<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 1, 1999
HORSESHOE GAMING HOLDING CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
============================================================================================
<S> <C> <C>
Delaware 333-80737 88-0425131
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification Number)
============================================================================================
</TABLE>
4024 South Industrial Road, Las Vegas, NV 89103
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 650-0080
Not Applicable
(Former name or former address, if changed since last report.)
Page 1
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) On December 1, 1999, Horseshoe Gaming Holding Corp., a Delaware
corporation (the "Company"), acquired from Empress Entertainment, Inc.
("Empress"), one of the largest operators of riverboat casinos serving the
Chicago metropolitan area, all of the outstanding stock of two of Empress'
operating subsidiaries, Empress Casino Hammond Corporation ("Empress Hammond")
and Empress Casino Joliet Corporation ("Empress Joliet") for approximately
$493.0 million in cash. The acquisition was accomplished through two
simultaneous merger transactions (collectively the "Empress Mergers") of the
Company's wholly-owned subsidiaries, Horseshoe Acquisition Indiana, Inc.
("Horseshoe Indiana") with and into Empress Hammond, and Horseshoe Acquisition
Illinois, Inc. ("Horseshoe Illinois") with and into Empress Joliet. As
additional consideration for the Empress Mergers, the Company assumed the
indebtedness and obligations of Empress, Empress River Casino Finance
Corporation, Empress Hammond, Empress Joliet and Hammond Residential LLC, a
wholly-owned subsidiary, of Empress Hammond ("Residential"), under an
Indenture, dated as of June 18, 1998, for $150 million 8 1/8% Senior
Subordinated Notes due 2006 (the "Notes"). Empress Hammond, Empress Joliet and
Residential, which will continue to operate as wholly-owned subsidiaries of the
Company, will remain as guarantors of the Notes, and the Company's restricted
subsidiaries were added as guarantors of the Notes. Empress Hammond, Empress
Joliet and Residential were also added as guarantors under the Indenture, dated
as of May 11, 1999, by and between the Company and U.S. Trust Company, National
Association, for 8 5/8% Senior Subordinated Notes due 2009, and the Indenture,
dated as of June 15, 1997, by and between Horseshoe Gaming, L.L.C. and U.S.
Trust Company of Texas, N.A., for 9 3/8% Senior Subordinated Notes due 2007.
The sources of the funds used by the Company to pay the cash
merger consideration consisted of funds obtained under: (i) a Credit Agreement,
dated as of June 30, 1999, by and among the Company, DLJ Capital Funding, Inc.,
as Syndication Agent, Canadian Imperial Bank of Commerce, as Administrative
Agent, Wells Fargo Bank, National Association, as Documentation Agent, and the
Lenders listed therein; and (ii) an Indenture, dated as of May 11, 1999,
between the Company and U.S. Trust Company, National Association, as trustee.
The Empress Mergers were consummated pursuant to an Agreement and
Plan of Merger, dated as of September 2, 1998, by and among the Company,
Horseshoe Gaming, L.L.C., certain of the Company's affiliates named therein,
Empress, Empress Hammond and Empress Joliet (as amended by the First Amendment
dated as of March 25, 1999 and by the Second Amendment dated as of July 23,
1999, and as modified by the Assumption Agreement dated as of November 18, 1999,
collectively, the "Merger Agreement"). The consideration was agreed upon as the
result of arm's-length, good faith negotiations between the parties to the
Merger Agreement and their respective representatives.
(b) Empress Hammond and Empress Joliet are operators of riverboat
casinos in Joliet, Illinois and Hammond, Indiana. The Company currently intends
that Empress Hammond and Empress Joliet will continue in the same businesses.
Page 2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) The financial statements required to be filed by Item 7(a) of this
Form 8-K will be filed by the Company within 60 days after the date
that this Form 8-K is filed with the Securities and Exchange
Commission.
(b) Pro Forma Financial Information
HORSESHOE GAMING HOLDING CORP.
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
You should be read the following unaudited pro forma combined financial
statements of Horseshoe Gaming Holding Corp. ("Horseshoe") and Empress
Entertainment, Inc. ("Empress"). The effects on the combined statement of
operations are presented as if all such transactions were consummated on the
first day of the respective periods presented. The effects on the combined
balance sheets are presented as if all such transactions occurred on September
30, 1999.
