursue the resolution
of any objections to the Disclosure Statement. Any modification to the Plan or
Disclosure Statement adversely affecting the rights of Purchaser under the
Transaction Documents and the transactions contemplated thereby made pursuant to
resolution of objections to the Disclosure Statement or in connection with the
Disclosure Statement hearing or otherwise must be consented to by Purchaser
prior to approval of the Disclosure Statement by the Bankruptcy Court. Upon
approval of the Disclosure Statement by the Bankruptcy Court, Seller shall
promptly and diligently pursue distribution of the Disclosure Statement and
solicitation of approval of the Plan. Seller shall set a hearing for
confirmation of the Plan and obtain the Confirmation Order within the time
period provided for in Section 2.09(d).
5.22 Updates of Employee and Accounts Receivable Information.
Within ten days after the end of each calendar month prior to the Closing Date,
Seller shall submit to Purchaser true and correct reports of any changes in the
list of names, titles and compensation of salaried Employees (excluding
executive officers and probationary employees) specified in Section 3.14(b) or
in the Accounts Receivable information set forth in Schedule 3.19.
58
5.23 Access to Hotel Information. From and after the Selection of
Purchaser until the Closing Date, Seller shall provide for Purchaser and its
authorized employees, agents and representatives office space in the Hotel,
which space shall be the existing "data room" at the Hotel/Casino and, during
the normal business hours of Seller, reasonable access to Employees working at
the Business, provided, however, until Purchaser has been placed on the Nevada
Gaming Authorities' public agenda for final gaming licensure approval, all
access to Employees shall be subject to coordination by and be in the presence
of Seller's Chief Executive Officer. Seller shall provide such space and access
to enable Purchaser to observe the Hotel/Casino business and operations for the
purpose of effecting a smooth transition in the ownership and operation of the
Business as of the Closing; provided, however, that (i) neither Purchaser nor
its employees, agents or representatives shall unreasonably interfere with the
normal management, operations or business of any part of the Hotel/Casino; (ii)
all Books and Records or other information provided to or obtained by Purchaser
or its employees, agents or representatives pursuant to this Section shall be
subject to the confidentiality provisions of Section 15.04 (without limiting the
generality of those provisions); (iii) Purchaser, at its cost and expense, shall
promptly repair, replace and restore any damage to the Transferred Assets or the
Hotel/Casino caused, directly or indirectly, by Purchaser or its employees,
agents or representatives in their activities under this Section; and (iv) this
Section shall not grant Purchaser or its employees, agents or representatives
access to, or any right to information of any kind regarding, any part of the
Hotel/Casino, the Business or the Transferred Assets that involves gaming
activities or operations unless and until Seller is notified that the Nevada
Gaming Commission has placed on its hearing agenda Purchaser's application for
approval of a Nevada gaming license.
5.24 Closing the Due Diligence Room. Promptly after Seller has been
notified of the Bankruptcy Court's entry of the Purchaser Selection Order
approving the Selection of Purchaser, Seller shall close the "due diligence
room" and other due diligence information and keep it closed until the Closing
(except for Seller's and Purchaser's own internal use).
ARTICLE VI. COVENANTS OF PURCHASER.
Purchaser covenants and agrees with Seller that, at all times from and
after the date hereof until the Closing and, with respect to any covenant or
agreement herein by its terms to be performed in whole or in part after the
Closing, for the period specified therein (or for the period necessary to
complete the required performance in the event that no period is specified or
such covenant or agreement has not been complied with during the specified
period), Purchaser will comply with all covenants and provisions of this Article
VI, except to the extent Seller may otherwise consent in writing.
6.01 Regulatory and Other Approvals and Notifications.
(a) Until the Closing Date, Purchaser will, as promptly
as practicable, (i) take all commercially reasonable steps necessary or
desirable to obtain all consents, approvals or actions of, make all filings with
and give all notices to Governmental or Regulatory Authorities or any other
Person required for Purchaser to consummate the transactions contemplated hereby
and by the Operative Agreements, including without limitation, those described
in Schedules 4.03 and 4.04 (each, a "Regulatory Action"), (ii) provide such
other information and communications to such Governmental or Regulatory
Authorities or other Persons as Seller or
59
such Governmental or Regulatory Authorities or other Persons may reasonably
request in connection therewith and (iii) cooperate with Seller in connection
with the performance of Seller's obligations under Sections 5.01 and 5.02.
Without limiting the generality of the foregoing, as soon as practicable after
entry of the Confirmation Order, Purchaser will file all applications, notices
or similar documents with all Gaming Authorities whose consents, approvals or
other actions are necessary or appropriate in connection with the consummation
by Purchaser of the transactions contemplated by this Agreement or the Operative
Agreements included in the definition of Regulatory Approvals.
(b) Until the Closing Date, to the extent permitted by
applicable Laws, Purchaser will provide reasonably descriptive written
notification to Seller within five days after Purchaser becomes aware of any of
the following events:
(i) Purchaser makes any filing or submits any
application, notice or similar document (or any amendment or supplement to any
of the foregoing) necessary for any Regulatory Action to be obtained, taken,
made or given;
(ii) Purchaser withdraws any filing, application,
notice or similar document referred to in clause (i) of this paragraph (b);
(iii) any Regulatory Action is obtained, taken,
made or given;
(iv) any Governmental or Regulatory Authority
notifies Purchaser that its application, notice, filing or other request for a
Regulatory Action has been placed on an agenda or scheduled for hearing or
consideration (which notification from Purchaser to Seller shall specify the
date of such hearing or consideration), delayed or removed from such agenda or
schedule; or
(v) any Governmental or Regulatory Authority
issues a decision not to take, make or give any Regulatory Action or withdraws,
revokes, cancels, nullifies or materially modifies any Regulatory Action that
was previously taken, made or given.
6.02 HSR Filings. In addition to and without limiting Purchaser's
covenants in Section 6.01, from and after the Selection of Purchaser, Purchaser
will (i) take promptly all actions necessary to make the filings required of
Purchaser or its Affiliates under the HSR Act, (ii) comply at the earliest
practicable date with any request made to Purchaser or its Affiliates by the FTC
or the DOJ for additional information pursuant to the HSR Act, (iii) cooperate
with Seller in connection with its filing under the HSR Act and in connection
with resolving any investigation or other regulatory inquiry concerning the
transactions contemplated by this Agreement by either the FTC or the DOJ or
state attorneys general, and (iv) pay any and all filing fees due and payable in
connection therewith.
6.03 Representations and Warranties. Purchaser shall not, directly
or indirectly through any of its Affiliates, take any actions or obligate itself
to take any actions that would make it impossible or impracticable with
Purchaser's use of reasonable efforts for any of Purchaser's representations or
warranties in this Agreement to be true and correct in all material respects on
and as of the Closing Date as though such representations or warranties were
made on and as of the Closing Date (other than any such representations or
warranties which are
60
expressly limited to a date or dates prior to the Closing Date, as to which
Purchaser's obligations in this Section 6.03 shall apply to such prior date or
dates).
