EXHIBIT 2.2
FIRST AMENDMENT
TO
PURCHASE AGREEMENT
This First Amendment, dated as of October 5, 1999 (this "First
Amendment"), to the Amended and Restated Purchase Agreement, dated as of August
31, 1999, and effective as of August 19, 1999 (the "Amended and Restated
Purchase Agreement"), by and among Lady Luck Gaming Corporation, a Delaware
corporation (the "Purchaser"), and Gemini, Inc. (d/b/a Lady Luck Casino Hotel),
a Nevada corporation ("Gemini"), International Xxxxx Xxxx'x Services, Inc., a
Nevada corporation ("IMPS") (Gemini and IMPS being sometimes herein referred to
collectively as the "Companies" and individually as a "Company"), and Xxxxxx X.
Xxxxxxxx (the "Seller"), is entered into by and among the Purchaser, the
Companies and the Seller.
RECITALS
A. The parties have heretofore entered into the Amended and Restated
Purchase Agreement, which provides, among other things, for the purchase and
sale of all of the issued and outstanding capital stock of the Companies, and
the sale and assignment of certain Real Property related to the operation of the
Lady Luck Casino & Hotel in Las Vegas, Nevada. All capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in the
Amended and Restated Purchase Agreement.
B. Pursuant to that certain Agreement and Plan of Merger dated as of
the date hereof (the "Merger Agreement"), by and among Isle of Capri Casinos,
Inc., a Delaware corporation ("Isle of Capri"), Isle Merger Corp., a Delaware
corporation and a wholly owned subsidiary of Isle of Capri
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("Merger Sub"), and the Purchaser, Merger Sub shall be merged with and into the
Purchaser, the separate corporate existence of Merger Sub shall cease, and
Purchaser shall continue as the surviving corporation and as a wholly owned
subsidiary of Isle of Capri (the "Merger").
C. In connection with the Merger, Isle of Capri has agreed to enter
into that certain Credit Agreement establishing a $16,300,000 Senior Secured
Bridge Facility (the "Bridge Financing"), to be dated as of the date of funding
of the Bridge Financing, between Gamblers Supply Management Company, as
Borrower, and Isle of Capri, as Lender (the "Credit Agreement").
D. The Purchaser, the Companies and the Seller wish to enter into this
First Amendment to amend certain provisions of the Amended and Restated Purchase
Agreement as contemplated by 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 are hereby acknowledged, the parties hereto agree as
follows:
1. Status of Amended and Restated Purchase Agreement. Except as set forth in
this First Amendment, the Amended and Restated Purchase Agreement and each of
the exhibits and schedules thereto shall remain in full force and effect and
shall not be waived, modified, superseded or otherwise affected by this First
Amendment. The terms of this First Amendment shall be effective as of the date
of this First Amendment; provided, that if the Merger is not consummated in
accordance with the terms of the Merger Agreement or if Isle of Capri defaults
upon its obligations under the Credit Agreement, the terms of this First
Amendment shall terminate with no further action
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by any of the parties to this Agreement and the terms of the Amended and
Restated Purchase Agreement prior to the execution of this First Amendment shall
be reinstated in their entirety; provided further, that notwithstanding the
foregoing, the amendments contained in this First Amendment to Sections 2.8(a),
2.9(a) and 6.9 of the Amended and Restated Purchase Agreement shall survive and
remain in full force and effect regardless of whether the Merger and Bridge
Financing are consummated. To the extent there are inconsistencies between the
terms of this First Amendment and the terms of the Amended and Restated Purchase
Agreement, the terms of this First Amendment shall prevail.
2. Amendments to the Amended and Restated Purchase Agreement.
(a) Section 1.1. Section 1.1 of the Amended and Restated Purchase
Agreement is hereby modified to (i) delete the following definitions:
"Adjusted EBITDA," "Cancellation Notice," "Closing," "Due Diligence Period,"
"Purchase Price" and "Refinancing" and (ii) add or to replace, as
applicable, the following definitions, such definitions to be inserted in
the appropriate alphabetical order:
Allocation Schedule: As defined in Section 6.14 of this Agreement.
Bridge Financing: The $16,300,000 Senior Secured Bridge Facility
between Gamblers Supply Management Company, as Borrower, and Isle of Capri
Casinos, Inc., as Lender, pursuant the terms and conditions contained in the
Bridge Credit Agreement.
Bridge Credit Agreement: Credit Agreement, to be dated as of the
date of funding of the Bridge Financing, between Gamblers Supply Management
Company, as Borrower, and Isle of Capri Casinos, Inc., as Lender, in the amount
of U.S. $16,300,000.
Certificate of Merger: The certificate of merger filed with the
Secretary of State of the State of Delaware pursuant to the Merger Agreement.
Claims: As defined in Section 11.10 of this Agreement.
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Closing Date: With respect to the transfer of the First Closing
Assets, references to the Closing Date shall mean the First Closing Date and,
with respect to the transfer of the Second Closing Assets, references to the
Closing Date shall mean the Second Closing Date.
Damages: As defined in Section 11.10 of this Agreement.
Effective Time: The date of filing of the Certificate of Merger
filed with the Secretary of State of the State of Delaware pursuant to the
Merger Agreement or such later date and time as may be specified in the
Certificate of Merger.
Excluded Assets: As defined in Section 2.1(c) of this Agreement.
Excluded Real Property: As defined in Section 2.1(d) of this
Agreement.
Expiration Date: As defined in Section 11.9 of this Agreement.
Final S Tax Period: As defined in Section 11.1 of this Agreement.
First Closing: As defined in Section 2.3 of this Agreement.
First Closing Assets: As defined in Section 2.1 of this Agreement.
First Closing Date: As defined in Section 2.3 of this Agreement.
First Closing Purchase Price: As defined in Section 2.2 of this
Agreement.
Gemini Copyrights: All copyrights, copyright registrations and
copyright applications, which, in each case, have been filed with the Copyright
Office of the Library of Congress or any similar office or agency of any other
country or used in the United States, any state, territory or possession thereof
or any other country, and all renewals thereof, which are owned by Gemini.
Gemini Intellectual Property: The Gemini Trademarks; the Mailing
List; the Gemini Copyrights; the Internet Domain Name; all incomes, royalties,
damages and payments now or hereafter due or payable under the Gemini
Trademarks, the Mailing List, the Gemini Copyrights and the Internet Domain
Name; all rights to xxx and collect charges and payments for past and future
infringements of the Gemini Trademarks, the Mailing List, the Gemini Copyrights
and the Internet Domain Name; and all goodwill and business in any way relating
to the Trademarks, the Mailing List, the Gemini Copyrights and the Internet
Domain Name.
Gemini Trademarks: All of Gemini's right, title and interest (in
the United States and throughout the world) in and to all of Gemini's
trademarks, service marks, trade names, trade dress, colors, designs, logos,
indicia, corporate names, company names, business names,
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fictitious business names, trade styles or other source or business identifiers
and all registrations and applications to register the same, including, without
limitation, the Licensed Trademarks, and all renewals thereof.
Indemnified Party: As defined in Section 11.11 of this Agreement.
Indemnifying Party: As defined in Section 11.11 of this Agreement.
Internet Domain Name: The Internet domain name xxxxxxxx.xxx.
Isle Cancellation Notice: As defined in Section 2.9(d) of this
Agreement.
Isle Due Diligence Period: As defined in Section 2.9(a) of this
Agreement.
Isle of Capri: Isle of Capri Casinos, Inc., a Delaware
corporation.
Landlord and Landlords: As defined in Section 8.6 of this
Agreement.
Landlord Estoppel Certificate: As defined in Section 8.8 of this
Agreement.
Mailing List: The mailing list that is owned by Gemini, and
currently maintained by IMPS, containing the names and addresses of, and other
information regarding, over five million (5,000,000) casino patrons, including,
without limitation: (1) all computer disks, magnetic tape and other electronic
media upon which such information may be recorded; (2) all filing cabinets, disk
and tape storage facilities and other equipment which is used for maintenance or
storage of such information; and (3) the books and records that are maintained
in connection therewith.
Merger: The merger of Merger Sub with and into the Purchaser
pursuant to the Merger Agreement, following which the separate corporate
existence of Merger Sub shall cease and Purchaser will become a wholly owned
subsidiary of Isle of Capri.
Merger Agreement: That certain Agreement and Plan of Merger, dated
as of October 5, 1999, by and among Isle of Capri, Merger Sub and the Purchaser,
pursuant to which the Merger shall be effected.
Merger Sub: Isle Merger Corp., a Delaware corporation and wholly
owned subsidiary of Isle of Capri.
Outside Date: As defined in Section 12.1(b) of this Agreement.
Property Taxes: As defined in Section 11.3(a) of this Agreement.
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Purchaser Cancellation Notice: As defined in Section 2.8(d) of
this Agreement.
Purchaser Claims: As defined in Section 11.10 of this Agreement.
Purchaser Due Diligence Period: As defined in Section 2.8(a) of
this Agreement.
Purchaser Group: As defined in Section 11.10 of this Agreement.
Purchaser Indemnitees: As defined in Section 11.3 of this
Agreement.
Purchaser License Agreement: That certain Exclusive License
Agreement dated as of October 5, 1999, by and among the Purchaser, Gemini and
the Seller, annexed hereto as Exhibit A.
Put Option Exercise Period: As defined in Section 6.13 of this
Agreement.
Second Closing: As defined in Section 2.4 of this Agreement.
Second Closing Assets: As defined in Section 2.1 of this
Agreement.
Second Closing Date: As defined in Section 2.4 of this Agreement.
Second Closing Purchase Price: As defined in Section 2.2 of this
Agreement.
Section 338(h)(10) Election: As defined in Section 6.14 of this
Agreement.
Seller Claims: As defined in Section 11.10 of this Agreement.
Seller Group: As defined in Section 11.10 of this Agreement.
Seller Put Option: As defined in Section 6.13 of this Agreement.
Services Agreement: That certain Services Agreement dated as of
October 5, 1999, between Gemini and IMPS, annexed hereto as Exhibit C.
Straddle Period: As defined in Section 11.3(a) of this Agreement.
Tax Claim: As defined in Section 11.6 of this Agreement.
Title Insurance Company: As defined in Section 2.7(a) of this
Agreement.
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(b) Article 2. Article 2 of the Amended and Restated Purchase
Agreement is hereby deleted in its entirety and replaced with the
following:
"2. Purchase and Sale.
2.1 Sale, Purchase and Delivery of Purchased Assets; Excluded Assets.
Subject to the terms and conditions of this Agreement:
(a) the Seller and Gemini hereby agree to sell and, on the First
Closing Date (as defined below), shall sell, convey, assign, transfer
and deliver to the Purchaser, and the Purchaser shall purchase, acquire
and accept from the Seller and Gemini, free and clear of all Liens, all
of the Seller's right, title and interest in and to the IMPS Shares and
all of Gemini's right, title and interest in and to the Gemini
Intellectual Property and the Company License Agreement (the "First
Closing Assets").
