Exhibit 10.15
AMENDED AND RESTATED AGREEMENT RESPECTING
PYRAMID CASINO
This AMENDED AND RESTATED AGREEMENT (this "Agreement") is entered into as
of this 14 day of July, 1995, by and between HOLLYWOOD PARK, INC., a Delaware
corporation ("HPI" or "Buyer"), COMPTON ENTERTAINMENT, INC., a California
corporation ("CEI" or "Seller") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, the sole shareholder of
Seller ("Shareholder"), with reference to the following facts and circumstances:
A. CEI has entered into an Amended and Restated Disposition and
Development Agreement, Agreement of Purchase and Sale, and Lease with Option to
Purchase (the "DDA") with The Community Redevelopment Agency of the City of
▇▇▇▇▇▇▇ (the "Agency") to lease and purchase certain property located in the
area known as the Alameda Auto Plaza in the City of ▇▇▇▇▇▇▇ (the "City") as more
particularly described on Exhibits 1 and 2 to the DDA (the "Card Club Site").
B. CEI and each of its officers, directors and shareholders have been
licensed by the City to own and operate a card club to be known as the Pyramid
Casino or such other name as the parties may agree (the "Card Club") to be
located at the Card Club Site.
C. CEI and HPI have entered into an Agreement of Principle dated April
29, 1994, as amended (the "AIP") and an Agreement Respecting Pyramid Casino
dated December 5, 1994, as amended April 14, 1995, with respect to the
development, ownership and operation of the Card Club and now desire to amend
and restate this Agreement as provided herein.
NOW, THEREFORE, in consideration of these premises, the mutual agreements
and representations contained herein and other good and valuable consideration
the receipt and adequacy of which is hereby acknowledged, each party hereto
(consisting of Buyer, on the one hand, and Seller and Shareholder, on the
other), agrees as follows:
I. DEFINITIONS
FOR ALL PURPOSES OF THIS AGREEMENT, THE FOLLOWING ADDITIONAL DEFINITIONS
SHALL APPLY:
1.1 "CARD CLUB OPENING" shall mean the opening of the Card Club for
business to the general public.
1.2 "CLOSING" and "CLOSING DATE" shall have the meanings ascribed
in Article IV.
1.3 "LEASE" shall mean the Lease to be entered into between HPI and
CEI pursuant to Section 2.3 in the form attached hereto as Exhibit A.
1.4 "LICENSE RIGHTS" shall mean CEI's City license to operate the
Card Club, as amended (the "License Amendment").
1.5 "LICENSE RIGHTS OPTION" shall have the meaning ascribed in
Section 2.2.
1.6 "PARTNERSHIP AGREEMENT" shall mean the Partnership Agreement or
the Limited Liability Company Operating Agreement, as the case may be, to be
entered into between HPI and CEI pursuant to Section 5.4.1 in the form attached
hereto as Exhibit B-1 and B-2, respectively. "PARTNERSHIP" shall mean the
general partnership or the limited liability company, as the case may be, of HPI
and CEI formed and/or governed by the Partnership Agreement.
1.7 "PLANS" shall mean the plans and specifications to construct
the Card Club heretofore submitted to the City for its approval by CEI.
1.8 "PURCHASED ASSETS" shall mean the Real Property Rights, the
Plans and all other assets, real or personal, tangible or intangible, pertaining
to the Card Club other than the License Rights.
1.9 "REAL PROPERTY RIGHTS" shall mean CEI's rights in and to the
Card Club Site, including its rights under the DDA.
II. PURCHASE, OPTION AND LEASE
2.1 PURCHASE AND SALE OF PURCHASED ASSETS. For the consideration
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and subject to the terms and conditions contained herein, Seller shall sell,
convey, assign and deliver to Buyer at the Closing, and Buyer shall purchase and
accept the conveyance, assignment and delivery of, the Purchased Assets, on the
terms and conditions set forth herein.
2.2 LICENSE RIGHTS OPTION.
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2.2.1 GRANT OF LICENSE RIGHTS OPTION. For the consideration
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and subject to the terms and conditions contained herein, Seller shall grant to
Buyer at the Closing an option to purchase the License Rights (the "License
Rights Option") and Buyer shall purchase the License Rights Option on the terms
and conditions set forth herein.