6.04 Notice and Cure. Purchaser will notify Seller in writing of,
contemporaneously provide Seller with true and complete copies of any and all
information or documents relating to, and will make all reasonable efforts to
cure as soon as practicable after it comes to the actual, current knowledge
(without further inquiry) of the persons identified on Schedule 1.01(I) and in
any event before the Closing, any development, event, transaction or
circumstance that (i) renders untrue in any material respect any representation
or warranty of Purchaser contained in this Agreement on or as of the Triggering
Date or (ii) causes any covenant or agreement of Purchaser under this Agreement
to be breached in any material respect. No notification given pursuant to this
Section 6.04 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 or shall in any way limit Seller
Indemnified Parties' right to seek indemnity under Article XII.
6.05 Fulfillment of Conditions. Purchaser will execute and deliver
at the Closing each Operative Agreement that Purchaser is required to execute
and deliver as a condition to the Closing. Purchaser will take all commercially
reasonable steps necessary or desirable and proceed diligently and in good faith
to satisfy each condition to the obligations of Seller contained in this
Agreement and will not take or fail to take any action that could reasonably be
expected to result in the non-fulfillment of any such condition.
6.06 Injunctions. If any court or other Governmental or Regulatory
Authority having jurisdiction over any Party, the Transferred Assets or the
Assumed Liabilities issues or otherwise promulgates any Order prior to the
Closing which prohibits the consummation of the transactions contemplated
hereby, the Parties will use their respective reasonable efforts to seek to have
such injunction dissolved or otherwise eliminated as promptly as possible.
6.07 Notices. From the date hereof through the Closing Date,
Purchaser will notify Seller promptly (and in any event within five Business
Days of obtaining knowledge thereof) of any of the following:
(i) any pending or threatened action, suit or
proceeding (other than against Seller or in the Bankruptcy Case) challenging
this Agreement or any of the transactions contemplated hereby;
(ii) any notice or other communication from any
third party (other than Seller or in the Bankruptcy Case) alleging that the
consent of such third party (other than a consent the necessity of which is
disclosed on any Schedule) is or may be required in connection with the
transactions contemplated by this Agreement;
(iii) any other development that would prevent or
raise a substantial doubt regarding the satisfaction of any condition set forth
in Article VIII; and
(iv) any notice or other communication to
Purchaser or the Sponsors from any Governmental or Regulatory Authority
regarding the transactions contemplated by this Agreement; provided, however,
that Purchaser's notification to Seller may exclude confidential
61
personal information about Purchaser or the Sponsors or other Persons that is
contained in such notice or other communication.
6.08 Press Release. Upon execution of this Agreement, Purchaser
(together with Seller) will issue a press release substantially in the form of
Exhibit G.
6.09 Intentionally Omitted.
6.10 Employment of Purchaser's Chief Executive Officer or Execution
of Hotel Management and Subordination Agreements. Not later than the Sales
Process and Purchaser Protection Hearing, Purchaser shall have either (i)
entered into a valid and binding employment contract with a Chief Executive
Officer with a person reasonably acceptable to Seller, GECC and the Bank Group
that provides for a term of employment commencing not later than the Closing
Date and expiring not earlier than one year thereafter and on such other terms
reasonably acceptable to GECC and the Bank Group or (ii) entered into a valid
and binding Hotel management agreement with a counter-party on terms reasonably
acceptable to GECC and the Bank Group, and Purchaser and such counter-party
shall also have delivered a subordination executed by such counter-party of such
Hotel management agreement executed by such counter-party in favor of the
Restated Credit Agreement Agent in a form reasonably acceptable to GECC and the
Bank Group.
6.11 Planet Hollywood Agreement. By not later than the Sales
Process and Purchaser Protection Hearing, Purchaser and Planet Hollywood shall
have a binding and enforceable Planet Hollywood Agreement on terms reasonably
acceptable to GECC and the Bank Group, and Purchaser shall have provided Seller
with a true and correct copy of the Planet Hollywood Agreement specifying, among
other things, the applicable fee structures.
6.12 Notification of Amendments. If the employment contract between
Purchaser and Chief Executive Officer, the Hotel management agreement and
related subordination agreement or the Planet Hollywood Agreement is amended or
modified in any respect prior to the Closing but after Purchaser has delivered a
copy of it to Seller pursuant to Sections 6.10 and 6.11, then Purchaser shall
provide Seller with a true and correct copy of such amendment or modification
within two Business Days after Purchaser and the applicable counter-parties have
executed it.
6.13 Financial Projections. Purchaser acknowledges that the
Financial Projections included in the Transferred Assets are being provided to
Purchaser with no representations or warranties (express or implied) by Seller
or Seller's Affiliates and with no reliance or expectation by Purchaser or
Purchaser's Affiliates as to the accuracy, reasonableness or completeness of the
Financial Projections. Purchaser shall not, and shall cause its Affiliates not
to, use the Financial Projections directly or indirectly in a manner adverse to
the interests of Seller, Seller's Affiliates, or Seller's accountants,
attorneys, consultants or other professionals. If Purchaser discloses any of the
Financial Projections to any other Person, Purchaser shall also disclose to such
Person the provisions of this Section 6.13.
6.14 Provision of Status Reports Respecting Gaming Licensure.
Purchaser shall, and shall cause Purchaser's Applicants to, periodically but in
no event less frequently than monthly, report to Seller, GECC and the Bank Group
respecting the status of their gaming licensing and
62
report to Seller, GECC and the Bank Group within three Business Days after
Purchaser or any of Purchaser's Applicants have been directly or indirectly
advised that the Gaming Authorities have a concern or issue with respect to any
of Purchaser's or any of Purchaser's Applicants' licensing proceedings which has
a reasonable likelihood of becoming an area of concern at the licensing hearings
or in the licensing deliberations.
6.15 Bankruptcy Case Involvement. Prior to the Closing Date,
Purchaser will not seek any Order or other affirmative relief (other than to
enforce this Agreement) from the Bankruptcy Court that would require Seller to
operate the Business otherwise than in the ordinary course, consistent with past
practice and in compliance with all Bankruptcy Court Orders to which Seller is
then subject.
ARTICLE VII. CONDITIONS TO OBLIGATIONS OF PURCHASER.
The obligations of Purchaser hereunder to purchase the Transferred
Assets and to assume and to pay, perform and discharge the Assumed Liabilities
are subject to the fulfillment, at or before the Closing, of each of the
following conditions (all or any of which may be waived in whole or in part by
Purchaser in its sole discretion):
7.01 Representations and Warranties. Subject to Section 5.08, each
of the representations and warranties made by Seller in this Agreement shall be
true and correct in all material respects on and as of the Closing Date as
though such representation or warranty was made on and as of the Closing Date
(other than such representations or warranties which are (i) already qualified
as to materiality, which shall be true and correct in all respects or (ii)
expressly limited to a date or dates prior to the Closing Date, which shall be
true and correct in all material respects as of such prior date or dates). The
provisions of this Section 7.01 shall not constitute or be construed as a
covenant on the part of Seller nor shall such provisions confer on any Party the
right to terminate this Agreement; any such termination right shall be governed
by Section 14.01.
7.02 Performance. Seller shall have performed and complied with, in
all material respects, each agreement, covenant and obligation required by this
Agreement to be so performed or complied with by Seller by the applicable time
period specified herein or, if not so specified, by not later than the Closing
(unless such agreement, covenant or obligation by its terms is not required to
be performed until after the Closing).
