EXHIBIT 2
EXECUTION COPY
RIVERBOAT CASINO SALE AND PURCHASE AGREEMENT
THIS RIVERBOAT CASINO SALE AND PURCHASE AGREEMENT ("Agreement") dated as
of the 30th day of September, 2004, by and among President Casinos, Inc.,
debtor and debtor-in-possession ("Seller") in a chapter 11 bankruptcy case,
Case No. 02-53005 (the "Seller Case") pending in the United States
Bankruptcy Court for the Eastern District of Missouri (the "Bankruptcy
Court"), President Riverboat Casino-Missouri, Inc., a Missouri corporation
(the "Company") and Columbia Sussex Corporation, a Kentucky corporation
("Buyer").
BACKGROUND:
A. Seller is the owner of all of the Closing Shares (as herein defined) of
the Company, which is also a debtor and debtor-in-possession in a chapter 11
bankruptcy case that is jointly administered with the Seller Case (the
"Company Case" and, collectively with the Seller Case, the "Case").
B. The Company is the owner and operator of a riverboat casino, located on
the Mississippi River riverfront in St. Louis, Missouri and moored to a
barge known as Admiral Barge One and connected by a porte-cochere
(collectively, the "Riverboat Casino"), more particularly described as:
Name: The Admiral
Official No.: 204086
Name: Admiral Barge One
Official No.: 689603
C. An official committee of unsecured creditors (the "Committee") has been
appointed in the Company Case pursuant to section 1102 of the United States
Bankruptcy Code (the "Bankruptcy Code");
D. Seller, with the support of the Committee and certain holders of Seller's
12% Senior Notes due 2001 and 13% Senior Notes due 2001 (the "Bondholders"),
desires to sell, and Buyer desires to purchase, the Closing Shares upon the
terms and conditions set forth in this Agreement and subject to further
action of the Bankruptcy Court;
E. Seller, Company and Penn National Gaming, Inc. ("Penn") have previously
entered into that certain Riverboat Casino Sale and Purchase Agreement dated
as of the 9th day of August, 2004, certain provisions of which were
initially reviewed by the Bankruptcy Court at a hearing on September 8,
2004, and subsequently Seller, Buyer and Company amended and restated such
agreement in its entirety to reflect certain mutually-acceptable changes
thereto (as amended and restated, the "Penn Purchase Agreement");
F. Following execution of the Penn Purchase Agreement, Seller and the
Company sought authority from the Bankruptcy Court to hold an auction at
which Penn's offer for the Closing Shares shall be subject to higher and
better offers of third parties;
G. The Bankruptcy Court granted such authority and pursuant thereto a Notice
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of Auction and Bidding Procedures and Hearing to Consider Approval of Sale
("Notice of Auction") was issued setting forth the process, procedures and
timing of (i) submission by third Persons of higher and better offers, (ii)
qualification of all such third parties as qualified bidders and (iii) the
actual auction and Sale Order that is to be administered and issued by the
Bankruptcy Court; and
H. Pursuant to the provisions of the Notice of Auction, Buyer is hereby
submitting an executed sale and purchase agreement to purchase the Closing
Shares upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt and
adequacy of which hereby is acknowledged, and with the intent to be legally
bound hereby, the parties agree as follows:
1. PURCHASE AND SALE OF CLOSING SHARES; RIVERBOAT CASINO ASSETS OWNED BY
THE COMPANY; TRADEMARK LICENSE.
(a) Closing Shares to be Sold. Subject to the provisions of this
Agreement, Seller agrees to sell and Buyer agrees to purchase, all of
Seller's right, title and interest in, to and under the Closing Shares, free
and clear of any lien, mortgage, security interest, pledge, encroachment,
easement, defect of title or other claim, charge or encumbrance of any
nature whatsoever, or any restriction on transferability, option, right of
first refusal, or restriction on the use, voting, transfer, receipt of
income or other exercise of any attributes of ownership (in each case other
than under Applicable Law) (collectively, "Encumbrances").
(b) Riverboat Casino Assets Owned by the Company. Immediately following
the Closing, the Company shall have good and marketable title to all assets,
properties and rights owned by the Company or otherwise material to the
operation of the Riverboat Casino wherever such assets, properties and
rights are located, and whether real, personal or mixed, tangible or
intangible, except the Excluded Assets (as defined in Section 9(c)(vii)
below) (collectively, the "Riverboat Casino Assets"), which Riverboat Casino
Assets, to the maximum extent permitted under Section 1141(c) of the
Bankruptcy Code, will be free and clear of all claims and interests of
creditors of the Company, other than the Company Liabilities. Such Riverboat
Casino Assets shall include, but in no way be limited to, the following
assets and properties of the Company:
(i) the Riverboat Casino, together with its furniture, fixtures,
equipment, necessaries, uniforms, apparel, inventory held for resale (other
than Gift Shop Inventory and Food Inventory), supplies held for consumption,
life saving equipment (including life boats and inflatable boats), spare
parts, radio equipment, crockery, plates, cutlery and other similar items,
cordage, general outfit and all other appurtenances and appliances belonging
to the Riverboat Casino, and the Company's parking and transportation
shuttles and other vehicles, whether aboard the Riverboat Casino or on shore
at the time of Closing;
(ii) all of the Company's right, title and interest in and to (A) the
Lease and Sublease among the Company, the City of St. Louis, Missouri and
The Port Authority of the City of St. Louis (the "City Lease") and such
other executory leases, subleases, easements, licenses, concessions or other
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agreements made for the benefit of the Company listed or described on
Schedule 1(b)(ii), whether written or oral, granting to any person the right
to use or occupy real property (the "Parking Leases"; the City Lease and the
Parking Leases are collectively, the "Real Property Leases"), (B) the
Company's collective bargaining agreement with Hotel Employees, Restaurant
Employees Local 74, AFL-CIO and (C) other executory leases or contracts
either (I) listed on Schedule 1(b)(ii) or (II) entered into after the date
of this Agreement in compliance with the provisions hereof and designated in
writing by Buyer as an "Assumed Executory Lease and Executory Contract" by
no later than three (3) business days after the date on which the Company
Plan of Reorganization (as defined in Section 9(c) below) is filed
(collectively, the "Assumed Executory Leases and Executory Contracts");
(iii) all gambling games, slot machines, tables and other gaming
equipment that are used by the Company in the operation of the Riverboat
Casino, together with the Company's inventory of gaming chips, tokens,
scrip, markers, gaming supplies and other items held for use by the Company
at the Riverboat Casino in the ordinary course of business;
(iv) all cash in cashiers' cages, vaults, carts, drawers, cash
registers and gaming devices and machines ("Included Cash"), which amount
shall be no less than $3,000,000 on the Closing Date; (v)all food processing
and preparation and washing equipment, machines and fixtures, racks, trays,
buffet tables, furniture, flatware, serving xxxx, utensils, uniforms,
napkins, linens and other tangible personal property held by the Company for
use in connection with its food service and dining facilities at the
Riverboat Casino
(vi) to the extent relating to the Company's marketing and operation
of the Riverboat Casino, all books, records, files and papers, whether in
hard copy or computer format, including books of account, sales and
promotional literature, manuals and data, sales and purchase correspondence,
lists of present and former suppliers, personnel and employment records of
present or former employees, documentation developed or used for accounting
or, marketing purposes;
(vii) all of the Company's right, title and interest in and to each of
the following and all copies and other tangible embodiments thereof: (A) the
"Admiral" name and all variants and derivations thereof, and all other
fictitious business names, trademarks (registered and unregistered), service
marks, trade dress, logos, trade names and the goodwill of the Company's
business associated therewith, and all applications, extensions,
registrations, and renewals in connection therewith but excluding Seller's
Trademarks (as defined in Section 1(c) below), which may only be used by
Buyer pursuant to and in accordance with Section 1(c) hereof, (B) all
copyrightable works, all copyrights, and all applications, registrations and
renewals in connection therewith in both published works and unpublished
works and (C) all trade secrets and confidential and other business
information (including ideas, research and development, know-how, formulas,
works for hire, gaming, security and food service processes and techniques,
market research, tracking methods, census reports, designs, drawings,
specifications and business and marketing plans and proposals)
(collectively, "Intellectual Property");
(viii) all of the Company's transferable right, title and interest in
and to licenses, permits, franchises, zoning rights, approvals,
registrations, consents and authorizations used in, or necessary to the
operation of the
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Riverboat Casino as presently operated or the other Riverboat Casino Assets,
including those listed in Schedule 6(i) (collectively "Gaming Licenses");
(ix) all of the Company's right, title and interest in and to all post
office boxes, e-mail addresses, telephone and facsimile numbers and domain
names held for use in connection with the operation of the Riverboat Casino;
(x) all computer software, proprietary or otherwise (including data
and related documentation), sales and promotional literature, manuals,
customer and supplier correspondence, plats, architectural plans, drawings,
designs, blueprints, specifications and studies that are owned or used in
connection with the operation of the Riverboat Casino, in all cases in any
form or medium, other than the Excluded Software;
(xi) all know-how, trade secrets, customer lists and customer and
supplier information, personnel information, technical information, process
technology, plans, drawings, innovations, designs, ideas, proprietary,
blueprints and information and other information, including player tracking
information related to Riverboat Casino Assets, and fixed asset, general
ledger and risk management data (the Company will provide Buyer with
assistance to incorporate the fixed asset, general ledger and risk
management data into Buyer's computer systems) owned or used by the Company
in connection with the operation of the Riverboat Casino;
(xii) all prepaid expenses relating to the Riverboat Casino ("Prepaid
Expenses");
(xiii) all accounts receivable and related deposits, security, or
collateral therefor, including recoverable customer deposits and receivables
(collectively, the "Receivables");
(xiv) all security deposits deposited by or on behalf of the Company
as lessee or sublessee under the Assumed Executory Leases and Executory
Contracts existing on the Closing Date and all deposits of the Company with
utilities and other providers of services to the Riverboat Casino (the
"Security Deposits");
(xv) all of the Company's rights to any indemnity payments relating to
the Riverboat Casino Assets held by the Company; and
(xvi) any credits, carryforwards, operating losses and other
attributes related to Taxes, but excluding any refunds for Taxes described
in Section 9(c)(vii)(11) below.
(c) Trademark License. In further consideration of the payment of the
Purchase Price, and the mutual covenants under this Agreement, Seller grants
to Buyer a non-exclusive, fully paid-up right and license to use the names
"President", "President Riverboat Casino" and other related trademarks and
services marks of Seller (collectively, the "Seller's Trademarks") under the
common law and under any trademark or service xxxx registrations in
connection with the Riverboat Casino Assets within a one hundred fifty mile
radius of the St. Louis, Missouri city limits (the "Trademark License").
Seller agrees that during the term of the Trademark License, Seller will not
license the use of Seller's Trademarks to any other Person. The Trademark
License shall be effective for a period of one year from the Closing Date.
Upon expiration of the Trademark License, Buyer will cease all further use
of Seller's Trademarks
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and Buyer will have no further rights thereto. Any termination or expiration
of the Trademark License shall not terminate or otherwise affect any other
provision of this Agreement. As used herein, "Person" means any natural
person, business trust, corporation, partnership, limited liability company,
joint stock company, proprietorship, association, trust, joint venture,
unincorporated association or any other legal entity of whatever nature.
2. Consideration.
(a) Purchase Price. The aggregate consideration to be paid by Buyer to
Seller for the Closing Shares shall be the payment of a cash amount equal to
(A) Twenty Nine Million Dollars ($29,000,000), less (B) the Deficiency, if
any, plus (C) the Surplus, if any (the "Purchase Price"). The Purchase Price
shall be payable as follows: (i) Buyer is paying a refundable $1,000,000
cash deposit (the "Deposit") by wire transfer of immediately available funds
to an escrow account (the "Escrow Account") held by U.S. Bank National
Association as escrow agent under an Escrow Agreement in substantially the
form attached hereto as Exhibit A (the "Escrow Agreement") within three (3)
days of the execution of this Agreement; and (ii) on the Closing Date, (x)
the Deposit (with interest accrued thereon, if any) shall be paid over to
Seller from the Escrow Account and (y) Buyer shall pay the Purchase Price,
less the Deposit (plus interest accrued thereon, if any), by wire transfer
of immediately available funds to such account or accounts as Seller shall
direct. The Purchase Price shall be subject to adjustment by (A) the
prorations set forth in Section 2(b) and (B) the payment of any Cure Amounts
(as defined below) by Buyer in accordance with Section 2(c). If Buyer
increases the amount of the cash consideration offered for the Closing
Shares or otherwise modifies the terms and conditions of its bid as set
forth in this Agreement in order to outbid a proponent of a higher and
better offer, then the Purchase Price shall automatically be increased by an
equal amount and/or the terms and conditions hereof shall be automatically
modified and, if Buyer is the successful bidder, Buyer and Seller shall
execute a written instrument to memorialize such increased Purchase Price
(and change in form of consideration, as applicable) and such modifications
to the terms and conditions hereof. All interest and other earnings on the
Deposit shall, whether or not the Closing occurs, be the property of Buyer.
