<PAGE 1>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1999
_______________
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _______________ to ____________
Commission file number 0-19049
______________
American Gaming & Entertainment, Ltd.
______________________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Delaware 74-2504501
________________________________ ________________________________
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
One Woodland Avenue, Paramus, New Jersey 07652
______________________________________________________________________________
(Address of principal executive offices)
(609) 822-8505
______________________________________________________________________________
(Issuer's telephone number)
______________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X No ___
___
Number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date.
Class Outstanding at June 30, 1999
____________________________ ____________________________
Common Stock, $.01 par value 12,532,102 shares
<PAGE 2>
AMERICAN GAMING & ENTERTAINMENT, LTD.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
1999 1998
____________ ____________
ASSETS
Current Assets
Cash $ 357,000 $ 123,000
Restricted cash - charter payments 5,610,000 4,320,000
Restricted cash - Rising Sun 1,144,000 1,119,000
Prepaid expenses 125,000 71,000
Other current assets 167,000 801,000
____________ ____________
Total current assets 7,403,000 6,434,000
Asset held for sale: Casino barge and
improvements, subject to lease, net of
accumulated depreciation of $5,765,000 - 1999
and $5,243,000 - 1998 6,828,000 7,350,000
Furniture, fixtures and equipment, net of
accumulated depreciation of $81,000 - 1999
and $79,000 - 1998 7,000 9,000
____________ ____________
$ 14,238,000 $ 13,793,000
============ ============
See Notes to Consolidated Financial Statements
<PAGE 3>
AMERICAN GAMING & ENTERTAINMENT, LTD.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
1999 1998
____________ ____________
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
Amounts due to related parties:
Accrued interest $ 21,674,000 $ 19,882,000
Dividends payable 2,853,000 2,553,000
Accrual for lease costs 2,701,000 2,701,000
Current portion of long term debt 34,592,000 34,592,000
____________ ____________
61,820,000 59,728,000
Accounts payable 71,000 86,000
Accrued payroll and related expenses 10,000 3,000
Accrued expenses and other current
liabilities 137,000 2,241,000
Short term portion of estimated net
liabilities for subsidiaries in
bankruptcy 3,635,000 2,070,000
Deferred charter revenue 11,528,000 10,238,000
____________ ____________
Total current liabilities 77,201,000 74,366,000
____________ ____________
Long term portion of estimated net
liabilities for subsidiaries in
bankruptcy - 1,640,000
____________ ____________
77,201,000 76,006,000
____________ ____________
Commitments and Contingencies
Stockholders' Deficiency
Preferred stock, 1,000,000 shares
authorized:
Series A preferred stock, par value
$.01 per share, 55,983 shares
issued 1,000 1,000
Series C and D cumulative preferred
stock, and Series E preferred stock,
par value $.01 per share, 4,000
shares authorized and issued for
each series 16,502,000 15,869,000
Common stock, par value $.01 per share;
50,000,000 shares authorized, 12,556,137
shares issued (including 24,035 shares
held in treasury) 126,000 126,000
Additional paid-in capital 40,488,000 41,421,000
Cost of shares held in treasury (25,000) (25,000)
Accumulated deficit (120,055,000) (119,605,000)
____________ ____________
(62,963,000) (62,213,000)
____________ ____________
$ 14,238,000 $ 13,793,000
=========== ===========
See Notes to Consolidated Financial Statements
<PAGE 4>
<TABLE>
AMERICAN GAMING & ENTERTAINMENT, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
______________________ _____________________
1999 1998 1999 1998
___________ ___________ __________ __________
<S> <C> <C> <C> <C>
Revenues $ - $ 256,000 $ - $ 445,000
___________ ___________ __________ __________
Costs and expenses
Selling, general and administrative 149,000 485,000 592,000 886,000
Depreciation and amortization 189,000 337,000 524,000 673,000
Reversal of bad debt expense
related to lease expenses (2,785,000) - (2,785,000) -
Reversal of net liabilities
for subsidiaries in bankruptcy (75,000) - (75,000) -
___________ ___________ __________ __________
Total costs and expenses (2,522,000) 822,000 (1,744,000) 1,559,000
___________ ___________ __________ __________
Operating income (loss) 2,522,000 (566,000) 1,744,000 (1,114,000)
___________ ___________ __________ __________
Other income (expense)
Interest income 15,000 23,000 34,000 44,000
Interest expense (1,164,000) (1,400,000) (2,316,000) (2,784,000)
Net gain on sale of assets 40,000 - 88,000 -
___________ ___________ __________ __________
Total other income (expense) (1,109,000) (1,377,000) (2,194,000) (2,740,000)
___________ ___________ __________ __________
Net income (loss) 1,413,000 (1,943,000) (450,000) (3,854,000)
Dividends and accretion on
preferred stock 467,000 467,000 933,000 933,000
___________ ___________ __________ __________
Net income (loss) for common
stockholders $ 946,000 $ (2,410,000) $ (1,383,000) $ (4,787,000)
=========== =========== ========== ==========
Income (loss) for common
stockholders per common share $ 0.08 $ (0.19) $ (0.11) $ (0.38)
=========== =========== ========== ==========
Weighted average number of common
shares outstanding 12,532,102 12,532,102 12,532,102 12,532,102
=========== =========== ========== ==========
See Notes to Consolidated Financial Statements
<PAGE 5>
AMERICAN GAMING & ENTERTAINMENT, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months ended June 30,
1999 1998
Operating Activities
Net loss $ (450,000) $ (3,854,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 524,000 673,000
Accrued interest 2,316,000 2,784,000
Interest income from restricted cash (25,000) (17,000)
Reversal of bad debt expense related
to lease expenses (2,785,000) -
Reversal of net liabilities for
subsidiaries in bankruptcy (75,000) -
Net gain on sale of assets (88,000) -
Restricted proceeds from investment - (445,000)
Changes in operating assets and liabilities
Restricted cash - charter payments (1,290,000) -
Deferred charter revenue 1,290,000 -
Other current assets (80,000) 57,000
Accounts payable, accrued expenses
and other current liabilities 174,000 506,000
___________ ___________
Net cash used in operating
activities (489,000) (296,000)
___________ ___________
Investing Activities
Proceeds from asset dispositions 423,000 -
___________ ___________
Net cash provided by
investing activities 423,000 -
___________ ___________
Financing Activities
Proceeds from notes receivable and other
long-term assets 300,000 150,000
___________ ___________
Net cash provided by
financing activities 300,000 150,000
___________ ___________
Increase (decrease) in cash 234,000 (146,000)
Cash at beginning of year 123,000 381,000
___________ ___________
Cash at end of period $ 357,000 $ 235,000
=========== ===========
See Notes to Consolidated Financial Statements
<PAGE 6>
AMERICAN GAMING & ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited Consolidated Interim Financial
Statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. The unaudited Consolidated Interim Financial
Statements include the accounts of American Gaming &
Entertainment, Ltd. and its subsidiaries (collectively, the
"Company"). The unaudited Consolidated Interim Financial
Statements do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of the Company, all
adjustments (including normal recurring accruals) and disclosures
(including events occurring subsequent to June 30, 1999)
considered necessary for a fair presentation have been included.
Operating results for the three and six month periods ended June
30, 1999 may not be indicative of the results that may be
expected for the year ending December 31, 1999. For further
information, reference is also made to the Consolidated Financial
Statements contained in the Company's Annual Report on Form 10-
KSB for the year ended December 31, 1998.
The accompanying unaudited Consolidated Interim Financial
Statements have been prepared on a going concern basis, which
contemplates continuity of operations, realization of assets and
liquidation of liabilities in the ordinary course of business. As
further described in Note 2, the Company has sustained recurring
operating losses since its inception. The Company has also had a
history of insufficient liquidity and has been dependent upon its
largest stockholder, Shamrock Holdings Group, Inc. ("Shamrock"),
and certain related entities (The Bennett Funding Group, Inc.
("Bennett Funding") and Bennett Management and Development Corp.
("Bennett Management"), collectively with Shamrock, the "Bennett
Entities") for both working capital and project related
financing. As a result, the Company's available cash, recurring
losses, negative working capital, stockholders' deficiency,
defaults under its debt agreements, uncertainties relating to the
ability to consummate the liquidation of certain of its
subsidiaries (see Note 2), uncertainties relating to the
bankruptcies of Shamrock, Bennett Funding and Bennett Management
and securities fraud charges by the federal government against
Bennett Funding and Bennett Management raise substantial doubt
about the ability of the Company to continue as a going concern.
Management's plans concerning these matters are discussed in Note
2. The accompanying unaudited Consolidated Interim Financial
Statements do not include any additional adjustments that might
result from the outcome of these uncertainties.
NOTE 2: LIQUIDITY AND CONTINUATION OF BUSINESS
Given the Company's present financial and liquidity position and
the legal problems described above relating to the Bennett
Entities (see Note 1), the business of the Company is unlikely to
continue to be the ownership of equity interests in casino gaming
ventures. Additionally, the Company's ability to continue in
business is dependent upon numerous factors, discussed below.
<PAGE 7>
The Company had available cash of approximately $357,000 as of
June 30, 1999. The Company believes that such cash is sufficient
to fund the Company's operations, excluding the Company's (a)
obligations to Shamrock and, if applicable, Bennett Management,
and (b) contingent obligations to the Company's President,
through the second quarter of 2000, based on the Company's
current level of operations and projected expenditures.
The Company does not anticipate receiving additional funds and
therefore will probably not have sufficient cash to operate
beyond such date. The Company would then need to pursue a formal
plan of reorganization or liquidation.
On March 10, 1999, Shamrock advised the Company that it should
consult Shamrock before utilizing the net proceeds of $415,000
from the sale on March 1, 1999 of a former railroad station in
Mobile, Alabama (the "GM&O Building") for working capital
purposes. If Shamrock demands that such funds should be utilized
to repay indebtedness due to Shamrock, the Company would need to
pursue a formal plan of reorganization or liquidation.
