SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
June 11, 1998
Date of Report (Date of
Earliest Event Reported)
Lady Luck Gaming Corporation
(Exact name of Registrant as specified in its Charter)
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<S> <C> <C>
DELAWARE 000-22436 88-0295602
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
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220 Stewart Avenue 89101
Las Vegas, Nevada (Zip Code)
(Address of principal
executive offices)
702-477-3000
(Registrant's Telephone Number Including Area Code)
N.A.
(Former Address, if changed since last Report)
The Index to Exhibits is on page 4.
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Item 5. Other Events
On June 11, 1998, Lady Luck Gaming Corporation (the "Company") consummated
the disposition of substantially all the assets associated with its Lady Luck
Biloxi casino including real property, the casino barge, and other operating
assets to Grand Casinos and has received payment of $15 million cash. Lady Luck
Gaming will retain the gaming and computer equipment, and certain real property
which is not contiguous with its Lady Luck Biloxi site.
In accordance with the indenture (the "Indenture") covering the 11-7/8%
First Mortgage Notes due 2001 (the "2001 Notes") issued by Lady Luck Gaming
Finance Corporation ("LLGFC"), the parent of Lady Luck Biloxi, Inc. ("LLBI"),
the Company has 180 days after receiving the $15 million to invest the money in
a Related Business (as defined in the Indenture). If the Company does not make
an investment or does not invest the $15 million in a Related Business before
such time, under certain circumstances, the Company must make an offer to
repurchase a portion of the 2001 Notes at a price of 101% of par for the amount
of the proceeds that was not invested in a Related Business.
A copy of the Asset Purchase Agreement dated as of June 2, 1998 by and
among the Company, LLBI, LLGFC, Grand Casinos, Inc. ("GCI") and Grand Casinos of
Mississippi, Inc.-Biloxi (together with GCI, "Grand") is attached hereto as
Exhibit 2.1.
A copy of the Company's Press Release dated June 12, 1998 announcing the
closing of an agreement to sell substantially all of the assets associated with
its Lady Luck Biloxi casino to Grand is attached hereto as Exhibit 99.1.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
2.1 Asset Purchase Agreement dated June 2, 1998 by and among the Company,
LLBI, LLGFC and Grand (schedules and exhibits which are not material,
and which will be furnished upon the request of the Commission, are
omitted).
99.1 Press Release of the Company dated June 12, 1998 announcing the
closing of an agreement to sell certain of the assets of its Biloxi,
Mississippi operation to Grand.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LADY LUCK GAMING CORPORATION
(Registrant)
By:/s/ Rory J. Reid
Name: Rory J. Reid
Title: Senior Vice President,
Secretary and
General Counsel
Dated: June 22, 1998
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INDEX TO EXHIBITS
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Exhibit
Number Description Page
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2.1 Asset Purchase Agreement dated June 2, 1998 by and among the 5
Company, LLBI, LLGFC and Grand (schedules and exhibits which are not
material, and which will be furnished upon the request of the
Commission, are omitted).
99.1 Press Release of the Company dated June 12, 1998 announcing the 47
closing of an agreement to sell certain of the assets of its Biloxi,
Mississippi operation to Grand.
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EXHIBIT 2.1
5
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made as of June 2, 1998, among Lady Luck Biloxi, Inc., a
Mississippi corporation ("Seller"), Lady Luck Gaming Finance Corporation, a
Delaware corporation ("Finance"), Lady Luck Gaming Corporation, a Delaware
corporation ("Parent"; Parent and Finance are sometimes collectively referred to
herein as the "Parent Companies"), Grand Casinos, Inc., a Minnesota corporation
("Purchaser Parent"), and Grand Casinos of Mississippi, Inc. - Biloxi, a
Minnesota corporation ("Buyer").
RECITALS
A. Seller owns the Lady Luck Biloxi Casino (the "Casino") located at 307
Beach Boulevard, Highway 90, Biloxi, Mississippi, on approximately 8.87 acres of
land which are either owned or leased by Seller, and adjacent to which Seller
leases from the State of Mississippi certain tidelands areas for the mooring of
the Casino Barge (as defined in Section 1.2(a)(iv) hereof) (the Casino, the
Casino Barge, the "Equipment" (as defined in Section 1.2(a)(i)), the "Real
Estate" (as defined in Section 1.2(a)(ii)) and the "Leased Property" (as defined
in Section 1.2(a)(iii)), collectively referred to herein as the "Gaming
Facility").
B. Parent owns all the outstanding common stock of Finance, and Finance
owns all the outstanding common stock of Seller. C. Buyer desires to purchase
from Seller all real estate and certain personal property owned by Seller (and
take by assignment all contracts for lands leased or under option by Seller
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from third parties) used in connection with the Casino, any buildings
constructed thereon (including but not limited to parking garages and other
structures) and the Casino Barge (further defined in Section 1.2(a) herein as
the "Purchased Assets"), but not including the Excluded Property set forth in
Section 1.2(b) hereof, all on the terms and subject to the conditions contained
in this Agreement.
AGREEMENTS Therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
Purchase and Sale of Assets
1.1 Agreement to Purchase and Sell. On the terms and subject to the
conditions contained in this Agreement, Buyer agrees to purchase from Seller,
and Seller agrees to sell to Buyer, as of the Closing Date (as herein defined in
Section 3.3 below), the "Purchased Assets" (as herein defined in Section 1.2
below). All of the Purchased Assets shall be sold to Buyer free and clear of any
liens, title claims, encumbrances or security interests of any nature
whatsoever, other than those which are included in the Assumed Liabilities (as
defined in Section 2.1 below) and the Permitted Exceptions (as defined in
Section 2.2(c) below).
1. Enumeration of Purchased Assets.
(a) The Purchased Assets shall consist of the following items:
(i) all furniture, fixtures, equipment, machinery, vehicles and parts owned
by Seller and located at the Gaming Facility (but not including (a) any and all
slot machines at the Casino,(b) any and all slot data systems or player
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tracking systems or any other computer systems whether or not used in connection
with such slot machines or gaming devices at the Casino, and (c) any and all
signage on the Casino Barge), all as described in Schedule 1.2(a)(i) hereto (the
"Equipment");
(ii) all of the rights and interest of Seller in any real estate located in
Biloxi, Harrison County, Mississippi (other than the office building and real
and personal property located at 1848 Beach Boulevard), all as more particularly
described in Schedule 1.2(a)(ii) hereto (including all appurtenances, easements
and other rights related thereto and buildings, structures, and other
improvements erected thereon) (the "Real Estate");
(iii) the rights and leasehold interests created pursuant to the Lease
Agreements set forth on Schedule 1.2(a)(iii) hereto (the "Lease Agreements")
(all of the property that Seller is leasing or in which Seller has any rights
under the Lease Agreements shall herein be referred to as the "Leased
Property");
(iv) the Casino Barge (the "Casino Barge") presently docked at the Gaming
Facility (U.S. Coast Guard Official Number 522588), together with any and all
engines, boilers, machinery, components, masts, boats, anchors, cables, chains,
rigging, tackle, apparel, furniture, capstans, outfit tools, pumps, gear,
furnishings, appliances, fittings, spare and replacement parts, and any and all
other appurtenances appertaining or belonging thereto, and, whether on board or
not on board, all log books, manuals, trip records, maintenance reports,
inspection records, seaworthiness certificates, and other historical records or
information relating to the Casino Barge in the possession of Seller or Parent
Companies, and ramps, generators and related equipment (including, but not
limited to, existing walkway coverings) located at the Gaming Facility;
(v) all the licenses and permits with respect to the Gaming Facility as
listed on Schedule 1.2(a)(v) hereto to the extent they are legally transferrable
by Seller ("Assigned Permits");
(vi) all records of Seller relating to the Gaming Facility not excluded
under Section 1.2(b) herein, including, without limitation, fixed asset ledgers,
operating and maintenance records, blueprints, drawings and other technical
papers;
(vii) to the extent assignable, all of the other contracts, leases and
ground leases, subleases and agreements listed in Schedule 1.2(a)(vii) hereto
(the "Assigned Contracts");
(viii) to the extent consents to assignment are obtained prior to the
Closing, the contracts, leases, ground leases, subleases and agreements listed
on Schedule 1.2(a)(viii) hereto (those scheduled items for which consents to
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assignment are obtained, the "Contingently Assigned Contracts", and any real
estate which is the subject of any such Contingently Assigned Contract being
referred to herein as "Contingently Assigned Leased Property"); and
(ix) any other assets of Seller not specifically excluded in Section 1.2(b)
as Excluded Property.
(b) The following items (the "Excluded Property") are not part of the
Purchased Assets and are excluded from the term "Purchased Assets" as used
throughout this Agreement: all of Seller's (i) rights under this Agreement, (ii)
cash on hand (including cash in the hopper) and in banks, securities such as
certificates of deposit, treasury notes and other types of liquid investments
and current assets including accounts receivable, (iii) corporate stock records,
seal and minute books of Seller, (iv) books of account and original entry, tax
returns and schedules, (v) market data and studies and engineering and research
data and studies either not directly related to the Gaming Facility or related
to the operation or future operation of the Gaming Facility within the context
of Seller's business, (vi) inventories located at the Gaming Facility, (vii) any
and all slot machines at the Casino, any and all slot data systems or player
tracking systems or other computer systems whether or not used in connection
with such slot machines or gaming devices at the Casino and any and all signage
on the Casino Barge and any other signage, (viii) items of equipment and
personal property leased by Seller under leases (other than the Assigned
Contracts and Lease Agreements) and all other agreements and contracts of Seller
not expressly assumed hereunder; (ix) any and all assets of Seller not located
on, related to or used in the operation of the Gaming Facility; (x) the office
building and real estate and personal property located at 1848 Beach Boulevard;
(xi) the fishing yacht presently docked at Biloxi, Mississippi (U.S. Coast Guard
Official Number 603495), together with any and all engines, boilers, machinery,
components, masts, boats, anchors, cables, chains, rigging, tackle, apparel,
furniture, capstans, outfit tools, pumps, gear, furnishings, appliances,
fittings, spare and replacement parts, and any and all other appurtenances
appertaining or belonging thereto, and, whether on board or not on board, all
log books, manuals, trip records, maintenance reports, inspection records,
seaworthiness certificates, and other historical records or information relating
to the same in the possession of Seller or Parent Companies; and (xii) any
intangible assets, including but not limited to trademarks, customer lists and
know-how.
