AMENDMENT NO. 1 TO PURCHASE AGREEMENT
Exhibit 2
This AMENDMENT NO. 1, dated as of September 17, 2007 (this
“Amendment”), by and among Resorts International Holdings, LLC, a
Delaware limited liability company (“Seller”), Ameristar Casinos,
Inc., a Nevada corporation (“Buyer”) and Ameristar East Chicago
Holdings, LLC, an Indiana limited liability company and wholly owned
subsidiary of Buyer (“AECH”), is being entered into to amend that
certain PURCHASE AGREEMENT dated as of April 3, 2007 (the “Purchase
Agreement”), by and between Seller and Buyer. Capitalized terms used and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Purchase Agreement.
R E C I T A L S
WHEREAS, on April 3, 2007, Seller and Buyer entered into the Purchase
Agreement providing, among other things, for the sale by Seller to Buyer of
all of the membership interests of RIH Acquisitions IN, LLC, an Indiana
limited liability company (the “Company”);
WHEREAS, pursuant to that certain Assignment and Assumption Agreement,
dated as of September 4, 2007, by and between Buyer and AECH, Buyer assigned
its rights and obligations under the Purchase Agreement to AECH; and
WHEREAS, Seller, Buyer and AECH (collectively, the “Parties”) now
desire to amend the Purchase Agreement as provided below.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
1. Amendment to Article II of the Purchase Agreement. Article II
of the Purchase Agreement is hereby by adding the following new Section 2.22
at the end thereof:
“Section 2.22. Loan Documents. No event of default has
occurred under the Loan Documents (as such term is defined in that
certain Loan Agreement dated as of October 24, 2006 between Lender, IN
Borrower, RIH Acquisitions NJ, LLC, RIH Propco NJ, LLC, RIH Acquisitions
MS I, LLC, RIH Propco MS I, LLC, RIH Acquisitions MS II, LLC and RIH
Propco MS II, LLC).”
2. Amendment to Section 4.4 of the Purchase Agreement. Section
4.4 of the Purchase Agreement is hereby amended by adding at the end thereof
the following new subsection (c):
“(c) Notwithstanding anything in this Agreement to the
contrary, following the Closing, Seller shall be solely responsible
with respect to all Liabilities of the Company and/or the Company
Subsidiary with respect to any claims by employees of the Company
or the Company Subsidiary or such employees’ covered dependents
that are made, incurred, existing or pending prior to the Closing
Date (i) under any health or medical (including dental, vision and
prescription drug) benefit plans maintained by the Company, the
Company Subsidiary or any of their Affiliates or (ii) with respect
to workers compensation. Seller shall administer, or cause to be
administered, such claims and shall make timely payment of any
amounts owed by the Company or the Company Subsidiary with respect
to such claims or, to the extent the Company or the Company
Subsidiary is required by applicable Law or the terms of any
insurance policy to make such payment, promptly make payment to the
Company or the Company Subsidiary, as applicable, following its
request.”
3. Amendment to Section 4.10 of the Purchase Agreement. Section 4.10 of the
Purchase Agreement is hereby amended as follows:
(a) Section 4.10(c) the Purchase Agreement is hereby amended and restated in its
entirety to read as follows:
“(c) Intentionally Omitted.”
(b) Section 4.10(d) the Purchase Agreement is hereby amended and restated in its
entirety to read as follows:
“(d) Use, Redemption and Destruction of Chips. After the
date hereof through the Closing, Seller shall manage the chip
Liability in the Ordinary Course of Business. On or prior to the
first anniversary of the Closing Date, Buyer shall cause the
Company to replace all chips, slot tickets, tokens and plaquemines
used at the Property with chips, slot tickets, tokens and
plaquemines that do not include the “Resorts” name. Thereafter,
pursuant to the Indiana Gaming Regulations and as approved and
directed by the applicable Gaming Authorities, Buyer shall redeem
for cash all of the Company’s then-outstanding gaming chips,
unredeemed slot tickets (to the extent such slot tickets are, by
their terms, still eligible for redemption), tokens and
plaquemines.”
