SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported):
March 18, 1977
PLAYERS INTERNATIONAL, INC.
(Exact name of registrant as specified in its
charter)
Nevada
(State or other
jurisdiction of
incorporation)
0-14897
(Commission File
Number)
95-41745832
(I.R.S.
Employer
Identification
No.)
1300 Atlantic Avenue, Suite 800
Atlantic City, New Jersey
(Address of principal executive
offices)
08402
(Zip Code)
Registrant's telephone number, including area code:
(609) 449-7777
(Not applicable)
(Former name or former address, if changed since last
report)
<PAGE>
This Form 8-K/A is being filed to include the final version of
Exhibit 2.1 that was previously filed on April 2, 1997.
Item 7. Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
Exhibit No. Exhibit Description
2.1 Asset Purchase Agreement by and among
Players Nevada, Inc., Players Mesquite
Land, Inc., Players Mesquite Golf Club,
Inc. and RBG, LLC.
<PAGE
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
PLAYERS INTERNATIONAL, INC.
(Registrant)
By /s/ Henry M. Applegate
Henry M. Applegate
Senior Vice President and Chief
Financial Officer and Chief
Accounting Officer
Dated: April 9, 1997
PH02/82628.5
PH02/82628.5
- 3 -
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made this 28th day of
February, 1997, by and among PLAYERS NEVADA, INC., a Nevada
corporation ("Players Nevada"), PLAYERS MESQUITE LAND, INC., a
Nevada corporation ("Players Mesquite"), PLAYERS MESQUITE GOLF
CLUB, INC., a Nevada corporation ("Players Golf" and together
with Players Nevada and Players Mesquite, sometimes herein
collectively called "Seller"), each having an office at 930 West
Mesquite Blvd., Mesquite Nevada 89024, and RBG, LLC, a Nevada
limited liability company ("Buyer"), with offices at 911 No.
Buffalo Drive, Suite 201, Las Vegas, NV 89128.
R E C I T A L S
A. Players Nevada is the fee owner of certain real
property in the City of Mesquite, County of Clark, and State of
Nevada, known as Assessor's Parcel Nos. 670-320-019, 670-350- 007
and 670-350-004 (the "Casino Land"), upon which Players Nevada is
presently operating a hotel and casino (the "Casino Hotel").
B. Players Mesquite is the fee owner of certain
undeveloped land located in the City of Mesquite, County of
Clark, and State of Nevada, known as Assessor's Parcel No. 670-
350-003 (the "Undeveloped Land").
C. Players Golf is the owner of a leasehold interest in
certain land in the City of Mesquite, County of Clark, and State
of Nevada, which land is more particularly described pursuant to
that certain Memorandum of Lease dated June 2, 1995, between
Players Golf and River View Limited Liability Company, recorded
in the real estate records of Clark County, Nevada on June 7,
1995 in Book 950607 as Instrument No. 00510 as amended; and
maintains a land use permit (Serial No. N-59743) from the US
Dept. of the Interior, Bureau of Land Management, for a parcel
known as "Government Lot 2"; upon which lands (collectively, the
"Golf Course Land") is located a golf course (the "Golf Course").
D. Seller operates the Casino Land, Undeveloped Land, Golf
Course Land, Casino Hotel, Golf Course and certain related assets
and properties as a casino/hotel/resort business known as
"Players Island Resort-Casino-Spa-Golf Course" in Mesquite,
Nevada (the "Business").
E. Seller desires to sell to Buyer and Buyer desires to
purchase from Seller, Seller's right, title and interest in the
Casino Land, the Undeveloped Land and leasehold interest in the
Golf Course Land (collectively, the "Land"), together with the
Casino Hotel, the Golf Course and all of Seller's right, title
and interest in and to the other properties and assets used
exclusively in connection with the Business, as more particularly
described herein.
F. Seller and Buyer contemplate that the sale and purchase
described in Recital Paragraph E, above, shall be accomplished,
subject to the terms hereof, in two (2) separate transactions:
the first being the sale by Seller to Buyer and immediate
leaseback by Buyer to Seller of the properties and assets
described in Section 1.1(a) hereof, and the second being the
sale, subject to regulatory approval (as to gaming devices), of
all remaining properties and assets described in Section 1.1(b)
hereof, and the termination of the aforesaid leaseback
arrangement.
A G R E E M E N T S
Therefore, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
agree as follows:
ARTICLE I
Purchase and Sale of Assets
1.1 Agreement to Purchase and Sell. On the terms and
subject to the conditions contained in this Agreement, Buyer
agrees to purchase from Seller, and Seller agrees to sell to
Buyer, substantially all of Seller's assets, properties and
rights as of the Closing Date (as herein defined), comprising or
used in the operation of the Business (but specifically excluding
the Excluded Assets, as defined and specified in Section 1.2
hereof ), as follows:
(a) Upon and subject to the terms and conditions set
forth in this Agreement, at the First Closing (as hereinafter
defined) Seller shall sell, transfer and convey to Buyer, and
Buyer shall purchase and accept from Seller, Seller's right,
title and interest in and to the following properties and assets
of Seller (the "Non-Gaming Hard Assets"), to the extent the same
are legally transferable by Seller:
(1) The Land, together with rights,
appurtenances, buildings and improvements thereto and thereon,
including without limitation, the Casino Hotel, the Golf Course
and the following:
(a) All of Seller's right, title and
interest in and to (i) all rights, privileges and easements
appurtenant to the Land, and (ii) all of Seller's development
rights, air rights, and all water rights relating to the Land;
and
(b) All of Seller's right, title and
interest in and to the improvements and fixtures (including
heating and air-conditioning systems and fixtures used to provide
any utility services, food and beverage services, recreation, and
other services or activities) located on the Land.
The Land is more particularly described in Exhibits A-1 through
A-3, attached hereto and by this reference made a part hereof.
(2) All of Seller's right, claim, title and/or
interest in, to and under any contracts, leases, permits,
approvals, agreements or other instruments relating to the
ownership, development and/or operation of the Land, or any
portion thereof, including without limitation, all such items
filed or recorded in the public records relating to the Land, or
any portion thereof, and those agreements and instruments more
particularly described in Exhibit "B", attached hereto and by
this reference made a part hereof; but excluding, however, those
that are to be assigned at the Second Closing as part of the
Gaming and Other Assets under subsection (b) hereof
(collectively, the "Realty Agreements").
(3) All of Seller's right, title and interest in
and to the furniture and furnishings, non-gaming equipment,
appliances, motor vehicles, and other transportation equipment,
tools, signs and signage, utensils, tableware, chinaware,
glassware, silverware, and all other tangible personal property
owned by Seller on the First Closing Date (hereinafter defined)
and used in the ownership, operation and maintenance of the
Business, including, but not limited to, all assignable
warranties on any such items of property, but only to the extent
reflected on Seller's books as of the First Closing Date under
the categories "Restaurant", "Beverage", "Arcade", "Spa", and
"Operations/Admin/Mkt" (the "First Assets").
(4) All of Seller's right, title and interest in,
to and under that certain loan made by Players Golf to River View
Limited Liability Company ("River View") in the amount of up to
$650,000.00 (the "Hafen Loan"), under and pursuant to the terms
of that certain Loan Agreement dated June 2, 1995, evidenced by a
certain $650,000.00 Promissory Note dated June 2, 1995, and
secured by that certain Deed of Trust and Assignment of Rents
encumbering the Golf Course Land and certain other surrounding
lands and premises as well as surrounding river bottom land,
together with certain personal property, all owned by River View
and all as more particularly described therein (the "Hafen Loan
Documents").
Immediately thereafter, Seller and Buyer shall execute and
deliver a lease for the Real Property (as defined in Section 1.3,
below), all as more specifically provided in Section 1.3, below.
(b) Upon and subject to the terms and conditions set
forth in this Agreement, at the Second Closing (as hereinafter
defined) Seller shall sell, transfer and convey to Buyer, and
Buyer shall purchase and accept from Seller, Seller's right,
title and interest in and to the following properties and assets
of Seller (the "Gaming and Other Assets"), to the extent the same
are legally transferable by Seller:
(1) All of Seller's right, title and interest in
and to the furniture and furnishings, non-gaming equipment,
appliances, motor vehicles, and other transportation equipment,
tools, signs and signage, utensils, tableware, chinaware,
glassware, silverware, and all other tangible personal property
owned by Seller on the Second Closing Date (hereinafter defined)
and used in the ownership, operation and maintenance of the
Business, including, but not limited to, all assignable
warranties on any such items of property, other than the items
sold and transferred to Buyer under Section 1.1(a)(3), above.
(2) All inventories of supplies and materials,
including without limitation food and beverage stocks (but not
hotel gift shop, spa gift shop and golf course gift shop
inventory, which shall remain Seller's property), and other
consumable items that Seller has historically inventoried,
provided that Buyer's right to use any such items bearing one or
more of the Marks (as defined in Section 1.2(k), below) shall
continue only for a period of 90 days following the date of the
Second Closing, as hereinafter provided.
(3) All of Seller's right, title and interest in
and to any intangible personal property owned by Seller and used
in the ownership, use and operation of the Real Property and
Business, but excluding any intangible Excluded Assets (including
without limitation, the Marks) as provided in Section 1.2, below.
(4) All contracts, leases, agreements, claims and
rights (and benefits arising therefrom) with or against all
persons whomsoever, relating to the Business or the assets
described in this subsection, or any portion thereof, including
without limitation, all development agreements, supply
agreements, service agreements and/or franchise agreements, if
any, and all leases of personal property, regardless of whether
Seller is lessee or lessor thereunder, including without
limitation, matters of public record but specifically excluding
any of the Realty Agreements described in subsection (a)(2)
hereof (the "Other Agreements") (the Other Agreements and the
Realty Agreements are sometimes referred to collectively herein
as the "Contracts").
(5) All advance reservations, bookings, room
deposits (the foregoing adjusted as provided in Section 3.12(a)
hereof), and originals of casino credit files with respect to the
Casino Hotel.
(6) Any telephone numbers used exclusively in
connection with the Business.
(7) Any and all gaming devices, gaming device
parts inventory, gaming tables and any or all other related
gaming equipment, provided that the sale and transfer of such
machines, inventory and equipment are subject to prior gaming
regulatory approval.
(8) Computer hardware and software listed on
Schedule 1.1(b)(8), attached hereto.
(9) Any and all permits and approvals with
respect to the Business or any of the properties and assets
described in this subsection (b).
(10) All other properties and assets of Seller
used in the operation of the Business, except for those Excluded
Assets described in Section 1.2 hereof.
(11) All of Seller's irrigation shares relating to
the Land.
The Non-Gaming Hard Assets and the Gaming and Other Assets are
sometimes referred to collectively hereinafter as the "Property".
1.2 Excluded Assets. Notwithstanding any provision
hereof to the contrary, the Purchased Assets shall not include
any of the following properties or assets of Seller (the
"Excluded Assets"):
(a) all cash on hand and in banks, and cash
equivalents;
(b) all gaming chips (including reserve chips) and
tokens;
(c) Seller's books and records, in whatever medium,
including without limitation digitally or magnetically stored
data, except for such books and records required by the Nevada
Gaming Authorities (hereinafter defined) to be maintained at the
Casino Hotel, which shall be and remain part of the Property
transferred to Buyer hereunder, and such other books and records
which are necessary for the ongoing operation of the Business
from and after the Second Closing Date, of which Buyer shall be
entitled to retain copies, and Seller the originals;
(d) securities, investments, bank accounts, time
certificates of deposit, utility deposits, deposits by Seller and
refund claims, whether or not such Property relate to Seller's
ownership of the Property or operation of the Business;
(e) any computer hardware or software not specifically
listed on Schedule 1.1(b)(8) hereto (provided, however, that any
personal computers and related non-proprietary software and any
electronic and other equipment used in connection with slot
machines or the operation of keno or race and sports book
activities that are located at the Casino Hotel shall not be
Excluded Assets);
(f) any insurance policies relating to the Business or
the Property and rights thereunder;
(g) choses in action, claims (other than warranty
claims relating to any of the Property, which shall be included
in the Property transferred to Buyer hereunder) and litigation;
(h) any obligations to and benefits from members of
Players Preferred Club;
(i) all guest ledger receivables, rents, notes and
loans payable to Seller, and other accounts (collectively, the
"Receivables") relating to the Business, except for the Hafen
Loan and the Hafen Loan Documents;
(j) All player/customer lists, player/customer records
and player/customer information other than such lists, records
and information relating exclusively to customers/players of the
Casino Hotel;
(k) all patents, inventions, trade secrets, business
and marketing plans, copyrights and applications therefor,
trademarks and applications therefor, service marks and
applications therefor, trade names and applications therefor,
names and slogans used by Seller involving or including the name
"Players" or "Players Island", or any variation thereof, and
Seller's corporate name(s), and all goodwill associated with any
of the foregoing; provided, however, that Seller shall, at the
Second Closing, grant to Buyer a non-exclusive limited license to
use and consume those tangible items sold and purchased hereunder
which bear any of Seller's trademarks, tradenames, servicemarks,
slogans or designs (the "Marks"), as more particularly provided
in Section 8.3, below;
(l) all hotel gift shop, spa gift shop and golf course
gift shop inventories;
(m) all Non-Assignable Assets, to the extent the same
cannot ultimately be validly and legally transferred by Seller
without additional cost to Seller;
(n) rights arising from prepaid expenses, if any;
(o) any refunds due with respect to insurance premium
payments, and any refunds due from federal, state and local
taxing authorities with respect to taxes paid by Seller and
accrued or relating to periods prior to the First Closing or the
Second Closing, as applicable;
(p) all rights of indemnification, claims and causes
of action which relate to the conduct of the Business prior to
the Second Closing Date, including, without limitation, those
arising by operation of law or in equity or otherwise, but
excluding warranty claims with respect to the inventory or the
equipment described in Section 1.1(b)(1) or (2), above, or
product liability against the suppliers or manufacturers thereof;
(q) Seller's corporate charter, minute and stock
record books, and corporate seal and tax returns;
(r) the assets, if any, described in Schedule 1.2(r).
1.3 Leaseback. At the First Closing, Seller and Buyer
shall enter into a certain "triple net" lease covering the Real
Property (defined below), in the form attached as Exhibit "C"
hereto, and by this reference made a part hereof, pursuant and
subject to which Seller shall remain in possession of the Real
Property, and shall continue to operate the Business, as more
particularly provided hereinbelow (the "Lease"). "Real Property"
shall mean the First Assets and the Land, together with all
rights and appurtenances (including water rights, if any)
thereto, and all buildings, improvements, fixtures and other
items of real property thereon; excluding, however, any
obligations or liabilities under the Realty Agreements, which
obligations and liabilities shall be the sole responsibility of
Buyer from and after the First Closing.