(b) the Seller hereby agrees to sell and, on the Second Closing
Date (as defined below), shall sell, convey, assign, transfer and
deliver to the Purchaser, and the Purchaser shall purchase, acquire and
accept from the Seller, free and clear of all Liens (other than, with
respect to paragraphs (2) - (5) below, Permitted Liens), all of the
Seller's right, title and interest in and to the following assets,
properties, privileges, claims and rights (collectively, the "Second
Closing Assets" and, together with the First Closing Assets, the
"Purchased Assets"):
(1) the Gemini Shares;
(2) the Fee Property and all Real Property in any way
appertaining to the Fee Property;
(3) the Hotel/Casino Facilities, including all buildings and
improvements forming a part thereof;
(4) the Real Property Leases, the Hotel/Casino Lease and the
Leased Parcels; and
(5) all goodwill of the Business.
(c) The Assets of the Seller set forth on Schedule 2.1(b) are not
included in the Purchased Assets and no rights in or to such assets are
to be transferred pursuant to this Agreement (the "Excluded Assets").
To the extent any of the Excluded Assets are located in the
Hotel/Casino Facilities, the Seller, at his expense, shall have the
right to remove the
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same at any time within thirty (30) days after the Second Closing
Date (provided that the Seller shall repair any damage caused by such
removal).
(d) The Real Property owned by Gemini set forth on Schedule 2.1(c)
is not included in the Purchased Assets and no rights, interest or
title in such Real Property are to be transferred pursuant to this
Agreement (the "Excluded Real Property"). Notwithstanding anything to
the contrary contained herein, the Seller, at his expense, shall
transfer all right, title and interest in the Excluded Real Property
from Gemini to the Seller prior to the Second Closing Date. In
connection with such transfer, the Seller shall refinance or assume all
indebtedness relating to the Excluded Real Property, shall take
commercially reasonable steps to cause Gemini to be released from all
such indebtedness and shall deliver to the Purchaser at the Second
Closing an agreed upon form of indemnification undertaking with respect
to any liabilities associated with the Excluded Real Property. The
indemnification provided under this Section 2.1(d) shall be separate
from, and not subject to the terms of, the Seller's general
indemnification obligations under Sections 11.10 through 11.12 of this
Agreement.
2.2 Purchase Price. The aggregate purchase price for the First Closing
Assets shall be Thirty One Million Dollars ($31,000,000) (the "First Closing
Purchase Price") and shall be paid on the First Closing Date by the Purchaser by
wire transfer of immediately available funds in such amounts and to such
accounts as designated by the Seller on or before the First Closing Date. The
aggregate purchase price for the Second Closing Assets shall be Fourteen Million
Five Hundred Thousand Dollars ($14,500,000) (the "Second Closing Purchase
Price") and shall be paid on the Second Closing Date by the Purchaser by wire
transfer of immediately available funds in such amounts and to such accounts as
designated by the Seller on or before the Second Closing Date.
2.3 First Closing.
(a) Subject to the terms and conditions of this Agreement, the
sale, assignment and purchase of the First Closing Assets pursuant to
Section 2.1(a) of this Agreement shall take place at a closing (the
"First Closing") at the offices of Purchaser's counsel in Nevada at
10:00 a.m., local time, on the date which is ten Business Days after
the satisfaction or waiver of all conditions to the First Closing, but
not prior to the date of the closing of the Merger or at such other
time and place as the Seller and the Purchaser mutually shall agree,
but not prior to the date of the closing of the Merger (it being
understood that the desire of the parties is to consummate the First
Closing on the closing date of the Merger); provided, that the First
Closing shall take place on the date of the closing of the Merger if
all conditions to the First Closing have been satisfied (or could be
satisfied if the First Closing were to occur) or waived on or prior to
such date (the day on which the First Closing takes place is referred
to herein as the "First Closing Date").
(b) At the First Closing, the Seller shall deliver or cause to be
delivered to the Purchaser the following:
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(1) certificates representing the IMPS Shares, duly endorsed
for transfer in blank or accompanied by a stock power
duly endorsed in blank by the Seller, with any requisite
documentary or stock transfer taxes affixed thereto;
(2) the certificates required by Sections 7.1 and 7.2
hereof;
(3) certificates issued by the Secretary of State of Nevada
evidencing, as of a recent date, the good standing of
IMPS and Gemini in the State of Nevada;
(4) copies of the Articles of Incorporation, including all
amendments thereto, of IMPS and Gemini, certified by the
Secretary of State or other appropriate official of the
State of Nevada;
(5) copies of the By-laws, including all amendments thereto,
of IMPS, certified by the Secretary of IMPS;
(6) copies of the By-laws, including all amendments thereto,
of Gemini, certified by the Secretary of Gemini;
(7) resolutions adopted by the Board of Directors of IMPS
authorizing the transactions contemplated hereby,
certified by the Secretary of IMPS;
(8) resolutions adopted by the Board of Directors of Gemini
authorizing the transactions contemplated hereby,
certified by the Secretary of Gemini;
(9) certificate of the Secretary of IMPS to the effect that
there have been no amendments to the applicable charter
documents and resolutions referred to in Sections
2.3(b)(4), 2.3(b)(5) and 2.3(b)(7) hereof since the date
of the certifications referred to in such subsections;
(10) certificate of the Secretary of Gemini to the effect
that there have been no amendments to the applicable
charter documents and resolutions referred to in
Sections 2.3(b)(4), 2.3(b)(6) and 2.3(b)(8) hereof since
the date of the certification referenced to in such
subsections;
(11) the Consent of any Person required for the consummation
by the Seller or Gemini of the transactions contemplated
hereby;
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(12) the documents, instruments and other certificates
required to be delivered by Seller and Gemini to the
Purchaser pursuant to Section 7.6 of this Agreement;
(13) a duly executed xxxx of sale and assignment, in form and
substance reasonably acceptable to the Purchaser,
transferring to the Purchaser all interests of Gemini in
the Company License Agreement to be transferred to the
Purchaser hereunder; and
(14) a duly executed assignment, in form and substance
reasonably acceptable to the Purchaser, transferring to
the Purchaser all of Gemini's right, title and interest
in and to the Gemini Intellectual Property.
(c) At the First Closing, the Purchaser shall deliver to the
Seller, the following:
(1) the First Closing Purchase Price, which shall be paid as
set forth in Section 2.2 of this Agreement;
(2) the certificates required by Sections 9.1 and 9.2
hereof;
(3) resolutions adopted by the Board of Directors of the
Purchaser authorizing the transactions contemplated
hereby, certified by the Secretary of the Purchaser;
(4) the Purchaser License Agreement; and
(5) the Consent of any Person required for the consummation
by the Purchaser of the transactions contemplated
hereby.
(d) In addition to the deliveries provided in Sections 2.3(b) and
(c), each of the parties hereto shall deliver all other documents and
instruments required to be delivered by either of them at or prior to
the First Closing Date pursuant to this Agreement or reasonably
required to effectuate the transactions provided for herein.
2.4 Second Closing.
(a) Subject to the terms and conditions of this Agreement, the
sale, assignment and purchase of the Second Closing Assets pursuant to
Section 2.1(b) of this Agreement shall take place at a closing (the
"Second Closing") at the offices of Purchaser's counsel in Nevada at
10:00 a.m., local time, on the date which is ten Business Days after
the satisfaction or waiver of all conditions to the Second Closing, but
not prior to the First Closing Date, or
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at such other time and place as the Seller and the Purchaser
mutually shall agree, but not prior to the date of the closing of the
Merger; provided, that the Second Closing shall take place on the date
of the closing of the Merger if all conditions to the Second Closing
have been satisfied (or could be satisfied if the Second Closing were
to occur) or waived on or prior to such date (the day on which the
Second Closing takes place is referred to herein as the "Second Closing
Date").
(b) At the Second Closing, the Seller shall deliver or cause to be
delivered to the Purchaser the following:
(1) certificates representing the Gemini Shares, duly
endorsed for transfer in blank or accompanied by a stock
power duly endorsed in blank by the Seller, with any
requisite documentary or stock transfer taxes affixed
thereto;
(2) certificates required by Sections 8.1 and 8.2 hereof;
(3) a certificate issued by the Secretary of State of Nevada
evidencing, as of a recent date, the good standing of
Gemini in the State of Nevada;
(4) copies of the Articles of Incorporation including all
amendments thereto, of Gemini, certified by the
Secretary of State or other appropriate official of the
State of Nevada;
(5) copies of the By-laws, including all amendments thereto,
of Gemini, certified by the Secretary of Gemini;
(6) resolutions adopted by the Board of Directors of Gemini
authorizing the transactions contemplated hereby,
certified by the Secretary of Gemini;
(7) certificate of the Secretary of Gemini to the effect
that there have been no amendments to the applicable
charter documents and resolutions referred to in
Sections 2.3(b)(4), 2.3(b)(6) and 2.3(b)(8) hereof since
the date of the certifications referred to in such
subsections;
(8) the Consent of any Person required for the consummation
by the Seller or Gemini of the transactions contemplated
hereby;
(9) such other instruments as may be reasonably requested by
the Purchaser evidencing the transfer of all rights and
interests of the Seller in the Leased Parcels and the
transfer of all right, title and
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interest of the Seller in the Fee Property and the
Hotel/Casino Facilities to the Purchaser, including the
following:
(a) Assignment of Tenant's Interest in Ground Lease
(FNB Lease);
(b) Assignment of Tenant's Interest in Ground Lease
(Xxxxxxx Lease);
(c) Assignment of Tenant's Interest in Lease (Parking
Garage Lease);
(d) Grant Bargain Sale Deed for each of the parcels
contained in the Fee Property;
(e) Grant Bargain Sale Deed and Xxxx of Sale for the
Hotel/Casino Facilities;
(f) all necessary title affidavits;
(g) an affidavit, dated the Second Closing Date,
pursuant to Section 1445 of the Code (Foreign
Investment in Real Property Tax Act of 1980);
(h) to the extent not previously provided, copies of
executed counterparts of the Leases and all
amendments thereto (nothing contained herein shall
be deemed to prohibit the Seller from retaining
additional copies of all or any thereof);
(i) the Landlord Estoppel Certificates which the Seller
is required to obtain pursuant to the provisions of
Section 8.8;
(j) the Consents of the Landlords to the assignment of
the Leases which the Seller is required to obtain
pursuant to the provisions of Section 8.9;
(k) originals of all Licenses and Permits being
assigned to the Purchaser at the Closing, to the
extent such originals are in the possession of the
Seller;
(l) letter notices to Landlords, duly executed by the
Seller, advising Landlords of the assignment of the
Leases and
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directing that notices thereafter be sent to
Purchaser or its designee;
(m) such affidavits of title and other instruments and
documents as may be reasonably required to
consummate the transactions herein contemplated,
and as may be reasonably required by the Title
Insurance Company to cure and/or modify the
exceptions and/or objections to title in accordance
with Section 2.7 of this Agreement;
(n) Non-Disturbance Agreements from any mortgages of
fee interest of the ground lessor under the Real
Property Leases with priority over the Real
Property Leases;
(o) originals of each xxxx for current real estate
Taxes, sewer charges and assessments, water charges
and other utilities, together with proof of payment
thereof (to the extent same had been paid), to the
extent in the Seller's possession or control
(nothing contained herein shall be deemed to
prohibit the Seller from retaining additional
copies of all or any thereof).
