EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
WINDSOR WOODMONT BLACK HAWK RESORT CORP.
AND
AMERISTAR CASINOS, INC.
DATED AS OF MAY 28, 2004
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................................................. 1
1.1 Definitions.......................................................................................... 1
ARTICLE II TRANSACTION................................................................................................. 7
2.1 Acquired Assets...................................................................................... 7
2.2 Excluded Assets...................................................................................... 9
2.3 Assumption of Liabilities............................................................................ 10
2.4 Cure Amounts......................................................................................... 11
2.5 Consideration........................................................................................ 11
2.6 Payment of Cash Purchase Price....................................................................... 12
2.7 Post-Closing Adjustment to Cash Purchase Price....................................................... 12
2.8 The Closing.......................................................................................... 13
2.9 Deliveries at the Closing............................................................................ 14
2.10 Prorations........................................................................................... 14
2.11 Bankruptcy Court Approvals and Buyer Protections..................................................... 14
ARTICLE III SELLER'S REPRESENTATIONS AND WARRANTIES.................................................................... 16
3.1 Organization......................................................................................... 16
3.2 Authority Relative to Agreement...................................................................... 16
3.3 No Conflict.......................................................................................... 17
3.4 Property............................................................................................. 17
3.5 Assigned Contracts................................................................................... 18
3.6 Compliance with Laws................................................................................. 18
3.7 Litigation........................................................................................... 18
3.8 Taxes................................................................................................ 18
3.9 Financial Statements................................................................................. 19
3.10 Assets Title......................................................................................... 19
3.11 Absence of Changes................................................................................... 19
3.12 Environmental Matters................................................................................ 19
3.13 Brokers and Investment Advisors...................................................................... 19
ARTICLE IV BUYER'S REPRESENTATIONS AND WARRANTIES...................................................................... 20
4.1 Organization of Buyer................................................................................ 20
4.2 Authority Relative to Agreement...................................................................... 20
4.3 Consents and Approvals; No Conflict; Required Filing and Consents.................................... 20
4.4 Brokers and Investment Advisors...................................................................... 20
4.5 Bankruptcy........................................................................................... 21
i
4.6 Litigation........................................................................................... 21
4.7 Sufficiency of Funds................................................................................. 21
4.8 No Ineligible Person................................................................................. 21
4.9 Acquired Assets "AS IS"; Buyer's Acknowledgment Regarding Same....................................... 21
ARTICLE V COVENANTS.................................................................................................... 22
5.1 General.............................................................................................. 22
5.2 Bankruptcy Court Approval............................................................................ 22
5.3 Regulatory and Other Authorizations; Consents and Best Efforts....................................... 23
5.4 Operation of Business................................................................................ 24
5.5 Compliance with Laws................................................................................. 24
5.6 Inspections by Buyer................................................................................. 25
5.7 Confidentiality...................................................................................... 25
5.8 Post-Closing Books and Records....................................................................... 25
5.9 Further Assurances................................................................................... 26
5.10 Employee Matters..................................................................................... 26
5.11 Allocation........................................................................................... 26
5.12 Ineligible Person.................................................................................... 26
5.13 Preliminary Title Report............................................................................. 27
ARTICLE VI CONDITIONS TO OBLIGATION TO CLOSE........................................................................... 28
6.1 Conditions to Buyer's and Seller's Obligation........................................................ 28
6.2 Conditions to Buyer's Obligation..................................................................... 28
6.3 Conditions to Seller's Obligation.................................................................... 29
ARTICLE VII TERMINATION................................................................................................ 30
7.1 Termination of Agreement............................................................................. 30
7.2 Effect of Termination................................................................................ 32
7.3 Deposit.............................................................................................. 32
ARTICLE VIII INDEMNIFICATION........................................................................................... 32
8.1 Indemnification by Seller............................................................................ 32
8.2 Indemnification by Buyer............................................................................. 33
8.3 Indemnification Procedure............................................................................ 34
8.4 Payment of Indemnification........................................................................... 35
8.5 Treatment of Indemnity Payments...................................................................... 35
8.6 Insurance............................................................................................ 35
ii
ARTICLE IX MISCELLANEOUS............................................................................................... 35
9.1 Survival............................................................................................. 35
9.2 Press Releases and Public Announcements.............................................................. 35
9.3 Third-Party Beneficiaries............................................................................ 36
9.4 Entire Agreement..................................................................................... 36
9.5 Succession and Assignment............................................................................ 36
9.6 Headings............................................................................................. 36
9.7 Notices.............................................................................................. 36
9.8 Governing Law; Jurisdiction.......................................................................... 37
9.9 Amendments and Waivers............................................................................... 38
9.10 Severability......................................................................................... 38
9.11 Expenses............................................................................................. 38
9.12 Construction......................................................................................... 38
9.13 Incorporation of Exhibits and Schedules.............................................................. 38
9.14 Tax Disclosure Authorization......................................................................... 39
9.15 Counterparts and Facsimile Signatures................................................................ 39
iii
EXHIBITS
Exhibit A -- Matters to be Addressed in Confirmation Order
Exhibit B -- Real Property
Exhibit C -- Closing Deliveries
SCHEDULES
Schedule 2.1(c) -- General Intangibles
Schedule 2.1(d) -- Assigned Contracts
Schedule 2.1(h) -- Intellectual Property
Schedule 2.1(i) -- Seller Claims
Schedule 2.2(l) -- Additional Excluded Assets
Schedule 2.3(d) -- Employee Obligations
Schedule 2.6(b) -- Base Net Asset Value
Schedule 3.4 -- Liens
Schedule 3.4(c) -- Tangible Property
Schedule 3.7 -- Litigation
Schedule 3.8 -- Taxes
Schedule 3.9 -- Financial Statements
Schedule 5.10 -- Employees
Schedule 6.2(d) -- Material Adverse Effect
iv
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into as of May
28, 2004, by and between Windsor Woodmont Black Hawk Resort Corp., a Colorado
corporation ("Seller"), as debtor in possession in that certain proceeding
entitled "In re Windsor Woodmont Black Hawk Resort Corporation," Xxxx Xx.
00-00000-XXX, Xxxxxx Xxxxxx Bankruptcy Court, District of Colorado (the
"Bankruptcy Case"), and Ameristar Casinos, Inc., a Nevada corporation ("Buyer").
RECITALS
A. WHEREAS, on or about November 7, 2002, Seller filed a
voluntary petition for relief under Chapter 11 of Title 11 of the United States
Code, 11 U.S.C. Section 101 et seq., thereby commencing the Bankruptcy Case in
the United States Bankruptcy Court for the District of Colorado (the "Bankruptcy
Court");
B. WHEREAS, Seller's business consists of the operation of the
Mountain High Casino located in Black Hawk, Colorado (the "Business");
C. WHEREAS, subject to the terms and conditions set forth herein,
Seller desires to sell, assign, transfer and convey to Buyer certain specified
assets and liabilities of the Business;
D. WHEREAS, subject to the terms and conditions set forth herein,
Buyer desires to purchase and assume from Seller such assets and liabilities;
and
E. WHEREAS, in addition to other conditions set forth in this
Agreement, the consummation of the transactions contemplated by this Agreement
is subject to confirmation of the Plan by the Bankruptcy Court.
NOW, THEREFORE, in consideration of the mutual promises herein made,
and in consideration of the representations, warranties, and covenants herein
contained, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
As used in this Agreement, and unless the context requires a different
meaning, the following terms have the meanings indicated:
"Accounts Receivable" means all accounts, accounts receivable, contract
rights to payment, notes, and notes receivable of Seller, other than any amounts
owed to Seller by Hyatt Gaming Management, Inc. and the approximately $80,000
owed to Seller by Xxxxxx X. Xxxxxxxxxx.
"Acquired Assets" has the meaning set forth in Section 2.1.
"Ad Hoc Committee" means that ad hoc committee constituted of certain
of the holders of Seller's 13% Series B First Mortgage Notes due 2007.
"Affiliate" means any Person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with the Person specified.
"Antitrust Laws" has the meaning set forth in Section 5.3(a).
"Assigned Contracts" means all Contracts set forth on Schedule 2.1(d).
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Avoidance Actions" means all rights or causes of action arising under
Sections 506(c), 510, 544, 545, 547, 548, 549, 550, 551 and 553 of the
Bankruptcy Code and all defenses and rights of offset/recoupment relating to
proofs of claim asserted or deemed asserted in the Bankruptcy Case.
"Bankruptcy Case" has the meaning set forth in the preface above.
"Bankruptcy Code" means Chapter 11 of Title 11 of the United States
Code, 11 U.S.C. Sections 101 et seq.
"Bankruptcy Court" has the meaning set forth in the Recitals above.
"Base Net Asset Value" has the meaning set forth in Section
2.6(b)(i)(B).
"Books and Records" has the meaning set forth in Section 2.1(k).
"Breakup Fee" has the meaning set forth in Section 2.11(e).
"Business" has the meaning set forth in the Recitals above.
"Buyer" has the meaning set forth in the preface above.
"Buyer Protection Approval Motion" has the meaning set forth in Section
2.11(a).
"Buyer Protection Order" has the meaning set forth in Section 2.11(a).
"Cash" means cash (other than Casino Cash) and cash equivalents
(including marketable securities and short-term investments).
"Cash Purchase Price" has the meaning set forth in Section 2.5.
"Casino Cash" means cash in cashiers' cages, vaults, carts, drawers,
cash registers and gaming devices and machines.
"Casino Liabilities" means net circulating chip and token float,
ticket-in ticket-out liabilities, slot club liabilities, progressive jackpot
liabilities, slot machine and poker liabilities
2
and outstanding coupons, outstanding accrued "Peak Shopper Points," accrued
"Club Points" and unclaimed jackpot liabilities.
"Claim" has the meaning set forth in Section 8.3(a).
"CLGCC" means the Colorado Limited Gaming Control Commission.
"Closing" has the meaning set forth in Section 2.8.
"Closing Adjustment" has the meaning set forth in Section 2.7(b)(i).
"Closing Date" has the meaning set forth in Section 2.8.
"Closing Date Statement" has the meaning set forth in Section 2.7(b).
"Closing Payment" has the meaning set forth in Section 2.6(b)(i).
"Code" means the Internal Revenue Code of 1986, as amended.
"Competing Transaction" has the meaning set forth in Section 2.11(b).
"Confidential Information" means any information concerning the
business and affairs of Seller that is not already generally available to the
public.
"Confirmation Order" means the order entered by the Bankruptcy Court in
the Bankruptcy Case confirming the Plan, which order shall, at a minimum,
contain the provisions set forth in Exhibit A and shall otherwise be reasonably
acceptable to Buyer with respect to matters that affect Buyer's interest in the
Agreement or the transactions contemplated hereby.
"Consent" means any consent, waiver, approval, permit or authorization
of any Person.
"Contract" means any contract, agreement, purchase order, sale order,
lease, license, note, instrument or obligation to which Seller is a party.
"Cure Amounts" has the meaning set forth in Section 2.4.
"Damages" means any demand, claim, action, suit, proceeding, loss,
deficiency, liability, obligation, commitment, Tax, cost, expense or damage
whatsoever, including costs and expenses of investigating or defending any of
the foregoing or a party's right to indemnification with respect thereto, and
including reasonable fees and expenses of attorneys, accountants and experts in
connection therewith.
"Deductible" has the meaning set forth in Section 8.1(c).
"Deposit" has the meaning set forth in Section 2.6(a).
"Disclosure Statement" means the written disclosure statement that
relates to the Plan, as such disclosure statement may be amended, modified or
supplemented from time to time.
3
"DOJ" has the meaning set forth in Section 5.3(a).
"EBITDA" means, for any applicable period, earnings before interest,
taxes, depreciation and amortization, such amounts to be calculated consistently
with Buyer's past practice and, to the extent applicable, as reported in, or
consistent with, the publicly-issued earnings press release of Buyer covering
the earnings for such period.
"Employees" has the meaning set forth in Section 5.10.
"Environmental, Health and Safety Requirements" means all federal,
state, local, and foreign laws, statutes, rules, regulations, ordinances, codes,
plans, orders, decrees and settlements concerning public health and safety,
worker health and safety, and pollution or protection of the environment,
including all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, release, threatened release, transportation,
control, or cleanup of any hazardous or toxic materials, substances, wastes,
pollutants, contaminants or chemicals, industrial, or hazardous or toxic wastes,
as such requirements are enacted and in effect on or prior to the Closing Date.