In the event that (I) Seller or the Company (as applicable) completes a sale
of the Closing Shares and/or the Riverboat Casino Assets to a Person other
than Buyer or its affiliate, or (II) the conditions to Buyer's obligations
are not fulfilled or waived and the sale of the Closing Shares to Buyer has
not occurred on or before August 1, 2005, in any case, for any reason other
than the breach by Buyer of its obligations under this Agreement, then the
Deposit, with interest accrued thereon, if any, shall be immediately
returned to Buyer. If (1) all conditions set forth in Section 4 hereof have
been satisfied (or on the Closing Date will be satisfied) or waived by Buyer
and (2) Buyer breaches its obligation to purchase the Closing Shares, then
the Deposit (excluding interest accrued thereon, if any, which interest
shall in any event be returned to Buyer) shall be forfeited to Seller, but
without prejudice to any legal remedy for money damages Seller may have, if
any, against Buyer as a result of such breach, provided, however, that
Seller's legal remedies hereunder shall be limited exclusively to money
damages, and, provided, further, that in no event shall Seller have the
right to specific performance or any other equitable remedy against Buyer in
connection with this Agreement or the transactions contemplated hereby.
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(b) Costs and Prorations.
(i) To the extent applicable, all transfer, recording or similar taxes
and fees and expenses incurred in connection with redocumentation of the
Admiral and Admiral Barge One with the United States Coast Guard shall be
borne by Seller, and Seller hereby undertakes to timely remit all such
amounts to the applicable authority and to prepare and file all proper
returns and reports with respect thereto.
(ii) All real and personal property taxes and assessments, rents,
water rates and charges, electric, gas and telephone charges and all other
apportionable operating costs and charges and expenses with respect to the
Riverboat Casino Assets will be apportioned and adjusted between Seller and
Buyer as of the Closing, provided that if the Closing will occur before the
tax rate or assessment is fixed for the year in which the Closing takes
place, the apportionment of such real and personal property taxes will be
made upon the basis of the tax rate for the preceding year applied to the
latest assessed valuation, but such apportionment will be readjusted as soon
as the applicable rate and assessment is fixed. Seller and Buyer at Closing
shall execute and deliver a closing statement reflecting their reasonable
estimate of the prorations of expenses described above in a form reasonably
satisfactory to each party. Any net proration due to Buyer will reduce the
Purchase Price, and any net proration due to Seller will increase the
Purchase Price. To the extent adjustments cannot be determined as of
Closing, the parties agree to make such post Closing adjustments (by the
reduction or increase of the Purchase Price and payment of such increase in
cash to Seller, as applicable) as are appropriate and to resolve open items
within sixty (60) days after the Closing.
(c) Cure Amounts. Seller hereby agrees that it shall be solely
responsible for all cure amounts payable under Bankruptcy Code Section 365
to the extent necessary for the Company to assume the Assumed Executory
Leases and Executory Contracts ("Cure Amounts"). Seller at its sole option
shall either pay all such Cure Amounts in cash no later than Closing, or
shall direct Buyer in writing to pay such Cure Amounts out of the Purchase
Price (with a corresponding reduction thereof) otherwise required by this
Agreement to be paid to Seller, in which case Buyer shall pay such Cure
Amounts at Closing.
(d) Determination of Surplus or Deficiency; Post-Closing Purchase Price
Adjustment.
(i) On or before the fifth (5th) Business Day preceding the Closing
Date, Seller shall prepare and deliver to Buyer an interim balance sheet
(the "Estimated Closing Balance Sheet") of Company as of the close of
business on the final day of the calendar month immediately preceding the
calendar month during which the Closing Date occurs (the "Test Month"),
together with a statement of Company's Net Current Assets as of such date
calculated in accordance with generally accepted accounting principles
("GAAP") and the accounting practices of Company applied on a consistent
basis; provided that if the Closing Date occurs within the first fifteen
(15) Business Days of a calendar month, the Estimated Closing Balance Sheet
shall be prepared as of the close of business on the final day of the second
calendar month immediately preceding the calendar month during which the
Closing Date occurs (the "Test Month"). The amount of Net Current Assets set
forth in the Estimated Closing Balance Sheet shall be final and binding for
purposes of
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determining the amount of any Surplus or Deficiency used in calculating the
Purchase Price, unless Buyer delivers in good faith a written statement that
Buyer objects to the calculation of Net Current Assets at least two (2)
Business Days prior to the anticipated Closing Date (the "Objection Notice")
together with Buyer's determination of the Net Current Assets as of the Test
Month. Seller shall make available to Buyer and its representatives the
books, records and workpapers used to prepare the Estimated Closing Balance
Sheet. In the event of an Objection Notice, Seller and Buyer shall negotiate
in good faith during the period preceding the Closing Date to resolve the
dispute. If the dispute is not resolved by the specified Closing Date, (A)
Buyer shall pay the Purchase Price at the Closing based upon the amount of
any Deficiency or Surplus, as applicable, calculated with reference to the
Net Current Assets as determined by Buyer, and (B) Buyer shall deposit into
escrow pursuant to the Escrow Agreement, an amount equal to the Purchase
Price based upon the amount of any Deficiency or Surplus, as applicable,
calculated with reference to the Net Current Assets set forth in the
Estimated Balance Sheet as prepared by Seller, less the amount of the
Purchase Price paid by Buyer at the Closing in accordance with clause (A)
above. "Surplus" means the amount, if any, by which Net Current Assets as
determined in accordance with this Section 2(d)(i) is a positive number and
"Deficiency" means the amount, if any, by which Net Current Assets as
determined in accordance with this Section 2(d)(i) is a negative number.
(ii) As promptly as practicable after the Closing Date, but in no
event more than sixty (60) days after the Closing Date (such date on which
the Closing Balance Sheet is delivered, the "Closing Financial Statements
Delivery Date"), Buyer will prepare and deliver to Seller a balance sheet of
Company as of the close of business on the day immediately preceding the
Closing Date (the "Closing Balance Sheet") and a calculation of Net Current
Assets, each in accordance with GAAP and the accounting practices of Seller
applied on a consistent basis. The Closing Balance Sheet and the calculation
of the Net Current Assets shall be accompanied by a certificate of an
officer of Buyer to the effect that the Closing Balance Sheet presents
fairly, in accordance with GAAP and the accounting practices of Company
applied on a consistent basis, the financial condition of Company as of the
close of business on the day immediately preceding the Closing Date.
(iii) Seller and its financial advisors and/or accountants (the
"Seller's Advisors") will be entitled to reasonable access during normal
business hours to the relevant records, personnel and working papers of the
Buyer to aid in their review of the Closing Balance Sheet and the
calculation of Net Current Assets therefrom. The Closing Balance Sheet and
the calculation of Net Current Assets therefrom shall be deemed to be
accepted by Seller and shall be conclusive for the purposes of the
adjustment described in Section 2(d)(iv) and (v) except to the extent, if
any, that Seller or Seller's Advisors shall have delivered, within thirty
(30) days after the Closing Financial Statements Delivery Date, a written
notice to Buyer setting forth objections thereto, specifying in reasonable
detail any such objection (it being understood that any amounts not disputed
as provided herein shall be paid promptly). If a change proposed by Seller
is disputed by Buyer, then Buyer and Seller shall negotiate in good faith to
resolve such dispute. If, after a period of thirty (30) days following the
date on which Seller gives Buyer notice of any such proposed change, any
such proposed change still remains disputed, then Buyer and Seller hereby
agree that a nationally recognized accounting firm reasonably and mutually
acceptable to Buyer and Seller (the "Accounting Firm") shall resolve any
remaining disputes. The
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Accounting Firm shall act as an arbitrator to make a determination with
respect to the issues that are disputed by the parties, based on
presentations by Seller and Buyer, and by independent review of the
Accounting Firm if deemed necessary in the sole discretion of the Accounting
Firm, which determination shall be limited to only those issues still in
dispute. The decision of the Accounting Firm shall be final and binding and
shall be in accordance with the provisions of this Section 2(d)(iii). The
fees and expenses of the Accounting Firm, if any, shall be shared equally by
Buyer and Seller. The date on which the Net Current Assets is finally
determined pursuant to this Section 2(d)(iii) is referred to hereinafter as
the "Determination Date."
(iv) If the amount of Net Current Assets used to calculate the
Purchase Price paid at Closing pursuant to Section 2(d)(i)(A) above is
greater than the amount of Net Current Assets as determined pursuant to
Section 2(d)(iii) above, Seller shall pay to Buyer, as an adjustment to the
Purchase Price, an amount equal to such difference. Any payments required to
be made by Seller pursuant to this Section 2(d)(iv) shall be made within ten
(10) days of the Determination Date by wire transfer of immediately
available funds to an account designated by Buyer.
(v) If the amount of Net Current Assets used to calculate the Purchase
Price paid at Closing pursuant to Section 2(d)(i)(A) above is less than the
amount of Net Current Assets as determined pursuant to Section 2(d)(iii)
above, Buyer shall pay to Seller, as an adjustment to the Purchase Price, an
amount equal to such difference. Any payments required to be made by Buyer
pursuant to this Section 2(d)(v) shall be made within ten (10) days of the
Determination Date first, by payment to Seller of amounts deposited into the
Escrow Account pursuant to Section 2(d)(i)(B) and then, to the extent of any
additional payment required to be made by Buyer, by wire transfer of
immediately available funds to an account designated by Buyer. Any balance
remaining in the Escrow Account after payment of amounts required to be paid
to Seller under this subsection shall be immediately returned to Buyer.
(vi)For purposes of this Section 2(d), "Net Current Assets" means the
difference between (A) the sum of (1) Included Cash, (2) Prepaid Expenses,
(3) Security Deposits, (4) Receivables, (5) fifty percent (50%) of Seller's
direct cost (including freight) of slot machines newly installed at the
Riverboat Casino within six months prior to Closing, provided such purchase
and installation is approved in advance and in writing by Buyer, and (6)
seventy-five percent (75%) of Seller's direct cost (including freight) of
the Windows-CDS software and TiTo integrated gaming system ("Tito Assets")
referred to in, and in accordance with, the Motion for Authorization to
Purchase and Implement Certain Gaming Systems and Equipment filed with the
Bankruptcy Court on July 9, 2004, provided such purchase does not exceed
$1,829,000 in the aggregate, over (B) the sum of (1) Accounts Payable and
(2) Accrued Expenses and Deferred Obligations. Notwithstanding Buyer's
approval of items set forth in clauses (5) or (6) above, Buyer shall in no
way become liable for the payment of any such amounts unless and until the
Closing shall have occurred, in which case the adjustments provided for in
this Section 2(d) shall apply.
3. COMPANY LIABILITIES. Buyer acknowledges that on and following the
Closing, the Riverboat Casino Assets will be subject to the following
Liabilities (the "Company Liabilities"), which obligations shall remain the
obligations of the Company:
(a) subject to Seller's obligations under Section 2(c), all of the
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Company's respective obligations under the Assumed Executory Leases and
Executory Contracts (but not including obligations arising out of a Default
thereunder prior to the Closing), to the extent such obligations accrue from
and after the date of the Closing (the term "Default", as used herein,
meaning (i) a breach, default or violation, (ii) the occurrence of an event
that with or without the passage of time or the giving of notice, or both,
would constitute a breach, default or violation or cause an Encumbrance to
arise, or (iii) with respect to any Contract, the occurrence of an event
that with or without the passage of time or the giving of notice, or both,
would give rise to a right of termination, renegotiation or acceleration or
a right to receive damages or a payment of penalties);
(b) all of the Company's respective obligations with respect to accounts
payable arising on or after June 20, 2002, the Case petition date, and
existing on the Closing Date, excluding the Administrative Claims for
professional fees (the "Accounts Payable"); and
(c) (i) the accrued liability of the Company as of Closing to pay the
ultimate winnings owed to individuals playing the Company's progressive slot
machines and games primary progressive reserve, games reserve for top
awards, slots reserve for top awards (it being agreed that the progressive
slot liability shall be determined by a meter reading by Buyer and Seller at
Closing); (ii) poker progressive reserve of the Company; (iii) gift shop
certificate liability of the Company; (iv) the Company's lost and found
money; (v) the Company's customer safekeeping deposits; (vi) players club
accrual (or other outstanding complementaries) of the Company; (vii)
outstanding chips/tokens of the Company; (viii) the Company's employee
benefit accruals for holiday, vacation, personal day, sick day and severance
benefits, all as determined in accordance with good and customary gaming
practice; and (ix) all obligations of the Company with respect to other
accrued expenses existing on the Closing Date (collectively, "Accrued
Expenses and Deferred Obligations").
Following the Closing, neither Buyer nor the Company will assume or
otherwise have any responsibility with respect to any other Liability of
Seller or the Company not expressly included within the definition of
Company Liabilities, including the Excluded Liabilities, provided that Buyer
acknowledges it shall have no monetary recourse against Seller with respect
to any such other Liability in accordance with the provisions of Section 14.
