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EXHIBIT 2.2
FIRST AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
The First Amendment (this "Amendment") dated as of March 25, 1999 to
the Agreement and Plan of Merger (the "Merger Agreement") dated as of September
2, 1998 by and among Horseshoe Gaming, L.L.C., a Delaware limited liability
company ("Parent"), Horseshoe Gaming (Midwest), Inc., a Delaware corporation
("Horseshoe"), Empress Acquisition Illinois, Inc., a Delaware corporation
("Empress Illinois), Empress Acquisition Indiana, Inc., a Delaware corporation
("Empress Indiana"), Empress Entertainment, Inc., a Delaware corporation
("Empress"), Empress Casino Joliet Corporation, an Illinois corporation
("Empress Joliet"), and Empress Casino Xxxxxxx Corporation, an Indiana
corporation ("Empress Hammond"), is entered into by and among Parent, Horseshoe,
Empress Illinois, Empress Indiana, Empress, Empress Joliet and Empress Xxxxxxx.
RECITALS
A. Parent, Horseshoe, Empress Illinois, Empress Indiana, Empress,
Empress Joliet and Empress Xxxxxxx have heretofore entered into the Merger
Agreement, which provides, among other things, for (i) the merger of Empress
Illinois with and into Empress Joliet; and (ii) the merger of Empress Indiana
with and into Empress Xxxxxxx. All capitalized terms used herein and not
otherwise defined herein shall have the meaning ascribed to them in the Merger
Agreement.
B. Parent, Horseshoe, Empress Illinois, Empress Indiana, Empress,
Empress Joliet and Empress Xxxxxxx wish to enter into this Amendment to amend
certain provisions of the Merger Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Status of Merger Agreement. Except as specifically set forth herein,
the Merger Agreement and each of the exhibits thereto shall remain in full force
and effect and shall not be waived, modified, superseded or otherwise affected
by this Amendment. This Amendment is not to be construed as a release, waiver or
modification of any of the terms, conditions, representations, warranties,
covenants, rights or remedies set forth in the Merger Agreement, except as
specifically set forth herein.
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2. Amendments to the Merger Agreement.
(a) Section 1.05 of the Merger Agreement. The first sentence of Section
1.05 of the Merger Agreement is hereby deleted in its entirety and replaced with
the following:
"Subject to the terms and conditions set forth in this Agreement, the
aggregate consideration to be received by Empress upon the consummation of the
Merger shall be an aggregate amount equal to: (a) Six Hundred Nine Million
Dollars ($609,000,000), plus or minus (as the case may be) (b) Net Working
Capital (or the deficit in Net Working Capital), minus (c) Existing Debt plus
(d) the aggregate amount of the Hammond Payments plus (e) the aggregate amount
of cash expended on or after June 30, 1999 and prior to the Closing by the
Subsidiaries for the purchase of assets or property (except with respect to the
Hammond Payments and those expenditures described on Schedule 2.06(b)) that, in
accordance with GAAP, is capitalized on such Subsidiaries' balance sheet at any
time on or after June 30, 1999 and is made in accordance with Section 4.12 (the
"Merger Consideration")."
(b) Section 1.09 of the Merger Agreement. Section 1.09 of the Merger
Agreement is hereby deleted in its entirety and replaced with the following:
"Section 1.09. Deposit. The Buyers are depositing $10,000,000 (plus any
interest earned thereon, the "Deposit"), with the Escrow Agent (the "Deposit
Escrow") pursuant to an escrow agreement to be substantially in the form of
Exhibit A, as amended from time to time by the parties hereto (the "Deposit
Escrow Agreement," and together with the Adjustment Escrow Agreement, the
General Escrow Agreement, the Supplemental Escrow Agreements, and the Bonus
Escrow Agreement, the "Escrow Agreements"). The Deposit, without any right of
set-off, shall be paid to Empress in the event of termination of this Agreement
pursuant to Sections 10.01(a), (b), (d), (h) or (i) and the Deposit shall be
returned to the Buyers upon termination of this Agreement pursuant to Sections
10.01(c), (e), or (f). In the event of a termination of this Agreement pursuant
to Section 10.01(g), the Buyers and the Sellers shall mutually determine how the
Deposit will be disbursed. In the event of a Closing, the Deposit shall be
credited against the Merger Consideration and distributed to Empress in
accordance with Section 1.05. If the Deposit is paid to Empress as a result of a
termination of this Agreement pursuant to Sections 10.01(a), (b), (d), (h) or
(i), the Deposit and any payments made pursuant to the last sentence of this
Section 1.09 shall be paid as liquidated damages (and not as a penalty) in
recognition of the difficultly to ascertain damages. The receipt of the Deposit
and any payments made pursuant to the last sentence of this Section 1.09 shall
be in lieu of all other rights and remedies available to any of the Sellers and
any of their respective Affiliates, stockholders, representatives and agents, as
a result of a breach of this Agreement by any of the Buyers. Upon a termination
of this Agreement for any reason whatsoever, in addition to the payment of the
Deposit, if applicable, the Buyers agree to pay Sellers one-half of the amount
of the Commercial Payments, not to exceed $3,000,000, such payment to be made
within 10 days after the Sellers have provided to the Buyers reasonable
documentation of the amount and payment of the Commercial Payments."