4. Amendment to Section 4.23(a) of the Purchase Agreement. Section 4.23(a) of
the Purchase Agreement is hereby amended by adding the following at the end thereof:
“For so long as Seller shall maintain directors’ and officers’
liability insurance or employment practices liabilities insurance
for the directors and officers of the entities that own Resorts
Tunica, Bally’s Tunica and/or the Atlantic City Hilton (the “Other
Properties”) such policy (the “D&O/EPL Policy”) shall (on terms and
conditions substantially similar to such insurance in effect on the
date hereof) also cover the current and former directors and
officers of the Company and the Company Subsidiary with respect to
periods prior to the Closing Date. In the
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event a claim is made under the D&O/EPL Policy relating to any
current or former director or officer of the Company or the Company
Subsidiary, in his or her capacity as such, that results in an
increase to the premiums payable under such policy (or any renewal
policy) then the Buyer shall promptly reimburse Seller for the cost
of any such increase; provided, however, that if at
any time following the Closing and prior to the time a claim is
made under the D&O/EPL Policy relating to a current or former
director or officer of the Company or the Company Subsidiary, in
his or her capacity as such, Buyer informs Seller that it desires,
in its sole discretion, to release Seller from its obligations to
maintain the D&O/EPL Policy under this sentence, then Buyer shall
be released from its obligation to reimburse Seller for the cost of
any increase in the premium of such D&O/EPL Policy. In addition,
Seller agrees to give Buyer reasonable prior notice if Seller
determines to no longer maintain the D&O/EPL Policy for the
directors and officers of the Other Properties.”
5. Amendment to Section 4.17(c) of the Purchase Agreement.
Section 4.17(c) of the Purchase Agreement is hereby amended by inserting the
following language before the “.” at the end thereof:
“; provided, however, that the amount of any
Escrowed Development Taxes (as defined herein) and any earnings
thereon that are transferred on the Closing Date to a Company bank
account in accordance with Section 4.26 hereof shall be credited
against the amount of any Development Taxes for which Seller is
responsible (either directly or through indemnification of Buyer
or its Affiliates) pursuant to this Section 4.17”
6. Amendment to Article IV of the Purchase Agreement. Article IV
of the Purchase Agreement is hereby by adding the following new Sections 4.26
and 4.27 at the end thereof:
“Section 4.26 Escrow of Development Taxes.
(a) Between the date hereof and the Closing Date, Seller shall, or
shall cause the Company to, continue to deposit in an account with
U.S. Bank (the “Development Tax Bank Account”) all amounts
that accrue (or have accrued) with respect to the Development Taxes
that are payable to East Chicago Second Century, Inc. (calculated
in a manner consistent with past practices and the Development
Agreements (as defined herein)) and none of Seller, the Company or
the Company Subsidiary shall make any withdrawals from the
Development Tax Bank Account (including previously deposited funds
with respect to such Development Taxes or any earnings on such
previously deposited funds), unless such withdrawal is made in
connection with a corresponding payment of the Development Taxes to
East Chicago Second Century, Inc. in accordance with the
Development Agreements.
(b) On the Closing Date, all amounts that have been deposited in
the Development Tax Bank Account or otherwise set aside or
reserved in connection with the Development Taxes that are payable
to East Chicago Second Century,
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Inc. (the “Escrowed Development Taxes”) and any earnings
thereon shall be transferred to Account No. 153910593448, in the
Company’s name, at U.S. Bank. Following the Closing Date, the
Company and/or Buyer shall have sole control over the Escrowed
Development Taxes. Notwithstanding anything to the contrary in
this Agreement, Buyer agrees to, or shall cause the Company to,
pay all Development Taxes as and when required after the Closing.
