AMENDMENT NO. 1 TO PURCHASE AGREEMENT
Exhibit 2.2
EXECUTION VERSION
EXECUTION VERSION
This AMENDMENT NO. 1, dated as of September 17, 2007 (this “Amendment”), by and among
Resorts International Holdings, LLC, a Delaware limited liability company (“Seller”),
Ameristar Casinos, Inc., a Nevada corporation (“Buyer”) and Ameristar East Chicago
Holdings, LLC, an Indiana limited liability company and wholly owned subsidiary of Buyer
(“AECH”), is being entered into to amend that certain PURCHASE AGREEMENT dated as of April
3, 2007 (the “Purchase Agreement”), by and between Seller and Buyer. Capitalized terms
used and not otherwise defined herein shall have the meanings ascribed to such terms in the
Purchase Agreement.
R E C I T A L S
WHEREAS, on April 3, 2007, Seller and Buyer entered into the Purchase Agreement providing,
among other things, for the sale by Seller to Buyer of all of the membership interests of RIH
Acquisitions IN, LLC, an Indiana limited liability company (the “Company”);
WHEREAS, pursuant to that certain Assignment and Assumption Agreement, dated as of September
4, 2007, by and between Buyer and AECH, Buyer assigned its rights and obligations under the
Purchase Agreement to AECH; and
WHEREAS, Seller, Buyer and AECH (collectively, the “Parties”) now desire to amend the
Purchase Agreement as provided below.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Amendment to Article II of the Purchase Agreement. Article II of the Purchase
Agreement is hereby by adding the following new Section 2.22 at the end thereof:
“Section 2.22. Loan Documents. No event of default has occurred under the
Loan Documents (as such term is defined in that certain Loan Agreement dated as of October
24, 2006 between Lender, IN Borrower, RIH Acquisitions NJ, LLC, RIH Propco NJ, LLC, RIH
Acquisitions MS I, LLC, RIH Propco MS I, LLC, RIH Acquisitions MS II, LLC and RIH Propco MS
II, LLC).”
2. Amendment to Section 4.4 of the Purchase Agreement. Section 4.4 of the Purchase
Agreement is hereby amended by adding at the end thereof the following new subsection (c):
“(c) Notwithstanding anything in this Agreement to the contrary, following the
Closing, Seller shall be solely responsible with respect to all Liabilities of the
Company and/or the Company Subsidiary with respect to any claims by employees of the
Company or the Company Subsidiary or such employees’ covered dependents that are
made, incurred, existing or pending prior to the Closing Date (i) under any health
or medical (including dental, vision and prescription drug) benefit plans maintained
by the Company, the Company Subsidiary or any of their Affiliates or (ii) with
respect to workers compensation. Seller shall administer, or cause to be
administered, such claims and shall make timely payment of any amounts owed by the
Company or the Company Subsidiary with respect to such claims or, to the extent the
Company or the Company Subsidiary is required by applicable Law or the terms of any
insurance policy to make such payment, promptly make payment to the Company or the
Company Subsidiary, as applicable, following its request.”
3. Amendment to Section 4.10 of the Purchase Agreement. Section 4.10 of the Purchase
Agreement is hereby amended as follows:
(a) Section 4.10(c) the Purchase Agreement is hereby amended and restated in its entirety to
read as follows:
“(c) Intentionally Omitted.”
(b) Section 4.10(d) the Purchase Agreement is hereby amended and restated in its entirety to
read as follows:
“(d) Use, Redemption and Destruction of Chips. After the date hereof
through the Closing, Seller shall manage the chip Liability in the Ordinary Course
of Business. On or prior to the first anniversary of the Closing Date, Buyer shall
cause the Company to replace all chips, slot tickets, tokens and plaquemines used at
the Property with chips, slot tickets, tokens and plaquemines that do not include
the “Resorts” name. Thereafter, pursuant to the Indiana Gaming Regulations and as
approved and directed by the applicable Gaming Authorities, Buyer shall redeem for
cash all of the Company’s then-outstanding gaming chips, unredeemed slot tickets (to
the extent such slot tickets are, by their terms, still eligible for redemption),
tokens and plaquemines.”