ARTICLE II
Assumption of Liabilities
2.1 Agreement to Assume. At the Closing (as herein defined), Buyer shall
assume and agrees to discharge, perform or otherwise satisfy in accordance with
their respective terms
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when due, only those liabilities and obligations of Seller which are enumerated
specifically in Section 2.2, which shall consist of obligations arising
thereunder after Closing (but not any obligations arising due to acts or
omissions by Seller on or before the Closing Date unless otherwise indicated)
(the "Assumed Liabilities"). It is expressly acknowledged and agreed that Buyer
will not assume and shall not be liable, either expressly or impliedly, for any
of the obligations or liabilities of Seller of any kind and nature other than
those specifically enumerated in Section 2.2. Without limiting the foregoing,
Buyer shall not assume or become liable (expressly or impliedly) with respect to
any of the following: (a) any liability of Seller, either directly or
indirectly, for either principal or interest, with respect to advances or loans
made to or owed by Seller;
(b) any liability or claim arising out of or related to the operation and
use of the Purchased Assets or Seller's business or operations prior to the
Closing Date (as hereinafter defined), including, without limitation, any
obligations or liabilities of Seller with respect to contract, negligence,
strict liability, product liability, intellectual property right infringement,
or breach of warranty claims;
(c) any liability arising out of any employee benefit plans maintained by
Seller for the benefit of any employees of Seller or in which Seller
participates, or any other liability of Seller with respect to any employees,
including but not limited to incentive compensation plans, severance pay,
accrued salaries, wages, bonuses, payroll taxes, hospitalization, medical,
dental or disability insurance, deferred compensation and vacation and sick pay;
(d) any liability attributable to personal or real property taxes assessed
by any governmental entity, federal, state, or local, against any of the assets
and rights to be conveyed hereunder arising for periods on or before the Closing
Date, such taxes to remain the responsibility of Seller; and
(e) any liability for any other tax assessed by any governmental entity,
federal, state, or local, attributable to the business or operations of Seller
relating to the period on or before the Closing Date, including but not limited
to, any income, franchise, excise, sales, or use taxes.
Seller shall pay and discharge when due all of Seller's existing liabilities in
connection with its ownership and operation of the Gaming Facility, other than
the Assumed Liabilities.
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2.2 Description of Assumed Liabilities. The Assumed Liabilities shall
consist of and be limited only to the following liabilities of Seller: (a)
Liabilities and obligations of Seller arising after the Closing Date pursuant to
those certain Lease Agreements, Assigned Contracts and Contingently Assigned
Contracts all as set forth in Section 1.2(a) hereto; and
(b) The liabilities and obligations arising after the Closing Date under or
with respect to the Assigned Permits; and
(c) The liabilities and obligations arising after the Closing Date under or
with respect to the items listed on Schedule 2.2(c) attached hereto
(collectively, the "Permitted Exceptions").
ARTICLE III
Purchase Price, Manner of Payment and Closing
3.1 Purchase Price. In consideration of the sale, transfer, conveyance,
assignment and delivery of the Purchased Assets by Seller to Buyer, and in
reliance on the representations and warranties of Seller and Parent Companies
stated herein, Buyer will in full payment thereof pay to Seller at Closing a
total purchase price of Fifteen Million Dollars ($15,000,000.00), plus
assumption of the Assumed Liabilities (the "Purchase Price"). 3.2 Manner of
Payment of the Purchase Price. The Purchase Price shall be paid as follows at
Closing: (a) Buyer shall assume the Assumed Liabilities by execution and
delivery of the Assignment and Assumption Agreement attached hereto as Exhibit A
(the "Assignment and Assumption Agreement"); and (b) Buyer shall pay to Seller
an amount equal to Fifteen Million Dollars ($15,000,000.00) by wire transfer of
immediately available funds to such account as Seller shall designate by written
notice delivered to Buyer at least two (2) days prior to the Closing (less and
except $100,000 deposited in escrow pursuant to an Escrow Agreement dated
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April 9, 1998 among Buyer, Seller and Trustmark National Bank, as Escrow Agent
(the "Escrow Agreement") to the extent such deposit is released to Seller in
accordance with the terms of the Escrow Agreement). 3.3 Time and Place of
Closing. The transactions contemplated by this Agreement shall be consummated
(the "Closing") at 10:00 a.m., prevailing business time, on the fifth business
day after (i) receipt by Finance of the consent of the holders of the 11 7/8%
First Mortgage Note Due 2001 issued by Finance (the "Bondholder Consent") and
the receipt of the certificate required by &314(d) of the Trust Indenture Act of
1939 (the "TIA Certificate"), (ii) expiration of the period following notice
under the WARN Act (as defined below), and (iii) expiration of all waiting
periods required by the Hart-Scott-Rodino Act (as defined below). Closing shall
take place at the offices of Watkins Ludlam Winter & Stennis, P.A., 633 North
State Street, Jackson, Mississippi 39202, or at such other place as shall be
mutually agreed upon by Seller and Buyer, as soon as practicable after the date
hereof, but in no event later than September 1, 1998. The date on which the
Closing shall be scheduled to occur in accordance with the preceding sentence is
referred to in this Agreement as the "Closing Date."
ARTICLE IV
Representations and Warranties of Buyer
Buyer and Purchaser Parent, jointly and severally, represent and warrant to
Seller as follows and agree that no specific representation or warranty shall
limit the generality or applicability of a more general representation or
warranty: 4.1 Corporate. Buyer is a corporation duly organized, existing and in
good standing, under the laws of the State of Minnesota. Buyer is duly qualified
as a foreign corporation, and
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is in good standing under the laws of the State of Mississippi. Buyer has all
necessary corporate power to conduct its business as such business is now being
conducted. Purchaser Parent is a corporation duly organized, existing and in
good standing, under the laws of the State of Minnesota. 4.2 Power and
Authority. Buyer and Purchaser Parent have full corporate power and authority to
enter into this Agreement and the related agreements referred to herein and to
carry out and perform this Agreement and the related agreements referred to
herein. All proceedings or corporate action required to be taken by Buyer and
Purchaser Parent relating to the execution and delivery of this Agreement and
the related agreements referred to herein and the consummation of the
transactions contemplated thereby have been taken. This Agreement has been duly
executed and delivered by duly authorized officers of Buyer and Purchaser Parent
and the agreements referred to herein shall be duly executed and delivered by
duly authorized officers of Buyer or Purchaser Parent, as applicable. 4.3
Consents. No consent of any governmental authority or other person, other than
filing under Section 7A(b)(1) of the Clayton Act (the "Hart-Scott-Rodino Act"),
is required for the execution and delivery of this Agreement or the agreements
referred to herein by Buyer and Purchaser Parent which has not been obtained or
which, if not obtained, would materially interfere with the consummation of this
Agreement and the transactions contemplated hereby; nor is any consent of any
governmental authority required for the consummation by Buyer and Purchaser
Parent of any of the transactions contemplated by this Agreement or the
agreements referred to herein which has not been obtained or which, if not
obtained, would materially interfere with the consummation of such transactions.
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4.4 No Breach. Neither the execution and delivery of this Agreement or the
agreements referred to herein by Buyer or Purchaser Parent, nor the consummation
by Buyer or Purchaser Parent of the transactions contemplated thereby, will
conflict with or result in a breach of any of the terms, conditions or
provisions of Buyer's or Purchaser Parent's respective Articles of Incorporation
or Bylaws, or of any statute or administrative regulation, or of any order,
writ, injunction, judgment or decree of any court or governmental authority or
of any arbitration award applicable to Buyer or Purchaser Parent. 4.5 Contracts.
Neither Buyer nor Purchaser Parent is a party to any written or oral contract,
agreement, indenture, mortgage, debenture, note or other instrument under the
terms of which performance by Buyer or Purchaser Parent according to the terms
of this Agreement or the related agreements referred to herein will be a default
or will conflict or with passage of time or notice or both would be a default,
or whereby timely performance by Buyer or Purchaser Parent according to the
terms of this Agreement or the related agreements referred to herein may be
prohibited, prevented or delayed. 4.6 Litigation and Claims. (a) There is no
pending or, to Buyer's and Purchaser Parent's actual knowledge, threatened in
writing litigation or proceeding in law or in equity, or governmental or other
investigation before any commission or other administrative authority, with
respect to which, if adversely decided against Buyer or Purchaser Parent, would
prevent or delay the transactions contemplated herein.
(b) Neither Buyer nor Purchaser Parent is a party to any decree, order or
arbitration award (or agreement entered into in any administrative, judicial or
arbitration proceeding,with any governmental authority) which would prevent or
delay the transactions contemplated herein.
(c) Neither Buyer nor Purchaser Parent is in violation of any decree, order
or arbitration award applicable to Buyer or Purchaser Parent, or to Buyer's or
Purchaser Parent's actual knowledge, any law, statute, or regulation currently
in force and as presently applied and interpreted by the courts and regulatory
authorities or under any
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agreement with, or any license or permit from, any federal, state or local
governmental authority including, without limitation, laws, statute and
regulations, which violation would prevent or delay the transactions
contemplated herein.
ARTICLE V
Representations and Warranties of Seller and Parent Companies
5.1 Seller's Representations and Warranties. Seller and Parent Companies,
jointly and severally, represent and warrant to Buyer as follows and agree that
no specific representation or warranty shall limit the generability or
applicability of a more general representation and warranty: 5.2 Corporate. (a)
Seller is a corporation duly organized, existing and in good standing, under the
laws of the State of Mississippi and Seller has all necessary corporate power
and authority to conduct its business as such business is now being conducted.
Finance is a corporation duly organized, existing and in good standing under the
laws of the State of Delaware. Parent is a corporation duly organized, existing
and in good standing under the laws of the State of Delaware.
(b) Seller and each of the Parent Companies have full corporate power and
authority to enter into and perform this Agreement and the related agreements
referred to herein. This Agreement has been duly executed and delivered by duly
authorized officers of Seller and each of the Parent Companies and the related
agreements referred to herein will be duly executed and delivered by duly
authorized officers of Seller and each of the Parent Companies.
(c) Subject to the receipt of the TIA Certificate, neither the execution
and delivery of this Agreement by Seller or either Parent Company, nor the
consummation by Seller or either Parent Company of the transactions herein
contemplated, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Certificate of Incorporation or By-laws of
Seller or either Parent Company, or of any statute or administrative regulation,
or of any order, writ, injunction, judgment or decree of any court or any
governmental authority or of any arbitration award applicable to Seller or
either Parent Company.