1.4 Non-Assignable Assets. Seller and Buyer acknowledge
and agree that certain of the Contracts or other items of
Property may not, by their terms or nature, be assignable by
Seller to Buyer (the "Non-Assignable Assets"). The Purchase
Price (as hereinafter defined) shall not be reduced because any
of the Property is or remains a Non-Assignable Asset, nor shall
Seller be held or deemed in default under this Agreement by
reason thereof.
1.5 Right to Market. Notwithstanding any provision of this
Agreement to the contrary, between the date hereof and 5:00 p.m.
EST on February 28, 1997, Seller may at any time invite,
entertain, negotiate and/or accept offers from, and consummate
transactions with, parties other than Buyer, for the sale and
purchase or other disposition of the Business and the Property,
or any portion thereof. Seller retains the right to terminate
this Agreement as provided in Section 3.9, below.
ARTICLE II
Assumption of Liabilities
2.1 First Agreement to Assume. At the First Closing, Buyer
shall assume and agree to discharge and perform when due, and
indemnify, defend and agree to hold Seller, its present and
affiliated entities, and the officers, directors and agents of
each of them harmless from and against, all liabilities and
obligations of Seller relating to the ownership, development
and/or operation of the First Assets and the Land, or any portion
thereof, including, without limitation development, payment and
other liabilities and obligations under the Realty Agreements,
together with all Seller's liability or obligation under or with
respect to the Hafen Loan. Buyer acknowledges that certain
disagreements currently exist between Seller and the other
parties to certain of the Realty Agreements, including without
limitation, disagreements as to: (i) the exact boundaries of the
Golf Course, (ii) the exact infrastructure improvement
obligations of Seller, and (iii) the rights and obligations of
such parties concerning the proposed residential development
surrounding the Golf Course. Buyer hereby waives any right to
allege a breach or default under any covenant, warranty or
representation of Seller hereunder as a result of such
disagreements, and in addition to receiving Seller's right,
claim, title and/or interest thereunder as provided under Section
1.1(a)(2), above) assumes the liabilities and obligations
described in this Section 2.1 without qualification or limitation
as a result thereof.
2.2 Second Agreement to Assume. In addition to the
liabilities assumed by Buyer at the First Closing under Section
2.1, above, at the Second Closing, Buyer shall assume and agree
to discharge and perform when due, and indemnify, defend and
agree to hold Seller, its parent and affiliated entities, and the
officers, directors and agents of each them harmless from and
against those liabilities and obligations of Seller relating to
the Business, listed in this Section 2.2 as follows:
(1) [Intentionally Omitted].
(2) Obligations and liabilities under those leases,
agreements and contracts to which Seller is a party, or by which
Seller or any of the Property is bound, including without
limitation, those listed or described in Schedule 2.2 hereto, to
the extent the same relate to payment on or after the Second
Closing Date, or performance at any time.
(3) Obligations and liabilities with respect to which
there is a proration or adjustment at the Second Closing pursuant
to the provisions of this Agreement.
(4) Liabilities and obligations of Seller under or
with respect to any purchase orders, sales orders, marketing and
groups sales arrangements, room or other reservations, room or
other deposit or similar commitment incurred or made in the
ordinary course of Seller's business and existing as of the
Second Closing Date, to the extent the same relate to performance
or payment on or after the Second Closing Date.
(5) Liabilities or obligations of Seller under any
permits or approvals with respect to any of the Property or the
Business, to the extent the same relate to the operation of the
Business on or after the Second Closing Date.
(6) [Intentionally Omitted].
(7) All claims, liabilities, loss, cost, damage or
expense resulting or arising out of ownership or operation of the
Business and/or the Property, or caused by or occurring upon the
Property, on or after the Second Closing Date.
(8) Such other liabilities, commitments or obligations
of Seller relating to the Business or any of the Property, not
otherwise described in Section 2.1 or 2.2 hereof, which do not,
in the aggregate, constitute Material Liabilities. For purposes
of this Agreement, "Material Liabilities" means liabilities,
commitments or obligations of Seller for which the cost of
payment or performance thereof individually is greater than
$25,000.00; but, only to the extent such Material Liabilities, in
the aggregate, exceeds $500,000.00.
(9) All liability with respect to amounts shown on
progressive slot machine meters as of the Second Closing Date,
all liability with respect to keno or racebook customer winnings
which were won but not yet paid as of the Second Closing Date,
and all other liabilities for jackpots or other customer winnings
which are won in the operation of the Business after the Second
Closing Date.
(10) Any commitments or coupons for free or discounted
accommodations, services, golf, tickets, food or beverages or
granted by Seller to customers or others in the ordinary course
of Seller's Business.
(11) All liability with respect to amounts shown on
Seller's table games having an in-house progressive jackpot
feature as of the Second Closing Date.
The liabilities, obligations and commitments of Seller to be
assumed by Buyer pursuant to the provisions of Sections 2.1 and
2.2 hereof, are sometimes referred to collectively hereinafter as
the "Assumed Liabilities".
2.3 Excluded Liabilities. Notwithstanding any provision
hereof to the contrary, the following liabilities and
obligations of Seller (the "Excluded Liabilities") are hereby
excluded from the Assumed Liabilities, and shall not be assumed
by Buyer.
(a) any liabilities for legal, accounting, audit and
investment banking fees, and any other expenses incurred by
Seller in connection with the negotiation and preparation of this
Agreement and the sale of the Property to Buyer;
(b) any liabilities of Seller for income taxes;
(c) any liability for or related to indebtedness of
Seller to banks or other financial institutions not relating
exclusively to the Business or the operation thereof.
(d) Seller's trade accounts payable as of the Second
Closing Date;
(e) Seller's liability pursuant to the provisions of
the Lease and,
(f) any liability not described in either of Sections
2.1 and 2.2, above.
2.4 Players Contracts. Buyer acknowledges that certain
leases, contracts, purchase orders and other items relating
solely to the Business or the Property may be in the name of
"Players Island", "Players International, Inc.", or some
variation thereof. Buyer and Seller shall use their good faith
efforts to arrange for the valid transfer thereof in accordance
with the provisions of this Agreement.
2.5 No Expansion of Third Party Rights. The assumption by
Buyer of the Assumed Liabilities shall not expand the rights or
remedies of any third party against Buyer or Seller as compared
to the rights and remedies which such third party would have had
against Seller had Buyer not assumed the Assumed Liabilities.
ARTICLE III
Purchase Price, Manner of Payment and Closing; Termination; Title
Matters
3.1 Purchase Price. For and in consideration of the
Property, Buyer shall pay to Seller a purchase price of THIRTY
MILLION FIVE HUNDRED THOUSAND Dollars ($30,500,000.00)
("Purchase Price"), consisting of TWENTY TWO MILLION Dollars
($22,000,000.00) for the Non-Gaming Hard Assets (the "First
Purchase Price") and EIGHT MILLION FIVE HUNDRED THOUSAND
Dollars ($8,500,000.00) for the Gaming and Other Assets (the
"Second Purchase Price"). Buyer shall also assume the Assumed
Liabilities as provided under Article II hereof.
3.2 Payment. The Purchase Price shall be paid as follows:
(i) Buyer has previously paid to Escrow Agent
(defined below) the sum of TWO MILLION TWO HUNDRED FIFTY THOUSAND
Dollars ($2,250,000.00) in cash or by bank cashiers or certified
check payable in immediately available federal funds (the
"Deposit"). Upon receipt of the Deposit, the Escrow Agent shall
(if it has not already done so) establish an escrow account (the
"Escrow") into which the Deposit shall be deposited and held for
release as provided for herein. The Deposit shall, except for
Seller's default hereunder, or Seller's termination of this
Agreement under the provisions of Section 3.9 hereof, be non-
refundable, but shall be applicable towards the First Purchase
Price at the First Closing.
(ii) At the First Closing, the First Purchase
Price (including funds in Escrow) of TWENTY TWO MILLION Dollars
($22,000,000.00) shall be paid by Buyer to Seller in immediately
available federal funds.
(iii) At the Second Closing, the Second
Purchase Price of EIGHT MILLION FIVE HUNDRED THOUSAND Dollars
($8,500,000.00) shall be paid as follows:
(a) SEVEN MILLION Dollars ($7,000,000.00) by
Buyer to Seller in immediately available federal funds, and
(b) ONE MILLION FIVE HUNDRED THOUSAND
Dollars ($1,500,000.00) by delivery by Buyer to Seller of a
purchase money note, with a guaranty thereof by Robert R. Black,
Sr. , payable in full on the second anniversary of the Second
Closing Date, with interest at the rate of the Prime Rate plus
two percent (2%) per annum, accruing and payable on the second
anniversary of the Second Closing Date, such note and guaranty to
be in form acceptable to Seller.
3.3 Withheld Funds. Seller acknowledges and agrees that,
at the Second Closing, there may be withheld from such funds
payable to Seller at the Second Closing such amount(s) as shall
be necessary to comply with the provisions of Sections 612.695,
360.525 and 616B.269, Nevada Revised Statutes, or to satisfy
requirements to which the Property or a portion thereof may be
subject pursuant to Section 244.335, Nevada Revised Statutes. To
the extent any such funds are withheld from Seller by Buyer,
Buyer and Seller shall open an escrow account with Nevada Title
Company ("Title Company" or "Escrow Agent") and Buyer shall
deposit such funds into Escrow, to be held by Escrow Agent until
such time as Seller furnishes Escrow Agent the receipts or
certificates provided for in said statutes that the applicable
obligations have been paid or discharged or that funds out of the
Second Purchase Price sufficient for such purpose are held by
Escrow Agent. If Seller does not produce such receipts,
certificates or evidence within the time periods provided for in
said statutes, or if any lien or other claim therefor is asserted
against Buyer or the Property (or any portion thereof), Escrow
Agent may pay such sums as may be required by such statutes to
the appropriate authority.
3.4 Closings.
(a) First Closing. The closing of the sale, purchase,
leaseback transaction for the Non-Gaming Hard Assets (the "First
Closing") shall be held at the office of Escrow Agent (Attention:
Robbie Graham, Executive V.P.), 3320 West Sahara, Las Vegas,
Nevada at 10:00 a.m. Las Vegas business time on March 17, 1997,
or at such other time and place in metropolitan Las Vegas, Nevada
as to which the parties may mutually agree (the actual date of
First Closing being herein referred to as the "First Closing
Date").
(b) Second Closing. The closing of the sale and
purchase transactions for the Gaming and Other Assets (the
"Second Closing") shall be held at the office of Escrow Agent on
June 30, 1997, at 11:59 p.m. Las Vegas business time, or at such
other time and place in metropolitan Las Vegas, Nevada as to
which the parties may mutually agree (the date of Second Closing
being herein referred to as the "Second Closing Date"); provided,
however, that if all required licenses and approvals have not
been obtained from the Nevada Gaming Authorities by June 30,
1997, then Buyer shall be obligated to complete the Modified
Second Closing (as hereinafter defined) pursuant to the
provisions of subsection (c) below.
(c) Failure of Licensure. If, by June 30, 1997, Buyer
has not received all licenses and approvals from the Nevada
Gaming Authorities required for Buyer's purchase and ownership of
Seller's gaming devices, then Buyer shall, nevertheless, be
required to complete the Second Closing hereunder on or before
June 30, 1997, in accordance with the provisions of this Section
3.4(c) (the "Modified Second Closing"). At the Modified Second
Closing, Buyer shall purchase and accept, and Seller shall sell,
all of the Gaming and Other Assets other than gaming devices or
other items requiring licensure from the Nevada Gaming
Authorities for purchase and ownership ("Gaming Items"). At the
Modified Second Closing, Buyer shall also assume the liabilities
and obligations of Seller described in Section 2.2 hereof, other
than those that relate to the Gaming Items. The Second Purchase
Price to be paid by Buyer at the Modified Second Closing shall be
$7,500,000.00, to reflect a reduction of $1,000,000.00 allocable
to the Gaming Items, payable as $7,000,000.00 in cash and
$500,000.00 as the purchase money note and guaranty referenced in
Section 3.2(iii)(b) hereof. Such allocation of a portion of the
Second Purchase Price to the Gaming Items is effective for the
purpose of this provision only, and not as a general allocation
for income tax purposes. Seller shall retain all such Gaming
Items (and the Assumed Liabilities which relate thereto as
aforesaid) as its property and may dispose of the Gaming Items in
such manner and to such party or parties as Seller may, in its
sole discretion, determine. The Modified Second Closing shall,
in all other aspects, be subject to and governed by, the other
provisions of this Agreement concerning the Second Closing.
Failure of Buyer to complete either the Second Closing or the
Modified Second Closing on or before June 30, 1997, shall
constitute a default by Buyer under the provisions of this
Agreement. After completion of the Modified Second Closing,
Seller shall, at Buyer's request, store the Gaming Items at the
Casino Hotel without cost to Seller, from the Second Closing Date
to July 30, 1997 (the "Storage Period"). During the Storage
Period, Buyer shall have the right and option to purchase the
Gaming Items from Seller for $1,000,000, payable by adding the
same to the outstanding principal balance of the purchase money
note (plus the assumption of all liabilities with respect thereto
as originally contemplated hereunder), and otherwise in
accordance with the provisions hereof. Seller shall have a
reasonable period of time after the expiration of the Storage
Period (or if Buyer does not request storage, then after the
Second Closing Date) to remove its Gaming Items from the Casino
Hotel, and Seller shall use its diligent efforts to do so as
promptly as possible.
(d) The Property shall be conveyed at the First
Closing or the Second Closing, as specified herein, through
Escrow, and otherwise in accordance with the terms and provisions
of this Agreement.
(e) Buyer shall have the right, within 48 hours after
the First Closing, at Buyer's expense and without interference
with Seller's operation of the Business or the Property, to
conduct an inventory count of the tangible personal property
described in Sections 1.1(a)(3) and 1.1(b)(1) hereof.
3.5 Costs. Costs and expenses relating to the
transactions contemplated by this Agreement shall be borne and
paid as follows:
(a) All motor vehicle transfer taxes, vehicle
registration fees, sales, use and excise taxes relating to the
purchase and sale of the Property shall be borne and paid by
Buyer.
(b) Fees for the Title Policy shall be paid as
provided in Paragraph 3.11 hereof.
(c) Any fees and expenses of the Escrow Agent shall be
paid one-half (1/2) by Seller and one-half (1/2) by Buyer.
(d) Except as otherwise specifically provided in this
Agreement, Seller and Buyer shall bear their own costs and
expenses arising out of the negotiation, execution, delivery and
performance of this Agreement (including regulatory filing fees
and costs), and the consummation of the transactions contemplated
herein, including, without limitation, legal and accounting fees
and expenses.
