EXHIBIT (i)
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated April 10, 2004 among All Capital
LLC, a Nevada limited liability company ("All Capital"), Xxxxxx, LLC, a
Nevada limited liability company ("Xxxxxx") and Raceway Ventures, LLC, a
Florida limited liability company (the "Purchaser").
WITNESSETH
Whereas, Mid-State Raceway, Inc., a New York corporation ("Raceway") has
authorized capital stock consisting of 10,000,000 shares, $.10 par value (the
"Common Stock") of which 892,766 shares are issued and outstanding as of the
date hereof; and
Whereas, Xxxxxx is the registered owner of 19,549 shares of Common
Stock ("Capital Shares");
Whereas, Xxxxxx has transferred the Capital Shares to All Capital but is
nevertheless willing to execute and deliver this Agreement as one of the
selling entities;
Whereas, All Capital owns warrants to purchase 1,250,000 shares of
Common Stock currently exercisable at the rate of $2.00 per share ("Capital
Warrants"); and
Whereas, Xxxxxxxx Xxxxx ("Xxxxxxxx") owns 450,000 shares of Common Stock
("Victoria Shares") (the Capital Shares and Victoria Shares are hereinafter
collectively referred to as the "Seller Shares" and the Seller Shares and the
Capital Warrants are hereinafter collectively referred to as the
Securities"); and
Whereas, Xxxxxx and All Capital (hereinafter collectively referred to as
the "Seller") will cause Victoria to transfer all of the Victoria Shares to
Purchaser at the Closing contemplated by this Agreement;
Whereas, Xxxxx Xxxxx ("Xxxxx") has executed and delivered to Vestin
Mortgage, Inc. ("Vestin") a guaranty ("Xxxxx Guaranty") of the payment by
Raceway to Vestin of the principal and interest evidenced by a Consolidated
Secured Promissory Note in the original principal amount of $23,000,000; and
Whereas, Seller has executed and delivered to V.I.P. Structures, Inc.
("VIP") a guaranty ("Capital Guaranty") of the payment by Raceway of up to
$500,000 pursuant to a certain Financing Agreement; and
Whereas, Seller and Victoria desire to sell the Securities to the
Purchaser and the Purchaser desires to purchase the Securities from the
Seller and Victoria upon and subject to the terms, covenants and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the covenants, terms
and conditions hereinafter set forth, the parties hereto do hereby agree as
follows:
1. Subject to the terms and conditions of this agreement (the
"Agreement"), at the Closing (as defined) the Seller and Victoria shall sell
to the Purchaser and the Purchaser shall purchase from the Seller the
Securities.
2. In consideration for the conveyance of the Securities to the
Purchaser, the Purchaser shall pay to the Seller and to Victoria the
aggregate amount of $9,000,000 (the "Purchase Price"). The Purchase Price
shall be allocated between the Seller Shares and the Warrants in accordance
with the provisions of Exhibit A annexed hereto and made a part hereof. The
Purchase Price shall be payable to the Seller as follows:
(a) At the Closing (as defined) the Purchaser shall pay to the
Seller, the sum of $2,000,000 (the "Down Payment"), which Down Payment shall
be non-refundable. The Down Payment shall be paid by immediately collectible
funds by wire transfer to the account designated by and for benefit of the
Seller.
(b) In addition, at the Closing the Purchaser shall pay to the
Seller the aggregate amount of $7,000,000 (the "Remainder") by the execution
and delivery to the Seller of two full recourse secured promissory notes, (i)
one in the amount of Three Million Dollars ($3,000,000) and (ii) one in the
amount of Four Million Dollars ($4,000,000), in the form of Exhibit B annexed
hereto and made a part hereof (the "Notes"). The Notes shall be secured by a
Stock Pledge and Security Agreement in the form of Exhibit C annexed hereto
and made a part hereof (the "Security Agreement"). The obligations of
Purchaser under the Note and Security Agreement shall be guaranteed by Xxxxxx
X. Xxxxx, Xxxxxxx Xxxxx and Xxxxx X. Xxx by an Unconditional Guarantee in the
form of Exhibit D attached hereto and made a part hereof (the "Guarantee").
3. (a) The Purchaser has had the right to conduct such investigation of
the business, operations, financial condition, licensing status and pending
litigation of and/or affecting Raceway and/or the Securities as Purchaser
deemed necessary or appropriate.
