ASSET PURCHASE AGREEMENT
By and Among
CORPORATE COMMISSION OF THE
MILLE LACS BAND OF OJIBWE INDIANS
and
CASINO RESOURCE CORPORATION
and
CASINO BUILDING CORPORATION
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of this 29th day of June, 1998, by and among the CORPORATE COMMISSION OF THE
MILLE LACS BAND OF OJIBWE INDIANS (the "Purchaser"), a corporate body politic of
the Mille Lacs Band of 0jibwe Indians, a federally recognized tribal government,
CASINO RESOURCE CORPORATION, a Minnesota corporation ("CRC"), and CASINO
BUILDING CORPORATION, a Minnesota corporation (together CRC and CBC are referred
to as the "Seller").
RECITALS
A. The Seller is in the business of developing and managing hotels, and on
or about May 20, 1994 completed the construction of the GRAND HINCKLEY INN (the
"Hinckley Hotel") located in Hinckley, Minnesota pursuant to a Hotel Development
Agreement dated July 23, 1993 between Grand Casinos, Inc. ("GCI") and CRC (the
"Hotel Development Agreement"). The Seller currently owns, operates and manages
the Hinckley Hotel (the "Business").
B. The land upon which the Hinckley Hotel is located is currently owned by
Hinckley Holding Company ("HHC") and the Purchaser owns, one hundred percent
(100%) of all of the outstanding shares of the capital stock of HHC. CBC, a
wholly-owned subsidiary of CRC, currently leases from HHC the land on which the
Hinckley Hotel is located pursuant to a Lease dated August 11, 1993 between GCI
and CBC, as amended by that certain Amendment to Ground Lease dated April 5,
1994 (the "Business Lease"). HHC has succeeded to the interests of GCI under the
Business Lease.
C. Also pursuant to the Hotel Development Agreement, the Purchaser, the
Seller and GCI entered into a Marketing Enhancement and Purchase/Put Option
Agreement dated August 11, 1993, as amended by a first amendment executed in
September, 1993 and a second amendment executed in October, 1993 (the "Marketing
Agreement"), for the purpose of enhancing the Purchaser's and GCI's efforts to
advertise, market and promote the Grand Casino Hinckley gaming establishment
owned and operated by the Purchaser and located on property situated near the
Hinckley Hotel (the "Casino").
D. Subject to the terms and conditions contained in this Agreement, the
parties desire that the Purchaser purchase, and the Seller sell, substantially
all of the assets of the Seller related to the Business. In consideration
thereof, the Seller and the Purchaser desire to make the covenants, conditions,
representations, and warranties provided for herein.
E. The parties have recently settled a dispute which arose under the
Marketing Agreement with respect to the amounts of previous and current
"Windfall Payments" (as that term is defined in the Marketing Agreement) the
Seller was required to pay to the Purchaser (the "Dispute"). In settlement of
the Dispute, the Purchaser agreed to accept $100,000 from the Seller in full
satisfaction of the Dispute. In lieu of a $100,000 cash payment, the Purchaser
has agreed to a reduction in the previously agreed purchase price for the assets
of the Hinckley Hotel from $5,500,000 to $5,400,000.
(2)
NOW, THEREFORE, in consideration and reliance on the representations,
warranties, covenants, and agreements contained herein, and subject to the terms
and conditions set forth in this Agreement, the parties agree as follows:
1. Closing Transactions.
1.1. Transfer of Assets. Concurrently with die assumption of the
liabilities contemplated by Section 2, at the Closing (as defined
below) (i) the Seller shall assign, transfer, and deliver to the
Purchaser, and the Purchaser shall receive from the Seller, all of
the Purchased Assets (as defined below), but not the Retained Assets
(as defined below), which shall be retained by the Seller and not be
transferred or conveyed pursuant to this Agreement; and (ii) the
Purchaser shall deliver the Closing Cash Purchase Price (as defined
below) to the Seller as provided in Section 2.2.
1.2. Purchased Assets. The "Purchased Assets" means all of the assets and
property of the Seller (to the extent such assets and property
exist), real or personal, tangible or intangible, wherever located,
used or useful in connection with the Hinckley Hotel as of the
Closing Date, other than the Retained Assets, including, without
limitation, all of the Seller's right, title, and interest in, to,
and under the following:
(a) all inventory of goods held for resale or used in connection
with the Hinckley Hotel (the "Inventory");
(b) all advance deposits paid relative to the Hinckley Hotel and
all amounts paid for gift certificates purchased for the
Hinckley Hotel for use after noon on the Closing Date;
(c) all real property and leasehold interests, improvements,
buildings, and fixtures thereon and interests therein, any
prepaid, rent, security deposits and options to renew or
purchase thereunder, used or useful in connection with the
Hinckley Hotel, including, without limitation, the real
property and leasehold interests described on Schedule 1.2(c);
(d) to the extent such items are located in,, on or about the
Hinckley Hotel as of the Closing Date, all furniture, fixtures
and equipment ("FF&F") constituting a part of or utilized in
connection with the Hinckley Hotel, including, but not limited
to, all beds, mattresses, color television sets, radios, VCRs,
chairs, tables, carpeting, furnishings, art and decor items,
mirrors, accent pieces, wall coverings, drapes, curtains,
sheets, blankets, towels and other linens, lamps and light
fixtures, vacuums, and other cleaning apparatus, tools,
restaurant, bar and banquet equipment, engineering equipment,
carts, lawn and gardening equipment, material, cargo and
luggage handling equipment, office equipment, computer
hardware and software, telephone systems and telephones, file
cabinets, safes, signs, fittings, machinery, boilers, heating
and cooling systems, chinaware, glassware, utensils, silver,
silverware, uniforms, equipment and furniture in storage,
tools, appliances, wires and pictures, rugs,
(3)
kitchen equipment, supplies including hotel, restaurant and
bar operating supplies and cleaning supplies and materials
whether in sealed or broken packages, fuel, and all other
hotel service equipment or other personal property not
included in Inventory required for operation of the Hinckley
Hotel and its components, or any portion of the Hinckley Hotel
irrespective of whether any of said items are owned or leased
by Seller all as set forth in Schedule 1.2(d);
(e) all office and other supplies, tools, spare parts,
advertising, and promotional materials used or useful in
connection with the Hinckley Hotel;
(f) all rights of the Seller under or pursuant to all warranties,
representations and guaranties made by suppliers,
manufacturers and contractors in connection with the products
sold to or services provided to the Seller, or affecting any
property heretofore described;
(g) all common law and unregistered trademarks and copyrights,
logos, service marks, trade dress, trade names and
copyrightable marketing and other material used in connection
with the Hinckley Hotel, including, without limitation, all
rights in the name and servicemark "Grand Hinckley Inn" (the
"Trademarks and Copyrights");
(h) all processes, formulae, discoveries, improvements, trade
secrets, technical information and know-how, confidential and
non-confidential, which is used or held for use by or on
behalf of the Seller in connection with the Hinckley Hotel,
including, without limitation, all computer software, software
licenses, patterns, plans, designs, research data, trade
secrets and other proprietary know-how, formulae and
manufacturing, sales, service or other processes, operating
manuals, drawings, technology, equipment and parts lists (with
related descriptions and instructions), manuals, data,
records, procedures, product packaging instructions, product
specifications, analytical methods, sources and specifications
for raw materials, toxicity and general health and safety
information, environmental compliance and regulatory
information, research and development records and reports and
other documents relating to the foregoing, and all licenses,
approvals, authorizations or other rights to use intellectual
property rights of others (collectively, the "Technology");
(i) all rights in and under agreements to which the Seller is a
party relating to the Hinckley Hotel, instruments, leases for
personal property, customer contracts, marketing agreements
and other agreements used or useful in connection with the
Hinckley Hotel, including, without limitation, the agreements
described on Schedule 1.2(i);
(j) all transferable licenses and other governmental
authorizations used or use or in connection with the Hinckley
Hotel, including, without limitation, the licenses and
authorizations described on Schedule 1.2 (j);
(4)
(k) all manufacturer's, supplier's, contractor's and seller's
warranties made to the Seller in connection with the Hinckley
Hotel, or affecting the property, machinery or equipment used
by the Seller at the Hinckley Hotel;
(l) blueprints, instruction manuals, maintenance manuals, reports
and similar documents used or useful in, connection with the
Hinckley Hotel;
(m) all right, title and interest of the Seller in and to all
business information and related books and records used by the
Seller in the operation of the Hinckley Hotel, including, but
not limited to, unaudited Balance Sheets and Income Statements
prepared for the Hinckley Hotel, all daily revenue activity
reports, all general ledger activity reports, files, computer
data, computer discs and tapes, invoices, credit and sales
records, personnel records (subject to applicable law),
payroll, current and former customer lists (including customer
contracts and agreements), current and former supplier lists
(including supplier cost information), manuals, drawings,
business plans and other plans and specifications, sales
literature, current price lists and discounts, promotional
signs and literature, marketing and sales programs,
manufacturing and quality control records and procedures and
any other files and records relating to the Hinckley Hotel,
whether or nor held by the Seller or a third party
(collectively, the "Business Information"); provided, however,
that the Seller shall not have to provide Purchaser with any
Business Information related to the Hinckley Hotel to the
extent such Business Information has been or is consolidated
in the Seller's records; and provided further, that both
Seller and Purchaser shall have the right. to request from the
other party access to, and the right to copy, any documents
and records held by the other party which relate to the
Hinckley Hotel (whether or not consolidated) if such
requesting party can demonstrate to the party holding such
documents and records a legitimate need to have access to such
documents or records;
(n) all right, title and interest in and to all of the Seller's
permits, licenses, filings, authorizations, approvals or
indicia of authority (and any pending applications therefor),
to operate the Hinckley Hotel as presently operated; and
(o) all goodwill of the Seller arising out of or associated with
the Hinckley Hotel.
1.3. Retained Assets. The "Retained Assets" means (i) the Seller's rights
under this Agreement; and (ii) the credit card machines located on
the premises of the Hinckley Hotel.
2. Assumption of Liabilities: Purchase Price, Allocations.
2.1. Assumption of Liabilities. Only certain specified debts,
liabilities, commitments, and obligations incurred by the Seller in
the ordinary and normal course of business shall be assumed by the
Purchaser as follows:
(5)
(a) Assumed Liabilities. At the Closing, the Purchaser shall
assume from the Seller only the "Assumed Liabilities," which
shall consist solely of the operating obligations of the
Business listed on Schedule 2.1(a). The Assumed Liabilities
shall at all times specifically exclude, and the Purchaser
shall specifically not assume or in any way be responsible or
liable for and the Purchased Assets shall not be subject to,
all indebtedness for income taxes and borrowed money, or any
debts, liabilities, commitments, and obligations not disclosed
on Schedule 2.1(a).