The unaudited pro forma combined statement of operations do not reflect
any adjustments for cost savings that may be realized as a result of combining
the operations of Horseshoe and Empress following the Empress Merger.
The unaudited pro forma combined financial statements have been prepared
based upon currently available information and assumptions that we have deemed
appropriate. This pro forma information may not be indicative of what actual
results would have been, nor does such data purport to represent the combined
financial results of Horseshoe Gaming and Empress for future periods.
Page 3
<PAGE> 4
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
HISTORICAL
HORSESHOE HISTORICAL PRO FORMA PRO FORMA FOR THE
GAMING EMPRESS ADJUSTMENTS MERGER
============ =========== =========== =================
<S> <C> <C> <C> <C>
Current Assets:
Cash & Cash Equivalents $ 78.8 $ 35.8 $ 15.0 (a) $ 129.2
(0.4) (b)
Secured Proceeds 349.5 - (349.5) (a) $ -
Account Receivable, Net 7.8 3.7 - $ 11.5
Inventories 1.9 - $ 1.9
Prepaid Expenses and Other 7.3 4.8 - $ 12.1
- - $ -
------------ ---------- --------- -----------
Total Current Assets 445.3 44.3 (334.9) $ 154.7
------------ ---------- --------- -----------
Net Property and Equipment 363.1 189.9 7.6 (c) $ 560.6
Other Assets:
Goodwill, net 50.9 - 418.0 (c) $ 468.9
Investment in Unconsolidated Subsidiary - 11.0 (11.0) (b) $ -
Asset Held for Sale 4.0 - $ 4.0
Other 70.8 23.1 (4.6) (a) $ 95.8
(0.7) (b)
(17.8) (c)
(10.0) (a)
20.0 (d)
15.0 (c)
------------ ---------- --------- -----------
$ 934.1 $ 268.3 $ 81.6 $ 1,284.0
------------ ---------- --------- -----------
Current Liabilities:
Accounts Payable $ 4.6 $ 5.0 $ 9.6
Accrued Expenses 42.5 24.9 4.0 (d) $ 71.4
Interest Payable 25.4 3.1 (3.1) (a) $ 25.4
$ -
$ -
Current Portion of Long-Term Debt: 9.9 - $ 9.9
------------ ---------- --------- -----------
Total Current Liabilities 82.4 33.0 0.9 $ 116.3
Long-Term Debt (Net of Current Portion): 789.0 150.0 150.0 (a) $ 1,094.3
15.0 (15.0) (b)
5.3 (e)
Long-Term Accrued Expenses 22.0 16.0 (d) $ 38.0
Commitments and Contingencies (l)
Redeemable Ownership Interest 7.0 - - $ 7.0
Member's / Stockholders' Equity: 33.7 70.3 (73.2) (f) $ 28.4
(5.3) (e)
2.9 (b)
------------ ---------- --------- -----------
$ 934.1 $ 268.3 $ 81.6 $ 1,284.0
------------ ---------- --------- -----------
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements.