(d) Other than with respect to certain of the Lease Agreements, Assigned
Permits, Assigned Contracts and Contingently Assigned Contracts as noted on the
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schedules at Section 1.2(a) hereto as requiring consents to assignment, and the
Bondholder Consent for which such consents have not been obtained, no consent of
or filing with any governmental authority or other person, other than filings
required under the Hart-Scott-Rodino Act or notice under the WARN Act (as
defined in 5.4 below), is required for the execution and delivery of this
Agreement by Seller or either Parent Company which has not been obtained or
which, if not obtained, would interfere with the consummation of this Agreement
or the transactions contemplated hereby; nor is any consent of any governmental
authority or other person, other than filings under the Hart- Scott-Rodino Act
or notice under the WARN Act, required for the consummation by Seller or either
Parent Company of any of the transactions contemplated by this Agreement which
has not been obtained or which, if not obtained, would interfere with the
consummation of such transactions or result in the imposition of any lien or
encumbrance on any of Seller's property, the Purchased Assets or the Gaming
Facility other than the Permitted Exceptions.
(e) Neither the ownership nor use of Seller's properties nor the conduct of
its business conflicts with the rights of any other person, firm or corporation
or violates, or with or without the giving of notice or the passage of time, or
both, will violate, conflict with or result in a default, right to accelerate or
loss of rights under, any terms or provisions of any lien, encumbrance,
mortgage, deed of trust, lease, license, agreement, understanding, law,
ordinance, rule or regulation, or any order, judgment or decree to which Seller
or either Parent Company is a party or by which any of them may be bound or
affected, except for such violations or conflicts which will individually or in
the aggregate not cause a material adverse effect to the Purchased Assets, this
transaction or Buyer's continued use of the Purchased Assets after Closing.
5.3 Contracts.
(a) Schedule 1.2(a)(iii) contains a complete list and true and correct copy
of each of the Lease Agreements, Schedule 1.2(a) (vii) contains a complete list
and a true and correct copy of each of the Assigned Contracts and Schedule
1.2(a)(viii) contains a complete list and true and correct copy of each of the
Contingently Assigned Contracts which are to be assumed by Purchaser,
(b) Seller or either Parent Company is not a party to, or bound by, any
written or oral contract, agreement, indenture, mortgage, debenture, note or
other instrument under the terms of which performance by Seller or either Parent
Company according to the terms of this Agreement will be a material default or
an event of acceleration, and whereby timely performance by Seller or either
Parent Company according to the terms of this Agreement may be prohibited,
prevented or delayed or will result in the imposition of a lien, claim or
encumbrance on any of the Purchased Assets.
(c) All of the Lease Agreements, Assigned Contracts and Contingently
Assigned Contracts are valid and binding, enforceable in accordance with their
respective terms, in full force and effect and, except as otherwise specified as
requiring consent to
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assignment in the schedules to Section 1.2(a), including, without limitation,
Schedule 1.2(a)(viii), validly assignable to Buyer without the consent of any
other party such that the instruments of assignment thereof to Buyer effectively
will vest in Buyer Seller's interests therein, and there is not thereunder any
existing default, or event which, after notice or lapse of time, or both, would
constitute a default or result in a right to accelerate or loss of rights.
(d) Other than gaming licenses, Schedule 1.2(a)(v) contains a true and
correct listing of every current license, permit or governmental approval with
respect to the Purchased Assets applied for, pending by, issued or given to
Seller, and every unexpired agreement with governmental authorities (federal,
state, local or foreign) entered into by Seller, which is in effect or has been
applied for or is pending insofar as any of the above may relate to the
Purchased Assets.
(e) On the date hereof and through the date of Closing, Seller possesses
and shall possess the Assigned Permits and the Assigned Permits constitute all
licenses, permits and governmental approvals and authorization which are
required in order for Seller to maintain the Purchased Assets in their current
condition and location.
(f) Seller is not subject to any legal obligations to renegotiate, nor does
Seller have actual knowledge of a claim for a legal right to renegotiate, any
contract, loan, agreement, lease, sublease or instrument to which it is now or
has been bound insofar as it may relate to any of the Purchased Assets,
including the Lease Agreements, Assigned Contracts, Assigned Permits and
Contingently Assigned Contracts.
5.4 Employees. Seller and Parent Companies have determined to close the
Gaming Facility upon or before Closing. Seller and Parent Companies acknowledge
that Buyer will assume no employment agreements or other obligations or
liabilities to Seller's employees or any liabilities arising out of any employee
benefit plans maintained by Seller for the benefit of any employees of Seller or
in which Seller participates. Seller and Parent Companies shall be responsible
for the termination of all employees of Seller and any and all liabilities
related thereto prior to Closing and compliance with all applicable laws with
respect to the termination of Seller's employees, including the Worker
Adjustment and Retraining Notification Act 29, USC &101, et seq. (the "WARN
Act"). Seller and Parent Companies shall indemnify and hold harmless Buyer and
Purchaser Parent from any violations by Seller and Parent Companies of the
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WARN Act or the failure of Seller or Parent Companies to comply with any other
applicable laws relating to termination of Seller's employees and closing of the
Gaming Facility. 5.5 Litigation and Claims. (a) There is no pending or, to
Seller's and Parent Companies' actual knowledge, threatened in writing
litigation or proceeding in law or in equity, or governmental or other
investigation before any commission or other administrative authority, with
respect to the Gaming Facility or the Purchased Assets or the Assumed
Liabilities which, if adversely decided against Seller, would have a material
adverse impact or constitute a lien or encumbrance upon any of the Purchased
Assets, the Assumed Liabilities or the Gaming Facility, except as set forth on
Schedule 5.5(a) attached hereto.
(b) Seller or either Parent Company is not a party to any decree, order or
arbitration award (or agreement entered into in any administrative, judicial or
arbitration proceeding with any governmental authority) with respect to or
affecting the Gaming Facility or any of the Purchased Assets.
(c) Seller or either Parent Company is not, with respect to the Purchased
Assets, in violation of any decree, order or arbitration award applicable to
Seller or either Parent Company or, to Seller's or either Parent Company's
actual knowledge, any law, statute, or regulation currently in force and as
presently applied and interpreted by the courts and regulatory authorities, or
under any agreement with, or any license or permit from, any federal, state or
local governmental authority including, without limitation, laws, statutes and
regulations relating to equal employment opportunities, fair employment
practices, and sex, race, religious and age discrimination.
5.6 Real Estate.
(a) Other than the real estate located at 1848 Beach Boulevard, there is no
other real estate used in connection with the business or operations of the
Seller or the Casino except for the Real Estate, the Leased Property and the
Contingently Assigned Leased Property (collectively, the "Real Estate Purchased
Assets"). Seller enjoys peaceful and undisturbed possession of the Real Estate
Purchased Assets subject to and in accordance with the terms and conditions of
the Lease Agreements and the Contingently Assigned Contracts. The use of the
Real Estate Purchased Assets by Seller does not currently violate any existing
zoning ordinances. Neither Seller nor any Parent Company has any actual
knowledge and has not received notice of any violation of any law, zoning
ordinance, building or use statutes or regulation affecting the Real Estate
Purchased Assets and has not received any notice of nor has any actual knowledge
of any existing or threatened in writing condemnation or other legal action of
any kind involving the Real Estate Purchased Assets which may affect the value
of the Real Estate Purchased Assets. To the actual knowledge of Seller and
Parent Companies, the current use of the
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Real Estate Purchased Assets, and the activities conducted thereon are proper
and in compliance with all applicable laws, rules and regulations and with
proper permits and licenses.
(b) Other than the Lease Agreements, Assigned Contracts, Contingently
Assigned Contracts or Permitted Exceptions, there are no contracts, leases or
agreements to which the Seller or either Parent Company is a signatory in effect
with respect to the Real Estate Purchased Assets of any kind or nature
whatsoever, whether or not of record. Seller and Parent Companies have no actual
knowledge of any other agreements which may have been entered into by the owners
of the Leased Property and the Contingently Assigned Leased Property or any
third party with respect to the Real Estate, other than items shown on the Title
Binder.
(c) No federal, state or local taxing authority has given written notice to
Seller with regard to any tax deficiency, lien or assessment against the Real
Estate Purchased Assets which, if due and payable, has not been paid.
(d) There are no outstanding accounts payable or choate or inchoate
mechanics' liens or rights to claim a mechanic's lien in favor of any
contractor, materialman, laborer or any other Person in connection with any
portion of the Real Estate Purchased Assets, except for any such liens or rights
arising from actions of the owners of the Leased Property or the Contingently
Assigned Leased Property of which Seller and Parent Companies have no actual
knowledge.
(e) The land adjacent abutting or contiguous to the Real Estate Purchased
Assets is not used (except to the extent Seller shall have the right to such
use) for the benefit of the Real Estate Purchased Assets for any purpose,
including, but not limited to, storm drainage, utility service or access to the
Real Estate Purchased Assets and such land is not in any way necessary for the
operation or use of the Real Estate Purchased Assets. Seller has rights of
ingress and egress from the Real Estate Purchased Assets to public streets and
roads, and with respect to Leased Property or Contingently Assigned Leased
Property are subject to the terms and conditions of the leases with respect
thereto. Rights of ingress and egress from Parcel I (the tidelands parcel) to a
public street or road is through Leased Property and is not direct access. All
service utilities currently being used for operations at the Real Estate
Purchased Assets are presently available and serving the Real Estate Purchased
Assets in an adequate manner for its current use.
(f) The respective real estate and personal property taxes and assessed
valuations for the Real Estate Purchased Assets and Equipment included in the
Purchased Assets most recently received by Seller prior to the date hereof are
set forth in Schedule 5.6(f). Seller or either Parent Company has no actual
knowledge of any increase or proposed increase in such real estate and personal
property taxes or assessed valuations, except as may result from the
consummation of the transactions contemplated hereby. There are no challenges or
appeals by Seller or Parent Companies pending regarding the amount and/or
payments of said real estate and personal property taxes or assessed
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valuations, and no special arrangements or agreements exist with any
governmental authority with respect thereto (the representations and warranties
contained in this paragraph shall not be deemed to be breached by any
prospective increase in real estate and personal property tax rate or by any
current proposals for tax increases of general applicability not specifically
limited to the Real Estate Purchased Assets or Equipment).