7.03 Orders and Laws.
(a) On the Closing Date (and except as otherwise provided
in paragraph (b) of this Section):
(i) Each of the Purchaser Selection Order and
the Confirmation Order shall be a Final Order; and
(ii) No Order or Law shall be in effect which (A)
restrains, enjoins, stays, prohibits or makes illegal the consummation of any of
the transactions contemplated by this Agreement or any of the Operative
Agreements or (B) could reasonably be expected to result in a material
diminution of the benefits of the transactions contemplated by this Agreement or
any of the Operative Agreements to Purchaser.
63
(b) Neither a Hollywood Casino Challenge nor any Order or
settlement relating to a Hollywood Casino Challenge shall constitute a failure
to satisfy any of the conditions specified in paragraph (a) of this Section 7.03
or elsewhere in this Article VII.
7.04 Regulatory Consents and Approvals. All consents, approvals and
actions of, filings with and notices to, any Governmental or Regulatory
Authority (including without limitation, the Gaming Authorities that exercise or
will exercise jurisdiction over Purchaser and its Affiliates) necessary to
permit Purchaser to perform its obligations under this Agreement and the
Operative Agreements and to consummate the transactions contemplated hereby and
thereby, shall (i) have been duly obtained, made or given, (ii) not be subject
to the satisfaction of any condition that has not been satisfied or waived, and
(iii) be in full force and effect, and all terminations or expirations of
waiting periods imposed by the HSR Act or any Governmental or Regulatory
Authority necessary for the consummation of the transactions by Purchaser
contemplated by this Agreement and the Operative Agreements shall have occurred.
Seller shall have obtained a Certificate of Occupancy that is not subject to the
satisfaction of any conditions imposed by the issuing authority or, if subject
to any such conditions, those conditions shall have been met as of the Closing
Date.
7.05 Third Party Consents. If not otherwise effectively and validly
provided by an Order of the Bankruptcy Court, in all material respects the
consents (or in lieu thereof waivers) (i) listed in Schedule 7.05 and (ii) all
other consents (or in lieu thereof waivers) to the performance by Purchaser and
Seller of their obligations under this Agreement and the Operative Agreements or
to the consummation of the transactions contemplated hereby and thereby as are
required under any Contract to which Purchaser or Seller is a party or by which
any of their respective Assets and Properties are bound shall (A) have been
obtained, (B) not be subject to the satisfaction of any condition that has not
been satisfied or waived and (C) be in full force and effect, except (in the
case of clause (ii) above) where the failure to obtain any such consent (or in
lieu thereof waiver) could not reasonably be expected, individually or in the
aggregate with any other such failures, to materially adversely affect
Purchaser, the Transferred Assets, the Assumed Liabilities or the Business or
result in a material diminution of the benefits of the transactions contemplated
by this Agreement and the Operative Agreements to Purchaser.
7.06 Deliveries. Seller shall have executed and delivered to
Purchaser all of the Operative Agreements and other documents and instruments
required hereunder to be executed and delivered by Seller and all necessary
forms and certificates (including the affidavit described in Section 3.12), duly
executed, certifying that the transactions contemplated hereunder are exempt
from withholding under the tax laws. Furthermore, Seller shall have removed all
title exceptions to the extent required under Section 5.07.
7.07 Title Policy. Purchaser shall have received the Survey and the
Title Policy in compliance with Section 5.07.
7.08 Restated Credit Agreement. The Restated Credit Agreement and
the Restated Credit Facility Security Instruments shall be in effect and all
conditions precedent to the effectiveness of the Restated Credit Agreement shall
have been fulfilled or waived.
64
7.09 Effectiveness of Plan. The conditions to the effectiveness of
the Plan shall be satisfied.
7.10 Execution of Confirmation Order by GECC. GECC shall have given
its written consent to the Confirmation Order by affixing its countersignature
thereto.
ARTICLE VIII. CONDITIONS TO OBLIGATIONS OF SELLER.
The obligations of Seller hereunder to sell the Transferred Assets are
subject to the fulfillment, at or before the Closing or, with respect to the
condition specified in Section 8.02, by the time specified in that Section, of
each of the following conditions (all or any of which may be waived in whole or
in part by Seller in its sole discretion):
8.01 Representations and Warranties. Each of the representations
and warranties made by Purchaser in this Agreement shall be true and correct in
all material respects on and as of the Closing Date as though such
representations and warranties were made on and as of the Closing Date (other
than such representations or warranties which are (i) already qualified as to
materiality, which shall be true and correct in all respects or (ii) expressly
limited to a date or dates prior to the Closing Date, which shall be true and
correct in all material respects as of such prior date or dates).
8.02 Performance. Purchaser shall have performed and complied with,
in all material respects, each agreement, covenant and obligation required by
this Agreement to be so performed or complied with by Purchaser by the
applicable time specified herein or, if not so specified, by not later than the
Closing (unless such agreement, covenant or obligation by its terms is not
required to be performed until after the Closing).
8.03 Orders and Laws. On the Closing Date, the Confirmation Order
shall be a Final Order and shall not be subject to any Order or Law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement or any of the Operative
Agreements (or any pending Action or Proceeding seeking to do any of the
foregoing). There shall not be in effect on the Closing Date any Order or Law
that became effective after the date of this Agreement restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or any of the Operative Agreements.
8.04 Regulatory Consents and Approvals. All consents, approvals and
actions of, filings with, and notices to, any Governmental or Regulatory
Authority (including without limitation, the Gaming Authorities) necessary to
permit Seller to perform its obligations under this Agreement and the Operative
Agreements and to consummate the transactions contemplated hereby and thereby
shall (i) have been duly obtained, made or given, (ii) not be subject to the
satisfaction of any condition that has not been satisfied or waived, (iii) be in
full force and effect and all terminations or expirations of waiting periods
imposed by the HSR Act or any Governmental or Regulatory Authority necessary for
the consummation of the transactions by Seller contemplated by this Agreement
and the Operative Agreements shall have occurred.
65
8.05 Restated Credit Agreement. The Restated Credit Agreement and
the Restated Credit Agreement Security Documents shall be in effect and all
conditions precedent to the effectiveness of the Restated Credit Agreement shall
have been fulfilled or waived.
8.06 Organizational Documents. Prior to the execution of this
Agreement, Purchaser shall have provided Seller with true and correct copies of
its articles of organization and operating agreement.
8.07 Renovation Capital Expenditure. On the Closing Date, Purchaser
shall have funded the Renovation Commitment (as defined in the Restated Credit
Agreement) as required by the Restated Credit Agreement.
8.08 Effectiveness of Plan. The conditions to the effectiveness of
the Plan shall be satisfied.
ARTICLE IX. TAX MATTERS AND POST-CLOSING TAXES
9.01 Taxes.
(a) Except as otherwise provided by the Bankruptcy Code
or other Law, Seller shall pay all sales, use, withholding, gaming, transfer,
real property transfer, recording, gains, stock transfer and other similar taxes
and fees relating to the pre-Closing period (including the Closing Date) or
accruing prior to or at the Transfer Time ("Transfer Taxes") arising out of or
in connection with the transactions effected pursuant to this Agreement, and
shall indemnify, defend and hold harmless Purchaser on an after-Tax basis with
respect to such Transfer Taxes. Seller shall file all necessary documentation
and Tax Returns with respect to such Transfer Taxes.