Page 4
<PAGE> 5
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA
HORSESHOE EMPRESS ADJUSTMENTS PRO FORMA
------ ------ ------ ------
(in millions)
<S> <C> <C> <C> <C>
REVENUE
Casino $338.0 $315.9 $ -- $653.9
Food and Beverage 37.8 24.2 -- 62.0
Hotel 25.7 1.3 -- 27.0
Retail and Other 10.5 5.5 -- 16.0
------ ------ ------ ------
412.0 346.9 -- 758.9
Promotional Allowances 48.3 11.2 -- 59.5
------ ------ ------ ------
Total Net Revenues 363.7 335.7 -- 699.4
------ ------ ------ ------
OPERATING EXPENSES:
Casino 185.1 164.3 -- 349.4
Food and Beverage 11.5 23.1 -- 34.6
Hotel 8.8 3.9 -- 12.7
Retail and Other 5.0 31.1 -- 36.1
General and Administrative 45.7 15.4 -- 61.1
Depreciation and Amortization 28.5 16.0 14.8(c) 68.0
3.0(d)
5.7(h)
Preopening -- 1.5 -- 1.5
Development 0.2 -- -- 0.2
------ ------ ------ ------
Total Operating Expenses 284.8 255.3 23.5 563.6
------ ------ ------ ------
OPERATING PROFIT BEFORE CORPORATE
EXPENSES AND ASSET WRITE-DOWN 78.9 80.4 (23.5) 135.8
Corporate Expenses 3.2 5.9 -- 9.1
Asset Write-Down 8.0 -- -- 8.0
------ ------ ------ ------
OPERATING INCOME 67.7 74.5 (23.5) 118.7
Interest Expense (43.0) (14.4) (15.0)(g) (75.3)
Interest expense-ownership repurchases (2.9)(e)
Interest Income 8.8 2.7 (2.2)(b) 9.3
State Taxes -- (0.4) -- (0.4)
Minority Interest in loss of subsidiary (0.3) -- 0.3(h) --
Other, net (0.3) -- -- (0.3)
------ ------ ------ ------
INCOME FROM CONTINUING OPERATIONS $ 32.9 $ 62.4 $(43.3) $ 52.0
====== ====== ====== ======
</TABLE>
Page 5
<PAGE> 6
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA
HORSESHOE EMPRESS ADJUSTMENTS PRO FORMA
------ ------ ------ ------
(in millions)
<S> <C> <C> <C> <C>
REVENUE
Casino $429.8 $373.0 $ -- $802.8
Food and Beverage 48.3 27.9 -- 76.2
Hotel 35.4 1.6 -- 37.0
Retail and Other 10.0 5.5 -- 15.5
------ ------ ------ ------
523.5 408.0 -- 931.5
Promotional Allowances 62.3 11.3 -- 73.6
------ ------ ------ ------
Total Net Revenues 461.2 396.7 -- 857.9
------ ------ ------ ------
OPERATING EXPENSES:
Casino 245.2 194.0 -- 439.2
Food and Beverage 16.0 26.0 -- 42.0
Hotel 11.8 1.0 -- 12.8
Retail and Other 6.9 3.2 -- 10.1
General and Administrative 57.2 70.5 -- 127.7
Depreciation and Amortization 33.9 21.1 19.7(c) 86.3
4.0(d)
7.6(h)
Preopening 0.7 -- -- 0.7
Development 0.5 -- -- 0.5
------ ------ ------ ------
Total Operating Expenses 372.2 315.8 31.3 719.3
------ ------ ------ ------
OPERATING PROFIT BEFORE CORPORATE
EXPENSES AND ASSET WRITE-DOWN 89.0 80.9 (31.3) 138.6
Corporate Expenses 12.9 -- -- 12.9
Asset Write-Down 12.9 -- -- 12.9
------ ------ ------ ------
OPERATING INCOME 63.2 80.9 (31.3) 112.8
Interest Expense (39.9) (25.6) (30.9)(g) (100.1)
Interest expense-ownership repurchases (3.7)(e)
Interest Income 2.2 6.7 (4.8)(b) 4.1
State Taxes -- (0.4) -- (0.4)
Minority Interest in loss of subsidiary 0.6 -- (0.6)(h) --
Other, net (0.2) -- -- (0.2)
------ ------ ------ ------
INCOME FROM CONTINUING OPERATIONS $ 25.9 $ 61.6 $(71.3) $ 16.2
====== ====== ====== ======
</TABLE>
Page 6
<PAGE> 7
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(a) Reflects the net increase in long-term debt from $300.0 million to
be drawn under our new credit facility. In addition to providing
funds for the purchase of Empress, the proceeds from the
redeemable portion of the notes (secured proceeds account) will be
used in part to repurchase the $150.0 million of Empress notes.
Adjustments also include the removal of $4.6 million in
unamortized deferred finance charges and $3.1 million of accrued
interest relating to the repurchase of the Empress notes.
Following is the estimated sources and uses of funds necessary to
consummate the Empress merger:
<TABLE>
<CAPTION>
(IN MILLIONS)
<S> <C>
Sources of Funds:
Proceeds from secured proceeds account $349.5
New credit facility borrowings 300.0
Excess borrowings (15.0)
Empress merger deposit 10.0
------
Total sources $644.5
======
Uses of Funds:
Repurchase Empress notes $150.0
Premium on Empress notes 1.5
------
Subtotal $151.5
Net cash to be paid for the purchase of Empress:
Purchase price $609.0
Less: Empress notes (150.0)
Plus: Estimated capital expenditures 20.0
Plus: Net Working capital 14.0
-------
Net cash to be paid to Empress 493.0
------
Total uses $644.5
------
</TABLE>
(b) Reflects reductions for assets and liabilities, which are not
included in our purchase of Empress. Also eliminates interest
income for the $150 million of 10.75% Senior Notes of Empress
retired on April 1, 1999.