(b) Liabilities Not Assumed. Except only for those debts,
liabilities, commitments, and obligations of the Seller which
are expressly assumed by the Purchaser as of noon on the
Closing pursuant to Section 2.1(a), the Purchaser shall not
assume, nor shall it be liable or obligated in any way for any
debts, liabilities, commitments, and/or obligations of the
Seller of any kind or nature whatsoever, whether absolute or
contingent, liquidated or unliquidated, and whether or not
accrued, matured, known, or suspected (the "Retained
Liabilities").
2.2. Purchase Price. In full consideration for the Purchased Assets and
all of the covenants, conditions, representations, and warranties of
the Seller, and in addition to the assumption of the Assumed
Liabilities by the Purchaser and the covenants, conditions,
representations, and Warranties of the Purchaser, the Purchaser
shall pay by wire transfer on the Closing Date an aggregate purchase
price (the "Purchase Price") of Five Million Four Hundred Thousand
Dollars ($5,400,000) (the "Closing Cash Purchase Price" or the "Cash
Purchase Price") to Commonwealth Land Title Insurance Company (the
"Escrow Agent") which shall act as an escrow agent for the receipt
and disbursement of the Cash Purchase Price in accordance with
Section 2.3.
2.3. Third Party Payments. Seller and Purchaser each hereby appoint the
Escrow Agent for the purpose of disbursing the Cash Purchase Price
in accordance with the escrow instruction letter attached hereto as
Exhibit 2.3, (the "Escrow Instruction Letter"). Seller and Purchaser
agree that the Cash Purchase Price shall be deposited with the
Escrow Agent: for disbursement to Seller after deduction has been
made for payment to certain third-parties in accordance with the
Escrow Instruction Letter, including, but not limited to the fall
payment of and release of those Mortgages land other liens and
encumbrances set forth in the Escrow Instruction Letter. Seller
shall pay, in accordance with the Escrow Instruction Letter, all ad
valorem taxes and special assessments payable therewith in the year
of the Closing Date, adjusted and prorated as of noon on the Closing
Date on a calendar year basis, such that Seller shall have paid its
prorated share for the period from and after January 1, 1998 through
and including June 29, 1998. The Seller shall no longer be
responsible for any real estate taxes and special assessments due
and payable after noon on the Closing Date.
2.4. Closing Adjustments. The following closing adjustments shall be made
either on the Closing Date or, if the necessary information is not
available on the Closing Date as soon as reasonably possible after
the information necessary to calculate them is known, and the net
amount of the such closing adjustments, unless otherwise set
(6)
forth in this Section 2.4, shall be paid by the Purchaser by a wire
transfer to the Seller:
(a) Marketing Enhancement Payment. Purchaser shall pay to Seller
the "Marketing Enhancement Payment" (as defined in the
Marketing Agreement) owing through noon on the Closing Date
(that is, the last Marketing Enhancement Payment shall be made
relative to customers of the Hinckley Hotel renting rooms the
night that includes the Closing Date).
(b) Uncollected Revenues. Purchaser shall pay to Seller all
uncollected but earned (i) hotel room revenues through and
including noon on the Closing Date, and (ii) vending machine
remittances through and including noon on the Closing Date.
Schedule 2.4(b) contains a complete and accurate list of all
uncollected and earned revenues related to the Business as of
noon on the Closing Date.
(c) Gift Certificates and Advance Deposits. Seller shall pay to
the Purchaser the total amount of revenue collected for gift
certificates and advance deposits which have not been redeemed
as of noon on the Closing Date.
2.5. Allocations. All parties acknowledge and agree that the assumption
of liabilities and obligations of the Seller pursuant to Section
2.1(a), together with the payment of the Cash Purchase Price
pursuant to Section 2.2, shall be allocated among the Purchased
Assets in accordance with Exhibit 2.5. All parties agree to use the
allocations contained in this Section 2.5 for all purposes,
including preparing and filing any applicable tax returns and forms.
3. The Closing. The parties shall hold the closing of the transactions
contemplated by this Agreement (the "Closing") on or before June 30, 1998
at 9:00 a.m., Minneapolis, Minnesota time, at the offices of Xxxxxxxxxxx
Xxxxx & Xxxxxxxx LLP, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000 or whatever other time, date or place the parties shall mutually
agree (the "Closing Date"); unless this Agreement is terminated and the
transactions contemplated hereby abandoned pursuant to Section 14 hereof.
At the Closing, the Seller shall execute and deliver to the Purchaser a
xxxx of sale in the form attached hereto as Exhibit 3.1, (the "Xxxx of
Sale"), a Lease Termination Agreement between HHC and CBC terminating the
Business Lease in the form attached hereto as Exhibit 3.2, (the "Lease
Termination Agreement"), an Easement Termination Agreement by and among
CBC, GC1 and HHC in the form attached hereto as Exhibit 3.3 (the "Easement
Termination Agreement") and a Mutual Release by and among Seller,
purchaser, GCI and Casino Property Management, Inc. ("CPMI") in the form
attached hereto as Exhibit 3.4 (the "Mutual Release"), together with all
other documents or instruments as may reasonably be deemed necessary or
appropriate by the Purchaser or its counsel in order to effectively
transfer title to the Purchased Assets to the Purchaser in accordance-
with the provisions of this Agreement; the Purchaser shall deliver to the
Seller the Cash Purchase Price, an Assignment and Assumption Agreement in
the form attached hereto as Exhibit 3.5 evidencing the assignment to, and
Purchaser's assumption of, the Assumed Liabilities (the "Assignment and
Assumption Agreement"), the Lease Termination Agreement, and the
(7)
Mutual Release, together with all other documents or instruments as may
reasonably be deemed necessary or appropriate by the Seller or its counsel
in order to effectuate the assumption of the Assumed Liabilities by the
Purchaser in accordance with the provisions of this Agreement. Upon such
delivery of the foregoing documents (i) all right, title, and interest in
and to, and ownership and possession of, the Purchased Assets shall be
transferred to and shall vest in the Purchaser, and (ii) the Assumed
Liabilities shall be assumed by the Purchaser.
4. Representations and Warranties of the Seller. Except as set forth in the
Disclosure Schedule attached hereto as Schedule 4, the Seller represents,
warrants, and agrees with Purchaser that, at and as of the date of this
Agreement and at and as of the Closing Date, the following statements
shall be true in all respects:
4.1. Ownership and Delivery of Purchased Assets and Execution and Effect
of Agreement. The Seller has the fall right, power, and authority to
enter into and to perform this Agreement and all other agreements,
certificates, and documents executed or delivered, or to be i
executed or delivered, by it in connection with this Agreement
(collectively, with this Agreement, the "Seller's Documents"). On
the date hereof, the Seller has, and on the Closing Date the Seller
will have, the full right, power, and authority to sell, assign,
transfer, and deliver the Purchased Assets, Except as set forth on
the Disclosure Schedule, the Seller will convey to the Purchaser on
the Closing Date lawful, valid, and, in the case of Inventory, FF&E
and other tangible personal property, marketable title, to the
Purchased Assets, free and clear of any and all liens, pledges,
security interests, options, encumbrances, charges, agreements, or
claims of any kind whatsoever ("Claims"). This Agreement has been
duly authorized, executed, and delivered by the Seller, and the
Seller's Documents are (or when executed and delivered will be)
legal, valid, and binding obligations of the Seller enforceable in
accordance with their respective terms, except as enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization or
other similar laws affecting the enforcement of creditors rights
generally and to judicial limitations on the remedy of specific
enforcement and other equitable remedies. The authorization,
execution, delivery, and performance of the Seller's Documents and
Seller's consummation of the transactions as contemplated by the
Seller's Documents do not and will not violate, conflict with,
result in the breach of or constitute a default under, require any
notice pr consent under, accelerate the performance required by, or
give rise to a right of termination of any terms or provisions of
any agreement, instrument, or writing of any nature to which the
Seller is a party or is bound and which relates to the Hinckley
Hotel, other than purchase and sales orders entered into by the
Seller in the ordinary course of business.
4.2. Organization, Good Standing, Authority. CRC and CBC are corporations
duly organized, validly existing, and in good standing under the
laws of the State of Minnesota and both have full corporate power
and authority to own and lease their respective assets and
properties !and to conduct their businesses as they are now being
conducted. The copies of the Articles of Incorporation (which
include all amendments thereto and restatements thereof) of CRC and
CBC, respectively, as certified by the Secretary of State of the
State of Minnesota, and the Bylaws of CRC
(8)
and CBC, respectively, as certified by the Secretary of the Seller,
previously delivered to, the Purchaser are correct and complete.
4.3. Intentionally Left Blank.
4.4. Financial Statements, Closing Financial Condition. Schedule 4.4
contains a true and complete copy of (i) audited consolidated (with
CBC) balance sheets of CRC as of September 30, 1997, 1996, 1995,
1994 and 1993, and the related statements of operations,
stockholders' equity and cash flows for each of the respective
fiscal years then ended, and the report thereon of BDO Xxxxxxx, LLP,
the Company's independent certified public accountant (the "Audited
Balance Sheets") (ii) the unaudited consolidated (with CBC) balance
sheets of CRC as of March 31, 1998 (the "Unaudited Balance Sheet");
(iii) the unaudited balance sheet of the Hinckley Hotel as of May
30, 1998; and (iv) the unaudited income statements of the Hinckley
Hotel for the period May 30, 1994 through May 30, 1998. The
aforesaid financial statements and notes (i) are in accordance with
the books and records of Seller and have been prepared on a
consistent basis in all material respects for all periods presented,
and (ii) fairly present the financial condition of CRC (on a
consolidated basis) as of the respective dates thereof, and the
results of operations, changes in stockholders' equity and changes
in cash flow for the periods then ended, all in accordance with
generally accepted accounting principles ("GAAP"), subject, in the
case of the interim financial Statements, to normal recurring year
end adjustments and the absence of a full set of notes. The
financial statements referred to in this Section 4.4 reflect the
consistent application of GAAP throughout the periods involved,
except as disclosed in the notes to such financial statements.