(10) ALTA Owner's title insurance policy from the Title
Insurance Company in the amount of Fourteen Million Five
Hundred Thousand Dollars ($14,500,000) with respect to
the Leased Parcels and the Fee Property (the premium for
CLTA coverage being paid by the Seller and the remaining
premium being paid by the Purchaser); and
(11) an assignment, duly executed by the Seller, of all
warranties and guarantees, if any, in effect as of the
Second Closing Date.
(c) At the Second Closing, the Purchaser shall deliver to the
Seller the following:
(1) the Second Closing Purchase Price, which shall be paid
as set forth in Section 2.2 of this Agreement;
(2) the certificates required by Sections 10.1 and 10.2
hereof;
(3) resolutions adopted by the Board of Directors of the
Purchaser authorizing the transactions contemplated
hereby, certified by the Secretary of the Purchaser;
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(4) the Consent of any Person required for the consummation
by the Purchaser of the transactions contemplated
hereby; and
(5) a duly executed Assumption of Leases.
(d) In addition to the deliveries provided in Sections 2.4(b) and
(c), each of the parties hereto shall deliver all other documents and
instruments required to be delivered by either of them at or prior to
the Second Closing Date pursuant to this Agreement or reasonably
required to effectuate the transactions provided for herein.
2.5 Proceedings at the First Closing and the Second Closing. All
proceedings to be taken and all documents to be executed and delivered by all
parties at the First Closing shall be deemed to have been taken and executed and
delivered simultaneously, and no proceedings shall be deemed taken nor any
documents executed or delivered until all have been taken, executed and
delivered. All proceedings to be taken and all documents to be executed and
delivered by all parties at the Second Closing shall be deemed to have been
taken and executed and delivered simultaneously, and no proceedings shall be
deemed taken nor any documents executed or delivered until all have been taken,
executed and delivered.
2.6 Adjustments and Prorations.
(a) The following matters and items set forth in clause (1) of
this Section 2.6(a) pertaining to the Gemini Intellectual Property
shall be apportioned between the parties hereto or, where applicable,
credited in total to a particular party, as of 9:00 a.m. on the First
Closing Date. Net credits in favor of the Purchaser shall be deducted
from the balance of the First Closing Purchase Price at the First
Closing and net credits in favor of the Seller or Gemini, as
applicable, shall be paid in cash at the First Closing. Unless
otherwise indicated below, the Seller or Gemini, as applicable, shall
receive a credit for any of the following items to the extent the same
are accrued but unpaid as of 9:00 a.m. on the First Closing Date
(whether or not due, owing or delinquent as of 9:00 a.m. on the First
Closing Date) and the Purchaser shall receive a credit to the extent
any of the following items shall have been paid prior to the First
Closing Date to the extent the payment thereof relates to any period of
time after 9:00 a.m. on the First Closing Date.
(1) License Fee Payments. License fee payments and other
charges payable under the License Agreement and the
Company License Agreement. If as of the First Closing
Date, there are license fee payments or other charges
owed and not yet paid to Gemini or IMPS under the
License Agreement or the Company License Agreement,
Gemini shall receive payment in cash for such amount at
the First Closing.
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(b) The following matters and items set forth in clauses (1) and
(2) of this Section 2.6(b) pertaining to the Property shall be
apportioned between the parties hereto or, where applicable, credited
in total to a particular party, as of 9:00 a.m. on the Second Closing
Date. Net credits in favor of the Purchaser shall be deducted from the
balance of the Second Closing Purchase Price at the Second Closing and
net credits in favor of the Seller shall be paid in cash at the Second
Closing. Unless otherwise indicated below, the Purchaser shall receive
a credit for any of the following items to the extent the same are
accrued but unpaid as of 9:00 a.m. on the Second Closing Date (whether
or not due, owing or delinquent as of 9:00 a.m. on the Second Closing
Date) and the Seller shall receive a credit to the extent any of the
following items shall have been paid prior to the Second Closing Date
to the extent the payment thereof relates to any period of time after
9:00 a.m. on the Second Closing Date.
(1) Taxes and Assessments. All nondelinquent ad valorem
Taxes, special or general assessments, real property
Taxes, personal property Taxes and any municipal License
and Permit fees. If the amount of any such item is not
ascertainable on the Second Closing Date, the credit
therefor shall be based on the most recent available
xxxx and adjusted as necessary post-Second Closing as
contemplated in Section 11.5.
(2) Rent under the Real Property Leases and the Hotel/Casino
Lease. Rents and other charges payable under the Real
Property Leases and the Hotel/Casino Lease. If as of the
Second Closing Date, there are past due rents or other
charges owed under the Real Property Leases, the
Purchaser shall receive a credit for such amount against
the Second Closing Purchase Price.
(c) The parties agree to make such post-First Closing and
post-Second Closing adjustments and readjustments as may be required
due to errors and omissions in the First Closing and Second Closing
adjustments, as applicable. If information is not available to make any
adjustments at the First Closing or the Second Closing, as applicable,
the same shall not be deemed a ground for adjournment of the First
Closing or the Second Closing and such adjustment shall be made as soon
as practicable after such information is available. The provisions of
Section 2.6(a) shall survive the First Closing for one year and the
provisions of Section 2.6(b) shall survive the Second Closing for one
year.
2.7 Title Insurance and Ability of Seller to Convey.
(a) Within 30 days from the date hereof, the Seller shall cause
title to the Property to be searched and examined by a title insurance
company reasonably acceptable to the Purchaser (the "Title Insurance
Company") and shall deliver to the attorneys for Purchaser the title
report for the issuance of an ALTA Owner's policy, including the tax
search, survey readings, all other accompanying searches and all
underlying title exception documents together with an ALTA survey of
the Property performed by a surveyor licensed by the State
-15-
of Nevada and reasonably acceptable to the Purchaser. The Purchaser, at
the Purchaser's sole cost and expense, shall cause the title commitment
to the Property to be delivered to the Purchaser's attorneys for the
issuance of an ALTA Owner's policy; provided, that such cost of the
title commitment shall be reimbursed to the Purchaser by the Seller on
the Second Closing Date should the transactions provided for herein
close. The Seller agrees to take all reasonably necessary actions as
will enable the Title Insurance Company to delete (i) any exceptions
from the said commitment that are not listed among the Permitted Liens
and (ii) all Liens referenced in clause (v) of the definition of
Permitted Liens that have been recorded against the Property. If any
objections appear in any subsequent report, the Purchaser shall notify
the attorneys for the Seller promptly after becoming aware of same and,
if the Seller is unable to remedy such objections prior to the Second
Closing, the Purchaser hereby grants to the Seller a reasonable
adjournment of the Second Closing Date during which time the Seller
shall reasonably attempt to remedy same. The premium for CLTA coverage
shall be paid by the Seller and the remaining premium shall be paid by
the Purchaser.
(b) Notwithstanding anything contained herein to the contrary, the
Seller shall eliminate all mortgages and security interests regardless
of amount and any other Liens affecting the Property, other than
Permitted Liens, which Liens secure a liquidated sum of money.
(c) The Seller shall not, between the date hereof and the Second
Closing Date, subject the Property to any Lien or other encumbrance to
title except (i) Permitted Liens and (ii) Liens or other encumbrances
to the extent that the same will be discharged of record at or before
the Second Closing, and the Seller shall discharge same of record at or
before the Second Closing.
(d) If at the Second Closing there shall be any Liens affecting
the Property in addition to the Permitted Liens, the Seller may require
the Purchaser to apply such portion of the Second Closing Purchase
Price as shall be necessary to discharge such Liens; provided, that at
or prior to the Second Closing, the Seller shall have delivered to the
Purchaser instruments satisfactory to the Title Insurance Company and
sufficient to discharge the same of record.
2.8 Purchaser's Inspection of the Property; Due Diligence.
(a) The Purchaser shall have the right to continue for a period of
thirty (30) days after the date of this First Amendment (the "Purchaser
Due Diligence Period") to enter upon the Property during reasonable
hours for the purpose of inspection of the Property and preparing
engineering surveys and environmental reports and such other tests and
inspections as the Purchaser may reasonably desire, including a Phase
II environmental inspection, that includes sampling and report. Any
such inspections and tests shall be performed at the sole cost of the
Purchaser. The Purchaser will not create or cause to be created any
claim against or Lien upon the Property, nor otherwise impair the
Seller's estate or unreasonably interfere
-16-
in any manner with the regular conduct of business upon the
Property. The Purchaser shall repair and restore to its original
condition any portion of the Property damaged, altered or disturbed as
a result of such inspections and the Purchaser shall indemnify and hold
the Seller and the Companies harmless from any and all liability
damage, claims or injury lawsuits resulting from the acts or omissions
of the Purchaser, its employees, agents or contractors related to such
inspection of the Property. The Purchaser's obligations under this
Section 2.8(a) shall survive the First Closing and the Second Closing
or earlier termination of this Agreement.
(b) The Seller shall, as promptly as practicable after the
execution of this Agreement, to the extent not previously provided and
to the extent in the Seller's possession or control, provide or cause
to be provided to the Purchaser copies of the Leases; material service
contracts; material Contracts; material Licenses and Permits; insurance
policies; material personal property, inventory and fixture lists;
current real estate tax bills/receipts; as-built plans and
specifications; existing surveys; existing title reports and policies;
existing engineering, property condition or environmental reports; and
such other material documents regarding the operation of the Business
and Properties as the Purchaser may reasonably request. The Seller
shall, to the extent such items exist and are in the Seller's or the
Companies' possession or control, provide or cause to be provided to
the Purchaser the items set forth on the Outstanding Due Diligence list
annexed hereto as Exhibit B (other than those certain projections
requested in Section I.4 and I.5(b) which are being prepared by the
Purchaser) as promptly as practicable after the execution of this
Agreement but in any case at least twenty (20) days prior to the end of
the Purchaser Due Diligence Period.
(c) In addition to Purchaser's rights under Section 2.8(a) and
(b), during the Purchaser Due Diligence Period, the Seller shall permit
the Purchaser and its representatives full access to the books,
records, facilities, properties, assets and operations of the
Companies; provided, that such access shall not interfere with the
normal business and operations of the Companies. The Seller shall
arrange for the Purchaser and its representatives to discuss with
appropriate officers, employees and representatives of the Companies
such matters related to the transactions provided for herein as the
Purchaser may reasonably request; provided that a representative of or
counsel to the Seller and the Companies is present.