(e) The $45,000.00 filing or application fee, with
respect to the Hart-Scott- Rodino Act shall be borne and paid for
one-half (1/2) by Buyer and one-half by Seller; provided,
however, that Seller shall receive an adjustment at the First
Closing, to reimburse Seller for its share of the filing or
application fees so paid.
(f) Real Property Transfer taxes, under NRS Section 375.020
shall be borne and paid by Seller.
(g) Survey costs, if any, shall be borne and paid for
by Buyer.
3.6 Allocation of Purchase Price. Prior to the First
Closing, Seller and Buyer shall agree in writing on the manner in
which the Purchase Price shall be allocated among the Property
as required by Section 1060 of the Code (as herein defined),
which agreed allocation shall be attached as Schedule 3.6 hereto.
If, prior to the First Closing Date, the parties are unable to
agree on such purchase price allocation, the Purchase Price shall
be allocated among the Property, pro rata, based on the
respective net book value of each item thereof as of the subject
Closing Date. Buyer and Seller hereby agree for all purposes
(and regardless whether the parties agree on an allocation of the
Purchase Price as aforesaid) that all of the Property constitutes
"Class III" assets, and none of the Property constitutes "Class
IV" assets under Code Section 1060 or the Regulations thereunder.
Notwithstanding the foregoing, nothing in this Agreement shall be
construed to mean that a party hereto or other person must:
(a) use, for any one or more purposes, any price or
other allocation set forth or agreed as provided for in this
Agreement if such party or person reasonably believes or
reasonably is advised that such use is not in accordance with
law; or
(b) make or file, or cooperate in the making or filing
of, any return or report to any governmental authority in any
manner that such party or person reasonably believes or is
reasonably advised is not in accordance with law.
3.7 Gaming Taxes. Seller shall be and remain liable for
any fees or taxes due pursuant to Chapter 463 of the Nevada
Revised Statutes which accrue prior to the date of the Second
Closing, including without limitation, liability for payment of
any fees or taxes due pursuant to any subsequent deficiency
determinations made under such Chapter which relate to any period
of time prior to the Second Closing.
3.8 Due Diligence Fee. Buyer has previously paid into
Escrow the sum of Two Hundred Fifty Thousand Dollars
($250,000.00), as a fee (the "Due Diligence Fee") to compensate
Seller for the business disruption and attendant costs incurred
by Seller as a result of Buyer's due diligence investigation,
review, inspection and analysis of the Property and certain of
Seller's records with respect to the Business and/or the
Property. Buyer acknowledges and agrees that, except as
otherwise specifically provided to the contrary under Section 3.9
hereof, the Due Diligence Fee has been fully earned by Seller and
is completely nonrefundable to Buyer. Subject to any contrary
provisions of Section 3.9 hereof, the Due Diligence Fee shall be
released to Seller by Escrow Agent at the First Closing or, if
this Agreement is terminated prior to the First Closing, promptly
upon such termination.
3.9 Seller's Termination. Notwithstanding any provision of
this Agreement to the contrary, and in addition to the conditions
upon Seller's obligations as set forth in Section 6.1, below,
Seller shall have the right to terminate this Agreement and all
of its liability and obligation hereunder, without liability to
Buyer:
(a) If Seller does not receive from the Board of
Directors of Seller's parent corporation, Players International,
Inc. ("Players"), prior to 5:00 p.m. EST February 28, 1997, a
written approval of the form of this Agreement and the
transactions contemplated hereby, or if Seller does not receive
prior to the First Closing Date evidence that the Players Board
of Directors has taken such other actions as are necessary to
comply with or avoid default under the provisions of Players' 10-
7/8% Senior Note Indenture dated April 10, 1995 including,
without limitation, the provisions of Section 5.14 thereof which
require, inter alia, a determination by the Players Board of
Directors in its sole discretion that the Purchase Price
represents not less than fair market value for the sale of the
Property and the Business (the "Indenture Approval"). In the
event that Seller elects to terminate this Agreement because of
its failure to obtain the Indenture Approval or the Players Board
of Directors' approval of the form of this Agreement and the
transactions contemplated hereby, prior to the respective
deadlines therefor set forth in the first sentence of this
subsection (a), Seller shall provide prompt written notice of
such termination to Buyer, and thereupon this Agreement shall
terminate and be of no further force or effect, and the Due
Diligence Fee and Deposit shall be returned by Seller to Buyer,
and Seller shall reimburse Buyer for its reasonable out-of-pocket
expenses actually incurred in conducting Buyer's due diligence
review of the Property and the Business, up to a maximum of
$100,000.00 (for which Buyer shall provide such documentation as
Seller may reasonably require); provided, however, that no
Breakup Fee (defined below) shall be payable, and other than the
return of the Due Diligence Fee and the Deposit and reimbursement
of expenses upon such termination as provided in this sentence,
neither party shall have any further obligations under this
Agreement. Notwithstanding the preceding sentence, the Breakup
Fee shall be payable to Buyer in the event the Players Board of
Directors fails to approve the form of this Agreement and the
transactions contemplated hereby, or fails to provide the
Indenture Approval, in each case within the time periods herein
provided, due to the sale of the Property and the Business to an
entity or person other than Buyer (or Buyer's permitted assignee
hereunder), for consideration greater than the Purchase Price,
which sale results from an offer received prior to 5:00 p.m. EST
on February 28, 1997.
(b) For any reason whatsoever, in Seller's sole and
absolute discretion, at any time at or before 5:00 p.m. EST on
February 28 , 1997. If Seller elects to terminate this Agreement
as provided under this Section 3.9(b), Seller shall give Buyer
prompt written notice thereof, and thereupon this agreement shall
terminate and be of no further force or effect, and Seller shall
have no liability to Buyer except for: return to Buyer of the
Deposit, with interest thereon at the rate equal to two percent
(2%) per annum in excess of the Prime Rate (as defined below);
return of the Due Diligence Fee; and, except as provided in
subsection (a) hereof, payment to Buyer of the amount of
$500,000.00 as a breakup fee ("Breakup Fee"), which payments and
repayments shall be Buyer's sole remedy. The Breakup Fee is
payable to Buyer in such case as liquidated damages and not as a
penalty, and upon payment of the Breakup Fee and repayment of the
Deposit, the Agreement shall terminate with no further
obligations thereunder. Seller and Buyer specifically agree that
Buyer's damages in such event would be difficult to determine
with certainty and have agreed that the Breakup Fee is a fair and
reasonable estimate of the damages Buyer would incur in such
event.
As used herein, "Prime Rate" shall mean the prime rate (or base
rate) announced by Wells Fargo Bank, N.A. (whether or not such
rate has actually been charged by such bank). In the event Wells
Fargo Bank discontinues the practice of announcing the Prime
Rate, the "Prime Rate" shall mean the highest rate charged by
Wells Fargo Bank on short term, unsecured loans to its most
creditworthy large corporate borrowers.
(c) Seller hereby acknowledges that Seller has
received from the Board of Directors of Players, prior to 5:00
p.m. EST on February 28, 1997, a written approval of the form of
this Agreement and the transactions contemplated hereby. Seller
acknowledges that Seller has received evidence that the Players'
Board of Directors has given the Indenture Approval. Seller
further acknowledges that Seller did not elect to terminate this
Agreement at or before 5:00 p.m. EST on February 28, 1997,
pursuant to Section 3.9(b) hereof.
3.10 Title to Real Property; Reports and Exceptions.
(a) Seller has heretofore delivered to Buyer a
preliminary report with respect to title to the Real Property
("Preliminary Title Report") from the Title Company dated as of
January 22, 1997, No. 97-01-1599 RMG. Buyer acknowledges and
agrees that Buyer has reviewed and approved all exceptions and
other matters reflected in the Preliminary Title Report, except
for those items listed therein as numbers 54, 55, 56, 57, 58 and
62, which shall constitute Title Objections hereunder. If any
amendment of such Preliminary Title Report shall be hereafter
issued by the Title Company, Buyer shall have seven (7) business
days after receipt of each of any such amendment in which to
review such report and to notify Seller in writing of any Title
Objections thereto. For purposes of this Agreement, "Title
Objection" shall mean any item or matter appearing in an amended
report other than (i) statutory liens for taxes and assessments
not due and payable; (ii) all matters in the original Preliminary
Title Report, except for those items listed therein as numbers
54, 55, 56, 57, 58 and 62; (iii) any matter which appeared in a
prior amendment to which Buyer did not timely object in the
manner set forth herein; (iv) [Intentionally Deteted]; (v) any
matter of which Buyer has not notified Seller in writing
(stating in good faith the reason Buyer contends that such matter
constitutes a Title Objection) within seven (7) business days
after receipt of an amended report from the Title Company in
which such matter not previously referenced in an amended report
of the Preliminary Title Report first appears, together with a
reasonable description of such new matter (each such seven (7)
business day period herein called a "Title Review Period"); (vi)
any matter approved by Buyer; (vii) any matter that is caused by,
or otherwise results from the actions of Buyer; or (viii)
[Intentionally Omitted]. Upon termination of any applicable
Title Review Period, any matter not timely listed as a Title
Objection by Buyer as of such date shall be deemed approved as a
Permitted Exception and not constitute a Title Objection. As
used in this Agreement, the term "business day" shall mean any
day other than a Saturday, Sunday, Nevada state legal holiday or
U.S. federal legal holiday.
(b) If after the date hereof a matter is disclosed to
Buyer that Buyer contends to be a Title Objection, Seller shall
notify Buyer, in writing, within seven (7) business days after
notice from Buyer to Seller of the matter that Buyer contends to
be a Title Objection whether Seller will undertake to cure or
otherwise remove such matter on or prior to the First Closing.
If Seller gives written notice written in such seven (7) day
period to Buyer that Seller is unable or unwilling to cure such
matter on or prior to the First Closing, or if Seller, in fact,
fails to cure any Title Objection on or prior to the First
Closing, Buyer as its sole and exclusive remedy shall have the
right and option if such matter is a Title Objection, exercisable
by written notice to Seller on or prior to the First Closing, to
(i) accept conveyance of the Property subject to such Title
Objection at the First Closing without offset, reimbursement or
payment, which shall be deemed a waiver of same for all purposes,
or (ii) terminate this Agreement. Should Buyer not give the
notice required on or prior to the First Closing, such title
matter shall be conclusively deemed waived by Buyer and be
conclusively deemed a Permitted Exception.
(c) A Title Objection be deemed cured by Seller and no
longer constitute a Title Objection if such matter is either
removed of record by appropriate release or other instrument,
removed as an exception in an amended report (whether by reason
of "Bonding Around" by Seller or otherwise) or Insured Around.
"Insured Around" as used herein means the Title Policy shall
affirmatively indemnify Buyer from and against any and all loss
and liability, including litigation costs and attorneys' fees in
connection therewith. All exceptions to title of the Property
disclosed in the Preliminary Title Report or in any amended
report thereof which are not Title Objections, or which are
waived by Buyer pursuant to this Agreement, are herein referred
to as "Permitted Exceptions" and Buyer agrees to take title to
the Property at the First Closing subject to the Permitted
Exceptions. Seller is under no obligation to initiate legal
proceedings or incur expenses to cure Title Objections, except
Seller shall remove any voluntary contractual liens created by
Seller.
3.11 Title Policy. Except as otherwise provided in this
Agreement, at the First Closing Seller shall deliver to Buyer at
Seller's expense an CLTA Owner's Policy ("Title Policy") of
Nevada Title Company or its designee dated the First Closing Date
in the aggregate amount of TWENTY TWO MILLION DOLLARS
($22,000,000.00) insuring Buyer as owner of fee or leasehold
title to the Real Property, as applicable, subject only to the
Permitted Exceptions. Buyer shall pay that portion of the
premium expense for such Title Policy that is attributable to any
special endorsements requested by Buyer, including those
endorsements necessary to provide Buyer with "ALTA Policy"
coverage. After the First Closing Date, Buyer's sole recourse in
the event of any claim or impediment to title to the Real
Property shall be under and pursuant to the Title Policy.
3.12 Prorations and Other Payments. Except for the benefits
and burdens of ownership of the Real Property, which shall
transfer from Seller to Buyer effective at the midnight that
follows 11:59 p.m. on the First Closing Date ("First Midnight"),
operation of the Business until the midnight that follows 11:59
p.m. on the Second Closing Date ("Second Midnight") shall be for
the account of Seller and thereafter for the account of Buyer.
Any use of the term "Midnight" in this Section 3.12 shall be
deemed to refer to: (i) the First Midnight, with respect to any
expenses, revenues, payments or assessments relating to an asset
which is transferred, or a liability which is assumed, at the
First Closing; and (ii) the Second Midnight, with respect to any
expenses, revenues, payments or assessments relating to an asset
which is transferred, or a liability which is assumed, at the
Second Closing. Those items of revenue and expense for the
Business and other items hereinafter described shall be prorated
and adjusted between Buyer and Seller as follows:
(a) General Adjustment.
(i) Real estate taxes, personal property taxes,
sewer, mineral or utility charges, ground rents and other charges
or assessments relating to any of the Real Property (other than
charges or assessments under any of the Realty Agreements) and of
a type customarily adjusted with respect to transfers of real
estate in Nevada shall be adjusted and apportioned between Buyer
and Seller as of the First Midnight (with Seller paying or
reimbursing Buyer for such amounts during the term of the Lease,
in accordance with the provisions thereof);
(ii) rents (whether due by or to Seller) and any
other receipts or expenses attributable to any of the Gaming and
Other Assets shall be prorated between Buyer and Seller as of
the Second Midnight.
(iii) Any special assessments with respect to the
Property or Business existing at the First Midnight shall be
paid by Seller and any special assessments thereafter arising
shall be paid by Buyer. All business license, occupation, sales,
use, withholding or similar tax, or any other taxes of any kind
(other than real estate and personal property taxes which shall
be prorated as hereinabove provided), relating to the Business or
Property and attributable to the period prior to the Second
Midnight shall be paid by Seller, and all such taxes attributable
to the period after the Second Midnight shall be paid by Buyer.
Payment by Seller of any obligations under any service or trade
contracts, the benefit of which payment relates in whole or part
to the period after the Second Midnight, shall be adjusted
between Buyer and Seller such that Seller shall be reimbursed by
Buyer for that portion of any obligation paid by Seller, the
benefit of which relates to the period after the Second Midnight;
since Seller's trade accounts payable are Excluded Liabilities
hereunder, there shall be no prorations or adjustments with
respect to any Contracts under which Seller has not made a
prepayment as aforesaid. Prepayments received by Seller on any
contracts, and other deposits with Seller and advance payments
for room reservations and bookings received prior to the Second
Midnight for periods after the Second Midnight shall be paid over
and delivered by Seller to Buyer (or adjusted to provide the same
effect) on the Second Closing Date. Buyer shall thereafter
assume all obligations and liabilities with respect to such
payments or deposits and Seller shall have no further liability
or responsibility thereafter with respect thereto.