2.2.2 TERM AND EXERCISABILITY. The License Rights Option
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shall be exercisable by HPI or, at HPI's election, by the Partnership at any
time during the period commencing with the Closing Date and ending on the later
of (i) the fifth anniversary thereof or (ii) the Expiration Date of the Lease;
provided that the License Rights Option shall be exercisable only if at the time
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of exercise HPI is then qualified to be licensed by the State of California and
the City as an operator of a card club.
2.2.3 EXERCISE PRICE OF LICENSE RIGHTS OPTION. The exercise
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price of the License Rights Option shall be Two Million Dollars ($2,000,000), of
which One Million Five Hundred Thousand Dollars ($1,500,000) is payable at the
time the License Rights Option is exercised, and the remaining Five Hundred
Thousand Dollars ($500,000) shall be applied from the purchase price of the
License Rights Option pursuant to Section 3.1.3. The exercise price shall be
paid upon the Card Club Opening, if HPI is then licensed as an operator of the
Card Club. If HPI is not licensed as an operator of the Card Club at the time
of the Card Club Opening, it shall pay CEI an extension fee of One Million Four
Hundred Ninety Nine Thousand Dollars ($1,499,000) upon the Card Club Opening and
the exercise price thereupon shall be reduced to Five Hundred and One Thousand
Dollars ($501,000), payable by application of the purchase price of the License
Rights Option as aforesaid and One Thousand Dollars ($1,000) upon exercise
thereof.
2.3 LEASE. At the Closing, CEI and HPI shall enter into the Lease.
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III. PURCHASE PRICE
3.1 PURCHASE PRICE OF PURCHASED ASSETS AND LICENSE RIGHTS OPTION.
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The purchase price ("Purchase Price") for the Purchased Assets and License
Rights Option shall be as follows:
3.1.1 REAL PROPERTY RIGHTS. Two Million Dollars
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($2,000,000).
3.1.2 PLANS. One Million Dollars ($1,000,000).
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3.1.3 LICENSE RIGHTS OPTION. Five Hundred Thousand Dollars
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($500,000), which amount will be applied to the exercise price of the License
Rights Option at the time of exercise.
3.2 PAYMENT TERMS. The Purchase Price shall be paid as follows:
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3.2.1 AT CLOSING. At the Closing, HPI shall pay CEI the
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following:
(a) $2,000,000 for the Real Property Rights; and
(b) $500,000 for the License Rights Option.
3.2.2 CARD CLUB OPENING. The remainder of the Purchase Price
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and the exercise price of the License Rights Option shall be paid on the date of
Card Club Opening as follows:
(a) $1,000,000 for the Plans; and
(b) $1,500,000 for the balance of the exercise price of
the License Rights Option, or $1,499,000 as a license extension fee, as
applicable pursuant to Section 2.2.3.
provided, however, that any advances made by HPI pursuant to Section 3.4 shall
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be deducted from the payment made pursuant to this Section 3.2.2.
3.3 CEI REPRESENTATION. CEI represents and warrants that the
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actual out-of-pocket expenses incurred by CEI in connection with the Card Club
equal or exceed the aggregate amount to be paid by HPI at the Closing pursuant
to Section 3.2.1 and has provided HPI an itemization of such expenses. HPI
shall have the right, at any reasonable time, to audit such expenses and to
obtain from CEI such additional information or documentation with respect
thereto as HPI shall reasonably request in order to confirm the proper
relationship of such expenses to the Card Club.
3.4 ADVANCES BY HPI. HPI has agreed to pay the following costs and
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expenses of CEI on or prior to the Closing, which amounts will be treated as
advances to CEI of the amounts otherwise due and payable on Card Club Opening
pursuant to Section 3.2.2, and shall be deducted from the payment thereof:
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3.4.1 Attorneys' fees of Twenty-Six Thousand Dollars
($26,000) to ▇▇▇▇▇▇ ▇▇▇▇, Esq.;
3.4.2 Consulting fees of Seven Thousand Dollars ($7,000) to
▇▇▇▇▇ Head;
3.4.3 Attorneys' fees to ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ of
Sixty-One Thousand Five Hundred Ninety-Two Dollars ($61,592); and
3.4.4 Twenty Thousand Dollars ($20,000) to CEI for
reimbursement of miscellaneous expenses.