(c) Reflects estimated expense for the amortization of the excess of
the purchase price paid over the fair value of the assets
acquired, $14.8 million and $19.7 million for the nine months
ended September 30, 1999 and year ended December 31, 1998,
respectively. The following table sets forth the purchase price of
Empress and the preliminary allocation as of September 30, 1999:
<TABLE>
<CAPTION>
(IN MILLIONS)
<S> <C>
Purchase Price:
Initial purchase price $609.0
Net working capital adjustment 14.0
Empress tender premium 1.5
Estimated capital expenditures adjustment 20.0
------
644.5
------
Preliminary Allocation:
Net working capital $14.0
Land and land improvements 18.5
Buildings, riverboats, furniture, fixtures and equipment 179.0
Other long-term assets 15.0
------
Subtotal (fair value of net assets acquired) 226.5
Goodwill (excess of purchase price over fair
Value of assets acquired) 418.0
------
$644.5
======
</TABLE>
Page 7
<PAGE> 8
We are currently in the process of allocating the purchase price
among the tangible and intangible assets to be acquired and the
liabilities to be assumed. Reflects reductions of $17.8 million in
other assets of Empress, which we believe, have no value. We
estimate the value of other acquired intangibles included in other
long-term assets are $10 million for trademarks and $5 million for
customer lists, amortized over 5 years. The final purchase price
and its allocation will be based on independent appraisals,
discounted cash flows, quoted market prices and estimates by
management which are expected to be completed within one year
following the Empress merger. Upon completion of the purchase
price allocation process, to the extent the purchase price exceeds
the fair value of the net identifiable tangible and intangible
assets acquired, such excess will be allocated to goodwill and
amortized over approximately twenty-five (25) years.
(d) On July 23, 1999, we entered into a consulting agreement with
Empress to provide us with a wide range of consulting and advisory
services in connection with operating casinos in the greater
Chicago market and, in particular, exploiting in full the
opportunities presented to Empress Joliet as a result of the
legislation which now permits dockside gaming. In consideration
for the consulting and advisory services to be provided and in
recognition of the economic benefits to us of maintaining dockside
gaming, we will pay Empress a monthly consulting fee of $333,333
for a period of five years, the total of all such payments not to
exceed $20,000,000. The consulting payments will not commence
until the closing of the Empress merger and will be suspended
during any period during which Empress Joliet is prohibited from
conducting dockside gaming activities. All consulting payments
will be accelerated if we undergo a change in control.
(e) Records the purchase of approximately .7% of ownership interests
in Horseshoe Gaming for $5.3 million to facilitate our formation
as a Subchapter S corporation under the Internal Revenue Code of
1986, as amended. During the second and third quarter of 1999, the
Company also purchased approximately 11.8% ownership interests in
Horseshoe Gaming for $19.3 million in cash and debt of
approximately $41.0 million, of which $9.8 is current and $31.2 is
long-term. The increase in interest expense reflects the effects
of these transactions occurring on the beginning of each
respective period.
(f) Reflects the elimination necessary for the consolidation of
Empress based on the allocation of the purchase price. The $73.2
million adjustment is comprised of Empress' historical equity of
$70.3 million, plus equity adjustments of $2.9 million for the net
liabilities not acquired (note (b)).
(g) Reflects the changes in interest expense, including amortization
of related deferred financing charges and original issue discount
arising from the issuance of $600.0 million principal amount of
notes, the anticipated borrowing of approximately $230.0 million
under our new credit facility, the repurchase of $150.0 million of
Empress notes, the repayment of Empress' $100.0 million credit
facility, of which $15.0 million was outstanding on September 30,
1999. The pro forma effects of such borrowings on interest expense
have been computed at a rate of 8 1/2% on our new credit facility.