Notwithstanding the foregoing, Seller shall be entitled to retain
such deposits to the extent of rooms and/or services furnished by
Seller prior to the Second Midnight. Guest room rents with
respect to the evening which includes the Second Midnight shall
be allocated equally to Buyer and Seller. All casino, hotel
restaurant and lounge revenues prior to the Second Midnight shall
be paid to Seller. Prepayments made by Seller on any contracts,
leases or other agreements, relating to the period after the
Second Midnight, and utility or other deposits posted by Seller
with any third party, shall be adjusted between Seller and Buyer
so that Seller receives the benefit thereof. Buyer shall be
responsible for return of all guest items in safes or safe
deposit boxes.
(b) Utilities. In lieu of prorating power, gas and
water bills, the appropriate utilities will be requested to take
meter readings as close to the the Second Midnight as possible
and to bill Seller for service prior to such readings and to bill
Buyer for service thereafter. The readings may occur before or
after the Second Midnight. With respect to telephone services
upon receiving a copy of the next billing for telephone service
following the Second Closing Date, Seller will either pay
directly or reimburse Buyer within five (5) days after receipt
thereof for those charges attributable to calls made before the
Second Midnight. General monthly charges reflected by such
billing for telephone service to the Property will be prorated on
the basis on the number of days Seller occupied the Property
during the period covered by the billing.
(c) [Intentionally Omitted].
(d) Progressive Slot Machines; Keno and Racebook.
(i) At the Second Closing, (but not the Modified
Second Closing) the Second Purchase Price shall be reduced by the
aggregate total of Seller's liability for amounts shown on
Seller's progressive slot machine meters (other than multi-site
progressives), and by the aggregate total amount of Seller's
liability, if any, for unpaid customer winnings from keno and
racebook activites conducted by Seller as part of the Business.
(ii) From and after the Second Closing (but not
the Modified Second Closing), Buyer shall hold the Seller
harmless for all amounts equal to the liability existing at the
Second Midnight with respect to amounts shown on progressive slot
machine meters or with respect to equipment used in connection
with slot machines and any equipment used in connection with the
operation of keno or race book activities constituting a part of
the Property, which liability shall be assumed by Buyer upon its
licensing by the Nevada Gaming Authorities.
(iii) In the event Buyer fails to become
licensed by Nevada Gaming Authorities for any reason, Buyer shall
nevertheless complete the Modified Second Closing as provided
under Section 3.4(c) hereof, and liability with respect to
Seller's progressive slot machines as set forth in this sub-
paragraph shall be assumed by the party or parties to whom such
gaming devices are ultimately transferred, or as otherwise
required by the Nevada Gaming Authorities.
(iv) At the Second Closing, (but not the Modified
Second Closing) the Second Purchase Price shall be reduced by the
aggregate total of Seller's liability for amounts shown on
Seller's table games with an in-house progressive jackpot
feature.
(e) Payment For Cash And Cash Equivalents; Chips And
Tokens. Buyer and Seller shall mutually agree upon a procedure
for counting and determining cash and cash equivalents located on
the premises of the Business (including, but not by way of
limitation, cash, negotiable instruments and other cash
equivalents located in the cages, drop boxes, slot machines and
other gaming devices) as of the Second Midnight, and Buyer shall
pay Seller on the Second Midnight for the amount of cash and cash
equivalents so determined to be acquired by Buyer.
(f) Redemption Of Chips And Tokens. Pursuant to
Nevada Gaming Regulation 12.080, Seller shall for a period not
less than 120 days after the cessation of gaming by Seller on the
Property, redeem for cash all of Seller's gaming chips and tokens
utilized prior to the Second Closing Date. The procedures to be
utilized by Seller herein shall be submitted to the Nevada Gaming
Authorities, to the extent required, with a copy to Buyer, as
soon as practical. Buyer acknowledges and agrees, that to the
extent the Nevada Gaming Authorities allow, at the request of
Seller, Buyer shall redeem said chips and tokens, and Seller
shall reimburse Buyer for said redemptions once per week, or more
frequently as reasonably agreed.
(g) Implementation Of Prorations And Other Payments.
All payments to Seller hereinabove provided shall be made by wire
transfer of immediately available funds to Wells Fargo Bank, San
Francisco, California [ABA #121000248], for the account of
Players International, Inc. (Concentration Account) [Account #
4159565290]. All payments to Buyer hereinabove provided shall be
made in a manner and form reasonably acceptable to Buyer. Seller
and Buyer agree that, to the extent reasonably practicable, items
of revenue or expense shall be calculated and apportioned between
the parties at the subject Closing. Items of revenue or expense
which are not susceptible of calculation, allocation and/or
proration at the time of the Second Closing, shall be so
calculated, allocated and/or prorated as follows. Within five (5)
days following the Second Closing Date, Seller and Buyer shall
undertake in good faith to mutually agree upon and execute and
deliver to each other a statement setting forth the determination
of the items to be prorated and accounted for hereunder, and the
net amount due, if any, to either Buyer or Seller, as the case
may be, shall be paid within five (5) business days following the
receipt of such statement. If, with respect to either Closing,
Buyer and Seller are unable within said five (5) day period to
agree upon the appropriate proration of or payment due for an
item of revenue or expense or other item pursuant to this
paragraph, then Seller and Buyer shall employ a nationally
recognized accounting firm as may be mutually selected by Seller
and Buyer, as independent certified public accountants
("Accountant"), to determine the amount of the proration or
payment consistent with the provisions of the Agreement.
Accountant shall make such determination as promptly as possible
and in no event later than forty-five (45) days following such
engagement. The amount of the proration or payment as of the
subject Midnight as determined by Accountant shall be final and
binding upon Seller and Buyer, each of whom hereby consents to
the procedure herein set forth and waives any rights they may
have or conflicting provisions of the Nevada Uniform Arbitration
Act, N.R.S. Subsection 38.015 et seq. Seller and Buyer shall
each pay one-half (1/2) of the Accountant's fees and expenses for
making such determination.
(h) Inventory. At 11:00 p.m. on the day before the
Second Closing Date, Buyer and Seller shall jointly conduct a
physical inventory count of the Seller's inventories of
perishable and consumable items in usable condition ( the
"Consumables On-Hand"). At the Second Closing, Buyer shall pay
to Seller, in addition to the Second Purchase Price, an amount
equal to Seller's actual cost (using the average cost method) of
the Consumables On-Hand based upon the aforesaid physical
inventory count.
(i) HSR Filing Fee. At the First Closing, Buyer shall
reimburse Seller for Seller's share of the Hart-Scott-Rodino Act
application/filing fee, as contemplated under Section 3.5(e)
above.
ARTICLE IV
Representations and Warranties
4.1 General Statement. The parties make the
representations and warranties to each other which are set forth
in this Article IV. All such representations and warranties
shall survive the Closing (and none shall merge into any
instrument of conveyance). All representations and warranties of
Seller are made subject to the exceptions which are noted herein
or in any schedule or exhibit hereto. Any disclosure set forth
on any particular schedule or exhibit shall be deemed disclosed
in reference to all applicable schedules and exhibits.
4.2 Buyer's Representations and Warranties. Buyer
represents and warrants to Seller that:
(a) Buyer is a Nevada limited liability company,
wholly-owned by Robert R. Black, Sr., and another entity wholly-
owned by Robert R. Black, Sr., duly organized, existing and in
good standing, under the laws of its state of incorporation or
formation.
(b) Buyer has full power and authority to enter into
and perform (x) this Agreement and (y) all documents and
instruments to be executed by Buyer pursuant to this Agreement
(collectively, "Buyer's Ancillary Documents"). This Agreement
has been, and Buyer's Ancillary Documents will be, duly executed
and delivered by duly authorized officers of Buyer.
(c) Except for filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended ("Hart-Scott-
Rodino Act" or "HSR"), and approvals of the Nevada Gaming
Authorities (as hereinafter defined) no consent, authorization,
order or approval of, or filing or registration with, any
governmental authority or other person is required for the
execution and delivery by Buyer of this Agreement and Buyer's
Ancillary Agreements, and the consummation by Buyer of the
transaction contemplated by this Agreement and Buyer's Ancillary
Agreements.
(d) Neither the execution and delivery of this
Agreement and Buyer's Ancillary Documents by Buyer, nor the
consummation by Buyer of the transaction herein contemplated,
will conflict with or result in a breach of any of the terms,
conditions or provisions of Buyer's Articles of Organization or
Operating Agreement, or of any statute or administrative
regulation, or of any order, writ, injunction, judgment or decree
of any court or governmental authority or of any arbitration
award.
(e) [Intentionally Omitted].
(f) Neither Buyer, nor any of its Affiliates has dealt
with any person or entity who is or may be entitled to a broker's
commission, finder's fee, investment banker's fee or similar
payment from Seller for arranging the transaction contemplated
hereby or introducing the parties to each other. As used herein,
an "Affiliate" is any person or entity which controls a party to
this Agreement, which that party controls, or which is under
common control with that party. In the case of Buyer, an
Affiliate shall include Robert R. Black, Sr., James A. Black,
Gary W. Black, Michael T. Black, Barry R. Moore, Troy Herbst,
Edward Herbst, Timothy Herbst, Michael Gaughan and Leo Lewis.
"Control" means the power, direct or indirect, to direct or cause
the direction of the management and policies of a person or
entity through voting securities, contract or otherwise.
(g) Buyer represents and warrants to Seller that Buyer
has sufficient capital and financial ability to fulfill all of
its obligations under this Agreement and the Buyer's Ancillary
Documents, and the responsibility, capital and financial
condition necessary to satisfy the liabilities to be assumed
hereunder, including, without limitation, the Realty Agreements.
The representation and warranty in the preceding sentence is a
material inducement for Seller to enter into this Agreement, and
Buyer acknowledges Seller's material reliance thereon. Buyer
hereby indemnifies and agrees to defend and hold harmless Seller
and its affiliates, and the officers, agents and directors of any
of them, from and against any and all loss, cost, damage, claim
or expense (including attorneys' fees and costs actually
incurred) arising out of or in connection with any third-party
claim under or in connection with any of the Realty Agreements,
based on or alleging the untruth or incorrectness of the
preceeding representation and warranty.
4.3 Seller's Representations and Warranties. Seller
represents and warrants to Buyer that, except as set forth in the
Disclosure Schedule:
(a) Each entity comprising Seller is a corporation
duly organized, existing and in good standing, under the laws of
its state of incorporation. Each entity comprising Seller has all
necessary corporate power and authority to conduct the Business
as the Business is now being conducted.
(b) Each entity comprising Seller has full corporate
power and authority to enter into and perform (x) this Agreement
and (y) all documents and instruments to be executed by Seller
pursuant to this Agreement (collectively, "Seller's Ancillary
Documents"). This Agreement has been, and Seller's Ancillary
Documents will be, duly executed and delivered by duly authorized
officers of each entity comprising Seller.
(c) Neither the execution and delivery of this
Agreement and Seller's Ancillary Documents by Seller, nor the
consummation by Seller of the transaction herein contemplated,
will conflict with or result in a breach of any of the terms,
conditions or provisions of Seller's Articles of Incorporation or
By-laws, or of any statute or administrative regulation, or of
any order, writ, injunction, judgment or decree of any court or
any governmental authority or of any arbitration award.
(d) Schedule 2.2 sets forth all leases, agreements and
contracts (excluding the Realty Agreements) for services and
supplies relating to the ordinary operation of the Business,
except for other contracts, leases and agreements which do not
constitute Material Contracts. For purposes hereof, "Material
Contracts" means leases, contracts or agreements to which Seller
is a party which are not terminable within one hundred eighty
(180) days after the Second Closing Date, and for which the cost
of payment or performance required of Seller during the remaining
term thereof is greater than TWENTY FIVE THOUSAND DOLLARS
($25,000.00); but only to the extent such Material Contracts, in
the aggregate, involve costs of payment or performance greater
than FIVE HUNDRED THOUSAND DOLLARS ($500,000.00). The foregoing
shall not constitute a representation or warranty that any of the
items listed in Schedule 2.2 is, in fact, a valid, binding
agreement as of the date hereof, nor a representation or warranty
that any of such items is not in fact an Excluded Asset.
(e) Seller has received no written notice of any
actions, suits or other judicial proceedings against Seller which
relate exclusively to the Property or the Business, at law or in
equity, except for those matters as set forth on Schedule 4.3(e)
hereof.
4.4 Limitation on Warranties. Prior to the execution
hereof, Buyer has been given access to the Property and certain
books and records relating thereto, as set forth herein. In
making the decision to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer has relied
and will rely solely on the basis of its own independent
investigation of Seller's Business and Property and upon the
express representations, warranties and covenants of Seller set
forth in this Agreement. Buyer acknowledges that Seller has no
duty, responsibility or obligation whatsoever to volunteer to
Buyer information concerning the Business or the Property.
EXCEPT AS EXPRESSLY SET FORTH IN SECTION 4.3, SELLER MAKES (AND
HAS MADE) NO EXPRESS OR IMPLIED WARRANTY OF ANY KIND WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION AS TO PHYSICAL
CONDITION OR VALUE OF ANY OF THE PURCHASED ASSETS OR THE FUTURE
PROFITABILITY OR FUTURE EARNINGS PERFORMANCE OF THE BUSINESS.
ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED.
ARTICLE V
Conduct Prior to the Closing
5.1 General. Seller and Buyer shall have the rights and
obligations with respect to the period between the date hereof
and the Second Closing Date which are set forth in the remainder
of this Article V.
5.2 Seller's Obligations. The following are Seller's
obligations:
(a) Seller shall use reasonable efforts and make every
good faith attempt (and Buyer shall cooperate with Seller) to
obtain the consents to the assignment of, or alternate
arrangements satisfactory to Buyer with respect to, those
contracts, leases, or other instruments, and other items of
Property which are being purchased by Buyer hereunder.
(b) Subject to the provisions of Section 5.6 hereof,
Seller shall carry on the Business in the usual and ordinary
course of business, consistent with past practices, including
normal commitments for the purchase of supplies; except as
otherwise provided or permitted hereunder, Seller will not sell
or lease any of Seller's assets or properties, except in the
ordinary course of the Business.
(c) Any promotional commitments or coupons for free or
discounted goods or services issued by Seller from and after the
First Closing Date shall provide that such commitments or coupons
are terminable or revocable at or prior to the Second Closing
Date
5.3 Buyer's Obligations. The following are Buyer's
obligations:
(a) Buyer shall cooperate with Seller and exert
Buyer's reasonable good faith efforts to obtain the valid
assignment of any Non-Assignable Assets, or the reasonable
functional equivalent thereof (i.e. an alternative mechanism
which provides Buyer with the material benefits of the Non-
Assignable Asset), in each case without additional cost to
Seller.