(b) Except as otherwise provided by the Bankruptcy Code,
Seller shall be and will remain liable for any fees or taxes due pursuant to NRS
Chapter 463 which accrue prior to the Closing, including without limitation,
liability for payment of any fees or taxes due pursuant to any subsequent
deficiency determinations made under such statutes which relate to any period of
time prior to the Closing.
(c) Seller shall be liable for the payment of all
obligations referred to in NRS Sections 360.525 and 612.695. Purchaser and
Seller hereby acknowledge that an amount sufficient to pay such obligations has
not been withheld from the Consideration by Purchaser.
9.02 Pre-Closing Tax Returns and Taxes.
(a) Seller shall timely prepare and file all required Tax
Returns of Seller for taxable periods ending on or before the Closing Date
("Pre-Closing Tax Returns"). Seller shall timely pay or cause to be paid all
Taxes of Seller or related to the Transferred Assets or Liabilities of Seller
for all taxable periods ending on or before the Closing Date or otherwise
relating to any period ending on or before the Closing Date ("Pre-Closing
Taxes").
(b) Not later than five days before the due date for
payment of Taxes with respect to any Tax Returns which Purchaser has the
responsibility to file, Seller will pay to
66
Purchaser an amount equal to that portion of the Taxes shown on such return for
which Seller has an indemnification obligation pursuant to Section 9.03(a)(iv).
9.03 Tax Indemnification.
(a) After the Closing Date, Seller will indemnify and
hold harmless Purchaser from and against any and all claims, actions, causes of
action, liabilities, losses, damages and reasonable out-of-pocket expenses and
costs resulting from, arising out of or relating to (i) Pre-Closing Taxes of
Seller; (ii) any Taxes of Seller measured by net or gross income (including
without limitation, any Tax liability that arises solely by reason of Seller
being severally liable for any Tax of any current or former Affiliate of Seller
pursuant to Treasury Regulation Section 1.1502-6 or any analogous state or local
Tax provision) and all other Taxes of Seller except those described in Section
9.03(b); (iii) all Taxes described in Section 9.01; and (iv) with respect to any
Straddle Period, the portion of all Taxes of such Straddle Period relating to
periods prior to or on the Closing Date (as further described in Section
9.03(b)).
(b) Purchaser will be responsible for, and Purchaser will
indemnify and hold Seller harmless against, any and all liabilities with respect
to Taxes arising out of the ownership of the Transferred Assets for any taxable
year or period that begins after the Closing Date and, with respect to any
Straddle Period, the portion of such Straddle Period beginning after the Closing
Date. For purposes of the preceding sentence, in the case of any Taxes that are
imposed on a periodic basis and are payable for a tax period that includes (but
does not end on) the Closing Date, the portion of such Tax which relates to the
portion of such tax period ending on the Closing Date shall (i) in the case of
any Tax not based upon or related to income or receipts, be deemed the amount of
such Tax for the entire tax period multiplied by a fraction the numerator of
which is the number of days in the tax period ending on the Closing Date and the
denominator of which is the number of days in the entire tax period, and (ii) in
the case of any Tax based upon or related to income or receipts, be deemed the
amount of Tax which would be payable if the relevant tax period ended on the
Closing Date.
9.04 Tax Cooperation. After the Closing Date, the Parties will
cooperate with each other in the preparation of all Tax Returns and will provide
(or cause to be provided) any records and other information the other so
requests, and will provide access to, and the cooperation of, their respective
auditors. The Parties will cooperate with each other in connection with any Tax
investigation, audit or other proceeding.
9.05 Notification of Proceedings; Control. Seller shall have the
right to control any audit or examination by any taxing authority, initiate any
claim for refund, file any amended return, contest, resolve and defend against
any assessment, notice of deficiency or other adjustment or proposed adjustment
relating or with respect to all Taxes, other than any Taxes for which Purchaser
shall be liable after the Closing, and shall be entitled to all refunds with
respect to such Taxes other than any Taxes for which Purchaser shall be liable
after the Closing; provided that if Purchaser gives Seller written notice of any
such audit, examination, adjustment or proposed adjustment (collectively, an
"Adversary Proceeding") and Seller does not respond in writing to Purchaser
within five days of the receipt of such notice that it intends to control the
defense of such Adversary Proceeding, Purchaser shall have the right to control
the defense of such Adversary Proceeding and enter into any reasonable
settlement relating thereto; provided,
67
further, that if Seller controls such Adversary Proceeding, Purchaser shall be
entitled to have a representative present at all meetings, hearings,
examinations and other proceedings with respect to such Adversary Proceeding.
Purchaser shall have the right to control any audit or examination by any taxing
authority for any Taxes for which Purchaser shall be liable after the Closing,
and shall have the right to initiate any claim for refund, file any amended
returns, contest, resolve and defend against any assessment, notice of
deficiency or other adjustment or proposed adjustment relating or with respect
to any Taxes for which Purchaser shall be liable after the Closing, and shall be
entitled to all refunds with respect to such Taxes; provided, however, that
Purchaser will consult in good faith with Seller with respect to any Taxes for
periods that include the Closing Date, and Seller shall be entitled to any
refunds for such period to the extent the refund is allocable, in accordance
with the principles of Section 9.03(a), to that portion of such period ending on
the Closing Date.
9.06 Debt Restructuring Taxes. The Parties agree that treatment of
all indebtedness to be assumed by Purchaser and all indebtedness to which any of
the Transferred Assets is subject (including the secured claims of GECC and the
Bank Group) under the Plan will be treated for federal income tax purposes as
taking place immediately before the Transfer Time even if it actually occurs
after or contemporaneously with the Transfer Time and Seller will be liable for
all Taxes relating thereto, as provided in Treasury Regulations Section
1.1274-5(b)(1). For the avoidance of doubt, the Parties agree that no election
will be made pursuant to Treasury Regulations Section 1.1274-5(b)(2).
ARTICLE X. POST-CLOSING EMPLOYMENT OBLIGATIONS OF PURCHASER.
10.01 Hiring and Retaining Employees.
(a) Effective as of the Transfer Time, Purchaser shall
make bona fide, good faith offers of employment to all of the non-union
represented Employees, other than executive officers or probationary Employees,
for employment at the Business on substantially similar terms and conditions in
the aggregate as such employees are currently employed. In addition, Purchaser
shall make bona fide, good faith offers of employment to all Employees
represented by any unions (the "Union") and, subject to Seller's attainment of
the Union's written agreement in a form satisfactory to Purchaser, to likewise
remain bound by the current collective bargaining agreement(s) with the Union
following the Transfer Time, and Purchaser will assume and be bound by such
collective bargaining agreement(s). All Employees hired by Purchaser pursuant to
this Article X shall be credited by Purchaser for their periods of employment
with Seller through the Transfer Time for purposes of determining seniority and
eligibility for employee benefits (to the extent such service was recognized for
such purposes under comparable plans of Seller) and shall be eligible for
benefits provided generally by Purchaser to its employees performing the same or
substantially similar duties. For at least 91 days after the Transfer Time,
Purchaser shall not, directly or indirectly, take any actions prohibited by or
fail to take actions required by WARN that would subject Seller to any
liability, penalties, or awards pursuant to WARN, and shall not, directly or
indirectly, take any actions that would cause more than 49 Employees, including,
but not limited to, executive officers and probationary Employees, to incur an
Employment Loss within such period.