(c) Section 4.04(xii) of the Merger Agreement. Section 4.04(xii) of the
Merger Agreement is hereby amended by adding the following at the end of such
section:
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"; provided that Sellers, in consultation with Buyers, may make one or
more lump sum cash payments to satisfy all or any portion of the $10,000,000
commercial facilities commitment made by Sellers under the license of
suitability development agreement (the "Commercial Payments") of the Hammond
Commitments, which payments, if any, shall be deemed to be included in the
Hammond Payments."
(d) Section 4.12 of the Merger Agreement. Section 4.12 of the Merger
Agreement is hereby deleted in its entirety and replaced with the following:
"Section 4.12. Capital Expenditures. Empress shall and shall cause each
of the Subsidiaries to complete all capital expenditure projects contemplated in
the Budget on Schedule 2.06(b) and to the extent such projects have not been
completed as of the Closing Date, the costs to complete such projects shall be
deemed a Current Liability for purposes of the Closing Statement.
Notwithstanding any other provision of this Agreement, Empress or the
Subsidiaries may spend more on capital expenditures than the amounts provided
for in Schedule 2.06(b), provided that with respect to all such expenditures
over $25,000 Empress or the Subsidiaries, as applicable, shall consult with the
Buyers regarding the details related to such expenditures, prior to making such
expenditures."
(e) Section 6.03 of the Merger Agreement. Section 6.03 of the Merger
Agreement is hereby deleted in its entirety and replaced with the following:
"Section 6.03. Hammond Payments. Schedule 2.27 sets forth all of the
remaining commitments of Sellers to the City of Hammond, Indiana or other
governmental or quasi-governmental agencies thereof (collectively, the "Hammond
Commitments"). All amounts paid by Empress or any Subsidiary from the date of
this Agreement to the Closing in fulfillment of any portion of the Hammond
Commitments or to relieve Sellers of any of their remaining obligations relating
to the Hammond Commitments (collectively, the "Hammond Payments") and, to the
extent necessary, approved by the Buyers in accordance with Section 4.04 (xii),
shall be included in the Merger Consideration as provided in Section 1.05(d)."
(f) Sections 8.08 and 10.01(e) of the Merger Agreement. Sections 8.08
and 10.01(e) of the Merger Agreement are hereby amended by deleting the phrase
"(other than changes directly relating to the Buyers' ability to obtain the
necessary Illinois and Indiana gaming licenses)" from such sections.
(g) Section 10.01 of the Merger Agreement. The first sentence of
Section 10.01 of the Merger Agreement is hereby amended by deleting the phrase
"subparagraphs (g) or (h)" and replacing it with the phrase "subparagraphs (g),
(h) or (i)".
(h) Section 10.01(h) of the Merger Agreement. Section 10.01(h) of the
Merger Agreement is hereby deleted in its entirety and replaced with the
following:
"(h) By either the Buyers or the Sellers, if the Closing has not
occurred on or prior to September 30, 1999; provided, however that the right to
terminate this Agreement under this Section 10.01(h) will not be available to
any party whose failure to timely fulfill any obligation
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under this Agreement has been the cause of, or resulted in, the failure of the
Closing to occur on or before such date."
