AGREEMENT
THIS AGREEMENT is made this .12. day of December 1996 by and between:
Parral Compania Naviera S.A., a company incorporated, organized and existing
under the laws of Panama with a place of business at rue Saint-Leger 8, X.X.
Xxx 00, 0000 Xxxxxx 0, Xxxxxxxxxxx, (hereinafter referred to as
"Parral/Seller"),
Casino Magic (Europe) B.V., a company incorporated, organized and existing
under the laws of the Netherlands with its registered office at Xxxxxxxxx 0,
0000 XX Amsterdam, X.X. Xxx 00000, 0000 XX Xxxxxxxxx, xxx Xxxxxxxxxxx,
(hereinafter referred to as "CME/Seller"),
on the one part, and
Murbec Inc, a company incorporated, organized and existing under the laws of
Quebec, Canada, with a place of business at 0000 Xxxxxx Xxxx., Xxxxx 000, xxxx
xx Xxxxx Xxxxx, Xxxxxx, Xxxxxx or another company designated by Murbec Inc,
(hereinafter referred to as "Buyer"),
on the other part, and
Porto Xxxxxx Casino S.A., a company incorporated, organized and existing under
the laws of Greece, with its registered office at 0 Xxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxx, (hereinafter referred to as "PCC/Company"),
Casino Magic Hellas Management Services S.A., a company incorporated,
organized and existing under the laws of Greece, with its registered of f ice
at 00, Xxxxxxxxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxx, (hereinafter referred to
as "CMH/Manager"),
Touristiki Georgiki Exagogiki S.A., a company incorporated, organized and
existing under the laws of Greece, with its registered of f ice at 0 Xxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxx, (hereinafter referred to as "TGE/Lessor"),
Casino Magic Corp. a company incorporated, organized and existing under the
laws of the State of Minnesota, USA, with a place of business at 000 Xxxxxx
Xxxxx Xxxxx, Xxx Xx. Xxxxx, XX 00000, U.S.A., (hereinafter referred to as
"CMC/Licensor").
The above parties have reached an agreement for the sale of all of the
outstanding shares in the share capital of PCC (the "Shares") to Buyer on the
following terms:
1.1. Buyer agrees to acquire 51% of the Shares from Parral for the
consideration of a sum of US$1,000,000 net of any charges whatsoever, payable
in immediately available funds to Parral or in the manner described in clause
8.3. hereof, and the obligations undertaken under the terms of this Agreement.
Buyer agrees to acquire 49% of the Shares of PCC from CME for the
consideration of US$l and the obligations undertaken under the terms of this
Agreement.
1.2. Any charges, taxes or other payments whatsoever related to the
transfer of the shares or which may be imposed as a result thereof will be
borne exclusively by Buyer. Parral and CME shall not be liable to make any
payment whatsoever in connection with the transfer of the Shares to Buyer or
in connection with PCC in general, except any payment that CME may be under
the obligation to make under clause 3 hereof.
2.1 Buyer acknowledges that PCC has and will have at the time of closing
the transaction hereby agreed (the "Closing") significant obligations and
liabilities and is satisfied about it.
2.2 Parral, CME, PCC, CMH, TGE and CMC make no representations or
warranties whatsoever in respect of the obligations and liabilities of PCC
except the following:
(i) PCC, CME, PARRAL and CMH warrant that the gaming equipment of the
Porto Xxxxxx Casino has been purchased and not leased by PCC and that PCC has
not granted any contractual security interest on such equipment.
(ii) PCC warrants that it has not entered into any employment contracts
with its employees other than usual employment contracts under Greek law and
in particular that it has not entered into employment contracts of unusually
lengthy period or contracts with special advisors on a long term basis. It is
however acknowledged and agreed that PCC has recognized prior service of
certain employees with TGE and assumed relevant liabilities in connection with
the accrual of severance pay in favour of these employees.
(iii) PCC warrants that income tax for financial year 1995, calculated on
the basis of declared income, has been paid.
2.3 Buyer unconditionally guarantees and undertakes that all of the
obligations and liabilities of PCC accrued and/or accruing to the date of the
Closing which could result in personal liability on the part of any members of
the board of directors of PCC past or present shall be paid and satisfied in
full.