4.5. Liabilities. All known liabilities Of the Seller (whether accrued,
unmatured, contingent, or otherwise, and whether due or. to become
due) relative to the Business are set forth or adequately reserved
against in the Unaudited Balance Sheet to the extent such
liabilities would be required under GAAP to be set forth in the
Unaudited Balance Sheet, except for liabilities incurred since the
date thereof in the ordinary course of business as theretofore
conducted, which are not materially adverse to the operations or
prospects of the Business. The indebtedness and other liabilities of
the Seller relative to the Business have not been guaranteed or
assumed by any other person. Schedule 4.5 accurately identifies and
describes each debt, liability, commitment, and other obligation of
the Seller relative to the Business of the types specified in the
first sentence of Section 2.1 as of the date of this Agreement
(including, without limitation, the name of each creditor, the
amount of each debt, liability, commitment, and obligation, other
than trade payables incurred in the ordinary and normal course of
the Business for which invoices have not been received as of the
date hereof and excluding obligations of the Seller for borrowed
money or income taxes).
4.6. No Material Adverse Change. Since the date of the past Audited
Balance Sheet, the Seller has operated the Business diligently and
only in the ordinary course of business as theretofore conducted,
and there has been no: (i) material adverse change in the business,
properties, assets, liabilities, commitments, earnings, financial
(9)
condition, or prospects of the Seller; (ii) property damage or
destruction resulting in a loss or cost to the Seller of more than
$50,000 in the aggregate, whether or not covered by insurance; (iii)
notice, inquiry or request for information relating to any alleged
liability or responsibility under, or in violation of any law,
regulation, or rule related to Hazardous Substances, Oils,
Pollutants or Contaminants (as defined below) and none have been
threatened, or (iv) act or omission which, if taken or omitted after
the date of this Agreement and before the Closing would conflict
with Section 6.2, except for matters under 6.2 (v) which are
disclosed in this Agreement or a Schedule to this Agreement. There
is no fact known to the Seller that materially adversely affects, or
in the future will :materially adversely affect, the Purchased
Assets, Assumed Liabilities and the prospect or condition of the
Business.
4.7. Taxes. The Purchaser will not incur or be obligated for, nor will
the Purchased Assets be subject to, any sales, use, or other tax or
excise resulting from the acquisition of the Purchased Assets, and
all of such taxes shall be paid by the Seller. The Seller has not
failed to file any report or return with respect to the Business
that may be required to be filed under any law or regulation of the
United States or any foreign country or political subdivision
thereof. The Seller has duly accrued on its ;books of account and
paid when due all taxes, duties and charges required pursuant to
such reports and returns or assessed against the Business. The
Seller, after the Closing Date and from the Cash Purchase Price,
shall pay any transfer sales, purchase, use or similar taxes under
the laws of any nation, state, county, city, or political
subdivision thereof, payable as a result of the transactions
contemplated hereby.
4.8. Title: Condition of Purchased Assets, Absence of Encumbrances. The
Seller owns, leases or otherwise has the legal right to use and
transfer all of the Purchased Assets. The FF&E, Inventory and other
assets included in, the Purchased Assets are suitable for the uses
in which they are currently employed and are free from any material
defects, subject to ordinary wear and tear. The Seller has good and,
in the case of Inventory, FF&E and other tangible personal property,
marketable title to or, in the case of leases and licenses, valid
and subsisting leasehold interests or licenses in, all of its
properties and assets used in connection with the Hinckley Hotel
(whether real or personal, tangible or intangible), including,
without limitation, the Purchased Assets, in each case free and
clear of any and all liens, mortgages, pledges, security interests,
restrictions, prior assignments, claims, and encumbrances of any
kind whatsoever, except as may be set forth in Schedule 4.8 and
except for liens for current taxes and assessments not yet due and
payable. All assets, properties, and rights relating to the Business
are held by, and all agreements, obligations and transactions
relating to the Business have been entered into, incurred, and
conducted by the Seller rather than any of its affiliates.
4.9. Property. Schedule 1.2(d) contains a complete and correct list of
all personal property owned or leased by the Seller relative to the
Business and all interests therein. All such personal property,
buildings, and structures, and the equipment therein, and the
operations and maintenance thereof, comply with any applicable
agreements and restrictive covenants and conform in all material
respects to all
(10)
applicable Legal Requirements (as defined in Section 4.20) including
those relating to the environment, health and safety, land use and
zoning, and all work required to be done by the Seller as landlord
or tenant has been duly performed. No condemnation or other
proceeding is pending or, to the knowledge of the Seller threatened,
which would affect in any material manner the use of any such
property by the Seller, or following the Closing, by the Purchaser.
The Seller does not own or lease any vehicles. The Seller's
buildings and other structures, equipment and other assets (whether
leased or owned) relative to the Business are in good operating
condition and repair, subject to ordinary wear and tear, and, to the
Seller's knowledge, are free from all structural and material
defects, with no material maintenance, repair or replacement having
been deferred or neglected, and are suitable for the intended use.
4.10. Patents, Trademarks, and Copyrights. The Seller has no registered
trademarks, service marks, trade names, brands, registered
copyrights, and patents which are presently being used or have been
used in the Business.
4.11. Contracts, Leases and Commitments. The Seller has famished to the
Purchaser true and complete copies of the contracts, leases, and
commitments listed in Schedule 1.2(i), including summaries of the
terms of any unwritten contracts, leases, or commitments. Except as
set forth in the Disclosure Schedule: (1) the Seller and, to the
best of the knowledge of the Seller, the other parties thereto, have
complied in all material respects with such contracts, leases, and
commitments, all of which are valid and enforceable and, to the best
of the knowledge of the Seller, will not be adversely affected by
this acquisition or the transfer in connection therewith to the
Purchaser; (2) such contracts, leases, and commitments are in full
force and effect and there exists no breach by the Seller thereof
which with or without notice or lapse of time would be a default
thereunder, give rise to a right to accelerate or terminate any
provision thereof, or give rise to any lien, claim, encumbrance, or
restriction on any of the assets or properties of the Seller; and
(3) all of such contracts, leases, and commitments have been entered
into on an arm's-length basis, and none materially adversely affects
the Business. The Seller is not a party, nor are any of its assets
relative to the Business subject, to any contract, lease, or
commitment not listed in Schedule 1.2(i) and 4.16 (including,
without limitation, open purchase or sales commitments, financing or
security agreements or guaranties, repurchase agreements, agency
agreements, manufacturers representative agreements, commission
agreements, employment or collective bargaining agreements, pension,
bonus, or profitsharing agreements, group insurance, medical: or
other fringe benefit plans, and leases of real or personal
property), other than (i) contracts terminable without penalty on
not more than 30 days' notice that do not involve, individually or
in the aggregate, the receipt or expenditure of more than $5,000 in
any one year, (ii) purchase orders or commitments of the Seller
entered into in the ordinary course of business that individually do
not involve more than $5,000 or that are cancelable, or (iii) sales
commitments of the Seller entered into in the ordinary course of
business that individually do not involve more than $5,000 or for
which there is no liability for nonshipment. If any of the contracts
listed in Schedule 1.2(i) should provide for expiration or be
subject to termination before the Closing, the. Seller shall use its
(11)
best efforts to extend such contracts on reasonable terms in
accordance with the Seller's past practice, after consultation with
the Purchaser. Schedule 4.11 contains a list of the ten largest
suppliers of the Seller (measured by dollar volume of purchases).
The Seller is not engaged in. any material dispute with any supplier
relative to the Business. No supplier of the Business has notified
the Seller that it is considering termination, nonrenewal, or any
adverse modification of its arrangements with the Seller, and, to
the knowledge of the Seller, the transactions contemplated by this
Agreement will not have a material adverse affect on the Seller's
relationship, or the Purchaser's possible future relationship, with
any of the suppliers of the Business.
4.12. Inventory and FF& E. The Inventory is in good and marketable
condition, does not and will not include any items which are
obsolete or damaged, is salable in the normal course of business as
currently conducted and is sufficient in quantity to conduct the
Business as it is presently conducted. Each item of the Inventory as
of the date hereof is carried on the Unaudited Balance Sheet at the
lower of cost or market. The FF&E is in good and marketable
condition, subject to ordinary wear and tear.
4.13. Accounts Receivable and Payable. Schedule 4.13 is an aged list of
the Accounts Receivable and Payable of the Seller relative to the
Business as of May 31, 1998. The Accounts Receivable and Payable of
the Seller arose in the ordinary course of business for goods or
services delivered or rendered.
4.14. Permits, Compliance with Laws. The Seller holds the governmental
licenses, permits, and authorizations relative to the Business as
previously listed in Schedule 1.2(j) which are valid and unimpaired,
will be unaffected by a transfer of all of the Purchased Assets to
the Purchaser, and constitute all of the licenses, permits, and
authorizations required of the Seller for the ownership or occupancy
of its properties and assets and the operation of the Business. The
Business has been operated in compliance with all material laws and
regulations (federal, state, local, and foreign) applicable to it,
and all required material reports and filings with governmental
authorities have been properly made. The consummation of the
transactions contemplated by this Agreement will not give rise to
any liability of the Purchaser for severance pay or termination pay.
Within the past four (4) years, the Seller has not entered into any
agreement with, had any material dispute with, or been investigated
by, any governmental authority, community group, or other third
party that could restrict the operation of the Business.
4.15. Employees. Schedule 4.15 contains a list of the names, office
locations, and compensation of all full- and part-time employees of
the Business, and a description of the Seller's severance pay policy
with respect to such employees. To the Seller's knowledge, there
have not been any efforts within the last three years to attempt to
organize the employees of the Business, and no strike or labor
dispute involving the Business has occurred during the last three
years or, is threatened. Except as indicated on Schedule 4.15, no
key employee of the Business has provided the Seller with notice
that he or she is terminating his or her employment. The Seller has
(12)
complied with applicable wage and hour, equal employment, safety,
and other material legal requirements relating to employees of the
Business.
4.16. Employee Benefit Plans.
(a) Schedule 4.16 lists each employee benefit, incentive
compensation, deferred compensation, equity-based compensation
or perquisite plan, policy or practice covering current or
former employees of Seller or their spouses, dependents or
beneficiaries (a "Plan"). With respect to each Plan, Seller
has made available to Purchaser the current Plan document or a
complete and accurate description of the Plan.
(b) To the Seller's knowledge, the Seller does not and could not
have any liability arising directly or indirectly under
Section 412 of the Internal Revenue Code of 1986, as amended
(the "Code") or Section 302 or Title IV of the Employee
Retirement 1ncorne Security Act of 1974, as amended ("ERISA").
