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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)*
BOOMTOWN, INC.
(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
09858810
(CUSIP Number)
Edward P. Roski, Jr. With a copy to:
Majestic Realty Co. Michael W. Sturrock, Esq.
13191 Crossroads Parkway North Latham & Watkins
Sixth Floor 633 West Fifth Street
City of Industry, California 91746 Suite 4000
(310) 692-9581 Los Angeles, California 90071
(213) 485-1234
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 12, 1996
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 9 Pages
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SCHEDULE 13D
CUSIP No. 09858810
1 NAME OF PERSON
EDWARD P. ROSKI, JR.
2 CHECK THE APPROPRIATE BOX IF MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
7 SOLE VOTING POWER
724,586
NUMBER OF SHARES
BENEFICIALLY OWNED BY 8 SHARED VOTING POWER
EACH REPORTING PERSON 0
WITH 9 SOLE DISPOSITIVE POWER
724,586
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
724,586
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.8%
14 TYPE OF PERSON REPORTING*
IN
* SEE INSTRUCTIONS BEFORE FILLING OUT
Page 2 of 9 Pages
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ITEM 1. SECURITY AND ISSUER.
This Amendment No. 2 amends and restates in its entirety the
Schedule 13D previously filed by Edward P. Roski, Jr., an individual ("Mr.
Roski"), on June 10, 1994, as amended by Amendment No. 1 filed by Mr. Roski on
August 11, 1994. This statement relates to the shares of Common Stock, $.01
par value per share (the "Shares"), of Boomtown, Inc., a Delaware corporation
(the "Issuer"). The principal executive offices of the Issuer are located at
P.O. Box 399, Verdi, Nevada 89439.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is being filed by Mr. Roski.
(b) Mr. Roski's business address is 13191 Crossroads Parkway North,
Sixth Floor, City of Industry, California 91746.
(c) Mr. Roski's principal employment is serving as President and
Chief Operating Officer of Majestic Realty Co. ("Majestic"). Majestic is
principally engaged in the business of owning and developing real estate and its
address is 13191 Crossroads Parkway North, Sixth Floor, City of Industry,
California 91746.
(d) During the last five years, Mr. Roski has not been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, Mr. Roski was not a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) Mr. Roski is a citizen of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to that certain Stockholders and Affiliates Agreement
dated as of June 30, 1993 by and between, among others, Mr. Roski and the
Issuer, as amended (the "Blue Diamond Stockholders Agreement"), Mr. Roski sold
to the Issuer 50% of the outstanding stock of Blue Diamond Hotel & Casino, Inc.,
a Nevada corporation ("Blue Diamond"), for an aggregate consideration of 100
Shares (the "Blue Diamond Stock Sale"). At the time of the Blue Diamond Stock
Sale, Blue Diamond conducted no business and had no assets or liabilities and
such sale was made in connection with the development, construction and
operation of Boomtown Las Vegas, a hotel and casino currently operated by Blue
Diamond (the "Resort"). Concurrently with the Blue Diamond Stock Sale, Mr.
Roski granted to the Issuer, subject to certain terms and conditions, an
exclusive and irrevocable option to acquire the remaining 50% of the outstanding
stock of Blue Diamond (the "Blue Diamond Stock Option"). On June 2, 1994, Mr.
Roski received a letter from the Issuer notifying Mr. Roski of the Issuer's
election to exercise the Blue Diamond Stock Option. On August 5, 1995, pursuant
to a Stock Acquisition Agreement and Plan of Reorganization dated as of June 30,
1994 by and between Mr. Roski and the Issuer (the "Stock Acquisition
Agreement"), Mr. Roski received 714,286 Shares from the Issuer in return for the
remaining 50% of the outstanding stock of Blue Diamond beneficially owned by Mr.
Roski.
Page 3 of 9 Pages
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Mr. Roski had previously acquired 5,000 Shares with personal
funds. Further, one Share was issued to Mr. Roski as a gift from the Issuer in
March of 1996. An additional 5,199 Shares are issuable upon the exercise of
options received by Mr. Roski in connection with his services as a Director of
the Issuer.
ITEM 4. PURPOSE OF TRANSACTION.
Mr. Roski acquired the 724,586 Shares for investment purposes.
As described in Item 6 below, pursuant to the Purchase Agreement (as defined
below), Mr. Roski has agreed to sell 714,386 Shares to Hollywood Park for a
$3,464,722 promissory note.
So long as Mr. Roski is a member of the Board of Directors of
the Issuer, he intends to participate in the formulation, determination and
direction of basic business decisions and policies of the Issuer. For further
discussion of (i) the Purchase Option Agreement (as defined below) pursuant to
which a partnership affiliated with Mr. Roski has granted an option to Blue
Diamond which could result in the acquisition of additional Shares in the
future; and (ii) the Boomtown Stockholders Agreement (as defined below) which
contains provisions relating to Mr. Roski's membership on the Issuer's Board of
Directors and the Issuer's rights of first refusal, see Item 6, below.
Except as indicated above, Mr. Roski has no plans or proposals
with respect to the Issuer that relate to or that would result in the occurrence
of any of the events set forth in clauses (a) through (j) of Item 4 of Schedule
13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The 724,586 Shares beneficially owned by Mr. Roski
constitute approximately 7.8% of the total number of Shares outstanding as of
August 14, 1996, after giving effect to the issuance of the 5,199 Shares which
Mr. Roski is entitled to purchase upon the exercise of certain stock options
granted to him by the Issuer based upon 9,248,340 Shares outstanding as reported
in the Issuer's Quarterly Report on Form 10-Q filed under Commission File No.
0-20648 on May 15, 1996.
(b) Mr. Roski has the sole power to vote or to direct the
vote, and to dispose or to direct the disposition of, the 724,586 Shares
beneficially owned by him.
(c) Except as set forth herein, Mr. Roski has not engaged
in any transaction during the past 60 days in any securities of the Issuer.
(d) Not applicable.
(e) Not applicable.
Page 4 of 9 Pages
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Concurrently with the execution of the Blue Diamond
Stockholders Agreement, IVAC, a general partnership of which Mr. Roski is one
of two general partners, entered into a Purchase Option Agreement with
the Issuer and Blue Diamond dated as of June 30, 1993, as amended (the
"Purchase Option Agreement") pursuant to which IVAC granted to Blue Diamond,
subject to certain terms and conditions, the exclusive right and option to
purchase the Resort (the "Resort Purchase Option"). The Resort Purchase Option
became exercisable by Blue Diamond in May 1996 and expires in November 1996.
The price that Blue Diamond must pay to IVAC in order to exercise the Resort
Purchase Option is, at IVAC's sole and complete election, equal to (a) that
number of Shares equal to (i) 2,210,714, as adjusted for certain events, plus a
variable number of additional Shares or (ii) the sum of $30,950,000 divided by
the share price of each Share as of the date of Blue Diamond's exercise of the
Resort Purchase Option, plus a variable number of additional Shares or (b) cash
in an amount equal to the sum of $30,950,000, plus a variable sum.
Also in connection with the execution of the Blue Diamond
Stockholders Agreement, Mr. Roski, IVAC and the Issuer entered into that
certain Stockholders Agreement dated as of June 30, 1993 (the "Boomtown
Stockholders Agreement"). Pursuant to such agreement, Mr. Roski was appointed
to the Issuer's Board of Directors and thereafter the Issuer is required to
include Mr. Roski or another designee of IVAC in its slate of nominees for
election to the Board until June 1, 1997. The Boomtown Stockholders Agreement
also provides Mr. Roski and IVAC with certain registration rights with respect
to the Shares beneficially owned by them and provides the Issuer with rights of
first refusal with respect to certain transfers of the Shares beneficially
owned by Mr. Roski and/or IVAC.
As described in Item 3 above, Mr. Roski acquired the 714,286
Shares pursuant to a the Stock Acquisition Agreement concurrently with the
closing of the transactions contemplated by the Issuer's exercise of the Blue
Diamond Stock Option.
In September 1995, Mr. Roski entered into a loan agreement
with Comerica Bank - California ("CBC"). Pursuant to the loan agreement, Mr.
Roski has the option of extending the maturity date of the loan if he agrees to
pledge as collateral certain of his Shares to CBC. Currently, Mr. Roski's
Shares are not pledged to CBC, though Mr. Roski may later choose to pledge such
shares.
On August 12, 1996, Mr. Roski, the Issuer, Hollywood Park,
Inc. ("Hollywood Park"), Blue Diamond, IVAC and Majestic entered into the Blue
Diamond Swap Agreement (the "Swap Agreement"). The consummation of the Swap
Agreement is conditioned upon, among other things, the consummation of the
proposed merger between the Issuer and Hollywood Park (the "Merger"). Upon
consummation of the Swap Agreement, Boomtown will, among other things (i)
forego approximately $27 million in loans made to IVAC in connection with the
construction and opening of the Resort and (ii) release all of its and Blue
Diamond's interests in the Resort, and Mr. Roski will, among other things, (a)
issue to Blue Diamond two promissory notes totaling in the aggregate
$8,464,722, (b) allow Blue Diamond to terminate its lease of the Resort, and
assume certain of Blue Diamond's obligations with respect to the operation of
the Resort and (c) resign as a director of the Issuer, and surrender the stock
options granted to Mr. Roski in his capacity as such. Additionally, upon
consummation of the Swap Agreement, each of the Blue Diamond Stockholders
Agreement, the Purchase Option Agreement and the Boomtown Stockholders
Agreement will be terminated and the parties thereto will enter into mutual
release.
Page 5 of 9 Pages
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Also on August 12, 1996, Mr. Roski and Hollywood Park entered
into a Stock Purchase Agreement (the "Purchase Agreement") pursuant to which
Mr. Roski agreed to sell 714,386 Shares to Hollywood Park in return for a
$3,464,722 promissory note. The consummation of the Purchase Agreement is
conditioned upon, among other things, the consummation of the Merger and the
Swap Agreement.
The description of the terms of the Blue Diamond Stockholders
Agreement, Purchase Option Agreement, Boomtown Stockholders Agreement, Stock
Acquisition Agreement and Plan of Reorganization, Swap Agreement and Purchase
Agreement set forth in this Schedule 13D does not purport to be a complete
statement of the parties' rights and obligations, and is qualified in its
entirety by reference to such agreements, which are set forth as Exhibits 1 to
8 hereto. Reference is made to such agreements for a complete description of
the terms and provisions thereof and the agreement of the parties thereunder.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 99.1 Stockholders and Affiliates Agreement dated
as of June 30, 1993 by and among Blue
Diamond, Edward P. Roski, Sr., Mr. Roski, the
Issuer, IVAC and Majestic (Exhibit 10.1)(1).
Exhibit 99.2 First Amendment to and Clarification of
Stockholders and Affiliates Agreement dated
as of November 10, 1993 by and among Blue
Diamond, Edward P. Roski, Sr., Mr. Roski, the
Issuer, IVAC, the Roski Community Property
Trust, the Roski Senior Revocable Trust and
Majestic (Exhibit 10.21)(2).
Exhibit 99.3 Purchase Option Agreement dated as of June
30, 1993 by and among IVAC, the Issuer and
Blue Diamond (Exhibit 10.3)(1).
Exhibit 99.4 Amendment to Purchase Option Agreement,
Consent to Assignment dated as of November
10, 1993 by and among IVAC, the Issuer and
Blue Diamond (Exhibit 10.25)(2).
Exhibit 99.5 Boomtown Stockholders Agreement dated as of
June 30, 1993 by and among the Issuer, IVAC
and Mr. Roski (Exhibit 10.9)(1).
Exhibit 99.6 Stock Acquisition Agreement and Plan of
Reorganization dated as of June 30, 1994 by
and between Mr. Roski and the Issuer (Exhibit
1)(3).
Exhibit 99.7 Blue Diamond Swap Agreement dated as of
August 12, 1996 by and among the Issuer, Blue
Diamond, Hollywood Park, Mr. Roski, IVAC and
Majestic.
Exhibit 99.8 Stock Purchase Agreement dated as of August
12, 1996 by and between Hollywood Park and Mr.
Roski.
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(1) Incorporated by reference to the designated exhibit to the Issuer's
Current Report on Form 8-K filed under Commission File No. 0-20648 on
July 28, 1993.
Page 6 of 9 Pages
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(2) Incorporated by reference to the exhibit to Issuer's Annual Report on
Form 10-K for the fiscal year ended September 30, 1994.
(3) Incorporated by reference to the designated exhibit to Amendment No. 1
to Mr. Roski's Schedule 13D filed on August 11, 1994.
Page 7 of 9 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
/s/ EDWARD P. ROSKI, JR.
----------------------------------
Edward P. Roski, Jr.
Dated: August 14, 1996
Page 8 of 9 Pages
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EXHIBIT INDEX
Exhibit 99.1 Stockholders and Affiliates Agreement dated
as of June 30, 1993 by and among Blue
Diamond, Edward P. Roski, Sr., Mr. Roski, the
Issuer, IVAC and Majestic (Exhibit 10.1)(1).
Exhibit 99.2 First Amendment to and Clarification of
Stockholders and Affiliates Agreement dated
as of November 10, 1993 by and among Blue
Diamond, Edward P. Roski, Sr., Mr. Roski, the
Issuer, IVAC, the Roski Community Property
Trust, the Roski Senior Revocable Trust and
Majestic (Exhibit 10.21)(2).
Exhibit 99.3 Purchase Option Agreement dated as of June
30, 1993 by and among IVAC, the Issuer and
Blue Diamond (Exhibit 10.3)(1).
Exhibit 99.4 Amendment to Purchase Option Agreement,
Consent to Assignment dated as of November
10, 1993 by and among IVAC, the Issuer and
Blue Diamond (Exhibit 10.25)(2).
Exhibit 99.5 Boomtown Stockholders Agreement dated as of
June 30, 1993 by and among the Issuer, IVAC
and Mr. Roski (Exhibit 10.9)(1).
Exhibit 99.6 Stock Acquisition Agreement and Plan of
Reorganization dated as of June 30, 1994 by
and between Mr. Roski and the Issuer (Exhibit
1)(3).
Exhibit 99.7 Blue Diamond Swap Agreement dated as of
August 12, 1996 by and among the Issuer, Blue
Diamond, Hollywood Park, Mr. Roski, IVAC and
Majestic.
Exhibit 99.8 Stock Purchase Agreement dated as of August
12, 1996 by and between Hollywood Park and Mr.
Roski.
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(1) Incorporated by reference to the designated exhibit to the Issuer's
Current Report on Form 8-K filed under Commission File No. 0-20648 on
July 28, 1993.
(2) Incorporated by reference to the exhibit to Issuer's Annual Report on
Form 10-K for the fiscal year ended September 30, 1994.
(3) Incorporated by reference to the designated exhibit to Amendment No. 1
to Mr. Roski's Schedule 13D filed on August 11, 1994.
Page 9 of 9 Pages
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EXHIBIT 99.7
BLUE DIAMOND SWAP AGREEMENT
DATED AS OF AUGUST 12, 1996
BY AND AMONG
BOOMTOWN, INC.,
BLUE DIAMOND HOTEL & CASINO, INC.,
HOLLYWOOD PARK, INC.,
EDWARD P. ROSKI, JR.,
IVAC
AND
MAJESTIC REALTY CO.