(d) Subject to Section 6.13 of this Agreement, the Special
Committee shall have the right to cancel this Agreement on behalf of
the Purchaser at any time during the Purchaser Due Diligence Period if,
as a result of its due diligence review, the Special Committee shall
have discovered any matter which the Special Committee reasonably
believes would be materially adverse to the Business or its prospects
and such matter was not known by the Special Committee or its counsel
prior to the onset of the Purchaser Due Diligence Period, by notice to
the Seller given prior to the expiration of the Purchaser Due Diligence
Period (the "Purchaser Cancellation Notice"), following which all
parties shall be released from any further obligation under this
Agreement. Without limiting the foregoing,
-17-
any information set forth in the Limited Asbestos Survey, dated as
of October 25, 1996, and in the Operations Maintenance Plan, dated as
of November 4, 1996, both prepared for The Lady Luck Casino Hotel by
Terracon Consultants Western, Inc., shall be deemed to be known by the
Purchaser."
2.9 Isle of Capri's Inspection of the Property; Due Diligence.
(a) Isle of Capri shall have the right to continue for a period of
thirty (30) days after the date of this First Amendment, (the "Isle Due
Diligence Period") to enter upon the Property during reasonable hours
for the purpose of inspection of the Property and preparing engineering
surveys and environmental reports and such other tests and inspections
as Isle of Capri may reasonably desire, including a Phase II
environmental inspection, that includes sampling and report. Any such
inspections and tests shall be performed at the sole cost of Isle of
Capri. Isle of Capri will not create or cause to be created any claim
against or Lien upon the Property, nor otherwise impair the Seller's
estate or unreasonably interfere in any manner with the regular conduct
of business upon the Property. Isle of Capri shall repair and restore
to its original condition any portion of the Property damaged, altered
or disturbed as a result of such inspections and shall indemnify and
hold the Seller and the Companies harmless from any and all liability
damage, claims or injury lawsuits resulting from the acts or omissions
of Isle of Capri, its employees, agents or contractors related to such
inspection of the Property. Isle of Capri's obligations under this
Section 2.9(a) shall survive the First Closing and the Second Closing
or earlier termination of this Agreement.
(b) The Seller shall, as promptly as practicable after the
execution of this Agreement, to the extent not previously provided and
to the extent in the Seller's possession or control, provide or cause
to be provided to Isle of Capri copies of the Leases; material service
contracts; material Contracts; material Licenses and Permits; insurance
policies; material personal property, inventory and fixture lists;
current real estate tax bills/receipts; as-built plans and
specifications; existing surveys; existing title reports and policies;
existing engineering, property condition or environmental reports; and
such other material documents regarding the operation of the Business
and Properties as Isle of Capri may reasonably request. The Seller
shall, to the extent such items exist and are in the Seller's or the
Companies' possession or control or can be obtained through reasonable
commercial efforts, provide or cause to be provided to Isle of Capri
the items set forth on the Outstanding Due Diligence list annexed
hereto as Exhibit B as promptly as practicable after the execution of
this Agreement but in any case at least twenty (20) days prior to the
end of the Isle Due Diligence Period.
(c) In addition to Isle of Capri's rights under Section 2.9(a) and
(b), during the Isle Due Diligence Period, the Seller shall permit Isle
of Capri and its representatives full access to the books, records,
facilities, properties, assets and operations of the Companies;
provided, that such access shall not interfere with the normal business
and operations of the Companies. The Seller shall arrange for Isle of
Capri and its representatives to discuss with
-18-
appropriate officers, employees and representatives of the
Companies such matters related to the transactions provided for herein
as Isle of Capri may reasonably request; provided that a representative
of or counsel to the Seller and the Companies is present.
(d) Subject to Section 6.13 of this Agreement, Isle of Capri shall
have the right to cancel this Agreement on behalf of the Purchaser at
any time during the Isle Due Diligence Period (and effective only after
the consummation of the Merger pursuant to the terms of the Merger
Agreement) if, as a result of its due diligence review, Isle of Capri
shall have discovered any matter which Isle of Capri reasonably
believes would be materially adverse to the Business or its prospects
and such matter was not known by Isle of Capri or its counsel prior to
the onset of the Isle Due Diligence Period, by notice to the Seller
given prior to the expiration of the Isle Due Diligence Period (the
"Isle Cancellation Notice"), following which all parties shall be
released from any further obligation under this Agreement. Without
limiting the foregoing, any information set forth in the Limited
Asbestos Survey, dated as of October 25, 1996, and in the Operations
Maintenance Plan, dated as of November 4, 1996, both prepared for The
Lady Luck Casino Hotel by Terracon Consultants Western, Inc., shall be
deemed to be known by Isle of Capri."
(c) Section 4.5. Section 4.5 of the Amended and Restated Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
"4.5 Bringdown of Representations and Warranties. All representations
and warranties of the Seller contained in this Agreement shall be true and
correct on and as of the First Closing Date and the Second Closing Date, except
for such representations and warranties relating to the First Closing Assets
which shall be true and correct only on and as of the First Closing Date, with
the same force and effect as though such representations and warranties had been
made on, as of and with reference to such date (except that any representations
and warranties that speak as of a particular date shall continue to speak only
as of such date)."
(d) Section 5.11. Section 5.11 of the Amended and Restated Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
"Section 5.11. Bringdown of Representations and Warranties. All
representations and warranties of the Purchaser contained in this Agreement
shall be true and correct on and as of the First Closing Date and the Second
Closing Date with the same force and effect as though such representations and
warranties had been made on, as of and with reference to such date (except that
any representations and warranties that speak as of a particular date shall
continue to speak only as of such date)."
-19-
(e) Articles 6, 7 and 8. Articles 6, 7 and 8 of the Amended and
Restated Purchase Agreement are hereby deleted in their entirety and replaced
with the following and Articles 6 through 10, all subsequent Articles and
Sections shall be appropriately renumbered and all cross-references to such
Articles and Sections shall be appropriately renumbered:
"6. Conduct of Business Prior to the Closing and Other Agreements.
The parties hereto covenant and agree as follows:
6.1 Conduct of Business
(a) Except as otherwise expressly contemplated by this Agreement
or as specifically consented to in writing by the Purchaser, each of
the Seller and Gemini, from and after the date of this Agreement until
the Second Closing Date, and IMPS, from and after the date of this
Agreement until the First Closing Date, will use reasonable efforts
consistent with good business judgment to preserve the present business
organization of each of Gemini and IMPS intact, preserve the present
relationships of each of Gemini and IMPS with Persons having material
business dealings with each of Gemini and IMPS, generally operate the
Business and Properties in the ordinary and regular course consistent
with their prior practices and maintain all Insurance and Licenses and
Permits necessary for the ownership or conduct of their respective
business as currently conducted.
(b) Except as specifically contemplated by this Agreement,
including the Schedules attached hereto, or as otherwise consented to
in writing by the Purchaser, the Seller will cause Gemini, during the
period from the date of this Agreement to the Second Closing, and IMPS,
during the period from the date of this Agreement to the First Closing,
to:
(1) carry on its business only in the ordinary course in
substantially the same manner as heretofore conducted;
(2) use commercially reasonable efforts to (i) preserve
intact the present business organization and reputation
of Gemini and IMPS, (ii) keep available (subject to
dismissals, voluntary departures and retirements in the
ordinary course of business consistent with past
practice) the services of the present officers,
employees and consultants of Gemini and IMPS, (iii)
maintain the Assets and properties of Gemini and IMPS in
good working order and condition, ordinary wear and tear
excepted, (iv) maintain the goodwill of customers,
suppliers, lenders
-20-
and other persons to whom Gemini or IMPS sells goods or
provides services or with whom Gemini or IMPS otherwise
has significant business relationships, and (v) continue
all current sales, marketing and promotional activities
relating to the business and operations of Gemini and
IMPS;
(3) except to the extent required by applicable Law, cause
the books and records of Gemini and IMPS to be
maintained in the usual, regular and ordinary manner;
(4) use commercially reasonable efforts to maintain in full
force and effect until the Closing substantially the
same levels of coverage of insurance on Gemini's and
IMPS's properties and Assets as are currently in effect;
(5) not amend its Articles of Incorporation or By-laws;
(6) not acquire, by merger, consolidation, purchase of stock
or assets or otherwise, any corporation, partnership,
association or other business organization;
(7) not alter its outstanding capital stock or declare, set
aside, make or pay any dividend or other distribution in
respect of its capital stock (in cash or otherwise), or
purchase or redeem any shares of its capital stock;
(8) not issue or sell (or agree to issue or sell) any of its
capital stock or any options, warrants or other rights
to purchase any such shares or any securities
convertible into or exchangeable for such shares;
(9) not incur, other than in the ordinary course of business
consistent with past practice, any material indebtedness
for borrowed money (including through the issuance of
debt securities) or vary in any material manner the
terms of any material existing indebtedness, except that
the indebtedness under the Credit Agreement may be
modified if advantageous to the Borrowers and if such
modification does not materially and adversely affect
the ability of any party to timely perform its
obligations under this Agreement or otherwise to
consummate the transactions contemplated by this
Agreement;
(10) except to the extent required by applicable Law, not
permit any material change in (A) any pricing,
investment, accounting, financial reporting, inventory,
credit, allowance or tax practice or policy of the
-21-
Companies, (B) any method of calculating any bad debt,
contingency or other reserve of the Companies for
accounting, financial reporting or tax purposes, (C) its
accounting procedures or practices or (D) the fiscal
year of the Companies;
(11) not make or change any Tax election, file any amended
Tax Return, change its Tax accounting period, adopt or
change any method of Tax accounting, enter into any
closing agreement, compromise or settle any Tax claim or
assessment, surrender any right to claim a Tax refund,
consent to any extension or waiver of the statute of
limitations period applicable to any Tax claim or
assessment, or take or omit to take any other required
action relating to Taxes without the written consent of
the Purchaser, which shall not be unreasonably withheld;
(12) except in connection with the ordinary conduct of the
Business consistent with past practice and except to the
extent required by applicable Law, (i) not enter into,
amend, modify, terminate (partially or completely),
grant any waiver under or give any Consent with respect
to (A) any Lease, IP Agreement or Material Contract or
any Contract to which Gemini or IMPS is a party that
would, if in existence on the date of this Agreement, be
deemed a Material Contract or (B) any material License,
Permit or Consent, or (ii) not grant any irrevocable
powers of attorney;
(13) not violate, breach or default under, or take or fail to
take any action that (with or without notice or lapse of
time or both) would constitute a violation or breach of,
or default under, any term or provision of any Licenses
and Permits or Consent held or used by Gemini or IMPS or
any material Contract to which Gemini or IMPS is a party
or by which any of its Assets and properties is bound,
which violation, breach or default could reasonably be
expected to have a Material Adverse Effect;
(14) not make capital expenditures or commitments for
additions to property, plant or equipment constituting
capital assets in an aggregate amount exceeding $50,000
per annum unless required under the Credit Agreement;
(15) not dispose of, or incur any Lien (other than a
Permitted Lien) on, any Assets and properties of Gemini
or IMPS, material individually or in the aggregate other
than in the ordinary course of business consistent with
past practice;
-22-
(16) not write off or write down any of its Assets and
properties, outside the ordinary course of business
consistent with past practice;
(17) not take any action that would be reasonably likely to
cause any of the representations or warranties of the
Seller contained in this Agreement to be untrue in any
material respect;
(18) not increase the compensation payable or to become
payable by Gemini and IMPS to their respective
employees, except for increases in salary or wages in
the ordinary course of business consistent with past
practices or as required by applicable Law, or grant any
severance or termination pay (except as required by
current agreement, policy or by applicable Law);
(19) not sell, transfer, license or otherwise dispose of, or
permit to lapse or expire, any material Intellectual
Property or any interest therein; or
(20) not agree to take any of the actions set forth in the
foregoing subparagraphs 5 through 19.