4. BUYER'S CONDITIONS. Buyer's obligation to purchase the Closing Shares
is expressly conditioned (unless waived by Buyer in writing) upon
satisfaction of each of the following conditions:
(a) The entry by the Bankruptcy Court of an order approving the Break-Up
Fee, the Sale Order and the Confirmation Order, as respectively defined in
Sections 9(a), (b) and (c) below, each of which shall have become a Final
Order. The Sale Order shall, among other things, authorize the sale of the
Closing Shares to Buyer free and clear of all Encumbrances. "Final Order"
means an order or judgment of the Bankruptcy Court which has not been
reversed, stayed, modified or amended, that is in full force and effect, and
as to which (i) the time to appeal or application for review by a higher
court has expired without any appeal or application for review having been
filed, or (ii) any appeal or application for review by a higher court that
has been or may be taken has resulted in entry of an order affirming the
decision of the Bankruptcy Court, with all additional review periods from
that affirmance having expired without any appeal or other application for
review thereof having been filed;
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(b) The entry of such further orders as required to implement this
Agreement including a Final Order under Section 365 or 1123(b)(2) of the
Bankruptcy Code authorizing assumption by Seller and/or the Company of
Assumed Executory Leases and Executory Contracts, with specific findings
that upon payment by Seller and/or the Company of the Cure Amounts, all
Defaults required to be cured in order for the Company to assume the Assumed
Executory Leases and Executory Contracts have been cured and that the
Company has provided adequate assurance of future performance necessary to
satisfy the requirements of Section 365 of the Bankruptcy Code;
(c) Receipt by Buyer on the Closing Date on board the Riverboat Casino
of the Riverboat Casino's drawings and specifications and other technical
information in Seller or the Company's possession;
(d) The maintenance and delivery to Buyer of the original Certificates
of Documentation of the Admiral and Admiral Barge One, as applicable, to the
United States Coast Guard, National Riverboat Casino Documentation Center;
(e) The receipt on the Closing Date by Buyer of stock power or powers
executed by Seller, conveying to Buyer all of Seller's right, title and
interest in and to the Closing Shares, along with written resignation of all
of Company's officers and directors;
(f) Seller's representations and warranties set forth in Section 6
below, taken as a whole, shall be true and correct in all material respects
on the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement), which shall be certified by an
officer of Seller as of Closing, provided that for purposes of determining
whether such representations and warranties are true and correct in all
material respects, all "materiality" qualifications contained in such
representations and warranties set forth in Section 6 shall be disregarded;
(g) Seller's representations and warranties set forth in Section 6(p)
below shall be true and correct in all respects on the Closing Date (as
though made then and as though the Closing Date were substituted for the
date of this Agreement), which shall be certified by an officer of Seller as
of Closing;
(h) [intentionally omitted].
(i) Seller and the Company shall each have performed and complied in all
material respects with all obligations and covenants required to be
performed and observed by them under this Agreement prior to or as of the
Closing, which shall be certified by an officer of Seller as of Closing;
(j) The Missouri Gaming Commission (the "Commission") shall have issued
without condition all licenses, permits, approvals, consents, authorizations
and orders (which shall be Final Orders) as are required in order for Buyer
to acquire the Closing Shares and for the Company to lawfully operate the
Riverboat Casino following the Closing under the laws and regulations of the
State of Missouri, including the gaming license and liquor license described
in Schedule 6(i) (the "MGC Approval"), and the Company shall have
indefeasibly paid in full or settled all outstanding amounts owed to the
Commission as set forth on Schedule 6(l) hereof;
(k) All other necessary filings shall have been completed, waiting
periods observed and governmental approvals obtained as determined to the
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reasonable satisfaction of Buyer, including Xxxx Xxxxx-Xxxxxx Anti-Trust
Improvement Act of 0000 (xxx "XXX Xxx");
(l) There shall not have occurred any material adverse change in the
business, operations, prospects or condition (financial or otherwise) of the
Company and the Riverboat Casino Assets, taken as a whole, other than any
change, event, occurrence, effect or state of facts relating to (i) any new
casino development or similar project in the St. Louis metropolitan area,
(ii) any condemnation proceeding involving, or other loss of use of, the
parking lot known as Xxxxxxxx Lot or (iii) any Excepted Environmental
Conditions (a "Material Adverse Change");
(m) The Sale Order shall contain a finding that notice of the Sale
Motion was proper and the Confirmation Order shall contain a finding that
notice of the Confirmation Order was proper;
(n) Buyer shall have received evidence, reasonably satisfactory to
Buyer, that the amount of the Company's Included Cash as of the Closing Date
is not less than $3,000,000;
(o) Seller shall have delivered a certificate of its secretary dated the
Closing Date and certifying (i) that attached thereto is a true and complete
copy of the certificate or articles of incorporation and by-laws of Seller
and the Company as in effect on the date of such certification and (ii) as
to the incumbency and specimen signature of each officer of Seller and the
Company executing this Agreement or any other document delivered in
connection herewith (such certificate to contain a certification by another
officer of Seller as to the incumbency and signature of the officer signing
the certificate referred to in this clause (n); and
(p) Buyer shall have received, at Buyer's expense, the commitment of a
title insurance company reasonably acceptable to Buyer ("Title Company") as
of the Closing Date to issue, with respect to the City Lease:
(i) an ALTA extended coverage leasehold title insurance policy in the
amount of $30,000,000 insuring leasehold title to the City Lease in the
Company, and (A) including an endorsement insuring Buyer against loss or
damage sustained by reason of the Title Company denying liability under the
new title policy by reason of knowledge imputed to the Company or Seller
through its officers and directors and other fiduciaries of company (the
"Non-Imputation Coverage"), (B) dated as of the Closing Date, and (C)
subject only to Permitted Exceptions (as defined below), or
(ii) an endorsement to any existing owner's coverage title insurance
policies insuring the Company and delivered to buyer which shall include (A)
if available, Non-Imputation Coverage, (B) updating the date of the existing
title policy to the Closing Date, and (C) insuring over any matter which is
not a Permitted Exception.
For the purposes of this Agreement, "Permitted Exceptions" means (1) liens
for real property taxes and assessments for the current year, not yet
delinquent, (2) liens or encumbrances arising out of any activity of Buyer
with respect to the City Lease, (3) except as described on Schedule 4(p),
those matters listed on Schedule B of the title report or the existing title
policy, as applicable, a copy of which has been provided to Buyer prior to
the date hereof, and (4) those matters listed on Schedule B of any new title
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report or title policy, as applicable, which are approved by Buyer within 10
business days of receipt thereof.
(q) Seller shall have delivered to Buyer a Lease and Sublease Estoppel
Certificate and Consent Agreement, in substantially the form attached hereto
as Exhibit B (with such changes thereto as Buyer shall approve, such
approval not to be unreasonably withheld or delayed), duly executed by each
of the parties thereto;
(r) Seller shall have delivered to Buyer an estoppel certificate, in
substantially the form attached hereto as Exhibit C (with such changes
thereto as Buyer shall approve, such approval not to be unreasonably
withheld or delayed), executed by each counterparty other than the Company
under any written Real Property Lease;
(s) The Main Office and the other Excluded Assets shall have been
effectively assigned and transferred to an entity other than the Company and
the Company shall no longer have any interest therein;
(t) A trademark assignment, in form and substance reasonably
satisfactory to Buyer and in a form recordable with the United Stated Patent
and Trademark Office, pursuant to which Seller shall have effectively
assigned and transferred to the Company each of the trademarks listed on
Schedule 4(t), each of which shall be deemed to be included in the Riverboat
Casino Assets;
(u) Buyer shall have received a written analysis prepared by Seller as
of a date which is not more than 30 business days prior to the Closing Date,
together with copies of all supporting work papers thereto and other
information as may be reasonably requested by Buyer (the "Liquidation
Analysis"), as to the effect, upon the consolidated net operating loss
properly attributable to the Company, of income of Seller's consolidated
group (including income with respect to excess loss accounts required to be
taken into account under Treasury Regulations Section 1.1502-19) and the
discharge of all indebtedness and other obligations of Seller and all
members of Seller's consolidated group in connection with a final
liquidation of Seller and all such members of Seller's consolidated group
(and assuming, for purposes of such analysis, that all existing indebtedness
and other obligations of Seller and all members of Seller's consolidated
group as of immediately prior to the Closing Date hereunder were discharged
in a final liquidation occurring as of the Closing Date, with reasonable
assumptions being made with respect to the value of any assets of Seller and
the members of its consolidated group, and including the cash Purchase Price
to be paid by Buyer under this Agreement) (the "Assumed Final Liquidation"),
and the Liquidation Analysis shall demonstrate, to the reasonable
satisfaction of Buyer, that the consolidated net operating loss properly
attributable to the Company will not be diminished to an amount less than
$30,000,000 as a result of the Assumed Final Liquidation, provided that
Buyer acknowledges that any discharge of indebtedness of the Company to any
other member of Seller's consolidated group will not be deemed to diminish
such net operating loss for purposes of this subsection. If Buyer and Seller
are unable to agree upon the Liquidation Analysis, the Assumed Final
Liquidation or any assumption or other aspect thereof, any such disputed
matter shall be resolved by a nationally recognized accounting firm
reasonably and mutually acceptable to Buyer and Seller.
5. SELLER'S CONDITIONS. Seller's obligation to sell the Closing Shares to
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Buyer is expressly conditioned (unless waived by Seller in writing) upon
satisfaction of each of the following conditions:
(a) The (i) payment of the Purchase Price (less the Deposit (with
interest accrued thereon, if any)) by wire transfer from Buyer and (ii) the
receipt of the Deposit (with interest accrued thereon, if any) from the
Escrow Agent;
(b) The receipt of copies (certified by the secretary of Buyer) of the
resolutions of Buyer's board or other documentation authorizing the
execution, delivery and performance of this Agreement and the transactions
and documents contemplated herein;
(c) The entry by the Bankruptcy Court of the Sale Order and the
Confirmation Order;
(d) Buyer's representations and warranties in Section 7 below, taken as
a whole, shall be true and correct in all material respects on the Closing
Date (as though made then and as though the Closing Date were substituted
for the date of this Agreement), which shall be certified by an officer of
Buyer as of Closing, provided that for purposes of determining whether such
representations and warranties are true and correct in all material
respects, all "materiality" and "in all material respects" qualifications
contained in such representations and warranties set forth in Section 7
shall be disregarded;
(e) Buyer shall have performed and complied in all material respects
with all obligations and covenants required to be performed and observed by
Buyer under this Agreement prior to or as of the Closing, which shall be
certified by an officer of Buyer as of closing;
(f) The MGC Approval shall have been obtained; and
(g) All other necessary filings shall have been completed, waiting
periods observed and governmental approvals obtained as determined to the
reasonable satisfaction of Seller, including the HSR Act.
6. SELLER'S REPRESENTATIONS. Seller hereby represents and warrants to
Buyer that the following statements contained in this Section 6 are correct
and complete as of the date of this Agreement:
(a) Seller has and on the Closing Date will have (in each case, subject
to liens and claims to be discharged upon the issuance of the Sale Order)
good and lawful title to and possession of the Closing Shares, free and
clear of all Encumbrances. The Company has and on the Closing Date will have
(in each case, subject to liens and claims to be discharged upon the
issuance of the Confirmation Order) good and lawful title to and possession
of the Riverboat Casino Assets, free and clear of all claims and interests
of creditors of the Company (to the maximum extent permitted under Section
1141(c) of the Bankruptcy Code), other than the Company Liabilities.
(b) Provided the Sale Order and the Confirmation Order are issued by the
Bankruptcy Court and subject to the other terms and conditions of this
Agreement, the Riverboat Casino and the other Riverboat Casino Assets shall
be owned by the Company following the Closing Date free and clear of all
claims and interests of creditors of the Company other than the Company
Liabilities.
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Provided the Sale Order and the Confirmation Order are issued by the
Bankruptcy Court, the Closing Shares shall be owned by Buyer following the
Closing Date free and clear of all Encumbrances. Except for certain items
located in the Main Office that are listed on Schedule 6(b), all of the
tangible personal property of the Company that is necessary for the
operation of the Riverboat Casino in the same manner as presently operated
by the Company immediately prior to Closing is physically located at the
Riverboat Casino or at the properties covered by the Assumed Executory
Leases and Executory Contracts. Except as set forth in Schedule 6(b), all
tangible personal property included in the Riverboat Casino Assets are
suitable for the purposes for which they are used, in good working
condition, reasonable wear and tear excepted, and are free from any known
defects. The Hull Certification attached to Schedule 6(b) hereto is true and
correct and is in full force and effect.
(c) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it was
incorporated and is qualified to do business as a foreign corporation in
each jurisdiction where it is required to be qualified to avoid liability or
disadvantage. Seller has all requisite corporate power and authority
necessary to execute and deliver this Agreement, sell the Closing Shares and
otherwise perform its obligations under this Agreement and any documents
related thereto, subject only to the issuance of the Sale Order by the
Bankruptcy Court. Subject to the issuance of the Sale Order and the
Confirmation Order, this Agreement and any related document executed and
delivered by Seller and/or the Company (as applicable) has been, or will be,
duly executed and delivered by Seller and/or the Company (as applicable) and
constitutes, or, when executed will constitute, a valid and binding
obligation of Seller and/or Company, enforceable against Seller and/or
Company in accordance with its terms, subject only to the issuance of the
Sale Order by the Bankruptcy Court.
(d) Attached to this Agreement as Schedule 6(d) are the audited balance
sheets of the Company as of February 28, 2002 and 2003 and February 29,
2004, and the related unaudited statements of operations and cash flows for
the years then ended (the "Annual Financial Statements"), and the unaudited
balance sheet of Company as of June 30, 2004 (the "Balance Sheet") and the
related statement of operations for the three months then ended (the
"Interim Financial Statements", and together with the Annual Financial
Statements, the "Financial Statements"). The date of the Balance Sheet is
referred to herein as the "Balance Sheet Date." The Financial Statements
are, and the Post-Signing Financial Statements (as defined below) will be
true, correct and complete and fairly present in all material respects the
financial position of the Company as of the dates shown and the results of
the Company's operations for the periods covered thereby. The Financial
Statements have been prepared in accordance with GAAP applied on a
consistent basis, except that the Financial Statements lack full footnote
disclosures and the Interim Financial Statements are subject to year end
adjustment consistent with prior periods.