"Escrow Agent" has the meaning set forth in Section 2.6(a).
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section 2.3.
"Expense Reimbursement" has the meaning set forth in Section 2.11(f).
"Final Order" means an order, judgment, or other decree of the
Bankruptcy Court that has not been vacated, reversed, modified, amended, or
stayed, and for which the time to further appeal or seek review or rehearing has
expired.
"Financial Statements" has the meaning set forth in Section 3.9.
"FTC" has the meaning set forth in Section 5.3(a).
"GAAP" means United States generally accepted accounting principles,
consistently applied in accordance with past practice.
"Gaming Authority" means any gaming agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
any Governmental Entity, whether now or hereafter in existence, or any officer
or official thereof, including, but not limited to, the Colorado Division of
Gaming and the CLGCC and any other applicable gaming regulatory authority with
authority to regulate the gaming operations of Buyer or its Affiliates or the
gaming operation or proposed gaming operation of the Business.
"Gaming License" means any license, permit, franchise or other
authorization from any Gaming Authority, including, but not limited to, all
licenses granted under the Laws of any jurisdiction to which the Business is
subject.
4
"Governmental Entity" means any federal, state, local or foreign
government or any court or tribunal of competent jurisdiction, administrative
agency, department, commission, instrumentality, body or other governmental
authority or instrumentality, domestic or foreign, including, but not limited
to, any Gaming Authority.
"Hazardous Materials" means all hazardous or toxic substances, wastes,
materials or chemicals, petroleum (including crude oil or any fraction thereof),
petroleum products, asbestos, asbestos-containing materials, pollutants,
contaminants, radioactivity and all other materials, whether or not defined as
such, that are regulated pursuant to, or that could result in liability under,
any applicable Environmental, Health or Safety Requirement.
"Holdback Amount" has the meaning set forth in Section 2.6(b)(iii).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Hyatt Claims" means any of Seller's claims, counterclaims, rights or
causes of action (and defenses and rights of offset/recoupment) against Hyatt
Gaming Management, Inc.
"Indebtedness" with respect to any Person means without duplication,
(a) indebtedness for borrowed money, including indebtedness evidenced by a note,
bond, debenture or similar instrument and any guarantees or keep-well
obligations or other contingent obligations in respect thereof; (b) obligations
to pay rent or other amounts under any lease of real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet under generally accepted
accounting principles; (c) obligations in respect of outstanding letters of
credit, acceptances and similar obligations created for the account of such
Person; (d) liabilities under interest rate cap agreements, interest rate swap
agreements, foreign currency exchange agreements and other hedging agreements or
arrangements; and (e) retroactive insurance premium obligations.
"Ineligible Person" means any Person who (a) directly or indirectly
owns or controls any capital stock, debt instrument or other interest in Buyer
whose continued ownership or control of such capital stock, debt instrument or
other interest in Buyer could reasonably be expected to hinder or delay the
consummation of the transactions contemplated by this Agreement; or (b) is an
employee, director, officer, consultant, creditor or has any other relationship
with Buyer whose continued involvement in the Business as an employee, director,
officer, consultant, creditor or otherwise could reasonably be expected to
hinder or delay the consummation of the transactions contemplated by this
Agreement.
"Inventory" means all inventories of liquor, food and all other
inventories.
"Laws" means all laws of any Governmental Entity, including, without
limitation, all federal, state and local statutes, regulations, ordinances,
orders, decrees or any other laws, common law theories or reported decisions of
any court thereof.
"Lien" means any mortgage, pledge, lien, encumbrance, charge, or other
security interest.
5
"Material Adverse Effect" means an effect that either individually or
in the aggregate is materially adverse to either (a) the financial condition,
results of operations or prospects of the Business or (b) the conveyance of good
and marketable title to, or the intended use by, Buyer of the Acquired Assets.
"Net Asset Value" means the amount equal to (i) the sum of the values
of the following Acquired Assets: all Casino Cash, Accounts Receivable and
Inventory, minus (ii) the sum of the values of the following Assumed
Liabilities: all liabilities for unused vacation, sick pay, holiday pay and paid
time off obligations for all Employees hired by Buyer, as set forth on Schedule
2.3(d), and all Casino Liabilities.
"Order" means any decree, injunction, judgment, order, ruling, writ,
quasi-judicial decision or award or administrative decision or award of any
Governmental Entity to which any Person is a party or that is or may be binding
on any Person or its securities, assets or business.
"Ordinary Course of Business" means the ordinary course of the Business
as conducted in a manner consistent with past custom and practice (including
with respect to quantity and frequency).
"Permit" means any license, permit, franchise, certificate of authority
or order, or any waiver of the foregoing, required to be issued by any
Governmental Entity, including any Gaming License.
"Permitted Exceptions" has the meaning set forth in Section 5.13.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, any other business entity, or a
governmental entity (or any department, agency, or political subdivision
thereof).
"Plan" means that certain Second Amended Plan of Reorganization to be
proposed by Seller which Plan, to the extent applicable, shall be consistent
with the terms of this Agreement, and which shall be in form and substance
acceptable to the Ad Hoc Committee.
"Preliminary Statement" has the meaning set forth in Section 2.7(a).
"Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Entity or arbitrator.
"Purchase Price" means the Cash Purchase Price, as adjusted pursuant to
Section 2.7 and Articles VI and VIII, the additional contingent consideration
set forth Section 2.5(b), and the Assumed Liabilities.
"Qualified Competing Transaction Proposal" has the meaning set forth in
Section 2.11(c).
6
"Real Property" means the real property described on Exhibit B hereto,
together with all buildings, structures, fixtures and other improvements
actually or constructively attached thereto, and all appurtenant and ancillary
rights thereto, including easements, covenants, water rights, sewer rights and
utility rights.
"Resolving Accountant" has the meaning set forth in Section 2.7(b)(ii).
"Seller Claims" has the meaning set forth in Section 2.1(i).
"Tangible Property" has the meaning set forth in Section 2.1(b).
"Tax" or "Taxes" means any federal, state, local, or foreign income,
gross receipts, gaming, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Code), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
whether computed on a separate or consolidated, unitary or combined basis or in
any other manner, including any interest, penalty, or addition thereto, whether
disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 8.3(a).
"Title Company" means First American Title Insurance Company.
"Title Policy" has the meaning set forth in Section 6.2(h).
"Title Report" has the meaning set forth in Section 5.13.
"WARN Act" has the meaning set forth in Section 5.10.
ARTICLE II
TRANSACTION
2.1 Acquired Assets.
On and subject to the terms and conditions of this Agreement, Buyer
shall purchase from Seller, and Seller shall sell, transfer, convey and deliver
to Buyer, all of the Acquired Assets at the Closing for the consideration
specified in Section 2.5. The Acquired Assets include all of the right, title,
and interest that Seller possesses in and to all of the assets, properties and
rights of Seller, whether real, personal, tangible or intangible, of every kind,
nature and description used by Seller or relating to the operation of the
Business, free and clear of any Indebtedness, Liens and obligations whatsoever
other than the Assumed Liabilities and the Permitted Exceptions, including,
without limitation, the following items, but excluding therefrom the Excluded
Assets (collectively, the "Acquired Assets"):
7
(a) All of Seller's right, title and interest in, to or
under the Real Property, any lease thereof, and any other interests therein;
(b) all tangible personal property of Seller, wherever
located, including, but not limited to, all machinery, equipment (including, but
not limited to, gaming devices and machines, xxxx validators and coin counters),
Inventory, supplies, materials, tools, furniture, fixtures, computers, computer
systems and software, websites, office equipment, vehicles and other articles of
personal property relating to the Business (the "Tangible Property");
(c) general intangibles, goodwill associated therewith,
licenses and sublicenses granted and obtained with respect thereto, and rights
thereunder, remedies against infringements thereof, and rights to protection of
interests therein under the laws of all jurisdictions, as set forth on Schedule
2.1(c);
(d) the Assigned Contracts set forth on Schedule 2.1(d);
(e) all Accounts Receivable and all customer credits that
remain outstanding as of the Closing Date;
(f) all deposits, prepayments and prepaid assets relating
to the Business as of the Closing Date, other than as specifically referenced
herein and subject to the prorations set forth in Section 2.10;
(g) all Casino Cash;
(h) all trademarks and trade names relating to the
Business, including, but not limited to, all trade names, business names and
trade dresses incorporating Mountain High Casino, including, without limitation,
those trademark registrations or applications for trademark registrations set
forth on Schedule 2.1(h), and all other intellectual property used in the
Business;
(i) to the extent assignable by Seller to Buyer, all
rights, claims, credits, suits, actions, demands, hearings, proceedings,
judgments, orders, injunctions, writs, awards, decrees and rulings of any
Governmental Entity relating to any Acquired Asset or any Assumed Liability,
including any such items arising under guarantees, warranties, indemnities and
similar rights in favor of Seller in respect of any Acquired Asset or Assumed
Liability (collectively, "Seller Claims"), other than Seller Claims necessary to
offset claims against Seller set forth on Schedule 2.1(i) and the Hyatt Claims;
(j) all books of account, ledgers, financial, accounting
and Tax records and all general and personnel records, files, invoices,
customers' and suppliers' lists, other distribution and mailing lists, price
lists, reports, plans, advertising materials, catalogues, billing records,
accounting information systems and software, sales and promotional literature,
manuals, customer and supplier correspondence, plats, architectural plans,
drawings, specifications and studies (the "Books and Records") relating to the
Business, in all cases in any form or medium;
(k) all sundry items, including telephone numbers, key
and lock combinations and passwords used by the Seller in the conduct of the
Business;
8
(l) all goodwill generated by, associated with or
attributable to the Business;
(m) all of Seller's rights in, to and under third-party
manufacturers' warranties;
(n) the right to xxxx and receive payment for services
performed but unbilled as of the Closing;
(o) all advertising, marketing and promotional materials,
creative materials and all other printed, written or electronic materials;
(p) all franchises, approvals, permits, privileges,
immunities, licenses (other than Gaming Licenses and liquor licenses), orders,
registrations, certificates, variances, and similar rights obtained from any
Governmental Entity which are necessary to the conduct of the Business;
(q) all right, title and interest of Seller in the
benefits of all insurance covering the Acquired Assets and/or the Business;
(r) all indemnities and warranties relating to the
Acquired Assets; and
(s) all claims, refunds, causes of action, choses in
action, rights of recovery, rights of set-off and rights of recoupment or other
rights and claims of a similar nature in favor of Seller including tax refunds
and insurance refunds related to the Acquired Assets.
2.2 Excluded Assets.
Notwithstanding the provisions of Section 2.1 to the contrary, the
Acquired Assets shall not include the following specifically excluded assets
(the "Excluded Assets"):
(a) the corporate charter, qualifications to conduct
business as a foreign corporation, arrangements with registered agents relating
to foreign qualifications, taxpayer and other identification numbers, seals,
minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of Seller as
a corporation, and all tax credits and other tax attributes of Seller;
(b) Cash;
(c) all claims, refunds, causes of action, choses in
action, rights of recovery, rights of set-off and rights of recoupment or other
rights and claims of a similar nature including tax refunds and insurance
refunds related solely to the Excluded Assets;
(d) any shares of capital stock in Seller or any rights
pertaining thereto;
(e) the corporate name of Seller;
(f) the Hyatt Claims;
(g) Seller Claims necessary to offset claims against
Seller, as set forth on Schedule 2.1(i);
9
(h) any of the rights of Seller under this Agreement (or
under any side agreement between Seller on the one hand and Buyer on the other
hand entered into on or after the date of this Agreement);
(i) all Avoidance Actions;
(j) all of Seller's rights and causes of action arising
under Sections 502 and 503 of the Bankruptcy Code and Rule 3007 thereunder;
(k) Seller's director and officer insurance policy and
all prepaid premiums associated therewith; and
(l) any assets of Seller (whether or not included in the
definition of "Acquired Assets") which may be designated by Buyer in writing as
"Excluded Assets" in Buyer's sole discretion, prior to the Closing Date,
including, but not limited to, the items specifically set forth on Schedule
2.2(l).
2.3 Assumption of Liabilities.
On and subject to the terms and conditions of this Agreement, Buyer
shall assume and become responsible for all of the Assumed Liabilities at the
Closing. Buyer will not assume or have any responsibility, however, with respect
to any other obligation or liability of Seller not included within the
definition of Assumed Liabilities, including, but not limited to: (a) Taxes
related to the Business or the Acquired Assets for all Tax periods (or portions
thereof) ending on or prior to the Closing; (b) any costs or expenses incurred
in connection with, or related to, the administration of the Bankruptcy Case,
including, without limitation, any accrued professional fees and expenses of
attorneys, accountants, financial advisors and other professional advisors
related to the Bankruptcy Case; (c) liabilities to the extent relating to the
Excluded Assets; and (d) liabilities and obligations of Seller under this
Agreement (or under any side agreement between Seller on the one hand and Buyer
on the other hand entered into on or after the date of this Agreement); (e) all
claims against Seller related to the Hyatt Claims and the Seller Claims set
forth on Schedule 2.1(i); (f) all liabilities and obligations arising under any
Assigned Contract (and all liabilities for any breach, act or omission under any
Assigned Contract) arising on or prior to the Closing; and (g) all other
liabilities and obligations for which Buyer does not expressly assume any
liability (collectively, the "Excluded Liabilities"). Seller agrees to provide
for each of the Excluded Liabilities either by payment or under the Plan.
Buyer's assumption of the Assumed Liabilities shall in no way expand the rights
or remedies of third parties against Buyer as compared to the rights and
remedies which such parties would have had against Seller had this Agreement not
been consummated. The "Assumed Liabilities" are specifically as follows:
(a) all liabilities and obligations arising after the
Closing Date with respect to or arising under the Acquired Assets or in
connection with the Business;
(b) all Casino Liabilities existing on the Closing Date;
(c) all liabilities and obligations of Seller arising
under and related to the municipal bonds issued by the Black Hawk Improvement
District;
10
(d) as set forth on Schedule 2.3(d), all liabilities of
Seller for unused vacation, sick pay, holiday pay and paid time off obligations
as of the Closing Date for all Employees hired by Buyer; and
(e) all liabilities of Seller under the WARN Act incurred
in connection with the transactions contemplated by this Agreement.
2.4 Cure Amounts.
Seller shall be responsible for paying all amounts and other
consideration (the "Cure Amounts") that pursuant to Bankruptcy Code Section
365(a), as of the Closing Date, will be required to cure any defaults on the
part of Seller under the Assigned Contracts or that will be otherwise due to the
parties under the Assigned Contracts, which amounts or other consideration must
be delivered to the nondebtor parties under the Assigned Contracts, or with
respect to which adequate assurance of prompt delivery must be provided, as a
prerequisite to the assumption of such Assigned Contracts under Bankruptcy Code
Section 365(b). Following the Closing and subject to Seller's payment of the
Cure Amounts, Buyer shall have sole responsibility for the Assigned Contracts
and all the Assumed Liabilities associated therewith.
2.5 Consideration.
Subject to the terms and conditions of this Agreement, in consideration
for the Acquired Assets, Buyer hereby agrees to:
(a) pay Seller, pursuant to Section 2.6, an aggregate
amount equal to One Hundred Fifteen Million Dollars ($115,000,000), subject to
any adjustment pursuant to Article VI, VII or VIII or Section 2.7 (the "Cash
Purchase Price");
(b) pay Seller, as additional consideration for the
Acquired Assets, in cash each year within forty-five (45) days after the
anniversary of the Closing Date, until the earlier to occur of the opening of
hotel facilities on the Real Property or the four (4) year anniversary of the
Closing Date, 10% of the EBITDA (excluding any charges attributable to the
development and construction of hotel facilities on the Real Property)
associated with the operation of the Business in excess of Seventeen Million
Five Hundred Thousand Dollars ($17,500,000) during the twelve (12) month period
prior to such anniversary date. Upon the opening of hotel facilities, if any, on
the Real Property, during the remainder of the four (4) year period following
the Closing Date, Buyer shall pay to Seller in cash each year within forty-five
(45) days after the anniversary of the Closing Date, 10% of the EBITDA
(excluding any charges attributable to the development and construction of hotel
facilities on the Real Property) associated with the operation of the Business
and such hotel facilities in excess of Twenty Four Million Dollars ($24,000,000)
during the twelve (12) month period prior to such anniversary date. The
$17,500,000 and $24,000,000 threshold amounts used in calculating the additional
consideration to be paid as described in this Section 2.5(b) shall be prorated
during any partial year in which the hotel facilities are opened; and
(c) assume and satisfy the Assumed Liabilities.
11
2.6 Payment of Cash Purchase Price.
Subject to Section 2.7, the Cash Purchase Price shall be paid as
follows:
(a) On the date hereof, Buyer shall deposit an amount
equal to Two Million Dollars ($2,000,000) in cash (the "Deposit") into an
interest-bearing escrow account maintained by an escrow agent mutually agreeable
to the parties (the "Escrow Agent") for the benefit of the parties hereto;
(b) On the Closing Date,
(i) by wire transfer of immediately available
funds to an account designated by Seller, Buyer shall pay to Seller (the
"Closing Payment") an amount equal to One Hundred Eleven Million Dollars
($111,000,000), minus (A) any adjustment amount for Damages pursuant to Article
VI or VII, and plus or minus, as the case may be, (B) the aggregate amount by
which the Net Asset Value set forth on the Preliminary Statement required to be
delivered prior to Closing pursuant to Section 2.7(a) is greater or less than
the corresponding amount of Two Million Five Hundred Eight Thousand Seven
Hundred Eighty Seven Dollars ($2,508,787) (the "Base Net Asset Value"),
calculated pursuant to Schedule 2.6(b).
(ii) Seller shall be paid the principal amount of
the Deposit, and Buyer shall be paid the accrued interest thereon, from the
escrow account referenced in Section 2.6(a); and
(iii) Buyer shall pay into an interest bearing
escrow account maintained by the Escrow Agent for the benefit of the parties
hereto an amount equal to Two Million Dollars ($2,000,000) (subject to
adjustment pursuant to Section 2.7, the "Holdback Amount") to be held and
distributed in accordance with Article VIII.
2.7 Post-Closing Adjustment to Cash Purchase Price.
(a) Seller shall prepare and deliver to Buyer, not less
than three (3) business days prior to the Closing Date, a schedule consistent
with the form of Schedule 2.6(b) used in calculating the Base Net Asset Value
setting forth an estimate of the Net Asset Value as of the close of business on
the day immediately preceding the Closing (the "Preliminary Statement"). The
Base Net Asset Value has been, and the Preliminary Statement shall be, prepared
in a manner consistent with GAAP and in a manner consistent with Seller's
Financial Statements, including, but not limited to, the application of Seller's
historical methodology for establishing reserves for Accounts Receivable, Casino
Liabilities, and any other accounts subject to estimate or judgment, in each
case, to the extent in accordance with GAAP.
(b) (i) Within fifteen (15) days after the Closing
Date, Buyer shall prepare and deliver to Seller a statement of Net Asset Value,
as of the Closing Date (the "Closing Date Statement"). The Closing Date
Statement shall include a statement setting forth the amount, if any, by which
the Net Asset Value reflected on the Closing Date Statement is greater than or
less than the estimated Net Asset Value reflected on the Preliminary Statement
(the "Closing Adjustment"). The Closing Date Statement shall be prepared in a
manner consistent with GAAP and in a manner consistent with Seller's Financial
Statements, including, but not
12
limited to, the application of Seller's historical methodology for establishing
reserves for Accounts Receivable, Casino Liabilities, and any other accounts
subject to estimate or judgment, in each case, to the extent in accordance with
GAAP.
(ii) Seller or its agents may, at Seller's own
expense, audit or otherwise review the Closing Date Statement and Buyer shall
provide Seller or its agents with access to the work papers used in preparing
the Closing Date Statement. Seller shall have the right to object, by written
notice to Buyer, to any item on, or other matter relating to the Closing Date
Statement. If Seller does not deliver to Buyer such written notice of objection
within ten (10) days after receipt of the Closing Date Statement, the Closing
Date Statement will be deemed to have been accepted by Seller. If Seller does so
object and if Buyer and Seller are unable, within fifteen (15) days after
receipt by Buyer of such written notice of objection, to resolve any disputes
concerning the Closing Date Statement, the dispute will be turned over to a firm
of independent certified public accountants mutually acceptable to Buyer and
Seller (the "Resolving Accountants"). The Resolving Accountants so selected
shall, as soon as practicable, deliver to Buyer and Seller a written report
resolving any disputed matters and its determination will be conclusive and
binding upon the parties. The expenses of such Resolving Accountants will be
borne by the parties on a pro rata basis in relation to the degree to which the
positions of the respective parties are not confirmed by the accounting firm.
(iii) If the Closing Date Statement reflects a Net
Asset Value less than the Net Asset Value set forth in the Preliminary
Statement, the amount of such shortfall shall be deducted from the Cash Purchase
Price and, within two (2) days following the final confirmation of the Closing
Date Statement, Seller shall pay to Buyer an amount in cash equal to the amount
of such shortfall, payable by wire transfer or delivery of other good and
immediately available funds.
(iv) If the Closing Date Statement reflects a Net
Asset Value greater than the Net Asset Value set forth in the Preliminary
Statement, the amount of such excess shall be added to the Cash Purchase Price
and, within two (2) days following the final confirmation of the Closing Date
Statement, Buyer shall pay to Seller an amount in cash equal to the amount of
such excess, payable by wire transfer or delivery of other good and immediately
available funds.
2.8 The Closing.
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Klee, Tuchin, Xxxxxxxxx & Xxxxx
LLP commencing at 10:00 a.m. local time on the second business day following the
satisfaction or waiver of all conditions to the obligations of the parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective parties will take at the Closing itself) or
such other location or date as the parties may mutually determine (the "Closing
Date"); provided, however that the Closing Date shall be no later than December
31, 2004, unless such Closing Date is extended by the mutual agreement of the
parties.
13
2.9 Deliveries at the Closing.
At the Closing, (a) Seller will deliver to Buyer the various
certificates, instruments, and documents referred to in Exhibit C; (b) Buyer
will deliver to Seller the various certificates, instruments, and documents
referred to in Exhibit C; and (c) Buyer will deliver to Seller the consideration
to be delivered on the Closing Date as specified in Section 2.6.
2.10 Prorations.
All taxes, assessments, charges, and income pertaining to the Acquired
Assets shall be prorated between Seller and Buyer as of the close of the gaming
day immediately preceding the Closing Date, so that Seller shall bear all
expenses with respect to the Acquired Assets incurred up through and including
the gaming day immediately preceding the Closing Date, and Buyer shall bear all
expenses with respect to the Acquired Assets incurred from and after the close
of such gaming day. Notwithstanding the foregoing, Assumed Liabilities shall not
be prorated and shall be the sole responsibility of Buyer.
In the event that the amount of any prorated item is not known at
Closing, the parties agree that such items shall be prorated at Closing upon the
basis of the best information available, and shall be adjusted when the actual
amount(s) of such items are known, with appropriate charges and credits to be
made. In the event, subsequent to the Closing Date, any adjustment pursuant to
this Section 2.10 shall be necessary, then either party hereto who is entitled
to additional monies shall invoice the other party for such additional amounts
as may be owing, and such amount shall be paid within three (3) days from
receipt of the invoice if such amount is not in dispute. The provisions of this
Section 2.10 shall survive the Closing Date.
2.11 Bankruptcy Court Approvals and Buyer Protections
(a) Within five (5) business days after the execution of
this Agreement, Seller shall file or cause to be filed (and shall diligently
pursue an order on shortened time if permitted by the Bankruptcy Court) a motion
in the form agreed to by Seller, Buyer and the Ad Hoc Committee (the "Buyer
Protection Approval Motion") seeking entry of an order (the "Buyer Protection
Order") approving the matters specified in this Section 2.11. The Buyer
Protection Order shall be in the form agreed to by Seller, Buyer and the Ad Hoc
Committee. Buyer shall reasonably cooperate with Seller in providing any
information or documentation that the Bankruptcy Court might reasonably request
or require in connection with Seller's efforts to obtain the Buyer Protection
Order.
