Exhibit 10(kkk)
STOCK TRANSFER AGREEMENT
THIS AGREEMENT ( Agreement ) is made and entered into as of
the 23rd day of January, 1997, by and between Circus Circus
Enterprises, Inc., a Nevada corporation ( Circus ), Windsor Casino
Limited ( WCL ), Windsor Casino Supplies Limited ( Supplies ) and
Windsor Casino Financial Limited ( WCFL ) (collectively, the
Corporations ), each an Ontario corporation incorporated pursuant
to the laws of the Province of Ontario, Xxxxxxx Xxxxx, Inc., a
Florida corporation and successor by operation of law to Xxxxxxx
Xxxxx Resorts, Inc. ( Caesars ), Xxxxxx International Investment
Corporation, a Nevada corporation ( Xxxxxx ) and Hilton Hotels
Corporation, a Delaware corporation ( Xxxxxx Parent ) with regard
to the following:
A. Circus owns one (1) share each of WCL, WCFL and Supplies,
which represents one-third ( ) of the shares of each Corporation
(the Circus Shares ).
B. The Corporations were formed and organized for the
purpose of operating an interim casino in Xxxxxxx, Xxxxxxx, Xxxxxx,
and negotiating for the development and operation of a permanent
casino facility in Windsor (the Project ).
C. In furtherance of such purposes, (i) Circus and others
entered into an Interim Casino Operating Agreement dated as of May
14, 1994 (the Interim Agreement ), a Heads of Agreement dated May
14, 1994 (as amended, the Heads of Agreement ), and an Interim
Shareholders Agreement dated October 26, 1994 (the Interim
Shareholders Agreement ), and (ii) WCFL entered into that certain
Credit Agreement made as of July 10, 1996, between WCFL as
Borrower, and the financial institutions named as Lenders in the
signature pages thereto (the Credit Agreement ) and in connection
therewith, Circus executed a Guarantee dated as of July 10, 1996
(the Guarantee ).
D. Each of the Corporations wishes to redeem from Circus the
Circus Shares in their respective Corporations, thereby resulting
in ownership of each of the Corporations one-half (1/2) each by
Caesars and Xxxxxx.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and representations hereinafter contained, and subject to
the conditions hereinafter set forth, it is agreed as follows:
1. Sale and Transfer of Circus Shares. Circus hereby
transfers and conveys the Circus Shares in each of the Corporations
to the respective Corporations and each of the respective
Corporations acquires the Circus Shares in each Corporation from
Circus.
2. Purchase Price. The purchase price payable by WCL for
the transfer of the Circus Shares of WCL shall be CDN$14,804,142
representing one-third (1/3) of the retained earnings of WCL as of
January 21, 1997. The purchase price payable by WCFL for the
Circus Shares of WCFL shall be CDN$1.00. The purchase price
payable by Supplies for the Circus Shares of Supplies shall be
CDN$1.00 (each a Purchase Price ).
(a) WCL, on behalf of the Corporations as an
administrative convenience, shall remit to Circus in cash or other
immediately available federal funds an amount equal to 66 % of the
Purchase Price for each of the respective Corporations less
Canadian withholding tax at the rate of five percent (5%) on
CDN$14,804,142. WCL will remit the amount of such withholding tax
to Revenue Canada Customs Excise and Taxation in the manner and
within the time required by the Income Tax Act (Canada) and such
remittance shall constitute full payment and satisfaction of such
portion of the Purchase Price. WCL shall withhold an amount equal
to 33 % of the Purchase Price (the Withheld Amount ) and shall
deal with it in accordance with Section 5 of this Agreement.
(b) each of Caesars and Xxxxxx Parent shall, and hereby
each does, assume one-half (1/2) of the liability and indebtedness of
Circus pursuant to Circus Guarantee in accordance with Section
10(e)(i) of the Circus Guarantee and each of Caesars and Xxxxxx
Parent hereby indemnifies Circus against any claims arising from
and after the date of this Agreement and made against Circus under
the Circus Guarantee.
3. Representations by Circus. Circus represents and
warrants that Circus is the owner of the Circus Shares, free and
clear of all liens or encumbrances and that Circus has the power
and authority to transfer the Circus Shares to the Corporations as
provided herein.
4. Delivery to the Corporations. Circus hereby delivers (a)
to WCL the Circus Shares in WCL, as represented by WCL Stock
Certificate No. C-1, to WCFL the Circus Shares in WCFL, as
represented by WCFL Stock Certificate No. C-1 and to Supplies the
Circus Shares in Supplies, as represented by Supplies Stock
Certificate Nos. C-3 and (b) to each of the Corporations the stock
powers in the form attached hereto as Exhibits A , B , and C .
5. Escrow. The Withheld Amount shall be deposited by WCL in
an interest bearing account at Canadian Imperial Bank of Commerce.