As of June 30, 1999, the Company had recorded as restricted cash
approximately $1,144,000 attributable to profit distributions and
interest thereon received by the Company relating to the
Company's 24.5% beneficial equity interest (the "RSR Interest")
in RSR, LLC, a limited liability company formed by the Company
and a group of non-affiliated individuals, representing the
equivalent of a 4.9% equity interest in a riverboat gaming and
entertainment complex in the City of Rising Sun, Indiana on the
Ohio River (the "Rising Sun Project"). The Company has
transferred legal title to the RSR Interest to NBD Bank, N.A., as
trustee ("NBD"). NBD is holding the distributions received in
respect of the RSR Interest in trust until such time as NBD sells
or otherwise disposes of the RSR Interest in accordance with the
provisions of a trust agreement entered into between the Company
and NBD. Shamrock has orally notified the Company that all net
proceeds received by the Company from the sale of the RSR
Interest and the cash held by NBD attributable to the RSR
Interest should be paid to Shamrock to reduce the Company's
indebtedness to Shamrock. The amount of any such payments will
reduce the Company's indebtedness to Shamrock.
As of June 30, 1999, cash received from the charter of the Gold
Coast Barge in the amount of approximately $5,610,000 is also
recorded as restricted cash. The Company and the Bennett Entities
agreed on October 21, 1998 that any such payments related to the
charter or sale of the Gold Coast Barge disbursed to the Company
and the Bennett Entities, jointly, from the bankruptcy cases of
AMGAM Associates ("AMGAM") and American Gaming and Resorts of
Mississippi, Inc. ("AGRM"), each a wholly-owned subsidiary of the
Company, would be escrowed and disbursed only upon the order of
the United States Bankruptcy Court, Northern District of New
York. Shamrock has orally notified the Company that all such
payments should be paid to Shamrock to reduce the Company's
indebtedness to Shamrock. Any such cash not disbursed to Shamrock
will be disbursed to the creditors of AMGAM and AGRM.
The Company's ability to continue in business is also dependent
upon obtaining Shamrock's and, if necessary, Bennett Management's
agreement to modify, terminate or restructure on terms
<PAGE 8>
acceptable to the Company all obligations due from the Company to
Shamrock and, if applicable, Bennett Management. However, there
can be no assurance the Company will be successful in those
efforts. If the Company is unsuccessful in these efforts, the
Company would then need to pursue a formal plan of reorganization
or liquidation of the Company.
Either reorganization or liquidation would generally result in
the sale of the Company's assets to satisfy outstanding
obligations. If either such action is necessary, all of the
Company's obligations would probably not be completely satisfied
and the stockholders of the Company would probably not recover
any of their investment in the Company.
For a discussion of specific factors affecting the Company's
liquidity and continuation of business, see the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1998.
NOTE 3: SIGNIFICANT DEVELOPMENTS WITH RESPECT TO INVESTMENTS
Mississippi
On July 23, 1999, the United States Bankruptcy Court, Southern
District of Mississippi (the "Mississippi Bankruptcy Court")
confirmed a joint plan of liquidation (the "Consensus Plan") for
AMGAM and AGRM.
Pursuant to the Consensus Plan, each administrative and priority
claim, as defined in the Code, incurred in connection with the
bankruptcy proceedings of AMGAM and AGRM would be paid in full
from the respective estates of AMGAM and AGRM in accordance with
statutory priorities pursuant to the Code.
Pursuant to the Consensus Plan, each secured claim would be
either paid in full from the sale of the related collateral or
satisfied in full by abandoning the collateral to the secured
creditor, except for (i) the Ship Mortgage and the Second
Mortgage and (ii) a guaranteed claim of IGT in the amount of
$1,400,000 (the "IGT Guaranteed Claim"). A first preferred ship
mortgage in the amount of approximately $2,041,000 (the "Ship
Mortgage") held by Shamrock on the Gold Coast Barge and related
leasehold improvements (collectively, the "Gold Coast Barge"), a
second preferred ship mortgage in the amount of approximately
$31,101,000 (the "Second Mortgage") held by Shamrock on the Gold
Coast Barge and the IGT Guaranteed Claim would each be treated as
discussed below. The balance of the claim of IGT would be treated
as an unsecured claim.
Pursuant to the Consensus Plan, the IGT Guaranteed Claim will be
paid in four equal installments. The first installment will be
payable upon the effective date of the Consensus Plan from 30% of
the charter payments made by President Mississippi Charter
Corporation ("PMCC") pursuant to a charter (the "Charter") of the
Gold Coast Barge from the Company (the "PMCC Payments"),
including payments of $4,105,000 made by PMCC pursuant to an
amendment to the Charter (the "Amendment Payments"), held in an
escrow account for the benefit of the creditors of AMGAM and
AGRM. The second installment will be paid from 30% of the PMCC
Payments
<PAGE 9>
made during the period from December 1, 1998 through April 15,
2000 (the "Remaining Charter Term"). The third installment will
be paid from 28% of the first $3,000,000 of net proceeds from a
sale of the Gold Coast Barge, if any. The fourth and final
installment will be paid from 25% of the net proceeds in excess
of $3,000,000, if any, from a sale of the Gold Coast Barge.
Pursuant to the Consensus Plan, each unsecured claim, excluding
any claims of the Company and Shamrock, would be paid from the
assets of the respective estates of AMGAM and AGRM. Such assets
would include, subject to the payment of the installments of the
IGT Guaranteed Claim, as discussed above, (a) 30% of all PMCC
Payments, including the Amendment Payments, (b) 28% of the first
$3,000,000 of net proceeds from a sale of the Gold Coast Barge,
if any, and (c) 25% of the net proceeds in excess of $3,000,000,
if any, from a sale of the Gold Coast Barge. Such assets would
additionally include the funds remaining in an escrow account for
the benefit of the creditors of AMGAM and AGRM with respect to
(a) the sale of the leases comprising the site on which AMGAM
operated a casino and (b) all FF&E Payments (as defined below).
Pursuant to the Consensus Plan, the Company's and Shamrock's
unsecured claims, and the Ship Mortgage and the Second Mortgage
would be paid from (a) 70% of all PMCC Payments, including the
Amendment Payments, (b) 72% of the first $3,000,000 of net
proceeds from a sale of the Gold Coast Barge, if any, and (c) 75%
of the net proceeds in excess of $3,000,000, if any, from a sale
of the Gold Coast Barge (collectively, the "AGEL/Shamrock
Payments").
Pursuant to the Consensus Plan, all equity interests of the
Company in AMGAM and AGRM would be canceled as of the effective
date of the Consensus Plan and the Complaint would be dismissed.
The amounts to be paid to creditors would be subject to the claim
allowance process in the AMGAM and AGRM bankruptcies, pursuant to
which all allowed claim amounts, in the order set forth above,
would be fixed for purposes of distributions under the Consensus
Plan.
On July 2, 1999, The President Riverboat Casino-Mississippi, Inc.,
("Purchaser"), President Casinos, Inc. and President Mississippi
Charter Corporation (collectively with Purchaser and President
Casinos, Inc., the "President Group") and AGEL, AMGAM, AGRM, the
Committee for the Unsecured Creditors of AMGAM, the Committee for the
Unsecured Creditors of AGRM, IGT, and Shamrock (collectively with
AGEL, AMGAM, AGRM, the Committee for the Unsecured Creditors of AMGAM,
the Committee for the Unsecured Creditors of AGRM and IGT, the "AGEL
Group"), entered into an agreement (the "Sale Agreement") pursuant to
which AGEL agreed to sell the Gold Coast Barge to Purchaser. On July
23, 1999, the Mississippi Bankruptcy Court approved the Sale
Agreement.
Pursuant to the Sale Agreement, Purchaser will purchase the Gold
Coast Barge for $6,827,500 (the "Purchase Price"), calculated as
$5,000,000 plus all PMCC Payments that would have been made from
August 1, 1999 through April 15, 2000. Upon closing, AGEL will
deliver the Gold Coast Barge to Purchaser free and clear of any
liens or encumbrances. The Purchaser shall pay $1,000,000 and
deliver a promissory note in the amount of the remainder. The
principal amount of such promissory note will be reduced by any
PMCC Payments made after July 31, 1999 ($215,000 per month under
the Charter). The Purchaser will deliver to the AGEL Group a
security agreement, preferred ship mortgage and guaranty by
President Casinos, Inc. to secure the
<PAGE 10>
payments under such promissory note. Additionally upon closing,
all lawsuits filed by the members of the President Group and the
members of the AGEL Group against each other will be dismissed.
If the Sale Agreement is terminated upon certain conditions, the
Purchaser shall have the right to a two-year extension of the
current term of the Charter and three successive one-year
extensions thereafter, at charter rates and other extension terms
to be determined by PMCC and AGEL, or through arbitration if such
parties are unable to agree on charter terms.
Pursuant to an order of the Mississippi Bankruptcy Court, prior
to 1996 PMCC acquired from AMGAM all of the furniture, fixtures
and equipment, including certain slot machines, formerly used in
the operation of the Gold Shore Casino in exchange for the
promise to make to AMGAM payments totaling approximately
$3,188,000 (the "FF&E Payments"). PMCC made FF&E Payments through
July 1996 totaling approximately $1,618,000 (of which amount the
Company received approximately $411,000 and paid IGT $375,000 to
settle certain litigation). FF&E Payments, other than those
received by the Company, are being escrowed in the AMGAM
bankruptcy proceeding pending a determination by the Mississippi
Bankruptcy Court as to the disposition of such proceeds. The
Company has no claim to the escrowed FF&E Payments. Pursuant to
the Sale Agreement, the AGEL Group agreed to accept a payment of
$900,000 in full satisfaction of all remaining FF&E Payments.
In 1998, Shamrock orally notified the Company that any
AGEL/Shamrock Payments should be paid to Shamrock to reduce the
Company's indebtedness to Shamrock.