(c) To the Seller's knowledge, the Seller does not and could not
have any liability arising directly or indirectly to or with
respect to any "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA.
(d) To the Seller's knowledge, Seller does not and could not have
any, liability arising directly or indirectly in connection
with any failure of Seller or any affiliate of Seller to
comply with Section 4980B of the Code or Part 6 of Subtitle B
of Title I of ERISA.
(e) Nothing has occurred or failed to occur with respect to any
Plan which could result in any liability to Purchaser or any
affiliate of Purchaser other than a liability expressly
assumed, pursuant to this Agreement.
4.17. Insurance. A complete and correct list of all policies of insurance
of any kind or nature covering the Seller with respect to the
Business, including, without limitation, policies of life, fire,
theft, auto, casualty, product liability, workmen's compensation,
business interruption, employee fidelity, and other casualty and
liability insurance, indicating the type of coverage, name of
insured, the insurer, the premium, the expiration date of each
policy and the amount of coverage is contained in Schedule 4.17. All
such policies, except as set forth on the Disclosure Schedule, (i)
are in full force and effect; (ii) are sufficient for compliance
with all requirements of law and of all applicable agreements; (iii)
are valid, outstanding and enforceable policies; (iv) provide full
insurance coverage for the assets and operations of the Seller with
respect to the Hinckley Hotel for all risks normally insured against
by persons carrying on the same business as the Seller with respect
to the Hinckley Hotel, except for the deductibles and co-insurance
provisions set forth in the policies; and (v) will be unaffected by
the transfer thereof to the Purchaser, until the Closing Date.
Complete and correct copies of such policies have been furnished to
the Purchaser. The Seller has maintained in full force and effect
through noon on the Closing Date all such policies of insurance or
comparable insurance coverage. The Seller has not
(13)
been denied any insurance coverage which it has requested relative
to the Business or made any material reduction in the scope or
change in the nature of its insurance coverage relative to the
Business. The products liability and personal injury insurance,
maintained by the Seller has been on an occurrence basis during the
four-year period prior to the Closing Date.
4.18. Litigation. Except for claims of less than $5,000 in which the
Seller is the plaintiff in an action for goods sold and delivered
and in which there is no counterclaim, Schedule 4.18, contains a
complete and correct list of all actions, suits, proceedings,
claims, or governmental investigations pending or, to the best of
the knowledge of the Seller, threatened against the Seller relative
to the Business or any of the assets of the Business, or, in
connection with the Business, or any of the Seller's officers,
directors, or employees relative to the Business. Except as set
forth on Schedule 4.18, neither the Seller nor, in connection with
the Business, any of the Seller's officers, directors, or employees
is subject or party to any judgment, order, or other direction of or
stipulation with any court or other governmental authority or
tribunal, or in violation of any other Legal Requirements (as
defined below) relative to the Business. The Seller is not award of
any proposed Legal Requirement that might adversely affect in any
material respect the operation or prospects of the Business.
4.19. Environmental Matters.
(a) Since August 11, 1993, the Seller obtained all permits,
licenses and other authorizations required under the
Environmental Laws (as defined below) for the ownership, use
and operation of each location owned, operated or leased by
Seller in connection with the operation of the Business (the
"Property"), all: such permits, licenses and authorizations
are in effect, and no appeal or any other action is pending to
revoke any such permit, license or authorization. The Seller
is in full compliance with all terms and conditions of all
such permits, licenses and authorizations, except for minor
defects, if any, in such permits, licenses and authorizations
which do not affect the operation of the Business. The Seller
has listed all such permits, licenses and other
authorizations, including the expiration dates of such
permits, licenses and authorizations, in Schedule 4.19.
(b) Except for incidental matters, if any, which do not affect the
operation of the Business, the Seller has been, since August
11, 1993 and currently is in compliance with all Environmental
Laws including, without limitation, all applicable
restrictions, conditions, standards, limitations,
prohibitions, requirements, obligations, schedules and
timetables contained in the Environmental Laws or contained in
any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered,
promulgated or approved thereunder.
(c) The Seller has not made or been furnished with any
environmental studies with respect to the Property, except as
set forth in Schedule 4.19.
(14)
(d) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter existing or pending, or,
to the knowledge of the Seller, threatened, relating to the
Business, or any Property or facility currently owned,
operated or leased, and to the knowledge of the Seller, with
respect to any Property or facility previously owned, operated
or leased by the Seller for use in the Business relating in
any way to the Environmental Laws or any regulation, code,
plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder.
(e) The Seller has not released, placed, stored, buried or dumped
any "Hazardous Substances, Oils, Pollutants or Contaminants"
(as defined below) or any other wastes produced by, or
resulting from, any business, commercial or industrial
activities, operations or processes, on, beneath or adjacent
to any Property formerly or currently owned, operated or
leased by the Seller and used by or in connection with the
Business, except for inventories of such substances to be
used, and wastes generated therefrom, in the ordinary course
of business (which inventories and wastes, if any, were and
are stored or disposed of in accordance with applicable laws
and regulations and in a manner such that there has been no
Release (as defined below) of any such substances into the
environment), and, to the knowledge of the Seller, neither has
any other Person (as defined below).
(f) No Release or Cleanup (as defined below) has occurred since
August 11, 1993 at any Property currently owned or used by the
Seller relating to the Business which would be reasonably
likely to result in the assertion or creation of a lien on the
Property by any governmental body or agency with respect
thereto, nor has any such assertion of a lien been made by any
governmental body or agency with respect thereto, and to the
knowledge of the Seller, no such Release or Cleanup has
occurred since August 11, 1993 at any Property formerly owned
or used by the Seller.
(g) The Seller has received no notice or order from any
governmental agency or private or public entity advising it
that it is responsible for or potentially responsible for
Cleanup or paying for the cost of Cleanup of any Hazardous
Substances, Oils, Pollutants or Contaminants or any other
waste or substance relative to the Business, and the Seller
has not entered into any agreements concerning such Cleanup,
nor is the Seller aware of any facts which might reasonably
give rise to such notice, order or agreement.
(h) From August 11, 1993 to the present, Seller has not placed or
had placed on or in the Property any Q) underground storage
tanks; (ii) asbestos; (iii) equipment using PCB's; (iv)
underground injection xxxxx; or (v) septic tanks in which
process wastewater or any Hazardous, Substances, Oils,
Pollutants, or Contaminants, to the knowledge of the Seller,
have been disposed.
(15)
(i) The Seller has not entered into any agreement that will
require it to pay to, reimburse, guarantee, pledge, defend,
indemnify or hold harmless any Person for or against any
Environmental. Liabilities and Costs (as defined below)
relating to the Business.
(j) With regard to the Seller's operation of the Business,
beginning as of August 11, 1993 to the present, there are no
events, conditions, circumstances, activities, practices,
incidents, actions or plans which may interfere with or
prevent compliance or continued compliance with the
Environmental Laws as in effect on the date hereof or with any
regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or
approved thereunder, or which would be reasonably likely to
give rise to any common law or legal liability under the
Environmental Laws, or otherwise would be reasonably likely to
form the basis of any claim, action, demand, suit, proceeding,
hearing, notice of violation, study or investigation, based on
or related to the manufacture, generation, processing,
distribution, use, treatment, storage, place of disposal,
transport or handling, or the Release or threatened Release
into the: indoor or outdoor environment by the Seller or a
facility of the Seller while under the Seller's control, of
any Hazardous Substances, Oils, Pollutants or Contaminants.
For purposes of this Section 4.19, the following terms shall have the
following meanings:
(a) "Cleanup" means all actions required to: (i) cleanup, remove,
treat or remediate Hazardous Substances, Oils.; Pollutants or
Contaminants in the indoor or outdoor environment;; (ii)
prevent the Release of Hazardous Substances, Oils, Pollutants
or Contaminants so that they do not migrate, endanger or
threaten to endanger public health or welfare or the indoor or
outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial monitoring and care; or (iv)
respond to any government requests for information or
documents in any way relating to cleanup, removal, treatment
or remediation or potential cleanup, removal, treatment or
remediation of Hazardous Substances, Oils, Pollutants or
Contaminants in the indoor or outdoor environment.
(b) "Environmental Laws" means all federal, state and local laws,
regulations, rules and ordinances applicable to the Seller
relating to pollution or protection of the environment,
including, without limitation, laws relating to Releases or
threatened Releases of Hazardous Substances, Oils, Pollutants
or Contaminants into the indoor or outdoor environment
(including, without limitation, ambient air, surface water,
groundwater, land, surface and subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, Release, transport or handling of
Hazardous Substances, Oils, Pollutants or Contaminants, and
all laws and regulations with regard to record-keeping,
notification, disclosure and reporting requirements
respecting, Hazardous Substances, Oils, Pollutants or
(16)
Contaminants, and all Jaws relating to endangered or
threatened species of fish, wildlife and, plants.
(c) "Environmental Liabilities and Costs" means all liabilities,
obligations, responsibilities, obligations to conduct cleanup,
losses, damages, deficiencies, punitive damages, consequential
damages, treble damages, costs and expenses (including,
without limitation, all reasonable fees, disbursements and
expense of counsel, expert and consulting fees and costs of
investigations and feasibility studies and responding to
government requests for information or documents), fines,
penalties, restitution and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent,
past, present or future, resulting from any claim or do
demand, by any Person or entity, whether based in contract,
tort, implied or express warranty, strict liability, joint and
several liability, criminal or civil statute, including any
Environmental Law, or arising from. environmental, health or
safety conditions, the Release or threatened Release of
Hazardous Substances, Oils, Pollutants or Contaminants into
the environment, as a result of past or present ownership,
leasing or operation of the Property.
(d) "Hazardous Substances, Oils, Pollutants or Contaminants" means
all substances defined as such in the National Oil and
Hazardous Substances Pollutants Contingency Plan, 40 C.F.R.
ss. 300.5, or defined as such by, or regulated as such under,
any Environmental Law applicable to the Seller or the
Property.
(e) "Person" shall mean an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization
or, as applicable, any other entity.
(f) "Release" means any release, spill, emission, discharge,
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor
environment (including, without limitation, ambient air,
surface water, groundwater, and surface or subsurface strata)
or into or out of; any property, including the movement of
Hazardous Substances, Oils, pollutants or Contaminants through
or in the air, soil, surface water, groundwater of property.