(b) Unless and until this Agreement is terminated, except
as Seller may reasonably determine in good faith to be otherwise required in
connection with applicable fiduciary duties after consultation with counsel,
neither Seller nor the Ad Hoc Committee, except as otherwise required by the
Bankruptcy Court, shall knowingly take any action, directly or indirectly, to
cause, promote, authorize, or result in the purchase by any Person other than
Buyer of all or a substantial portion of the stock or assets of Seller, or any
other transaction competing, conflicting or interfering with the completion of
the transactions contemplated by this Agreement (a "Competing Transaction"),
including, without limitation, granting access to any third parties to Seller's
assets, Business, Records, officers, directors, or employees, which access, to
Seller's
14
knowledge, relates to, or is reasonably expected to lead to, a Competing
Transaction or a potential Competing Transaction.
(c) If any Person offers to enter into a Competing
Transaction with Seller, except as Seller reasonably determines in good faith to
be required in connection with its applicable fiduciary duties, Seller shall not
(i) consider, or enter into any agreement relating to, any Competing Transaction
or (ii) file any plan of reorganization proposed or supported by the Seller that
does not contemplate a transaction with Buyer or any of its affiliates or
successors, unless (x) the consideration to be paid in connection with the
Competing Transaction or, in the case of such a reorganization plan, the
consideration to be provided to creditors as a result of the transactions
contemplated thereby, is at least Four Million Dollars ($4,000,000) in cash
greater than the Purchase Price or the amount of any prior improvement thereto
in accordance with the provisions of this Section 2.11, and (y) the offer is in
writing, binding on the offeror, and contains closing contingencies no more
substantive than those contained in this Agreement (a "Qualified Competing
Transaction Proposal").
(d) If any person or entity submits a Qualified Competing
Transaction Proposal to Seller, and Seller has made a determination that such
offer is more beneficial to Seller than the transactions contemplated by this
Agreement, Seller shall immediately notify Buyer of such offer and provide Buyer
with a copy of the offer. Buyer shall have five (5) business days after such
notification and receipt of the offer to modify the terms of this Agreement so
as to substantially match or improve the terms offered in the Qualified
Competing Transaction Proposal. If Buyer makes such modification, except as
Seller reasonably determines in good faith to be otherwise required in
connection with applicable fiduciary duties after consultation with counsel,
Seller shall recommend to the Bankruptcy Court that this Agreement, as so
modified by Buyer, be approved by the Bankruptcy Court and shall continue to
perform its obligations under this Agreement. Buyer shall have the same rights
provided in this Section 2.11 with respect to any offers made subsequent to any
such modification of this Agreement.
(e) If, after the date of execution of this Agreement and
prior to the ninetieth (90th) day after the date of the termination of this
Agreement, (i) Seller enters into any Competing Transaction or any agreement to
enter into a Competing Transaction, (ii) the failure to consummate the
transactions contemplated hereby shall not have resulted from Seller's
termination of this Agreement pursuant to Section 7.1(a), Section 7.1(c) or
Section 7.1(d), and (iii) Buyer was not in material breach of any of its
obligations under this Agreement, Buyer shall be entitled to receive (x) a
breakup fee in the amount of Two Million Dollars ($2,000,000) (the "Breakup
Fee"), and (y) the Expense Reimbursement.
(f) For purposes of this Agreement, "Expense
Reimbursement" means the amount paid or to be paid to Buyer in immediately
available funds equaling the amounts incurred by Buyer as actual out-of-pocket
expenses in connection with the negotiation, preparation, execution, delivery,
and attempted performance of this Agreement and the matters contemplated hereby;
provided, however, that the amount of the Expense Reimbursement shall not exceed
Seven Hundred Fifty Thousand Dollars ($750,000). The Expense Reimbursement shall
include, without limitation, all reasonable, documented out-of-pocket costs,
fees, and expenses incurred by Buyer in connection with its due diligence
review, negotiation, and documentation of this Agreement and any of the expenses
contemplated under Section 9.11 and the transactions
15
contemplated hereby, including, without limitation, reimbursement of all filing
fees paid in connection with filings under the HSR Act and all fees and expenses
paid to Buyer's attorneys, accountants, consultants, and other professional or
financial advisers.
(g) If Buyer has become entitled to payment of the
Breakup Fee pursuant to Section 2.11(e), Seller shall pay the Breakup Fee to
Buyer by wire transfer of immediately available funds not later than two (2)
business days after the date on which Buyer becomes entitled to payment of the
Breakup Fee.
(h) If Buyer has become entitled to payment of the
Expense Reimbursement pursuant to Section 2.11(e), Seller shall pay the Expense
Reimbursement to Buyer by wire transfer of immediately available funds not later
than ten (10) days after the delivery by Buyer to Seller of a written request
for payment of the Expense Reimbursement and reasonably detailed and accurate
supporting documentation for such request, except to the extent, if any, that
Seller disputes the requested amount. If Seller disputes the amount of the
requested Expense Reimbursement, it shall so advise Buyer in writing and in
reasonable detail within ten (10) days after Seller's receipt of the request and
related supporting documentation. Any undisputed amount shall be timely paid by
Seller to Buyer and the balance of the amount requested by Buyer shall be held
in escrow by Seller for Buyer, and the dispute shall be resolved in good faith
by the parties, if possible. If such disputes have not been resolved by the
parties within ten (10) days after Seller notifies Buyer that it disputes the
amount of the requested Expense Reimbursement, then Seller or Buyer shall
request that the Bankruptcy Court resolve such disputes promptly.
ARTICLE III
SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Buyer that the statements contained
in this Article III are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though made then and
as though the Closing Date were substituted for the date of this Agreement).
3.1 Organization.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the state of Colorado, with full corporate power and
authority as a debtor and a debtor in possession subject to the Bankruptcy Code
to own all of its property and assets and to carry on the Business as it is now
being conducted.
3.2 Authority Relative to Agreement.
Subject to approval of the Bankruptcy Court, Seller has the full
corporate right, power and authority to execute and deliver this Agreement and
to consummate the transactions contemplated hereby. As of the Closing, the
execution, delivery and performance by Seller of this Agreement and the
consummation by Seller of the transactions contemplated hereby will have been
duly and validly authorized by all necessary corporate action or proceeding.
This Agreement has been duly and validly executed and delivered by Seller and,
subject to Bankruptcy Court approval, constitutes the valid and binding
agreement of Seller, enforceable in accordance with its terms, except as such
enforceability is limited by bankruptcy, insolvency and
16
other similar Laws affecting the enforcement of creditors' rights generally and
by general principles of equity.
3.3 No Conflict.
The execution and the delivery of this Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby will not (a)
violate any provision of the certificate of incorporation or bylaws of Seller;
(b) violate any Law applicable to Seller; (c) except with respect to filings
under the HSR Act or the need to seek Bankruptcy Court approval, require Seller
to make any filing with, obtain any permit, Consent, license or approval of, or
give any notice to, any Governmental Entity or (d) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or right to require repurchase
pursuant to, any Acquired Asset, including, without limitation, any Assigned
Contract.
3.4 Property.
(a) Exhibit B contains an identification of each parcel
of real property owned, leased, subleased, or otherwise occupied by Seller,
including a specific identification of whether such real property is owned or
leased and, with respect to any such real property owned by Seller, a complete
and accurate legal description. Seller has good and marketable fee simple title
to the Real Property owned by Seller, and has good and marketable leasehold
interests in the Real Property leased by Seller, free and clear of all Liens,
covenants, assessments or encumbrances, except for (i) any of the foregoing
disclosed in Schedule 3.4, (ii) liens covering current property Taxes not yet
delinquent, and (iii) easements, covenants, rights of way and other similar
restrictions of record. To the best of Seller's knowledge, there is no
unrecorded or undisclosed legal or equitable interest in any Real Property owned
or claimed by any Person. Any lease with respect to Real Property leased by
Seller is valid and in full force and effect, and there does not exist any
default or event that with notice or lapse of time, or both, would constitute a
default under any such lease. Seller has not received any written notice of, and
neither the executive officers nor the general manager of Seller have received
any notice of, any (i) violation of any applicable zoning, subdivision or
building laws and regulations or (ii) pending or threatened condemnation
proceeding against any of the Real Property or the desire or intention of any
Governmental Entity to take or use any of the Real Property or any material part
thereof. The Real Property is not subject to any mining rights or claims.
(b) Seller has not received any written notice of, and
neither the executive officers nor the general manager of Seller have received
any notice of, any violation in, on, under or about the Real Property of any
restrictive covenants, deed restrictions or Law, including, without limitation,
any Environmental, Health or Safety Requirement, which has not been remedied.
(c) Schedule 3.4(c) sets forth a correct and complete
list, as of the date of this Agreement, of each material item of Tangible
Property. Seller has good and marketable title to the Tangible Property.
17
(d) The Real Property and Tangible Property are in good
condition and repair (subject to routine maintenance and repair for similar
assets of like age and use) and are usable in the Ordinary Course of Business.
All of the Acquired Assets of a tangible nature, including, without limitation,
the Tangible Property, are located at the Real Property.
(e) The Acquired Assets constitute all the assets and
rights which are reasonably necessary for the continued conduct of the Business,
as currently conducted.
3.5 Assigned Contracts.
Seller has delivered to Buyer correct and complete copies of each
Assigned Contract. Subject only to the Cure Amounts, (a) Seller is in
compliance, in all material respects, with the terms of each Assigned Contract
and (b) no Consent, waiver or approval of any party to a Assigned Contract is
necessary for the execution and delivery of this Agreement or the consummation
by Seller of the transactions contemplated hereby.
3.6 Compliance with Laws.
The conduct of the Business by Seller has not violated and does not
violate any Law, judgment, order or arbitration award of any Governmental Entity
in force on the date hereof, including, but not limited to, Laws relating to (a)
the protection of the health and safety of employees, (b) gaming activities, (c)
the sale of food and beverages, (d) the environment, and (e) any other aspect of
the Business, which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or materially interfere with the
issuance to Buyer of any required licenses for the operation of the Business.
There are no material unresolved notices of deficiency or charges of violation
pending or, to the knowledge of Seller, threatened against Seller which could
reasonably be expected to have a Material Adverse Effect or materially interfere
with the issuance to Buyer of any required licenses for the operation of the
Business, and there are no facts or circumstances known to Seller that would
constitute a reasonable basis on which any such notices or charges may be
instituted, issued or brought hereafter.
3.7 Litigation.
Except as set forth in Schedule 3.7, there is no pending or, to the
knowledge of Seller, threatened claim, suit, arbitration or other judicial or
regulatory Proceeding or investigation of any character by or against Seller or
any of the Acquired Assets which could reasonably be expected to have a Material
Adverse Effect and there are no facts or circumstances known to Seller that
would constitute a reasonable basis on which any such claim, suit, arbitration
or other judicial or regulatory proceeding may be instituted, issued or brought
hereafter.
3.8 Taxes.
Except as set forth on Schedule 3.8, Seller has filed on a timely basis
all Tax Returns required to be filed by Seller on or prior to the date hereof,
it being understood and agreed to by all parties that a Tax Return shall not be
deemed to be due if Seller has obtained an extension to file and such extension
has not expired. As of the time of filing, all Tax Returns were true and
complete in all material respects. With respect to all amounts in respect of
Taxes imposed on Seller in any taxable period or portion of a period ending on
or before the Closing Date, (i) all
18
applicable Tax Laws have been complied with in all material respects, and (ii)
all such amounts required to be paid to taxing authorities or others have been
paid.
3.9 Financial Statements.
Attached hereto as Schedule 3.9 are copies of Seller's (a) audited
consolidated balance sheets as of December 31, 2001, 2002 and 2003, and audited
consolidated statements of operations, comprehensive loss, changes in
stockholders' deficit and cash flows for the years ended December 31, 2001, 2002
and 2003, and accompanying notes and (b) unaudited consolidated balance sheet as
of April 30, 2004 and unaudited consolidated statements of operations,
comprehensive loss, changes in stockholders' deficit and cash flows for the four
months ended April 30, 2004. All of the foregoing financial statements
(including the notes thereto) are referred to as the "Financial Statements." The
Financial Statements have been prepared in accordance with (x) the Books and
Records and (y) GAAP (except, with respect to the unaudited financial
statements, for normal year-end adjustments and the absence of footnotes and
other disclosures required solely for audited financial statements) applied in a
manner consistent with Seller's historic accounting practices, and present
fairly the financial condition and results of operations of Seller as of the
dates, and for the periods covered thereby.