(c) The Seller covenants with the Purchaser that subsequent to the
date of this Agreement and prior to the Second Closing:
(1) The Seller, without the Purchaser's prior written
consent, (i) will not modify or amend the Real Property
Leases or the Hotel/Casino Lease and (ii) will not
terminate the Real Property Leases or the Hotel/Casino
Lease.
(2) Subject to applicable Law, the Seller shall permit the
Purchaser and its authorized representatives, during
usual business hours, to inspect the Property and to
examine the operational records of the Seller with
respect thereof.
(3) The Seller shall pay or make, as and when due and
payable, all payments of principal and interest and all
deposits required to be paid or made under any mortgage
or deed of trust encumbering the Property.
(4) The Seller shall not permit Gemini, until the Second
Closing Date, and IMPS, until the First Closing Date, to
enter into any transaction with an Affiliate, or to
amend or modify existing agreements with Affiliates,
except for the Purchaser License Agreement and the
Services Agreement, and except in the ordinary course of
business
-23-
consistent with past practice or except with the written
consent of the Purchaser, which shall not be
unreasonably withheld.
(d) The Purchaser, from and after the First Closing Date, shall
preserve the present business organization of IMPS intact, preserve the
present relationships of IMPS with Gemini, the Seller and any other
person having material business dealings with IMPS, including the
provision of and payment for marketing services performed by IMPS
relating to the Business and Properties, generally operate the business
of IMPS in the ordinary and regular course consistent with prior
practice and maintain all Insurance and Licenses and Permits necessary
for the ownership or conduct of its business as currently conducted;
provided, however that, this covenant shall expire and be of no further
force or effect upon the provision of not less than ninety (90) days
notice to Gemini and the Seller that Purchaser has elected not to
continue the operation of IMPS and that Gemini and the Seller may
retain IMPS personnel.
6.2 Consents. Each of the parties hereto will use its good faith
efforts and shall fully cooperate with each other party to make promptly all
registrations, filings and applications, give all notices and obtain all
Consents, including without limitation, all necessary filings under the HSR Act.
6.3 Cooperation; Further Assurances.
(a) Each of the Seller, Gemini and IMPS, upon request by the
Purchaser, shall use its commercially reasonable efforts to provide the
Purchaser, its counsel, accountants and other authorized
representatives with such information concerning Gemini and IMPS as may
be reasonably necessary for the Purchaser to ascertain the accuracy and
completeness of the information supplied by or on behalf of Gemini and
IMPS and to verify Gemini's and IMPS' performance of and compliance
with its warranties and covenants herein contained.
(b) The parties hereto agree to (i) cooperate with each other in
determining whether any filings are required to be made or Consents
required to be obtained in any jurisdiction in connection with the
consummation of the transactions contemplated by this Agreement and in
making or causing to be made any such filings promptly and in seeking
to obtain timely any such Consents, and (ii) pursue all reasonable
commercial efforts to obtain promptly the satisfaction of the
conditions to the First Closing and the Second Closing. Each party
hereto shall furnish to each other and each other's counsel all such
information as may be reasonably available to such party and as may be
reasonably required in order to effectuate the foregoing actions.
6.4 Investment Assurances. The Seller and the Purchaser have discussed
certain capital expenditures, investments and other changes in the Business and
Properties. To the extent permitted by the Nevada gaming authorities, the Seller
and each Company agree that they will (i) cooperate with the Purchaser in
connection with any reasonable suggestions made by the Purchaser regarding
-24-
such capital expenditures, investments and other changes in the Business and
Properties and (ii) take commercially reasonable steps to implement the
suggestions referred to in clause (i) of this sentence; provided that neither
the Seller nor either Company shall be obligated to implement such suggestions.
6.5 Notification of Certain Matters. The parties hereto each agree to
give prompt notice to the other of (i) the occurrence, or failure to occur, of
any event which occurrence or failure to occur would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the First
Closing Date or the Second Closing Date, as applicable, and (ii) any material
failure on its part to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder.
6.6 Litigation Prior to Effective Time. Each of Gemini and IMPS shall
advise the Purchaser in writing promptly of the assertion, commencement or
threat of any claim, litigation, proceeding or investigation where a restraining
order, injunction, or preliminary injunction is sought or the amount claimed is
in excess of $100,000, in which Gemini or IMPS is or may be made a party or by
which the Assets or the business of Gemini or IMPS may be affected or which
relates to or may affect the transactions contemplated hereby.
6.7 Supplements to Schedules. Prior to the First Closing and the Second
Closing, the parties hereto will supplement or amend those portions of the
Seller Disclosure Schedule relating to the representations and warranties in
Articles 3, 4 and 5 hereof with respect to any matter hereafter arising which,
if existing or occurring at the date of this Agreement, would have been required
to be set forth or described in such Schedules; provided, that any such
supplemental disclosure shall not be deemed to have cured any breach of any
representation or warranty made as of the date hereof for purposes of the
indemnification obligations hereunder (or to have modified any representation or
warranty made as of the date hereof for purposes of determining whether the
conditions to the First Closing or the Second Closing, including the continued
accuracy of the representation and warranty set forth in Section 3.8(a), have
been met) but the Seller Disclosure Schedule shall be deemed to have been
amended and to have cured any breach of any representation or warranty made as
of the First Closing Date or the Second Closing Date, as applicable, for
purposes of the indemnification obligations hereunder.
6.8 No Other Representations or Warranties. Except for the
representations and warranties of Seller and the Companies expressly contained
in this Agreement, neither the Seller, nor the Companies nor any other person
acting for either of them makes any other representation or warranty, express or
implied, and the Seller and the Companies hereby disclaim any such
representation or warranty, with respect to the execution, delivery or
performance by the Seller of this Agreement notwithstanding the delivery or
disclosure to the Purchaser or any of its affiliates or any other person of any
documentation or other information by the Seller or the Companies or any of
their respective representatives or any other person with respect to any of such
matters.
-25-
6.9 Sale of Common Stock by the Seller. Purchaser and the Companies
agree that the Seller's execution of the Merger Agreement and the Stockholder
Support Agreement (as defined in the Merger Agreement) in the form attached as
an exhibit to the Merger Agreement, and the sale by the Seller of the Purchaser
Common Stock in accordance with the terms of the Stockholder Support Agreement
(as defined in the Merger Agreement) and the Merger Agreement, shall not be
deemed a violation of Section 6.9 of the Amended and Restated Purchase
Agreement.
6.10 Gaming Approvals. Promptly after the execution of this Agreement,
the Purchaser, accompanied by a representative of the Seller, shall notify the
Chairman of the Nevada State Gaming Control Board and the Chairman of the Nevada
Gaming Commission of the existence of this Agreement and shall promptly
thereafter file all necessary applications in good faith for the Purchaser and
all Persons required in order to obtain the necessary approvals and licenses
from all applicable agencies in order to consummate the transactions
contemplated hereby, and shall make every commercially reasonable effort to
place the applications for such approvals on the agenda in all applicable
jurisdictions, as soon as possible. All written communications between the
Purchaser and any Nevada Governmental Authority or official shall promptly be
delivered to the Seller and a written summary of any material telephonic
communications that would affect the approval process shall be promptly
delivered to the Seller.
6.11 Availability of Funds. The Purchaser shall use reasonable
commercial efforts to consummate the Merger Agreement on terms reasonably
acceptable to the Purchaser, following which and assuming consummation, the
Purchaser shall have available funds at least equal to the First Closing
Purchase Price and the Second Closing Purchase Price, in the aggregate, and the
expenses of the Purchaser incurred in connection with the negotiation,
preparation, execution and delivery of this Agreement and the consummation of
the transactions contemplated thereby.
6.12 Maintenance of Hotel/Casino Facilities. Seller and the Companies
agree to maintain, at no expense to the Purchaser or any of Purchaser's
subsidiaries, the condition of the Hotel/Casino Facilities and all other
facilities related to the Business such that, upon the consummation of the
Second Closing, the condition of the Hotel/Casino Facilities and all other
facilities related to the Business shall be at least as good as on the date of
the First Amendment, ordinary wear and tear, casualty and condemnation excepted.
6.13 Seller Put Option. In the event that this Agreement is terminated
by the Special Committee or Isle of Capri on behalf of the Purchaser pursuant to
Section 12.1(f) of this Agreement, Seller shall have the right (the "Seller Put
Option") for a period of thirty (30) days after such termination (the "Put
Option Exercise Period"), in Seller's sole discretion, to sell, convey, assign,
transfer and deliver to the Purchaser, and Purchaser shall have the obligation
to purchase all of Seller's and Gemini's respective right, title and interest in
and to the First Closing Assets, in each case in accordance with Article 2 of
this Agreement. The Seller shall exercise the Seller Put Option by delivering to
the Purchaser within the Put Option Exercise Period written notice of the
Seller's intention to exercise the Seller Put Option. The parties to this
Agreement agree to consummate the purchase and sale of the First Closing Assets
as soon as practicable after the satisfaction or waiver
-26-
of all conditions to the First Closing set forth in Article 7 of this Agreement,
but not prior to the date of the closing of the Merger.
6.14 Section 338(h)(10) Election. (a) At the Purchaser's option, the
Seller shall make a joint election(s) with the Purchaser under Section
338(h)(10) of the Code, and any corresponding elections permitted under state or
local law, with respect to the purchase of the Shares of either or each of the
Companies (each a "Section 338(h)(10) Election"); provided, that the Purchaser
must notify the Seller if it wishes to make such an election or elections no
later than forty-five (45) days after the First Closing Date (in the case of the
sale of IMPS Shares) or the Second Closing Date (in the case of the sale of
Gemini Shares), and in no event later than one hundred fifty (150) days prior to
the due date for filing Internal Revenue Service Form 8023 with respect to such
338(h)(10) Election. The Seller and the Purchaser shall, not later than one
hundred twenty (120) days prior to the filing date, exchange completed and
executed copies of the Internal Revenue Service Form 8023, required schedules
thereto, and any similar state and local forms. The Purchaser shall prepare an
allocation schedule with respect to each 338(h)(10) Election (each an
"Allocation Schedule") allocating the Purchase Price allocated to the relevant
Shares and the liabilities of the such Company among the assets of the such
Company in accordance with Section 338 of the Code and the regulations issued
thereunder, and shall submit such Allocation Schedule to the Seller for its
review and signature no later than ninety (90) days prior to the filing date.