(b) Buyer shall exert Buyer's best efforts to obtain
all regulatory approvals from the Nevada Gaming Authorities as
more particularly provided under Section 5.5 hereof. Buyer's
failure to file for or exert best efforts to obtain such
approvals shall be deemed to be a default by Buyer hereunder.
(c) Buyer shall obtain, prior to March 17, 1997, early
termination of all waiting periods imposed under HSR (as
hereinafter defined). If Buyer does not obtain such termination
of all appropriate waiting periods under HSR (with no
representative of DOJ or FTC taking the position that any of such
waiting periods has not commenced to run or has not expired for
any reason) by March 17, 1997, then Seller shall have the right
to terminate this Agreement by written notice to Buyer, and upon
such notice, this Agreement shall be of no further force or
effect, and Escrow Agent shall release the Due Diligence Fee and
the Deposit to Buyer, no Breakup Fee shall be payable, and Seller
shall have no further liability or obligation hereunder.
5.4 Joint Obligations. The following shall apply with
equal force to Seller and Buyer:
(a) Seller and Buyer shall assist and cooperate with
each other in obtaining approval of the Nevada Gaming
Authorities for the transactions contemplated hereby.
(b) Each party shall promptly give the other party
written notice of the existence or occurrence of any condition
which would make any representation or warranty herein contained
of either party untrue or which might reasonably be expected to
prevent the consummation of the transaction contemplated hereby.
(c) No party shall intentionally perform any act
which, if performed, or intentionally omit to perform any act
which, if omitted to be performed, would prevent or excuse the
performance of this Agreement by any party hereto or which would
result in any representation or warranty herein contained of said
party being untrue in any material respect as if originally made
on and as of the Closing Date.
(d) Buyer and Seller will file the respective reports
required of them under HSR, and the regulations thereunder as
soon as possible (and in no event later than March 17, 1997).
The parties agree to use their diligent good faith efforts to
satisfy any requests for additional information or other
requirements imposed by the Federal Trade Commission ("FTC") or
the U.S. Department of Justice ("DOJ") in connection with the
transactions contemplated by this Agreement, and to request early
termination of any waiting period imposed by statute. Seller has
agreed, as an accommodation to Buyer, to permit Seller's counsel
to assist Buyer's counsel in preparation and submission of such
reports on behalf of Buyer. Buyer acknowledges and agrees that
Seller has not thereby assumed, and shall not, at a result
thereof, be deemed to have undertaken, any responsibility or
obligation with respect to such matters, other than Seller's own
filing obligation hereunder.
5.5 Compliance with Applicable Nevada State Gaming Law.
(a) No Gaming Interest. Buyer acknowledges that
absent the requisite approval by the Nevada State Gaming Control
Board (the "Nevada Board"), the Nevada Gaming Commission, the
City of Mesquite and the Clark County Liquor and Gaming Licensing
Board (collectively, the "Nevada Gaming Authorities"), Buyer is
strictly prohibited from obtaining any interest whatsoever in the
gaming devices, slot machines and associated gaming devices, or
any revenues derived therefrom. Accordingly, the Gaming and
Other Assets shall not be sold or conveyed until the Second
Closing.
(b) Transfer of Gaming Equipment. Buyer acknowledges
and agrees that pursuant to the applicable Nevada law requiring
administrative approval of the Chairman of the Nevada State
Gaming Control Board, Seller herein is strictly prohibited from
allowing the transfer of any gaming devices, slot machines, parts
or inventories, or other related associated gaming items to a
non-licensed entity. As such, the parties expressly agree that
Seller shall retain ownership in any gaming devices of the gaming
devices until such time as Buyer or Buyer's designee obtains all
required Nevada gaming licenses (subject to earlier termination
of this Agreement and conditions on Seller's obligations as
herein provided). The parties hereto agree that absent Buyer's
receipt of all necessary gaming licenses, no ownership interest
shall pass to Buyer, and that upon receipt of such gaming
licenses, Seller and Buyer shall (subject to earlier termination
of this Agreement and conditions on Seller's obligations as
herein provided) consummate the transactions contemplated hereby
in the Second Closing, at no additional cost to Buyer.
(c) Buyer Regulatory Approvals. Buyer shall exert
Buyer's best efforts to obtain all regulatory approvals from the
Nevada Gaming Authorities and any other applicable governmental
authorities for this transaction. Without limiting the
foregoing, Buyer shall file for all necessary regulatory
approvals, and provide Seller with written evidence thereof, as
soon as practicable after the Agreement has been executed.
Buyer's failure to file for or exert best efforts to obtain such
approvals shall be deemed to be a default by Buyer under the
Agreement.
(d) Regulatory Approvals for Form of Transaction. Buyer and Seller hereby
acknowledge that they mutually desire that the structure contemplated hereby
for the sale/leaseback transaction and attendant First
Closing and Second Closing receive the administrative approval of
certain of the Nevada Gaming Authorities, including without
limitation, the Chairman of the Nevada Board. Buyer shall
deliver to Seller at or prior to the First Closing the reasoned
written opinion of Mssrs. Keefer, O'Reilly, Ferrario & Lubbers
(the "Buyer's Counsel Opinion") addressed to Seller and generally
providing that, based on: (i) past approvals of similarly
structured transactions by the Nevada Gaming Authorities; and
(ii) discussions with the Chairman of the Nevada State Gaming
Control Board regarding the structure and transactions
contemplated by this Agreement, the structure of the transactions
contemplated hereby will not violate applicable Nevada gaming
laws and regulations, and based thereon the First Closing can be
completed and the First Purchase Price (subject to adjustments
and prorations herein provided) can be released from Escrow to
Seller immediately thereafter. If at or prior to the First
Closing Buyer does not deliver the Buyer's Counsel Opinion, as
required above, then this Agreement shall terminate and be of no
further force or effect, and the Due Diligence Fee and the
Deposit shall be returned by Escrow Agent to Buyer, no Breakup
Fee shall be payable, and neither party shall have any further
obligations hereunder or under the Agreement.
(e) Release. Seller shall be permitted to obtain
written administrative approval of the Chairman of the Nevada
State Gaming Control Board, or in lieu thereof, an opinion issued
by Seller's counsel, which approval or opinion would permit the
Due Diligence Fee and/or the Deposit to be released to Seller
from Escrow prior to the First Closing. If Seller obtains such
approval or opinion, then Buyer shall cooperate with Seller to
effect such release. If the First Closing does not occur for any
reason, other than Buyer's default hereunder, then such released
sum shall be returned by Seller to Escrow for return to Buyer in
accordance with the terms hereof.
5.6 Seller's Right to Modify. Notwithstanding the
provisions of Section 5.2 hereof, Buyer acknowledges and agrees
that Seller may, between the date hereof and the Second Closing
Date, modify its operations in order to reduce costs or otherwise
minimize operating losses, by such means and mechanisms as Seller
may, in its sole discretion, determine, including, without
limitaiton, any of the following:
1. Reduction or modification of employee or
management staff;
2. Reduction, modification or elimination of
table games, the rules thereof or the hours
of operation thereof;
3. Reduction, elimination or modification of
marketing and promotional efforts or
programs;
4. Reduction of inventories of perishable or
consumable goods, or goods having any of the
Marks;
5. Limitations on wagering risks to be taken by
Seller in the operation of its casino; and,
6. Changes in the operations of any other aspect
of the Business.
Notwithstanding the preceding provisions of this Section 5.6,
Seller agrees to use its irrigation shares relating to the Land,
as described in Section 1.1(b)(11), to irrigate the Land or
portions thereof, in the same manner as previously done.
ARTICLE VI
Conditions to Closing
6.1 Conditions to Seller's Obligations. The obligation of
Seller to consummate the transactions contemplated hereby is
subject to the fulfillment of all of the following conditions on
or prior to the subject Closing Date, upon the non-fulfillment of
any of which this Agreement may, at Seller's option, be
terminated pursuant to and with the effect set forth in
Article XI:
(a) Each and every representation and warranty made by
Buyer shall have been true and correct in all material respects
when made and shall be true and correct in all material respects
as if originally made on and as of the subject Closing Date, and
Buyer shall have delivered to Seller a certificate, executed by
the Manager of Buyer and dated as of the subject Closing, to that
effect.
(b) Prior to the First Closing Date, the Buyer's
Counsel Opinion with respect to the transactions contemplated
hereby shall have been received and delivered to Seller as
required under Section 5.5(d) hereof.
(c) No suit or proceeding shall have been commenced by
any governmental authority on any grounds to restrain, enjoin or
hinder the consummation of the transaction contemplated hereby.
(d) No court order shall have been issued or entered
against the Buyer or the Seller which prohibits or materially
restricts or delays the subject Closing or the transactions
contemplated by this Agreement. No action or proceeding by any
federal, state or local governmental or regulatory body or
authority shall have been commenced (and be pending) against the
Buyer or Seller or any of their respective affiliates, partners,
associates, officers or directors, or any partners, officers or
directors of such affiliates, seeking to prevent, restrict or
delay the closing or the transactions contemplated by this
Agreement or challenging any of the terms or provisions of this
Agreement or arising out of this Agreement or the transactions
contemplated hereby.
(e) As to the Second Closing only, Buyer shall have
received all required licenses and approvals from the Nevada
Gaming Authorities.
(f) As to the First Closing , all waiting periods
under the HSR applicable to the transactions contemplated by this
Agreement shall have expired, by passage of time or by valid
early termination by the FTC or DOJ, and no representative of
either the FTC or the DOJ shall be taking the position that any
of such waiting periods has not commenced to run or has not
expired for any reason.
(g) Prior to the First Closing Date, Seller shall have
received the Illinois Approval.
(h) On or prior to the First Closing, Seller shall
have received the prior written approval of Wells Fargo Bank,
N.A. to the transactions contemplated hereby, and to Seller's
retention of the proceeds thereof, all in form and substance
satisfactory to Seller and the Players Board of Directors, in
their sole discretion, including, without limitation, such terms
as will allow Players, in the sole determination of the Board of
Directors, to avoid borrowings under "Tranche B" of Players'
Amended and Restated Credit Facility (the "Facility") in the
original principal amount of ONE HUNDRED TWENTY MILLION DOLLARS
($120,000,000.00).
(i) Seller shall have received the Indenture Approval
from the Board of Directors of Players as contemplated under
Section 3.9 hereof.
(j) Seller shall not have elected to terminate this
Agreement as provided under Section 3.9 hereof.
6.2 Conditions to Buyer's Obligations. The obligation of
Buyer to consummate the transaction contemplated hereby is
subject to the fulfillment of all of the following conditions on
or prior to the subject Closing Date, upon the non-fulfillment of
any of which this Agreement may, at Buyer's option, be terminated
pursuant to and with the effect set forth in Article XI:
(a) Each and every representation and warranty made by
Seller shall have been true and correct in all material respects
when made and shall be true and correct in all material respects
as if originally made on and as of the subject Closing Date, and
Seller shall have delivered to Buyer a certificate, executed by
the President or an Executive Vice-President of Seller and dated
as of the subject Closing, to that effect.
(b) [Intentionally Omitted].
(c) No suit or proceeding shall have been commenced by
any governmental authority on any grounds to restrain, enjoin or
hinder the consummation of the transaction contemplated hereby.
(d) No court order shall have been issued or entered
against Buyer or Seller which prohibits or materially restricts
or delays the subject Closing or the transactions contemplated by
this Agreement. No action or proceeding by any federal, state or
local governmental or regulatory body or authority shall have
been commenced (and be pending) against Buyer or Seller or any of
their respective affiliates, partners, associates, officers or
directors, or any partners, officers or directors of such
affiliates, seeking to prevent, restrict or delay the closing or
the transactions contemplated by this Agreement or challenging
any of the terms or provisions of this Agreement or arising out
of this Agreement or the transactions contemplated hereby.
(e) [Intentionally Omitted]
(f) As to the First Closing , all waiting periods
under the HSR applicable to the transactions contemplated by this
Agreement shall have expired, by passage of time or by valid
early termination by the FTC or DOJ, and no representative of
either the FTC or the DOJ shall be taking the position that any
of such waiting periods has not commenced to run or has not
expired for any reason.
ARTICLE VII
Closing
7.1 Form of Documents. At each Closing, the parties shall
deliver the documents, and shall perform the acts, which are set
forth in this Article VII. All documents which Seller shall
deliver shall be in form and substance reasonably satisfactory to
Buyer and Buyer's counsel. All documents which Buyer shall
deliver shall be in form and substance reasonably satisfactory to
Seller and Seller's counsel.
7.2 Buyer's Deliveries. Subject to the fulfillment or
waiver of the conditions set forth in Sections 6.2, Buyer shall
execute and/or deliver to Seller all of the following:
(a) At the First Closing.
(i) Payment of the First Purchase Price.
(ii) An assumption and indemnity agreement, duly
executed by Buyer, under which Buyer assumes those Assumed
Liabilities described in Section 2.1 hereof.
(iii) The Lease, duly executed by Buyer, as
provided in Section 1.3, above.
(iv) The Buyer's Counsel Opinion with respect to
the transactions contemplated hereby, as described in Section
5.5(d) above, and evidence of termination of all HSR waiting
periods, as described in Section 5.3(c) above.
(b) At the Second Closing (Or the Modified Second
Closing).
(i) Payment of the Second Purchase Price
(including delivery of the purchase money note and the guaranty
referenced in Section 3.2(iii)(b) hereof) and the cost of the
Consumables On-Hand.
(ii) An assumption and indemnity agreement, duly
executed by Buyer, under which Buyer assumes those Assumed
Liabilities described in Section 2.2 hereof.
(iii) A termination agreement with respect to
the Lease.
(c) At Both Closings.
(i) An incumbency and specimen signature
certificate with respect to the officers of Buyer executing this
Agreement and Buyer's Ancillary Documents on behalf of Buyer.
(ii) A certified copy of resolutions of Buyer's
Members, authorizing the execution, delivery and performance of
this Agreement and Buyer's Ancillary Documents.
(iii) A closing certificate executed by the
Manager of Buyer (or any other officer of Buyer specifically
authorized to do so), on behalf of Buyer, pursuant to which Buyer
represents and warrants to Seller that Buyer's representations
and warranties to Seller are true and correct as of the subject
Closing Date as if then originally made (or, if any such
representation or warranty is untrue in any respect, specifying
the respect in which the same is untrue), that all covenants
required by the terms hereof to be performed by Buyer on or
before the subject Closing Date, to the extent not waived by
Buyer in writing, have been so performed (or, if any such
covenant has not been performed, indicating that such covenant
has not been performed), and that all documents to be executed
and delivered by Buyer at the subject Closing have been executed
by duly authorized officers of Buyer.