4. Amendment to Section 4.23(a) of the Purchase Agreement. Section 4.23(a) of the
Purchase Agreement is hereby amended by adding the following at the end thereof:
“For so long as Seller shall maintain directors’ and officers’ liability insurance
or employment practices liabilities insurance for the directors and officers of the
entities that own Resorts Tunica, Bally’s Tunica and/or the Atlantic City Hilton
(the “Other Properties”) such policy (the “D&O/EPL Policy”) shall (on terms and
conditions substantially similar to such insurance in effect on the date hereof)
also cover the current and former directors and officers of the Company and the
Company Subsidiary with respect to periods prior to the Closing Date. In the
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event a claim is made under the D&O/EPL Policy relating to any current or former
director or officer of the Company or the Company Subsidiary, in his or her capacity
as such, that results in an increase to the premiums payable under such policy (or
any renewal policy) then the Buyer shall promptly reimburse Seller for the cost of
any such increase; provided, however, that if at any time following
the Closing and prior to the time a claim is made under the D&O/EPL Policy relating
to a current or former director or officer of the Company or the Company Subsidiary,
in his or her capacity as such, Buyer informs Seller that it desires, in its sole
discretion, to release Seller from its obligations to maintain the D&O/EPL Policy
under this sentence, then Buyer shall be released from its obligation to reimburse
Seller for the cost of any increase in the premium of such D&O/EPL Policy. In
addition, Seller agrees to give Buyer reasonable prior notice if Seller determines
to no longer maintain the D&O/EPL Policy for the directors and officers of the Other
Properties.”
5. Amendment to Section 4.17(c) of the Purchase Agreement. Section 4.17(c) of the
Purchase Agreement is hereby amended by inserting the following language before the “.” at the end
thereof:
“; provided, however, that the amount of any Escrowed Development
Taxes (as defined herein) and any earnings thereon that are transferred on the
Closing Date to a Company bank account in accordance with Section 4.26 hereof shall
be credited against the amount of any Development Taxes for which Seller is
responsible (either directly or through indemnification of Buyer or its Affiliates)
pursuant to this Section 4.17”
6. Amendment to Article IV of the Purchase Agreement. Article IV of the Purchase
Agreement is hereby by adding the following new Sections 4.26 and 4.27 at the end thereof:
“Section 4.26 Escrow of Development Taxes.
(a) Between the date hereof and the Closing Date, Seller shall, or shall cause the
Company to, continue to deposit in an account with U.S. Bank (the “Development
Tax Bank Account”) all amounts that accrue (or have accrued) with respect to the
Development Taxes that are payable to East Chicago Second Century, Inc. (calculated
in a manner consistent with past practices and the Development Agreements (as
defined herein)) and none of Seller, the Company or the Company Subsidiary shall
make any withdrawals from the Development Tax Bank Account (including previously
deposited funds with respect to such Development Taxes or any earnings on such
previously deposited funds), unless such withdrawal is made in connection with a
corresponding payment of the Development Taxes to East Chicago Second Century, Inc.
in accordance with the Development Agreements.
(b) On the Closing Date, all amounts that have been deposited in the Development Tax
Bank Account or otherwise set aside or reserved in connection with the Development
Taxes that are payable to East Chicago Second Century,
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Inc. (the “Escrowed Development Taxes”) and any earnings thereon shall be
transferred to Account No. 153910593448, in the Company’s name, at U.S. Bank.
Following the Closing Date, the Company and/or Buyer shall have sole control over
the Escrowed Development Taxes. Notwithstanding anything to the contrary in this
Agreement, Buyer agrees to, or shall cause the Company to, pay all Development Taxes
as and when required after the Closing.
Section 4.27 Litigation. Notwithstanding anything to the contrary in this
Agreement, from and after the Closing, Seller shall at its own cost, risk and
expense (i) take control of the defense and investigation of those matters set forth
on Schedule 4.27 of the Seller Disclosure Letter (collectively, the “Excluded
Litigation”), (ii) employ and engage attorneys of its own choice to handle and
defend the same and (iii) compromise or settle such Excluded Litigation, which
compromise or settlement shall be made only if such compromise or settlement
contains an unconditional release of the Company and its subsidiaries.
