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EXHIBIT 10.17
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of this ____ day of January, 1996 by and among CROWN CASINO
CORPORATION, a Texas corporation ("Crown"), and CASINO AMERICA, INC., a
Delaware corporation ("Casino America").
RECITALS
A. The outstanding capital stock of St. Xxxxxxx Gaming Company,
Inc. (the "Company") (the "Company Stock") is currently owned as follows: 50%
by Crown ("Crown Stock") and 50% by Louisiana Riverboat Gaming Partnership, a
Louisiana general partnership ("LRGP") (the "LRGP Stock"). LRGP is a
partnership composed of two equal partners, CSNO, Inc. and Louisiana River Site
Development, Inc. ("LRSD").
B. Crown desires to sell the Crown Stock to Casino America and
Casino America is willing to purchase the Crown Stock.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements, and upon the terms and subject to the
conditions hereinafter set forth, the parties do hereby agree as follows:
Section 1. Purchase and Sale of Stock. Crown shall sell, transfer,
assign and deliver the Crown Stock to Casino America and Casino America shall
purchase the Crown Stock from Crown on the Closing Date (as hereinafter
defined). The purchase price shall be the delivery to Crown of 1,850,000
shares of the validly issued and fully paid-for common capital stock, $.01 par
value per share, of Casino America (the "Casino America Stock"). Appropriate
adjustment shall be made in the number of shares of Casino America Stock
delivered to Crown at the Closing in the event of any stock splits or dividends
or similar events with respect to the common stock of Casino America between
the date of this Agreement and the Closing Date.
1.1 Delivery of Stock. (a) At the Closing (as hereinafter
defined), Crown shall deliver to Casino America a certificate for the Crown
Stock in negotiable form, duly endorsed in blank or with separate stock
transfer powers attached, free and clear of all liens, encumbrances, claims and
other charges thereon of every kind, except for a security interest in favor of
Nomura Holding America Inc. ("Nomura"), if applicable.
(b) At the Closing, Casino America shall deliver to Crown a
certificate or certificates (as requested by Crown reasonably in advance) for
the Casino America Stock in negotiable form, free and clear of all liens,
encumbrances, claims and other charges thereon of every kind. Upon the
execution of this Agreement, Casino America shall execute and deliver to Crown
a Registration Agreement relating to resale of the Casino America Stock by
Crown in the form attached to this Agreement as Exhibit A which shall require
Casino America, subject to certain conditions, to register the Casino America
Stock with the Securities and Exchange Commission for resale, and to
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maintain such registration for a period of two years after the Closing Date.
At the Closing, Crown shall execute and deliver to Casino America an
irrevocable proxy in the form attached as Exhibit B to this Agreement which
shall entitle Casino America to vote the Casino America Stock and any other
Casino America stock issued in connection with exercise of the warrants
described in Section 1.3, below, for so long as any Casino America stock is
owned by Crown or any affiliate of Crown.
1.2 Modification of Purchase Money Note. (a) On June 9, 1995,
LRGP purchased the LRGP Stock from Crown for a purchase price of $21,000,000,
payable as follows: payment of $1,000,000 cash and the delivery of a
$20,000,000 term note (the "Purchase Money Note") of LRGP payable to the order
of Crown, which Purchase Money Note was secured by the pledge of the LRGP
Stock.
(b) On the Closing Date, Casino America shall cause LRGP to
replace the Purchase Money Note with two promissory notes of LRGP, each in the
principal amount of $10,000,000, respectively referred to herein as "Purchase
Money Note A" and "Purchase Money Note B." The first payments under Purchase
Money Note A and Purchase Money Note B shall occur on the first business day
(the "Commencement Date") of the first month after the Closing Date and shall
collectively represent (i) interest accrued under the Purchase Money Note
through the Closing Date, and (ii) interest accrued under Purchase Money Note A
and Purchase Money Note B from the Closing Date through the Commencement date.
Purchase Money Note A shall provide for payment of monthly interest for the
full term thereof, and shall provide for equal fully amortizing quarterly
payments of principal, beginning on the first anniversary of the Commencement
Date, with a final maturity five years after the Commencement Date. Purchase
Money Note B shall provide for payment of monthly interest only for a period of
five years from the Commencement Date, with all principal and accrued but
unpaid interest being due at a final maturity five years after the Commencement
Date. The Purchase Money Note shall be cancelled as of the Closing Date.
Forms of the new Purchase Money Notes A and B are attached hereto as Exhibit
C-1 and Exhibit C-2, respectively.
(c) Casino America has an option to purchase the partnership
interest of LRSD (the "LRSD Interest") in LRGP. If Casino America or any
subsidiary thereof purchases all or substantially all of such interest then,
immediately upon the later to occur of the Closing Date or the consummation of
the purchase of the LRSD Interest (i) Casino America shall cause LRGP or its
successor (but not Casino America) to guarantee and be personally liable for
the payment of both principal and interest on both of the new Purchase Money
Notes A and B; and (ii) the repayment terms of Purchase Money Note B shall be
amended to conform to Purchase Money Note A.
1.3 Warrant to Convert Purchase Money Note B Into Equity. (a) On
Xxxx 0, 0000, Xxxxxx America issued a warrant (the "Original Warrant") to Crown
to purchase up to 416,667 shares of the common capital stock of Casino America.
Pursuant to the Original Warrant, at any time prior to the repayment in full of
the Purchase Money Note, Crown has the right to convert up to 50% of the
principal amount outstanding on the Purchase Money Note (but not more than a
total conversion of $5,000,000) for common capital stock of Casino America at a
conversion rate of $12 per share. On the Closing Date, the Original Warrant
will be amended (the "Amended Original Warrant") to provide that Crown has the
right to convert up to the principal amount outstanding on
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Purchase Money Note B (but not more than a total conversion of $5,000,000) for
416,667 shares of common capital stock of Casino America at the same conversion
rate of $12 per share, and on the same terms, and extending the expiration date
until five (5) years from the Closing Date, and no warrant shall be in place
with respect to Purchase Money Note A. At the Closing, the Original Warrant
will be delivered to Casino America for cancellation.
(b) On the Closing Date, Casino America shall issue an
additional warrant (the "Additional Warrant") to Crown to purchase up to
416,667 shares of the common capital stock of Casino America. The Additional
Warrant shall be substantially in the form of the Amended Original Warrant.
Pursuant to the Additional Warrant, Crown shall have the right to convert the
principal amount outstanding on Purchase Money Note B (but not more than a
total conversion of an additional $5,000,000) for common capital stock of
Casino America at the same conversion rate of $12 per share.
(c) The Amended Original Warrant must be exercised in full
before Crown may exercise any portion of the Additional Warrant.
(d) The forms of the Amended Original Warrant and the
Additional Warrant are attached hereto as Exhibit D-1 and Exhibit D-2,
respectively.
1.4 First Refusal to Purchase Casino America Stock. (a) In the
event that Crown desires to transfer record or beneficial ownership of an
aggregate of 500,000 or more shares of Casino America Stock or stock of Casino
America obtained upon exercise of the Amended Original Warrant or the
Additional Warrant, either in a single transaction or in a series of
transactions with the same or affiliated parties occurring within 120 days of
one another, Crown shall notify Casino America in writing of the terms and
conditions of the proposed sale and the identity of the proposed transferee,
and Casino America, or any other person or entity designated by Casino America,
shall have 5 business days thereafter within which to notify Crown in writing
of Casino America's, or Casino America's guarantee of such other party's,
irrevocable commitment to purchase all such shares on the aforesaid terms and
conditions. If Casino America timely notifies Crown of its or such other
party's irrevocable commitment to purchase all of such shares, Crown shall sell
and deliver the purchased shares to Casino America, and Casino America or such
other party shall pay Crown the purchase price therefor in accordance with the
aforesaid terms and conditions, at a closing date specified by Casino America
but in no event later than 15 days after Casino America's or such other third
party's affirmative notice to Crown. If Casino America does not timely notify
Crown of its irrevocable commitment to purchase all of such shares or if Casino
America notifies Crown that it does not desire to purchase such shares, Crown
shall be free to sell such shares to the proposed transferee pursuant to (but
only pursuant to) the aforesaid terms and conditions, in which case the
irrevocable proxy and right of first refusal as to those Casino America Shares
shall terminate. If the shares of Casino America Stock or stock of Casino
America obtained upon exercise of the Amended Original Warrant or the
Additional Warrant are to be transferred by Crown in a transaction subject to
this Section, whereby the consideration to be acquired by Crown in exchange for
such shares is property and not cash or other marketable securities with a
readily available market value, then the shares to be exchanged shall be valued
at the Fair Market Value (as defined in Section 1.5 hereof),
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except that the 45 trading days shall be measured immediately prior to the date
on which Crown notifies Casino America of the proposed sale.
(b) The provisions of Section 1.4(a) shall not apply to
transfers of Casino America Stock or to any other Casino America stock issued
in connection with exercise of the warrants described in Section 1.3, to
persons who are affiliated with Crown, or to a pledge of the Casino America
Stock or to any other Casino America stock issued in connection with exercise
of the warrants described in Section 1.3, in either of which events the
irrevocable proxy and the right of first refusal in favor of Casino America
shall remain in full force and effect as to shares transferred in reliance on
this Section 1.4(b).
1.5 Five Percent Ownership. Crown acknowledges that its
acquisition of the Casino America Stock will result in its ownership of in
excess of five percent of the issued and outstanding common stock of Casino
America (a "Five Percent Holder") and that, as a Five Percent Holder, Crown may
be subject to licensing and other regulatory review and approval procedures
("Regulatory Review"), by any governmental or quasi-governmental agency which
is authorized or empowered to regulate the gaming operations of Casino America
("Regulatory Authority") in the jurisdictions in which Casino America conducts
or proposes to conduct gaming activities. For so long as Crown (together with
any of its affiliates) are deemed to be a Five Percent Holder with respect to
the securities of Casino America or any of its affiliates or subsidiaries,
Crown agrees to cooperate fully and to cause its affiliates to cooperate fully
with the representatives of all such Regulatory Authorities in making
applications, supplying information, providing reports, attending licensing and
other hearings, and otherwise cooperating with and complying with the
requirements of all such Regulatory Authorities so as not to interfere with
Casino America's ability to develop new business or to continue to conduct its
existing business. Crown also agrees that in the event the Board of Directors
of Casino America reasonably determines based upon communications with a
Regulatory Authority that Crown or any of its affiliates is likely to be
determined unsuitable by such Regulatory Authority and its or its affiliates'
security ownership in Casino America may result in Casino America not being
permitted to engage or to continue to engage in a gaming activity, then, within
the lesser of 120 days of notice of such event from Casino America to Crown or
the applicable period prescribed by the appropriate Regulatory Authority
(provided Casino America timely notifies Crown of such a determination), Crown
will attempt to dispose and/or cause its affiliates to attempt to dispose of
all or that portion of its or its affiliates' interest in Casino America (the
"Divestiture Portion") as is determined necessary to permit Casino America to
engage in such gaming activity. Following the expiration of such period,
Casino America shall, for a period of 60 days, have the right, but not the
obligation, to purchase all or any part of the Divestiture Portion then owned
by Crown or its affiliates at a price per share equal to the "Fair Market
Value" (as hereinafter defined) of such stock, payable one-third in cash with
the balance represented by a promissory note of Casino America bearing interest
at 11 1/2% with interest payable monthly and payable in two equal installments
of principal one and two years from the date of issue, respectively. In the
event that Casino America exercises its right to purchase all or any portion of
such Divestiture Portion, Casino America shall arrange to close such sale at
Casino America's principal executive offices within 30 days of delivering
written notice to Crown that Casino America intends to exercise its option to
purchase all or a portion of such Divestiture Portion, specifying the number of
shares to be purchased. The term "Fair Market Value" shall be the price per
share of stock represented by the
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average of the closing bid and asked prices of the Casino America stock, as
quoted by the National Association of Securities Dealers, Inc. Automated
Quotations System (NASDAQ) (or such other securities association, quotation
system or securities exchange on which the Casino America stock is then listed
or authorized for quotation), for the 45 trading days prior to the date on
which Casino America provides written notice to Crown that Casino America
intends to purchase all or a portion of the Divestiture Portion then held by
Crown. In the event that there is no organized trading market for Casino
America's stock at the time Casino America provides such notice to Crown, then
the Fair Market Value of the shares of stock to be sold by Crown and purchased
by Casino America shall be determined by arbitration in New Orleans, Louisiana
in accordance with the rules of the American Arbitration Association then
pertaining. Notice of the restrictions imposed upon Crown's ownership of the
Casino America Stock by this Section shall be noted on the certificates issued
to Crown.
1.6 Refinancing of Existing Debt; Subordination of Purchase Money
Note. The Purchase Money Note is currently subordinated to certain
indebtedness of LRGP to Nomura and Hibernia National Bank ("Hibernia"). If
LRGP refinances any or all of such existing indebtedness with the same or other
persons before or after the Closing Date and the Closing occurs, Crown agrees
that the Purchase Money Notes A and B shall be subordinated to such refinancing
indebtedness but only to the extent of the lesser of $45,000,000 or the
principal balance of the indebtedness being refinanced as of the date of the
refinancing. Notwithstanding the foregoing, in the event that Casino America
purchases all or substantially all of the LRSD Interest as described in Section
1.2(c) (so that Casino America and/or any affiliate thereof directly or
indirectly collectively own all or substantially all of the partnership
interests or assets of LRGP), and if LRGP (or its successor) refinances or has
refinanced any or all of such existing indebtedness, the parties agree that at
the option of Casino America either (i) the Purchase Money Note A and Purchase
Money Note B shall not be subordinated to any indebtedness or (ii) Purchase
Money Note A shall be paid off at the later of the time of any refinancing and
the Closing Date and Purchase Money Note B shall become an unsecured,
subordinated note of Casino America (but such subordination shall permit
exercise of the Amended Original Warrant and the Additional Warrant) or (iii)
any combination of (i) and (ii) above, which provides that a portion of
Purchase Money Note A (at least $5,000,000) shall be paid and the balance shall
not be subordinate to any indebtedness and shall continue to be secured.