68
(b) From time to time after the execution of this
Agreement, Seller shall be entitled to notify Employees regarding Purchaser's
obligations under paragraph (a) of this Section 10.01.
10.02 Purpose and Intent. The provisions of this Article X are
intended to, among other things, effect a smooth transition of the ownership of
the Business from Seller to Purchaser and of the employment of the Employees
such that in connection with the transactions contemplated by this Agreement,
Employees at the Business will not be deemed to have incurred an Employment Loss
for which Seller had or will have obligations, Liabilities or responsibilities
under WARN. Purchaser shall perform its obligations under this Article X in a
spirit of cooperation and utmost good faith with a view towards achieving this
intent. Seller shall seasonably notify Purchaser of any Employment Losses that
occur within 90 days before the Transfer Time.
10.03 Enforcement of Obligations. Purchaser acknowledges and agrees
that a violation of any covenants or agreements in this Article X would cause
irreparable injury to Seller and that the remedy at law for any violation or
threatened violation thereof would be inadequate and that, in addition to
whatever other remedies may be available at law or in equity, Seller shall be
entitled to temporary and permanent injunctive or other equitable relief from
the Bankruptcy Court without the necessity of proving actual damages or posting
bond. Purchaser also waives any requirement of proving actual damages in
connection with the obtaining of any such injunctive or other equitable relief.
10.04 Exception to Hiring Obligations. This Article X shall not
require Purchaser to hire any Employees who freely and voluntarily choose not to
be employed by Purchaser, so long as Purchaser has neither taken actions nor
expressed an intention to take actions with respect to such Employees that would
reasonably be expected to cause such Employees to incur an Employment Loss if
they were to accept employment by Purchaser.
ARTICLE XI. SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
Notwithstanding any right of Purchaser (whether or not exercised) to
investigate the Business or any right of either Party (whether or not exercised)
to investigate the accuracy of the representations and warranties of the other
Party in this Agreement, Seller and Purchaser have the right to rely fully on
the representations, warranties, covenants and agreements of each other
contained in this Agreement (subject, however, to the limitations and
qualifications of Seller's representations and warranties set forth in clause
(i) of the first paragraph of Article III). The representations and warranties
in this Agreement will survive the Closing until, and terminate on, the date
which is six months after the Closing Date; provided, however, that any
representation or warranty that would otherwise terminate in accordance with the
above provisions of this Article XI will continue to survive until the related
claim for indemnification has been satisfied or otherwise resolved, but only if
(i) the Party or other Person who is entitled to the benefits of such
representation or warranty is also entitled to indemnification under Article XII
and (ii) on or prior to the date which is six months after the Closing Date,
such Party or other Person has
69
delivered to the breaching Party an Indemnity Notice relating to the
representation or warranty that has been breached.
ARTICLE XII. INDEMNIFICATION AND OTHER REMEDIES.
12.01 Indemnification by Seller. Subject to Section 12.03, Seller
shall indemnify the Purchaser Indemnified Parties in respect of, and hold each
of them harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to, (i) any breach of any representation or
warranty or nonfulfillment of or failure to perform any covenant or agreement on
the part of Seller contained in this Agreement (which shall, in the event the
Closing has occurred, include damages resulting from an item described in a
Development Notification that was insufficient to permit Purchaser to terminate
this Agreement pursuant to Section 14.01(f) due to the lack of a material
adverse effect), (ii) any and all other Liabilities, obligations and costs of
Seller arising prior to the Closing Date other than the Assumed Liabilities,
(iii) any and all other Liabilities, obligations and costs of Seller arising
prior to the Closing Date (other than the Assumed Liabilities) but which are
brought against Purchaser prior to or after the Closing Date and (iv) the
failure of Seller to assume, pay, perform or discharge the Retained Liabilities.
12.02 Indemnification by Purchaser. Purchaser shall indemnify the
Seller Indemnified Parties in respect of, and hold each of them harmless from
and against, any and all Losses suffered, incurred or sustained by any of them
or to which any of them becomes subject, resulting from, arising out of or
relating to (i) any breach of any representation or warranty or nonfulfillment
of or failure to perform any covenant or agreement on the part of Purchaser
contained in this Agreement or (ii) after the Closing, the failure of Purchaser
to assume, pay, perform and discharge the Assumed Liabilities or Post-Closing
Taxes.
12.03 Limitations on Seller's Liability. Notwithstanding anything to
the contrary in this Agreement (including Sections 12.01 and 14.03), (i) if the
Sales Process Order is not entered by the Bankruptcy Court, Seller shall have no
liability for any Losses due to Purchaser or any Sponsor and (ii) if the Sales
Process Order is entered by the Bankruptcy Court (y) subject to the following
clauses (z) of this Section, no termination of this Agreement will relieve any
Party of any liability for a breach of this Agreement occurring prior to such
termination and (z) Seller's liability to the Purchaser Indemnified Parties for
Losses arising from or relating to a breach of this Agreement by Seller shall be
limited as follows:
(a) The Purchaser Indemnified Parties shall be entitled
to recover such Losses (including attorneys' fees incurred by Purchaser in any
Action or Proceeding to enforce Purchaser's rights under subclause (c) below)
solely (except as otherwise provided in subclauses (c) and (d) below) from the
Indemnity Escrow Amount, if any, then remaining in the Indemnity Escrow Account;
provided that such Losses suffered, incurred or sustained by the Purchaser
Indemnified Parties exceed $200,000 in the aggregate;
(b) If this Agreement has been terminated and the Closing
has not occurred, the Purchaser Indemnified Parties shall be entitled to
recover, as their sole and exclusive remedy, actual Losses sustained or incurred
by them as a result of a breach of this Agreement by Seller, as determined by a
Final Order of the Bankruptcy Court (or, in the event of a timely appeal of the
70
relevant Order, by Final Order of the court having jurisdiction over such appeal
or over any further appeal); provided, however, that in no event shall such
recovery exceed (w) the dollar amount of the Breakup Fee (as specified in the
first sentence of Section 2.09(a)) plus (x) any Expense Reimbursement payable
under Section 2.09(c) minus (y) the Breakup Fee (if Purchaser has become
entitled to the Breakup Fee under Section 2.09(c) and the amount of such fee has
been paid) minus (z) the Expense Reimbursement (if Purchaser has become entitled
to the Expense Reimbursement under Section 2.09(c) and the amount of such fee
has been paid); and provided further, however, that Purchaser Indemnified
Parties shall not be entitled to recover consequential and punitive damages;
(c) Purchaser shall be entitled to an Order of specific
performance or injunctive relief to remedy any such breach other than a breach
of an obligation to pay money to Purchaser; and
(d) The limitations in this Section 12.03 shall not apply
to payments required under Sections 2.10 or 2.11.