2.4 CME, Parral, CMC, CMH and PCC acknowledge that the liabilities on the
books of PCC owing to CME, CMC and CMH were intended to be treated as equity
contributions and not as obligations of PCC to CME, CMC and CMH. At the
Closing, Parral and CME shall take all necessary actions to have those
liabilities of PCC owing to CME, CMH and CMC converted into share capital of
PCC. All the shares which will be issued as a result of such conversion of
liabilities into share capital will at and upon Closing also be transferred to
the Buyer for the consideration of US$l and the obligations undertaken on the
terms of this Agreement.
3. PCC, CMC, CME and CMH will at and upon Closing mutually release each of
the other entities from any claims whatever. In consideration for such
release CMC shall procure that CME shall pay PCC at the Closing the sum of
US$500.000.
4. With regard to the lease between PCC and TGE for the Sithania Hotel, it
is agreed subject to the Closing that there will be no increase or decrease in
the Minimum Rent (as defined in the Lease Contract) after the increase which
becomes effective on lst January 1997, provided the formula for percentage
rent will remain unchanged. The past due amounts owed to TGE under the lease
must be paid as soon as possible after the Closing. As of November 30, 1996
the total amount owed to TGE under the lease did not exceed GRD 195-000-GOO
5. The management agreement between CMH and PCC will on Closing be terminated.
6. The license agreement between CMC and PCC will be amended at Closing to
provide for the elimination of the royalty set forth therein and to provide
for termination six months after the Closing.
7.1. CME and PCC warrant that there are no other agreements between PCC
and any company affiliated with CME or obligations of PCC towards any company
affiliated with CME except this Agreement and those mentioned herein.
7.2. PARRAL and PCC warrant that there are no other agreements between
PCC and PARRAL or obligations of PCC towards PARRAL except this Agreement.
7.3. TGE and PCC warrant that there are no other agreements between PCC
and TGE or obligations of PCC towards TGE except this Agreement; the lease for
the SITHONIA hotel, PCC's obligation to make payments f or common services
shared with TGE and normal trade payables.
8.1 The consummation of the transactions hereby agreed will be contingent
upon the approval of the transfer of the Shares to Buyer by the Greek Gaming
Commission, the Greek Minister of Tourism and any other competent Greek Gaming
Authorities f or the transfer of the Shares which approvals must be obtained
within three months f from the date hereof. If the Closing cannot be effected
due to delay on the part of the Greek Gaming Commission (or any other
competent Gaming Authority f or such approval to be obtained) then the 3-month
period shall be extended further as it shall be reasonably required.
8.2 The closing will take place not later than five (5) working days from
the date on which the approval by the Greek Gaming Commission (and any other
competent Authority involved related to Gaming) shall have been given,
PROVIDED ALWAYS that Buyer has duly complied with all its obligations
hereunder.
8.3 Subject to the satisfaction of the requirements referred to in Clauses
8.1 and 8.2 above, at the Closing Buyer shall in exchange of the transfer of
the Shares pay to Parral the sum of US$1,000,000 net of any withholdings,
taxes or any other charges whatsoever in immediately available funds and shall
pay to CME the sum of US$l. Provided that the Buyer shall have the option to
pay to Parral a sum of S$500.000 in immediately available funds at the
Closing and a sum of US$500.000 within 6 months from the date of Closing
secured by a bank guarantee acceptable to Parral to be delivered at the time
of Closing.
9. 1 During the period from the date of this Agreement to the date of the
Closing, Buyer will make sure that PCC will continue to properly operate the
Casino and will contribute to PCC in time the funds required for PCC to meet
its obligations punctually and in particular and in order of priority:
(a) pay all taxes and social security contributions that are currently
overdue and all interest, fines and penalties associated with any non payment
or late payment thereof and pay all taxes and social security contributions
as they come due and all interest, fines and penalties associated with any non
payment or late payment thereof, including 20@. of the fine that has been
imposed on PCC anticipated to be ascertained before 31 December 1996;
(b) pay all the employees as THEIR- salaries, bonuses and
other benefits come due;
(c) pay or otherwise settle amounts to the suppliers, vendors, directors
and other creditors of PCC and persons to whom PCC is obligated as they become
due, including those already due;
(d) maintain an appropriate amount of working capital to permit PCC to
properly operate in a normal and reasonable manner; and
(e) maintain cash in the cage of at least GRD 130,000,000.
