EXHIBIT 2.9
ASSET PURCHASE AGREEMENT
dated as of October 17, 2000
by and among
AMERISTAR CASINO KANSAS CITY, INC.,
a Missouri corporation
("Purchaser"),
AMERISTAR CASINOS, INC.,
a Nevada corporation
("ACI"),
KANSAS CITY STATION CORPORATION,
a Missouri corporation
(the "Company"),
and
STATION CASINOS, INC.,
a Nevada corporation
("Parent"),
with respect to
the assets of
KANSAS CITY STATION CORPORATION,
a Missouri corporation
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience only.
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ASSET PURCHASE AGREEMENT..........................................................................................1
ARTICLE I SALE OF ASSETS AND CLOSING..............................................................................1
1.01 Assets................................................................................................1
1.02 Liabilities...........................................................................................6
1.03 Purchase Price; Allocation............................................................................8
1.04 Closing...............................................................................................8
1.05 Determination of Surplus or Deficiency; Post-Closing Adjustment; Real Estate Purchase Adjustment......9
1.06 Prorations...........................................................................................11
1.07 Further Assurances; Post-Closing Cooperation.........................................................11
1.08 Third-Party Consents; ACI's Gaming Compliance Program................................................12
1.09 Insurance Proceeds...................................................................................13
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND PARENT..............................................13
2.01 Corporate Existence..................................................................................13
2.02 Authority............................................................................................14
2.03 No Conflicts.........................................................................................14
2.04 Governmental Approvals and Filings...................................................................14
2.05 Financial Statements and Condition...................................................................15
2.06 Taxes................................................................................................15
2.07 Legal Proceedings....................................................................................15
2.08 Compliance With Laws and Orders......................................................................16
2.09 Benefit Plans; ERISA; Labor Matters..................................................................16
2.10 Real Property........................................................................................17
2.11 Tangible Personal Property...........................................................................18
2.12 Contracts............................................................................................18
2.13 Licenses.............................................................................................19
2.14 Affiliate Transactions...............................................................................19
2.15 Environmental Matters................................................................................19
2.16 Labor Matters........................................................................................20
2.17 Brokers..............................................................................................20
2.18 Absence of Certain Changes...........................................................................21
2.19 Sufficiency of and Title to the Assets...............................................................21
2.20 Insurance............................................................................................21
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER AND ACI..................................................22
3.01 Existence............................................................................................22
3.02 Authority............................................................................................22
3.03 No Conflicts.........................................................................................22
3.04 Governmental Approvals and Filings...................................................................23
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3.05 Legal Proceedings....................................................................................23
3.06 Brokers..............................................................................................23
3.07 Financing............................................................................................23
3.08 Purchaser's Gaming Licenses..........................................................................23
ARTICLE IV COVENANTS OF THE COMPANY AND PARENT...................................................................23
4.01 Regulatory and Other Approvals.......................................................................24
4.02 HSR Filings..........................................................................................24
4.03 Investigation by Purchaser...........................................................................24
4.04 Conduct of Business..................................................................................25
4.05 Certain Restrictions.................................................................................25
4.06 Transition Period....................................................................................26
4.07 No Solicitation......................................................................................27
4.08 Title Insurance......................................................................................27
4.09 ACI's Gaming Compliance Program......................................................................29
4.10 Fulfillment of Conditions............................................................................29
4.11 Noncompetition.......................................................................................30
4.12 No Solicitation......................................................................................31
ARTICLE V COVENANTS OF PURCHASER.................................................................................31
5.01 Regulatory and Other Approvals.......................................................................31
5.02 HSR Filings..........................................................................................32
5.03 Investigation by the Company.........................................................................32
5.04 No Solicitation......................................................................................32
5.05 Collection of Gaming Chips and Tokens................................................................32
5.06 Baggage..............................................................................................33
5.07 Safe Deposits........................................................................................33
5.08 Valet Parking........................................................................................33
5.09 Undertakings with Respect to Ground Lease............................................................33
5.10 Return of Books and Records..........................................................................34
5.11 Use of Transferred Intellectual Property.............................................................34
5.12 Fulfillment of Conditions............................................................................34
ARTICLE VI CONDITIONS TO OBLIGATIONS OF PURCHASER................................................................34
6.01 Representations and Warranties.......................................................................34
6.02 Performance..........................................................................................34
6.03 Officers' Certificates...............................................................................35
6.04 Orders and Laws......................................................................................35
6.05 Regulatory Consents and Approvals....................................................................35
6.06 Consummation of Related Transaction..................................................................35
6.07 Deliveries...........................................................................................35
6.08 Title Insurance and Environmental Reports............................................................35
6.09 Consents.............................................................................................35
6.10 Absence of Material Adverse Effect...................................................................36
ARTICLE VII CONDITIONS TO OBLIGATIONS OF THE COMPANY.............................................................36
7.01 Representations and Warranties.......................................................................36
7.02 Performance..........................................................................................36
7.03 Officers'Certificates................................................................................36
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7.04 Orders and Laws......................................................................................36
7.05 Regulatory Consents and Approvals....................................................................36
7.06 Consummation of Related Transaction..................................................................37
7.07 Deliveries...........................................................................................37
7.08 Letter Of Credit.....................................................................................37
7.09 Required Consents....................................................................................37
ARTICLE VIII TAX MATTERS AND POST-CLOSING TAXES..................................................................37
8.01 Transfer Taxes and Transfer Fees.....................................................................37
8.02 Tax Indemnification..................................................................................37
8.03 Tax Cooperation......................................................................................38
8.04 Notification of Proceedings; Control.................................................................38
ARTICLE IX EMPLOYEE BENEFITS MATTERS.............................................................................38
9.01 Offer of Employment..................................................................................38
9.02 Welfare Plans -- Claims Incurred; Pre-Existing Conditions............................................39
9.03 Vacation.............................................................................................39
9.04 Service Credit.......................................................................................40
9.05 Company's Benefit Plans..............................................................................40
9.06 COBRA Matters........................................................................................40
ARTICLE X SURVIVAL OF REPRESENTATIONS............................................................................40
10.01 Survival of Representations, Warranties, Covenants and Agreements....................................40
10.02 No Other Representations.............................................................................40
ARTICLE XI INDEMNIFICATION.......................................................................................41
11.01 Other Indemnification................................................................................41
11.02 Method of Asserting Claim............................................................................42
11.03 Exclusivity..........................................................................................45
ARTICLE XII TERMINATION..........................................................................................45
12.01 Termination..........................................................................................45
12.02 Effect of Termination................................................................................46
ARTICLE XIII DEFINITIONS.........................................................................................46
13.01 Defined Terms........................................................................................46
13.02 Construction of Certain Terms and Phrases............................................................54
ARTICLE XIV MISCELLANEOUS........................................................................................55
14.01 Notices..............................................................................................55
14.02 Entire Agreement.....................................................................................56
14.03 Expenses.............................................................................................56
14.04 Public Announcements.................................................................................56
14.05 Waiver...............................................................................................57
14.06 Amendment............................................................................................57
14.07 Confidentiality......................................................................................57
14.08 No Third Party Beneficiary...........................................................................58
14.09 No Assignment; Binding Effect........................................................................58
14.10 Headings.............................................................................................58
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14.11 Invalid Provisions...................................................................................58
14.12 Consent to Jurisdiction and Venue....................................................................58
14.13 Governing Law........................................................................................59
14.14 Attorney's Fees......................................................................................59
14.15 Time of the Essence..................................................................................59
14.16 Counterparts.........................................................................................59
ARTICLE XV GUARANTEES............................................................................................59
15.01 Guarantee of the Company's Obligations...............................................................59
15.02 Guarantee of Purchaser's Obligations.................................................................59
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SCHEDULES
Section 1.01(a)(i)..............................................................................Owned Real Property
Section 1.01(a)(ii)............................................................................Real Property Leases
Section 1.01(a)(v).........................................................................Personal Property Leases
Section 1.01(a)(vi)..............................................................................Business Contracts
Section 1.01(a)(viii).............................................................................Business Licenses
Section 1.01(a)(ix)............................................................................Vehicles and Vessels
Section 1.01(a)(xiii).............................................................Transferred Intellectual Property
Section 2.03..............................................................................................Conflicts
Section 2.04.................................................................................Governmental Approvals
Section 2.05(a)................................................................................Financial Statements
Section 2.05(b)................................................................................Changes in Condition
Section 2.06(a)...........................................................................................Tax Liens
Section 2.06(b)............................................................................Compliance with Tax Laws
Section 2.07......................................................................................Legal Proceedings
Section 2.08........................................................................Compliance with Laws and Orders
Section 2.09(a).......................................................................................Benefit Plans
Section 2.09(e).....................................................................................Benefit Accrual
Section 2.09(f)....................................................................Collective Bargaining Agreements
Section 2.09(g)................................................................................Terminated Employees
Section 2.10(a).......................................................................................Real Property
Section 2.10(b)...............................................................................................Liens
Section 2.12(a)...........................................................................................Contracts
Section 2.12(b).................................................................................Contract Violations
Section 2.13...............................................................................................Licenses
Section 2.15..................................................................................Environmental Matters
Section 2.18........................................................................................Certain Changes
Section 2.20..............................................................................................Insurance
Section 3.04.....................................................................Purchaser's Governmental Approvals
Section 3.08............................................................................Purchaser's Gaming Licenses
Section 6.09......................................................................................Required Consents
Section 7.09.......................................................................Parent/Company Required Consents
EXHIBITS
Exhibit A.......................................................................General Assignment and ▇▇▇▇ of Sale
Exhibit B......................................................................................Assumption Agreement
Exhibit C......................................................................Officer's Certificate of the Company
Exhibit D....................................................................Secretary's Certificate of the Company
Exhibit E-1......................................................................Officer's Certificate of Purchaser
Exhibit E-2............................................................................Officer's Certificate of ACI
Exhibit F-1....................................................................Secretary's Certificate of Purchaser
Exhibit F-2....................................................................Secretary's Certificate of Purchaser
Exhibit G.....................................................................................Intentionally Omitted
Exhibit H............................................................................Net Current Assets Calculation
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT dated as of October 17, 2000 (the
"EFFECTIVE DATE") is made and entered into by and among Ameristar Casino Kansas
City, Inc., a Missouri corporation ("PURCHASER"), Ameristar Casinos, Inc., a
Nevada corporation ("ACI"), Kansas City Station Corporation, a Missouri
corporation (the "COMPANY"), and Station Casinos, Inc., a Nevada corporation
("PARENT"). Capitalized terms not otherwise defined herein have the meanings set
forth in SECTION 13.01.
WHEREAS, the Company owns and operates that certain riverboat gaming
and entertainment facility known as "Station Casino Kansas City" located in
Kansas City, Missouri (the "BUSINESS"); and
WHEREAS, Parent and the Company have entered into that certain Asset
Purchase Agreement dated as of July 19, 2000 with KC Opco, LLC, a Delaware
limited liability company (the "JULY AGREEMENT") pursuant to which the Company
has agreed to sell the Business to KC Opco, LLC; and
WHEREAS, the Company desires to enter into an agreement to sell,
transfer and assign to Purchaser, and Purchaser desires to enter into an
agreement to purchase and acquire from the Company, certain of the assets of the
Company relating to the operation of the Business, and in connection therewith,
Purchaser has agreed to assume certain of the liabilities of the Company
relating to the Business, all on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
SALE OF ASSETS AND CLOSING
1.01 ASSETS.
(a) ASSETS TRANSFERRED. On the terms and subject to the
conditions set forth in this Agreement, the Company will sell, transfer, convey,
assign and deliver to Purchaser, and Purchaser will purchase and pay for, at the
Closing, all of the Company's right, title and interest in, and to all of the
properties, assets and rights of every nature, kind and description, tangible
and intangible (including goodwill), whether real, personal or mixed, whether
accrued, contingent or otherwise, and whether now existing or hereafter acquired
(other than the Excluded Assets) used primarily in connection with the Business,
except as otherwise provided in SECTION 1.01(b), as the same shall exist on the
Closing Date including but not limited to such properties, assets and rights in
the following categories (collectively with any proceeds and awards referred to
in SECTION 1.09, the "ASSETS"):
(i) REAL PROPERTY. The real property described in
SECTION 1.01(a)(i) OF THE DISCLOSURE SCHEDULE, and all of the rights
arising out of the ownership thereof or appurtenant thereto (the
"OWNED REAL PROPERTY"), together with all buildings, structures,
facilities, fixtures and other improvements thereto (the
"IMPROVEMENTS") and all transferable licenses, permits, approvals and
qualifications relating to any Owned Real Property issued to the
Company by any Governmental or Regulatory Authority;
(ii) REAL PROPERTY LEASES AND AGREEMENTS. Subject to
SECTION 1.08, (A) the leases, subleases and licenses of real property
and related guarantees described in SECTION 1.01(a)(ii)(A) OF THE
DISCLOSURE SCHEDULE as to which the Company is the lessor, sublessor
or licensor together with any agreements for use or occupancy of hotel
rooms, banquet facilities or meeting rooms, (B) the leases and
subleases of real property described in SECTION 1.01(a)(ii)(B) OF THE
DISCLOSURE SCHEDULE as to which the Company is the lessee, sublessee
or licensee (including the land and buildings, improvements and
structures and all appurtenances belonging thereto) (such real
property, the "LEASED REAL PROPERTY"; and, together with the Owned
Real Property, the "REAL PROPERTY"), (C) that certain Joint Venture
Agreement between First Holdings Company and Parent dated September
25, 1993, as amended (the "JOINT VENTURE AGREEMENT"), (D) that certain
Development Agreement dated as of April 24, 1995, as amended, by and
between the Company and The Port Authority of Kansas City, Missouri
(the "DEVELOPMENT AGREEMENT") and (E) that certain Option Agreement
dated September 25, 1993, as amended, between First Holdings Company
and Parent (the "OPTION AGREEMENT"); and all other rights, subleases,
licenses, permits, deposits and profits appurtenant to or related to
such leases, subleases and licenses described in this SECTION
1.01(a)(ii) (the leases and agreements described in subclauses (A),
(B), (C), (D) and (E), the "REAL PROPERTY LEASES") and all of the
Company's interest (including the land and buildings, improvements and
structures located thereon and all appurtenances belonging thereto) in
those certain leases, subleases and licenses as to which the Company
is the lessee, sublessee or licensee as described in SECTION
1.01(a)(ii)(B) OF THE DISCLOSURE SCHEDULE;
(iii) ACCOUNTS RECEIVABLE. All accounts receivable of the
Company existing on the Closing Date and calculated as set forth on
the schedule attached hereto as EXHIBIT H (the "ACCOUNTS RECEIVABLE");
(iv) TANGIBLE PERSONAL PROPERTY. All furniture, fixtures,
equipment, machinery, consumables, inventory, merchandise, liquor,
food, supplies, spare and replacement parts and other tangible
personal property (including, without limitation, all plans, designs
and drawings for future expansions and all Gaming Devices which shall
be transferred through a Licensed Supplier in accordance with the
rules and regulations of the Missouri Gaming Commission (the
"COMMISSION")) used primarily in the conduct of the Business (the
"TANGIBLE PERSONAL PROPERTY");
(v) PERSONAL PROPERTY LEASES. Subject to SECTION 1.08,
(A) the leases or subleases of Tangible Personal Property described in
SECTION 1.01(a)(v)(A) OF THE DISCLOSURE SCHEDULE as to which the
Company is the lessor or sublessor and (B) the leases of Tangible
Personal Property described in SECTION 1.01(a)(v)(B) OF THE DISCLOSURE
SCHEDULE as to which the Company is the lessee or sublessee, together
with any options to
2
purchase the underlying property (the leases and subleases described
in SUBCLAUSES (A) and (B), the "PERSONAL PROPERTY LEASES");
(vi) BUSINESS CONTRACTS. Subject to SECTION 1.08, all
Contracts (other than the Real Property Leases and the Personal
Property Leases) to which the Company is a party, the terms of which
permit assignment of the Company's interest therein or with respect to
which all necessary consents to assignment of the Company's interest
therein have been obtained prior to the Closing, and which are
utilized primarily in the conduct of the Business, including, without
limitation, Contracts described in SECTION 1.01(a)(vi) OF THE
DISCLOSURE SCHEDULE and Contracts relating to suppliers, sales
representatives, distributors, purchase orders, marketing arrangements
and manufacturing arrangements (the "BUSINESS CONTRACTS");
(vii) PREPAID EXPENSES. All prepaid expenses of the
Company existing on the Closing Date and calculated as set forth on
the schedule attached hereto as EXHIBIT H (the "PREPAID EXPENSES");
(viii) LICENSES. To the extent transfer is permitted under
applicable Laws and pursuant to the terms of such Licenses and subject
to SECTION 1.08, Licenses (including applications therefor) issued
primarily in connection with the conduct of the Business, including,
without limitation, the Licenses listed in SECTION 1.01(a)(viii) OF
THE DISCLOSURE SCHEDULE (the "BUSINESS LICENSES");
(ix) VEHICLES AND VESSELS. All motor vehicles, boats and
barges and related docking facilities owned or leased by the Company
and used primarily in the conduct of the Business, all of which are
listed in SECTION 1.01(a)(ix) OF THE DISCLOSURE SCHEDULE (the
"VEHICLES AND VESSELS");
(x) SECURITY DEPOSITS. All security deposits deposited
by or on behalf of the Company as lessee or sublessee under the Real
Property Leases and the Personal Property Leases existing on the
Closing Date and calculated as set forth on the schedule attached
hereto as EXHIBIT H (the "LESSEE SECURITY DEPOSITS");
(xi) OTHER RIGHTS. All third party guarantees,
warranties, indemnities and similar rights in favor of the Company
with respect to any Asset, other than claims and recoveries under
litigation of the Company against third parties arising out of or
relating to events or conditions existing or occurring prior to the
Transfer Time;
(xii) HOTEL AND ENTERTAINMENT RESERVATIONS. All security
deposits or payments made to the Company prior to the Transfer Time
with regard to any hotel and entertainment reservations for events
following the Transfer Time;
(xiii) INTELLECTUAL PROPERTY. All of the Company's licensed
products or processes, patents, copyrights, trademarks, service marks,
service names, designs, know-how, processes, trade secrets,
inventions, and other proprietary data (including, without limitation,
all customer lists) used exclusively in the Business or exclusively in
connection with the Assets (other than the trade names and logos
described in SECTION
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1.01(b)(ix)) (the "TRANSFERRED INTELLECTUAL PROPERTY"), which
Transferred Intellectual Property is listed in SECTION 1.01(a)(xiii)
OF THE DISCLOSURE SCHEDULE;
(xiv) EQUITY INTERESTS. Subject to SECTION 1.08, all of
the Company's right, title and interest in and to the equity interests
of the JV; and
(xv) BOOKS AND RECORDS. All Books and Records used
primarily in the conduct of the Business or otherwise relating
primarily to the Assets (including, without limitation, customer lists
and customer data bases relating primarily to the Business (the
"BUSINESS CUSTOMER LISTS"), all Books and Records required by the
Commission to be maintained at the Business, other than the Excluded
Books and Records (the "BUSINESS BOOKS AND RECORDS").
To the extent any of the Business Books and Records are items
susceptible to duplication and are either (x) used in connection with any of the
Company's or its Affiliates' businesses other than the Business or (y) are
required by Law to be retained by the Company or its Affiliates, the Company may
deliver photostatic copies or other reproductions from which, in the case of
Business Books and Records referred to in clause (x), information solely
concerning the Company's businesses other than the Business has been deleted.
Subject to the terms and conditions hereof, at the Closing,
the Assets shall be transferred or otherwise conveyed to Purchaser free and
clear of all Liabilities, obligations, liens and encumbrances excepting only
Assumed Liabilities and Permitted Liens which shall be payable by Purchaser only
to the extent they are Assumed Liabilities.