(g) Except for taxes which are payable after the date of Closing, Seller
has paid all ad valorem taxes relating to the Purchased Assets which if not paid
as of the date of this Agreement would be delinquent or which would create a
material adverse effect or a lien on the Purchased Assets.
5.7 Title to and Condition of the Purchased Assets.
(a) Title. Except for Permitted Exceptions, Seller has good and marketable
fee simple title to the Real Estate and good and marketable leasehold title to
all the Leased Property and Contingently Assigned Leased Property and good and
marketable title to all the other Purchased Assets. Except as set forth in
Schedule 5.7(a), none of the Purchased Assets is subject to any mortgage,
pledge, lien, charge, security interest, encumbrance, restriction, lease,
license, easement, liability or adverse claim of any nature whatsoever, direct
or indirect, whether accrued, absolute, contingent or otherwise, except those
Permitted Exceptions) and at the Closing the Purchased Assets shall only be
subject to the Permitted Exceptions.
(b) Condition. Except as set forth in that certain preliminary report for
the parking garage dated June 1, 1998, by Reigstad & Associates, Inc. and that
certain report for the Casino Barge dated June 1, 1998, by Arthur D. Darden
Incorporated, to Seller's and Parent Companies' actual knowledge, all of the
Purchased Assets (other than the land included in the Real Estate Purchased
Assets) and their component parts are in good operating condition and repair,
and to the Seller's and Parent Companies' actual knowledge, there are no
structural defects on or in the Casino Barge or in any building or improvements
located on the Real Estate Purchased Assets.
(c) None of the warranties and representations contained in Sections 5.6
and 5.7 of this Agreement are intended by any party hereto to be for the benefit
of or relied upon by any third party, including the Title Company.
5.8 Environmental Matters. Except as disclosed on Schedule 5.8:
(a) All federal, state and local permits, licenses and authorizations
required for the use and operation of the Purchased Assets, including the Real
Estate Purchased Assets, have been obtained and are presently in effect.
(b) None of the Purchased Assets have been used by Seller or, to Seller's
actual knowledge, by any other person at any time to handle, treat, store or
dispose of any hazardous or toxic waste or substance, nor are any of the
Purchased Assets or the
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Real Estate Purchased Assets, including all soils, groundwaters and surface
waters located on, in or under the Purchased Assets or the Real Estate Purchased
Assets, contaminated with pollutants or other substances which contamination may
give rise to a clean-up obligation under any federal, state or local law, rule,
regulation or ordinance, including, but not limited to, the federal
Comprehensive Environmental Response, Compensation and Liability Act, 42 USC
9601 et seq., and the common law.
(c) To Seller's actual knowledge, there are no underground tanks located
in, on or under the Real Estate Purchased Assets.
(d) There are no outstanding violations or any consent decrees entered
against Seller or either Parent Company regarding environmental and land use
matters, including, but not limited to, matters affecting the emission of air
pollutants, the discharge of water pollutants, the management of hazardous or
toxic substances or wastes, or noise.
(e) To Seller's actual knowledge, there are no claimed, threatened or
alleged violations with respect to any federal, state or local environmental
law, rule, regulation, ordinance, permit, license or authorization, and there
are no present discussions with any federal, state or local governmental agency
concerning any alleged violation of environmental laws, rules, regulations,
ordinances, permits, licenses or authorizations.
(f) All operations conducted by Seller or either Parent Company on the Real
Estate Purchased Assets have been and are in substantial compliance with all
federal, state and local statutes, rules, regulations, ordinances, permits,
licenses and authorizations relating to environmental compliance and control.
5.9 Disclosure. No representations and warranties by the Seller and Parent
Companies in this Agreement and no statement in this Agreement or any schedule
or exhibit or certificate furnished or to be furnished to Buyer on behalf of
Seller and Parent Companies pursuant hereto contains or will contain any untrue
statement of a material fact or omits to state a material fact or will omit to
state a material fact necessary in order to make the statements contained
therein not misleading.
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ARTICLE VI
Conduct Prior to the Closing
6.1 General. Seller and Parent Companies and Buyer and Purchaser Parent
shall have the rights and obligations with respect to the period between the
date hereof and the Closing Date which are set forth in the remainder of this
Article VI.
6.2 Seller's Obligations. The following are Seller's and Parent Companies'
obligations:
(a) Seller and Parent Companies shall give to Buyer's officers, employees,
attorneys, consultants and accountants reasonable access during normal business
hours to all of the Purchased Assets and all contracts, documents and records of
Seller and Parent Companies relating to the Gaming Facility and shall furnish to
Buyer such available information relating to the Gaming Facility and Purchased
Assets as Buyer may at any time and from time to time reasonably request,
provided that any such access shall not unreasonably interfere with the business
or operations of Seller or Parent Companies.
(b) Seller shall not dispose of any of the Purchased Assets, or, without
limitation by specific enumeration of the foregoing, enter into any other
transaction or otherwise amend any contracts with respect to or affecting any of
the Purchased Assets.
(c) Seller and Parent Companies shall use their commercially reasonable
efforts to obtain any consent or estoppel certificate or non-disturbance
agreement or deliver any documents reasonably specified by Buyer for the
assignment and assumption of the Lease Agreements, Assigned Contracts and
Assigned Permits and the Assumed Liabilities and the release of the Purchased
Assets from any and all liens, claims or encumbrances other than the Permitted
Exceptions.
(d) Seller and Parent Companies shall maintain in force through the Closing
Date property and casualty and liability insurance coverage with respect to the
Purchased Assets in such amounts and on such terms and conditions as are
currently in force.
6.3 Confidentiality and Disclosure Obligations.
(a) Except as and to the extent required by law, Buyer or Purchaser Parent
will not disclose or use, and will direct their representatives not to disclose
or use to the detriment of Seller or Parent Companies, any Confidential
Information (as defined below) with respect to Seller or Parent Companies
furnished, or to be furnished, by Seller or Parent Companies or their respective
representatives to Buyer or Purchaser Parent or their representatives, or
otherwise obtained by Buyer or Purchaser Parent, at any time
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or in any manner other than in connection with the transactions contemplated by
this Agreement. For purposes of this paragraph, "Confidential Information" means
any information about Seller unless (i) such information is already known to
Buyer or Purchaser Parent or their representatives or to others not bound by
duty of confidentiality or such information becomes publicly available through
no fault of Buyer or Purchaser Parent or their representatives, (ii) the use of
such information is necessary or appropriate in making any filing or obtaining
any consent or approval required for the consummation of the acquisition of the
Purchased Assets, or (iii) the furnishing or use of such information is required
by or necessary or appropriate in connection with legal proceedings. Upon the
written request of Seller and Parent Companies, Buyer and Purchaser Parent will
promptly return to Seller or destroy any Confidential Information in its
possession and certify in writing to Seller and Parent Companies that they have
done so.
(b) Except as and to the extent required by law, without the prior written
consent of the other party, neither Buyer or Purchaser Parent nor Seller or
Parent Companies will, and each will direct its representatives not to, make,
directly or indirectly, any public comment statement, or communication with
respect to, or otherwise to disclose or to permit the disclosure of the
existence of this Agreement between the parties or any of the terms, conditions,
or other aspects of the transaction. If a party is required by law to make any
such disclosure, it must first provide to the other party the content of the
proposed disclosure, the reasons that such disclosure is required by law, and
the time and place that the disclosure will be made.
6.4 Joint Obligations. The following shall apply with equal force to Seller
and Buyer:
(a) Prior to Closing, each party shall promptly give the other party
written notice of the existence or occurrence of any condition of which such
party may obtain notice or otherwise discover which would make any
representation or warranty herein contained of such party untrue or which might
reasonably be expected to prevent the consummation of the transactions herein
contemplated.
(b) No party shall intentionally perform any act which, if performed, or
omit to perform any act which, if omitted to be performed, would prevent or
excuse the performance of this Agreement by such party or which would result in
any representation or warranty herein contained of such party being untrue in
any material respect as if originally made on and as of the Closing Date.
(c) The parties shall promptly make and diligently pursue all filings and
perform all acts required by them, respectively, under the Hart-Scott-Rodino
Act; and, in addition to the conditions set forth in Article VI, the parties'
obligations under this Agreement shall each be conditional upon the expiration
or early termination of the waiting period set forth in the Hart-Scott-Rodino
Act and the rules promulgated thereunder.
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6.5 Title Binder and Policy, Survey.
(a) Title Binder. Buyer, at the cost of Buyer, has secured a current
Commitment for Title Insurance (No. 1006.A.2, dated as of May 21, 1998 at 8:00
a.m.) (the "Title Binder") issued by First American Title Insurance Company (the
"Title Company"). The Title Binder sets forth the state of title to the Real
Estate Purchased Assets, together with a listing of each of the mortgages, deeds
of trust, liens, claims, encumbrances, easements, servitudes, charges, equities,
covenants, conditions, reservations, restrictions, rights-of-way, or other
matters affecting title to the Real Estate Purchased Assets which would appear
in an owner's title policy when issued at the Closing (all of which are herein
referred to collectively as the "Exceptions to Title"). The Title Binder
contains the express commitment of the Title Company to issue the Title Policy
(as hereinafter defined) to Buyer in an amount equal to the purchase price of
the Real Estate Purchased Assets, insuring such title to the Real Estate
Purchased Assets as is specified in the Title Binder. Buyer shall deliver to
Seller any updates and revisions to the Title Binder upon receipt by Buyer
thereof.
(b) Seller's and Parent Companies' Obligation to Cure. To the extent that
exceptions to the title to the Real Estate Purchased Assets have been raised in
the Title Binder other than the Permitted Exceptions, then Seller and Parent
Companies shall, prior to the Closing Date, either satisfy such exceptions at
Seller's and Parent Companies' sole cost and expense, or promptly notify the
Buyer in writing as to which exceptions Seller and Parent Companies cannot or
will not satisfy at Seller's or Parent Companies' expense. If Seller and Parent
Companies elect to satisfy the exceptions, Seller may adjourn the Closing Date
for a reasonable time to affect such cure (not to exceed 90 days) and extend by
the same number of days the deadlines of September 1, 1998, set forth in Section
11.2(b) and (c) hereof. In the event that Seller or the Parent Companies fail or
refuse to satisfy any of such exceptions, the Buyer shall have the option of
either consummating the transactions herein contemplated and accepting the Real
Estate Purchased Assets without having such exceptions satisfied (in which event
such objections shall become Permitted Exceptions hereunder), or terminating
this Agreement as provided in Section 11.2.