(b) (i) Purchaser does hereby expressly acknowledge and confirm
that any and all of the information and/or materials provided to it or its
representatives, as the case may be, by the Seller and/or Raceway with
respect to the Securities and/or the assets, business and operations of
Raceway not otherwise described in the filings made by the Seller and/or
Raceway pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act") prior to the date hereof (hereinafter collectively the
"Materials") are the proprietary business properties and assets of Raceway
and/or the Seller, as the case may be, and have been disclosed to the
Purchaser and/or its representatives in a confidential relationship and
solely for the limited purposes and utilization herein contained;
(ii) Purchaser does hereby expressly represent, warrant,
covenant and agree (which representations, warranties, covenants and
agreements shall be and be deemed to be continuing and survive the execution
and delivery of this Agreement) as follows:
(A) It shall utilize the Materials, any physical
representation of the Materials and/or any of the information contained on or
in the Materials solely in connection with the proposed acquisition by the
Purchaser of the Securities and for no other purpose;
(B) It shall not distribute or make available, or cause or
permit another to distribute or make available to any person or entity any of
the Materials, any physical representations of the Materials and/or any of
the information contained on or in the Materials;
(C) It shall not utilize, or cause or permit another to
utilize any of the Materials (including any physical representation of the
Materials and/or any of the information therein contained) for any purpose
other than in connection with the proposed acquisition of the Securities by
the Purchaser; and
(D) It shall deliver to the Seller and/or Raceway, as the
case may be, any and all of the Materials and/or copies or physical
representations of the Materials and/or the information therein contained
received from or with respect to the Seller and/or Raceway within 24 hours of
the request therefore made by such party if the proposed acquisition of the
Securities by the Purchaser is abandoned by either party hereto and/or not
consummated; provided however that its obligations under this Paragraph 3
hereof shall survive any such delivery.
(c) Anything in this Agreement, the Exchange Act and/or law to the
contrary notwithstanding, none of the Seller, Xxxxx or Victoria shall: (i) be
deemed to have furnished, distributed or provided to the Purchaser the
Materials and/or any of the information with respect to Raceway therein
contained and/or provided by any of the officers, directors, agents or
employees of Raceway; (ii) have any duty or obligation of any kind, nature or
description, to review, correct and/or supplement the Materials and/or any of
the information with respect to Raceway therein contained and/or provided by
any of the officers, directors, agents or employees of Raceway and/or set
forth in any reports or other filings made by Raceway pursuant to the
Exchange Act; and/or (iii) have any liability to the Purchaser and/or be
liable for or with respect to, the truth, accuracy or completeness of the
Materials and/or any information with respect to Raceway therein contained
and/or provided by any of the officers, directors, agents or employees of
Raceway and/or set forth in any reports or other filing made by Raceway
pursuant to the Exchange Act. In furtherance and not in limitation of the
foregoing, the Purchaser shall not, in any forum, judicial, administrative,
arbitral or investigatory, assert or allege any claim, counterclaim, cross
claim or defense which is or may reasonably be construed to be, inconsistent
with or contrary to the provisions of this subparagraph 3(c).
4. (a) The closing (the "Closing") of the sale and purchase of the
Securities shall take place at on March 31, 2004 ("Closing Date"); provided,
however, that the Closing may be accelerated or postponed, on one or more
occasions by written agreement ("Closing Date Agreement") executed by the
Purchaser and Seller to the date, place and time set forth in such Closing
Date Agreement(s).
(b) The Closing shall be effected through an escrow of documents and
funds with Xxxxx X. Xxxx, Esq., 0000 Xxxxx Xxxxx Xxxx, Xxxxx X, Xxx Xxxxx,
Xxxxxx 00000, Telephone (000) 000-0000, Fax (000) 000-0000 (the "Escrow
Agent") as established by this Agreement and any additional written escrow
instructions required by the Escrow Agent and approved by Seller and
Purchaser as evidenced by their signatures thereon. At Closing, so long as
such other documents do not modify, waive or otherwise affect any rights or
obligations of the respective parties under this Agreement or otherwise, both
parties shall execute and deliver all other documents reasonably required by
the Escrow Agent to consummate the transactions contemplated by this
Agreement, including a closing settlement statement setting forth the
charges, adjustments and credits to each party. At Closing, the Escrow Agent
shall disburse all funds, and deliver all original documents and copies
thereof to the party or parties entitled thereto. All proceedings to take
place at the Closing and on the Closing Date shall take place simultaneously,
and no delivery shall be considered to have been made until all such
proceedings have been completed and the cash portion of the Purchase Price
(plus or minus any adjustments) has been paid or is available for immediate
unconditional payment to the Seller.