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TABLE OF CONTENTS
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1. DEFINITIONS AND RULES OF INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Rules of Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2. TRANSFER OF ROSKI NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1 Transfer of Roski Notes on the Exchange Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 No Liabilities Assumed; Excluded Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. TRANSFER OF BD INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 Transfer of BD Interest on the Exchange Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Liabilities Assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. CASH PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5. EXCHANGE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Exchange Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Cash Payment; Proration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 Deliveries by BD Transferor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Deliveries by Roski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.5 Additional Undertakings by Roski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.6 Additional Undertakings by Boomtown, Blue Diamond,
Hollywood Park and BD Transferor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1 Representations and Warranties of the Roski Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Representations and Warranties of Boomtown, Blue Diamond,
Hollywood Park and BD Transferor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.1 Conditions to Execution and Delivery of this Agreement by Boomtown . . . . . . . . . . . . . . . . . . . . 18
7.2 Conditions to Execution and Delivery of this Agreement by Roski . . . . . . . . . . . . . . . . . . . . . 18
7.3 Conditions to Exchange by BD Transferor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.4 Conditions to Exchange by Roski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
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TABLE OF CONTENTS
(CONTINUED)
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8. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 Indemnification by the Roski Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2 Indemnification by Boomtown, Blue Diamond and BD Transferor. . . . . . . . . . . . . . . . . . . . . . . . 20
8.3 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9. ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.1 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.2 Consents, Authorizations and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.3 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.4 Additional Deliveries; Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.5 Maintenance of Resort Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.6 Director's Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.2 Other Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.1 Changes, Waivers, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.2 Payment of Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.5 Survival of Representations and Warranties, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.6 Headings; References to Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.7 Choice of Law; Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.10 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.11 No third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.12 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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BLUE DIAMOND SWAP AGREEMENT
This Blue Diamond Swap Agreement (this "Agreement") is made as of the
12th day of August, 1996 by and among Boomtown, Inc., a Delaware corporation
("Boomtown"), Blue Diamond Hotel & Casino, Inc., a Nevada corporation and a
wholly-owned subsidiary of Boomtown ("Blue Diamond"), Hollywood Park, Inc., a
Delaware corporation ("Hollywood Park"), Edward P. Roski, Jr., an individual
residing in the State of California ("Roski"), IVAC, a California general
partnership of which Roski is a partner ("IVAC") and Majestic Realty Co., a
California corporation ("Majestic").
WHEREAS, IVAC owns certain real property in Las Vegas, Nevada, on
which a resort consisting of a casino, hotel, restaurant, recreational vehicle
park and related facilities (as more fully defined below, the "Resort") is
being operated by Blue Diamond as Boomtown Las Vegas;
WHEREAS, Boomtown has advanced certain funds to IVAC to enable IVAC to
complete development and construction of the Resort, which advances are
evidenced by certain promissory notes issued by IVAC, which notes are governed
by loan agreements and secured by deeds of trust on the Resort site and certain
related property;
WHEREAS, Blue Diamond has entered into a lease with IVAC for the
Resort site, and has purchased and installed certain trade fixtures in the
Resort;
WHEREAS, Hollywood Park intends to enter into a strategic combination
(the "Merger") with Boomtown pursuant to an Agreement and Plan of Merger dated
as of April 23, 1996 by and among Hollywood Park, Boomtown and HP Acquisition,
Inc., a Delaware corporation and a wholly-owned subsidiary of Hollywood Park
(as amended and in effect from time to time, the "Merger Agreement");
WHEREAS, subject to consummation of the Merger pursuant to the Merger
Agreement, Boomtown and Blue Diamond intend either (a) to effect any one or
combination of the following transfers of their respective interests in the
Resort (i) a transfer to a subsidiary of Boomtown (an "SPC") created for the
purpose and designated as an "Unrestricted Subsidiary" under the Boomtown
Indenture (as defined below), or (ii) as set forth in Section 3.1, any other
transfer which would achieve the result contemplated by this Agreement or (b)
to retain their respective interests in the Resort, for the purpose of entering
directly into the transactions contemplated by this Agreement;
WHEREAS, it is the intent of the parties hereto that, upon
consummation of the Merger pursuant to the Merger Agreement, subject to the
terms and conditions set forth in this Agreement, the holder of such interests
in the Resort, regardless of whether such holder is then Boomtown, Blue
Diamond, Hollywood Park, any designated Affiliate (as defined below) of
Hollywood Park, any SPC or other designated subsidiary of Boomtown or any
combination thereof (any such holder(s), "BD Transferor") would either exchange
such interests in the
<PAGE> 5
Resort for the Roski Notes (as defined below) or effect the same result through
a series of related transactions, and, in any such case, Roski would exchange
the Roski Notes for such interests in the Resort (such exchange, however
effected, the "Blue Diamond Swap");
NOW THEREFORE, in consideration of the foregoing premises, and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, Boomtown, Blue Diamond, Hollywood Park, Roski, IVAC and
Majestic hereby agree as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION
1.1 Definitions. The following terms shall have the
respective meaning set forth below, or in the Sections of this Agreement
respectively referred to below:
"Affiliate" of any person or entity organized as a
corporation, partnership, joint venture, business trust or other non-
individual person, shall mean (i) any person or entity which directly or
indirectly owns fifty percent (50%) or more of the stock, partnership or other
beneficial interest of such person or entity, (ii) any corporation, partnership
or other entity of which fifty percent (50%) or more of the stock, partnership
or other beneficial interest is owned directly or indirectly by such person or
entity, and (iii) any corporation, partnership or entity of which fifty percent
(50%) or more of the stock, partnership or other beneficial interest is owned
directly or indirectly by any person or entity that owns fifty percent (50%) or
more of the stock, partnership or other beneficial interest of such person or
entity.
"Affiliate Loan Agreement" shall mean the Affiliate Loan
Agreement dated as of June 30, 1993, by and among IVAC, Majestic and Boomtown.
"Affiliate Note" shall mean the Affiliate Loan Note dated as
of June 30, 1993, made by IVAC in favor of Boomtown.
"Affiliate Loan Deed of Trust" shall mean the Deed of Trust
and Assignment of Rents and Security Agreement dated as of June 30, 1993, by
and among IVAC, as trustor, Nevada Title Company, a Nevada corporation, as
trustee and Boomtown and Majestic as tenants in common, as beneficiaries.
"Approvals" shall mean all governmental approvals, consents,
licenses, findings of suitability, and permits, including without limitation,
any approvals of Gaming Authorities, as may be required to effect the Blue
Diamond Swap.
"Assumed Contracts" shall mean (i) the leases and notes
identified on Schedule 1-A hereto, (ii) the gift shop leases and the sports
book agreement between Boomtown and Leroy's Horse and Sports Place, dated
November 30, 1995, (iii) the agreement for the family amusement center at the
Resort, (iv) the maintenance contracts listed on Schedule 1-B hereto,
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(v) the outdoor sign agreements listed on Schedule 1-C hereto, (vi) the license
and progressive service agreements listed on Schedule 1-D hereto and (vii) the
agreements for entertainment at the Resort in effect on the Exchange Date.
"BD Interest" shall mean all of BD Transferor's right, title
and interest in and to (i) the Affiliate Note, the Bridge Note, the Affiliate
Loan Agreement, the Bridge Loan Agreement, the Purchase Option Agreement, the
Affiliate Loan Deed of Trust, the Bridge Loan Deed of Trust and the Purchase
Option Deed of Trust, (ii) the mortgage liens on, and other rights in, the
Resort site and related properties respectively conveyed in trust under the
Affiliate Loan Deed of Trust, the Bridge Loan Deed of Trust and the Purchase
Option Deed of Trust, (iii) the Blue Diamond Lease, the Assumed Contracts, the
FF&E and the Specified Assets and (iv) security systems, customer lists,
telephone numbers, books and records, user manuals, plans, surveys, liquor and
other licenses and inventories which are located at, or used principally in
connection with, the Resort; provided, however, that the BD Interest shall
include all interests of Boomtown and Blue Diamond in the foregoing as of the
Exchange Date.
"BD Transferor" shall have the meaning ascribed thereto in the
recitals hereto.
"Blue Diamond" shall have the meaning ascribed to such term in
the recitals hereto.
"Blue Diamond Lease" shall mean the Lease dated as of June 30,
1993, as amended by a First Amendment to Lease dated as of November 10, 1993,
by and between IVAC as lessor and Blue Diamond as lessee, pursuant to which
IVAC has agreed to lease to Blue Diamond, and Blue Diamond has agreed to lease
from IVAC, the real property in Las Vegas, Nevada on which the Resort is
situated.
"Blue Diamond Swap" shall have the meaning ascribed thereto in
the recitals hereto.
"Boomtown" shall have the meaning ascribed thereto in the
preamble hereto.
"Boomtown Indenture" shall mean the Indenture dated as of
November 1, 1993, by and among Boomtown, Blue Diamond, certain of their
Affiliates and the Trustee.
"Bridge Loan Agreement" shall mean the Bridge Loan Agreement
dated as of June 30, 1993, by and between IVAC and Boomtown, as amended by an
Amendment No. 1 to Bridge Loan Agreement dated as of November 10, 1993.
"Bridge Note" shall mean the Amended and Restated Promissory
Note (Bridge) dated as of June 30, 1993, made by IVAC in favor of Boomtown.
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<PAGE> 7
"Bridge Loan Deed of Trust" shall mean the Deed of Trust and
Assignment of Rents and Security Agreement dated as of June 30, 1993, by and
among IVAC, as trustor, Nevada Title Company, a Nevada corporation, as trustee
and Boomtown as beneficiary.
"Designated Roski Entity" shall mean an entity designated by
Roski and either (i) reasonably acceptable to Boomtown and Hollywood Park or
(ii) the obligations of which hereunder and under the Related Documents,
including all indemnities for which such Roski Entity is liable, shall have
been unconditionally guaranteed by Roski pursuant to the Roski Guaranty.
"Effective Date" shall mean the date of this Agreement.
"Employees" shall mean the employees of Boomtown, Blue Diamond
or their Affiliates employed at or in connection with the Resort exclusively
and not employed at other facilities.
"Exchange Date" shall mean the date on which the conditions
precedent specified in Sections 7.3 and 7.4 hereof have been satisfied or
waived.
"FF&E" shall mean all trade fixtures, other fixtures and
equipment located at or used principally in connection with the Resort,
including, in any event, those assets (however characterized) listed on the
fixed asset register of Blue Diamond as of the Effective Date and those assets
(however characterized) leased or purchased under the leases and notes listed
on Schedule 1-A; provided, however, that FF&E shall be deemed to include any
replacements of any such assets and any similar assets acquired for use at or
principally in connection with the Resort by Boomtown, Blue Diamond or BD
Transferor during the period from the Effective Date until the Exchange Date
and shall be deemed to exclude any such assets that no longer exist as of the
Exchange Date due to obsolescence or use in the ordinary course of business.
"Fixture Filings" shall mean the fixture filings with respect
to the Resort listed as of the Exchange Date on Schedule 1 to the Termination
Agreement.
"GAAP" shall mean generally accepted accounting principles as
in effect on the relevant date of determination, consistently applied.
"Gaming Authority" shall mean the Nevada Gaming Commission,
the Nevada State Gaming Control Board, the Clark County Liquor and Gaming
Licensing Board and any other state, county or other governmental authority
having responsibility for, jurisdiction over, or regulatory authority,
oversight or supervisory responsibilities in respect of, any gaming related
business operated or contemplated to be operated at or in connection with the
Resort.
"Gaming Law" shall mean all applicable provisions (i) the
Nevada Gaming Control Act and the statutes rules, and regulations promulgated
thereunder and (ii) all interpretations, decisions, judgments, orders and
decrees of any Gaming Authority.
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"Hollywood Park" shall have the meaning ascribed to such
term in the preamble hereto.
"IVAC" shall have the meaning ascribed to such term in the
preamble hereto.
"Majestic" shall have the meaning ascribed to such term in the
preamble hereto.
"Merger" shall have the meaning ascribed to such term in the
recitals hereto.
"Merger Agreement" shall have the meaning ascribed to such
term in the recitals hereto.
"Permitted Liens" shall mean (a) liens and encumbrances,
including rights of consent to assignment, arising under the Assumed Contracts
in accordance with the terms thereof, (b) restrictions imposed by Gaming Laws
and other applicable governmental authorities and (c) other encumbrances
arising in the ordinary course of business in connection with the operation of
the Resort.
"Perishable Inventory" shall mean all liquor, beverages,
foodstuff and other consumable or perishable inventory purchased by Blue
Diamond or any of its Affiliates for consumption or use at the Resort, valued
at cost on a FIFO basis.
"Purchase Option Agreement" shall mean the Purchase Option
Agreement dated as of June 30, 1993 by and among IVAC, Boomtown and Blue
Diamond.
"Purchase Option Deed of Trust" shall mean the Deed of Trust
and Assignment of Rents and Security Agreement dated as of June 30, 1993, by
and among IVAC, as trustor, Nevada Title Company, a Nevada corporation, as
trustee and Blue Diamond, as beneficiary.
"Related Agreements" shall mean the Termination Agreement, the
Roski Notes, the Roski Guaranty, if applicable, the Release and all of the
other documents, instruments and agreements executed and delivered in
connection with any of the foregoing, and the transactions respectively
contemplated hereby and thereby.
"Release" shall mean the general release by each of (i) the
Roski Entities of BD Transferor, Boomtown, Blue Diamond and their respective
Affiliates of the obligations related to the Resort created by or contained in
the Blue Diamond Lease, the Assumed Contracts, the Specified Liabilities and
all obligations, liabilities and claims relating to the Resort arising or
accruing prior to the date on which Boomtown or Blue Diamond took possession of
the "Premises" (as defined in the Blue Diamond Lease) or arising or accruing on
or after the Exchange Date and (ii) BD Transferor, Boomtown and Blue Diamond of
the Roski Entities of all obligations, liabilities and claims arising under the
Affiliate Note, the Bridge Note, the Affiliate Loan Agreement, the Bridge Loan
Agreement, the Purchase Option Agreement, the Affiliate Loan Deed of Trust, the
Bridge Loan Deed of Trust and the Purchase Option Deed of Trust in
substantially the form of Exhibit A hereto.
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<PAGE> 9
"Resort" shall mean the facility located at 3333 Blue Diamond
Road, Las Vegas, Nevada consisting of a casino, hotel, restaurant, recreational
vehicle park and related facilities, and all assets located at, used
principally in connection with, or arising principally from such facilities,
including the FF&E, the Specified Assets, certain rights under the Assumed
Contracts, security systems, customer lists, telephone numbers, books and
records, user manuals, plans, surveys, liquor and other licenses and
inventories.
"Retained Employees" shall have the meaning ascribed thereto in
Section 5.6(a) of this Agreement.
"Roski" shall have the meaning ascribed to such term in the
preamble hereto.
"Roski Entities" shall mean collectively, Roski, IVAC
(including Edward P. Roski, Sr. as a general partner of IVAC) and Majestic.
"Roski Guaranty" shall mean a guaranty by Roski of the
obligations of the Designated Roski Entity hereunder and under the other
Related Agreements to which the Designated Roski Entity is a party, if required
by Boomtown and Hollywood Park, in form and substance satisfactory to Boomtown
and Hollywood Park.
"Roski Notes" shall mean (i) an unsecured promissory note made
by the Designated Roski Entity, in an initial principal amount of five million
dollars ($5,000,000) having an interest rate equal to the Prime Rate, as
announced by Bank of America from time to time, plus one and one half percent
(1.5%) per annum and providing for annual principal payments of one million
dollars ($1,000,000) plus accrued interest and maturing on the date that is
five years after the Exchange Date, in substantially the form of Exhibit B-1
hereto and (ii) an unsecured promissory note, made by the Designated Roski
Entity, in an initial principal amount of $3,464,287 having an interest rate
equal to the Prime Rate, as announced by Bank of American from time to time,
plus one-half percent (.5%) per annum and providing for a payment of all
principal plus accrued interest on the date that is three (3) years after the
Exchange Date, in substantially the form of Exhibit B-2 hereto.
"Roski Stock" shall mean 714,386 shares of the common stock of
Boomtown held, as of the Effective Date, by Roski, and all shares of the common
stock of Hollywood Park into which such Boomtown common stock had then
converted, or which Roski then had a right to receive in exchange for such
Boomtown common stock.
"Roski Stock Purchase Agreement" means an agreement of even
date herewith between Roski and Hollywood Park pursuant to which Roski is
selling, transferring and conveying the Roski Stock to Hollywood Park, and
Hollywood Park is purchasing and acquiring the Roski Stock for the Roski Stock
Purchase Price.