12.04 Exculpation. None of Seller's present or former members,
managers, directors, officers, employees, advisors, attorneys, accountants,
financial advisors or agents shall have or incur any liability to Purchaser, or
any of its respective agents, employees, representatives, financial advisors,
attorneys or Affiliates, or any of its successors or assigns, for any act or
omission in connection with, relating to, or arising out of, this Agreement, the
Operative Agreements, the Bankruptcy Case, the pursuit of confirmation of the
Plan or the consummation of the Plan, except for their willful misconduct, and
in all respects shall be entitled to reasonably rely upon the advice of counsel
with respect to their duties and responsibilities with respect to this
Agreement, under the Plan or in the context of the Bankruptcy Case. Purchaser
and its agents, employees, representatives, financial advisors, attorneys,
accountants or Affiliates shall not have any right of action against Seller's
present or former members, managers, officers, directors, employees, advisors,
attorneys, accountants, financial advisors or agents for any act or omission in
connection with, relating to, or arising out of, this Agreement, the Bankruptcy
Case, the pursuit of confirmation of the Plan, the consummation of the Plan or
the administration of the Plan, except for such willful misconduct and only to
the extent provided in the preceding sentence.
ARTICLE XIII. CASUALTIES AND TAKING.
13.01 Casualties.
(a) If any substantial damage to the Owned Real Property
shall occur on or before the Closing Date by reason of fire or other casualty
(either, a "Casualty"), Seller will give Purchaser notice of such event upon the
earlier of the then-scheduled Closing Date or two Business Days following such
Casualty. If and to the extent necessary to carry out the provisions of
paragraph (b) of this Section 13.01, the Closing Date shall thereupon be
rescheduled to the earliest practicable future date.
(b) If the cost to repair and restore the Owned Real
Property exceeds $15,000,000 (as reasonably estimated and reported in writing to
Seller and Purchaser by an
71
independent and disinterested architect or registered professional engineer
competent to make such estimate and selected by Seller not later than 15
Business Days following such Casualty) (the "Restoration Cost"), then Purchaser
may elect to terminate this Agreement and abandon the transactions contemplated
hereby pursuant to Section 14.01(g) by giving written notice to Seller to such
effect within five Business Days after Purchaser's receipt of the written report
of the architect or engineer referred to above. If the Restoration Cost exceeds
$25,000,000, then Seller may elect to terminate this Agreement and abandon the
transactions contemplated hereby pursuant to Section 14.01(g) by giving written
notice to Purchaser to such effect within five Business Days after Seller's
receipt of the written report of the architect or engineer referred to above. If
neither Party timely elects to terminate and abandon as hereinabove provided, or
if Purchaser is obligated to close because the Restoration Cost does not exceed
$15,000,000 (and provided neither Party has otherwise properly terminated this
Agreement and abandoned the transactions contemplated hereby in accordance with
Section 14.01), then the Closing shall take place as herein provided without
adjustment of the Consideration and Seller shall, pursuant to Section 2.07, pay
or assign to Purchaser the proceeds from all fire and other casualty insurance
paid or payable with respect to the Casualty; provided, however, such proceeds
will not be treated as Transferred Cash or Working Capital (except to the
extent, if any, that the Assets and Properties in respect of which the insurance
proceeds are paid or payable would have been so treated).
13.02 Taking. In the event that Seller has knowledge through receipt
of written notice of the actual or threatened taking of all or any part of the
Owned Real Property by exercise of right of eminent domain, Seller will give
Purchaser prompt written notice (a "Condemnation Notice") of such event. If, on
or before the Closing Date, all of the Owned Real Property shall be taken or
threatened to be taken by exercise of right of eminent domain, or there shall be
taken or threatened to be taken so material a part thereof that, in the
reasonable judgment of Purchaser, the taking does, or in the case of a
threatened taking will, materially interfere with the operation of the Business,
then Purchaser may terminate this Agreement and abandon the transactions
contemplated hereby pursuant to Section 14.01(g) by giving Seller written notice
to such effect by the earlier of (i) the then-scheduled Closing Date or (ii) 30
days after Seller has given Purchaser the Condemnation Notice. If Purchaser does
not timely elect to terminate this Agreement and abandon the transactions
contemplated hereby or if Purchaser is obligated to close because the
condemnation does not materially interfere with the operation of the Business
(and provided neither Party has otherwise properly terminated this Agreement and
abandoned the transactions contemplated hereby in accordance with Section
14.01), then the Closing shall take place as herein provided without any
abatement of the Consideration, and Seller shall, pursuant to Section 2.07,
assign to Purchaser all of Seller's right, title and interest in and to any
condemnation award; provided, however, such award will not be treated as
Transferred Cash or Working Capital (except to the extent, if any, that the
Assets and Properties in respect of which the award is paid or payable would
have been so treated). For purposes of this Section 13.02, the term "taking"
shall include temporary as well as permanent takings, and a taking shall not be
deemed "threatened" unless and until a fund for the payment of the anticipated
compensation for such taking shall have been appropriated or some official
action with respect to such taking shall have been taken by a governmental body
possessing powers of eminent domain.
72
ARTICLE XIV. TERMINATION.
14.01 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned before the Closing:
(a) by Seller if Purchaser materially breaches this
Agreement and, if such breach is capable of cure, fails to cure such breach
within 30 days after receipt of written notice thereof from Seller, in which
case Seller shall be entitled to the Xxxxxxx Money Deposit and all interest
earned thereon (unless the event giving rise to such termination is directly
caused by the failure of the Bank Group Approvals to have been given, in which
case the Purchaser shall be entitled to the Xxxxxxx Money Deposit and all
interest earned thereon);
(b) by Seller if (i) Purchaser withdraws any
applications, notices or other documents previously filed with, or submitted to,
any Governmental or Regulatory Authority that are necessary for the conditions
specified in Sections 7.04 or 8.04 to be satisfied, (ii) the application
submitted by Purchaser appears on the State Gaming Control Board agenda and is
"referred back to staff" by the State Gaming Control Board, without the State
Gaming Control Board having scheduled a definitive date, within the next 90
days, when Purchaser's application would receive final action, or (iii) any
Governmental or Regulatory Authority (A) issues a decision not to give any
consents or approvals or not to take any actions specified in Section 7.04 or
(B) withdraws, revokes, cancels or nullifies any such consents or approvals that
were previously given or any such actions that were previously taken, but only
if the occurrence of any of the events specified in clauses (i), (ii) or (iii)
of this paragraph (b) is not caused by a breach, active participation or
deliberate nonfeasance by Seller, in which case Seller shall be entitled to the
Xxxxxxx Money Deposit and all interest earned thereon (unless the event giving
rise to such termination is directly caused by the failure of the Bank Group
Approvals to have been given, in which case the Purchaser shall be entitled to
the Xxxxxxx Money Deposit and all interest earned thereon);
(c) by Seller if Purchaser has made an Appellate
Proceeding Election and Seller delivers to Purchaser written notice of
termination and abandonment within 15 days after Seller's receipt of Purchaser's
notice of the Appellate Proceeding Election, in which case Purchaser shall be
entitled to the Xxxxxxx Money Deposit and all interest earned thereon;
(d) by Seller if (i) the Bankruptcy Court enters the
Alternative Transaction Order, in which case Purchaser shall be entitled to the
Xxxxxxx Money Deposit and all interest earned thereon;
(e) by Purchaser if Seller materially breaches this
Agreement and, if such breach is capable of cure, fails to cure such breach
within 30 days after receipt of written notice thereof from Purchaser, in which
case Purchaser shall be entitled to the Xxxxxxx Money Deposit and all interest
earned thereon; provided, however, that with respect to (A) any Development of
which Seller has given to Purchaser a Development Notification or (B) a breach
by Seller of any of its representations or warranties herein which constitutes
the material breach of this Agreement specified above in this paragraph (e) (a
"Representation or Warranty Breach"), Purchaser's right to terminate this
Agreement and abandon the transactions contemplated hereby shall be governed
exclusively by Section 14.01(f);
73
(f) by Purchaser if (i) (A) within 30 days immediately
preceding such termination, Seller has given Purchaser a Development
Notification or (B) Seller has committed a Representation or Warranty Breach and
(ii) the Development that is the subject of such Development Notification or the
Representation or Warranty Breach (as the case may be) has had a material
adverse effect on the Condition of the Business, in which case Purchaser shall
be entitled to the Xxxxxxx Money Deposit and all interest earned thereon;
(g) by Purchaser, in accordance with the terms of
Sections 2.09(d), 13.01(b) or 13.02 or by Seller in accordance with the terms of
Section 13.01(b), in which case Purchaser shall be entitled to the Xxxxxxx Money
Deposit and all interest earned thereon;
(h) by Seller or Purchaser if Sections 6.10 or 6.11 are
not satisfied, in which case Purchaser shall be entitled to the Xxxxxxx Money
Deposit and all interest earned thereon and neither Purchaser nor Seller shall
be responsible for any damages as a result of the requirements of such sections
not being satisfied.