(iv) Such other documents from Buyer as may
reasonably be required in order to effectuate the transactions
contemplated (i) hereby and (ii) by the Buyer's Ancillary
Documents.
7.3 Seller's Deliveries. Subject to the fulfillment or
waiver of the conditions set forth in Section 6.1, Seller shall
execute (where applicable in recordable form) and/or deliver or
cause to be executed and/or delivered to Buyer all of the
following:
(a) At the First Closing.
(i) A grant, bargain and sale deed ("Deed")
conveying the Real Property to Buyer (other than the Golf Course
Land, which shall be conveyed by assignment of lease) subject
only to the Permitted Exceptions and other matters permitted
under Section 3.10, above.
(ii) An assignment of lease conveying Seller's
leasehold interest in the Golf Course Land, subject only to the
permitted exceptions and other matters permitted under Section
3.10 hereof.
(iii) An assignment to Buyer of all of
Seller's right, title and interest in, to and under the Realty
Agreements.
(iv) The Title Policy.
(v) A "non-foreign affidavit," properly executed
by officers of Seller in recordable form, containing such
information as shall be required by Section 1445(b)(2) of the
Internal Revenue Code of 1986, as amended ("Code") and the
temporary regulations issued thereunder.
(vi) The Hafen Note;
(vii) A bill of sale, executed by Seller,
conveying the First Assets; and
(viii) The Lease, duly executed by Seller, as
provided in Section 1.3, above.
(b) At the Second Closing (Or The Modified Second
Closing).
(i) A bill of sale, executed by Seller, conveying
all of the tangible personal property included in the Gaming and
Other Assets to Buyer, other than the Excluded Assets.
(ii) An assignment to Buyer, executed by Seller,
assigning to Buyer all of the intangible properties and assets
comprising the Gaming and other Assets, other than the Excluded
Assets.
(iii) A non-exclusive license to Buyer of
Seller's right, title and interest in and to the Marks for 90
days from the Second Closing Date.
(iv) A termination agreement with respect to the
Lease required to be sold and transferred hereunder.
(v) Certificates of title or origin (or like
documents) with respect to all vehicles included in the Gaming
and Other Assets and other Equipment, and any other items of
Property for which a certificate of title or origin is required
in order for title thereto to be transferred to Buyer.
(vi) Physical possession of the tangible items
comprising the Property.
(vii) An assignment to Buyer of Seller's
right, title and interest in irrigation shares evidenced by 4
shares of the capital stock of the Mesquite Irrigation Company.
(c) At Both Closings.
(i) An incumbency and specimen signature
certificate with respect to the officers of Seller executing this
Agreement and Seller's Ancillary Documents on behalf of Seller.
(ii) A certified copy of resolutions of Seller's
board of directors and stockholders, authorizing the execution,
delivery and performance of this Agreement and Seller's Ancillary
Documents.
(iii) A closing certificate duly executed by
the President of Seller (or any other officer of Seller
specifically authorized to do so), on behalf of Seller, pursuant
to which Seller represents and warrants to Buyer that Seller's
representations and warranties to Buyer are true and correct as
of the Closing Date as if then originally made, (or, if any such
representation or warranty is untrue in any respect, specifying
the respect in which the same is untrue), that all covenants
required by the terms hereof to be performed by Seller on or
before the Closing Date, have been so performed (or, if any such
covenant has not been so performed, indicating that such covenant
has not been performed), and that all documents to be executed
and delivered by Seller at the Closing have been executed by duly
authorized officers of Seller.
(iv) Such other documents as may reasonably
required from Seller in order to effectuate the transactions
contemplated (i) hereby and (ii) by the Seller's Ancillary
Documents.
7.4 Approval of Closing Documents. All certificates,
instruments, documents and agreements to be executed and
delivered at either the First Closing or the Second Closing
(together, the "Closings") shall be in form and substance
reasonably acceptable to and approved by the parties and their
counsel.
7.5 No Merger. None of the covenants and agreements of
Buyer and Seller, as the case may be, contained in this Agreement
shall merge with any deed or conveyance, and such covenants and
agreements shall survive each of the respective Closings and
shall continue in full force and effect until such time, if any,
as provided in such covenant or agreement or otherwise limited by
law.
7.6 Conveyance of Title. The Real Property shall be
conveyed at the First Closing through Escrow. The other Property
shall be conveyed outside of Escrow at either the First Closing
or the Second Closing, as applicable, in accordance with the
terms and provisions of the Agreement.
ARTICLE VIII
Post-Closing Agreements
8.1 [Intentionally Omitted]
8.2 Non-Assignment. Notwithstanding any provision to the
contrary contained herein, Seller shall not be obligated to
assign to Buyer (but Buyer shall nevertheless remain liable after
the Second Closing therefor) any contract, purchase order, sales
order, lease or other instrument which provides that it may not
be assigned without the consent of the other party thereto and
for which such consent is not obtained, but in any such event,
Seller shall cooperate with Buyer in any reasonable arrangement
designed to provide the benefits thereof to Buyer. Without
limiting the foregoing, Seller may require that (without limiting
Buyer's other assumption and indemnity obligations hereunder)
Buyer execute a writing under which Buyer agrees to indemnify,
defend and hold harmless Seller, its parent and affiliated
entities and the officers, directors and agents of any of them,
from and against any and all liability, loss, cost, damage, claim
or expense arising out of or in connection with such contract,
order, lease or other instrument, or the alternate arrangement so
agreed, from and after the Second Closing Date. The subject
contract, purchase order, sales order, lease or other instrument
may remain in Seller's name, so long as such writing contemplates
that it is to be paid or performed only using (and to the extent
of) funds, information or staff provided by Buyer, and Buyer
alone retains the economic benefit or burdens thereof.
8.3 Use of Seller's Trademarks. From and after the Second
Closing, Buyer may continue to use (and Seller shall grant at the
Second Closing a limited non-exclusive license to Buyer for the
use of) those consumable items of tangible personal property
comprising a portion of the Property, which contain or display
any of the Marks, for use exclusively in connection with the
operation of the Casino Hotel; provided, however, that such
license shall terminate and expire automatically ninety (90) days
following the Second Closing Date, whereupon Buyer shall
immediately and forever cease the use of all items of Property
having or displaying such Marks. Seller may enforce the
termination of such license by injunction or other equitable
remedy, it being agreed that monetary damages would be an
insufficient remedy for any violation of the foregoing by Buyer.
8.4 Further Assurances. The parties shall execute such
further documents, and perform such further acts, as may be
necessary to transfer and convey the Property to Buyer, on the
terms herein contained, and to otherwise comply with the terms of
this Agreement and consummate the transaction contemplated
hereby.
8.5 Indemnification. At and from the Second Closing,
Buyer agrees to indemnify, defend, save and hold Seller free,
clear and harmless from and against any and all claims, losses,
damages, actions, suits, proceedings, demands, judgments,
interest cost and expenses (including attorney's fees and costs
and punitive damages) and liability arising out of or in
connection with the ownership of the Property or the operation of
the Business, from and after the Second Closing Date. The
foregoing indemnity is in addition to Buyer's indemnity
obligations under Article X hereof.
8.6 [Intentionally Omitted].
ARTICLE IX
Employees and Employee Benefit Plans
9.1 WARN Act.
(a) Prior to the Second Closing, Buyer will not take
or omit to take any action, which act or omission which would
trigger liability, claims, or a notice or other obligation of
Seller or the Business under the National Labor Relations Act, as
amended, 29 U.S.C. Section 151 et seq., the Workers Adjustment
Retraining and Notification Act, 29 U.S.C. Section 2102 et seq. ("WARN
Act"), the Employee Retirement Income Security Act, 29 U.S.C. Section
1001 et seq., the Family and Medical Leave Act of 1993, 29 U.S.C.
Section 2601 et seq., the Fair Labor Standards Act of 1938, as amended,
29 U.S.C. Section 201 et seq., and any other federal, state or local
law.
(b) Seller shall be responsible for compliance with
the WARN Act in connection with the consummation of the
transactions contemplated hereby at the Second Closing, and shall
issue appropriate notice to all its employees under WARN Act at
least sixty (60) days prior to the Second Closing Date.
(c) Buyer and Seller hereby acknowledge and intend
that all employees of Seller shall be terminated from Seller's
employ as of the Second Closing Date. Buyer has made no
agreements hereunder to limit Buyer's discretion over hiring
decisions under applicable Federal, State and local law.
Compensation due employees working as of the Second Closing Date
will be paid by Seller for all shifts commencing prior to the
Second Midnight; and shall be paid by Buyer for all shifts
commencing after the Second Midnight.
9.2 [Intentionally Omitted]
9.3 [Intentionally Omitted]
9.4 [Intentionally Omitted]
9.5 [Intentionally Omitted]
9.6 [Intentionally Omitted]
ARTICLE X
Indemnification
10.1 General. From and after the First Closing, the parties
shall indemnify each other as provided in this Article X.
10.2 Certain Definitions. As used in this Agreement, the
following terms shall have the indicated meanings:
(a) "Damages" shall mean all liabilities, demands,
claims, actions or causes of action, regulatory, legislative or
judicial proceedings or investigations, assessments, levies,
losses, fines, penalties, damages, costs and expenses, including,
without limitation, reasonable attorneys', accountants',
investigators', and experts' fees and expenses, sustained or
incurred in connection with the defense or investigation thereof;
(b) "Indemnified Party" shall mean a party hereto who
is entitled to indemnification from another party hereto pursuant
to this Article X;
(c) "Indemnifying Party" shall mean a party hereto who
is required to provide indemnification under this Article X to
another party hereto;
(d) "Third Party Claims" shall mean any claims for
Damages asserted or threatened by a party other than the parties
hereto, their successors and permitted assigns, against any
Indemnified Party or to which an Indemnified Party is subject.
10.3 Indemnification Obligations of Seller. Subject to the
provisions of Section 10.4, Seller shall indemnify, save and keep
harmless Buyer and its successors and permitted assigns ("Buyer
Indemnitees") against and from all Damages sustained or incurred
by any of them resulting from or arising out of or by virtue of:
(a) any inaccuracy in or breach of any representation
and warranty made by Seller in this Agreement or in any closing
document delivered to Buyer in connection with this Agreement;
(b) any breach by Seller of, or failure by Seller to
comply with, any of its covenants or obligations under this
Agreement (including, without limitation, its obligations under
this Article X);
(c) the failure to discharge any liability or
obligation of Seller other than the Assumed Liabilities; and
(d) Except for the Assumed Liabilities, any Third
Party Claims to the extent caused by the acts or omissions of
Seller before the First Closing Date, including without
limitation, Damages which arise out of Seller's ownership of the
Real Property before the First Closing Date, or to the extent
caused by Seller's operation of the Business before the Second
Closing Date.
10.4 Limitation on Seller's Indemnification Obligations.
Seller's obligations pursuant to the provisions of Section 10.3
are subject to the following limitations:
(a) the Buyer Indemnitees shall not be entitled to
recover under Section 10.3(a) until the aggregate total amount
which the Buyer Indemnitiees would recover under Section 10.3(a),
but for this Section 10.4(a), for all matters exceeds
$250,000.00, and then only for the excess over $250,000.00;
(b) the Buyer Indemnitees shall not be entitled to
recover under Section 10.3(a) unless a claim has been asserted by
written notice, specifying the details of the alleged
misrepresentation or breach of warranty, delivered to Seller on
or prior to June 30, 1998;
(c) the Buyer Indemnitees shall not be entitled to
recover under Section 10.3(b) or (c) hereof if indemnification is
also available to the Buyer Indemnitees under Section 10.3(a)
hereof (it being understood that the Buyer Indemnitees' exclusive
remedy in such case shall be pursuant to Section 10.3(a) hereof);
(d) the Buyer Indemnitees shall not be entitled to
recover under Section 10.3:
(i) with respect to title to any of the Real
Property;
(ii) WITH RESPECT TO CONSEQUENTIAL DAMAGES,
INCLUDING CONSEQUENTIAL DAMAGES CONSISTING OF BUSINESS
INTERRUPTION OR LOST PROFITS, OR WITH RESPECT TO PUNITIVE
DAMAGES;
(iii) with respect to a misrepresentation or
breach of warranty by or of Seller which is contained herein if
at or before the time of the subject Closing Buyer had actual
knowledge (the burden of proving which actual knowledge shall be
Seller's) of the misrepresentation or breach of warranty;
(iv) with respect to the nonassignability or
nontransferability of any of the Property or Assumed Liabilities
or the failure to obtain any consent, or conditions imposed
incident to the giving of any consent, required in connection
with, or as a consequence of, the transfer of any of the Property
to, or the assumption of the Assumed Liabilities by, Buyer;
(v) to the extent the aggregate claims under
Section 10.3(a) of the Buyer Indemnitees exceed $1,000,000.00;
(vi) to the extent the subject matter of the claim
is covered by insurance (including title insurance) held by
Buyer; or
(vii) to the extent the claim for
indemnification is based upon circumstances which resulted in an
adjustment or proration of the Purchase Price pursuant to Article
III hereof; and
(e) [Intentionally Omitted].
10.5 Buyer's Indemnification Obligations. Buyer shall
indemnify, save and keep harmless Seller and its successors and
permitted assigns against and from all Damages sustained or
incurred by any of them resulting from or arising out of or by
virtue of:
(a) any inaccuracy in or breach of any representation
and warranty made by Buyer in this Agreement or in any closing
document delivered to Seller in connection with this Agreement;
(b) any breach by Buyer of, or failure by Buyer to
comply with, any of its covenants or obligations under this
Agreement (including, without limitation, its obligations under
this Article X);
(c) Buyer's failure to pay, discharge and perform any
of the Assumed Liabilities; or
(d) any Third Party Claims to the extent caused by the
acts or omissions of Buyer after the First Closing Date,
including, without limitation, Damages which arise out of Buyer's
ownership of the Real Property after the First Closing Date, or
to the extent caused by Buyer's operation of the Business after
the Second Closing Date.
10.6 Cooperation. Subject to the provisions of Section
10.7, the Indemnifying Party shall have the right, at its own
expense, to participate in the defense of any Third Party Claim,
and if said right is exercised, the parties shall cooperate in
the investigation and defense of said Third Party Claim.
