SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 3, 1998
(Date of earliest event reported)
Aztar Corporation
(Exact name of Registrant as specified in its charter)
Delaware 1-5440 86-0636534
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
2390 East Camelback Road, Suite 400, Phoenix, AZ 85016-3452
(Address of principal executive offices, including zip code)
(602) 381-4100
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Item 5. Aztar Corporation (the "Company") has issued a press
release dated February 3, 1998, attached hereto as
Exhibit 99.1, which references an option agreement dated
February 2, 1998, attached hereto as Exhibit 99.2,
entered into between the Company and parties
constituting the Jaffe Group. This Form 8-K replaces
in its entirety the Form 8-K filed earlier today, which
contained a draft version of the final press release
attached hereto as Exhibit 99.1
Item 7. Financial Statements, Pro Forma Financial Informa-
tion and Exhibits.
(c) Exhibits. The following is a list of Exhibits to
this Form 8-K which are filed herewith:
Exhibit Description
99.1- Press Release dated February 3, 1998.
99.2- Option Agreement dated February 2, 1998
between the Company and parties consti-
tuting the Jaffe Group.
SIGNATURES
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.
AZTAR CORPORATION
Date: February 3, 1998 By: /s/ Robert M. Haddock
---------------------
Name: Robert M. Haddock
Title: Vice President
Exhibit 99.1
CONTACT: Joe Cole
602/381-4111
AZTAR REPORTS SIGNING OF OPTION TO ACQUIRE
OUTSIDE OWNERS' SHARE OF TROPICANA LAS VEGAS
PHOENIX, Arizona -- February 3, 1998 -- Aztar Corporation
(NYSE:AZR) today reported that the company has obtained an option to
acquire the Jaffe family partnership interests in the Tropicana Resort
and Casino in Las Vegas. The company also announced that it has engaged
Goldman Sachs & Co. to explore alternatives for a major redevelopment
of the property.
"Aztar now has the ability to control the destiny of the Las Vegas
Tropicana and to unlock the value of this irreplaceable site on the Las
Vegas Strip," said Paul E. Rubeli, chairman of the board, president and
chief executive officer of Aztar. "We have a tremendous opportunity to
capitalize on one of the best locations for development on the Strip."
The Tropicana is situated on a 34-acre site at the intersection of
Tropicana Avenue and Las Vegas Boulevard, which is known as "The New
Four Corners" of the famed Las Vegas Strip. It is owned by a
partnership of which Aztar owns 50 percent and entities associated with
the Jaffe family of Chicago own the other 50 percent. The property is
leased from the partnership and operated by Aztar. The option
agreement gives Aztar up to 18 months to purchase the Jaffe family
partnership interests for $120 million. The purchase would give Aztar
100 percent ownership and control of the property.
"With the opening of Bellagio, Paradise, Paris, Venetian and
others, we expect a revitalization of the Las Vegas market in which the
biggest, best and brightest properties will achieve the highest
returns. Nobody has as strong a geographic position as the Tropicana
for future development. As these new projects come on line, we think
our location will become increasingly attractive," Rubeli said. "With
an exercise date potentially as late as August 2, 1999, the option
agreement gives us a great deal of flexibility to provide value for
our shareholders. The signing of this option, along with the increasing
cash flows from our other assets, the improving market story in Atlantic
City and a continuing development opportunity at the Tropicana in Atlantic
City, positions Aztar for significant growth."
Aztar Corporation is a publicly held company that operates
Tropicana Casino and Resort in Atlantic City, New Jersey, Tropicana
Resort and Casino in Las Vegas, Nevada, Ramada Express Hotel and Casino
in Laughlin, Nevada, Casino Aztar in Caruthersville, Missouri, and
Casino Aztar in Evansville, Indiana.
###
The disclosures herein include statements that are 'forward looking'
within the meaning of federal securities law. Such forward-looking
information involves important risks and uncertainties that could
significantly affect results in the future and, accordingly, such
results may differ from those expressed in any forward-looking
statements made by or on behalf of the company. These risks and
uncertainties include, but are not limited to, those relating to
competition and reliance on key personnel. For more information, review
the company's filings with the Securities and Exchange Commission,
including the company's annual report on Form 10-K and certain
registration statements of the company.
Exhibit 99.2
[CONFORMED COPY]
OPTION AGREEMENT
OPTION AGREEMENT (this "Agreement") made this 2nd day of
February, 1998, among Adamar of Nevada ("Purchaser"), a Nevada
corporation, the parties designated on Exhibit A attached hereto and
made a part hereof (hereinafter collectively called the "Jaffe Group"),
Aztar Corporation ("Guarantor"), a Delaware corporation, and Hotel
Ramada of Nevada ("Lessee"), a Nevada corporation. Purchaser and the
Jaffe Group, and/or Purchaser, the Jaffe Group, Guarantor and Lessee,
as the case may be, are sometimes hereinafter referred to as "the
parties."