IV. CLOSING
The closing of the transactions contemplated by Article II of this
Agreement (the "Closing") shall be held concurrently with the closing of the
transactions contemplated by the DDA, as specified in Section 1(c) thereof (but
no later than October 31, 1995 (the "Closing Date"), at _______________________
____________________________________________________________ California, subject
to postponement or acceleration as agreed upon in writing by Buyer and Seller.
V. OTHER AGREEMENTS
5.1 EQUITY CONTRIBUTION.
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5.1.1 It is expected that the aggregate cost of constructing,
developing and furnishing the Card Club (including the purchase price of the
Purchased Assets and the purchase and exercise price of the License Rights
Option) and related start-up matters will be approximately Twenty Million
Dollars ($20,000,000) (the "Equity Contribution"). Subject to the provisions of
Section 5.1.2, HPI agrees to make the entire Equity Contribution in installments
as needed. It is understood and agreed that all taxes, insurance or other
operating expenses incurred by HPI from the Closing Date to the commencement of
the Lease shall be part of and credited to HPI's Equity Contribution.
Notwithstanding the foregoing, CEI understands and agrees that certain other
investors previously approved by CEI may participate with HPI in making the
Equity Contribution. To the extent such other investors make an Equity
Contribution, they shall share pro-rata with HPI in all distributions to HPI
which relate to the Equity Contribution and shall have a pro-rata ownership
interest in HPI's interest in the Card Club Site and any improvements thereon.
Concurrently with such investment by any such other investor, HPI shall obtain
the agreement of such investor to be bound by all of the provisions of this
Agreement, specifically including the provisions of Section 10.2 with respect to
the
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transferability of such investors' interests hereunder. In such event, except
where the context otherwise requires, references to HPI in this Agreement and in
the Exhibits hereto shall include HPI and such other investors.
5.1.2 At CEI's option, any fees, costs or other expenses
which are due and payable prior to Card Club Opening, including any Periodic
License Fees (as hereinafter defined), may be paid by CEI and, to the extent
such amounts, when added to the amounts expended by CEI and accounted for
pursuant to Section 3.3 or otherwise approved in advance by HPI, exceed Five
Million Dollars ($5,000,000), shall be deemed an Equity Contribution made by
CEI. To the extent CEI has made such an Equity Contribution, it will share pro
rata with HPI in all distributions referable to the Equity Contribution and
shall have a pro-rata ownership interest in the Card Club Site and any
improvements thereon. If CEI does not elect to pay any such fees, costs or
other expenses itself, HPI shall pay such fees, costs or other expenses as part
of its Equity Contribution. For purposes of this Section 5.1.2, "Periodic
License Fees" shall mean the $12,500 quarterly license fee described in Section
2.B.1 of the City License and the "additional" Gross Revenue License Fees
required by Section 2.B.2(c)(ii) of the City License (i.e., the $5,000 per month
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interest payment on the $125,000 accrual).
5.2 CONSTRUCTION OF CARD CLUB. Following the Closing and the
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transfer of the Purchased Assets and the License Rights Option to HPI as
contemplated herein, HPI shall construct and furnish the Card Club pursuant to
the Lease in accordance with the Plans.
5.3 CARD CLUB OPENING; BUY-OUT PROVISIONS.
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5.3.1 The parties shall use their best efforts to obtain all
necessary consents and approvals from the City, the California Attorney General
and any other applicable authority for the Card Club Opening as soon as
practicable following the construction and furnishing of the Card Club.
5.3.2 In the event the Card Club cannot be opened by CEI by
October 31, 1996, HPI shall have the right to own and operate the Card Club
itself if it can then be licensed, or to lease the Card Club to another Card
Club operator licensed by the City. If HPI cannot then be licensed or cannot
transfer the license to another operator which can operate the Card Club within
one hundred eighty (180) days after such date, then subject to Section 5.3.3
below, CEI shall have the right to acquire all of HPI's right, title and
interest to the Card Club Site and all improvements thereon, the Plans and the
License Rights Option for an amount equal to
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HPI's Equity Contribution, with no profit or interest payable to HPI. In such
event, CEI shall assume all remaining obligations of "Redeveloper" under the DDA
and shall cause Agency to fully release HPI from all obligations thereunder. If
HPI operates the Card Club itself or leases the Card Club to a third party
operator pursuant to this Section 5.3.2, then at such time as CEI or Shareholder
is licensed to operate the Card Club, CEI and HPI shall form the Partnership if
HPI is then licensed, or in the event HPI is not then licensed, CEI shall have
the right to operate the Card Club pursuant to the terms of the Lease upon the
expiration of the existing operating agreement with the third party operator.