(b) EXCLUDED ASSETS. Notwithstanding anything in this Agreement to
the contrary, the following assets and properties of the Company (the "EXCLUDED
ASSETS") shall be excluded from and shall not constitute Assets:
(i) CASH. All cash (including checks received prior to
the Transfer Time, whether or not deposited or cleared prior to the
Transfer Time) including, without limitation, cage cash, slot fill,
drop boxes, valet register, commercial paper, certificates of deposit
and other bank deposits, treasury bills and other cash equivalents;
(ii) EQUITY INTERESTS. All of the Company's rights, title
and interest in and to the equity interests of Station Casino Kansas
City Restaurants, Inc.;
(iii) INSURANCE. Subject to SECTION 1.09, life insurance
policies of officers and other employees of the Company and all other
insurance policies relating to the operation of the Business;
(iv) EMPLOYEE BENEFIT PLANS. All assets owned or held by
or under any Benefit Plans including assets held in trust or insurance
contracts for the benefit of Benefit Plan participants or
beneficiaries;
(v) TAX REFUNDS. All refunds or credits, if any, of Taxes
due to or from the Company by reason of its ownership of the Assets or
operation of the Business to the extent attributable to any time or
period ending at or prior to the Transfer Time;
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(vi) EXCLUDED BOOKS AND RECORDS. The minute books, stock
transfer books and corporate seal of the Company and any other Books
and Records relating primarily to the Excluded Assets or the Retained
Liabilities except for the Business Customer Lists and such Books and
Records required by the Commission to be maintained at the Business
(the "EXCLUDED BOOKS AND RECORDS");
(vii) LITIGATION CLAIMS. All rights (including
indemnification) and claims and recoveries under litigation of the
Company against third parties (other than rights, claims and
recoveries acquired by Purchaser pursuant to SECTION 1.01(a)(xi)),
arising out of or relating to events prior to the Transfer Time;
(viii) EXCLUDED OBLIGATIONS. The rights of the Company in,
to and under all Contracts of any nature, the obligations of the
Company under which expressly are not assumed by Purchaser pursuant to
SECTION 1.02(b);
(ix) TRADE NAMES AND LOGOS. All of the Company's right,
title and interest in, to and under the names "Station Casinos, Inc.",
"Station Casino Kansas City", "The Feast", and "Boarding Pass Players
Program", including any derivative names and related marks, designs or
logos, except for the Transferred Intellectual Property;
(x) GAMING CHIPS AND TOKENS. All of the Company's gaming
chips and tokens, including, without limitation, all (A) Gaming Device
tokens not currently in circulation and (B) "reserve" chips, if any,
not currently in circulation, except that at Purchaser's written
election made at any time prior to the Closing Date (which election
shall be subject to the prior approval of the Commission), such chips
and tokens may be acquired by Purchaser at the Closing without further
consideration;
(xi) INTELLECTUAL PROPERTY. All trade names, marks,
designs, logos, domain names and web sites other than the Transferred
Intellectual Property;
(xii) RIGHTS UNDER THIS AGREEMENT. The Company's rights
under this Agreement and the July Agreement; (xiii) SIGNS. All of the
Company's signs containing any trade name, ▇▇▇▇, design or logo
described in clause (ix) above, which Purchaser shall, at Purchaser's
sole cost and expense and using reasonable care, not later than
promptly following the expiration of any period that Purchaser is
permitted to use such names, marks, designs or logos pursuant to
SECTION 4.06 hereof, remove from the Real Property and Improvements
thereto and place in a reasonably accessible location on the Real
Property for prompt retrieval by the Company, together with all of the
Company's right, title and interest therein, and as promptly as
practicable, notify the Company and Parent that such signs have been
removed and as to the location of such signs; PROVIDED, HOWEVER, that
other than as expressly provided herein, Purchaser shall have no
liability to the Company arising out of or resulting from Purchaser's
performance of its removal, storage or other obligations with respect
to such signs; and
(xiv) EXCLUDED CONTRACTS. The Administrative Services
Agreement between the Company and Parent.
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1.02 LIABILITIES.
(a) ASSUMED LIABILITIES. In connection with the sale, transfer,
conveyance, assignment and delivery of the Assets pursuant to this Agreement, on
the terms and subject to the conditions set forth in this Agreement, Purchaser
shall assume as of the Transfer Time and shall pay, perform and discharge when
due the following Liabilities of the Company, in each case to the extent arising
out of or relating to the Business or the Assets (x) in the case of items listed
in SUBSECTIONS (i), (iii) AND (iv) below, as the same shall accrue after the
Transfer Time and (y) in the case of items listed in subsections (ii) and (v)
through (ix) below, as the same shall exist at the Transfer Time (collectively,
the "ASSUMED LIABILITIES"), and no other Liabilities:
(i) REAL PROPERTY LEASE OBLIGATIONS. Subject to the
provisions of SECTION 1.08, all obligations of the Company under the
Real Property Leases;
(ii) ACCOUNTS PAYABLE. All obligations of the Company
with respect to accounts payable outstanding on the Closing Date and
calculated as set forth on the Schedule attached hereto as EXHIBIT H,
but excluding any Liability owed by the Company to any Affiliate of
the Company ("ACCOUNTS PAYABLE");
(iii) PERSONAL PROPERTY LEASE OBLIGATIONS. Subject to the
provisions of SECTION 1.08, all obligations of the Company under the
Personal Property Leases;
(iv) OBLIGATIONS UNDER CONTRACTS AND LICENSES. Subject to
the provisions of SECTION 1.08, all obligations of the Company under
the Business Contracts and Business Licenses that constitute Assets;
(v) ACCRUED EXPENSES. All obligations of the Company
with respect to accrued expenses outstanding on the Closing Date and
calculated as set forth on EXHIBIT H attached hereto ("ACCRUED
EXPENSES");
(vi) RETURNED GOODS. All obligations of the Company for
replacement of, or refund for, damaged, defective or returned goods,
to the extent such goods are subject to full return privileges from
the supplier thereof;
(vii) SECURITY DEPOSITS. All outstanding obligations of
the Company on the Closing Date with respect to any security deposit
held by the Company as lessor or sublessor under the Real Property
Leases or Personal Property Leases calculated as set forth on EXHIBIT
H attached hereto (the "LESSOR SECURITY DEPOSITS");
(viii) PROGRESSIVE METERS. All outstanding obligations of
the Company on the Closing Date with respect to any progressive meter
on any Gaming Device calculated as set forth on EXHIBIT H attached
hereto;
(ix) RESERVATIONS. All obligations of the Company with
respect to hotel room and entertainment reservations; and
(x) POST-CLOSING LIABILITIES. All Liabilities of the
Business (other than Retained Liabilities) to the extent (A) resulting
from events or conditions occurring
6
following the Transfer Time or (B) arising out of the Assets and
occurring after the Transfer Time.
(b) RETAINED LIABILITIES. All Liabilities of the Company other
than Assumed Liabilities (the "RETAINED LIABILITIES") shall be retained and
paid, performed and discharged when due by the Company and Parent (PROVIDED,
that the Company shall have the ability to contest, in good faith, any such
claim of liability asserted in respect thereof by any Person other than
Purchaser and its Affiliates, so long as such contest does not result in a Lien
upon any of the Assets):
(i) except to the extent any such liability is reflected
on the Closing Date Balance Sheet as a current liability of the
Business, any loss or liability of the Company of any nature or
description, whether liquidated or contingent, to the extent (a)
resulting from events or conditions which occurred or existed prior to
the Transfer Time, or (b) arising out of or relating to the Excluded
Assets (including those items identified as Retained Liabilities in
SECTION 1.08);
(ii) any loss or liability relating to current or former
employees of the Business (and their eligible dependents and
beneficiaries), including with respect to employment or Benefit Plans,
which accrued on or prior to the Transfer Time, except to the extent
that such liability is reflected on the Closing Balance Sheet as a
current liability of the Business;
(iii) all Liabilities with respect to gaming chips and
tokens issued by the Company (but not progressive meters), except as
provided otherwise herein;
(iv) all Liabilities related to Benefit Plans, except to
the extent that such liability is reflected on the Closing Balance
Sheet as a current liability of the Business;
(v) all Indebtedness (other than current accounts payable
or accrued expenses of the Company incurred or accrued in the ordinary
course of business, but only to the extent that the accrual for such
payables and expenses has been properly reflected on the Closing
Balance Sheet, and other than to the extent arising following the
Transfer Time under Contracts that constitute Assets);
(vi) any Liability, whether currently in existence or
arising hereafter, owed by the Company to any of its Affiliates;
(vii) all Liabilities related to any fines or penalties
imposed against the Company (or with respect to the Business or any
Asset) by any Governmental or Regulatory Authority (including, without
limitation, the Commission) prior to the Transfer Time; and
(viii) all other Liabilities of the Company other than the
Assumed Liabilities.
7
1.03 PURCHASE PRICE; ALLOCATION.
(a) PURCHASE PRICE. Subject to the adjustments set forth in
SECTION 1.05, the aggregate purchase price for the Assets shall be equal to
Three Hundred Fifteen Million Dollars ($315,000,000) plus the amount of any
Surplus or minus the amount of any Deficiency, in each case, as determined in
accordance with SECTION 1.05 (the "PURCHASE PRICE"). Upon Closing, the Purchase
Price shall be payable in immediately available United States funds at the
Closing in the manner provided in SECTION 1.04.
(b) ALLOCATION OF PURCHASE PRICE. Purchaser and the Company
shall negotiate in good faith prior to the Closing Date and determine the
allocation of the consideration paid by Purchaser for the Assets and the
covenant not to compete contained in SECTION 4.11 hereof. Purchaser and the
Company each agrees (i) that any such allocation shall be consistent with the
requirements of Section 1060 of the Code and the regulations thereunder, (ii) to
complete jointly and to file separately Form 8594 with its Federal income Tax
Return consistent with such allocation for the tax year in which the Closing
Date occurs and (iii) that no party will take a position on any income, transfer
or gains Tax Return, before any Governmental or Regulatory Authority charged
with the collection of any such Tax or in any judicial proceeding, that is in
any manner inconsistent with the terms of any such allocation without the
consent of the other party.
1.04 CLOSING. The Closing will take place at the offices of Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, 601 South ▇▇▇▇▇▇▇▇ Street, 31st Floor, Los Angeles,
California, or at such other place as Purchaser and the Company mutually agree,
at 10:00 A.M. local time and shall be deemed to occur at 6:00 A.M., Central
time, on the day immediately after the Closing Date (the "TRANSFER TIME"). At
the Closing, Purchaser will pay the Estimated Purchase Price by wire transfer of
immediately available funds to such accounts as the Company may reasonably
direct by written notice delivered to Purchaser at least two (2) Business Days
before the Closing Date. Simultaneously, (a) the Company will assign and
transfer to Purchaser all of its right, title and interest in and to the Assets
(free and clear of all Liens, other than Permitted Liens) by delivery of (i) a
General Assignment and ▇▇▇▇ of Sale substantially in the form of EXHIBIT A
hereto (the "GENERAL ASSIGNMENT"), duly executed by the Company, (ii) general
warranty deeds in proper statutory form for recording and otherwise in form and
substance reasonably satisfactory to Purchaser conveying title to the Owned Real
Property and (iii) such other good and sufficient instruments of conveyance,
assignment and transfer, in form and substance reasonably acceptable to
Purchaser's counsel, as shall be effective to vest in Purchaser good title to
the Assets (the General Assignment and the other instruments referred to in
clauses (ii) and (iii) being collectively referred to herein as the "ASSIGNMENT
INSTRUMENTS"), and (b) Purchaser will assume from the Company the due payment,
performance and discharge of the Assumed Liabilities by delivery of (i) an
Assumption Agreement substantially in the form of EXHIBIT B hereto (the
"ASSUMPTION AGREEMENT"), duly executed by Purchaser, and (ii) such other good
and sufficient instruments of assumption, in form and substance reasonably
acceptable to the Company's counsel, as shall be effective to cause Purchaser to
assume the Assumed Liabilities as and to the extent provided in SECTION 1.02(a)
(the Assumption Agreement and such other instruments referred to in clause (ii)
being collectively referred to herein as the "ASSUMPTION INSTRUMENTS"). At the
Closing, there shall also be delivered to the Company and Purchaser the
8
certificates and other contracts, documents and instruments required to be
delivered under ARTICLES VI and VII.
1.05 DETERMINATION OF SURPLUS OR DEFICIENCY; POST-CLOSING
ADJUSTMENT; REAL ESTATE PURCHASE ADJUSTMENT.
(a) On or before the seventh (7th) Business Day preceding the
Closing Date, the Company shall, and Parent shall cause the Company to, prepare
and deliver to Purchaser an interim balance sheet (the "ESTIMATED CLOSING
BALANCE SHEET") of the Company as of the close of business on the final day of
the calendar month immediately preceding the calendar month during which the
Closing Date occurs (the "TEST MONTH"), together with a statement of the
Company's Net Current Assets as of such date calculated in a manner consistent
with the calculation set forth on EXHIBIT H attached hereto; provided that if
the Closing Date occurs within the first seven (7) Business Days of a calendar
month, the Estimated Closing Balance Sheet shall be as of the close of business
on the final day of the second calendar month immediately preceding the calendar
month during which the Closing Date occurs (in such case, the "Test Month"). The
Estimated Closing Balance Sheet shall be accompanied by a certificate of the
Chief Financial Officer of the Company to the effect that the Estimated Closing
Balance Sheet presents fairly, in accordance with GAAP and the accounting
practices of the Company applied on a consistent basis, the financial condition
of the Company as of the close of business on the last day of the Test Month.
The amount of Net Current Assets set forth in the Estimated Closing Balance
Sheet shall be final and binding for purposes of determining the amount of any
Surplus or Deficiency used in calculating the Purchase Price (the "ESTIMATED
PURCHASE PRICE"), unless Purchaser delivers a good faith written objection to
the calculation of Net Current Assets at least three (3) Business Days prior to
the anticipated Closing Date (the "OBJECTION NOTICE"). The Company shall make
available to Purchaser and its representatives the books, records and workpapers
used to prepare the Estimated Closing Balance Sheet. In the event of an
Objection Notice, the Company and Purchaser shall negotiate in good faith during
the period preceding the Closing Date to resolve the dispute. If the dispute is
not resolved by the specified Closing Date, Purchaser shall pay an Estimated
Purchase Price based upon the amount of any Deficiency or Surplus, as
applicable, resulting from the calculation of Net Current Assets set forth in
the Estimated Balance Sheet.
(b) As promptly as practicable after the Closing Date, but in no
event more than sixty (60) days after the Closing Date (such date on which the
Closing Balance Sheet is delivered, the "CLOSING FINANCIAL STATEMENTS DELIVERY
DATE"), Purchaser will prepare and deliver to the Company and Parent a balance
sheet of the Company as of the close of business on the Closing Date (the
"CLOSING BALANCE SHEET") and a calculation of Net Current Assets, in a manner
consistent with the calculation set forth on EXHIBIT H attached hereto, from
such Closing Balance Sheet. The Closing Balance Sheet shall be accompanied by a
certificate of the Chief Financial Officer of Purchaser to the effect that the
Closing Balance Sheet presents fairly, in accordance with GAAP and the
accounting practices of the Company applied on a consistent basis, the financial
condition of the Company as of the close of business on the Closing Date and
that the Net Current Assets calculation was made in accordance with the terms of
this Agreement.
(c) The Company and a firm of independent public accountants
designated by the Company (the "COMPANY'S ACCOUNTANT") will be entitled to
reasonable access during normal
9
business hours to the relevant records, personnel and working papers of the
Purchaser to aid in their review of the Closing Balance Sheet and the
calculation of Net Current Assets therefrom. The Closing Balance Sheet and the
calculation of Net Current Assets therefrom shall be deemed to be accepted by
the Company and shall be conclusive for the purposes of the adjustment described
in SECTION 1.05(d) and (e) hereof except to the extent, if any, that the Company
or Company's Accountant shall have delivered, within thirty (30) days after the
Closing Financial Statements Delivery Date, a written notice to Purchaser
setting forth objections thereto, specifying in reasonable detail any such
objection (it being understood that any amounts not disputed as provided herein
shall be paid promptly). If a change proposed by the Company is disputed by
Purchaser, then Purchaser and the Company shall negotiate in good faith to
resolve such dispute. If, after a period of thirty (30) days following the date
on which the Company gives Purchaser notice of any such proposed change, any
such proposed change still remains disputed, then Purchaser and the Company
hereby agree that the Las Vegas, Nevada office of PricewaterhouseCoopers LLP
(the "ACCOUNTING FIRM") shall resolve any remaining disputes. The Accounting
Firm shall act as an arbitrator to make a determination with respect to the
issues that are disputed by the parties, based on presentations by the Company
and Purchaser, and by independent review of the Accounting Firm if deemed
necessary in the sole discretion of the Accounting Firm, which determination
shall be limited to only those issues still in dispute. The decision of the
Accounting Firm shall be final and binding and shall be in accordance with the
provisions of this Section 1.05(b). The fees and expenses of the Accounting
Firm, if any, shall be paid equally by Purchaser and the Company. The date on
which the Net Current Assets is finally determined pursuant to this SECTION 1.05
is referred to hereinafter as the "DETERMINATION DATE."
(d) If the amount of Net Current Assets used to determine the
Estimated Purchase Price pursuant to SECTION 1.05(a) above is greater than the
amount set forth in the Closing Balance Sheet, the Company shall pay to
Purchaser, as an adjustment to the Estimated Purchase Price, an aggregate amount
equal to such excess. Any payments required to be made by the Company pursuant
to this SECTION 1.05(d) shall be made within ten (10) days of the Determination
Date by wire transfer of immediately available funds to an account designated by
Purchaser.
(e) If the amount of Net Current Assets used to determine the
Estimated Purchase Price pursuant to SECTION 1.05(a) above is less than the
amount set forth in the Closing Balance Sheet, Purchaser shall pay to the
Company, as an adjustment to the Estimated Purchase Price, an amount equal to
such difference. Any payments required to be made by Purchaser pursuant to this
SECTION 1.05(e) shall be made within ten (10) days of the Determination Date by
wire transfer of immediately available funds to an account designated by the
Company.
(f) In the event that Company or Parent exercises the right to
purchase the JV interests subject to the Option Agreement prior to the Closing
Date, the Purchase Price shall be increased in an amount equal to the exercise
price paid by Parent or Company, as applicable, with respect to the exercise of
the right to purchase the JV interests subject to the Option Agreement, provided
that in no event shall the Purchase Price be increased in an amount in excess of
the exercise price set forth in the Option Agreement in effect on the Effective
Date.
10
1.06 PRORATIONS. The following prorations relating to the Assets
and the ownership and operation of the Business will be made as of the Transfer
Time, with the Company liable to the extent such items relate to any time period
prior to the Transfer Time and are Retained Liabilities and Purchaser liable to
the extent such items relate to periods beginning with and subsequent to the
Transfer Time or are Assumed Liabilities:
(a) Real estate taxes and assessments on or with respect to the
Real Property, provided that proration with respect to Leased Real Property
shall be based upon the amounts payable by the Company in respect to such taxes
under the Real Property Leases.
(b) Rents, additional rents, taxes and other items payable by or
to the Company under the Real Property Leases and Personal Property Leases.
(c) The amount of rents, taxes and charges for sewer, water,
telephone, electricity and other utilities relating to the Real Property.
(d) All other items normally adjusted in connection with similar
transactions; provided that receipts of the Company with respect to hotel room
rentals on the Closing Date shall be retained by the Company.
Except as otherwise agreed by the parties or with respect to amounts to
adjustments to the Purchase Price made pursuant to SECTION 1.05, the net amount
of all such prorations will be settled and paid on the Closing Date. If the
Closing shall occur before a real estate tax rate is fixed, the apportionment of
taxes shall be based upon the tax rate for the preceding year applied to the
latest assessed valuation.
1.07 FURTHER ASSURANCES; POST-CLOSING COOPERATION.
(a) Subject to the terms and conditions of this Agreement, at
any time or from time to time after the Closing, at Purchaser's request and
without further consideration, the Company shall execute and deliver to
Purchaser such other instruments of sale, transfer, conveyance, assignment and
confirmation, provide such materials and information and take such other actions
as Purchaser may reasonably deem necessary or desirable in order more
effectively to transfer, convey and assign to Purchaser, and to confirm
Purchaser's title to, all of the Assets (including, without limitation, the
delivery to Purchaser of fully executed Uniform Commercial Code amendment or
termination statements relating to the Assets as Purchaser shall request), and,
to the full extent permitted by Law, to put Purchaser in actual possession and
operating control of the Business and the Assets and to assist Purchaser in
exercising all rights with respect thereto, and otherwise to cause the Company
to fulfill its obligations under this Agreement.