W I T N E S S E T H :
WHEREAS, Purchaser and the Jaffe Group are partners in a
partnership (the "Partnership") known as Tropicana Enterprises and
formed pursuant to that certain Amended and Restated Partnership
Agreement dated as of November 1, 1984, as amended, clarified and
supplemented by the letter agreement dated as of November 19, 1984, the
First Amendment thereto dated as of June 19, 1985, the letter agreement
dated as of December 15, 1987 and the Second Amendment thereto dated as
of December 20, 1989 (collectively, as such may be further amended,
clarified and supplemented from time to time, the "Partnership
Agreement"); and
WHEREAS, certain obligations under the Partnership Agreement
have been guaranteed by Guarantor pursuant to, inter alia, that certain
Tropicana Enterprises Partnership Guaranty and Agreement dated as of
December 20, 1989 (any such guaranty, the "Partnership Agreement
Guaranty");
WHEREAS, the Partnership owns certain real property located
in the County of Clark, State of Nevada, commonly known as the
Tropicana Hotel/Casino in Las Vegas, Nevada and more particularly
described in Exhibit B attached hereto and made a part hereof (the
"Land"), together with improvements ("Improvements") and certain
personal property located thereon (the Land, Improvements and personal
property hereinafter collectively referred to as the "Tropicana
Hotel/Casino"); and
WHEREAS, the Partnership has leased the Tropicana
Hotel/Casino to Lessee under that certain Amended and Restated Lease
(Tropicana Hotel/Casino) dated as of November 1, 1984, as amended,
clarified and supplemented by the First Amendment thereto dated as of
January 1, 1986, the letter agreement clarifying "Maximum Encumbrance
Ceiling" dated as of April 15, 1986, the letter agreement captioned
"Memorandum of Date of Completion of Construction under Amended and
Restated Lease (Tropicana Hotel/Casino)" dated as of April 15, 1986,
and the Second Amendment thereto dated as of December 20, 1989
(collectively, as such may be further amended, clarified and
supplemented from time to time, the "Lease"); and
WHEREAS, certain obligations under the Lease have been
guaranteed by Guarantor pursuant to, inter alia, that certain Tropicana
Hotel Lease Guaranty and Agreement dated as of December 20, 1989 (any
such guaranty, the "Lease Guaranty"); and
WHEREAS, the Partnership, predecessors in interest to the
Jaffe Group and to Trop. C. C., a Nevada general partnership, Ramada
Inc., a Delaware corporation f/n/a Ramada Inns, Inc. ("Ramada"), Lessee
and Adamar of New Jersey, Inc., a New Jersey corporation ("Ramada-NJ"),
are parties to that certain Agreement dated as of September 1, 1980
(the "Trade Name Agreement") pursuant to which Lessee, Ramada and
Ramada-NJ were given the right to use the trade name "Tropicana" and
certain other names (collectively, the "Trade Name") on the terms and
conditions therein described; and
WHEREAS, Purchaser desires to obtain an exclusive option (the
"Option") to purchase the Jaffe Group's interests in the Tropicana
Hotel/Casino, the Lease, the Partnership, the Trade Name and the Trade
Name Agreement as such interests are set forth on Exhibit A hereto or
may be otherwise held by the Jaffe Group (the Partnership, the Trade
Name and the Trade Name Agreement, collectively, the "Interest," and
the Tropicana Hotel/Casino and the Lease, collectively, the "Quitclaim
Interest") and the Jaffe Group is willing to grant the Option on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, the payment by Purchaser to the Jaffe
Group of TWO MILLION DOLLARS ($2,000,000) (the "Option Fee"), and other
good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties hereto do
hereby agree that:
1. Option. The Jaffe Group hereby grants to Purchaser the
Option to purchase the Interest and the Quitclaim Interest in
accordance with the provisions of this Agreement. The Option Fee (A)
has been paid by Purchaser to the Jaffe Group by wire transfer in
immediately available funds to XXXXX XXXXXXXX XXXXX XXXXX XXXX XXXX
XXXXX XXXXX XXXXXX XXXXX XXXXX XXXXXX XXXXXX XXXXX XXXXX XXXXXX XXXXX
XXXXX XXXXX XXXXX XXXXX XXXX XXXX XXXX XXXX XXXXX, (B) is earned as of
the date hereof and (C) is non-refundable in all events, but may be
applied as a credit against the Option Price (hereinafter defined) as
set forth in Section 4 hereof.