(c) At the Closing each of the following deliveries shall be made by
the parties as hereinafter indicated and each such delivery shall be and be
deemed to be made simultaneously:
(i) The Purchaser shall deliver or cause to be delivered to the
Seller:
(A) the Down Payment and the Notes executed by the
Purchaser and evidencing an indebtedness in the amount of the Remainder;
(B) two counterparts of the Security Agreement executed by
the Purchaser and the Pledge Holder (as therein defined);
(C) two counterparts of the Guarantee executed by Xxxxxx
X. Xxxxx, Xxxxxxx Xxxxx and Xxxxx X. Xxx; and
(D) executed counterparts of the instruments and documents
required to be delivered at the Closing as set forth in Paragraph 10 hereof.
(ii) The Seller shall deliver or cause to be delivered to the
Purchaser:
(A) certificate(s) representing the Seller Shares duly
endorsed in blank or accompanied by duly executed stock assignment powers;
(B) the Capital Warrants duly endorsed in blank or
accompanied by duly executed assignments;
(C) two counterparts of the Security Agreement executed by
All Capital; and
(D) executed counterparts of the instruments and documents
required to be delivered at the Closing as set forth in Paragraph 9 hereof.
(iii) The Purchaser shall deliver or cause to be delivered to
the Pledge Holder, as defined in the Security Agreement:
(A) one or more counterparts of the Security Agreement
executed by the All Capital and the Purchaser;
(B) certificate(s) representing the Seller Shares duly
endorsed in blank or accompanied by duly executed stock assignment powers;
and
(C) the Capital Warrants duly endorsed in blank or
accompanied by duly executed assignments.
5. In order to induce the Purchaser to execute and perform this
Agreement, Seller does hereby represent, warrant, covenant and agree (which
representations, warranties, covenants and agreements shall survive the
execution, delivery and performance of this Agreement and the Closing) that
except as otherwise specifically set forth in the Disclosure Schedule
prepared and signed by Seller and delivered to Purchaser simultaneously with
the execution of this Agreement, all of the statements contained in this
Section 5 are true as of the date of this Agreement:
(a) (i) Seller owns the Capital Shares free and clear of all liens,
claims, rights and options of others; (ii) Victoria owns the Victoria Shares
free and clear of all liens, claims, rights and options of others and will
transfer the Victoria Shares to Purchaser at the Closing; and (iii) upon the
acquisition by Purchaser of the Seller Shares as herein provided, Purchaser
will acquire all of the right, title and interest of Seller and Victoria in
and to such shares free and clear of all liens, claims, rights and options of
others;
(b) (i) Seller owns the Capital Warrants free and clear of all
liens, claims, rights and options of others; and (ii) upon the acquisition by
Purchaser of the Capital Warrants as herein provided, Purchaser
will acquire all of the right, title and interest of Seller in and to such
Warrants free and clear of all liens, claims, rights and options of others;
(c) Each of All Capital and Xxxxxx is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Nevada, with full power and authority, corporate and otherwise, and
with all licenses, permits, certifications, registrations, approvals,
consents and franchises necessary to own or lease and operate its properties
and to conduct its business as presently being conducted;
(d) (i) Seller has the full power and authority, corporate and
otherwise, to execute, deliver and perform this Agreement, the Security
Agreement and all instruments and documents executed and delivered with
respect thereto (collectively the "Transactional Documents") and to
consummate the transactions contemplated hereby; (ii) the execution, delivery
and performance of Transactional Documents, the consummation by Seller of the
transactions herein contemplated and the compliance by it with the terms of
Transactional Documents have been duly authorized by all necessary action and
the execution and delivery of each of the Transactional Documents has been
duly and properly authorized by Seller; (iii) this Agreement is, and each of
the other Transactional Documents when executed and delivered will be, the
valid and binding obligation of Seller, enforceable in accordance with its
terms, subject, as to enforcement of remedies, to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the rights of
creditors generally and the discretion of courts in granting equitable
remedies; (iv) the execution, delivery and performance of the Transactional
Documents by Seller and the consummation by Seller of the transactions herein
contemplated does not, and will not, with or without the giving of notice or
the lapse of time, or both, (A) result in any violation of the constituent
documents of Seller, (B) result in a breach of or conflict with any of the
terms or provisions of, or constitute a default under, or result in the
modification or termination of, or result in the creation or imposition of
any lien, security interest, charge or encumbrance upon any of the properties
or assets of Seller pursuant to any indenture, mortgage, note, contract,
commitment or other agreement or instrument to which Seller is a party or by