(b) Following the Closing, the Company and Purchaser will afford
the other party, its counsel and its accountants, during normal business hours,
reasonable access to the books, records and other data relating to the Business
in its possession with respect to periods prior to the Closing and the right to
make copies and extracts therefrom, to the extent that such access may be
reasonably required by the requesting party in connection with (i) the
preparation of Tax Returns, (ii) the determination or enforcement of rights and
obligations under this Agreement, (iii) compliance with the requirements of any
Governmental or Regulatory Authority including without limitation the
Commission, (iv) the determination or enforcement of the rights
11
and obligations of any party to this Agreement and (v) in connection with any
actual or threatened Action or Proceeding. Further, the Company and Purchaser
agree for a period extending six (6) years after the Closing Date not to destroy
or otherwise dispose of any such books, records and other data unless such party
shall first offer in writing to surrender such books, records and other data to
the other party and such other party shall not agree in writing to take
possession thereof during the ten (10) day period after such offer is made.
(c) If, in order properly to prepare its Tax Returns, other
documents or reports required to be filed with Governmental or Regulatory
Authorities or its financial statements or to fulfill its obligations hereunder,
it is necessary that the Company or Purchaser be furnished with additional
information, documents or records relating to the Business not referred to in
paragraph (b) above, and such information, documents or records are in the
possession or control of the other party, such other party shall use its
commercially reasonable efforts to furnish or make available such information,
documents or records (or copies thereof) at the recipient's request, cost and
expense.
(d) Notwithstanding anything to the contrary contained in this
Section, if the Company and Purchaser are in an adversarial relationship in
litigation or arbitration, the furnishing of information, documents or records
in accordance with paragraphs (b) and (c) of this Section shall be subject to
applicable rules relating to discovery.
1.08 THIRD-PARTY CONSENTS; ACI'S GAMING COMPLIANCE PROGRAM.
(a) To the extent that any Real Property Lease, Personal
Property Lease, Business Contract or Business License is not assignable without
the consent of another party, this Agreement shall not constitute an assignment
or an attempted assignment thereof if such assignment or attempted assignment
would constitute a breach thereof or a default thereunder. The Company and
Purchaser shall use commercially reasonable efforts to obtain the consent of
such other party to the assignment of any such Real Property Lease, Personal
Property Lease, Business Contract or Business License to Purchaser in all cases
in which such consent is required for such assignment, PROVIDED, HOWEVER, that
in the event any such consent, other than any required consent of the Commission
or any consent that is listed in SECTION 6.09 OF THE DISCLOSURE SCHEDULE (each a
"REQUIRED CONSENT"), is not obtained on or prior to the Closing Date, such event
shall not cause the Closing to be delayed or constitute a default by the Company
of any obligation hereunder or result in a reduction of the Purchase Price. If
any such consent, other than a Required Consent, shall not be obtained, the
Company shall cooperate with Purchaser in any reasonable arrangement designed to
provide for Purchaser the benefits intended to be assigned to Purchaser under
the relevant Real Property Lease, Personal Property Lease, Business Contract or
Business License, including enforcement at the cost and for the account of
Purchaser of any and all rights of the Company against the other party thereto
arising out of the breach or cancellation thereof by such other party or
otherwise, provided that if Purchaser does not receive the benefits intended to
be assigned to Purchaser pursuant to a Real Property Lease, Personal Property
Lease, Business Contract or Business License because a consent is not obtained
and an arrangement transferring such benefit is not entered into, such Real
Property Lease, Personal Property Lease, Business Contract or Business License,
as applicable, shall constitute an Excluded Asset and the obligations pursuant
thereto shall constitute a Retained Liability.
12
(b) In the event that any background investigation with respect
to any party (and its respective owners and management) to any Real Property
Lease, Personal Property Lease or Business Contract to which Purchaser will
become a party by virtue of the consummation of the transactions contemplated
hereby results in a finding by ACI that such party is an "Unsuitable Person" (as
defined in ACI's Gaming Compliance Program in the form provided to Parent), then
such Real Property Lease, Personal Property Lease or Business Contract shall not
be assumed by Purchaser and shall constitute an Excluded Asset and a Retained
Liability. ACI shall notify Parent and the Company no later than forty-five (45)
days following the Effective Date if such investigation reveals that any such
party is an "Unsuitable Person," which notice shall specify the identity of the
person that has been determined to be unsuitable and shall also indicate if any
person that is subject to a background investigation required pursuant to ACI's
Gaming Compliance Program has not responded to inquiries made pursuant to such
background investigation.
1.09 INSURANCE PROCEEDS. If any of the Assets is destroyed or
damaged or taken in condemnation following the Effective Date, the insurance
proceeds or condemnation award with respect thereto shall be an Asset. At the
Closing, the Company shall pay or credit to Purchaser any such insurance
proceeds or condemnation awards received by it on or prior to the Closing (along
with the amount of any deductible or retention withheld therefrom) and shall
assign to or assert for the benefit of Purchaser all of its rights against any
insurance companies, Governmental or Regulatory Authorities and others with
respect to such damage, destruction or condemnation. As and to the extent that
there is available insurance under policies maintained by the Company and its
Affiliates, predecessors and successors in respect of any Assumed Liability,
except for any such insurance proceeds with respect to which the insured is
directly or indirectly self-insured or has agreed to indemnify the insurer, the
Company shall cause such insurance to be applied toward the payment of such
Assumed Liability.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND PARENT
The Company and Parent hereby jointly and severally represent and
warrant to Purchaser as follows as of the Effective Date and as of the Closing
Date, except, to the extent any such representation or warranty is made as of a
specified date earlier than the Closing Date, such earlier date:
2.01 CORPORATE EXISTENCE.
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the Laws of the State of Missouri, and has
full corporate power and authority to conduct its business as and to the extent
now conducted and to own, use and lease its Assets and enter into and perform
this Agreement and consummate the transactions contemplated hereby.
(b) SUBSIDIARIES. The Company does not have any equity
investment in any entity, nor does it own any other securities with respect to
any entity, other than Station/First Joint Venture and Station Casino Kansas
City Restaurants, Inc. Station Casino Kansas City
13
Restaurants, Inc. does not own any assets or conduct any operations related to
the Business or otherwise.
2.02 AUTHORITY. The execution and delivery by the Company of this
Agreement, and the performance by the Company and Parent of their obligations
hereunder, have been duly and validly authorized by the Board of Directors and
the stockholder of the Company and the Board of Directors of Parent, no other
action on the part of the Company or Parent or their stockholders being
necessary. This Agreement has been duly and validly executed and delivered by
the Company and Parent and constitutes a legal, valid and binding obligation of
the Company and Parent enforceable against the Company and Parent in accordance
with its terms, except to the extent such enforceability (a) may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally, and (b) is subject to general
principles of equity.
2.03 NO CONFLICTS. Except as set forth in SECTION 2.03 OF THE
DISCLOSURE SCHEDULE, the execution, delivery and performance by the Company of
this Agreement do not and the consummation of the transactions contemplated
hereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the articles of incorporation or bylaws
(or other comparable charter documents) of the Company;
(b) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in SECTION 2.04 OF THE
DISCLOSURE SCHEDULE, conflict with or result in a violation or breach of any
term or provision of any Law or Order applicable to the Company or any of the
Assets (other than such conflicts, violations or breaches (i) which could not in
the aggregate reasonably be expected to materially and adversely affect the
validity or enforceability of this Agreement or to have a Material Adverse
Effect or (ii) as would occur solely as a result of the identity or the legal or
regulatory status of Purchaser or any of its Affiliates); or
(c) except as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or to materially and
adversely affect the ability (i) of the Company to consummate the transactions
contemplated hereby or to perform its obligations hereunder or (ii) Purchaser to
operate the Business after the Transfer Time in a manner substantially
consistent with the Company's past practice, (A) conflict with or result in a
violation or breach of, (B) constitute (with or without notice or lapse of time
or both) a default under, (C) require the Company to obtain any consent,
approval or action of, make any filing with or give any notice to any Person as
a result or under the terms of, (D) result in or give to any Person any right of
termination, cancellation, acceleration or modification in or with respect to,
or (E) result in the creation or imposition of any Lien upon the Company or any
of the Assets under, any Contract or License to which the Company is a party or
by which any of its Assets is bound.
2.04 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed in
SECTION 2.04 OF THE DISCLOSURE SCHEDULE, no consent, approval, action, order or
authorization of, or registration, declaration or filing with or notice to any
Governmental or Regulatory Authority on
14
the part of the Company is required in connection with the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby, except (a) where the failure to obtain any such consent,
approval or action, to make any such filing or to give any such notice could not
reasonably be expected to materially and adversely affect the ability of the
Company to consummate the transactions contemplated by this Agreement or to
perform its obligations hereunder, or to have a Material Adverse Effect, and (b)
those as would be required solely as a result of the identity or the legal or
regulatory status of Purchaser or any of its Affiliates.
2.05 FINANCIAL STATEMENTS AND CONDITION.
(a) Prior to the execution of this Agreement, the Company has
delivered to Purchaser true and complete copies of (i) the unaudited combined
balance sheets and the related combined statements of operations, stockholder's
equity and cash flows of the Company and St. ▇▇▇▇▇▇▇ Riverfront Station, Inc.
for the fiscal year ended December 31, 1999, and (ii) the unaudited combined
balance sheets of the Company and St. ▇▇▇▇▇▇▇ Riverfront Station, Inc. as of
March 31, 2000 and June 30, 2000 and the related unaudited statement of
operations for the portion of the fiscal year then ended. Except as set forth in
the notes thereto and as disclosed in SECTION 2.05(a) OF THE DISCLOSURE
SCHEDULE, all such financial statements were prepared in accordance with GAAP
and fairly present in all material respects the combined financial condition and
results of operations of the Company and St. ▇▇▇▇▇▇▇ Riverfront Station, Inc.,
in each case, as of the respective dates thereof and for the respective periods
covered thereby.
(b) Except for the execution and delivery of this Agreement and
the transactions to take place pursuant hereto on or prior to the Closing Date
and except as disclosed in SECTION 2.05(b) OF THE DISCLOSURE SCHEDULE, during
the period beginning on the Financial Statement Date and ending on the Effective
Date there has not been any change with respect to the Business or the Assets
that could reasonably be expected to have a Material Adverse Effect.
2.06 TAXES.
(a) TAX LIENS. Except as set forth in SECTION 2.06(a) OF THE
DISCLOSURE SCHEDULE, there are no Tax Liens upon the assets of the Company
except liens for Taxes not yet due.
(b) COMPLIANCE WITH TAX LAWS. Except as set forth in SECTION
2.06(b) OF THE DISCLOSURE SCHEDULE, the Company has complied (and, with respect
to all amounts due with respect to periods through and including the Closing
Date, will comply) with all applicable laws, rules, and regulations relating to
the filing of Tax Returns and the payment and withholding of Taxes (including,
without limitation, withholding and reporting requirements under Code sections
1441 through 1464, 3401 through 3406, 6041 and 6049 and similar provisions under
any other laws) and have, within the time and in the manner prescribed by law,
withheld from employee wages and paid over to the proper governmental
authorities all required amounts.
2.07 LEGAL PROCEEDINGS. Except as disclosed in SECTION 2.07 OF
THE DISCLOSURE SCHEDULE, there are no Orders outstanding and no Actions or
Proceedings pending or, to the Knowledge of the Company, threatened against,
relating to or affecting the Company or any of
15
its Assets which could reasonably be expected individually or in the aggregate
to have a Material Adverse Effect, or which seek to enjoin, rescind or otherwise
prevent the consummation of the transactions contemplated hereby.
2.08 COMPLIANCE WITH LAWS AND ORDERS. To the Knowledge of the
Company, except as disclosed in SECTION 2.08 OF THE DISCLOSURE SCHEDULE or in
the filings of Parent with the Securities and Exchange Commission, the Company
is not in violation of or in default under any Law or Order applicable to the
Company or any of its Assets the effect of which, individually or in the
aggregate with other such violations and defaults, could reasonably be expected
to have a Material Adverse Effect.
2.09 BENEFIT PLANS; ERISA; LABOR MATTERS.
SECTION 2.09(a) OF THE DISCLOSURE SCHEDULE contains a true and
complete list of each Benefit Plan and "employee benefit plan" (within the
meaning of section 3(3) of ERISA, including, without limitation, multiemployer
plans within the meaning of ERISA section 3(37)), stock purchase, stock option,
severance, employment, change-in-control, fringe benefit, collective bargaining,
bonus, incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or not,
under which any employee or former employee of the Company has any present or
future right to benefits or under which the Company has any present or future
liability. All such plans, agreements, programs, policies and arrangements shall
be collectively referred to as the "COMPANY PLANS".
(c) With respect to each Company Plan, the Company has delivered
to Purchaser a current, accurate and complete copy (or, to the extent no such
copy exists, an accurate description) thereof.
(d) No Lien has arisen on the Assets by reason of Section 302 of
ERISA, Section 412 of the Code or Title IV of ERISA.
(e) Except as set forth in SECTION 2.09(e) OF THE DISCLOSURE
SCHEDULE, no individual shall accrue or receive additional benefits, service or
accelerated rights to payments of benefits under any Benefit Plan, as defined in
Section 280G of the Code, or become entitled to severance, termination allowance
or similar payments as a direct result of the transactions contemplated by this
Agreement.
(f) There are no controversies pending or, to the Knowledge of
the Company, threatened between the Company and any of its employees which
controversies would have a Material Adverse Effect. The Company is not a party
to any collective bargaining agreement or other labor union Contract applicable
to persons employed by the Company except as disclosed in SECTION 2.09(f) OF THE
DISCLOSURE SCHEDULE. To the Knowledge of the Company there are no strikes,
slowdowns, work stoppages, lockouts or threats thereof by or with respect to any
of the employees of the Company.
16
(g) SECTION 2.09(g) OF THE DISCLOSURE SCHEDULE lists the number
of employees terminated by the Company at each site of employment of the
Business in the 90-day period ending on the date hereof, and the date of such
termination, with respect to each such termination which would be required to be
taken into account in determining whether a "plant closing" or "mass layoff"
subject to the Worker Adjustment and Retraining Notification Act (the "WARN")
could occur based on subsequent terminations; provided that this sentence shall
not apply with respect to any site of employment at which sufficient employees
have not been employed at any time in such 90-day period for terminations of
employment at such site to be subject to WARN.
2.10 REAL PROPERTY.
(a) SECTION 2.10(a) OF THE DISCLOSURE SCHEDULE contains a list
of (i) each parcel of real property currently owned by the Company and (ii) each
parcel of real property leased by the Company.
(b) The Company has good and marketable title to each parcel of
real property described in CLAUSE (i) of PARAGRAPH (a) above free and clear of
Liens, except for Permitted Liens or as disclosed in SECTION 2.10(b) OF THE
DISCLOSURE SCHEDULE, and has a valid and subsisting leasehold estate in the real
properties referred to in CLAUSE (ii) of PARAGRAPH (a) above free and clear of
Liens, except for Permitted Liens or as disclosed in SECTION 2.10(b) OF THE
DISCLOSURE SCHEDULE. To the Knowledge of the Company, all of the Real Property
Leases are valid, binding, and enforceable in accordance with their terms, and
are in full force and effect as of the date hereof. To the Knowledge of the
Company, except as disclosed in SECTION 2.10(b) OF THE DISCLOSURE SCHEDULE there
are no existing material defaults by the Company beyond any applicable grace
periods under such leases and the Company has not received any notice of default
under any of such leases.
(c) Without limiting the generality of the foregoing, as to
leasehold estates under the Real Property Leases, the Company warrants that it
has quiet and peaceful possession of each of the properties leased by it.
(d) To the Knowledge of the Company, the Real Property is not
subject to any deferred or rollback taxes on account of any change in zoning or
land use classification, and to the Knowledge of the Company there are no
pending assessments affecting the Real Property.
(e) Except as could not be reasonably expected to have a
Material Adverse Effect, all water, sewer, gas, electric, telephone and drainage
facilities and all other utilities required by law or for the present normal use
and operation of the Business are all connected and operating pursuant to valid
permits, are adequate to service the Business, and such facilities are connected
by means of one or more public or private easements extending from a property
line to one or more public streets, public rights-of-way or utility facilities.
(f) There are no pending or, to the Knowledge of the Company,
threatened condemnation, eminent domain or similar proceedings affecting the
Real Property or any portion thereof.
(g) The Company is not a "foreign person" within the meaning of
Section 1445 ET SEQ. of the Internal Revenue Code of 1986, as amended.
17
(h) The mechanical equipment located in any improvements located
on the Real Property, including but not limited to air conditioning and heating
systems and the electrical and plumbing systems, are in sufficient condition to
permit the operation of the Business as it is currently conducted.
2.11 TANGIBLE PERSONAL PROPERTY. The Company is in possession of
and has good title to, or has valid leasehold interests in or valid rights under
Contract to use, all tangible personal property used in and, individually or in
the aggregate with other such property, material to the Business or Condition of
the Company, except for such tangible personal property sold, consumed or
otherwise disposed of in the ordinary course of business since the Financial
Statement Date. All tangible Assets, taken as a whole, are in sufficient
condition to permit the operation of the Business as it is currently conducted.
2.12 CONTRACTS.
(a) SECTION 2.12(a) OF THE DISCLOSURE SCHEDULE (with paragraph
references corresponding to those set forth below) contains a true and complete
list of each of the following Contracts that constitute Assets as of the
Effective Date:
(i) all Contracts (excluding Benefit Plans) providing for
a commitment of employment or consultation services for a specified
term and payments at any one time or in any one year in excess of One
Hundred Thousand Dollars ($100,000);
(ii) all Contracts with any Person containing any
provision or covenant prohibiting or materially limiting the ability
of the Company to engage in any business activity or compete with any
Person;
(iii) all Contracts relating to Indebtedness of the Company
included as an Assumed Liability;
(iv) all Contracts (other than this Agreement) providing
for (A) the future disposition or acquisition of any assets or
properties individually or in the aggregate material to the Business,
other than dispositions or acquisitions in the ordinary course of
business, and (B) any merger or other business combination;
(v) all Contracts between the Company, on the one hand,
and any Affiliate of the Company, on the other hand and which is
included as an Assumed Liability;
(vi) all Contracts (other than this Agreement) that limit
or contain restrictions on the ability of the Company to incur
Indebtedness or incur or suffer to exist any Lien, to purchase or sell
any Assets, to change the lines of business in which it participates
or engages or to engage in any merger or other business combination
and which is included as an Assumed Liability;
(vii) all other Contracts that (A) involve the payment,
pursuant to the terms of any such Contract, by or to the Company of
more than One Hundred Thousand Dollars ($100,000) annually or (B)
cannot be terminated within ninety (90) days after giving
18
notice of termination without resulting in any material cost or
penalty to the Company; and
(viii) all Real Property Leases.
(b) As of the Effective Date, each Contract required to be
disclosed in SECTION 2.12(a) OF THE DISCLOSURE SCHEDULE, true and complete
copies of which have been delivered to Purchaser, is in full force and effect
and constitutes a legal, valid and binding agreement, enforceable in accordance
with its terms, of the Company and, to the Knowledge of the Company, of each
other party thereto; and except as disclosed in SECTION 2.12(b) OF THE
DISCLOSURE SCHEDULE neither the Company nor, to the Knowledge of the Company,
any other party to such Contract is in violation or breach of or default under
any such Contract (or with notice or lapse of time or both, would be in
violation or breach of or default under any such Contract) as of the Effective
Date, the effect of which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(c) As of the Effective Date, the July Agreement has been
terminated by the parties thereto and is of no further force or effect.
2.13 LICENSES. As of the Effective Date, the Company has all
Licenses required for the conduct of the Business as presently conducted (other
than Licenses, the absence of which could not reasonably be expected to have a
Material Adverse Effect). Except as set forth on SECTION 2.13 OF THE DISCLOSURE
SCHEDULE, each such License is valid, binding and in full force and effect as of
the Effective Date. Except as set forth on SECTION 2.13 OF THE DISCLOSURE
SCHEDULE, to the Knowledge of the Company, as of the Effective Date the Company
is not in default (or with the giving of notice or lapse of time or both, would
be in default) under any such License in any respect that could reasonably be
expected to have a Material Adverse Effect. The Licenses listed in SECTION 2.13
OF THE DISCLOSURE SCHEDULE are not transferable.