(e) Schedule 6(e) attached to this Agreement sets forth a list of all
real property used by the Company in connection with its ownership and
operation of the Riverboat Casino. Except for the Real Property Leases
identified on Schedule 6(e), for easement rights which are shown on the
title policy as appurtenant to the City Lease and for public rights of way,
the lawful operation or occupancy of the Riverboat Casino does not require
use of any other real property, for parking, access, support or any other
purpose, and no other real property is now being used in conjunction with
the operation
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or occupancy of the Riverboat Casino. Except for Real Property Leases
identified on Schedule 6(e), the Company does not own, lease, license, hold
or use any other land, buildings or other interest, including any option, in
real property. A true and complete copy of each written Real Property Lease
identified on Schedule 6(e) has been delivered to Buyer, including all
amendments or modifications thereto and any other agreements related thereto
such as options, rights of first offer or rights of first refusal to
purchase the leased premises or any portion thereof. Each oral Real Property
Lease has been described in reasonable detail on Schedule 6(e). Each of the
Real Property Leases is in full force and effect and no claim of Default by
either tenant or landlord thereunder has been made. The description of the
leased premises in each Real Property Lease describes the real property
being used thereunder fully and adequately. The Company has not received
written notice of any condemnation proceedings by any public authority
relating to any of the real property leased by the Company, except for any
condemnation proceeding involving the parking lot known as Xxxxxxxx Lot (a
"Xxxxxxxx Proceeding"), and, to Seller's Knowledge, none are pending. The
Riverboat Casino has adequate water supply, sanitary facilities, telephone,
gas, electricity and fire protection services and other public utilities
sufficient to operate the Riverboat Casino as it is presently operated.
Except as set forth on Schedule 6(e), the Company has the exclusive right to
occupy the real property leased pursuant to the Real Property Leases
identified on Schedule 6(e) and the Company has not granted any leases,
subleases, licenses, concessions, options, or other agreements, written or
oral, to any third party granting the right to use or occupy said real
property.
(f) Except as described on Schedule 6(f) and except with respect to the
Excluded Assets, the business of the Riverboat Casino has been conducted in
the ordinary course since the Balance Sheet Date, and there has not been
with respect to the Company any of the items specified below since the
Balance Sheet Date:
(i) any increase in the compensation payable or to become payable to
any director, officer, employee or agent of the Company, except for
increases for non-officer employees made in the ordinary course of business
or as otherwise consented to in writing by Buyer, nor any other change in
any employment or consulting arrangement;
(ii) any sale, assignment or transfer of any Riverboat Casino Assets,
or any additions to or transactions involving any Riverboat Casino Assets,
other than those made in the ordinary course of business or as otherwise
consented to in writing by Buyer;
(iii) other than in the ordinary course of business or pursuant to the
Company Plan of Reorganization, any waiver or release of any claim or right
or cancellation of any debt held (other than Excluded Liabilities);
(iv) any damage, destruction or loss, whether or not covered by
insurance, (A) materially and adversely affecting the Riverboat Casino
Assets or the operations, assets, properties or prospects of the Riverboat
Casino Assets or (B) of any item or items carried on its books of account
individually or in the aggregate at more than $100,000, or any material
repeated, recurring or prolonged shortage, cessation or interruption of
supplies or utility or other services required to operate the Riverboat
Casino Assets; and
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(v) receipt of notice or actual or threatened labor trouble, strike or
other occurrence, event or condition of any similar character which has had
or would reasonably be expected to materially and adversely affect the
Riverboat Casino Assets or the transactions contemplated by this Agreement
or any other document delivered in connection herewith.
(g) Schedule 6(g) attached to this Agreement contains a complete and
accurate list and summary description of all registered Intellectual
Property owned by the Company or its affiliates. All copyrights, trademarks
and service marks that have been registered are currently in compliance with
all formal legal requirements (including the timely post-registration filing
of affidavits of use and incontestability and renewal applications), are
valid and enforceable, and are not subject to any maintenance fees or taxes
or Actions falling due within 90 days after the Closing Date. No such
copyright, trademark or service xxxx has been or is now involved in any
interference, reissue, reexamination, or opposition proceeding. To Seller's
Knowledge, none of the Registered Intellectual Property of the Company
infringes, or has been alleged to infringe, any copyright, trademark,
service xxxx or other proprietary right of any other Person.
(h) Schedule 6(h) sets forth a list or description of each written or
oral contract, agreement, lease, instrument, or other document or
commitment, arrangement, undertaking, practice or authorization material to
the business of the Company and that is binding upon the Company or its
property under any applicable Law ("Contracts"), including Contracts of the
type described below:
(i) employment agreements; collective bargaining agreements,
multiemployer plan adoption agreements and other agreements affecting any
union employee of the Company; and deferred compensation agreements,
relocation agreements and other agreements affecting any nonunion employee
of the Company;
(ii) leases of any tangible personal property, including gaming
equipment, food service machinery and equipment, and office, printing or
computer equipment;
(iii) license agreements (other than the Gaming Licenses), whether as
licensor or licensee (excluding licenses from third parties implied by the
sale of a product and paid up licenses for commonly available shrink wrap
software applications);
(iv) joint venture agreements, affiliation and endorsement agreements,
advertising agreements with minimum purchase provisions or other
undertakings which have not yet been satisfied by the Company, and public
relations Contracts;
(v) Contracts by which any material product or service offered by the
Company or any material operating function of the Company (including gaming,
food service, personnel and security) have been outsourced to a third party;
(vi) any guarantee or other pledging of the Company's credit or
financial resources for the obligations of officers, directors, employees or
affiliates of the Company or any other Person;
(vii) any Contract that has been entered into outside of the ordinary
course of the Company's business;
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(viii) any other Contract which is material to the Company or to the
operation of the Riverboat Casino; and
(ix) any Contract to pay brokerage commissions or parking operation or
facilities fees with respect to the Real Property Leases.
Seller has delivered or made available to Buyer true and complete copies
of each Contract, all of which are in force and effect and may be assumed by
the Company subject to this Agreement or Buyer's consent, as applicable,
provided the Sale Order and Confirmation Order is obtained.
(i) Schedule 6(i) attached to this Agreement sets forth a list of all
Gaming Licenses of the Company. Other than Gaming Licenses listed on
Schedule 6(i), no other Gaming License or other governmental permit,
license, registration, certificate of occupancy, approval and other
governmental authorization is required for the complete operation of the
Riverboat Casino Assets as currently operated. All Gaming Licenses listed on
Schedule 6(i) are in full force and effect, and neither the Company nor
Seller (as applicable) is in Default thereunder. Complete and correct copies
of all of the Gaming Licenses have heretofore been delivered or made
available to Buyer by Seller.
(j) Except as set forth in Schedule 6(j) and other than the Case, there
is not pending or, to Seller's Knowledge, threatened any suit, Action,
arbitration or legal, administrative or other proceeding by or against or
affecting Seller, the Company or any of the Riverboat Casino Assets other
than any Xxxxxxxx Proceeding and, to Seller's Knowledge, no basis exists
therefor, and there are no suits, Actions or proceedings pending in which
the Company is the plaintiff or claimant with respect to the Riverboat
Casino Assets. Except as set forth in Schedule 6(j) or as contemplated by
this Agreement, the Break-Up Fee Order, the Confirmation Order and the
Company Plan of Reorganization, neither Seller, the Company nor any of the
Riverboat Casino Assets is subject to any order, writ, injunction or decree
of any federal, state, local or foreign court, department, agency or
instrumentality or any award in any arbitration proceeding ("Court Orders").
Neither Seller nor the Company is in Default with respect to any Court
Orders. There is no Action, suit or proceeding pending or, to Seller's
Knowledge, threatened which questions the legality or propriety of the
transactions contemplated hereby.
(k) Schedule 6(k) lists the names, addresses, dates of hire, positions
and current annual compensation rates of all of the Company's employees and
officers as of the date indicated therein. The Company has paid in full to
all employees and officers, as and when such amounts have become due, or
made appropriate accruals therefor on its books of account, all salary,
wages, commissions, bonuses and other direct compensation for all services
performed by them. The Company has withheld or collected from each payment
made to each of its employees the amount of all taxes required to be
withheld or collected therefrom, and the Company has paid the same when due
to the proper authorities. Except as disclosed in Schedule 6(k), there are
no controversies, grievances or claims pending with the Company by any of
the Company's employees, former employees or beneficiaries of employees of
the Company with respect to their employment or benefits incident thereto,
including sexual harassment and discrimination claims and claims arising
under workers' compensation laws which have not been resolved and, to
Seller's Knowledge, no basis exists therefor. Except as listed in Schedule
6(k), there is no union representation of the Company's employees, and, to
Seller's Knowledge, there has been no attempt by a labor organization to
organize the Company's
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employees into a collective bargaining unit.
(l) Except as described in Schedule 6(l), there has been no material
Default by the Company under any statute, law, ordinance, regulation, order
or rule of 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 (each, a "Governmental Authority") that
have not previously been cured or for which all consequences of
noncompliance have already occurred and neither Seller nor the Company has
received any notices from any Governmental Authority regarding any alleged
material Defaults applicable to Seller, the Company or any Riverboat Casino
Assets under any Applicable Laws.
(m) Except as set forth in Schedule 6(m), the Company is not a party to,
nor has the Company established, any pension, profit-sharing, cafeteria,
medical reimbursement, 401(k), retirement, deferred compensation, stock
option, incentive, vacation, hospitalization, medical, disability or life
insurance, severance, termination, bonus or other employee benefit plan,
contract, arrangement or understanding of the Company or any Person required
to be aggregated with, or treated as the same employer as the Company under
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or the Internal Revenue Code of 1986, as amended ("Code") (collectively
hereinafter referred to as an "ERISA Affiliate"), whether or not covered by
ERISA or qualified within the meaning of Section 401(a) of the Code, and
whether single-employer or multi- employer, which is presently in force or
which has been terminated within the six calendar year period prior to this
year. The employee benefit and welfare plans set forth in Schedule 6(m) do
not qualify for the special provisions for multi-employer plans set forth in
29 U.S.C. Section 1384 and this Agreement does not invoke a complete or
partial withdrawal as contemplated by 29 U.S.C. Section 1384, or the
attenuating penalties and liabilities to Buyer as set forth therein.
(n) Except as described in Schedule 6(n), neither the execution and
delivery by Seller of this Agreement, nor the performance of the
transactions performed or to be performed by Seller and/or the Company
hereunder, (i) require any filing, consent, notice, registration,
renegotiation or approval of any third party (including any Governmental
Authority) or any customer, supplier, landlord, licensor or union or (ii)
violate in any material respect or constitute a Default in any material
respect, or cause any payment obligation or Encumbrance to arise under (A)
any laws of any Governmental Authority, including all federal, state and
local statutes, regulations, ordinances, orders, decrees or any other laws,
common law theories or reported decisions of any court thereof ("Applicable
Law") or Court Order to which Seller or the Company is subject (other than
any approvals or orders of the Bankruptcy Court or any consent required
under the HSR Act), (B) the certificate or articles of incorporation or
bylaws of Seller or the Company, or (C) any Contract, Gaming License or
other document to which Seller or the Company is a party or by which the
Riverboat Casino Assets may be bound.
(o) The Company has authorized (i) 1,000 shares of Company Common Stock
of which 1,000 shares are issued and outstanding (the "Closing Shares"), all
of which are owned of record by Seller. Other than the Closing Shares, there
are no other equity securities, options, warrants, convertible securities,
Contracts or rights of any kind to purchase or otherwise acquire any equity
securities of the Company. No shares of the capital stock of the Company are
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held as treasury stock. All of the Closing Shares have been duly authorized
and validly issued, are fully paid and non-assessable, were not issued in
violation of the terms of any Contract binding upon the Company or, to
Seller's Knowledge, any holder thereof and were issued in compliance with
the certificate or articles of incorporation and bylaws of the Company and
all applicable federal, state and foreign securities laws, rules and
regulations. There are no Contracts to which Seller or the Company is a
party among any Persons which (i) affect or relate to the voting or giving
of written consents with respect to any security, or (ii) restrict the
transfer of the Closing Shares.