10.7 Third Party Claims. Forthwith following the receipt
of notice of a Third Party Claim, the party receiving the notice
of the Third Party Claim shall (i) notify the other party of its
existence setting forth with reasonable specificity the facts and
circumstances of which such party has received notice and (ii) if
the party giving such notice is an Indemnified Party, specifying
the basis hereunder upon which the Indemnified Party's claim for
indemnification is asserted. The Indemnified Party may, upon
reasonable notice, tender the defense of a Third Party Claim to
the Indemnifying Party. If:
(a) the defense of a Third Party Claim is so tendered
and such tender is accepted without qualification by the
Indemnifying Party; or
(b) within thirty (30) days after the date on which
written notice of a Third Party Claim has been given pursuant to
this Section 10.7, the Indemnifying Party shall acknowledge with
qualification its indemnification obligations as provided in this
Article X in writing to the Indemnified Party, but shall commit
to providing defense;
then, except as hereinafter provided, the Indemnified Party shall
not have the right to defend or settle such Third Party Claim.
The Indemnified Party shall have the right to be represented by
counsel at its own expense in any such contest, defense,
litigation or settlement conducted by the Indemnifying Party
provided that the Indemnified Party shall be entitled to
reimbursement therefor if the Indemnifying Party shall lose its
right to contest, defend, litigate and settle the Third Party
Claim as herein provided. The Indemnifying Party shall lose its
right to defend and settle the Third Party Claim if it shall fail
to diligently contest the Third Party Claim. So long as the
Indemnifying Party has not lost its right and/or obligation to
defend and settle as herein provided, the Indemnifying Party
shall have the exclusive right to contest, defend and litigate
the Third Party Claim and shall have the exclusive right, in its
discretion exercised in good faith, and upon the advice of
counsel, to settle any such matter, either before or after the
initiation of litigation, at such time and upon such terms as it
deems fair and reasonable, provided that at least ten (10) days
prior to any such settlement, written notice of its intention to
settle shall be given to the Indemnified Party. All expenses
(including without limitation attorneys' fees) incurred by the
Indemnifying Party in connection with the foregoing shall be paid
by the Indemnifying Party. Notwithstanding the foregoing, in
connection with any settlement negotiated by an Indemnifying
Party, no Indemnified Party shall be required by an Indemnifying
Party to (x) enter into any settlement that does not include as
an unconditional term thereof the delivery by the claimant or
plaintiff to the Indemnified Party of a release from all
liability in respect of such claim or litigation, (y) enter into
any settlement that attributes by its terms liability to the
Indemnified Party or (z) consent to the entry of any judgment
that does not include as a term thereof a full dismissal of the
litigation or proceeding with prejudice. No failure by an
Indemnifying Party to acknowledge in writing its indemnification
obligations under this Article X shall relieve it of such
obligations to the extent they exist. If an Indemnified Party is
entitled to indemnification against a Third Party Claim, and the
Indemnifying Party fails to accept the defense of a Third Party
Claim tendered pursuant to this Section 10.7, or if, in
accordance with the foregoing, the Indemnifying Party shall lose
its right to contest, defend, litigate and settle such a Third
Party Claim, the Indemnified Party shall have the right, without
prejudice to its right of indemnification hereunder, in its
discretion exercised in good faith and upon the advice of
counsel, to contest, defend and litigate such Third Party Claim,
and may settle such Third Party Claim, either before or after the
initiation of litigation, at such time and upon such terms as the
Indemnified Party deems fair and reasonable, provided that at
least ten (10) days prior to any such settlement, written notice
of its intention to settle is given to the Indemnifying Party.
If, pursuant to this Section 10.7, the Indemnified Party so
defends or settles a Third Party Claim, for which it is entitled
to indemnification hereunder, as hereinabove provided, the
Indemnified Party shall be reimbursed by the Indemnifying Party
for the reasonable attorneys' fees and other expenses of
defending the Third Party claim which is incurred from time to
time, forthwith following the presentation to the Indemnifying
Party of itemized bills for said attorneys' fees and other
expenses.
ARTICLE XI
Effect of Termination/Proceeding
11.1 General. The parties shall have the rights and
remedies with respect to the termination and/or enforcement of
this Agreement which are set forth in this Article XI.
11.2 Right to Terminate. This Agreement and the transaction
contemplated hereby may be terminated at any time prior to the
Closing by prompt notice given in accordance with Section 13.4:
(a) by the mutual written consent of Buyer and Seller;
or
(b) by either of such parties if the First Closing
shall not have occurred at or before 11:59 p.m. on March 17,
1997; or if the Second Closing shall not have occurred at or
before 11:59 p.m. on June 30, 1997; provided, however, that the
right to terminate this Agreement under this Section 11.2(b)
shall not be available to any party whose failure to fulfill any
of its obligations under this Agreement has been the cause of or
resulted in the failure of the subject Closing to occur on or
prior to the aforesaid date.
(c) by Seller as provided under Section 3.9 hereof.
(d) by either of such parties if, notwithstanding the
terminating party's diligent good faith efforts, any condition on
such parties obligations hereunder, or set forth in Article VI
hereof, is not fulfilled at or prior to the subject Closing.
(e) by Buyer as provided under Section 3.10(b)(ii)
hereof.
11.3 Certain Effects of Termination. In the event of the
termination of this Agreement by either Seller or Buyer as
provided in Section 11.2:
(a) each party, if so requested by the other party,
will return promptly every document furnished to it by the other
party (or any subsidiary, division, associate or Affiliate of
such other party) in connection with the transaction contemplated
hereby, whether so obtained before or after the execution of this
Agreement, and any copies thereof (except for copies of documents
publicly available) which may have been made, and will use
reasonable efforts to cause its representatives and any
representatives of financial institutions and investors and
others to whom such documents were furnished promptly to return
such documents and any copies thereof any of them may have made;
(b) all information received by any party hereto with
respect to the business of the other party hereto or its
subsidiaries, divisions, affiliates or associates (other than
information which is a matter of public knowledge or which has
heretofore been or is hereafter publicly published in any
publication for public distribution or filed as public
information with any governmental authority) shall not, unless
otherwise required by law, at any time be used for the advantage
of, or disclosed to third parties by, such party for any reason
whatsoever.
This Section 11.3 shall survive any termination of this
Agreement.
11.4 Remedies. No party shall be limited to the termination
right granted in Section 11.2 by reason of the nonfulfillment of
any condition to such party's closing obligations but may, in the
alternative, elect to do one of the following:
(a) proceed to close despite the nonfulfillment of any
closing condition, it being understood that consummation of the
transaction contemplated hereby shall be deemed a waiver of a
breach of any representation, warranty or covenant or of any
party's rights and remedies with respect thereto to the extent
that the other party shall have actual knowledge of such
misrepresentation or breach and the Closing shall nonetheless
occur;
(b) decline to close, terminate this Agreement as
provided in Section 11.2, and thereafter seek damages to the
extent permitted in Section 11.5; or
(c) seek specific performance of the obligations of
the other party. Each party hereby agrees that in the event of
any breach by such party of this Agreement, the remedies
available to the other party at law would be inadequate and that
such party's obligations under this Agreement may be specifically
enforced.
11.5 Right to Damages. If this Agreement is terminated
pursuant to Section 11.2, neither party hereto shall have any
claim against the other except if the circumstances giving rise
to such termination were caused by the other party's willful
failure to comply with a material covenant set forth herein, in
which event termination pursuant to Section 11.2 shall not be
deemed or construed as limiting or denying any legal or equitable
right or remedy of said party, and said party shall be entitled
to recover its costs and expenses which are incurred in pursuing
its rights and remedies (including reasonable attorneys' fees).
11.6 Deposit. If Buyer wilfully fails to complete the First
Closing, absent default by Seller, then Seller shall be entitled
to keep and retain the Deposit, and to apply same against
Seller's damages incurred as a result of such default by Buyer,
it being acknowledged that Seller's actual damages are likely to
exceed the amount of the Deposit.
ARTICLE XII
Insurance and Taxes; Risk of Loss
12.1 [Intentionally Omitted]
12.2 Taxes. All foreign, federal, state, county and local
income, excise, withholding, property, sales, use, franchise, and
other tax returns and related information (including, without
limitation, information returns) required to be filed up to and
including the First Closing Date or the Second Closing Date, as
applicable, have been prepared and filed or will be prepared and
filed in accordance with applicable law and with payment in full,
or establishment of an adequate reserve for all taxes, interest,
penalties, assessments or deficiencies thereon that have become
due pursuant to such returns or pursuant to any assessment which
has become payable or otherwise, subject to any extension granted
for the filing of any return or for the payment of any tax,
interest, penalty, assessment or deficiency. Buyer shall assume
all tax liabilities for the Real Property that may become payable
after the First Closing Date (except as provided in the Lease),
and for any other items of the Property that may become payable
after the Second Closing Date.
12.3 Risk of Loss; General. All risk of loss with respect
to the Real Property shall be upon Seller until the First
Closing, and thereafter upon Buyer. All risk of loss with
respect to the Property other than the Real Property shall be
upon Seller until the Second Closing, and thereafter upon Buyer.
12.4 Risk of Loss; Special Provisions.
(a) In the event of material destruction or damage of
any buildings or other improvements located on the Real Property
or the condemnation of a material portion of the Real Property
prior to the First Closing, Seller shall either (i) upon
providing Buyer with a description thereof, repair such damage
and destruction at Seller's expense prior to the First Closing
Date or (ii) promptly notify Buyer of the damage or destruction
and Seller's inability or decision not to repair it. Within ten
(10) days after receipt by Buyer of Seller's notification of its
inability or decision not to repair, Buyer shall have the right
to notify Seller of Buyer's election to terminate this Agreement.
If any destruction, damage or condemnation of any building or
other improvement on the Real Property is not material (as
provided in subsection (b), below), or if such destruction,
damage or condemnation is material and un-repaired by Seller
prior to the First Closing Date but Buyer does not elect to
terminate this Agreement as provided in the immediately preceding
sentence, Buyer shall be obligated to complete the First Closing,
but shall be entitled to a credit against the Purchase Price of
an amount equal to the insurance or condemnation proceeds, if
any, received by Seller by reason of such damage, destruction, or
condemnation (to the extent such funds have not been expended on,
or committed to, the repair or restoration of such damaged,
destroyed or condemned property), and Seller shall at the First
Closing Date assign to Buyer any rights Seller has to receive any
future insurance proceeds or payments with respect to such
damage, destruction or condemnation. Notwithstanding the
foregoing, Buyer shall in no event be entitled to a credit
against the Purchase Price, or to receive any portion of such
insurance proceeds, in an amount greater than $26,000,000.00,
provided in such event that the Second Closing shall take place
on the First Closing Date. Any insurance proceeds not credited
against the Purchase Price shall be and remain the property of
Seller exclusively, and Buyer shall have no claim thereto.
Seller shall in no event be obligated to repair any such damage.
(b) Material destruction or damage shall be deemed to
have occurred if the damage is such that it may be reasonably
expected to prevent or materially and adversely affect the
conduct of gaming operations, or operation of the Business for a
period in excess of one hundred twenty (120) days, or result in
an uninsured loss in excess of One Million Dollars ($1,000,000)
for which Seller is unwilling to assume responsibility. In the
case of condemnation, the affected Property shall be deemed to be
a "material portion of the Property" if such condemnation may be
reasonably expected to interfere materially and permanently with
the operation of the Business as presently being conducted or the
ability of Buyer to further develop a substantial portion of the
Property for hotel/casino purposes (condemnation of an easement
or the fee, for utility or roadway purposes relating to an
unimproved area, which is not occupied by buildings, within
fifteen (15) feet of the perimeter of the Property shall be
deemed, in the absence of such condemnation materially
restricting access to the Property, for example (but without
limitation), not to interfere materially and permanently).
(c) Between the First Closing and the Second Closing,
Buyer shall bear all risk of loss with respect to the Non-Gaming
Hard Assets, and Seller shall bear all risk of loss with respect
to the Gaming and Other Assets. Each party shall keep its
respective portion of this Property fully insured against loss or
casualty. If any of the Non-Gaming Hard Assets and/or the Gaming
and Other Assets are damaged or destroyed by fire or other
casualty, or are taken by condemnation, between the First Closing
and the Second Closing, Buyer shall nevertheless be obligated to
complete the Second Closing (or the Modified Second Closing), but
Buyer shall be entitled to a credit against the Second Purchase
Price in an amount equal to the insurance or condemnation
proceeds received by Seller on account of the damage,
destruction, or taking, if any, of the Gaming and Other Assets,
up to the amount of (and not to exceed) the amount of the Second
Purchase Price, or (in the case of the Modified Second Closing),
credit in an amount equal to such insurance or condemnation
proceeds received by Seller on account of damage, destruction or
taking of the assets actually purchased by Buyer, up to the
amount of the reduced Second Purchase Price described in Section
3.4(c) hereof.
(d) This Section is intended as an express provision
with respect to destruction and condemnation which supersedes the
provisions of the Nevada Uniform Vendor and Purchaser Risk Act,
N.R.S. 113.030 et. seq.
ARTICLE XIII
Miscellaneous
13.1 [Intentionally Omitted]
13.2 Publicity. At all times from the date hereof through
the date of the Second Closing the Buyer shall not make any
public announcement of the transactions contemplated hereby
without the prior written consent of the Seller. Seller and its
affiliates shall be entitled to make any and all public
announcements concerning this transactions as they may be
obligated to disclose under applicable law. Nothing contained
herein shall prevent Seller or its affiliates from communicating
with their agents and prospective purchasers or other contracting
parties with respect to the Business or Property, prior to 5:00
p.m. EST on February 28, 1997, as contemplated under Section 1.5
hereof. Nothing contained herein shall prevent the Buyer from
making disclosures to third parties reasonably related to obtain
financing for the Purchase Price. Nothing contained herein shall
prevent either party at any time from furnishing any information
to any governmental agency which it is requested to furnish to
such agency or pursuant to any court order, regulation or
applicable gaming law. The covenants of the Buyer contained in
this Section are in addition to the Buyer's covenants contained
in the separately executed confidentiality agreement, each of
which covenants is hereby confirmed. The foregoing provisions
are binding upon the parties as provided in Section 1 hereof.
13.3 Time of Essence. Buyer and Seller acknowledge and
agree that the times and dates specified for the performance of
all obligations hereunder are and shall be of the essence of this
Agreement.
13.4 Notices. All notices required or permitted to be given
hereunder shall be in writing and may be delivered by hand, by
facsimile, by nationally recognized private courier, or by United
States mail. Notices delivered by mail shall be deemed given
three (3) business days after being deposited in the United
States mail, postage prepaid, registered or certified mail.
Notices delivered by hand by facsimile, or by nationally
recognized private carrier shall be deemed given on the first
business day following receipt; provided, however, that a notice
delivered by facsimile shall only be effective if such notice is
also delivered by hand, or deposited in the United States mail,
postage prepaid, registered or certified mail, on or before two
(2) business days after its delivery by facsimile. All notices
shall be addressed as follows:
If to Seller
Addressed to
Players International, Inc.