"Roski Stock Purchase Price" shall mean a note to be issued by
Hollywood Park to Roski in the principal amount of $3,464,772 pursuant to the
Roski Purchase Agreement as consideration for the purchase of the Roski Stock.
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"SPC" shall have the meaning ascribed to such term in the
preamble hereto.
"Specified Assets" shall mean (i) prepaid deposits with
utilities with respect to the Resort, security deposits and any other prepaid
expenses, (ii) cash in the Resort, whether in machines, gaming tables, change
stations, the gaming control center or at the hotel front desk, the restaurant
or the recreational vehicle park, (iii) Perishable Inventory (iv) applicable
property tax refunds accrued prior to the Exchange Date and not included in the
tax proration contemplated by Section 5.2 and (v) all trade receivables and all
other liquid assets other than markers (i.e., receivables and other
uncontingent payment rights convertible into cash within 90 days after the
respective issuance dates thereof), in each case, accruing or arising through
the last day prior to the Exchange Date.
"Specified Liabilities" shall mean (i) trade payables, (ii)
players points (Players Club), (iii) progressive slot winnings liability as
shown on Boomtown's books and records, (iv) caribbean stud liability, (v)
advance deposits, (vi) outstanding tokens and (vii) pre-sold concerts, with
respect to the Resort, in each case, accruing or arising through the last day
prior to the Exchange Date.
"Termination Agreement" shall have the meaning ascribed to
such term in Section 5.3(a) hereof.
"Trustee" shall mean First Trust National Association, as
trustee under the Boomtown Indenture.
1.2 Rules of Interpretation
(a) A reference to any document or agreement
shall, unless otherwise provided, include such document or agreement as
amended, modified or supplemented from time to time in accordance with its
terms and, if applicable, as permitted by this Agreement.
(b) The singular includes the plural and the
plural includes the singular.
(c) A reference to any law includes any
applicable amendment or modification to such law, or any applicable successor
law.
(d) A reference to any person or entity includes
its permitted successors and permitted assignees.
(e) Accounting terms not otherwise defined herein
have the respective meanings assigned to them by GAAP applied on a consistent
basis by the accounting entity to which they refer.
(f) The words "include," "includes" and
"including" are not limiting.
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(g) All terms not specifically defined herein or
by GAAP, which terms are defined in the Uniform Commercial Code as in effect in
the State of Nevada, shall have the respective meanings assigned to them
therein.
(h) Reference to a particular "Section" refers to
that section of this Agreement unless otherwise indicated.
(i) The words "herein," "hereof," "hereunder" and
words of like import shall refer to this Agreement as a whole and not to any
particular section or subdivision of this Agreement.
2. TRANSFER OF ROSKI NOTES.
2.1 Transfer of Roski Notes on the Exchange Date.
Subject to the terms and conditions of this Agreement, (i) the Designated Roski
Entity agrees, on the Exchange Date, to issue the Roski Notes to BD Transferor
and (ii) BD Transferor agrees, on the Exchange Date, to acquire and accept from
Roski the Roski Notes.
2.2 Excluded Assets. No other assets of the Roski
Entities, except those specifically listed in Section 2.1 and the cash payments
respectively contemplated by Sections 3.1 and 5.2, if applicable, shall be
transferred or deemed to be transferred hereby.
2.3 No Liabilities Assumed; Excluded Liabilities. BD
Transferor is not assuming and shall not be responsible for any liability or
obligation of any Roski Entity, any Specified Liabilities, any obligations
under Assumed Contracts accruing on or after the Exchange Date or any other
claims or liabilities with respect to the Resort arising or accruing on or
after the Exchange Date, or any liability or obligation arising from or
relating to any of the following:
(a) any costs or expenses, including, but not
limited to, legal fees, accounting fees, consulting, other finder, broker and
financing costs incurred by Roski or his Affiliates in connection with this
Agreement or the Related Agreements or the consummation of the transactions
contemplated hereby or thereby; or
(b) any taxes owed by any Roski Entity or
assessed as a result of or in connection with the transactions contemplated
hereby, including, without limitation, any income, property, sales, use or
withholding taxes.
In no event shall Hollywood Park be deemed to have assumed, or
otherwise become liable for, any liability whatsoever of any Roski Entity
(regardless of whether Hollywood Park is designated as BD Transferor).
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3. TRANSFER OF BD INTEREST.
3.1 Transfer of BD Interest on the Exchange Date.
Subject to the terms and conditions of this Agreement, BD Transferor agrees, on
the Exchange Date, to transfer, convey, assign and deliver to Roski, or the
Designated Roski Entity, and Roski agrees to acquire, accept and assume (or
cause the Designated Roski Entity to acquire, accept and assume) from the BD
Transferor, all right, title and interest of BD Transferor in and to the BD
Interest. The parties intend that this exchange shall occur by means of a
series of contemporaneous steps as follows: (a) Boomtown and Blue Diamond
would transfer the BD Interest to the SPC, (b) the Designated Roski Entity
would convey the Roski Notes and any cash payments to be made hereunder to the
SPC and assume the liabilities described herein, (c) the SPC would transfer and
convey the BD Interest to the Designated Roski Entity as contemplated herein,
subject to the Assumed Contracts and (d) the SPC would transfer the Roski Notes
and any cash payments to be made hereunder to Boomtown. The parties
acknowledge and agree that Boomtown and Hollywood Park may mutually agree
without the consent of Roski, to utilize a structure other than the foregoing
structure, to accomplish the objectives of the parties set forth herein,
provided that such structure is economically equivalent to the contemplated
structure set forth above. It is further acknowledged that as part of such
alternative structure, Boomtown and Hollywood Park may require Roski to
continue to own and hold the Roski Stock.
3.2 Excluded Assets. No other rights, interests or
assets of BD Transferor or any of its Affiliates, except those specifically
listed in Section 3.1 and the cash payment contemplated by Section 5.2, if
applicable, shall be transferred or deemed to be transferred hereby.
3.3 Liabilities Assumed. Upon and after the Exchange
Date, the Designated Roski Entity shall be solely liable for the Specified
Liabilities, accrued liabilities relating to vacation, earned but unused under
the Blue Diamond employee benefits policy in effect as of the date hereof
associated with the employees hired by Roski pursuant to Section 5.5(F) and
liabilities arising under the Assumed Contracts and all other costs, expenses,
claims, liabilities and obligations of the Resort, of every kind and nature, in
each case, arising or accruing on or after the Exchange Date. The Designated
Roski Entity shall take such actions to assume the liabilities of the Resort
accruing after the Exchange Date under the Assumed Contracts as may be necessary
to substitute the Designated Roski Entity for BD Transferor or, as applicable,
any of its Affiliates, and/or shall relieve BD Transferor and its Affiliates of
all liability thereunder. Except for the Specified Liabilities, accrued
liabilities relating to vacation earned but unused to the extent described
above, amounts accruing under the Assumed Contracts on or after the Exchange
Date and all of the other costs, expenses, claims, liabilities and obligations
arising on or after the Exchange Date in connection with the Resort, the
Designated Roski Entity will not assume or otherwise become responsible for any
liability or obligation of Boomtown, Blue Diamond, Hollywood Park or any of
their respective Affiliates, or any other claims or liabilities whatsoever,
including, any costs or expenses, including, but not limited to, legal fees,
accounting fees, consulting, other finder, broker and financing costs incurred
by Boomtown, Blue Diamond, Hollywood Park, BD Transferor or any of their
Affiliates in
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connection with this Agreement or the Related Agreements or the consummation of
the transactions contemplated hereby or thereby.
4. CASH PAYMENT. Subject to the terms and conditions of this
Agreement, each of the parties agrees to make the cash payments respectively
contemplated to be made by such party in Sections 3.1 and 5.2, as applicable.
5. EXCHANGE OF ASSETS.
5.1 Exchange Date. Subject to a restructuring in
accordance with Section 3.1, on the Exchange Date, (a) BD Transferor shall
transfer, convey, assign and deliver to Roski, and Roski shall acquire, accept
and assume from BD Transferor, the BD Interest and (b) Roski shall deliver to
BD Transferor, and BD Transferor shall acquire and accept from Roski, the Roski
Notes. Each party shall deliver to the other such endorsements, assignments,
releases and other instruments as the other party shall reasonably request or
as necessary to vest in the other party valid and marketable title, free and
clear of all liens or encumbrances (except, with respect to the BD Interest,
Permitted Liens) to the BD Interest, in the case of Roski, and to the Roski
Notes, in the case of BD Transferor.
5.2 Cash Payment; Proration. On the Exchange Date, if
the amount of Specified Assets is greater than the amount of Specified
Liabilities as of the Exchange Date, then Roski shall pay to BD Transferor an
amount equal to the amount of Specified Assets less the amount of Specified
Liabilities. On the Exchange Date, if the amount of Specified Liabilities is
greater than the amount of Specified Assets as of the Exchange Date, then BD
Transferor shall pay to Roski an amount equal to the amount of Specified
Liabilities less the amount of Specified Assets. In addition, all outstanding
taxes, rent, utilities and payments under the Assumed Contracts shall be pro
rated as of the Exchange Date, so that all such amounts accruing prior to the
Exchange Date shall be for the account of Blue Diamond or Boomtown and all such
amounts accruing from and after the Exchange Date shall be for the account of
the applicable Roski Entity.
5.3 Deliveries by BD Transferor. On the Exchange Date,
subject to the terms and conditions hereof, BD Transferor shall deliver to
Roski each of the following:
(a) a termination agreement in substantially the
form of Exhibit C hereto (the "Termination Agreement"), duly executed by BD
Transferor, Boomtown and Blue Diamond terminating all of the respective rights
and obligations of BD Transferor and the Roski Entities under the Affiliate
Note, the Bridge Note, the Affiliate Loan Agreement, the Bridge Loan Agreement,
the Purchase Option Agreement, the Affiliate Loan Deed of Trust, the Bridge
Loan Deed of Trust, the Purchase Option Deed of Trust, the Blue Diamond Lease
and all or other documents relating to the Resort and the relationship among
Boomtown, Blue Diamond and any one or more of the Roski Entities, providing,
inter alia, for the acceptance by Roski of BD Transferor's transfer of the BD
Interest in a condition which complies with the terms of the Blue Diamond Lease
and this Agreement;
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(b) the Affiliate Note, marked canceled;
(c) the Bridge Note, marked canceled;
(d) a discharge of the Affiliate Loan Deed of
Trust, in recordable form;
(e) a discharge of the Bridge Loan Deed of Trust,
in recordable form;
(f) a discharge of the Purchase Option Deed of
Trust, in recordable form;
(g) a quitclaim deed, in recordable form,
regarding the Resort (including BD Transferor's interest under the Blue Diamond
Lease and the Purchase Option Agreement);
(h) a discharge in recordable form of the
Construction and Permanent Deed of Trust, Security Agreement and Fixture Filing
with Assignment of Rents dated as of November 10, 1993, among Blue Diamond, as
trustor, Nevada Title Company, as trustee, and the Trustee, as beneficiary;
(i) a discharge in recordable form of the
Construction and Permanent Deed of Trust, Security Agreement and Fixture Filing
with Assignment of Rents (Subordinated) dated as of November 10, 1993, among
Blue Diamond, as trustor, Nevada Title Company, as trustee, and Boomtown, as
beneficiary;
(j) a termination in recordable form of the
Collateral Assignment of Deed of Trust dated as of November 10, 1993, between
Boomtown and the Trustee;
(k) UCC-3 termination statements, terminating
the Fixture Filings;
(l) the Release, duly executed by BD Transferor,
Blue Diamond and Boomtown;
(m) assignment agreements and any such other
documents, consents, authorizations and waivers as may be reasonably required
by Roski, lessors or other contracting parties, to assign all of BD
Transferor's rights and obligations under the Assumed Contracts;
(n) bills of sale for all personal property owned
by BD Transferor and included in the BD Interest;
(o) vehicle certificates of title and appropriate
transfer documents for all automobiles or other vehicles owned by BD Transferor
and included in the BD Interest;
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(p) a list of all Employees employed at the Resort
as of the business day prior to the Exchange Date;
(q) an accounting of all cash on hand and
Perishable Inventory on the premises of the Resort on the business day prior to
the Exchange Date; and
(r) an accounting of Specified Assets and
Specified Liabilities.
5.4 Deliveries by Roski. On the Exchange Date, subject
to the terms and conditions hereof, Roski shall deliver to BD Transferor each
of the following:
(a) the Termination Agreement, duly executed by
Roski and each other affected Roski Entity;
(b) the Roski Notes;
(c) the Release, duly executed by each affected
Roski Entity; and
(d) assumption agreements and other documents as
may be reasonably required by BD Transferor to cause Roski to assume the
obligations of BD Transferor under the Assumed Contracts.
5.5 Additional Undertakings by Roski. In addition to the
transfer of the property listed in Section 2.1 and the deliveries listed in
Section 5.4, each applicable Roski Entity agrees as follows:
(a) Roski shall resign as a director of Boomtown,
effective as of the Exchange Date.
(b) Roski shall take such action as is necessary
to cancel the options on the stock of Boomtown received by Roski in connection
with his service as a director of Boomtown, effective as of the Exchange Date.
(c) From and after the Exchange Date, Roski shall
maintain the confidentiality of any non-public information pertaining to
Boomtown, Blue Diamond, Hollywood Park or BD Transferor acquired by him in his
capacity as a director of Boomtown; provided, however, that Roski shall not be
obligated to maintain the confidentiality of any information which is already
in the public domain through no act of Roski or which is required to be
disclosed by court order or applicable law.
(d) No Roski Entity shall use the name
"Boomtown," or any other trademark, trade name, service mark or similar
property of Boomtown or any of its Affiliates, after the 180th day following
the Exchange Date, and no Roski Entity shall at any time use the name
"Hollywood Park" or any other trademark, tradename, service mark or similar
property of Hollywood Park or any of its Affiliates, except by agreement with
Hollywood Park or such
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Affiliates. So long as any Roski Entity uses the name "Boomtown", the Roski
Entities shall maintain the condition, service and operations of the Resort in
substantial conformity with those maintained by Blue Diamond and Boomtown prior
to the Exchange Date. The applicable Roski Entities and BD Transferor shall
enter into a trademark license agreement on the Exchange Date, including the
protections to Boomtown set forth in the Trademark License Agreement dated as
of June 30, 1993, by and between Boomtown and Blue Diamond.
(e) After the Exchange Date, the Roski Entities
shall allow the BD Transferor, its Affiliates and designees or appropriate
governmental agencies reasonable access to all books and records kept in
connection with the Resort prior to the Exchange Date, as reasonably requested
by the BD Transferor for legitimate business purposes. The parties will
develop and follow a mutually agreed upon retention policy with respect to the
books and records of the Resort.
(f) Prior to the Exchange Date, the Designated
Roski Entity, shall make offers of employment to substantially all of the
Employees; provided, however, that no Roski Entity shall attempt to solicit, or
interfere in any manner with, the employment of the Retained Employees.
(g) Each Roski Entity agrees, if Boomtown
determines that it is appropriate to solicit the consents to the Blue Diamond
Swap from the holders of the notes issued pursuant to the Boomtown Indenture,
to cooperate as reasonably requested by Boomtown in such consent solicitation
and to cooperate reasonably in any other actions which may be necessary to
effect the transactions contemplated hereby, regardless of the structure or
form of the Blue Diamond Swap; provided, that no Roski Entity shall be required
to incur any expense or liability in connection therewith.
(h) Roski or the Designated Roski Entity agrees
to give such notices as may be required by the Worker Adjustment and Retraining
Notification Act.
(i) The Designated Roski Entity, if not a party to
this Agreement, shall become a party to this Agreement.