Harolds Club Casino
On June 25, 1999, Shamrock Holdings Group, Inc. ("Shamrock"), the
Company's largest stockholder and creditor, sold the Harolds Club
in Reno, Nevada. All five land leases held by Shamrock related to
the Harolds Club terminated at closing. The Company, who assigned
such land leases to Shamrock in September 1998, was released from
all obligations under such leases, except that the Company agreed
to indemnify the five lessors of the Harolds Club property
against any environmental liabilities resulting from intentional
or negligent conduct on the part of the Company. (The Company is
unaware of, and no claim has been asserted related to, adverse
environmental conditions at Harolds Club resulting from
intentional or negligent conduct on the part of the Company.)
Additionally, lawsuits filed against the Company in the Second
Judicial District Court of the State of Nevada in and for the
County of Washoe (Case Nos. CV9604947, CV9604933, CV9604939,
CV9604997 and CV9604692), by the five lessors of the Harolds Club
property and cross-claims filed against the Company by co-
defendants (collectively, the "HC Lawsuits") were dismissed upon
closing, and any judgments which were entered have been withdrawn
and set aside as if not entered.
Due to certain lease guarantees, the Company had recorded unpaid
Harolds Club lease payments and property taxes from April 1996
through March 1999, collectively totaling approximately
$2,307,000 (the "Unpaid Harolds Obligations"), as current
liabilities as of March 31, 1999. The Company had recorded the
amount of the Unpaid Harolds Club Obligations as a receivable due
<PAGE 11>
from Shamrock, but, as a result of the Company's determination
that there was a substantial likelihood that such amounts would
be uncollectible, the Company fully reserved for such amounts at
the same time such amounts were recorded as a receivable. As a
result of the sale of the Harolds Club, and the consequent
release of the Company from all obligations under such leases and
the dismissal of all related lawsuits and cross-claims against
the Company, the Company reversed the Unpaid Harolds Obligations
as of June 30, 1999.
In September 1996, Shamrock and the Company entered into an
agreement (the "HC Agreement") pursuant to which Shamrock agreed,
upon the sale of the Harolds Club, to reimburse the Company for
(i) all costs and expenses, in an amount not to exceed $15,000,
incurred by the Company in connection with such sale, (ii) all
reasonable attorneys' fees incurred by the Company in connection
with litigation commenced against, among others, the Company by
the five lessors of the Harolds Club property, and (iii) all
reasonable costs and expenses incurred by the Company in
connection with the operation and maintenance of the Harolds
Club. The Company had recorded the amount of such costs and
expenses as a receivable due from Shamrock, but, as a result of
the Company's determination that there was a likelihood that
Harolds Club would not be sold, the Company fully reserved for
such amounts at the same time such amounts were recorded as a
receivable. As a result of the sale of the Harolds Club, the
Company set off such amounts, collectively totaling approximately
$524,000 as of June 30, 1999, against the Company's indebtedness
due to Shamrock (see Note 4).
NOTE 4: AMOUNTS DUE TO RELATED PARTIES AND LONG-TERM DEBT
The Company is delinquent in the payment of (i) interest due
under the Company's various loan agreements with Shamrock and
(ii) rent which was due under an operating lease between the
Company and Bennett Management (the "SCS Lease") with respect to
the Vessels, which SCS Lease Shamrock orally represented to the
Company that Bennett Management, prior to its bankruptcy filing,
assigned to Shamrock. The Company has therefore classified all
indebtedness due to Shamrock as current liabilities in the
accompanying unaudited Consolidated Interim Financial Statements.
At June 30, 1999 and December 31, 1998, the Company had accrued
for financial statement purposes outstanding amounts due Shamrock
of approximately $61,820,000 and $59,728,000, respectively,
including accrued interest of approximately $21,674,000 and
$19,882,000, respectively. Pursuant to the HC Agreement, and as a
result of the sale of the Harolds Club, the Company set off
certain costs and expenses totaling approximately $524,000 as of
June 30, 1999 against accrued interest due to Shamrock (see Note
3).
The above outstanding amounts due Shamrock also include
approximately $2,701,000 due under the SCS Lease and accrued
dividends of approximately $2,853,000 and $2,553,000 at June 30,
1999 and December 31, 1998, respectively, on the Company's Series
C Cumulative Preferred Stock ("Series C Preferred Stock") and
Series D Cumulative Preferred Stock ("Series D Preferred Stock").
The balance of accrued long-term debt due Shamrock at June 30,
1999 and December 31, 1998 is comprised of approximately (i)
$1,066,000, at the end of each period, related to a working
capital line of credit, (ii) $2,041,000, at the end of each
period, related to a term loan to assist the
<PAGE 12>
Company in financing pertaining to a casino in Biloxi,
Mississippi which the Company owned, managed and operated in
prior years (the "Gold Shore Casino"), (iii) $384,000, at the end
of each period, related to the Company's utilization of slot
machine sales proceeds, which slot machines were beneficially
owned by Bennett Management and which slot machine proceeds
Shamrock orally represented to the Company that Bennett
Management, prior to its bankruptcy filing, assigned to Shamrock
and (iv) $31,101,000, at the end of each period, related to
project financing for the Gold Shore Casino.
The accrued outstanding amount due Shamrock at June 30, 1999
represents approximately 80% of the Company's liabilities in the
accompanying unaudited Consolidated Interim Financial Statements
as of such date and is substantially in excess of the Company's
estimates of the fair value of the Company's assets.
The Company has entered into an agreement under which amounts
received by Shamrock will reduce the Company's indebtedness to
Shamrock. The Company has also agreed to repay indebtedness to
Shamrock of $125,000 from the sale in 1997 of certain securities,
which amount has not yet been paid to Shamrock.
NOTE 5: OTHER RELATED PARTY ISSUES
Shamrock, of which Richard C. Breeden, the bankruptcy trustee of
Bennett Funding and Bennett Management (the "Trustee") is the
sole stockholder, owns (i) 4,423,454 shares of Common Stock, and
(ii) all of the Company's outstanding Series A Preferred Stock,
convertible into, and voting as, 1,399,565 shares of Common
Stock. Additionally, the Trustee owns (i) an additional 1,500,000
shares of Common Stock and (ii) all of the Company's outstanding
Series C Preferred Stock, Series D Preferred Stock and Series E
Preferred Stock, convertible as of June 30, 1999 into
1,173,501,156 shares of Common Stock. The Company does not have a
sufficient number of authorized shares of Common Stock to enable
the conversion of all of the Series C Preferred Stock, the Series
D Preferred Stock and the Series E Preferred Stock. On April 1,
1996 the Board of Directors voted to request the stockholders of
the Company to approve an amendment to the Company's Restated
Certificate of Incorporation increasing the number of authorized
shares of Common Stock to 500,000,000 shares no later than the
next annual meeting of the Company's stockholders. The Board of
Directors has not set a date for such annual meeting. Assuming
the Trustee converted as of June 30, 1999 that number of shares
of the Series C Preferred Stock, Series D Preferred Stock and
Series E Preferred Stock convertible into the total number of the
Company's presently authorized but unissued shares of Common
Stock (i.e. 37,467,898 shares), the Trustee, on behalf of the
estates of certain Bennett Entities and Shamrock, would own
approximately 86.8% of the total outstanding shares of Common
Stock and approximately 87.1% of the total voting power
represented by the total outstanding voting securities of the
Company. Assuming the Company's stockholders approve an amendment
to the Company's Restated Certificate of Incorporation increasing
the number of authorized shares of Common Stock to 500,000,000
shares and the Trustee converted as of June 30, 1999 that number
of shares of the Series C Preferred Stock, the Series D Preferred
Stock and the Series E Preferred Stock convertible into the total
number of the Company's authorized but unissued shares of Common
Stock immediately after giving effect to such amendment (i.e.
resulting in a total of 487,467,898
<PAGE 13>
shares of Common Stock being issued to the Trustee as of such
date), the Trustee, on behalf of the estates of certain Bennett
Entities and Shamrock, would own approximately 98.7% of both the
total outstanding shares of Common Stock and the total voting
power represented by the total outstanding voting securities of
the Company.
NOTE 6: DECONSOLIDATION OF AMGAM AND AGRM
As a result of the bankruptcy proceedings under Chapter 11 of the
Code with respect to AMGAM and AGRM, and the expected liquidation
of these subsidiaries in the near future (see Note 3), the
Company's control of these entities is likely to be temporary. In
accordance with generally accepted accounting principles, the
Company has elected to deconsolidate AMGAM and AGRM and present
the results of operations for AMGAM and AGRM on the equity basis
of accounting as a single line item in the accompanying unaudited
Consolidated Interim Statements of Operations for financial
reporting purposes. Neither AMGAM nor AGRM had any business
operations for the six months ended June 30, 1999 or June 30,
1998.
NOTE 7: RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities."
This statement, which establishes accounting and reporting
standards for derivatives and hedging activities, is effective
for fiscal years beginning after June 15, 1999. Upon the adoption
of SFAS No. 133, all derivatives are required to be recognized in
the statement of financial position as either assets or
liabilities and measured at fair value. The Company is currently
evaluating the impact the adoption of SFAS No. 133 will have on
its financial position and results of operations.
NOTE 8: CONTINGENCIES
As discussed in Note 3, the HC Lawsuits were dismissed upon the
closing of the sale of Harolds Club.
On May 13, 1999, the Company paid $8,000, collectively, to two
stockholders of the Company, who were bondholders and
stockholders of AGRM prior to the merger of AGRM into the
Company, to settle a lawsuit filed in 1996 in the Circuit Court
of Harrison County, Mississippi, Second Judicial District (Civil
Action No. A2402-96-00210), alleging federal and state securities
fraud.
<PAGE 14>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations: Comparison of the three month periods
ended June 30, 1999 and June 30, 1998
Revenues
The Company has not received any financial statement information
or payments relating to the RSR Interest for the three months
ended June 30, 1999 and therefore has not recorded any revenues
attributable to the RSR Interest for the three months ended June
30, 1999. Cash received from the Rising Sun Project is recorded
as "Restricted Cash" in the accompanying unaudited Consolidated
Balance Sheets (see Note 2 to the unaudited Consolidated Interim
Financial Statements). For the three months ended June 30, 1998,
the Company recorded revenues of approximately $256,000
attributable to the RSR Interest.