(i) by Purchaser or by Seller if the conditions specified
in Sections 7.03 or 8.03, respectively, have not been satisfied or waived by the
Expiration Date, but only if the failure to satisfy any such conditions is not
caused by a breach, active participation or deliberate nonfeasance by the
terminating Party, in which case Purchaser shall be entitled to the Xxxxxxx
Money Deposit and all interest earned thereon (unless the event giving rise to
such termination is related to the failure by Purchaser to satisfy the
conditions specified in the first sentence of Section 7.04, in which case such
termination shall be governed by paragraph (b) of this Section);
(j) by Purchaser if on or prior to the 150th day after
the Bankruptcy Court enters the Confirmation Order (i) an event has occurred or
condition exists that has or would reasonably be expected to have a material
adverse effect on the (A) Condition of the Business (based on how the Business
has been conducted by Seller) or (B) gaming business (taken as a whole)
conducted by casinos located on the portion of Las Vegas Boulevard in Xxxxx
County, Nevada bounded by Blue Diamond Road at the south end and Oakey Boulevard
at the north end, other than any such material adverse effect that was the
direct or indirect result of any action or inaction by Purchaser or its
Affiliates and (ii) Purchaser has delivered to Seller a notice of termination
and abandonment pursuant to this paragraph (j), in which case Purchaser shall be
entitled to the Xxxxxxx Money Deposit and all interest earned thereon;
(k) by Seller (in the circumstance described in the
following clause (1))or by Purchaser (in the circumstances described in the
following clauses (1) and (2)) if (1) the Closing has not occurred by the later
of (i) the first anniversary date of the entry of the Confirmation Order or (ii)
the date provided in Section 14.02 if Purchaser exercises its extension rights
thereunder (either, the "Expiration Date"), but only if such failure of the
Closing to occur is not caused by a breach, active participation or deliberate
nonfeasance by the terminating Party or delays in obtaining Gaming Authorities'
approvals that are caused by the terminating Party, in which case Seller shall
be entitled to the Xxxxxxx Money Deposit and all interest earned thereon;
provided, however, that if on the Expiration Date Purchaser is entitled to
exercise its termination and abandonment rights under paragraphs (i) or (j) of
this Section 14.01 or if the failure of any condition precedent to the Closing
to have been satisfied as of the Expiration Date is the direct
74
result of a breach by Seller or is directly caused by the Bank Group Approvals
having not been given, then Purchaser shall be entitled under this paragraph (k)
to the Xxxxxxx Money Deposit and all interest earned thereon; or (2) there is an
assertion by the Restated Credit Agreement Agent or by the requisite lenders
under the Restated Credit Agreement of the failure of the condition set forth in
Section 5.1(j) of the Restated Credit Agreement, in which case Purchaser shall
be entitled to the Xxxxxxx Money Deposit and all interest earned thereon;
(l) by Seller if the Bankruptcy Court fails or refuses to
enter the Sales Process Order by the 16th day after the expiration of the
Non-Solicitation Period, in which case Purchaser shall be entitled to the
Xxxxxxx Money Deposit and all interest earned thereon; or
(m) by mutual agreement of Purchaser and Seller, in which
case entitlement to the Xxxxxxx Money Deposit and all interest thereon shall be
determined by such mutual agreement.
14.02 Extension of Expiration Date. If the Closing has not occurred
by the first anniversary date of the entry of the Confirmation Order and this
Agreement has not already been terminated and the transactions contemplated
hereby have not already been abandoned in accordance with any paragraph of
Section 14.01 other than paragraph (k), then Purchaser may (but shall not be
obligated to) extend the Expiration Date for not more than three consecutive
one-month periods. To effectuate each one-month extension, Purchaser shall
deliver an Extension Notice to Seller by not later than 10 days prior to the
commencement of each one-month extension and pay an Extension Xxxxxxx Money
Deposit pursuant to Section 2.03(c) not later than one Business Day after
providing such notice.
14.03 Effect of Termination.
(a) Without limiting the generality of paragraph (b) of
this Section, if this Agreement is terminated and the transactions contemplated
hereby are abandoned before the Closing in accordance with any of paragraphs (a)
through (m) of Section 14.01, the Parties' respective termination and
abandonment rights under any other of paragraphs (a) through (m) of Section
14.01 shall thereupon cease and become null and void.
(b) If this Agreement is terminated and the transactions
contemplated hereby are abandoned before the Closing, this Agreement shall
become null and void and there will be no liability or obligation under this
Agreement on the part of any Party or any of such Party's officers, directors,
managers, employees, agents or other Representatives or Affiliates, except that
the provisions of Section 2.09(c), which relate to payment of the Breakup Fee
and the Expense Reimbursement, and Sections 5.07(f)(iii), 5.07(g)(v), 12.01,
12.02, 12.03, 12.04, 14.01, 14.03, 15.01, 15.02, 15.03, 15.04, 15.05, 15.06,
15.07, 15.10, 15.11, 15.12, 15.13, 15.14, 15.15 and 15.16 shall survive such
termination and abandonment.
ARTICLE XV. MISCELLANEOUS.
15.01 Notices. All notices, requests and other communications
hereunder or under any of the Operative Agreements must be in writing and will
be deemed to have been duly given only if delivered personally or by facsimile
transmission or mailed (first class postage prepaid) to the Parties at the
following addresses or facsimile numbers:
75
If to Purchaser, to: Xx. Xxxxxx Xxxx
c/o Planet Hollywood International,
Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
and a copy to: Bay Harbour Management LC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn.: Xx. Xxxxxxx X. Xxxxxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
with a copy of any Xxxxx Day
notice to Purchaser, to: 0000 Xxxxx Xxxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Tel.: (000) 000-0000
Fax: (000) 000-0000
If to Seller, to: Aladdin Gaming, LLC
0000 Xxx Xxxxx Xxxx. Xx.
Xxx Xxxxx, XX 00000
Attn.: Xx. Xxxxxx X. Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
with a copy of any Xxxxxx & Silver, Ltd.
notice to Seller, to: 0000 Xxxxxx Xxxxxx Xxxxxxx, 0xx Xxxxx
Xxx Xxxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxx, Esq.