which it or its properties or assets are or may be bound or affected; or (C)
to the best knowledge of Seller, after due investigation, violate any
existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction
over Seller or its assets. No consent, approval, authorization or order of
any court, governmental agency, authority or body and/or any party to an
agreement to which Seller is a party and/or by which it is bound, is required
in connection with the execution, delivery and performance of the
Transactional Documents, and/or the consummation by Seller of the
transactions contemplated by the Transactional Documents;
(e) Seller is not in violation of, or in default under, (i) any term
or provision of its constituent documents; (ii) any material term or
provision or any financial covenant of any indenture, mortgage, contract,
guaranty, commitment or other agreement or instrument to which it is a party
or by which it or any of its assets is or may be bound or affected; or (iii)
to the best knowledge of Seller, any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over it or any of its assets;
(f) No action, investigation, audit, review, claim, suit or
proceeding by any federal, state, local or foreign government, political
subdivision or governmental or regulatory authority, agency, board, bureau,
commission, instrumentality or court, or quasi-governmental authority
(collectively "Governmental Authority") or third party is pending or, to the
knowledge of the Seller, threatened against the Seller which would delay or
prevent the consummation of the transactions contemplated by this Agreement
or which may adversely affect or restrict the Seller' ability to consummate
the transactions contemplated hereby except for the Xxxxx Action (as defined
in Exhibit G annexed hereto and made a part hereof). The Seller is not bound
by any outstanding judgments, order, injunction or decree of any
Governmental Authority or any third party which would prevent the Seller
from consummating the transactions contemplated by this Agreement;
(g) Seller agrees to defend, indemnify and hold harmless the
Purchaser in accordance with the terms and conditions contained in paragraph
13 hereof.
(h) Seller agrees to use its best efforts to cause Raceway to file
Raceway's annual report on Form 10-K for the year ended December 31, 2003
with the Securities and Exchange Commission on or before April 12, 2004.
(i) Seller will not challenge or contest, or permit Xxxxx X. Xxxxx
to challenge or contest, any license issued to Raceway now or at any time in
the future by any licensing authority of or located in the State of New York.
6. In order to induce the Seller to execute and perform this Agreement,
the Purchaser does hereby represent, warrant, covenant and agree (which
representations, warranties, covenants and agreements shall survive the
execution, delivery and performance of this Agreement and the Closing) that
all of the statements contained in this Section 6 are true as of the date of
this Agreement:
(a) Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Florida, with
full power and authority, corporate and otherwise, and with all licenses,
permits, certifications, registrations, approvals, consents and franchises
necessary to own or lease and operate its properties and to conduct its
business as presently being conducted;
(b) (i) Purchaser has the full power and authority, corporate and
otherwise, to execute, deliver and perform this Agreement, the Note, the
Security Agreement and all instruments and documents executed and delivered
with respect thereto (collectively the "Purchaser's Transactional Documents")
and to consummate the transactions contemplated hereby; (ii) the execution,
delivery and performance of the Purchaser's Transactional Documents, the
consummation by Purchaser of the transactions herein contemplated and the
compliance by it with the terms of Purchaser's Transactional Documents have
been duly authorized by all necessary action, (iii) this Agreement and the
execution and delivery of each of the Purchaser's Transactional Documents
have been duly and properly authorized by Purchaser; (iv) this Agreement is,
and each of the Purchaser's Transactional Documents when executed and
delivered will be, the valid and binding obligation of Purchaser, enforceable
in accordance with its terms, subject, as to enforcement of remedies, to
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and the discretion of courts in
granting equitable remedies; (v) the execution, delivery and performance of
Purchaser's Transactional Documents by Purchaser and the consummation by
Purchaser of the transactions herein contemplated does not, and will not,
with or without the giving of notice or the lapse of time, or both, (A)
result in any violation of the constitutional documents of Purchaser, (B)
result in a breach of or conflict with any of the terms or provisions of, or
constitute a default under, or result in the modification or termination of,
or result in the creation or imposition of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Purchaser
pursuant to any indenture, mortgage, note, contract, commitment or other
agreement or instrument to which Purchaser is a party or by which it or its
properties or assets are or may be bound or affected; or (c) to the best