4.20. Restrictions. The authorization, execution, delivery, and
performance of the Seller's Documents and the consummation of the
transactions contemplated by the Seller's Documents do not and will
not (1) violate any of the provisions of the Seller's Articles of
Incorporation or Bylaws, as applicable, or (2) violate, or result in
a breach of, conflict with, or require any notice, filing (other
than applicable required tax reporting) or consent under, any
statute, rule, regulation or other provision of law, or any order,
judgment or other direction of a court or other tribunal, or any
other governmental requirement, permit, registration, license or
authorization applicable to the Seller for any of its assets or the
Business (collectively, "Lega1 Requirements"), or (3) result in the
creation of any lien, claim, encumbrance, restriction on any of the
(17)
assets or properties of the Seller. The Seller is not a party to any
non-compete or similar agreement which in any way restricts the
operation of the Business.
4.21. Transactions with Affiliates. As of the Closing Date, neither the
shareholders of the Seller nor any affiliate, associate or relative
of the Seller's shareholders ("Related Persons") has, any interest
in any property, tangible or intangible, used in or pertaining to
the Business and which has a value in excess of $5,000. As of the
Closing Date, neither the Seller's shareholders nor any Related
Person, has or owns or has owned of record or beneficially an equity
interest or any other financial or profit interest in any person or
entity which has (i) had business dealings or a material financial
interest in any transaction with the Seller involving more than
$5,000, or (ii) engaged in competition with the Seller in any market
presently served by the Seller, except for ownership interests of
less that one percent of the outstanding capital stock of any
competing business which is publicly traded. Schedule 4.21
reasonably describes, as of the Closing Date, the nature and extent
of any products, services, or benefits involving more than $5,000
provided to the Seller by any such Related Person and indicates
whether there was a corresponding charge equal to the fair market
value of such products, services or benefits.
4.22. Books and Records. The books and, records of the Seller relative to
the Business are complete and correct in all material respects and
have been maintained in accordance with the Seller's past business
practices.
4.23. Improper Payments. To the Seller's knowledge, neither the Seller nor
its officers have made any illegal or improper payments to, or
provided any illegal or improper benefit or inducement for, any
governmental official, supplier, customer, or other person, in an
attempt to influence any such person to take or to refrain from
taking any action relating to the Seller.
4.24. Products, Services and Warranties. Each product sold, leased, or
delivered by the Seller relative to the Business, and each service
provided by the Seller relative to the Business, has been in
conformity with all applicable contractual commitments and all
express and implied warranties, and meets or exceeds the standards
required by all laws in effect at the time such product was sold,
leased or delivered by the Seller, and, to the knowledge of the
Seller, there is no pending legislation, ordinance or regulation,
which if adopted, would have a material adverse effect upon such
products and services. To the knowledge of the Seller, the Seller
has no liability (and there is no basis for any present or any
future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against it giving rise to any liability)
for replacement or repair of any such product or service or other
damages in connection therewith. No such product or service relative
to the Business is subject to any guaranty, warranty, or other
indemnity beyond the applicable standard terms and conditions of
sale, lease or other provision. Schedule 4.24 includes copies of the
standard terms and conditions of sale for the Business (containing
applicable guaranty, warranty, and indemnity provisions).
(18)
4.25. Product Liability, Auto Liability and Workers' Compensation. To the
knowledge of the Seller, the Seller has no liability relative to the
Business not covered by insurance (and there is no basis for any
present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand against it giving rise to any
liability) arising out of (a) any injury to individuals or property
as a result of the ownership, possession, or use of any product
manufactured, sold, leased, or delivered by the Seller relative to
the Business or any services provided by the Seller relative to the
Business; or (b) any injury to individuals or property as a result
of the ownership or lease by the Seller of any automobile in
connection with the operation of the Business. There are no open
workers' compensation claims against the Seller relating to the
Business, except for those previously disclosed on Schedule 4.18.
4.26. Disclosure. The Seller has received no notice (written or oral) that
any distributor, sales representative or supplier of the Business
will terminate his, her or its relationship with the Seller or, as
the in case may be, decrease his, her or its business with the
Seller, as a result of the transactions contemplated by this
Agreement or for any other reason. Schedule 4.26 sets forth a list
of all suppliers of the Business as of May 20, 1998.
4.27. Completeness of Schedules and Exhibits. To the best of the knowledge
and belief of the Seller, all schedules and exhibits hereto are
complete and accurate. Originals, or true and complete copies, of
all documents requested by the Purchaser or other written materials
underlying items listed on the schedules and exhibits that have been
requested in writing by the Purchaser have been or will be promptly
delivered to the Purchaser, and such documents have not been
modified and will not be modified prior to the Closing Date with the
Purchaser's prior written consent.
4.28. Disclosure. No representation, warranty, or other statement by the
Seller in this Agreement or in any other of the Seller's Documents
contains or will contain an untrue statement of a material fact o r
omit to state a material fact necessary to make such statements not
misleading.
5. Representations and Warranties of the Purchaser. The Purchaser represents,
warrants to, and agrees with, the Seller that, at and as of the date of
this Agreement and at and as of the Closing Date, the following statements
shall be true in all respects:
5.1. Authority. The Purchaser is a corporate body politic of a federally
recognized tribal government and has full legal power; and
authority, to enter into this Agreement, purchase the Business and
perform all of its other obligations under this Agreement. The
Purchaser has taken all actions and has received all required
consents and approvals which are necessary to be taken to authorize
the Purchaser to execute this Agreement and to perform all of its
obligations under the terms of this Agreement.
5.2. Execution and Effect of Agreement. The Purchaser has the full right,
power, and authority to enter into and perform this Agreement and
all other agreements, certificates and documents executed or
delivered, or to be executed or delivered, by the Purchaser in
connection with this Agreement (collectively, with this Agreement,
(19)
the "Purchaser's Documents"). The execution, delivery, and
performance by the Purchaser, of the Purchaser's Documents have been
duly authorized by all necessary action of the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser and
the Purchaser's Documents are (or when executed and delivered by the
Purchaser will be) legal, valid, and binding obligations of the
Purchaser, enforceable in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting, the
enforcement of creditor's rights generally and to judicial
limitations on the remedy of specific enforcement and other
equitable remedies.
5.3. Restrictions. The authorization, execution, delivery, and
performance of the Purchaser's Documents and the consummation of the
transactions contemplated by the Purchaser's Documents do not and
will not (1) violate, conflict with, result in a breach of or
constitute a default under, require any notice or consent under,
give rise to a right of termination of, or accelerate the
performance required by, any terms or provisions of any agreement,
instrument or writing of any nature to which the Purchaser is a
party or is bound or any of its assets or business is subject, or
(2) violate, conflict with or result in a breach of, or require any
notice, filing or consent under, any statute, rule, regulation or
other provision of law, or, any order, judgment or other direction
of a court or other tribunal, or any other governmental requirement,
permit, registration license, or authorization applicable to the
Purchaser.
5.4. Insurance. The Purchaser shall have, as of noon on the Closing Date,
all policies of insurance covering the Purchaser with respect to the
Business that the Seller had in force immediately prior to the
Closing, and the Purchaser shall provide the Seller with a
certificate evidencing such insurance coverage.
6. Covenants of the Seller. The Seller covenants and agrees that:
6.1. Access by the Purchaser. The Purchaser and its representatives and
advisers have been provided full and reasonable access during normal
business hours to the Seller's (to the extent that the following
relate to the Hinckley Hotel) assets, premises, books and records,
employees, accountants, consultants attorneys and other
representatives involved in the Business including, but not limited
to, the work papers and files of :the Accountants relating to the
Financials or tax returns of the Seller, and the Seller has
furnished the Purchaser with such information and copies of such
documents as the Purchaser may reasonably have requested; provided,
however, that the information requested will not affect or relieve
the Seller from any obligation, representation, covenant or warranty
contained in this Agreement, nor affect the Purchaser's ability to
rely on such obligations, representations, covenants or warranties.
The Seller shall promptly furnish to the Purchaser all financial
statements of the Seller that are prepared in the ordinary course of
business and relate to the Hinckley Hotel. None of the records
relating in any manner to the Hinckley Hotel retained by the Seller
will be destroyed by the Seller without prior written notice to the
Purchaser, to enable the Purchaser to take possession of or make
copies of such records. As used in this Section 6, the right of
inspection includes the right to make or extract copies.
(20)
6.2. Conduct of Business. Since April 16, 1998, the Business has been
conducted in the ordinary course, consistent with the past conduct
of the Business, and the Seller has used its best efforts to
maintain, preserve, and protect the assets and goodwill of the
Seller relative to the Business. Between April 16, 1998 and the
Closing, the Seller did not take or commit to take any of following
actions relative to the Business, except with the prior written
consent of the Purchaser: (i) amend its Bylaws or Articles of
Incorporation, (ii) except as specifically contemplated hereby,
incur, or perform, pay, or otherwise discharge, any obligation or
liability (absolute or contingent), except for current obligations
and liabilities incurred in the ordinary course of business
consistent with past practice, (iii) enter into any employment
agreement with, extend any employee agreements with, become liable
for any bonus, profit-sharing or incentive payment to, or increase
the compensation or benefits of, any of its officers, directors, or
employees, except pursuant to presently existing plans,
arrangements, or agreements disclosed in this Agreement or in a
schedule to this Agreement, (iv) sell, transfer, encumber, acquire
or otherwise dispose of, or grant any right with respect to, any
properties or assets, tangible or intangible, other than in the
ordinary course of business, (v) make any material changes in its
customary method of operation, including marketing, selling, and
maintenance of business premises, fixtures, furniture, and
equipment, (vi) modify, amend, or cancel any of its existing leases,
or enter into any contracts, agreements, leases, or understandings
other than in the ordinary course of business or enter into any loan
agreements, (vii) alter or revise the accounting principles,
practices or procedures applicable to the Business unless required
by GAAP, or (viii) take any other action which would cause any of
the representations and warranties made by the Seller in the
Seller's Documents not to be true and correct in all material
respects on and as of the Closing Date with the same force and
effect as if such representations and warranties had been made on
and as of the Closing Date.
6.3. Sales and Hospitality Taxes. Seller shall pay and be responsible for
all sales and hospitality taxes owing in connection with the
Business through noon on the Closing Date.
7. Covenants of the Purchaser.
7.1. Representations and Warranties. The Purchaser agrees that between
the date of this Agreement and the Closing it will not take any
action which would cause any of the representations and warranties
made by it in the Purchaser's Documents not to be true and correct
in all material respects on and as of the Closing Date with the same
force and effect as if such representations and warranties had been
made on and as of the Closing Date.