Each 1/8% change in the rate on these borrowings would result in a
change in interest expense of $216,000 for nine months ended
September 30, 1999 and $288,000 for the year ended December 31,
1998.
(h) Reflects the effects of the repurchase of 8.08% of limited
partnership interests in HE for $30.4 million. The purchase price
was allocated as follows: $16.0 million to goodwill to be
amortized over 25 years, $10.0 million to a non-compete agreement
to be amortized over 2 years, $4.0 million to another asset for
release of claims and consent to be amortized over 2 years and
$0.4 million to the write-up of the existing riverboat to be
depreciated over 15 years. Payment for the purchase was made as
follows (i) the credit of $2.2 million to the minority interest
holders' capital account, which was a deficit, (ii) an accrued
liability to be paid over three years, $4.1 million of which is
current and $22.0 million of which is long-term, and (iii) the use
of $2.1 million in cash to make the initial payment due upon
execution of the agreement to repurchase. The increase in
amortization expense is comprised of $0.5 million and $0.6 million
for amortization of goodwill and $5.2 million and $7.0 million for
amortization of non-compete and release of claims and consent for
the nine months ended September 30, 1999 and the year ended
December 31, 1998, respectively. Adjustment also includes the
removal of $0.3 million of minority interest income and $0.6
million of minority interest expense for the nine months ended
September 30, 1999 and the year ended December 31, 1998,
respectively.
Page 8
<PAGE> 9
(c) Exhibits.
# 2.1 Agreement and Plan of Merger, dated as of September 2,
1998, by and among Horseshoe Gaming, L.L.C., Horseshoe Gaming (Midwest), Inc.,
Empress Acquisition Illinois, Inc., Empress Acquisition Indiana, Inc., Empress
Casino Joliet Corporation, Empress Casino Hammond Corporation and Empress
Entertainment, Inc.
## 2.2 First Amendment to Agreement and Plan of Merger, dated
as of March 25, 1999, by and among Horseshoe Gaming, L.L.C., Horseshoe Gaming
(Midwest), Inc., Empress Acquisition Illinois, Inc., Empress Acquisition
Indiana, Inc., Empress Casino Joliet Corporation, Empress Casino Hammond
Corporation and Empress Entertainment, Inc.
* 2.3 Second Amendment to Agreement and Plan of Merger, dated
as of July 23, 1999, by and among Horseshoe Gaming, L.L.C., Horseshoe Gaming
(Midwest), Inc., Empress Acquisition Illinois, Inc., Empress Acquisition
Indiana, Inc., Empress Casino Joliet Corporation, Empress Casino Hammond
Corporation and Empress Entertainment, Inc.
** 2.4 Assumption Agreement, dated as of November 18, 1999, by
and among Horseshoe Gaming, L.L.C., Horseshoe Gaming (Midwest), Inc., Empress
Acquisition Illinois, Inc., Empress Acquisition Indiana, Inc., Empress
Entertainment, Inc., Empress Casino Joliet Corporation, Empress Casino Hammond
Corporation, Horseshoe Acquisition Illinois, Inc., Horseshoe Acquisition
Indiana, Inc., and Horseshoe Gaming Holding Corp.
- ---------------------------------------
# Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 8-K, filed September
18, 1998.
## Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-K for the fiscal
year ended December 31, 1998, filed March 29, 1999.
* Filed as an Exhibit to Horseshoe Gaming Holding Corp. Amendment No. 1 to
Form S-4 Registration Statement, filed July 30, 1999.
** Filed herewith.
Page 9
<PAGE> 10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
HORSESHOE GAMING HOLDING CORP.
By: /s/ Kirk C. Saylor
-----------------------------
Name: Kirk C. Saylor
Title: Chief Financial Officer
Date: December 16, 1999
Page 10
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
- -----------------------------------------------------------------------------------------------
<S> <C>
2.4 Assumption Agreement, dated as of November 18, 1999, by and among
Horseshoe Gaming, L.L.C., Horseshoe Gaming (Midwest), Inc., Empress
Acquisition Illinois, Inc., Empress Acquisition Indiana, Inc.,
Empress Entertainment, Inc., Empress Casino Joliet Corporation,
Empress Casino Hammond Corporation, Horseshoe Acquisition Illinois,
Inc., Horseshoe Acquisition Indiana, Inc., and Horseshoe Gaming
Holding Corp.