Costs and Expenses
Selling, general and administrative expenses were approximately
$149,000 for the three months ended June 30, 1999, representing a
decrease of approximately $336,000 or approximately 69% when
compared to the three months ended June 30, 1998. Such decrease
was primarily due to a decrease of bad debt expense of
approximately $242,000 related to the Harolds Club in Nevada,
which was sold in June 1999 (see Note 3 to the unaudited
Consolidated Interim Financial Statements), a decrease in legal
fees of approximately $54,000 (including the reversal for the
three months ended June 30, 1999 of approximately $21,000 related
to the Harolds Club) and a decrease in insurance expense of
approximately $32,000.
Depreciation and amortization costs were approximately $189,000
for the three months ended June 30, 1999, representing a decrease
of approximately $148,000 or approximately 44% when compared to
the three months ended June 30, 1998. For the three months ended
June 30, 1999, the Company depreciated the Gold Coast Barge to
its Purchase Price (see Note 3 to the unaudited Consolidated
Interim Financial Statements).
For the three months ended June 30, 1999, the Company recorded a
reversal of bad debt expense related to lease expenses of
approximately $2,785,000 based on the sale of Harolds Club (see
Note 3 to the unaudited Consolidated Interim Financial
Statements) and a reversal of net liabilities for subsidiaries in
bankruptcy of approximately $75,000 based upon the Sales
Agreement and the anticipated distributions under the Consensus
Plan (See Note 3 to the unaudited Consolidated Interim Financial
Statements). No such amounts were recorded for the three months
ended June 30, 1998.
Net interest expense for the three months ended June 30, 1999 was
approximately $1,149,000, a decrease of approximately $228,000 or
approximately 17% compared to the three months ended June 30,
1998. Interest expense decreased approximately $236,000 while
interest income decreased approximately $8,000 during the three
months ended June 30, 1999 compared to the three months ended
June 30, 1998. Interest expense for the three months ended June
30, 1998
<PAGE 15>
includes interest on debt of approximately $5,917,000 that was
reclassified as deferred charter revenue as of December 31, 1998.
For the three months ended June 30, 1999, the Company recorded a
net gain on sale of assets of $40,000 as the result of the
settlement of a lawsuit brought by the Company against the
purchaser of one of the Company's keno systems. The associated
account receivable had been written off in 1996. No such gain was
recorded for the three months ended June 30, 1998.
Results of Operations: Comparison of the six month periods ended
June 30, 1999 and June 30, 1998
Revenues
The Company has not received any financial statement information
or payments relating to the RSR Interest for the six months ended
June 30, 1999 and therefore has not recorded any revenues
attributable to the RSR Interest for the six months ended June
30, 1999. For the six months ended June 30, 1998, the Company
recorded revenues of approximately $445,000 attributable to the
RSR Interest. Cash received from the Rising Sun Project is
recorded as "Restricted Cash" in the accompanying unaudited
Consolidated Balance Sheets (see Note 2 to the unaudited
Consolidated Interim Financial Statements).
Costs and Expenses
Selling, general and administrative expenses were approximately
$592,000 for the six months ended June 30, 1999, representing a
decrease of approximately $294,000 or approximately 33% when
compared to the six months ended June 30, 1998. Such decrease was
primarily due to a decrease of approximately $257,000 related to
the Harolds Club in Nevada, which was sold in June 1999 (see Note
3 to the unaudited Consolidated Interim Financial Statements) and
a decrease in insurance expense of approximately $29,000.
Depreciation and amortization costs were approximately $524,000
for the six months ended June 30, 1999, representing a decrease
of approximately $149,000 or approximately 22% when compared to
the six months ended June 30, 1998. For the six months ended June
30, 1999, the Company depreciated the Gold Coast Barge to its
Purchase Price (see Note 3 to the unaudited Consolidated Interim
Financial Statements).
For the six months ended June 30, 1999, the Company recorded a
reversal of bad debt expense related to lease expenses of
approximately $2,785,000 based on the sale of Harolds Club (see
Note 3 to the unaudited Consolidated Interim Financial
Statements) and a reversal of net liabilities for subsidiaries in
bankruptcy of approximately $75,000 based upon the Sales
Agreement and the anticipated distributions under the Consensus
Plan (See Note 3 to the unaudited Consolidated Interim Financial
Statements). No such amounts were recorded for the six months
ended June 30, 1998.
<PAGE 16>
Net interest expense for the six months ended June 30, 1999 was
approximately $2,282,000, a decrease of approximately $458,000 or
approximately 17% compared to the six months ended June 30, 1998.
Interest expense decreased approximately $468,000 while interest
income decreased approximately $10,000 during the six months
ended June 30, 1999 compared to the six months ended June 30,
1998. Interest expense for the six months ended June 30, 1998
includes interest on debt of approximately $5,917,000 that was
reclassified as deferred charter revenue as of December 31, 1998.
The Company recorded a net gain of approximately $48,000 for the
six months ended June 30, 1999 related to the sale of the GM&O
Building in Mobile, Alabama. Additionally, for the six months
ended June 30, 1999, the Company recorded a net gain of $40,000
as the result of the settlement of a lawsuit brought by the
Company against the purchaser of one of the Company's keno
systems. The associated account receivable had been written off
in 1996. No such gains were recorded for the six months ended
June 30, 1998.
Changes in Financial Condition, Liquidity and Capital Resources
As of June 30, 1999, the Company had no committed financing
arrangements and a working capital deficiency of approximately
$69,839,000. For a discussion of liquidity and capital resources,
see Note 2 to the unaudited Consolidated Interim Financial
Statements.
Risk Factors; Forward Looking Statements
Management's Discussion and Analysis contains forward-looking
statements regarding the Company's future plans, objectives and
expected performance. These statements are based on assumptions
that the Company believes are reasonable, but are subject to a
wide range of risks and uncertainties, and a number of factors
could cause the Company's actual results to differ materially
from those expressed in the forward-looking statements. These
factors include, among others, the uncertainties related to (i)
the Company's ability to obtain sufficient funds for its
operations, (ii) obtaining Shamrock's and, if necessary, Bennett
Management's agreement to modify, terminate or restructure on
terms acceptable to the Company all obligations due from the
Company to Shamrock and, if applicable, Bennett Management, and
(iii) the legal problems described above relating to certain
Bennett Entities (see Notes 1 and 2 to the unaudited Consolidated
Interim Financial Statements).
<PAGE 17>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For a discussion of legal proceedings, see Note 8 to the
unaudited Consolidated Interim Financial Statements.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
For a discussion of defaults with respect to the Company's
indebtedness due to Shamrock, see Notes 2 and 4 to the unaudited
Consolidated Interim Financial Statements.
The Company has accrued and declared, but has not paid as of June
30, 1999, dividends totaling approximately $152,000 which were
due and payable on the outstanding shares of its Series C
Preferred Stock as of December 31, 1994. The Company has accrued
and declared, but has not paid as of June 30, 1999, dividends
totaling approximately $152,000 which were due and payable on the
outstanding shares of its Series D Preferred Stock as of December
31, 1994.
Additionally, the Company has accrued, but has not declared or
paid as of June 30, 1999, dividends totaling approximately
$1,325,000 which were due and payable on the outstanding shares
of its Series C Preferred Stock from January 1, 1995 through June
30, 1999. The Company has accrued, but has not declared or paid
as of June 30, 1999, dividends totaling approximately $1,225,000
which were due and payable on the outstanding shares of its
Series D Preferred Stock from January 1, 1995 through June 30,
1999. Although such dividends do not constitute actual
liabilities of the Company until declared, the Company has
accrued for such dividends because, under the terms of the Series
C Preferred Stock and the Series D Preferred Stock, dividends are
cumulative whether or not declared and the Company is prohibited
from paying dividends on, purchasing or redeeming any of its
Series A Preferred Stock or Common Stock so long as any such
cumulated dividends are unpaid. The Company is prohibited under
the General Corporation Law of Delaware from declaring such
dividends unless the Company has (i) capital surplus or (ii) net
profits in the fiscal year in which such dividends are declared
and/or the preceding fiscal year.
<PAGE 18>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Number Description
10.27 Sale Agreement dated as of July 2, 1999 between The
President Riverboat Casino-Mississippi, Inc., President
Casinos, Inc., President Mississippi Charter
Corporation, the Company, AMGAM Associates, American
Gaming & Resorts of Mississippi, Inc., the Committee
for the Unsecured Creditors of AMGAM, the Committee for
the Unsecured Creditors of AGRM, International Game
Technology, Inc., and Shamrock Holdings Group, Inc.
11 Computation of Earnings Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K. The following reports were filed
by the Company during the second quarter of 1999:
(1) Form 8-K dated June 14, 1999 with respect to the
appointment of new independent public accountants to the
Company.
(2) Form 8-K/A dated June 14, 1999, amending the Form 8-K
dated June 14, 1999 described above.
(3) Form 8-K dated June 25, 1999 with respect to the sale of
the Harolds Club.
<PAGE 19>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
American Gaming & Entertainment, Ltd.
Date: 7/28/99 By: J. DOUGLAS WELLINGTON
________________ _________________________
J. Douglas Wellington
President and Chief Executive
Officer, and Principal Accounting
Officer
<PAGE 20>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION PAGE NO.