2. Term. Purchaser shall have the right to exercise the
Option by the simultaneous delivery of (A) a notice (the "Option
Notice") to the Jaffe Group in the form of the notice attached hereto
as Exhibit C-1, given at any time during the period (the "Option Term")
from the date hereof through 11:59pm on February 1, 1999 (the
"Expiration Date"), as such Option Term and Expiration Date may be
extended pursuant to Section 3 hereof and (B) an earnest money deposit
(the "Earnest Money Deposit") in the amount of THREE MILLION DOLLARS
($3,000,000) to the Title Company (as defined in the Purchase Agreement
(hereinafter defined)) pursuant to the Escrow Agreement (as defined in
the Purchase Agreement); provided, however, that Purchaser (or its
assignee) shall not have the right to exercise the Option during any
period during which there is (x) an uncured material monetary default
or (y) an uncured material non-monetary default that is adverse to the
Jaffe Group (in either event, beyond any applicable cure period) by
Purchaser under the Partnership Agreement or Lessee under the Lease.
3. Extension. Purchaser shall have the one-time right to
extend the Option Term (and, thereby, the Expiration Date) for an
additional six (6) month period (the "Extension Term"), i.e., through
11:59 pm on July 30, 1999, upon (A) payment by Purchaser to the Jaffe
Group of ONE MILLION DOLLARS ($1,000,000) (the "Extension Fee") prior
to the Expiration Date, and (B) notice (the "Extension Notice") to the
Jaffe Group in the form of the notice attached hereto as Exhibit C-2
given at any time during the Option Term. The Extension Fee shall be
(x) paid by wire transfer of immediately available funds to the account
specified in Section 1 hereof or to an account otherwise designated by
the Jaffe Group Representative (hereinafter defined), (y) earned as of
the date received by the Jaffe Group and (z) non-refundable and non-
applicable to the Option Price in all events.
4. Option Price.
(A) The Option may be exercised at any time during the
Option Term upon payment to the Jaffe Group of ONE HUNDRED TWENTY
MILLION DOLLARS ($120,000,000) (the "Option Price") payable, at the
Jaffe Group's option, as follows:
(i) (a) ONE MILLION DOLLARS ($1,000,000) by assumption
of the obligation (pursuant to Article X of the Partnership Agreement)
to repay that certain ONE MILLION DOLLAR ($1,000,000) security deposit
paid by Lessee to the Partnership pursuant to Article XIII, Paragraph A
of the Lease (the "Security Deposit"); and
(b) ONE HUNDRED NINETEEN MILLION DOLLARS
($119,000,000) by wire transfer to the Jaffe Group of immediately
available funds to the account specified in Section 1 hereof or to an
account otherwise designated by the Jaffe Group Representative, or, at
the Jaffe Group's option as set forth in Section 6 hereof, by transfer
of cash and property in connection with a tax-deferred transaction (the
"Tax-Deferred Transaction"); provided, however, that said ONE HUNDRED
NINETEEN MILLION DOLLARS ($119,000,000) shall be reduced by (x) the
amount of the Option Fee (i.e., TWO MILLION DOLLARS ($2,000,000)) if
the Option Notice is served within the Option Term and prior to the
commencement of the Extension Term or (y) one-half of the amount of the
Option Fee (i.e., ONE MILLION DOLLARS ($1,000,000)) if the Option
Notice is served within the Option Term and subsequent to the
commencement of the Extension Term (it being understood that the
Extension Fee shall in no event be applied in reduction of the Option
Price) ((x) or (y), as the case may be, the "Option Fee Adjustment")
and (z) the Earnest Money Deposit to the extent the same is distributed
to the Jaffe Group pursuant to the terms and conditions of the Escrow
Agreement (the "Earnest Money Deposit Adjustment"); provided further
that, in either event, the transaction contemplated hereby is in fact
consummated pursuant to Section 6 hereof; or
(ii) ONE HUNDRED TWENTY MILLION DOLLARS ($120,000,000)
by wire transfer to the Jaffe Group of immediately available funds to
the account specified in Section 1 hereof or to an account otherwise
designated by the Jaffe Group Representative, or, at the Jaffe Group's
option as set forth in Section 6 hereof, pursuant to the Tax-Deferred
Transaction; provided, however, that said ONE HUNDRED TWENTY MILLION
DOLLARS ($120,000,000) shall be reduced by the Option Fee Adjustment
and the Earnest Money Deposit Adjustment if and when the transaction
contemplated hereby is in fact consummated pursuant to Section 6
hereof; and provided further, however, that ONE MILLION DOLLARS
($1,000,000) by cashier's, official bank or certified check payable to
Purchaser has been delivered to Purchaser in return for Purchaser's
assumption of the obligation to repay the Security Deposit.
(B) Notwithstanding anything set forth in this Agreement to
the contrary, the parties agree that upon the Jaffe Group's conveyance
of the Interest and the Quitclaim Interest and repayment in full or
release of the Jaffe Group Loan (as defined in the Purchase Agreement)
as contemplated herein, the Jaffe Group shall have no liability for any
indebtedness of the Partnership.