Any lease of the Card Club to a third party operator by HPI hereunder shall be
terminable upon HPI's becoming licensed to operate the Card Club.
5.3.3 In the event the Card Club cannot be opened by CEI
because of the denial or revocation of CEI's state or City license, or in the
event of a material breach of this Agreement by CEI which is incapable of cure
(including a material breach of CEI's representations and warranties set forth
in Article VI) then HPI shall pay CEI any remaining balance of the Purchase
Price of the Purchased Assets, including but not limited to, the payment for the
Real Property Rights, the Plans and both the purchase price and exercise price
of the License Rights Option, whereupon all of CEI's rights and obligations
hereunder to the Card Club shall terminate and be of no further force or effect.
Thereafter, HPI shall have the right to own and operate the Card Club itself (if
then eligible pursuant to applicable state and City law) or to lease the Card
Club to another operator licensed by the City and to assign all necessary rights
and obligations to such other operator in substitution and in lieu of CEI.
5.4 LLC AGREEMENT; LEASE TERMINATION.
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5.4.1 CEI and HPI each agree at such time as HPI is licensed
as an operator of the Card Club under applicable California law and City
ordinances, the Lease shall terminate as provided therein and CEI and HPI shall
enter into the Partnership Agreement in substantially the form attached hereto
as Exhibit B-1 for the ownership and operation of the Card Club (or, if at such
time a limited liability company may legally operate a card club, a Limited
Liability Company Operating Agreement in substantially the form attached hereto
as Exhibit B-2). CEI and the Shareholder shall fully cooperate with HPI in its
efforts to be so licensed.
5.4.2 In the event that HPI is not licensed prior to the
expiration of the Lease term, then, at CEI's election:
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(i) the parties shall negotiate: (A) a new lease for
the continued operation of the Card Club on the same terms as the Lease (except
that the monthly rent shall equal the greater of the "Monthly Rent", as defined
in the Lease, or the "Fair Market Rental Value"); and (B) an extension of the
License Rights Option; or
(ii) CEI may acquire from HPI its rights to the Card
Club Site together with the improvements thereon for a purchase price equal to
the "Fair Market Sale Value" thereof. In such event, CEI will assume all
obligations of "Redeveloper" under the DDA and shall cause HPI to be fully
released by the Agency from all obligations under the DDA, and the License
Rights Option shall terminate in accordance with its terms. If other investors
have participated in HPI's Equity Contribution in the Card Club Site pursuant to
Section 5.1.1, and CEI elects to acquire HPI's rights under this clause (ii),
CEI also shall be entitled to acquire all rights of such other investors to the
Card Club Site and any improvements thereon together with HPI's rights.
5.4.3 For purposes of Section 5.4.2, the "Fair Market Rental
Value" and the "Fair Market Sale Value", as the case may be, shall be determined
as follows:
In determining the Fair Market Rental Value or the Fair
Market Sale Value, as the case may be, the parties shall negotiate in good faith
in order to reach agreement; and in the event the parties are unable to reach
agreement during the period that is not more than four (4) months and not less
than three (3) months prior to the expiration date of the Lease, ("Negotiation
Period"), the determination of Fair Market Rental Value or the Fair Market Sale
Value, as the case may be, shall be made by appraisal as provided in Section
5.4.4.
5.4.4 APPRAISAL PROCEDURE. The parties shall use their best
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efforts to complete the appraisal process within sixty (60) days after the
expiration of the Negotiation Period and shall instruct their appraisers to do
likewise.