(p) Other than those specific facts, conditions and circumstances
disclosed in the Phase I environmental assessment performed by Penn in
August 2004 with respect to the real property (including the Casino) owned
by the Company or otherwise used in the operation of the Riverboat Casino
Assets (the "Excepted Environmental Conditions"), there are no material
Environmental Conditions (i) at any premises at which the Riverboat Casino
Assets have been operated by the Company, its affiliates or their
predecessors, (ii) at any property owned, leased or operated at any time by
the Company, any Person controlled by the Company or any of their
predecessors, or (iii) at any property at which Hazardous Substances have
been deposited or disposed of by or at the behest or direction of any of the
foregoing. "Environmental Condition" means any condition or circumstance,
including a Release or the presence of Hazardous Substances, whether created
by Seller, the Company or any third party, at or relating to any such
property or premises specified in any of clauses (i) through (iii) of this
Section that (A) has required or may reasonably be expected to require
abatement or correction under an Environmental Law, (B) has given or may
reasonably be expected to give rise to any civil or criminal liability on
the part of the Company to any Governmental Authority or third party under
an Environmental Law, (C) is a violation of Environmental Law, or (D) has
created or may reasonably be expected to create a public or private
nuisance. "Environmental Law" means any and all Laws, Court Orders and
Governmental Permits relating to the protection of health, safety or the
environment, worker health and safety, and/or governing the handling, use,
generation, treatment, storage, transportation, disposal, manufacture,
distribution, formulation, packaging, labeling, or Release of Hazardous
Substances whether now existing or subsequently amended or enacted and the
regulations promulgated thereunder, all amended or superseded from time to
time; and any common law doctrine, including negligence, nuisance, trespass,
personal injury, or property damage related to or arising out of the
presence, Release, or exposure to a Hazardous Substance. "Hazardous
Substances" means petroleum, petroleum hydrocarbons or petroleum products,
petroleum by-products, radioactive materials, asbestos or asbestos
containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, lead or lead containing materials, polychlorinated biphenyls;
and any other chemicals, materials, substances or wastes in any amount or
concentration which are now or hereafter become defined as or included in
the definition of "hazardous substances," "hazardous materials," "hazardous
wastes," "extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," "pollutants," "regulated substances,"
"solid wastes," or "contaminants" or words of similar import, under any
Environmental Law. "Release" means any release, spill, emission, leaching,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, or
leaching into the indoor or outdoor environment, or into or out of any
property.
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(q)Taxes.
(i) The Company has filed (or there has been filed on its behalf) all
Tax Returns that were required to be filed with respect to the Company
(including Tax Returns of any consolidated, affiliated, combined, unitary or
similar group of which the Company is or was a member to the extent the
Company would be liable for any Taxes imposed on the Company or any other
such member under Treasury Regulation Section 1.1502-6 or corresponding
provisions of state, local or foreign law or as a transferee or successor,
by contract or otherwise) under applicable laws and regulations. All such
Tax Returns were correct and complete in all material respects and were
prepared in substantial compliance with all applicable laws and regulations.
All Taxes due and owing by the Company, or of any consolidated, affiliated,
combined, unitary or similar group of which the Company is or was a member
(whether or not shown on any Tax Return) to the extent the Company would be
liable for any Taxes imposed on the Company or any other such member under
Treasury Regulation Section 1.1502-6 or corresponding provisions of state,
local or foreign law or as a transferee or successor, by contract or
otherwise, have been paid. Except as described in Schedule 6(q), the Company
is not currently the beneficiary of any extension of time within which to
file any Tax Return. As used herein, "Taxes" means all taxes, duties,
charges, fees, levies or other assessments imposed by any taxing authority
including income, gross receipts, value-added, excise, withholding, personal
property, real estate, sale, use, ad valorem, license, lease, service,
severance, stamp, transfer, payroll, employment, customs, duties,
alternative, add-on minimum, estimated and franchise taxes (including any
interest, penalties or additions attributable to or imposed on or with
respect to any such assessment).
(ii) The Company was properly includible in Seller's consolidated
federal income tax returns for all open tax periods prior to and including
the Closing Date.
(iii) Neither Seller nor the Company has undergone a Code Section 382
change in ownership; provided, however, in the event that any portion of the
consolidated net operating loss carryforward allocable to the Company under
Treasury Regulations Section 1.1502-21(b) is determined to be subject to a
consolidated or subgroup 382 limitation, Seller shall elect in accordance
with Treasury Regulations Section 1.1502-95(c) to apportion to the Company a
portion of the consolidated Section 382 limitation sufficient to permit the
Company to absorb the apportioned consolidated net operating loss
carryforward that is otherwise available to the Company and its new
consolidated group; and provided, further, that Seller makes no
representation as to the effects of the transactions contemplated by this
Agreement.
(iv) No claim has ever been made by an authority in a jurisdiction
where the Company does not file Tax Returns that the Company is or may be
subject to taxation by that jurisdiction. There are no Liens for Taxes
(other than Taxes not yet due and payable) upon any of the assets of the
Company.
(v) Except as described in Schedule 6(q), no foreign, federal, state,
or local tax audits or administrative or judicial Tax proceedings are
pending or being conducted with respect to the Company (including with
respect to any consolidated, affiliated, combined, unitary or similar group
of which the Company is or was a member to the extent the Company would be
liable for any Taxes imposed on the Company or any other such member under
Treasury Regulation Section 1.1502-6 or corresponding provisions of state,
local or
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foreign law or as a transferee or successor, by contract or otherwise).
Seller shall remit any refund of Taxes received by Seller to the extent such
refund is attributable to the Company or its business (including any refund
that may result from Tax proceedings as described in Schedule 6(q)), but
excluding any tax refunds described in Section 9(c)(vii)(11). Except as
described in Schedule 6(q), neither Seller, to the extent attributable to
the Company, nor the Company has received from any foreign, federal, state,
or local taxing authority (including jurisdictions where the Company has not
filed Tax Returns) any (A) notice indicating an intent to open an audit or
other review, (B) request for information related to Tax matters, or (C)
notice of deficiency or proposed adjustment for any amount of Tax proposed,
asserted, or assessed by any taxing authority against the Company.
(vi) Neither Seller, to the extent attributable to the Company, the
Company nor any of their respective subsidiaries has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(vii) Neither Seller nor the Company are foreign persons and are
"United States Persons" as defined in Code Section 7701(a)(3). (viii)The
Company will not be required to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of any:
(A) change in method of accounting for a taxable period ending on or
prior to the Closing Date;
(B) "closing agreement" as described in Code Section 7121 (or any
corresponding or similar provision of state, local or foreign income Tax
law) executed on or prior to the Closing Date;
(C) installment sale or open transaction disposition made on or
prior to the Closing Date; or
(D) prepaid amount received on or prior to the Closing Date.
(ix) Seller will not treat the stock of the Company as worthless under
Code Section 165.
(x) Seller will not elect, on behalf of the Company, to reduce the
basis of the depreciable property of the Company under Code Section
108(b)(5).
(r) The Company does not have any direct or indirect liability,
indebtedness, obligation, commitment, expense, claim, deficiency, guaranty
or endorsement of or by any Person, whether accrued, absolute, contingent,
matured, unmatured, liquidated, unliquidated, known or unknown ("Liability")
except for (i) Liabilities which are adequately reflected and reserved
against in the Balance Sheet, and (ii) Liabilities arising under the Company
Contracts, provided that none of the Liabilities described in this Section
relates to any Default, breach of warranty, tort, infringement or violation
of Law or arose out of any action, order writ, injunction, judgment or
decree outstanding or claim, suit, litigation, proceeding, investigation or
dispute ("Action").
Other than the representations and warranties contained in this Agreement,
Seller makes no representation or warranty as to the seaworthiness of the
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Xxxxxxxxx Xxxxxx or the condition or fitness of the Riverboat Casino or any
of the other Riverboat Casino Assets thereof for any particular purpose
other than the purpose for which they are currently used. For purposes of
this Agreement, "Seller's Knowledge" means the actual knowledge of any of
its executive officers as of the date of this Agreement, after reasonable
inquiry.
7. BUYER'S REPRESENTATIONS. As of the date hereof and as of the Closing,
Buyer hereby represents and warrants to Seller that (a) Buyer is a
corporation duly formed, validly existing and in good standing under the
laws of the jurisdiction identified in the preamble to this Agreement and is
in good standing under the laws of the Commonwealth of Kentucky, (b) Buyer
has all requisite power and authority necessary to enter into this Agreement
and to carry out its obligations hereunder, (c) Buyer is a citizen of the
United States within the meaning of 46 U.S.C. Section 2, authorized to own
and operate the Riverboat Casino in the coastwise trade, (d) Buyer has had
full opportunity to inspect the Riverboat Casino, its various components and
systems and the other Riverboat Casino Assets, and Buyer is relying solely
on the representations and warranties made by Seller herein and its own
evaluation of the seaworthiness of the Riverboat Casino and the condition
and fitness of the other Riverboat Casino Assets in connection with its
agreement to purchase the Riverboat Casino Assets, (e) all documents and
information furnished by Buyer to Seller with respect to Buyer's financial
condition, sources of financing and capability of operating a gaming
establishment are true and correct in all material respects, (f) other than
the MGC Approval and any filings required to be made under the HSR Act, no
consent, approval or action of, filing with or notice to any governmental or
regulatory authority or other third party on the part of Buyer is required
in connection with the (i) execution, delivery and performance of this
Agreement or (ii) consummation of the transactions contemplated hereby, (g)
the execution and delivery by Buyer of this Agreement and the performance by
Buyer of its obligations hereunder do not (i) conflict with or result in a
violation or breach of any of the terms, conditions or provisions of the
certificate of incorporation or By-laws of Buyer or (ii) conflict with or
result in a violation or breach of any term or provision of any law or order
applicable to Buyer or any of its assets and properties, other than such
conflicts, violations or breaches that could not in the aggregate reasonably
be expected to adversely affect the validity or enforceability of this
Agreement and (h) Buyer has sufficient cash and/or available credit
facilities (and has provided Seller with evidence thereof) to pay the
Purchase Price and to make all other necessary payments of fees and expenses
in connection with the transactions contemplated by this Agreement,
including in respect of the Company Liabilities.
8. COVENANTS.
(a) Pre-Closing Covenants of Seller. Seller hereby covenants and agrees
that prior to the Closing Date it shall (and shall cause the Company, as
applicable, to):
(i) make available to Buyer's representatives true and correct
originals or copies of all records relating to the construction and
operation of the Riverboat Casino which are in Seller's or the Company's
possession (with Buyer to bear the cost of any copying costs) including
drawings and specifications;
(ii) cause the Riverboat Casino to be insured through and including
the Closing Date with the same coverages, limits, policies and underwriters
as in
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effect on the date hereof;
(iii) use all commercially reasonable efforts to cause those
conditions to the Closing which are reasonably within Seller's and/or the
Company's control to be timely satisfied;
(iv) (A) not amend, modify, terminate (partially or completely), grant
any waiver under or give any consent with respect to any Contract that is an
Assumed Executory Lease and Executory Contract; (B) not materially Default
under any Contract that is an Assumed Executory Lease and Executory
Contract, provided, that if such Default is cured prior to the Closing,
Seller shall not have breached this clause (B); (C) not create any
Encumbrance on any of the Riverboat Casino Assets other than the Company
Liabilities or pursuant to this Agreement or otherwise in the ordinary
course of business; (D) not compromise, settle or otherwise adjust any
Assumed Liability; (E) not alter the salaries or other compensation payable
to any employee in any material respect, other than in the ordinary course
of business with respect to employees with salaries and bonuses of less than
$50,000 and other than with respect to new employees hired in the ordinary
course of business; or (F) not fail to take any reasonable action within its
control as a result of which any of the changes or events listed in Section
6(f) would be likely to occur, in each case other than pursuant to the
Company Plan of Reorganization and this Agreement and other than in respect
of claims not being assumed by the Company;
(v) deliver to Buyer within 15 days after the end of each calendar
month unaudited financial statements the Company for such month, consisting
of a balance sheet, a statement of income (including detailed revenue
classifications) and a statement of cash flows (all such financial
statements, the "Post-Signing Financial Statements");
(vi) give Buyer and its representatives (including Buyer's
accountants, counsel, consultants, employees and such other representatives
as Buyer may designate from time to time), upon reasonable notice and during
normal business hours, full access to the Riverboat Casino Assets, and all
Contracts, books, records and affairs of Seller and the Company related to
the Riverboat Casino Assets, and Seller shall cause its officers and
employees to furnish to Buyer copies of all documents, records and
information related to the Riverboat Casino Assets as Buyer or its
representatives may reasonably request;
(vii) [intentionally omitted];
(viii) subject to the restrictions set forth in this Agreement, use
commercially reasonable efforts (A) to operate the Riverboat Casino in the
ordinary course of business consistent with Seller's and the Company's
practices during and prior to the period following the filing of its
bankruptcy petition, and (B) as necessary to cause the representations and
warranties of Seller in Section 6 to be true and correct in all material
respects as of the Closing Date;
(ix) notify Buyer, in writing, prior to implementing operational
decisions of a material nature outside the ordinary course of business and
obtain Buyer's written consent prior to entering into any Contract involving
an amount in excess of $75,000;
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(x) not take a position (or cause the Company to take a position) on
any income tax return, before any governmental agency charged with the
collection of any income tax, or in any judicial proceeding that is in any
way inconsistent with the allocation of the Purchase Price as agreed to by
Seller and Buyer at or prior to the Auction (as defined in Section 9(a)
below);
(xi) subject to the restrictions set forth in this Agreement, use (or
cause the Company to use) commercially reasonable efforts (but shall not be
required to increase wages or benefits) to keep available the services of
the current employees and agents of Seller and the Company and to maintain
its relations and goodwill with the suppliers, customers, distributors of
Seller or the Company and any others having a business relation with Seller
or the Company;
(xii) obtain Buyer's consent, in writing, prior to modifying or
terminating any Real Property Lease or abandoning any real property covered
by a Real Property Lease, which consent Buyer may grant or withhold in its
sole and absolute discretion;
(xiii) promptly disclose to Buyer in writing any information set forth
in the Schedules that is no longer complete, true or applicable and any
information of the nature of that set forth in the Schedules that arises
after the date hereof and that would have been required to be included in
the Schedules if such information had been obtained on the date of delivery
thereof; provided, however, that none of such disclosures shall be deemed to
modify, amend or supplement the representations and warranties of Seller or
the Schedules hereto for the purposes of this Agreement (including Section 4
and Section 12 hereof) unless Buyer shall have consented thereto in writing;
(xiv) not treat the stock of the Company as worthless under Code
Section 165; and
(xv) not elect, on behalf of the Company, to reduce the basis of the
depreciable property of the Company under Code Section 108(b)(5).