5. Affirmation of Lease and Partnership Agreement.
(A) Lessee and Guarantor hereby covenant that the Lease and
Lease Guaranty, respectively, are and shall remain in full force and
effect, notwithstanding the entering into of this Agreement, and that
the obligations of Lessee and Guarantor and rights of the lessor
thereunder shall (x) not be affected by (i) the execution of this
Agreement or the transactions contemplated hereunder or (ii) any
default of the Jaffe Group under this Agreement or the Purchase
Agreement, and (y) continue in accordance with the provisions thereof.
(B) Purchaser and Guarantor hereby covenant that the
Partnership Agreement and the Partnership Agreement Guaranty,
respectively, are and shall remain in full force and effect,
notwithstanding the entering into of this Agreement, and that the
obligations of Purchaser and Guarantor and rights of the Jaffe Group
thereunder shall (x) not be affected by (i) the execution of this
Agreement or the transactions contemplated hereunder or (ii) any
default of the Jaffe Group under this Agreement or the Purchase
Agreement, and (y) continue in accordance with the provisions thereof.
6. Purchase Agreement. Upon delivery of an Option Notice,
the Jaffe Group shall within five (5) business days give notice (the
"Contract Notice") to Purchaser of the Jaffe Group's election to
consummate the transaction contemplated by this Agreement pursuant to:
(A) the purchase agreement (the "Purchase Agreement") attached hereto
as Exhibit D or (B) a purchase agreement to effectuate the Tax-Deferred
Transaction (the "Tax-Deferred Transaction Contract") (the Purchase
Agreement and the Tax-Deferred Transaction Contract, collectively or
individually, as the context may require, the "Contract"). Upon the
delivery of a Contract Notice electing the Purchase Agreement, the
Purchase Agreement shall be deemed to have been executed by the parties
hereto and dated as of the date of the delivery of such Contract
Notice, and the parties shall, as purchaser and seller, respectively,
perform the obligations contained in the Purchase Agreement to be
performed by them. Upon the delivery of a Contract Notice electing the
Tax-Deferred Transaction Contract, Purchaser and the Jaffe Group hereby
agree to use commercially reasonable efforts to cooperate with each
other to consummate the Tax-Deferred Transaction Contract upon terms
substantially similar to those contained in the Purchase Agreement but
for modifications necessary to meet the technical transactional
requirements of the Tax-Deferred Transaction; provided that such
modifications do not affect Purchaser in a materially adverse manner;
and provided further that the Tax-Deferred Transaction Contract shall
be deemed to have been executed by the parties hereto and dated as of
the date of the delivery of such Contract Notice, and the parties
shall, as purchaser and seller, respectively, perform the obligations
to be contained in the Tax-Deferred Transaction Contract to be
performed by them. In the event that the Jaffe Group does not give
Purchaser the Contract Notice within the requisite five (5) business
days, or if the Tax-Deferred Transaction Contract cannot be entered
into pursuant to the terms hereof within twenty (20) days after the
Jaffe Group's delivery of the Contract Notice, then, in either event,
anything to the contrary set forth herein notwithstanding, Purchaser
shall have the right to serve notice (the "Second Notice") upon the
Jaffe Group declaring that the Purchase Agreement shall be deemed
elected by the Jaffe Group and executed by the parties hereto as of the
date of said notice (provided that if an original Contract Notice had
been given to Purchaser the effective date of the Purchase Agreement
shall not be modified) if the Contract Notice is not so given or the
Tax-Deferred Transaction Contract not so entered into within three (3)
business days thereafter. The parties hereto agree that
notwithstanding anything to the contrary set forth herein, if the
Contract Notice is not so given or the Tax-Deferred Transaction
Contract not so entered into within said three (3) business days, then
the Purchase Agreement shall be deemed elected by the Jaffe Group and
executed by the parties hereto. In such event, the Purchase Agreement
shall be deemed dated as of the date of the Second Notice (provided
that if an original Contract Notice had been given the effective date
of the Purchase Agreement shall not be modified) and the parties shall,
as purchaser and seller, respectively, perform the obligations
contained in the Purchase Agreement to be performed by them.
Nothwithstanding anything contained herein to the contrary, at such
time as the Contract shall be deemed effective, (x) Lessee and
Guarantor shall be deemed to have executed the Contract and (y) if
Purchaser shall have assigned its rights and obligations hereunder,
Adamar of Nevada shall nonetheless be deemed to have executed the
Contract for the purpose of evidencing its obligations under Paragraph
13 thereunder. The Jaffe Group shall have the right to require that
Adamar of Nevada, Lessee and Guarantor execute and deliver a Contract
to the Jaffe Group at Closing.