Notwithstanding anything to the contrary in this Agreement, Seller shall be solely
responsible for all amounts payable in connection with the Excluded Litigation
(including legal fees and other out-of-pocket expenses) and shall fully indemnify,
defend and hold Buyer, the Company and the Company Subsidiary harmless from and
against any amounts required to be paid in connection with the Excluded Litigation.
Seller shall be entitled to retain, and none of the Buyer, the Company or the
Company Subsidiary shall have any claim to, any amounts received by, or awarded to,
Seller, the Company or the Company Subsidiary in connection with the Excluded
Litigation. In addition, Buyer, the Company and the Company Subsidiary agree to
promptly pay to Seller any and all amounts received under any Seller Policy in
respect of Excluded Litigation. Seller represents and warrants to Buyer that Target
Closing Working Capital reflects the inclusion of a receivable of $179,000 with
respect to one of the Excluded Litigation matters.”
7. Amendment to Section 7.1(b) of the Purchase Agreement. Section 7.1(b) of the
Purchase Agreement is hereby amended by adding the following the following at the end thereof:
“Notwithstanding anything to the contrary in this Section 7.1(b), the representation
and warranties in Section 2.22 shall survive indefinitely.”
8. Amendment to Section 7.2(a) of the Purchase Agreement. Section 7.2(a) of the
Purchase Agreement is hereby amended by inserting the following language before the “.” at the end
thereof:
“; and
(iii) the Loan Documents (as such term is defined in that certain Loan Agreement dated
as of October 24, 2006 between Lender, IN Borrower, RIH Acquisitions NJ, LLC, RIH Propco NJ,
LLC, RIH Acquisitions MS I, LLC, RIH Propco MS I, LLC, RIH Acquisitions MS II, LLC and RIH
Propco MS II, LLC).”
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9. Amendment to Section 7.6 of the Purchase Agreement. Section 7.6 of the Purchase
Agreement is hereby amended as follows:
(a) The last sentence of Section 7.6(a) of the Purchase Agreement is hereby amended and
restated as follows:
“Notwithstanding the foregoing, the limitations set forth in this Section 7.6(a) shall
not apply to any claims for indemnification in respect of any breach of Sections 2.2(a),
2.3, 2.6(d), 2.17, 2.18, 2.22, 3.2(a) and 3.3, as applicable.”
(b) Section 7.6(b) of the Purchase Agreement is hereby amended by adding the following at the
end thereof:
“Notwithstanding the foregoing, this Section 7.6(b) shall not be applicable to any
Damages payable to a Buyer Indemnified Party pursuant to Section 7.2(a)(iii).”
10. Amendment to Section 7.8(b) of the Purchase Agreement. Section 7.8(b) of the
Purchase Agreement is hereby amended by adding the following the following at the end thereof:
“Notwithstanding the foregoing, this Section 7.8(b) shall not be applicable to any
Damages payable to a Buyer Indemnified Party pursuant to Section 7.2(a)(iii).”
11. Amendment to Section 9.1 of the Purchase Agreement. Section 9.1 of the Purchase
Agreement is hereby amended as follows:
(a) The definition of “Adjusted Working Capital” is hereby amended and restated in its
entirety read as follows:
“ “Adjusted Working Capital” means, as of any date, the (a) the consolidated
current assets of the Company and the Company Subsidiary as of such date, less (b)
the consolidated current Liabilities of the Company and the Company Subsidiary as of
such date, in each case determined in accordance with GAAP in a manner consistent
with the preparation of the Financial Information; provided, however, that (i) the
following shall be excluded from current assets or current liabilities, as
applicable, for purposes of determining Adjusted Working Capital: (A) the assets and
Liabilities that are components of the definition of “Closing Cash” (including 100%
of the Liabilities described in clause (B) thereof); (B) Liabilities that are
retained by the Seller pursuant to Section 4.4(c) or 4.27 of this Agreement; (C) the
portion of any prepaid insurance premiums that are refundable to Seller pursuant to
the cancellation of any insurance policies (or coverage thereunder with respect to
the Company and the Company Subsidiary) as contemplated in Section 4.11(a); and (D)
any Liabilities between Seller or any of its Affiliates (other than the Company and
the Company Subsidiary), on the one hand, and the Company or the Company Subsidiary,
on the other hand and (ii) for purposes of calculating Closing Working Capital, (1)
only 84% of the value of all of the Company’s outstanding gaming chips, unredeemed
slot tickets, tokens and plaquemines shall be included in current liabilities, (2)
the amount of current liabilities with respect to Taxes shall be identical to the
amount of such
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Tax liabilities reflected in Target Closing Working Capital (which amount the
parties agree is $8,956,000), and (3) in light of the parties’ agreement in Section
4.27 that Seller retain the right to any proceeds from, or claims with respect to,
the Excluded Litigation, the amount of current assets shall be reduced by $179,000.”