5.6 Additional Undertakings by Boomtown, Blue Diamond,
Hollywood Park and BD Transferor. In addition to the transfer of the property
listed in Section 5.3, Boomtown, Blue Diamond, Hollywood Park and BD Transferor
agree as follows:
(a) Boomtown, Blue Diamond and the BD Transferor
recognize that the Designated Roski Entity will generally need to retain the
services of the Employees (other than the Retained Employees as defined below)
in order to operate the Resort in a businesslike and efficient manner following
the Exchange Date. Accordingly, Boomtown, Blue Diamond and BD Transferor agree
not to transfer any Employees from the Resort to their other operations after
the Effective Date and agree to terminate, as of the Exchange Date, all
Employees. Notwithstanding the foregoing, Boomtown, Blue Diamond or BD
Transferor may designate, by means of a written notice received by Roski within
thirty (30) days after the
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Effective Date, up to five (5) Employees as "Retained Employees" and Boomtown,
Blue Diamond and BD Transferor shall have the right to transfer the Retained
Employees from the Resort to their other operations and shall have no
obligation to terminate the Retained Employees. Following the Exchange Date,
none of Boomtown, Blue Diamond or BD Transferor, nor any of their Affiliates,
shall attempt to solicit from the Designated Roski Entity the Employees hired
by the Designated Roski Entity or otherwise interfere in their employment at
the Resort; provided that this Section 5.6 shall not be construed to restrain
Boomtown, Blue Diamond, BD Transferor or their Affiliates from hiring former
employees of the Designated Roski Entity.
(b) Boomtown, Blue Diamond, Hollywood Park and BD
Transferor shall maintain the confidentiality of any nonpublic information
pertaining to the Resort, including Resort-specific customer lists and other
information relating to patrons of the Resort; provided, however, that
Boomtown, Blue Diamond, Hollywood Park and BD Transferor shall not be obligated
to maintain the confidentiality of any information which is already in the
public domain through no act of Boomtown, Blue Diamond, Hollywood Park or BD
Transferor or which is required to be disclosed by court order or applicable
law.
(c) Boomtown, Blue Diamond, and BD Transferor
shall not extend any Assumed Contract by a period of greater than one (1) year,
or otherwise amend any Assumed Contract, without obtaining the consent of
Roski, which consent shall not be unreasonably withheld.
(d) Boomtown, Blue Diamond, and BD Transferor
agree to allow Roski reasonable access to all books and records necessary to
verify the amount of Specified Assets and Specified Liabilities as of the
Exchange Date, to participate in taking a joint inventory with Roski of cash in
the Resort, FF&E and Perishable Inventory on the Exchange Date and to assist
Roski in making a general inspection of the Resort on the Exchange Date.
(e) If applicable, BD Transferor shall be
designated by Boomtown and Hollywood Park to facilitate, in Hollywood Park's
and Boomtown's judgment, the consummation of the Blue Diamond Swap. Once
designated, if not a party to this Agreement, Boomtown and Hollywood Park shall
cause BD Transferor to become a party to this Agreement.
(f) Boomtown, Blue Diamond and BD Transferor
acknowledge the need for Roski to obtain the information necessary to effect a
smooth transition of the operations of the Resort and agree to permit designees
of the Roski Entities access at reasonable times during customary business
hours onto the premises of the Resort; provided that no activities by such
designees shall materially interfere with the operations of the Resort.
(g) Blue Diamond agrees to change its name to a
name not including the words "Blue Diamond" prior to the Exchange Date so as to
permit the use of such a name by Roski.
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(h) Boomtown and Hollywood Park shall take
appropriate steps to comply with the Boomtown Indenture so as to effect the
transactions contemplated hereby, by, at Boomtown and Hollywood Park's sole
election, any of the following means: (i) soliciting, commencing no later than
45 days prior to the scheduled termination date of the Merger Agreement, as the
same may be extended from time to time, the consent of the holders of the notes
issued pursuant to the Boomtown Indenture to the Blue Diamond Swap or (ii) such
other means, utilizing such other transactional structure, as Boomtown and
Hollywood Park may devise, in compliance with the Boomtown Indenture (including
without limitation, effecting, prior to or contemporaneously with the Exchange
Date, an asset disposition from Boomtown and Blue Diamond to Hollywood Park or
an Affiliate of Hollywood Park, in compliance with the asset sale restrictions
contained in the Boomtown Indenture).
(i) Boomtown and Blue Diamond shall cooperate
with the Roski Entities in providing such notice to the employees of Blue
Diamond as may be required by the Worker Adjustment and Retraining Notification
Act.
6. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of the Roski Entities.
Each Roski Entity (except Edward P. Roski, Sr. and Roski hereby represents and
warrants on behalf of Edward P. Roski, Sr.) represents and warrants to BD
Transferor and its Affiliates, as of the Effective Date and the Exchange Date
(unless a specific date is referenced below), jointly and severally, as
follows:
(a) Legal Capacity. Roski is an individual with
capacity to contract; he has all requisite power and authority and is entitled
to carry on his business as now being conducted, and to own, lease or operate
his properties in the places where his business is now conducted and where his
properties are now owned, leased or operated.
Each other Roski Entity (other than Edward P.
Roski, Sr.) is duly organized and validly existing under the laws of its
jurisdiction of organization. Such Roski Entity has all requisite power and
authority to, and is entitled to, carry on its business as now conducted and to
own or lease its properties as and in the places where such business is now
conducted and such properties are now owned, leased or operated. Such Roski
Entity is qualified to do business in all foreign jurisdictions in which it is
required to be so qualified, except where the failure to be so qualified would
not have a material adverse effect on the business or assets of such Roski
Entity.
(b) Authorization, etc. Each Roski Entity has
all requisite power and full legal right to enter into this Agreement and the
Related Agreements to which such Roski Entity is a party and to consummate the
transactions contemplated hereby and thereby. This Agreement and each of the
Related Agreements to which such Roski Entity is a party have been duly
executed and delivered by and constitute the valid and binding obligations of
such Roski Entity, enforceable in accordance with their respective terms,
except insofar as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, receivership,
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reorganization, moratorium or other laws providing relief to debtors, or laws
or principles of equity generally.
(c) Execution, Delivery and Performance. Subject
to obtaining the Approvals, neither execution and delivery nor performance of
this Agreement or any of the Related Agreements to which any Roski Entity is a
party by such Roski Entity will, with or without the giving of notice or the
passage of time, or both, conflict with, result in a default, right to
accelerate by any other party to, require any consent not obtained prior to the
Exchange Date with respect to, or result in the creation of any lien, charge or
encumbrance pursuant to any provisions of any material indenture, bond, note,
loan agreement, guaranty, franchise, mortgage, deed of trust, lease or other
agreement by which such Roski Entity is bound or conflict with, result in a
default, right to accelerate by any other party to, or result in the creation
of any lien, charge or encumbrance pursuant to any law, ordinance, rule or
regulation, or any order, judgment, award or decree to which such Roski Entity
is a party or by which it or any part of the Roski Notes may be bound or
affected.
(d) Roski Notes etc. The Roski Notes will, on
the Exchange Date, be the valid and binding obligations of the Designated Roski
Entity, enforceable against the Designated Roski Entity in accordance with its
terms. The Roski Guaranty, if required by Boomtown and Hollywood Park, will be
the valid and binding obligation of Roski, enforceable against Roski in
accordance with its terms. No part of the Roski Notes on the Exchange Date
will be subject to any mortgage, deed of trust, pledge, lien, charge, security
interest, encumbrance, restriction, lease, license, easement, shop rights,
covenants not to sue, or adverse claim of any kind or nature, or other
encumbrances of any kind, rights of use or occupancy, or any other rights or
privileges, other than as set forth in the Related Agreements. In addition to
the Roski Stock, 5,001 shares of Boomtown common stock held by Roski and the
options to acquire Boomtown common stock held by Roski in his capacity as a
Boomtown director, as of the Effective Date no Roski Entity owns any other
securities of Boomtown or any of its Affiliates, or rights (contingent or
otherwise) to acquire securities of Boomtown or any of its Affiliates.
(e) Representations Complete. There is no fact
known to Roski which could reasonably be expected to affect in a materially
adverse manner, the enforceability of the Roski Notes or the ability of any
Roski Entity to carry out the transactions contemplated by this Agreement and
the Related Agreements or for the Designated Roski Entity to satisfy such
Person's obligations under the Roski Notes.
6.2 Representations and Warranties of Boomtown, Blue
Diamond, Hollywood Park and BD Transferor. Each of Boomtown, Blue Diamond and
BD Transferor (other than Hollywood Park) jointly and severally represents and
warrants to the Roski Entities, and, with respect to Subsections 6.2(a)-(c),
Hollywood Park severally represents and warrants to the Roski Entities as to
itself, as of the Effective Date and the Exchange Date (unless a specific date
is referenced below), as follows:
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(a) Organization. Such entity is duly organized
and validly existing under the laws of its jurisdiction of incorporation. Such
entity has all requisite power and authority to, and is entitled to, carry on
its business as now conducted and to own or lease its properties as and in the
places where such business is now conducted and such properties are now owned,
leased or operated. Such entity is qualified to do business in all foreign
jurisdictions in which it is required to be so qualified, except where the
failure to be so qualified would not have a material adverse effect on the
business or assets of such entity.
(b) Authorization, etc. Such entity has all
requisite corporate power and authority to enter into this Agreement and the
Related Agreements to which it is or is to become a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Related Agreements to which it is or is to become a
party by such entity and the consummation by such entity of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
action of such entity. This Agreement has been, and the Related Agreements to
which such entity is or is to become a party have been or will be, duly
executed and delivered by and constitute the valid and binding obligations of
such entity, enforceable in accordance with their respective terms, except
insofar as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, receivership, reorganization, moratorium or other laws providing
relief for debtors or principles of equity generally.
(c) Execution, Delivery and Performance. Subject
to obtaining the Approvals and compliance prior to the Exchange Date with the
Boomtown Indenture, neither execution and delivery nor performance of this
Agreement by such entity will, with or without the giving of notice or the
passage of time, or both, conflict with, result in a default, right to
accelerate by any other party to, or result in the creation of any lien, charge
or encumbrance pursuant to any provisions of such person's organizational
documents or by-laws or any material franchise, mortgage, deed of trust, lease,
license, agreement or understanding, or conflict with, result in a default,
right to accelerate by any other party to, or result in the creation of any
lien, charge or encumbrance pursuant to any law, ordinance, rule or regulation,
or any order, judgment, award or decree to which such entity is a party or by
which it may be bound or affected.
(d) Title to BD Interest. BD Transferor will on
the Exchange Date, immediately prior to the transfer to Roski contemplated
hereby, have valid and marketable title to, and unrestrained right to transfer,
all of the BD Interest. No part of the BD Interest will, prior to such
transfer on the Exchange Date, be subject to any mortgage, deed of trust,
pledge, lien, charge, security interest, encumbrance, restriction, lease,
license, easement, shop rights, covenants not to sue, or adverse claim of any
kind or nature, or other encumbrances of any kind, rights of use or occupancy,
or any other rights or privileges other than Permitted Liens. BD Transferor
makes no representation or warranty as to any interest in the Resort owned by
any Roski Entity prior to the Exchange Date or the effect of any encumbrance
created by any Roski Entity on the Resort.
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(e) Liabilities. Other than the Specified
Liabilities and the liabilities of Blue Diamond and Boomtown arising under the
Boomtown Indenture and the Blue Diamond Lease and certain related documents,
the Assumed Contracts constitute all of the indebtedness and lease obligations
of Boomtown, Blue Diamond, Hollywood Park and BD Transferor incurred in
connection with the Resort.
7. CONDITIONS PRECEDENT.
7.1 Conditions to Execution and Delivery of this
Agreement by Boomtown. This Agreement shall not take effect until Boomtown,
Blue Diamond and Hollywood Park shall have received an original or facsimile
counterpart of this Agreement, duly executed and delivered by the appropriate
Roski Entities.
7.2 Conditions to Execution and Delivery of this
Agreement by Roski. This Agreement shall not take effect until each of the
Roski Entities (excluding Edward P. Roski, Sr.) shall have received an original
or facsimile counterpart of this Agreement, duly executed and delivered by
Boomtown, Blue Diamond and Hollywood Park.
7.3 Conditions to Exchange by BD Transferor. The
obligation of BD Transferor to transfer to Roski the BD Interest in exchange
for the Roski Notes is subject to the satisfaction (or waiver by BD Transferor)
of the conditions set forth below:
(a) The representations and warranties made by
the Roski Entities in this Agreement and the Related Agreements shall be true
and correct in all material respects on and as of the Exchange Date with the
same effect as if made on and as of the Exchange Date, except as otherwise
contemplated by this Agreement and the Related Agreements. Each Roski Entity
shall have performed and complied with all agreements, covenants and conditions
on the part of such Roski Entity required to be performed or complied with on
or prior to the Exchange Date in all material respects.
(b) The execution, delivery and performance of
this Agreement and the Related Agreements and the consummation of the
transactions contemplated by this Agreement and the Related Agreements shall
not violate any law, rule or regulation applicable to BD Transferor, including
without limitation, Gaming Laws, federal and state securities laws or any
order, decree or judgment of any court or governmental body having competent
jurisdiction, and no order shall have been issued by a court of competent
jurisdiction restraining, prohibiting or rendering unlawful the execution,
delivery and performance of this Agreement or the Related Agreements or the
consummation of the transactions contemplated by this Agreement and the Related
Agreements. No default or breach by any Roski Entity shall have occurred and
be continuing in respect of any document, instrument or agreement comprising a
part of the BD Interest, except as would not be material after giving effect to
the transactions contemplated hereby as of the Exchange Date.
(c) All Approvals necessary to effect the
transactions hereunder and under the Related Agreements shall have been
obtained and shall be in full force and effect.
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No Gaming Authority shall have indicated to the parties hereto that in, the
opinion of such Gaming Authority, any Approvals required for the consummation
of the transactions contemplated hereby are likely to be revoked or rejected.
No registration with any governmental authority or agency (except for filing
and recording of UCC statements and real estate documents) which has not been
effected shall be necessary to effect the transactions contemplated hereby.
(d) Roski shall have duly delivered each item
listed in Section 5.4.
(e) All of the conditions precedent to the Merger
shall have been satisfied or waived and the Merger shall have been consummated.
(f) The consummation of the transactions
contemplated by this Agreement and the Stock Purchase Agreement shall not, as a
result of any changes in tax law occurring after the Effective Date (including
without limitation statutory, regulatory, administrative or judicial changes)
create a material risk that the contemplated treatment of the Merger as a
tax-free reorganization would be impaired or adversely affected in the view of
either Boomtown or Hollywood Park, based upon advise of its respective tax
counsel.
(g) Subject to a restructuring in accordance with
Section 3.1, the transactions contemplated by the Roski Stock Purchase
Agreement, including the sale and transfer of the Roski Stock to Hollywood
Park, shall have been consummated.
7.4 Conditions to Exchange by Roski. The obligation of
Roski to transfer to BD Transferor the Roski Notes in exchange for the BD
Interest hereunder shall be subject to the satisfaction (or waiver by Roski) of
the conditions set forth below:
(a) The representations and warranties made by
Boomtown, Blue Diamond, Hollywood Park and BD Transferor in this Agreement and
the Related Agreements shall be true and correct in all material respects on
and as of the Exchange Date with the same effect as if made on and as of the
Exchange Date, except as otherwise contemplated by this Agreement and the
Related Agreements. Each of Boomtown, Blue Diamond, Hollywood Park and BD
Transferor, as applicable, shall have performed and complied with all
agreements, covenants and conditions on the part of such entity required to be
performed or complied with on or prior to the Exchange Date in all material
respects.
(b) The execution, delivery and performance of
this Agreement and the Related Agreements and the consummation of the
transactions contemplated by this Agreement and the Related Agreements shall
not violate any law, rule or regulation applicable to the Roski Entities,
including, without limitation, Gaming Laws, federal and state securities laws,
or any order, decree or judgment of any court or governmental body having
competent jurisdiction, and no order shall have been issued by a court of
competent jurisdiction restraining, prohibiting or rendering unlawful the
execution, delivery and performance of this Agreement or the Related Agreements
or the consummation of the transactions contemplated by this Agreement and the
Related Agreements. No default or breach on the part of
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Boomtown, Blue Diamond, Hollywood Park or BD Transferor shall have occurred and
be continuing in respect of any document, instrument or agreement comprising a
part of the BD Interest, except as would not be material after giving effect to
the transactions contemplated hereby as of the Exchange Date.