Casino America agrees that any refinancing of the indebtedness will comply with
the provisions of this Section.
1.7 Joint Venture. In the event the transaction described in
Section 6.9 hereof is consummated but the Closing of the transactions
contemplated by this Agreement does not occur, as a result of the failure to
obtain the approval of the Gaming Commission or the Enforcement Division, Crown
agrees, immediately upon consummation of the transaction described in Section
6.9, to execute and deliver a Joint Venture Agreement in accordance with the
term sheet attached hereto as Exhibit E providing for, among other things, the
payment to Crown of an annual docking fee of $2 million.
1.8 Closing. The consummation (the "Closing") of the transactions
contemplated by this Agreement shall take place at the offices of Xxxxxx
Xxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx on that date which is not
more than ten days after all conditions of Closing set forth in
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Section 6 and Section 7 hereof have been satisfied or waived, or at such other
time and place as shall be mutually agreed upon by Crown and Casino America,
but in no event later than June 30, 1996 (the date of Closing being herein
referred to as the "Closing Date"), provided, however, if all conditions set
forth in Sections 6 and 7 hereof have been satisfied except for the condition
set forth in Section 6.9 hereof, then the Closing shall take place
contemporaneously with the satisfaction of the condition set forth in Section
6.9 hereof.
Section 2. Representations and Warranties of Crown. Crown represents
and warrants to Casino America as follows:
2.1 Organization and Authority. Crown is a corporation duly
organized and validly existing under the laws of the State of Texas, and has
the corporate power and authority to perform its business as presently
conducted and to own and lease the properties used in connection therewith.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby are within the power of Crown and have been
duly authorized by all necessary corporate and other action. This Agreement
constitutes the valid obligation of Crown legally binding upon it and
enforceable in accordance with its terms.
2.2 Stock Ownership. Crown is the lawful owner of record and
beneficially owns all of the Crown Stock, free and clear of any liens,
encumbrances, rights, equities, security interests and any other adverse claims
whatsoever, except for the security interest created by the Crown Stock Pledge
Agreement dated as of July 20, 1995 executed by Crown in favor of Nomura.
Crown is not a party to, or bound by, any written or oral contract or agreement
which grants to any person an option or right of first refusal or other right
to acquire at any time, or upon the happening of any stated events, any of the
Crown Stock, except for a right of first refusal to purchase the Crown Stock in
favor of LRGP pursuant to the Shareholders Agreement between Crown and LRGP
dated as of June 9, 1995.
2.3 No Conflict. Upon obtaining the consents described in
Schedule 2.3, neither the execution, delivery or performance of this Agreement
by Crown, nor the consummation of the transactions contemplated hereby will (a)
violate, conflict with or result in a breach of any provisions of, constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, result in the termination of or accelerate the
performance required by, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of Crown
under, any of the terms, conditions or provisions of its Articles of
Incorporation or By-laws or any note, bond, mortgage, indenture, deed of trust,
lease, license, agreement or other instrument or obligation which binds it or
any of its assets or (b) violate any order, writ, injunction, decree, statute,
rule or regulation of any governmental body applicable to Crown or any of its
assets.
2.4 Investment Representations. Crown is acquiring the Casino
America Stock for the purpose of investment for its own account and not with a
view to or for resale in connection with any distribution thereof within the
meaning of Section 2(11) of the Securities Act. Crown acknowledges that (a)
the Casino America Stock has not been registered under the Securities Act or
the securities laws of any state in reliance on exemptions from the
registration requirements of
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the securities laws and that reliance upon such exemptions is predicated in
part on the representations of Crown contained in this Agreement, (b) the
Casino America Stock cannot be transferred unless it is subsequently registered
under the Securities Act or an exemption from such registration is available
with respect to such transfer, (c) Crown cannot sell, transfer or otherwise
dispose of the Casino America Stock in violation of the Securities Act or any
applicable federal or state law or regulation, (d) Casino America's records may
be marked to indicate such transfer restrictions, and (e) Casino America may
direct any transfer agent to enter a stop transfer order in its records with
respect to the Casino America Stock in accordance with the foregoing. Crown is
an "accredited investor" within the meaning of Regulation D under the
Securities Act. Crown is able to bear the economic and other risks associated
with an investment in the Casino America Stock.
2.5 Consents. Except for the consents described in Schedule 2.3,
all consents, approvals or authorizations required to be obtained by Crown in
connection with the transactions contemplated by this Agreement have been
obtained.
2.6 No Claims. Except as stated in Schedule 2.6 hereto, there is
no litigation, proceeding, governmental investigation or claim pending or, to
Crown's knowledge, threatened, against or related to the Company or its
properties or business. Except as stated in Schedule 2.6 hereto, there is no
litigation, proceeding, governmental investigation or claim pending or, to
Crown's knowledge, threatened, against or related to Crown or its properties or
business which either is not adequately covered by insurance, or which, if
resolved adversely to Crown, would have a material adverse effect on its
business or results of operations. Crown is not and, to Crown's knowledge, the
Company is not, in default with respect to any order, writ, injunction or
decree of any court or federal, state, municipal or governmental department,
commission, board, bureau agency or instrumentality. It is acknowledged and
agreed by Casino America that its affiliate Riverboat Services, Inc.,
("Manager") is the manager of the business of the Company and except as
otherwise disclosed on Schedule 2.6, there may be other litigation, claims or
proceedings of which Manager has knowledge.
2.7 Disclosure. No representation or warranty by Crown in this
Agreement contains any untrue statement of a material fact or omits to state
any material fact necessary to make any statement herein not misleading.
2.8 Acknowledgement of Risks and Availability of Information.
Crown acknowledges that the purchase of the Casino America Stock involves a
number of significant risks and that an investment in Casino America may result
in a loss of all or part of Crown's investment. Crown has carefully evaluated
these risks before making a decision to purchase the Casino America Stock.
Crown further acknowledges that (a) Casino America has made available to Crown
and its representatives, prior to the Closing, all documents and other matters
that they have requested relating to Casino America and its operations or any
other matters requested by such persons, (b) Casino America has afforded Crown
the opportunity to review files of Casino America and to ask questions and
receive answers to all of its questions concerning Casino America and its
operations, and (c) Casino America has provided documents, responses to
questions and other materials only to the extent Casino America possesses such
information and documents or could acquire them without unreasonable effort or
expense.
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2.9 As to the Company. Since June 9, 1995, Crown has not taken
any action, in its capacity as a shareholder of the Company or otherwise, which
has not been disclosed to and agreed to by LRGP and which could cause or
subject the Company to any liability in excess of $5,000.
Section 3. Representations and Warranties of Casino America. Casino
America represents and warrants to Crown that:
3.1 Organization and Authority. Casino America is a corporation
duly organized and validly existing under the laws of the State of Delaware and
has full power and authority to own its properties and assets and to carry on
its business as presently conducted. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby are
within the power of Casino America and have been duly authorized by all
necessary corporate and other action. This Agreement, the Amended Original
Warrant and the Additional Warrant constitute the valid obligations of Casino
America legally binding upon it, enforceable in accordance with their
respective terms.
3.2 Casino America Stock. The shares of Casino America Stock that
will be issued to Crown at Closing will be duly and validly authorized and
issued, fully paid and non-assessable.
3.3 No Conflict. Upon obtaining the consents described in
Schedule 3.3 hereof, neither the execution, delivery or performance of this
Agreement by Casino America, nor the consummation of the transactions
contemplated hereby will (a) violate, conflict with or result in a breach of
any provisions of, constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, result in the
termination of or accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Casino America under, any of the terms, conditions or
provisions of its articles of incorporation or bylaws, or any note, bond,
mortgage, indenture, deed of trust, lease, license, agreement or other
instrument or obligation which binds it or any of its assets, or (b) violate
any order, writ, injunction, decree, statute, rule or regulation of any
governmental body applicable to Casino America or any of its assets.
3.4 Investment Representations. The Crown Stock being delivered
to Casino America pursuant to the provisions of this Agreement is being
purchased by Casino America for investment for its own account and not with a
view to the resale or distribution thereof.
3.5 Consents. Except for the consents described in Schedule 3.3,
all consents, approvals or authorizations required to be obtained by Casino
America in connection with the transactions contemplated by this Agreement have
been obtained.
3.6 Disclosure. No representation or warranty by Casino America
in this Agreement contains any untrue statement of a material fact or omits to
state any material fact necessary to make any statement herein not misleading.
3.7 No Claims. Except as stated in Schedule 3.7 hereto, there is
no litigation, proceeding, governmental investigation or claim pending or, to
Casino America's knowledge, threatened against
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or related to Casino America or its properties or businesses which either is
not adequately covered by insurance, or which, if resolved adversely to Casino
America, would have a material adverse effect on its business or results of
operations; and Casino America is not in default with respect to any order,
writ, injunction or any decree of any court or federal, state, municipal or
governmental department, commission, board, bureau, agency or instrumentality.
3.8 Acknowledgment of Risks and Availability of Information.
Casino America acknowledges that the purchase of the Crown Stock involves a
number of significant risks and that an investment in the Company may result in
a loss of all or part of Casino America's investment. Casino America has
carefully evaluated these risks before making a decision to purchase the Crown
Stock. Casino America further acknowledges that (a) Crown has made available
to Casino America and its representatives, prior to the Closing, all documents
and other matters that they have requested relating to the Company and its
operations or any other matters requested by such persons, (b) Crown has
afforded Casino America the opportunity to review files of Crown relating to
the Company and to ask questions and receive answers to all of its questions
concerning the Company and its operations, and (c) Crown has provided
documents, responses to questions and other materials only to the extent Crown
possesses such information and documents or could acquire them without
unreasonable effort or expense.
Section 4. Conduct of Business Pending Closing. Crown, Casino
America and LRGP (if necessary) shall (i) timely submit an application for
consent to the transactions contemplated by this Agreement with the Louisiana
Riverboat Gaming Commission (the "Gaming Commission") and the Louisiana State
Police Riverboat Gaming Enforcement Division (the "Enforcement Division") and
shall use their commercially reasonable efforts to obtain such consents; (ii)
submit any necessary filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976; and (iii) submit requests for consent to the transactions
contemplated by this Agreement (to the extent required) with Nomura, Hibernia,
and other necessary persons.
Section 5. Liability and Indemnification. (a) Crown shall defend,
indemnify and hold harmless Casino America against and in respect of any and
all liability, damage, loss, deficiency, cost and expenses arising out of or
otherwise in respect of (i) any misrepresentation, breach of warranty (or
claims which would constitute a breach of warranty if true) or non-fulfillment
of any agreement or covenant contained in this Agreement, or in any certificate
or other instrument furnished hereunder by Crown; and (ii) any and all actions,
suits, proceedings, audits, demands, assessments, judgments, costs and legal
and other expenses incident to any of the foregoing or the enforcement of this
Section. The foregoing indemnity is in addition to, but not an extension of,
the indemnities of Crown in favor of LRGP contained in the Stock Purchase
Agreement dated June 9, 1995 and Crown hereby confirms the existence and
continued validity of those indemnities.
(b) Casino America shall defend, indemnify and hold harmless Crown
against and in respect of any and all liability, damage, loss, deficiency, cost
and expenses arising out of or otherwise in respect of (i) any
misrepresentation, breach of warranty (or claims which would constitute a
breach of warranty if true) or non-fulfillment of any agreement or covenant
contained in this Agreement, or in any certificate or other instrument
furnished hereunder by Casino America
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and (ii) any and all actions, suits, proceedings, audits, demands, assessments,
judgments, costs and legal and other expenses incident to any of the foregoing
or the enforcement of this Section.
(c) Crown has personally guaranteed certain obligations of the
Company to third parties as described on Schedule 5(c) hereto (the "Guaranteed
Liabilities"). Effective on the later of the Closing Date or the date the LRSD
Interest is acquired as described in Section 1.2(c), Casino America shall cause
LRGP to defend, indemnify and hold Crown harmless against and in respect of any
and all liability, damage, loss, deficiency, cost and expenses (including
reasonable attorney's fees) arising out of or in respect to such Guaranteed
Liabilities. Casino America agrees not to oppose Crown's efforts to remove its
guaranty of the Guaranteed Liabilities.
(d) Casino America will cause the Company to defend, indemnify and
hold harmless Crown against and in respect of any and all liability, damage,
loss, deficiency, cost and expense arising out of or otherwise in respect of
(i) the litigation described on Schedule 5(d) hereof, (ii) acts or omissions of
the Company occurring on or after June 9, 1995, and (iii) any and all actions,
suits, proceedings, audits, demands, assessments, judgments, costs and legal
and other expenses incident to any of the foregoing or the enforcement of this
Section.