3.10 Assets Title.
At the Closing, the Acquired Assets shall be transferred by Seller to
Buyer free and clear of all Liens or other liabilities or obligations, other
than the Assumed Liabilities and the Permitted Exceptions.
3.11 Absence of Changes.
Since December 31, 2003, there has not been any event, circumstance,
condition, development or occurrence causing, resulting in, or that could
reasonably be expected to result in, a Material Adverse Effect.
3.12 Environmental Matters.
To the knowledge of Seller, (a) none of the Acquired Assets and no
portion of the Real Property fails to comply in any material respect with, and
there is no liability or potential liability with respect to any Acquired Asset
or any portion of the Real Property under, any Environmental Law; and (b) none
of the Acquired Assets and no portion of the Real Property fails to comply in
any material respect with any Environmental Laws. Seller and its agents have
operated the Business, and have owned, used or leased the Acquired Assets and
the Real Property, in material compliance with all Environmental Laws.
3.13 Brokers and Investment Advisors.
No broker, finder or investment adviser is entitled to any commission,
financial advisory, brokerage, finder's fee or other similar compensation
arrangement from Seller in connection with the transactions contemplated hereby
for which Buyer would have any responsibility or liability.
19
ARTICLE IV
BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to Seller that the statements contained
in this Article IV are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement).
4.1 Organization of Buyer.
Buyer is a corporation duly incorporated, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation, with full
corporate power and authority to own all of its property and assets.
4.2 Authority Relative to Agreement.
Buyer has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Buyer of this Agreement and the consummation by Buyer of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action. This Agreement has been duly and validly executed and
delivered by Buyer and constitutes the valid and binding agreement of Buyer,
enforceable in accordance with its terms, except as such enforceability is
limited by bankruptcy, insolvency and other similar Laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
4.3 Consents and Approvals; No Conflict; Required Filing and
Consents.
The execution and the delivery of this Agreement by Buyer and the
consummation by Buyer of the transactions contemplated hereby will not (a)
violate any provision of the articles of incorporation or bylaws of Buyer; (b)
violate any Law applicable to Buyer; (c) except with respect to filings under
the HSR Act, the need to file reports with the Securities and Exchange
Commission, the need to give notice to Gaming Authorities, the need to obtain
Gaming Licenses, the need to obtain Consents related to, or arising out of,
compliance with statutes, rules or regulations regarding health, the
consumption, sale or serving of alcoholic beverages and food and the preparation
of food or the need to seek Bankruptcy Court approval, require Buyer to make any
filing with, obtain any Permit, or give any notice to, any Governmental Entity;
or (d) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any right of termination, amendment, acceleration or cancellation of, or right
to require repurchase pursuant to, any agreement, contract, lease, license,
instrument or other arrangements which would impair Buyer's ability to
consummate the transactions contemplated by this Agreement.
4.4 Brokers and Investment Advisors.
No broker, finder or investment adviser is entitled to any commission,
financial advisory, brokerage, finder's fee or other similar compensation
arrangement from Buyer in connection
20
with the transactions contemplated hereby for which Seller would have any
responsibility or liability.
4.5 Bankruptcy.
Buyer has not (a) made a general assignment for the benefit of
creditors; (b) filed any voluntary petition in bankruptcy or suffered the filing
of any involuntary petition by Buyer's creditors; (c) suffered the appointment
of a receiver to take possession of all, or substantially all, of Buyer's
assets; (d) suffered the attachment or other judicial seizure of all, or
substantially all, of Buyer's assets; (e) admitted in writing its inability to
pay its debts as they become due or (f) made an offer of settlement, extension,
or composition to its creditors generally.
4.6 Litigation.
There are no Proceedings pending or, to the knowledge of Buyer,
threatened against or affecting Buyer in any court at law or in equity, or
before or by any Governmental Entity, an adverse decision in which could
reasonably be expected to materially affect Buyer's ability to perform Buyer's
obligations under this Agreement.
4.7 Sufficiency of Funds.
Buyer (a) will have as of the Closing, sufficient funds available to
pay the Cash Purchase Price and any expenses incurred by Buyer in connection
with the transactions contemplated by this Agreement; (b) has and will have at
Closing the resources and capabilities (financial or otherwise) to perform its
obligations hereunder and (c) has not, and will not have as of the Closing,
incurred any obligation, commitment, restriction or liability of any kind,
absolute or contingent, present or future, which would impair or adversely
affect such resources and capabilities.
4.8 No Ineligible Person.
As of the date of this Agreement, to Buyer's knowledge after due
inquiry, none of Buyer, its directors or officers or any holder of five percent
(5%) or greater financial or equity interest in Buyer is or is likely to become
an Ineligible Person.
4.9 Acquired Assets "AS IS"; Buyer's Acknowledgment Regarding
Same.
Buyer agrees, warrants, and represents that, except as set forth in
this Agreement, the conveyance documents or the Schedules hereto, (a) Buyer is
purchasing the Acquired Assets on an "AS IS" basis based solely on Buyer's own
investigation of the Acquired Assets and (b) neither Seller nor any real estate
broker, agent, officer, employee, servant, attorney, or representative of Seller
has made any warranties, representations or guarantees, express, implied or
statutory, written or oral, respecting the Acquired Assets, or any part of the
Acquired Assets, including the Real Property, or any matters pertaining thereto,
including respecting the compliance or non-compliance with or the applicability
or non-applicability of, any other building, health, zoning, Environmental,
Health and Safety Requirements, or any other applicable city and county, state,
or federal statute, ordinance, code, rule, regulation, or other Law, relating to
the Acquired Assets, or any part thereof, or relating to the financial
performance
21
of the Acquired Assets or the Business, or otherwise with regard to or
pertaining to the Acquired Assets, Buyer's intended use and operation thereof,
or the physical condition of the Acquired Assets. Buyer further acknowledges
that the consideration for the Acquired Assets specified in this Agreement has
been agreed upon by Seller and Buyer after good-faith arms'-length negotiation
in light of Buyer's agreement to purchase the Acquired Assets "AS IS", except as
set forth in this Agreement, the conveyance documents and the Schedules hereto.
Buyer agrees, warrants, and represents that, except as set forth in this
Agreement, the conveyance documents or the Schedules hereto, Buyer has relied,
and shall rely, solely upon Buyer's own investigation of all such matters, and
that Buyer assumes all risks with respect thereto. EXCEPT AS SET FORTH IN THIS
AGREEMENT, THE CONVEYANCE DOCUMENTS OR THE SCHEDULES HERETO, SELLER MAKES NO
EXPRESS WARRANTY, NO WARRANTY OF MERCHANTABILITY, NO WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE, NOR ANY IMPLIED OR STATUTORY WARRANTY WHATSOEVER WITH
RESPECT TO ANY REAL OR PERSONAL PROPERTY OR ANY FIXTURES.
ARTICLE V
COVENANTS
5.1 General.
Each of the parties will use all commercially reasonable efforts to
take all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the Closing conditions set forth in
Article VI) in the most expeditious manner practicable.
5.2 Bankruptcy Court Approval.
(a) As soon as practicable, but not later than fifteen
(15) days after entry of the Buyer Protection Order, Seller shall file, or cause
to be filed, the Disclosure Statement and the Plan. The Disclosure Statement
shall comply with the requirements of section 1125 of the Bankruptcy Code (it
being understood that the adequacy of the Disclosure Statement, at the time of
filing, shall be subject to the resolution of any objections entertained by the
Bankruptcy Court), and the Plan shall comply with the requirements of section
1123 of the Bankruptcy Code and shall be capable of being confirmed pursuant to
section 1129 of the Bankruptcy Code (it being understood that the confirmability
of the Plan, at the time of filing, shall be subject to the resolution of any
objections entertained by the Bankruptcy Court). Buyer shall have the
opportunity to review and comment on the Plan and Disclosure Statement (and
proposed service lists) prior to their filing to confirm the Plan is not
inconsistent with the terms of the Agreement and the transactions contemplated
thereby. Seller shall request that the Bankruptcy Court set a hearing for
approval of the Disclosure Statement on not more than thirty (30) days' notice.
Seller shall diligently and in good faith pursue the resolution of any
objections to the Disclosure Statement. Any modification to the Plan or
Disclosure Statement adversely affecting the rights of Buyer under the Agreement
and the transactions contemplated thereby made pursuant to resolution of
objections to the Disclosure Statement or in connection with the Disclosure
Statement hearing or otherwise must be consented to by Buyer prior to approval
of the Disclosure Statement by the Bankruptcy Court. Upon approval of the
Disclosure Statement by the Bankruptcy Court, Seller shall promptly and
diligently pursue dissemination of the
22
Disclosure Statement and solicitation of approval of the Plan in accordance with
the relevant provisions of the Bankruptcy Code, Bankruptcy Rules, and local
rules of the Bankruptcy Court. Seller shall schedule a hearing for confirmation
of the Plan and diligently pursue obtaining the Confirmation Order.
(b) Buyer agrees to cooperate with Seller in providing
any information and evidence that may be required to demonstrate to the
Bankruptcy Court's satisfaction adequate assurance of future performance of all
Assigned Contracts. There shall be no reduction of the Cash Purchase Price, nor
may Buyer terminate this Agreement, due to the exclusion of one or more Assigned
Contracts primarily as a result of Buyer's failure to provide adequate assurance
of future performance in connection therewith.
5.3 Regulatory and Other Authorizations; Consents and Best
Efforts.
(a) To the extent required by the HSR Act, each of the
parties shall promptly file with the United States Federal Trade Commission
("FTC") and the United States Department of Justice ("DOJ") the notification and
report form required for the transactions contemplated hereby, shall promptly
file any supplemental or additional information that may be requested in
connection therewith pursuant to the HSR Act and shall comply in all respects
with the requirements of the HSR Act. Each party shall use all commercially
reasonable efforts to resolve objections, if any, which may be asserted with
respect to the transactions contemplated by this Agreement under the HSR Act,
the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the Federal Trade
Commission Act, as amended, and any other Law designed to prohibit, restrict or
regulate actions for the purpose or effect of monopolization or restraint of
trade (collectively "Antitrust Laws"). In the event any Proceeding is threatened
or instituted challenging the transactions contemplated by this Agreement as
violative of Antitrust Laws, each party shall use all commercially reasonable
efforts to avoid the filing of, or resist or resolve such proceeding. Each party
shall use all commercially reasonable efforts to take such action as may be
required by: (i) the DOJ and/or the FTC in order to resolve such objections as
either of them may have to the transactions contemplated by this Agreement under
the Antitrust Laws or (ii) any federal or state court of the United States, or
similar court of competent jurisdiction in any foreign jurisdiction, in any suit
brought by any Governmental Entity or any other Person challenging the
transactions contemplated by this Agreement as violative of the Antitrust Laws,
in order to avoid the entry of any order (whether temporary, preliminary or
permanent) which has the effect of preventing the consummation of the
transactions contemplated by this Agreement and to have vacated, lifted,
reversed or overturned any such order. Buyer shall pay the filing fees required
to be paid by Seller and Buyer under the HSR Act in connection with such
filings.
(b) The parties hereto shall cooperate with each other
and use all commercially reasonable efforts to promptly prepare and file all
necessary documentation, to effect all applications, notices, petitions and
filings, and to obtain as promptly as practicable all Consents from any Person
or Governmental Entity, including Gaming Licenses and the filings pursuant to
subsection (a) above, and satisfy all requirements imposed by any Governmental
Entity, that are necessary or advisable to consummate the transactions
contemplated by this Agreement, including the requirements of any party to
fulfill gaming compliance investigation requirements imposed upon it by any
Governmental Entity. The parties shall consult with each other with respect to
the obtaining of all consents of, and satisfying all requirements imposed by,
23
all Governmental Entities necessary or advisable to consummate the transactions
contemplated by this Agreement and each party will keep the other apprised of
the status of matters relating to consummation of the transactions contemplated
herein. Each party also shall promptly advise the others upon receiving any
communication from any Governmental Entity whose Consent is required for
consummation of the transactions contemplated by this Agreement which causes
such party to believe that there is a reasonable likelihood that any such
Consent will not be obtained or that the receipt of any such Consent will be
materially delayed.