(b) The definition of “Closing Cash” is hereby amended by inserting after the word “GAAP” in
clause (i) thereof the following language:
“(provided that none of the Escrowed Development Taxes shall constitute “cash” for
purposes of this definition)”
(c) The definition of “Taxes” is hereby amended by inserting the following at the end thereof:
“Without in any way limiting the generality of the foregoing, the terms “Tax” and
“Taxes” shall be deemed to include the Development Taxes.”
(d) The following new definition is hereby added to Section 9.1 of the Purchase Agreement in
the appropriate alphabetical order:
“ “Development Taxes” means the obligation of the Company to make annual
payments, in an aggregate amount equal to 3.75% of its adjusted gross receipts (as
defined in the Gaming Laws of the State of Indiana), to the City of East Chicago,
Foundations of East Chicago, Inc. (as successor by merger to Twin City Education
Foundation, Inc. and East Chicago Community Foundation, Inc.) and East Chicago
Second Century, Inc. (collectively, the “Development Tax Recipients”)
pursuant to certain commitments made by the Company and/or its predecessors with
respect to the Property (including a letter dated April 18, 1995 from Showboat
Marina Partnership to the Mayor of the City of East Chicago and a memorandum of
understanding, dated August 25, 2000, between Xxxxxx’x East Chicago and the City of
East Chicago (collectively, the “Development Agreements”)), together with
any interest, penalties or additions to such payments imposed in connection
therewith or with respect thereto.”
12. Amendment to Seller Disclosure Letter. The Seller Disclosure Letter is hereby
amended by adding Exhibit A hereto as Section 4.27 thereof.
13. General.
(a) Sections 9.2, 9.4, 9.5, 9.7, 9.10 and 9.11 of the Purchase Agreement are
incorporated herein as if fully set forth, mutatis mutandum.
(b) The Purchase Agreement (and the Exhibits and Schedules attached thereto) as
modified, amended and changed by this Amendment, and the other documents delivered pursuant
hereto or thereto constitute the full and entire understanding and agreement between and
among the Parties with regard to the subject matter hereof and thereof.
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(c) Except as expressly provided herein, this Amendment shall not constitute an
amendment, modification or waiver of the Purchase Agreement (or any provision thereof or any
Exhibit and Schedule attached thereto) and the provisions of the Purchase Agreement (and the
Exhibits and Schedules attached thereto) as modified hereby shall otherwise continue in full
force and effect.
[Signatures on following page]
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed and delivered
as of the date first set forth above.
| RESORTS INTERNATIONAL HOLDINGS, LLC |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| AMERISTAR CASINOS, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| AMERISTAR EAST CHICAGO HOLDINGS, LLC |
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| By: | ||||
| Name: | ||||
| Title: | ||||
EXHIBIT A
SECTION 4.27
| 1. | Resorts International Holdings, LLC and RIH Acquisitions IN, LLC v. Federal Insurance Co. Action against insurance carrier seeking a declaration that losses sustained by Resorts International Holdings, LLC in a sophisticated criminal employee cheating scam are covered by an insurance policy issued by Federal Insurance Co. |
| 2. | Xxxx Xxxxx v. Colony Capital, LLC and RIH Acquisitions IN, LLC. Claim by Abbas alleging that he was forcefully dragged from his hotel room at Resorts East Chicago and taken down to the lobby. The Depart of Immigration and Naturalization Services currently has a retainer as Abbas is a Jordanian national. Colony Capital, LLC and RIH Acquisitions IN, LLC have filed a motion for summary judgment. |