2.14 AFFILIATE TRANSACTIONS. There is no Liability between the
Company, on the one hand, and any officer, director or Affiliate of the Company,
on the other, that will constitute an Assumed Liability.
2.15 ENVIRONMENTAL MATTERS. Except as disclosed in SECTION 2.15
OF THE DISCLOSURE SCHEDULE or as could not be reasonably expected to have a
Material Adverse Effect, to the Knowledge of the Company:
(a) the Company holds and is in compliance with all Licenses
which are required under applicable Environmental Laws for the Company to own
and operate the Business (the "ENVIRONMENTAL PERMITS") and will use commercially
reasonable efforts to provide copies of such Environmental Permits to Purchaser
and to facilitate the transfer of those Environmental Permits which are
transferable to Purchaser;
(b) the Company and all real property owned, operated or leased
by the Company are in compliance with applicable Environmental Laws;
(c) the Company has not been notified by any Governmental or
Regulatory Authority or third party of any pending or threatened claim arising
under Environmental Laws
19
(an "ENVIRONMENTAL CLAIM") against the Business or the Company in connection
with the Business;
(d) the Company has not been notified by any Governmental or
Regulatory Authority or third party of any pending claim that either the
Business or the Company in connection with the Business may be a potential
responsible party for environmental contamination or any Release of Hazardous
Material, nor has the Company been notified that any site or facility now or
previously owned or leased by the Company is listed or proposed for listing on
the NPL or any similar state or local list of sites requiring investigation or
clean-up;
(e) the Company in connection with the Business has not entered
into or agreed to any consent decree or order with respect to or affecting the
Assets relating to compliance with any Environmental Law or to investigation or
cleanup of Hazardous Material under any Environmental Law;
(f) there are no aboveground or underground storage tanks
located on, in or under any properties currently or formerly owned, operated or
leased by the Company in connection with the Business or any predecessor of the
Business or the Company in connection with the Business;
(g) no Releases of Hazardous Material have occurred at, from,
in, on, to or under any property currently or formerly owned, operated or leased
by the Company in connection with the Business or any predecessor of the
Business or the Company, and no Hazardous Material is present in, on or about or
is migrating to or from any such property that could give rise to an
Environmental Claim by a Governmental or Regulatory Authority or third party
against the Business or the Company;
(h) neither the Company in connection with the Business, nor any
predecessors thereof, has transported or arranged for the treatment, storage,
handling, disposal or transportation of any Hazardous Substance to any location
that could result in an Environmental Claim against or liability to the Business
or the Company;
(i) there is no amount of asbestos, ureaformaldehyde material,
polychlorinated biphenyl containing equipment or lead paint containing materials
in, at or on any property owned, leased or operated by the Company in connection
with the Business; and
(j) there have been no environmental investigations, studies,
audits or tests with respect to any property currently or formerly owned, leased
or operated by the Company in connection with the Business thereof which have
not been delivered to Purchaser prior to execution of this Agreement.
2.16 LABOR MATTERS. To the Knowledge of the Company, the Company
is in compliance in all material respects with all Laws respecting employment
and employment practices, terms and conditions of employment and wages and
hours.
2.17 BROKERS. Except for ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc., whose
fees, commissions and expenses are the sole responsibility of the Company, all
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried out by the Company
20
directly with Purchaser without the intervention of any other Person on behalf
of the Company in such manner as to give rise to any valid claim by any Person
against Purchaser for a finder's fee, brokerage commission or similar payment.
2.18 ABSENCE OF CERTAIN CHANGES. Except as set forth in SECTION
2.18 OF THE DISCLOSURE SCHEDULE, since the Financial Statement Date, the
Business has been conducted in the ordinary course, and there has not been:
(a) any event, occurrence, state of circumstances or facts or
change in the Company, the Assets or the Business that has had or that may be
reasonably expected to have, either alone or together, a Material Adverse
Effect;
(b) any change by the Company in its accounting principles,
methods or practices other than changes required pursuant to GAAP or in the
manner it keeps its books and records or any change by the Company of its
current practices with regards to sales, receivables, payables or accrued
expenses;
(c) the entering into of any Contract (other than the July
Agreement) or other arrangement between the Company and any officer, director,
stockholder or Affiliate of the Company; or
(d) any (i) single commitment for capital expenditures that has
not been performed prior to the Effective Date in excess of $1,000,000 for
additions to property, plant, equipment or intangible capital assets, (ii)
commitments for capital expenditures that has not been performed prior to the
Effective Date in an aggregate amount in excess of $5,000,000 for additions to
property, plant, equipment or intangible capital assets or capital expenditures,
(iii) sale, assignment, transfer, lease or other disposition of or agreement to
sell, assign, transfer, lease or otherwise dispose of any asset or property
outside the ordinary course of business having a value of $2,000,000 in the
aggregate.
2.19 SUFFICIENCY OF AND TITLE TO THE ASSETS. Upon consummation of
the transactions contemplated by this Agreement, the Company will have sold,
assigned, transferred and conveyed to Purchaser, free and clear of all Liens,
other than Permitted Liens, all of the Assets, which constitute all of the
properties and assets now held or employed by the Company primarily in
connection with the Business (other than the Excluded Assets).
2.20 INSURANCE. As of the Effective Date, the assets, properties
and operations of the Business are insured under various policies of insurance,
all of which are described in SECTION 2.20 OF THE DISCLOSURE SCHEDULE, which
discloses for each policy the type of coverage and the amounts of coverage. As
of the Effective Date, all such policies are in full force and effect, no notice
of cancellation has been received, and there is no existing material default, or
event which the giving of notice or lapse of time or both, would constitute a
material default, by any insured thereunder.
21
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND ACI
Purchaser and ACI, jointly and severally represent and warrant to the
Company as follows as of the Effective Time and as of the Closing Date, except,
to the extent any such representation or warranty is made as of a specified date
earlier than the Closing Date, such earlier date:
3.01 EXISTENCE. Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Missouri.
ACI is a corporation duly organized, validly existing and in good standing under
the Laws of the State of Nevada. Each of Purchaser and ACI has full corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
3.02 AUTHORITY. The execution and delivery by Purchaser and ACI
of this Agreement, and the performance by Purchaser and ACI of their respective
obligations hereunder, have been duly and validly authorized by the respective
boards of directors of Purchaser and ACI, no other corporate action on the part
of Purchaser or ACI or their respective shareholders being necessary. This
Agreement has been duly and validly executed and delivered by each of Purchaser
and ACI and constitutes a legal, valid and binding obligation of each of
Purchaser and ACI enforceable against each of them in accordance with its terms,
except to the extent such enforceability (a) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally and (b) is subject to general principles of equity.
3.03 NO CONFLICTS. The execution and delivery by each of
Purchaser and ACI of this Agreement do not and the consummation of the
transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the articles of incorporation (or other
comparable corporate charter document) of Purchaser or ACI, as applicable;
(b) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in SECTION 3.04 OF THE
DISCLOSURE SCHEDULE, conflict with or result in a violation or breach of any
term or provision of any Law or Order applicable to Purchaser or ACI or any of
the Assets (other than such conflicts, violations or breaches which could not in
the aggregate reasonably be expected to adversely affect the validity or
enforceability of this Agreement); or
(c) except as could not, individually or in the aggregate,
reasonably be expected to adversely affect the ability of Purchaser or ACI to
consummate the transactions contemplated hereby or to perform its obligations
hereunder, (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require Purchaser or ACI to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of, or (iv) result in the
22
creation or imposition of any Lien upon Purchaser or ACI or any of their
respective assets or properties under, any Contract or License to which
Purchaser or ACI is a party or by which any of their respective assets and
properties is bound.
3.04 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed in
SECTION 3.04 OF THE DISCLOSURE SCHEDULE, no consent, approval, action, order or
authorization of, or registration, declaration or filing with or notice to any
Governmental or Regulatory Authority on the part of Purchaser or ACI is required
in connection with the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby, except where the
failure to obtain any such consent, approval or action, to make any such filing
or to give any such notice could not reasonably be expected to adversely affect
the ability of Purchaser or ACI to consummate the transactions contemplated by
this Agreement or to perform its obligations hereunder.
3.05 LEGAL PROCEEDINGS. There are no Orders outstanding and no
Actions or Proceedings pending or, to the Knowledge of Purchaser or ACI, as
applicable, threatened against, relating to or affecting Purchaser or ACI, as
the case may be, which could reasonably be expected to result in the issuance of
an Order restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement.
3.06 BROKERS. Except for Deutsche Bank Securities Inc., whose
fees, commissions and expenses are the sole responsibility of Purchaser and/or
ACI, all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Purchaser and ACI without the
intervention of any Person on behalf of Purchaser or ACI in such manner as to
give rise to any valid claim by any Person against the Company for a finder's
fee, brokerage commission or similar payment.
3.07 FINANCING. Purchaser has sufficient cash and/or available
credit facilities (and has provided the Company with evidence thereof) to pay
the Purchase Price and to make all other necessary payments of fees and expenses
in connection with the transactions contemplated by this Agreement.
3.08 PURCHASER'S GAMING LICENSES. Neither Purchaser nor any of
its directors or executive officers has ever been denied a gaming license by any
Governmental or Regulatory Authority. ACI and the directors and executive
officers of Purchaser are currently licensed or hold findings of suitability to
conduct gaming activities in the States of Nevada, Mississippi and Iowa. A list
of such directors, officers and each such state in which such Person is licensed
or holds a finding of suitability is set forth in SECTION 3.08 OF THE DISCLOSURE
SCHEDULE.
ARTICLE IV
COVENANTS OF THE COMPANY AND PARENT
The Company and Parent covenant and agree with Purchaser that, at all
times from and after the Effective Date until the Closing, and in the case of
SECTIONS 4.06, 4.11 and 4.12 for the period set forth therein, Parent and the
Company will, and Parent will cause the Company to, comply with all covenants
and provisions of this ARTICLE IV, except to the extent
23
Purchaser may otherwise consent in writing. Purchaser acknowledges and agrees
that the actions taken, or failed to be taken, by Parent and the Company prior
to or following the Effective Date with respect to the investigation by the
Commission or any other Governmental or Regulatory Authority into the activities
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and the involvement of Parent and the Company therewith, and
any related matters, shall not constitute a breach of the obligations of Parent
and the Company pursuant to this ARTICLE IV; PROVIDED, HOWEVER, that Purchaser
shall have no liability with respect to any obligations resulting from such
investigation and all liabilities arising out of, or with respect to, such
investigation shall be considered a "Retained Liability" for the purposes of
this Agreement.
4.01 REGULATORY AND OTHER APPROVALS. The Company will, as
promptly as reasonably practicable (a) take all commercially reasonable steps
necessary or desirable to obtain all consents, approvals, actions, orders or
authorizations of, or make all registrations, declarations or filings with and
give all notices to Governmental or Regulatory Authorities or any other Person
required of the Company to consummate the transactions contemplated hereby
(including, without limitation, the Required Consents), (b) provide such other
information and communications to such Governmental or Regulatory Authorities or
other Persons as such Governmental or Regulatory Authorities or other Persons
may reasonably request in connection therewith and (c) provide reasonable
cooperation to Purchaser in connection with the performance of its obligations
under SECTIONS 5.01 and 5.02 below. The Company will provide, or cause to be
provided, notification to Purchaser when any such consent, approval, action,
order, authorization, registration, declaration, filing or notice referred to in
clause (a) above is obtained, taken, made or given, as applicable, and will
advise Purchaser of any communications (and, unless precluded by Law, provide
copies of any such communications that are in writing) with any Governmental or
Regulatory Authority or other Person regarding any of the transactions
contemplated by this Agreement.
4.02 HSR FILINGS. In addition to and not in limitation of the
Company's covenants contained in SECTION 4.01 above, the Company will (a) take
promptly all actions necessary to make the filings required of the Company or
its Affiliates under the HSR Act, (b) comply at the earliest practicable date
with any request for additional information received by the Company or its
Affiliates from the Federal Trade Commission or the Antitrust Division of the
Department of Justice pursuant to the HSR Act and (c) cooperate with Purchaser
in connection with Purchaser's filing under the HSR Act and in connection with
resolving any investigation or other inquiry concerning the transactions
contemplated by this Agreement commenced by either the Federal Trade Commission
or the Antitrust Division of the Department of Justice or state attorneys
general.
4.03 INVESTIGATION BY PURCHASER. The Company will (a) provide
Purchaser and its officers, employees, counsel, accountants, financial advisors,
consultants and other representatives (together, "REPRESENTATIVES") with full
access, upon reasonable prior notice and during normal business hours, to all
officers, employees, agents and accountants of the Company and its Assets and
Books and Records, but only to the extent that such access does not unreasonably
interfere with the business operations of the Company and (b) furnish Purchaser
and such other Persons with all such information and data (including, without
limitation, copies of Contracts, Benefit Plans and other Books and Records)
concerning the business and operations of the Company as Purchaser or any of
such other Persons reasonably may request in
24
connection with such investigation, except to the extent that furnishing any
such information or data would violate any Law, Order, Contract or License
applicable to the Company or by which any of its Assets is bound.
4.04 CONDUCT OF BUSINESS. Subject to SECTION 4.05 below, the
Company will conduct business only in the ordinary course consistent with past
practice and shall:
(a) take all actions to be in compliance with, and to maintain
the effectiveness of, all Licenses, it being acknowledged and agreed that
actions taken, or failed to be taken, by Parent and the Company prior to or
following the Effective Date with respect to the investigation by the Commission
or any other Governmental or Regulatory Authority into the activities of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and the involvement of Parent and the Company therewith shall not
constitute a breach of this clause (a);
(b) preserve the goodwill of those of its suppliers, customers
and distributors having material business relationships with the Business,
unless such failure to preserve such goodwill would not be commercially
unreasonable;
(c) maintain policies of insurances with substantially the same
insurance coverage as exists as of the Effective Date against loss or damage to
the Assets;
(d) use commercially reasonable efforts to maintain the Assets,
in the aggregate, in a condition comparable to their current condition,
reasonable wear, tear and depreciation excepted, and except for Assets disposed
of, sold or consumed in the ordinary course of business in accordance with
SECTION 4.05(a) below;
(e) continue and maintain its dredging operations in material
compliance with the requirements of applicable Laws; and
(f) unless precluded by law, notify Purchaser in writing if to
the Knowledge of the Company there is any event, condition, circumstance or
group of actions, events, conditions or circumstances that could be reasonably
expected to have a Material Adverse Effect, provided that nothing contained
herein shall be deemed to require the Company to disclose any information that
is privileged.
4.05 CERTAIN RESTRICTIONS. The Company shall not:
(a) other than in the ordinary course of business or pursuant to
the exercise of the rights to purchase the JV interests subject to the Option
Agreement, acquire, lease, dispose of or otherwise transfer, any Assets;
(b) engage with any Person in any merger or other business
combination; or
(c) amend or modify in any material respect or terminate any
material Contract that could be reasonably expected to have a Material Adverse
Effect, it being agreed that amendments to the Option Agreement that do not
increase the exercise price to Purchaser of the option that is the subject of
the Option Agreement and amendments to the Joint Venture Agreement and/or the
Ground Lease to permit the assignment thereof to Purchaser and the
25
novation of the Company and Parent or the acceleration of the exercise of the
option under the Option Agreement shall not be deemed to have a Material
Adverse Effect;
(d) make any material changes in the Company's staffing
levels that could be reasonably expected to have a Material Adverse Effect;
(e) without Purchaser's prior written approval, which
approval shall not be unreasonably withheld, materially increase the salary,
bonus or other compensation of any of the Company's current employees that
are department heads of the Business, other than pursuant to bonus plans that
have been approved prior to the Effective Date, increases pursuant to
employment agreements entered into prior to the Effective Date and increases
consistent with past practices in an amount not to exceed five percent (5%)
of the applicable employee's most recent annual salary and bonus;
(f) enter into any Contract to do or engage in any of items
listed in clauses (a) through (g) above; or
(g) except as expressly permitted elsewhere in this
Agreement, enter into or commit or propose to enter into any Contract
obligating the Company to make payments thereunder in excess of $100,000 in
any twelve-month period that can not be cancelled upon thirty days notice;
and
(h) amend its articles of incorporation or bylaws in any
manner that would have an adverse effect on the transactions contemplated
hereby.
4.06 TRANSITION PERIOD.
(a) Subject to the prior approval of the Commission, the
Company and Parent will, beginning at the Transfer Time and for a period of
twelve (12) months after the Transfer Time, permit Purchaser to use and
employ, solely in connection with the operation of the Business and pursuant
to a non-exclusive, non-transferable, royalty-free license and right to use,
the "Station Casino" name and logo (the "▇▇▇▇") in connection with the
operation of the Business following the Closing; provided that Purchaser
shall conduct the Business under the ▇▇▇▇ in a manner that is of a quality
which at all times comports with the quality of the goods and services
previously offered by the Company and its Affiliates under the ▇▇▇▇ at the
acquired property. The Company or its designee shall have the right, upon
reasonable notice to Purchaser and during reasonable business hours, to
inspect the premises of the Business to ensure that the quality of the
Business is being maintained. In the event Purchaser fails to carry out or
comply with such quality standards, the Company may immediately terminate
this non-exclusive, non-transferable, royalty-free license upon written
notice to Purchaser.
(b) Each of the Company and Parent will, beginning at the
Effective Date and for a period of twelve (12) months after the Transfer
Time, upon reasonable request from Purchaser and at the sole cost and expense
of Purchaser, promptly provide Purchaser any and all information regarding
the Assets and the Business, including but not limited to financial,
accounting, tax and related data, reasonably necessary for the preparation by
Purchaser of applications, reports and filings with any Governmental or
Regulatory Authority.
26
(c) Each of the Company and Parent will, following the
Effective Date and at the sole cost and expense of Purchaser, provide
reasonable assistance to Purchaser with respect to the transfer of the
Assets, including, without limitation, the transition and integration of
payroll and benefit processing, accounting systems and other similar
administrative systems and software systems constituting Assets. In addition,
the Company and Parent will reasonably cooperate with Purchaser with respect
to any permitted transfer of any rating experience with respect to
unemployment and workers' compensation, and such other processes and
procedures with respect to the operation of the Business as Purchaser may
reasonably request.
4.07 NO SOLICITATION. From and after the Effective Date,
neither the Company nor Parent shall, directly or indirectly, through any
officer, director, employee, financial advisor, representative or agent of
such party (i) solicit, initiate, or encourage (including by way of
furnishing information) or take any other action to facilitate knowingly any
inquiries or proposals that constitute, or could reasonably be expected to
lead to, a proposal or offer for a merger, consolidation, business
combination, sale of substantial assets, sale of shares of capital stock
(including, without limitation, by way of a tender or exchange offer) or
similar transaction involving the Company or the Business, other than the
transactions contemplated by this Agreement (an "ACQUISITION PROPOSAL"), (ii)
engage in negotiations or discussions with any person (or group of persons)
other than Purchaser or its affiliates (a "THIRD PARTY") concerning, or
provide any non-public information to any person or entity relating to, any
Acquisition Proposal, (iii) continue any prior discussions or negotiations
with any Third Party concerning any Acquisition Proposal or (iv) accept, or
enter into any agreement concerning, any Acquisition Proposal with any Third
Party or consummate any Acquisition Proposal other than as contemplated by
this Agreement.