5.4 Operation of Business.
Until the Closing, Seller shall, except as otherwise required,
authorized or restricted pursuant to an Order of the Bankruptcy Court, operate
the Business solely in the Ordinary Course of Business. Seller shall use its
commercially reasonable efforts to preserve intact its business organization, to
maintain the Business, to keep available the services of its officers and
employees and to maintain satisfactory relationships with licensors, licensees,
suppliers, contractors, distributors, consultants, customers and others having
business relationships with Seller in connection with the operation of the
Business. Without limiting the generality of the foregoing, and except as
otherwise expressly provided in or contemplated by this Agreement, on or prior
to the Closing Date, Seller may not, without the prior written consent of Buyer:
(a) modify in any manner the compensation of any of the
Employees, or accelerate the payment of any such compensation (other than in the
Ordinary Course of Business or such that the liability associated with such
modification is excluded from the Assumed Liabilities);
(b) remove or permit to be removed from any building,
facility, or real property any Acquired Asset that, individually or in the
aggregate, is material;
(c) sell, lease or otherwise dispose of, mortgage,
hypothecate or otherwise encumber any Acquired Asset (other than in the Ordinary
Course of Business);
(d) amend, terminate or renew any Assigned Contract
without the approval of the Bankruptcy Court (other than in the Ordinary Course
of Business);
(e) knowingly take any action that would cause any
condition set forth in Article VI not to be met; or
(f) agree, whether in writing or otherwise, to do any of
the foregoing.
5.5 Compliance with Laws.
Seller shall comply in all material respects with all applicable Laws
as may be required (a) with respect to the operation of the Business; (b) for
its ownership of the Acquired Assets prior to the Closing; and (c) for the valid
and effective transfer of the Acquired Assets as contemplated by this Agreement
at the Closing.
24
5.6 Inspections by Buyer.
Seller has permitted and will continue to permit representatives of
Buyer (including legal counsel and accountants) to have full access at all
reasonable times, and in a manner so as not to unreasonably interfere with the
normal business operations of Seller, to all premises, properties, personnel,
Books and Records (including tax records), contracts, and documents of or
pertaining to Seller or the Business.
5.7 Confidentiality.
Buyer will treat and hold as such any Confidential Information it
receives from Seller (as defined in that certain Nondisclosure and
Confidentiality Agreement between Seller and Buyer dated March 30, 2004 which is
incorporated herein and hereby made a part hereof), and Buyer will not use any
of the Confidential Information except in connection with this Agreement, and,
if this Agreement is terminated for any reason whatsoever, Buyer will either
return to Seller or promptly destroy all tangible embodiments (and all copies)
of the Confidential Information which are in its possession. Notwithstanding the
foregoing, Buyer may disclose such information (a) if Buyer is compelled to
disclose the same by judicial or administrative process, any directive of any
Governmental Entity or Gaming Authority or by any other requirement of Law (but
subject to the following provisions of this Section 5.7); (b) if the same
hereafter is in the public domain through no fault of Buyer or (c) if the same
is later acquired by Buyer from another source and Buyer is not aware, after due
inquiry, that such source is under an obligation to another Person to keep such
information confidential. If Buyer is requested or required (by oral questions,
interrogatories, requests for information or documents in any Proceeding to
disclose any such information, Buyer shall, to the extent not prohibited by Law,
provide Seller with prompt written notice of any such request or requirement so
that Seller may, at its own expense, seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this Section
5.7. If, in the absence of a protective order or other remedy or the receipt of
a waiver by Seller, Buyer nonetheless, based on the advice of counsel, is
required to disclose such Confidential Information to any tribunal or other
Person, Buyer, without liability hereunder, may disclose that portion of such
information which such counsel advises Buyer it is legally required to disclose.
Nothing in this Section 5.7 shall limit the rights of the parties to disclose or
use any confidential or proprietary information of the other parties in
connection with any legal action arising out of or in connection with this
Agreement; provided, that such party shall take reasonable steps to preserve the
confidentiality of such information (including by obtaining an appropriate
protective order or other reliable assurance that confidential treatment will be
afforded such information).
5.8 Post-Closing Books and Records.
For a period of two (2) years after the Closing Date, Seller on the one
hand and Buyer on the other hand shall afford each other and their respective
counsel, accountants and other representatives, or any trustee appointed in the
Bankruptcy Case or any case under Chapter 7 of the Bankruptcy Code to which the
Bankruptcy Case may be converted, reasonable access to the Books and Records in
respect of the Business which, after the Closing, are in the custody or control
of the other party and which such party reasonably requires in order to comply
with its obligations under Law, including, but not limited to, audits by Tax
authorities, or which Buyer
25
reasonably requires to comply with its obligations under the Assumed Liabilities
or the Assigned Contracts. Buyer will retain all Books and Records that Buyer
may have, if any, relating and material to the operation of the Business and the
Acquired Assets prior to the Closing for a period of one (1) year after the
Closing Date.
5.9 Further Assurances.
At any time and from time to time at or after the Closing, the parties
shall cooperate with each other, to execute and deliver such other documents,
instruments of transfer or assignment, files, Books and Records and do all such
further acts and things as may be reasonably required to carry out the
transactions contemplated hereby.
5.10 Employee Matters.
Seller shall, as of the Closing, terminate all employees of the
Business other than the individuals identified on Schedule 5.10 (the
"Employees"), and shall timely deliver to all Employees the required notices of
termination of employment pursuant to the Worker Adjustment and Retraining
Notification Act and any similar state statutes (the "WARN Act"). Buyer shall
make offers of employment to all Employees as new employees of Buyer as of the
time of the Closing. Buyer shall cause all Employees hired by Buyer to be
covered by Buyer's employee benefit plans and programs applicable to similarly
situated employees of Buyer. Buyer shall not be required to pay any amounts
otherwise payable to Employees as a result of any severance or change-of-control
provision existing between any Employee and Seller. Buyer shall indemnify and
hold harmless Seller from and against any and all Damages arising under the WARN
Act incurred in connection with the transactions contemplated hereby. To the
extent Seller pays an Assumed Liability under this Section 5.10, such amount
shall be reimbursed by Buyer to Seller within five (5) business days of written
notice thereof.
5.11 Allocation.
At least three (3) days prior to Closing, Seller and Buyer shall
prepare an allocation of the Purchase Price (and all other capitalized costs)
among the Acquired Assets in accordance with Section 1060 of the Code and the
treasury regulations thereunder (and any similar provision of state, local or
foreign law, as appropriate). Seller and Buyer shall report, act, and file Tax
Returns (including, but not limited to Internal Revenue Service Form 8594) in
all respects and for all purposes consistent with such allocation. Neither
Seller nor Buyer shall take any position (whether in audits, Tax Returns, or
otherwise) which is inconsistent with such allocation unless required to do so
by applicable law.
5.12 Ineligible Person.
At any time after the date of this Agreement, if Buyer, any employee or
director, officer or consultant of Buyer or any holder of capital stock, debt
instruments or other interests in Buyer shall become an Ineligible Person, then
Buyer shall use its commercially reasonable best efforts to cure such event,
which may include (a) the undertaking of any administrative or other Proceeding
before any applicable Gaming Authority or other Governmental Entity, (b) any
action necessary to cease Buyer's relationship with such Ineligible Person,
including requiring the resignation from any position in or relationship with
Buyer or (c) any other action which
26
Buyer in its sole discretion determines is necessary or appropriate to cause
Buyer to not be affiliated with any Ineligible Person. Each Person who shall be
determined to be an Ineligible Person shall, and Buyer shall use all
commercially reasonable best efforts to cause each Ineligible Person to,
cooperate with Buyer in its efforts to obtain and retain in full force and
effect the Gaming Licenses.
5.13 Preliminary Title Report.
(a) Not later than four (4) business days after the date
of this Agreement, Seller, with Buyer's assistance and cooperation as necessary,
shall arrange for the Title Company to prepare and deliver to Buyer a
preliminary title report (the "Title Report") covering the Real Property dated
not earlier than the date of this Agreement, such report showing all matters of
record and all items which would be shown as exceptions on a ALTA owner's policy
of title insurance, together with a recent ALTA survey of the Real Property
certified by a licensed land surveyor and a legible copy of each recorded
document underlying any exceptions shown in the Title Report. Subject only to
the following permitted exceptions (the "Permitted Exceptions"), Seller shall
cause all exceptions to title to the Real Property set forth in such Title
Report to be removed prior to the Closing: (1) the standard printed exceptions
contained in the Title Company's form of Owner's Policy; (2) building
restrictions and zoning regulations heretofore or hereafter adopted by any
municipal or other public authority relating to the Property; (3) current
property taxes not yet delinquent; (4) the exceptions approved by Buyer in
accordance with Section 5.13(b); and (5) any exception to which Buyer, in
Buyer's sole discretion, specifically and expressly consents in writing prior to
the Closing. Buyer shall pay all fees and costs associated with obtaining the
Title Report.
(b) Buyer shall have until 5:00 p.m. (Los Angeles time)
on the fifth (5th) calendar day following Buyer's receipt of the Title Report to
disapprove, in Buyer's sole discretion, any matters set forth in the Title
Report; provided, however, that Buyer may not disapprove of the exceptions
described in items (1), (2) and (3) of Section 5.13(a). If Buyer timely
disapproves of any matters set forth in the Title Report, other than with
respect to the exceptions described in items (1), (2) and (3) of Section
5.13(a), Seller shall have three (3) business days to indicate in writing
whether Seller will cause such disapproved matters to be removed as exceptions
to title prior to or concurrently with the Closing. Seller's failure to timely
respond shall be deemed to constitute Seller's irrevocable agreement to remove
all such disapproved matters as exceptions to title. If Seller timely indicates
that it is unwilling to remove any such disapproved matters as exceptions to
title, Buyer may elect to (i) proceed with the transaction contemplated hereby
and take title subject to such disapproved matters, or (ii) terminate this
Agreement. Buyer's failure to make such election within three (3) business days
after being informed of Seller's decision shall be deemed an election of option
(i). If Buyer terminates this Agreement pursuant to this Section 5.13(b), the
Deposit (and all interest accrued thereon) shall be returned to Buyer, and the
parties shall have no further obligations to one another except for any
obligations that, by their terms, survive the termination of this Agreement.
27
ARTICLE VI
CONDITIONS TO OBLIGATION TO CLOSE
6.1 Conditions to Buyer's and Seller's Obligation.
Both Buyer's and Seller's obligation to consummate the transactions to
be performed by them in connection with the Closing is subject to satisfaction
of the following conditions:
(a) there is not any Law or any order, decree or
injunction of a court of competent jurisdiction that (i) renders any transaction
contemplated by this Agreement illegal; (ii) would impose any material
limitation on the ability of Buyer to effectively exercise full rights of
ownership of the Acquired Assets; or (iii) renders Seller or Buyer incapable of
consummating the transactions contemplated by this Agreement; and
(b) all authorizations, consents, orders or approvals of,
or declarations or filings with, or expiration of waiting periods imposed by,
any Governmental Entity necessary for the consummation of the transactions
contemplated by this Agreement shall have been filed or been obtained,
including, but not limited to, the expiration of the waiting period applicable
to the consummation of the transactions contemplated by this Agreement under the
HSR Act, including any extensions thereof.