(c) Title Policy. At the Closing, Buyer, at the cost of Buyer, shall cause
an Owner's/Leasehold Title Policy (the "Title Policy") to be furnished to the
Buyer. The Title Policy shall be issued by the Title Company and shall insure
fee simple, indefeasible title to the Real Estate and valid leasehold interest
in the Leased Property and the Contingently Assigned Leased Property. The Title
Policy may contain the Permitted Exceptions, but shall contain no additional
exceptions to title to the Real Estate Purchased Assets. Buyer shall deliver a
copy of the Title Policy to Seller upon receipt by Buyer thereof.
(d) Survey. Buyer, at Buyer's expense, has obtained a complete, current
certified survey of the Real Estate Purchased Assets made by Brown & Mitchell
and prepared in accordance with ALTA requirements (the "Survey"). The certified
survey
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shows the number of square feet of area included in the Real Estate Purchased
Assets, easements or encroachments on the Real Estate Purchased Assets, access
from the Real Estate Purchased Assets to a dedicated public road, flood hazard
data and improvements concerning the Real Estate Purchased Assets. Attached
hereto as Schedule 6.5(d) is a listing of such objections to the survey as the
Buyer has concerning easements or encroachments from surrounding property onto
the Real Estate Purchased Assets, reasonable access from the Real Estate
Purchased Assets to a dedicated public road, the Real Estate Purchased Assets
are located in a flood hazard zone that is unacceptable to the Buyer or any
other matter which Buyer finds unacceptable (the "Survey Exceptions"). Seller
and Parent Companies shall either satisfy such Survey Exceptions at Seller's and
Parent Companies' sole cost and expense or promptly notify the Buyer in writing
as to which Survey Exceptions Sellers and Parent Companies cannot or will not
satisfy at Seller's and Parent Companies' expense. In the event the Seller fails
or refuses to satisfy any such Survey Exceptions, the Buyer shall have the
option of either consummating the transactions herein contemplated and accepting
the Real Estate Purchased Assets without having such Survey Exceptions satisfied
or terminating this Agreement as provided in Section 11.2.
ARTICLE VII
Conditions to Closing
7.1 Conditions to Seller's Obligations. The obligation of Seller and Parent
Companies to consummate the transactions contemplated hereby is subject to
fulfillment of all of the following conditions precedent on or prior to the
Closing Date:
(a) Each and every representation and warranty made by Buyer or Purchaser
Parent shall have been true in all material respects when made and shall be true
in all material respects as if originally made on and as of the Closing Date.
(b) All obligations of Buyer and Purchaser Parent to be performed hereunder
through and including the Closing Date (including, without limitation, all
obligations which Buyer or Purchaser Parent would be required to perform at the
Closing if the transactions contemplated hereby was consummated) shall have been
performed in all material respects.
(c) All necessary governmental filings have been made and all governmental
consents or approvals have been obtained and no suit, proceeding or
investigation shall have been commenced or threatened by any governmental
authority or private person on any grounds to restrain, enjoin or hinder, or to
seek material damages on account of, or
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in connection with or related to, the transactions herein contemplated, and any
and all waiting periods under the Hart-Scott-Rodino Act and the WARN Act shall
have expired.
(d) Buyer and Purchaser Parent shall have executed a notice to the Escrow
Agent for release of the Deposit (as defined in the Escrow Agreement) to Seller
at Closing.
(e) All of the consents necessary for the consummation of the transactions
contemplated herein shall have been subject to no conditions which are not
satisfied as of the Closing Date.
(f) Finance shall have received the TIA Certificate and Bondholder Consent
with regard to the transaction contemplated herein.
7.2 Conditions to Buyer's Obligations. The obligation of Buyer to
consummate the transactions contemplated hereby is subject to the fulfillment of
all of the following conditions precedent on or prior to the Closing Date:
(a) Each and every representation and warranty made by Seller or Parent
Companies shall have been true in all material respects when made and shall be
true in all material respects as if originally made on and as of the Closing
Date.
(b) All obligations of Seller and Parent Companies to be performed
hereunder through and including the Closing Date (including, without limitation,
all obligations which Seller and Parent Companies would be required to perform
at the Closing if the transaction contemplated hereby was consummated) shall
have been performed in all material respects.
(c) Including but not limited to the consents and non-disturbance
agreements set forth on Schedule 7.2(c) hereto, all of the consents and estoppel
certificates in form satisfactory to Buyer (and without cost to Buyer) and
necessary for the assignment of the Lease Agreements, Assigned Contracts and
Assigned Permits shall have been obtained and all releases or satisfactions
required to obtain a release of the Purchased Assets from any liens or
encumbrances other than the Permitted Exceptions shall have been obtained
subject to no conditions which are not satisfied as of the Closing Date,
provided, however, that the failure to deliver such release or satisfaction at
the Closing with respect to the Real Estate Purchased Assets shall not
constitute a condition precedent to the Closing if the Title Company will omit
such lien or encumbrance. Notwithstanding the foregoing, with regard to the
Contingently Assigned Contracts, in the event Seller does not obtain consent to
assignment thereof from the respective necessary third parties by the Closing
Date, Buyer shall proceed to close the transactions (excepting such Contingently
Assigned Contracts for which consents to transfer have not been obtained (the
"Non-Assigned Contracts")) and any such Non-Assigned Contracts shall not be
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included in Purchased Assets, Seller shall retain all rights and obligations
thereunder, Buyer shall have no right to any purchase price adjustments under
this Agreement, and consents to transfer such Non-Assigned Contracts shall not
be a condition to Closing hereunder; provided, however, Seller shall have a
continuing obligation post-Closing to use commercially reasonable efforts and
cooperate with the Buyer to obtain a consent to transfer of such Non-Assigned
Contracts. In the event of receipt of consent to assignment of any of the
Non-Assigned Contracts (in such form and substance reasonably satisfactory to
Buyer), Seller shall assign and Buyer shall assume all of Seller's rights and
obligations thereunder from and after the date of such consent subject to
receipt of consents and non-disturbance agreements set forth on Schedule 7.2(c)
hereto.
(d) All necessary governmental consents or approvals have been obtained and
no suit, proceeding or investigation shall have been commenced or threatened by
any governmental authority or private person on any grounds to restrain, enjoin
or hinder, or to seek material damages on account of, or in connection with or
related to the transactions herein contemplated, and any and all waiting periods
under the Hart-Scott- Rodino Act and the WARN Act shall have expired.
(e) Seller shall have delivered to Buyer the written opinion(s) of counsel
for Seller and Parent Companies, in form and substance as set forth on Exhibit B
attached hereto.
(f) Buyer shall have received evidence of satisfaction of all Exceptions to
Title in the Title Binder not included in the Permitted Exceptions, satisfaction
of all Survey Exceptions and satisfaction and cancellation of all encumbrances
or liens affecting the Purchased Assets not included in the Permitted
Exceptions, all in such form which shall be reasonably satisfactory to Buyer.
7.3 Casualty. If, prior to Closing, any material portion of the Purchased
Assets is damaged or destroyed, Buyer may terminate this Agreement and such
termination shall be deemed to be a termination as a result of a failure of a
condition precedent to Closing; provided, however, that the parties shall
nevertheless be bound to perform all obligations specified in Sections 6.3 and
11.3 hereof. If, prior to Closing, any material portion of the Purchased Assets
is damaged or destroyed, and Buyer elects to proceed with the Closing, and the
transaction is consummated, any insurance proceeds received by Seller for repair
or replacement of such damage or loss shall be assigned to Buyer for such repair
or replacement. For purposes of this
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section, a "material portion of the Purchased Assets" shall mean damage or
destruction that results in a repair or replacement cost of $50,000 or more.
ARTICLE VIII
Closing
8.1 Form of Documents. At the Closing, the parties shall deliver the
documents, and shall perform the acts, which are set forth in this Article VIII.
All documents which Seller and Parent Companies shall deliver shall be in the
form attached hereto or otherwise in form and substance reasonably satisfactory
to Buyer. All documents which Buyer and Purchaser Parent shall deliver shall be
in the form attached hereto or otherwise in form and substance reasonably
satisfactory to Seller.
8.2 Buyer's and Purchaser Parents' Deliveries. Subject to the fulfillment
or waiver of the conditions set forth in Section 7.2, Buyer and Purchaser Parent
shall execute and/or deliver at Closing to Seller all of the following:
(a) the cash payment to be made at the Closing as provided in Section 3.2;
(b) certificates of good standing of Buyer and Purchaser Parent, issued not
earlier than ten (10) days prior to the Closing Date by the Secretary of State
of Minnesota and the Secretary of State of Mississippi;
(c) an incumbency and specimen signature certificate with respect to the
officers of Buyer and Purchaser Parent executing this Agreement, and any other
document delivered hereunder, on behalf of Buyer;
(d) a certified copy of resolutions of each of Buyer's and Purchaser
Parent's board of directors, authorizing the execution, delivery and performance
of this Agreement;
(e) the Assignment and Assumption Agreement;
(f) a closing certificate executed by the president of Buyer and Purchaser
Parent (or any other officer of Buyer and Purchaser Parent specifically
authorized to do so), on
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behalf of Buyer and Purchaser Parent, pursuant to which Buyer and Purchaser
Parent represent and warrant to Seller that Buyer's and Purchaser Parent's
representations and warranties to Seller are true and correct in all material
respects as of the Closing Date as if then originally made (subject to the
provisions of Section 10.1 hereof), that all covenants required by the terms
hereof to be performed by Buyer and Purchaser Parent at or before the Closing
have been so performed, and that all documents to be executed and delivered by
Buyer and Purchaser Parent at the Closing have been executed by duly authorized
officers of Buyer and Purchaser Parent;
(g) the notice to the Escrow Agent for release of the Deposit to Seller;
and
(h) without limitation by specific enumeration of the foregoing, all other
documents reasonably required to consummate the transactions herein
contemplated.