Provided, however, notwithstanding anything to the contrary herein, the
Company may, at any time and from time to time, distribute, dividend,
transfer, assign or otherwise dispose of any or all of the Excluded Assets;
provided, further, that, notwithstanding any other provision in this
Agreement, so long as the Company Plan of Reorganization is prepared and
prosecuted in good faith, the failure of the Company Plan of Reorganization
to be confirmed by the Bankruptcy Court shall not constitute a breach by
Seller of any covenant herein; and provided, further, that, notwithstanding
any other provision in this Agreement, nothing in this Agreement shall be
deemed to restrict or prohibit either the Company or the Committee from
including provisions in the Company Plan of Reorganization (including
provisions regarding the treatment of creditors) that either the Company or
the Committee deem to be appropriate or in furtherance of its fiduciary
duties, so long as nothing so included in the Company Plan of Reorganization
is inconsistent with the provisions of this Agreement.
(b) Post-Closing Covenant of Seller. Seller further covenants that (i)
for a period of thirty (30) days from and after the Closing Date, Seller
shall permit Buyer and its authorized representatives to have access to the
Main Office for purposes of removing the items stored or located therein
that are included in the Riverboat Casino Assets, as set forth on Schedule
6(b); (ii)
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Seller will not treat the stock of the Company as worthless under Code
Section 165; (iii) Seller will not elect, on behalf of the Company, to
reduce the basis of the depreciable property of the Company under Code
Section 108(b)(5), and (iv) Seller shall apportion the consolidated Section
382 limitation to Buyer under the circumstances and in the manner described
in Section 6(q)(iii). To the extent employees of Seller or the Company are
owed salary, wages or other benefits in connection with services rendered to
Seller and/or the Company through the Closing Date (excluding accrued
vacation pay), Seller and/or the Company (as applicable) shall pay all such
amounts to its employees on a timely basis after the Closing in accordance
with Seller's regular payroll procedures. Buyer acknowledges and agrees
that, notwithstanding anything to the contrary in this Agreement, following
the Closing, (x) Seller and/or any entity other than the Company that will
be responsible under the Company Plan of Reorganization for distributing
assets on or after the effective date of the Company Plan of Reorganization
to creditor classes may, at any time and from time to time, distribute,
pay-out, dividend, assign or otherwise dispose of any of their respective
assets, including without limitation the Excluded Assets and the Purchase
Price (collectively, "Distributions"), to their respective creditors,
provided, however, that this provision shall in no event apply to the
Company or be deemed to authorize the distribution of any assets owned by
the Company following the Closing.
(c) Covenants of Buyer.
(i) Buyer hereby covenants and agrees that it shall (A) use all
commercially reasonable efforts to cause those conditions to the Closing
which are reasonably within Buyer's control to be timely satisfied, and (B)
use all commercially reasonable efforts to cause the representations and
warranties of Seller in Section 6 to be true and correct in all material
respects as of the Closing Date.
(ii) From the Closing Date until the date on which the Case is closed
and at Seller's expense, Buyer shall permit Seller and its authorized
representatives, upon reasonable notice to Buyer and at a time convenient to
Buyer, to have access to the books and records of Seller and the Company
being transferred to Buyer as part of the Riverboat Casino Assets, for the
purpose of obtaining any information necessary for the preparation and
filing of any tax returns or other reports to any governmental authority for
any period or for any other reason related to the Case. Buyer shall retain
such records consistent with Buyer's normal record retention policies.
(iii) Promptly following receipt thereof, Buyer shall provide to
Seller a copy of the Phase I Environmental Assessment.
(d) Tax Matters.
(i) Seller shall include the items of the Company (including any items
required to be taken into account by Treasury Regulations Section 1.1502-13
and 1.1502-19) on Seller's consolidated federal income Tax Returns for all
periods through the ending of Seller's tax year including the Closing Date
in accordance with Treasury Regulations Section 1.1502-76(b)(1)(ii)(A)(i)
and pay all federal income Taxes attributable to such income. Any items of
the Company that occur on the Closing Date other than items occurring after
the Closing which are outside the Company's ordinary course of business
shall not be subject to the next day rule as such rule is provided in
Treasury Regulations Section 1.1502-76(b)(1)(ii)(B). For all taxable periods
ending on
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or before the Closing Date, Seller shall cause the Company to join in
Seller's consolidated federal income tax return (and any consolidated,
affiliated, combined, unitary or similar other tax return where required or
previously filed) and, in jurisdictions where Company separately reports,
Seller shall cause to be filed with respect to the Company separate company
state and local income tax returns and shall cause to be timely paid any
Taxes imposed on Company. All such Tax Returns shall be prepared and filed
in a manner consistent with prior practice, except as required by a change
in applicable law or regulation. Buyer shall have the right, at its expense,
to review and comment on any such Tax Returns prepared by Seller. Buyer
shall cause the Company to furnish information to Seller as reasonably
requested by Seller to allow Seller to satisfy its obligations under this
section in accordance with past custom and practice. The Company and Buyer
shall consult and cooperate with Seller as to any elections to be made on
Tax Returns of the Company for periods ending on or before the Closing Date.
Buyer shall include the Company in its combined or consolidated income Tax
Returns, as applicable, for all periods other than periods ending on or
before the Closing Date. Buyer and Seller shall, and shall each cause its
affiliates to, provide to the other such cooperation and information, as and
to the extent reasonably requested, in connection with the filing of any Tax
Return, determination of liability for Taxes, or conduct of any audit,
litigation or other proceeding with respect to Taxes, which cooperation and
information shall include providing copies of all relevant Tax Returns
(including any relevant Tax Return of Seller or any group of Seller that
includes the Closing Date), together with relevant accompanying schedules
and workpapers.
(ii) Seller shall pay the Buyer the amount of any Tax refund received
by Seller resulting from the carryback by Company of any post-closing income
Tax attribute of the Company into Seller's consolidated income Tax Return.
(iii) Seller shall allow the Company and its counsel to participate,
at its expense, in any audit of Seller's consolidated federal income Tax
Returns to the extent that such returns relate to the Company. Seller shall
not settle any such audit in a manner that would adversely affect the
Company after the Closing Date without the prior written consent of Buyer,
which consent shall not be unreasonably withheld or delayed.
(iv) Seller shall join Buyer, at Buyer's option, in making an election
under Code Section 338(h)(10) (and any corresponding elections under state,
local, or foreign tax law) (collectively a "Section338(h)(10) Election")
with respect to the purchase and sale of the stock of the Company hereunder.
Any Section 338(h)(10) Election must be made by Buyer, and Buyer shall be
required to notify Seller of such election, not later than 90 days prior to
the extended due date of Seller's federal income Tax Return (whether or not
extended) for the fiscal year during which the Closing occurs, provided that
Buyer shall in any event notify Seller within 30 days after Buyer has made
any Section 338(h)(10) Election. Seller will pay any Tax attributable to the
making of the Section338(h)(10) Election. At the Closing, Seller will
deliver to Buyer a fully executed IRS Form 8023 reflecting the
Section338(h)(10) Election and any similar form provided for under state,
local or foreign law.
(v) Seller shall, and shall cause the Company to, take all necessary
actions such that all Tax sharing agreements or similar agreements with
respect to or involving the Company shall be terminated as of the Closing
Date and such that, after the Closing Date, the Company shall not be bound
thereby or have any liability thereunder.
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(vi) Buyer shall pay to Seller all refunds of Taxes received by Buyer
or the Company after the Closing Date and attributable to Taxes paid by the
Company with respect to any pre-closing period or portion thereof (other
than those refunds to which Buyer is entitled pursuant to Section 8(d)(ii)).
Buyer shall not be required to seek any such tax refund whether at Seller's
request or otherwise or whether through the filing of amended Tax Returns,
claims for refunds or otherwise, if Buyer believes the Company is not
reasonably entitled to seek such refund. In the event that Seller chooses to
seek any such Tax refund directly, Buyer, at Seller's reasonable expense,
will cooperate fully with Seller in preparing and filing any related claims,
amended returns or other documents (including but not limited to relevant
powers of attorney or other required authorizations that would permit Seller
to represent the Company and receive directly any Tax Refunds resulting from
Seller's filing such claims, amended Tax returns or other required
documents). Buyer is entitled to waive the carryback of any net operating
loss or other item of the Company for any post-Closing period or portion
thereof
(vii) Buyer shall not, and shall not cause, any Tax Return of the
Company for any period ending on or before the Closing Date to be amended
without the prior written consent of Seller.
(viii) Buyer shall not make, and shall not cause any election to be
made, other than the Section338(h)(10) Election as permitted by Section
8(d)(iv), with respect to the Company that could increase the Tax liability
of the Company for any period or portion thereof ending on or before the
Closing Date to the extent such election would cause the Company or Seller
to pay additional Taxes (excluding for this purpose any election that would
result solely in any reduction in any net operating loss carryforward
attributable to the Company for periods ending after the Closing Date).
(ix) Seller shall not make, and shall not cause any election to be
made, with respect to the Company that could increase the Tax liability of
the Company for any period or portion thereof ending on or after the Closing
Date to the extent such election would cause the Company or Buyer to pay
additional Taxes (including for this purpose any election that would result
solely in any reduction in any net operating loss carryforward attributable
to the Company for periods ending on or before the Closing Date).
9. BANKRUPTCY COURT APPROVALS.
(a) Bid Protections, Break-Up Fee Order and Sale Motion. Seller has
obtained an order of the Bankruptcy Court (the "Break-Up Fee Order") which
authorizes the payment by Seller to Penn of an amount equal to $250,000 for
the actual, necessary and reasonable out-of-pocket costs and legal fees
incurred by Penn prior to the date of the Auction (without prejudice to
Penn's right to seek additional amounts under a motion filed with the
Bankruptcy Court) in connection with (i) Penn's investigation of Seller, the
Company and the Riverboat Casino Assets, (ii) negotiating the Penn Purchase
Agreement and (iii) seeking to protect or enforce Penn's rights under the
Penn Purchase Agreement (the "Break-Up Fee") in the event the Penn Purchase
Agreement shall be terminated pursuant to Section 16 of the Penn Purchase
Agreement due to (A) Bankruptcy Court approval of a sale of the Closing
Shares or Riverboat Casino Assets, as applicable, to any Person other than
Penn or an affiliate of Penn (a "Competing Sale") or (B) Bankruptcy Court
approval of a competing plan of reorganization or liquidating plan relating
to the Closing Shares or the Riverboat Casino Assets not incorporating the
Penn Purchase Agreement (a
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"Competing Plan"), which Break-Up Fee shall be payable only upon a
successful closing of such Competing Sale or the occurrence of the effective
date (the "Competing Plan Effective Date") of such Competing Plan, as
applicable; provided, however, that if Seller shall have prepared and
prosecuted the Company Plan of Reorganization in good faith, then Penn shall
not be entitled to any Break-Up Fee in the event the Company Plan of
Reorganization is not confirmed. Buyer acknowledges that it shall not, in
any event, including without limitation (i) the non-acceptance by Seller or
Company of this Agreement, (ii) the approval of the Bankruptcy Court of a
sale of the Closing Shares or Riverboat Casino Assets to Penn or any other
third Person other than Buyer, or (iii) the approval of the Bankruptcy Court
of a Competing Plan, be entitled to any type of break-up fee in connection
with this Agreement or the contemplated purchase and sale of the Closing
Shares.
Seller shall hold the Auction to sell the Closing Shares or Riverboat
Casino Assets, as applicable, pursuant to Section 363(b) of the Bankruptcy
Code ("Sale Motion"). Subject to the terms of the Penn Purchase Agreement,
the Break-Up Fee and refund of the Penn Deposit (with interest accrued
thereon, if any) shall be an administrative expense claim under Section
503(b) of the Bankruptcy Code and a surcharge under Section 506(c) of the
Bankruptcy Code and shall be payable immediately upon (as applicable) (A)
the closing of the Competing Sale (as a deduction from the purchase price
paid by the Buyer or any other third Person buyer in the Competing Sale) or
(B) the Competing Plan Effective Date. Subject to the terms of this
Agreement, the refund of the Deposit (with interest accrued thereon, if any)
shall be an administrative expense claim under Section 503(b) of the
Bankruptcy Code and a surcharge under Section 506(c) of the Bankruptcy Code
and shall be payable immediately upon (as applicable) (A) the closing of the
Penn Purchase Agreement, (B) the closing of a Competing Sale to any other
third Person other than Buyer or its designee, or (C) the Competing Plan
Effective Date.