6.2 Conditions to Buyer's Obligation.
Buyer's obligation to consummate the transactions to be performed by it
in connection with the Closing is subject to satisfaction of the following
conditions:
(a) each of the Buyer Protection Order and the
Confirmation Order shall be a Final Order;
(b) Seller shall have performed and complied in all
material respects with all of its obligations, or cured any failure to so
perform and comply, under this Agreement and any Order of the Bankruptcy Court
relating to this Agreement to be performed by it at or prior to Closing;
provided, however, that if any portion of any obligation is already qualified by
materiality, for purposes of determining whether this condition has been
satisfied with respect to such portion of such obligation, Seller shall have
performed and complied in all respects with such portion of such obligation;
(c) the representations and warranties of Seller
contained in this Agreement, and in the certificates, schedules, exhibits and
attachments delivered to Buyer pursuant hereto, shall be true and correct in all
material respects on the date hereof and on the Closing Date as though such
representations and warranties were made on and as of the Closing Date;
provided, however, that if any portion of any such representation or warranty is
already qualified by materiality, for purposes of determining whether this
condition has been satisfied with respect to such portion of such representation
or warranty, such portion of such representation or warranty as so qualified
must be true and correct in all respects;
28
(d) except as set forth on Schedule 6.2(d), since the
date of this Agreement no event shall have occurred which has or would
reasonably be expected to have a Material Adverse Effect;
(e) all material Consents of or Permits from any
Governmental Entity or any other Person necessary to permit the consummation of
the transactions contemplated by this Agreement and the operation of the
Business following the Closing in the Ordinary Course of Business shall have
been received, shall be in full force and effect and shall not have been revoked
as of the Closing Date, including all necessary approvals to consummate the
transactions from the Gaming Authorities;
(f) Seller shall have delivered all of the items set
forth in Exhibit C to be delivered by Seller; and
(g) the Title Company shall have irrevocably committed to
issue to Buyer as of the Closing an ALTA Owner's Policy of Title Insurance
(policy form 1992) (the "Title Policy") on standard rates covering the Real
Property in the amount of One Hundred Ten Million Dollars ($110,000,000), with
the creditors' rights exclusion from coverage deleted, containing no exceptions
for monetary liens or encumbrances (including, without limitation, mortgages,
deeds of trust, property taxes which are past due or currently due and payable,
fines or other amounts owed to any Governmental Entity) and only the Permitted
Exceptions, including any easements benefiting the subject Real Property as
parcels and containing such endorsements as Buyer may reasonably request. Buyer
shall pay all fees and costs associated with obtaining the Title Policy.
Notwithstanding anything in this Section 6.2 to the contrary, Buyer may not
exercise its rights under Section 6.2(b), Section 6.2(c), or Section 6.2(d)
unless and until Buyer could reasonably be expected to suffer aggregate Damages
under such sections in excess of Two Million Dollars ($2,000,000); provided
that, at the Closing, Buyer recovers all such Damages as an adjustment to, and
reduction of, the Cash Purchase Price in the amount of such aggregate Damages,
less the Deductible.
Buyer may waive any condition specified in this Section 6.2 if Buyer executes a
writing so stating at or prior to the Closing.
6.3 Conditions to Seller's Obligation.
Seller's obligation to consummate the transactions to be performed by
it in connection with the Closing is subject to satisfaction of the following
conditions:
(a) Buyer shall have delivered all of the items set forth
in Exhibit C to be delivered by Buyer;
(b) Buyer shall have performed and complied in all
material respects with all of its obligations, or cured any failure to so
perform and comply, under this Agreement and any Order of the Bankruptcy Court
relating to this Agreement to be performed by it at or prior to Closing;
provided, however, that if any portion of any obligation is already qualified by
materiality, for purposes of determining whether this condition has been
satisfied with respect to
29
such portion of such obligation, Buyer shall have performed and complied in all
respects with such portion of such obligation;
(c) the representations and warranties of Buyer contained
in this Agreement and in the certificates delivered to Seller pursuant hereto
shall be true and correct in all material respects on the date hereof and on the
Closing Date as though such representations and warranties were made on and as
of the Closing Date; provided, however, that if any portion of any such
representation or warranty is already qualified by materiality, for purposes of
determining whether this condition has been satisfied with respect to such
portion of such representation or warranty, such portion of such representation
or warranty as so qualified must be true and correct in all respects; and
(d) all material Consents of or Permits from any
Governmental Entity or any other Person necessary to permit the consummation of
the transactions contemplated by this Agreement and the operation of the
Business following the Closing in the Ordinary Course of Business shall have
been received, shall be in full force and effect and shall not have been revoked
as of the Closing Date.
Notwithstanding anything in this Section 6.3 to the contrary, Seller may not
exercise its rights under Section 6.3(b) or Section 6.3(c), unless and until
Seller could reasonably be expected to suffer aggregate Damages under such
sections in excess of Two Million Dollars ($2,000,000); provided that, at the
Closing, Seller recovers all such Damages as an adjustment to, and increase of,
the Cash Purchase Price in the amount of such aggregate Damages, less the
Deductible.
Seller may waive any condition specified in this Section 6.3 if Seller executes
a writing so stating at or prior to the Closing.
ARTICLE VII
TERMINATION
7.1 Termination of Agreement.
The parties may terminate this Agreement as provided below:
(a) Buyer and Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(b) Buyer may terminate this Agreement by giving written
notice to Seller at any time prior to the Closing (i) if Seller fails to file
the Buyer Protection Approval Motion within the time period provided for in
Section 2.11(a); (ii) if the Bankruptcy Court fails or refuses to enter the
Buyer Protection Order on or prior to forty-five (45) days after execution of
this Agreement; (iii) if Seller fails to file the Disclosure Statement within
the time period provided for in Section 5.2(a); (iv) if the Bankruptcy Court
shall not have entered the Confirmation Order on or before October 15, 2004; (v)
if any material change that is adverse to Buyer is made to, or any order is
entered that is adverse to Buyer and materially inconsistent with, the Buyer
Protection Order or Confirmation Order not reasonably acceptable to Buyer; (vi)
in the event Seller has materially breached any representation, warranty or
covenant contained in this Agreement (other than any representation, warranty or
covenant which is
30
already qualified by materiality, in which case, this event shall apply to
Seller's breach in any respect of any such representation, warranty or
covenant), Buyer has notified Seller of the breach in writing, and the breach
has continued without cure (or waiver in writing by Buyer) for a period of
thirty (30) days after the notice of breach (except that no cure period will be
provided for a breach by Seller which, by its nature, cannot be cured), and
Buyer is not itself in material breach of any representation, warranty or
covenant contained in this Agreement); (vii) if the Bankruptcy Case is dismissed
or converted to Chapter 7 of the Bankruptcy Code or a trustee is appointed for
Seller; or (viii) if the Closing shall not have occurred on or before December
31, 2004, or such later date as mutually agreed to by the parties, by reason of
the failure of any condition precedent under Section 6.2 (unless the failure
results primarily from Buyer itself breaching any representation, warranty or
covenant contained in this Agreement, or unless Buyer shall waive such condition
precedent in writing);
(c) Seller may terminate this Agreement by giving written
notice to Buyer at any time prior to the Closing (i) in the event Buyer has
materially breached any representation, warranty, or covenant contained in this
Agreement (other than any representation, warranty or covenant which is already
qualified by materiality, in which case, this event shall apply to Buyer's
breach in any respect of any such representation, warranty or covenant), Seller
has notified Buyer of the breach in writing, and the breach has continued
without cure (or waiver in writing by Seller) for a period of thirty (30) days
after the notice of breach (except that no cure period will be provided for a
breach by Buyer which, by its nature, cannot be cured), and Seller is not itself
in material breach of any representation, warranty or covenant contained in this
Agreement; (ii) if the Bankruptcy Case is dismissed or converted to Chapter 7 of
the Bankruptcy Code; or (iii) if the Closing shall not have occurred on or
before December 31, 2004, or such later date as mutually agreed to by the
parties, by reason of the failure of any condition precedent under Section 6.3
(unless the failure results primarily from Seller itself breaching any
representation, warranty or covenant contained in this Agreement, or unless
Seller shall waive such condition precedent in writing); and
(d) at Buyer's or Seller's election, in writing, (i) if a
court of competent jurisdiction or any Governmental Entity has issued a Final
Order having the effect of permanently restraining, enjoining or otherwise
prohibiting any of the transactions contemplated by this Agreement or (ii) if
the Bankruptcy Court shall not have entered the Confirmation Order by October
15, 2004.
(e) Notwithstanding anything in this Section 7.1 to the
contrary, Buyer may not exercise its rights under Section 7.1(b)(vi), unless and
until Buyer could reasonably be expected to suffer aggregate Damages under such
section in excess of Two Million Dollars ($2,000,000); provided that, at the
Closing, Buyer recovers all such Damages as an adjustment to, and reduction of,
the Cash Purchase Price in the amount of such aggregate Damages, less the
Deductible. Notwithstanding anything in this Section 7.1 to the contrary, Seller
may not exercise its rights under Section 7.1(c)(i), unless and until Seller
could reasonably be expected to suffer aggregate Damages under such section in
excess of Two Million Dollars ($2,000,000); provided that, at the Closing,
Seller recovers all such Damages as an adjustment to, and increase of, the Cash
Purchase Price in the amount of such aggregate Damages, less the Deductible.
Notwithstanding anything in this Agreement to the contrary, Seller may not
terminate this Agreement without the consent of the Ad Hoc Committee.
31
7.2 Effect of Termination.
If this Agreement is terminated pursuant to Section 7.1, all rights and
obligations of the parties hereunder shall terminate; provided, however, that
Seller's obligations under Section 2.9(e) with respect to the Breakup Fee and
Expense Reimbursement, Buyer's obligations under Section 5.7 with respect to
confidentiality, the provisions identified in Section 7.3, Article VIII and
Buyer's and Seller's obligations under Article IX shall survive any cancellation
or termination of this Agreement (and any such cancellation or termination shall
not be deemed to terminate this Agreement in such circumstances insofar as such
provisions are concerned); provided, further, that termination shall not relieve
any party breaching this Agreement from liability for such breach.
7.3 Deposit.
(a) If this Agreement is terminated pursuant to Section
7.1(a), Section 7.1(b), Section 7.1(c)(ii), Section 7.1(c)(iii) or Section
7.1(d), the Deposit, together with any interest accrued thereon, shall be
returned to Buyer within one (1) business day of the day the Agreement is
terminated.
(b) If this Agreement is terminated pursuant to Section
7.1(c)(i), the Deposit, together with any interest accrued thereon, shall be
paid to Seller within one (1) business day of the day the Agreement is
terminated. Except for fraud or willful misconduct by Buyer, Seller acknowledges
and agrees that the Deposit shall be the exclusive remedy of Seller with respect
to any failure by Buyer to consummate the transactions contemplated by this
Agreement.
(c) Except as specifically provided herein, whether or
not the transactions contemplated by this Agreement are consummated, the costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Seller.
(a) Seller shall indemnify and hold harmless Buyer and
its officers, directors, employees and agents, for any and all Damages which may
be sustained, suffered or incurred by Buyer and arising out of or by reason of
(i) any breach of any representation, warranty, covenant or undertaking made by
Seller pursuant to this Agreement; (ii) any liabilities, obligations,
commitments or claims arising with respect to any Excluded Asset or any Excluded
Liability; (iii) any violation of any Environmental, Health or Safety
Requirement or any release or disposal of Hazardous Materials that occurred on
or before the Closing Date with respect to the Real Property or in connection
with the Business; or (iv) any other liabilities, obligations, commitments or
claims arising with respect to any Acquired Asset on or before the Closing Date.
Notwithstanding the foregoing, Seller shall not indemnify Buyer with respect to
(A) amounts for which Buyer receives a Cash Purchase Price adjustment pursuant
to Articles VI or VII or Section 2.7, (B) Damages which arise out of the
operation of the Business by Buyer after the Closing, or (C) matters arising
primarily as a result of the rejection by Buyer of any Contracts.
32
(b) Each of the representations and warranties made by
Seller in this Agreement or pursuant hereto shall survive for a period of twelve
(12) months from and after the Closing Date unless a claim shall have been
commenced by Buyer providing Seller with written notice thereof prior to the
date that is twelve (12) months after the Closing Date, in which case the
applicable representations and warranties shall survive with respect to such
claim until such claim has been resolved.
(c) Buyer shall not be entitled to recover any Damages
under this Article VIII to the extent the aggregate claims (including claims for
Damages arising under Article VI or VII) against Seller are less than Two
Hundred Fifty Thousand Dollars ($250,000) (the "Deductible"). Buyer shall only
be entitled to recover Damages in excess of the Deductible. In pursuing the
collection of any Damages against Seller following the Closing, the funds being
held by Escrow Agent pursuant to the Holdback Amount shall be the exclusive
remedy of Buyer. On the date that is twelve (12) months from the Closing Date,
Escrow Agent shall distribute to Seller by wire transfer of immediately
available funds an amount, if any, equal to the remaining portion of the
Holdback Amount plus accrued interest, exclusive of amounts which Buyer is
entitled to forever retain or for claims that have not yet been resolved
pursuant to this Article VIII.
(d) Except for fraud or criminal misconduct, the parties
hereto acknowledge and agree that, following the Closing, the indemnification
provisions in this Section 8.1 shall be the exclusive remedy of Buyer with
respect to the transactions contemplated by this Agreement.