Section 6. Conditions Precedent to Casino America's Obligations. All
obligations of Casino America under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
6.1 Representations and Warranties. Crown's representations and
warranties contained in this Agreement, or in any certificates or other
instrument delivered pursuant to the provisions hereof, shall be true and
correct as of the effective date of this Agreement and as of the Closing Date
as though such representations and warranties were made at and as of such time,
and Crown shall have delivered to Casino America a certificate dated the
Closing Date and signed by it to such effect.
6.2 Litigation. Except as otherwise identified on Schedule 2.6
hereof, there shall not have been filed or threatened, any action, suit,
proceeding or claim by any person, which if successful would have a material
adverse effect on the business of Crown, Casino America, the Company or the
transactions contemplated by this Agreement. No action or proceeding shall
have been threatened or instituted against Casino America, Crown or the Company
before a court or other governmental body by any person, governmental agency or
public authority to restrain or prohibit the transactions contemplated by this
Agreement or to obtain damages or other material relief in connection with the
execution of this Agreement or the consummation of the transactions
contemplated hereby. In addition, no governmental agency shall have given
notice to Crown, Casino America or the Company to the effect that consummation
of the transactions contemplated by this Agreement would constitute a violation
of any law or regulation or that it intends to commence proceedings to restrain
consummation of the transactions contemplated hereby.
6.3 Compliance with Agreements. Crown shall have performed or
complied with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing, and Crown shall
have delivered to Casino America a certificate dated the Closing Date and
signed by it to such effect.
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6.4 Satisfactory Proceedings. All corporate and other proceedings
and actions taken in connection with the transactions contemplated hereby and
all certificates, opinions, agreements, instruments and documents referred to
in this Section 6 or incident to any such transactions shall be reasonably
satisfactory in form and substance to Casino America and its counsel. Crown
shall furnish to Casino America and its counsel such supporting documentation
and evidence of the satisfaction of any or all of the conditions precedent
specified in this Section 6 as Casino America or its counsel may reasonably
request.
6.5 Xxxx-Xxxxx-Xxxxxx Filing and Approval. Crown and Casino
America (and any other required parties) shall have made any filings with the
Federal Trade Commission required by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, the required waiting periods thereunder shall have
expired, and the parties shall not have received any objection to the
consummation of the transactions contemplated by this Agreement.
6.6 Amendment of Shareholders Agreement. The Shareholders
Agreement dated June 9, 1995 between Crown and LRGP shall have been amended as
reflected on Exhibit F.
6.7 Regulatory Consents. Crown, Casino America, LRGP and the
Company shall have received all necessary approvals of governmental authorities
(including without limitation the Gaming Commission and the Enforcement
Division) to consummate the transactions contemplated by this Agreement.
6.8 Financing Consents. Crown, Casino America, LRGP and the
Company shall have obtained the consent of Nomura, Hibernia and all other
creditors and other third parties whose consent is necessary to consummate the
transactions contemplated by this Agreement.
6.9 Grand Palais Riverboat Purchase. Casino America (or an
affiliate thereof) shall have consummated the direct or indirect acquisition of
all or substantially all of the outstanding shares of capital stock of Grand
Palais Riverboat, Inc.
6.10 Existing Licenses. The licenses currently held by the Company
and LRGP to conduct riverboat gaming activities in the State of Louisiana shall
be in full force and effect, and no proceedings shall be pending or threatened
by any regulatory body which may seek to restrain or limit the conduct of such
activities.
6.11 Delivery of Crown Stock. Crown shall have delivered the Crown
Stock to Casino America, free and clear of any liens, encumbrances, rights,
equities, security interests and other adverse claims whatsoever, except for
the security interest in favor of Nomura.
6.12 No Material Adverse Change. There shall not have occurred
since the date of this Agreement, any material adverse change in the business,
financial condition or prospects of the Company or Casino America.
6.13 Opinion of Counsel. Crown shall have delivered to Casino
America an opinion of its counsel, dated the Closing Date, substantially in the
form of Exhibit G hereto.
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6.14 Resignations. Crown shall have delivered to Casino America
the written resignations of the officers and directors of the Company who are
officers of Crown.
Section 7. Conditions Precedent to Crown's Obligations. All
obligations of Crown under this Agreement are subject to the fulfillment, prior
to or at the Closing, of each of the following conditions:
7.1 Representations and Warranties. The representations and
warranties of Casino America contained in this Agreement or in any certificate
or other instrument delivered pursuant to the provisions hereof shall be true
and correct as of the effective date of this Agreement and as of the Closing
Date as though such representations and warranties were made at and as of such
time, and Casino America shall have delivered to Crown a certificate dated the
Closing Date and signed by it to such effect.
7.2 Litigation. There shall not have been filed or threatened,
any action, suit, proceeding or claim by any person, which if successful would
have a material adverse effect on the business of Crown, Casino America, the
Company or the transactions contemplated by this Agreement. No action or
proceeding shall have been threatened or instituted against Crown, the Company
or Casino America before a court or other governmental body by any person,
governmental agency or public authority to restrain or prohibit the
transactions contemplated by this Agreement or to obtain damages or other
material relief in connection with the execution of this Agreement or the
consummation of the transactions contemplated hereby. In addition, no
governmental agency shall have given notice to Crown, the Company or Casino
America to the effect that consummation of the transactions contemplated by
this Agreement would constitute a violation of any law or that it intends to
commence proceedings to restrain consummation of the transactions contemplated
hereby.
7.3 Compliance with Agreements. Casino America shall have
performed or complied with all agreements and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing,
and Casino America shall have delivered to Crown a certificate dated the
Closing Date and signed by it to such effect. The registration statement
described in Exhibit A relating to the resale by Crown of the Casino America
Stock shall have been declared effective by the Securities and Exchange
Commission.
7.4 Satisfactory Proceedings. All corporate and other proceedings
and actions taken in connection with the transactions contemplated hereby and
all certificates, opinions, agreements, instruments and documents referred to
in this Section 7 or incident to any such transactions shall be reasonably
satisfactory in form and substance to Crown and its counsel. Casino America
shall furnish to Crown and its counsel such supporting documentation and
evidence of the satisfaction of any or all of the conditions precedent
specified in this Section 7 as Crown or its counsel may reasonably request.
7.5 Xxxx-Xxxxx-Xxxxxx Filing and Approval. Crown and Casino
America (and any other required parties) shall have made any filings with the
Federal Trade Commission required by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, the required waiting periods thereunder
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shall have expired, and the parties shall not have received any objection to
the consummation of the transactions contemplated by this Agreement.
7.6 Amendment of Shareholders Agreement. The Shareholders
Agreement dated June 9, 1995 between Crown and LRGP shall have been amended as
reflected on Exhibit F.
7.7 Regulatory Consents. Crown, Casino America, LRGP and the
Company shall have received all applicable approvals of governmental
authorities (including without limitation, the Gaming Commission and the
Enforcement Division) to consummate the transactions contemplated by this
Agreement.
7.8 Financing Consents. Crown, Casino America, LRGP and the
Company shall have obtained the consent of Nomura, Hibernia and all other
creditors and third parties whose consent is necessary to consummate the
transactions contemplated by this Agreement. In addition, Crown shall have
received from Nomura and Hibernia an amendment to the Crown Subordination
Agreement, whereby Crown shall not be prohibited from, and Nomura and Hibernia
shall consent to, the conversion of the Additional Warrant, in addition to
conversion of the Amended Original Warrant into shares of stock of Casino
America.
7.9 Delivery of Casino America Stock. Casino America shall have
delivered the Casino America Stock to Crown, free and clear of any liens,
encumbrances, rights, equities, security interests and other adverse claims
whatsoever, except for the restrictions imposed by Sections 1.1(b) (as it
pertains to the irrevocable proxy), 1.4 and 1.5 of this Agreement.
7.10 Opinion of Counsel. Casino America shall have delivered to
Crown an opinion of Casino America's counsel, dated the Closing Date,
substantially in the form of Exhibit H hereto.
Section 8. Broker and Finder's Fees. Crown represents and warrants
to Casino America that it has not engaged or dealt with any person who may be
entitled to any broker fee or commission in respect of the execution of this
Agreement or the consummation of the transactions contemplated hereby. Casino
America represents and warrants to Crown that it has not engaged or dealt with
any broker or other person who may be entitled to any brokerage fee or
commission in respect of the execution of this Agreement or the consummation of
the transactions contemplated hereby. Each of the parties hereto shall
indemnify and hold the others harmless against any and all claims, losses,
liabilities or expenses which may be asserted against such other parties as a
result of such first mentioned party's dealings, arrangements or agreements
with any such broker or person.
Section 9. Inspection and Expenses. Prior to the Closing, and
subject to the execution of such confidentiality and limited use agreements as
may be appropriate in the circumstances, Crown and its representatives shall be
permitted to examine the books, records and properties of Casino America and to
ask questions of and receive answers from Casino America's officers and Casino
America will upon reasonable request furnish Crown with any information
reasonably required in respect to Casino America's property, assets and
business. No such examination, however, shall constitute a waiver or
relinquishment on the part of Crown of its right to rely upon the covenants,
representations and warranties made by Casino America herein. Crown and Casino
America shall
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each bear their own expenses in connection with this Agreement and the
transactions contemplated thereby.
Section 10. Announcements. Casino America and Crown will consult and
cooperate with each other as to the timing and content of any announcements of
the transactions contemplated hereby to the general public or to employees,
customers or suppliers. Except as otherwise required by applicable law,
neither party without the consent of the other, will issue any press release
concerning the transactions contemplated by this Agreement, it being the intent
of the parties that any press releases will be issued simultaneously and the
contents thereof will be approved by all parties.
Section 11. Competition. For a period of two years after the Closing
Date, Crown will not, alone or through an affiliated person or otherwise, or as
a member or partner of any partnership, or similar entity, or as a 5% or more
shareholder or investor in any corporation or other entity directly or
indirectly owned or managed, or otherwise connected with, engage in the
ownership, management or operation of gaming activities within a one hundred
(100) mile radius of the location of the Company's casino riverboat on the
Calcasieu River in Calcasieu Parish, Louisiana. The provisions of this Section
11 shall not apply to the purchase or other acquisition of all or substantially
all of the issued and outstanding capital stock of Crown by an unaffiliated
third party (including, without limitation, a merger with an unaffiliated third
party), if such third party, at the date of such acquisition or merger, already
conducts gaming operations within the radius set forth herein.
Section 12. Further Actions and Assurances. Crown, Casino America
and the Company will execute and deliver any and all documents, and will cause
any and all other action to be taken, either before or after Closing, which may
be reasonably necessary or proper to effect or evidence the provisions of this
Agreement and the transactions contemplated hereby.
Section 13. Counterparts. This Agreement may be executed in several
counterparts each of which is an original. This Agreement and any counterpart
so executed shall be deemed to be one and the same instrument. It shall not be
necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
Section 14. Contents of Agreement; Parties in Interest; Etc.. This
Agreement sets forth the entire understanding of the parties. Any previous
agreements or understandings between the parties regarding the subject matter
hereof are merged into and superseded by this Agreement. This Agreement may
not be assigned by any party hereto without the prior written consent of the
other party, except that Casino America may freely assign its rights pursuant
to this Agreement to any of its affiliates or subsidiaries so long as Casino
America remains a party to this Agreement and guarantees the full and faithful
performance of any such affiliate or subsidiary. Subject to the foregoing, all
representations, warranties, covenants, terms, conditions and provisions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, legal representatives, successors and
assigns of Crown and Casino America.
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Section 15. Governing Law. This Agreement is being delivered and is
intended to be performed in the State of Louisiana and shall be construed and
enforced in accordance with the laws thereof.
Section 16. Section Headings and Gender. The section headings herein
have been inserted for convenience of reference only and shall in no way modify
or restrict any of the terms or provisions hereof. The use of the masculine
pronoun herein when referring to any party has been for convenience only and
shall be deemed to refer to the particular party intended regardless of the
actual gender of such party.
Section 17. Schedules and Exhibits. All Schedules and Exhibits
referred to in this Agreement are intended to be and are hereby specifically
made a part of this Agreement.
Section 18. Notices. Any notice or demand which, by provision of
this Agreement, is required or permitted to be given or served by Casino
America to or on Crown shall be deemed to have been sufficiently given and
served for all purposes (if mailed) three calendar days after being deposited,
postage prepaid, in the United States Mail, registered or certified mail, or
(if delivered by express courier) one Business Day after being delivered to
such courier, or (if delivered in person) the same day as delivery, in each
case addressed (until another address is given in writing by Crown to Casino
America) as follows:
Crown Casino Corporation
0000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
Vice President - Finance
and
X. X. Xxxxxxx, III, Esq.
Executive Vice President and General Counsel
Any notice or demand which, by any provision of this Agreement, is
required or permitted to be given or served by Crown to or on Casino America
shall be deemed to have been sufficiently given and served for all purposes (if
mailed) three calendar days after being deposited, postage prepaid, in the
United States Mail, registered or certified mail, or (if delivered by express
courier) one Business Day after being delivered to such courier, or (if
delivered in person) the same day as delivery, in each case addressed (until
another address or addresses are given in writing by Casino America to Crown)
as follows:
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Casino America, Inc.
000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
President
and
Xxxxx X. Xxxxxxx, Esq.
Executive Vice President and General Counsel
Casino America, Inc.