(i) Each party shall, within ten (10) days following
the expiration of the Negotiation Period, appoint a licensed, disinterested
M.A.I. Appraiser having substantial experience with comparable buildings in the
County of Los Angeles (a "Qualified Appraiser") and give written notice of such
appointment to the other. If either party fails to notify the other of the
appointment of its Qualified Appraiser within the time period specified above,
then the Qualified Appraiser appointed shall be the sole appraiser to
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determine Fair Market Rental Value or the Fair Market Sale Value, as the case
may be;
(ii) In the event two (2) Qualified Appraisers are
chosen as herein provided, the Qualified Appraisers so chosen shall meet within
ten (10) business days after they are appointed as aforesaid, and, if within ten
(10) business days after such first meeting, the two (2) Qualified Appraisers
fail to come to a mutual determination as to the appropriate Fair Market Rental
Value or the Fair Market Sale Value, as the case may be, they themselves shall
appoint a third Qualified Appraiser, who shall be a competent and disinterested
person with qualifications similar to those required of the first two (2)
Qualified Appraisers as herein provided. In the event the first two (2)
Qualified Appraisers fail to agree upon and select a third Qualified Appraiser
within ten (10) days after the expiration of said ten (10) day period, the third
Qualified Appraiser shall be selected by the Presiding Judge of the Superior
Court for the County of Los Angeles and the parties shall not raise any
questions or objections as to such Judge's full power, jurisdiction, and
authority to select said Qualified Appraiser;
(iii) Within ten (10) days after appointment of the
third Qualified Appraiser, each of the three (3) Qualified Appraisers selected
shall state in writing his or her respective opinion as to the appropriate Fair
Market Rental Value or Fair Market Sale Value, as the case may be, supported by
the reasons therefor with counterpart copies to each party;
(iv) The Qualified Appraisers shall arrange for a
simultaneous exchange of such determinations promptly. The opinion which is the
furthest from the middle value shall be excluded and the Fair Market Rental
Value or Fair Market Sale Value, as the case may be, for purposes hereof shall
be the average of the remaining two (2) opinions and shall constitute the
decision of the Qualified Appraisers and be final and binding on the parties.
The Qualified Appraisers shall give written notice to the parties stating their
determination, and shall furnish to each party a signed copy of such
determination. The Qualified Appraisers shall have no power to modify the
provisions of the Lease.
(v) In the event of a failure, refusal or inability of
any Qualified Appraiser to act, a successor shall be appointed by the party who
originally appointed the Qualified Appraiser, but in the case of the third
Qualified Appraiser, the third Qualified Appraiser's successor shall be
appointed in the same manner as provided for appointment of the third Qualified
Appraiser. Each party shall pay the fees and expenses of the party's own
Qualified Appraiser and shall share equally the fees and expenses of the
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third Qualified Appraiser and all other expenses of the appraisal.
5.4.5 With the exception of an "Event of Default" made in bad
faith or the revocation of CEI's state or City license as a result of such bad
faith, no "Event of Default" under the Lease or termination of the Lease shall
act as a bar against CEI entering into the Partnership at such time as HPI can
be licensed. In the event of the termination of the Lease or the revocation of
CEI's state or City license as a result of CEI's bad faith, all of CEI's rights
and obligations hereunder to the Card Club shall terminate and be of no further
force or effect provided that HPI has paid CEI the full Purchase Price of the
Purchased Assets hereunder. In the event either party's license is revoked
after the Partnership has been formed, the rights and obligations of the parties
shall be determined in accordance with Section 2.2 of the Partnership Agreement.
5.4.6 In the event the Lease terminates for any reason other
than as provided in Section 5.4.5 above, CEI shall have the right, but not the
obligation, for a period of ninety (90) days following such termination, to
purchase a one-third (1/3) interest in HPI's interest in the Card Club, for a
purchase price equal to one-third (1/3) of HPI's total cost thereof.
Concurrently with CEI's purchase of such interest, CEI and HPI shall enter into
a partnership or limited liability company in form and terms mutually agreed
upon to own the Card Club Site and all improvements thereon and such partnership
or limited liability company shall assume all obligations of HPI as landlord
under HPI's lease with any third party operator. At such time as HPI is
licensed to operate the Card Club and the lease with the third party operator
terminates, HPI and CEI shall enter into the Partnership Agreement, with
appropriate changes to the Partnership Agreement relating to capital accounts
and distributions so that CEI shall be entitled to receive the same rate of
return on its purchased interest hereunder as HPI is entitled to receive on its
Initial Capital Account as provided in Section 5.2(a) of the Partnership
Agreement. Each of the parties hereto agree that if CEI elects to purchase such
interest hereunder, it will execute such further documents and take such further
action as may be necessary or appropriate to implement the foregoing.
