EXHIBIT 10.38
NOTE EXTENSION AND SATISFACTION AGREEMENT
This Note Extension and Satisfaction Agreement, dated
as of February 17, 1999 (this "Agreement"), is entered into by
and among the shareholders of CRC Holdings, Inc. ("CRC")
identified on Schedule A attached hereto (each a "Shareholder"
and, collectively, the "Shareholders") and Carnival Corporation,
a Panama corporation ("CCL").
WHEREAS, each Shareholder owns, beneficially and of
record, the number of shares of common stock, par value $.005 per
share ("CRC Common Stock"), of CRC set forth opposite such
Shareholder's name on Schedule A (collectively, the "Shares"),
which Shares are currently pledged to CCL to secure in part
certain obligations of the Shareholders owing to CCL, as
evidenced by promissory notes (collectively, the "CCL Notes")
made by the Shareholders in favor of CCL (Schedule B attached
hereto sets forth, for each Shareholder as of the date hereof,
the outstanding principal amount of and accrued and unpaid
interest on such Shareholder's CCL Note before and after giving
effect to the transactions (the "Related Transactions")
contemplated by the Stock Purchase Agreement, dated as of the
date hereof, among CCL and the Shareholders);
WHEREAS, the CCL Notes were executed and delivered by
the Shareholders in connection with the transactions contemplated
by the Stock Purchase Agreement, dated as of November 30, 1994,
as amended (the "Stock Purchase Agreement"), among CCL and the
Shareholders;
WHEREAS, CRC and Jackpot Enterprises, Inc. ("Jackpot")
have entered into that certain Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), pursuant to
which, among other things, following the spinoff (the "Spinoff")
of certain assets and liabilities of CRC as described in the
Merger Agreement, CRC will be merged (the "Merger") with and into
Jackpot;
WHEREAS, as consideration for the Merger, Jackpot has
agreed (i) to issue and deliver to holders of CRC Common Stock at
the effective time of the Merger (the "Effective Time") (other
than CCL and the Shareholders in respect of the Shares) and
certain holders of options to purchase CRC Common Stock the
number of shares of common stock, $.01 par value per share, of
Jackpot (the "Share Merger Consideration") determined in
accordance with the Merger Agreement, (ii) to issue a promissory
note to CCL in exchange for shares of CRC Common Stock held
beneficially and of record by CCL at the Effective Time in the
principal amount determined in accordance with the Merger
Agreement (the "Jackpot Note I") and (iii) to issue substantially
identical promissory notes to the Shareholders in exchange for
the Shares in the principal amount determined in accordance with
the Merger Agreement (the "Jackpot Note II" and, together with
the Share Merger Consideration and the Jackpot Note I, the
"Merger Consideration"), all as set forth in the Merger
Agreement;
WHEREAS, subject to the conditions herein set forth and
concurrently with the consummation of the Merger, the
Shareholders desire to repay in full amounts remaining
outstanding under the CCL Notes by (i) assigning to CCL all of
the Shareholders' right, title and interest in and to the Jackpot
Note II and (ii) transferring to CCL the Spinco Interest (as
defined herein) received by the Shareholders pursuant to the
Spinoff; and
WHEREAS, in order to facilitate the repayment of the
CCL Notes as contemplated herein, CCL has agreed to (i) extend
the maturity of the CCL Notes to provide adequate time for the
Merger to be consummated and (ii) provide for the release of the
Shares from the lien of the Security and Pledge Agreements, dated
as of November 30, 1994, as amended (collectively, the "Pledge
Agreements"), between each Shareholder and CCL, pursuant to which
the Shareholders pledged, among other things, the Shares as
collateral security for the CCL Notes.
NOW THEREFORE, in consideration of the foregoing and
the mutual representations, warranties and agreements contained
herein, the parties hereto agree as follows:
1. Extension of Maturity. In order to facilitate the
repayment in full of the CCL Notes as contemplated herein, CCL
hereby agrees effective as of the date hereof, that (a) the
maturity of the CCL Notes shall be extended to the earlier of (i)
the closing date of the Merger and (ii) December 31, 1999, or
such later date specified in an amendment to Section 6.01(b)(i)
of the Merger Agreement and (b) interest in respect of the CCL
Notes shall cease to accrue (it being understood and agreed that
(x) upon any termination of this Agreement under Section 8 below
interest will accrue retroactive to the date hereof on the terms
set forth in the CCL Notes with respect to the portion of the
principal amount of the CCL Notes as shall remain unsatisfied on
the date of such termination and (y) in the event the Related
Transactions shall not have been consummated as described under
Section 7(b)(iii), interest will accrue retroactive to the date
hereof on the terms set forth in the CCL Notes with respect to
the portion of the principal amount of the CCL Notes as shall
remain unsatisfied following the Closing hereunder).