The Purchaser shall consult with the Seller as it prepares an Allocation
Schedule.
(b) The Seller will notify the Purchaser in writing within thirty(30)
days of delivery of the Allocation Schedule if it does not agree with an
Allocation Schedule. Any disputed items not resolved between the parties within
five (5) days shall be resolved by an independent accountant or accounting firm
reasonably acceptable to both the Seller and the Purchaser, whose determination
shall bind all parties. The Purchaser shall bear the cost of such independent
accountant or accounting firm. Each of the Seller, the Purchaser and the
Companies will file all Tax Returns and reports in a manner consistent with the
Allocation Schedule and will not take any position for purposes of any Taxes
respecting the allocation of the Purchase Price and the liabilities of the
Companies which is inconsistent with the Allocation Schedule.
(c) Prior to making any Section 338(h)(10) Election, the Purchaser
shall pay to the Seller with respect to such Section 338(h)(10) Election an
amount of cash equal to any Taxes imposed on the Seller as a result of such
Section 338(h)(10) Election and the payment required by this subsection 6.14(c).
Such amount shall be computed as the product of (y) the excess of (i) the
Seller's combined federal, state and local Tax liability (determined by treating
Seller as in the highest marginal Tax bracket in each such jurisdiction,
ignoring any effect of the alternative minimum Tax, and by treating state and
local Taxes as non-deductible) on the taxable income resulting from such Section
338(h)(10) Election (as reflected on the Tax Return of each Company) over (ii)
the amount of the Seller's combined federal, state and local Tax liability
(determined by treating all gain on the sale of each Company as long-term
capital gain, taxable at the Tax rates applicable to long-term capital gains) on
the taxable income that the Seller would have recognized had no Section
338(h)(10) Election been made, as agreed by the Purchaser and the Seller,
multiplied by (z) a fraction, the
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numerator of which is one, and the denominator of which is one minus the
Seller's combined federal, state and local Tax liability (determined by treating
Seller as in the highest marginal Tax bracket in each such jurisdiction,
ignoring any effect of the alternative minimum Tax, and by treating state and
local Taxes as non-deductible). In the event the Purchaser fails to make the
payment contemplated by this Section 6.14, the Seller shall be relieved of any
obligation to join in the filing of Section 338(h)(10) Election.
(d) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, the Purchaser shall be responsible for, and shall indemnify the
Seller for and against, (y) the excess of (i) any Tax imposed on the Seller or
the Companies which is attributable to or arises out of any Section 338(h)(10)
Election (including but not limited to an election under Section 338(g) of the
Code or similar provision of state, local or foreign law) with respect to the
transactions contemplated herein over (ii) the Tax which would have been imposed
on the Seller or the Companies had such election not been made, and (ii) any
Taxes incurred by the Seller or the Companies on any payment pursuant to
subsection 6.14(c) or this subsection 6.14(d).
7. Conditions Precedent to the Purchaser's Obligations Prior to the First
Closing.
The obligations of the Purchaser prior to the First Closing are subject
to the satisfaction, at or before the First Closing, of the conditions set out
below. The benefit of these conditions is for the Purchaser only and may be
waived in writing by the Special Committee at any time in its sole and absolute
discretion.
7.1 Accuracy of Seller's, Gemini's and IMPS' Warranties. The warranties
of each of the Seller, Gemini and IMPS shall be true and correct in all respects
as of the date when made and as of the First Closing Date (except that any
representations and warranties that speak as of a particular date shall continue
to speak only as of such date), as though made at that time as supplemented or
amended in accordance with and subject to Section 6.7 hereof, and the Purchaser
shall have received a certificate from each of the Seller, Gemini and IMPS
attesting thereto signed by the Seller and a duly authorized officer of each of
Gemini and IMPS.
7.2 Performance by Seller, Gemini and IMPS. The Seller, Gemini and IMPS
shall have performed, satisfied and complied in all material respects with all
covenants, agreements, and conditions required by this Agreement including those
set forth in Section 2.3(b) and the Purchaser shall have received a certificate
attesting thereto signed by the Seller and a duly authorized officer of each of
Gemini and IMPS.
7.3 Consents. All Consents (including the Consents set forth on
Schedules 3.5 and 5.4) which are required for the consummation of the purchase,
sale and assignment of the First Closing Assets shall have been obtained, shall
be in full force and effect and shall not have been revoked as of the First
Closing Date.
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7.4 HSR Act. Any applicable waiting period relating to the transactions
contemplated by this Agreement under the HSR Act shall have expired or been
terminated.
7.5 Proceedings and Documents. All legal and corporate proceedings in
connection with the transactions contemplated by this Agreement shall be in form
and substance reasonably satisfactory to the Purchaser and the Purchaser's
counsel (including counsel to the Special Committee), and the Purchaser shall
have received all such counterpart originals or certified or other copies of
such documents and proceedings in connection with such transactions as the
Purchaser reasonably requests, in form and substance as to certification and
otherwise reasonably satisfactory to the Purchaser and the Purchaser's counsel
(including counsel to the Special Committee).
7.6 Release of Obligations; Liens. Seller and Gemini shall have
delivered to the Purchaser at the First Closing a duly executed release and such
other documents, instruments and certificates as Purchaser may request, in each
case in form and substance satisfactory to Purchaser, in Purchaser's sole
discretion, necessary to evidence (i) the termination of the obligations of IMPS
in connection with the Credit Agreement and (ii) the release of any and all
Liens against the Gemini Intellectual Property, the Company License Agreement
and the License Agreement securing the obligations of the borrowers under the
Credit Agreement;
7.7 No Litigation. No Order (including a preliminary or permanent
injunction or temporary restraining order) of any state, commonwealth or federal
court or other Governmental Authority that prevents or restrains the
consummation of the transactions that are the subject of this Agreement shall
have been issued and remain in effect.
7.8 Merger. The Purchaser shall have consummated the transactions
contemplated by the Merger Agreement and the Bridge Financing on terms
reasonably acceptable to the Purchaser as contemplated by Section 6.11 hereof.
8. Conditions Precedent to the Purchaser's Obligations Prior to the Second
Closing.
The obligations of the Purchaser prior to the Second Closing are
subject to the satisfaction, at or before the Second Closing, of the conditions
set out below. The benefit of these conditions is for the Purchaser only and may
be waived in writing by the Special Committee at any time in its sole and
absolute discretion.
8.1 Accuracy of Seller's and Gemini's Warranties. The warranties of
each of the Seller and Gemini shall be true and correct in all respects as of
the date when made and as of the Second Closing Date (except that any
representations and warranties that speak as of a particular date shall continue
to speak only as of such date), as though made at that time as supplemented or
amended in accordance with and subject to Section 6.7 hereof, and the Purchaser
shall have received a certificate from each of the Seller and Gemini attesting
thereto signed by the Seller and a duly authorized officer of Gemini.
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8.2 Performance by Seller and Gemini. The Seller and Gemini shall have
performed, satisfied and complied in all material respects with all covenants,
agreements, and conditions required by this Agreement including those set forth
in Section 2.4(b) and the Purchaser shall have received a certificate attesting
thereto signed by the Seller and a duly authorized officer of Gemini.
8.3 Consents. All Consents (including the Consents set forth on
Schedules 3.5 and 5.4 and those referenced in Section 6.10) which are required
for the consummation of the purchase, sale and assignment of the Second Closing
Assets shall have been obtained, shall be in full force and effect and shall not
have been revoked as of the Second Closing Date.
8.4 Proceedings and Documents. All legal and corporate proceedings in
connection with the transactions contemplated by this Agreement shall be in form
and substance reasonably satisfactory to the Purchaser and the Purchaser's
counsel (including counsel to the Special Committee), and the Purchaser shall
have received all such counterpart originals or certified or other copies of
such documents and proceedings in connection with such transactions as the
Purchaser reasonably requests, in form and substance as to certification and
otherwise reasonably satisfactory to the Purchaser and the Purchaser's counsel
(including counsel to the Special Committee).
8.5 Release of Obligations, Liens. Gemini shall have delivered to the
Purchaser at the Second Closing, duly executed instruments necessary to evidence
(i) the termination of the obligations of Gemini in connection with the Credit
Agreement, and (ii) the release of Liens securing the obligations described in
the immediately preceding clause.
8.6 Leases. The Real Property Leases and the Hotel/Casino Lease shall
be in full force and effect on the Closing Date with no default by the Seller,
either Company or any landlord under any of the Leases (individually a
"Landlord" and collectively, the "Landlords") and the Purchaser through the
Special Committee shall have a right to terminate this Agreement in the event of
a default by the Seller, either Company or any Landlord under the Leases on the
Second Closing Date.
8.7 No Litigation. No Order (including a preliminary or permanent
injunction or temporary restraining order) of any state, commonwealth or federal
court or other Governmental Authority that prevents or restrains the
consummation of the transactions that are the subject of this Agreement shall
have been issued and remain in effect.
8.8 Landlord Estoppel Certificates. The Seller shall have obtained a
current estoppel certificate from each Landlord under each Real Property Lease
stating (i) that such Lease is in full force and effect and has not been
amended, modified or supplemented other than as set forth in Schedule 3.12, (ii)
that all rent and other sums and charges payable under such Lease are current,
and setting forth the date through which such payments have been made, (iii) the
amount of any tenant security or other similar deposit held by or on behalf of
such Landlord under such Lease, (iv) that to the best knowledge of the lessor,
no notice of default on the part of the Seller or termination notice has been
served under such Lease which remains outstanding, (v) that to the best
knowledge of the lessor, no default exists under such Lease, and that no event
has occurred or condition exists
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which, with the giving of notice or the lapse of time or both, would constitute
such a default and (vi) that, except as set forth in Schedule 3.12, the
consummation of the transactions provided for herein will not constitute a
default under such Lease or grounds for the termination thereof or for the
exercise of any other right or remedy adverse to the interests of the tenant
thereunder (a "Landlord Estoppel Certificate"). If the Seller is unable to
obtain a Landlord Estoppel Certificate acceptable to the Purchaser, in
Purchaser's sole and absolute discretion, then the Special Committee may either
(i) waive and close or (ii) on or before the Second Closing Date, elect to
terminate this Agreement.
8.9 Landlord Consents. The Seller shall have obtained the Consents of
the Landlords under the Real Property Leases to the assignment of the Real
Property Leases to the Purchaser to the extent required pursuant to the terms of
the Leases.
8.10 Governmental Approval. The consent and approval of the Nevada
Gaming Commission, the Nevada Gaming Control Board and any other applicable
Governmental Authority to the transfer of the Business and Properties to the
Purchaser and all other transfers hereunder and the operation of the Business
and Properties by the Purchaser, shall have been obtained.