7. Closing. The closing of title under the Contract
("Closing") shall take place on the date ("Closing Date") on which the
thirtieth (30th) calendar day following the date of the Contract
occurs, except that the Closing shall occur on the next business day if
the thirtieth (30th) calendar day following the date of the Contract is
not a business day, except as otherwise provided in this Agreement or
the Contract or as mutually agreed between the parties.
8. Memorandum. Simultaneously herewith, the Jaffe Group
agrees to execute and deliver to Purchaser, in recordable form, a
memorandum of this Agreement, which Purchaser may file for record.
Such memorandum will be in the form of Exhibit E annexed hereto.
Simultaneously herewith, Purchaser agrees to execute and deliver to the
Title Company in escrow a termination agreement (the "Termination
Agreement") in recordable form that terminates the aforesaid
memorandum. The Termination Agreement will be in the form of Exhibit F
annexed hereto. At any time after the Expiration Date or earlier
termination of the Option pursuant to the terms of this Agreement, if
Purchaser shall not have exercised the Option, then the Jaffe Group
shall have the right to petition the Title Company for the release of
the Termination Agreement from escrow, as more particularly set forth
in an escrow agreement to be entered into among Title Company,
Purchaser and the Jaffe Group. The parties hereto hereby agree to
enter into an escrow agreement that is reasonably acceptable to the
Escrow Agent and the parties hereto promptly after the execution of
this Agreement, provided that the escrow agreement provides that the
Title Company shall deliver the Termination Agreement to the Jaffe
Group upon receipt of a written affidavit of the Jaffe Group
Representative stating that the Option has not been exercised on or
before the Expiration Date or earlier termination of the Option and
that Purchaser is not afforded any extension rights.
9. Assignment.
(A) Purchaser shall have the absolute right and
authority, at any time, without the consent of the Jaffe Group, to
sell, transfer, assign or otherwise dispose of, including, without
limitation, by reason of merger, acquisition, consolidation or similar
transaction (collectively, "Transfer"), all of its rights hereunder to
any person, partnership, corporation or other entity; and any such
assignee shall be entitled to all of the rights and powers, and shall
assume all of the obligations, of Purchaser hereunder; provided,
however, that any such assignment shall not release Adamar of Nevada,
Lessee or Guarantor from their respective obligations under sub-
subparagraphs 13C(iv) and 13C(v) and subparagraphs 13D and 13E of the
Purchase Agreement (it being expressly understood, however, that under
no circumstances shall Purchaser, Adamar of Nevada, Lessee or Guarantor
have any indemnification or similar obligations in connection with the
actions or inactions of an assignee of Purchaser hereunder). Purchaser
hereby consents, as such consent may be required under the Partnership
Agreement or any other instrument to which Purchaser is a party, to the
purchase of the Interest by Purchaser or any assignee of Purchaser
hereunder. Notwithstanding anything to the contrary set forth herein,
any assignment of Purchaser's interests hereunder shall not be deemed
to supersede any restrictions on assignments by Purchaser under the
Partnership Agreement, Lessee under the Lease, or Guarantor under the
Partnership Agreement Guaranty or the Lease Guaranty, nor shall any
such assignment release any of the foregoing from their obligations
thereunder (it being expressly understood, however, that said
restrictions shall in no way restrict the right of Purchaser to assign
its rights hereunder).
(B) The Jaffe Group shall not, during the Option Term,
Transfer the Interest or the Quitclaim Interest, to the extent the
Interest and the Quitclaim Interest may be otherwise assignable, to any
person, partnership, corporation, trust, limited liability company or
other entity without the prior written consent of Purchaser; provided,
however, that each member of the Jaffe Group may Transfer the Interest
and the Quitclaim Interest to any person, partnership, corporation,
trust, limited liability company or other entity permitted without the
prior consent of Purchaser pursuant to the terms and conditions of the
Partnership Agreement (each a "Partnership Permitted Transferee") or to
any person, partnership, corporation, trust, limited liability company
or other entity controlling, controlled by or under common control with
said Jaffe Group member or Partnership Permitted Transferee. Any such
permitted assignee of a member of the Jaffe Group shall be entitled to
all of the rights and powers, and shall assume all of the obligations,
of the Jaffe Group hereunder.