5.5 EMPLOYMENT AGREEMENTS. CEI agrees that any employment
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agreements which are entered into with any individuals (including Shareholder)
for Card Club employment during the term of the Lease shall, by their terms,
terminate no later than the termination date of the Lease so that upon formation
of the Partnership, the Partnership may enter into whatever employment
arrangements it believes are desirable at
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such time. HPI acknowledges and agrees that it is intended that Shareholder will
be employed by the Partnership on mutually acceptable terms and that certain
other employees of CEI also may be employed by the Partnership.
5.6 OPTION FOR OTHER CARD CLUBS. CEI hereby grants HPI the right
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and option (but not the obligation) during the term of the Lease and the
Partnership Agreement to participate with CEI and Shareholder in the ownership
of any card club in the State of California (including the City of South El
Monte and the City of Norwalk) in which CEI or Shareholder secure an opportunity
to own a majority interest (directly or through affiliated entities). Should
HPI elect to participate in any such opportunity, such participation shall be on
the following basis: (a) CEI will secure the site and license to operate the
card club in exchange for a one-third interest in the venture and reimbursement
of its costs and expenses plus an amount equal to two-thirds (2/3) of such costs
and expenses; and (b) HPI will provide up to one-half of the financing required
for land acquisition and construction of the card club in exchange for a two-
thirds (2/3) interest in CEI's interest in the venture. Should HPI elect to
participate in any such opportunity, the parties shall enter into either a lease
arrangement or a new partnership or limited liability company (depending on
whether or not HPI is then qualified to be licensed as a card club operator and
whether or not a limited liability company can then legally operate a card club)
substantially identical in form and substance to the Lease or Partnership
Agreement contemplated by this Agreement, as the case may be, whereupon HPI or
such partnership or limited liability company, as the case may be, shall avail
itself of such opportunity and, subject to the availability of the remaining
necessary financing, acquire ownership of such card club in its name.
Notwithstanding the foregoing, HPI shall not be under any obligation to offer
CEI or Shareholder the opportunity to participate in the ownership or operation
of any other card club in which HPI obtains an ownership interest.
5.7 GROSS REVENUE LICENSE FEE.
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5.7.1 PAYMENT. CEI has previously paid the City an initial
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gross revenue license fee in the amount of One Million Five Hundred Thousand
Dollars ($1,500,000) as acknowledged by the City in Section 2.B.2(a) of the City
License and included in CEI's itemization of expenses pursuant to Section 3.3
hereof (the "Initial License Fee") and is obligated to pay an additional gross
license fee of Two Hundred Fifty Thousand Dollars ($250,000) upon Card Club
Opening (the "Additional License Fee"). CEI hereby agrees to pay the Additional
License Fee pursuant to the City License
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when due whether or not the City License has been assigned to HPI or the
Partnership.
5.7.2 REFUND. Pursuant to Section 2.B.2(e) of the City
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License, if in any license year the gross revenue license fee paid by the holder
of the City License exceeds Three Million Dollars ($3,000,000), the City shall
refund the Initial License Fee and the Additional License Fee to CEI (but not to
any assignee). CEI and HPI agree that upon such refund:
(a) CEI shall retain the Additional License Fee and HPI
shall have no claim or rights thereto; and
(b) With respect to the Initial License Fee:
(i) If such refund is made to CEI at any time after
HPI has received all distributions contemplated by Section 5.2(a) of the
Partnership Agreement, such amount shall be remitted to the Partnership as part
of its operating income and no adjustments on account thereof shall be made to
the capital accounts of either of the Partners; and
(ii) If such refund is made to CEI at any time
prior to such time as HPI has received all distributions contemplated by Section
5.2(a) of the Partnership Agreement, CEI shall promptly remit the same to HPI,
and CEI shall have no further claims or rights thereto. In such event, the
amount of HPI's Equity Contribution (or HPI's Initial Capital Account after
formation of the Partnership) shall be adjusted accordingly.