8.3 Seller's and Parent Companies' Deliveries. Subject to the fulfillment
or waiver of the conditions set forth in Section 7.1, Seller and Parent
Companies shall upon Closing deliver to Buyer at the Gaming Facility physical
possession of all tangible Purchased Assets, and shall execute (where applicable
in recordable form) and/or deliver at Closing to Buyer (or Buyer shall have
otherwise obtained) all of the following:
(a) certificates of good standing of Seller and each Parent Company, issued
not earlier than ten days prior to the Closing Date by the Secretary of State of
each relevant jurisdiction;
(b) an incumbency and specimen signature certificate with respect to the
officers of Seller and each Parent Company executing this Agreement, and any
other original document delivered hereunder, on behalf of Seller;
(c) a certified copy of resolutions of Seller's and each Parent Company's
board of directors, authorizing the execution, delivery and performance of this
Agreement;
(d) a bill of sale, executed by Seller, conveying all of the tangible
personal property constituting a part of the Purchased Assets to Buyer, free and
clear of all liens, claims, encumbrances, and security interests except the
Permitted Exceptions, and containing the warranties of title set forth in this
Agreement;
(e) the Assignment and Assumption Agreement;
(f) a closing certificate duly executed by the president of Seller and each
Parent Company (or any other officers of Seller and each Parent Company
specifically authorized to do so), on behalf of Seller and each Parent Company,
pursuant to which Seller and each
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Parent Company represents and warrants to Buyer that Seller's and each Parent
Company's representations and warranties to Buyer are true and correct in all
material respects as of the Closing Date as if then originally made (subject to
the provisions of Section 10.1 hereof), that all covenants required by the terms
hereof to be performed by Seller on or before the Closing Date have been so
performed, and that all documents to be executed and delivered by Seller at the
Closing have been executed by duly authorized officers of Seller and each Parent
Company;
(g) to the extent not obtained by the Title Company, copies of UCC, federal
and state tax lien and bankruptcy searches with respect to Seller and each
Parent Company, for the State of Mississippi, and Harrison County, Mississippi,
prepared by the UCC Clerks of the Chancery Clerk's offices and Secretary of
State's office or search companies reasonably satisfactory to Buyer, and dated
not earlier than fifteen (15) days prior to the Closing Date and an abstract of
title with respect to the Casino Barge dated not earlier than fifteen (15) days
prior to the Closing Date;
(h) a general warranty deed with respect to Parcel 7 (Holt) and Parcel 2
(Nguyen) as identified on Schedule 1.2(a)(ii) and a special warranty deed with
respect to Parcel 5 (People's Bank) as identified on Schedule 1.2(a)(ii),
together with any necessary transfer declarations, and a quit-claim Deed with
respect to the legal descriptions for the Real Estate as shown on the Survey;
(i) the Buyer shall have obtained the Title Policy subject only to the
Permitted Exceptions and the Survey;
(j) a release of the Purchased Assets from all liens and encumbrances other
than the Permitted Exceptions as of the Closing Date or in lieu thereof, with
respect to any of the Real Estate Purchased Assets, an omission by the Title
Company of such lien or encumbrance;
(k) consents or approvals and non-disturbance agreements, as necessary, for
the assignment and assumption of the Lease Agreements, Assigned Contracts, and
Assigned Permits, and Contingently Assigned Contracts; and
(l) a bill of sale in form satisfactory for filing with the U.S. Coast
Guard for the Casino Barge together with the original certificate of
documentation on the Casino Barge;
(m) without limitation by specific enumeration of the foregoing, all other
documents reasonably required to consummate the transactions herein
contemplated.
8.4 Closing Adjustments and Prorations. Adjustments to the Purchase Price
shall be made between Seller and Buyer and shall be prorated on a per diem
accrual basis as of the
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Closing Date with respect to each of the following, such that Seller shall
receive the benefit of all revenues and be responsible for all expenses and
liabilities allocable to the period prior to and through the Closing Date and
Buyer shall receive the benefit of all revenues and be responsible for all
expenses and liabilities allocable to the period after the Closing Date: (a) any
accrued taxes with respect to the Real Estate not yet due and payable including
taxes for the then current tax fiscal year and any installment of taxes due and
payable for any prior tax fiscal year, shall be prorated as of the Closing Date.
If the Closing occurs prior to the receipt by Seller of the tax bill for the tax
fiscal year in which the Closing occurs or for any prior tax fiscal year, Buyer
and Seller shall prorate Real Estate taxes for such tax fiscal year or years
based upon the amount of the Real Estate taxes for the most recent tax fiscal
year for which a tax bill is available. Thereafter, upon receipt of the tax bill
or bills for the tax fiscal year in which the Closing occurs and for any prior
tax fiscal years, the proration of such taxes shall be recalculated based upon
the amount of Real Estate taxes shown by such tax bill or bills, and Buyer or
Seller and Parent Companies, as the case may be, shall pay to the other on
demand the amount that may be necessary to effectuate the adjustment;
(b) all personal property taxes, and water and sewer rents, rates and
charges shall be prorated as of the Closing Date. If the amount of any such item
is unascertainable on the Closing Date, the proration therefor shall be based on
the most recent available bill. Thereafter, if the actual amount of any such
item, when later determined, and prorated as of the Closing Date, differs from
the proration made therefor at Closing, Buyer and Purchaser Parent or Seller and
Parent Companies, as the case may be, shall pay to the other on demand the
amount that may be necessary to effectuate such adjustment;
(c) utilities (including, without limitation, contracts for the supply of
heat, steam, electric power, gas, lighting, telephone and telex contracts),
payable by Seller, based upon the last reading of meters, prior to the Closing,
which readings Seller shall obtain not more than two days prior to the Closing,
shall be prorated. Seller shall endeavor to obtain meter readings on the Closing
Date, and if such readings are obtained, there shall be no proration of such
items and Seller shall pay the bills therefor for the period to the Closing
Date, and Buyer shall pay the bills therefor for the period subsequent to the
Closing Date as and when rendered;
(d) all rents under the Lease Agreements and payments under the Assigned
Contracts and the Contingently Assigned Contracts shall be prorated between
Seller and Buyer; provided, however, that any deposits made by Seller under the
Lease Agreements and the Assigned Contracts and the Contingently Assigned
Contracts shall be credited to Seller and Buyer shall pay to Seller the value of
such deposits on the Closing Date in the form of a Purchase Price adjustment;
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(e) any other prepaid items with respect to the Purchased Assets shall be
prorated between Seller and Buyer;
(f) (i) Any proration permitted and agreed to under this Agreement for any
reason not apportioned at the Closing shall be apportioned as soon thereafter as
practicable. If any mutual mistakes, including without limitation, any erroneous
mathematical calculations, are made in any apportionment at the Closing, Seller
and Buyer shall, within forty-five (45) days after the Closing, correct said
mistakes and make any payment required to produce an accurate apportionment. Any
party requesting such a correction (the "Requesting Party") shall present a
detailed accounting in writing, together with supporting documentation of all
prorations required by subsections (a), (b), (c), (d) and (e) within forty-five
(45) days after the Closing. If either party disputes the other party's
proration, the disputing party shall provide written notice to Requesting Party
of such dispute together with all necessary detail and supporting documentation
within fifteen (15) days of receipt of the proposed corrected proration. All
such disputes shall be resolved by the parties in good faith.
(ii) In the event that Seller and Buyer are unable to resolve any such
dispute within ten (10) days following delivery of such notice, Seller and Buyer
shall together designate a third-party accounting firm (the "Arbitrating
Accountants") to act as arbitrator with respect to any such dispute. In the
event that Seller and Buyer are unable to agree as to the identity of such
Arbitrating Accountants, each of Seller and Buyer shall identify a third-party
accounting firm, and the two (2) accounting firms so designated shall themselves
identify the Arbitrating Accountants.
(iii) In the event of a dispute, as aforesaid, the Arbitrating Accountants
shall be instructed to review the proration required by subsections (a), (b),
(c), (d) and (e), meet with Seller and Buyer to review the extent of any
dispute, and resolve any such disputes as promptly as possible. The
determination of the Arbitrating Accountants shall be final and binding upon
Seller and Buyer. The costs of the Arbitrating Accountants shall be borne
equally by Seller and Buyer.
ARTICLE IX
Post-Closing Agreements
9.1 Post-Closing Agreements. From and after the Closing, the parties shall
have the respective rights and obligations which are set forth in the remainder
of this
Article IX.
9.2 Further Assurances. The parties shall execute such further documents,
and perform such further acts, as may be necessary to transfer and convey the
Purchased Assets to Buyer, on
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the terms herein contained, and to otherwise comply with the terms of this
Agreement and consummate the transactions herein provided. To the extent that
consents to assignment from third parties are required under any of the Lease
Agreements, Assigned Contracts or Assigned Permits and such consents have not
been obtained by the Closing Date, and Buyer agrees to close the transactions
contemplated by this Agreement notwithstanding the lack of such consents, Seller
agrees to exercise reasonable efforts to obtain such consents subsequent to the
Closing Date.
