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EXHIBIT 10.42
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 22 day of April, 1999 by and between LEISURE
EXPRESS CRUISE, LLC, a Colorado limited liability company ("Buyer"), LEISURE
TIME CASINOS & RESORTS, INC., a corporation formed under the laws of the State
of Colorado ("Leisure Time"), and J. XXXX XXXXXX, an individual resident of the
State of Florida ("Seller").
W I T N E S S E T H:
WHEREAS, Seller is the sole owner of all of the issued and outstanding
shares of stock of Florida Casino Cruises, Inc., a corporation organized under
the laws of the State of Georgia ("Company"); and
WHEREAS, Company owns a U.S. registered vessel known as the Vegas Express
(the "Vessel"); and
WHEREAS, Leisure Time is the beneficial owner of Buyer; and
WHEREAS, Seller desires to sell and Buyer desires to purchase 100% of the
issued and outstanding shares of stock of Company;
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements contained herein and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE .
PURCHASE AND SALE OF SHARES
[ ]1[ ]1 Purchase and Sale of Shares. Subject to the terms and conditions
of this Agreement, and on the basis of the representations and warranties
hereinafter set forth and for the consideration hereinafter provided, Seller
shall sell, transfer, assign, convey and deliver to Buyer at the Closing, and
Buyer shall purchase from Seller, 100% of the issued and outstanding shares of
stock of Company represented by 1,000 shares of $1 par value common stock (the
"Shares") thereby making Company a wholly-owned subsidiary of Buyer.
[ ]1[ ]1 Purchase Price and Payment. Subject to the terms and conditions of
this Agreement, the purchase price to be paid by Buyer for the Shares shall be
the sum of Two Million One Hundred Thousand Dollars ($2,100,000);
In addition, Buyer shall cause Leisure Time to issue to Seller the
following:
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[ ]1[ ]1.1 a copy of the following documents:
[ ]1[ ]1.1.1 Authorization. Seller has full power, legal capacity
and legal right to execute and deliver this Agreement, to consummate
the transactions contemplated hereby and to take all actions required
to be taken by Seller pursuant to the provisions hereof, and this
Agreement constitutes the valid and binding obligation of Seller
enforceable in accordance with its terms.
[ ]1[ ]1 Non-Contravention. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, does or
will violate, conflict with, result in breach of any material provision of,
constitute a default under, result in the termination of or permit any third
party to terminate (with or without notice, lapse of time or pursuant to any
legal or equitable principle) or accelerate the performance required on the part
of the Company by the terms of, the charter or bylaws of the Company or any
material agreement or instrument (including any Contract, as defined in Section
3.14) to which either the Company is a party or by which the Company or any of
its assets is subject or bound, or result in the creation or imposition of any
lien, charge or encumbrance on or security interest in or restriction on the use
of any of the Company's assets.
[ ]1[ ]1 Ownership of the Shares. Seller has good title to the Shares with
full legal right, power and authority to sell, assign and transfer the Shares to
Buyer, free and clear of all claims, liens and encumbrances. Upon the sale of
the shares to Buyer, Buyer will own 100% of the issued and outstanding stock of
the Company free and clear of all liens and encumbrances.
[ ]1[ ]1 Tax Returns and Reports. All income, excise, property, sales, use,
information, payroll and other tax returns and reports required to be filed by
the Company (the "Tax Returns") have been timely filed with the appropriate
governmental agencies in all jurisdictions in which such returns and reports are
required to be filed, and all such returns and reports properly reflect the
taxes of the Company, for the periods covered thereby. Except as set forth on
Schedule 3.6, all taxes, assessments, interest, penalties, deficiencies, fees
and other governmental charges or impositions which are called for as due by the
Tax Returns, or which are claimed to be due, or which are otherwise due to any
taxing authority from the Company (the "Taxes"), have been properly paid.