10.27 Sale Agreement dated as of July 2, 1999
between The President Riverboat Casino
-Mississippi, Inc., President Casinos, Inc.,
President Mississippi Charter Corporation,
the Company, AMGAM Associates, American
Gaming & Resorts of Mississippi, Inc., the
Committee for the Unsecured Creditors of
AMGAM, the Committee for the Unsecured
Creditors of AGRM, International Game
Technology, Inc., and Shamrock Holdings
Group, Inc. 21
11 Computation of Earnings Per Share 39
27 Financial Data Schedule 40
</TABLE>
<PAGE 21>
EXHIBIT 10.27
SALE AGREEMENT
THIS SALE AGREEMENT (this "Agreement") is entered into on July 2,
1999, by and between The President Riverboat Casino-Mississippi, Inc.,
a Mississippi corporation ("Purchaser"), President Casinos, Inc. and
President Mississippi Charter Corporation (collectively with Purchaser
and President Casinos, Inc., the "President Group"), on the one hand,
and American Gaming & Entertainment, Ltd. ("AGEL"), AmGam Associates
("AmGam"), American Gaming & Resorts of Mississippi, Inc. ("AGRM"),
the Committee for the Unsecured Creditors of AmGam, the Committee for
the Unsecured Creditors of AGRM, International Game Technology, Inc.
("IGT"), and Shamrock Holdings Group, Inc. (formerly known as Bennett
Holdings Group, Inc.) ("Shamrock" and collectively with AGEL, AmGam,
AGRM, the Committee for the Unsecured Creditors of AmGam, the
Committee for the Unsecured Creditors of AGRM and IGT, the "AGEL
Group"), on the other hand.
WITNESSETH:
WHEREAS, AGEL is the record owner of the Gold Coast Casino Barge,
Coast Guard Registration No.995650 (the "Barge");
WHEREAS, AGEL and the remaining members of the AGEL Group desire to
sell the Barge to Purchaser, and Purchaser desires to purchase the
Barge, upon the terms and conditions described herein;
WHEREAS, the AGEL Group and the President Group desire to settle
certain litigation and other claims between them and their Affiliates
(as defined below);
WHEREAS, the AGEL Group and the President Group desire to obtain
approval of this Agreement by the United States Bankruptcy Court for
the Southern District of Mississippi prior to the effective date of
the transfer of the Barge.
WHEREAS, Shamrock's execution of this Agreement and the other
Transaction Documents (as defined below) including, without
limitation, the release of its liens upon and security interest in the
Barge, is subject to the approval of the New York Bankruptcy Court
(defined below).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto hereby
agree as follows:
<PAGE 22>
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the following
designated meanings:
Affiliate means, with respect to any Person, any other Person
that directly or indirectly controls, is controlled by, or is under a
common control with such first Person, where the term "control"
(including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or
otherwise. In the case of Purchaser, the term Affiliate includes,
without limitation, President Casinos, Inc., President Riverboat
Casinos, Inc. and President Mississippi Charter Corporation.
Breeden means Richard C. Breeden, in his capacity as duly
appointed chapter 11 trustee of the substantially consolidated
bankruptcy estates of The Bennett Funding Group, Inc., Bennett
Receivables Corporation, Bennett Receivables Corporation II, Bennett
Management & Development Corporation, et al.
Business Day means any day other than a Saturday, a Sunday or a
day on which commercial banks in the State of Mississippi are
authorized or required by law to close.
Charter means the lease of the Barge dated February 17,1995
between American Gaming & Entertainment, Ltd., as Owner, and President
Mississippi Charter Corporation, as Charterer, and all amendments
thereto.
Closing Date means the Business Day following the date that all
of the following have been entered and become final or if appealed, no
stay pending appeal has been granted as of the time of closing or, if
a stay has been granted, it has been dissolved: (a) the Order; (b) the
Mississippi Bankruptcy Court's order represented by Exhibit L hereto;
and (c) the New York Bankruptcy Court's orders granting the motion of
Shamrock attached hereto as part of Exhibit I.
Mississippi Bankruptcy Court means the United States Bankruptcy
Court for the Southern District of Mississippi, Biloxi Division.
New York Bankruptcy Court means the United States Bankruptcy
Court for the Northern District of New York.
Order means the order of the Mississippi Bankruptcy Court
authorizing the transfer of the Barge to the Purchaser free and clear
of all liens, claims and interests and approving the Transaction
Documents, substantially in the form attached hereto as part of
Exhibit H.
Payment Agent means Rimmer, Rawlings, MacInnis & Hedglin, 210 E.
Capitol Street, Jackson, MS 39201.
Person means any natural person, firm, partnership, association,
corporation, company, trust, entity, public body or government.
<PAGE 23>
Slot Machines means the 616 slot machines manufactured by IGT,
sold by IGT to AmGam in 1994, and then acquired by President
Mississippi Charter Corporation by order of the Bankruptcy Court dated
September 21, 1995.
Transaction Document means any of this Agreement, any Exhibit to
this Agreement, or any other document executed and delivered by a
member of the AGEL Group and the President Group, or any of them, in
connection with the consummation of the transactions contemplated
hereby.
ARTICLE 2
PURCHASE AND SALE OF THE BARGE AND SLOT MACHINES
2.1 Sale of the Barge. Subject to the terms and conditions of
this Agreement, AGEL and the other members of the AGEL Group agree to
sell, convey, assign and transfer all of their right, title and
interest, if any, to Purchaser, and Purchaser agrees to purchase and
accept, the Barge, including all furniture, fixtures and equipment
located on the Barge and belonging to AGEL or any other member of the
AGEL Group on the date hereof. On the Closing Date, the parties shall
execute and deliver a Bill of Sale in the form attached hereto as
Exhibit A. Purchaser is purchasing the Barge on an "as is, where is"
"with all faults" basis, with no warranties as to the physical
condition of the Barge or any of its contents.
2.2 Purchase Price for the Barge. The purchase price (the
"Purchase Price") for the Barge is SIX MILLION, EIGHT HUNDRED, TWENTY-
SEVEN THOUSAND FIVE HUNDRED AND NO/1OO DOLLARS ($6,827,500.00)
(subject to reduction as set forth in paragraph 2.2(b) below), which
shall be paid by Purchaser as follows:
(a) On the Closing Date, the President Group will cause
Purchaser to deliver to the Payment Agent, by wire transfer or
certified check, the amount of ONE MILLION AND NO/1OO DOLLARS
($1,000,000.00).
(b) On the Closing Date, the President Group will cause
Purchaser to deliver to the Payment Agent a promissory note, in the
form attached hereto as Exhibit B (the "Promissory Note"), in the
amount of FIVE MILLION EIGHT HUNDRED, TWENTY-SEVEN THOUSAND FIVE
HUNDRED AND NO/100 DOLLARS ($5,827,500.00). The amount of the
Promissory Note shall be reduced on the Closing Date, on a dollar-for-
dollar basis, by the amount of any Charter payments made by Purchaser
for any Charter period after July 31, 1999.
It is understood and agreed by the parties hereto that the Purchase
Price was calculated as the sum of $5,000,000, plus all payments under
the Charter that have not been made as of the Closing.
2.3 Security and collateral. As security for its obligations
under the Promissory Note, Purchaser shall deliver to the AGEL Group
on the Closing Date the following documents:
<PAGE 24>
(a) A security agreement, in the form attached hereto as
Exhibit C;
(b) A preferred ship mortgage, in the form attached hereto as
Exhibit D; and
(c) A guaranty agreement, in the form attached hereto as
Exhibit E, pursuant to which President Casinos, Inc. will guarantee
the obligations of The President Riverboat Casino-Mississippi, Inc.
under the Promissory Note.
2.4 Termination of the Charter. On the Closing Date, the
Charter will be canceled, without any further acts of the parties. On
the Closing Date, the President Group shall deliver to the AGEL Group
an agreement, in the form attached hereto as Exhibit F, pursuant to
which President Mississippi Charter Corporation consents to such
cancellation.
2.5 Settlement of the sale price of the Slot Machines. On or
betore the Closing Date, the AGEL Group (other than Shamrock, AGRM and
the Committee for the Unsecured Creditors of AGRM, which claim no
interest in the Slot Machines) shall execute a Cross Receipt, in the
form attached hereto as Exhibit G, pursuant to which the AGEL Group
(other than Shamrock, AGRM and the Committee for the Unsecured
Creditors of AGRM, which claian no interest in the Slot Machines) will
certify that Purchaser has satisfied all of the obligations of
Purchaser and its Affiliates with respect to the purchase of the Slot
Machines.
2.6 Final payment for the Slot Machines. Upon execution and
delivery of the Cross Receipt, Purchaser will deliver to the Payment
Agent, by wire transfer or certified check, the amount of NINE HUNDRED
THOUSAND DOLLARS ($900,000.00), representing the final installment
payment of the purchase price of the Slot Machines.
ARTICLE 3
ACTIONS TO BE TAKEN UPON EXECUTION OF THIS AGREEMENT
3.1 Execution of pleadings to be filed in the Bankruptcy
Courts and other filings. Upon execution of this Agreement, the
parties will execute and deliver the following documents, each of
which will be transmitted as promptly as practicable for filing in the
Bankruptcy Courts designated and at the Securities and Exchange
Commission:
(a) Each party will execute and deliver the Joint Motion to
approve Sale Agreement for filing in the Mississippi Bankruptcy Court,
substantially in the form attached hereto as Exhibit H;
(b) Shamrock will execute and deliver a motion, substantially
in the form attached hereto as part of Exhibit I, for approval of
Shamrock's agreement to the transactions set forth herein and for
approval of Shamrock's execution of the Sale Agreement and the other
Transaction Documents, and will deliver such motion for filing in the
New York Bankruptcy Court;
<PAGE 25>
(c) Each party will execute and deliver the Joint Motion to
expedite approval of Sale Agreement for filing in the Mississippi
Bankruptcy Court, in the form attached hereto as Exhibit J;
(d) IGT will execute and deliver the Withdrawal of Objection
to Approval of Settlement originally filed by IGT in the Adversary
Proceeding No.97-0868 entitled "AmGam Associates, a Ms. General
Partnership d/b/a Gold Shore Casino and Official Unsecured Creditors'
Committee v. President Mississippi Charter Corporation and President
Riverboat Casino-Mississippi, Inc.," for filing in the Mississippi
Bankruptcy Court in the form attached hereto as Exhibit K;
(e) AGEL will file with the Securities and Exchange
Commission an information statement with respect to the transactions
contemplated by this Agreement.