Section 4.27 Litigation. Notwithstanding anything to the
contrary in this Agreement, from and after the Closing, Seller
shall at its own cost, risk and expense (i) take control of the
defense and investigation of those matters set forth on Schedule
4.27 of the Seller Disclosure Letter (collectively, the
“Excluded Litigation”), (ii) employ and engage attorneys
of its own choice to handle and defend the same and (iii)
compromise or settle such Excluded Litigation, which compromise or
settlement shall be made only if such compromise or settlement
contains an unconditional release of the Company and its
subsidiaries. Notwithstanding anything to the contrary in this
Agreement, Seller shall be solely responsible for all amounts
payable in connection with the Excluded Litigation (including
legal fees and other out-of-pocket expenses) and shall fully
indemnify, defend and hold Buyer, the Company and the Company
Subsidiary harmless from and against any amounts required to be
paid in connection with the Excluded Litigation. Seller shall be
entitled to retain, and none of the Buyer, the Company or the
Company Subsidiary shall have any claim to, any amounts received
by, or awarded to, Seller, the Company or the Company Subsidiary
in connection with the Excluded Litigation. In addition, Buyer,
the Company and the Company Subsidiary agree to promptly pay to
Seller any and all amounts received under any Seller Policy in
respect of Excluded Litigation. Seller represents and warrants to
Buyer that Target Closing Working Capital reflects the inclusion
of a receivable of $179,000 with respect to one of the Excluded
Litigation matters.”
7. Amendment to Section 7.1(b) of the Purchase Agreement. Section
7.1(b) of the Purchase Agreement is hereby amended by adding the following the
following at the end thereof:
“Notwithstanding anything to the contrary in this Section 7.1(b),
the representation and warranties in Section 2.22 shall survive
indefinitely.”
8. Amendment to Section 7.2(a) of the Purchase Agreement. Section
7.2(a) of the Purchase Agreement is hereby amended by inserting the following
language before the “.” at the end thereof:
“; and
(iii) the Loan Documents (as such term is defined in that certain
Loan Agreement dated as of October 24, 2006 between Lender, IN Borrower,
RIH Acquisitions NJ, LLC, RIH Propco NJ, LLC, RIH Acquisitions MS I,
LLC, RIH Propco MS I, LLC, RIH Acquisitions MS II, LLC and RIH Propco MS
II, LLC).”
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9. Amendment to Section 7.6 of the Purchase Agreement. Section 7.6 of the
Purchase Agreement is hereby amended as follows:
(a) The last sentence of Section 7.6(a) of the Purchase Agreement is hereby amended
and restated as follows:
“Notwithstanding the foregoing, the limitations set forth in this
Section 7.6(a) shall not apply to any claims for indemnification in
respect of any breach of Sections 2.2(a), 2.3, 2.6(d), 2.17, 2.18, 2.22,
3.2(a) and 3.3, as applicable.”
(b) Section 7.6(b) of the Purchase Agreement is hereby amended by adding the following
at the end thereof:
“Notwithstanding the foregoing, this Section 7.6(b) shall not be
applicable to any Damages payable to a Buyer Indemnified Party pursuant
to Section 7.2(a)(iii).”
10. Amendment to Section 7.8(b) of the Purchase Agreement. Section 7.8(b) of
the Purchase Agreement is hereby amended by adding the following the following at the end
thereof:
“Notwithstanding the foregoing, this Section 7.8(b) shall not be
applicable to any Damages payable to a Buyer Indemnified Party pursuant
to Section 7.2(a)(iii).”
11. Amendment to Section 9.1 of the Purchase Agreement. Section 9.1 of the
Purchase Agreement is hereby amended as follows:
(a) The definition of “Adjusted Working Capital” is hereby amended and restated
in its entirety read as follows:
“ “Adjusted Working Capital” means, as of any date, the (a)
the consolidated current assets of the Company and the Company
Subsidiary as of such date, less (b) the consolidated current
Liabilities of the Company and the Company Subsidiary as of such
date, in each case determined in accordance with GAAP in a manner
consistent with the preparation of the Financial Information;
provided, however, that (i) the following shall be excluded from
current assets or current liabilities, as applicable, for purposes
of determining Adjusted Working Capital: (A) the assets and
Liabilities that are components of the definition of “Closing Cash”
(including 100% of the Liabilities described in clause (B)
thereof); (B) Liabilities that are retained by the Seller pursuant
to Section 4.4(c) or 4.27 of this Agreement; (C) the portion of any
prepaid insurance premiums that are refundable to Seller pursuant
to the cancellation of any insurance policies (or coverage
thereunder with respect to the Company and the Company Subsidiary)
as contemplated in Section 4.11(a); and (D) any Liabilities between
Seller or any of its Affiliates (other than the Company and the
Company Subsidiary), on the one hand, and the Company or the
Company Subsidiary, on the other hand and (ii) for purposes of
calculating Closing Working Capital, (1) only 84% of the value of
all of the Company’s outstanding gaming chips, unredeemed slot
tickets, tokens and plaquemines shall be included in current
liabilities, (2) the amount of current liabilities with respect to
Taxes shall be identical to the amount of such
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Tax liabilities reflected in Target Closing Working Capital (which
amount the parties agree is $8,956,000), and (3) in light of the
parties’ agreement in Section 4.27 that Seller retain the right to
any proceeds from, or claims with respect to, the Excluded
Litigation, the amount of current assets shall be reduced by
$179,000.”