1300 Atlantic Avenue, Suite 800
Atlantic City, NJ 08401
Attention: Patrick Madamba, V.P.
Telecopier: (609) 449-7765
with a copy to
Horn, Goldberg, Gorny, Plackter, Weiss & Perskie,
P.C.
1300 Atlantic Avenue, Suite 500
Atlantic City, NJ 08401
Attention: Melvyn J. Tarnopol, Esquire
Telecopier: (609) 348-6834
If to Buyer
Addressed to
RBG, LLC.
911 No. Buffalo Drive, Suite 201
Las Vegas, NV 89128
Attention: Robert R. Black, Sr.
Telecopier: (702) 341-5287
with a copy to
Keefer, O'Reilly, Ferrario & Lubbers
325 South Maryland Parkway
Las Vegas, NV 89101
Attention: John O'Reilly, Esq.
Telecopier: (702) 387-6978
and/or to such other respective addresses and/or addressees as
may be designated by notice given in accordance with the
provisions of this Section 12.5.
13.5 Expenses. Each party hereto shall bear its own
professional fees and expenses incurred by such party in
connection with, relating to or arising out of the execution,
delivery and performance of this Agreement and the consummation
of the transaction contemplated hereby, including, without
limitation, attorneys', accountants' and other professional fees
and expenses.
13.6 Entire Agreement. This Agreement and the Buyer's
Ancillary Documents and the Seller's Ancillary Documents (the
Buyer's Ancillary Documents and the Seller's Ancillary Documents
together being referred to herein as the "Ancillary Agreements")
constitute the entire agreement between the parties and shall be
binding upon and inure to the benefit of the parties hereto and
their respective legal representatives, successors and permitted
assigns. Each exhibit and the Disclosure Schedule, shall be
considered incorporated into this Agreement and the Ancillary
Agreements. Any matter which is disclosed in any portion of the
Disclosure Schedule is deemed to have been disclosed for the
purposes of all relevant provisions of this Agreement and the
Ancillary Agreements. The inclusion of any item in the
Disclosure Schedule is not evidence of the materiality of such
item for the purposes of this Agreement and the Ancillary
Agreements. The parties make no representations or warranties to
each other, except as contained in this Agreement and the
Ancillary Agreements, and any and all prior representations and
statements made by any party or its representatives, whether
verbally or in writing, are deemed to have been merged into this
Agreement and the Ancillary Agreements, it being intended that no
such representations or statements shall survive the execution
and delivery of this Agreement and the Ancillary Agreements.
Buyer acknowledges that it has conducted an independent
investigation of the financial condition, assets, liabilities,
properties and projected operations of the Business in making its
determination as to the propriety of the transactions
contemplated by this Agreement and the Ancillary Agreements, and
in entering into this Agreement and the Ancillary Agreements has
relied solely on the results of said investigation and on the
representations and warranties of Seller expressly contained in
this Agreement and in the Seller's Ancillary Documents delivered
by Seller pursuant to the provisions of this Agreement.
13.7 Non-Waiver. The failure in any one or more instances
of a party to insist upon performance of any of the terms,
covenants or conditions of this Agreement, to exercise any right
or privilege in this Agreement conferred, or the waiver by said
party of any breach of any of the terms, covenants or conditions
of this Agreement, shall not be construed as a subsequent waiver
of any such terms, covenants, conditions, rights or privileges,
but the same shall continue and remain in full force and effect
as if no such forbearance or waiver had occurred. Except as
provided in Sections 3.10(b) and 11.4(a), no waiver shall be
effective unless it is in writing and signed by an authorized
representative of the waiving party.
13.8 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed to be an
original, and all such counterparts shall constitute but one
instrument.
13.9 Severability. The invalidity of any provision of this
Agreement or portion of a provision shall not affect the validity
of any other provision of this Agreement or the remaining portion
of the applicable provision.
13.10 Applicable Law. This Agreement shall be governed
and controlled as to validity, enforcement, interpretation,
construction, effect and in all other respects by the internal
laws of the State of Nevada applicable to contracts made in that
State.
13.11 Binding Effect; Benefit. This Agreement shall
inure to the benefit of and be binding upon the parties hereto,
and their successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer on any
person other than the parties hereto, and their respective
successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement,
including, without limitation, third party beneficiary rights.
13.12 Assignability.
(a) Neither this Agreement, nor any interest therein
may be assigned or transferred in whole or in part by Seller
except with the consent in writing of the Buyer, which consent
shall not be unreasonably withheld, and no such assignment shall
relieve the Seller of any liability hereunder. Through the
Second Closing Date, Buyer shall have no right to assign this
Agreement or any document entered into pursuant hereto, nor any
interest therein, nor to negotiate or enter into any agreement to
do so and any such purported assignment or agreement or
negotiations to do so shall be void and of no effect, shall
constitute a default by Buyer hereunder and under the Agreement,
and any monetary or other benefit therefrom shall be the property
of Seller. Notwithstanding the foregoing, Buyer shall have the
limited right to assign this Agreement, if any, to Buyer and any
combination of James A. Black, Gary W. Black, Michael T. Black,
Barry R. Moore, Troy Herbst, Edward Herbst, Timothy Herbst,
Michael Gaughan and Leo Lewis, or to an entity which is 100%
owned or controlled by Buyer and any combination of such listed
individuals, and which remains 100% owned and controlled by Buyer
and such listed individuals through completion of the Second
Closing; provided, however, that no such assignment will be
permitted if, in Seller's reasonable discretion, it does or will
likely delay the approval of the transactions contemplated
hereunder by any of the Nevada Gaming Authorities. Upon any such
permitted assignment, Buyer (together with any predecessor Buyer)
shall personally and unequivocally guarantee any such assignee's
performance of the obligations of Buyer under this Agreement, as
the case may be, until such time as the Purchase Price (including
the Second Purchase Price) has been paid in full.
(b) Buyer represents and warrants to Seller that Buyer
is purchasing the Property for its own account and not with a
view towards resale, in whole or in part, or directly or
indirectly. Buyer covenants and agrees that during the period
(the "Restrictive Period") between the First Closing and June 30,
1998, Buyer shall not dispose of any of the Property except in
the ordinary course of the Business, nor enter into any agreement
to do so, and the principals of Buyer shall not dispose of any
interest in Buyer, nor enter into any agreement to do so.
Notwithstanding the foregoing, the principals of Buyer may
dispose of interests in Buyer, provided that, notwithstanding any
such disposition, Robert R. Black, Sr. retains management
control, directly or indirectly through his wholly-owned entity,
over Buyer and the Business.
13.13 Amendments. This Agreement shall not be modified
or amended except pursuant to an instrument in writing executed
and delivered on behalf of each of the parties hereto.
13.14 Headings. The headings contained in this
Agreement are for convenience of reference only and shall not
affect the meaning or interpretation of this Agreement.
13.15 Governmental Reporting. Anything to the contrary
in this Agreement notwithstanding, nothing in this Agreement
shall be construed to mean that a party hereto or other person
must make or file, or cooperate in the making or filing of, any
return or report to any governmental authority in any manner that
such person or such party reasonably believes or reasonably is
advised is not in accordance with law.
13.16 [Intentionally Omitted]
13.17 Consent to Jurisdiction. This Agreement has been
executed and delivered in and shall be deemed to have been made
in Las Vegas, Nevada. Seller and Buyer each agrees to the
exclusive jurisdiction of any state or Federal court within the
City of Las Vegas, with respect to any claim or cause of action
arising under or relating to this Agreement, and waives personal
service of any and all process upon it, and consents that all
services of process be made by registered mail, directed to it at
its address as set forth in Section 12.5, and service so made
shall be deemed to be completed when received. Seller and Buyer
each waives any objection based on forum non conveniens and
waives any objection to venue of any action instituted hereunder.
Nothing in this paragraph shall affect the right of Seller or
Buyer to serve legal process in any other manner permitted by
law.
13.18 Regulatory Matters.
(a) Several of Seller's affiliates ("Players
Entities") are licensed by and otherwise subject to the authority
of various casino and gaming regulatory agencies including, but
without limitation, gaming regulators in Illinois, Kentucky,
Louisiana, Missouri, Nevada and New Jersey ("Gaming Regulators").
Players has adopted a regulatory compliance policy, and Buyer,
for itself and its successors and permitted assigns, agrees to
provide Players with such documentation, information and
assurances regarding itself, any owners, principal employees,
brokers, agents or others where applicable as may be necessary in
order for Seller to comply with Players' regulatory compliance
policy and with the request of any Gaming Regulators. The
foregoing shall be a material obligation of Buyer hereunder.
Seller hereby agrees that Buyer's delivery of a copy of Robert R.
Black Sr.'s Nevada gaming license shall fulfill Buyer's
obligations hereunder.
(b) Players and Seller shall cooperate with respect to
any of Buyer's reasonable information requests in connection with
any and all of the regulatory approvals (including regulatory
informational requests) necessary for Buyer to consummate the
transactions contemplated by this Agreement, if any.
(c) Buyer acknowledges that Seller's obligations
hereunder are contingent upon complying with the requirements,
and obtaining the approval, of the State of Illinois to the
modification of the Facility necessitated by Seller's
consummation of the transactions contemplated under this
Agreement (the "Illinois Approval").
13.19 Survival. All of the representations, covenants
and warranties of the parties set forth in this Agreement shall
be continuing and shall survive the execution, delivery and
performance of this Agreement and shall not be merged; provided,
however, that Seller's liabilities hereunder and under the
Seller's Ancillary Documents shall terminate and be of no further
force or effect on and as of the date which is three (3) years
after the Date of the Second Closing.
13.20 [Intentionally Omitted]
13.21 Termination of Letter of Intent. By their
execution of this Agreement, Seller and Buyer hereby agree that
the Letter of Intent between them, dated January 27 and 28, 1997,
is hereby terminated and of no further force or effect.
13.22 Brokerage Matters. Seller agrees that at the
First Closing it shall pay to Steven Cohen, Esquire (301 E.
Clark, Las Vegas, Nevada), a finder's fee with respect to the
transaction contemplated hereby in the amount of $250,000.00.
Each of the parties hereto represents and warrants to the other
that, except as provided in the immediately preceding sentence,
neither such party nor any officer, director or agent of such
party has entered into any agreement for the payment of any
brokerage or finder's fees, commissions, compensation or expenses
to any person, firm or corporation in connection with the
transactions contemplated by this Agreement, and each agrees to
indemnify and hold and save the other or others harmless from any
such fees, commissions, compensation or expenses (including
reasonable attorneys' fees and other expenses incurred in
connection with any such claim which may be due or asserted by
reason of any such agreement or purported agreement by the
indemnifying party).
13.23 Access. Seller shall afford Buyer access to
the Property from time to time, provided that Buyer covenants not
to interfere with Seller's conduct of the Business.
13.24 Contract Renewals. Seller agrees to use its good
faith efforts to terminate or otherwise refrain from renewing any
Other Agreements, the termination, expiration or non-renewal of
which would, in Seller's discretion, not have an adverse effect
upon the Business. The foregoing shall include, without
limitation, Seller's agreement with Leroy's Horse and Sports
Place. As to any of the Other Agreements that Seller does renew,
Seller shall use its good faith efforts to have such renewal
limited to a month-to-month basis.
(signatures continued on following page)
(signatures continued from previous page)
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
SELLER:
PLAYERS NEVADA, INC., a Nevada
corporation
By:
PLAYERS MESQUITE LAND, INC., a Nevada
corporation
By:
PLAYERS MESQUITE GOLF CLUB, INC., a
Nevada corporation
By:
(signatures continued on following page)
(signatures continued from previous page)
BUYER:
RBG, LLC, a Nevada limited liability
Company
By:
Robert R. Black, Sr.
JOINDER
The undersigned hereby joins in the execution of this
Agreement to evidence his agreement to personally and
unconditionally guaranty the performance of Buyer's obligations
hereunder, until such time as the Purchase Price (including the
Second Purchase Price) has been paid in full.
_______________________________
Robert R. Black, Sr.
EXHIBIT "B"
Unrecorded Mesquite Documents
1. Agreement Concerning Development of Golf Course and
Residential Housing dated February 3, 1995 by and between Players
Mesquite Golf Club, Inc. and River view Limited Liability Company
(the "Golf Course Agreement"), as amended by Amendment Agreement
dated June 2, 1995 by and among Players Mesquite Golf Club, Inc.,
Riverview Limited Liability Company, Players Nevada, Inc.,
Players Mesquite Land, Inc., Hafen Dairy, Inc., Brian K. Hafen
and Dawn N. Hafen, and Mesquite Mart, Inc. (the "Amendment").
2. Letter Agreement dated June 2, 1995 by and between
Players Mesquite Golf Club, Inc. and Riverview Limited Liability
Company regarding real estate taxes. This letter sets forth the
allocable percentages of the real estate taxes to be paid by the
Hafens on the one hand and Players on the other until such time
as the golf course parcel is subdivided from the balance of the
land owned by the Hafens to be developed under the Golf Course
Agreement.
3. Bureau of Land Management Land Use Permit No. N-59743
for Government Lot 2 issued effective April 26, 1995. This
permit has been renewed through April 25, 1998 subject to payment
of an annual fee of $220.00.
4. A First Amendment to the June 2, 1995 Lease Agreement
between Players Mesquite Golf Club, Inc. and Riverview's Limited
Liability Company which was made on August 25, 1995. The First
Amendment to Lease Agreement also amended Section 1.3 of the Golf
Course Agreement concerning the obligation and time table for
completion of the 18 hole golf course.
5. Lease Agreement dated June 2, 1995 by and between
Players Mesquite Land, Inc. and Riverview Limited Liability
Company. This leases back to the Hafens the 17.4 acres the
billboard and the irrigation shares which Players purchased from
the Hafens.
6. Undated Outdoor Advertising Agreement between Mesquite
Mart, Inc. and Players Nevada, Inc. covering the billboard which
is located on the 17.4 acre parcel, and the First Amendment to
that agreement which was entered into on June 2, 1995.
7. Assignment and Partial Termination of Option Rights
dated June 2, 1995.
8. Second Amendment to Lease Agreement dated as of January
9, 1997 between Players Golf and River View Limited Liability
Company, concerning the description of the leased premises, real
estate taxes, and other matters.
9. Letter Agreement dated January 10, 1997 between Players
Golf and River View Limited Liability Company, concerning a golf
cart path easement and other matters.
10. Letter Agreement dated August 23, 1995 between Players
Mesquite Golf Course, Players Nevada, Inc., Players Mesquite
Land, Inc., Players International, Inc., River View Limited
Liability Company, Bryan K Hafen, Dawn N. Hafen, Hafen Dairy,
Inc., Mesquite Mart, Inc. and First Interstate Bank of Nevada,
N.A.