8.2 Indemnification by Buyer.
(a) Buyer shall indemnify and hold harmless Seller and
its officers, directors, employees and agents, for any and all Damages which may
be sustained, suffered or incurred by Seller and arising out of or by reason of
(i) any breach of any representation, warranty, covenant or undertaking made by
Buyer pursuant to this Agreement; or (ii) any liabilities, obligations,
commitments or claims arising with respect to any Acquired Asset or any Assumed
Liability after the Closing Date.
(b) Each of the representations and warranties made by
Buyer in this Agreement or pursuant hereto shall survive for a period of twelve
(12) months from and after the Closing Date, unless a claim shall have been
commenced by Seller's providing Buyer with written notice thereof prior to the
date that is twelve (12) months after the Closing Date, in which case the
applicable representations and warranties shall survive with respect to such
claim until such claim has been resolved.
(c) Seller shall not be entitled to recover any Damages
under this Article VIII to the extent the aggregate claims (including claims for
Damages arising under Article VI or VII) against Buyer are less than the
Deductible. Seller shall only be entitled to recover Damages in excess of the
Deductible. The total liability of Buyer for its indemnity obligations under
this Section 8.2 shall be limited to Two Million Dollars ($2,000,000) in the
aggregate.
(d) Except for fraud or criminal misconduct, the parties
hereto acknowledge and agree that, following the Closing, the indemnification
provisions in this Section 8.2 shall be the exclusive remedy of Seller with
respect to the transactions contemplated by this Agreement.
33
8.3 Indemnification Procedure.
(a) Whenever any claim (a "Claim") shall arise for
indemnification under this Article VIII, the indemnitee shall promptly give
written notice to the indemnifying party with respect to the Claim, which notice
shall include reliable information of the facts constituting the basis for the
Claim. Notwithstanding the foregoing, the failure to timely give such notice
shall not relieve the indemnifying party from any obligation under this
Agreement, except to the extent, if any, that the indemnifying party is
materially prejudiced thereby. In the event of any Claim resulting from or in
connection with any claim or legal proceedings by a third party (a "Third Party
Claim"), the notice to the indemnifying party shall specify, if known, the
amount or an estimate of the amount of liability arising therefrom. The
indemnitee shall not settle or compromise any claim by any third party for which
it is entitled to indemnification hereunder without the prior written consent of
the indemnifying party (which consent will not be unreasonably withheld or
delayed) unless suit shall have been instituted against it and the indemnifying
party shall not have taken control of such suit after notification thereof as
provided in Section 8.3(c) hereof.
(b) Upon receipt of written notice from the indemnitee of
a Third Party Claim, the indemnifying party shall provide counsel (such counsel
subject to the reasonable approval of the indemnitee) to defend the indemnitee
against the matter from which the Third Party Claim arose, at the indemnifying
party's sole cost, risk and expense. The indemnitee shall cooperate in all
reasonable respects, at the indemnifying party's sole cost, risk and expense,
with the indemnifying party in the investigation, trial, defense and any appeal
arising from the matter from which the Third Party Claim arose. The indemnitee
shall be entitled to participate in (but not control) the defense of any such
action, with counsel at its own expense. The indemnifying party shall have the
right to elect to settle any claim for monetary damages without the indemnitee's
consent only if the settlement includes a complete release of the indemnitee. If
the settlement does not include such a release, it will be subject to the
consent of the indemnitee, which will not be unreasonably withheld. The
indemnifying party may not admit any liability of the indemnitee or waive any of
the indemnitee's rights without the indemnitee's prior written consent, which
will not be unreasonably withheld. If the subject of any Third Party Claim
results in a judgment or settlement, the indemnifying party shall promptly pay
such judgment or settlement.
(c) If the indemnifying party (i) fails to assume the
defense of the subject of any Third Party Claim in accordance with the terms of
Section 8.3(b), (ii) fails diligently to prosecute such defense, or (iii) has,
in the indemnitee's reasonable good faith judgment, a conflict of interest, the
indemnitee may defend against the subject of the Third Party Claim, at the
indemnifying party's sole cost, risk and expense, in such manner and on such
terms as the indemnitee deems appropriate, including, without limitation,
settling the subject of the Third Party Claim; provided, however, that any
compromise or settlement shall be subject to the indemnifying party's consent,
which consent will not be unreasonably withheld. If the indemnitee defends the
subject of a Third Party Claim in accordance with this Section 8.3(c), the
indemnifying party shall cooperate with the indemnitee and its counsel, at the
indemnifying party's sole cost, risk and expense, in all reasonable respects,
and shall deliver to the indemnitee or its counsel copies of all pleadings and
other information within the indemnifying party's knowledge or possession
reasonably requested by the indemnitee or its counsel that are relevant
34
to the defense of the subject of any such Third Party Claim and that will not
prejudice the indemnifying party's position, claims or defenses. The indemnitee
shall maintain confidentiality with respect to all such information consistent
with the conduct of a defense hereunder.
8.4 Payment of Indemnification.
All payments owing under this Article VIII will be made promptly as
indemnifiable Losses are incurred. If an indemnitee defends any Third Party
Claim in accordance with Section 8.3(c), the expenses (including attorneys' fees
and costs) incurred by the indemnitee shall be paid by the indemnifying party in
advance of the final disposition of such matter as incurred by the indemnitee;
provided that the indemnitee undertakes in writing to repay any such advances in
the event that it is ultimately determined by a court of competent jurisdiction
that the indemnitee is not entitled to indemnification under the terms of this
Agreement.
8.5 Treatment of Indemnity Payments.
To the maximum extent permissible under applicable Tax Laws, the
receipt by any party of any indemnification payment pursuant to this Article
VIII will be treated and reported as a non-taxable adjustment to the Cash
Purchase Price.
8.6 Insurance.
No indemnitee shall be entitled to indemnification under this Article
VIII for Damages covered by insurance proceeds from any insurance policy owned
and paid for by Seller or the Title Policy, to the extent that such indemnitee
actually receives such insurance proceeds to cover such Damages.
ARTICLE IX
MISCELLANEOUS
9.1 Survival.
Seller and Buyer agree that: (a) Buyer's and Seller's representations
and warranties shall survive as provided in Article VIII, (b) Buyer's and
Seller's covenants contained in Article V shall survive in accordance with the
terms thereof and (c) the provisions pertaining to Buyer's and Seller's rights
of indemnification and the provisions respecting confidentiality shall survive
any cancellation or termination of this Agreement pursuant to the provisions
hereof (and any such cancellation or termination shall not be deemed to
terminate this Agreement in such circumstances insofar as such provisions are
concerned).
9.2 Press Releases and Public Announcements.
No party shall issue any press release or make any public announcement
relating to the subject matter of this Agreement prior to the Closing without
the prior written approval of the other party (which approval shall not be
unreasonably withheld or delayed); provided, however, that, upon notice to the
other party, any party may make any public disclosure it believes in good faith
is required by applicable Law or any listing or trading agreement concerning its
publicly-
35
traded securities, in which case the disclosing party shall advise the other
party prior to making the disclosure.
9.3 Third-Party Beneficiaries.
This Agreement shall not confer any rights or remedies upon any Person
other than the parties and their respective successors and permitted assigns;
provided, that the members of the Ad Hoc Committee are intended third-party
beneficiaries of this Agreement with the right to enforce the terms hereof.
9.4 Entire Agreement.
This Agreement (including the documents referred to herein) constitutes
the entire agreement between the parties and supersedes any prior
understandings, agreements, or representations by or between the parties,
written or oral, to the extent they relate in any way to the subject matter
hereof.
9.5 Succession and Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties named herein and their respective successors and permitted assigns. No
party may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other party;
provided, however, that Buyer may (a) assign any or all of its rights and
interests hereunder to one or more of its Affiliates and (b) designate one or
more of its Affiliates to perform its obligations hereunder (in any or all of
which cases Buyer nonetheless shall remain responsible for the performance of
all of its obligations hereunder).
9.6 Headings.
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
9.7 Notices.
All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given (a) when delivered personally
to the recipient; (b) one (1) business day after being sent to the recipient by
reputable overnight courier service (charges prepaid); or (c) one (1) business
day after being sent to the recipient by facsimile transmission (provided
receipt has been confirmed) or electronic mail, and addressed to the intended
recipient as set forth below:
To Seller: Windsor Woodmont Black Hawk Resort Corp.
000 Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
E-Mail: Xxxx.Xxxxxxxxx@xxxxxxxx.xxx
36
with copies to: Irell & Xxxxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
E-Mail: xxxxxx@xxxxx.xxx
and to: Klee, Tuchin, Xxxxxxxxx & Xxxxx LLP
2121 Avenue of the Stars, Xxxxxx-Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
E-Mail: XXxxxxx@xxxxxxx.xxx
To Buyer: Ameristar Casinos, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000X
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
E-Mail: Xxxxx.Xxxxx@xxxxxxxxxxxxxxxx.xxx
with a copy to: Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
E-Mail: xxxxxx@xxxxxxxxxx.xxx
Any party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.
9.8 Governing Law; Jurisdiction.
This Agreement and any instrument or agreement executed in connection
with this Agreement shall be governed by and construed in accordance with the
laws of the State of Colorado. Subject to the terms of any Order of the
Bankruptcy Court, the parties further agree that the Bankruptcy Court in the
Bankruptcy Case shall have exclusive and continuing jurisdiction over this
Agreement and the enforcement thereof, and the parties hereby submit themselves
to the jurisdiction of the Bankruptcy Court for such purposes.
37
9.9 Amendments and Waivers.
No amendment of any provision of this Agreement shall be valid unless
the same shall be in writing and signed by Buyer and Seller, consented to in
writing by the Ad Hoc Committee and approved by the Bankruptcy Court, to the
extent Bankruptcy Court approval is required. No waiver by any party of any
provision of this Agreement or any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be valid
unless the same shall be in writing and signed by the parties making such a
waiver, nor such waiver shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
9.10 Severability.
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or part thereof, not essential to the commercial purpose of this
Agreement, or the application thereof to any person or entity or any
circumstance, is illegal, invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefore in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability.
9.11 Expenses.
Except as otherwise expressly provided in this Agreement, each of Buyer
and Seller will bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.
9.12 Construction.
The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including" shall
mean including without limitation.
9.13 Incorporation of Exhibits and Schedules.
The Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
38
9.14 Tax Disclosure Authorization.
Notwithstanding anything herein to the contrary, the parties (and each
Affiliate and Person acting on behalf of any party) agree that each party (and
each employee, representative, and other agent of such party) may disclose to
any and all Persons, without limitation of any kind, the transaction's tax
treatment and tax structure (as such terms are used in Section 6011 and Section
6112 of the Code and the regulations thereunder) contemplated by this Agreement
and all materials of any kind (including opinions or other tax analyses)
provided to such party or such Person relating to such tax treatment and tax
structure, except to the extent necessary to comply with any applicable federal
or state securities laws or the requirements of the Bankruptcy Court.
9.15 Counterparts and Facsimile Signatures.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement. Any signature delivered by facsimile shall be deemed to
be an original signature hereunder.
39
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SELLER:
WINDSOR WOODMONT BLACK HAWK RESORT CORP.,
a Colorado corporation
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------------
Name:Xxxxx X. Xxxxxxxxx
Title: CEO
BUYER:
AMERISTAR CASINOS, INC.,
a Nevada corporation
By: /s/ Xxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President and General
Counsel
Solely with respect to Section 2.11(b) and
Section 9.9
AD HOC COMMITTEE
By: /s/ Xxxxx Xxxxx
--------------------------------------------
Name: Xxxxx Xxxxx
Title: SVP - ABLECO FINANCE
40
AGREEMENT OF AD HOC COMMITTEE:
The Ad Hoc Committee hereby agrees to use its commercially reasonable efforts to
assist Seller, and to cooperate with the reasonable requests of Buyer, in filing
the Bankruptcy Court motions and in obtaining the Bankruptcy Court approvals
described in Sections 2.11 and 5.2. With respect to any consents or approvals
required of the Ad Hoc Committee in connection with the transactions
contemplated by this Agreement, the Ad Hoc Committee hereby agrees that such
consents or approvals will not be unreasonably withheld or delayed.
AD HOC COMMITTEE:
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: SVP - ABLECO FINANCE LLC
41