knowledge of Purchaser, after due investigation, violate any existing
applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over
Purchaser or its assets. No consent, approval, authorization or order of any
court, governmental agency, authority or body and/or any party to an
agreement to which Purchaser is a party and/or by which it is bound, is
required in connection with the execution, delivery and performance of the
Transactional Documents, and/or the consummation by Purchaser of the
transactions contemplated by the Transactional Documents;
(c) Purchaser is not in violation of, or in default under, (i) any
term or provision of its constituent documents; (ii) any material term or
provision or any financial covenant of any indenture, mortgage, contract,
commitment or other agreement or instrument to which it is a party or by
which it or any or its assets is or may be bound or affected; or (iii) to the
best knowledge of Purchaser, any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over it or any of its assets;
(d) No action, investigation, audit, review, claim, suit or
proceeding by any federal, state, local or foreign government, political
subdivision or governmental or regulatory authority, agency, board, bureau,
commission, instrumentality or court, or quasi-governmental authority
(collectively "Governmental Authority") or third party is pending or, to the
knowledge of the Purchaser, threatened against the Purchaser which would
delay or prevent the consummation of the transactions contemplated by this
Agreement or which may adversely affect or restrict the Purchaser's ability
to consummate the transactions contemplated hereby. The Purchaser is not
bound by any outstanding judgments, order, injunction or decree of any
Governmental Authority or any third party which would prevent the Purchaser
from consummating the transactions contemplated by this Agreement;
(e) Purchaser: (i) is an "accredited investor" as such term is
defined in the Securities Act of 1933, as amended (the "Act") and the rules
and regulations ("Regulations") promulgated thereunder by the Securities and
Exchange Commission ("Commission"); (ii) has no need for liquidity in its
investment in the Securities and has the financial capacity to bear the
economic risk of any investment in the Securities for an indefinite period of
time; (iii) has sufficient means to bear the economic risk and/or entire loss
of its investment in the Securities; (iv) has sufficient resources to
purchase the Securities without the need, or intention, of borrowing in order
to complete such purchase; and (v) has sufficient knowledge and experience in
business matters to evaluate the merits and risks of an investment in the
Securities;
(f) Purchaser has reviewed and understood (i) all reports and
other filings made by Raceway and/or its stockholders prior to the date
hereof with the Commission including, without limitation, Raceway's Annual
Report on Form 10K for each of the years 1999, 2000, 2001 and 2002
(collectively the "SEC Reports"), and (ii) the complaints in each of the
actions described on Exhibit H annexed hereto and made a part hereof
(collectively the "Complaints"); the receipt of copies of which complaints is
hereby acknowledged by Purchaser;
(g) Except as expressly set forth herein, no representations or
warranties, of any kind, nature or description have been made to the
Purchaser by the Seller or any of their agents, employees or affiliates with
respect to Raceway or its business, operations, financial condition,
licensing value or marketability of the Securities; and, in purchasing and/or
attempting to purchase the Securities the Purchaser is not relying upon any
information with respect to Raceway other than that contained in the
Materials, the SEC Reports and the Complaints;
(h) Purchaser has been advised and is aware that the Securities
are "restricted securities" and that there are substantial restrictions on
the transferability of the Securities; any document or certificate evidencing
the Securities shall contain an appropriate legend limiting transfers to
those complying with federal and state Securities and Blue Sky laws. The date
and amount of each acquisition of "restricted securities" by Seller and the
dates upon which the holding period for such securities shall expire after
the Closing are contained in Exhibit 6(h) annexed hereto and made a part
hereof;
(i) Purchaser is acquiring the Securities for its own account and
for investment purposes only and without a view towards or agreement with
respect to the transfer, sale, assignment, or other
disposition thereof, and the Purchaser shall not sell, assign, transfer,
pledge, hypothecate or deal in and with the Securities in violation of the
Act or the Regulations promulgated thereunder by the Commission or in
violation of any applicable state securities laws or regulations; and
(j) Purchaser has been advised and is aware of the status of any
and all gaming licenses or application filed and pending, or which are
required to be flied by Mid-State Raceway, Inc. for authorization for a
license to conduct harness racing and to conduct Video Lottery Terminal
Gaming at Xxxxxx Xxxxx Raceway. The status of the foregoing matters is
contained in Exhibit 6(j) annexed hereto and made a part hereof.