Tel.: (000) 000-0000
Fax: (000) 000-0000
and a copy to: BNY Asset Solutions, LLC
000 Xxxx Xxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxx, XX 00000
Attn.: Xxxx Xxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
76
and a copy to: Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn.: Xxxxxxx X. Xxxxx, Esq.
Tel.: (000) 000-0000
Fax: (000) 000-0000
and a copy to: General Electric Capital Corporation
Capital Funding, Inc.
Portfolio Group
000 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Attn.: Mr. Xxxx Xxxxxxxx, Aladdin Risk
Manager
Tel.: (000) 000-0000
Fax: (000) 000-0000
and a copy to: Xxxx & Xxxxxxx, Ltd.
000 X. Xxxxxx Xxxxxx, 0x Xxxxx
Xxx Xxxxx, XX 00000
Attn.: Xxxxxxx Xxxxxxx, Esq.
Tel.: (000) 000-0000
Fax: (000) 000-0000
and a copy to: Xxxxxxx, Xxxxxxxx & Xxxxx Professional
Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn.: Xxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All such notices, requests and other communications will (i) if
delivered personally to the address as provided in this Section 15.01, be deemed
given upon delivery, (ii) if delivered by facsimile transmission to the
facsimile number as provided in this Section 15.01, be deemed given upon
receipt, and (iii) if delivered by mail in the manner described above to the
address as provided in this Section 15.01, be deemed given upon receipt (in each
case regardless of whether such notice, request or other communication is
received by any other Person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this Section 15.01). A Party from
time to time may change its address, facsimile number or other information for
the purpose of notices to that Party by giving notice specifying such change to
the other Party.
15.02 Entire Agreement. This Agreement and the Operative Agreements
supersede all prior discussions and agreements among the Parties with respect to
the subject matter hereof and thereof, and constitute the sole and entire
agreement among the Parties with respect to such subject matter.
77
15.03 Expenses. Except as otherwise expressly provided in this
Agreement (including without limitation, Sections 2.09 and 14.03), whether or
not the transactions contemplated hereby are consummated, each Party will pay
its own costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the Operative Agreements and the
transactions contemplated hereby and thereby.
15.04 Intentionally Omitted.
15.05 Waiver; Remedies. Any term or condition of this Agreement may
be waived at any time by the Party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the Party waiving such term or condition. No waiver
by any Party of any term or condition of this Agreement, in any one or more
instances, shall be deemed or construed as a waiver of the same or any other
term or condition of this Agreement on any future occasion. All remedies, either
under this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
15.06 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
Party.
15.07 No Third Party Beneficiary. The terms and provisions of this
Agreement and the Operative Agreements are intended solely for the benefit of
each Party and their respective successors or permitted assigns, and it is not
the intention of the Parties to confer third-party beneficiary rights upon any
other Person other than (i) a Sponsor in respect of its right to the Expense
Reimbursement and any Person entitled to indemnity, other remedies or release
under Article XII or Section 14.03; and (ii) solely to the extent that Seller is
relieved of any duty, obligation or liability pursuant to the terms of this
Agreement, each and every lender under the Restated Credit Agreement and their
agents and assigns will also be relieved of such duty, obligation or liability
owed to Purchaser co-extensively with Seller.
15.08 No Assignment; Binding Effect. Neither this Agreement, the
Operative Agreements nor any right, interest or obligation hereunder or
thereunder may be assigned by Purchaser without the prior written consent of
Seller and any attempt to do so will be void, except (i) for assignments and
transfers by operation of Law and (ii) that Purchaser may assign any or all of
its rights, interests and obligations hereunder or thereunder (including without
limitation, its rights under Article XII) to (A) any financial institution
providing purchase money or other financing to Purchaser from time to time as
collateral security for such financing, (B) a wholly-owned subsidiary or (C)
another Person that is 100% owned and controlled by, Xxxxxx Xxxx and Bay Harbour
or their Affiliates. Subject to the preceding sentence, this Agreement and the
Operative Agreements are binding upon, inure to the benefit of, and are
enforceable by the Parties and their respective successors and assigns
including, solely with respect to Sections 2.09(a) and (b), any Chapter 7 or 11
trustee(s) that may be appointed with respect to Seller.
15.09 Directors and Officers. Neither this Agreement nor the
Operative Agreements shall confer any obligation on the part of any directors,
officers, managers or employees of Seller or any of its Affiliates to remain
employed by, or to remain as directors, officers, managers or employees of, any
such entities after the date of this Agreement.
78
15.10 Headings. The headings used in this Agreement or in the
Operative Agreements have been inserted for convenience of reference only and do
not define or limit the provisions hereof or thereof.
15.11 Consent to Jurisdiction; Venue. Each Party irrevocably submits
to the exclusive jurisdiction of the Bankruptcy Court in any action, suit or
proceeding arising out of or relating to this Agreement or any of the Operative
Agreements or any of the transactions contemplated hereby or thereby, and agrees
that any such action, suit or proceeding shall be brought only in such court.
Each Party irrevocably waives, to the fullest extent permitted by Law, any
objection that it may now or hereafter have to the laying of the venue of any
such action, suit or proceeding brought in such a court and any claim that any
such action, suit or proceeding brought in such a court has been brought in an
inconvenient forum.
15.12 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future Law, and if
the rights or obligations of any Party under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof
and (iii) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.
15.13 Governing Law. This Agreement and the Operative Agreements
shall be governed by and construed in accordance with the (i) Laws of the State
of Nevada applicable to a contract executed and performed exclusively in the
State of Nevada, without giving effect to the conflicts of laws principles
thereof, and (ii) the Bankruptcy Code, to the extent applicable.
15.14 Counterparts. This Agreement and each of the Operative
Agreements may be executed in any number of counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.
15.15 Employees and Independent Contractors. Until the Closing or
the termination of this Agreement, other than termination because of a material
breach or material default by Purchaser, Purchaser shall not, and Purchaser
shall cause its Affiliates not to, directly or indirectly, hire or seek to hire
any Employees, any officers, managers or employees of Seller or any Affiliate of
Seller (collectively, the "Subject Employers") or any independent contractors
substantially all of whose day-to-day services are performed at the Hotel/Casino
or for the benefit of any of the Subject Employers or encourage any of the
foregoing Persons to terminate their employment or independent contractor
relationship (as the case may be) with any of the Subject Employers unless the
Subject Employers have first terminated such Persons' employment or independent
contractor relationship. In the event of termination of this Agreement because
of a material breach or material default by Purchaser, Purchaser's obligations
under this Section 15.15 shall survive such termination.
15.16 Recordation. This Agreement shall not be recorded.
79
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officer of each Party as of the date first above written.
PURCHASER: SELLER:
OpBiz, L.L.C., Aladdin Gaming, LLC,
a Nevada limited liability company a Nevada limited-liability company
By: /s/ Xxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
----------------------------- -----------------------------
Name: Xxxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Authorized Agent Title: Senior Vice President and
Chief Financial Officer
By: /s/ Xxxxxx Xxxx
-----------------------------
Name: Xxxxxx Xxxx
Title: Authorized Agent
80