10. Representations, Warranties and Covenants.
(A) The Jaffe Group hereby represents and warrants
(which representations and warranties shall (x) pertain to each
constituent of the Jaffe Group solely to the extent of each
constituent's interest in the Interest, (y) survive the execution and
delivery of this Agreement and (z) expire twelve (12) months after the
Expiration Date or earlier termination of this Agreement pursuant to
the terms hereof, i.e., Purchaser shall have no right to assert any
claim arising out of the representations and warranties contained
herein after such 12 month period) to Purchaser that:
(i) the Jaffe Group has the full right, power,
authority and capacity to enter into this Agreement and undertake all
of the performances contemplated hereunder; and
(ii) the execution and delivery by the Jaffe Group
of this Agreement and the performance of its obligations hereunder will
not result in any:
(a) breach, violation or default under, or be
in conflict with, any of the terms or conditions of any organizational
documents or other agreements of the Jaffe Group other than agreements
in connection with any indebtedness of the Partnership (including the
Jaffe Group Loan, although it is expressly understood and agreed that
the Jaffe Group Loan will nonetheless be repaid in full or released as
of the Closing Date ), as such may have been heretofore amended and in
force on the date hereof; or
(b) to the best of the Jaffe Group
Representative's knowledge, material and adverse breach or violation
of, or default under or be in conflict, in any material and adverse
respect, with any of the terms and conditions of any judgment, order,
injunction, decree, or ruling of any court or governmental authority,
or any agreement or other instrument to which the Jaffe Group is a
party or by which it is bound other than agreements or instruments in
connection with any indebtedness of the Partnership (including the
Jaffe Group Loan, although it is expressly understood and agreed that
the Jaffe Group Loan will nonetheless be repaid in full or released as
of the Closing Date ), a conflict with, default under, or breach or
violation of which would have an adverse effect on the financial
condition of the Interest or would materially impair the ability of the
Jaffe Group to perform its obligations hereunder; and
(iii) the execution and delivery of this Agreement
and the performance of the Jaffe Group's obligations hereunder are duly
authorized by all necessary action, and this Agreement, when executed
and delivered by the Jaffe Group, will constitute the legal, valid and
binding obligation of the Jaffe Group enforceable in accordance with
its terms, subject to creditor's rights; and
(iv) to the best of the Jaffe Group
Representative's knowledge, no consent, approval or authorization of
any governmental authority is required in connection with the
execution, delivery and performance of this Agreement; and
(v) the Jaffe Group has good and valid title to
the Interest, free and clear of all mortgages, pledges, security
interests, liens, charges, options or other encumbrances of any nature
whatsoever (collectively, "Liens"), except for the Liens (the
"Permitted Liens") set forth on Schedule I attached hereto and made a
part hereof; and the Jaffe Group hereby covenants that the Interest
will remain free and clear of all Liens, except for the Permitted Liens
and Liens created by Purchaser or the Partnership, throughout the
Option Term and, if Purchaser exercises the Option, through the Closing
Date; and
(vi) as of the date of this Agreement, there is no
claim, action or proceeding pending or, to the best knowledge of the
Jaffe Group Representative, threatened against the Jaffe Group by or
before any governmental entity with respect to the Interest which
could reasonably be expected to have a material adverse effect on the
Interest or that challenges the validity of this Agreement or the
ability of the Jaffe Group to perform its obligation hereunder to
convey to Purchaser good and valid title to the Interest, excepting,
however, any claims, actions or proceedings of which Purchaser has
knowledge, including but not limited to the widening of Reno Road.
(B) Purchaser hereby represents and warrants (which
representations and warranties shall survive the execution and delivery
of this Agreement and expire 12 months after the Expiration Date or
earlier termination of this Agreement pursuant to the terms hereof) to
the Jaffe Group that:
(i) the Purchaser has the full right, power,
authority and capacity to enter into this Agreement and undertake all
of the performances contemplated hereunder; and
(ii) the execution and delivery by Purchaser of
this Agreement and the performance of its obligations hereunder will
not result in any:
(a) breach, violation or default under, or be
in conflict with, any of the terms or conditions of any organizational
documents or other agreements of Purchaser, as such may have been
heretofore amended and in force on the date hereof; or
(b) to the best of Purchaser's knowledge,
material and adverse breach or violation of, or default under or be in
conflict, in any material and adverse respect, with any of the terms
and conditions of any judgment, order, injunction, decree, or ruling of
any court or governmental authority, or any agreement or other
instrument to which Purchaser is a party or by which it is bound, a
conflict with, default under, or breach or violation of which would
have an adverse effect on the financial condition of the Interest or
would materially impair the ability of Purchaser to perform its
obligations hereunder; and
(iii) the execution and delivery of this Agreement
and the performance of Purchaser's obligations hereunder are duly
authorized by all necessary action, and this Agreement, when executed
and delivered by Purchaser, will constitute the legal, valid and
binding obligation of Purchaser enforceable in accordance with its
terms, subject to creditor's rights; and
(iv) to the best of Purchaser's knowledge, no
consent, approval or authorization of any governmental authority is
required in connection with the execution, delivery and performance of
this Agreement.