7. Intentionally omitted.
8. Intentionally omitted.
9. The obligation of Purchaser to implement this Agreement and
consummate the subject acquisition is, at its election, subject to and
conditioned upon the satisfaction (and/or written waiver) of each of the
following conditions:
(a) No action or proceeding shall have been instituted and be
pending by any private party and/or governmental agency or authority
challenging the legality of this Agreement or the subject acquisition and/or
seeking to prevent or delay consummation of the transactions herein
contemplated; which action or proceeding shall have resulted in preliminary
or permanent injunctive relief prohibiting consummation of this Agreement
and/or the subject acquisition;
(b) Purchaser and the Escrow Agent shall have received all of the
documentation required to be delivered to each of them respectively, pursuant
to the provisions of this Agreement;
(c) The Purchaser shall have received an executed counterpart of
an opinion of legal counsel to the Seller, reasonably acceptable to the
Purchaser and in form reasonably acceptable to the Purchaser with respect to
those matters set forth on Exhibit E annexed hereto;
(d) The Purchaser shall have received an executed counterpart of
an opinion of legal counsel to the Seller, reasonably acceptable to the
Purchaser and in form reasonably acceptable to the Purchaser with respect to
the transferability of the Capital Warrants; and
(e) As at the Closing (i) there shall be no more than 892,766.16
shares of Common Stock issued and outstanding (other than shares issued upon
the exercise of warrants issued prior to the date hereof) and (ii) there
shall not be in existence any warrants, options or rights of any kind, nature
or description to acquire shares of the Common Stock from the Company except
as set forth in Raceway's Annual Report on Form 10K for the year ended 2002.
10. The obligations of the Seller to implement this Agreement and
consummate the subject acquisition is subject to and conditioned upon the
satisfaction (and/or written waiver) of each of the following conditions:
(a) No action or proceeding shall have been instituted and be
pending by any private party and/or governmental agency or authority
challenging the legality of this Agreement or the subject acquisition and/or
seeking to prevent or delay consummation of the transactions herein
contemplated; which action or proceeding shall have resulted in preliminary
or permanent injunctive relief prohibiting consummation of this Agreement
and/or the subject acquisition;
(b) The Seller and the Escrow Agent shall have received all of the
documentation required to be delivered to them respectively pursuant to the
provisions of this Agreement;
(c) The Seller shall have received an executed counterpart of an
opinion of legal counsel to the Purchaser, reasonably acceptable to the
Seller and in form reasonably acceptable to the Seller with respect to those
matters set forth on Exhibit F annexed hereto;
(d) The Seller shall have received a document, in form and content
reasonably acceptable to the Seller, releasing Xxxxx from any liability under
and/or arising out of or relating to, the Xxxxx Guaranty; and
(e) All Capital shall have received a document, in form and
content reasonably acceptable to the Seller, releasing All Capital from any
liability under and/or arising out of or relating to, the Capital Guaranty
or, in the alternative, an indemnity agreement covering claims, losses etc.
as a result of the Capital Guaranty from the Purchaser and the Guarantors in
form and substance reasonably satisfactory to Seller.
11. This Agreement may be terminated by (a) Purchaser if at the
Closing all of the representations and covenants of the Seller set forth in
Paragraphs 5 and 7 hereof and/or the conditions set forth in Paragraph 9
shall not have been timely and fully satisfied, waived or cured, or (b) the
Seller if at the Closing all of the representations and covenants of
Purchaser set forth in Paragraphs 6 and 8 hereof and/or the conditions set
forth in Paragraph 10 hereof, shall not have been timely and fully satisfied,
waived and/or cured, or (c) the Purchaser as provided in subparagraph 3(c)
hereof.
12. In the event of any actual or alleged default by Seller under
this Agreement existing and known to Purchaser on or prior to the Closing
Date, Purchaser shall provide written notice to Seller at or prior to the
Closing (the "Default Notice") specifying the default or other matter;
setting forth the Purchaser's claim that the matter constitutes a default or
breach by Seller under this Agreement; and specifying the steps or actions
that the Purchaser believes the Seller should take in order to cure the
matter or matters alleged. The Seller shall have a period of 15 business
days after receipt of the Default Notice (or until the then projected date of
Closing, if later) to cure any and all defaults and other matters alleged in
the Default Notice. Seller shall not have any liability or responsibility for
any such actual or alleged default known at or prior to the Closing that: (i)
is not the subject of a Default Notice that meets all of the preceding
requirements of this Paragraph; or (ii) is cured within any applicable cure \
period.