(c) All Approvals necessary to effect the
transactions contemplated hereby and by the Related Agreements and for the
Designated Roski Entity (or its designee) to operate the Resort shall have been
obtained. No Gaming Authority shall have indicated to the parties hereto that
the opinion of such Gaming Authority, any Approvals required for the
consummation of the transactions contemplated hereby are likely to be revoked
or rejected. No registration or filing with any governmental agency or
authority (other than UCC filings and recordings in the real estate records)
which has not been effected shall be necessary to effect the transaction
contemplated hereby.
(d) BD Transferor shall have duly delivered each
item listed in Section 5.3 and any other documents of transfer Roski may
reasonably request to effect the transfer of the BD Interest.
8. INDEMNIFICATION.
8.1 Indemnification by the Roski Entities. The Roski
Entities party hereto jointly and severally agree to indemnify and hold
harmless Boomtown, Blue Diamond and BD Transferor and their respective
Affiliates, officers, directors, employees, agents and attorneys against all
claims, losses, liabilities, damages, deficiencies, costs and expenses,
including reasonable attorneys' fees and expenses of investigation incurred by
any of them (a) as a result of any inaccuracy of a representation or breach of
any warranty by any Roski Entity contained herein, in any Related Agreement
delivered pursuant hereto or in the Roski Stock Purchase Agreement by any Roski
Entity, or any failure by any Roski Entity to perform or comply with any
covenant of such Roski Entity contained herein, in any Related Agreement or in
the Roski Stock Purchase Agreement or any other document delivered by any Roski
Entity pursuant hereto or thereto, (b) related to any costs, expenses, claims,
liabilities or obligations incurred in connection with the Resort arising or
accruing prior to the "Original Term" of the Blue Diamond Lease (as defined
therein) or arising or accruing on or after the Exchange Date (including, but
not limited to, any costs, expenses, claims, liabilities or obligations arising
in connection with the Assumed Contracts or Hazardous Substances) or in
connection with the Specified Liabilities as of the Exchange Date, other than
the consequences of any act or omission by Boomtown, Blue Diamond or any of
their respective Affiliates, officers, directors, agents, employees or
attorneys, (c) related to any guaranties made by Boomtown, Blue Diamond or any
of their Affiliates of any obligations of IVAC or any of its Affiliates under
construction or development financing relating to the Resort or any bond or
similar obligations with Clark County, Nevada, or (d) as a result of acts or
omissions of the Roski Entities, including but not limited to acts or omissions
related to the construction of the Resort.
8.2 Indemnification by Boomtown, Blue Diamond and BD
Transferor. Boomtown, Blue Diamond and BD Transferor jointly and severally
agree to indemnify and
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hold harmless the Roski Entities and their respective Affiliates, officers,
directors, employees, agents and attorneys against all claims, losses,
liabilities, damages, deficiencies, costs and expenses, including reasonable
attorneys' fees and expenses of investigation incurred by any of them (a) as a
result of any inaccuracy of a representation or breach of any warranty by
Boomtown, Blue Diamond or BD Transferor contained herein or in any Related
Agreement delivered pursuant hereto by Boomtown, Blue Diamond or BD Transferor,
or any failure by Boomtown, Blue Diamond or BD Transferor to perform or comply
with any covenant of Boomtown, Blue Diamond or BD Transferor contained herein
or in any Related Agreement, or any such other document delivered by Boomtown,
Blue Diamond or BD Transferor pursuant hereto or thereto and (b) related to any
costs, expenses, claims, liabilities or obligations of the Resort both accruing
during the "Original Term" of the Blue Diamond Lease (as defined therein) and
arising or accruing prior to the Exchange Date (including, but not limited to,
any costs, expenses, claims, liabilities, or obligations arising in connection
with the Assumed Contracts or, except as set forth below, Hazardous Substances)
other than (i) the Specified Liabilities as of the Exchange Date, (ii)
obligations accruing under the Assumed Contracts on or after the Exchange Date
and (iii) the consequences of any act or omission by any of the Roski Entities
or any of their respective Affiliates, officers, directors, employees, agents
or attorneys. Notwithstanding the foregoing, (i) in no event shall the BD
Transferor (other than Blue Diamond and Boomtown) have any liability or
responsibility for any "Hazardous Substances" (as defined in the Blue Diamond
Lease) or any other environmental matters with respect to the Resort, (ii) in
no event shall the liability of Boomtown for any such Hazardous Substances or
any other environmental matters with respect to the Resort exceed the remaining
principal amount of the Note the form of which is attached hereto as Exhibit
B-1 as of the date a claim for indemnity is made hereunder, and (iii) the
extent of the liability of Boomtown and Blue Diamond for all Hazardous
Substances or other environmental matters shall be limited to applicable law or
to the extent of liability under Blue Diamond's paragraph 6.2(c) of the Blue
Diamond Lease. In addition, from and after the Exchange Date, Boomtown shall
continue at all times to indemnify Roski with respect to his actions as a
director of Boomtown to the same extent as it is obligated to provide such
indemnification immediately prior to the Exchange Date. In no event shall the
provisions of this section 8.2 subject Hollywood Park to any indemnity
obligation or other liability, contingent or otherwise, regardless of whether
Hollywood Park is designated as BD Transferor.
8.3 Procedure. Upon obtaining knowledge of the
institution of any action, proceeding, or other event which could give rise to
a claim of indemnity pursuant to this Section 8, the party seeking
indemnification (the "indemnified party") shall promptly give written notice
thereof to the other party (the "indemnifying party"); provided, however, that
the failure to give such notice shall not relieve the indemnifying party of its
obligations under this Section 8 unless it is materially prejudiced by such
failure. Each party will cooperate with the other in determining the validity
of any such claim or assertion. If such claim or demand relates to a claim or
demand asserted by a third party, the indemnifying party shall have the right
at its expense to employ counsel satisfactory to the indemnified party to
defend such claim or demand and the indemnified party shall have the right, but
not the obligation, to participate in the defense of any such claim or demand
at its expense. Each party agrees not to settle or compromise any such third
party suit, claim or proceeding without the prior written
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consent of the other, which consent shall not be unreasonably withheld. The
indemnified party shall make available to the indemnifying party all records
and other materials reasonably required by it in contesting a claim or demand
asserted by a third party against the indemnified party and shall cooperate in
the defense thereof.
9. ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES.
9.1 Approvals. The parties agree to use their best
efforts and to cooperate with each other to obtain the Approvals necessary to
effect the transactions hereunder.
9.2 Consents, Authorizations and Waivers. The parties
agree to use their best efforts and to cooperate with each other to obtain,
prior to the Exchange Date, all consents, authorizations or waivers necessary
to assign the Assumed Contracts to the Designated Roski Entity. If the parties
are unable to obtain any consents, authorizations or waivers necessary to
assign any of the Assumed Contracts, the Designated Roski Entity shall
indemnify the BD Transferor against any claims or losses resulting from the
failure to obtain such consents, authorizations or waivers. The parties agree
that any failure to so obtain such consents, authorizations or waivers shall
not prevent the parties from, or relieve the parties from the obligation of,
consummating the transactions contemplated hereunder.
9.3 Transfer Taxes. The parties acknowledge and agree
that all transfer, stamp, recording and similar taxes assessed or otherwise
payable by reason of the conveyances contemplated hereby, or in connection with
the Blue Diamond Swap, shall be for the account of the Roski Entities. The
parties agree to cooperate with each other to the extent legally permitted to
minimize any such taxes and charges.
9.4 Additional Deliveries; Further Assurances. After the
Effective Date, each party to this Agreement shall, at the request of the
other, furnish, execute, and deliver such documents, instruments, certificates,
notices or other further assurances as the requesting party shall reasonably
request as necessary or desirable to effect complete consummation of this
Agreement, the Related Agreements and the transactions contemplated hereby and
thereby. After the Exchange Date, Roski and its Affiliates shall, at the
request of BD Transferor, (a) execute and deliver and file or record, such
further instruments of sale, conveyance, transfer and assignment, and (b) take
such other actions as BD Transferor may reasonably request in order to
effectuate the purposes hereof. After the Exchange Date, BD Transferor and its
Affiliates shall, at the request of Roski, (a) take such further actions as may
be reasonably necessary to vest in the applicable Roski Entity title to the BD
Interest, (b) execute and deliver and file or record, such further instruments
of sale, conveyance, transfer and assignment, and (c) take such other actions,
as Roski may reasonably request in order effectively to sell, convey, transfer
and assign the BD Interest to Roski and otherwise to effectuate the purposes
hereof.
9.5 Maintenance of Resort Business. During the period
from the Effective Date until the Exchange Date, Boomtown, Blue Diamond and BD
Transferor (but not Hollywood Park, regardless of whether Hollywood Park is
designated as BD Transferor) agree
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to operate the Resort in all material respects in the ordinary course of
business at not less than the same standards of operation, maintenance,
services and advertising as are in effect as of the Effective Date and agree to
remain in compliance in all material respects with the Blue Diamond Lease at
all times. Without limiting the foregoing, from the Effective Date until the
Exchange Date Boomtown, Blue Diamond and BD Transferor agree not to transfer
from the Resort any material assets thereof.
9.6 Director's Insurance. Boomtown shall continue to
provide insurance covering Roski with respect to his actions as a director of
Boomtown, to the extent that such insurance is provided for directors or former
directors of Boomtown, as set forth in the Merger Agreement.
10. TERMINATION.
10.1 Termination. If (a) the Exchange Date has not
occurred prior to or on June 30, 1997, or, if the Merger Agreement is extended,
such later date as may then be the scheduled termination date of the Merger
Agreement, or such later date as may have been agreed to by the parties in
writing, or (b) the Merger Agreement has terminated in accordance with its
terms, then this Agreement and the Related Agreements shall, on such date,
automatically and without further action by either party, terminate and have no
further force and effect. In addition, if any representation or warranty made
by any party herein or in any Related Agreement shall prove to have been false,
inaccurate or misleading in any material respect when made, then the party to
whom such representation or warranty is made may terminate this Agreement and
the Related Agreements by notice to the breaching party any time prior to the
Exchange Date. In the event that this Agreement shall terminate by reason of
the material falsity, inaccuracy or misleading character of any representation
or warranty, the party to whom such representation or warranty is made shall
retain, both before and after such termination, all rights and remedies
available under applicable law.
10.2 Other Merger. Notwithstanding any other provision of
this Agreement, if Boomtown enters into a merger or similar transaction with
any person or entity other than Hollywood Park, the failure of the Merger to be
consummated shall not result in the termination of this Agreement or any of the
Related Agreements except as to Hollywood Park. Boomtown shall cause any such
person or entity with which it plans to enter into a merger or similar
transaction to become a party to this Agreement and the Related Agreements and
to assume the obligations of Hollywood Park hereunder and thereunder. Nothing
in this Agreement shall alter the rights or obligations of Hollywood Park and
Boomtown under the Merger Agreement.
11. MISCELLANEOUS.
11.1 Changes, Waivers, etc. Neither this Agreement nor
any provision hereof may be changed, waived, discharged or terminated orally,
except by a statement in writing which references this Agreement and is signed
by the party against whom enforcement of the change, waiver, discharge or
termination is sought.
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<PAGE> 27
11.2 Payment of Fees and Expenses. Each of the parties
hereto shall pay its own respective fees and expenses incurred in connection
herewith. In the event of any litigation or other proceeding resulting from a
dispute hereunder, the legal fees, costs and expenses of the prevailing party
shall be paid by the losing party.
11.3 Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall be
delivered, or mailed first-class postage prepaid, registered or certified mail,
or delivered via overnight courier;
If to Hollywood Park: Hollywood Park, Inc.
1050 South Prairie Avenue
Inglewood, California 90301
Attention: Michael Finnigan
with copy to: Irell & Manella LLP
1800 Avenue of the Stars
Suite 900
Los Angeles, CA 90067
Attention: Al Segel, Esq.
If to Boomtown or Boomtown, Inc.
Blue Diamond: Interstate 80/Garson Road
Verdi, Nevada 89439
Attention: Timothy J. Parrott
with copy to: Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94306
Attention: John V. Roos, Esq.
If to any Roski Entity: Edward P. Roski, Jr.
Majestic Realty Co.
13191 Crossroads Parkway North
6th Floor
City of Industry, California 91746
with a copy to: Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: David B. Rogers, Esq.
Such notices and other communications shall for all purposes of this Agreement
be treated as being effective or having been given on the date of delivery, if
delivered personally, one (1) day following the date of delivery, if delivered
by overnight courier or, if sent by mail, five (5) days thereafter.
-24-
<PAGE> 28
11.4 Entire Agreement. This Agreement and the Related
Agreements, including the schedules and exhibits which are incorporated into
and made an integral part of this Agreement or any of the Related Agreements by
reference, set forth the entire understanding of the parties and supersede all
prior agreements of the parties with respect to the subject matter hereof and
thereof.
11.5 Survival of Representations and Warranties, etc. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement.
11.6 Headings; References to Agreement. The headings of
the sections of this Agreement have been inserted for convenience of reference
only and do not constitute a part of this Agreement. References herein to
"this Agreement" shall include all exhibits and schedules hereto.
11.7 Choice of Law; Interpretation. THIS AGREEMENT SHALL
FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEVADA (WITHOUT REFERENCE TO CONFLICTS OF LAW).
11.8 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but which
shall together constitute but one and the same instrument. To make proof of
this Agreement, it shall only be necessary to produce one such counterpart.
11.9 Severability. To the extent any provision of this
Agreement shall be invalid or unenforceable, it shall be considered deleted
from this Agreement and the remaining provisions of this Agreement shall be
unaffected and shall continue in full force and effect.
11.10 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that neither party may
assign its rights or obligations hereunder other than to an Affiliate without
the prior written approval of the other party.
11.11 No third Party Beneficiaries. This Agreement is not
intended to confer upon any person or entity other than each party hereto (and
their successors and assigns permitted hereby) any rights or remedies
hereunder.
11.12 Waiver of Jury Trial. EACH PARTY HERETO KNOWINGLY,
ABSOLUTELY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS IT MAY OTHERWISE HAVE
HAD TO A TRIAL BY JURY WITH RESPECT TO OR IN CONNECTION WITH THIS AGREEMENT,
THE RELATED DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.
-25-
<PAGE> 29
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered as of the date and year first above written.
BOOMTOWN, INC.
By: /s/ TIMOTHY J. PARROTT /s/ EDWARD P. ROSKI, JR.
----------------------------- ------------------------------
EDWARD P. ROSKI, JR.
Title:
--------------------------
BLUE DIAMOND HOTEL & CASINO, INC. IVAC
By: EDWARD P. ROSKI, JR.
its General Partner
By: /s/ TIMOTHY J. PARROTT
-----------------------------
Title: /s/ EDWARD P. ROSKI, JR.
--------------------------- ------------------------------
EDWARD P. ROSKI, JR.
HOLLYWOOD PARK, INC. MAJESTIC REALTY CO.
By: /s/ G. MICHAEL FINNIGAN By: /s/ EDWARD P. ROSKI
----------------------------- ------------------------------
Title: Title:
-------------------------- -----------------------
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<PAGE> 30
Exhibit A
FORM OF
MUTUAL RELEASE
This MUTUAL RELEASE ("Mutual Release") is given and entered into as of
______ __, 199__ , by and among the following parties: (i) Edward P. Roski,
Jr., IVAC and Majestic Realty Co. (collectively, the "Roski Entities") and (ii)
BD Transferor, Boomtown, Blue Diamond and their respective Affiliates
(collectively, the "Boomtown Entities").