8.11 Title Insurance Endorsements. The ALTA Owner's policy referenced
in Section 2.7(a) shall include endorsements insuring over the encroachments
listed in Exception 29 to the Title Policy attached hereto as Schedule 1.1
similar to the endorsements listed in such Title Policy.
8.12 No Material Adverse Change. No material adverse change shall have
occurred in the business, properties, condition (financial or otherwise),
prospects or results of operations of the Business of the Seller and Gemini,
taken as a whole, since the date of the Gemini Interim Financial Statements
other than any change arising out of, or resulting from, general economic
conditions in the United States or conditions generally affecting the gaming
industry in the United States and other than as resulting from the sale of the
First Closing Assets.
9. Conditions Precedent to the Seller's Obligations Prior to the First Closing.
The obligations of the Seller prior to the First Closing are subject to
the satisfaction, at or before the First Closing, of the conditions set out
below to the satisfaction of the Seller. The benefit of these conditions is for
the Seller only and may be waived on his behalf by the Seller in writing at any
time in his sole discretion.
9.1 Accuracy of the Purchaser's Representations and Warranties. The
representations and warranties of the Purchaser shall be true and correct as of
the date when made and as of the First Closing Date as though made at that time
and the Seller shall have received a certificate attesting thereto signed by a
duly authorized officer of the Purchaser.
9.2 Performance by the Purchaser. The Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this
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Agreement including those set forth in Section 2.3(c) and the Seller shall have
received a certificate of a duly authorized officer of the Purchaser to such
effect.
9.3 Consents. All Consents which are required for the consummation of
the purchase, sale and assignment of the First Closing Assets shall have been
obtained, shall be in full force and effect and shall not have been revoked as
of the First Closing Date.
9.4 Absence of Litigation. There shall not have been issued and be in
effect any Order of any court or tribunal of competent jurisdiction preventing
or restraining the sale by the Seller of the Purchased Assets.
9.5 HSR Act. Any applicable waiting period relating to the transactions
contemplated by this Agreement under the HSR Act shall have expired or been
terminated.
9.6 Proceedings and Documents. All legal and corporate proceedings in
connection with the transactions contemplated by this Agreement shall be in form
and substance reasonably satisfactory to the Seller and each Company's counsel,
and the Seller shall have received all such counterpart originals or certified
or other copies of such documents and proceedings in connection with such
transactions as the Seller reasonably requests, in form and substance as to
certification and otherwise reasonably satisfactory to the Seller and each
Company's counsel.
9.7 Delivery of Agreements. The Purchaser, the Seller and Gemini shall
have entered into the Purchaser License Agreement. IMPS and Gemini shall have
entered into the Services Agreement.
10. Conditions Precedent to the Seller's Obligations Prior to the Second
Closing.
The obligations of the Seller prior to the Second Closing are subject
to the satisfaction, at or before the Second Closing, of the conditions set out
below to the satisfaction of the Seller. The benefit of these conditions is for
the Seller only and may be waived on his behalf by the Seller in writing at any
time in his sole discretion.
10.1 Accuracy of the Purchaser's Representations and Warranties. The
representations and warranties of the Purchaser shall be true and correct as of
the date when made and as of the Second Closing Date as though made at that time
and the Seller shall have received a certificate attesting thereto signed by a
duly authorized officer of the Purchaser.
10.2 Performance by the Purchaser. The Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement including those set forth in Section
2.4(c) and the Seller shall have received a certificate of a duly authorized
officer of the Purchaser to such effect.
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10.3 Consents. All Consents which are required for the consummation of
the purchase, sale and assignment of the Second Closing Assets shall have been
obtained, shall be in full force and effect and shall not have been revoked as
of the Second Closing Date.
10.4 Absence of Litigation. There shall not have been issued and be in
effect any Order of any court or tribunal of competent jurisdiction preventing
or restraining the sale by the Seller of the Second Closing Assets.
10.5 Proceedings and Documents. All legal and corporate proceedings in
connection with the transactions contemplated by this Agreement shall be in form
and substance reasonably satisfactory to the Seller and each Company's counsel,
and the Seller shall have received all such counterpart originals or certified
or other copies of such documents and proceedings in connection with such
transactions as the Seller reasonably requests, in form and substance as to
certification and otherwise reasonably satisfactory to the Seller and Gemini's
counsel.
10.6 Releases. The Seller shall have been completely released from all
guarantees and other contractual obligations to third parties incurred by him in
connection with the Business or the Purchased Assets, including any obligations
in connection with the Credit Agreement. All other parties named as borrowers in
the Credit Agreement and as guarantors of the obligations under the Credit
Agreement pursuant to any other document shall have received complete releases
of any such obligations."
(e) Section 11.1. Renumbered Section 11.1 of the Amended and
Restated Purchase Agreement is hereby deleted in its entirety and replaced with
the following:
"11. Obligations After the Closing.
11.1 Closing of Tax Year. The Seller and the Purchaser hereby
acknowledge that (i) effective as of the passing of title to the IMPS Shares on
the First Closing Date, IMPS will cease to be an S corporation under the Code
and (ii) effective as of the passing of title to the Gemini Shares on the Second
Closing Date, Gemini will cease to be an S corporation under the Code. As a
result, the S corporation taxable year of each Company will terminate as of the
day before the applicable Closing Date and each Company will be required to file
Tax Returns for the period beginning on the first day of its then current fiscal
year and ending on the day before the applicable Closing Date (the "Final S Tax
Period"). The Seller and the Purchaser hereby agree that each Company shall be
treated as an S corporation for federal income Tax purposes, and by all states
in which an "S" election is in effect, for the Final S Tax Period of each
Company."
(f) Renumbered Section 11.10 of the Amended and Restated Purchase
Agreement is hereby amended by adding the following subsection (c):
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"(c) Subject to the terms and conditions of Section 11.11, the
Seller hereby agrees to indemnify, defend and hold harmless the
Purchaser Group and each member thereof for, from and against any and
all Damages, directly or indirectly asserted against, resulting to,
imposed upon or incurred by the Purchaser Group or any member thereof,
at any time after the Second Closing Date by reason of or resulting
from the termination of any Employee Benefit Plan that has been
terminated or was otherwise previously sponsored or maintained by
either Company. The amount of indemnification due under this Section
11.10(c) shall be calculated after deduction of (i) any amount of
Damages which is attributable to the action or failure to act of any
member of the Purchaser Group and (ii) any amounts as set forth in
Section 11.8 of this Agreement. The Seller's indemnification
obligations under this Section 11.10(c) are in addition to, separate
from, and not subject to the terms or limitations of, the Seller's
indemnification obligations under Section 11.3, 11.10(a) or 11.12."
(g) Article 12. Renumbered Article 12 of the Amended and Restated
Purchase Agreement is hereby deleted in its entirety and replaced with
the following:
12. Termination.
12.1 Right to Terminate. Notwithstanding anything to the contrary set
forth in this Agreement, this Agreement may be terminated and the transactions
contemplated herein abandoned by notice given in writing as provided herein at
any time prior to the Second Closing (provided, that any right to terminate
other than pursuant to (a) and (b) must be exercised within thirty (30) days
after the terminating party receives written notice of the event giving rise to
such right of termination and further provided, that any right to terminate that
is exercised at any time after the First Closing shall be deemed to be effective
only with respect to the Second Closing Assets):
(a) by mutual consent of the parties hereto;
(b) by either the Purchaser or the Seller if the Second Closing
shall not have occurred by December 31, 2000 (the "Outside Date");
provided, that if on or prior to the Outside Date (but on or after
October 1, 2000), the Nevada State Gaming Control Board, the Nevada
Gaming Commission and any other Governmental Authority whose approval
is required have granted the gaming licenses or the approvals necessary
for the Purchaser to consummate the purchase of the Purchased Assets,
the Outside Date shall be extended to March 5, 2001; provided further,
that the right to terminate this Agreement under this Section 12.1(b)
shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in,
the failure of the Second Closing Date to occur on or before the
Outside Date; and further provided that if the Outside Date is extended
to March 5, 2001 as set forth in this Section 12.1(b), the Purchaser,
or Isle of Capri on behalf of the Purchaser, shall reimburse the Seller
for any obligations incurred by the Seller with respect to Taxes
incurred in respect of the First Closing and the Second Closing not
being
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consummated in the same calendar year, as well as a gross-up
amount for any such reimbursement amounts paid to the Seller. Any
payment made to the Seller in accordance with this Section 12.1(b)
shall be paid within ten (10) days after the Seller makes written
demand upon the Purchaser or Isle of Capri, but in no case earlier than
five (5) business days prior to the date on which the relevant Taxes
are required to be paid to the relevant Taxing Authority.
(c) by either the Purchaser or the Seller if a court of competent
jurisdiction shall have issued a Judgment or Order permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such Judgment or Order or other
action shall have become final and nonappealable;
(d) by the Seller if the Purchaser (x) breaches its
representations and warranties, or (y) fails to comply in any material
respect with any of its covenants or agreements contained herein, and
such breach or non-compliance as set forth in clauses (x) and (y) of
this paragraph shall not have been cured within ten (10) days after
receipt by the Purchaser of written notice specifying particularly such
breach or non-compliance;
(e) by either the Purchaser or the Seller as set forth in Section
12.5(b), or by the Purchaser as set forth in Section 12.4(b);
(f) by the Special Committee on behalf of the Purchaser as set
forth in Section 2.8(d), or Isle of Capri on behalf of the Purchaser as
set forth in Section 2.9(d);
(g) by the Purchaser, if the Seller, Gemini or IMPS (x) breaches
any of their respective representations and/or warranties to the extent
contained in this Agreement or (y) fails to comply in any material
respect with any of their respective covenants and/or agreements
contained in this Agreement, and such breach or non-compliance as set
forth in clauses (x) and (y) of this paragraph shall not have been
cured within ten (10) days after receipt by the Seller of written
notice specifying particularly such breach or non-compliance; and
(h) by the Purchaser, if a material adverse change as described in
Section 8.12 has occurred.
12.2 Obligations to Cease. In the event that this Agreement shall be
terminated pursuant to Section 12.1 hereof, all obligations of the parties
hereto under this Agreement shall terminate and there shall be no liability of
any party hereto to any other party except for the obligations set forth in
Section 13.1 hereof.
12.3 Remedies for Breach. Nothing herein will relieve any party from
liability for any breach of this Agreement. Without limiting the generality of
the foregoing, if the Purchaser breaches this Agreement, the Seller, Gemini and
IMPS shall be entitled to seek specific performance from the
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Purchaser and if the Seller, Gemini or IMPS shall breach this Agreement, the
Purchaser shall be entitled to seek specific performance from any of them.