Neither the Company nor the Seller has received any notice of assessment or
proposed assessment by any taxing authority in connection with any Tax Returns
and there are no pending tax examinations of or tax claims asserted against the
Company or its properties, except as disclosed in Schedule 3.6, and the results
of any prior examinations have been properly reflected in the Financial
Statements. There has been no intentional disregard of any statute, regulation,
rule or revenue ruling in the preparation of any Tax Return applicable to the
Company.
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Except as disclosed in Schedule 3.6, there are no tax liens on any of the
properties or assets of the Company except for liens for current taxes not yet
due and payable. Except as disclosed in Schedule 3.6, there is no basis for any
additional assessment of any Taxes, penalties or interest with respect to the
Company. The Company has not waived any law or regulation fixing, or consented
to the extension of, any period of time for assessment of any Taxes which waiver
or consent is currently in effect.
[ ]1[ ]1 Financial Statements.
[ ]1[ ]1.1 Harbortowne Marina Lease. The Company is a party to a lease
agreement for dockage rights in Dania, Florida at the Harbortowne Marina
(the "Marina Lease"), a copy of which has been provided to Buyer. The
Marina Lease remains in full force and effect and the Company is not in
breach of any provisions thereof. Except with respect to parking
requirements imposed by the City of Dania, neither Seller nor Company is
aware of any reason for the Marina Lease to be terminated prior to May 31,
2000, its regular termination date. The sublease of the Marina Lease from
Company to Buyer remains in full force and effect.
[ ]1[ ]1 Condition of Assets.
[ ]1[ ]1.1 Contracts. Schedule 3.14 sets forth a complete and accurate
list of all material contracts to which the Company is a party or which
affect or relate to the Company's assets or its business or are used or
useful in its business as a going concern (each, a "Contract" and
collectively, the "Contracts") including, without limitation, those
described below. As used herein, the term Contract includes any written or
oral agreement, commitment, understanding or arrangement, including
purchase or sales of goods or services, commitments and letters of credit
or their equivalent.
"Contracts" includes, but is not limited to, the following:
[ ]1[ ]1.1 all Contracts relating to the future disposition or
acquisition of any assets individually or in the aggregate material to the
condition of the Business;
[ ]1[ ]1.1 Insurance. Schedule 3.15 contains a complete and correct
list and summary description of all material insurance policies maintained
by or on behalf of the Company as of the date hereof. Such policies are in
full force and effect, no premiums due thereunder have not been paid. The
Company has not received any notice that it is in default with the terms
and provisions of such policies in any respect.
[ ]1[ ]1 Property.
[ ]1[ ]1.1 No Violations. Except as disclosed in Schedule 3.17, the
Company has complied in all material respects with all environmental
permits and all applicable environmental laws pertaining to the Vessel and
the Marina
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Lease. None of the Company or the Seller has been notified that any person
has alleged any material violation by the Company of any environmental
permits or any applicable environmental law relating to the conduct of the
Business or the use, ownership or transferability of the Vessel or the
Marina Lease property.
[ ]1[ ]1.1 Employee Benefit Plans. Except as set forth on Schedule
3.19, the Company does not maintain or contribute to any "employee welfare
benefit plan" or "employee pension benefit plan," as such terms are defined
in ERISA (collectively, "Benefit Plans") which is under-funded or which
might give rise to a lien against the Company's assets. As used herein,
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time. The Company does not contribute, and has not
contributed since its formation, to a "multi-employer plan,"as that term is
defined in ERISA. Complete and correct copies of the following documents
have been attached hereto as Schedule 3.19:
[ ]1[ ]1.1 No Other Assets. The Seller does not own in his personal
capacity any assets which are used in the operation of the business of the
Company.
[ ]1[ ]1 Brokers and Finders. Neither the Seller nor the Company has
employed any broker, agent or finder or incurred any liability for any brokerage
fees, agent's commission or finder's fee concerning the transactions
contemplated hereby.