- -----------------------------------------------------------------------------------------------
</TABLE>
Page 11
<PAGE> 1
ASSUMPTION AGREEMENT
This Assumption Agreement ("Assumption Agreement"), dated as of November
18, 1999, is entered into by and among Horseshoe Gaming, L.L.C., a Delaware
limited liability company ("Parent"), Horseshoe Gaming (Midwest), Inc., a
Delaware corporation ("Horseshoe"), Empress Acquisition Illinois, Inc., a
Delaware corporation ("Empress Illinois"), Empress Acquisition Indiana, Inc., a
Delaware corporation ("Empress Indiana"), Empress Entertainment, Inc., a
Delaware corporation ("Empress"), Empress Casino Joliet Corporation, an Illinois
corporation ("Empress Joliet"), Empress Casino Hammond Corporation, an Indiana
corporation ("Empress Hammond"), Horseshoe Acquisition Illinois, Inc., an
Illinois corporation ("Horseshoe Illinois"), Horseshoe Acquisition Indiana,
Inc., an Indiana corporation ("Horseshoe Indiana"), and Horseshoe Gaming Holding
Corp., a Delaware corporation ("HGHC").
RECITALS
A. Parent, Horseshoe, Empress Illinois, Empress Indiana, Empress, Empress
Joliet and Empress Hammond have heretofore entered into the Agreement and Plan
of Merger, dated as of September 2, 1998, as amended by the First Amendment,
dated as of March 25, 1999 (the "First Amendment") and the Second Amendment,
dated as of July 23, 1999 (the "Second Amendment"), which provides, among other
things, for the merger of Empress Illinois with and into Empress Joliet, and the
merger of Empress Indiana with and into Empress Hammond. The Merger Agreement as
amended by the First Amendment and Second Amendment is referred to herein as the
"Merger Agreement." All capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to them in the Merger Agreement.
-1-
<PAGE> 2
B. Pursuant to the First Amendment, the parties agreed that HGHC would
replace Horseshoe as a party to the Merger Agreement and that Horseshoe Illinois
and Horseshoe Indiana would replace Empress Illinois and Empress Indiana,
respectively, as parties to the Merger Agreement (the "Assumptions").
C. All of the parties hereto wish to enter into this Assumption Agreement
to implement and evidence the Assumptions contemplated by the First Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Status of Merger Agreement. Except as set forth herein and as otherwise
necessary to effectuate the intent of this Assumption Agreement, the Merger
Agreement shall remain in full force and effect in accordance with its
terms and shall not be waived, modified, superseded, or otherwise affected
by this Assumption Agreement. This Assumption Agreement is not to be
construed as a release, waiver or modification of any of the terms,
conditions, representations, warranties, covenants, rights or remedies set
forth in the Merger Agreement, except as specifically set forth herein.
2. Assumption of Obligations. Upon and subject to the terms herein, the
parties agree that:
a. HGHC Assignment and Assumption. Horseshoe does hereby convey, transfer
and assign to HGHC, its successors and assigns forever, all right,
title and interest of Horseshoe under the Merger Agreement, and HGHC,
for itself and its successors and assigns, does hereby unconditionally
assume and agree to pay, discharge and perform
-2-
<PAGE> 3
when lawfully due all liabilities, agreements, covenants, commitments
and obligations of every kind and nature of Horseshoe under the Merger
Agreement, in each case effective as of the date hereof. All
references in the Merger Agreement to Horseshoe shall be replaced with
references to HGHC.
b. Horseshoe Illinois Assignment and Assumption. Empress Illinois does
hereby convey, transfer and assign to Horseshoe Illinois, its
successors and assigns forever, all right, title and interest of
Empress Illinois under the Merger Agreement, and Horseshoe Illinois
for itself and its successors and assigns, does hereby unconditionally
assume and agree to pay, discharge and perform when lawfully due all
liabilities, agreements, covenants, commitments and obligations of
every kind and nature of Empress Illinois under the Merger Agreement,
effective as of the date hereof. All references to Empress Illinois in
the Merger Agreement shall be replaced with references to Horseshoe
Illinois. Horseshoe Illinois shall be merged with and into Empress
Joliet in accordance with the laws of the State of Illinois and the
Merger Agreement (the "Illinois Merger"). Empress Joliet shall be the
surviving corporation of the Illinois Merger and such merger shall be
governed by the laws of the State of Illinois.