All terms used without definition herein shall have the respective
meanings ascribed to such terms in the Blue Diamond Swap Agreement Dated as of
August 12, 1996 (the "Swap Agreement") by and among Boomtown, Inc., Blue
Diamond Hotel & Casino, Inc., Hollywood Park, Inc., Edward P. Roski, Jr., IVAC
and Majestic Realty Co. to which the form of this Mutual Release is an Exhibit.
WHEREAS, IVAC owns certain real property in Las Vegas, Nevada, on
which a resort consisting of a casino, hotel, restaurant and related facilities
(as more fully defined in the Swap Agreement, the "Resort") has been built by
Majestic and is being operated by Blue Diamond;
WHEREAS, Boomtown has advanced certain funds to IVAC to enable IVAC to
complete development and construction of the Resort, which advances are
evidenced by certain promissory notes issued by IVAC, which notes are governed
by loan agreements and secured by deeds of trust on the Resort site and certain
related property;
WHEREAS, Blue Diamond has entered into a lease with IVAC for the
Resort site, and has purchased and installed certain trade fixtures in the
Resort;
WHEREAS, Hollywood Park intends to enter into a strategic combination
(the "Merger") with Boomtown pursuant to an Agreement and Plan of Merger dated
as of April 23, 1996 by and among BD Transferor, Boomtown and HP Acquisition
Inc., a Delaware corporation and a wholly-owned subsidiary of Hollywood Park
(as amended and in effect from time to time, the "Merger Agreement");
WHEREAS, subject to consummation of the Merger pursuant to the Merger
Agreement, Boomtown and Blue Diamond might agree to transfer their respective
interests in the Resort to Hollywood Park or one or more Affiliates of
Hollywood Park designated by Hollywood Park, and Hollywood Park or such
Affiliate(s) might acquire and accept such interests;
WHEREAS, it is the intent of the parties hereto that, upon
consummation of the Merger pursuant to the Merger Agreement, subject to the
terms and conditions set forth in the Swap Agreement, the holder of such
interests in the Resort, regardless of whether such holder is then Boomtown,
Blue Diamond, Hollywood Park, any designated Affiliate of Hollywood Park, or
any
A-1
<PAGE> 31
combination thereof (any such holder(s), "BD Transferor") would exchange such
interests in the Resort for the Roski Notes or would effect the same result
through a series of related transactions, and, in either case, Roski would
either exchange the Roski Notes Paper for such interests in the Resort (such
exchange, the "Blue Diamond Swap");
NOW, THEREFORE, in accordance with the foregoing recitals, and for
good and valuable consideration receipt of which is hereby acknowledged, the
parties hereto are desirous of putting to rest all disputes and controversies
between them and the other parties hereto arising from, related to, or in any
way connected with any and all obligations, liabilities and claims relating to
the Affiliate Note, the Bridge Note, the Affiliate Loan Agreement, the Bridge
Loan Agreement, the Purchase Option Agreement, the Affiliate Loan Deed of
Trust, the Bridge Loan Deed of Trust, the Purchase Option Deed of Trust, the
Blue Diamond Lease, the Boomtown Stockholders Agreement dated as of June 30,
1996, Boomtown, Roski and IVAC, and the Stockholders and Affiliates Agreement
dated as of June 30, 1993, by and among Blue Diamond, Roski, Edward P. Roski,
Sr., Boomtown, IVAC and Majestic (all such documents, instruments and
agreements, collectively, the "Blue Diamond Documents"). Accordingly, each of
the Boomtown Entities and the Roski Entities hereby agree and covenant as
follows:
1. Release by Roski Entities. As of the date hereof, the Roski
Entities forever release, discharge and acquit the Boomtown Entities, and each
Boomtown Entity's present, former or future directors, partners, principals,
officers, employees, agents, trustees, attorneys, parents, subsidiaries,
Affiliates, divisions, representatives, predecessors or successors,
partnerships or corporations, and their respective administrators, successors
and assigns, from any and all claims, demands, rights and causes of action,
known or unknown, suspected or unsuspected, fixed or contingent, including,
without limitation, all legal fees and costs, that they or any of them may have
acquired or hereafter acquire against each or any other of them, based upon,
arising from, or in any way connected with or related to the Specified Assets,
the Specified Liabilities, the BD Interest, the Resort or the Blue Diamond
Documents, including the obligations arising under the Blue Diamond Lease;
provided, that nothing contained herein shall operate to release any Boomtown
Entity from its obligations under the Swap Agreement and the Related
Agreements.
2. Release by Boomtown Entities. As of the date hereof, the
Boomtown Entities forever release, discharge and acquit each of the Roski
Entities, and each Roski Entity's present, former or future directors,
partners, principals, officers, employees, agents, trustees, attorneys,
parents, subsidiaries, affiliates, divisions, representatives, predecessors or
successors, partnerships or corporations, and their respective administrators,
successors and assigns, from any and all claims, demands, rights and causes of
action, known or unknown, suspected or unsuspected, fixed or contingent,
including, without limitation, all legal fees and costs, that they or any of
them may have acquired or hereafter acquire against each or any other of them,
based upon, arising from, or in any way connected with or related to the Blue
Diamond Documents; provided, that nothing contained herein shall operate to
release any Roski Entity from its obligations under the Swap Agreement, and the
Related Agreements or from liability arising from or relating to Roski's role
as a director of Boomtown. Such release shall not effect the availability to
Roski of any indemnification or directors' and officers' insurance covering any
claims relating to his activities as a director.
A-2
<PAGE> 32
3. Mutual Release as Defense. Each party to this Mutual Release
understands, acknowledges and agrees that this Mutual Release may be pleaded as
a full and complete defense to, and used as a basis for an injunction against,
any action, suit or other proceeding that may be instituted, prosecuted or
attempted in breach of this Mutual Release.
4. Successors and Assigns. Each party to this Mutual Release
understands, acknowledges and agrees that this Mutual Release shall be binding
on each of them and upon their respective successors, representatives, and
assigns.
5. Beneficiaries. Each party to this Mutual Release understands,
acknowledges and agrees that this Mutual Release inures to the benefit of all
other persons described in paragraphs 1 and 2 above.
6. Entire Agreement. Each party to this Mutual Release
understands, acknowledges and agrees that this Mutual Release constitutes the
entire agreement among the parties regarding the release of the matters set
forth herein and that this Mutual Release may not be altered, amended,
modified, or otherwise changed in any respect whatsoever except in writing
signed by the parties hereto.
7. Parties Represented by Counsel, Etc. Each party to this
Mutual Release understands, represents and warrants that it has entered into
this Mutual Release upon the legal advice of its attorneys, that said attorneys
have explained the terms of this Mutual Release, and that each party has read,
fully understands, and voluntarily accepts the terms of this Mutual Release.
8. Authority. Each signatory to this Mutual Release who signs on
behalf of another hereby warrants that he or she has the authority to sign on
behalf of said person or entity.
9. Counterparts. This Mutual Release may be executed in one or
more counterparts. All executed counterparts, and each of them, shall be
deemed to be one and the same instrument. Counsel for the parties to this
Mutual Release shall exchange among themselves original signed counterparts.
10. Construction. This Mutual Release or any uncertainty or
ambiguity herein shall be construed as if this Mutual Release was jointly
prepared by the parties hereto.
11. GOVERNING LAW. THIS MUTUAL RELEASE, IN ALL RESPECTS, SHALL BE
INTERPRETED, ENFORCED AND GOVERNED BY AND UNDER THE INTERNAL SUBSTANTIVE LAWS
OF THE STATE OF NEVADA AS THEY EXIST ON THE DATE THAT THIS MUTUAL RELEASE IS
FULLY EXECUTED BY THE PARTIES.
12. No Transfer. Each party to this Mutual Release acknowledges,
represents and warrants that it has not assigned, sold, transferred or
otherwise disposed of any of the claims, demands, rights and causes of action
described in paragraph 1 above except, if applicable, the transfer of the BD
Interest to BD Transferor.
A-3
<PAGE> 33
13. Unknown Claims. With respect to the matters described in
paragraphs 1 and 2 above, each party to this Mutual Release acknowledges that
it may have sustained damages, losses, fees, costs or expenses that are
presently unknown and unsuspected, and that such damages, losses, fees, costs,
or expenses as may have been sustained by the party or parties hereto might
give rise to additional damages, losses, fees, costs or expenses in the future.
Notwithstanding such unknown claims, the parties to this Mutual Release
acknowledge that each signatory hereto has been advised by an attorney
concerning the effect of the Mutual Release on any and all unknown and
presently unsuspected claims and such parties wish to expressly release and
extinguish any and all disputes and controversies as described in paragraphs 1
and 2, above, between and among them, whether now known or unknown, which such
parties hereto may have, or claim at any future time to have against any or all
of the parties hereto, based in whole or in part, upon any act or omission to
the date of this Mutual Release, without regard to present actual knowledge of
such acts or omissions. Each party to this Mutual Release understands,
acknowledges and agrees that if any fact now believed to be true is found
hereafter to be other than, or different from, that which is now believed, each
expressly assumes the risk of such difference in fact and agrees that this
Mutual Release shall be, and will remain, effective notwithstanding any such
difference in fact. As to the matters covered by this Mutual Release, each
party does hereby expressly waive and relinquish, to the fullest extent
permitted by law, the provisions, rights, and benefits of any applicable law,
including the common law and any and all other provisions, rights and benefits
of any state or federal law, rule or regulation.
A-4
<PAGE> 34
IN WITNESS WHEREOF, intending to be legally bound, the undersigned
have caused this Mutual Release to be duly executed and delivered, to take
effect as a contract under the laws of the State of Nevada as of the date first
hereinabove written.
BOOMTOWN, INC.
By:
----------------------------------- ---------------------------------
EDWARD P. ROSKI, JR.
Title:
-------------------------------
BLUE DIAMOND HOTEL & CASINO, INC. IVAC
By: EDWARD P. ROSKI, JR.
its General Partner
By:
----------------------------------
Title:
------------------------------- ---------------------------------
EDWARD P. ROSKI, JR.
HOLLYWOOD PARK, INC. MAJESTIC REALTY CO.
By: By:
---------------------------------- -----------------------------
Title: Title:
------------------------------- --------------------------
[BD Transferor, if not named above]
By:
----------------------------------
Title:
-------------------------------
A-5
<PAGE> 35
Exhibit B-1
FORM OF PROMISSORY NOTE
$____________
Los Angeles, California
_______ __, 199_
FOR VALUE RECEIVED, [ ] (the "Maker") hereby absolutely
and unconditionally promises to pay to [ ] (the "Holder"), or order, in
accordance with the payment schedule set forth below, in immediately available
funds, the principal amount of ____________________ Dollars ($____________),
and to pay interest on the unpaid principal amount hereof at an annual rate of
interest equal to the rate announced by Bank of America from time to time as
its "reference rate", adjusted on the first business day of the next succeeding
calendar month after any change to such rate is announced, plus one and one
half percent (1.5%), in immediately available funds; payable annually in
arrears on the anniversary of the issuance of this Note provided, that interest
on any amounts not paid when due hereunder shall accrue at an annual rate which
is two percent (2%) above the rate otherwise payable hereunder; and provided,
further, that in no event shall the interest rate of this Note exceed the
maximum rate permitted by applicable law. This Note is issued pursuant to the
Blue Diamond Swap Agreement dated as of August 12, 1996 (the "Swap Agreement")
by and among the Maker, the Holder and certain other parties named therein and
constitutes one of the "Roski Notes" described therein. Capitalized terms
defined in the Swap Agreement, whether directly or indirectly by reference,
shall have the respective meanings herein assigned to such terms in the Swap
Agreement.
Principal obligations of the Maker evidenced hereby shall be paid in
four (4) equal installments of $1,000,000 each, on each anniversary of the
issuance date of this Note, and an additional, final payment on the [ ]
anniversary thereof in an amount equal to all obligations of the Maker then
outstanding hereunder.
Upon the occurrence and during the continuance of any of the
following events (each, an "Event of Default"): (i) failure to pay any
interest accrued hereunder within five days following the date such payment was
due, or the failure to pay any principal amount owing by the Maker hereunder
when due and payable, (ii) material falsity of any representations or
warranties by the Maker in the Swap Agreement, (iii) initiation of any
bankruptcy, insolvency, moratorium, receivership or reorganization by or
against the Maker, or (iv) acceleration of any indebtedness in excess of
$1,000,000 by other creditors of the Maker, the entire unpaid principal balance
of this Note, all of the unpaid interest accrued thereon and all other amounts
owing in respect thereof may automatically become, in the case of a default
under clauses (iii) or (iv), or may be declared, in the case of a default under
clauses (i) or (ii), to be immediately due and payable. Thereupon, the Holder
may proceed to enforce its rights and remedies under this Note and applicable
law, all of such remedies being cumulative and not exclusive.
No delay or omission on the part of the Holder or any holder hereof
in exercising any right hereunder shall operate as a waiver of such right or
any other right of the Holder or of
B-1
<PAGE> 36
such holder, nor shall any delay, omission or waiver of any one occasion be
deemed a bar to or waiver of the same or any other right or any other occasion.
The Maker and every endorser and guarantor of this Note regardless of the time,
order or place of signing hereby waives presentment, demand, protest and notice
of every kind, and assents to any extension or postponement of the time for
payment or any other indulgence, to any substitution, exchange or release of
collateral, and to the addition or release of any other party or person or
entity primarily or secondarily liable.
All costs incurred in any litigation arising from this Note shall be
borne by the prevailing party. All other expenses of enforcement of the
Holder's rights hereunder (including reasonable legal and other professional
fees) shall be for the account of the Maker.
THIS NOTE SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA (WITHOUT REFERENCE TO CONFLICTS
OF LAW).
This Note shall be binding upon the Maker's successors and assigns,
and shall inure to the benefit of the Holder's successors and assigns.
B-2
<PAGE> 37
IN WITNESS WHEREOF, the Maker has caused this Note to be [duly]
executed [by its duly authorized officer] to take effect as of the date first
hereinabove written.
[Maker]
By: ____________________________
[Title: __________________________]
B-3
<PAGE> 38
Exhibit B-2
FORM OF PROMISSORY NOTE
$____________Los Angeles, California
_______ __, 199_
FOR VALUE RECEIVED, [ ] (the "Maker") hereby absolutely
and unconditionally promises to pay to [ ] (the "Holder"), or order, in
accordance with the payment schedule set forth below, in immediately available
funds, the principal amount of ____________________ Dollars ($____________),
and to pay interest on the unpaid principal amount hereof at an annual rate of
interest equal to the rate announced by Bank of America from time to time as
its "reference rate", adjusted on the first business day of the next succeeding
calendar month after any change to such rate is announced, plus one half
percent (.5%), in immediately available funds; payable annually in arrears on
the anniversary of the issuance of this Note provided, that interest on any
amounts not paid when due hereunder shall accrue at an annual rate which is two
percent (2%) above the rate otherwise payable hereunder; and provided, further,
that in no event shall the interest rate of this Note exceed the maximum rate
permitted by applicable law. This Note is issued pursuant to the Blue Diamond
Swap Agreement dated as of August 12, 1996 (the "Swap Agreement") by and among
the Maker, the Holder and certain other parties named therein and constitutes
one of the "Roski Notes" described therein. Capitalized terms defined in the
Swap Agreement, whether directly or indirectly by reference, shall have the
respective meanings herein assigned to such terms in the Swap Agreement.
Principal obligations of the Maker evidenced hereby shall be paid in
full on the third anniversary of the issuance date of this Note in an amount
equal to all obligations of the Maker then outstanding hereunder.
Upon the occurrence and during the continuance of any of the
following events (each, an "Event of Default"): (i) failure to pay any
interest accrued hereunder within five days following the date such payment was
due, or the failure to pay any principal amount owing by the Maker hereunder
when due and payable, (ii) material falsity of any representations or
warranties by the Maker in the Swap Agreement, (iii) initiation of any
bankruptcy, insolvency, moratorium, receivership or reorganization by or
against the Maker, or (iv) acceleration of any indebtedness in excess of
$1,000,000 by other creditors of the Maker, the entire unpaid principal balance
of this Note, all of the unpaid interest accrued thereon and all other amounts
owing in respect thereof may automatically become, in the case of a default
under clauses (iii) or (iv), or may be declared, in the case of a default under
clauses (i) or (ii), to be immediately due and payable. Thereupon, the Holder
may proceed to enforce its rights and remedies under this Note and applicable
law, all of such remedies being cumulative and not exclusive.