[ ]1[ ]1 Securities Representations and Warranties. Seller, as a further
material inducement to Buyer to enter into this Agreement, hereby represents and
warrants to Buyer and Leisure Time that:
[ ]1[ ]1.1 Seller has adequate means of providing for his current
needs and personal contingencies, is able to bear the substantial economic
risks of an investment in the Leisure Time Stock and Warrants for an
indefinite period of time, has no need for liquidity in such investment
and, at the present time, can afford a complete loss of such investment.
[ ]1[ ]1.1 Authorization. Buyer is a limited liability company duly
organized and validly existing under the laws of the state of Colorado and
has full authority to enter into this Agreement and to take all actions
required to be taken by Buyer pursuant to the provisions hereof, and this
Agreement constitutes the valid and binding obligation of Buyer,
enforceable in accordance with its terms.
[ ]1[ ]1 Brokers and Finders. The Buyer has not employed any broker, agent
or finder or incurred any liability for any brokerage fees, agent's commission
or finder's fee concerning the transactions contemplated hereby.
[ ]1[ ]1 Investment Intent. Buyer acknowledges that the purchase of the
Shares will not be registered under the Securities Act of 1933, as amended.
Buyer affirms that Buyer
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is acquiring the Shares for Buyer's own account for investment and not with a
view to, or for sale or other disposition in connection, any distribution
thereof nor with any present intention of selling or otherwise disposing
thereof.
ARTICLE .
COVENANTS OF SELLER
Seller covenants and agrees as follows:
[ ]1[ ]1 Operation in Ordinary Course. From the date of this Agreement to
the Closing Date, the Company shall (a) conduct its business only in the
ordinary course and in substantially the same manner as conducted at the date
hereof, (b) use its best efforts to preserve its business organization intact
and to retain the services of its present officers, key employees, purchasing
and sales personnel and representatives, (c) use its best efforts to preserve
its favorable relationship with its employees, customers, suppliers and others
having business relations with it, and (d) use its best efforts to comply with
all laws, ordinances and regulations applicable to it in the conduct of its
business.
[ ]1[ ]1 Notification. Seller shall promptly notify Buyer of (a) any event,
condition or circumstance occurring from the date of this Agreement through the
Closing Date which would constitute a violation or breach of this Agreement and
(b) any lawsuits, claims, proceedings or investigations which after the date
hereof are threatened or commenced against the Company, Seller or any officer,
director, employee, consultant, or agent of the Company with respect to the
affairs of the Company.
[ ]1[ ]1 Best Efforts. Seller shall utilize his best efforts to obtain,
prior to the Closing Date, all consents, approvals and waivers of third parties
required as a condition precedent to the obligations to close hereunder or that
may otherwise be necessary or desirable to permit the consummation of the
transactions contemplated in this Agreement and to satisfy all the conditions
necessary to Closing.
[ ]1[ ]1 Exclusive Dealing. So long as this Agreement remains in effect,
Seller shall not directly or indirectly take any action to encourage, initiate
or engage in discussions or negotiations with, or provide any information to,
any corporation, partnership, person, or other entity or group, other than
Buyer, concerning the purchase and sale of the Shares, or the purchase and sale
of substantially all of the assets of the Company, or any transaction similar to
the foregoing involving Seller or the Company.
[ ]1[ ]1 Further Assurances. Seller covenants and agrees that from and
after the Closing he will execute, deliver and acknowledge (or cause to be
executed, delivered and acknowledged), from time to time at the request of Buyer
and without further consideration, all such further instruments and take all
such further action as may be reasonably necessary or appropriate to transfer
more effectively to Buyer, or to perfect or record Buyer's title to or interest
in or to enable Buyer to use, the Shares, or to enable the
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Company to use its assets, or otherwise to confirm or carry out the provisions
and intent of this Agreement.
ARTICLE .
COVENANTS OF BUYER
[ ]1[ ]1 Xxxxxx Mortgage. Buyer covenants and agrees that the Xxxxxx
Mortgage held against the Company and the Vessel shall be satisfied by the
payment of the Mortgage Satisfaction Payment provided for herein.