4.08 TITLE INSURANCE.
(a) On the Closing Date, the Company shall, at the Company's
expense (except as provided hereinafter), cause to be issued and delivered to
Purchaser a policy of title insurance (the "Title Policy") with respect to
the Real Property and conforming to the following specifications:
(i) The form of the policy will be ALTA Owner's
Policy Form B 1970 (amended 10/17/70), with appropriate
modifications for leasehold estates, or the current approved form
for the jurisdiction in which the Real Property is located, with
an endorsement deleting any exclusion or exception for creditors'
rights;
(ii) The Title Policy will be issued by Assured
Quality Title Company (the "Title Company") and shall be
underwritten by First American Title Insurance Company;
(iii) Reinsurance (with direct access) of all
amounts in excess of $100,000,000, if any, shall be underwritten
by Chicago Title Insurance Company;
(iv) The insured will be Purchaser and the JV;
(v) The Title Policy shall be in an amount equal
to that portion of the Purchase Price allocated to the Real
Property;
27
(vi) The Title Policy shall contain an affirmative
statement of the insurer to the effect that the knowledge of the
Company and First Holdings Company prior to the Closing shall not
be imputed to Purchaser;
(vii) The Title Policy will be dated concurrent with
or subsequent to the Closing;
(viii) There will be no exceptions to coverage other
than the Permitted Liens. Without limiting the generality of the
foregoing provisions hereof, the Title Policy shall not contain any
exceptions with respect to:
(A) Rights or claims of parties in possession
other than tenants, as tenants only, under the leases
and subleases described in SECTIONS 1.01(a)(ii)(A) AND
1.01(a)(ii)(B) OF THE DISCLOSURE SCHEDULE;
(B) Encroachments, overlaps, boundary line
disputes or any other matters which would be disclosed
by an accurate survey and inspection;
(C) Easements or claims of easements not
shown by the public records;
(D) Any lien, or right to a lien, for
services, labor or materials heretofore or hereafter
furnished; and
(E) Any other exceptions which may be
designated or included as standard exceptions in the
area where the Real Property is located.
(ix) The Title Policy, at Purchaser's request and
expense, shall contain a zoning endorsement in the form of ALTA
Form 3.1 showing the zoning classification of the Real Property
and confirming that the current use of the Real Property is in
conformance with the applicable zoning laws and use restrictions;
and
(x) The Title Policy, at Purchaser's request, will
contain an assignment endorsement whereby the insurer agrees to
consent to the assignment of the policy to, and to issue without
charge an endorsement to the policy to show as an insured under
the policy, any of the following: (i) any successor to Purchaser,
by dissolution, liquidation, merger, consolidation, reorganization
or otherwise; (ii) any stockholder of Purchaser to whom the Real
Property, or any part thereof, is distributed; and (iii) any
Affiliate of Purchaser, including any entity controlled by, in
control of or under common control with Purchaser and to whom an
interest in the Real Property, or any part thereof, is transferred
by Purchaser. In the event that the Real Property, or any part
thereof, consists of more than one parcel, the Title Policy shall,
at Purchaser's request, contain an affirmative statement of
insurance to the effect that all parcels of land constituting the
Real Property, or such part thereof, are contiguous. The policy
also shall contain such other affirmative statements of insurance
and endorsements (for example, but not by way of limitation, an
"access endorsement") as Purchaser may reasonably require.
28
(xi) The fee or premium for any endorsements to the
Title Policy whether identified in this Section 4.08 or otherwise
requested by Purchaser, shall be for the account of and paid by
Purchaser.
(b) The Company shall within ten (10) days after the date
hereof deliver to Purchaser (i) a current commitment from the Title Company
setting forth the basis upon which the Title Company is willing to insure
title to the Real Property (the "Title Commitment"), and all documents
referenced in Schedule B thereto, and (ii) a copy of each survey (the
"Survey") of each parcel of the Real Property in the Company's possession,
which Purchaser acknowledges and agrees shall be delivered without any
representation or warranty of any kind as to the accuracy or completeness
thereof by the Company or Parent. The cost of any survey work performed or
ordered by the Company prior to the date hereof shall be paid for by the
Company. If Purchaser requires any revisions or updates to the Survey
delivered by the Company or requires a new survey, all such work shall be at
the cost and expense of Purchaser. If the Title Commitment or the Survey
discloses any liens, easements, restrictions, reservations or other defects
or any other matters objectionable to Purchaser ("Title Objections"), other
than Permitted Liens, Purchaser shall advise the Company of the same in
writing within ten (10) days after last receipt by Purchaser of the Title
Commitment (with all documents referred to in Schedule B thereto) and the
Survey (as revised or updated as may be required by Purchaser within 30 days
after receipt of the Title Commitment and Survey). Matters not objected to by
Purchaser within said period shall be deemed to be additional Permitted
Liens. As to any Title Objections, the Company may, but shall not be
obligated to, remedy such matters as are susceptible of being remedied and
shall, within ten (10) days after Purchaser gives the Company notice of its
Title Objections, deliver written notice to Purchaser of those Title
Objections which it shall remedy and those which it shall not remedy. Unless
Purchaser elects to terminate this Agreement in accordance with clause
4.08(b)(y) below, the Company shall, as a condition to Purchaser's obligation
to close hereunder, deliver to Purchaser a Title Commitment and Survey
revised to reflect that any Title Objections which the Company has committed
to remedy have been remedied to Purchaser's reasonable satisfaction. If the
Company elects not to remedy any Title Objection, Purchaser shall have the
option, which it shall exercise in writing within ten (10) days of its
receipt of the written notice from the Company, of (x) consummating the
transaction contemplated hereby and accepting such title as the Company
holds, without change in or to the terms hereof, unless such matters are
encumbrances or liens for an ascertainable amount, in which case the Company
shall pay the amount thereof to Purchaser in cash at the Closing, or (y)
terminating this Agreement and receiving a refund of all monies deposited
hereunder. If Purchaser fails to deliver the written notice required in the
immediately preceding sentence within the period prescribed thereby, such
failure shall be deemed an irrevocable election by Purchaser to proceed to
close the purchase and sale contemplated by this Agreement in accordance with
clause 4.08(b)(x) above.
4.09 ACI'S GAMING COMPLIANCE PROGRAM. The Company, Parent and
their respective executive officers, directors and principal stockholders
shall fully cooperate with any background investigation with respect to each
of them required to be conducted by ACI pursuant to its Gaming Compliance
Program to the extent required by the Nevada Gaming Control Board.
4.10 FULFILLMENT OF CONDITIONS. The Company (a) will execute
and deliver at the Closing each certificate, document and instrument that the
Company is hereby required to
29
execute and deliver as a condition to Closing, (b) will take all commercially
reasonable steps necessary or desirable and proceed diligently and in good
faith (i) to satisfy each condition to the obligations of Purchaser contained
in this Agreement and (ii) to consummate all of the transactions contemplated
by this Agreement, and (c) will not take or fail to take any action that
could reasonably be expected to result in the nonfulfillment of any
obligation of the Company or Purchaser contained in this Agreement.
4.11 NONCOMPETITION.
(a) TERM. The Company and Parent hereby covenant with
Purchaser that from the Closing Date until the date that is three (3) years
following the Closing Date, none of the Company, Parent or their respective
subsidiaries shall (except as otherwise specifically permitted herein),
directly or indirectly, for their own account, or as a partner, member,
advisor or agent of any partnership or joint venture, or as a trustee,
officer, director, shareholder, advisor or agent of any corporation, trust,
or other business organization or entity, own, manage, join, participate in,
encourage, support, finance, be engaged in, have an interest in, give
financial assistance or advice to, permit Parent's name to be used in
connection with or be concerned in any way in the ownership, management,
operation or control of any casino gaming operation within one hundred (100)
miles of the facilities of the Business as of the Effective Date other than a
Currently Existing Gaming Operation (as such operations may be expanded from
time to time) PROVIDED that (i) such operation shall not conduct casino
gaming under the "Station Casinos" name, or any derivative thereof, (ii) such
entity is acquired by or becomes affiliated with Parent or its subsidiaries
as a result of a transaction between an entity that has assets other than
such Currently Existing Gaming Operation (the "COMPETING GROUP") and Parent
or such subsidiary and (iii) either (A) EBITDA of such operation for the
immediately preceding four fiscal quarters shall not be greater than 30% of
the consolidated EBITDA of the Competing Group for the immediately preceding
four fiscal quarters or (B) Parent or the Competing Group pays Purchaser an
amount equal to $10 million no later than ten (10) Business Days following
consummation of the transaction between Parent and the Competing Group. For
purposes of this Agreement, "Currently Existing Gaming Operation" shall mean
a gaming operation that is owned or operated by third parties prior to the
acquisition of ownership or commencement of operations thereof by the
Company, Parent or their Affiliates. Each of the Company and Parent also
hereby covenants that it shall not, for a period of eighteen (18) months
after the Closing Date, solicit or encourage any employee, agent, consultant
or independent contractor of Purchaser to terminate or curtail his or her
relationship with Purchaser.
(b) REMEDIES. The parties agree that the remedy of the
Purchaser at law for any actual or threatened breach of this SECTION 4.11 by
the Company or Parent would be inadequate and that, in the event of such
actual or threatened breach, in addition to any other remedy available to it,
Purchaser shall be entitled to specific performance hereof, injunctive
relief, or both, by temporary or permanent injunction or other appropriate
judicial remedy, writ or order. The remedies provided for in this SECTION
4.11 are non-exclusive and are in addition to each other and to any other
remedy available elsewhere in this Agreement or available generally at law or
in equity.
(c) DIVISIBILITY. If any portion of this SECTION 4.11 is held
to be unreasonable, arbitrary or against public policy, provisions of this
SECTION 4.11 shall be considered divisible
30
both as to time and as to geographical areas; and each month of each year of
the specified period shall be deemed to be a separate period of time. In the
event any court determines the specified time period or geographical area to
be unreasonable, arbitrary or against public policy, the lesser time period
or geographical area which is determined to be reasonable, non-arbitrary and
not against public policy may be enforced. Notwithstanding the foregoing, the
Company and Parent agree to honor the terms of this SECTION 4.11 for the time
periods and areas specified herein and not to contest the enforceability of
such periods or areas.
(d) PERMITTED OWNERSHIP. Notwithstanding any language to the
contrary contained in this SECTION 4.11, it shall be permissible for the
Company and Parent to own stock or securities of any company which may be
deemed competitive with Purchaser providing such shares or securities held by
the Company or Parent are issued by a company listed on a national securities
exchange or the NASDAQ Automated Quotation System and represent less than a
five percent (5%) interest in such company.
4.12 NO SOLICITATION. For a period of twelve (12) months
following the Closing Date, Parent, the Company and their respective
Affiliates shall refrain from, either alone or in conjunction with any other
Person, directly or indirectly, soliciting for hire any employee of Purchaser
or any Affiliate of Purchaser, except as contemplated pursuant to the terms
of that certain Asset Purchase Agreement dated as of October 17, 2000, by and
among Lake ▇▇▇▇ Station, Inc., Parent, Ameristar Casino Las Vegas, Inc. and
ACI; provided, however, that the Company shall not be prohibited from
soliciting for employment any Person whose employment with Purchaser or any
of its Affiliates terminated prior to such solicitation.
ARTICLE V
COVENANTS OF PURCHASER
Purchaser covenants and agrees with the Company that, at all times
from and after the date hereof until the Closing and, in the case of SECTIONS
5.04, 5.05, 5.06, 5.07, 5.08, 5.10 and 5.11 below, thereafter, Purchaser will
comply with all covenants and provisions of this ARTICLE V, except to the
extent the Company may otherwise consent in writing.
5.01 REGULATORY AND OTHER APPROVALS. Purchaser will as
promptly as practicable (a) take all steps necessary or desirable to obtain
all consents, approvals, actions, orders or authorizations of, or make all
registrations, declarations or filings with and give all notices to
Governmental or Regulatory Authorities or any other Person required of
Purchaser to consummate the transactions contemplated hereby and will
diligently and in good faith strive to obtain the same including, without
limitation, (i) making all necessary filings under the HSR Act with the
Federal Trade Commission and the Department of Justice no later than seven
(7) days following the date hereof (ii) making all necessary filings with the
Commission no later than fifteen (15) days following the date hereof, and
(iii) no later than ten (10) days following the Effective Date, making all
necessary filings and requesting consents from and, to the extent required to
obtain consents, hearings with The Port Authority of Kansas City, Missouri
and the Birmingham Drainage District, (b) provide such other information and
communications to such Governmental or Regulatory Authorities or other
Persons as such Governmental or Regulatory Authorities or other Persons may
request in connection therewith and (c) provide cooperation to
31
the Company in connection with the performance of their obligations under
SECTIONS 4.01 and 4.02 above. The parties acknowledge and agree that so long
as the Purchaser complies with clauses (a) and (b) of the foregoing sentence,
any failure or refusal by the Commission to grant to Purchaser a Class A
gaming license to operate the Business shall not be deemed to be a breach of
the obligations of Purchaser or Parent hereunder; provided that nothing
contained herein shall limit the obligations of Purchaser to comply with any
other covenant or agreement contained in this Agreement or shall relieve
Purchaser from liability for any breach of a representation or warranty
contained in this Agreement. Purchaser will provide prompt written
notification to the Company when any such consent, approval, action, order,
authorization, registration, declaration, filing or notice referred to in
clause (a) above is obtained, taken, made or given, as applicable, and will
advise the Company of any communications (and, unless precluded by Law,
provide copies of any such communications that are in writing) with any
Governmental or Regulatory Authority or other Person regarding any of the
transactions contemplated by this Agreement.
5.02 HSR FILINGS. In addition to and without limiting
Purchaser's covenants contained in SECTION 5.01 above, Purchaser will (a)
take promptly all actions necessary to make the filings required of Purchaser
or its Affiliates under the HSR Act and in any event no later than seven (7)
days following the date hereof, (b) comply at the earliest practicable date
with any request for additional information received by Purchaser or its
Affiliates from the Federal Trade Commission or the Antitrust Division of the
Department of Justice pursuant to the HSR Act and (c) cooperate with the
Company in connection with the Company's filing under the HSR Act and in
connection with resolving any investigation or other inquiry concerning the
transactions contemplated by this Agreement commenced by either the Federal
Trade Commission or the Antitrust Division of the Department of Justice or
state attorneys general. Purchaser shall pay the Filing Fee, if any, required
under the HSR Act.
5.03 INVESTIGATION BY THE COMPANY. Purchaser will provide the
Company and their respective Representatives with such documentation, data
and other information as the Company may reasonably request in order to
verify Purchaser's representations and warranties set forth in SECTION 3.07
above, but only to the extent that furnishing any such documentation, data or
information would not violate any Law, Order, Contract or License applicable
to Purchaser.
5.04 NO SOLICITATION. Purchaser will, for a period of eighteen
(18) months following the Closing Date, except as expressly permitted or
required by ARTICLE IX of this Agreement, refrain from, either alone or in
conjunction with any other Person, directly or indirectly, through its
present of future Affiliates, soliciting for hire any employee of the Company
or any Affiliate of the Company; provided, however, that Purchaser shall not
be prohibited from soliciting for employment any Person whose employment with
the Company or any of its Affiliates terminated prior to such solicitation.
5.05 COLLECTION OF GAMING CHIPS AND TOKENS. Purchaser shall
redeem, in its capacity as the Company's agent if Purchaser has not elected
to acquire such chips and tokens pursuant to SECTION 1.01(b)(x) hereof, any
gaming chips or tokens (from any series in use as of or prior to the Transfer
Time) of the Company relating to the use and operation of the Business, which
are presented by patrons of the Business or Purchaser for payment within the
applicable Missouri statutory time periods for such redemptions. The
Company's gaming chips and tokens
32
redeemed by Purchaser shall be reimbursed, at Purchaser's election, as often
as weekly for the first 30 Business Days following the Closing Date, and
thereafter as often as monthly, by the Company, upon delivery by Purchaser to
the Company of such gaming chips and tokens being redeemed. The Company
agrees to make arrangements for the additional redemption of its gaming chips
and tokens as may be required by Missouri law.
5.06 BAGGAGE. At the Transfer Time, an authorized
representative of the Company shall perform the following functions for all
baggage, trunks and other property that was checked and placed in the care of
the Company: (i) seal all pieces of baggage with tape: (ii) prepare an
inventory ("INVENTORIED BAGGAGE") of such items indicating the check number
applicable thereto; and (iii) deliver the Inventoried Baggage to an
authorized representative of Purchaser and secure a receipt for the
Inventoried Baggage. Thereafter, Purchaser shall be responsible for such
Inventoried Baggage, PROVIDED that the Company shall be liable to the owners
of such Inventoried Baggage with respect to any missing or damaged contents
of such Inventoried Baggage and such liability shall be a Retained Liability
for the purposes of this Agreement to the extent that Purchaser is able to
prove that such contents were missing or damaged prior to the Transfer Time.
5.07 SAFE DEPOSITS. Safe deposit boxes in use by customers at
the Transfer Time will be sealed in a reasonable manner mutually agreeable to
Purchaser and the Company. At the Transfer Time, Purchaser and the Company
shall designate in writing their initial safe deposit representatives.
Representatives of Purchaser are to be present when a seal is broken. The
Company will have no further responsibility for seals broken without the
presence of the Company's representative. Purchaser will have no
responsibility for loss or theft from a safe deposit box whose seal was
broken in the presence of the Company representative. The Company will make a
representative available within one (1) hour after Purchaser notifies a
person or persons whom the Company will from time to time designate. All safe
deposit keys, combinations and records shall be delivered at the Transfer
Time to Purchaser.
5.08 VALET PARKING. At the Transfer Time, an authorized
representative of the Company shall perform the following functions for all
motor vehicles that were checked and placed in the care of the Company: (i)
▇▇▇▇ all motor vehicles with a sticker or tape; (ii) prepare a report with
respect to any damages to such vehicles; (iii) prepare an inventory of such
vehicles ("INVENTORIED VEHICLES") indicating the check number applicable
thereto; and (iv) transfer control of the Inventoried Vehicles to an
authorized representative of Purchaser and secure a receipt for the
Inventoried Vehicles. Thereafter, Purchaser shall be responsible for the
Inventoried Vehicles, PROVIDED that the Company shall be liable to the owners
of such Inventoried Vehicles with respect to any damages occurring as a
result of actions taken by the Company and its employees prior to the
Transfer Time (including, without limitation, damages (as a result of actions
taken by the Company and its employees) set forth in the damage report) or
items missing from or damaged in such Inventoried Vehicles and such liability
shall be a Retained Liability for the purposes of this Agreement, to the
extent that Purchaser is able to prove that such items were missing or
damaged prior to the Transfer Time.
5.09 UNDERTAKINGS WITH RESPECT TO GROUND LEASE. In the event
that all necessary consents to the assignment of the Ground Lease, the Option
Agreement and the Joint Venture Agreement have not been received prior to the
date that all other conditions to the
33
obligations of Purchaser (other than deliveries to be made at the Closing)
hereunder have been satisfied, Purchaser shall undertake to exercise the
option to purchase the joint venture interest in the Station/First Joint
Venture held by First Holdings Company at the earliest possible time pursuant
to the terms of the Option Agreement, as the same may be amended following
the date hereof to accelerate the exercise period of the option set forth in
the Option Agreement.
5.10 RETURN OF BOOKS AND RECORDS. Following the Closing Date,
upon the request of the Company, Purchaser shall return to the Company all
Books and Records relating to the Company that are not used primarily in the
conduct of the Business, including, without limitation, the Books and Records
relating to the businesses of Parent or its Affiliates (other than the
Company).
5.11 USE OF TRANSFERRED INTELLECTUAL PROPERTY. Purchaser
agrees that neither it nor any of its Affiliates shall use any portion of the
Transferred Intellectual Property that prior to the Closing Date constituted
proprietary property of the Company in its operations in ▇▇▇▇▇ County, Nevada.
5.12 FULFILLMENT OF CONDITIONS. Purchaser (a) will execute and
deliver at the Closing each certificate, document and instruments that
Purchaser is hereby required to execute and deliver as a condition to the
Closing, (b) will as promptly as practicable affirmatively take all steps
necessary or desirable and proceed diligently and in good faith (i) to
satisfy each other condition to the obligations of the Company contained in
this Agreement and (ii) to consummate all of the transactions contemplated in
this Agreement, and (c) will not take or fail to take any action that could
reasonably be expected to result in the nonfulfillment of any obligation of
the Company or Purchaser contained in this Agreement.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder to purchase the Assets are
subject to the fulfillment, at or before the Closing, of each of the
following conditions (all or any of which may be waived in whole or in part
by Purchaser in its sole discretion):
6.01 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Company and Parent in this Agreement shall be true and
correct, in all respects, on and as of the Closing Date as though made on and
as of the Closing Date or, in the case of representations and warranties made
as of a specified date earlier than the Closing Date, on and as of such
earlier date, except in each case as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
PROVIDED, HOWEVER, that for the purposes of determining the accuracy of such
representations and warranties, all "Material Adverse Effect" qualifications
and other materiality qualifications, and any similar qualifications,
contained in such representations and warranties shall be disregarded.