11. Estoppels. (A) The Jaffe Group shall execute and
deliver to Purchaser, at such time or times as Purchaser may request,
but not more than twice, a certificate stating (i) whether or not this
Agreement is in full force and effect, (ii) to the best of the Jaffe
Group Representative's knowledge, whether or not Purchaser has
defaulted in any of the terms of this Agreement, (iii) whether or not
this Agreement has been modified or amended in any respect, and (iv)
whether or not, to the best of the Jaffe Group Representative's
knowledge, there are any defaults under this Agreement or any reason
why the Jaffe Group cannot comply with the terms and conditions
contained in this Agreement.
(B) Purchaser shall execute and deliver to the Jaffe
Group at such time or times as the Jaffe Group may request a
certificate stating (i) whether or not this Agreement is in full force
and effect, (ii) whether or not the Jaffe Group has defaulted in any of
the terms of this Agreement, (iii) whether or not this Agreement has
been modified or amended in any respect, and (iv) whether or not, to
the best of Purchaser's knowledge, there are any defaults under this
Agreement or any reason why Purchaser cannot comply with the terms and
conditions contained in this Agreement.
12. No Broker. The Jaffe Group and Purchaser each represent
and warrant to the other that it has not dealt with any broker, finder
or similar agent in connection with the transaction provided for in
this Agreement. The Jaffe Group and Purchaser agree to indemnify and
hold each other harmless from and against any loss, claim, liability
and expense (including, without limitation, reasonable attorneys' fees)
incurred by, imposed upon or payable by the indemnified party in
connection with claims of any brokers or persons for commissions or
finders' or similar fees upon or in connection with this Agreement or
the transaction contemplated hereby where such claims arise from the
communications or action of the indemnifying party.
13. Condemnation/Casualty. During the Option Term,
notwithstanding any provision of this Agreement to the contrary, if (A)
there is damage to or destruction of all or any portion of the
Tropicana Hotel/Casino (a "Casualty"), or (B) there is a taking of all
or any portion of the Tropicana Hotel/Casino through the power of
eminent domain (a "Taking"), then, in either or both of such events,
this Agreement shall remain in full force and effect; the Jaffe Group
shall, however, at Closing pay, transfer, convey and assign to
Purchaser (x) any and all insurance proceeds resulting from a Casualty
theretofore received by the Jaffe Group together with any and all
rights of the Jaffe Group to receive same, and (y) any and all
condemnation awards resulting from a Taking theretofore received by the
Jaffe Group together with any and all rights of the Jaffe Group to
receive same, excepting, however, any and all condemnation awards
resulting from the widening of Reno Road, which awards shall be shared
equally between Purchaser and the Jaffe Group if received by the
Partnership prior to the Closing Date.
14. Jaffe Group Representative. The Jaffe Group hereby
appoints Cary S. Glenner (the "Jaffe Group Representative") as agent
for each and every member of the persons or entities constituting the
Jaffe Group for all purposes in connection with the transaction
contemplated by this Agreement. Communications to and/or from the
Jaffe Group Representative shall have the same force and effect as
communications to and/or from each person or entity constituting the
Jaffe Group and Purchaser shall have the right to rely on notices,
communications, consents and agreements of the Jaffe Group
Representative as given and made by and/or on behalf of each and every
person or entity constituting the Jaffe Group. The Jaffe Group may
appoint a substitute Jaffe Group Representative in accordance with the
notice procedures set forth in Section 15 of this Agreement.
15. Notice. Any notice, designation, consent, approval or
other communication required or permitted to be given pursuant to this
Agreement, shall be given in writing and shall be sent by hand
delivery, a reputable, nationally recognized overnight courier or by
registered or certified mail, postage prepaid, return receipt
requested, addressed as follows and, if mailed within the United
States, shall be deemed to have been given three (3) business days
after so mailed:
If to the Jaffe Group:
Guarantee Associates, L.L.C.
3115 Ridge Road, Second Floor
Lansing, Illinois 60438
Attention: Mr. Cary S. Glenner
with a copy to:
Katten Muchin & Zavis
525 West Monroe Street - Suite 1600
Chicago, Illinois 60661
Attention: Daniel J. Perlman, Esq.
If to Purchaser:
Adamar of Nevada
c/o Aztar Corporation
2390 East Camelback Road
Phoenix, Arizona 85016-3452
Attention: Mr. Robert M. Haddock
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Wallace L. Schwartz, Esq.
or, in either case, to such other address as either party may have
previously notified the other pursuant to the provisions of this
Section 15.
16. Antitrust. The parties have determined that the
transactions contemplated by this Agreement may be subject to the
reporting requirements of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (the "Act"). Accordingly, each party (and/or their
respective permitted assignees) shall forthwith proceed to make the
necessary filings, and diligently take all other actions necessary to
comply with the Act and the rules and regulations thereunder.