3.2 Filing of order to approve Slot Machine settlement. AGEL,
the President Group, AmGam, the Committee for the Unsecured Creditors
of AmGam and IGT will also immediately submit to the Mississippi
Bankruptcy Court an Order Approving Settlement and Judgment of
Dismissal with Prejudice in Adversary Proceeding No.97-0868, entitled
"AmGam Associates, a Ms. General Partnership d/b/a Gold Shore Casino
and Official Unsecured Creditors' Committee v. President Mississippi
Charter Corporation and President Riverboat Casino-Mississippi, Inc.,"
in the form attached hereto as Exhibit L.
3.3 Best efforts. Each party agrees to go forward in good
faith and use its reasonable best efforts to obtain the approval of
the Mississippi Bankruptcy Court to the pleadings represented by
Exhibits H, J and K as expeditiously as possible and to obtain the
approval of the New York Bankruptcy Court of the Shamrock pleading
represented by part of Exhibit I as expeditiously as possible.
ARTICLE 4
THE CLOSING
4.1 The Closing. The closing of the transactions provided for
in this Agreement (the "Closing") shall be at 10:00 a.m. Central
Daylight Time on the Closing Date. The Closing will be held at the
offices of Phelps Dunbar, L.L.P., 400 Poydras Street, 30th Floor, New
Orleans, Louisiana.
4.2 Actions to be taken at the Closing. At the Closing, the
parties shall deliver to each other the Transaction Documents provided
for in Article 2 hereof In addition, the following Transaction
Documents shall be delivered and, as to the documents specified in
paragraphs (e), (f) and (a), below, would be recorded or filed, as
applicable, by the Purchaser in the order specified:
(a) Shamrock shall deliver to Purchaser two Satisfactions of
Preferred Ship Mortgage, in the form attached hereto as Exhibit M,
which shall be immediately transmitted for filing with the United
States Coast Guard as well as such other documents (including, without
limitation, appropriate UCC termination statements) as Purchaser may
<PAGE 26>
reasonably require to reflect AGEL's transfer of tide to the Barge
free of Shamrock's liens;
(b) Purchaser shall deliver to the AGEL Group certified
resolutions adopted by the Boards of Directors of President Casinos,
Inc., President Mississippi Charter Corporation and President
Riverboat Casino-Mississippi, Inc. in the forms attached hereto as
Exhibits N, O and P respectively;
(c) AGEL shall deliver to Purchaser a certificate, dated as
of the Closing Date, in the form attached hereto as Exhibit Q;
(d) Purchaser shall deliver to the AGEL Group a certificate,
dated as of the Closing Date, in the form attached hereto as Exhibit
R;
(e) Purchaser shall execute Uniform Commercial Code forms 1
("UCC 1"), in the form attached hereto as Exhibit S, which shall be
immediately transmitted for filing in the appropriate jurisdictions,
as well as such other documents as the AGEL Group may reasonably
require to perfect the security interest granted to AGEL by Purchaser;
(f) AGEL and Purchaser shall execute Coast Guard Form 1258,
in the form attached hereto as Exhibit T1 which shall be immediately
transmitted for filing in the records of the United States Coast
Guard;
(g) All of the parties hereto shall execute and deliver the
Agreement of Compromise, Settlement and Release, in the form attached
hereto as Exhibit U;
(h) AGEL and Purchaser shall execute and deliver a letter, in
the form attached hereto as Exhibit V, requesting that the arbitration
proceeding between them currently being conducted by the American
Arbitration Association, be dismissed, which letter shall be
immediately transmitted to the appropriate office of the American
Arbitration Association;
(i) All members of the AGEL Group except Shamrock shall
execute and deliver the Joint Motion and Order to Dismiss President
Mississippi Charter Corporation and President Riverboat Casino-
Mississippi, Inc. as defendants in Adversary Proceeding No.97-01010
entitled "International Gaming Technology v. AmGam Associates, a
Mississippi General Partnership d/b/a Gold Shore Casino, American
Gaming & Entertainment, Limited d/b/a Gold Shore Casino, American
Gaming of Biloxi, Inc., Gamma of Mississippi, Inc., American Gaming &
Resorts of Mississippi, Inc., President Mississippi Charter
Corporation and President Riverboat Casino-Mississippi, Inc.," in the
form attached hereto as Exhibit W, which Joint Motion shall be
transmitted immediately to the Mississippi Bankruptcy Court for
filing;
(j) IGT shall execute and deliver a Motion to Dismiss the
Adversary Proceeding No.98-05095 entitled "International Gaming
Technology v. President Casinos,
<PAGE 27>
Inc., President Mississippi Charter Corporation, President Riverboat
Casino-Mississippi, Inc., and President Riverboat Casino, Inc.," in
the form attached hereto as Exhibit X, which Motion to Dismiss shall
be transmitted immediately to the Mississippi Bankruptcy Court for
filing;
(k) The members of the AGEL Group that are parties to the
litigation described in this paragraph shall execute and deliver a
Motion to Dismiss President Mississippi Charter Corporation, President
Riverboat Casinos, Inc., and The President Riverboat Casino-
Mississippi, Inc. as defendants in the Adversary Proceeding Nos.95-
1001 and 95-1002 entitled "The Official Committee of Unsecured
Creditors of AmGam Associates and the Official Committee of Unsecured
Creditors of American Gaming and Resorts of Mississippi, LTD V.
American Gaming & Entertainment, Ltd, Bennett Holdings Inc., Bennett
Management and Development Co., President Mississippi Charter
Corporation; President Riverboat Casinos, Inc., and President
Riverboat Casino-Mississippi, Inc.," in the form attached hereto as
Exhibit Y, which Motion to Dismiss shall be immediately transmitted to
the Bankruptcy Court for filing;
(l) Purchaser and its Affiliate shall execute and deliver a
Motion to Dismiss the appeal of Purchaser and President Mississippi
Charter Corporation from an order rendered by the Mississippi
Bankruptcy Court in Adversary Proceedings Nos. 95-1001 and 95-1002,
filed by President Mississippi Charter Corporation and President
Riverboat Casino-Mississippi, Inc. in the United States District Court
for the Southern District of Mississippi (1:99cv154 RG and 1:99cv153
GR), in the form attached hereto as Exhibit Z, which Motion to Dismiss
shall be transmitted immediately to the United States District Court
for the Southern District of Mississippi for filing; and
(m) Purchaser and AGEL shall execute and deliver a Joint
Motion withdrawing Purchaser's pending motion in the Mississippi
Bankruptcy Court styled "Motion for a Declaration that Contractual
Right of First Refusal in Post Petition Contract is Enforceable" and
AGEL's objection to such motion, in the form attached hereto as
Exhibit AA.
In addition, Purchaser and the members of the AGEL Group shall
execute and deliver such other documents, certificates and instruments
that are required by the Mississippi Bankruptcy Court or the New York
Bankruptcy Court or that are otherwise necessary to consummate the
transactions contemplated hereby.
4.3 Best efforts. Each party agrees to go forward in good
faith and use its reasonable best efforts to obtain the approval of
the Mississippi Bankruptcy Court and the United States District Court
for the Southern District of Mississippi of the pleadings contemplated
by Exhibits W, X, Y, Z and AA as expeditiously as possible.
<PAGE 28>
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PRESIDENT GROUP
To induce the AGEL Group to enter into this Agreement and the
transactions contemplated hereby, each member of the President Group
represents and warrants to the AGEL Group as of the date hereof and as
of the Closing Date as follows:
5.1 Organization of Purchaser. Each member of the President
Group is a corporation duly formed, validly existing and in good
standing under the laws of the state of its incorporation and has full
power and authority to own and operate its business as it is now being
conducted, and to own and use its properties and assets and, upon
receipt of approval by the Mississippi Gaming Commission, Purchaser
will have full power and authority to acquire, own and use the Barge.
5.2 Authorization, Execution and Delivery. Each member of the
President Group has the power and authority to enter into this
Agreement and the Transaction Documents to which it is or will be a
party and to carry out the transactions contemplated hereby and
thereby. The execution, delivery and performance by each member of the
President Group of this Agreement and the Transaction Documents to
which each member of the President Group is or will be a party and the
consummation of the transactions contemplated hereby and thereby have
been duly authorized by all requisite action by such member. This
Agreement has been duly executed and delivered by each member of the
President Group and, upon due execution and delivery by each such
member (to the extent it is a party thereto) each Transaction Document
will constitute, the valid and binding obligation of such member,
enforceable against such member in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, or other laws affecting creditors' rights
generally and by general equitable principles (whether arising in a
proceeding in equity or otherwise) and, with respect to the Preferred
Ship Mortgage attached hereto as Exhibit D, except to the extent that
the Barge is not a vessel under the law governing creation, perfection
and enforceabillty of such mortgage.
5.3 No Conflict or Violation. Neither the execution and
delivery of this Agreement and the Transaction Documents to which each
member of the President Group is or will be a party nor the
consummation of the transactions contemplated hereby and thereby will
(i) result in any conflict with or breach or violation of or default
under the Articles of Incorporation or Bylaws of any member of the
President Group, (ii) conflict with or result in the breach or
violation of any law, regulation, writ, injunction or decree of any
court or governmental instrumentality applicable to any member of the
President Group, or (iii) constitute a breach of any agreement to
which any member of the President Group is a party or by which any
member of the President Group is bound.