ARTICLE .
LIABILITY SATISFACTION AMOUNTS
During the three (3) years after the Closing, the Buyer shall continue to
work on resolving the disclosed liabilities listed on Schedule 7 attached hereto
for the Company. Buyer shall provide Seller with a copy of the final resolution
of the liabilities after which Seller shall have thirty (30) days in which to
advise Buyer in the event Seller disagrees with the computation. If Seller
disagrees with the computation, then Seller's accountant and Buyer's accountant
shall select a third independent accountant who will make the computation of
resolved disclosed liabilities to the best of his or her ability. Such number
shall be conclusive. Seller shall reimburse Buyer by one-half of the amount by
which the total of the disclosed liabilities paid by Buyer is in excess of One
Million Four Hundred Fifty Thousand and No/100ths Dollars ($1,450,000.00).
Seller shall reimburse Buyer by said amount within a fifteen (15) day period
after the computation has become final.
ARTICLE .
CONDITIONS TO CLOSING
[ ]1[ ]1 Conditions Precedent to Obligations of Seller. The obligations of
Seller to proceed with the transactions contemplated hereunder to be consummated
at the Closing are subject, at the option of Seller, to the fulfillment of each
and all of the following conditions at or prior to the Closing Date:
[ ]1[ ]1.1 any fees, expenses or other payments incurred or owed by
Seller to any brokers or comparable third parties retained or employed by
it in connection with the transactions contemplated by the Agreement;
[ ]1[ ]1.1 Nature and Survival of Representations and Warranties. The
representations and warranties made by Seller and Buyer under this
Agreement shall survive the Closing for a period of one year except for the
representations given by Seller
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in Section 3.6 (Tax Returns and Reports) which shall survive the Closing
for so long as any governmental agency can assess against the Company
additional taxes, interest, penalties, deficiencies, fees or other
governmental charges based upon any actions or inactions of Seller or the
Company during any period prior to Closing. All statements made by or on
behalf of either party herein or in the Schedules, or in any other written
instrument delivered to the other party hereunder shall be deemed
representations and warranties of such party relied upon by such other
party regardless of any investigation made by or on behalf of such other
party, and shall not be affected in any respect by such investigation.
ARTICLE .
GENERAL PROVISIONS
The parties further covenant and agree as follows:
[ ]1[ ]1 Waiver of Terms. Any of the terms or conditions of this Agreement
may be waived at any time by the party or parties entitled to the benefit
thereof but only by a written notice signed by the party or parties waiving such
terms or conditions.
[ ]1[ ]1 Amendment of Agreement. This Agreement may be amended,
supplemented or interpreted at any time only by written instrument duly executed
by each of the parties hereto.
[ ]1[ ]1 Payment of Expenses. The parties shall each pay their own
expenses, including, without limitation, the expenses of their own counsel and
accountants, incurred in connection with the preparation, execution and delivery
of this Agreement and the other agreements and documents referred to herein and
the consummation of the transactions contemplated hereby and thereby.
[ ]1[ ]1 Parties in Interest, Assignment. All representations, warranties,
covenants, terms and conditions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective heirs, legal
representatives, successors and permitted assigns of the parties hereto;
provided, however, that none of the rights or obligations of any of the parties
hereto may be assigned without the prior written consent of, in the case of
assignment by Seller, Buyer, or, in the case of assignment by Buyer, Seller,
which consent shall not unreasonably be withheld; provided however, that Buyer
may assign all or part of its rights under this Agreement and may delegate all
or part of its obligations under this Agreement to one or more corporations all
or substantially all of the capital stock or equity interest of which is owned,
directly or indirectly, by Buyer, or which entity owns, directly or indirectly,
all of the membership interest of Buyer, or to Foothill Capital Corporation, in
which event all the rights and powers of Buyer and the remedies available to it
under this Agreement shall extend to and be enforceable by such assignee. In the
event of any such assignment and delegation, the term "Buyer" as used in this
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Agreement shall be deemed to refer to each such assignee of Buyer and shall be
deemed to include both Buyer and each such assignee where appropriate.