7.2. Personnel Matters. To the extent that current employees of the
Business meet Purchaser's employment criteria, the Purchaser shall
offer employment to all current employees of the Business at
comparable salary and benefit levels as of the Closing Date. All
employment and severance obligations regarding such employees for
all periods prior to the Closing shall remain with the Seller and
the Purchaser shall assume no responsibility for any such
obligations.
(21)
7.3. Cooperation and Assistance. The Purchaser agrees to assist the
Seller in the defense of any such claims by providing access to
documents and making personnel available in connection with any such
claims. The Purchaser shall also cooperate with the Seller in any
future Internal Revenue Service audits or investigations conducted
by other taxing authorities or with respect to any claims made
against the Seller that related to actions occurring before the
Closing Date, for which the Seller is legally responsible or for
which the Seller is obligated to indemnify the Purchaser under this
Agreement. In connection with any such cooperation under this
Section 7.3, the Purchaser and the Seller shall only be entitled to
recover from the other party hereto its out-of-pocket costs
incurred, such as for travel and copying costs, it being understood
that neither party shall be entitled to any per them consulting fees
for the time involved of any of their personnel.
7.4. Purchaser's Records. After the Closing, the Purchaser shall retain
all financial records which relate to the Business including,
without limitation, books, records, ledgers, files, documents,
correspondence, computer discs, reports and similar documents of the
Seller with respect to all transactions of the Seller relative to
the Business occurring prior to or relating to the Closing, and the
historical financial condition, assets, liabilities, operations and
cash flows of the Business. The Purchaser shall keep such records at
its premises and shall make such financial records available for
inspection by the Seller and the Seller's duly appointed
representatives, upon reasonable notice for reasonable business
purposes at all reasonable times during :normal business hours.
After the Closing Date, none of such records will be destroyed by
the Purchaser without prior written notice to the Seller to enable
the Seller to take possession of or to make copies of such records,
and this obligation of the Purchaser shall continue for as long as
the Seller has any duty of indemnification or liability to the
Purchaser under this Agreement.
7.5. Sales and Hospitality Taxes. The Purchaser shall pay and be
responsible for all sales and hospitality taxes owing in connection
with the Business from and after noon on the Closing Date.
8. Conditions Precedent to Obligations of the Purchaser. The obligations of
the Purchaser to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, at or before the Closing, of
each of the following conditions, any of which may be waived by the
Purchaser in writing, and the Seller shall use its best efforts to cause
such conditions to be fulfilled:
8.1. Representations and Warranties. Each of the representations and
warranties of the Seller in the Seller's Documents shall be true and
correct in all material respects on and as of the Closing Date with
the same force and effect as though made on and as of the Closing
Date.
8.2. Performance of the Seller. The Seller shall have performed and
complied in all material respects with all agreements, covenants,
and conditions required by the Seller's Documents to be performed or
complied with by them at or before the Closing.
(22)
8.3. Delivery of Xxxx of Sale. The Seller shall have delivered to the
Purchaser the Xxxx of Sale as provided in Section 3.
8.4. Delivery of Lease Termination Agreement. The Seller shall have
delivered to the Purchaser the Lease Termination Agreement as
provided in Section 3.
8.5. Opinion of Counsel of the Seller. The Seller shall have delivered to
the Purchaser an opinion of Xxxxxxx Rumble & Xxxxxx, counsel to the
Seller, dated the Closing Date, in the form attached hereto as
Exhibit 8.5.
8.6. Certificate. The Purchaser shall have received a certificate
executed by the Seller, dated the Closing Date, certifying, in such
detail as the Purchaser may reasonably request, as to the
fulfillment of the conditions set forth in Sections 8.1 and 8.2.
8.7. Certified Resolutions. The Purchaser shall have received copies of
resolutions of the Seller's Board of Directors, certified by the
Secretary of the Seller, authorizing the execution, delivery and
performance of the Agreement and the transactions contemplated
hereby by the Seller and authorizing the signatory officers of the
Seller to execute this Agreement.
8.8. Certificate of Good Standing. The Purchaser shall have received a
Certificate of Good Standing for each CRC and CBC dated not more
than seven (7) days before the Closing Date from the Secretary of
State of the State of Minnesota.
8.9. Consents. The Seller shall have obtained or, to the reasonable
satisfaction of the Purchaser obviated the need to obtain, all
consents, approvals, or waivers from regulatory authorities and
third parties necessary for the execution, delivery, and performance
of the Seller's Documents and the transactions contemplated by the
Seller's Documents, will without cost or other adverse consequences
to the Seller. The Seller shall deliver a certificate, dated the
Closing Date, stating that the Seller has received all
authorizations, material consents, approvals and waivers required by
this Section 8.9.
8.10. Litigation. No action or proceeding shall be Tending or threatened
before any court, tribunal, or governmental body, and, no claim or
demand shall have been made against the Seller, seeking to restrain
or prohibit or to obtain damages or other relief in connection with
the consummation of the transactions contemplated by the Seller's
Documents, or which might materially affect the Business, which in
the reasonably exercised opinion of the Purchaser makes it
inadvisable to consummate such transactions.
8.11. Title Insurance. The Purchaser shall have received a commitment of
title insurance from the Escrow Agent showing that the interests of
Seller being conveyed herein are free from all liens, security
interests, judgments and encumbrances and further showing that
Seller has not nor has allowed to be created any liens, security
interests, judgments or encumbrances on the interest owned by the
Landlord under the Lease. Purchaser shall also have received
assurance from the Escrow Agent that the Escrow Agent will Issue an
Owner's Policy of Title Insurance or an endorsement to the
(23)
existing Owner's Policy of Title Insurance in favor of the Purchaser
in accordance with this Section 8.11.
8.12. UCC Section. The Purchaser shall have received results reasonably
satisfactory to the Purchaser of a search of the files of the
Secretary of State and/or County of each state in which the Seller
does business showing all filings under the Uniform Commercial Code
(the "UCC') including liens or warrants for delinquent taxes, naming
the Seller as a debtor or otherwise encumbering the Purchased Assets
or the Business.
8.13. Release of Liens. The Purchaser shall have received evidence (the
"Release Evidence"), reasonably satisfactory to the Purchaser, of
the termination of all loan agreements, security agreements and
notes, the termination and release of all liens and security
interests in collateral, and the termination of any UCC financing
statements.
8.14. Purchase Price Allocation. The Purchaser and the Seller shall have
completed the Purchase Price Allocation described in Section 2.5.
8.15. Mutual Release. The Seller and CPMJ shall have executed and
delivered to the Purchaser the Mutual Release dated as of, the
Closing Date as described in Section 3 which mutually releases the
Purchaser, GC1 and the Seller from any obligations, rights, and
claims as described in the Mutual Release arising out of or in
connection with the Hotel Development Agreement, the Marketing
Agreement and any other agreement entered into by the Seller (and
CPMI), Purchaser and/or GCI relating to the Hinckley Hotel.
8.16. Easement Termination Agreement. CBC shall have executed and
delivered to the Purchaser the Easement Termination Agreement as
provided in Section 3.
9. Conditions Precedent to Obligations of the Seller. The obligations of the
Seller to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, at or before the Closing, of each of the
following conditions, any of which may be waived by the Seller in writing,
and the Purchaser shall use its best efforts to cause such conditions to
be fulfilled:
9.1. Representations and Warranties. The representations and warranties
of the Purchaser in the Purchaser's Documents shall be true and
correct in all material respects on and as of the Closing Date with
the same force and effect as though the same had been made on and as
of the Closing Date.
9.2. Performance by the Purchaser. The Purchaser shall have performed and
complied in all material respects with the agreements, covenants,
and conditions required by the Purchaser's Documents to be performed
or complied with by it at or before the Closing.
9.3. Assumption and Liabilities; Purchase Price. The Purchaser shall have
delivered the Assignment and Assumption Agreement as provided in
Section 3 and, if possible,
(24)
shall have made the net closing adjustment payment required to be
made by the Purchaser pursuant to Section 2.4.
9.4. Opinion of Purchaser's Counsel. The Purchaser shall have delivered
to the Seller an opinion of Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP,
counsel to the Purchaser, dated the Closing Date, in the form
attached hereto as Exhibit 9.4.
9.5. Certificate. The Seller shall have received a certificate executed
by the Purchaser, dated the Closing Date, certifying, in such detail
as the Seller may reasonably request, as to the fulfillment of the
conditions set forth in Sections 9.1 and 9.2.
9.6. Certified Resolutions. The Seller shall have received copies of
resolutions of the Purchaser, certified by the Purchaser,
authorizing the execution, delivery and performance of the Agreement
and the transactions contemplated hereby by the Purchaser, and
authorizing the signatory officers of the Purchaser to execute this
Agreement.
9.7. Litigation. No action or proceeding shall be pending or threatened
before any court, tribunal, or governmental body, and no claim or
demand shall have been made against the Purchaser seeking to
restrain or prohibit or to obtain damages or other relief in
connection with the consummation of the transactions contemplated by
the Purchaser's Documents, which in the reasonably exercised opinion
of the Seller makes it inadvisable to consummate such transaction.
9.8. Consents. The Purchaser shall have obtained or, to the reasonable
satisfaction of the Seller obviated the need to obtain, all
consents, approvals or waivers from regulatory authorities and third
parties necessary for the execution, delivery and performance of the
Purchaser's Documents and the transactions contemplated by the
Purchaser's Documents, all without cost or other adverse
consequences to the Seller. The Purchaser shall deliver a
certificate, dated the Closing Date, stating that the Purchaser has
received all necessary authorizations, material consents, approvals
and waivers required by this Section 9.8.
9.9. Mutual Release. The Purchaser shall have executed and delivered to
the Seller the Mutual Release as described in Sections 3 and 8.15
above.
9.10. Easement Termination Agreement. The Purchaser shall deliver the
Easement Termination Agreement as provided in Section 3 executed by
HHC.
10. Closing Deliveries.
10.1. Deliveries of the Seller. At the Closing, the Seller shall deliver,
or shall cause to be delivered, to the Purchaser the following:
(a) The Xxxx of Sale conveying to the Purchaser the Purchased
Assets free and clear of all claims except as disclosed
hereunder.
(25)
(b) The Lease Termination Agreement terminating the Business Lease
effective on the date and time of Closing.
(c) The executed opinion of Xxxxxxx Rumble & Xxxxxx, counsel to
the Seller, referred to in Section 8.5.