5.4 Litigation, et cetera. There are no actions, suits or
proceedings at law or equity, pending or to the knowledge of the
President Group, threatened against, affecting or able to affect the
President Group's ability to consummate the transactions contemplated
hereby, at law or in equity, or before by any governmental agency or
instrumentality or pending before any arbitrator of any kind
<PAGE 29>
5.5 Lien and Security Interest on Barge and all other
collateral. Upon entry of the Order and after the Closing and proper
filing of the Transaction Documents with the appropriate authorities,
AGEL will hold a lien and security interest on the Barge and all other
collateral identified in the Security Agreement attached hereto as
Exhibit C that is, to the same extent that the Order effects AGEL's
transfer of title to Purchaser free and clear of all other liens,
claims, encumbrances and interests, first in priority over any and all
other liens or security interests, and in any event first in priority
over any and all liens or security interests created by the President
Group or caused by actions or inaction of the President Group, except
to the extent that the Barge would not be considered a vessel under
the law governing creation, perfection and enforceability of the
Mortgage attached hereto as Exhibit D.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF AGEL
To induce Purchaser to enter into this Agreement and the
transactions contemplated hereby, AGEL represents and warrants to
Purchaser as of the date hereof and as of the Closing Date as follows:
6.1 Authorization, Execution and Delivery. AGEL has the power
and authority to enter into this Agreement and the Transaction
Documents to which it is or will be a party and to carry out the
transactions contemplated hereby and thereby. Subject to the written
consents of Shamrock and Breeden constituting the holders of a
majority of the shares of outstanding voting stock of AGEL and subject
to the approval of the New York Bankruptcy court of such consents, (a)
the execution, delivery and performance by AGEL of this Agreement and
the Transaction Documents to which AGEL is or will be a party and the
consummation of the transactions contemplated hereby and thereby have
been duly authorized by all requisite action by AGEL, and (b) this
Agreement has been duly executed and delivered by AGEL and
constitutes, and upon due execution and delivery by AGEL to the extent
a party thereto each other Transaction Document will constitute, the
valid and binding obligation of AGEL, enforceable against AGEL in
accordance with their respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, moratorium, or other laws
affecting creditors' rights generally and by general equitable
principles (whether arising in a proceeding in equity or otherwise).
6.2 No Conflict or Violation. Neither the execution and delivery
of this Agreement and the Transaction Documents to which AGEL is or
will be a party nor the consummation of the transactions contemplated
hereby and thereby will (i) result in any conflict with or breach or
violation of or default under the Articles of Incorporation or Bylaws
of AGEL, (ii) conflict with or result in the breach or violation of
any law, regulation, writ, injunction or decree of any court or
governmental instrumentality applicable to AGEL, or (Ill) constitute a
breach of any agreement to which AGEL is a party or by which AGEL is
bound.
6.3 Litigation, et cetera. Except for the pending avoidance
action syled Official Committee of Unsecured Creditors v. American
Gaming and Entertainment, Ltd., et al., Adv. Proc. No.95-1001 SEG and
Adv. Proc. No.95-1002 SEG, there are no actions, suits or
<PAGE 30>
proceedings at law or equity, pending or to the knowledge of AGEL,
threatened against, affecting or able to affect AGEL's ability to
consummate the transactions contemplated hereby, at law or in equity,
or before by any governmental agency or instrumentality or pending
before any arbitrator of any kind.
6.4 Consents and Approvals. Other than the approval of the
New York Bankruptcy Court of the written consents of Shamrock and
Breeden and the filing of a definitive information statement with the
United States Securities and Exchange Commission referred to in
Section 3.1(e) above, no consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, is required to be
obtained or made by or with respect to AGEL in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
6.5 Title to Barge. On the Closing Date, AGEL will transfer
the Barge, free and clear of all liens and encumbrances pursuant to
the Order except for any liens created by the President Group or
caused to be created by actions or inaction of the President Group. As
soon as practicable after the date hereof, the AGEL Group will serve
and deliver notice of the filing of the Joint Motion attached hereto
as Exhibit H to all parties to whom such notice is required to be
delivered in order to make the foregoing representation and warranty
accurate as of the Closing Date. Subject to the provisions of Section
9.9 hereof, upon the execution and delivery of the Bill of Sale
attached hereto as Exhibit A, Purchaser will have valid and
enforceable tide to the Barge, free and clear of all liens or
encumbrances except for the liens created hereunder and for any liens
created by the President Group or caused to be created by actions or
inaction of the President Group. AGEL has no actual knowledge of any
unrecorded or undisclosed legal or equitable interest in the Barge
owned or claimed by any Person other than AGEL, other than those
claims made in the bankruptcy cases of AmGam and AGRM, which claims
and/or encumbrances will be transferred from the Barge to the proceeds
of the sale by the Order.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions to each party's obligations to close. The
respective obligations of the AGEL Group and Purchaser to consummate
at the Closing the transactions contemplated by this Agreement are
subject to satisfaction of the following conditions as of the Closing:
(a) The execution of this Agreement and the consummation of
the transactions contemplated herein shall have been approved by the
Mississippi Bankruptcy Court pursuant to its Order which has become
final and non-appealable and has not been stayed.
(b) The execution of this Agreement and the consummation of
the transactions contemplated herein by Shamrock shall have been
approved by the New York Bankruptcy Court pursuant to its Order which
has become final and non-appealable and has not been stayed.
<PAGE 31>
7.2 The President Group's obligations to close. The
obligations of the President Group to close hereunder are subject to
the satisfaction (or waiver by the President Group) of the following
conditions:
(a) The representations and warranties of AGEL contained
herein shall be true and correction in all material respects as of the
date hereof and on and as of the Closing Date as though made on and as
of the Closing Date.
0,) Each member of the AGEL Group shall have performed and
complied with all covenants, agreements and conditions required to be
performed or complied with by it pursuant to this Agreement prior to
or as of the Closing.
(c) Purchaser shall have received approval of the
transactions contemplated by this Agreement from the Mississippi
Gaming Commission.
(d) The transactions contemplated by Exhibit L hereto shall
be consummated on or before the Closing Date.
(e) The Closing shall have occurred on or before August 13,
1999; unless the orders described in Section 8.1(b) below are entered
after July 26, 1999 but on or before August 16, 1999 as set forth in
Section 8.1(b), in which case the Closing shall have occurred on or
before the Closing Date, as defined in this Sale Agreement.
7.3 The AGEL Group's obligations to close. The obligations of
the AGEL Group to close hereunder are subject to the satisfaction (or
waiver by the AGEL Group) of the following conditions:
(a) The representations and warranties of the President Group
contained herein shall be true and correct in all material respects as
of the date hereof and on and as of the Closing Date as though made on
and as of the Closing Date.
(b) Each member of the President Group shall have performed
and complied with all covenants, agreements and conditions required to
be performed or complied with by it pursuant to this Agreement prior
to or as of the Closing.
(c) The Closing shall have occurred on or before September
30, 1999.
ARTICLE 8
TERMINATION
8.1 Termination. This Agreement and the transactions at the
Closing contemplated hereby may be terminated:
(a) by the mutual agreement of the AGEL Group and Purchaser;
<PAGE 32>
(b) on or before the Closing Date, by Purchaser if there have
not been entered on or before July 26, 1999 (or, if the motions
included in Exhibit I are presented for hearing on July 22, 1999 but
not approved until August 12, 1999, then on or before August 16, 1999)
orders by both the Mississippi Bankruptcy Court and the New York
Bankruptcy Court approving the execution of this Agreement and the
consummation of the transactions contemplated herein; or
(c) on or after September 30, 1999 by the AGEL Group if the
Closing has not occurred by such date, and there has been no breach of
a covenant or condition by the AGEL Group;
(d) on or after September 30, 1999 by the President Group if
the Closing has not occurred by such date, and there has been no
breach of a covenant or condition by the President Group;
provided, that no party may terminate this Agreement pursuant to
8.l(b), 8.1(c) or 8.1(d) if the failure of any condition in Sections
7.1, 7.2 or 7.3 to be satisfied results from the breach by such party
or any covenant, agreement, representation or warranty of such party
contained in this Agreement.
8.2 Effect of Temination. If this Agreement is terminated
under Section 8.1, the transactions at the Closing contemplated hereby
shall be terminated without further action by any patty, and upon such
termination:
(a) If such termination occurs as a result of the President
Group's breach of any of its individual or collective obligations (i)
described in Sections 3.1, 3.2 or 3.3 of this Agreement or (ii)
described in Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 4.2 or 4.3 of this
Agreement after the conditions to Closing by the President Group
described in Sections 7.1 and 7.2 of this Agreement have been
satisfied, then the President Group shall have no rights or claims to
extend the current term of the Charter or to purchase the Barge under
any right of first refusal, and the President Group shall, within 30
days of such termination, execute and file such papers as are
necessary to withdraw and dismiss the arbitration proceeding referred
to in Section 4.2(h), the appeals referred to in Section 4.2(1) and
the right-of-first-refusal motion referred to in Section 4.2(m) of
this Agreement.
(b) If such termination occurs as a result of (i) the AGEL
Group's breach of any of its individual or collective obligations (A)
described in Sections 3.1, 3.2 or 3.3 of this Agreement or (B)
described in Sections 2.1, 2.5, 4.2, or 4.3 of this Agreement after
the conditions to Closing by the AGEL Group described in Sections 7.1
and 7.3 of this Agreement have been satisfied, or (ii) Breeden's
failure to (A) go forward in good faith and use his reasonable best
efforts to obtain the approval of the New York Bankruptcy Court to the
motion of Breeden included as part of Exhibit I or (B) following
approval of such motion, to execute the appropriate consents to
authorize AGEL to consummate the transaction contemplated by this
Agreement or to execute Exhibit U hereto, then President Mississippi
Charter
<PAGE 33>
Corporation ("President Charter") shall have the right (but only by
notice delivered to the AGEL Group), exercisable on or before October
30, 1999, to an option for a two-year extension of the current term of
the Charter and, only if such two-year option is exercised and there
exists no default by President Charter under the Charter, for three
successive one-year extensions thereafter, each exercisable upon six
months' notice to the AGEL Group, all at reasonable monthly rental
amounts, to be established, along with other necessary extension
terms, through arbitration in accordance with the rules of the
American Arbitration Association if AGEL and President Charter are
unable mutually to agree upon such rental amounts and other terms
within 30 days of such termination.
