1
EXHIBIT 10.1
PURCHASE AGREEMENT
PURCHASE AGREEMENT dated and effective as of the 1st day of April, 2000
(this "Agreement"), between Horseshoe Gaming Holding Corp., a Delaware
corporation ("Horseshoe"), and Xxxxxx X. Xxxxxxx ("Seller").
RECITALS:
A. Horseshoe is a casino owner/operator with its principal office in
Joliet, Illinois.
B. Seller is the current owner of a 145.605191 shares of Horseshoe (the
"Ownership Interest") and a capital account having a balance of $372,976 (the
"Capital Account").
C. In connection with the Acquisition, Seller desires to sell and
Horseshoe believes it is in its best interest to acquire from Seller the
Ownership Interest and any rights or claim to the Capital Account associated
with the Ownership Interest.
D. Horseshoe and Seller have agreed that the fair market value of the
Ownership Interest plus the payout of the Capital Account is SIX MILLION FOUR
HUNDRED AND SEVENTY SEVEN THOUSAND AND SIX HUNDRED AND EIGHTY THREE DOLLARS AND
SEVENTY FOUR CENTS ($6,477,683.74).
E. Seller previously received an initial payment of $1,366,923.00 and a
loan against his ownership equal to $610,000 plus outstanding interest of
$98,660.24 for a total advance of $2,075,583.24 ("Advance").
NOW, THEREFORE, in consideration of the premises and each act performed
by either party hereto, the parties agree as follows:
1. Subject to the terms and conditions set forth herein, Seller agrees
to sell, transfer, convey, assign and deliver to Horseshoe, and Horseshoe agrees
to purchase, acquire and accept from Seller, the Ownership Interest, at the
price of $6,477,683.74 (the "Purchase Price"), payable by a promissory note of
Horseshoe, which is attached hereto (the "Promissory Note") in the amount of
$3,400,000, plus the Advance previously paid to Seller, plus $1,002,100.500, the
receipt of which is hereby acknowledged.
2. Seller hereby unconditionally releases and discharges Horseshoe from
any and all claims, known or unknown, directly or indirectly related to or in
any way connected with the Ownership Interest and any and all agreements in any
way connected with or related thereto other than this Agreement and the
Promissory Note. Seller acknowledges and agrees that following the consummation
of the transaction contemplated by this Agreement, Seller shall have no equity
ownership or any other
2
interest in Horseshoe or any of its affiliates or subsidiaries nor will Seller
have rights of any kind to acquire an ownership interest in Horseshoe or any of
its affiliates or subsidiaries; the only rights Seller shall have will be to
enforce the terms of the Promissory Note.
3. Seller acknowledges that on April 14, 2000, Horseshoe made an
additional distribution to Seller as a result of further estimating taxable
income to Seller for 1999. To the extent the estimated total tax distributions
for the 1999 tax year exceeds necessary actual payments, Seller shall return the
excess to Horseshoe. If the estimated payment is insufficient to pay Seller's
taxes on account of Seller's taxable income attributable to his Ownership
Interest, Horseshoe shall distribute an additional amount to Seller to cover
such taxes.
4. Seller represents and warrants that Seller is the lawful record and
beneficial owner of the Ownership Interest, free and clear of any liens, claims,
encumbrances, marital property rights, security agreements, equities, options,
charges or restrictions of any kind.
5. This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof and may be amended only by a writing signed
by each party hereto.
6. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
7. This Agreement and the rights and obligations of the Company and the
Seller hereunder shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the State of New York (including Section
5-1401 of the General Obligations Law of the State of New York), without regard
to conflicts of laws principles.
8. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same agreement.
9. Horseshoe, on the one hand, and Seller, on the other hand, shall pay
their respective fees and expenses incurred by them in connection with the
transaction contemplated herein.
10. Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms and provisions of
this Agreement in any other jurisdiction.
3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
HORSESHOE GAMING HOLDING CORP.
By: /s/ Xxxx Xxxxxx
---------------------------------------------------
Xxxx Xxxxxx, Chief Financial Officer
Seller:
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Xxxxxx X. Xxxxxxx