c. Horseshoe Indiana Assignment and Assumption. Empress Indiana does
hereby convey, transfer and assign to Horseshoe Indiana, its
successors and assigns forever, all right, title and interest of
Empress Indiana under the Merger Agreement, and Horseshoe Indiana, for
itself and its successors and assigns, does hereby unconditionally
assume and agree to pay, discharge and perform when lawfully due
-3-
<PAGE> 4
all liabilities, agreements, covenants, commitments and obligations of
every kind and nature of Empress Indiana under the Merger Agreement,
effective as of the date hereof. All references to Empress Indiana in
the Merger Agreement shall be replaced with references to Horseshoe
Indiana. Horseshoe Indiana shall be merged with and into Empress
Hammond in accordance with the laws of the State of Indiana and the
Merger Agreement (the "Indiana Merger"). Empress Hammond shall be the
surviving corporation of the Indiana Merger and such merger shall be
governed by the laws of the State of Indiana.
3. Authorization of the Assumption Agreement. Each of the parties hereto
represents and warrants that (a) its execution, delivery, and performance
of this Assumption Agreement has been duly authorized by all necessary
corporate or limited liability company action, as applicable, (b) this
Assumption Agreement is a legal, valid and binding obligation of such
entity enforceable in accordance with its terms, and (c) this Assumption
Agreement does not conflict with any agreement or obligation of such party.
4. Counterparts. This Assumption Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together constitute one and the same instrument.
5. Governing Law. This Assumption Agreement shall be a contract made and
governed under the laws of the State of Delaware, without regard to
conflict of law principles.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the parties have duly executed this Assumption
Agreement as of the date first written above.
"PARENT"
HORSESHOE GAMING, L.L.C.
By Its Manager: Horseshoe Gaming, Inc.
By: /s/ Jack B. Binion
-----------------------------------
Printed: Jack B. Binion
-----------------------------------
Its: President
-----------------------------------
"HORSESHOE"
HORSESHOE GAMING (MIDWEST), INC.
By: /s/ Jack B. Binion
------------------------------------
Printed: Jack B. Binion
------------------------------
Its: President
---------------------------------
-5-
<PAGE> 6
"EMPRESS ILLINOIS"
EMPRESS ACQUISITION ILLINOIS, INC.
By: /s/ Jack B. Binion
-----------------------------------
Printed: Jack B. Binion
------------------------------
Its: President
---------------------------------
"EMPRESS INDIANA"
EMPRESS ACQUISITION INDIANA, INC.
By: /s/ Jack B. Binion
-----------------------------------
Printed: Jack B. Binion
------------------------------
Its: President
---------------------------------
"HORSESHOE ILLINOIS"
HORSESHOE ACQUISITION ILLINOIS, INC.
By: /s/ Jack B. Binion
-----------------------------------
Printed: Jack B. Binion
------------------------------
Its: President
---------------------------------
-6-
<PAGE> 7
"HORSESHOE INDIANA"
HORSESHOE ACQUISITION INDIANA, INC.
By: /s/ Jack B. Binion
-----------------------------------
Printed: Jack B. Binion
------------------------------
Its: President
---------------------------------
"EMPRESS"
EMPRESS ENTERTAINMENT, INC.
By: /s/ Peter A. Ferro, Jr.
------------------------------------
Printed: Peter A. Ferro, Jr.
-------------------------------
Its: Chief Executive Officer
---------------------------------
"EMPRESS JOLIET"
EMPRESS CASINO JOLIET CORPORATION
By: /s/ Peter A. Ferro, Jr.
------------------------------------
Printed: Peter A. Ferro, Jr.
-------------------------------
Its: Chief Executive Officer
---------------------------------
-7-
<PAGE> 8
"EMPRESS HAMMOND"
EMPRESS CASINO HAMMOND CORPORATION
By: /s/ Peter A. Ferro, Jr.
------------------------------------
Printed: Peter A. Ferro, Jr.
-------------------------------
Its: Chief Executive Officer
---------------------------------
-8-