Purchaser (and/or its permitted assignee) shall be responsible for both
party's filing fees, if any, incurred as a result of the parties'
filing obligations set forth in the preceding sentence. It shall be a
condition precedent to Purchaser's right to exercise the Option that
clearance be obtained for the contemplated transaction, as required
under the Act, prior to the Expiration Date (as such may be extended
pursuant to the terms hereof).
17. Conveyance. Notwithstanding anything to the contrary
set forth herein, it is expressly understood and agreed between the
parties that the Jaffe Group's conveyance of the Quitclaim Interest as
contemplated by this Agreement shall include a quitclaim of all
interests whatsoever, if any, the Jaffe Group may have therein.
18. Conditions Precedent. (A) Payment of the Earnest Money
Deposit (as provided in Section 2 hereof) and (B) to the extent
required under the applicable loan documents, receipt by the Jaffe
Group of the consent of the beneficiary of the indebtedness of the
Partnership (as such indebtedness is set forth at Exception B.20 of the
title commitment attached as Exhibit D to the Purchase Agreement) to
the Closing and the withdrawal of the Jaffe Group from the Partnership
(and releasing the Jaffe Group from any further liability in connection
with such indebtedness thereafter), shall be conditions precedent to
Purchaser's exercise of the Option.
19. Trustees. Anything herein to the contrary
notwithstanding, each and all of the representations, warranties,
covenants, undertakings and agreements in this Agreement made on the
part of the Jaffe Group, as such, are made and intended not as personal
representations, warranties, covenants, undertakings and agreements by
the trustees that are signatories hereto or for the purpose or with the
intention of binding said trustees personally, but are made and
intended for the purpose of binding, and shall bind, only the trust
property, and this Agreement is executed and delivered by said trustees
not in their own right, but solely in the exercise of the powers
conferred upon them as trustees; no personal liability or personal
responsibility is assumed by, nor shall at any time be asserted or
enforceable against, the trustees, as such, or any of the
beneficiaries, as such, under any trust on account of this Agreement or
on account of any representation, warranty, covenant, undertaking or
agreement of the trustees in this Agreement contained, either expressed
or implied, any such personal liability being expressly waived and
released.
20. No Merger. There shall be no merger of the Lease or of
any leasehold estate created thereby by reason of the fact that the
same person may acquire or hold, directly or indirectly, the Lease or
any leasehold in the Land or the Improvements and any interest in the
fee to same.
21. Governing Law. This Agreement shall be construed and
governed by the laws of the State of New York.
22. Severability. Any provision of this Agreement that is
not enforceable under the laws of the State of New York shall be
construed to be severable from the other provisions hereof without
affecting the enforceability of the remaining provisions.
23. Interpretation. Whenever the singular or the masculine
gender is used in this Agreement, it shall be construed as if the
plural, or the feminine or neuter gender, respectively, had been used
where the context so requires and the rest of the sentence shall be
construed as if the grammatical and terminological changes thereby
rendered necessary had been made.
24. No Oral Modification. This Agreement contains the
entire understanding of the parties and may not be changed or modified
orally but only by written instrument signed by the parties hereto.
25. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the respective successors and
permitted assigns of the parties hereto.
26. Further Assurances. In addition to the obligations
required to be performed hereunder by the parties at the Closing, the
parties agree from time to time, whether before, at or after the
Closing, to perform such other acts, and to execute, acknowledge and
deliver such other instruments, documents and other materials as either
party may reasonably request in order to effectuate the consummation of
the transaction contemplated hereunder, if and to the extent that
responding to such request would not be materially adverse to the
responding party.
27. Remedies. It is expressly agreed that the remedies at
law for the breach of any of the obligations of the Jaffe Group set
forth in this Agreement are inadequate in view of (A) the complexities
and uncertainties in measuring the actual damages that would be
sustained by reason of the failure of the Jaffe Group to comply fully
with each of said obligations and (B) the uniqueness of the Partnership
and the Tropicana Hotel/Casino. Accordingly, each of the aforesaid
obligations shall be, and is hereby expressly made, enforceable by
specific performance, which remedy shall be Purchaser's sole remedy for
the breach by the Jaffe Group of any of its obligations hereunder.
28. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date and year first above written.
PURCHASER:
Adamar of Nevada
By: /s/ Robert M. Haddock
----------------------------------
Name: Robert M. Haddock
Title: VP
THE JAFFE GROUP:
/s/ XXX
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/s/ XXX
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/s/ XXX
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/s/ XXX
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/s/ XXX
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LESSEE:
Hotel Ramada of Nevada
By: /s/ Robert M. Haddock
-----------------------------------
Name: Robert M. Haddock
Title: VP
GUARANTOR:
Aztar Corporation
By: /s/ Robert M. Haddock
-----------------------------------
Name: Robert M. Haddock
Title: VP