2. Repayment of the CCL Notes; Release of Shareholder
Agreements.
(a) Upon delivery to CCL at the Closing as
provided in Section 4 below of (i) the Jackpot Note II (which
shall be assigned by the Shareholders to CCL hereunder with the
consent of Jackpot as contemplated by and immediately upon the
closing under the Merger Agreement) and (ii) certificates
evidencing 2,610,000 membership units or other equivalent equity
interests (the "Spinco Interest") of the limited liability entity
to be formed to effectuate the Spinoff ("Spinco") (representing
21.5189% of the aggregate equity interests of Spinco on a fully
diluted basis at the time of the Spinoff), in the case of each of
clauses (i) and (ii) free and clear of any liens, claims,
options, defects in title, proxies, voting agreements,
shareholder agreements, charges or encumbrances of any nature or
kind ("Encumbrances"), the CCL Notes shall be deemed repaid and
satisfied in full (assuming the Related Transactions have been
consummated).
(b) Effective immediately upon full satisfaction
of the CCL Notes as provided in clause (a) above, CCL, in respect
of the Shareholders, and the Shareholders, in respect of CCL,
hereby irrevocably and unconditionally release and forever
discharge each other, and each of their respective agents,
attorneys, affiliates, heirs and legal representatives and, in
the case of the release of CCL, the officers, directors and
shareholders of CCL and its subsidiaries, and the respective
successors and assigns of any of the foregoing, from any and all
claims, demands, debts, liabilities, obligations, causes of
actions or claims for relief of any kind or nature, whether known
or unknown, which they may have or which may hereafter be
asserted or accrue against any of them resulting from or in any
way relating to any of the Stock Purchase Agreement, the CCL
Notes, the Pledge Agreements and any other related instruments or
agreements (collectively, the "Shareholder Agreements").
3. Closing. Subject to the conditions herein set
forth, the closing (the "Closing") shall take place at the
offices of CRC Holdings, Inc., 0000 Xxxx Xxxxxx, Xxxxx, Xxxxxxx
00000, at 9:00 a.m., on the closing date of the Merger, or at
such other place and time as may be mutually agreed by the
parties. The actual time and date of the Closing is herein
referred to as the "Closing Date."
4. Deliveries at the Closing. At the Closing: (a) CCL
will deliver to the Shareholders the Shares, free and clear of
any liens in favor of CCL, including, but not limited to, the
liens created pursuant to the Pledge Agreements and the other
Shareholder Agreements; and (b) the Shareholders will deliver or
cause to be delivered to CCL free and clear of any Encumbrances
(i) the Jackpot Note II, (ii) certificates representing the
Spinco Interest and (iii) any other documents, certificates or
agreements that in the reasonable judgment of CCL are necessary
to make effective the transactions contemplated by this Agreement
and vest in CCL good, valid and marketable title to the Jackpot
Note II and the Spinco Interest, free and clear of any
Encumbrances. Effective immediately upon such delivery, each
Shareholder (severally and not jointly, and without
representation or warranty except as provided herein) hereby
assigns and transfers to CCL all of such Shareholder's right,
title and interest in and to the Jackpot Note II.
5. Shareholders' Representations and Warranties.
Each Shareholder severally (but not jointly) represents and
warrants to CCL as follows:
(a) Such Shareholder has the full power,
authority and legal right to execute and deliver this Agreement
and to consummate the transactions contemplated hereby.
(b) This Agreement has been duly and validly
executed and delivered by such Shareholder and constitutes a
valid and binding agreement of such Shareholder, enforceable
against such Shareholder in accordance with its terms, subject to
applicable principles of equity, bankruptcy, reorganization,
insolvency or other laws affecting the enforcement of creditors'
rights generally.