13. (a) If the Closing is consummated, Seller agrees to defend,
indemnify and hold harmless the Purchaser from and against any and all
judgments, debts, obligations, liabilities, costs or expenses (including
reasonable out-of-pocket fees, expenses and disbursements in connection with
any action, suit or proceeding) net of insurance proceeds actually received
(collectively, "Damages") suffered, paid or incurred by Purchaser resulting
from or arising out of the claims by Xxxxx and/or other shareholders in the
Xxxxx Action. Seller shall have the right, to assume and control the defense
of the Xxxxx Action, as well as any action for which Purchaser demands
defense, indemnity and to be held harmless under the provision of this
paragraph 12(a), with counsel satisfactory to Seller and at Seller's expense.
(b) The Xxxxx Action seeks payment of sums by Xxxxx Xxxxx and
others to Raceway. Notwithstanding any other provision of this Agreement to
the contrary, in the event any sums are paid by Xxxxx Xxxxx or others to
Raceway as a result of the Xxxxx Action or any similar action filed by one or
more of the plaintiffs in the Xxxxx Action, Purchaser will immediately
reimburse Xxxxx Xxxxx or the other persons or entities paying such sums to
Raceway for an amount equal to 80.267326% of such payment(s) to Raceway.
(c) If the Closing is consummated, Seller agrees to defend,
indemnify and hold harmless the Purchaser from and against any and all
Damages suffered, paid or incurred by Purchaser resulting from or arising out
of any claims by Xxxxxxxx Xxxxx to the Purchase Price or any part thereof.
(d) If the Closing is consummated, Seller agrees to defend,
indemnify and hold harmless Raceway from and against any and all fines and/or
penalties paid or incurred by Raceway resulting from or arising out of any
late filing by Raceway of its annual report on Form 10-K for the year ended
December 31, 2003 with the Securities and Exchange Commission.
14. Notwithstanding anything contained in this Agreement to the
contrary, the aggregate of all payments by the Seller in satisfaction for any
and all claims by Purchaser under or arising from this Agreement shall not
exceed the sum of $2,000,000 unless, and then only to the extent, if any,
that Seller is determined to have acted willfully in bad faith in respect to
the breach or failure causing damages in excess of the foregoing limitation.
15. Any and all notices, requests or instructions desired or required
to be given by any party hereto to any other party hereto shall be in writing
and shall either be hand delivered or mailed to the recipient first class,
postage prepaid, certified, return receipt requested at the following
respective addresses:
To: Seller: 17 Strand
X.X. Xxx 0000
Xxxxxxxxxxxx, Xx. Xxxxx, XXXX 00000
Fax: 000-000-0000
With copy to: Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxx & Gersten, LLP
00 Xxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Fax: 000-000-0000
To: Purchaser: Racing Ventures, LLC
0000 X.X. 00 Xxxxxx, Xxxxx 0
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
With copy to: Xxxxxxx X. Xxxxxxxx, Esq.
000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
Fax: 000-000-0000
or to such other address as any party hereto shall designate in a writing
complying with the provisions of this Paragraph 15.
16. Each of the parties hereto may, by written instrument to the
party against whom enforcement is sought (a) extend the time for the
performance of any of the obligations or other acts of any party hereto; (b)
waive any inaccuracies of such other party in the representations and
warranties contained herein or in any document delivered pursuant to this
Agreement; (c) waive compliance with any of the covenants of such other party
contained in this Agreement; (d) waive such other party's performance of any
of such party's obligations set out in this Agreement; and (e) waive any
condition to its obligation to effect the within acquisition.
17. Intentionally deleted.
18. This Agreement may only be modified, altered or amended by a
writing executed by all of the parties hereto. Any waivers, consents or
notices must be in writing.
19. This Agreement shall be governed and construed in accordance
with the internal laws of the State of Nevada applicable to contracts
executed and to be fully performed therein and without regard to principles
of conflicts of laws.
20. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors, transferees, heirs,
assigns and beneficiaries.