Pursuant to the Notice of Auction, the bid procedures to be used for the
Auction shall provide that any Qualified Bidder may structure its bid as a
purchase of the Riverboat Casino Assets from the Company, rather than as a
bid for the Closing Shares. Except as otherwise permitted in the Notice of
Auction, each bid shall be substantially on the terms of, or on more
favorable terms for Seller or the Company (as applicable) than, those set
forth in the Penn Agreement.
Pursuant to the Notice of Auction, the Sale Hearing to approve the sale of
the Closing Shares shall commence on October 13, 2004. To the extent that a
competing bidder seeks to submit a bid, such competing bidder or an
affiliate (as defined in the Bankruptcy Code) of such competing bidder must
be currently licensed as a gaming operator under the laws of a state of the
United States. In addition, such competing bidder shall, at least three (3)
days before the Auction (i.e. no later than 12:00 p.m. (Central Time) on
October 4, 2004), deliver to Seller and/or the Company, as applicable, (i) a
refundable cash deposit of $1,000,000, (ii) reasonable proof of the
interested party's ability to consummate a purchase of the Closing Shares or
the Riverboat Casino Assets, as applicable, including a copy of such party's
annual, quarterly and monthly financial statements for the most recently
ended fiscal periods, certified to be true correct and complete in all
material respects, and (iii) an executed Sale and Purchase Agreement on
substantially the terms of, or on more favorable terms than those set forth
in, the Penn Purchase Agreement, except as may be necessary to reflect an
offer for the purchase of only the Riverboat Casino Assets (and not the
Closing Shares), which Sale and Purchase Agreement
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shall (A) specify the amount of cash or other consideration offered by the
competing bidder for the Closing Shares and/or the Riverboat Casino Assets,
as applicable, (B) not be subject to unperformed due diligence or conditions
for a breakup fee or expense reimbursement, and (C) constitute an
irrevocable offer by such competing bidder to complete its proposed purchase
upon the terms set forth therein. Once a competing bid that satisfies the
above-enumerated requirements has been submitted to the Seller, the Company
or the Committee, such bid may be modified by the applicable bidder at any
time prior to the Auction to the extent that such modifications would, in
the opinion of the Committee, after consultation with the Seller, the
Company and the Bondholders, improve the quality of such bid.
The terms of the Notice of Auction provides that no initial competing
offer will be considered unless (i) the aggregate consideration to Seller or
the Company under such bid is at least $250,000 more than the sum of the
Purchase Price designated in the Penn Purchase Agreement plus a Break-Up Fee
of $450,000 (which is the anticipated maximum amount of Penn's out-of-pocket
costs and legal fees incurred prior to the date of the Auction) [On
September 14, 2004, the Bankruptcy Court entered the Order On Break Up Fees,
in which it approved the Break-up Fee. Any request for an increase in the
Break-up Fee will be based upon Buyer's incurrence of actual, necessary and
reasonable out-of-pocket expenses in excess of the $250,000.] or (ii) the
aggregate consideration to Seller or the Company under such bid is at least
$100,000 more than the Purchase Price designated in the Penn Purchase
Agreement plus a Break-Up Fee of $450,000 and the Committee, after
consultation with the Bondholders, Seller and the Company, determines in its
sole discretion that such offer, taken as a whole, is a higher and/or better
bid than the bid set forth in the Penn Purchase Agreement. In the event that
the Committee shall so determine that such bid is a higher and/or better bid
than that set forth in the Penn Purchase Agreement, Penn shall have the
right to amend the Penn Purchase Agreement as necessary in its reasonable
discretion in order to cause Penn's bid thereunder to be comparable to such
higher and/or better bid. Only those persons submitting an offer in
compliance with the provisions of the Notice of Auction shall be a
"Qualified Bidder." Each Qualified Bidder shall be invited to attend an
outcry auction (the "Auction") at the Office of Xxxxxxxx Xxxxxx, LLP, which
Auction must be attended in person. The Seller and the Company shall cause
the Auction to commence at 1 p.m. (Central Time), on October 7, 2004.
Subject to the limitations set forth above, the opening price at such
Auction shall be the highest and/or best offer of a Qualified Bidder (as
determined by the Committee in its sole discretion after consultation with
the Bondholders, Seller and the Company). Subsequent bids shall be in
increments of $100,000 or such greater amount as designated by the Committee
from time to time during the Auction. At the request of Buyer, Seller shall
provide or cause the Committee to provide its valuation of any competing bid
that constitutes the highest and/or best offer at the time of such request.
Seller, the Company and the Committee shall consider bids submitted by
Penn, Buyer and the other Qualified Bidders during the Auction and the
Committee, after consultation with the Bondholders, Seller and the Company,
shall make a determination of the highest and/or best offer in its sole
discretion. The determination of which bidder has submitted the highest
and/or best offer for the Closing Shares and/or the Riverboat Casino Assets,
as applicable, at the Auction shall be made by the Committee in its sole
discretion after consultation with the Bondholders, Seller and the Company,
subject to the final determination by the Court at the Sale Hearing. At the
Sale Hearing,
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the Court shall consider the results of the Auction and shall make a final
determination of the highest and/or best offer to the Company's bankruptcy
estate. After the determination of the winning bidder, Seller, or the
Company, as applicable, shall promptly execute the Sale and Purchase
Agreement previously executed and submitted by such winning bidder.
(b) Sale Order. The Notice of Auction provides that by no later than
three (3) business days following entry of the Break-Up Fee Order, Seller
and the Company will file the Sale Motion, through which they will seek an
order of the Bankruptcy Court in form reasonably satisfactory to the winning
bidder and consistent with the applicable purchase and sale agreement (the
"Sale Order"). The Sale Order shall, among other things (i) order the sale
of the Closing Shares to Buyer pursuant to Section 363(b) of the Bankruptcy
Code on the terms and conditions set forth in this Agreement and authorize
Seller to proceed with this transaction, (ii) order that the sale of the
Closing Shares shall be free and clear of all Encumbrances and provide for
an injunction in favor of Buyer and its property, including the Closing
Shares, prohibiting any holder of a claim from taking any action or
enforcing any Encumbrance against the Closing Shares, (iii) include specific
findings that: (A) Buyer is a good faith purchaser of the Closing Shares and
under Section 363(m) of the Bankruptcy Code is entitled to all protections
thereby; that Buyer is not a successor to Seller and this Agreement does not
constitute a de facto merger or consolidation of Seller and Buyer; Buyer is
not a mere consolidation or substantial continuation of Seller's business;
Buyer is entering the sale in good faith; (B) any objections to the
Agreement and related transactions are overruled, and that future objections
to the Agreement or related transactions are barred; (C) any subsequent
bankruptcy proceedings by Seller or the Company or reorganized Seller or
dismissal of the Case shall not affect the Agreement or related
transactions; (D) that Seller has full authority to execute the Agreement;
and all necessary corporate action has been taken; no consents or approvals
other than those expressly provided in the Agreement are required for
consummation of the Agreement and related transactions; (E) approval of the
Agreement and consummation of the transactions are in best interest of
Seller and the Company and their respective creditors and estates; (F)
reasonable opportunity to object or be heard with respect to the Sale Motion
has been afforded to all interested entities; (G) the Agreement was
negotiated, proposed and entered by Seller and Buyer, without collusion, in
good faith, and from arms length bargaining positions with parties
represented by counsel and financial advisors; (H) the terms and conditions
of the Agreement and related transaction are fair and reasonable; (I) the
Bankruptcy Court retains exclusive jurisdiction to enforce the Sale Order;
and (J) such other items as are reasonably acceptable to Buyer. Both Buyer's
and Seller's obligations to complete the sale and purchase of the Closing
Shares are conditioned upon the Bankruptcy Court's entry of the Sale Order.
(c) Confirmation Order. Promptly following the Sale Hearing, Seller will
cause the Company to seek an order of the Bankruptcy Court (the
"Confirmation Order") confirming a Plan of Reorganization of the Company
(the "Company Plan of Reorganization"). Both Buyer's and Seller's
obligations to complete the sale and purchase of the Closing Shares are
conditioned upon the Bankruptcy Court's entry of the Confirmation Order.
Seller agrees that each of the Company Plan of Reorganization and the
Confirmation Order must be in form and substance reasonably satisfactory to
Buyer and shall not be inconsistent with the provisions of this Agreement,
and shall further provide for the following:
(i) the Purchase Price shall be used to pay in full, as of the
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effective date of the Company Plan of Reorganization, all allowed
pre-petition priority claims against and post-petition administrative
expenses of the Company other than Company Liabilities;
(ii) the portion of the Purchase Price allocated to the Riverboat
Casino Assets in accordance with the Sale Order shall be used to fund the
treatment provided under the Company Plan of Reorganization of allowed
secured and non-priority unsecured claims against the Company;
(iii) except with respect to the Company Liabilities as described in
Section 3 hereof, the discharge of all secured and unsecured claims against
the Company;
(iv) except with respect to the Company Liabilities as described in
Section 3 hereof, the issuance of an injunction in favor of Buyer, the
Company and their respective properties, including the Riverboat Casino
Assets, prohibiting any holder of a claim against the Company in existence
as of the date immediately preceding the effective date of the Company Plan
of Reorganization from taking any action to collect, assess, enforce or
recover such claim;
(v) provide that Buyer shall be the owner of all of the Closing
Shares, which shall represent all of the issued and outstanding capital
stock of the Company;
(vi) ratify the findings in the Sale Order and include specific
findings that: (1) reasonable opportunity to object or be heard with respect
to the Confirmation Order has been afforded to all interested entities; and
(2) the Bankruptcy Court retains exclusive jurisdiction to enforce the
Confirmation Order;
(vii) the following assets shall be excluded from the Riverboat Casino
Assets (collectively, the "Excluded Assets"): (1) officer and crew personal
effects; (2) all cash (including checks received prior to the close of
business on the Closing Date, whether or not deposited or cleared prior to
the close of business on the Closing Date) other than Included Cash; (3) all
commercial paper, certificates of deposit and other bank deposits, treasury
bills and other cash equivalents other than the Included Cash; (4) all
rights of the Company to claims or recoveries under Chapter 5 of the United
States Bankruptcy Code; (5) all contracts, leases and other agreements other
than the Assumed Executory Leases and Executory Contracts; (6) all rights of
Seller and/or the Company under employee benefit plans and related trusts
and insurance policies and similar arrangements sponsored or maintained by
Seller for current or former employees; (7) the building, improvements and
tangible personal property (other than certain items of tangible personal
property used in the operation of the Riverboat Casino and listed on
Schedule 6(b)), located at 000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000 (the
"Main Office"); (8) subject to Buyer's rights under the Trademark License,
all right, title and interest of Seller in the name "President," "President
Riverboat Casino" and variants thereof, and all marks and logos, whether or
not registered, incorporating such names or portions thereof; (9) all risk
management, general ledger and fixed asset software (excluding data and
related documentation), in each case which are owned, used, or licensed by
Seller as licensee or licensor in connection with the Riverboat Casino
("Excluded Software"); (10) all outstanding claims arising under Seller's
insurance policies prior to the Closing Date; (11) all rights to any refunds
for Taxes accruing to the owner
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of the Riverboat Casino Assets for the period prior to and including the
Closing Date, including but not limited to all claims for refund for
Missouri state and local sales and use taxes, regardless whether such claims
were actually filed prior to the Closing Date; (12) all inventory of food
and beverages existing on the Closing Date and held for sale by the Company
at the food service and dining facilities located at the Riverboat Casino
("Food Inventory"); and (13) all inventory of the Company existing on the
Closing Date and held for resale to customers at the Company's gift shop
located aboard the Riverboat Casino ("Gift Shop Inventory");
(viii) pursuant to Section 1141(c) of the Bankruptcy Code and other
than with respect to the Assumed Liabilities, the Company shall hold the
Riverboat Casino Assets free and clear of, all claims and interests of
creditors to the maximum extent permitted under Section 1141(c) of the
Bankruptcy Code (the "Excluded Liabilities"), and, without limiting the
foregoing, the Confirmation Order shall specifically provide that the
Company shall hold the Riverboat Casino Assets free and clear of each of the
following (which shall be deemed to be Excluded Liabilities): (1)
Liabilities for Taxes related to all Tax periods (or portions thereof)
ending on or prior to the Closing; (2) Liabilities for any costs or expenses
incurred arising out of or related to the administration of the Bankruptcy
Case, including any accrued professional fees and expenses of attorneys,
accountants, financial advisors and other professional advisors
(collectively, the "Administrative Claims"); (3) Liabilities arising out of
or related to the Excluded Assets; (4) any Cure Amounts payable by Seller
pursuant to Section 2(c), or (5) Liabilities of Seller under this Agreement.
(ix) the assumption by the Company of the Assumed Executory Leases and
Executory Contracts under Section 365 of the Bankruptcy Code;
(x) the affirmation of each of the provisions of the Sale Order; and
(xi) the retention by the Bankruptcy Court of exclusive jurisdiction
to enforce all provisions of the Confirmation Order relating to the Sale
Order.
(d) Return of Deposit and Expense Reimbursement. If this Agreement is
terminated in accordance with Section 16 hereof for any reason (other than a
termination by Seller solely as a result of a material breach of the terms
hereof by Buyer), then the Deposit (together with interest thereon) shall be
immediately returned to Buyer.