0000 Xxxxxxxxx Xxxxxxxxx, XX
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Section 19. Satisfaction of Conditions. Crown and Casino America
agree in good faith to use their commercially reasonable efforts to bring about
the satisfaction of the conditions specified in Sections 6 and 7 hereof,
respectively.
Section 20. Termination. This Agreement may be terminated at any
time prior to the Closing (i) by consent of Crown and Casino America; (ii) by
Casino America if any of the conditions described in Section 6 hereof have not
been met as of the proposed Closing Date and have not been waived by Casino
America; (iii) by Crown if any of the conditions described in Section 7 hereof
have not been met as of the proposed Closing Date and have not been waived by
Crown; or (iv) by any party if the Closing has not occurred by June 30, 1996.
Any termination pursuant to this Section 20 shall be effective immediately upon
the giving of notice by the terminating party to the other party. In the event
of termination pursuant to this Section 20, this Agreement shall become null
and void and no party shall have any obligations to any other party.
Section 21. Exclusivity. From and after the date of this Agreement
until the earlier of the Closing Date or the termination of this Agreement
pursuant to Section 20 hereof, Crown and Casino America will not solicit or
encourage inquiries or proposals with respect to, or furnish any information
relating to, or participate in any negotiations or discussions concerning, any
acquisition of the Crown Stock, the assets of the Company or any other matters
contemplated by this Agreement, and Crown and Casino America shall instruct
their officers, directors, agents and affiliates to refrain from doing so.
Crown will notify Casino America immediately if any such serious inquiries or
proposals are received by Crown or the Company, or if any such information is
requested from Crown of the Company, or any such negotiations are sought to be
initiated with Crown or the Company, and any response thereto shall be approved
in advance by Casino America.
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Section 22. No Waiver. The failure by any party to enforce any of
its rights hereunder shall not be deemed to be a waiver of such rights, unless
such waiver is an express written waiver which has been signed by the waiving
party. Waiver of any one breach shall not be deemed to be a waiver of any
other breach of the same or any other provisions hereof.
Section 23. Survival. The representations, warranties, covenants and
agreements contained in this Agreement shall survive the Closing for a period
of five (5) years thereafter, except that the representations and warranties
contained in Sections 2.1, 2.2, 2.3, 2.5, 3.1, 3.2, 3.3 and 3.5 shall survive
for the maximum period permitted by applicable law.
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IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
CROWN CASINO CORPORATION
By: _________________________________________
Name:
Title:
CASINO AMERICA, INC.
By: _________________________________________
Name:
Title:
Consented to and Agreed:
Louisiana River Site Development, Inc.
By:___________________________________________
Its:__________________________________________
Louisiana Riverboat Gaming Partnership
By: Louisiana River Site Development, Inc.
By:___________________________________________
Its:__________________________________________
By: CSNO, Inc.
By:___________________________________________
Its:__________________________________________
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LIST OF EXHIBITS
Exhibit A Registration Agreement
Exhibit B Irrevocable Proxy
Exhibit C-1 Purchase Money Note A
Exhibit C-2 Purchase Money Note B
Exhibit D-1 Amended Original Warrant
Exhibit D-2 Additional Warrant
Exhibit E Joint Venture Term Sheet
Exhibit F Amendment to Shareholders Agreement
Exhibit G Crown Counsel Opinion
Exhibit H Casino America Counsel Opinion
LIST OF SCHEDULES
Schedule 2.3 Crown Consents
Schedule 2.6 Claims Against Crown and the Company
Schedule 3.3 Casino America Consents
Schedule 3.7 Claims Against Casino America
Schedule 5(c) Guaranteed Liabilities
Schedule 5(d) Certain Litigation
Certain non-material exhibits and the schedules to this Agreement have
been omitted from this filing, but will be provided to the Commission
upon its request.
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EXHIBIT A
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT is made as of the ___ day of January,
1996, by and between CASINO AMERICA, INC., a Delaware corporation (the
"Company"), and Crown Casino Corporation, a Texas corporation ("Crown").
RECITALS
WHEREAS, the Company and Crown are parties to a Stock Purchase
Agreement of even date herewith (the "Stock Purchase Agreement");
WHEREAS, under the terms of the Stock Purchase Agreement, Crown
proposes to acquire an aggregate of 1,850,000 shares of Common Stock of the
Company (the "Shares"), the sale of which has not been registered under the
Securities Act of 1933, as amended (the "Act");
WHEREAS, in order to induce Crown to enter into the Stock Purchase
Agreement and to consummate the transactions contemplated thereby, the Company
hereby agrees to enter into this Agreement to register the Shares for resale
with the Securities and Exchange Commission pursuant to the Stock Purchase
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Definitions. Unless the context otherwise requires, the
following terms shall have the respective meanings indicated:
(a) The term "Act" means the Securities Act of 1933, as
amended.
(b) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(c) The term "1934 Act" means the Securities Exchange Act of
1934, as amended.
(d) The term "register", "registered", and "registration"
refer to a registration of the Shares for resale effected by preparing and
filing a registration statement in compliance with the Act, and the declaration
or ordering by the SEC of the effectiveness of such registration statement.
(e) The term "SEC" means the United States Securities and
Exchange Commission.
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2. Registration. Promptly following the date of this Agreement,
the Company shall effect as soon as practicable the registration of all of the
Shares for resale under the Act in accordance with the provisions of Section 4
of this Agreement.
3. Offer and Sale. Not less than 2 nor more than 30 business
days prior to any attempted sale of all or a portion of the Shares in
accordance with the provisions of Section 4 of this Agreement, Crown shall
notify the Company in writing of the fact of such proposed sale, and the
Company shall within 2 business days of the receipt of such notice either
deliver to Crown the certificate described in the following paragraph of this
Section 3 or notify Crown that such sale may proceed.
Notwithstanding the foregoing, if the Company shall furnish to
Crown, a certificate signed by the Chief Executive Officer or the Chief
Financial Officer of the Company stating that in the good faith judgment of the
Board of Directors of the Company, the proposed sale of Shares would take place
at a time when there existed any material, non-public information regarding
the Company, or that the proposed sale of Shares would require the Company to
make public disclosure of information the premature disclosure of which would
likely have a material adverse affect on the Company, and it is therefore
beneficial to the Company or Crown for Crown to defer any proposed sale of
Shares, the Company shall have the right to require Crown to refrain from
selling Shares for a period of not more than 30 days from the original notice
date referred to above.
4. Obligations of the Company. To effect the registration of the
Shares, the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Shares and use its commercially reasonable efforts to
cause such registration statement to become effective, and keep such
registration statement effective for a period of two (2) years from the date
the Shares are issued to Crown or, if earlier, until the distribution
contemplated in the Registration Statement is completed with respect to all
Shares, provided, however, that SEC Rule 415, or any successor rule under the
Act, permits an offering on a continuous or delayed basis.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Act with respect to the disposition of all securities
covered by such registration statement.
(c) Furnish to Crown such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as Crown may reasonably request in order to
facilitate the disposition of the Shares.
(d) Use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by Crown; provided, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
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(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Crown shall
also enter into and perform its obligations under such an agreement, if it is a
party to such underwriting.
(f) Cause all such Shares registered pursuant hereto to be
listed on each securities exchange (including NASDAQ) on which that class of
securities issued by the Company are then listed.
(g) Provide a transfer agent and registrar for all Shares
registered pursuant hereunder and a CUSIP number for all such Shares, in each
case not later than the effective date of such registration.
5. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 4 of this
Agreement with respect to the Shares that Crown shall furnish to the Company
such information regarding itself, the Shares and the intended method of
disposition of such securities as shall be required to effect the registration
of such Shares.
6. Expenses of Registration. The Company shall bear all expenses
incurred in connection with the registration, filing or qualification of the
Shares, including all registration, filing and qualification fees, printers'
and accounting fees and fees and disbursements of counsel for the Company. All
expenses related to the disposition of the Shares, including all underwriting
discounts, brokerage commissions and transfer taxes as well as fees and
disbursements of counsel for Crown shall be borne by Crown.
7. Indemnification.
(a) To the extent permitted by law, the Company will
indemnify and hold harmless Crown and each person, if any, who controls Crown
within the meaning of the Act or the 1934 Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement filed under the Act with respect to the Shares, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading (a "Violation"); and the Company will pay to
Crown, or such controlling person, any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 7(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is affected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in
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connection with such registration by Crown or any such controlling person or
underwriter acting for Crown.
(b) To the extent permitted by law, Crown will indemnify and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who controls the
Company within the meaning of the Act, any underwriter, and any controlling
person of any such underwriter, against any losses, claims, damages, or
liabilities (joint or several) to which any of the foregoing persons may become
subject, under the Act, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such losses, claims,
damages or liabilities occur in reliance upon and in conformity with written
information furnished by Crown expressly for use in connection with such
registration; and Crown will pay any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this subsection
7(b), in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 7(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of Crown, which consent shall not be unreasonably
withheld; and provided, that, in no event shall any indemnity under this
subsection 7(b) exceed the net proceeds from the offering received by Crown.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 7,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by
such counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
7, but the omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 7.
(d) If the indemnification provided for in this Section 7 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand, and of the indemnified party on the
other, in connection with the statements or omissions that resulted in such
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loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Crown under this
Section 7 shall survive the completion of any offering of the Shares pursuant
to a registration statement under this Agreement, and otherwise.
8. Reports Under Securities Exchange Act of 1934. With a view to
making available to Crown the benefits of Form S-3 and SEC Rule 144 promulgated
under the Act (subject to compliance with the applicable holding period in such
Rule), the Company agrees to use its best efforts to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, and
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the 1934 Act.
9. "Market Stand-Off" Agreement. Crown hereby agrees that,
during the period of duration specified by the Company and the underwriter in
question of common stock or other securities of the Company which include a
material equity component but in no event to exceed 30 days prior to the
anticipated effective date of, and 120 days following the effective date of, a
registration statement of the Company filed under the Act, (but in no event to
exceed the time period agreed to by management of the Company) Crown shall not,
to the extent requested by the Company and such underwriter, directly or
indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of (other than to donees who agree to be similarly bound) any common
stock of the Company held by Crown at any time during such period. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Shares until the end of such period.
Notwithstanding the foregoing, the obligations described in
this Section 9 shall not apply (i) to a private, non-cash transaction by Crown,
(ii) to any transaction unless Crown has been offered the right and is
permitted by the underwriter to participate in the underwritten offering in
question for at least 500,000 (subject to adjustment for stock splits,
dividends, etc.) of any shares of the common stock of the Company owned by it
or which would be owned by it upon conversion of warrants (by reason of this
Agreement or otherwise) or (iii) to a registration relating solely to an
A-5
25
employee benefit plan of the Company on Form S-8 or a similar form which may be
promulgated in the future, or a registration relating solely to an SEC Rule 145
transaction.
The provisions of this Section 9 shall terminate and be of no
further force or effect once Crown's holdings of the Company's common stock
(including common stock to be owned by Crown upon the exercise of any warrants)
are less than or equal to 1% of the total issued and outstanding common stock
of the Company.
10. Termination of Registration. The Company shall cease to have
any obligation pursuant to this Agreement on and after the earlier of two years
from the issuance of the Shares to Crown or the date upon which all Shares held
by Crown have been sold.
11. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor any delay on
the part of either party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence.
(b) Controlling Law. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement
(including, without limitation, provisions concerning limitations of actions),
shall be governed by and construed in accordance with the laws of the State of
Delaware, notwithstanding any conflict-of-laws doctrine of such state or other
jurisdiction to the contrary, and without the aid of any canon, custom or rule
of law requiring construction against the draftsman.
(c) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
delivered (personally, by courier service such as Federal Express, or by other
messenger), when sent by facsimile and confirmed by another method specified in
this paragraph or when deposited in the United States mails, registered or
certified mail, postage prepaid, return receipt requested, addressed as set
forth below:
(i) If to the Company, to:
Casino America, Inc.
000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, President
A-6
26
with a copy, given in the manner prescribed
above, to:
Casino America, Inc.
0000 Xxxxxxxxx Xxxxxxxxx, XX
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
(ii) If to Crown, to:
Crown Casino Corporation
0000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxx
with a copy, given in the manner prescribed
above, to:
Crown Casino Corporation
0000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: X. X. Xxxxxxx, III
In addition, notice by mail shall be by air mail if posted outside of
the continental United States.
Any party may alter the address to which communications or copies are
to be sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.
(d) Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.
(e) Provisions Separable. The provisions of this Agreement
are independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of them may be invalid or unenforceable in whole
or in part.
(f) Entire Agreement. Except for the Investment Letter of
even date therewith between the Company and Crown, this Agreement contains the
entire understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and
A-7
27
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of
the trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing.
(g) Paragraph Headings. The paragraph headings in this
Agreement are for convenience only, they form no part of this Agreement and
shall not affect its interpretation.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
CASINO AMERICA, INC.
By:_______________________________________________
CROWN CASINO CORPORATION
By:_______________________________________________
A-8
28
EXHIBIT C-1
PROMISSORY NOTE
(Purchase Money Note A)
$10,000,000.00 New Orleans, Louisiana [CLOSING DATE], 1996
FOR VALUE RECEIVED, the undersigned, LOUISIANA RIVERBOAT
GAMING PARTNERSHIP, a Louisiana partnership (hereinafter called the "Maker")
promises to pay to the order of CROWN CASINO CORPORATION, a Texas corporation
(hereinafter called the "Payee"), at its offices at 0000 X. Xxxxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000, in lawful money of the United States of
America, the sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00), together
with interest on the unpaid principal balance from and after date hereof until
maturity at a fixed rate per annum which shall from day to day be equal to
eleven and one-half percent (11.5%) per annum, computed on the basis of a year
of 365 or 366 days, as the case may be, and for the actual number of days
elapsed (including the first day but excluding the last day). All past due
principal and interest shall bear interest from and after maturity until paid,
regardless of how maturity occurs, at an interest rate which, from day to day,
shall be equal to eighteen percent (18%) per annum.