No delay or omission on the part of the Holder or any holder hereof
in exercising any right hereunder shall operate as a waiver of such right or
any other right of the Holder or of such holder, nor shall any delay, omission
or waiver of any one occasion be deemed a bar to
B-4
<PAGE> 39
or waiver of the same or any other right or any other occasion. The Maker and
every endorser and guarantor of this Note regardless of the time, order or
place of signing hereby waives presentment, demand, protest and notice of every
kind, and assents to any extension or postponement of the time for payment or
any other indulgence, to any substitution, exchange or release of collateral,
and to the addition or release of any other party or person or entity primarily
or secondarily liable.
All costs incurred in any litigation arising from this Note shall be
borne by the prevailing party. All other expenses of enforcement of the
Holder's rights hereunder (including reasonable legal and other professional
fees) shall be for the account of the Maker.
THIS NOTE SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA (WITHOUT REFERENCE TO CONFLICTS
OF LAW).
This Note shall be binding upon the Maker's successors and assigns,
and shall inure to the benefit of the Holder's successors and assigns.
B-5
<PAGE> 40
IN WITNESS WHEREOF, the Maker has caused this Note to be [duly]
executed [by its duly authorized officer] to take effect as of the date first
hereinabove written.
[Maker]
By: ____________________________
[Title: __________________________]
B-6
<PAGE> 41
EXHIBIT C
FORM OF
TERMINATION AGREEMENT
This Termination Agreement (this "Agreement") is made as of this __
day of ____, 199_, by and among Boomtown, Inc., a Delaware corporation
("Boomtown"), Blue Diamond Hotel & Casino, Inc., a Nevada corporation and a
wholly-owned subsidiary of Boomtown ("Blue Diamond"), Hollywood Park, Inc., a
Delaware corporation ("Hollywood Park") [Blue Diamond Transferor, if not
already named ("BD Transferor")], Edward P. Roski, Jr., an individual residing
in California ("Roski"), Majestic Realty Co., a California corporation
("Majestic") and IVAC, a California general partnership of which Roski is a
general partner ("IVAC").
WHEREAS, the parties hereto have entered into a Blue Diamond Swap
Agreement dated as of August 12, 1996 (as amended and in effect from time to
time, the "Swap Agreement");
WHEREAS, it is a condition precedent to the consummation of the Blue
Diamond Swap (as defined in the Swap Agreement), that the parties hereto
terminate their respective obligations under the Blue Diamond Documents (as
defined below) on the terms set forth herein;
NOW THEREFORE, in consideration of the foregoing premises, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Definitions.
(a) "Blue Diamond Documents" shall mean, collectively, the
Stockholders and Affiliates Agreement dated as of June 30, 1993, the Affiliate
Note, the Bridge Note, the Affiliate Loan Agreement, the Bridge Loan Agreement,
the Purchase Option Agreement, the Affiliate Loan Deed of Trust, the Bridge
Loan Deed of Trust, the Purchase Option Deed of Trust and the Blue Diamond
Lease, the Boomtown Stockholders Agreement dated as of June 30, 1996, Boomtown,
Roski and IVAC, and the Stockholders and Affiliates Agreement dated as of June
30, 1993, by and among Blue Diamond, Roski Edward P. Roski, Sr., Boomtown, IVAC
and Majestic.
(b) "Note Documents" shall mean (i) the Indenture dated
as of November 1, 1993, by and among Boomtown, Blue Diamond, certain of their
affiliates and First Trust National Association as trustee and (ii) the
documents listed in Sections 5.3(h), (i) and (j) of the Swap Agreement.
(c) Terms defined in the Swap Agreement (whether directly
or indirectly by reference) and used herein without definition shall have the
respective meanings herein assigned to such terms in the Swap Agreement.
C-1
<PAGE> 42
EXHIBIT C
Section 2. Satisfaction or Waiver of Conditions Precedent. Each
of the parties hereto acknowledges that the conditions precedent to its
obligation to effect the Blue Diamond Swap have been satisfied or waived. The
Designated Roski Entity hereby accepts the BD Interest in its present
condition, and acknowledges receipt of the Blue Diamond Documents. No
liabilities arising under the Blue Diamond Documents shall survive such
termination; provided, that the foregoing shall not be construed to relieve the
applicable parties of the Surviving Indemnities or any liabilities arising
under the Swap Agreement or the Related Documents or in connection with the
transactions contemplated thereby.
Section 3. Termination of Blue Diamond Documents. Each of the
Blue Diamond Documents shall be automatically terminated as of the date of this
Agreement, without the necessity of further action by any party, and shall have
no further force or effect.
Section 4. Release. Each party hereto is delivering the Release
contemporaneously with this Agreement.
Section 5. Release of Collateral Security. The Roski Entities
acknowledge receipt, as of the date hereof, of termination statements,
releases, discharges, quitclaim deeds and other appropriate documents and
instruments to terminate of record each of the filings and recordings listed on
Schedule 1 hereto. Each of the parties hereto (a) acknowledges that any other
party may record or file the discharges, termination statements, quitclaim
deeds and similar documents delivered to such party pursuant to the Swap
Agreement, to evidence of record the release of the security interests and
liens granted pursuant to the Blue Diamond Documents and the Note Documents,
and (b) agrees to execute and deliver such additional documents and
instruments, and take such other action, as any other party may reasonably
request to release of record all such security interests and liens, all at the
expense of the requesting party.
Section 6. Counterparts. This Agreement may be executed in any
number of counterparts, which shall together constitute but one and the same
agreement. To make proof of this Agreement, it shall only be necessary to
produce one such counterpart.
Section 7. GOVERNING LAW. THIS AGREEMENT SHALL FOR ALL PURPOSES
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA
(WITHOUT REFERENCE TO CONFLICTS OF LAW).
C-2
<PAGE> 43
IN WITNESS WHEREOF, each of the parties hereto has caused its duly
authorized representative to execute this agreement to take effect under the
laws of the State of Nevada as of the date first hereinabove written.
BOOMTOWN, INC.
By:
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EDWARD P. ROSKI, JR.
Title:
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BLUE DIAMOND HOTEL & CASINO, INC. IVAC
By: EDWARD P. ROSKI, JR.
its General Partner
By:
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Title:
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EDWARD P. ROSKI, JR.
HOLLYWOOD PARK, INC. MAJESTIC REALTY CO.
By: By:
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Title: Title:
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BD Transferor, if not named above
By:
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Title:
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C-3
<PAGE> 1
EXHIBIT 99.8
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of the
12th day of August, 1996 by and between Hollywood Park, Inc., a Delaware
corporation ("Hollywood Park"), and Edward P. Roski, Jr., an individual
residing in the State of California ("Roski").
WHEREAS, Hollywood Park intends to enter into a strategic combination
(the "Merger") with Boomtown, Inc., a Delaware corporation ("Boomtown"),
pursuant to an Agreement and Plan of Merger dated as of April 23, 1996 by and
among Hollywood Park, Boomtown and HP Acquisition, Inc., a Delaware corporation
and a wholly-owned subsidiary of Hollywood Park (as amended and in effect from
time to time, the "Merger Agreement"); and
WHEREAS, subject to consummation of the Merger pursuant to the Merger
Agreement and certain other conditions set forth herein, Hollywood Park intends
to purchase from Roski, and Roski intends to sell to Hollywood Park, the Roski
Stock (as defined herein).
NOW THEREFORE, in consideration of the foregoing premises, and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, Hollywood Park and Roski hereby agree as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION
1.1 Definitions. The following terms shall have the
respective meaning set forth below, or in the Sections of this Agreement
respectively referred to below:
"Affiliate" of any person or entity organized as a
corporation, partnership, joint venture, business trust or other non-
individual person, shall mean (i) any person or entity which directly or
indirectly owns fifty percent (50%) or more of the stock, partnership or other
beneficial interest of such person or entity, (ii) any corporation, partnership
or other entity of which fifty percent (50%) or more of the stock, partnership
or other beneficial interest is owned directly or indirectly by such person or
entity, and (iii) any corporation, partnership or entity of which fifty percent
(50%) or more of the stock, partnership or other beneficial interest is owned
directly or indirectly by any person or entity that owns fifty percent (50%) or
more of the stock, partnership or other beneficial interest of such person or
entity.
"Approvals" shall mean all governmental approvals, consents,
licenses, findings of suitability, and permits, including without limitation,
any approvals of Gaming Authorities, as may be required to effect the
transactions contemplated hereby.
"Boomtown" shall have the meaning ascribed thereto in the
recitals hereto.
"Effective Date" shall mean the date of this Agreement.
"Exchange Date" shall mean the date on which the conditions
precedent specified in Sections 5.3 and 5.4 hereof have been satisfied or
waived.
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"GAAP" shall mean generally accepted accounting principles as
in effect on the relevant date of determination consistently applied.
"Gaming Authority" shall mean the Nevada Gaming Commission,
the Nevada State Gaming Control Board, the Clark County Liquor and Gaming
Licensing Board and any other state, county or other governmental authority
having responsibility for, jurisdiction over, or regulatory authority,
oversight or supervisory responsibilities in respect of, any gaming related
business operated or contemplated to be operated at or in connection with the
Resort.
"Gaming Laws" shall mean (i) all applicable provisions of the
Nevada Gaming Control Act and the statutes rules, and regulations promulgated
thereunder and (ii) all interpretations, decisions, judgments, orders and
decrees of any Gaming Authority.
"Hollywood Park" shall have the meaning ascribed to such term
in the preamble hereto.
"IVAC" shall mean IVAC, a California general partnership.
"Merger" shall have the meaning ascribed to such term in the
recitals hereto.
"Merger Agreement" shall have the meaning ascribed to such
term in the recitals hereto.
"Resort" shall mean the facility located at 3333 Blue Diamond
Road, Las Vegas, Nevada consisting of a casino, hotel, restaurant, recreational
vehicle park and related facilities, and all assets located at, used
principally in connection with, or arising principally from such facilities.
"Roski" shall have the meaning ascribed to such term in the
preamble hereto.
"Roski Stock" shall mean 714,386 shares of the common stock of
Boomtown held, as of the Effective Date, by Roski, and all shares of the common
stock of Hollywood Park into which such Boomtown common stock may hereafter be
converted in the Merger, or which Roski may hereafter have a right to receive
in exchange for such Boomtown common stock.
"Roski Stock Value" shall mean the average per share closing
price of the Boomtown common stock on the Nasdaq National Market over the five
trading days preceding the date of signing this Agreement multiplied by the
number of shares of Roski Stock.
"Swap Agreement" shall mean that certain Blue Diamond Swap
Agreement, dated as of even date herewith, by and among Boomtown, Hollywood
Park, Roski, IVAC and certain other Affiliates of such parties.
1.2 Rules of Interpretation
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(a) A reference to any document or agreement
shall, unless otherwise provided, include such document or agreement as
amended, modified or supplemented from time to time in accordance with its
terms and, if applicable, as permitted by this Agreement.
(b) The singular includes the plural and the
plural includes the singular.
(c) A reference to any law includes any
applicable amendment or modification to such law, or any applicable successor
law.
(d) A reference to any person or entity includes
its permitted successors and permitted assignees.
(e) Accounting terms not otherwise defined herein
have the respective meanings assigned to them by GAAP applied on a consistent
basis by the accounting entity to which they refer.
(f) The words "include," "includes" and
"including" are not limiting.
(g) All terms not specifically defined herein or
by GAAP, which terms are defined in the Uniform Commercial Code as in effect
shall have the respective meanings assigned to them therein.
(h) Reference to a particular "Section" refers to
that section of this Agreement unless otherwise indicated.
(i) The words "herein," "hereof," "hereunder" and
words of like import shall refer to this Agreement as a whole and not to any
particular section or subdivision of this Agreement.
2. TRANSFER OF ROSKI STOCK
Subject to the terms and conditions of this Agreement, (i) Roski
agrees, on the Exchange Date, to transfer, convey, assign and deliver to
Hollywood Park all of Roski's right, title and interest in and to the Roski
Stock and (ii) Hollywood Park agrees, on the Exchange Date, to acquire and
accept from Roski all of Roski's right, title and interest in and to the Roski
Stock, in exchange for a promissory note to be issued by Hollywood Park in the
principal amount of the Roski Stock Value in the form attached as Exhibit A
hereto (the "Hollywood Park Note").
3. EXCHANGE DATE DELIVERIES
On the Exchange Date, subject to the terms and conditions hereof, (a)
Roski shall transfer, convey, assign, and deliver to Hollywood Park, and
Hollywood Park shall acquire and accept from Roski, the Roski Stock and (b)
Hollywood Park shall deliver to Roski the Hollywood Park Note. Each party
shall deliver to the other such endorsements, assignments, stock powers,
releases and other instruments as the other party shall reasonably request or
as necessary to vest in the other party valid and marketable title, free and
clear of all liens or encumbrances to the
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Hollywood Park Note, in the case of Roski, and to the Roski Stock, in the case
of Hollywood Park.
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Roski. Roski
represents and warrants to Hollywood Park, as of the Effective Date and the
Exchange Date (unless a specific date is referenced below), as follows:
(a) Legal Capacity. Roski is an individual with
capacity to contract; he has all requisite power and authority and is entitled
to carry on his business as now being conducted, and to own, lease or operate
his properties in the places where his business is now conducted and where his
properties are now owned, leased or operated.
(b) Authorization, etc. Roski has all requisite
power and full legal right to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by and constitutes the valid and binding obligation of Roski,
enforceable in accordance with its terms, except insofar as the enforceability
hereof may be limited by applicable bankruptcy, insolvency, receivership,
reorganization, moratorium or other laws providing relief to debtors, or laws
or principles of equity generally.
(c) Execution, Delivery and Performance. Neither
execution and delivery nor performance of this Agreement by Roski will, with or
without the giving of notice or the passage of time, or both, conflict with,
result in a default, right to accelerate by any other party to, require any
consent not obtained prior to the Exchange Date with respect to, or result in
the creation of any lien, charge or encumbrance pursuant to any provisions of
any material indenture, bond, note, loan agreement, guaranty, franchise,
mortgage, deed of trust, lease or other agreement by which Roski is bound or
conflict with, result in a default, right to accelerate by any other party to,
or result in the creation of any lien, charge or encumbrance pursuant to any
law, ordinance, rule or regulation, or any order, judgment, award or decree to
which Roski is a party or by which Roski or any portion of the Roski Stock may
be bound or affected.
(d) Title to Roski Stock, etc. Roski has, and
will on the Exchange Date, immediately prior to the transfer to Hollywood Park
contemplated hereby, have, valid and marketable title to, and unrestrained
right to transfer, all of the Roski Stock. No part of the Roski Stock on the
Exchange Date will be subject to any mortgage, deed of trust, pledge, lien,
charge, security interest, encumbrance, restriction, lease, license, easement,
shop rights, covenants not to sue, or adverse claim of any kind or nature, or
other encumbrances of any kind, rights of use or occupancy, or any other rights
or privileges, other than those imposed by Gaming Laws on the Roski Stock. In
addition to the Roski Stock and 5,001 shares of Boomtown common stock held by
Roski as of the Effective Date and the options to acquire shares of Boomtown
common stock in his capacity as a Boomtown director, neither Roski nor any of
his Affiliates owns any other securities of Boomtown or any of its Affiliates,
or rights (contingent or otherwise) to acquire securities of Boomtown or any of
its Affiliates.
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(e) Representations Complete. There is no fact
known to Roski which could reasonably be expected to affect, in a materially
adverse manner, the transferability of the Roski Stock or otherwise to carry
out the transactions contemplated by this Agreement.