6.02 PERFORMANCE. The Company and Parent shall have performed
and complied with the agreements, covenants and obligations required by this
Agreement to be so performed or complied with by the Company, as the case may
be, at or before the Closing,
34
except in each case as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
6.03 OFFICERS' CERTIFICATES. The Company and Parent shall have
delivered to Purchaser a certificate, dated the Closing Date and executed in
the name and on behalf of the Company by an executive officer of the Company
and on behalf of the Parent by an executive officer of the Parent,
substantially in the form and to the effect of EXHIBIT C hereto, and
certificates, dated the Closing Date and executed by the Secretary of the
Company and the Secretary of Parent, substantially in the form and to the
effect of EXHIBIT D hereto.
6.04 ORDERS AND LAWS. There shall not be in effect at the time
of Closing any Order or Law restraining, enjoining or otherwise prohibiting
or making illegal the consummation of any of the transactions contemplated by
this Agreement.
6.05 REGULATORY CONSENTS AND APPROVALS. All consents,
approvals, actions, orders or authorizations of, all registrations,
declarations or filings with and all notices to any Governmental or
Regulatory Authority necessary to permit Purchaser and the Company to perform
their respective obligations under this Agreement and to consummate the
transactions contemplated hereby shall have been duly obtained, made or given
and shall be in full force and effect, and all terminations or expirations of
waiting periods imposed by any Governmental or Regulatory Authority necessary
for the consummation of the transactions contemplated by this Agreement,
including under the HSR Act, shall have occurred, except for such consents,
approvals, actions, orders or authorizations the failure of which to obtain
could not be reasonably expected to have a Material Adverse Effect.
6.06 CONSUMMATION OF RELATED TRANSACTION. The transactions
contemplated by the St. ▇▇▇▇▇▇▇ Riverfront Station, Inc. Agreement shall be
consummated substantially concurrently with the consummation of the
transactions contemplated hereby.
6.07 DELIVERIES. The Company shall have delivered to Purchaser
the General Assignment and other Assignment Instruments.
6.08 TITLE INSURANCE AND ENVIRONMENTAL REPORTS. Purchaser
shall have received (a) the Title Policy (as defined and described in SECTION
4.08 hereof) and (b) recently completed Phase I environmental assessment
reports with respect to the Real Property.
6.09 CONSENTS.
With respect to each Contract set forth in SECTION 6.09 OF THE
DISCLOSURE SCHEDULE, the Company shall have obtained and delivered to
Purchaser a consent from the relevant third parties to the extent required
for the assignment of such Contract to Purchaser or, in the case of the
Ground Lease, the Option Agreement or Joint Venture, if the consents required
pursuant to the terms thereof shall not have been obtained the Company and
Purchaser shall have entered into a sublease on terms satisfactory to
Purchaser with respect to the real property leased pursuant to the Ground
Lease, which sublease shall contain representations and warranties regarding
the ability of the Company and Parent to sublease the real property subject
to such Sublease.
35
6.10 ABSENCE OF MATERIAL ADVERSE EFFECT. Since the date
hereof, there shall not have occurred any Material Adverse Effect or any
events or series of events that constitute a Material Adverse Effect.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company hereunder to sell the Assets are
subject to the fulfillment, at or before the Closing, of each of the
following conditions (all or any of which may be waived in whole or in part
by the Company in its sole discretion):
7.01 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Purchaser in this Agreement shall be true and correct in
all material respects on and as of the Closing Date as though made on and as
of the Closing Date or, in the case of representations and warranties made as
of a specified date earlier than the Closing Date, on and as of such earlier
date, except in each case as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
PROVIDED, HOWEVER, that for the purposes of determining the accuracy of such
representations and warranties, all "Material Adverse Effect" qualifications
and other materiality qualifications, and any similar qualifications,
contained in such representations and warranties shall be disregarded.
7.02 PERFORMANCE. Purchaser shall have performed and complied
with, in all material respects, the agreements, covenants and obligations
required by this Agreement to be so performed or complied with by Purchaser
at or before the Closing.
7.03 OFFICERS' CERTIFICATES. Purchaser and ACI shall have
delivered to the Company certificates, dated the Closing Date and executed in
the name and on behalf of Purchaser and ACI by the executive officer of
Purchaser and ACI, respectively, substantially in the form and to the effect
of EXHIBIT E-1 and EXHIBIT E-2 hereto, and certificates, dated the Closing
Date and executed by the Secretary of Purchaser and ACI, respectively,
substantially in the form and to the effect of EXHIBIT F-1 and EXHIBIT F-2
hereto.
7.04 ORDERS AND LAWS. There shall not be in effect at the time
of Closing any Order or Law restraining, enjoining or otherwise prohibiting
or making illegal the consummation of any of the transactions contemplated by
this Agreement.
7.05 REGULATORY CONSENTS AND APPROVALS. All consents,
approvals and actions of, filings with and notices to any Governmental or
Regulatory Authority necessary to permit the Company and Purchaser to
materially perform their obligations under this Agreement and to consummate
the transactions contemplated hereby, shall have been duly obtained, made or
given, shall be in full force and effect and shall be in form and substance
satisfactory to the Company and not subject to any material condition or
contingency and all terminations or expirations of waiting periods imposed by
any Governmental or Regulatory Authority necessary for the consummation of
the transactions contemplated by this Agreement, including under the HSR Act,
shall have occurred.
36
7.06 CONSUMMATION OF RELATED TRANSACTION. The transactions
contemplated by the St. ▇▇▇▇▇▇▇ Riverfront Station, Inc. Agreement shall be
consummated substantially concurrently with the consummation of the
transactions contemplated hereby.
7.07 DELIVERIES. Purchaser shall have delivered the Assumption
Agreement and other Assumption Instruments.
7.08 LETTER OF CREDIT. At the Closing, Purchaser shall deliver
to the Company an irrevocable standby letter of credit substantially in the
form of, and in the same amount and with the same terms as, the Company's
existing letter of credit, which amount may change from time to time, and in
form and substance satisfactory to the Company, which may be drawn upon only
by the Company in accordance with the terms of such letter of credit in the
event that the Company becomes liable for payments or other obligations, at
any time on or after the Closing Date, under the terms of that certain
Guaranty Agreement executed by the Company guaranteeing payment obligations
pursuant to the Bond Trust Indenture, dated July 5, 1999, by and between The
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and American National Bank
and Trust Company of Chicago, as Trustee, and the standby letter of credit
relating thereto; (ii) an irrevocable standby letter of credit in form and
substance satisfactory to the Company and Parent and in an amount equal to
the payment obligations of the Company and Parent remaining as of the Closing
Date pursuant to Sections VI and VII of the Development Agreement, as amended.
7.09 REQUIRED CONSENTS. The third party consents listed in
SECTION 7.09 OF THE DISCLOSURE SCHEDULE shall have been obtained and shall
not have been revoked.
ARTICLE VIII
TAX MATTERS AND POST-CLOSING TAXES
8.01 TRANSFER TAXES AND TRANSFER FEES. The Company shall pay
all sales, use, transfer, real property transfer, recording, stock transfer
and other similar taxes and fees (other than Taxes of Purchaser and its
Affiliates based upon or measured by net income or gains) ("TRANSFER TAXES")
arising out of or in connection with the transactions effected pursuant to
this Agreement, and shall indemnify, defend, and hold harmless Purchaser and
its Affiliates with respect to such Transfer Taxes. The Company and Purchaser
shall equally share the costs of Gaming Device transfer fees. The Company
shall file all necessary documentation and Tax Returns with respect to such
Transfer Taxes.
8.02 TAX INDEMNIFICATION.
(a) Subject to SECTION 1.06, after the Closing Date, the
Company and Parent will indemnify and hold harmless Purchaser from and
against any and all claims, actions, causes of action, liabilities, losses,
damages, and reasonable out-of-pocket expenses and costs resulting from,
arising out of or relating to any Taxes of, or with respect to, the Company
(including, without limitation, any Tax liability that arises solely by
reason of Company being severally liable for any Tax of any federal or state
or local consolidated or combined group of which it is a
37
member pursuant to Treasury Regulation Section 1.1502-6 or any analogous
state or local Tax provision) or with respect to the income, assets or
operation of the Business or the Assets for all taxable periods ending on or
before the Closing Date and that portion of any taxable period including and
ending on the Closing Date that ends on or after the Closing Date (determined
as if the relevant period ended on the Closing Date) in excess of the amount
of such Taxes shown as Accrued Expenses on the Closing Balance Sheet.
(b) Purchaser will be responsible for and indemnify and hold
the Company harmless against any all liabilities with respect to Taxes
relating to the Assets for all taxable periods beginning on the Closing Date
and ending after the Closing Date other than to the extent such Taxes relate
to or result from a breach of a representation set forth in Section 2.06, and
other than Taxes for which the Company is responsible pursuant to SECTIONS
1.06, 8.01 and 8.02(a) above.
(c) For purposes of clarification, the obligations of the
Company, Parent and Purchaser pursuant to this SECTION 8.02 shall not be
subject to the limits contained in SECTION 11.01(c)(i) hereof.
8.03 TAX COOPERATION.
(a) After the Closing Date, the Company and Parent will
cooperate with Purchaser, and Purchaser will cooperate with the Company and
Parent, in the preparation of all Tax Returns and will provide (or cause to
be provided) any records and other information the other so requests, and
will provide access to, and the cooperation of its auditors. The Company and
Parent will cooperate with Purchaser and Purchaser will cooperate with the
Company and Parent in connection with any Tax investigation, audit or other
proceeding.
(b) At Parent's request, Purchaser shall cooperate with the
Company and Parent in structuring the transactions contemplated by this
Agreement so as to enable the Company to qualify such transactions as part of
a "like-kind exchange" within the meaning of Code Section 1031 and the
Treasury Regulations promulgated thereunder including assigning this
Agreement to an intermediary selected by Parent.
8.04 NOTIFICATION OF PROCEEDINGS; CONTROL. The Company shall
have the right to control any audit or examination relating to Taxes by any
taxing authority, initiate any claim for refund, file any amended return,
contest, resolve and defend against any assessment, notice of deficiency or
other adjustment or proposed adjustment relating or with respect to any Taxes
of any company for which the Company is responsible pursuant to SECTION 8.02
and shall be entitled to all refunds with respect to such taxes.
ARTICLE IX
EMPLOYEE BENEFITS MATTERS
9.01 OFFER OF EMPLOYMENT.
(a) The parties hereto intend that there shall be continuity
of employment with respect to all of the employees of the Business. Subject
to Purchaser's (or its Affiliates')
38
ordinary ninety-day orientation period, Purchaser shall offer employment at
will, commencing on the Closing Date, to all employees, including those on
vacation, leave of absence or disability, who were employed by the Business
immediately prior to Closing, on substantially the same terms in the
aggregate (including salary, fringe benefits, job responsibility and location
but excluding employee stock ownership and incentive plans) as those provided
to similar employees of Purchaser (or its Affiliates) immediately prior to
Closing to the extent permitted under applicable law. Those persons who
accept Purchaser's offer of employment and commence working with Purchaser on
the Closing Date shall hereafter be referred to as "TRANSFERRED EMPLOYEES."
The parties hereto agree that nothing in this Agreement shall limit
Purchaser's ability after the Closing Date to modify or terminate (i) the
employment of any Transferred Employee or (ii) any benefit policy, plan or
program offered to or covering any Transferred Employee.
(b) Prior to, or in connection with, the Closing, Purchaser
shall take no action to cause the Company or the Business to terminate the
employment of any employee of the Business, and neither the Company nor the
Business shall be under any obligation to terminate any employee of the
Business prior to or on the Closing Date. Purchaser shall be liable for any
amounts to which any employee of the Business may become entitled pursuant to
any employment or severance contract as a result of, or in connection with,
the sale of the Business hereunder. Purchaser agrees that it will not take
any action which would give rise to liability under WARN or any similar
state, local or federal Law or regulation.
9.02 WELFARE PLANS -- CLAIMS INCURRED; PRE-EXISTING CONDITIONS.
(a) Notwithstanding any provision of this Agreement to the
contrary, the Company shall retain responsibility for and continue to pay all
medical, life insurance, disability and other welfare plan expenses and
benefits for each Transferred Employee with respect to claims incurred by
such Transferred Employees or their covered dependents prior to the Closing
Date. Notwithstanding any provision of this Agreement to the contrary,
expenses and benefits with respect to claims incurred by Transferred
Employees or their covered dependents on or after the Closing Date shall be
the responsibility of Purchaser. For purposes of this paragraph, a claim is
deemed incurred when the services that are the subject of the claim are
performed; in the case of life insurance, when the death occurs, in the case
of long-term disability benefits, when the disability occurs and, in the case
of a hospital stay, when the employee first enters the hospital.
(b) With respect to any welfare benefit plans (as defined in
Section 3(1) of ERISA) maintained by Purchaser for the benefit of Transferred
Employees on and after the Closing Date, Purchaser shall (i) use commercially
reasonable efforts to cause there to be waived any pre-existing condition
limitations (other than those limitations existing under the Company's
welfare benefit plans) and (ii) give effect, in determining any deductible
and maximum out-of-pocket limitations, to claims incurred and amounts paid
by, and amounts reimbursed to, such employees with respect to similar plans
maintained by the Company (and its Affiliates) for their benefit immediately
prior to the Closing Date.
9.03 VACATION. With respect to any accrued but unused vacation
time to which any Transferred Employee is entitled pursuant to the vacation
policy applicable to such employee immediately prior to the Closing Date (the
"VACATION POLICY"), Purchaser shall allow
39
such Transferred Employee to use such accrued vacation, subject to the terms
and conditions of Purchaser's vacation policy; PROVIDED, HOWEVER, that if
Purchaser deems it necessary to disallow such Transferred Employee from
taking such accrued vacation, Purchaser shall be liable for and pay in cash
to each such Transferred Employee an amount equal to such vacation time in
accordance with terms of the Vacation Policy; PROVIDED, FURTHER, that
Purchaser shall be liable for and pay in cash an amount equal to any
remaining accrued vacation time to any Transferred Employee whose employment
terminates for any reason prior to the close of business on the last calendar
day of the year during which the Closing Date occurs.
9.04 SERVICE CREDIT. Purchaser will provide, for the purposes
of eligibility and vesting (but not for benefit accrual) each Transferred
Employee with credit for all service with the Company and its Affiliates to
the extent possible under each employee benefit plan, program, or arrangement
of Purchaser or its Affiliates in which such employee is eligible to
participate; provided, however, that in no event shall any employee be
entitled to any credit to the extent that it would result in a duplication of
benefits with respect to the same period of service.
9.05 COMPANY'S BENEFIT PLANS. Except as provided in this
Agreement, the parties hereto agree that Purchaser shall not assume any
Benefit Plan and the Company shall retain and be responsible for any cost,
expense, liability, damage or obligation relating to any Benefit Plan,
whether arising before, on or after the Closing Date.
9.06 COBRA MATTERS. The Company agrees to provide and be fully
responsible for the continuation coverage required by Section 4980B of the
Code and Sections 601 through 608 of ERISA ("COBRA") for all employees and
former employees of the Company and their covered beneficiaries who incurred
or will incur a qualifying event prior to the Closing Date, or will incur a
qualifying event as a result of the consummation of the transactions
contemplated herein, and who are entitled to COBRA coverage as a result
thereof.
ARTICLE X
SURVIVAL OF REPRESENTATIONS
10.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS. Except for (i) this ARTICLE X, SECTIONS 2.06, 5.05, 5.06, 5.07,
5.08, 5.10 and 5.11 above, ARTICLES VIII and IX above, SECTIONS 14.03, 14.04
and 14.07 below and the Company's agreements and covenants with respect to
Retained Liabilities, which shall survive and remain enforceable
indefinitely, (ii) SECTIONS 4.06, 4.11 AND 5.04 which shall survive for the
period set forth therein, and (iii) SECTIONS 2.10 and 2.15 which shall
survive and remain enforceable for a period of five (5) years following the
Closing Date, the representations, warranties, agreements and covenants
contained in this Agreement shall survive the Closing for a period of
eighteen (18) months following the Closing Date, after which time there shall
be no liability in respect thereof on the part of either party or its
officers, directors, employees, agents and Affiliates.
10.02 NO OTHER REPRESENTATIONS. Notwithstanding anything to the
contrary contained in this Agreement, but subject to SECTION 10.01 above, it
is the explicit intent of each party hereto that the Company and Purchaser
are making no representation or warranty whatsoever, express or implied,
except those representations and warranties contained in
40
ARTICLE II above and in any certificate delivered pursuant to SECTION 6.03
above. It is understood that, except to the extent otherwise expressly
provided herein, Purchaser takes the Assets "as is" and "where is." In
particular, the Company and Parent make no representation or warranty to
Purchaser with respect to the information set forth in the ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co., Inc. offering memorandum relating to the Company, or (y) any
financial projection or forecast relating to the Company. With respect to any
projection or forecast delivered by or on behalf of the Company to Purchaser,
Purchaser acknowledges that (i) there are uncertainties inherent in
attempting to make such projections and forecasts, (ii) it is familiar with
such uncertainties, (iii) it is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all such projections and forecasts
furnished to it and (iv) it shall have no claim against the Company or Parent
with respect thereto.
ARTICLE XI
INDEMNIFICATION
11.01 OTHER INDEMNIFICATION.
(a) Subject to PARAGRAPH (c) of this Section and the other
Sections of this ARTICLE XI, the Company and Parent shall jointly and
severally indemnify the Purchaser Indemnified Parties in respect of, and hold
it harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to (i) any breach of representation or
warranty or nonfulfillment of or failure to perform any covenant or agreement
on the part of the Company or Parent contained in this Agreement, (ii) a
Retained Liability, (iii) the First Holdings Litigation, (iv) if the parties
hereto enter into a sublease with respect to the property subject to the
Ground Lease, any termination of such sublease or the Ground Lease for any
reason other than a termination or breach of the sublease by Purchaser or a
breach by the landlord under the Ground Lease, or (v) if the Company
exercises its option to purchase the JV interest from First Holdings Company,
any failure of the Company to deliver good and marketable title, subject to
Permitted Liens, to the real property that is subject to the Ground Lease;
(b) Subject to the other Sections of this ARTICLE XI,
Purchaser shall indemnify the Company Indemnified Parties in respect of, and
hold each of them harmless from and against, any and all Losses suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to (i) any breach of
representation or warranty or nonfulfillment of or failure to perform any
covenant or agreement on the part of Purchaser contained in this Agreement or
(ii) an Assumed Liability;
(c) Notwithstanding anything to the contrary contained in this
Agreement, no amounts of indemnity shall be payable as a result of any claim
in respect of a Loss arising under PARAGRAPH (a)(i) or (b)(i), as applicable,
of SECTION 11.01 (other than a claim based on fraud or willful misconduct or
for or with respect breaches of SECTION 2.06 hereof or claims under ARTICLE
VIII hereof):
41
(i) unless, until and then only to the extent that the
Purchaser Indemnified Parties or the Company Indemnified Parties, as
applicable, have suffered, incurred, sustained or become subject to Losses
referred to in such paragraph in excess of one hundred thousand dollars
($100,000) in the aggregate;
(ii) unless and to the extent that the Purchaser Indemnified
Parties and the Purchaser Indemnified Parties as defined in the St. ▇▇▇▇▇▇▇
Riverfront Station, Inc. Agreement or the Company Indemnified Parties and the
Company Indemnified Parties as defined in the St. ▇▇▇▇▇▇▇ Riverfront Station,
Inc. Agreement, as applicable, have not received payments in respect of
claims made under Section 11.01(a)(i) of this Agreement and the St. ▇▇▇▇▇▇▇
Riverfront Station, Inc. Agreement or Section 11.01(b)(i) of this Agreement
and the St. ▇▇▇▇▇▇▇ Riverfront Station, Inc. Agreement, respectively, in
excess of Twenty Million Dollars ($20,000,000) in the aggregate;
(iii) unless the Indemnified Party has given the Indemnifying
Party a Claim Notice or Indemnity Notice, as applicable, with respect to such
claim, setting forth in reasonable detail the specific facts and
circumstances pertaining thereto, (A) as soon as practical following the time
at which the Indemnified Party discovered or reasonably should have
discovered such claim (except to the extent the Indemnifying Party is not
prejudiced by any delay in the delivery of such notice) and (B) in any event
prior to the applicable Cut-off Date; or
(iv) to the extent that the Indemnified Party had a reasonable
opportunity, but failed, in good faith to mitigate such Loss, including,
without limitation, to the failure to use commercially reasonable efforts to
recover under a policy of insurance or under a contractual right of set off
or indemnity.