For the purposes of this Section 8.2, the term "breach" is intended to
and shall mean the willful failure or refusal in a material way of a
party to this Agreement to perform its obligations referred to above
in this Section 8.2. In addition, nothing contained herein shall
relieve any party from liability for any breach of any covenant or
agreement in this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 Assignment. This Agreement and any of the rights or
obligations hereunder may not be assigned by Purchaser except to an
Affiliate of Purchaser, in which event Purchaser shall not be relieved
of any of its obligations hereunder. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. It is
understood that, if the First Amended Joint Plan of Liquidation for
AmGam Associates and American Gaming and Resorts of Mississippi, Inc.,
as filed with the Mississippi Bankruptcy Court on May 24, 1999, as
such plan may be amended from time to time, is approved by the
Mississippi Bankruptcy Court and Shamrock's execution of the plan and
agreement to its terms is approved by the New York Bankruptcy Court,
then, all of AGEL's rights hereunder and under all Transaction
Documents including, without limitation, Exhibits B, C, D and B
hereto, shall be assigned by AGEL to the liquidating trustee created
under such plan.
9.2 Notices. Unless otherwise provided herein, all notices and
other communications hereunder shall be in writing and shall be deemed
to have been sufficiently given or served for all purposes: (a) three
(3) days after such notice is deposited in the mail, if sent by
registered or certified mail (return receipt requested), (b) when
delivered, if delivered personally or if sent by overnight mail or
overnight courier or if sent in any manner other than as described in
the preceding clause 9.2(a) or in the following clause 9.2(c), or (c)
when transmitted, if sent by facsimile if a confirmation of
transmission is produced by the sending machine (and a copy of each
facsimile promptly shall be sent by ordinary mail), in each case to
the parties at the following addresses or facsimile numbers, or at
such other address or facsimile numbers as shall be specified by like
notice:
<PAGE 34>
If to the AGEL Group, to:
Robert A. Byrd, Esq.
Byrd & Wiser
P.O. Box 1939
Biloxi, MS 39533-1939
Telephone: (228) 432-8123
Facsimile: (228) 432-7029
Bobbie T. Shell, Esq.
Baker & Botts, L.L.P.
2001 Ross Ave., Ste. 700
Dallas, TX 75201
Telephone: (214) 953-6500
Facsimile: (214) 953-6503
Shamrock Holdings Group, Inc.
Two Clinton Square
Syracuse, New York 13202
Telephone: (315) 422-9000
Facsimile: (315) 422-9361
Attention: Richard C. Breeden
T. Glover Roberts, Esq.
Sheinfeld, Maley & Kay, P.C.
1700 Pacific Avenue, Suite 4400
Dallas, Texas 75201
Telephone: (214) 953-8019
Facsimile: (214) 953-8199
William S. Boyd, Esq.
P.O. Box 1326
Gulfport, MS 39502
Telephone: (228) 864-1915
Facsimile: (228) 864-1957
John Hedglin, Esq.
Rimmer, Rawlings, MacInnis
& Hedglin
1290 Deposit Guaranty Plaza
Jackson, MS 39201
Telephone: (601) 969-1030
Facsimile: (601) 969-1040
Douglas S. Draper, Esq.
Hefler, Draper, Hayden, Horn, L.L.C.
<PAGE 35>
650 Poydras Street
Suite 2500
New Orleans, La. 70130-6103
Telephone: (504) 568-1888
Facsimile: (504) 522-0949
If to Purchaser:
The President Riverboat Casino-Mississippi, Inc.
802 North First Street
St. Louis, Missouri 63102
Telephone: (314) 622-3079
Facsimile: (314)
Attention: James A. Zweifel
with copies to:
James W. O'Mara
Phelps Dunbar, L.L.P.
Suite 500, SkyTel Centre
200 South Lamar Street
Jackson, Mississippi 39225
Telephone: (601) 352-2720
Facsimile: (601) 360-9777
and
Virginia Boulet
Phelps Dunbar, L.L.P.
400 Poydras Street, 3oth Floor
New Orleans, Louisiana 70130
Telephone: (504) 584-9286
Facsimile: (504) 568-9130
9.3 Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF MISSISSIPPI,
EXCLUDING PROVISIONS OF SUCH LAW REFERRING SUCH MATTERS TO THE LAW OF
ANOTHER JURISDICTION. The parties hereto mutually consent to the
jurisdiction of the Mississippi Bankruptcy Court and acknowledge that
the Mississippi Bankruptcy Court shall constitute the proper and
convenient forum for the resolution of any actions between the parties
hereto concerning the subject matter hereof, and agree, except for
paragraph 8.2(b), that the Mississippi Bankruptcy Court shall be the
sole forum for the resolutions of any actions between the parties
hereto concerning the subject matter hereof.
9.4 Entire Agreement; Amendments and Waivers. This Agreement,
together with all Exhibits hereto, constitutes the entire Agreement
between the parties pertaining to the subject
<PAGE 36>
matter hereof and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written,
of the parties, and there are no warranties, representations or other
agreements between the parties in connection with the subject matter
hereof except as set forth specifically herein. No amendment,
supplement, modification or waiver of this Agreement shall be binding
unless executed in writing by the party to be bound thereby. No waiver
of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless
expressly agreed to in writing by the affected party.
9.5 Multiple Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original,
but all of which together shall Constitute one and the same
instrument. Telecopy signatures shall be deemed valid and binding to
the same extent as the original.
9.6 Invalidity. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
9.7 Headings; References. The headings of the several
Articles and Sections herein are inserted for convenience of reference
only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement. Any reference herein to an Article
or Section shall be deemed to refer to the applicable Article or
Section of this Agreement unless otherwise expressly stated herein.
Any reference to an Exhibit shall be deemed to refer to the applicable
Exhibit attached hereto, all such Exhibits being incorporated herein
and made a part hereof by this reference.
9.8 No Third-Party Beneficiaries. Except as set forth in
Section 9.1 hereof, this Agreement is solely for the benefit of the
parties hereto, their respective successors and assigns permitted
under this Agreement, and no provisions of this Agreement shall be
deemed to confer upon any other Persons any remedy, claim, liability,
reimbursement, cause of action or other right.
9.9 No Merger; Survival. The representations, warranties and
agreements contained in or made pursuant to this Agreement shall not
merge, be extinguished or otherwise affected by the Closing or the
delivery and execution of the Transaction Documents and all of such
representations, warranties and agreements shall survive the Closing
and continue for a period prescribed by applicable statutes of
limitations. In response to any challenge by anyone to the tide of the
Barge acquired by it pursuant to this Agreement, Purchaser agrees (a)
to immediately provide notice of such challenge to the AGEL Group,
which may, in its sole discretion, elect to cure the claimed defect in
Purchaser's tide, and (b) vigorously and diligently to assert and
pursue to final order all claims and defenses available to it under
the Order before claiming any breach of title warranty hereunder by
AGEL.
9.10 Attorneys' Fees and Costs. If it becomes necessary for
any party hereto to file any action to enforce this Agreement or any
provision contained herein, the party prevailing in such
<PAGE 37>
action shall be entitled to recover from the non-prevailing party
reasonable attorneys' fees and court costs incurred in such action.
IN WITNESS WHEREOF, this Agreement has been duly executed to be
effective as of the date first above written.
THE PRESIDENT RIVERBOAT CASINO-
MISSISSIPPI, INC.
By: JAMES A. ZWEIFEL
_______________________________
James A. Zweifel, Executive Vice
President and Chief Financial
Officer
PRESIDENT CASINOS, INC.
By: JAMES A. ZWEIFEL
_______________________________
James A. Zweifel, Executive Vice
President and Chief Financial
Officer
PRESIDENT MISSISSIPPI CHARTER
CORPORATION
By: JAMES A. ZWEIFEL
_______________________________
James A. Zweifel, Executive Vice
President and Chief Financial
Officer
AMERICAN GAMING & ENTERTAINMENT, LTD.
By: J. DOUGLAS WELLINGTON
_______________________________
J. Douglas Wellington, President
& CEO
AMGAM ASSOCIATES
By: J. DOUGLAS WELLINGTON
______________________________
J. Douglas Wellington, Management
Committee
<PAGE 38>
AMERICAN GAMING & RESORTS OF
MISSISSIPPI, INC.
By: J. DOUGLAS WELLINGTON
______________________________
J. Douglas Wellington,
COMMITTEE FOR THE UNSECURED
CREDITORS OF AMGAM
By: T. GLOVER ROBERTS
______________________________
T. Glover Roberts
COMMITTEE FOR THE UNSECURED
CREDITORS OF AGRM
By: WILLIAM S. BOYD
______________________________
William S. Boyd
IGT INTERNATIONAL
By: DOUGLAS S. DRAPER
______________________________
Douglas S. Draper
Its attorney in fact
* SHAMROCK HOLDINGS GROUP, INC.
By: RICHARD C. BREEDEN
______________________________
* Subject to approval of the United
States Bankruptcy Court of the
Northern District Of New York
<PAGE 39>
EXHIBIT 11
AMERICAN GAMING & ENTERTAINMENT, LTD.
COMPUTATION OF EARNINGS (LOSS) PER SHARE
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
____ ____ ____ ____
Weighted average number
of shares for computation 12,532,102 12,532,102 12,532,102 12,532,102
========== ========== ========== ==========
Net income (loss) $1,413,000 $(1,943,000) $(450,000) $(3,854,000)
Dividends and accretion
on preferred stock 467,000 467,000 933,000 933,000
_______ _______ _______ _______
Net income (loss) for
common
stockholders $946,000 $(2,410,000) $(1,383,000) $(4,787,000)
======== =========== =========== ===========
Income (loss) for common
stockholders per common
share $0.08 $(0.19) $(0.11) $(0.38)
===== ======= ======= ======
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS OF AMERICAN GAMING &
ENTERTAINMENT, LTD. FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 357,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,403,000
<PP&E> 12,681,000
<DEPRECIATION> 5,846,000
<TOTAL-ASSETS> 14,238,000
<CURRENT-LIABILITIES> 77,201,000
<BONDS> 0
0
16,503,000
<COMMON> 126,000
<OTHER-SE> (79,592,000)
<TOTAL-LIABILITY-AND-EQUITY> 14,238,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (1,744,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,316,000
<INCOME-PRETAX> (450,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (450,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,383,000)
<EPS-BASIC> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