The Withheld Amount shall be remitted to the Receiver General of
Canada on the day that the Withheld Amount is required to be so
remitted pursuant to subsection 116(5) of the Income Tax Act
(Canada) (the Remittance Date ). All interest received on the
Withheld Amount shall be for the account of Circus and the full
amount of such interest less any applicable taxes of any nature
whatsoever applicable to such interest shall be paid to Circus on
the Remittance Date. Notwithstanding the foregoing, if Circus
delivers a certificate issued by the Minister of National Revenue
of Canada pursuant to subsection 116(2) of the Income Tax Act
(Canada) (a Section 116 Certificate ) to WCL at any time prior to
the Remittance Date with respect to the Circus Shares in WCL, WCFL
and Supplies in form and substance satisfactory to WCL, acting
reasonably, WCL shall pay to Circus on account of the Purchase
Price, an amount equal to the amount, if any by which
(1) the aggregate of
(i) the Withheld Amount
and
(ii) the amount, if any, by which
(A) the amount of interest received by Circus on
the Withheld Amount
exceeds
(B) the amount of any Canadian withholding tax at
the rate of ten percent (10%) in respect of
any interest on the Withheld Amount which WCL
is required or entitled to withhold or deduct
in respect of such interest
exceeds
(2) 33 % of the amount, if any, by which
(i) the aggregate Purchase Price
exceeds
(ii) the certificate limit specified in the Section 116
Certificate.
In any case where WCL withholds any amount pursuant to this
paragraph, WCL shall be deemed to have paid such amount to Circus
on account of the Purchase Price. WCL shall pay the amount of
Canadian withholding taxes required to be deducted and withheld
from any payment made to Circus under this Section 5.
6. Reimbursement of Expenses. Caesars and Xxxxxx
acknowledge that Circus regularly advances certain expenses to the
Corporations for salaries, benefits and other items and agrees to
cause the Corporations to reimburse Circus for such expenses,
including an outstanding invoice in the amount of US$161,692 and
for expenses not yet invoiced, provided that such expenses not yet
invoiced will not exceed US$300,000 and are supported by proper documentation.
7. Indemnification. Circus will at all times indemnify and
hold harmless Caesars, Xxxxxx and Xxxxxx Parent, their subsidiaries
and affiliates and their officers, directors, employees and agents,
from and against any and all claims, damages, liabilities, costs
and expenses, including reasonable counsel fees, for any injury,
loss or damage to any person(s), entity(ies) or property arising
out of or based on (a) any acts or omissions of Circus, or (b) any
breach by Circus of the Interim Agreement, Heads of Agreement,
Interim Shareholders Agreement, Credit Agreement, or Guarantee,
occurring prior to the transfer of the Circus Shares.
8. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties
hereto.
9. Governing Law. The laws of the Province of Ontario
applicable to contracts made in that Province, without giving
effect to its conflict of law rules, shall govern the validity,
construction and performance and effect of this Agreement.
10. Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter
hereof, and supersedes all previous agreements, negotiations,
memoranda and understandings, whether written or oral.
11. Amendment. This Agreement may not be modified or amended
except in writing, signed by the parties hereto.
12. Counterparts. This Agreement may be executed in any
number of counterparts, all of which together shall constitute one
and the same document.
13. Additional Documents. Each party covenants and agrees to
execute and deliver to the other such further additional documents
or instruments as may be required to fully effectuate and manifest
the intent of the parties and the transactions contemplated hereby.
14. Bylaws, Articles or Shareholder Agreements. In the event
of any conflict between the provisions of this Agreement and the
provisions of the bylaws or the Articles of any of the
Corporations, or any Shareholder Agreements respecting the
Corporations, the provisions of this Agreement shall prevail.
15. Public Representations. No party to this Agreement shall
make or suffer to be made any statement, comment or analysis
concerning the subject matter of this Agreement without the express
prior written consent of Xxxxxx, Circus and Caesars.
[Signature page to follow]
CIRCUS CIRCUS ENTERPRISES, INC., XXXXXXX XXXXX, INC.,
a Nevada corporation a Florida corporation
By: Xxxxx X. Xxxxxx By: Xxxxx X. Xxxxxxx
President & Chief
Its: Chairman Its: Executive Officer
Circus Caesars
XXXXXX INTERNATIONAL HILTON HOTELS CORPORATION,
INVESTMENT CORPORATION, a Delaware corporation
a Nevada corporation
By: Xxxxx X. XxXxxxx By: Xxxxx X. XxXxxxx
Its: Vice President & Treasurer Its: Vice President & Treasurer
Xxxxxx Xxxxxx Parent
WINDSOR CASINO LIMITED, WINDSOR CASINO SUPPLIES LIMITED,
an Ontario corporation an Ontario corporation
By: Xxxxx X. Xxxxxx By: Xxxxx X. Xxxxxx
Its: Chairman Its: Chairman
WCL Supplies
WINDSOR CASINO FINANCIAL
LIMITED, an Ontario corporation
By: Xxxxx X. Xxxxxx
Its: Chairman
WCFL