[ ]1[ ]1 Notices. All notices, requests, demands, service of process and
other communications required or permitted to be given hereunder shall be by
hand-delivery, certified or registered mail, return receipt requested; by
telecopier, or air courier to the parties set forth below. The notice shall be
considered given at the time personally delivered, if delivered by hand or by
courier; at the time received if sent certified or registered mail; when receipt
is acknowledged by telecopy equipment, if telecopied.
If to Buyer: Leisure Express Cruise, LLC
0000 Xxxxxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx
Telecopier No.: _____________
With a copy to: Xxxxxxx X. Xxxx, Esq.
Xxxxx, Xxxxxxxx & Xxxxxxx, LLP
Suite 3100, Promenade II
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
And a copy to: Foothill Capital Corporation
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxxxx
Telecopier No.: 000-000-0000
If to Seller: Xxxx Xxxxxx
0000 Xxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Telecopier No.: 000-000-0000
With a copy to: Xxx Xxxxxxx, Esq.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopier No.: 000-000-0000
[ ]1[ ]1 Severability. In the event that any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect for any reason,
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the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions of this Agreement shall not be in any
way impaired.
[ ]1[ ]1 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed an original, and all of which together
shall constitute one and the same agreement. One or more counterparts of this
Agreement (or portions hereof) may be delivered via telecopier with the
intention that they shall have the same effect as an original counterpart hereof
(or of portions of an original counterpart hereof).
[ ]1[ ]1 Headings. The headings of the Sections and the subsections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
[ ]1[ ]1 Governing Law; Jurisdiction. This Agreement shall be governed,
construed and enforced in accordance with the laws of the State of Georgia.
[ ]1[ ]1 Instruments of Further Assurance. Each of the parties hereto
agrees, upon the request of any of the other parties hereto, from time to time
to execute and deliver to such other party or parties all such instruments and
documents of further assurance or otherwise as shall be reasonable under the
circumstances, and to do any and all such acts and things as may reasonably be
required to carry out the obligations of such requested party hereunder.
[ ]1[ ]1 Merger. This Agreement sets forth the entire agreement between the
parties and supercedes all prior agreements, commitments, understandings and
obligations whatsoever oral or written, including, but not limited to the
Purchase Option Agreement dated January 22, 1999 issued by Company in favor of
Buyer.
ARTICLE .
TERMINATION
To the extent under the circumstances set forth herein, this Agreement may
be terminated at any time by Buyer or Seller prior to the Closing, upon written
notice to the other party, and upon such termination, the terminating party
shall have no liability to the other parties.
[ ]1[ ]1 Material Adverse Change. Termination may be made by Buyer if a
material adverse change in the financial condition, physical condition or
business of the Vessel or the Company shall have occurred or the Vessel or the
Company shall have suffered a material loss or damage which effects or impairs
the ability of the Vessel or the Company to conduct business.
[ ]1[ ]1 Noncompliance by Seller. Buyer may terminate this agreement if the
terms, covenants or conditions of this Agreement to be complied with or
performed by Seller at
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or before the Closing shall not by that time have been complied with or
performed in all material respects and such noncompliance or nonperformance
shall not have been waived in writing by Buyer.
[ ]1[ ]1 Noncompliance by Buyer. This agreement may be terminated by Seller
if the terms, covenants or conditions of this Agreement to be complied with or
performed by Buyer at or before the Closing shall not by that time have been
complied with or performed in all material respects and such noncompliance or
nonperformance shall not have been waived in writing by Seller.
[Signatures on Following Page]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto on the day and year first above written.
"SELLER"
J. Xxxx Xxxxxx
/s/
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"BUYER"
Leisure Express Cruise, LLC
By: /s/
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Its:
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"LEISURE TIME"
Leisure Time Casinos & Resorts, Inc.
By: /s/
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Its:
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