(i) Section 10.01 of the Merger Agreement. Section 10.01 of the Merger
Agreement is hereby amended by adding the following provision immediately after
subparagraph (h) of Section 10.01:
"(i) By Sellers if (i) the Buyers or their Affiliates who have become
parties to and agreed to be bound by this Agreement as a Buyer have not
completed an offering of securities pursuant to Rule 144A under the Securities
Act of 1933, as amended, by May 31, 1999; (ii) the Buyers or their Affiliates
who have become parties to and agreed to be bound by this Agreement as a Buyer
fail to maintain a substantial portion of the funds raised pursuant to the
offering described in Section 10.01 (i)(i) in escrow to be used to complete the
transactions contemplated by this Agreement (as evidenced by monthly balance
sheets of Buyers provided to Sellers within thirty (30) days after the end of
each calendar month prior to Closing, with a certification by the Chief
Financial Officer of Buyers that the escrowed amount is true and correct); (iii)
prior to May 31, 1999, the Buyers or their Affiliates who have become parties to
and agreed to be bound by this Agreement as a Buyer have not entered into a
customary Commitment Letter with one or more financial institutions (in a form
reasonably acceptable to Sellers) to obtain the funds necessary to consummate
the transactions contemplated by this Agreement and such Commitment Letter is
not maintained at all times after the execution thereof until the senior credit
facility described in item (iv) below becomes effective; (iv) prior to June 30,
1999 the Buyers or their Affiliates who have become parties to and agreed to be
bound by this Agreement as a Buyer have not entered into a new senior credit
facility to make available funds adequate to consummate the transactions
contemplated by this Agreement, or such new senior credit facility is not
maintained in place at all times after execution thereof and prior to the
Closing or Buyers fail to maintain sufficient availability under the new senior
credit facility to consummate the transactions contemplated by this Agreement at
any time prior to the Closing; (v) neither the Buyers nor any of their
respective Affiliates have consummated (subject only to payment terms)
transactions with August Xxxxx, Xxxxxxxxx Xxxxx and Xxxxxxx Xxxxx, or any of
their respective Affiliates to purchase or redeem any such parties' equity
interests in Buyers or any of their respective Affiliates by May 31, 1999; or
(vi) the Indiana Gaming Commission has not approved the transfer of ownership of
Empress Hammond to the Buyers pursuant to the Indiana Merger on or before August
31, 1999."
(j) Section 10.02(e) of the Merger Agreement. Section 10.02(e) of the
Merger Agreement is hereby deleted in its entirety and replaced with the
following:
"(e) Whether or not any breach or default by the Buyers with respect to
the provisions of this Agreement is willful or otherwise, the sole and exclusive
remedy of the Sellers against the Buyers shall be to recover the Deposit and
one-half of the Commercial Payments, not to exceed $3,000,000, as liquidated
damages and in no event shall the Buyers or any of their respective directors,
officers, members, managers, representatives, agents or Affiliates be liable to
any of the Sellers, or any of their respective directors, officers,
stockholders, representatives, agents or Affiliates, in any respect for any
amount except for the Deposit, and one-half of the Commercial Payments, not to
exceed $3,000,000, which shall be disbursed in accordance with Section 1.09.
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(k) The following definition shall be added to Article XVI of the
Merger Agreement:
"Commercial Payments" has the meaning set forth in Section 4.04(xii)
hereof."
3. Acknowledgment of Reorganization. Each of Empress, Empress Joliet
and Empress Xxxxxxx acknowledges, agrees and consents that in connection with
the securities offering to be made by the Buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended, (i) Horseshoe Gaming Holding Corp. ("HGHC")
will be organized as a Delaware corporation to effect the offering; (ii) HGHC
shall replace Horseshoe as a party to the Merger Agreement; (iii) substantially
all of the membership interests in Horseshoe Gaming, L.L.C. will be contributed
to HGHC in exchange for capital stock of HGHC; and (iv) two to-be-formed,
wholly-owned subsidiaries of HGHC will replace Empress Illinois and Empress
Indiana as (x) parties to the Merger Agreement and (y) the entities to be merged
with and into Empress Joliet and Empress Xxxxxxx, respectively. In accordance
with the last sentence of Section 1.01 of the Merger Agreement, the Sellers
consent to the foregoing actions and agree to execute appropriate amendments to
the Merger Agreement to reflect such actions.
4. No Waiver. Each of the Buyers acknowledges and agrees that it shall
be obligated to timely perform its obligations contained in the Merger Agreement
after the date hereof irrespective of the fact that Sellers have waived Buyers'
timely performance of certain obligations of the Buyers contained in the Merger
Agreement prior to the date hereof.
5. Representations and Warranties of Entities. Each of Parent,
Horseshoe, Empress Illinois, Empress Indiana, Empress, Empress Joliet and
Empress Xxxxxxx represents and warrants that its execution, delivery and
performance of this Amendment has been duly authorized by all necessary
corporate action and this Amendment is a legal, valid and binding obligation of
such entity in accordance with its terms.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
7. Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of Delaware, without regard to conflict of law
principles.
IN WITNESS WHEREOF, the parties have executed this Amendment and caused
the same to be duly delivered on their behalf on the day and year first written
above.
HORSESHOE GAMING, L.L.C.
By:
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Title:
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HORSESHOE GAMING (MIDWEST), INC.
By:
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Title:
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EMPRESS ACQUISITION ILLINOIS, INC.
By:
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Title:
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EMPRESS ACQUISITION INDIANA, INC.
By:
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Title:
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EMPRESS ENTERTAINMENT, INC.
By:
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Title:
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EMPRESS CASINO JOLIET CORPORATION
By:
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Title:
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EMPRESS CASINO XXXXXXX CORPORATION
By:
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Title:
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