ARTICLE X
Indemnification
10.1 General. From and after the Closing, the parties shall indemnify each
other as provided in this Article X. For the purposes of this Article X, each
party shall be deemed to have remade all of its representations and warranties
contained in this Agreement on the Closing Date with the same effect as if
originally made at such time, provided, however, that to the extent a party has
notified the other parties in writing of an untrue representation, breach of
warranty or nonfulfillment of any covenant by such notifying party no later than
two (2) days prior to Closing, and the other parties receiving such notification
elect to close the transactions contemplated by this Agreement, such
representation, warranty or covenant, as appropriate, shall be deemed to have
been remade on the Closing Date as modified to the extent of any such
notification by a certificate of such notifying party stating the modified
representation, warranty or covenant to be delivered at Closing. 10.2 Seller's
and Parent Companies' Indemnification Covenants. Seller and each Parent Company
shall indemnify and hold Buyer and Purchaser Parent and their officers,
directors and their successors and assigns, forever harmless against and from
all liability, demands, claims,
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actions or causes of action, assessments, losses, fines, penalties, costs,
damages and expenses, including, without limitation, those asserted by any
federal, state or local governmental entity, third party, or former or present
employee of Seller or Purchaser Parent, including reasonable attorneys' and
expert witness fees, sustained or incurred by any of them as a result of or
arising out of or by virtue of:
(a) any untrue representation, breach of warranty or nonfulfillment of any
covenant by Seller or any Parent Company contained herein or in any certificate,
document or instrument delivered to Buyer or Purchaser Parent pursuant hereto or
in connection herewith, unless Seller and Parent Companies have notified Buyer
and Purchaser Parent in writing of such breach or falsity prior to Closing and
Buyer and Purchaser Parent have elected to proceed with Closing;
(b) any liabilities of Seller or any Parent Company not specifically
assumed by Buyer pursuant to the terms of this Agreement;
(c) any and all debts, liabilities or obligations of Seller or any Parent
Company, direct or indirect, fixed, contingent or otherwise, which exist at or
as of the date of the Closing hereunder or which arise after the Closing but
which are based upon or arise from any act, transaction, circumstance, sale of
goods or services, state of facts or other condition which occurred or existed
on or before the date of the Closing, whether or not then known, due or payable,
except for the Assumed Liabilities;
(d) any claim for finders fee or brokerage or other commission arising by
reason of any services alleged to have been rendered to or at the instance of
Seller or any Parent Company with respect to this Agreement or any of the
transactions contemplated hereby; and
(e) any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs and expenses, including, without limitation, legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Buyer's Indemnification Covenants. Buyer and Purchaser Parent shall
indemnify and hold Seller and each Parent Company, and their officers,
directors, successors and assigns, forever harmless against and from all
liability, demands, claims, actions or causes of action, assessments, losses,
fines, penalties, costs, damages and expenses, including, without limitation,
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those asserted by any federal, state or local governmental entity or third party
or former or present employee of Buyer or Purchaser Parent, including reasonable
attorneys' and expert witness fees, sustained or incurred by Seller or each
Parent Company and their successors and assigns, as a result of or arising out
of or by virtue of: (a) Any untrue representation, breach of warranty or
nonfulfillment of any covenant or agreement by Buyer or Purchaser Parent
contained herein or in any certificate, document or instrument delivered to
Seller pursuant hereto or in connection herewith, unless Buyer or Purchaser
Parent have notified Seller and Parent Companies in writing of such breach or
falsity prior to Closing and Seller and Parent Companies have elected to proceed
with Closing;
(b) Any of the Assumed Liabilities; and
(c) Any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs and expenses, including, without limitation, legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
(d) any and all debts, liabilities or obligations of Buyer or Purchaser
Parent, direct or indirect, fixed, contingent or otherwise, regarding the
Purchased Assets which are based upon or arise from any act, transaction,
circumstance, sale of goods or services, state of facts or other condition which
occurs after the date of the Closing; and
(e) any claim for finder's fee or brokerage or other commission arising by
reason of any services alleged to have been rendered to or at the instance of
Buyer or Purchaser Parent with respect to this Agreement or any of the
transactions contemplated hereby.
10.4 Procedure for Indemnification. Each party indemnified pursuant to
Section 10.2 or Section 10.3 (an "Indemnified Party") shall notify the
indemnitor (the "Indemnifying Party") in writing of any claim for
indemnification hereunder, describing the claim, the amount thereof, if
reasonably determinable, and the basis therefor within 60 days after such
Indemnified Party shall have had actual notice thereof. The Indemnifying Party
shall respond in writing to each such claim within 30 days of receipt of such
notice. Failure to so respond within such time period shall constitute an
absolute admission of liability by the Indemnifying Party failing to respond for
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the claim or claims to which the notice related. No action shall be taken
pursuant to the provisions of this Agreement or otherwise by the Indemnified
Party (except with respect to claims made by a third party or unless the claim
if not first paid, discharged or complied with would result in the interruption
or cessation of the conduct of business of the Indemnified Party, in which case
the Indemnified Party may act individually) until the later of (i) the
expiration of the 30-day response. period; or (ii) 30 days following the
termination of the 30-day response period if a response received within such
30-day period requested an opportunity to cure the mater giving rise to
indemnification (and, in such event, the amount of such claim for
indemnification shall be reduced to the extent so cured within such 30-day cure
period). If such demand is based on a claim by a third party, prompt written
notice thereof shall be given by the Indemnified Party to the Indemnifying
Party, and the Indemnifying Party shall have the right to assume by written
notice within ten (10) days of notice thereof the control of the defense
thereof, at its own expense, and to employ counsel satisfactory to it and the
Indemnified Party in connection therewith, if the claim seeks only monetary
damages but if the claim seeks injunctive or other equitable relief or the claim
if not first paid, discharged or complied with would result in the interruption
or cessation of the conduct of business of the Indemnified Party, then the
Indemnified Party may act immediately and if so acts shall control the defense
thereof. Any payment, compromise or settlement of any third-party claim for
which the Indemnifying Party has assumed the defense shall fully release the
Indemnified Party and finally dispose of such matter or the consent of the
Indemnified Party shall be required therefor. The party which does not control
the defense shall cooperate fully to make available to the party controlling the
defense all pertinent information under its control. In the event that the
Indemnifying Party has failed to give notice of its election
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to assume defense, then in such event the Indemnified Party may assume control
of the defense and settle or compromise such claim for the amount of and risk of
the Indemnifying Party. 10.5 Reduction for Insurance, Etc. The amount which an
Indemnifying Party is required to pay to, for, or on behalf of any other party
pursuant to this Article X shall be reduced (including, without limitation,
retroactively) by any proceeds from the Title Policy ("Insurance Proceeds")
actually recovered by or on behalf of such Indemnified Party in reduction of the
related indemnifiable loss (the "Indemnifiable Loss"). Notwithstanding the
foregoing, the Indemnified Party agrees to first make a claim against the Title
Policy for any indemnifiable loss covered under the Title Policy and only if
such claim is denied in whole or part, or if the Title Company has failed to
accept or deny such claim within ninety (90) days of the filing of such claim,
may the Indemnified Party proceed against Seller or Parent Companies for such
Indemnifiable Loss. Amounts required to be paid, as so reduced, are hereafter
sometimes called an "Indemnity Payment." If an Indemnified Party shall have
received or shall have paid on its behalf an Indemnity Payment in respect of an
Indemnifiable Loss and shall subsequently receive directly or indirectly
Insurance Proceeds in respect of such Indemnifiable Loss, then such Indemnified
Party shall promptly reimburse to the Indemnifying Party a sum equal to the
amount of such Insurance Proceeds, provided, however, that such reimbursement
amounts shall not exceed the amount of the Indemnity Payment actually made by
the Indemnifying Party. 10.6 Indemnification Threshold. No party to this
Agreement shall be entitled to indemnification pursuant to this Agreement until
the total amount for which such party shall have been entitled to such
indemnification, but for this Section 10.6, exceeds fifty thousand dollars
($50,000) in the aggregate; provided, however, that once such amount exceeds
fifty thousand dollars ($50,000), then, in that event, such party to be
indemnified shall be entitled to
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indemnification for the total amount for which indemnification may be owing,
including the first fifty thousand dollars ($50,000). Nothing contained in this
Section 10.6 shall in any manner constitute or be deemed to limit any claim by
Seller, the Parent Companies, Purchaser Parent or Buyer arising out of a claim
of fraud. 10.7 Nature and Survival of Representations and Warranties. Each
statement, representation, warranty, indemnity, covenant and agreement made by
Seller or any Parent Company in this Agreement or in any document, certificate
or other instrument delivered by or on behalf of Seller or any Parent Company
pursuant to this Agreement or in connection herewith shall be deemed the joint
and several statement, representation, warranty, indemnity, covenant and
agreement of Seller and each such Parent Company. Each statement,
representation, warranty, indemnity, covenant and agreement made by Buyer or
Purchaser Parent in this Agreement or in any document, certificate or other
instrument delivered by or on behalf of Buyer or Purchaser Parent pursuant to
this Agreement or in connection herewith shall be deemed the joint and several
statement, representation, warranty, indemnity, covenant and agreement of Buyer
and Purchaser Parent. All statements, representations, warranties, indemnities,
covenants and agreements made by each of the parties hereto shall survive the
Closing until a date three (3) years from the Closing Date, at which time all
such statements, representations, warranties, indemnities, covenants and
agreements shall expire (provided, however, that there shall be no expiration
date with respect to the representations, warranties, indemnities, covenants and
agreements made in Section 5.8 hereof). 10.8 Limitation of Liability,. The
liability of the Seller and Parent Companies, jointly and severally, under this
Article X shall be limited to a maximum of $15,000,000.
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ARTICLE XI
Effect of Termination/Proceeding
11.1 General. The parties shall have the rights and remedies with respect
to the termination and/or enforcement of this Agreement which are set forth in
this Article XI.
11.2 Right to Terminate. Anything to the contrary herein notwithstanding,
this Agreement and the transactions contemplated hereby may be terminated (the
date upon which notice of termination is delivered being defined as the
"Termination Date") absent fraud, malice or gross negligence on the part of the
terminating party, subject to the provisions of Section 11.4, as follows:
(a) by mutual consent of Buyer and Seller; or
(b) by Seller if, as of September 1, 1998, any of the conditions to Sellers
obligations set forth in Sections 6.4 and 7.1 have not been satisfied through no
fault of Seller; or
(c) by Buyer if, as of September 1, 1998, any of the conditions to Buyer's
obligations set forth in Sections 6.4 and 7.2 have not been satisfied through no
fault of Buyer; or
(d) by Seller if, at any time prior to Closing, Buyer notifies Seller in
writing that it cannot or will not be able to meet any condition of Seller to
close through no fault of Seller and identifies such conditions and reasons for
failure to satisfy any such conditions; or
(e) by Buyer if, at any time prior to Closing, Seller notifies Buyer in
writing that it cannot or will not be able to meet any condition of Buyer to
close through no fault of Buyer and identifies such conditions and reasons for
failure to satisfy any such conditions.
11.3 Certain Effects of Termination. In the event of the termination of
this Agreement by either Seller or Buyer as provided in Section 11.2:
(a) each party, if so requested by the other party will redeliver promptly
every document furnished to it by the other party (or any subsidiary, division,
associate or affiliate of such other party) in connection with the transaction
contemplated hereby,
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whether so obtained before or after the execution of this Agreement, and any
copies thereof which may have been made, and will cause its representatives and
any representatives of financial institutions and investors and any others to
whom such documents were furnished promptly to return such documents and any
copes thereof that may have been made; and
(b) all information received by any party hereto or its affiliates or
representatives with respect to the business of the other party hereto or its
subsidiaries, divisions, affiliates or associates shall not, unless otherwise
required by law, at any time be used for the advantage of, or caused to be
disclosed to third parties by or used for any other reason by such party or its
affiliates or representatives for any reason whatsoever.
Sections 6.3 and 11.3 shall survive any termination of this Agreement.
11.4 Right to Damages. If this Agreement is terminated pursuant to Section
11.2, neither party hereto shall have any claim against the other unless the
circumstances giving rise to the right to terminate were caused either by the
other party's material breach of Article VI or Article VII or by any of the
material representations and warranties contained in Article IV or Article V by
such other party being in a material respect incorrect when made, or by a
closing document delivered by such other party being materially incorrect when
delivered; in which events termination shall not be deemed or construed as
limiting or denying any legal or equitable right or remedy of said party, and
said party shall be entitled to recover its costs and expenses which are
incurred in pursuing its rights and remedies (including reasonable attorneys'
fees).
11.5 Specific Performance. No party shall be limited to the damages
referenced in Section 11.4 and either party may seek specific performance of the
obligations of the other party, but only to the extent that the party seeking
specific performance would have a claim against the other party pursuant to
Section 11.4 if the party seeking specific performance had elected to terminate
this Agreement.
11.6 Other Remedies. Seller and Buyer agree that in the event either party
defaults under the terms of this Agreement, the restrictions and obligations of
which are reasonable and
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necessary and the violation of which would result in substantial and irreparable
injury to the nondefaulting party, the remedies available to the nondefaulting
party at law would be inadequate and that both parties' obligations under this
Agreement may be specifically enforced.
11.7 Attorneys Fees. If it should become necessary for any party to employ
an attorney and seek to enforce its rights hereunder, then the prevailing party
shall be entitled in addition to damages to all costs and expenses (including
reasonable attorney's fees) paid or incurred regardless of whether suit is
filed.
ARTICLE XII
Miscellaneous
12.1 Fees. Seller and Buyer each represent and warrant to the other that
the respective warrantor has not dealt with any person, firm or corporation who
is or may be entitled to a broker's commission, finder's fee, investment
banker's fee or similar payment from the other party for arranging these
transactions or introducing the parties to each other.
12.2 Publicity. Press releases concerning this transaction shall be made
only with the prior written agreement of Seller and Buyer, and, in the event a
press release is required by law, the written agreement of Seller and Buyer
shall not be unreasonably withheld. Buyer and Seller acknowledge and agree that,
after the Closing, Buyer and Seller shall each disclose this transaction and the
terms of this Agreement on Form 8-K to be filed with the Securities and Exchange
Commission, which filing shall include a copy of this Agreement.
12.3 Notices. All notices required or permitted to be given hereunder shall
be in writing and shall be deemed given when delivered in person, seven (7)
business days after being deposited
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in the United States mail, postage prepaid, registered or certified mail, or the
next business day if sent for overnight delivery by a nationally recognized
courier service, addressed as follows: If to Seller, Finance or Parent,
respectively, Addressed to the appropriate party: 220 Stewart Avenue Las Vegas,
NV 89101 Attention: Rory Reid, Esq., General Counsel Fax: 702-477-3003
with a copy to:
McDermott, Will & Emery
50 Rockefeller Plaza
New York, NY 10020
Attention: Brian Hoffmann, Esq.
Fax: 212-547-5444
If to Buyer, or Purchaser Parent, respectively,
Addressed to the appropriate party:
130 Cheshire Lane
Minnetonka, MN 55305
Attention: Joseph M. Valandra, Vice President
Fax: 612-449-7022
with a copy to:
Watkins Ludlam Winter & Stennis, P.A.
633 N. State Street
Jackson, Mississippi 39205
Attention: Thomas B. Shepherd III, Esq. and Gina M. Jacobs, Esq.
Fax: 601-949-4804
and/or to such other respective addresses and/or addressees as may be designated
by notice given in accordance with the provisions of this Section 12.3.
12.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and shall be binding upon and inure to the benefit of the
parties hereto and their respective legal representatives, successors and
permitted assigns. Each schedule hereto shall be considered
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incorporated into this Agreement. Any amendments or alternative or supplementary
provisions to this Agreement must be made in writing and duly executed by an
authorized representative or agent of each of the parties hereto.
12.5
Non-Waiver. The failure in any one or more instances of a party to insist upon
performance of any of the terms, covenants or conditions of this Agreement, to
exercise any right or privilege in this Agreement conferred, or the waiver by
said party of any breach of any of the terms, covenants or conditions of this
Agreement, shall not be construed as a subsequent waiver of any such terms,
covenants, conditions, rights or privileges, but the same shall continue and
remain in full force and effect as if no such forbearance or waiver had
occurred. No waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party. A breach of any representation,
warranty or covenant shall not be affected by the fact that a more general or
more specific representation, warranty or covenant was not also breached.
12.6 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed to be an original, and all such counterparts shall
constitute but one instrument.
12.7 Severability. The invalidity of any provision of this Agreement or
portion of a provision shall not affect the validity of any other provision of
this Agreement or the remaining portion of the applicable provision.
12.8 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONTROLLED AS TO
VALIDITY, ENFORCEMENT, INTERPRETATION, CONSTRUCTION, EFFECT AND IN ALL OTHER
RESPECTS BY THE INTERNAL LAWS OF THE STATE OF MISSISSIPPI APPLICABLE TO
CONTRACTS MADE IN THAT STATE.
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12.9 Non-assignability. Neither Buyer, Purchaser Parent, Seller nor any
Parent Company shall assign its respective rights or delegate its respective
duties pursuant to this Agreement to any third party without the prior written
consent of the other party, except that Buyer may assign its rights under this
Agreement, for collateral security purposes, to its lenders providing financing
for the transaction contemplated hereby or to another wholly-owned subsidiary of
Purchaser Parent upon the written consent of Seller and Parent Companies, not to
be unreasonably withheld. Purchaser Parent guarantees the obligation of Buyer or
its assignee to fund the Purchase Price.
12.10 Exclusive Dealing. Until the later of (i) the Closing Date or, (ii)
the Termination Date:
(a) Seller and Parent Companies will not, and will cause their officers,
directors, employees and representatives not to, directly or indirectly, through
any representative or otherwise, solicit or entertain offers from, negotiate
with or in any manner encourage, discuss, accept, or consider any proposal of
any other person relating to the acquisition of the Purchased Assets, in whole
or in part, whether directly or indirectly, through purchase, merger,
consolidation, or otherwise (other than sales of inventory in the ordinary
course and other than as a result of a transaction involving an acquisition of
any Parent Company through purchase, merger, consolidation, or otherwise); and
(b) Seller and Parent Companies will immediately notify Buyer regarding any
contact between Seller or any Parent Company and any other person regarding any
such offer or proposal or any related inquiry (including, but not limited to,
such a transaction involving any Parent Company).
12.11 Break-up Fee. If (a) Seller or any Parent Company breaches Paragraph
12.10 hereof, and (b) within six months after the date of such breach or the
Termination Date, as the case may be, Seller or any Parent Company signs a
letter of intent or other agreement relating to the acquisition of a material
portion of the Purchased Assets, in whole or in part, whether directly or
indirectly, through purchase, merger, consolidation, or otherwise (other than
sales of
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inventory or immaterial portions of the Purchased Assets in the ordinary course)
and such transaction is ultimately consummated, then, immediately upon the
closing of such transaction, Seller and/or Parent Companies will pay to Buyer
the sum of $3,000,000. In the event of termination of this Agreement due to a
breach of Section 12.10, no party hereto, or any of its directors, officers or
stockholders, shall have any liability or further obligation to any other party
under this Agreement, except as provided in Sections 6.3 and 11.3 herein and
this Section 12.11. 12.12 No Third Party Beneficiaries. Except for the
provisions of Article X with respect to any officer or director of the parties,
nothing in this Agreement shall confer any rights upon any person or entity not
a party or a permitted assignee of a party to this Agreement. 12.13 Expenses:
Legal Fees and Costs. Whether the transaction contemplated by this Agreement is
consummated or fails to be consummated for any reason whatsoever, each of the
parties hereto shall pay its own expenses and the fees and expenses of its
counsel and accountants and other experts; provided, however, in the event
either party elects to incur legal expenses to enforce or interpret any
provision of this Agreement, the prevailing party will be entitled to recover
such legal expenses, including, without limitation, reasonable attorneys' fees,
costs and necessary disbursements, in addition to any other relief to which such
party shall be entitled. 12.14 Headings. The headings contained in this
Agreement are intended solely for convenience and shall not affect the rights of
the parties to this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
Attest:/s/ Rory J. Reid
Title: Senior Vice President
Attest:/s/ Rory J. Reid
Title: Senior Vice President
Attest:/s/ Rory J. Reid
Title: Senior Vice President
Attest:
Title:
Attest:
Title:
SELLER:
LADY LUCK BILOXI, INC.
By:/s/ Andrew H. Tompkins
Title: President
FINANCE:
LADY LUCK GAMING FINANCE
CORPORATION
By:/s/ Andrew H. Tompkins
Title: Chief Executive Officer
PARENT:
LADY LUCK GAMING CORPORATION
By:/s/ Andrew H. Tompkins
Title: Chief Executive Officer
BUYER:
GRAND CASINOS OF MISSISSIPPI, INC.-
BILOXI
By:/s/ Thomas J. Brosig
Title: President
PURCHASER PARENT:
GRAND CASINOS, INC.
By:/s/ Thomas J. Brosig
Title: President
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EXHIBIT 99.1
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For release Friday, For further information contact:
June 12, 1998 Lawrence Tombari, VP/CFO or
Robert Walsh, Director of Corporate PR
(702) 477-3000 or (800) 634-6580
LADY LUCK GAMING CORPORATION CLOSES ON SALE OF BILOXI,
MISSISSIPPI FACILITY TO GRAND CASINOS
Company Receives $15 Million Cash for Lady Luck Biloxi
(Las Vegas, NV - June 12, 1998) - Lady Luck Gaming Corporation (NASDAQ -
NNM - LUCKD) today announced it has closed on the sale of substantially all the
assets associated with its Lady Luck Biloxi casino including real property, the
casino barge, and other operating assets to Grand Casinos and has received
payment of $15 million cash.
Lady Luck Gaming will retain the gaming and computer equipment, and certain
real property which is not contiguous with its Lady Luck Biloxi site. In 1997,
Lady Luck Biloxi reported negative EBITDA of $(518,000). In the first quarter of
1998, the property reported negative EBITDA of $(828,000).
Lady Luck Gaming Corporation is headquartered in Las Vegas, Nevada. The
Company develops, owns, and operates riverboat and dockside casinos and related
amenities in Mississippi and Iowa. The Company is also in the pre-development
stages on projects in Missouri and Vancouver, British Columbia.
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