This Note is Purchase Money Note A as defined in the Stock
Purchase Agreement (the "Stock Purchase Agreement") dated January [DATE], 1996
by and among the Payee and Casino America, Inc. It has been executed
contemporaneously with Purchase Money Note B as defined in the Stock Purchase
Agreement. It has replaced the $20 million Promissory Note dated June 9, 1995
by the Maker to the order of the Payee (the "Purchase Money Note") as recited
in the Stock Purchase Agreement. This Note and Purchase Money Note B shall be
secured by the Security Agreement - Pledge (the "Pledge Agreement") dated June
9, 1995 by the Maker in favor of the Payee, and shall be subject to the
Hibernia Subordination Agreement and the Nomura Subordination Agreement (as
defined in legends on the last pages of this Note). To the extent that the
Pledge Agreement, the Hibernia Subordination Agreement or the Nomura
Subordination Agreement refer to the Purchase Money Note, they shall henceforth
be deemed to refer with equal effect to this Note and Purchase Money Note B,
collectively. If the Maker refinances any or all of the indebtedness to which
this Note is subordinated with the same or other persons, this Note and
Purchase Money Note B shall be subordinated to such refinancing indebtedness
but only to the extent of the lesser of $45 million or the principal balance of
the indebtedness being refinanced as of the date of the refinancing.
Interest on the outstanding principal balance of this Note
shall be due and payable monthly as it accrues on the first Business Day of
each and every calendar month from [COMMENCEMENT DATE], 1996 through the first
Business Day of [THE COMMENCEMENT DATE], 2001 (or, if not a Business Day, the
first Business Day thereafter). The first payments under this Note and
Purchase Money Note B shall collectively represent all interest accrued under
the Purchase Money Note through the date of this Note, and shall respectively
represent the interest accrued under this Note and Purchase Money Note B from
the date of this Note through the Commencement Date.
C-1 / 1
29
One-half (1/2) of such interest accrued under the Purchase Money Note through
the date of this Note shall be paid by the Maker hereunder, and the balance
shall be paid by the Maker pursuant to Purchase Note B. After [THE
COMMENCEMENT DATE], 1997, the outstanding principal of this Note shall be due
and payable in seventeen (17) equal quarterly installments of principal
beginning on the [THE COMMENCEMENT DATE], 1997 (or, if not a Business Day, the
first Business Day thereafter), continuing on the first Business Day of each
third month thereafter and ending on [THE COMMENCEMENT DATE], 2001, on which
date the then remaining balance of principal and accrued, unpaid interest shall
be due and payable in full.
As used herein, the term "Business Day" shall mean any day
other than a day on which commercial banks in the State of Texas are authorized
to be closed. Any check, draft, money order or other instrument given in
payment of all or any portion of this Note may be accepted by the Payee and
handled in collection in the customary manner, but the same shall not
constitute payment or diminish any rights of the Payee except to the extent
that actual cash proceeds of such instrument are unconditionally received by
the Payee.
If any installment or payment of principal or interest of this
Note or Purchase Money Note B is not paid when due, and such installment is not
paid within ten (10) days of the scheduled due date thereof; or if a default
occurs under any instrument now or hereafter executed in connection with or as
security for this Note, including without limitation, the Security Agreement
granting to the Payee a security interest in and pledge of all of the Maker's
fifty percent (50%) of the issued and outstanding capital stock in St. Xxxxxxx
Gaming Company, Inc. ("Maker's SCGC Stock"); thereupon, at the option of the
Payee, the principal and unpaid accrued interest on this Note shall become and
be due and payable forthwith without demand, notice of default or of intent to
accelerate the maturity hereof, notice of acceleration, notice of nonpayment,
presentment, protest or notice of dishonor, all of which are hereby expressly
waived by the Maker.
If this Note is not paid at maturity whether by acceleration
or otherwise and is placed in the hands of any attorney for collection, or suit
is filed hereon, or proceedings are had in probate, bankruptcy, receivership,
reorganization, arrangement or other legal proceedings for collection hereof,
the Maker agrees to pay the Payee its collection costs, including reasonable
attorney's fees. The Maker is and shall be directly and primarily liable for
the payment of all sums called for hereunder, and the Maker hereby expressly
waives bringing of suit and diligence in taking any action to collect any sums
owing hereon and in the handling of any security, and the Maker hereby consents
to and agrees to remain liable hereon regardless of any renewals, extensions
for any period or rearrangements hereof, or partial prepayments hereon, or any
release or substitution of security for this Note, in whole or in part, with or
without notice, from time to time, before or after maturity.
The Maker shall have the privilege to prepay at any time, and
from time to time, all or any part of the principal amount of this Note,
without notice, penalty or fee. Such advances or prepayments will be applied,
first to the payment of installments of principal in the inverse order of
maturity.
It is expressly provided and stipulated that notwithstanding
any provision of this Note or any other instrument evidencing or securing the
loan evidenced hereby, in no event shall the
C-1 / 2
30
aggregate of all interest paid by the Maker to the Payee under this Note ever
exceed the Maximum Rate on the principal balance of this Note from time to time
advanced and remaining unpaid. In this connection, it is expressly stipulated
and agreed that it is the intent of the Payee and the Maker in the execution
and delivery of this Note to contract in strict compliance with the Applicable
Laws. In furtherance thereof, none of the terms of this Note or any other
instrument evidencing or securing the loan evidenced hereby, shall ever be
construed to create a contract to pay for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate permitted to be charged
of the Maker under such laws. The Maker or any guarantors, endorsers or other
parties now or hereafter becoming liable for payment of this Note shall never
be liable for interest in excess of the Maximum Rate, and the provision of this
paragraph and the immediately succeeding paragraph shall govern over all other
provisions of this Note and any instruments evidencing or securing the loan
evidenced hereby, should such provisions be in apparent conflict herewith.
Specifically and without limiting the generality of the
foregoing paragraph, it is expressly provided that:
i) In the event of prepayment of the principal of this
Note (if permitted hereunder) or the payment of the principal of this
Note prior to the stated maturity date hereof resulting from
acceleration of maturity of this Note, if the aggregate amounts of
interest accruing hereon prior to such payment plus the amount of any
interest accruing after maturity and plus any other amounts paid or
accrued in connection with the loan evidenced hereby which by
Applicable Law are deemed interest on the loan evidenced by this Note
and which aggregate amount paid or accrued (if calculated in
accordance with the provisions of this Note other than this paragraph)
would exceed the Maximum Rate, then in such event the amount of such
excess shall be credited, as of the date paid, toward the payment of
principal of this Note so as to reduce the amount of the final payment
of principal due on this Note;
ii) If under any circumstance the aggregate amounts paid
on the loan evidenced by this Note prior to and incident to the final
payment hereof include amounts which by Applicable Law are deemed
interest and which would exceed the Maximum Rate, the Maker stipulates
that such payment and collection will have been and will be deemed to
have been the result of a mathematical error on the part of both the
Maker and the Payee, and any excess shall be credited on the Note by
the Payee. If this Note shall have been paid in full, the party
receiving such excess payment shall promptly refund the amount of such
excess (to the extent only of the excess of such interest payments
above the Maximum Rate) upon the discovery of such error by the party
receiving such payment or notice thereof from the party making such
payment; and
iii) All amounts paid or agreed to be paid in connection
with the indebtedness evidenced by this Note which would under
Applicable Law be deemed interest shall, to the extent provided by
Applicable Law, be amortized, prorated, allocated and spread
throughout the full term of this Note.
C-1 / 3
31
All notices required or permitted under this Note shall be in
writing and shall be deemed to have been sufficiently given or served for all
purposes when presented personally or deposited with the United States Postal
Service, postage prepaid, certified mail, return receipt requested, to the
Maker at the address set forth below, or at such other address of which the
Maker shall have notified the President or any Vice President of the Payee in
writing at least thirty (30) days prior to the date of the Payee giving such
notice. Where appropriate, any pertinent noun, verb or pronoun shall be
construed and interpreted to include both the proper number and gender. This
Note shall not be renewed, extended, or modified except by a written instrument
evidencing the same.
Notwithstanding anything to the contrary contained herein or
in any instrument securing the payment hereof, including without limitation,
the Pledge Agreement, the exclusive remedy of the Payee for the failure of the
Maker to pay all or any portion of the principal owing hereunder shall be
limited to proceeding against the properties, rights and estates described in
and encumbered by the Pledge Agreement, and no attachment, execution, or other
writ or process shall be sought, issued, or levied upon any other assets,
properties, or funds of the Maker. The provisions of this paragraph shall only
be applicable to a default by the Maker in the payment of the principal portion
hereof, and the Payee has and shall continue to possess full recourse against
the Maker for the payment of all interest accrued hereon through the earlier to
occur of (i) [THE COMMENCEMENT DATE], 2001, or (ii) the date on which the Payee
conducts a foreclosure sale on the Maker's SCGC Stock.
"Applicable Law" means that law in effect from time to time
and applicable to this Note which permits the charging and collection of the
highest permissible lawful nonusurious rate of interest on this Note, including
laws of the State of Texas and laws of the United States of America. It is
intended that Article 1.04, Title 79, Revised Civil Statutes of Texas, 1925, as
amended (Article 5069-1.04, as amended, Vernon's Texas Civil Statutes) shall be
included in the laws of the State of Texas in determining applicable Law; and
for the purpose of applying Article 1.04 to this Note, the interest ceiling
applicable to this Note under Article 1.04 shall be the indicated rate ceiling
from time to time in effect.
"Maximum Rate" means the maximum lawful nonusurious rate of
interest (if any) which under Applicable Law the Payee is permitted to charge
the Maker on this Note from time to time.
As permitted by Article 5069-15.10(b), Title 79, Revised Civil
Statutes of Texas, 1925, as amended (Article 5069-15.10(B), as amended,
Vernon's Texas Civil Statutes), the Maker and the Payee have agreed that the
provisions of Chapter 15 of Title 79, as amended, shall not be applicable to
this Note or any "Account" or "Arrangement" (as such terms are defined in
Article 5069-15.01 of Title 79) which may exist by virtue of this Note or the
instruments securing this Note.
This Note shall be construed under and governed by the laws of
the State of Texas and applicable federal law.
C-1 / 4
32
THIS PROMISSORY NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
MAKER:
Address of Maker:
LOUISIANA RIVERBOAT GAMING PARTNERSHIP,
a Louisiana general partnership
000 Xxxx xx Xxxxx Xxxx.
Xxxxxxxxxx, XX 00000
By: Louisiana River Site Development, Inc.,
General Partner, a wholly-owned
subsidiary of Louisiana Downs, Inc.
By:_____________________________________
Name:___________________________________
Title:__________________________________
By: CSNO, Inc., General Partner, a
wholly-owned subsidiary of
Casino America, Inc.
By:_____________________________________
Name:___________________________________
Title:__________________________________
C-1 / 5
33
ALL INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED TO OTHER INDEBTEDNESS
PURSUANT TO, AND TO THE EXTENT PROVIDED IN, AND IS OTHERWISE SUBJECT TO THE
TERMS OF, THE SUBORDINATION AGREEMENT, DATED JUNE 9, 1995 (THE "HIBERNIA
SUBORDINATION AGREEMENT") BY AND AMONG CROWN CASINO CORPORATION, LOUISIANA
RIVERBOAT GAMING PARTNERSHIP, AND HIBERNIA NATIONAL BANK, AS BANK REFERRED TO
IN THE SUBORDINATION AGREEMENT, AS THE SAME MAY BE AMENDED, MODIFIED OR
OTHERWISE SUPPLEMENTED FROM TIME TO TIME.
ALL INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED TO OTHER INDEBTEDNESS
PURSUANT TO, AND TO THE EXTENT PROVIDED IN, AND IS OTHERWISE SUBJECT TO THE
TERMS OF, THE CROWN SUBORDINATION AGREEMENT, DATED JULY 20, 1995 (THE "NOMURA
SUBORDINATION AGREEMENT") BY AND AMONG CROWN CASINO CORPORATION, LOUISIANA
RIVERBOAT GAMING PARTNERSHIP, NOMURA HOLDING AMERICA, INC., AND FIRST NATIONAL
BANK OF COMMERCE, AS AGENT REFERRED TO IN THE SUBORDINATION AGREEMENT, AS THE
SAME MAY BE AMENDED, MODIFIED OR OTHERWISE SUPPLEMENTED FROM TIME TO TIME.
C-1 / 6
34
EXHIBIT C-2
PROMISSORY NOTE
(Purchase Money Note B)
$10,000,000.00 New Orleans, Louisiana [CLOSING DATE], 1996
FOR VALUE RECEIVED, the undersigned, LOUISIANA RIVERBOAT
GAMING PARTNERSHIP, a Louisiana partnership (hereinafter called the "Maker")
promises to pay to the order of CROWN CASINO CORPORATION, a Texas corporation
(hereinafter called the "Payee"), at its offices at 0000 X. Xxxxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000, in lawful money of the United States of
America, the sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00), together
with interest on the unpaid principal balance from and after date hereof until
maturity at a fixed rate per annum which shall from day to day be equal to
eleven and one-half percent (11.5%) per annum, computed on the basis of a year
of 365 or 366 days, as the case may be, and for the actual number of days
elapsed (including the first day but excluding the last day). All past due
principal and interest shall bear interest from and after maturity until paid,
regardless of how maturity occurs, at an interest rate which, from day to day,
shall be equal to eighteen percent (18%) per annum.