(d) The certificate referred to in Section 8.6,1 duly executed by
the Seller.
(e) The certified Board resolutions referred to in Section 8.4.
(f) Good Standing Certificates referred to in Section 8.8.
(g) Copies of the consents, approvals, or waivers referred to in
Section 8.9.
(h) The Release Evidence referred to in Section 8.13.
(i) The Mutual Release referred to in Section 8.15.
(j) The Easement Termination Agreement referred to in Section
8.16.
10.2. The Purchasers Deliveries. At the Closing, the Purchaser shall
deliver or cause to be delivered to the Seller the following:
(a) The Closing Cash Purchase Price and net closing adjustment
payment referred to in Sections 2.2 and 2.4.
(b) The Assignment and Assumption Agreement, referred to in
Section 3, duly executed by the Purchaser.
(c) The executed opinion of Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP,
counsel to the Purchaser, referred to in Section 9.4.
(d) The certificate referred to in Section 9.5, duly executed by
the Purchaser.
(e) Certified resolutions of the Purchaser referred to in Section
9.6.
(f) Copies of the consents, approvals or waivers referred to in
Section 9.8.
(g) The Mutual Release referred to in Section 9.9.
(h) The Easement Termination Agreement referred to in Section 9.
10.
(i) The insurance certificate referred to in Section 5.4.
(j) A Resale Certificate for the Inventory.
(26)
11. Restrictive Covenant.
11.1. Noncompetition. The parties acknowledge that the Seller carries on
the Business within a ten mile radius of Hinckley, Minnesota (the
"Territory"), that a substantial portion of the value of the
Purchased Assets and the Business being purchased is the goodwill
the Seller has built up in the Territory and the ability of the
Purchaser and the Purchaser's other subsidiaries to expand their
operations within the Territory, and that the Purchaser would not be
purchasing the Purchased Assets but for such goodwill and ability to
expand. Accordingly, during the "Restricted Period" (as defined
below), the Seller and its respective affiliates shall not without
the prior written consent of the Purchaser (i) directly or
indirectly, in any part of the Territory, engage or be interested in
or carry on (whether as owner, partner, consultant, employee, agent,
or otherwise) any business, activity, or enterprise which is similar
to or competes with in any aspect of the Business; (ii) directly or
indirectly employ or otherwise engage, or offer to employ or
otherwise engage, any person who is then (or was at any time within
two years prior to the time of such employment, engagement, or offer
thereof) an employee, sales representative, or agent of the Seller
or the Purchaser relative, to the Business (as successor to the
Business of the Seller); or (iii) directly or indirectly induce or
influence any customer, supplier, or other person that has a
business relationship with the Seller or the Purchaser relative to.
the Business to discontinue or reduce the extent of such
relationship with the Purchaser relative to the Business (as
successor to the Business). As used herein, the "Restricted Period"
shall mean the period expiring on the second anniversary of the date
hereof. In addition, the Seller, and its affiliates shall never
divulge to any third parties any trade secrets, customer or supplier
lists, pricing information, marketing arrangements, strategies,
business plans, internal performance statistics, training manuals,
or other information concerning the Business that is competitively
sensitive or confidential, unless such information is required to be
disclosed by law, rule or regulation or by reason of subpoena, court
order or government action; provided, however, that the Seller and
its affiliates shall not disclose such information until they have
given the Purchaser prompt notice of the requirement to disclose and
the Purchaser, should it so desire, has had a reasonable opportunity
to take any action designed to prevent such disclosure.
11.2. Damage. Because a breach, or attempted or threatened breach, of this
restrictive covenant will result in immediately and irreparable
injury to the Purchaser for which the Purchaser will not have an
adequate remedy at law, the Purchaser shall be entitled, in addition
to all other remedies, to a decree of specific performance of this
covenant and to a temporary and permanent injunction enjoining such
breach, without posting bond or furnishing similar security.
11.3. Investment. The provisions of Section 11.1 notwithstanding, the
Seller or any affiliate of the Seller thereof may invest in a
publicly held company, provided that such investment does not
constitute more than five percent (5%) of the issued and outstanding
securities of such company and any such person is strictly a passive
investor without any direct or indirect involvement in the
operations of the company.
(27)
11.4. Further Assurances. The parties shall cooperate and take such
actions, and execute such other documents, at the Closing or
subsequently, as either may reasonably request in order to carry out
the provisions or purpose of this Agreement.
11.5. The Seller's Employees.
(a) Offer of Employment. Seller's Employees relative to the
Business who accept past service with the Seller for the
purposes of determining their vesting in or eligibility for
any employee plan, hospital, medical, dental or disability
plan, vacation or sick leave, and life insurance benefits of
the Purchaser. No credit shall be allowed for past service
with the Seller relative to the Business in determining the
amount of any financial benefit under such benefit plans
(b) Severance Benefits. The Purchaser shall not have any
obligation to make severance payments to any of the Seller's
employee relative to the Business by virtue of such employees
termination of employment with or by the Seller prior to or as
of the Closing, or termination by the Purchaser subsequent to
the Closing other than as specifically provided for in the
benefit plans adopted by the Purchaser and specifically made
applicable to such employees hired by the Purchaser.
(c) Credit for Service with Seller. If any former employee hired
by the Purchaser is given credit under this Agreement for
service with the Seller, the service credited shall be
determined solely with reference to data provided to the
Purchaser by the Seller.
(d) Seller's Employment Agreements. The Purchaser shall not have
any responsibility or liability under any deferred
compensation agreement or Plan, or any individual written
agreement between the Seller and any of the Seller's employees
relative, to the Business setting forth specific terms of
employment duration or compensation, including, without
limitation, any termination agreement, or any agreement for
parachute payments within the meaning of Code Section 280G.
(e) COBRA Requirements. The Seller shall be responsible for full
compliance with the requirements of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"), and
any costs, expenses, Claims, Liabilities, or obligations
related thereto, as required by COBRA.
(f) No Rights to Employment. Nothing, expressed or implied in this
Agreement shall confer upon any of the Seller's, employees,
beneficiaries, dependents, legal representatives or collective
bargaining agents of such employees any right or remedy of any
nature or kind whatsoever under or by reason of this
Agreement, including without limitation any right to
employment or to continued employment for any specified
period, at any specified location or under any specified job
category.
(28)
12. Brokers and Finders. Each party represents to the other that it has had no
dealings with any broker or finder or similar person in connection with
the transactions contemplated by this Agreement. Should any other claim be
made for a broker's, finder's or similar fee, on account of any actions or
dealings by a party or its agents, such party shall indemnify and hold the
other party harmless from and against any and all liability and expenses,
including reasonable attorneys' fees, incurred by reason of any claim made
by such broker, finder, or similar person.
13. Indemnification.
13.1. Indemnification by the Seller. The Seller shall indemnify, defend,
and hold harmless the Purchaser and its affiliates, promptly upon
demand at any time and from time to time, against any and all
losses, liabilities, claims, actions, damages, and expenses,
including, without limitation, attorneys' fees and disbursements
(collectively, "Losses"), arising out of or in connection with any
of the following: (a) any misrepresentation or breach of any
warranty made by the Seller in any of the Seller's Documents; (b)
the Retained Liabilities; (c) any breach or nonfulfillment of any
covenant or agreement made by the Seller in any of the Seller's
Documents; (d) the claims of any broker, finder, or similar person
engaged bit the Seller; (e) any customer claims for damaged or
defective goods sold or services provided prior to the Closing
except to the extent such goods may be returned, or services
refunded, by the Purchaser to the manufacturer for credit of not
less than 90% of the full purchase price paid to such manufacturer;
(f) any claim by any federal, state or local taxing authority for
taxes, interest, penalties, fees, assessments, duties and other
similar governmental charges which arise from the operation of the
Business by the Seller during any period or periods on or prior to
noon on the Closing Date; (g) any Environmental Liabilities and
Costs (as defined in Section 4.19) that are related in any way to
the Seller's use, control, ownership or operation of the Business or
the Purchased Assets, including, without limitation, any on-site or
off-site activities of the Seller involving Hazardous Substances,
Oils, Pollutants or Contaminants (as defined in Section 4.19), and
that occurred, existed, arose out of conditions or circumstances
that occurred or existed, or were caused, in whole or in part during
the period of time commencing on August 11, 1993 and continuing to
and including noon on the Closing Date, whether or not the pollution
or threat to human health or the environment or violation of any
Environmental Laws (as defined in Section 4.19) is described in the
Disclosure Schedule; and (h) without in any manner limiting the
foregoing, Losses which arise from the operation of the Business, or
from the ownership of the Purchased Assets by the Seller, during the
period of time commencing on August 11, 1993 and continuing to and
including noon on the Closing Date, except for those liabilities
which constitute Assumed Liabilities, or other liabilities expressly
assumed by the Purchaser hereunder.
13.2. Indemnification by the Purchaser. The Purchase shall indemnify,
defend, and hold harmless the Seller, promptly upon demand at any
time and from time to time, against any and all Losses arising out
of or in connection with any of the following: (a) any
misrepresentation or breach of any warranty made by the Purchaser in
any of the Purchaser's Documents; (b) any breach or nonfulfillment
of any covenant or
(29)
agreement made by the Purchaser in Purchaser's Documents; (c) the
claims of any broker, finder, or similar person engaged by the
Purchaser; (d) any failure to pay the Assumed Liabilities or other
liabilities expressly assumed by the Purchaser hereunder; (e)
without in any manner limiting the foregoing, any liabilities. or
obligations of, or claims or causes of action against the Seller
which arise from the operation of the Business by the Purchaser
during any period or periods after noon on the Closing Date; (0 any
customer claims for damaged or defective goods sold or services
provided by the Purchaser after noon on the Closing Date, except
such goods that were sold by Seller to Purchaser or services that
included the provision of such goods; (g) any claim by any federal,
state or local taxing authority for taxes, interest, penalties,
fees, assessments, duties and other similar governmental charges
which arise from the operation of the Business by the Purchaser
after noon on the Closing Date; and (h) any Environmental
Liabilities and Costs (as defined in Section 4. 19) that are related
in any way to the Purchaser's use, control, ownership or operation
of the Business or the Purchased Assets, including, without
limitation, any on-site or off-site activities of the Purchaser
involving Hazardous Substances, Oils, Pollutants or Contaminants (as
defined in Section 4.19), and that occurred, existed, arose out of
conditions or circumstances that occurred or existed, or were caused
solely after noon on the Closing Date.