11.02 METHOD OF ASSERTING CLAIM. All claims for indemnification
by any Indemnified Party under SECTION 11.01 will be asserted and resolved as
follows:
(a) In the event any claim or demand in respect of which an
Indemnified Party might seek indemnity under SECTION 11.01 is asserted
against or sought to be collected from such Indemnified Party by a Person
other than the Company, Parent, ACI, Purchaser or any Affiliate of the
Company or of Purchaser (a "THIRD PARTY CLAIM"), the Indemnified Party shall
deliver a Claim Notice with reasonable promptness to the Indemnifying Party.
The Indemnifying Party will notify the Indemnified Party as soon as
practicable within the Dispute Period whether the Indemnifying Party disputes
its liability to the Indemnified Party under SECTION 11.01 and whether the
Indemnifying Party desires, at its sole cost and expense, to defend the
Indemnified Party against such Third Party Claim, PROVIDED that failure to
give such notice shall not relieve the Indemnifying Party of its obligations
hereunder except to the extent it shall have been prejudiced by such failure.
(i) If the Indemnifying Party notifies the Indemnified Party
within the Dispute Period that the Indemnifying Party desires to defend
the Indemnified Party with respect to the Third Party Claim pursuant to
this SECTION 11.02(a), then the Indemnifying Party will have the right to
defend, at the sole cost and expense of the Indemnifying Party, such
Third Party Claim by all appropriate proceedings, which proceedings will
be vigorously and diligently prosecuted by the Indemnifying Party to a
final conclusion or
42
will be settled at the discretion of the Indemnifying Party. The
Indemnifying Party will have full control of such defense and
proceedings, including that if requested by the Indemnifying Party, the
Indemnified Party will, at the sole cost and expense of the Indemnifying
Party, reasonably cooperate with the Indemnifying Party and its counsel
in contesting any Third Party Claim that the Indemnifying Party elects to
contest, or, if appropriate and related to the Third Party Claim in
question, in making any counterclaim against the Person asserting the
Third Party Claim, or any cross-complaint against any Person (other than
the Indemnified Party or any of its Affiliates); PROVIDED that the
Indemnified Party may participate in such settlement or defense through
counsel chosen by such Indemnified Party and paid at its own expense; and
PROVIDED FURTHER that, if in the opinion of counsel for such Indemnified
Party, there is a reasonable likelihood of a conflict of interest between
the Indemnifying Party and the Indemnified Party, the Indemnifying Party
shall be responsible for reasonable fees and expenses of one counsel to
such Indemnifying Party in connection with such defense. Notwithstanding
the foregoing, the Indemnified Party may retain or take over the control
of the defense or settlement of any Third Party Claim the defense of
which the Indemnifying Party has elected to control if the Indemnified
Party irrevocably waives its right to indemnity under SECTION 11.01 with
respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified
Party within the Dispute Period that the Indemnifying Party desires to
defend the Third Party Claim pursuant to SECTION 11.02(a), then the
Indemnified Party will have the right to defend, at the sole cost and
expense of the Indemnifying Party, the Third Party Claim by all
appropriate proceedings, which proceedings will be vigorously and
diligently prosecuted by the Indemnified Party to a final conclusion or
will be settled at the discretion of the Indemnified Party (with the
consent of the Indemnifying Party, which consent will not be unreasonably
withheld). The Indemnified Party will have full control of such defense
and proceedings, including (except as provided in the immediately
preceding sentence) any settlement thereof; PROVIDED, HOWEVER, that if
requested by the Indemnified Party, the Indemnifying Party will, at the
sole cost and expense of the Indemnifying Party, cooperate with the
Indemnified Party and its counsel in contesting any Third Party Claim
which the Indemnified Party is contesting, or, if appropriate and related
to the Third Party Claim in question, in making any counterclaim against
the Person asserting the Third Party Claim, or any cross-complaint
against any Person (other than the Indemnifying Party or any of its
Affiliates). Notwithstanding the foregoing provisions of this clause
(ii), if the Indemnifying Party has notified the Indemnified Party within
the Dispute Period that the Indemnifying Party disputes its liability
hereunder to the Indemnified Party with respect to such Third Party Claim
and if such dispute is resolved in favor of the Indemnifying Party in the
manner provided in clause (iii) below, the Indemnifying Party will not be
required to bear the costs and expenses of the Indemnified Party's
defense pursuant to this clause (ii) or of the Indemnifying Party's
participation therein at the Indemnified Party's request, and the
Indemnified Party will reimburse the Indemnifying Party in full for all
reasonable costs and expenses incurred by the Indemnifying Party in
connection with such litigation. The Indemnifying Party may retain
separate counsel to represent it in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to this clause
(ii), and the Indemnifying Party will bear its own costs and expenses
with respect to such participation.
43
(iii) If the Indemnifying Party notifies the
Indemnified Party that it does not dispute its liability to the
Indemnified Party with respect to the Third Party Claim under
SECTION 11.02 or fails to notify the Indemnified Party within the
Dispute Period whether the Indemnifying Party disputes its liability
to the Indemnified Party with respect to such Third Party Claim, the
Loss arising from such Third Party Claim will be conclusively deemed
a liability of the Indemnifying Party under SECTION 11.01 and the
Indemnifying Party shall pay the amount of such Loss to the
Indemnified Party on demand following the final determination
thereof. If the Indemnifying Party has timely disputed its
liability with respect to such claim, the Indemnifying Party and the
Indemnified Party will proceed in good faith to negotiate a
resolution of such dispute, and if not resolved through negotiations
within the Resolution Period, such dispute shall be resolved by
arbitration in accordance with paragraph (c) of this SECTION 11.02.
(b) In the event any Indemnified Party should have a claim under
SECTION 11.02 against any Indemnifying Party that does not involve a Third
Party Claim, the Indemnified Party shall deliver an Indemnity Notice with
reasonable promptness to the Indemnifying Party. If the Indemnifying Party
notifies the Indemnified Party that it does not dispute the claim described
in such Indemnity Notice or fails to notify the Indemnified Party within the
Dispute Period whether the Indemnifying Party disputes the claim described in
such Indemnity Notice, the Loss arising from the claim specified in such
Indemnity Notice will be conclusively deemed a liability of the Indemnifying
Party under SECTION 11.01 and the Indemnifying Party shall pay the amount of
such Loss to the Indemnified Party on demand following the final
determination thereof. If the Indemnifying Party has timely disputed its
liability with respect to such claim, the Indemnifying Party and the
Indemnified Party will proceed in good faith to negotiate a resolution of
such dispute, and if not resolved through negotiations within the Resolution
Period, such dispute shall be resolved by arbitration in accordance with
paragraph (c) of this SECTION 11.02.
(c) Any dispute submitted to arbitration pursuant to this SECTION
11.02 shall be finally and conclusively determined by the decision of a panel
of three arbitrators (hereinafter sometimes called the "BOARD OF
ARBITRATION") selected as herein provided. Each of the Indemnified Party and
the Indemnifying Party shall select one (1) member and the third member shall
be selected by mutual agreement of the other members, or if the other members
fail to reach agreement on a third member within twenty (20) days after their
selection, such third member shall thereafter be selected by the American
Arbitration Association (the "AAA") upon application made to it jointly by
the Indemnified Party and the Indemnifying Party for a third member
possessing expertise or experience appropriate to the dispute. Within 120
days of the selection of the Board of Arbitration, the Indemnified Party and
the Indemnifying Party shall meet in Las Vegas, Nevada with such Board of
Arbitration at a place and time designated by such Board of Arbitration after
consultation with such parties and present their respective positions on the
dispute. The arbitration proceeding shall be held in accordance with the
rules for commercial arbitration of the AAA in effect on the date of the
initial request for appointment of the Board of Arbitration, that gave rise
to the dispute to be arbitrated (as such rules are modified by the terms of
this Agreement or may be further modified by mutual agreement of the
parties). Each party shall have no longer than five (5) days to present its
position, the entire proceedings before the Board of Arbitration shall be no
more than ten consecutive days, and the decision of the Board of Arbitration
shall be made in writing no more than thirty (30) days
44
following the end of the proceeding. Such an award shall be a final and
binding determination of the dispute and shall be fully enforceable as an
arbitration decision in any court having jurisdiction and venue over such
parties. The prevailing party (as determined by the Board of Arbitration)
shall in addition be awarded by the Board of Arbitration such party's own
attorneys' fees and expenses in connection with such proceeding. The
non-prevailing party (as determined by the Arbitrator) shall pay the Board of
Arbitration's fees and expenses.
(d) In the event of any claim for indemnity under SECTION 11.02(a),
Purchaser agrees to give the Company and its Representatives reasonable
access to the Books and Records and employees of the Company in connection
with the matters for which indemnification is sought to the extent the
Company reasonably deems necessary in connection with its rights and
obligations under this ARTICLE XI.
11.03 EXCLUSIVITY. After the Closing, to the extent permitted by
Law, the indemnities set forth in ARTICLE VIII and this ARTICLE XI shall be
the exclusive remedies of Purchaser, Parent and the Company and their
respective officers, directors, employees, agents and Affiliates for any
misrepresentation, breach of warranty or nonfulfillment or failure to be
performed of any covenant or agreement contained in this Agreement, and the
parties shall not be entitled to a rescission of this Agreement or to any
further indemnification rights or claims of any nature whatsoever in respect
thereof, all of which the parties hereto hereby waive; PROVIDED, HOWEVER,
that no party hereto shall be deemed to have waived any rights, claims,
causes of action or remedies if and to the extent such rights, claims, causes
of action or remedies may not be waived under applicable law or actual fraud
or intentional misrepresentation is proven on the part of a party by another
party hereto.
ARTICLE XII
TERMINATION
12.01 TERMINATION. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written agreement of
the Company and Purchaser;
(b) at any time before the Closing without liability to the
terminating party, by the Company or Purchaser, in the event that any Order
or Law becomes effective restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by
this Agreement upon notification of the non-terminating party by the
terminating party and the terminating party is not then in material breach of
this Agreement;
(c) at any time before the Closing, by Company or Purchaser in the
event of a material breach of this Agreement by the non-terminating party if
such non-terminating party fails to cure such non-compliance or breach within
ten (10) Business Days following notification thereof by the terminating
party;
(d) at any time after the date that is ninety (90) days following
the Effective Date (the "Initial Term"), without liability to the terminating
party, upon notification of the non-
45
terminating party by the terminating party if the Closing shall not have
occurred on or before such date and such failure to consummate is not caused
by a breach of this Agreement by the terminating party; PROVIDED that the
Company may in its sole and absolute discretion extend such period for up to
three additional thirty (30) day extension periods upon five (5) Business
days' written notice to Purchaser prior to the then applicable termination
date; and PROVIDED, FURTHER, that if the sole condition that remains
unsatisfied as of the expiration of the then applicable term (other than
deliveries of closing certificates and other Closing documents) is the
receipt of a Class A license from the Commission and Purchaser demonstrates
to the reasonable satisfaction of the Company that (x) it has sufficient cash
on hand and/or available credit facilities to pay the Purchase Price and make
all other necessary payments of fees and expenses in connection with the
transactions contemplated by this Agreement and (y) it is using commercially
reasonable efforts to obtain such license and there are no facts known to
Purchaser or the Company that could be reasonably expected to result in the
failure to obtain such license, Purchaser may extend such period for up to
three additional thirty (30) day extension periods by providing written
notice to the Company on or before the date that is no more than ten (10)
Business Days and no less than five (5) Business Days prior to the then
applicable termination date.
12.02 EFFECT OF TERMINATION. If this Agreement is validly terminated
pursuant to the provisions of SECTION 12.01 above, this Agreement will
forthwith become null and void, and, except as set forth in the next
sentence, there will be no liability or obligation on the part of Parent, the
Company, Purchaser or ACI (or any of their respective officers, directors,
employees, agents or other representatives or Affiliates), except that the
provisions of SECTIONS 14.02, 14.03, 14.04 and 14.07 below will continue to
apply following any such termination. Notwithstanding any other provision in
the Agreement to the contrary, upon any termination of this Agreement by any
party pursuant to SECTION 12.01(c), the non-terminating party shall remain
liable to the terminating party for any and all willful breaches of this
Agreement and the terminating party may seek such remedies, including damages
and attorneys' fees, as are provided in this Agreement or as are otherwise
available at Law or in equity.
ARTICLE XIII
DEFINITIONS
13.01 DEFINED TERMS. As used in this Agreement, the following
defined terms have the meanings indicated below:
"ACCOUNTS PAYABLE" has the meaning ascribed to it in SECTION 1.02(a).
"ACCOUNTS RECEIVABLE" has the meaning ascribed to it in SECTION
1.01(a).
"ACCRUED EXPENSES" has the meaning ascribed to it in SECTION 1.02(a).
"ACI" has the meaning ascribed to it in the forepart of this
Agreement.
"ACQUISITION PROPOSAL" has the meaning ascribed to it in SECTION
4.07.
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation.
46
"AFFILIATE" means any Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by or is under common
control with the Person specified. For purposes of this definition, control
of a Person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether by Contract
or otherwise and, in any event and without limitation of the previous
sentence, any Person owning ten percent (10%) or more of the voting
securities of another Person shall be deemed to control that Person.
"AGREEMENT" means this Asset Purchase Agreement and the Exhibits,
the Disclosure Schedule and the Schedules hereto and the certificates
delivered in accordance with SECTIONS 6.03 and 7.03, as the same shall be
amended from time to time.
"ASSETS" has the meaning ascribed to it in SECTION 1.01(a).
"ASSIGNMENT INSTRUMENTS" has the meaning ascribed to it in SECTION
1.04.
"ASSUMED LIABILITIES" has the meaning ascribed to it in SECTION
1.02(a).
"ASSUMPTION AGREEMENT" has the meaning ascribed to it in SECTION
1.04.
"ASSUMPTION INSTRUMENTS" has the meaning ascribed to it in SECTION
1.04.
"BENEFIT PLAN" means any Plan established by the Company, or any
predecessor or Affiliate of any of the foregoing, existing at the Closing
Date or at any time since December 31, 1997, to which the Company contributes
or has contributed, or under which any employee, former employee or director
of the Company or any dependent or beneficiary thereof is covered, is
eligible for coverage or has benefit rights.
"BOARD OF ARBITRATION" has the meaning ascribed to it in SECTION
11.02(c).
"BOOKS AND RECORDS" means all files, documents, instruments, papers,
books and records relating primarily to the Business or Condition of the
Company, including, without limitation, financial statements, Tax Returns and
related work papers and letters from accountants, budgets, pricing
guidelines, ledgers, journals, deeds, title policies, minute books, stock
certificates and books, stock transfer ledgers, Contracts, Licenses, customer
lists, computer files and programs, retrieval programs, operating data and
plans, environmental studies, audits, plans, surveys, designs, models and
specifications.
"BUSINESS" has the meaning ascribed to it in the forepart of this
Agreement.
"BUSINESS BOOKS AND RECORDS" has the meaning ascribed to it in
SECTION 1.01(a).
"BUSINESS CONTRACTS" has the meaning ascribed to it in SECTION
1.01(a).
"BUSINESS CUSTOMER LISTS" has the meaning ascribed to it in SECTION
1.01(a).
47
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on
which banks located in the States of location of the Company's principal
executive offices are authorized or obligated to close.
"BUSINESS LICENSES" has the meaning ascribed to it in SECTION
1.01(a).
"BUSINESS OR CONDITION OF THE COMPANY" means the business, financial
condition or results of operations of the Company.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and the rules and
regulations promulgated thereunder.
"CLAIM NOTICE" means written notification pursuant to SECTION
11.02(a) of a Third Party Claim as to which indemnity under SECTION 11.01 is
sought by an Indemnified Party, enclosing a copy of all papers served, if
any, and specifying the nature of and basis for such Third Party Claim and
for the Indemnified Party's claim against the Indemnifying Party under
SECTION 11.01, together with the amount or, if not then reasonably
determinable, the estimated amount, determined in good faith, of the Loss
arising from such Third Party Claim.
"CLOSING" means the closing of the transactions contemplated by
SECTION 1.04.
"CLOSING BALANCE SHEET" has the meaning ascribed to it in SECTION
1.05(a).
"CLOSING DATE" means (a) the second Business Day after the day on
which the last of the conditions described in Articles VI and VII hereof
above has been obtained, made or given or has expired, as applicable, or (b)
such other date as Purchaser and the Company mutually agree upon in writing.
"CLOSING FINANCIAL STATEMENTS DELIVERY DATE" has the meaning
ascribed to it in SECTION 1.05(a).
"CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"COMMISSION" has the meaning ascribed to it in SECTION 1.01(a)(iv).
"COMMON STOCK" means the common stock, no par value, of the Company.
"COMPANY" has the meaning ascribed to it in the forepart of this
Agreement.
"COMPANY INDEMNIFIED PARTIES" means Parent, the Company and their
respective officers, directors, employees, agents and Affiliates.
"COMPANY PLANS" has the meaning ascribed to it in SECTION 2.09(a).
"COMPANY'S ACCOUNTANT" has the meaning ascribed to it in SECTION
1.05(c).
"CONTRACT" means any agreement, lease, license, evidence of
Indebtedness, mortgage, indenture, security agreement or other contract.
48
"CUT-OFF DATE" means, with respect to any representation, warranty,
covenant or agreement contained in this Agreement, the date on which such
representation, warranty, covenant or agreement ceases to survive as provided
in SECTION 11.01, as applicable.
"DEFICIENCY" means the amount, if any, by which the Net Current
Assets as determined in accordance with SECTION 1.05 is a negative number.
"DETERMINATION DATE" has the meaning ascribed to it in SECTION
1.05(c).
"DEVELOPMENT AGREEMENT" has the meaning ascribed to in SECTION
1.01(a)(ii).
"DISCLOSURE SCHEDULE" means the record delivered to Purchaser by the
Company herewith and dated as of the date hereof, containing all lists,
descriptions, exceptions and other information and materials as are required
to be included therein by the Company pursuant to this Agreement, as said
record may be amended, supplemented or modified by the Company at any time
prior to the Closing without any liability to the Company other than that
Purchaser shall have the right for five (5) Business Days after such
amendment, supplement or modification of the Disclosure Schedule to terminate
the Agreement based upon such amendment, supplement or modification of the
Disclosure Schedule if such amendment, supplement or modification of the
Disclosure Schedule reveals a matter which would have a Material Adverse
Effect. Reference herein to the Disclosure Schedule shall mean and refer not
only to the record itself, but to all items, documents, agreements and
instruments referenced therein and to the content of each such item,
document, agreement and instrument. Likewise, reference herein to a certain
Section of the Disclosure Schedule shall refer not only to that portion of
the Disclosure Schedule, but to the items, documents, agreements and
instruments referenced in that Section and the contents of each such item,
document, agreement and instrument. Further, matters disclosed for the
purpose of one Section of the Disclosure Schedule shall constitute disclosure
of such matters for the purposes of all other Sections of the Disclosure
Schedule. The duplication or cross-referencing of any disclosures made in the
Disclosure Schedule shall not, in any instance or in the aggregate, effect a
waiver of the foregoing sentence.
"DISPUTE PERIOD" means the period ending sixty (60) days following
receipt by an Indemnifying Party of either a Claim Notice or an Indemnity
Notice.
"EBITDA" means, with respect to any Person for any period, the
earnings before interest, taxes, depreciation and amortization of such Person
for such period.