(e) Superpriority Claim. Buyer shall have (and is hereby granted by
Seller) a superpriority administrative expense claim senior to all other
administrative expenses in the Seller Case, subject however to the priority
of the Expense Reimbursement and Penn Deposit owed to Penn pursuant to the
terms of the Penn Purchase Agreement, in an amount equal to the sum of the
Deposit (together with interest thereon).
(f) [intentionally omitted].
10. MGC APPROVAL. Within thirty (30) business days after the issuance of
the Sale Order, Buyer shall file with the Commission all applications,
certifications and other documents as may be appropriate to obtain the MGC
Approval, which applications, certifications and other documents shall be
limited only to matters directly related to those approvals and orders that
are necessary in order for Buyer to lawfully operate the Riverboat Casino
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under the laws and regulations of the State of Missouri, and make available
to Seller copies of all such materials (except confidential or commercially
sensitive material) together with evidence of filing. Buyer shall use all
commercially reasonable efforts to comply with all requests of the
Commission and to obtain the MGC Approval and further agrees not to take any
action that could reasonably be expected to impede or delay the issuance by
the Commission of the MGC Approval or result in the refusal of the
Commission to issue the MGC Approval. From time to time at Seller's written
request, Buyer shall deliver a written update of the status of such
application and the most recent communications between Buyer and the
Commission.
11. CLOSING. The closing of the sale and purchase of the Closing Shares
and the other transactions contemplated hereby (the "Closing") shall occur
as promptly as practicable, and in any event on the date (the "Closing
Date") which is the third business day after satisfaction (or written
waiver) of the conditions to Closing set forth in Sections 4 and 5 (other
than conditions with respect to actions the respective parties will take at
the Closing itself). The Closing shall occur at the principal office of
Seller or as otherwise agreed by the parties hereto.
(a) At Closing, Seller shall deliver to Buyer the instruments, documents
and agreements required to be delivered by Seller under Section 4 hereof.
(b) At Closing, Buyer shall do or deliver to Seller the following:
(i) pay the Purchase Price less the Deposit (with interest accrued
thereon, if any) by wire transfer of immediately available funds to such
account or accounts as Seller shall direct in writing;
(ii) deliver to Seller irrevocable written authorization to apply the
Deposit (with interest accrued thereon, if any) against the Purchase Price;
and
(iii) deliver to Seller the instruments, documents and agreements
required to be delivered by Buyer under Section 5 hereof (to the extent
required to be delivered at such time).
12. BROKERS. Except for Libra Securities Corporation and other financial
advisors to Seller, which have been engaged by and at the expense of Seller,
each party hereto represents that it has not retained a broker or other
Person entitled to any commission or other compensation in connection with
the transaction contemplated herein. Each of Seller and Buyer shall
indemnify and hold the other harmless from and against the rights or claims
of any Person claiming through such party to be entitled to any such
commission or compensation; provided that Buyer is not responsible for
payment of Seller's advisors.
13. DELIVERY. The Closing Shares shall be deemed delivered to Buyer
hereunder at St. Louis, Missouri, simultaneous with the Closing. Except as
otherwise provided in Section 2(b), Buyer shall not be responsible for any
sale, use or similar taxes, fees and expense imposed in Missouri or
elsewhere upon or in connection with the sale of the Closing Shares.
14. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Notwithstanding
anything to the contrary herein, prior to the Closing, Buyer will not have
any recourse to Seller in the event any of the representations and
warranties made
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herein or deemed made are untrue as at any time of expression thereof,
except in the case of fraud and except that Buyer may terminate this
Agreement in accordance with Section 16 hereof and, if applicable, shall
have the right to receive the Deposit as provided in, and subject to the
terms and conditions set forth in, this Agreement; provided, however, that
Buyer's obligation to purchase the Closing Shares at Closing is expressly
conditioned (unless waived by Buyer in writing) upon satisfaction of each of
the conditions set forth in Section 4. The only remedy for a breach of such
representations and warranties shall be Buyer's option not to close and
Buyer's right to terminate this Agreement in accordance with and subject to
the limitations set forth in Sections 4 and 16. Without limiting the
foregoing, following the Closing, Buyer shall have no remedy whatsoever for
any breach of any representation or warranty made by Seller herein, except
in the case of fraud. All representations, warranties and (except as set
forth in the following sentence) covenants set forth in this Agreement or in
any certificate, document or other instrument delivered in connection
herewith shall terminate at the earlier of (i) the Closing and (ii)
termination of this Agreement in accordance with Section 16, provided,
however, that those covenants that contemplate actions to be taken or
restrict actions from being taken after the Closing or termination of this
Agreement, as the case may be, shall survive in accordance with their terms.
15. RISK OF LOSS.
(a) All risk of loss, whether total loss, constructive total loss or
less than total loss or constructive total loss shall be borne by Seller
prior to the Closing and any insurance proceeds for events occurring prior
to the Closing shall be for Seller's account. Buyer shall have no obligation
to purchase the Closing Shares if the Riverboat Casino is damaged in any
material respect after its inspection and survey and prior to Closing. All
insurance proceeds for such loss shall be paid to and solely for the account
of Seller. In the event that the Riverboat Casino suffers damage which does
not constitute a total loss or constructive total loss, Buyer may, at its
sole option, elect to purchase the Closing Shares, in which case any
insurance proceeds payable with respect to such accident shall be used by
Buyer to repair and/or replace the Riverboat Casino and other affected
Riverboat Casino Assets. In order to assist in having such repairs
accomplished, Seller shall assign to Buyer all of its rights under the
insurance policies covering such loss.
(b) All risk of loss, whether total loss, constructive total loss or
less than total loss or constructive total loss shall be borne by Buyer
subsequent to the Closing and any insurance proceeds for events occurring
subsequent to the Closing shall be for Buyer's account.
16. TERMINATION EVENTS. This Agreement may be terminated prior to the
Closing Date:
(a) by Buyer or Seller upon written notice to the other party at any
time prior to the Closing (i) if the Confirmation Order has not been entered
on or before August 1, 2005 (or such later date(s) as mutually agreed to by
the parties with respect to the foregoing) or (ii) Closing shall not have
occurred on or before August 1, 2005 (or such later date as is mutually
agreed to by the parties), by reason of the failure of any condition
precedent under Section 4, provided that such failure did not result
primarily from the terminating party materially breaching any covenant
contained in this
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Agreement, or unless the terminating party shall have waived such condition
precedent in writing);
(b) by Buyer upon written notice to Seller if Buyer is in compliance in
all material respects with this Agreement and Seller fails to perform any
material obligation required to be performed by Seller prior to or at the
Closing, which failure continues for twenty (20) business days after written
notice from Buyer to Seller of such failure;
(c) by Seller upon written notice to Buyer if Seller is in compliance in
all material respects with this Agreement and Buyer fails to perform any
material obligation required to be performed by Buyer prior to or at the
Closing, which failure continues for twenty (20) business days after written
notice from Seller to Buyer of such failure;
(d) by mutual written agreement of Buyer and Seller;
(e) by Seller or Buyer upon written notice to the other if either (A)
Seller, with the approval of the Bankruptcy Court, enters into any contract
with a third party for the sale of the Closing Shares or any of the
Riverboat Casino Assets to a Person other than Buyer or Buyer's designee, or
(B) the Bankruptcy Court approves a Competing Plan;
(f) by Buyer upon written notice to Seller if any of the conditions of
Section 4 cannot be met and will not be waived by Buyer;
(g) by Seller upon written notice to Buyer if any of the conditions of
Section 5 cannot be met and will not be waived by Seller;
(h) by Seller or Buyer in the event the Company Plan of Reorganization
is not confirmed; and
(i) [intentionally omitted].
Upon a valid termination of this Agreement by Seller pursuant to
subsection (c) above, the Deposit (excluding interest accrued thereon, if
any) shall be forfeited to Seller, but without prejudice to any legal remedy
for money damages Seller may have, if any, against Buyer as a result of such
breach; provided, however, that Seller's legal remedies hereunder shall be
limited exclusively to money damages, and, provided, further, that in no
event shall Seller have the right to specific performance or any other
equitable remedy against Buyer in connection with this Agreement or the
transactions contemplated hereby. Upon a valid termination of this Agreement
pursuant to subsection (a), (b), (d), (e), (f), (g), (h) or (i), the Deposit
(with interest accrued thereon, if any) shall be returned to Buyer.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Missouri, and where
applicable, the federal laws of the United States.
18. NO CONTRIBUTION. Following the Closing, Seller shall not seek, nor
will Seller be entitled to, contribution from, or indemnification by, the
Company, under the Company's charter documents, this Agreement, applicable
corporate laws or other laws or otherwise, in respect of amounts due from
Seller in connection with any claim or suit arising under this Agreement.
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19. JURISDICTION. In the event any dispute shall arise in connection with
the interpretation of this Agreement or the respective rights and
obligations of the parties hereunder, each party submits to the exclusive
jurisdiction of the Bankruptcy Court for the resolution of such dispute.
20. NOTICES. All notices or other communications required or permitted to
be given under this Agreement shall be given in writing and delivered
personally or sent by registered mail (with postage prepaid) or recognized
courier or fax to the following address and fax number, or to such other
address as any party may from time to time designate in a notice to the
other.
If to Buyer: Columbia Sussex Corporation
000 Xxxxxxxxx Xxxxx
Xx. Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, VP of Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-Mail: xxx@xxxxxxxxxxxxxx.xxx
with a copy to: Columbia Sussex Corporation
000 Xxxxxxxxx Xxxxx
Xx. Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Chief Legal Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxx@xxxxxxxxxxxxxx.xxx
and with a copy to: Xxxxxxx XxxXxxxxx P.C.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000 0000
Facsimile: (000) 000-0000
E-Mail: xxx@xxxxxxxxxxxxxxxx.xxx
If to Seller: President Riverboat Casino-Missouri, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx
President & Chief Operating Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to: Xxxxxxxx Xxxxxx, LLP
One XX Xxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx and
Xxxxxx X. Xxxxxxx, Xx.
Telephone: 000-000-0000
Facsimile: 000-000-0000
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and with a copy to: Milbank, Tweed, Xxxxxx & XxXxxx XXX
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx and
Xxxxx X. Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
and with a copy to: Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP
000 Xxxxx Xx., Xxxxx 0000
Xx. Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Any such notice or communication shall be deemed to have been duly served
(if given or made personally) immediately or (if given or made by facsimile)
upon evidence of transmission or upon confirmed answerback or (if given or
made by recognized courier) once the return receipt for the served notice
has been signed by the party receiving the notice or (if given or made by
letter) 48 hours after posting or and in proving the same it shall be
sufficient to show that the envelope containing the same was duly addressed,
stamped and posted. Each notice or communication made by telefax shall be
followed by a confirmation copy to be sent by post. Failure to send any
confirmation copy shall have no effect on the validity or deemed delivery of
the notice or communication.
21. FURTHER ASSURANCES. Seller and Buyer shall do and perform such other
and further acts and execute and deliver any and all such other and further
instruments as may be required by law or reasonably requested by the other
(and at such other party's cost) to establish, maintain and protect the
respective rights and remedies of the other and to carry out and effect the
intent and purpose of this Agreement.
22. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement constitutes the entire
understanding of the parties and supersedes any and all other agreements,
written or oral, with respect to the subject matter hereof. This Agreement
may only be modified or amended by a written instruments signed by the party
or parties against which such modification or amendment is to be enforced.
Seller shall cause the Company to join in, and agree to be bound by, any
waiver, consent or agreement made or given by Seller under this Agreement.
This agreement may be executed in two or more counterparts which together
shall constitute a single agreement.
23. BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding on the
parties hereto and inure to the benefit of their respective successors and
assigns. Neither party may assign its rights or interests under this
agreement prior to the Closing, unless the prior written consent of the
other party is obtained, except that this Agreement (i) may be assigned by
Buyer as collateral security for obligations of Buyer to a financial
institution or institutions, and (ii) may, upon notice to Seller, be
assigned by Buyer to any entity controlled by or affiliated with Xxxxxxx X.
Xxxx, provided, however, that Buyer shall not be relieved from any
obligations hereunder.
24. HEADINGS; INTERPRETATION. The section and other headings contained in
this Agreement are inserted for convenience only and shall not affect in any
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way the meaning or interpretation of this Agreement. Unless the context of
this Agreement clearly requires otherwise, (a) references to the plural
include the singular, the singular the plural, the part the whole, (b)
references to any gender include all genders, (c) "including" has the
inclusive meaning frequently identified with the phrase "but not limited
to," and (d) references to "hereunder" or "herein" relate to this Agreement.
Section, subsection, Schedule and Exhibit references are to this Agreement
unless otherwise specified. Each accounting term used herein that is not
specifically defined herein shall have the meaning given to it under GAAP.
25. INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof. Any items listed or described on the Exhibits or Schedules
shall be listed or described under a caption that specifically identifies
the Section(s) of this Agreement to which the item relates (which, in each
case, shall constitute the only valid disclosure with respect to such
Section(s)).
IN WITNESS WHEREOF, the parties have caused this Riverboat Casino Sale and
Purchase Agreement to be executed by their duly authorized representatives
as of the day and year first above written.
SELLER:
PRESIDENT CASINOS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Sr. Vice President & Chief Financial Officer
COMPANY:
PRESIDENT RIVERBOAT CASINO-MISSOURI, INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Sr. Vice President & Chief Financial Officer
BUYER:
COLUMBIA SUSSEX CORPORATION
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President-Finance
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