(b) The definition of “Closing Cash” is hereby amended by inserting after the word
“GAAP” in clause (i) thereof the following language:
“(provided that none of the Escrowed Development Taxes shall
constitute “cash” for purposes of this definition)”
(c) The definition of “Taxes” is hereby amended by inserting the following at the end
thereof:
“Without in any way limiting the generality of the foregoing, the
terms “Tax” and “Taxes” shall be deemed to include the Development
Taxes.”
(d) The following new definition is hereby added to Section 9.1 of the Purchase
Agreement in the appropriate alphabetical order:
“ “Development Taxes” means the obligation of the Company
to make annual payments, in an aggregate amount equal to 3.75% of
its adjusted gross receipts (as defined in the Gaming Laws of the
State of Indiana), to the City of East Chicago, Foundations of East
Chicago, Inc. (as successor by merger to Twin City Education
Foundation, Inc. and East Chicago Community Foundation, Inc.) and
East Chicago Second Century, Inc. (collectively, the
“Development Tax Recipients”) pursuant to certain
commitments made by the Company and/or its predecessors with
respect to the Property (including a letter dated April 18, 1995
from Showboat Marina Partnership to the Mayor of the City of East
Chicago and a memorandum of understanding, dated August 25, 2000,
between Xxxxxx’x East Chicago and the City of East Chicago
(collectively, the “Development Agreements”)), together
with any interest, penalties or additions to such payments imposed
in connection therewith or with respect thereto.”
12. Amendment to Seller Disclosure Letter. The Seller Disclosure Letter is
hereby amended by adding Exhibit A hereto as Section 4.27 thereof.
13. General.
(a) Sections 9.2, 9.4, 9.5, 9.7, 9.10 and 9.11 of the Purchase
Agreement are incorporated herein as if fully set forth, mutatis
mutandum.
(b) The Purchase Agreement (and the Exhibits and Schedules attached
thereto) as modified, amended and changed by this Amendment, and the
other documents delivered pursuant hereto or thereto constitute the full
and entire understanding and agreement between and among the Parties with
regard to the subject matter hereof and thereof.
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(c) Except as expressly provided herein, this Amendment shall not
constitute an amendment, modification or waiver of the Purchase Agreement
(or any provision thereof or any Exhibit and Schedule attached thereto)
and the provisions of the Purchase Agreement (and the Exhibits and
Schedules attached thereto) as modified hereby shall otherwise continue
in full force and effect.
[Signatures on following page]
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Exhibit 2
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed and
delivered as of the date first set forth above.
| RESORTS INTERNATIONAL HOLDINGS, LLC |
||||
| By: | /s/ Xxxx X. Xxxxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxxxx | |||
| Title: | Chief Financial Officer | |||
| AMERISTAR CASINOS, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Senior Vice President and General Counsel | |||
| AMERISTAR EAST CHICAGO HOLDINGS, LLC |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Vice President | |||
EXHIBIT A
SECTION 4.27
| 1. | Resorts International Holdings, LLC and RIH Acquisitions IN, LLC v. Federal Insurance Co. Action against insurance carrier seeking a declaration that losses sustained by Resorts International Holdings, LLC in a sophisticated criminal employee cheating scam are covered by an insurance policy issued by Federal Insurance Co. | |
| 2. | Xxxx Xxxxx v. Colony Capital, LLC and RIH Acquisitions IN, LLC. Claim by Abbas alleging that he was forcefully dragged from his hotel room at Resorts East Chicago and taken down to the lobby. The Depart of Immigration and Naturalization Services currently has a retainer as Abbas is a Jordanian national. Colony Capital, LLC and RIH Acquisitions IN, LLC have filed a motion for summary judgment. |