4.2 Representations and Warranties of Hollywood Park.
Hollywood Park represents and warrants to Roski, as of the Effective Date and
the Exchange Date (unless a specific date is referenced below), as follows:
(a) Organization. Hollywood Park is duly
organized and validly existing under the laws of its jurisdiction of
incorporation. Hollywood Park has all requisite power and authority to, and is
entitled to, carry on its business as now conducted and to own or lease its
properties as and in the places where such business is now conducted and such
properties are now owned, leased or operated. Hollywood Park is qualified to
do business in all foreign jurisdictions in which it is required to be so
qualified, except where the failure to be so qualified would not have a
material adverse effect on the business or assets of Hollywood Park.
(b) Authorization, etc. Hollywood Park has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Hollywood Park and the consummation by Hollywood Park of the
transactions contemplated hereby have been duly authorized by all requisite
action of Hollywood Park. This Agreement has been duly executed and delivered
by and constitutes the valid and binding obligation of Hollywood Park,
enforceable in accordance with its terms, except insofar as the enforceability
hereof may be limited by applicable bankruptcy, insolvency, receivership,
reorganization, moratorium or other laws providing relief for debtors or
principles of equity generally.
(c) Execution, Delivery and Performance. Neither
execution, delivery nor performance of this Agreement by Hollywood Park will,
with or without the giving of notice or the passage of time, or both, conflict
with, result in a default, right to accelerate by any other party to, or result
in the creation of any lien, charge or encumbrance pursuant to any provisions
of such person's organizational documents or by-laws or any material franchise,
mortgage, deed of trust, lease, license, agreement or understanding, or
conflict with, result in a default, right to accelerate by any other party to,
or result in the creation of any lien, charge or encumbrance pursuant to any
law, ordinance, rule or regulation, or any order, judgment, award or decree to
which Hollywood Park is a party or by which it may be bound or affected.
(d) Validity of Note. The Hollywood Park Note
will, on the Exchange Date, be the valid and binding obligation of Hollywood
Park, enforceable against Hollywood Park in accordance with its terms.
5. CONDITIONS PRECEDENT
5.1 Conditions to Execution and Delivery of this
Agreement by Hollywood Park. This Agreement shall not take effect until
Hollywood Park shall have received a facsimile or an original counterpart of
this Agreement, duly executed and delivered by Roski.
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5.2 Conditions to Execution and Delivery of this
Agreement by Roski. This Agreement shall not take effect until Roski shall
have received a facsimile or an original counterpart of this Agreement duly
executed and delivered by Hollywood Park.
5.3 Conditions to Exchange by Hollywood Park. The
obligation of Hollywood Park to transfer to Roski the Hollywood Park Note in
exchange for the Roski Stock is subject to the satisfaction (or waiver by
Hollywood Park) of the conditions set forth below:
(a) The representations and warranties made by
Roski in this Agreement shall be true and correct in all material respects on
and as of the Exchange Date with the same effect as if made on and as of the
Exchange Date, except as otherwise contemplated by this Agreement. Roski shall
have performed and complied with all agreements, covenants and conditions on
his part required to be performed or complied with on or prior to the Exchange
Date in all material respects.
(b) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated by this
Agreement shall not violate any law, rule or regulation applicable to Hollywood
Park, including without limitation, Gaming Laws, federal and state securities
laws, or any order, decree or judgment of any court or governmental body having
competent jurisdiction, and no order shall have been issued by a court of
competent jurisdiction restraining, prohibiting or rendering unlawful the
execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated by this Agreement.
(c) All Approvals necessary to effect the
transactions hereunder and to vest valid and marketable title to the Roski
Stock in Hollywood Park shall have been obtained and shall be in full force and
effect. No Gaming Authority shall have indicated to any party hereto that in,
the opinion of such Gaming Authority, any Approvals required for the
consummation of the transactions contemplated hereby are likely to be revoked
or rejected. No registration with any governmental authority or agency which
has not been effected shall be necessary to effect the transactions
contemplated hereby.
(d) Roski shall have duly delivered the Roski
Stock as set forth in Section 3 and any other documents of transfer Hollywood
Park may reasonably request to effect the transfer of the Roski Stock.
(e) All of the conditions precedent to the Merger
shall have been satisfied or waived and the Merger shall have been consummated.
(f) Each of the transactions contemplated by the
Swap Agreement shall have been consummated under the terms of the Swap
Agreement.
(g) The consummation of the transactions
contemplated by this Agreement and the Swap Agreement shall not, as a result of
any changes in tax law occurring after the signing of this Agreement (including
without limitation statutory, regulatory, administrative, or judicial changes),
create a material risk that the contemplated treatment of the
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Merger as a tax-free reorganization would be impaired or adversely affected in
the view of either Hollywood Park or Boomtown, based upon advice of its
respective tax counsel.
5.4 Conditions to Exchange by Roski. The obligation of
Roski to transfer to Hollywood Park the Roski Stock in exchange for the
Hollywood Park Note hereunder shall be subject to the satisfaction (or waiver
by Roski) of the conditions set forth below:
(a) The representations and warranties made by
Hollywood Park in this Agreement shall be true and correct in all material
respects on and as of the Exchange Date with the same effect as if made on and
as of the Exchange Date, except as otherwise contemplated by this Agreement.
Hollywood Park shall have performed and complied with all agreements, covenants
and conditions on the part of such entity required to be performed or complied
with on or prior to the Exchange Date in all material respects.
(b) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated by this
Agreement shall not violate any law, rule or regulation applicable to Roski,
including, without limitation, Gaming Laws, federal and state securities laws,
or any order, decree or judgment of any court or governmental body having
competent jurisdiction, and no order shall have been issued by a court of
competent jurisdiction restraining, prohibiting or rendering unlawful the
execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated by this Agreement.
(c) All Approvals necessary to effect the
transactions contemplated hereby shall have been obtained. No Gaming Authority
shall have indicated to any party hereto that, in the opinion of such Gaming
Authority, any Approvals required for the consummation of the transactions
contemplated hereby are likely to be revoked or rejected. No registration with
any governmental authority or agency which has not been effected shall be
necessary to effect the transactions contemplated hereby.
(d) Hollywood Park shall have duly delivered the
Hollywood Park Note as set forth in Section 3 and any other documents of
transfer Roski may reasonably request to effect the issuance of the Hollywood
Park Note.
(e) Each of the transactions contemplated by the
Swap Agreement shall have been consummated under the terms of the Swap
Agreement.
6. ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES.
6.1 Approvals. The Parties agree to use their best
efforts and to cooperate with each other to obtain the Approvals necessary to
effect the transactions hereunder.
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6.2 Transfer Taxes. The parties acknowledge and agree
that all transfer, stamp, recording and similar taxes assessed or otherwise
payable by reason of the conveyance contemplated hereby shall be for the
account of Roski. The parties agree to cooperate with each other to the extent
legally permitted to minimize any such taxes and charges.
6.3 Additional Deliveries; Further Assurances. After the
Effective Date, each party to this Agreement shall, at the request of the
other, furnish, execute, and deliver such documents, instruments, certificates,
notices or other further assurances as the requesting party shall reasonably
request as necessary or desirable to effect complete consummation of this
Agreement and the transactions contemplated hereby. After the Exchange Date,
Roski and his Affiliates shall, at the request of Hollywood Park, (a) take such
further actions as may be reasonably necessary to vest in Hollywood Park
marketable title to the Roski Stock, (b) execute and deliver and file or
record, such further instruments of sale, conveyance, transfer and assignment,
and (c) take such other actions, as Hollywood Park may reasonably request in
order effectively to sell, convey, transfer and assign the Roski Stock to
Hollywood Park and otherwise to effectuate the purposes hereof. After the
Exchange Date, Hollywood Park and its Affiliates shall take such further
actions as Roski may reasonably request in order effectively to issue the
Hollywood Park Note to Roski and otherwise to effectuate the purposes hereof.
7. TERMINATION.
If (a) the Exchange Date has not occurred prior to or on June
30, 1997, or, if the Merger Agreement is extended, such later date as may then
be the scheduled termination date of the Merger Agreement, or such later date
as may have been agreed to by the parties in writing, or (b) the Merger
Agreement has terminated in accordance with its terms, then this Agreement
shall, on such date, automatically and without further action by either party,
terminate and have no further force and effect. In addition, if any
representation or warranty made by any party herein shall prove to have been
false, inaccurate or misleading in any material respect when made, then the
party to whom such representation or warranty is made may terminate this
Agreement by notice to the breaching party any time prior to the Exchange Date.
In the event that this Agreement shall terminate by reason of the material
falsity, inaccuracy or misleading character of any representation or warranty,
the party to whom such representation or warranty is made shall retain, both
before and after such termination, all rights and remedies available under
applicable law. Furthermore, in the event that Boomtown and Hollywood Park
elect to utilize an alternate structure to effect the transactions contemplated
by the Blue Diamond Swap Agreement in accordance with such agreement, which
structure involves Roski retaining the Roski Stock, then Hollywood Park may
terminate this Agreement without any liability to Roski. If Roski is so
required to retain the Roski Stock, the shares of Hollywood Park common stock
he would be entitled to receive in
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the Merger will be covered by the same Registration Statement on Form S-4 as
the other shares of Hollywood Park common stock issuable in the Merger.
8. MISCELLANEOUS.
8.1 Changes, Waivers, etc. Neither this Agreement nor
any provision hereof may be changed, waived, discharged or terminated orally,
except by a statement in writing which references this Agreement and is signed
by the party against whom enforcement of the change, waiver, discharge or
termination is sought.
8.2 Payment of Fees and Expenses. Each of the parties
hereto shall pay its own respective fees and expenses incurred in connection
herewith. In the event of any litigation or other proceeding resulting from a
dispute hereunder, the legal fees, costs and expenses of the prevailing party
shall be paid by the losing party.
8.3 Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall be
delivered, or mailed first-class postage prepaid, registered or certified mail,
or delivered via overnight courier;
If to Hollywood Park: Hollywood Park, Inc.
1050 South Prairie Avenue
Inglewood, CA 90301
Attention: Michael Finnigan
with copy to: Irell & Manella LLP
1800 Avenue of the Stars
Suite 900
Los Angeles, CA 90067
Attention: Al Segel, Esq.
If to Roski: Edward P. Roski, Jr.
Majestic Realty Co.
13191 Crossroads Parkway North
6th Floor
City of Industry, California 91746
with a copy to: Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: David B. Rogers, Esq.
Such notices and other communications shall for all purposes of this Agreement
be treated as being effective or having been given on the date of delivery, if
delivered
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personally, one (1) day following the date of delivery, if delivered by
overnight courier or, if sent by mail, five (5) days thereafter.
8.4 Entire Agreement. This Agreement, including the
exhibits which are incorporated into and made an integral part of this
Agreement by reference, set forth the entire understanding of the parties and
supersede all prior agreements of the parties with respect to the subject
matter hereof.
8.5 Survival of Representations and Warranties, etc. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement.
8.6 Headings; References to Agreement. The headings of
the sections of this Agreement have been inserted for convenience of reference
only and do not constitute a part of this Agreement. References herein to
"this Agreement" shall include all exhibits hereto.
8.7 Choice of Law; Interpretation. THIS AGREEMENT SHALL
FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF CALIFORNIA (WITHOUT REFERENCE TO CONFLICTS OF LAW).
8.8 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but which
shall together constitute but one and the same instrument. To make proof of
this Agreement, it shall be necessary to produce one such counterpart.
8.9 Severability. To the extent any provision of this
Agreement shall be invalid or unenforceable, it shall be considered deleted
from this Agreement and the remaining provisions of this Agreement shall be
unaffected and shall continue in full force and effect.
8.10 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that neither party may
assign its rights or obligations hereunder other than to an Affiliate without
the prior written approval of the other party.
8.11 Waiver of Jury Trial. EACH PARTY HERETO KNOWINGLY,
ABSOLUTELY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS IT MAY OTHERWISE HAVE
HAD TO A TRIAL BY JURY WITH RESPECT TO OR IN CONNECTION WITH THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed and delivered as of the date and year first above written.
/s/ EDWARD P. ROSKI, JR.
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EDWARD P. ROSKI, JR.
HOLLYWOOD PARK, INC.
By: /s/ G. MICHAEL FINNIGAN
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Title:
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S-1
<PAGE> 12
Exhibit A
FORM OF PROMISSORY NOTE
$_________ Los Angeles, California
_______________, 1996
FOR VALUE RECEIVED, Hollywood Park, Inc., a Delaware corporation (the
"Maker") hereby absolutely and unconditionally promises to pay to Edward J.
Roski, Jr. (the "Holder"), or order, in accordance with the payment schedule
set forth below, in immediately available funds, the principal amount of
__________________________ ($_________), and to pay interest on the unpaid
principal amount hereof at an annual rate of interest equal to the rate
announced by Bank of America from time to time as its "reference rate",
adjusted on the first business day of the next succeeding calendar month after
any change to such rate is announced, plus one percent (1.0%), in immediately
available funds, payable annually in arrears on the anniversaries of the
issuance date of this Note, provided, that interest on any amounts not paid
when due hereunder shall accrue at an annual rate which is two percent (2%)
above the rate otherwise payable hereunder; and provided, further, that in no
event shall the interest rate of this Note exceed the maximum rate permitted by
applicable law. This Note is issued pursuant to the Stock Purchase Agreement
dated as of August __, 1996 (the "Purchase Agreement") by and among the Maker
and the Holder and constitutes the "Hollywood Park Note" described therein.
Capitalized terms defined in the Purchase Agreement, whether directly or
indirectly by reference, shall have the respective meanings herein assigned to
such terms in the Purchase Agreement.
Principal obligations of the Maker evidenced hereby shall be paid in four
(4) equal installments of $_________ each [20% of the principal amount], on
each anniversary of the issuance date of this Note, and an additional, final
payment on the fifth anniversary thereof in an amount equal to all obligations
of the Maker then outstanding hereunder.
Upon the occurrence and during the continuance of any of the following
events (each, an "Event of Default"): (i) failure to pay any interest accrued
hereunder within five days following the date such payment was due, or the
failure to pay any principal amount owing by the Maker hereunder when due and
payable, (ii) material falsity of any representations or warranties by the
Maker in the Purchase Agreement, (iii) initiation of any bankruptcy,
insolvency, moratorium, receivership or reorganization by or against the Maker,
or (iv) acceleration of any indebtedness in excess of $1,000,000 by other
creditors of the Maker, the entire unpaid principal balance of this Note, all
of the unpaid interest accrued thereon and all other amounts owing in respect
thereof may automatically become, in the case of a default under clauses (iii)
or (iv), or may be declared to be, in
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the case of a default under clauses (i) or (ii), immediately due and payable.
Thereupon, the Holder may proceed to enforce its rights and remedies under this
Note and applicable law, all of such remedies being cumulative and not
exclusive.
No delay or omission on the part of the Holder or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or any
other right of the Holder, nor shall any delay, omission or waiver of any one
occasion be deemed a bar to or waiver of the same or any other right or any
other occasion. The Maker and every endorser and guarantor of this Note
regardless of the time, order or place of signing hereby waives presentment,
demand, protest and notice of every kind, and assents to any extension or
postponement of the time for payment or any other indulgence, to any
substitution, exchange or release of collateral, and to the addition or release
of any other party or person or entity primarily or secondarily liable.
All costs incurred in any litigation arising from this Note shall be
borne by the prevailing party. All other expenses of enforcement of the
Holder's rights hereunder (including reasonable legal and other professional
fees) shall be for the account of the Maker.
THIS NOTE SHALL FOR ALL PURPOSES BY GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA (WITHOUT REFERENCE TO
CONFLICTS OF LAW).
This Note shall be binding upon the Maker's successors and assigns, and
shall inure to the benefit of the Holder's successors and assigns.
IN WITNESS WHEREOF, the Maker has caused this Note to be executed by its
duly authorized officer to take effect as of the date first hereinabove
written.
"Maker"
Hollywood Park, Inc.
By: ______________________________
G. Michael Finnigan
Chief Financial Officer
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