This Note is Purchase Money Note B as defined in the Stock
Purchase Agreement (the "Stock Purchase Agreement") dated January [DATE], 1996
by and among the Payee and Casino America, Inc. It has been executed
contemporaneously with Purchase Money Note A as defined in the Stock Purchase
Agreement. It has replaced the $20 million Promissory Note dated June 9, 1995
by the Maker to the order of the Payee (the "Purchase Money Note") as recited
in the Stock Purchase Agreement. This Note and Purchase Money Note A shall be
secured by the Security Agreement - Pledge (the "Pledge Agreement") dated June
9, 1995 by the Maker in favor of the Payee, and shall be subject to the
Hibernia Subordination Agreement and the Nomura Subordination Agreement (as
defined in legends on the last pages of this Note). To the extent that the
Pledge Agreement, the Hibernia Subordination Agreement or the Nomura
Subordination Agreement refer to the Purchase Money Note, they shall henceforth
be deemed to refer with equal effect to this Note and Purchase Money Note A,
collectively. If the Maker refinances any or all of the indebtedness to which
this Note is subordinated with the same or other persons, this Note and
Purchase Money Note A shall be subordinated to such refinancing indebtedness
but only to the extent of the lesser of $45 million or the principal balance of
the indebtedness being refinanced as of the date of the refinancing.
Interest on the outstanding principal balance of this Note
shall be due and payable monthly as it accrues on the first Business Day of
each and every calendar month from [COMMENCEMENT DATE], 1996 through [THE
COMMENCEMENT DATE], 2001 (or, if not a Business Day, the first Business Day
thereafter), on which date the then remaining balance of principal and accrued,
unpaid interest shall be due and payable in full. The first payments under
this Note and Purchase Money Note A shall collectively represent all interest
accrued under the Purchase Money Note through the date of this Note, and shall
respectively represent the interest accrued under this
C-2 / 1
35
Note and Purchase Money Note A from the date of this Note through the
Commencement Date. One-half (1/2) of such interest accrued under the Purchase
Money Note through the date of this Note shall be paid by the Maker hereunder,
and the balance shall be paid by the Maker pursuant to Purchase Note A.
As used herein, the term "Business Day" shall mean any day
other than a day on which commercial banks in the State of Texas are authorized
to be closed. Any check, draft, money order or other instrument given in
payment of all or any portion of this Note may be accepted by the Payee and
handled in collection in the customary manner, but the same shall not
constitute payment or diminish any rights of the Payee except to the extent
that actual cash proceeds of such instrument are unconditionally received by
the Payee.
If any installment or payment of principal or interest of this
Note or Purchase Money Note A is not paid when due, and such installment is not
paid within ten (10) days of the scheduled due date thereof; or if a default
occurs under any instrument now or hereafter executed in connection with or as
security for this Note, including without limitation, the Security Agreement
granting to the Payee a security interest in and pledge of all of the Maker's
fifty percent (50%) of the issued and outstanding capital stock in St. Xxxxxxx
Gaming Company, Inc. ("Maker's SCGC Stock"); thereupon, at the option of the
Payee, the principal and unpaid accrued interest on this Note shall become and
be due and payable forthwith without demand, notice of default or of intent to
accelerate the maturity hereof, notice of acceleration, notice of nonpayment,
presentment, protest or notice of dishonor, all of which are hereby expressly
waived by the Maker.
If this Note is not paid at maturity whether by acceleration
or otherwise and is placed in the hands of any attorney for collection, or suit
is filed hereon, or proceedings are had in probate, bankruptcy, receivership,
reorganization, arrangement or other legal proceedings for collection hereof,
the Maker agrees to pay the Payee its collection costs, including reasonable
attorney's fees. The Maker is and shall be directly and primarily liable for
the payment of all sums called for hereunder, and the Maker hereby expressly
waives bringing of suit and diligence in taking any action to collect any sums
owing hereon and in the handling of any security, and the Maker hereby consents
to and agrees to remain liable hereon regardless of any renewals, extensions
for any period or rearrangements hereof, or partial prepayments hereon, or any
release or substitution of security for this Note, in whole or in part, with or
without notice, from time to time, before or after maturity.
The Maker shall have the privilege to prepay at any time, and
from time to time, all or any part of the principal amount of this Note,
without penalty or fee, but only upon fifteen (15) days' prior notice to the
Payee. Such advances or prepayments will be applied, first to the payment of
installments of principal in the inverse order of maturity.
It is expressly provided and stipulated that notwithstanding
any provision of this Note or any other instrument evidencing or securing the
loan evidenced hereby, in no event shall the aggregate of all interest paid by
the Maker to the Payee under this Note ever exceed the Maximum Rate on the
principal balance of this Note from time to time advanced and remaining unpaid.
In this connection, it is expressly stipulated and agreed that it is the intent
of the Payee and the Maker in the execution and delivery of this Note to
contract in strict compliance with the Applicable Laws.
C-2 / 2
36
In furtherance thereof, none of the terms of this Note or any other instrument
evidencing or securing the loan evidenced hereby, shall ever be construed to
create a contract to pay for the use, forbearance or detention of money,
interest at a rate in excess of the Maximum Rate permitted to be charged of the
Maker under such laws. The Maker or any guarantors, endorsers or other parties
now or hereafter becoming liable for payment of this Note shall never be liable
for interest in excess of the Maximum Rate, and the provision of this paragraph
and the immediately succeeding paragraph shall govern over all other provisions
of this Note and any instruments evidencing or securing the loan evidenced
hereby, should such provisions be in apparent conflict herewith.
Specifically and without limiting the generality of the
foregoing paragraph, it is expressly provided that:
i) In the event of prepayment of the principal of this
Note (if permitted hereunder) or the payment of the principal of this
Note prior to the stated maturity date hereof resulting from
acceleration of maturity of this Note, if the aggregate amounts of
interest accruing hereon prior to such payment plus the amount of any
interest accruing after maturity and plus any other amounts paid or
accrued in connection with the loan evidenced hereby which by
Applicable Law are deemed interest on the loan evidenced by this Note
and which aggregate amount paid or accrued (if calculated in
accordance with the provisions of this Note other than this paragraph)
would exceed the Maximum Rate, then in such event the amount of such
excess shall be credited, as of the dated paid, toward the payment of
principal of this Note so as to reduce the amount of the final payment
of principal due on this Note;
ii) If under any circumstance the aggregate amounts paid
on the loan evidenced by this Note prior to and incident to the final
payment hereof include amounts which by Applicable Law are deemed
interest and which would exceed the Maximum Rate, the Maker stipulates
that such payment and collection will have been and will be deemed to
have been the result of a mathematical error on the part of both the
Maker and the Payee, and any excess shall be credited on the Note by
the Payee. If this Note shall have been paid in full, the party
receiving such excess payment shall promptly refund the amount of such
excess (to the extent only of the excess of such interest payments
above the Maximum Rate) upon the discovery of such error by the party
receiving such payment or notice thereof from the party making such
payment; and
iii) All amounts paid or agreed to be paid in connection
with the indebtedness evidenced by this Note which would under
Applicable Law be deemed interest shall, to the extent provided by
Applicable Law, be amortized, prorated, allocated and spread
throughout the full term of this Note.
All notices required or permitted under this Note shall be in
writing and shall be deemed to have been sufficiently given or served for all
purposes when presented personally or deposited with the United States Postal
Service, postage prepaid, certified mail, return receipt requested, to the
Maker at the address set forth below, or at such other address of which the
Maker
C-2 / 3
37
shall have notified the President or any Vice President of the Payee in writing
at least thirty (30) days prior to the date of the Payee giving such notice.
Where appropriate, any pertinent noun, verb or pronoun shall be construed and
interpreted to include both the proper number and gender. This Note shall not
be renewed, extended, or modified except by a written instrument evidencing the
same.
Notwithstanding anything to the contrary contained herein or
in any instrument securing the payment hereof, including without limitation,
the Pledge Agreement, the exclusive remedy of the Payee for the failure of the
Maker to pay all or any portion of the principal owing hereunder shall be
limited to proceeding against the properties, rights and estates described in
and encumbered by the Pledge Agreement, and no attachment, execution, or other
writ or process shall be sought, issued, or levied upon any other assets,
properties, or funds of the Maker. The provisions of this paragraph shall only
be applicable to a default by the Maker in the payment of the principal portion
hereof, and the Payee has and shall continue to possess full recourse against
the Maker for the payment of all interest accrued hereon through the earlier to
occur of (i) [THE COMMENCEMENT DATE], 2001, or (ii) the date on which the Payee
conducts a foreclosure sale on the Maker's SCGC Stock.
"Applicable Law" means that law in effect from time to time
and applicable to this Note which permits the charging and collection of the
highest permissible lawful nonusurious rate of interest on this Note, including
laws of the State of Texas and laws of the United States of America. It is
intended that Article 1.04, Title 79, Revised Civil Statutes of Texas, 1925, as
amended (Article 5069-1.04, as amended, Vernon's Texas Civil Statutes) shall be
included in the laws of the State of Texas in determining applicable Law; and
for the purpose of applying Article 1.04 to this Note, the interest ceiling
applicable to this Note under Article 1.04 shall be the indicated rate ceiling
from time to time in effect.
"Maximum Rate" means the maximum lawful nonusurious rate of
interest (if any) which under Applicable Law the Payee is permitted to charge
the Maker on this Note from time to time.
As permitted by Article 5069-15.10(b), Title 79, Revised Civil
Statutes of Texas, 1925, as amended (Article 5069-15.10(B), as amended,
Vernon's Texas Civil Statutes), the Maker and the Payee have agreed that the
provisions of Chapter 15 of Title 79, as amended, shall not be applicable to
this Note or any "Account" or "Arrangement" (as such terms are defined in
Article 5069-15.01 of Title 79) which may exist by virtue of this Note or the
instruments securing this Note.
The Payee shall have the collective rights and options to
convert (the "Conversion Rights") up to the lesser of (a) the outstanding
principal balance of this Note on the date such option is exercised by the
Payee, or (b) Ten Million and No/100 Dollars ($10,000,000.00) of the principal
hereof, into shares of the Common Stock of Casino America, Inc., a Delaware
corporation ("Casino America"), the parent corporation of CSNO, Inc., a general
partner of the Maker, at a conversion rate of Twelve and No/100 Dollars
($12.00) per share. The Conversion Rights may be exercised by the Payee
pursuant to the terms of that certain Amended and Restated Warrant to Purchase
up to 416,667 Shares of Common Stock of even date herewith executed by Casino
America in favor
C-2 / 4
38
of the Payee and that certain Additional Warrant to Purchase up to 416,667
Shares of Common Stock of even date herewith executed by Casino America in
favor of the Payee.
This Note shall be construed under and governed by the laws of
the State of Texas and applicable federal law.
THIS PROMISSORY NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
MAKER:
Address of Maker:
LOUISIANA RIVERBOAT GAMING PARTNERSHIP,
a Louisiana general partnership
000 Xxxx xx Xxxxx Xxxx.
Xxxxxxxxxx, XX 00000
By: Louisiana River Site Development, Inc.,
General Partner, a wholly-owned
subsidiary of Louisiana Downs, Inc.
By:______________________________________
Name:____________________________________
Title:___________________________________
By: CSNO, Inc., General Partner, a
wholly-owned subsidiary of Casino
America, Inc.
By:______________________________________
Name:____________________________________
Title:___________________________________
C-2 / 5
39
ALL INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED TO OTHER INDEBTEDNESS
PURSUANT TO, AND TO THE EXTENT PROVIDED IN, AND IS OTHERWISE SUBJECT TO THE
TERMS OF, THE SUBORDINATION AGREEMENT, DATED JUNE 9, 1995 (THE "HIBERNIA
SUBORDINATION AGREEMENT") BY AND AMONG CROWN CASINO CORPORATION, LOUISIANA
RIVERBOAT GAMING PARTNERSHIP, AND HIBERNIA NATIONAL BANK, AS BANK REFERRED TO
IN THE SUBORDINATION AGREEMENT, AS THE SAME MAY BE AMENDED, MODIFIED OR
OTHERWISE SUPPLEMENTED FROM TIME TO TIME.
ALL INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED TO OTHER INDEBTEDNESS
PURSUANT TO, AND TO THE EXTENT PROVIDED IN, AND IS OTHERWISE SUBJECT TO THE
TERMS OF, THE CROWN SUBORDINATION AGREEMENT, DATED JULY 20, 1995 (THE "NOMURA
SUBORDINATION AGREEMENT") BY AND AMONG CROWN CASINO CORPORATION, LOUISIANA
RIVERBOAT GAMING PARTNERSHIP, NOMURA HOLDING AMERICA, INC., AND FIRST NATIONAL
BANK OF COMMERCE, AS AGENT REFERRED TO IN THE SUBORDINATION AGREEMENT, AS THE
SAME MAY BE AMENDED, MODIFIED OR OTHERWISE SUPPLEMENTED FROM TIME TO TIME.