13.3. Further Provisions Regarding Indemnification.
(a) Survival. Notwithstanding any examination or investigation
made by or for any party, all representations, warranties,
indemnities, covenants, and agreements made by the Seller in
the Seller's Documents, and made by the Purchaser in the
Purchaser's Documents, shall survive the Closing for a period
of one (1) year from the Closing Date.
(b) Limitations. Notwithstanding the foregoing, neither party
shall be entitled to indemnification for Losses arising out of
matters referred to in Sections 13.1 or 13.2, as applicable,
unless it shall have given written notice to the other party,
setting forth its claim for indemnification in reasonable
detail, within two (2) years after the Closing Date; provided,
however, that the foregoing limitation shall not apply with
respect to the obligations of the Purchaser assumed in Section
2. 1(a), a breach of the representations and warranties
contained in Section 4.1 (other than the last sentence
thereof), 4.2, 4.8 and 4.19, and in Sections 5.1, 5.2 and 5.3,
with respect to which sections respective statutes of
limitation of applicable law shall apply, and with respect to
breaches of the representations and warranties contained in
Section 4.7, such notice shall be given at any time prior to
the expiration of the last federal or state statute of
limitations relating to the tax liability discussed therein.
Notwithstanding the foregoing, no Party shall be entitled to
indemnification for any Losses arising out of matters referred
to in Sections 13.1(a) through (e), 13.1(h), or 13.2(a)
through (f) or 13.2(h), as applicable, unless and only to the
extent that such Losses exceed $30,000 in the aggregate.
(30)
(c) Defense. If an indemnified party shall receive notice of a
claim asserting Losses for which it is indemnified under this
Agreement, it shall promptly notify the indemnifying party.
The failure to notify the indemnifying party shall not relieve
the indemnifying party from its indemnity obligation, except
to the extent its defense of the action is actually
prejudiced. The indemnifying party may, at its cost and
expense, participate in the defense of such action and may
assume the defense with counsel satisfactory, in the exercise
of reasonable judgment, to the indemnified party. The
indemnifying party may settle, compromise and pay any claim of
or to any third party. If the indemnified party shall
reasonably conclude that its interests in such action are
materially different from those of the indemnifying party or
that it may have defenses that are different from or in
addition to those available to the indemnifying party, the
indemnified party may call such matters to the attention of
the indemnifying party, who shall use its best efforts to
incorporate such concerns into the defense of such action. If
the indemnified party still believes that its interests are
not being protected in such action, it may use separate
counsel to assert such matters, but at its sole cost an4
expense. If the indemnifying party shall assume the defense
with counsel satisfactory to the indemnified party, the
indemnifying party shall not be liable for any legal expenses
subsequently incurred by the indemnified party. If the claim
is one that cannot by its nature be defended solely by the
indemnifying party, the indemnified party shall make available
all information and assistance that the indemnifying party may
reasonably request.
14. Termination.
14.1. Termination Events. This Agreement may, by notice given on or before
the Closing Date, in the manner hereinafter provided, be terminated
and abandoned:
(a) Material Default. By the Purchaser or the Seller if the other
party materially defaults or breaches the Agreement with
respect to the due and timely performance of any of such other
party's covenants and agreements contained herein, or with
respect to due compliance with any of such other party's
representations and warranties contained herein, and such
default shall have not been cured within ten (10) days after
receipt of notice from the party alleging default specifying
such default with particularity, unless the default is of a
type which cannot be cured within ten (10) days after receipt
of notice, in which case such other party shall have a
reasonable time within which to cure such default.
(b) Conditions Not Met. By the Purchaser if all of the conditions
set forth in Section 8 shall not have been satisfied (or are
incapable of being satisfied) on or before Closing or waived,
by the Purchaser on or before such date; or by the Seller, if
all of the conditions set forth in Section 9 shall not have
been satisfied (or are incapable of being satisfied) by
Closing or waived by the Seller on or before such date.
(31)
(c) Mutual Consent. By mutual consent of the of the Purchaser and
the Seller.
(d) Closing Not Occurred. By either the Purchaser or the Seller if
the Closing shall not have occurred, through no fault of
either party, on or before June 30, 1998 or such later date as
may be agreed upon by the parties.
(e) Effect of Termination. Each party's right of termination
hereunder is in addition to any other rights it may have
hereunder or otherwise. If this Agreement is rightfully
terminated pursuant to this Section 14, all further
obligations of the parties hereunder shall terminate, except
for the obligations set forth in Section 15.6.
(f) Confidentiality. If this Agreement is terminated, the
Purchaser will promptly return (or destroy, if requested by
the Seller) any material which the Seller has furnished to the
Purchaser, and the Purchaser agrees to take all reasonable
steps to protect and maintain the confidential nature of any
such information obtained by the Purchaser in its
investigation of the Seller.
15. Miscellaneous.
15.1. Notices. All notices or other communications in connection with this
Agreement shall be in writing and shall be considered given when
personally delivered or when mailed by registered or certified mail,
postage prepaid, return receipt requested, or when sent via
commercial courier or telecopier, directed, as follows:
If to the Seller:
Casino Resource Corporation
000 Xxxxxxxxx Xxxxxxxxx Xxxxx Xxxxxxx, Xxxxxxxxxxx 00000
Attn: Xx. Xxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With copies to:
Xxxxxxx, Rumble & Xxxxxx, Professional Association
0000 Xxxxx Xxxxxx Towers
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Purchaser:
Corporate Commission of the
Mille Lacs Band of Ojibwe Indians
(32)
XXX 00, Xxx 000 Xxxxxx, XX 00000
Attn: Commissioner of Corporate Affairs
Telephone No.: (000) 000-0000, Ext. 5776
Facsimile No.: (000) 000-0000
With copies to:
Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000 Xxxxxxxxxxx, XXX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
15.2. Entire Agreement. This Agreement (which includes the schedules and
exhibits) sets forth the parties' final and entire agreement with
respect to its subject matter and supersedes any and all prior
understandings and agreements, oral or written, relating thereto.
This Agreement can be amended, supplemented, or changed, and any
provision, of this Agreement can be waived, only by a written
instrument making specific reference to this Agreement signed by the
party against whom enforcement of any such amendment, supplement,
change, or waiver is sought.
15.3. Successors. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective heirs, executors,
administrators, personal representatives, successors, and assigns;
provided, however, that neither this Agreement nor any right or
obligation under this Agreement may be assigned or transferred,
except that Purchaser may assign this Agreement and its rights under
this Agreement to any direct or indirect wholly-owned subsidiary of
the Purchaser and to financial institutions providing the Financing.
15.4. Section Headings. The section headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
15.5. Other Discussions. Unless this Agreement shall have been terminated,
the Seller shall not consider or entertain any offers for, or hold
discussions with any person regarding, the acquisition of arty
assets or capital stock of the Seller relative to the Business.
15.6. Fees and Expenses, Sales Taxes. Whether or not the transactions
contemplated by this Agreement are consummated, the parties shall
pay their own respective expenses.
15.7. Severability. If any provision of this Agreement shall be held by
any court of competent jurisdiction to be illegal, invalid, or
unenforceable, such provision shall be construed and enforced as if
it had been more narrowly drawn so as not to be illegal, invalid, or
unenforceable, and such illegality, invalidity, or unenforceability
shall
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have no effect upon and shall not impair the enforceability of any
other provision of this Agreement.
15.8. Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the internal law of the State of
Minnesota (without reference to its rules as to conflicts of law).
15.9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
15.10.Bulk Transfers. The parties waive compliance with the requirements
of the bulk sales law of any applicable jurisdiction in connection
with the sale of the Purchased Assets to the Purchaser.
15.11.Waiver, Discharge, Etc. This Agreement may not be released,
discharged, abandoned, changed, or modified in any manner, except by
an instrument in writing signed on behalf of each of the parties by
their duly authorized representatives. The failure of any party to
enforce at any time any of the provisions of this Agreement shall in
no way he construed to waive any such provision, nor in any way to
affect the validity. of this Agreement or any part thereof or the
right of any party thereafter to; enforce each and every such
provision. No waiver of any breach of this Agreement shall be held
to be a waiver of any other or subsequent breach.
00.00.Xxxxxxx Waiver of Sovereign Immunity. The Purchaser hereby waives
its sovereign immunity from suit to the extent, and only to the
extent, stated in this Section 15.12. During the period that the
Purchaser's obligations under this Agreement are in existence, the
Purchaser consents to be sued, or named a party, by Seller in any
action arising under or related to this Agreement and seeking to
enforce a term or terms of this Agreement or seeking damages for the
Purchaser's violation hereof, brought or pursued in the United
States District Court for the District of Minnesota, the United
States Court of Appeals for the Eighth Circuit and the United States
Supreme Court jointly, the "Courts"); provided, however, that any
award of damages against the Purchaser shall be collectible from or
executable against only the undistributed or future income of the
Purchaser and shall not be collectible from or executable against
any other asset of the Purchaser. The Purchaser hereby agrees to
submit to the jurisdiction of the Courts, waives any objection to
the jurisdiction of the Courts and agrees riot to object to or
contest such jurisdiction. The Seller and the Purchaser hereby agree
to assert and argue that the Courts have jurisdiction over them in
any action under or related to this Agreement. If the Seller in any
way challenges the jurisdiction of the Courts in such an action,
such challenge shall render the limited waiver of sovereign immunity
provided for in this Section 15.12 ineffective with respect to the
action in which the challenge occurs. In addition to the Courts, the
Purchaser may be sued, or named, a party, in any action arising
under or related to this Agreement or related to the Purchaser's
related investment in the Company brought or pursued in the Court of
Central Jurisdiction of the Mille Lacs Band of Qjibwe Indians. The
limited waiver of sovereign immunity by the
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Purchaser provided for in this Section 15.12 shall not be effective
in any way relative to the Mille Lacs Band of Ojibwe Indians or any
of its assets.
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IN WITNESS WHEREOF, the parties have duly executed tins Asset Purchase
Agreement by their authorized representatives as of the date first above
written.
PURCHASER: CORPORATE COMMISSION OF THE
MILLE LACS BAND OF OJIWE INDIANS
By: _________________________________________
Its: ________________________________________
Dated: June 29, 1998
SELLER: CASINO RESOURCE CORPORATION
By: _________________________________________
Its: ________________________________________
Dated: June 29, 1998
CASINO BUILDING CORPORATION
By: _________________________________________
Its: ________________________________________
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SEE ANNEX
FOR EXHIBITS AND SCHEDULES
TO
ASSET PURCHASE AGREEMENT