21. This Agreement (including the Exhibits hereto, the documents
and instruments delivered by the parties hereto and initialed for
identification as herein provided or otherwise, and any other documents
executed and delivered and/or to be executed and delivered pursuant to the
provisions of this Agreement as herein provided) sets forth the entire
agreement among the parties hereto with respect to the subject matter herein
contained; and there are no covenants, promises, agreements, conditions or
understandings, either oral or written, between or among the parties hereto
with respect to the subject matter hereof except as herein and in such
ancillary documents provided.
22. This Agreement may be executed in multiple copies, each of which
shall constitute an original, but all of which shall constitute one and the
same agreement.
23. (a) Any dispute or controversy arising out of or relating to
this Agreement and/or any of the Transactional Documents or Purchaser
Transactional Documents shall be submitted to and settled by binding
arbitration to be held in the metropolitan area of Las Vegas, Nevada, in
accordance with the commercial arbitration rules of the American Arbitration
Association then obtaining. Such arbitration shall be held before three
arbitrators: one of whom shall be designated by the Seller, one of whom shall
be designated by the Purchaser and the third shall be chosen by Purchaser and
Seller from a list of neutral arbitrators provided by the AAA. The
arbitrators designated by Seller and Purchaser do not have to be neutral
arbitrators. The decision of a majority of the arbitrators shall be binding
and enforceable in any court of competent jurisdiction. The arbitrators shall
render their decision within fourteen (14) days of the conclusion of the
arbitration hearing and shall provide written reasons with findings of fact
and conclusions of law. For the purpose of aiding the arbitration and/or
preserving the rights of the parties during the pendency of an arbitration,
the parties shall have the right to seek preliminary and/or emergency
equitable relief in any court of competent jurisdiction and shall be
entitled to conduct discovery in conformity with the applicable rules of
civil procedure.
(b) In the event litigation arises concerning this Agreement (such
as to enforce an arbitration award), jurisdiction and exclusive venue for
such litigation shall be in a court of competent jurisdiction located in the
Xxxxx County, State of Nevada; however, the parties shall also have the right
to enforce a judgment in any court of competent jurisdiction. The prevailing
party in any such litigation shall be entitled to an award of reasonable
attorneys fees and costs.
24. Intentionally omitted.
25. (a) Seller agrees to defend, indemnify and hold Purchaser harmless
for any brokerage or finders' fees or agents' commissions or other similar
payments incurred or owed by Seller and its agents in connection with this
Agreement, including, without limitation, fees due to Vestar Associates,
Xxxxxx X. Xxxxx, Relco Corp. and Xxxxxx Xxxxxxx under their agreement with
Seller.
(b) Purchaser agrees to defend, indemnify and hold Seller harmless
for any brokerage or finders' fees or agents' commissions or other similar
payments incurred or owed by Purchaser and its agents in connection with
this Agreement.
26. TIME IS OF THE ESSENCE WITH RESPECT TO EACH PROVISION OF THIS
AGREEMENT. The parties acknowledge and agree that the preceding sentence is a
crucial element of this Agreement.
27. All representations and warranties of the parties, and all
agreements and undertakings of the parties which have not been fully
performed and satisfied as of or prior to the Closing, including, without
limitation, the indemnification obligations hereunder, shall survive the
Closing.
28. All exhibits and schedules to this Agreement shall be treated
as incorporated herein by reference and made a material part hereof.
29. Purchaser and Seller have each read and fully understand the
terms of this Agreement, and each has had the opportunity to have this
Agreement reviewed by its own counsel. The rule of construction providing
that ambiguities in an agreement shall be construed against the party
drafting the same shall not apply.
30. Subsequent to the sale contemplated herein and upon request by
Purchaser, Seller will provide reasonable assistance and cooperation to
Purchaser, at Purchaser's expense, when necessary or helpful to assist the
Purchaser in seeking to accomplish the business transactions reasonably
contemplated or arising out of this Purchase Agreement and the purchase of
Seller's shares.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SELLER:
All Capital, LLC, a Nevada
limited liability company
By: /s/ Xxxxx Xxxxxx
------------------------
XXXXX XXXXXX, Authorized Agent
Xxxxxx, LLC, a Nevada
limited liability company
By: /s/Xxxxx Xxxxxx
------------------------
XXXXX XXXXXX, Authorized Agent
PURCHASER:
Raceway Ventures, LLC, a Florida
limited liability company
By: /s/ Xxxxxx X. Xxxxx
--------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Member