X-0 / 0
00
XXXXXXX X-0
Amended Original Warrant
THE SECURITIES REPRESENTED BY THIS WARRANT, INCLUDING THE UNDERLYING COMMON
STOCK, HAVE NOT BEEN REGISTERED WITH, APPROVED OR OTHERWISE REVIEWED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER FEDERAL OR STATE
AGENCY. THE SECURITIES HAVE BEEN ISSUED TO THE PERSON WHOSE NAME APPEARS ON
THE FACE OF THIS WARRANT IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF FEDERAL AND STATE SECURITIES LAW. BEFORE THIS WARRANT MAY BE
TRANSFERRED TO ANY THIRD PARTY, AN OPINION OF COUNSEL MUST BE OBTAINED STATING
THAT THE OFFER, SALE OR PURCHASE, AS THE CASE MAY BE, WILL NOT VIOLATE FEDERAL
OR ANY STATE'S SECURITIES LAWS. THESE SECURITIES ARE ALSO SUBJECT TO
RESTRICTIONS IMPOSED BY THE CERTIFICATE OF INCORPORATION AND BYLAWS OF THE
CORPORATION. A COPY OF THE CORPORATION'S CERTIFICATE OF INCORPORATION AND
BYLAWS CAN BE OBTAINED AT THE OFFICES OF THE CORPORATION.
Amended and Restated
Warrant to Purchase
Up To
416,667 Shares of Common Stock
CASINO AMERICA, INC.
(Incorporated under the laws of the State of Delaware)
STOCK PURCHASE WARRANT
Void after 5:00 p.m., Eastern Standard Time, on __________, 2001
This is to certify that Crown Casino Corporation ("Holder"), or its
assigns, is entitled, subject to the terms and conditions hereinafter set
forth, on or before 5:00 p.m. Eastern Standard Time, on _______________, 2001
to purchase up to 416,667 Shares of Common Stock ("Share(s)") of Casino
America, Inc. (the "Company") from the Company at an exercise price of $12.00
Dollars (the "Exercise Price") per Share. Upon presentation and surrender of
this Warrant, together with the form of subscription duly executed and the
payment to the Company of the Exercise Price in the
D-1 / 1
41
manner provided in Section 1 hereof, the Holder will be entitled to receive
a certificate representing the Shares so purchased. If this Warrant is
exercised in respect of less than all of the Shares covered hereby, then Holder
shall be entitled to receive a new warrant covering the number of Shares in
respect of which this Warrant shall not have been exercised.
1. The purchase rights represented by this Warrant are
exercisable at the option of the Holder at any time within the period specified
above in increments of not less than $1,000,000, for all or any whole number of
Shares which are subject to this Warrant. The Company agrees to reserve from
its authorized and unissued shares a sufficient number of unissued Shares to
provide for the issuance and delivery of all shares purchasable pursuant to
this Warrant. This Warrant is exercisable only in exchange for the forgiveness
and cancellation of outstanding principal due and payable under that certain
Purchase Money Note B (the "Note") dated ____________, 1996 issued to Holder by
the Louisiana Riverboat Gaming Partnership and in no event may the amount of
such redemption exceed $5,000,000. This Warrant is issued in exchange for that
certain warrant dated June 9, 1995 between Holder and Company which is hereby
cancelled.
2. Except to the extent that this Warrant expressly provides
otherwise, the Holder shall not be entitled to any of the rights of a
shareholder of the Company; but immediately upon the exercise of this Warrant
and upon payment and receipt by the Company as provided herein, the Holder
shall be deemed a record owner of the shares so purchased and, as such, shall
have all of the rights of such a record owner.
3. Subject to the limitations and restrictions provided herein
and by operation of federal and state securities laws, this Warrant and all
rights hereunder are transferable by the Holder to a transferee of the Note, in
person or by duly authorized attorney, on the books of the Company upon
surrender of this Warrant, properly endorsed, to the Company. The Shares when
issued shall be validly issued, fully paid and nonassessable.
4. The Company may deem and treat the Holder as the absolute
owner hereof for all purposes and shall not be affected by any notice to the
contrary.
5. Unless such exercise is registered or exempt from registration
under federal and state security laws, this Warrant shall not be exercisable
except for a security which at the time of such exercise is exempt under the
Securities Act, is the subject matter of an exempt transaction, is registered
by description, by coordination, or by qualification, or at such time is the
subject matter of a transaction which has been registered by description.
6. The number of Shares purchasable pursuant to this Warrant
and/or the Exercise Price shall be subject to adjustment from time to time as
hereinafter set forth in the following subsections of this Section 6.
a. In any of the following events, occurring hereafter,
appropriate adjustment shall be made in the number of Shares purchasable
pursuant to this Warrant and/or the Exercise Price, so as to maintain the
proportionate interest of the Holder: (i) recapitalization of the Company
through a split-up of the outstanding common shares or a combination of the
outstanding common
D-1 / 2
42
shares into a lesser number; (ii) declaration of a dividend on the common
shares, payable in common shares or other securities convertible into common
shares; or (iii) any stock split or reverse stock split with respect to the
common shares. Irrespective of any adjustment or change in the purchase price
per share or in the number of the Shares purchasable pursuant to this Warrant,
such Warrant may continue to express the purchase price per share and the
number of shares purchasable hereunder as expressed when initially issued.
b. If the Company offers for subscription any of its
shares of capital stock or other securities convertible into common shares, to
the record owners of the common shares as a class or classes, the Holder shall
be entitled to subscribe for the same number of common shares as the Holder
would have been entitled to purchase had the Holder theretofore fully exercised
this Warrant and become a shareholder.
c. In the event that the Company, or any successor,
shall be consolidated or merged with or into another entity, or all or
substantially all of the Company's assets shall be sold to another corporation
in exchange for stock with the view of distributing such stock to the Company's
shareholders, the Holder shall have the right thereafter to receive upon the
exercise of this Warrant the kind and amount of shares of stock and other
securities and property receivable upon such consolidation, merger, sale or
conveyance, and adequate provisions to that effect shall be made a condition of
such consolidation, merger, sale or conveyance. Such provisions shall include
provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section of the Warrant.
The Holder shall receive notice of any such transaction.
d. In the event that any dissolution, liquidation or
winding up of the Company, whether voluntary or involuntary, shall at any time
be proposed, the Company shall give to the Holder at least 20 days' prior
written notice of the date as of which the record owners of the Shares will be
fixed in respect of their right to exchange their Shares for the securities or
other property distributable upon such dissolution, liquidation or winding up.
In the event that such dissolution, liquidation or winding up shall actually
take place, this Warrant and all rights with respect hereto shall automatically
terminate and become null and void as of the fixed date referred to above.
e. Upon the occurrence of any event requiring any
adjustment of the number of Shares purchasable pursuant to this Warrant and/or
the purchase price per share, the Company shall promptly give to the Holder
written notice thereof and the adjustment(s) resulting therefrom, which notice
shall set forth in reasonable detail the computations which constitute the
basis for such adjustment(s). The Company's Board of Directors shall in good
faith determine all such adjustments, which shall be binding upon the parties.
7. Each certificate for the Shares purchasable pursuant to this
Warrant will, when issued, bear a legend which describes and/or refers to the
restrictions imposed on the transfer of the Shares by federal and state
securities laws as well as any standard gaming legend then required to be
affixed to the certificates by any state regulatory authorities.
D-1 / 3
43
8. a. The Holder may request on a one-time basis
registration under the Securities Act of 1993, as amended (the "Act"), and
appropriate state securities laws, of all or part of the Shares. Promptly upon
receipt of such request, the Company will prepare and file a registration
statement with the Securities and Exchange Commission ("SEC") with respect to
the Shares to be registered, and use its best efforts to cause such
registration statement to become effective.
b. The Company shall advise the Holder by written notice
at least twenty (20) days prior to the filing of any new registration statement
or post-effective amendment thereto under the Act covering securities of the
Company and will, upon request include in any such new registration statement
(and any related qualification under blue sky laws or other compliance) such
information as may be required to permit a public offering of all or any
portion of the Shares.
c. However, no such obligations shall apply (i) to a
registration statement on Forms S-4 or S-8; (ii) if any underwriter of the
Company's securities determines for any reason that it would not permit such
registration; or (iii) if the Holder has had two prior opportunities to have
its securities registered.
d. The Company and the Holder shall supply and furnish
indemnification in the manner set forth herein.
e. The following provisions of this Section shall also
be applicable:
(i) The Holder shall bear all of the fees and
disbursements of its own counsel and its pro rata share of any registration
fees, transfer taxes or underwriting discounts or commissions or other
underwriting compensation and charges applicable to the Shares sold by it
pursuant hereto; the Company shall pay all other costs, expenses, commissions
and other fees of such registration.
(ii) The Company shall indemnify and hold harmless
the Holder and each underwriter, within the meaning of the Act, who may
purchase from or sell for such Holder any Shares from and against any and all
losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or alleged untrue statement
or omission or alleged omission based upon information furnished or required to
be furnished in writing to the Company by such Holder or underwriter expressly
for use therein. The Holder or underwriter shall at the same time indemnify
the Company, its directors, each officer signing the related registration
statement and each person, if any, who controls the Company from and against
any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or caused by any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished in writing to the Company by
such Holder or underwriter expressly for use therein.
D-1 / 4
44
f. The Company's agreements in this Section shall
continue in effect regardless of the exercise and surrender of this Warrant.
g. This right of registration shall in all instances be
subject and limited to a proration of securities if requested by an
underwriter, with all other Shareholders of the Company who own restricted
securities and who request registration at such time.
h. In the case of the filing of a registration statement
pursuant to Section 8a. hereof, the Company shall prepare and file with the SEC
such amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement, and shall
use the best efforts to keep such registration statement effective for a period
of one hundred eighty (180) days or upon notice from the Holder that the Shares
subject to the registration statement have been sold, whichever occurs first.
i. The Company shall furnish to the Holder such numbers
of copies of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of the Shares
subject thereto.
j. The Company will use its best efforts to register and
qualify the Shares covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holder, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions or to agree to any restrictions as to the conduct of its business
in the ordinary course thereof.
9. Notices herein required or permitted to be given to the Holder
by the Company shall be given by first class mail, postage prepaid, addressed
to the Holder at the address of such Holder appearing in the records of the
Company and shall be deemed to have been given when sent pursuant to the
provisions hereof.
10. This Warrant shall be construed in accordance with the laws of
the State of Delaware.
11. The term "Holder" means the original holder of this Warrant
and any transferee of this Warrant to whom the Note and this Warrant and the
rights hereunder are assigned in accordance with Paragraph 3 hereof.
D-1 / 5
45
IN WITNESS WHEREOF, the Company has caused this Amended and Restated
Warrant to be duly executed on this ____ day of ____________, 1996.
CASINO AMERICA, INC.
By: ________________________________________________
X-0 / 0
00
Xxxxxxxxxxxx Xxxx
(Xx xx executed by the Holder to exercise the rights
to purchase the Shares evidenced by the within Warrant)
CASINO AMERICA, INC.
0000 Xxxxxxxxx Xxxxxxxxx, XX
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
The undersigned hereby irrevocably subscribes for _______ Shares
pursuant to and in accordance with the terms and conditions of this Warrant,
herewith encloses the purchase price therefor in the form permitted by this
Warrant and requests that a certificate for the Shares be issued in the name of
the undersigned and be delivered to the undersigned at the address stated
below. If such number of Shares shall not be all of the Shares purchasable
pursuant to this Warrant, please issue a new warrant of like tenor for the
balance of the remaining Shares purchasable under this Warrant to be delivered
to the undersigned at the address provided below.
Date:____________________ Signed:______________________________
Address:_____________________________
_____________________________
D-1 / 7
47
ASSIGNMENT FORM
FOR VALUE RECEIVED, ___________________________________ hereby
sells, assigns and transfers unto
Name:__________________________________________________________________________
Address:_______________________________________________________________________
the right to purchase Common Stock represented by this Warrant and does hereby
irrevocably constitute and appoint ___________________, Attorney, to transfer
the same on the books of the Company with full power of substitution in the
premises.
Date:_______________________, 199_
Signature:______________________________________________
Signature Guaranty:_____________________________________
(By a member of the New York Stock Exchange or a commercial bank or trust
company in New York City)
X-0 / 0
00
XXXXXXX X-0
Additional Warrant
THE SECURITIES REPRESENTED BY THIS WARRANT, INCLUDING THE UNDERLYING COMMON
STOCK, HAVE NOT BEEN REGISTERED WITH, APPROVED OR OTHERWISE REVIEWED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER FEDERAL OR STATE
AGENCY. THE SECURITIES HAVE BEEN ISSUED TO THE PERSON WHOSE NAME APPEARS ON
THE FACE OF THIS WARRANT IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF FEDERAL AND STATE SECURITIES LAW. BEFORE THIS WARRANT MAY BE
TRANSFERRED TO ANY THIRD PARTY, AN OPINION OF COUNSEL MUST BE OBTAINED STATING
THAT THE OFFER, SALE OR PURCHASE, AS THE CASE MAY BE, WILL NOT VIOLATE FEDERAL
OR ANY STATE'S SECURITIES LAWS. THESE SECURITIES ARE ALSO SUBJECT TO
RESTRICTIONS IMPOSED BY THE CERTIFICATE OF INCORPORATION AND BYLAWS OF THE
CORPORATION. A COPY OF THE CORPORATION'S CERTIFICATE OF INCORPORATION AND
BYLAWS CAN BE OBTAINED AT THE OFFICES OF THE CORPORATION.