"EFFECTIVE DATE" has the meaning ascribed to it in the forepart of
this Agreement.
"ENVIRONMENTAL CLAIM" has the meaning ascribed to it in SECTION
2.15(c).
"ENVIRONMENTAL LAW" means any federal, state, or local law, statute,
code, ordinance, order, rule, regulation, judgment, decree, injunction, writ,
edict, award, authorization, or other legally binding and enforceable
requirement by any Governmental or Regulatory Authority relating to any
environmental, health or safety matters.
"ENVIRONMENTAL PERMITS" has the meaning ascribed to it in SECTION
2.15(a).
49
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.
"EXCLUDED ASSETS" has the meaning ascribed to it in SECTION 1.01(b).
"EXCLUDED BOOKS AND RECORDS" has the meaning ascribed to it in
SECTION 1.01(b).
"FINANCIAL STATEMENT DATE" means December 31, 1999.
"FINANCIAL STATEMENTS" means the combined financial statements of
the Company delivered to Purchaser pursuant to SECTION 2.05.
"FIRST HOLDINGS LITIGATION" means that legal action by First
Holdings Company and Kansas City Station Joint Venture against the Company
and Parent filed on September 8, 2000 in the Circuit Court of ▇▇▇▇▇▇▇ County,
Missouri.
"GAAP" means generally accepted accounting principles, consistently
applied throughout the specified period and in the immediately prior
comparable period.
"GAMING DEVICES" means any gambling games or implements of gaming
(as such terms are used in the applicable gaming statutes and regulations of
the State of Missouri) that is an asset or property of the Company and is not
an Excluded Asset.
"GENERAL ASSIGNMENT" has the meaning ascribed to it in SECTION 1.04.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, administrative or other agency, commission, gaming
authority, official or other authority or instrumentality of the United
States or any state, county, city or other political subdivision.
"GROUND LEASE" means that certain Lease Agreement dated as of April
1, 1994, as amended, by and between Station/First Joint Venture and the
Company.
"HAZARDOUS MATERIAL" means any chemical, or other material, or
substance regulated under any Environmental Law including, without
limitation, any which are defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials,"
"infectious waste," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," or "toxic pollutants" or words of similar import
under any Environmental Law.
"HSR ACT" means Section 7A of the ▇▇▇▇▇▇▇ Act (Title II of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended) and the
rules and regulations promulgated thereunder.
"IMPROVEMENTS" has the meaning ascribed to it in SECTION 1.01(a).
"INDEBTEDNESS" of any Person means all obligations of such Person
(i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the
50
deferred purchase price of goods or services (other than trade payables or
accruals incurred in the ordinary course of business), (iv) under capital
leases and (v) in the nature of guarantees of the obligations described in
clauses (i) through (iv) above of any other Person.
"INDEMNIFIED PARTY" means any Person claiming indemnification under
any provision of ARTICLE XI.
"INDEMNIFYING PARTY" means any Person against whom a claim for
indemnification is being asserted under any provision of ARTICLE XI.
"INDEMNITY NOTICE" means written notification pursuant to SECTION
11.02(b) of a claim for indemnity under ARTICLE XI by an Indemnified Party,
specifying the nature of and basis for such claim, together with the amount
or, if not then reasonably determinable, the estimated amount, determined in
good faith, of the Loss arising from such claim.
"INVENTORIED BAGGAGE" has the meaning ascribed to it in SECTION 5.06.
"INVENTORIED VEHICLES" has the meaning ascribed to it in SECTION
5.08.
"JV" means the Station/First Joint Venture, a Missouri partnership.
"JOINT VENTURE AGREEMENT" has the meaning ascribed to it in SECTION
1.01(a)(ii).
"JULY AGREEMENT" has the meaning ascribed to it in the forepart of
this Agreement.
"KNOWLEDGE OF THE COMPANY" means the actual knowledge of the
directors and executive officers of Parent or the Company, Parent's President
of Midwest Operations, Parent's General Counsel for Midwest Operations or the
General Manager of the Business.
"KNOWLEDGE OF PURCHASER" means the actual knowledge of the members,
directors and officers of Purchaser and its Affiliates.
"LAWS" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States or any
state, county, city or other political subdivision or of any Governmental or
Regulatory Authority.
"LEASED REAL PROPERTY" has the meaning ascribed to it in SECTION
1.01(a).
"LESSEE SECURITY DEPOSITS" has the meaning ascribed to it in SECTION
1.01(a).
"LESSOR SECURITY DEPOSITS" has the meaning ascribed to it in SECTION
1.02(a).
"LIABILITIES" means all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).
"LICENSED SUPPLIER" means a licensed supplier of Gaming Devices in
the State of Missouri.
51
"LICENSES" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"LIENS" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"LOSS" or "LOSSES" means any and all damages, fines, penalties,
deficiencies, losses and expenses (including without limitation interest,
court costs, reasonable fees of attorneys, accountants and other experts or
other reasonable expenses of litigation or other proceedings or of any claim,
default or assessment).
"▇▇▇▇" has the meaning ascribed to it in SECTION 4.06(a).
"MATERIAL ADVERSE EFFECT" means any event or circumstance that has
or will have, or could reasonably be expected to have, a material adverse
effect on the Business or Condition of the Company after the Closing Date, it
being understood that in no event shall any of the following shall be deemed
by itself or by themselves, either individually or in the aggregate, to
constitute a Material Adverse Effect: (a) a failure by the Company to meet
internal earnings, revenue or other projections or earnings, revenue or other
predictions of any analyst, (b) any event, circumstance or market condition
occurring as a general economic or financial conditions or other developments
which are not unique to the Company but also is applicable to the gaming
industry generally, or the Missouri gaming industry in particular, or (c) the
appointment of a receiver to operate the Business, the operation of the
Business by such a receiver and the results of operations of the Business
during such period of operation, the imposition of monetary penalties which
shall constitute Retained Liabilities, or any Permitted Interruption; it
being further understood that any cessation of operation of the Business
other than a Permitted Interruption shall conclusively be deemed to be a
Material Adverse Effect.
"NET CURRENT ASSETS" means for any date of determination the net
current assets of such Person at such date of determination calculated as set
forth on Exhibit H attached hereto.
"NPL" means the National Priorities List under CERCLA.
"OPTION AGREEMENT" has the meaning ascribed to it in SECTION
1.01(a)(ii).
"ORDER" means any writ, judgment, decree, injunction or similar
order of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"OWNED REAL PROPERTY" has the meaning ascribed to it in SECTION
1.01(a).
"PARENT" has the meaning ascribed to it in the forepart of this
Agreement.
"PERMITTED INTERRUPTION" shall mean a cessation of the operation of
the Business for a period not to exceed fifteen days, provided that during
such period of interruption the Company shall continue to pay its employees
pursuant to its compensation policies in effect immediately prior to the
cessation of operations and for each day of such interruption shall
52
compensate employees that receive compensation in the form of tips an
additional amount equal to the average daily tip compensation received by
such employees.
"PERMITTED LIEN" means (i) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, (ii)
any statutory Lien arising in the ordinary course of business by operation of
Law with respect to a Liability that is not yet due or delinquent and (iii)
any minor imperfection of title, easements of public record or similar Liens
which individually or in the aggregate with other such Liens would not have a
Material Adverse Effect.
"PERSON" means any natural person, corporation, limited liability
company, general partnership, limited partnership, proprietorship, other
business organization, trust, union, association or Governmental or
Regulatory Authority.
"PERSONAL PROPERTY LEASES" has the meaning ascribed to it in SECTION
1.01(a).
"PLAN" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock
option, stock ownership, stock appreciation rights, phantom stock, leave of
absence, layoff, vacation, day or dependent care, legal services, cafeteria,
life, health, accident, disability, workers' compensation or other insurance,
severance, separation or other employee benefit plan, practice, policy or
arrangement of any kind, whether written or oral, including, without
limitation, any "employee benefit plan" within the meaning of Section 3(3) of
ERISA.
"PREPAID EXPENSES" has the meaning ascribed to it in SECTION 1.01(a).
"PURCHASE PRICE" has the meaning ascribed to it in SECTION 1.03(a).
"PURCHASER" has the meaning ascribed to it in the forepart of this
Agreement.
"PURCHASER INDEMNIFIED PARTIES" means Purchaser and its officers,
directors, employees, agents and Affiliates.
"REAL PROPERTY" has the meaning ascribed to it in SECTION 1.01(a).
"REAL PROPERTY LEASES" has the meaning ascribed to it in SECTION
1.01(a).
"RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration
into the indoor or outdoor environment.
"REPRESENTATIVES" has the meaning ascribed to it in SECTION 4.03.
"REQUIRED CONSENTS" has the meaning ascribed to it in SECTION 1.08.
"RESOLUTION PERIOD" means the period ending ninety (90) days
following receipt by an Indemnified Party of a written notice from an
Indemnifying Party stating that it disputes all or any portion of a claim set
forth in a Claim Notice or an Indemnity Notice.
53
"RETAINED LIABILITIES" has the meaning ascribed to it in SECTION
1.02(b).
"ST. ▇▇▇▇▇▇▇ RIVERFRONT STATION, INC. AGREEMENT" means that certain
agreement dated as of October 17, 2000 by and among Ameristar Casino St.
▇▇▇▇▇▇▇, Inc., Ameristar Casinos, Inc., a Nevada corporation, St. ▇▇▇▇▇▇▇
Riverfront Station, Inc., a Missouri corporation and Station Casinos, Inc. a
Nevada corporation.
"SURPLUS" means the amount, if any, by which Net Current Assets as
determined in accordance with SECTION 1.05 is a positive number.
"TANGIBLE PERSONAL PROPERTY" has the meaning ascribed to it in
SECTION 1.01(a).
"TAX RETURN" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"TAXES" means (i) any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not and any
expenses incurred in connection with the determination, settlement or
litigation of any Tax liability and (ii) any liability for payment of amounts
described in clause (i) above as a result of any express or implied agreement
to pay or indemnify another Person with respect to such amounts or any
liability for such amounts, any joint and/or several liability for such
amounts, and any such amounts for which a Person is liable by operation of
Law (including but not limited to successor liability).
"THIRD PARTY CLAIM" has the meaning ascribed to it in SECTION
11.02(a).
"TRANSFER TAXES" has the meaning ascribed to it in SECTION 8.01.
"TRANSFER TIME" has the meaning ascribed to it in SECTION 1.04.
"TRANSFERRED EMPLOYEES" has the meaning ascribed to it in SECTION
9.01(a).
"TRANSFERRED INTELLECTUAL PROPERTY" has the meaning ascribed to it
in SECTION 1.01(a).
"VACATION POLICY" has the meaning ascribed to it in SECTION 9.03.
"VEHICLES AND VESSELS" has the meaning ascribed to it in SECTION
1.01(a).
"WARN" means the Worker Adjustment Retraining and Notification Act
of 1988.
13.02 CONSTRUCTION OF CERTAIN TERMS AND PHRASES. Unless the context
of this Agreement otherwise requires, (i) words of any gender include each other
gender; (ii) words
54
using the singular or plural number also include the plural or singular
number, respectively; (iii) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement; (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement; and (v) the phrase "ordinary course of business" refers to the
business of the Company. Whenever this Agreement refers to a number of days,
such number shall refer to calendar days unless Business Days are specified.
All accounting terms used herein and not expressly defined herein shall have
the meanings given to them under GAAP. Any representation or warranty
contained herein as to the enforceability of a Contract shall be subject to
the effect of any bankruptcy, insolvency, reorganization, moratorium or other
similar law affecting the enforcement of creditors' rights generally and to
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at Law).
ARTICLE XIV
MISCELLANEOUS
14.01 NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only
if delivered personally, by facsimile transmission, by registered or
certified mail (postage prepaid, return receipt requested) or by overnight
express courier to the parties at the following addresses or facsimile
numbers:
If to Purchaser, to:
Ameristar Casino Kansas City, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President & CEO
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Senior Vice President of Legal Affairs
Ameristar Casinos, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
55
If to the Company, to:
Kansas City Station Corporation
c/o Station Casinos, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇, Esq.
with copies to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
All such notices, requests and other communications will (a) if
delivered personally to the address as provided in this SECTION 14.01, be
deemed given upon delivery, (b) if delivered by facsimile transmission to the
facsimile number as provided in this SECTION 14.01, be deemed given upon
receipt, and (c) if delivered by mail in the manner described above to the
address as provided in this SECTION 14.01, be deemed given upon receipt (in
each case regardless of whether such notice, request or other communication
is received by any other Person to whom a copy of such notice, request or
other communication is to be delivered pursuant to this SECTION 14.01). Any
party from time to time may change its address, facsimile number or other
information for the purpose of notices to that party by giving notice
specifying such change to the other party hereto.
14.02 ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.
14.03 EXPENSES. Whether or not the transactions contemplated hereby
are consummated, Purchaser and the Company each shall pay the costs and
expenses incurred by such party in connection with the negotiation, execution
and closing of this Agreement and the transactions contemplated hereby.
14.04 PUBLIC ANNOUNCEMENTS. At all times at or before the
Closing, the Company and Parent, on the one hand, and Purchaser and ACI, on the
other, will not issue or make any reports, statements or releases to the public
or generally to the employees, customers, suppliers or other Persons to whom the
Company sells goods or provides services or with whom the Company otherwise has
significant business relationships with respect to this Agreement or the
transactions contemplated hereby without the consent of the other, which consent
shall not be unreasonably withheld. If either party is unable to obtain the
approval of its public report, statement or release from the other party and
such report, statement or release is, in the opinion of legal counsel to such
party, required by Law in order to discharge such party's disclosure
56
obligations, then such party may make or issue the legally required report,
statement or release and promptly furnish the other party with a copy thereof.
Purchaser and ACI will obtain the Company's prior approval of any press release
to be issued immediately following execution of this Agreement or the Closing
announcing execution of this Agreement or the consummation of the transactions
contemplated by this Agreement, which approval shall not be unreasonably
withheld. The Company and Parent will obtain Purchaser's prior approval of any
press release to be issued immediately following execution of this Agreement or
the Closing announcing this Agreement or the consummation of the transactions
contemplated by this Agreement.
14.05 WAIVER. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No
waiver by any party of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by Law or otherwise afforded, will
be cumulative and not alternative.
14.06 AMENDMENT. Except for amendments, supplements and
modifications to the Disclosure Schedule by the Company prior to the Closing
(which shall be made in accordance with the terms and provisions set forth in
the definition of the term "Disclosure Schedule"), this Agreement may be
amended, supplemented or modified only by a written instrument duly executed
by or on behalf of Purchaser, on the one hand, and the Company, on the other
hand.
14.07 CONFIDENTIALITY. Each party hereto will hold, and will use its
best efforts to cause its Affiliates, and in the case of Purchaser, any
Person who has provided, or who is considering providing, financing to
Purchaser to finance all or any portion of the Purchase Price, and their
respective Representatives to hold, in strict confidence from any Person
(other than any such Affiliate, Person who has provided, or who is
considering providing, financing or Representative), unless (i) compelled to
disclose by judicial or administrative process (including, without
limitation, in connection with obtaining the necessary approvals of this
Agreement and the transactions contemplated hereby of Governmental or
Regulatory Authorities) or by other requirements of Law or (ii) disclosed in
an Action or Proceeding brought by a party hereto in pursuit of its rights or
in the exercise of its remedies hereunder, all documents and information
concerning the other party or any of its Affiliates furnished to it by the
other party or such other party's Representatives in connection with this
Agreement or the transactions contemplated hereby, except to the extent that
such documents or information can be shown to have been (a) previously known
by the party receiving such documents or information, (b) in the public
domain (either prior to or after the furnishing of such documents or
information hereunder) through no fault of such receiving party or (c) later
acquired by the receiving party from another source if the receiving party is
not aware that such source is under an obligation to another party hereto to
keep such documents and information confidential; provided that following the
Closing the foregoing restrictions will not apply to Purchaser's use of
documents and information concerning the Business, the Assets or the Assumed
Liabilities furnished by Seller hereunder. In the event the transactions
contemplated hereby are not consummated, upon the request of the other party,
each party hereto will, and will cause its Affiliates, any Person who has
provided, or who is considering providing, financing to such party and their
respective Representatives to,
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promptly (and in no event later than five (5) Business Days after such
request) redeliver or cause to be redelivered all copies of documents and
information furnished by the other party in connection with this Agreement or
the transactions contemplated hereby and destroy or cause to be destroyed all
notes, memoranda, summaries, analyses, compilations and other writings
related thereto or based thereon prepared by the party furnished such
documents and information or its Representatives.
14.08 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other Person
other than any Person entitled to indemnity pursuant to ARTICLE XI hereof.
14.09 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt
to do so will be void, except (a) for assignments and transfers by operation
of Law and (b) that Purchaser may assign any or all of its rights, interests
and obligations hereunder (including, without limitation, its rights under
ARTICLE XI) to (i) a wholly-owned subsidiary, provided that any such
subsidiary agrees in writing to be bound by all of the terms, conditions and
provisions contained herein and Purchaser remains liable for its obligations
under this Agreement, (ii) any post-Closing purchaser of the Business or a
substantial part of the Assets or (iii) any financial institution or other
entity providing purchase money or other financing to Purchaser from time to
time as collateral security for such financing. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and
assigns.
14.10 HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
14.11 INVALID PROVISIONS. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future Law, and
if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part
hereof, and (c) the remaining provisions of this Agreement will remain in
full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom.
14.12 CONSENT TO JURISDICTION AND VENUE. Each party hereby
irrevocably submits to the exclusive jurisdiction of the United States
District Court for the District of Nevada or any court of the State of Nevada
located in ▇▇▇▇▇ County in any action, suit or proceeding arising out of or
relating to this Agreement or any of the transactions contemplated hereby,
and agrees that any such action, suit or proceeding shall be brought only in
such court; PROVIDED, HOWEVER, that such consent to jurisdiction is solely
for the purpose referred to in this SECTION 14.12 and shall not be deemed to
be a general submission to the jurisdiction of said courts or in the State of
Nevada other than for such purpose. Each party hereby irrevocably waives, to
the fullest extent permitted by Law, any objection that it may now or
hereafter have to the laying of the venue of any such action, suit or
proceeding brought in such a court. Each party further
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irrevocably waives and agrees not to plead or claim that any such action,
suit or proceeding brought in such a court has been brought in an
inconvenient forum.
14.13 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Nevada applicable to a
Contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
14.14 ATTORNEY'S FEES. In the event of a dispute between the parties
hereto relating to this Agreement, the prevailing party to such dispute will
be entitled to recover its reasonable attorneys fees and other costs and
expenses relating to such dispute from the non-prevailing party.
14.15 TIME OF THE ESSENCE. Time is of the essence in performing
covenants and agreements hereunder.
14.16 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
ARTICLE XV
GUARANTEES
15.01 GUARANTEE OF THE COMPANY'S OBLIGATIONS. Parent hereby, to the
fullest extent permitted by applicable law, irrevocably and unconditionally
guarantees (the "PARENT GUARANTEE") to Purchaser and its successors and
assigns the prompt performance and payment in full when due of all
obligations of the Company to Purchaser under this Agreement and hereby
agrees to take all reasonably necessary action as the sole shareholder of the
Company to cause the Company to perform its obligations hereunder.
15.02 GUARANTEE OF PURCHASER'S OBLIGATIONS. ACI hereby, to the
fullest extent permitted by applicable law, irrevocably and unconditionally
guarantees (the "ACI GUARANTEE") to the Company and its successors and
assigns the prompt performance and payment in full when due of all
obligations of Purchaser to the Company under this Agreement and hereby
agrees to take all reasonably necessary action as the sole shareholder of
Purchaser to cause Purchaser to perform its obligations under this Agreement.
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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer or trustee, as applicable, of each
party hereto as of the date first above written.
"PURCHASER"
AMERISTAR CASINO KANSAS CITY, INC.,
a Missouri corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
"THE COMPANY"
KANSAS CITY STATION CORPORATION,
a Missouri corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title:
"PARENT"
STATION CASINOS, INC.,
a Nevada corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title:
"ACI"
AMERISTAR CASINOS, INC.,
a Nevada corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
and Chief Financial Officer