(c) Upon the occurrence of the Spinoff, such
Shareholder will have good, valid and marketable title to its
portion of the Spinco Interest, free and clear of any
Encumbrances, other than under the Shareholder Agreements, and
upon transfer to CCL by such Shareholder of its portion of the
Spinco Interest and the Jackpot Note II and satisfaction of the
CCL Notes as provided hereunder, CCL will acquire record and
good, valid and marketable title to such portion of the Spinco
Interest and the Jackpot Note II, free and clear of all
Encumbrances.
6. CCL Representations and Warranties. CCL represents
and warrants to the Shareholders as follows:
(a) CCL is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization. CCL has the full power, authority
and legal right to execute, deliver and carry out the terms and
provisions of this Agreement, to consummate the transactions
contemplated hereby and to perform, comply with or satisfy all of
the agreements, obligations and conditions required to be
complied with or satisfied by CCL under this Agreement, and has
taken all necessary action to authorize the execution, delivery
and performance of this Agreement.
(b) This Agreement has been duly and validly
authorized, executed and delivered by CCL and constitutes a valid
and binding agreement of CCL, enforceable against CCL in
accordance with its terms, subject to applicable principles of
equity, bankruptcy, reorganization, insolvency or other laws
affecting the enforcement of creditors' rights generally.
7. Conditions to the Obligations of the Shareholders
and CCL.
(a) The obligations of the Shareholders
hereunder are subject to the compliance by CCL with the
deliveries specified in Section 4 of this Agreement and the
satisfaction or, if permitted by applicable law, waiver of the
following condition:
(i) the representations and warranties of
CCL shall be true and correct at and as of the Closing Date
as though such representations and warranties were made at
and as of such date.
(b) The obligations of CCL hereunder are subject
to the compliance by the Shareholders with the deliveries
specified in Section 4 of this Agreement and the satisfaction or,
if permitted by applicable law, waiver of the following
conditions:
(i) the representations and warranties of
the Shareholders shall be true and correct at and as of the
Closing Date as though such representations and warranties
were made at and as of such date;
(ii) all of the conditions to the Merger
shall have been satisfied or waived by the appropriate
parties and the Spinoff shall have occurred; and
(iii) the Related Transactions shall have
been consummated; provided, that in the event the Related
Transactions shall not have been consummated the parties
will endeavor in good faith to negotiate an appropriate
modification to this Agreement to provide for a partial
repayment of the CCL Notes.
8. Termination. The transactions contemplated herein
may be terminated or abandoned at any time prior to the Closing:
(a) by mutual consent of CCL and the
Shareholders holding a majority of the Shares;
(b) by any party if the Merger shall not have
occurred on or before December 31, 1999, or such later date
specified in an amendment to Section 6.01(b)(i) of the Merger
Agreement for termination thereof; and
(c) automatically, upon termination of the
Merger Agreement.
CCL and the Shareholders acknowledge and agree that
notwithstanding any termination of this Agreement, the extension
of the maturity of the CCL Notes to December 31, 1999 shall
survive such termination.
9. Miscellaneous.
(a) All representations, warranties and
covenants shall survive the Closing.
(b) This Agreement may be executed in any number
of counterparts, each of which shall, when executed, be deemed to
be an original and all of which shall be deemed to be one and the
same instrument.
(c) This Agreement shall be governed by and con-
strued and enforced in accordance with the laws of the State of
Florida, without reference to the conflict of laws principles
thereof.
IN WITNESS WHEREOF, each Shareholder and CCL has
executed or caused this Agreement to be executed on the date
first above written.
/s/ Xxxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
/s/ W. Xxxxx Xxxxxxx
W. Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
CARNIVAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Sr. Vice President-Finance
and CFO
Schedule A
Name of Shareholder Number of Shares
Xxxxxxxx Xxxxxx 859,248
Xxxxxx Xxxxxx 859,248
Xxxxxx Xxxxxx 318,394
Xxxxx Xxxxxx 318,394
Xxxxxx Xxxxxxx 127,358
Xxxxx Xxxxxxx 127,358
Schedule B
Principal and Accrued Interest
Before Related After Related
Name of Shareholder Transactions Transactions
Xxxxxxxx Xxxxxx $6,641,505 $4,966,497
Xxxxxx Xxxxxx 6,641,505 4,966,497
Xxxxxx Xxxxxx 2,461,007 1,840,334
Xxxxx Xxxxxx 2,461,007 1,840,334
Xxxxxx Xxxxxxx 984,406 736,136
Xxxxx Xxxxxxx 984,406 736,136
Total $20,173,837 $15,085,934