Additional
Warrant to Purchase
Up To
416,667 Shares of Common Stock
CASINO AMERICA, INC.
(Incorporated under the laws of the State of Delaware)
STOCK PURCHASE WARRANT
Void after 5:00 p.m., Eastern Standard Time, on ____________, 2001
This is to certify that Crown Casino Corporation ("Holder"), or its
assigns, is entitled, subject to the terms and conditions hereinafter set
forth, on or before 5:00 p.m. Eastern Standard Time, on ___________, 2001 to
purchase up to 416,667 Shares of Common Stock ("Share(s)") of Casino America,
Inc. (the "Company") from the Company at an exercise price of $12.00 Dollars
(the "Exercise Price") per Share. Upon presentation and surrender of this
Warrant, together with the form of subscription duly executed and the payment
to the Company of the Exercise Price in the
D-2 / 1
49
manner provided in Section 1 hereof, the Holder will be entitled to receive
a certificate representing the Shares so purchased. If this Warrant is
exercised in respect of less than all of the Shares covered hereby, then Holder
shall be entitled to receive a new warrant covering the number of Shares in
respect of which this Warrant shall not have been exercised.
1. The purchase rights represented by this Warrant are
exercisable at the option of the Holder at any time within the period specified
above in increments of not less than $1,000,000, for all or any whole number of
Shares which are subject to this Warrant. The Company agrees to reserve from
its authorized and unissued shares a sufficient number of unissued Shares to
provide for the issuance and delivery of all shares purchasable pursuant to
this Warrant. This Warrant is exercisable only in exchange for the forgiveness
and cancellation of outstanding principal due and payable under that certain
Purchase Money Note B (the "Note") dated ___________, 1996 issued to Holder by
the Louisiana Riverboat Gaming Partnership, in no event may the amount of such
redemption exceed $5,000,000, and this Warrant may not be exercised until after
exercise of that certain Amended and Restated Warrant of even date herewith.
2. Except to the extent that this Warrant expressly provides
otherwise, the Holder shall not be entitled to any of the rights of a
shareholder of the Company; but immediately upon the exercise of this Warrant
and upon payment and receipt by the Company as provided herein, the Holder
shall be deemed a record owner of the shares so purchased and, as such, shall
have all of the rights of such a record owner.
3. Subject to the limitations and restrictions provided herein
and by operation of federal and state securities laws, this Warrant and all
rights hereunder are transferable by the Holder to a transferee of the Note, in
person or by duly authorized attorney, on the books of the Company upon
surrender of this Warrant, properly endorsed, to the Company. The Shares when
issued shall be validly issued, fully paid and nonassessable.
4. The Company may deem and treat the Holder as the absolute
owner hereof for all purposes and shall not be affected by any notice to the
contrary.
5. Unless such exercise is registered or exempt from registration
under federal and state security laws, this Warrant shall not be exercisable
except for a security which at the time of such exercise is exempt under the
Securities Act, is the subject matter of an exempt transaction, is registered
by description, by coordination, or by qualification, or at such time is the
subject matter of a transaction which has been registered by description.
6. The number of Shares purchasable pursuant to this Warrant
and/or the Exercise Price shall be subject to adjustment from time to time as
hereinafter set forth in the following subsections of this Section 6.
a. In any of the following events, occurring hereafter,
appropriate adjustment shall be made in the number of Shares purchasable
pursuant to this Warrant and/or the Exercise Price, so as to maintain the
proportionate interest of the Holder: (i) recapitalization of the Company
through a split-up of the outstanding common shares or a combination of the
outstanding common
D-2 / 2
50
shares into a lesser number; (ii) declaration of a dividend on the common
shares, payable in common shares or other securities convertible into common
shares; or (iii) any stock split or reverse stock split with respect to the
common shares. Irrespective of any adjustment or change in the purchase price
per share or in the number of the Shares purchasable pursuant to this Warrant,
such Warrant may continue to express the purchase price per share and the
number of shares purchasable hereunder as expressed when initially issued.
b. If the Company offers for subscription any of its
shares of capital stock or other securities convertible into common shares, to
the record owners of the common shares as a class or classes, the Holder shall
be entitled to subscribe for the same number of common shares as the Holder
would have been entitled to purchase had the Holder theretofore fully exercised
this Warrant and become a shareholder.
c. In the event that the Company, or any successor,
shall be consolidated or merged with or into another entity, or all or
substantially all of the Company's assets shall be sold to another corporation
in exchange for stock with the view of distributing such stock to the Company's
shareholders, the Holder shall have the right thereafter to receive upon the
exercise of this Warrant the kind and amount of shares of stock and other
securities and property receivable upon such consolidation, merger, sale or
conveyance, and adequate provisions to that effect shall be made a condition of
such consolidation, merger, sale or conveyance. Such provisions shall include
provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section of the Warrant.
The Holder shall receive notice of any such transaction.
d. In the event that any dissolution, liquidation or
winding up of the Company, whether voluntary or involuntary, shall at any time
be proposed, the Company shall give to the Holder at least 20 days' prior
written notice of the date as of which the record owners of the Shares will be
fixed in respect of their right to exchange their Shares for the securities or
other property distributable upon such dissolution, liquidation or winding up.
In the event that such dissolution, liquidation or winding up shall actually
take place, this Warrant and all rights with respect hereto shall automatically
terminate and become null and void as of the fixed date referred to above.
e. Upon the occurrence of any event requiring any
adjustment of the number of Shares purchasable pursuant to this Warrant and/or
the purchase price per share, the Company shall promptly give to the Holder
written notice thereof and the adjustment(s) resulting therefrom, which notice
shall set forth in reasonable detail the computations which constitute the
basis for such adjustment(s). The Company's Board of Directors shall in good
faith determine all such adjustments, which shall be binding upon the parties.
7. Each certificate for the Shares purchasable pursuant to this
Warrant will, when issued, bear a legend which describes and/or refers to the
restrictions imposed on the transfer of the Shares by federal and state
securities laws as well as any standard gaming legend then required to be
affixed to the certificates by any state regulatory authorities.
D-2 / 3
51
8. a. The Holder may request on a one-time basis
registration under the Securities Act of 1993, as amended (the "Act"), and
appropriate state securities laws, of all or part of the Shares. Promptly upon
receipt of such request, the Company will prepare and file a registration
statement with the Securities and Exchange Commission ("SEC") with respect to
the Shares to be registered, and use its best efforts to cause such
registration statement to become effective.
b. The Company shall advise the Holder by written notice
at least twenty (20) days prior to the filing of any new registration statement
or post-effective amendment thereto under the Act covering securities of the
Company and will, upon request include in any such new registration statement
(and any related qualification under blue sky laws or other compliance) such
information as may be required to permit a public offering of all or any
portion of the Shares.
c. However, no such obligations shall apply (i) to a
registration statement on Forms S-4 or S-8; (ii) if any underwriter of the
Company's securities determines for any reason that it would not permit such
registration; or (iii) if the Holder has had two prior opportunities to have
its securities registered.
d. The Company and the Holder shall supply and furnish
indemnification in the manner set forth herein.
e. The following provisions of this Section shall also
be applicable:
(i) The Holder shall bear all of the fees and
disbursements of its own counsel and its pro rata share of any registration
fees, transfer taxes or underwriting discounts or commissions or other
underwriting compensation and charges applicable to the Shares sold by it
pursuant hereto; the Company shall pay all other costs, expenses, commissions
and other fees of such registration.
(ii) The Company shall indemnify and hold harmless
the Holder and each underwriter, within the meaning of the Act, who may
purchase from or sell for such Holder any Shares from and against any and all
losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or alleged untrue statement
or omission or alleged omission based upon information furnished or required to
be furnished in writing to the Company by such Holder or underwriter expressly
for use therein. The Holder or underwriter shall at the same time indemnify
the Company, its directors, each officer signing the related registration
statement and each person, if any, who controls the Company from and against
any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or caused by any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished in writing to the Company by
such Holder or underwriter expressly for use therein.
D-2 / 4
52
f. The Company's agreements in this Section shall
continue in effect regardless of the exercise and surrender of this Warrant.
g. This right of registration shall in all instances be
subject and limited to a proration of securities if requested by an
underwriter, with all other Shareholders of the Company who own restricted
securities and who request registration at such time.
h. In the case of the filing of a registration statement
pursuant to Section 8a. hereof, the Company shall prepare and file with the SEC
such amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement, and shall
use the best efforts to keep such registration statement effective for a period
of one hundred eighty (180) days or upon notice from the Holder that the Shares
subject to the registration statement have been sold, whichever occurs first.
i. The Company shall furnish to the Holder such numbers
of copies of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of the Shares
subject thereto.
j. The Company will use its best efforts to register and
qualify the Shares covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holder, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions or to agree to any restrictions as to the conduct of its business
in the ordinary course thereof.
9. Notices herein required or permitted to be given to the Holder
by the Company shall be given by first class mail, postage prepaid, addressed
to the Holder at the address of such Holder appearing in the records of the
Company and shall be deemed to have been given when sent pursuant to the
provisions hereof.
10. This Warrant shall be construed in accordance with the laws of
the State of Delaware.
11. The term "Holder" means the original holder of this Warrant
and any transferee of this Warrant to whom the Note and this Warrant and the
rights hereunder are assigned in accordance with Paragraph 3 hereof.
D-2 / 5
53
IN WITNESS WHEREOF, the Company has caused this Additional Warrant to
be duly executed on this ____ day of _______________, 1996.
CASINO AMERICA, INC.
By: _________________________________________________
X-0 / 0
00
Xxxxxxxxxxxx Xxxx
(Xx xx executed by the Holder to exercise the rights
to purchase the Shares evidenced by the within Warrant)
CASINO AMERICA, INC.
0000 Xxxxxxxxx Xxxxxxxxx, XX
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
The undersigned hereby irrevocably subscribes for _______ Shares
pursuant to and in accordance with the terms and conditions of this Warrant,
herewith encloses the purchase price therefor in the form permitted by this
Warrant and requests that a certificate for the Shares be issued in the name of
the undersigned and be delivered to the undersigned at the address stated
below. If such number of Shares shall not be all of the Shares purchasable
pursuant to this Warrant, please issue a new warrant of like tenor for the
balance of the remaining Shares purchasable under this Warrant to be delivered
to the undersigned at the address provided below.
Date:____________________ Signed:____________________________________
Address:___________________________________
___________________________________
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55
ASSIGNMENT FORM
FOR VALUE RECEIVED, ___________________________________ hereby
sells, assigns and transfers unto
Name:___________________________________________________________________________
Address:________________________________________________________________________
the right to purchase Common Stock represented by this Warrant and does hereby
irrevocably constitute and appoint ___________________, Attorney, to transfer
the same on the books of the Company with full power of substitution in the
premises.
Date:_______________________, 199_
Signature:______________________________________________
Signature Guaranty:_____________________________________
(By a member of the New York Stock Exchange or a commercial bank or trust
company in New York City)
D-2 / 8
56
EXHIBIT E
Purchase of Grand Palais Riverboat
1. GPRI and SCGC would operate both vessels as a joint venture whereby
all of the income and expenses of the operation of the vessels as well
as all operating costs and real estate lease obligations of the land
based facilities will be borne by the joint venture. All profits and
losses of the joint venture will be divided 52.5% by GPRI and 47.5% by
SCGC.
2. The joint venture will be managed by Riverboat Services, Inc. pursuant
to separate management agreements containing the same terms and
conditions that presently exist for the Isle-Calcasieu.
3. The term of the joint venture shall exist so long as SCGC continues to
lease property in Calcasieu Parish for the purpose of gaming. The
joint venture will terminate at such time as Casino America no longer
owns, directly or indirectly, any interest in the Isle-Calcasieu or
SCGC.
4. All assets, properties, liabilities and obligations shall remain in
each constituent corporation. GPRI shall pay all costs incurred in
modifying and/or expanding the berthing site to accommodate the second
vessel. The joint venture will bear the costs of all improvements and
development costs relating to the Site that are incurred after the
start-up date of the Riverboat at the Site.
5. GPRI shall pay an annual fee of $3 million to SCGC for the privilege
of docking at the Site and equal use of all of the facilities at the
Site, as well as an annual fee of $2 million to Louisiana Downs, the
latter payment being payable for so long as Louisiana Downs or any
subsidiary owns an interest, directly or indirectly, in SCGC.* The
fees shall begin 90 days after the Riverboat opens at the Site and
shall be paid monthly in arrears.
6. LRGP and Casino America will execute another Warrant Payment Agreement
providing for reimbursement to Casino America of $5 million (but not a
"Black Xxxxxx" payment) in the event that Crown exercises an
additional warrant (to be given to them at the opening of the
Riverboat) for 416,667 Casino America shares, to reimburse Casino
America for an additional $5 million loan reduction (calculated at $12
per share).
7. The other terms and provisions of the joint venture shall be set forth
in the terms of a joint venture agreement to be executed by the
parties.
8. These arrangements shall be subject to such regulatory and lender
approvals as shall be necessary to implement the provisions of these
resolutions.
* (GPRI shall also pay an annual fee of $2 million to Crown,
payable only so long as Crown or any subsidiary owns an
interest, directly or indirectly, in SCGC.)
E-1