12.4 Fire or Other Damage.
(a) If, prior to the Second Closing Date, all or any part of the
Property is damaged by fire or other casualty, the Seller shall
promptly inform the Purchaser of same and the following shall apply:
(b) The risk of loss or damage to the Property by fire or other
casualty, until the time of the delivery of the deeds as herein
provided pursuant to Section 2.4(b)(9)(d)-(e) is assumed by the Seller
and the Seller shall repair any such damage or pay insurance as
provided below prior to the Second Closing; provided, that if more than
10% of the rentable square feet of the Property is destroyed or
severely damaged as a result of such casualty and such loss or damage
materially impairs the operation of the Business and the Properties for
at least four (4) months after the date of such loss or damage, but not
more than two (2) months after the Second Closing Date, the Purchaser
shall have the option, exercisable by notice to the Seller within 30
days after receipt of written notice of such loss or damage, to
terminate this Agreement and thereupon this Agreement shall be deemed
null and void and the parties shall be released from all further
obligation and liability hereunder. If less than 10% of the rentable
square feet of the Property is destroyed or severely damaged, if the
condition set forth in the preceding sentence is not satisfied or if
the Purchaser fails to exercise the option hereinabove granted within
the time period provided, this Agreement shall continue in full force
and effect, without any abatement of the Second Closing Purchase Price
by reason of such loss or damage; and the Seller shall repair such
damage prior to Second Closing, or at the option of the Purchaser, at
the Second Closing, the Seller shall pay to the Purchaser the amount of
any insurance proceeds paid by the Seller's insurance company in
connection with such damage less all sums reasonably expended by the
Seller in collecting the same and all sums expended by the Seller
pursuant to this Section 12.4 and shall execute and deliver an
assignment (without recourse to the Seller) of all future sums to be
paid by the Seller's insurance company in connection with such damage.
(c) The Seller shall consult with, and keep the Purchaser advised
of, the Seller's progress in connection with all actions required to
adjust, compromise and collect the proceeds payable under the
applicable policy or policies of casualty insurance. Provided that the
Purchaser has agreed to consummate the sale of the Property following a
casualty, the Seller shall not agree to any settlement of the insurance
proceeds payable in connection with any such casualty without the
Purchaser's approval, which approval shall not be unreasonably
withheld.
(d) The Seller, prior to the Second Closing Date and upon the
collection of the insurance proceeds paid in connection with a
casualty, shall cause to be promptly commenced all work necessary to
restore or repair the damage or destruction caused by such
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casually. The Seller shall cause to be entered into such Contracts
and agreements and cause to be prepared such plans and specifications
as may be necessary to undertake such work, subject in each case to the
approval of the Purchaser, which approval shall not be unreasonably
withheld. Such Contracts, agreements, plans and specifications shall
not be modified or amended in any material respect without the
Purchaser's approval, such approval not to be unreasonably withheld. If
such restoration or repair shall not be completed by the Second Closing
Date, the Second Closing Date shall be adjourned until the restoration
or repair is completed, or at the Purchaser's option, the Seller and
the Purchaser shall proceed with the Second Closing. In such event, at
the Second Closing, the Seller shall assign to the Purchaser any and
all Contracts and agreements entered into by the Seller in connection
with such restoration and repair, together with any plans and
specifications prepared in connection therewith.
12.5 Condemnation.
(a) If, prior to the Second Closing Date, all or any part of the
Property is taken by eminent domain (or is the subject of a pending
taking or a taking which has been announced by a Governmental
Authority, which, in either case, has not been consummated), the Seller
shall promptly give the Purchaser written notice thereof and the
following shall apply:
(b) In the event a "material part of the Property" (as defined
below) is taken (or is the subject of a pending taking or a taking
which has been announced by a Governmental Authority, which, in either
case, has not been consummated), either party may, by written notice to
the other, elect to cancel this Agreement prior to the Closing Date and
thereupon this Agreement shall be deemed null and void and the parties
shall be released from all further obligation and liability hereunder.
(c) In the event an immaterial part of the Property is taken (or
is the subject of a pending taking or a taking which has been announced
by a Governmental Authority, which, in either case, has not been
consummated), neither party shall have any right to cancel this
Agreement or if neither party exercises its right to terminate pursuant
to Section 12.5(b), title shall nonetheless close in accordance with
this Agreement, without any abatement on the part of the Purchaser by
reason of such taking; provided, that, at the Second Closing, the
Seller shall pay to the Purchaser the amount of any award for or other
proceeds on account of such taking which may have been paid as a result
of such taking and shall execute and deliver an assignment (without
recourse to the Seller) of all future sums to be paid by the
Governmental Authority in connection with such taking.
(d) For purposes of this Section 12.5, "material part of the
Property" shall mean 10% of the rentable square footage of the
Property, or a lesser portion of the Property as, when so taken, would
leave remaining a balance of the Property which, due either to the area
so taken or the location of the parts so taken in relation to the part
not so taken, would not,
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under economic conditions, Zoning laws or building regulations
then existing or prevailing, readily accommodate a new or reconstructed
building or buildings of a type and size generally similar to the
building or buildings existing on the date of such taking or would
result in the lack of reasonable access to public roads.
(e) The Seller, prior to the Second Closing Date and upon the
collection of the award made in connection with a taking, shall cause
to be promptly commenced all work necessary to restore or repair the
damage or destruction caused by such taking. The Seller shall cause to
be entered into such Contracts and agreements and cause to be prepared
such plans and specifications as may necessary to undertake such work,
subject in each case to the approval of the Purchaser, which approval
shall not be unreasonably withheld. Such Contracts, agreements, plans
and specifications shall not be modified or amended without the
Purchaser's approval, such approval not to be unreasonably withheld. If
such restoration or repair shall not be completed by the Second Closing
Date, then the Second Closing Date shall be adjourned until restoration
or repair is completed, or at the Purchaser's option, the Seller and
the Purchaser nevertheless shall proceed with the Second Closing. In
such event, at the Second Closing, the Seller shall assign to the
Purchaser any and all Contracts and agreements entered into by the
Seller in connection with such restoration and repair, together with
any plans and specifications prepared in connection therewith."
(i) Sections 13.2, 13.3 and 13.6. Renumbered Sections 13.2, 13.3
and 13.6 of the Amended and Restated Purchase Agreement are hereby deleted in
their entirety and replaced with the following:
"13.2 Transfer Taxes.
(a) All stock transfer, Real Property transfer, documentary,
registration, value-added and other similar Taxes (including interest,
penalties and additions thereto) incurred in connection with the
transactions contemplated by the Agreement shall be borne by the
Seller, and the Seller shall indemnify the Purchaser for any such Taxes
incurred by the Purchaser as a result of the Seller's failure to timely
pay such Taxes. All sales and use Taxes incurred in connection with the
transactions contemplated by this Agreement shall be borne by the
Purchaser.
(b) The Seller shall deliver to the Purchaser at or prior to the
Second Closing a certificate, in form and substance reasonably
satisfactory to the Purchaser, certifying that all payments under this
Agreement are exempt from withholding pursuant to the Foreign
Investment in Real Property Tax Act.
13.3 Publicity. At all times from the date hereof to the Second
Closing, the parties will consult with each other before issuing any
press releases or otherwise making any public
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statement with respect to this Agreement or the transactions
contemplated herein and shall not issue any such press release or make
any such public statement prior to such consultation or as to which the
other party promptly and reasonably objects, except as may be required
by Law based on the advice of such party's counsel or by obligations
pursuant to any listing agreement with any national securities exchange
or inter-dealer quotation system, in which case the party proposing to
issue such press release or make such public announcement shall notify
and use its best efforts to consult in good faith with the other party
before issuing any such press release or making any such public
announcements.
13.6 Assignment; Binding Effect; Successors and Assigns. Prior to the
Second Closing, none of the parties hereto shall assign (except by
means of the Merger as contemplated by the Merger Agreement) any rights
hereunder without the prior written consent of the other parties. This
Agreement will be binding upon and inure to the benefit of the parties
hereto (including following the change of control of any such party or
following any sale, or other transfer, of all or substantially all of
the assets of any such party) and their respective successors
(including a purchaser of all or substantially all of the assets of or
a controlling equity interest in any such party) and permitted assigns.
Notwithstanding the foregoing or any other provision of this Agreement,
the Seller may transfer the Shares or any of the Seller's right, title
or interest in or to any Assets (including the Property) to members of
his family or trusts for the benefit of members of his family or
pursuant to his will or the laws of intestate succession, so long as
each transferee shall have agreed to be bound by the terms of this
Agreement (and each such transferee shall be deemed to be included in
the term "Seller"); provided that no such transfer shall release the
Seller from any of his representations, warranties, covenants or
obligations under this Agreement; and further provided that no such
transfer shall invalidate either Company's status as an "S Corporation"
under Sections l361 through 1379 of the Code and further provided, that
no such transfer shall materially and adversely affect the ability of
any party to timely perform its obligation under this Agreement or
otherwise to consummate the transactions contemplated by this
Agreement."
(i) Section 13.15. The following is hereby inserted as a new
Section 13.15 of the Amended and Restated Purchase Agreement:
"13.15 Third Party Beneficiary. The parties to this Agreement expressly
acknowledge and agree that this Agreement confers certain benefits
upon, and creates certain rights in favor of, Isle of Capri, including,
without limitation, Sections 2.9 and 12.1(f) of this Agreement and the
right, from and after the closing date of the Merger Agreement, to
cause Purchaser to exercise its rights under this Agreement.
Notwithstanding the foregoing, the parties to this Agreement expressly
acknowledge and agree that Isle of Capri shall have no obligations
under this Agreement."
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(j) Schedule 3.11. Schedule 3.11 shall be deemed amended by adding a
reference to the amendments to the License Agreement and the Company License
Agreement, the Purchaser License Agreement, and that certain marketing agreement
dated as of the date hereof between Gemini and IMPS, relating to the provision
of certain marketing services by IMPS to Gemini consistent with past practice,
as set forth in Section 6.1(c)(4) of the Amended and Restated Purchase Agreement
as amended by this First Amendment.
(k) Any provision in the Amended and Restated Purchase Agreement
notwithstanding, Gemini may distribute any moneys Gemini receives under the
Amended and Restated Purchase Agreement as amended hereby.
3. Authorization of First Amendment. The parties hereto each represent and
warrant that their respective execution, delivery and performance of this First
Amendment has been duly authorized (including by the Special Committee), this
First Amendment is a legal, valid and binding obligation of each such entity
enforceable in accordance with its terms, and this First Amendment does not
conflict with any agreement or obligation of the respective parties.
4. Counterparts. This First 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.
5. Governing Law. This First Amendment shall be a contract made under and
governed by the laws of the State of Delaware, without regard to conflict of law
principles.
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IN WITNESS WHEREOF, the parties have executed this First Amendment and
caused the same to be duly delivered on their behalf on the day and year first
written above.
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx
GEMINI, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
INTERNATIONAL XXXXX XXXX'X
SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
LADY LUCK GAMING CORPORATION
By: /s/ Xxxx X. Xxxx
---------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
ISLE OF CAPRI CASINOS, INC.
solely with respect to
Sections 2.9(d) and 12.1(f)
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President,
General Counsel and Secretary
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EXHIBIT A
PURCHASER LICENSE AGREEMENT
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EXHIBIT C
SERVICES AGREEMENT
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