9.2 Buyer shall make arrangements for an immediate cash infusion to be
made to PCC to enable PCC to meet its financial obligations. In this respect,
Buyer shall procure that an amount of GRD 400,000,000 be paid to PCC as
follows:
GRD 150,000,000 shall be paid by Buyer to PCC by 16 December 1996; and
GRD 130,000,000 shall be paid by Buyer to PCC by 8t-h January 1997; and
GRD 120,000,000 Shall be paid by Buyer to PCC at the Closing.
9.3 CMH as the manager of PCC during the (interim) period to the Closing,
shall, in conjunction with Buyer's representative, use PCC's available funds
(including those contributed by Buyer) in discharge of the
obligations/liabilities of PCC in the order of priority referred to in the
foregoing Clause 9.1.
10.1 Buyer will immediately after the execution of this Agreement,
nominate five members for the board of directors of PCC. Parral and CME shall
immediately hold an extraordinary meeting of the General Assembly of the
shareholders of PCC and elect the members of the board of directors so
nominated by Buyer. Buyer shall procure that the new members of the Board of
Directors immediately after being elected pass a resolution approving,
retroactively, any and all acts undertaken by Xxxx Xxxxxxx, as managing
director of PCC, including the signing of this Agreement, until that date.
10.2 From the date hereof through the Closing or the termination of this
Agreement, CMH shall, in conjunction with Buyer's representative, continue to
manage PCC pursuant to the current management agreement between PCC and CMH in
a manner consistent with the past and will not make any substantial changes in
the operations of PCC without the approval of Buyer; provided, however, that
CMH shall not be entitled to any compensation under such management agreement
during such period. In addition, from the date hereof through the Closing or
the termination of this Agreement, no royalties shall accrue to CMC under the
license agreement between CMC and PCC.
10. 3 Buyer will immediately make all appropriate applications and submit
fully all documents required to the Greek Gaming Commission and any other
competent Greek Authorities related to Gaming. All parties hereto will use
their best good faith efforts to obtain approval of the transfer of the Shares
to Buyer from the competent Greek Authorities related to Gaming at the
shortest time after the execution of this Agreement as the intention of the
parties hereto is to consummate this Agreement and proceed to the Closing as
soon as possible.
11. I If the transaction does not close for any reason by 12 March 1997 or
such later date as provided for in Clause 8.1 above, this Agreement shall
terminate and the funds advanced by Buyer will be considered a loan to PCC and
will be repaid by PCC out of free cash f low or at the time of any sale of
PCC; provided however that if this Agreement be breached by Buyer and Buyer
does not remedy such breach within five working days from receiving notice of
the breach by any of the other parties to this Agreement, PCC will have no
obligation to repay any funds advanced to it by Buyer under clause 9.2 hereof.
Notice to the Buyer is valid if delivered and addressed to Xx. Xxxxx
Xxxxxxxxxx 0, Xxxxxxxxxx Xxx. Athens, Tel 0000000, 0000000.
11.2 In the event that Buyer is not in default hereunder, on 31, January
1997 and approval of the Greek Gaming Commission and any other competent Greek
Gaming Authorities required have not yet been given, Buyer may terminate this
Agreement by written notice of such termination to Parral and CME given
immediately thereafter. In the event that Buyer so terminates this Agreement,
the funds advanced by Buyer to PCC will be considered a loan to PCC and will
be repaid by PCC out of free cash flow or at the time of any sale of PCC.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement in
seven (7) originals as of the day and year first written above.
PARRAL COMPANIA NAVIERA S.A.
By:
Title:
CASINO MAGIC (EUROPE) B.V.
By:
Title:
MURBEC, Inc.
By:
Title:
PORTO XXXXXX CASINO S.A.
By:
Title:
CASINO MAGIC HELLAS
MANAGEMENT SERVICES S.A.
By:
Title:
TOURISTIKI GEORGIKI
EXAGOGIKI S.A.
By:
Title:
CASIO MAGIC CORP.
By:
Title:
