SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D**
Under the Securities Exchange Act of 1934
(Amendment No. ___ )*
Alpha Hospitality Corporation
------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
------------------------------------------------------------
(Title of Class of Securities)
02073210
------------------------------------------------------------
(CUSIP Number)
Greenville Casino Partners, L.P.
111 Walnut Street
Greenville Mississippi 38701
with a copy to:
Kenneth M. Crane
Altheimer & Gray
10 South Wacker Drive
Chicago, Illinois 60606
(312) 715-4000
------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 20,1997
------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject
of this Schedule 13D, and is filing this Schedule because of
Rule 13d-1(b)(3) or (4), check the following box. / /
Check the following box if a fee is being paid with the
statement. / /
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect
to the subject class of securities, and for any subsequent
amendment containing information which would alter
disclosures provided in a prior cover page. <PAGE>
CUSIP NO. 02073210 13D Page 2 of 11 Pages
**The total number of shares of common stock reported as
beneficially owned by the Reporting Persons herein is
9,447,239 which constitutes approximately 65.6% of the total
number of shares outstanding. All ownership percentages set
forth herein assume that there are 14,406,204 shares
outstanding.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act
(however, see the Notes). <PAGE>
CUSIP NO. 02073210 13D Page 3 of 11 Pages
_________________________________________________________
1. Name of Reporting Person:
Greenville Casino Partners, L.P.
_________________________________________________________
2. Check the Appropriate Box if a Member of a Group:
(a)
(b)
_________________________________________________________
3. SEC Use Only
_________________________________________________________
4. Source of Funds: Not Applicable.
_________________________________________________________
5. Check box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e):
_________________________________________________________
6. Citizenship or Place of Organization: Mississippi
_________________________________________________________
Number of 7. Sole Voting Power: 0
Shares _________________________________________
Beneficially 8. Shared Voting Power:9,447,239 (1) (2)
Owned By _________________________________________
Each 9. Sole Dispositive Power: 0
Reporting _________________________________________
Person 10. Shared Dispositive Power: 0
With
__________________________________________________________
11. Aggregate Amount Beneficially Owned by Each
Reporting Person:
9,447,239 (1)
_________________________________________________________
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares:__________________________________________
13. Percent of Class Represented by Amount in Row (11):
65.6% ___________________________________________________
14. Type of Reporting Person: PN
_________________________________________________________
(1) Power is exercised through Greenville CP, Inc., the
sole general partner of Greenville Casino Partners, L.P.
(2) See Item 5. <PAGE>
CUSIP NO. 02073210 13D Page 4 of 11 Pages
_________________________________________________________
1. Name of Reporting Person:
Greenville CP, Inc.
_________________________________________________________
2. Check the Appropriate Box if a Member of a Group:
(a)
(b)
_________________________________________________________
3. SEC Use Only
_________________________________________________________
4. Source of Funds: Not Applicable.
_________________________________________________________
5. Check box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e):
_________________________________________________________
6. Citizenship or Place of Organization: Delaware
_________________________________________________________
Number of 7. Sole Voting Power: 0
Shares ____________________________________________
Beneficially 8. Shared Voting Power: 9,447,239 (1) (2) (3)
Owned By ____________________________________________
Each 9. Sole Dispositive Power: 0
Reporting ____________________________________________
Person 10. Shared Dispositive Power: 0
With
_________________________________________________________
11. Aggregate Amount Beneficially Owned by Each
Reporting Person:
9,447,239 (1) (2)
_________________________________________________________
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares:
_________________________________________________________
13. Percent of Class Represented by Amount in Row (11):
65.6%
_________________________________________________________
14. Type of Reporting Person: CO
_________________________________________________________
(1) Solely in its capacity as the sole general partner of
Greenville Casino Partners, L.P.
(2) Power is exercised through, Michael J. Jacobson,
Chairman and Chief Executive Officer and a 50%
shareholder, and John O'Donnell, President and Chief
Operating Officer and a 50% shareholder.
(3) See Item 5. <PAGE>
CUSIP NO. 02073210 13D Page 5 of 11 Pages
_________________________________________________________
1. Name of Reporting Person:
Michael J. Jacobson
_________________________________________________________
2. Check the Appropriate Box if a Member of a Group:
(a)
(b)
_________________________________________________________
3. SEC Use Only
_________________________________________________________
4. Source of Funds: Not Applicable
_________________________________________________________
5. Check box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e):
_________________________________________________________
6. Citizenship or Place of Organization: USA
____________________________________________
Number of 7. Sole Voting Power: 0
Shares ____________________________________________
Beneficially 8. Shared Voting Power: 9,447,239 (1) (2)
Owned By ____________________________________________
Each 9. Sole Dispositive Power: 0
Reporting ____________________________________________
Person 10. Shared Dispositive Power: 0
With
_________________________________________________________
11. Aggregate Amount Beneficially Owned by Each Reporting
Person:
9,447,239 (1) (2)
_________________________________________________________
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares:
_________________________________________________________
13. Percent of Class Represented by Amount in Row (11):
65.6%
_________________________________________________________
14. Type of Reporting Person: IN
_________________________________________________________
(1) Solely in his capacity as a controlling person of
Greenville CP, Inc.
(2) See Item 5. <PAGE>
CUSIP NO. 02073210 13D Page 6 of 11 Pages
1. Name of Reporting Person:
John R. O'Donnell
_________________________________________________________
2. Check the Appropriate Box if a Member of a Group:
(a)
(b)
_________________________________________________________
3. SEC Use Only
_________________________________________________________
4. Source of Funds: Not Applicable
_________________________________________________________
5. Check box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e):
_________________________________________________________
6. Citizenship or Place of Organization: USA
____________________________________________
Number of 7. Sole Voting Power: 0
Shares ____________________________________________
Beneficially 8. Shared Voting Power: 9,447,239 (1) (2)
Owned By ____________________________________________
Each 9. Sole Dispositive Power: 0
Reporting ____________________________________________
Person 10. Shared Dispositive Power: 0
With
_________________________________________________________
11. Aggregate Amount Beneficially Owned by Each Reporting
Person:
9,447,239 (1) (2)
_________________________________________________________
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares:
_________________________________________________________
13. Percent of Class Represented by Amount in Row (11):
65.6%
_________________________________________________________
14. Type of Reporting Person: IN
_________________________________________________________
(1) Solely in his capacity as a controlling person of
Greenville CP, Inc.
(2) See Item 5. <PAGE>
CUSIP NO. 02073210 13D Page 7 of 11 Pages
Item 1. Securities and Issuer
This statement relates to the Common Stock, $.01 per
share par value (the "Stock"), of Alpha Hospitality
Corporation, a Delaware corporation (the "Company"). The
principal executive offices of the Company are located at 12
East 49th Street, New York, New York 10017.
Item 2. Identity and Background
(a) The undersigned, Greenville Casino Partners,
L.P., a Mississippi limited partnership ("LP"), Greenville
CP, Inc., a Delaware corporation ("CP"), Michael J. Jacobson
("Jacobson") and John O'Donnell ("O'Donnell"), hereby file
this Statement on Schedule 13D. The foregoing persons and
entities are sometimes collectively referred to herein as
the "Reporting Persons".
(b)-(c) LP is a Mississippi limited partnership
whose principal business is that of operating a casino
located in Greenville, Mississippi. CP is the sole general
partner of LP. Jacobson serves as Chairman and Chief
Executive Officer of CP, and O'Donnell serves as President
and Chief Operating Officer of CP. Jacobson currently has
the right to vote 50% of the outstanding shares of common
stock of CP, and O'Donnell has the right to vote 50% of the
outstanding shares of common stock of CP.
The principal business address (which also serves as
the principal office) of each of the Reporting Persons is
111 Walnut Street, Greenville, Mississippi 38701. Pursuant
to Instruction C to Schedule 13D under the Act, the
directors of CP and their respective business addresses and
principal occupations are listed below. Each of the
individuals listed below also serves as an executive officer
of CP.
Directors Address Occupation
--------- ------- ----------
Michael J. Jacobson 16 Highland Avenue Chairman and
Cambridge, MA 02139 Chief Executive
Officer of CP
John O'Donnell 1550 Napoli Way President and
Colorado Springs, CO, 80906 Chief Operating
Officer
<PAGE>
CUSIP NO. 02073210 13D Page 8 of 11 Pages
(d) None of the entities or persons identified in
this Item 2 has, during the last five years, been convicted
in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) None of the entities or persons identified in
this Item 2 has during the last five years been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(f) All of the natural persons identified in this
Item 2 are citizens of the United States of America.
Item 3. Source and Amount of Funds or Other
Consideration
No purchases of securities which are the subject
hereof were made; therefore, no funds have been used for the
acquisition of such securities. Beneficial ownership of the
securities which are the subject hereof was acquired solely
through the proxies described in Item 6.
Item 4. Purpose of Transaction
Beneficial ownership of the securities which are the
subject hereof was acquired solely through the proxies
described in Item 6.
Item 5. Interests in Securities of the Issuer.
The following information is provided in response to
Item 5 of Schedule 13D and is based on a total of 14,406,204
shares of stock ("Shares") outstanding as of November 7,
1997 as reported in the Form 10-Q for Alpha Hospitality
Corporation (the "Issuer"), for the quarterly period ended
September 30, 1997.
(a) LP beneficially owns 9,447,239 Shares,
constituting approximately 65.6% of the outstanding Shares
as of December 20, 1997. CP, through its relationship with
LP, may be deemed to beneficially own all of the Shares
beneficially owned by LP, and each of Jacobson and
O'Donnell, through their relationship with CP and LP, may be
deemed to beneficially own all of the Shares beneficially
owned by CP.
<PAGE>
CUSIP NO. 02073210 13D Page 9 of 11 Pages
(b) LP has the power to vote or direct the vote of
all 9,447,239 Shares reported herein. CP, as the sole
general partner of LP, may be deemed to share voting power
with respect to all of such Shares. Jacobson, as the
Chairman and Chief Executive Officer of CP, and as the
holder of 50% of the voting stock of CP, has the power to
act on behalf of CP and LP and may be deemed to share voting
power with respect to all of the Shares. O'Donnell, as the
President and Chief Operating Officer of CP, and as the
holder of 50% of the voting stock of CP, has the power to
act on behalf of CP and LP and may be deemed to share voting
power with respect to all of the Shares.
(c) Except as set forth above, the Reporting
Persons do not beneficially own any Shares and, except as
set forth herein, have effected no transactions in Shares
during the preceding 60 days.
(d) A list of shareholders of the Issuer, together
with the number of shares owned by such shareholder, from
whom the Reporting Persons obtained proxies for purposes of
voting in favor of the transaction contemplated by the
Purchase Agreement (as defined in Item 6) is contained in
Item 6.
(e) The Reporting Persons will cease to have voting
control of the Shares upon the earlier to occur of (i) the
consummation of the transactions contemplated by the
Purchase Agreement (as defined in Item 6) or (ii) the end of
business on February 28, 1998.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the
Issuer.
On December 19, 1997, LP entered into an Asset
Purchase Agreement (the "Purchase Agreement"), attached
hereto as Exhibit A, with Alpha Gulf Coast, Inc., a Delaware
corporation and Alpha Greenville Hotel, Inc., a Delaware
corporation ("Alpha Hotel"), each a wholly owned subsidiary
of Alpha Hospitality Corporation (the "Issuer"), pursuant to
which, among other things, LP agreed to purchase
substantially all of the assets of Alpha Hotel. In
connection therewith, LP obtained proxies from certain of
the shareholders of the Issuer, authorizing LP to vote the
shares held by such shareholders in favor of the
transactions contemplated by the Purchase Agreement. A form
of such proxy is attached hereto as Exhibit B. The
shareholders from whom LP obtained such proxies are: (i)
Patricia Cohen (for herself and on behalf of B.P. Group,
LTD.), (ii) Charles Hundley (for himself and as trustee of
the Tyler Hundley Trust), (iii) Joan Hundley, (iv) Sanford
Freedman, (v) Brett Tollman (for himself, the Bryanston
Group, Inc. and the Tollman Family Trust), (vi) Mathew
Walker, (vii) Beatrice Tollman, and (viii) Steve O'Hana.
<PAGE>
CUSIP NO. 02073210 13D Page 10 of 11 Pages
Except as set forth in this Item 6, the Reporting
Persons do not have any contract, arrangement, understanding
or relationship (legal or otherwise) with any person with
respect to the acquisition of any securities of the Issuer,
including but not limited to transfer or voting of any of
the securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits,
division of profit or loss, or the giving or withholding of
proxies.
Item 7. Material to be filed as Exhibits.
Exhibit A Asset Purchase Agreement
Exhibit B Form of Proxy
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Dated: December 30, 1997
GREENVILLE CASINO PARTNERS, L.P.
By: Greenville CP, Inc.,
its general partner
By: /s/ Michael J. Jacobson
-----------------------
Chairman and Chief
Executive Officer
GREENVILLE CP, INC.
By: /s/ Michael J. Jacobson
-----------------------
Chairman and Chief
Executive Officer
/s/ Michael J. Jacobson
------------------------
Michael J. Jacobson
/s/ John O'Donnell
------------------------
John O'Donnell <PAGE>
CUSIP NO. 02073210 13D Page 11 of 11 Pages
EXHIBIT INDEX
Exhibit No. Document Description
----------- --------------------
A Asset Purchase Agreement
B Form of Proxy<PAGE>
ASSET PURCHASE AGREEMENT
------------------------
between
ALPHA GULF COAST, INC., a Delaware Corporation
and
ALPHA GREENVILLE HOTEL, INC., a Delaware Corporation
and
GREENVILLE CASINO PARTNERS, L.P.,
a Mississippi Limited Partnership
Dated December 17, 1997 <PAGE>
Table of Contents
1. Casino Assets . . . . . . . . . . . . . . . . . . . 3
1.1 Casino Barge and Related Equipment . . . . . . 3
1.2 Fixtures, Gaming Equipment and Other Assets . . 4
1.3 Moorage, Lease and Related Agreements. . . . . 5
1.4 Excluded Assets. . . . . . . . . . . . .. . . . 6
1.5 List of Casino Assets . . . . . . . .. . . . . 7
2. Hotel Assets. . . . . . . . . . . . . . . . . . .. . 7
2.1 Casino Hotel . . . . . . . . . . . . . . . . . 7
2.2 Lease, Permits and Commitments . . . . . .. . . 8
3. Employees . . . . . . . . . . . . . . . . . . . .. . 9
4. Consideration and Closing . . . . . . . . . . . .. . 10
4.1 Cash Portion . . . . . . . . . . . . . . . .. . 10
4.2 Designated Liabilities . . . . . . . . . . . . 12
4.3 Limited Partnership Interest . . . . . . . . . 14
4.4 Consideration for Hotel Assets . . . . . . . . 15
4.5 Closing of the Purchase of the Casino Assets . 17
4.6 Closing of Purchase of Hotel Assets . . . . . 18
5. Deliveries at Closing . . . . . . . . . . . . . . . 22
5.1 Unencumbered Assets. . . . . . . . . . . . . . 22
5.2 Current Obligations. . . . . . . . . . . . . . 25
5.3 Assumption of Liabilities. . . . . . . . . . . 26
5.4 Excluded Liabilities . . . . . . . . . . . . . 26
6. Conduct Prior to the Closing Date . . . . . . . . . 27
7. Additional Conduct Prior to the Hotel Closing Date. 33
8. Conditions to Closing . . . . . . . . . . . . . . . 35
i <PAGE>
8.1 Conditions to Seller's Obligations to Close
Purchase of Casino Assets . . . . . . . . . . 35
8.2 Conditions to Purchaser's Obligation to Close
Purchase of the Casino Assets . . . . . . . . 38
8.3 Conditions to Purchaser's Obligations to Close
the Purchase of the Hotel Assets . . . . . . . 49
9. Post-Closing Agreements . . . . . . . . . . . . . . 53
9.1 Disclosure and Use of Confidential
Information . . . . . . . . . . . . . . . . . . 53
9.2 Use of Trademarks. . . . . . . . . . . . . . . 54
9.3 Hiring Away Employees. . . . . . . . . . . . . 54
9.4 Back-Up . . . . . . . . . . . . . . . . . . . 54
9.5 Further Assurances . . . . . . . . . . . . . . 55
9.6 Injunctive Relief. . . . . . . . . . . . . . . 55
9.7 Indemnification and Settlement of Claims . . . 56
(a) Indemnification of Purchaser . . . . . . 56
(b) Survival Periods as to Seller . . . . . . 59
(c) Indemnification of Seller
and its Parent . . . . . . . . . . . . . 60
(d) Survival Periods as to Purchaser . . . . 61
(e) Procedure for Claimed Relief . . . . . . 62
(i) Notice of Claims . . . . . . . . . . 62
(ii) Dispute with Respect to Notice of
Claim . . . . . . . . . . . . . . . 64
(iii) Third Party Claims . . . . . . . . . 66
(f) Right to Offset . . . . . . . . . . . . . 68
10. Seller's Representations and Warranties . . . . . . 69
10.1 Permits, Registrations, Licenses, Leasehold,
Moorage and Dockage Interest . . . . . . . . . 70
10.2 Listing of Assets and Title . . . . . . . . . 72
ii <PAGE>
10.3 Payment of Debts . . . . . . . . . . . . . . . 73
10.4 Designated Liabilities . . . . . . . . . . . . 74
10.5 No Other Contracts . . . . . . . . . . . . . . 74
10.6 Hart-Scott-Rodino Act . . . . . . . . . . . . 75
10.7 Coast Guard Standards. . . . . . . . . . . . . 75
10.8 No Conflict. . . . . . . . . . . . . . . . . . 76
10.9 Condition and Non-Removal of Equipment . . . . 76
10.10 Compliance with Laws . . . . . . . . . . . . 77
10.11 Hotel Marketing. . . . . . . . . . . . . . . . 78
10.12 Litigation . . . . . . . . . . . . . . . . . . 78
10.13 Hazardous Substances . . . . . . . . . . . . . 79
10.14 Brokers and Real Estate Commissions. . . . . . 80
10.15 Contracts and Agreements . . . . . . . . . . . 81
10.16 Compliance with Mississippi Gaming
Regulations . . . . . . . . . . . . . . . . . . 82
10.17 Good Standing. . . . . . . . . . . . . . . . . . 83
10.18 Corporate Authorization. . . . . . . . . . . . 83
10.19 Valid Obligation . . . . . . . . . . . . . . . 84
10.20 Profit and Loss Statements . . . . . . . . . . 84
10.21 Knowledge . . . . . . . . . . . . . . . . . . 85
10.22 Application of Sale Proceeds . . . . . . . . . 85
10.23 Pledge of Partnership Interest . . . . . . . . 88
11. Purchaser's Representations and Warranties. . . . . 88
11.1 Good Standing. . . . . . . . . . . . . . . . . 88
11.2 Corporate Authorization. . . . . . . . . . . . 89
11.3 No Violation of Other Documents. . . . . . . . 89
iii <PAGE>
11.4 Brokers and Real Estate Commissions. . . . . . 90
11.5 Hart-Scott-Rodino Act . . . . . . . . . . . 90
11.6 Delivery of Partnership Agreement . . . . . . 91
11.7 Delivery of Proforma Balance Sheet . . . . . . 91
12. Right to Terminate and Remedies . . . . . . . . . . 92
12.1 Right To Terminate . . . . . . . . . . . . . . 92
12.2 Remedies . . . . . . . . . . . . . . . . . . . 93
(a) Purchaser's Remedies . . . . . . . . . . 93
(b) Seller's Remedies . . . . . . . . . . . . 95
(c) Subordination of Termination Payments . . 97
13. Legal Compliance. . . . . . . . . . . . . . . . . . 98
14. Risk of Loss. . . . . . . . . . . . . . . . . . . . 99
15. Time of Essence . . . . . . . . . . . . . . . . . . 101
16. Governing Law . . . . . . . . . . . . . . . . . . . 101
17. Guaranty . . . . . . . . . . . . . . . . . . . . . 101
18. Notices . . . . . . . . . . . . . . . . . . . . . . 102
19. Miscellaneous . . . . . . . . . . . . . . . . . . . 103
19.1 Entire Agreement; Enforceability . . . . . . . 103
19.2 Amendments . . . . . . . . . . . . . . . . . . 104
19.3 Binding Effect; Assignment; No
Third Party Beneficiaries . . . . . . . . . . 104
19.4 Waivers; Consents . . . . . . . . . . . . . . 106
19.5 Severability . . . . . . . . . . . . . . . . . 106
19.6 Captions . . . . . . . . . . . . . . . . . . . 107
19.7 Interpretation of "including" and "day". . . . 107
19.8 Counterparts . . . . . . . . . . . . . . . . . 107
20. No Offer. . . . . . . . . . . . . . . . . . . . . . 108
iv <PAGE>
Schedules
Schedule 1.3(a) Casino Agreements
Schedule 1.3(b) Option to Acquire Option and
Contract Rights
Schedule 1.4 Excluded Assets
Schedule 1.5 Casino Assets
Schedule 4.6 Pledge of Limited Partnership
Interest
Schedule 5.1 Form of Conveyances
Schedule 5.1(e)(v) Additional Permitted Exceptions to
Title to Real Estate
Schedule 6(d)(i) Key Employee Positions Requiring
Notification
Schedule 6(e) Casino Insurance
Schedule 7(c) Builder's Risk Insurance Policy
Schedule 8.1(c) Form of Opinion Letter of
Purchaser's Counsel
Schedule 8.2(c)(2)(a) Form of Written Consent of the City
of Greenville
Schedule 8.2(c)(2)(b) Form of Consent of City of Greenville
to Collateral Assignment
Schedule 8.2(c)(3)(a) Form of Written Consent of the
Greenville Yacht Club
Schedule 8.2(c)(3)(b) Form of Consent of the Greenville
Yacht Club to Collateral Assignment
Schedule 8.2(c)(4)(a) Form of Written Consent of Board of
Mississippi Levee Commissioners
Schedule 8.2(c)(4)(b) Form of Consent of the Board of
Mississippi Levee Commissioners to
Collateral Assignment
i <PAGE>
Schedule 8.2(c)(5)(a) Form of Written Consent for Assignment
to Purchaser of Permit to Construct
and Maintain Facilities
Schedule 8.2(c)(5)(b) Form of Consent of Board of
Mississippi Levee Commissioners to
Collateral Assignment
Schedule 8.2(c)(9)(a) Form of Acknowledgment of the
Greenville Port Commission
Schedule 8.2(c)(9)(b) Consent to Collateral Assignment by
Greenville Port Commission
Schedule 8.2(c)(10)(a) Form of Acknowledgment of the Board
of Mississippi Levee Commissioners
Schedule 8.2(c)(10)(b) Consent to Collateral Assignment by
Board of Mississippi Levee
Commissioners
Schedule 8.2(e) Form of Opinion Letter of Seller's
Counsel for Casino Closing
Schedule 8.2(f) Environmental Matters
Schedule 8.2(i) Engineering Matters
Schedule 8.2(j) Site Inspection Matters
Schedule 8.2(m) Regulatory Matters
Schedule 8.2(n) Utility Matters
Schedule 8.3(e) Form of Opinion of Seller's Counsel
for Hotel Closing
Schedule 8.3(k) Supervisory Management Agreement
Schedule 8.3(l) Consent of The Mississippi
Department of Archives and History
to Assignment and Collateral
Assignment
Schedule 10.9 Slot Machines to Be Removed from
Casino
Schedule 10.12 Pending Litigation
Schedule 10.20 Non-Recurring Items
ii <PAGE>
Schedule 11.6 Partnership Agreement
Schedule 11.7 Purchaser's Proforma Balance Sheet
Schedule 17 Guaranty from Alpha Hospitality
Corporation
iii <PAGE>
ASSET PURCHASE AGREEMENT
-------------------------
This Agreement is entered into by ALPHA GULF COAST,
INC., a Delaware corporation (hereinafter referred to as
"Seller"), ALPHA GREENVILLE HOTEL, INC., a Delaware
corporation (hereinafter referred to as "Alpha Hotel"), and
GREENVILLE CASINO PARTNERS, L.P., a Mississippi limited
partnership (hereinafter referred to as "Purchaser") as of
the 17th day of December, 1997 (hereinafter referred to as
the "Execution Date").
R E C I T A L S:
A. Seller is the owner and operator of the Bayou Caddy's
Jubilee Casino (hereinafter referred to as the
"Casino") consisting of the Casino Barge (Official
Number 519419) (hereinafter referred to as the "Casino
Barge"), certain permits, mooring, dockage, lease
rights and other assets, including real property and
tangible and intangible personal property more
particularly described herein.
B. Seller wishes to sell to Purchaser the Casino including
Casino Barge, and all related fixtures, equipment,
contractual rights, and all other real and personal
property associated therewith, and the Casino Hotel,
together with its furniture and fixtures, and to assign
each of the agreements described below to Purchaser,
and Purchaser wishes to buy and assume the same, all <PAGE>
under the terms and conditions set forth in this
Agreement.
C. Seller's affiliate, Alpha Hotel, is currently
constructing an all-suite hotel on the site of the
former headquarters of the Mississippi Board of Levee
Commissioners as described in Section 2 below
(hereinafter referred to as the "Casino Hotel"). Alpha
Hotel is a wholly owned subsidiary of Alpha Hospitality
Corporation. Seller hereby undertakes to cause Alpha
Hotel to transfer the Hotel Assets in accordance with
the terms of this Agreement and Alpha Hotel by
execution hereof agrees to transfer the Hotel Assets to
Purchaser and to be bound by the terms of this
Agreement as they relate to the sale of the Hotel
Assets and makes any and all representations and
undertaking with respect to the Hotel Assets as set
forth herein. When used herein with respect to any and
all obligations, undertakings, agreements,
representations or warranties with respect to the Hotel
Assets and the sale of the Hotel Assets, the term
Seller shall be deemed to include Alpha Gulf Coast,
Inc. and Alpha Greenville Hotel, Inc.
2 <PAGE>
AGREEMENT
Seller and Purchaser agree as follows:
1. Casino Assets: (excluding the Casino Hotel)
Seller agrees to sell Seller s interest in, and
Purchaser agrees to buy Seller s interest in the
following, all under the terms and conditions set forth
in this Agreement:
1.1 Casino Barge and Related Equipment
The Casino Barge presently docked at the
Greenville, Mississippi Waterfront, together with
the Boarding Barge (Official Number 514272)
(hereinafter referred to as the "Boarding Barge"),
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, and,
additionally, all log books, manuals, trip
records, maintenance reports, inspection records,
seaworthiness certificates, and other historical
records or information relating to the Casino
Barge and the Boarding Barge in the possession of
3 <PAGE>
Seller, and ramps, generators and related
equipment (including, but not limited to, existing
walkway coverings) located at the site described
in the Mooring Agreement and the Dockage Agreement
described in Schedule 1.3(a).
1.2 Fixtures, Gaming Equipment and Other Assets
Except as otherwise provided in Section 1.4, all
fixtures, improvements, equipment, equipment
supplies, furniture, advertising and promotional
materials, trade names, logos, customer lists and
other tangible and intangible assets, including,
without limitation, all books and records with
respect to assets described in Sections 1.1, 1.2,
and 1.3(a) (except for those certain books and
records expressly excluded in Section 1.4(c)), in,
on, or about the Casino Barge, or at any other
location at Greenville, Mississippi, and owned,
leased and/or used by Seller in connection with
the Casino, and all interests in real property
owned, leased, or under option to Seller in
Washington County, Mississippi, and all
improvements thereto.
4 <PAGE>
1.3 Moorage, Lease and Related Agreements
(a) All of Seller's rights and obligations under
the permits, moorage, dockage, license, lease
agreements and contracts as listed on
Schedule 1.3(a) (hereinafter referred to as
the "Casino Agreements").
(The assets described in Sections 1.1, 1.2,
and 1.3(a) except those expressly excluded in
Section 1.4 are hereinafter referred to as
the "Casino Assets".)
(b) Provided that with respect to the real
property described in the Real Estate Option
Agreement dated October 26, 1995, recorded in
Book 1893, at page 62, of the land records of
Washington County, Mississippi, and the Lease
and Option Agreement dated October 26, 1995,
the Memorandum of which is recorded in Deed
Book 1893, at page 70, of said land records,
each between Deer Creek and Black Bayou Steam
Navigation and Transportation Company and
Cotton Club, Inc., and assigned to Seller,
Seller shall not convey such assets to
Purchaser upon Closing but, in lieu of
conveyance, shall execute and deliver to Pur-
chaser at closing the Option to Exercise
5 <PAGE>
Option Rights in the form attached as
Schedule 1.3(b).
1.4 Excluded Assets
The provisions of Sections 1.1, 1.2 and 1.3(a)
notwithstanding, Casino Assets shall not include:
a. cash, accounts receivable, notes receivable
and any other amounts due from any third
party arising from the operation of the
Casino prior to the closing on the closing
date;
b. the gaming equipment and other equipment and
assets listed on Schedule 1.4;
c. Seller s stock records, books, tax returns,
minute books and financial, tax, and
accounting records;
d. All of Seller s rights under this Agreement;
e. All tax refunds;
f. The Lease Agreement with Mosow Real Estate,
Inc. dated November 14, 1995;
g. The Lease Agreement with Mosow Real Estate,
Inc. dated February 1, 1997; and
h. The Real Estate Option Agreement dated
October 26, 1995, and the Lease and Option
Agreement dated October 26, 1995, each
between Deer Creek Navigation and
6 <PAGE>
Transportation Company and Cotton Club, Inc.,
and assigned to Seller.
1.5 List of Casino Assets
The Casino Assets to be purchased, except the
Casino Agreements which are listed on Schedule
1.3(a), are listed on Schedule 1.5; provided,
however, as soon as practical, and in no event
later than five (5) days after the execution of
this Agreement, Seller shall provide Purchaser
with any amendments to Schedule 1.5 and, subject
to Purchaser's agreement, the amendments shall be
made to Schedule 1.5.
2. Hotel Assets:
2.1 Casino Hotel
Alpha Hotel agrees to sell and Purchaser agrees to
buy the Casino Hotel upon the substantial comple-
tion of its construction by Alpha Hotel in accor-
dance with the Standard Form Agreement between
Alpha Greenville Hotel, Inc., as Owner, and W. G.
Yates and Sons Construction Company, Inc., dated
July 7, 1997 and the plans and specifications for
construction as referenced therein, and the
specifications for furnishing of the hotel
prepared by Seller and delivered to Purchaser on
7 <PAGE>
December 6, 1997 (hereinafter referred to
collectively the "Hotel Plans") together with all
furniture, fixtures, and equipment, including
telephone equipment, located therein or owned or
acquired for use in connection therewith.
2.2 Lease, Permits and Commitments
In connection with the purchase of the Casino
Hotel, Seller agrees to assign and Purchaser
agrees to assume the following agreements with
third parties:
a. A Lease Agreement with The Board of
Mississippi Levee Commissioners for
construction and maintenance of a hotel in
Greenville, Mississippi dated February 19,
1997, and amended April 18, 1997;
b. A permit for construction and maintenance of
facilities on The Board of Mississippi Levee
Commissioners' right-of-way dated September
11, 1997;
c. A Mississippi Landmark permit issued by the
Mississippi Department of Archives and
History dated March 28, 1997;
d. A Consent by The Board of Mississippi Levee
Commissioners to the aforementioned Missis-
sippi Landmark permit dated July 9, 1997.
8 <PAGE>
(Hereinafter the agreements identified in Section
2.2 are hereinafter collectively referred to as
the "Hotel Agreements").
(The Casino Hotel and the Hotel Agreements are
hereinafter referred to as the "Hotel Assets".
The Casino Assets and Hotel Assets are hereinafter
referred to collectively as the "Assets").
3. Employees:
Purchaser will assume no employment agreements or other
obligations to Seller's employees (except for accrued
vacation and health insurance due upon the Closing Date
and assumed by Purchaser as described in Section 4.2).
Notwithstanding the foregoing, Purchaser intends to
rehire some employees of the Seller and certifies that
it shall rehire so many of Seller s employees as is
necessary to prevent the application of the Worker
Adjustment and Retraining Notification Act, 29 USC
Section 2101, et seq. (the "WARN Act"). Purchaser shall
indemnify and hold harmless the Seller from any
violations of the WARN Act caused by any act or
omission of Purchaser including a breach of the
certification in the prior sentence. If requested by
Purchaser, Seller shall deliver to Purchaser before the
Closing Date, or Hotel Closing Date respectively, the
9 <PAGE>
following information as to each of its employees:
name; salary or wage rate; date of hire; vacation
entitlement; and the amount and monetary value of
accrued vacation as of the Closing Date and Hotel
Closing Date. Purchaser shall be entitled prior to the
Closing Date, and Hotel Closing Date respectively, to
review Seller's employee records and to interview
Seller's employees, on a schedule mutually agreed to by
the parties and under conditions mutually agreed to by
the parties, and, at Purchaser's sole discretion,
subject to the certifications made in this Section 3,
to make offers, if any, for post Closing Date and post
Hotel Closing Date employment to Seller's employees.
Provided, nothing herein shall constitute a right to
employment in any employee.
4. Consideration and Closing:
The total consideration for the Casino Assets shall be
the sum of the considerations set forth in Sections
4.1, 4.2 and 4.3:
4.1 Cash Portion
The cash portion of the purchase price shall be
$26,500,000, which shall be payable as follows:
(a) Credit to the Purchaser for the assumption by
Purchaser of the principal balance owing as
of the Closing Date of the senior secured
10 <PAGE>
Promissory Note from Seller to Credit Suisse
First Boston Mortgage Capital, L.L.C. or any
affiliate, successor, assignee or designee
thereof (hereinafter referred to as the
"Lender") in the original principal amount of
$19,000,000 executed in the financing
transaction described in Section 8.1(e) and
Section 8.2(t) (hereinafter referred to as
the "Principal Loan"). The amount of such
credit shall be equal to the original
principal amount of the Principal Loan less
the sum of the following:
(i) an amount equal to the sum of any
principal payments made by the
Seller on account of the Principal
Loan, and
(ii) an amount equal to the sum of loan
points, and brokerage commissions,
totaling in the aggregate 4.5% of
the Principal Loan amount
(totalling no more than $855,000.-
00), and filing fees and title
insurance expenses incurred by
Seller in connection with the
closing of the Principal Loan and
the Subordinated Debt (as here-
11 <PAGE>
inafter defined). It is expressly
understood and agreed that all of
the Lender's legal fees owing to
Lender's counsel shall be charged
to Purchaser.
(b) Payment in cash or other immediately
available funds upon the Closing Date of the
balance of the aforesaid cash portion of the
purchase price.
4.2 Designated Liabilities and Assumed Debt
The assumption by Purchaser of the following
specified liabilities of Seller which shall not
exceed $2,000,000.00 as of closing:
a. Accrued vacation pay and health insurance
claims due to employees of Seller upon the
Closing Date;
b. Chip liability as of the Closing Date;
c. Seller's Greenville Casino operations
accounts incurred in the ordinary course of
business which are not older than forty-five
(45) days past their respective due dates on
the Closing Date. Provided, however, any
wages earned by Seller's Casino employees but
not paid as of the Closing Date shall not be
included in the Designated Liabilities and
12 <PAGE>
shall be paid by Purchaser when due, provided
that such amount shall not exceed
$1,000,000.00 as of the Closing Date, and
shall be accounted for by Seller on closing
as a reduction to the cash payment in Section
4.1;
d. Non-delinquent city, county, levee, drainage,
and school district ad valorem property taxes
and special assessments for calendar year
1998, prorated to Closing Date on the basis
of calendar year 1997's property taxes and
special assessments;
e. The gross amount of slot machine and table
games progressive meter liability;
f. The gross amount of poker "bad beat"
liability; and
g. The slot club points and unredeemed
promotional coupons liability.
The liabilities to be assumed by Purchaser under
Section 4.2, subparts (a) through (g) inclusive are
hereinafter referred to collectively as the "Designated
Liabilities". The precise amount of the Designated
Liabilities set forth in Section 4.2(a)-(g) shall be
calculated by Seller as of the Closing Date and
verified as accurate by Purchaser. Provided that the
13 <PAGE>
value of slot club points and unredeemed promotional
coupons shall be calculated upon Closing Date at sixty
percent (60%) of the face amount thereof; provided,
further, that the actual dollar value of the slot club
points and promotional coupon liability as of Closing
Date shall be verified by a subsequent accounting
performed by Seller and Purchaser on the six (6) month
anniversary of the Closing Date and any variation in
the actual dollar value of these items which when added
to the Designated Liabilities causes the Designated
Liabilities to exceed $2,000,000.00 shall result in a
payment by Seller to Purchaser in the amount of the
excess of such Designated Liabilities above
$2,000,000.00 upon twenty (20) days advance written
notice of the excess.
Also, Purchaser shall assume the outstanding balance as
of the Closing Date on the subordinated secured note
from the Seller to the Lender in the original principal
amount of $4,879,000.00 executed in the financing
transaction described in Section 8.1(e) and Section
8.2(t) (hereinafter the "Subordinated Debt").
4.3 Limited Partnership Interest
A limited partnership interest equal to twenty-
five percent (25%) of all the outstanding
14 <PAGE>
partnership interests in Purchaser as of the
Closing Date. Seller's limited partnership
interest shall be subject to all terms and
conditions of the Revised Third Amended and
Restated Partnership Agreement of Purchaser dated
as of December 1, 1997. The parties agree solely
for purposes of this Agreement that the value of
the 25% limited partnership interest is
$8,500,000.00.
4.4 Consideration for Hotel Assets
The total purchase price for the Hotel Assets
shall be equal to Seller's cost of construction
and furnishing in compliance with the Hotel Plans,
subject to a maximum purchase price of
$3,200,000.00 plus the additional sum of
$112,500.00 as consideration for Seller's advance
lease payments in a like amount made to the Board
of Mississippi Levee Commissioners pursuant to the
Lease described in Section 2.2(a) for the 27-month
period beginning December 1, 1997, through
February 29, 2000, subject to a $4,166.67 per
month reduction in the amount of $112,500.00 for
each month or part thereof after December 1, 1997,
during which the purchase of the Hotel Assets does
not close (the "Hotel Purchase Price"), plus
15 <PAGE>
interest at an annual rate of 11% for construction
financing on an amount equal to the Hotel Purchase
Price from the date of Purchaser's receipt of
written notice from Seller of substantial
completion of the construction and furnishing of
the Casino Hotel (which notice shall include a
copy of the architect's certificate of substantial
completion and which will also certify that such
construction conformed to the plans submitted to
and approved by the Mississippi Department of
Archives and History addressed to Seller and
Purchaser and a certificate of the building
inspector of the City of Greenville or his
designated agent evidencing inspection and
approval for occupancy) (hereinafter referred to
as "Date of Substantial Completion") until closing
of the purchase of the Hotel Assets, less the
amount of any items of work necessary to complete
construction and furnishing of the Casino Hotel
after issuance of the certificate of the building
inspector of the City of Greenville or his
designated agent evidencing inspection and
approval for occupancy and architect's certificate
of substantial completion. The purchase price for
the Hotel Assets shall be payable upon the Hotel
Closing Date (hereinafter defined).
16 <PAGE>
4.5 Closing of the Purchase of the Casino Assets
The closing of the purchase of the Casino Assets
shall be consummated at 590 Madison Avenue, New
York, New York, (or at such other place, as may
hereinafter be agreed upon by Seller and
Purchaser) on the earlier of (a) the fifth (5th)
business day after all conditions precedent stated
in Article 8 are fulfilled or (b) January 31,
1998, provided, however, the foregoing
notwithstanding, if the Securities and Exchange
Commission (hereinafter referred to as the "SEC")
has not approved the form of the proxy statement
for the meeting of Seller's parent's shareholders
to consider approval of this transaction on or
before January 6, 1998, the date of January 31,
1998, shall be extended to the earlier of (x) the
twenty-fifth (25th) day after SEC approval of such
proxy statement or (y) February 25, 1998, or on
such other date, as may hereafter be agreed upon
by Seller and Purchaser (hereinafter referred to
as the "Closing Date"). The physical transfer of
Casino Assets and transfer of the operation of the
Casino shall occur on Closing Date. The schedule
and procedure for transfer of Casino Assets and
transfer of operation of the Casino shall comply
with rules, regulations, orders and directives of
17 <PAGE>
the Mississippi Gaming Commission. At the time of
transfer of Casino Assets, and subject to
approval of the Mississippi Gaming Commission and
the Mississippi State Tax Commission, Purchaser
and Seller will count down the floor bank, hopper
and cage cash and Purchaser will purchase from
Seller the cash therein (the total sum of which
shall equal the minimum amount required by the
Mississippi Gaming Commission for the current
operation of the Casino not, however, to exceed
$1,500,000.00) upon payment therefor at par in
cash or other immediately available funds.
4.6 Closing of Purchase of Hotel Assets
The closing of the purchase of Hotel Assets shall
be consummated at 590 Madison Avenue, New York,
New York, as soon as practically possible after
written notice by Seller of the Date of
Substantial Completion and the conditions
precedent to the Hotel Closing have been fulfilled
(hereinafter referred to as the "Hotel Closing
Date"). The Date of Substantial Completion of the
Hotel shall occur no later than February 6, 1998,
or on such later date as provided in this Section
4.6, and Seller represents that February 26, 1998,
is the latest date on which Seller must complete
18 <PAGE>
the Casino Hotel in order to satisfy
infrastructure investment requirement applicable
to the Casino under current orders issued by the
Mississippi Gaming Commission. In the event that
the Date of Substantial Completion for the Hotel
is after February 6, 1998, then for each day after
February 6, 1998, until Hotel Closing Date:______
a. Seller shall pay to Purchaser liquidated
damages of One Thousand Dollars ($1,000.00)
per day, payable weekly until the Date of
Substantial Completion of the Casino Hotel,
the payment of which shall be secured by a
security interest in Seller's limited
partnership interest in Purchaser, as more
particularly described in the pledge of
partnership instrument attached as Schedule
4.6 (hereinafter referred to as the "Pledge
of Partnership Interest"); and
b. In the event any failure to complete the
Casino Hotel (including, but not limited to,
a failure caused by a casualty loss) results
in any suspension of Purchaser's gaming
license at the Casino by the Mississippi
Gaming Commission, Seller shall pay to
Purchaser an additional amount of liquidated
damages in the sum of One Hundred Thousand
19 <PAGE>
Dollars ($100,000.00) per day, payable daily,
for each day during which such suspension is
in effect, which liability shall be secured
by a security interest in Seller's limited
partnership interest in Purchaser, as more
particularly described in the Pledge of
Partnership Interest attached as Schedule
4.6. In the event any amount of liquidated
damages is in excess of the value of the
limited partnership interest when applied
against it, the excess shall be due and
payable from Seller. Provided, however, Pur-
chaser shall give Seller written notice of
its intent to collect such liability under
Section 4.6(a) or Section 4.6(b) by exercise
of Purchaser's rights under the Pledge of
Partnership Interest and Seller shall have
thirty (30) days to pay the amount to be
otherwise collected under the Pledge of
Partnership Interest in cash or other
immediately available funds. In the event of
any such cash payment by Seller, Purchaser's
right to collect the amount owing by exercise
of Purchaser's rights under the Pledge of
Partnership Interest shall be reduced by the
amount thus paid. The Purchaser agrees to
20 <PAGE>
take such reasonable action and work with the
Mississippi Gaming Commission and Seller to
prevent the suspension of the Purchaser's
gaming license. Provided, further, it is
expressly understood that the notice and
procedure provisions set forth in Paragraph
9.7 shall have no application to the payments
required in this Paragraph 4.6(a) and (b).
c. Subject to fulfillment of the conditions
precedent to the Hotel Closing, should
Purchaser, due to no fault of Seller or its
agents, representatives or contractors, fail
to close the purchase of the Hotel Assets
within fifteen (15) days after receipt of
Seller s notice of the Date of Substantial
Completion of the Hotel, Purchaser shall pay
to Seller, in addition to the interest
specified in Section 4.4, an additional sum
of One Thousand Dollars ($1,000.00) per day,
payable weekly, for each day thereafter
during which Purchaser does not close the
purchase of the Hotel Assets. If after the
expiration of the sixty (60) day period
following the receipt of the notice of the
Date of Substantial Completion, Purchaser has
failed to close the purchase of Hotel Assets
21 <PAGE>
under conditions stated above in this Section
4.6(c), in addition to the monetary penalties
provided above and any other remedy available
to Seller, Seller shall be entitled to seek
specific performance of Purchaser's
obligation to close the purchase of the Hotel
Assets.
5. Deliveries at Closing:
5.1 Unencumbered Assets
At the Closing Date and Hotel Closing Date
respectively, the Seller shall deliver to
Purchaser all documents (including all Required
Approvals (as such term is defined in Section
8.2(c) hereof) from third parties) necessary to
convey title to or assign Seller's interests in
the Casino Assets and the Hotel Assets,
respectively. All documents to be delivered shall
be in the forms specified in Schedule 5.1
(provided that fee simple estates in real property
shall be conveyed by deeds of the same type by
which such real property was conveyed to Seller's
predecessor-in-title, Jubilation Lakeshore, Inc.,
formerly known as Cotton Club of Greenville, Inc.,
(hereinafter referred to as the "Jubilation
22 <PAGE>
Lakeshore")) and shall convey the Assets free and
clear of all mortgages, liens, security interests,
reservations, judgments, pledges, charges, claims,
escrows or other encumbrances (hereinafter
referred to collectively as "Encumbrances") except
the following expressly enumerated Encumbrances
and other exceptions (hereinafter referred to as
the "Permitted Exceptions"):
a. The liens in favor of the Lender securing the
Principal Loan and the Subordinated Debt;
b. Liens in respect to Seller's share of the ad
valorem taxes for the year 1998 not yet due
and payable, including city, county, levee,
drainage and school district ad valorem taxes
and special assignments (all ad valorem and
special assessments for the year 1997 shall
have been paid by Seller on or before
closing);
c. Except as otherwise provided in this
Agreement, interests in real estate including
estates in fee simple, leaseholds, licenses,
and options, shall only be warranted to be
free and clear of Encumbrances created by
Seller or by Seller's predecessor-in-title,
Jubilation Lakeshore, or arising after the
earlier of the acquisition of the subject
23 <PAGE>
real estate asset by Jubilation Lakeshore or
by Seller, as the case may be; and
d. Except as otherwise provided in this
Agreement, with respect to any interest in
real estate included in the Assets, including
estates in fee simple, leaseholds, licenses,
and options, the following exceptions shall
also apply:
(i) Any restrictions, terms or provisions of
any zoning ordinances of the City of
Greenville or Washington County,
Mississippi;
(ii) Oil, gas and other minerals lying in, on
or under any property conveyed by
Seller's predecessors-in-title;
(iii) Rights of parties in possession not
shown of public record, deficiencies in
quantity of land, boundary line
disputes, road ways, unrecorded
servitudes or easements, or uses of the
subject property not visible from the
surface, and any other similar matters
not of record not created by or known to
Seller;
(iv) With respect to parties in the chain of
title before Seller and/or Jubilation
24 <PAGE>
Lakeshore, lack of legal capacity or
lack of authority of any grantor, fraud
of forgery of any instruments, false
recitals of marital status or marital
rights, and undisclosed heirs not
revealed in the chain of title for any
such properties; and
(v) The additional exceptions to title as
described on Schedule 5.1(e)(v) with
respect to each of the real estate par-
cels owned or leased.
5.2 Current Obligations
Seller shall be current, as of the Closing Date
and Hotel Closing Date, respectively, in its
obligations on all permits, leases, moorage,
dockage, licenses, and other existing contracts
which are part of the Assets purchased. Seller
shall use its commercially reasonable efforts to
obtain estoppel certificates from the other party
to each such agreement, but shall not be responsi-
ble to Purchaser for failure to obtain such
estoppel certificates.
25 <PAGE>
5.3 Assumption of Liabilities
Subject to the terms and conditions set forth in
this Agreement, Purchaser shall assume and agree
to pay, perform and discharge the following, and
only the following, liabilities and obligations of
Seller as the same exist on midnight of the day
preceding the Closing Date (the "Assumed
Liabilities"):
(a) Seller's indebtedness to the Lender under the
Principal Loan and the Subordinated Debt;
(b) Designated Liabilities as described in
Section 4.2;
(c) Seller's liability for lease payments and
contractual obligations which first become
due and owing after the Closing Date under
the Casino Agreements and Hotel Agreements
listed on Schedule 1.3(a) and in Section 2.2,
respectively.
5.4 Excluded Liabilities
Except for the Assumed Liabilities, no obligation
or liability of Seller or relating to the business
of Seller or to the Assets, of any nature
whatsoever (whether express or implied, fixed or
contingent, liquidated or unliquidated, known or
unknown, accrued, due or to become due), is to be
26 <PAGE>
assumed by Purchaser, nor shall Purchaser be
liable to pay, perform or discharge any such
obligation or liability.
6. Conduct Prior to the Closing Date:
Between the Execution Date and closing and physical
transfer of Casino Assets on the Closing Date:
a. Seller shall give to Purchaser and
Purchaser's officers, employees, agents,
attorneys, consultants, accountants and
lenders (designated by Purchaser as
"Purchaser's Authorized Representatives") all
of whom shall have agreed in writing to be
bound by the confidentiality agreement
between Seller and Purchaser dated September
30, 1997, reasonable access, during normal
business hours upon reasonable notice, to all
of the properties (both real and personal)
included in the Assets and to the books, con-
tracts, documents and records of the Casino
and shall furnish to Purchaser and
Purchaser's Authorized Representatives such
information as Purchaser or such persons may
at any time and from time to time reasonably
request.
27 <PAGE>
b. Seller shall use its commercially reasonable
efforts to obtain the Required Approvals
required under Section 8.2(c). At
Purchaser s request, Seller shall provide all
reasonable assistance needed to transfer to
Purchaser, or to any person designated by
Purchaser, any other transferable licenses
and permits not included in the Required
Approvals, provided that failure to obtain
approvals for transfer of licenses and
permits not included in the Required
Approvals is not a condition precedent for
closing for which Seller shall be held
responsible.
c. Seller shall cause the Casino to carry on its
business in the usual and ordinary course,
consistent with past practices, and shall use
its commercially reasonable efforts to
preserve the Casino's business and the
goodwill of its customers, suppliers and
others having business relations with the
Casino and to retain the business
organization of the Casino intact, including
using reasonable efforts to keep available
the services of its present employees (other
than those dismissed for cause or who
28 <PAGE>
voluntarily discontinue their employment),
and to maintain all of its properties in good
operating condition and repair, ordinary wear
and tear excepted. Without limiting the
generality of the foregoing and subject to
the provisions of Section 4.2 hereof, Seller
shall pay, when due, all wages and benefits
(including medical benefit claims) of
Seller's employees currently when due in
accordance with their terms, all indebtedne-
sses to trade creditors and other obligations
incurred in the ordinary course of the
Casino's business. Seller shall make no
material change in marketing expenditures
without the prior written consent of Purchas-
er, provided, however, Seller shall be
entitled to allocate such expenditures as
Seller deems appropriate.
d. Without the prior written consent of
Purchaser, which shall not be unreasonably
withheld, and without limiting the generality
of any other provision of this Agreement,
except in the ordinary course of business,
Seller shall not:
(i) hire any employee for a position listed
on Schedule 6(d)(i) without prior
29 <PAGE>
notification to Purchaser's
representative, John R. O'Donnell, or
such other representative as may be
designated by Purchaser;
(ii) sell, transfer or otherwise dispose of
any asset or property, except for monies
applied in payment of the Casino's
liabilities in the usual and ordinary
course of business;
(iii) incur or commit to incur any capital
expenditures (including, without
limitation, purchases, commitments or
offers to purchase real estate) in
excess of $50,000 or which materially
changes the character of the Casino's
operations without the written approval
of John R. O'Donnell or such other
representative as may be designated by
Purchaser;
(iv) incur, assume or guarantee any
indebtedness secured by the Assets
(except for the Principal Loan and the
Subordinated Debt); or
(v) directly or indirectly, enter into or
assume any contract, agreement,
obligation, lease, license or commitment
30 <PAGE>
other than in the usual and ordinary
course of business in accordance with
past practices and which would extend
beyond the Closing Date.
e. Seller shall cause the Casino to maintain the
insurance policies listed on Schedule 6(e) in
full force and effect. If any of the said
policies shall expire, the Casino shall use
reasonable efforts to renew or replace the
same prior to the expiration of the expiring
policies with policies from a reputable
insurance carrier with a "Best's Rating"
equal to or better than that of the existing
carrier, containing insurance coverage in the
same or greater amount than the existing
policies in substantially the same form and
substance as the existing policies.
f. The Seller shall cooperate to provide
documents relating to the Assets and relating
to the revenues and expenses of the Casino
and other documents and information
reasonably requested by Purchaser in
connection with the closing of Purchaser s
financing, provided that Purchaser shall
reimburse Seller for any reasonable expenses
incurred by Seller in connection with
31 <PAGE>
providing such documents or information and
Seller shall have no obligation with respect
to any requirements or approvals required for
such financing except as expressly provided
for herein.
g. Seller shall provide Purchaser notice within
24 hours after receipt of any notice of
resignation received by Seller from any of
its employees whose position is listed on
Schedule 6(d)(i).
h. Seller shall use commercially reasonable
efforts to close the Principal Loan and the
Subordinated Debt prior to midnight December
31, 1997. After closing of said financing,
Seller shall remain current in its obliga-
tions to Lender on the Principal Loan and the
Subordinated Debt and shall not allow an
Event of Default (as defined in the Principal
Loan or the Subordinate Debt as the case may
be) to occur under the loan agreement and
other loan documents executed in connection
with the Principal Loan and the Subordinated
Debt.
i. Purchaser shall use commercially reasonable
efforts to close the financing with Lender
32 <PAGE>
that will be evidenced by a Senior Secured
Note in the amount of $17,200,000.00 and by a
Subordinated Note in the amount of
$3,621,000.00 prior to midnight December 31,
1997. After closing of said financing, Pur-
chaser shall remain current in its
obligations to Lender on the Senior Secured
Note and the Subordinated Note and shall not
allow an Event of Default (as defined in the
loan agreement made in connection with the
Senior Secured Note and the Subordinated
Note, as the case may be) to occur under the
loan agreement and other loan documents in
connection with the Senior Secured Note and
the Subordinated Note.
7. Additional Conduct Prior to the Hotel Closing Date:
Between the Execution Date and the Hotel Closing Date:
a. Seller shall give the Purchaser and
Purchaser's Authorized Representatives
reasonable access during normal business
hours to all of the Hotel Assets (both real
and personal), books, contracts, documents,
records and shall furnish to Purchaser and
Purchaser's Authorized Representatives such
information as Purchaser or Purchaser's
33 <PAGE>
Authorized Representatives may at any time
and from time to time reasonably request.
b. Seller shall use commercially reasonable
efforts to complete the construction of the
Hotel in accordance with the Hotel Plans.
Any change orders in the Hotel Plans
totalling in the aggregate more than
$20,000.00 (whether as an increase or reduc-
tion) shall be subject to Purchaser s
approval, which shall not be unreasonably
withheld.
c. Seller shall maintain the builder's risk
insurance policy listed on Schedule 7(c)
which covers the Casino Hotel in full force
and effect. If the Casino Hotel policy shall
expire, the Seller shall use reasonable
efforts to renew or replace the same prior to
the expiration of the expiring policy with
the policy from a reputable insurance carrier
with the "Best Rating" equal to or better
than that of the existing carrier containing
insurance coverage in the same or greater
amount than the existing policies in
substantially the same form and substance as
the existing policy.
34 <PAGE>
8. Conditions to Closing:
8.1 Conditions to Seller's Obligations to Close
Purchase of Casino Assets
The obligation of Seller to close the transactions
contemplated hereby is subject to the fulfillment
of all of the following conditions as of the
Closing Date (except where a different date is
expressly provided for herein), upon the non-
fulfillment of any of which, this Agreement may,
at Seller's option, be terminated and/or remedies
sought pursuant to and with the effect set forth
in Section 12:
a. Each and every representation and warranty
made by Purchaser as of Execution Date shall
have been true and correct when made and
shall be true and correct as of the Closing
Date.
b. All obligations of Purchaser to be performed
hereunder through, and including on, the
Closing Date (including, without limitation,
all obligations which Purchaser would be
required to perform at the closing if the
transaction contemplated hereby was
consummated) shall have been performed.
35 <PAGE>
c. Purchaser shall have delivered to Seller the
written opinions of Lake Tindall, LLP, and/or
Altheimer & Gray, and/or gaming counsel for
Purchaser, dated as of the Closing Date
concerning Purchaser's partnership organiza-
tion and the Purchaser's general partner's
good standing and authority to consummate the
transactions contemplated hereby, in sub-
stantially the form of Schedule 8.1(c) at-
tached hereto.
d. Approval by final Order of the Mississippi
Gaming Commission of the transactions
contemplated herein and post-closing
operation of the Casino by Purchaser.
e. All conditions precedent to the closing of
the Principal Loan and the Subordinated Debt
shall have been satisfied and the closing
thereof shall have occurred and all
conditions precedent to the closing of that
certain financing from Lender to Purchaser
represented by a senior secured note in the
principal amount of $17,200,000.00 and a
subordinated secured note in the amount of
$3,621,000.00 shall have been satisfied and
the closing thereof shall have occurred and
all such financing shall have been fully
36 <PAGE>
funded by the Lender by midnight December 31,
1997. If both of the aforementioned loan
financings have not been closed and fully
funded by midnight December 31, 1997, this
Agreement shall be null and void. Provided
further, that all conditions precedent to the
closing of the assumption of the Principal
Loan and the Subordinated Debt as of Closing
Date, pursuant to an amended and restated
loan agreement between Lender and Purchaser
renewing and rearranging indebtedness in the
in the principal amount of $36,200,000 of
senior secured indebtedness and $8,500,000.00
of subordinated secured indebtedness on terms
agreeable to Lender and to Purchaser shall
have been satisfied, the closing of such
assumption and refinancing shall have occurred,
and all loans to be made pursuant
thereto shall have been fully funded to
Purchaser before Seller shall have any
obligation to sell the Casino Assets
hereunder.
f. There shall have been no voluntary or
involuntary bankruptcy filing of Purchaser or
its General Partner.
37 <PAGE>
g. No suit, proceeding or litigation (including
but not limited to any proceeding by any
government agency under Hart-Scott-Rodino
Act, as hereinafter defined) shall have been
commenced and an order obtained (which has
not been stayed) restraining or enjoining the
consummation of the transaction contemplated
hereby.
8.2 Conditions to Purchaser's Obligation to Close
Purchase of the Casino Assets
The obligation of Purchaser to close the
transactions contemplated hereby is subject to the
fulfillment of all of the following conditions as
of the Closing Date (except where different date
is expressly provided for herein), upon the non-
fulfillment of any of which, this Agreement may,
at Purchaser's option, be terminated and/or
remedies sought pursuant to and with the effect
and subject to the limitations set forth in
Section 12.
a. Each and every representation and warranty
made by Seller as of Execution Date shall
have been true and correct when made and
38 <PAGE>
shall be true and correct as of the Closing
Date.
b. All obligations of Seller to be performed
hereunder through, and including on, the
Closing Date (including, without limitation,
all obligations which Seller would be re-
quired to perform at the closing if the
transaction contemplated hereby was consum-
mated) shall have been performed.
c. All of the consents and approvals as listed
below in this Section 8.2(c) ("Required
Approvals") shall have been obtained:
(1) Approval by proper corporate and
shareholder actions of the transactions
contemplated herein by the Sellers'
Boards of Directors and shareholders,
and by the Board of Directors and
shareholders of Alpha Hospitality
Corporation.
(2) Written consent of the City of
Greenville to the assignment to the
Purchaser of the City Moorage Agreement
and the City Lease Agreement, and to the
collateral assignment thereof to the
Lender in the forms attached as Schedule
8.2(c)(2)(a) and (b).
39 <PAGE>
(3) Written consent of the Greenville Yacht
Club (a) to the assignment to the
Purchaser of the Yacht Club Dockage
Agreement and Yacht Club License
Agreement and (b) to the collateral
assignment thereof to the Lender in the
forms attached as Schedule 8.2(c)(3)(a)
and (b).
(4) Written consent of The Board of Missis-
sippi Levee Commissioners (a) to assign-
ment to the Purchaser of the Hotel Lease
(effective as of the Hotel Closing Date)
and (b) to the collateral assignment
thereof to the Lender in the forms
attached as Schedule 8.2(c)(4)(a) and
(b).
(5) Written consent for assignment to
Purchaser of the permit for construction
and maintenance of facilities on The
Board of Mississippi Levee
Commissioners' right-of-way dated
September 11, 1997, in the form attached
as Schedule 8.2(c)(5)(a) and (b).
(6) Assignment to the Purchaser of permits
from the U. S. Army Corps of Engineers
or issuance of permits to Purchaser
40 <PAGE>
permitting the moorage of the Casino
Barge and the Boarding Barge in their
present location.
(7) Written verification from the Mis-
sissippi Gaming Commission that Seller
is not in violation of any
infrastructure requirements which have
been imposed in connection with the
granting of Gaming Licenses to Seller
effective as of the Closing Date.
(8) The consents, approvals and estoppels,
if any, obtained by Seller in connection
with the closing of the Principal Loan
shall not have been withdrawn or revoked
by the issuing party.
(9) Written acknowledgment of the Greenville
Port Commission that it has no objection
to the assignment to the Purchaser of
the City Moorage Agreement and City
Lease Agreement and to the collateral
assignment thereof to the Lender in the
forms attached as Schedule 8.2(c)(9)(a)
and (b).
(10) Written acknowledgment of The Board of
Mississippi Levee Commissioners that it
has no objection to the assignment to
41 <PAGE>
the Purchaser of the City Moorage
Agreement and the City Lease Agreement
and to the collateral assignment thereof
to the Lender in the forms attached as
Schedules 8.2(c)(10)(a) and (b).
d. No suit, proceeding or litigation (including,
but not limited to, any proceeding by any
government agency under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, Pub. L.
94-435 (the "Hart-Scott-Rodino Act"), shall
have been commenced and an order obtained
(which has not been stayed) restraining or
enjoining the consummation of the transaction
contemplated hereby.
e. Seller shall have delivered to Purchaser the
written opinions of Watkins, Ludlam &
Stennis, P.A., Parker, Duryee, Rosoff & Haft,
P.C. and such other law firm(s) reasonably
acceptable to Purchaser, dated as of the
Closing Date, addressed to Purchaser and
which shall state that the Lender will be
entitled to rely thereon, which contains
opinions in substantially the form of Sched-
ule 8.2(e) attached hereto.
f. All of the matters shown on the attached
42 <PAGE>
Schedule 8.2(f) shall have been cured to the
satisfaction of Purchaser and the Lender, and
there shall have been no material adverse
change in the types of matters shown in the
environmental reports dated November 20,
1997, provided to the Lender since the date
of such environmental reports that has not
been cured to the satisfaction of Purchaser
and the Lender.
g. Seller's parent, Alpha Hospitality
Corporation, shall have executed and
delivered to Purchaser on Execution Date the
guaranty, the form of which is attached as
Schedule 17.
h. Seller shall have delivered to Purchaser a
copy of a "Fairness Opinion" acceptable to
the Securities and Exchange Commission as
part of Seller's disclosure to its
Shareholders and which shall state that the
Lender may rely thereon, relating to the
transactions under this Agreement.
i. All of the matters shown on the attached
Schedule 8.2(i) shall have been cured to the
satisfaction of Purchaser and the Lender, and
there shall have been no material adverse
change in the types of matters shown in the
43 <PAGE>
Engineering Reports provided to the Lender
since the date of such Engineering Reports
which has not been cured to the satisfaction
of Purchaser and the Lender.
j. All of the matters shown on the attached
Schedule 8.2(j) shall have been cured to the
satisfaction of Purchaser and the Lender, and
there shall have been no material adverse
change in the real property and facilities
since the date of the site inspections dated
November 21, 1997, provided to the Lender
that has not been cured to the satisfaction
of Purchaser and the Lender.
k. There shall have been no material adverse
change in the matters addressed in the
Appraisals provided to the Lender since the
date of such Appraisals that has not been
cured to the satisfaction of Purchaser and
the Lender.
l. All material necessary licenses, permits,
approvals, waivers, authorization, consents,
waiting period expirations and clearances for
the acquisition of the Casino Assets, use and
operation (and proposed operation) of Casino
Assets and the conduct of Purchaser's
44 <PAGE>
business as conducted or as proposed to be
conducted (including the operation of both
the Las Vegas Casino and Bayou Caddy's
Jubilee Casino) have been issued and/or
obtained from the appropriate governmental
authority (excluding the Alcoholic Beverage
Control Division of the State Tax Commission
("ABC")) and are in full force and effect.
Provided that except for the Required
Approvals which are expressly addressed in
Schedule 8.2(c), Seller shall be obligated
only to use its commercially reasonable
efforts to obtain the assignment of the
aforementioned items and Seller's failure to
obtain one or more of such items after using
its reasonable efforts to obtain the same
shall not result in any liability from Seller
to Purchaser. All the Casino Agreements
shown on Schedule 1.3(a) (Items 1-7) shall
have been assigned by Seller to Purchaser.
All approvals to be obtained from the Missis-
sippi Gaming Authorities in connection with
the issuance of additional equity by
Purchaser to Seller shall have been obtained.
All licensing, registrations and all other
approvals and findings of suitability for
45 <PAGE>
Seller to become an equity holder in
Purchaser shall have been obtained.
m. All of the matters shown on the attached
Schedule 8.2(m) shall have been cured to the
satisfaction of Purchaser and the Lender and
there shall have been no material adverse
change since September 30, 1997, in the
compliance of the improvements and facilities
or the use thereof with all applicable
zoning, subdivision, environmental
protection, toxic waste, asbestos, and all
other applicable federal, state and local
laws and ordinances, and all rules,
regulations and requirements of any and all
governmental or quasi-governmental
authorities having jurisdiction over any of
the Casino Assets with respect to the fore-
going.
n. All of the matters shown on the attached
Schedule 8.2(n) shall have been cured to the
satisfaction of Purchaser and the Lender, and
there shall have been no material adverse
change in utility-related matters since
November 21, 1997.
o. A certificate in a form satisfactory to
Purchaser and the Lender representing that no
46 <PAGE>
pending or threatened action, suit, or
proceeding, judicial, administrative or
otherwise, is pending against Seller or its
parent, Alpha Hospitality Corporation, which
would have a material adverse effect on their
ability to perform their respective obliga-
tions under this Asset Purchase Agreement.
p. Seller shall have delivered evidence of
acceptance by the City of utility, water, and
sewer lines to be installed in partial
payment of rent pursuant to Section 6 of the
Alpha Moorage Agreement.
q. Seller shall deliver to Purchaser the pledge
(in the form attached as Schedule 4.6) of its
partnership interest in Purchaser as
described in Section 4.3 as collateral to
secure Purchaser's obligations under Sections
4.6 and 9.7(f).
r. Approval by Final Order of the Mississippi
Gaming Commission of the transactions contem-
plated herein and post closing operation of
the Casino by Purchaser.
s. There shall have been no voluntary or
involuntary bankruptcy filing of Seller,
Seller's Parent, Alpha Hospitality
47 <PAGE>
Corporation, or any other subsidiary of Alpha
Hospitality Corporation.
t. All conditions precedent to the closing of
the Principal Loan and the Subordinated Debt
shall have been satisfied and the closing
thereof shall have occurred and all
conditions precedent to the closing of that
certain financing from Lender to Purchaser
represented by a senior secured note in the
principal amount of $17,200,000.00 and a
subordinated secured note in the amount of
$3,621,000.00 shall have been satisfied and
the closing thereof shall have occurred and
all such financing shall have been fully
funded by midnight December 31, 1997. If
both of the aforementioned loan financings
have not been closed and fully funded by
midnight December 31, 1997, this Agreement
shall be null and void. Provided further,
that all conditions precedent to the closing
of assumption of the Principal Loan and the
Subordinated Debt as of Closing Date,
pursuant to an amended and restated loan
agreement between Lender to Purchaser
renewing and rearranging indebtedness in the
aggregate amount of $36,200,000.00 of senior
48 <PAGE>
secured indebtedness and $8,500,000.00 of
subordinated secured indebtedness on terms
agreeable to Lender and to Purchaser shall
have been satisfied, the closing of such
assumption and refinancing shall have
occurred and all loans to be made pursuant
thereto shall have been fully funded to
Purchaser before Purchaser shall have any
obligation to purchase the Casino Assets
hereunder.
8.3 Conditions to Purchaser's Obligations to Close
the Purchase of the Hotel Assets
The conditions to Purchaser's obligations to close
the purchase of the Hotel Assets are as follows:
a. The closing of the Casino Assets shall have
closed or be closed simultaneously herewith.
b. Each and every representation and warranty
made by Seller with respect to the Hotel
Assets as of Execution Date shall have been
true and correct in all material respects
when made and shall be true and correct in
all material respects as of the Hotel Closing
Date.
c. All obligations of Seller with respect to the
Hotel Assets to be performed hereunder
49 <PAGE>
through, and including on, the Hotel Closing
Date (including, without limitation, all
obligations which Seller would be required to
perform at the closing if the transaction
contemplated hereby was consummated) shall
have been performed.
d. No suit, proceeding or investigation
(including, but not limited to, any
proceeding or request for information from
any government agency under the Hart-Scott-
Rodino Act) 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, the consummation of the
transaction contemplated hereby.
e. Seller's delivery to Purchaser of the written
opinion of Watkins, Ludlam & Stennis, P.A.
and Parker, Duryee, Rosoff & Haft, P.C. and
such other law firm(s) reasonably acceptable
to Purchaser, dated as of the Hotel Closing
Date, which shall state that the Lender is
entitled to rely thereon and which contains
opinions in substantially the form of
Schedule 8.3(e) attached.
50 <PAGE>
f. All of the matters shown on the attached
schedule 8.2(f) which relate to the Casino
Hotel shall have been cured to the
satisfaction of Purchaser and the Lender and
there shall have been no material adverse
change in the types of matters which relate
to the Casino Hotel shown in the
Environmental Reports provided to the Lender
since the date of such Environmental Reports
that has not been cured to the satisfaction
of Purchaser and the Lender.
g. Seller shall have provided Purchaser with a
certificate of approval from the building
inspector of the City of Greenville or his
designated agent evidencing inspection and
approval for occupancy, and an architect's
certificate evidencing the substantial
completion of the Casino Hotel in compliance
with the Hotel Plans (which will also certify
that such construction conformed to the plans
submitted to and approved by the Mississippi
Department of Archives and History), subject
to punch list items which do not exceed in
the aggregate $10,000.00.
h. Seller shall have provided Buyer with copies
of all documents, invoices and agreements
51 <PAGE>
related to the construction and furnishing of
the Casino Hotel and the cost of same.
i. The Hotel shall be ready in all material
respects to receive guests in the ordinary
course of the Hotel s business.
j. All of the Hotel Agreements listed in Section
2.2 shall have been assigned by Seller to
Purchaser.
k. Greenville Hotel II, LLC, a wholly owned
subsidiary of Purchaser, and Alpha Hospi-
tality Corporation shall have entered into
that certain Supervisory Management Agreement
in the form attached as Schedule 8.3(k) and
Seller shall have no obligation to close the
sale of the Hotel until such agreement is
executed and delivered.
l. The Mississippi Department of Archives and
History (the "MDAH") shall have consented to
the granting of a leasehold deed of trust by
Alpha Greenville Hotel, Inc., its successors
and assigns, in the form attached as Schedule
8.3(l) to Lender and the assignment of the
MDAH permit to Greenville Hotel II, and
Purchaser and Greenville Hotel II, LLC, shall
have received an architect's certificate
52 <PAGE>
confirming that there has been no violation
of the MDAH permit.
9. Post-Closing Agreements:
The parties agree that after the Closing:
9.1 Disclosure and Use of Confidential Information
The Confidentiality Agreement dated September 30,
1997, (hereinafter "Confidentiality Agreement")
between the parties shall remain in effect until
December 31, 2002, provided that the restrictions
in the Confidentiality Agreement shall be waived
to the extent notices must be given or filings
must be made by either the Seller or Purchaser to
any partners, shareholders, regulatory officials,
or other third parties, provided that any notices,
filings or announcements concerning the transac-
tion made by Seller or Purchaser which contain
Confidential Information covered by the
Confidentiality Agreement will be subject to
advance review and approval by the opposite party,
which approval shall not be unreasonably delayed
or withheld.
53 <PAGE>
9.2 Use of Trademarks
Seller shall not use and shall not license or
permit any third party to use, any names, slogan,
logo or trademark which is similar or deceptively
similar to any of the names or trademarks
presently used or which may be used prior to
Closing Date in connection with the Casino's
business.
9.3 Hiring Away Employees
For a period commencing on the Execution Date and
ending 180 days after the Closing Date, Seller and
its affiliates shall not employ or take any
actions which are calculated to persuade any sala-
ried, technical or special employees,
representatives or agents of Purchaser who are
rehired by Purchaser at Closing to terminate their
association with Purchaser and thereafter shall
only take such actions upon 30 days prior written
notice provided to Purchaser. This section shall
not apply to any employee who Purchaser chooses
not to employ as of the Closing Date.
9.4 Back-Up
Seller shall, at Purchaser's request and expense,
furnish to Purchaser such documents and informa-
54 <PAGE>
tion with respect to Seller, the Casino, or the
Casino Hotel, which are in Seller's possession and
which are requested in connection with any
investigation by the Mississippi Gaming Commission
or any tax authorities.
9.5 Further Assurances
The parties shall execute such further documents,
and perform such further acts, as may be
reasonably necessary to transfer and convey the
Assets to Purchaser on the terms herein contained
and to otherwise comply with the terms of this
Agreement.
9.6 Injunctive Relief
Seller specifically recognizes that any breach of
Sections 9.1, 9.2 and 9.3 by Seller will cause
irreparable injury to Purchaser, and Purchaser
specifically recognizes that any breach of Section
9.1 by Purchaser will cause irreparable injury to
Seller and that both parties recognize that in any
such event actual damages may be difficult to
ascertain, and in any event, may be inadequate.
Accordingly (and without limiting the availability
of legal or equitable, including injunctive,
remedies under any other provisions of this
55 <PAGE>
Agreement), Seller and Purchaser agree that in the
event of any such breach, in addition to such
other legal and equitable remedies, injunctive
relief may be available. Seller and Purchaser
recognize that the absence of time limitations in
Sections 9.1 and 9.2 is reasonable and properly
required for the protection of Seller and Purchas-
er, and in the event that the absence of such
limitation is deemed to be unreasonable by a court
of competent jurisdiction, the parties agree and
submit to the imposition of such a limitation as
said court shall deem reasonable.
9.7 Indemnification and Settlement of Claims
a. Indemnification of Purchaser. Subject to the
terms, conditions and limitations contained
in this Agreement, the Seller agrees to
indemnify, defend and hold Purchaser, its
partners and subsidiaries, and their
respective officers and directors (as herein-
after defined) (collectively, for purposes of
this Section 9.7(a), referred to as
"Purchaser") harmless from and against any
claims, losses, liability, obligations,
lawsuits, deficiencies, damages or expense,
including reasonable attorneys' fees and all
56 <PAGE>
reasonable amounts paid in defense or settle-
ment of the foregoing (but net of any tax
benefit derived by any of the foregoing and
net of any off-setting recoveries or related
proceeds received from insurance or similar
arrangements from third parties) (hereinafter
referred to as "Losses"), suffered or
incurred as a result of (i) the occurrence of
any litigation identified in Schedule 10.12;
(ii) breach of any obligation, representa-
tion, warranty, covenant or agreement made in
this Agreement; (iii) any of the Excluded
Liabilities and/or (iv) the operation, use or
occupancy of the Assets by Seller or Seller's
predecessors-in-interest on or before the
Closing Date which obligation is not part of
the Designated Liabilities. All statements
contained in this Agreement or any schedule
or exhibit hereto or certificate delivered by
or on behalf of Seller pursuant hereto shall
be deemed representations and warranties of
Seller. Notwithstanding the foregoing,
Seller shall be liable to Purchaser hereunder
only if and to the extent the amount of
Losses exceeds in aggregate $10,000 with
respect to Casino Assets or exceeds in the
57 <PAGE>
aggregate $10,000 with respect to Hotel
Assets; provided that Seller's aggregate
liability under this provision with respect
to the Casino Assets shall not exceed the
amount of the total debt assumed by Purchaser
from Seller under Section 4.1 and Section 4.2
and the cash paid pursuant to Section 4.1 or
with respect to the Hotel Assets shall not
exceed $3,200,000; provided, further, in the
event of any breach of any of the representa-
tions and warranties in Section 10.1(i)
during the first five (5) years after the
Closing Date, Purchaser shall receive as its
sole remedy damages equal to the lesser of
(a) the aggregate of the sum of present value
(using a discount rate of 11%) of increased
payments required to cure the disturbance of
the moorage and/or occupancy of the Casino at
its present location and to continue such
moorage and occupancy and all reasonable
expenses incurred by Purchaser in connection
with such breach, or (b) the following
amounts: $600,000.00 if the breach occurs in
the first year following the Closing Date;
$480,000.00 if the breach occurs in the
second year following the Closing Date;
58 <PAGE>
$360,000.00 if the breach occurs in the third
year following the Closing Date; $240,000.00
if the breach occurs in the fourth year
following the Closing Date; and $120,000.00
if the breach occurs in the fifth year
following the Closing Date. Nothing herein
shall be construed to require indemnification
by Seller for any federal or state income
taxes, or any interest or penalties incurred
thereon, payable by the Purchaser as a result
of any federal, state or local taxing
authority challenging the valuation of assets
or the treatment for tax purposes of any
payment of fees or expenses.
b. Survival Periods as to Seller. Except as
otherwise provided in this Agreement, the
representations, warranties, covenants, and
agreements made by the Seller in this
Agreement or any exhibit or schedule hereto
or certificate delivered pursuant hereto
shall not merge into the documents delivered
at closing and shall survive the Closing
Dates and the transfer of Assets for a period
to expire on the later of (a) expiration of
eighteen (18) months after Closing Date or
(b) July 31, 1999; provided, however,that the
59 <PAGE>
representations and warranties set forth in
Section 10.1(i) and 10.13 shall be enforce-
able for a period to expire on the later of
(a) expiration of five (5) years after
Closing Date or (b) January 31, 2003.
c. Indemnification of Seller and its Parent. (i)
Subject to the provisions of this Agreement,
Purchaser agrees to indemnify, defend and
hold Seller, its parent corporation, Alpha
Hospitality Corporation, and their respective
officers and directors (collectively, for
purposes of this Section 9.7(c), referred to
as the "Seller") harmless from and against
any losses, liability, obligations, lawsuits,
damages, or expenses including (without
limitation) reasonable legal cost and
attorney's fees (but net of any offsetting
recoveries for related proceeds received from
insurance or similar arrangements with third
parties) (hereinafter referred to as
"Losses") suffered or incurred by Seller as a
result of the occurrence of any breach of any
obligation, representation, warranty, cove-
nant or agreement of Purchaser contained in
this Agreement or the operation, use or
occupancy of the Assets by Purchaser or
60 <PAGE>
Purchaser's successors-in-interest to the
Assets from and after the Closing Date (and
not arising from acts or omissions by Seller
or its predecessors prior to closing). All
statements contained in this Agreement or any
schedule or exhibit hereto or certificate
delivered by or on behalf of Purchaser
pursuant hereto shall be deemed
representations and warranties of Purchaser.
d. Survival Periods as to Purchaser. Except as
otherwise provided in this Agreement, the
representations, warranties, covenants, and
agreements made by the Purchaser in this
Agreement or any exhibit or schedule hereto
or certificate delivered pursuant hereto
shall survive the Closing Dates and the
transfer of Assets and shall not merge into
the documents delivered at Closing. The
covenant to indemnify Seller for losses
suffered or incurred by Seller as a result of
the operation, use, or occupancy of assets by
Purchaser or Purchaser's successors-in-
interest to the Assets (and not arising from
acts or omissions by Seller or its predeces-
sors on or prior to closing) from and after
the Closing Date shall be enforceable until
61 <PAGE>
expiration of five (5) years after Closing
Date, or such longer period for any
agreements which were assigned and assumed by
Purchaser and for which the Seller or any of
its affiliates remain liable. All other
representations, warranties, covenants, and
agreements made by Purchaser shall be
enforceable for a period to expire on the
later of (a) expiration of eighteen (18)
months after Closing Date or (b) July 31,
1999.
(e) Procedure for Claimed Relief.
(i) Notice of Claims If at any time, or
from time to time, the party to be
indemnified under Sections 9.7(a) or 9.7(c)
(hereinafter referred to as the "Indemnified
Party") shall receive notice of or become
aware of any claim or liability which results
or could result in a Loss, such Indemnified
Party shall give written notice (hereinafter
referred to as a "Notice of Claim") to the
appropriate party to provide the
indemnification under this Section 9.7(a) or
9.7(c), as appropriate (hereinafter referred
to as the "Indemnifying Party"), (a) within
thirty (30) days of the discovery of such
62 <PAGE>
potential or actual Loss in the event the
Indemnified Party has received formal written
notice of a third party claim, or (b)
otherwise within forty-five (45) days of the
discovery of such potential or actual Loss.
Provided, the failure of the Indemnified
Party to give the 45-day notice of any claim
shall not release, waive, or otherwise affect
the Indemnifying Party's obligations with
respect thereto except to the extent that the
Indemnifying Party can demonstrate actual
loss and prejudice as a result of such
failure; provided, the Indemnifying Party
shall be relieved of any indemnification
obligation whatsoever under Section 9.7(a)
and Section 9.7(c) respecting claims for
which the Indemnified Party has failed to
provide notice prior to the expiration of the
applicable survival period as set forth in
Section 9.7(b) or Section 9.7(d), as the case
may be. A Notice of Claim shall set forth
(a) a brief description of the nature of the
potential or actual Loss, (b) a copy of all
information and documents relating thereto,
(c) an estimate of the total amount of Loss
anticipated (including any costs or expenses
63 <PAGE>
which have been or may be reasonably incurred
in connection therewith). With regard to
third party claims as described in Section
9.7(e)(iii), the Indemnified Party shall
submit a copy of the pleading asserting any
such claim as its Notice of Claim or, if no
pleadings have been filed, the form of notice
shall contain the information as set forth
above. The providing of a Notice of Claim
within the applicable survival period as set
forth in Section 9.7(b) and Section 9.7(d),
as the case may be, tolls the survival period
as to the claim described in the Notice of
Claim, subject to the requirements set forth
in Section 9.7(e)(ii).
(ii) Dispute with Respect to Notice of Claim.
If the Indemnifying Party rejects any Loss as
to which a Notice of Claim is received from
an Indemnified Party, the Indemnifying Party
shall give written notice of such rejection
to such Indemnified Party within thirty (30)
days after the date of the Notice of Claim.
Such written notice shall set forth the
grounds upon which the Indemnifying Party
bases its rejection of Loss. If no such
rejection of a Notice of Claim shall be sent
64 <PAGE>
within such 30 day period, the Indemnifying
Party shall be deemed to acknowledge the
correctness of such claim for up to the full
amount thereof. In the event that the
Indemnifying Party shall have made timely
rejection of any such claim of an Indemnified
Party, and the Indemnifying Party and such
Indemnified Party shall have failed to
resolve or compromise such claim within 60
days from the date the Indemnified Party
shall have received notice of such rejection,
then the Indemnified Party must, within 90
days after such 60 day period, commence legal
proceedings against the Indemnifying Party,
provided that, in any event, suit must be
brought within 6 months of the assertion of
the claim. Within sixty (60) days after the
Indemnifying Party's liability to an Indemni-
fied Party for a Loss is finally determined
(a "final determination") in such legal
proceedings by a final nonappealable judgment
or by written agreement of the Indemnifying
Party and Indemnified Party, the Indemnifying
Party shall satisfy the Loss or its portion
thereof as applicable by paying cash or other
65 <PAGE>
immediately available funds to such
Indemnified Party.
(iii) Third Party Claims. With respect to
any claims or demands by third parties,
whenever the Indemnified Party shall have
notice that a third party claim or demand has
been asserted or threatened which, if true,
would constitute a basis for indemnification
hereunder, the Indemnified Party shall notify
the appropriate Indemnifying Party of such
claim or demand and of the facts within the
knowledge of the Indemnified Party which
relate thereto by a Notice of Claim in
accordance with Section 9.7(e)(i) above, and
such Notice of Claim shall specifically state
that the claim is a third party claim. The
Indemnifying Party shall then have the right
to contest, negotiate or settle any such
claim or demand through counsel of the Indem-
nifying Party's selection, reasonably
satisfactory to the Indemnified Party, and
solely at the Indemnifying Party's own cost,
risk and expense; provided, however, that the
Indemnifying Party shall not, without the
prior written consent of the Indemnified
Party (such consent not to be unreasonably
66 <PAGE>
withheld or delayed) settle, compromise or
offer to settle or compromise any such claim
or demand on a basis which would result in
the imposition of a consent order, injunction
or decree which would restrict the future
activity or conduct of Purchaser's business
by the Indemnified Party. In the event that
the Indemnifying Party should fail to give
written notice to the Indemnified Party of
the Indemnifying Party's intention to contest
or settle any such claim or demand within
twenty (20) days after the Indemnified Party
has notified the Indemnifying Party that any
such claim or demand has been asserted or
threatened, the Indemnified Party shall have
the right to satisfy and discharge the same
by payment, compromise or otherwise, and the
Indemnifying Party shall be entirely liable
therefor to the Indemnified Party under this
indemnity. Notwithstanding the foregoing,
however, in the event the Indemnifying Party
disputes the Notice of Claim sent pursuant to
Section 9.7(e)(i) or (iii), then the
Indemnified Party shall not, without such
Indemnifying Party's written consent settle
or compromise such claim or consent to the
67 <PAGE>
entry of a judgment in respect thereto. The
Indemnified Party may also, if it so elects
and entirely within its own discretion,
defend any such claim or demand in the event
the Indemnifying Party fails to give notice
of its intention to contest or settle any
such claim or demand or to contest the Notice
of Claim as provided in Section 9.7(e)(ii),
in which event the Indemnifying Party shall
be required to indemnify the Indemnified
Party for any and all Losses which it may
sustain, suffer, incur or become subject to
as a result of its decision to defend any
such claim or demand.
f. Right to Offset. In the event that the Seller
fails to pay any Loss adjudicated to be due
against the Seller pursuant to the procedure
set forth in Section 9.7(e) within thirty
(30) days after the final determination,
subject to the terms of this subsection (f),
Purchaser shall have the right, at its
option, to enforce any such claim for
recovery by exercising its rights under the
Pledge of Partnership Interest pursuant to
which Seller's Partnership Interest in
Purchaser described in Section 4.3 shall
68 <PAGE>
serve as collateral for any Loss adjudicated
to be due the Purchaser as aforesaid. Any
amount of Loss in excess of the value of the
limited partnership interest when applied
against it shall be due and payable in cash
or immediately available funds from Seller.
Provided, however, Purchaser shall give
Seller written notice of its intent to
enforce such liability against the Pledge of
Partnership Interest and Seller shall have
thirty (30) days to pay the amount to be
collected by the exercise of Purchaser's
rights under the Pledge of Partnership
Interest, in which case Purchaser's right to
collect the amount by exercise of its rights
under the Pledge of Partnership Interest
shall be reduced by the amount thus paid.
10. Seller's Representations and Warranties:
To induce Purchaser to enter into this Agreement,
Seller makes the following representations and
warranties effective as of the closing and transfer on
Closing Date (except where any other effective date is
expressly indicated):
69 <PAGE>
10.1 Permits, Registrations, Licenses, Leasehold, Moor-
age and Dockage Interest
a. Seller is a party to each of the Casino
Agreements identified in Schedule 1.3(a) and
the Hotel Agreements identified in Section
2.2 (hereinafter collectively "Agreements");
b. A true and complete copy of each of the
Agreements (including all amendments,
modifications and supplements to the
Agreements) has been delivered to Purchaser
as of the Execution Date;
c. The Agreements are in full force and effect;
d. The Agreements have not been amended,
modified or supplemented, orally, by course
of conduct or in writing, except as
identified in Schedule 1.3(a) and Section 2.2
or except as may be agreed to by Purchaser
after the Execution Date and before Closing
Date or Hotel Closing Date as appropriate;
e. All rentals and fees due through the
respective Closing Dates under the Agreements
shall have been paid in full as of such
closing dates and all such rentals and fees
for current periods not then due have been
prorated in accordance with a closing
statement mutually agreed to between Seller
70 <PAGE>
and Purchaser as of the respective closing
dates;
f. Seller is not in material default under the
terms of any of the Agreements and Seller has
received no notice of any alleged default by
Seller under the terms of any of the
Agreements. To the best of Seller s
knowledge, no other party to any of the
Agreements is in material default under the
terms of any of the Agreements;
g. No event has occurred which, upon the passage
of time or the giving of notice or both,
would constitute a material default by any
party to any of the Agreements;
h. All Required Approvals for assignment of the
Agreements to Purchaser will have been ob-
tained as of the Closing Date or the Hotel
Closing Date, as applicable;
i. So long as Purchaser performs its obligations
under the Casino Agreements from and after -
Closing Date, Purchaser's moorage and
occupancy of the Casino moored at its present
location at the Greenville, Mississippi,
Waterfront cannot be disturbed or terminated
by any third party and a breach hereof may be
asserted despite the fact that the facts
71 <PAGE>
relating to such breach also may constitute a
breach of any other representation or
warranty; and
j. So long as Purchaser performs its obligations
under the Hotel Agreements from and after
Hotel Closing Date, Purchaser's occupancy of
the Casino Hotel cannot be disturbed or
terminated by any third party.
10.2 Listing of Assets and Title
a. The Casino Assets identified on Schedules
1.3(a) and 1.5 are complete lists of the
assets owned, leased, or used by the Seller
in connection with the operation or ownership
of the Casino, excepting only those assets
listed on Schedule 1.4.
b. Seller has good and valid title, right, or
leasehold interests in the Assets free and
clear of all Encumbrances (except Permitted
Exceptions) except that with respect to title
to interests in real estate (including
estates in fee simple, leaseholds, licenses,
and options), Seller warrants only that such
Assets are free of Encumbrances created by
Seller or Seller's predecessor-in-title,
Jubilation Lakeshore, but are subject to the
72 <PAGE>
Permitted Exceptions, and that as to title to
the trade name "Bayou Caddy's Jubilee
Casino," Seller warrants only that Seller has
the right to use such name as it is presently
used and that such name is free of Encum-
brances created by Seller;
c. Seller has the right to sell or assign the
Assets under the terms of this Agreement
subject to obtaining the approvals
specifically described in Section 8.2; and
d. Seller will defend the title to all Assets
against all claims and demands made by any
party claiming rights against Seller and its
successors-in-interest as a result of acts of
Seller.
10.3 Payment of Debts
Excepting Permitted Exceptions, including, but not
limited to, Designated Liabilities, the Principal
Loan and the Subordinated Debt, Seller has paid,
or will promptly pay and discharge as of the
Closing Date (or Hotel Closing Date as related to
debts and liabilities for construction and
furnishing for the Casino Hotel) all debts,
liabilities and obligations, including, without
limitation, sales taxes, employee salaries and
73 <PAGE>
benefits, and obligations to trade creditors,
customers, public authorities, or other third
parties, which constitute a lien on any of the
Assets as of the Closing Date or which if not paid
would result in the imposition of a lien on the
Assets or a judgment, consent order, injunction or
decree which would require payment by the Pur-
chaser or which would restrict the future activity
or conduct of the Casino or Casino Hotel by Pur-
chaser. Provided further, Seller shall be current
on all obligations to the Lender in connection
with the Principal Loan and the Subordinated Debt
and Seller shall not be in default under any of
the terms of the Principal Loan or the
Subordinated Debt.
10.4 Designated Liabilities
The Designated Liabilities including any increases
thereto in connection with Section 4.2 hereof
shall not exceed $2,000,000.00 in the aggregate.
10.5 No Other Contracts
As of the Execution Date and as of the Closing
Date (except for the Principal Loan and the
Subordinated Debt), the Seller has not entered
into any other contract to assign, sell, mortgage,
74 <PAGE>
or encumber all or part of the Casino Assets. As
of the Hotel Closing Date, the Seller has not
entered into any other contract to assign, sell,
mortgage, or encumber all or part of the Hotel
Assets. Except for the Hotel Agreements, Seller
will not enter into any executory contracts as to
the Hotel Assets requiring performance beyond the
time of the Hotel Closing Date.
10.6 Hart-Scott-Rodino Act
Seller's parent, Alpha Hospitality Corporation, is
its own "ultimate parent" for purposes of the
Hart-Scott-Rodino Act, and rules and regulations
issued thereunder and Seller and its "ultimate
parent" do not have assets or annual revenues of
$100,000,000.00 per their most recent regularly
prepared financial statements.
10.7 Coast Guard Standards
To the best of Seller's knowledge, the Casino
meets U. S. Coast Guard standards applicable to
floating casino vessels and is in a seaworthy
condition. Seller has received no written notices
to the contrary.
75 <PAGE>
10.8 No Conflict
By entering into this Agreement, as of the
Execution Date, and subject to obtaining the
consents referred to in Section 8.2, by assigning
the Agreements and selling the Assets to Pur-
chaser, as of the Closing Date and Hotel Closing
Date as applicable, Seller will not breach any
other material contract or agreement to which
Seller is a party, violate any judgment, order, or
decree of any court or arbiter that is binding on
Seller, or create any lien, charge, or encumbrance
upon the Assets purchased and conveyed or assigned
hereunder.
10.9 Condition and Non-Removal of Equipment
The Casino Assets will be at Closing Date, and the
Hotel Assets will be on the Hotel Closing Date, in
good operating condition, except for normal wear
and tear. Except for the slot machines and other
assets listed in Schedule 1.4, none of the Casino
Assets or Hotel Assets present on the Execution
Date will be removed, sold, or disposed of before
the respective closing dates, except in ordinary
course of business. Specifically, and without
limitation of the generality of the foregoing,
there shall be no removal of gaming equipment or
76 <PAGE>
reconfiguration of the gaming equipment in the
Casino from Execution Date through Closing Date,
provided that prior to Closing Date, Seller shall
remove from the Casino those certain sixteen (16)
slot machines listed by name and serial number in
Schedule 10.9 and replace them with substantially
comparable sixteen (16) slot machines now in Sel-
ler's inventory of slot machines stored off the
Casino Barge.
10.10 Compliance With Laws
Except as otherwise provided herein, as of the
Execution Date and as of the Closing Date with
respect to the Casino Assets, and as of the Hotel
Closing Date with respect to the Hotel Assets,
Seller is not in default or in violation of any
law or regulation, except for such defaults or
violations which will not have a material adverse
effect on the Assets or the operation of the
Casino or Hotel operations. The business operated
by Seller at the Casino will be conducted up to
the time of Closing Date substantially in accor-
dance with all applicable federal, state, and
local laws, rules, regulations, and orders,
including those pursuant to the Mississippi Gaming
Control Act and all rules, regulations, and orders
77 <PAGE>
of the Mississippi Gaming Commission. Any non-
compliance which results in a fine or monetary
claim (which Seller has not paid as of Closing
Date), or an action by a public official or
regulatory agent to close or restrict Casino
operations is deemed to be a material non-
compliance for purposes of this Section.
10.11 Hotel Marketing
Seller will market the opening of the Casino Hotel
prior to the Hotel Closing Date pursuant to its
Hotel marketing plan and budget which has been
provided to Purchaser prior to Execution Date.
10.12 Litigation
Except as identified on Schedule 10.12, as of the
Execution Date, and as of the Closing Date with
respect to the Casino Assets, and as of the Hotel
Closing Date with respect to the Hotel Assets, no
action, litigation, government investigation,
condemnation proceeding, claim, eminent domain
proceeding, or any other proceeding is pending or,
to the best of Seller's knowledge, contemplated as
to Seller or all or part of the Assets which is
not covered by insurance or which if adversely
determined would impose a lien on any of the
78 <PAGE>
Assets or would result in a consent order,
injunction or decree which would require that a
payment be made or would restrict the future con-
duct of the Casino business by Purchaser at the
Casino Barge in its present location in
Greenville, Mississippi.
10.13 Hazardous Substances
To the best of Seller s knowledge, neither Seller
nor any of its predecessors-in-interest has
allowed any Hazardous Substances to discharge or
accumulate in violation of any applicable
environmental law, rule, or regulation on the
Casino Barge or the Boarding Barge, at the
Greenville, Mississippi, waterfront or at other
real estate sites owned, licensed or leased by
Seller in Greenville, Mississippi, or at the site
of the Hotel (except as previously disclosed in
writing to Purchaser and remediated by Seller at
the site of the Hotel in accordance with
applicable environmental laws, rules, and regula-
tions). To the best of Seller's knowledge, no
material violations of environmental laws and
regulations exist with respect to the Assets and
no notices of such alleged violations have been
received by Seller. "Hazardous Substances" shall
79 <PAGE>
mean any dangerous, toxic or hazardous substance
defined as hazardous or as a pollutant or
contaminant in, or the release or disposal of
which is regulated by, the Comprehensive Envi-
ronmental Response, Compensation and Liability Act
of 1980; the Super Fund Amendments and
Reauthorization Act of 1986; the Federal Resource
Conservation and Recovery Act of 1986; the Clean
Water Act; the Clean Air Act; or the Toxic
Substances Control Act; or any other applicable
federal or state law. The representations and
warranties in this Section 10.13 do not cover the
three properties to which Seller holds options
under that certain Real Estate Option dated
October 26, 1995, from Deer Creek & Black Bayou
Steam Navigation and Transportation Company, Inc.,
and that certain Lease and Option to Purchase
Agreement dated October 26, 1995, from Deer Creek
& Black Bayou Steam Navigation and Transportation
Company, Inc.
10.14 Brokers and Real Estate Commissions
Neither Seller nor any of its officers, directors,
representatives, or employees have had any
dealings with any broker or finder or incurred any
liability for any brokerage fees, brokerage
80 <PAGE>
commissions, or finder's fees as to this Agreement
or the sale of the Casino Assets or Hotel Assets.
10.15 Contracts and Agreements
Schedule 1.3(a) and Section 2.2 contain a true and
complete list of all material contracts and agree-
ments to which Seller is a party and which relate
to the Casino or the Casino Hotel. Except for
non-written employment agreements with employees
of the Casino which are terminable at will by
Seller, Seller is not a party to any non-written
contract or agreement pertaining to the Casino or
the Casino Hotel. True and correct copies of all
contracts and agreements listed on Schedule 1.3(a)
and in Section 2.2, including any amendments,
modifications, or supplements thereto, have been
provided to Purchaser prior to Execution Date.
All such contracts and agreements are in full
force and effect. Seller has materially performed
its obligations thereunder, and, to the best of
Seller's knowledge, neither Seller nor any other
party thereto is in material default thereunder;
and, to the best of Seller's knowledge, no
condition exists with which notice or lapse of
time or both would constitute a material default
thereunder. Seller will comply with all its
81 <PAGE>
material obligations under each of the above de-
scribed contracts and agreements up to the time of
the Closing Date and Hotel Closing Date as
applicable. Specifically, and without limitation
of the generality of the foregoing, Seller will
comply with its obligations under its rental
agreement with Mosow Real Estate, Inc., related to
the property at 240 S. Theobald Street for such
period of time as Seller is obligated to The Board
of Mississippi Levee Commissioners to provide it
office space under the Temporary Facilities
Agreement between Seller and The Board of
Mississippi Levee Commissioners dated as of April
18, 1997.
10.16 Compliance with Mississippi Gaming Regulations
The Casino is and will remain through the Closing
Date in compliance with the Mississippi Gaming
Control Act and regulations, rules, and orders of
the Mississippi Gaming Commission, provided,
however, that non-material and non-substantial
breaches of said regulations, rules, and orders
which have had or will have no economic or
operational consequence are excluded from this
representation and warranty.
82 <PAGE>
10.17 Good Standing
Seller is a corporation that is duly incorporated,
validly existing, and in good standing under the
laws of the State of Delaware, and Seller has all
requisite corporate power and authority to own its
properties and to conduct its businesses as they
are now being conducted.
10.18 Corporate Authorization
The execution, delivery, and performance of this
Agreement by Seller, Alpha Hospitality Corporation
and Alpha Hotel have been duly and validly
authorized by all requisite corporate action
subject to obtaining their respective
Shareholders' approval of the execution, delivery
and performance of this Agreement prior to
Closing.
10.19 Valid Obligation
This Agreement is a valid and binding obligation
of Seller and is enforceable according to its
terms, except as the same may be restricted,
limited or delayed by applicable bankruptcy or
other similar laws affecting creditors rights
generally and general equitable principles.
83 <PAGE>
10.20 Profit and Loss Statements
Seller has provided to Purchaser prior to the
Execution Date (a) audited financial statements
for the Casino for the fiscal year ended December
31, 1996, and (b) unaudited profit and loss
statements for the Casino from January 1, 1997
through September 29, 1997, which, except for non-
recurring items shown on Schedule 10.20, have been
produced in the ordinary course of business
consistent with Seller s past practice in
connection with the operation of the Casino. The
above-referenced audited financial statements
fairly present in all material respects the finan-
cial condition of the Seller and the results of
its operations for the fiscal year ended December
31, 1996, and the above-referenced unaudited
profit and loss statements fairly present in all
material respects the results of Seller's
operations (except for non-recurring items as
listed on Schedule 10.20 hereto) for the periods
ended at the respective dates thereof.
10.21 Knowledge
Any representation, warranty or covenant of Seller
qualified by the phrase "to best of Seller's
knowledge" or "to Seller's knowledge", "known" or
84 <PAGE>
other similar phrase implying a limitation on the
basis of knowledge is intended to indicate that
none of the present directors of Seller or its
parent, Seller's or Seller's parent's President,
Vice President, Chief Financial Officer or Vice
President-Casino Operations or any of them has
information which would give him or her actual
knowledge contrary to the existence or nonexis-
tence of such facts and appropriate inquiry has
been made of the relevant operational personnel of
the Casino.
10.22 Application of Sale Proceeds
At closing on the Closing Date, the closing agent,
First American Title Insurance Company, as agent
for Seller, will apply the net cash portion of the
purchase price described in Section 4.1 as is
necessary to satisfy any and all then-outstanding
Encumbrances against the Assets and indebtednesses
of Seller (not included in the Designated
Liabilities), except for the Permitted Exceptions,
including, but not limited to, liens, mortgages
and encumbrances in favor of the Lender and
granted in connection with the Principal Loan and
the Subordinated Debt, provided the closing agent
shall distribute the funds in accordance with a
85 <PAGE>
closing statement agreed to by the Purchaser and
Seller. The Purchaser and Seller agree that the
closing statement shall provide that the claims of
Seller's non-affiliated third party creditors
(including, but not limited to, all trade
creditors with invoices over 45 days old on the
Closing Date), except the Lender, shall be
satisfied in full prior to any payment from the
sale proceeds to Seller's affiliated creditors
(including specifically and without limitation
Bryanston Group, Inc. and BP Group, Ltd.), each of
which shall, nonetheless, release any then-out-
standing liens, mortgages, and encumbrances
against the Assets and shall consent in writing to
this distribution of sales proceeds and waive any
claims against Purchaser or the Lender arising
therefrom. Provided further, that Seller
represents and warrants that all litigation
matters shown on Schedule 10.12, except the
matters numbered 1, 13, 18, 27, 28 and 29, shall,
consistent with the representations made on the
Schedule, either be fully insured without a
reservation of rights or be paid in full or
otherwise fully satisfied on the Closing Date. As
to the following litigation matters: Hendrick
Outdoor, Inc. v. Alpha Gulf Coast, Inc., Cause No.
86 <PAGE>
96-0426 (No. 13 on Schedule 10.12); Tidelands
Lease with the State of Mississippi (No. 27 on
Schedule 10.12); and Pitney Bowes Credit Corp. v.
Alpha Gulf Coast, Inc., Cause No. 097-0406 (No. 29
on Schedule 10.12), Seller shall, prior to any
payment to affiliated creditors, deposit with
First American Title Insurance Company at closing
the sums of $63,000.00, $393,000.00 and
$43,000.00, respectively, to be held by said title
insurance company as agent for Seller to satisfy
any of the contingent liabilities arising out of
or in connection with the aforelisted itemized
litigation matters, upon the satisfaction of each
of which Seller shall be entitled to disbursement
of remaining funds, if any, held by the Closing
Agent on account of that litigation matter. As to
the matters numbered 1, 18, and 28 on Schedule
10.12 (Akers v. Bayou Caddy's Jubilee Casino,
Cause #C196,0232; Lewis v. Alpha Gulf Coast Inc.,
Cause #C197-0128; and Wilson v. Alpha Gulf Coast
Inc., Cause #C197-0041), Seller represents and
warrants that such claims are fully insured
without reservation of rights except to the extent
that the allegations made of intentional conduct
and/or give rise to punitive damages and further
represents and warrants that no damages arising
87 <PAGE>
out of claims for intentional conduct and/or
punitive damages will be awarded in any such
action.
10.23 Pledge of Partnership Interest
Upon its delivery to Purchaser on Closing Date,
the pledge of partnership interest, if any, de-
scribed in Sections 4.6 and 9.7(f) will be duly
and validly authorized by Seller's shareholders
and organizational documents and shall constitute
valid and binding obligation of Seller and shall
be enforceable against Seller according to its
terms, except as the same may be restricted,
limited or delayed by applicable bankruptcy or
similar laws affecting creditors rights and
general equitable principles.
11. Purchaser's Representations and Warranties:
To induce Seller to enter into this Agreement,
Purchaser makes the following representations and
warranties effective as of the closing on Closing Date
(except where any other effective date is expressly
indicated):
11.1 Good Standing
Purchaser is a limited partnership that is duly
organized, validly existing, and in good standing
88 <PAGE>
under the laws of the State of Mississippi.
Purchaser s general partner, Greenville CP, Inc.,
is a corporation that is duly incorporated,
validly existing, in good standing under the laws
of the State of Delaware and qualified to do
business in the State of Mississippi. Purchaser
has all requisite partnership power and authority
to own its properties and to carry on its
businesses as they are now being conducted.
11.2 Partnership Authorization
The execution, delivery, and performance of this
Agreement by Purchaser has been duly and validly
authorized in a manner required by its
organizational documents. This Agreement is a
valid and binding obligation of Purchaser and is
enforceable against Purchaser according to its
terms, except as the same may be restricted,
limited or delayed by applicable bankruptcy or
other similar laws affecting creditors rights
generally and general equitable principles.
11.3 No Violation of Other Documents
By closing the transactions contemplated under
this Agreement on the Closing Date and Hotel
Closing Date, as applicable, Purchaser will not
89 <PAGE>
breach any other contract to which Purchaser is a
party or violate any judgment, order, or decree of
any court or arbiter that is binding on Purchaser.
11.4 Brokers and Real Estate Commissions
Neither Purchaser nor any of its officers,
directors, representatives, or employees have had
any dealings with any broker or finder or incurred
any liability for any brokerage fees, brokerage
commissions, or finder's fees as to this Agreement
or the purchase of the Assets, except that
Purchaser has employed the services of Executive
Business Services, Inc., in connection with
financing from Lender. Brokerage fees, if any, to
Executive Business Services, Inc., shall be paid
by Purchaser.
11.5 Hart-Scott-Rodino Act
Purchaser is its own "ultimate parent" for
purposes of the Hart-Scott-Rodino Act, and rules
and regulations issued thereunder, and Purchaser
does not have assets or annual revenues of
$100,000,000.00 per its most recent regularly
prepared financial statement.
90 <PAGE>
11.6 Delivery of Partnership Agreement
Purchaser has delivered to Seller prior to the
Execution Date a true and complete copy of its
current Partnership Agreement and all prior
amendments thereto and the Securities Purchase
Agreement between Purchaser and certain
Noteholders, dated as of December 14, 1993, and
all prior amendments thereto to Seller on or
before Closing Date. Attached hereto as Schedule
11.6 is a true and complete copy of the Revised
Third Amended and Restated Partnership Agreement,
which will be in full force and effect in lieu of
the Second Amended Partnership Agreement from and
after the Closing Date. Purchaser and its General
Partner will use their best efforts as described
in the Letter attached to Schedule 11.6 to obtain
approval of the amendments to the Partnership
Agreement contained in said Letter.
11.7 Delivery of Balance Sheet and Proforma Balance
Sheet
Purchaser has delivered to Seller on or before -
Execution Date Purchaser's balance sheet as of the
end of its fiscal quarter most recently closed
prior to the Execution Date, and attached as
Schedule 11.7 is Purchaser's proforma balance
91 <PAGE>
sheet as of Closing Date, which will take into
account the transactions contemplated hereby.
Purchaser represents that the balance sheet
delivered on or before Execution Date fairly
presents the assets, liabilities, and partnership
investments as of the date thereof.
12. Right To Terminate and Remedies:
12.1 Right to Terminate
Anything to the contrary herein notwithstanding,
this Agreement and the transactions contemplated
hereby may be terminated at any time prior to the
Closing Date and Hotel Closing Date, respectively,
by prompt notice given in accordance with Section
18:
a. by the mutual written consent of Purchaser
and Seller; or
b. by either of such parties by written notice
given in accordance with Section 18 if the
closing of the purchase of the Casino Assets
shall not have occurred on the earlier of (a)
five (5) business days after all conditions
precedent stated in Sections 8.1 and 8.2 are
fulfilled or (b) January 31, 1998, provided,
however, the foregoing notwithstanding, if
the "SEC" has not approved the form of the
92 <PAGE>
proxy statement for the meeting of Seller's
parent's shareholders to consider approval of
this transaction on or before January 6,
1998, the date of January 31, 1998, shall be
extended to the earlier of (a) the twenty-
fifth (25th) day after SEC approval of such
proxy statement or (b) February 25, 1998 (or
on such later date on which Seller and
Purchaser may hereafter mutually agree in
writing to be the Closing Date, neither party
being obligated to agree to such an exten-
sion); provided however, that the right to
terminate this Agreement under this Section
12.1(b) shall not be available to any party
whose failure to fulfill any material
obligation for which such party has re-
sponsibility under this Agreement has been
the cause of or resulted in the failure of
the closing to occur on or prior to the
aforesaid dates.
12.2 Remedies
a. Purchaser's Remedies. The provisions of
Section 12.1(b) notwithstanding, in the event
of a material breach of this Agreement by
Seller, and/or if all conditions precedent to
93 <PAGE>
Seller's obligation to close the purchase of
Casino Assets as set forth in Section 8.1 are
satisfied on the Closing Date, or if all
conditions precedent to Seller's obligation
to close the purchase of the Hotel Assets are
satisfied on the Hotel Closing Date, and
Seller fails to close in accordance with this
Agreement, the Purchaser shall not be limited
to the remedy of termination of this
Agreement, but shall be entitled to pursue
monetary damages up to the amount of the
Subordinated Debt and/or specific performance
of this Agreement. Provided, however, the
Purchaser shall not execute on any monetary
judgment obtained by it against the Seller
(except one obtained in connection with
Seller's obligations under Section 4.6(a)
and/or (b)) pursuant to the foregoing until
Seller has paid the Principal Loan and
Subordinated Note in full or it has otherwise
been satisfied or assigned. Notwithstanding
the foregoing, in the event that the closing
does not occur due to (i) the failure of
Seller and/or Seller's parent, Alpha
Hospitality Corporation, to obtain on or
before the Closing Date, the approval of the
94 <PAGE>
transaction contemplated herein by their
respective shareholders provided in Section
8.2(e); (ii) Seller, its parent or any other
subsidiary of its parent are the subject of
bankruptcy proceedings; or (iii) the Seller
fails to deliver the Casino Assets as pro-
vided in Section 5.1 of the Agreement then,
in such event, Purchaser shall be immediately
entitled to damages in the amount of One
Million Dollars ($1,000,000.00) in addition
to all other damages and remedies provided
for in this Section. In addition to the
foregoing, the Purchaser shall be entitled to
recover all of its reasonable costs and
expenses incurred in pursuing either of these
remedies (including, without limitation,
reasonable attorneys' fees).
b. Seller s Remedies. The provisions of Section
12.1(b) notwithstanding, in the event of a
material breach of this Agreement by
Purchaser, and/or if all conditions precedent
to Purchaser's obligation to close the
purchase of Casino Assets as set forth in
Section 8.2 are satisfied on the Closing
Date, or if all conditions precedent to
Purchaser's obligation to close the purchase
95 <PAGE>
of the Hotel Assets are satisfied on the
Hotel Closing Date, and Purchaser fails to
close in accordance with this Agreement, the
Seller shall not be limited to the remedy of
termination of this Agreement, but shall be
entitled to pursue monetary damages up to the
amount of the Subordinated Debt and/or
specific performance of this Agreement and
shall be entitled to recover all of its
reasonable costs and expenses incurred in
pursuing either of these remedies (in-
cluding, without limitation, reasonable
attorneys' fees). Provided, however, the
Seller shall not execute on any monetary
judgment obtained by it pursuant to the
foregoing until the Purchaser has paid the
indebtedness from the Lender evidenced by (i)
the senior secured note to the Lender in the
amount of $17,200,000.00 and the subordinated
secured note in the amount of $3,621,000.00
executed in the financing transaction
described in Section 8.1(e) and Section
8.2(t), or (ii) the senior secured note to
the Lender in the amount of $36,200,000.00
and the subordinated secured note to the
Lender in the amount of $8,500,000.00 in the
96 <PAGE>
event the amended and restated loan agreement
described in Section 8.2(t) is consummated.
Notwithstanding the foregoing, in the event
that the closing of the sale and purchase of
the Casino Assets occurs, and all of the
conditions precedent to Purchaser's
obligation to close the purchase of the Hotel
Assets are satisfied on the Hotel Closing
Date and Purchaser fails to close such
Purchase in accordance with this Agreement,
the Seller shall be entitled to pursue
specific performance of this Agreement and
shall be entitled to recover all of its
reasonable costs and expenses incurred in
pursuing this remedy (including, without
limitation, reasonable attorneys' fees).
c. Subordination of Termination Payments. All
amounts, if any, payable by (i) Seller to
Purchaser pursuant to Section 12.2 (a)
hereof, except those described in Section
4.6(a) and (b) and except for the one million
dollar payment described in Section 12.2(a),
shall be evidenced by a non-interest bearing
promissory note issued by Seller to Purchaser
(the "Seller Termination Note") which shall
be fully subordinated to all obligations
owing to Lender from Seller, if any, or (ii)
97 <PAGE>
Purchaser to Seller pursuant to Section
12.2(b) hereof shall be evidenced by a non-
interest bearing promissory note issued by
Purchaser to Seller (the "Purchaser
Termination Note") which shall be fully
subordinated to all obligations owing to
Lender from Purchaser. As long as Seller
owes any obligations to Lender, the holder of
the Seller Termination Note shall be
prohibited from receiving payments, declaring
an event of default or otherwise accelerating
the amounts payable thereunder and as long as
Purchaser owes any obligations to Lender, the
holder of the Purchaser Termination Note
shall be prohibited from receiving payments,
declaring an event of default or otherwise
accelerating the amounts payable thereunder.
13. Legal Compliance:
Seller and Purchaser agree that Article 6 of the
Uniform Commercial Code--Bulk Transfer has been
repealed in Mississippi and, accordingly, no action to
comply with Bulk Sales laws will be taken.
98 <PAGE>
14. Risk of Loss:
Seller shall fully assume the risk of any loss by fire
or other casualty that affects any of the Casino Assets
or Hotel Assets up to the time of Closing Date (as to
Casino Assets) and the Hotel Closing Date (as to the
Hotel Assets). Seller shall, at its expense, keep the
Casino Asset insured until the time of the Closing Date
and the Hotel Assets insured until Hotel Closing Date
against any loss from fire or other casualty in an
amount equal to the replacement value of such Assets.
If before the transfer of Assets on the Closing Date
and Hotel Closing Date, as applicable, any loss by fire
or other casualty affects some or all of the Assets,
Purchaser may choose either of the following
alternatives:
a. If the casualty damages or destroys the
Casino Assets to the extent of Five Million
Dollars ($5,000,000.00) or more of their
replacement cost and/or so damages the Casino
Barge as to render it not commercially usable
for a period of twenty (20) days or more,
Purchaser may terminate this Agreement. In
that event, Purchaser shall have no further
obligations under this Agreement. If the
casualty damages or destroys the Hotel Assets
to the extent of Seven Hundred Thousand
Dollars ($700,000.00) or more of their
99 <PAGE>
replacement cost and/or so damages the Hotel
as to delay its substantial completion or
opening for a period not to exceed the
shorter of thirty (30) days from February 6,
1998, or such period as the Mississippi
Gaming Commission allows Seller to complete
the Casino Hotel in satisfaction of
"infrastructure" requirements under orders
and requirements issued by the Mississippi
Gaming Commission to proceed with closing,
Purchaser may terminate this Agreement with
respect to the Hotel Assets.
b. If a casualty loss occurs in an amount or
duration less than the applicable amount or
duration set forth in Section 14.1(a) or, if
notwithstanding the provisions of Section
14.1(a), in the event of casualty loss
covered by Section 14.1(a), Purchaser chooses
to go forward with the purchase of the Casino
Assets or the Hotel Assets, as applicable,
all insurance proceeds paid as a result of
the loss affecting the Assets (except for
business interruption insurance) shall be
used to pay the expenses of repairing,
replacing, and restoring the Casino Assets or
Hotel Assets as applicable affected by the
loss, and any such expenses not covered by
100 <PAGE>
the insurance proceeds shall be borne by
Seller, with the Closing Date or Hotel
Closing Date extended until such repairs are
completed. If the repair, replacement, and
restoration of the Casino Assets or Hotel
Assets has not been completed by the time
scheduled for the Closing Date or Hotel
Closing Date, as applicable, and nonetheless
the parties mutually agree to proceed with
closing, further repair work shall be
completed by Purchaser at Seller's expense
and any insurance proceeds paid as a result
of the loss shall be held in trust for that
purpose.
15. Time of Essence:
The parties agree that as to performance under this
Agreement, time shall be of the essence.
16. Governing Law:
The Agreement shall be governed by the substantive laws
of the State of Mississippi, without regard to
conflicts of law rules.
17. Guaranty of Alpha Hospitality Corporation:
101 <PAGE>
By its signature below, Alpha Hospitality Corporation,
parent of Seller, guarantees Seller's performance of
all of Seller's obligations and liabilities to
Purchaser arising out of or in relation to this
Agreement and any documents executed pursuant to this
Agreement in accordance with the terms and provisions
set forth in the form of guaranty attached as Schedule
17, the original of which shall be executed and
delivered to Purchaser by Alpha Hospitality Corporation
on the Execution Date.
18. Notices:
All notices given under this Agreement shall be in
writing and shall be sent postage prepaid by either
(a) United States certified mail, return receipt
requested, or (b) for delivery on the next business day
with a nationally-recognized express courier. All such
notices shall be sent to the following addresses, until
such addresses are changed by 30 days' notice:
To Seller: Alpha Gulf Coast, Inc.
12 East 49th Street
New York, New York 10017
ATTN: President
With a copy to: Gina Jacobs, Esq.
Watkins, Ludlam & Stennis, P.A.
P. O. Box 427
Jackson, MS 39205
102 <PAGE>
To Purchaser: Greenville Casino
Partners, L.P.
c/o Greenville CP, Inc.,
its general partner
242 South Walnut Street
Greenville, MS 38701
ATTN: John R. O'Donnell,
President
With a copy to: Jerome C. Hafter, Esq.
Jenny M. Virden, Esq.
Lake Tindall, LLP
P. O. Box 918
Greenville, MS 38702-0918
Notices shall be deemed delivered on the fifth day
after postmark, if sent by certified mail, or on date
of delivery to addressee as shown by express courier s
receipt, if sent by express courier. If the last day
for giving any notice or taking any action required or
permitted under this Agreement would otherwise fall on
a Saturday, Sunday, or legal holiday, that last day
shall be postponed until the next legal business day.
19. Miscellaneous:
19.1 Entire Agreement; Enforceability
This Agreement, including any Recitals and any
attached Schedules, all of which are made a part
of this Agreement, contains the entire agreement
of the parties concerning this subject matter. No
other terms or oral promises which are not in this
103 <PAGE>
Agreement may be legally enforced, and no
promises, projections, inducements or
representations made on or before the Execution
Date will change the terms of this Agreement or be
binding on any party. No promises or other terms
shall be implied in this Agreement.
19.2 Amendments
No amendment of this Agreement shall be binding
unless it is in writing, states that it consti-
tutes an Amendment to this Agreement, and is
signed by the party against whom enforcement is
sought.
19.3 Binding Effect; Assignment; No Third Party
Beneficiaries This Agreement shall both bind and
benefit the parties to this
Agreement and their successors and
permitted assigns. Purchaser may
assign its rights and privileges
and delegate its obligations under
this Agreement, in whole or in
part, (a) to another entity which
is wholly-owned by Purchaser; (b)
to another entity which is at the
time of assignment a current holder
104 <PAGE>
of a gaming license issued by the
Mississippi Gaming Commission; or
(c) to any other assignee only with
the advance written approval of the
Seller, which approval will not be
unreasonably denied or delayed;
provided, however, that no such
assignment or delegation shall
relieve Purchaser of any
obligations to Seller expressly set
forth in this Agreement. Purchase
may assign, as collateral, this
Agreement and each of Purchaser's
rights and privileges hereunder to
the Lender. The parties do not
intend that there be any third
party or other beneficiaries of
this Agreement or guaranty except
that the Lender or any other party
who becomes Purchaser's successor-
in-interest as to any or all of the
Assets, after or as a result of an
event of default under the Casino
Loan, shall become Purchaser's
successor as to all rights and
privileges under this Agreement and
105 <PAGE>
the guaranties delivered pursuant
hereto, including without
limitation the right to rely upon
and enforce Seller s repre-
sentations and warranties set forth
in Article 10, as if the Lender or
such other party were a party to
this Agreement.
19.4 Waivers; Consents
A party shall not be deemed to have made a waiver,
consent or approval under this Agreement unless it
does so in writing. The mere failure of a party
to act to enforce any provision of this Agreement
shall not be considered a waiver, consent or
approval and shall not prevent that party from
enforcing any provision of this Agreement in the
future.
19.5 Severability
The invalidity or unenforceability of one
provision of this Agreement will not affect the
validity or enforceability of the other
provisions.
106 <PAGE>
19.6 Captions
The section numbers and captions are inserted only
as a matter of convenience, and do not in any way
define, limit, or describe the scope or intent of
this Agreement. Any references in this Agreement
to a Section or subsection shall refer to such
Section or subsection of this Agreement, unless
expressly provided otherwise.
19.7 Interpretation of "including" and "day"
Wherever the word "including" is used in this
Agreement, or in any recital or exhibit to this
Agreement, it shall mean "including without
limitation." Wherever the word "day(s)" is used
in this Agreement, or in any recital or exhibit to
this Agreement, and the word "business" does not
appear immediately before such word, such word
shall mean "calendar day(s)."
19.8 Counterparts
This Agreement may be executed in several
counterparts, each of which shall be deemed an
original, and all of which together shall con-
stitute one and the same instrument.
107 <PAGE>
20. No Offer:
The submission of this Agreement for examination and
negotiation does not constitute an offer to enter into
an agreement, and this Agreement shall not be binding
on any party until it is executed and delivered by each
party to this Agreement.
Seller, Purchaser, and Guarantor only for purposes of the
guaranty executed herein, have executed this Agreement as of
the Execution Date.
SELLER:
ALPHA GULF COAST, INC., a
Delaware Corporation
By:
------------------------
Its:
------------------------
ALPHA GREENVILLE HOTEL, INC.,
a Delaware Corporation
By:
------------------------
Its:
-----------------------
GUARANTOR:
ALPHA HOSPITALITY CORPORATION,
a Delaware Corporation, only
for the purpose of agreeing to
the Guaranty
By:
------------------------
Its:
------------------------
108 <PAGE>
PURCHASER:
GREENVILLE CASINO PARTNERS,
L.P., a Mississippi Limited
Partnership
By: Greenville CP, Inc., a
Delaware Corporation, Its
General Partner
By:
------------------------
Its:
------------------------
109 <PAGE>
IRREVOCABLE PROXY
The undersigned Stockholder of Alpha Hospitality
Corporation, a Delaware corporation (the "Company"), hereby
irrevocably designates and appoints Greenville Casino
Partners, L.P., a Mississippi Limited Partnership (the
"Proxy Holder"), proxy and attorney-in-fact with full power
of substitution, on behalf and in the name of the
undersigned, to represent the undersigned at the Meeting of
the Stockholders of the Company (the "Meeting"), to be held
for the purpose, inter alia, of seeking stockholder approval
of the Transactions (as hereinafter defined), including the
sale of substantially all of the operating assets of the
Company to Greenville Casino Partners, L.P. pursuant to an
Asset Purchase Agreement (the "Asset Purchase Agreement")
between Alpha Gulf Coast, Inc., a Delaware corporation,
Alpha Greenville Hotel, Inc., a Delaware corporation, and
Greenville Casino Partners, L.P., a Mississippi Limited
Partnership, and at any adjournment or adjournments or any
postponement or postponements thereof, and to vote all
shares of Common Stock and Preferred Stock in the Company
that the undersigned would be entitled to vote if then and
there personally present (the "Shares"), for the purpose of
voting IN FAVOR of the Transactions and taking any and all
other actions to devote the shares to effectuate the
Transactions. The undersigned has read the draft proxy
disclosure document relating to the Transactions and the
Asset Purchase Agreement and has an opportunity to examine
the related agreements and documents, and the undersigned
has been given the opportunity to ask and have answered any
questions regarding such agreements and the transactions
provided for therein (collectively, the "Transactions").
This Proxy is (except as provided below) irrevocable
and coupled with an interest. The undersigned grants this
Proxy as an inducement to the Proxy Holder and as a
condition to the Proxy Holder's obligation to consummate the
Transactions and in consideration for the Proxy Holder's
covenant and undertaking, as set forth below, to vote all of
the Shares in favor of the Transactions, and for other good
and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged. Upon the execution hereof,
all prior proxies given by the undersigned with respect to
the Shares are hereby revoked and no subsequent proxies will
be given with respect to any vote relating to the
Transactions.
<PAGE>
Notwithstanding anything contained herein to the
contrary, this Proxy shall not extend to other matters not
expressly provided for herein. The undersigned expressly
reserves the right to exercise (or decline to exercise) all
votes related to the Shares with respect to any other matter
to be considered and voted on at the Meeting or otherwise;
provided, however, that the undersigned agrees not to vote
the Shares in favor of any action that is inconsistent with
or which would prevent or hinder the Company's authorization
and consummation of the Transactions and the Company's
performance of its obligations under the Asset Purchase
Agreement and related agreements and documents.
Notwithstanding anything contained herein to the
contrary, if the Proxy Holder shall have received at least
10 days' notice of the Meeting, or any adjournment or
postponement thereof, at which the stockholders of the
Company vote with respect to approval of the Transactions
and, for any reason or cause whatsoever, does not vote at
such Meeting in favor of the Transactions, this proxy shall
automatically be null and void and of no force or effect.
2 <PAGE>
This proxy shall expire on the earliest of (i) the
consummation of the Transactions or (ii) the end of business
on February 28, 1998.
Dated:_____________________, 1997
---------------------------------
Stockholder's Signature
---------------------------------
Number of Shares
Greenville Casino Partners, L.P. hereby confirms to the
stockholder whose signature appears above the covenant and
undertaking of Greenville Casino Partners, L.P. that it will
vote all of the Shares (as defined above) in favor of the
Transactions (as defined above) and will not abstain or
otherwise fail to vote in favor of the Transactions.
Dated:______________________, 1997
GREENVILLE CASINO PARTNERS, L.P.,
a Mississippi Limited Partnership
By: Greenville C.P., Inc.,
a Delaware corporation,
its General Partner
By:
--------------------------
Its:
-----------------------
Dated:______________________, 1997
----------------------------------
Signature
3 <PAGE>