VI. REPRESENTATIONS AND WARRANTIES OF
SELLER AND SHAREHOLDER
As an inducement for Buyer entering into this Agreement, each of Seller and
Shareholder, jointly and severally, represents and warrants as follows:
6.1 ORGANIZATION. Seller is a corporation duly organized, validly
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existing and in good standing under the laws of the State of California. Seller
has all necessary corporate power and authority to enter into, be bound by the
terms and conditions of, and perform its obligations under, this Agreement, and
to transfer the Purchased Assets and to grant the License Rights Option to Buyer
pursuant hereto.
6.2 SECURITIES OF CEI. All of the outstanding shares of capital
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stock of CEI (the "Shares") (i) are duly
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authorized, validly issued, fully paid and non-assessable, (ii) were issued in
compliance with all applicable state, federal and foreign securities laws, and
(iii) are owned beneficially and of record by Shareholder, free and clear of all
liens, charges, security interests, encumbrances or adverse claims of any nature
whatsoever. There are no outstanding securities convertible into, or any
options, warrants, rights, calls or other commitments of any nature relating to,
the shares of the capital stock or other securities of CEI.
6.3 AUTHORIZATION; NO CONFLICT. All requisite corporate action on
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the part of Seller has been taken to authorize and approve the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Seller and Shareholder and constitutes a legal, valid and binding
obligation of Seller and Shareholder, and each instrument contemplated by this
Agreement, when executed and delivered by Seller and/or Shareholder, as the case
may be, in accordance with the provisions hereof, will be a legal, valid and
binding obligation of Seller and/or Shareholder, in each case enforceable
against Seller and/or Shareholder in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to time in effect which affect
creditors' rights generally and by legal and equitable limitations on the
availability of equitable remedies). Neither the execution, delivery or
performance of this Agreement nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in the breach of any
provision of the Articles of Incorporation or Bylaws of Seller, (ii) constitute
a default (or an event which, with notice or lapse of time or both, would
constitute a default) under the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, lease, agreement or other material
instrument or obligation to which Seller or Shareholder is a party or by which
Seller or Shareholder is bound, (iii) result in the creation of any lien,
charge, security interest or other encumbrance upon the Purchased Assets or the
License Rights pursuant to the terms of any such note, bond, mortgage,
indenture, license, agreement or other material instrument or obligation, (iv)
violate any judgment, order, injunction, decree, or award of any court,
administrative agency or governmental body against, or binding upon, Seller or
Shareholder, or (v) constitute a violation by Seller or Shareholder of any law
or regulation of any jurisdiction applicable to Seller or Shareholder.
6.4 GOVERNMENTAL APPROVALS. Schedule 6.4 sets forth all approvals,
----------------------
authorizations, consents or orders or actions of any governmental authority
required to be obtained
13
by Seller and/or Shareholder in connection with their execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby or
performance of the obligations undertaken herein. Except as set forth on
Schedule 6.4, no approval, authorization, consent or order or action of or
filing with any court, administrative agency or other governmental authority is
required to be obtained by Seller or Shareholder for the execution and delivery
by Seller and Shareholder of this Agreement or the consummation of the
transactions contemplated hereby or for the operation of the Card Club.
6.5 OWNERSHIP OF PURCHASED ASSETS AND LICENSE RIGHTS. Seller has
------------------------------------------------
good title to the Purchased Assets and the License Rights free and clear of any
claim, lien, charge, security interest or encumbrance whatsoever and neither
Seller nor Shareholder has any legal obligation, absolute or contingent, to any
other person or entity to sell or transfer any interest in any portion of the
Purchased Assets or the License Rights. Upon Seller's transfer and sale of the
Purchased Assets to Buyer pursuant to this Agreement, Buyer will have good title
to all of the Purchased Assets, free and clear of any claim, lien, charge,
security interest or encumbrance whatsoever. Upon grant of the License Rights
Option by Seller to Buyer and the exercise thereof by Buyer (or the Partnership)
as provided herein (subject to any required State and City approvals), Buyer or
the Partnership, as the case may be, will have good and marketable title to all
of the License Rights, free and clear of any claim, lien, charge, security
interest or encumbrance whatsoever.
6.6 CARD CLUB LICENSE. Each of Shareholder, Seller and each of
-----------------
Seller's officers and directors is duly and validly licensed by the City to
operate and own the Card Club.
6.7 COMPLIANCE WITH LAWS. To the best of each of Seller's and
--------------------
Shareholder's knowledge, without independent investigation, this Agreement, the
Lease, the Partnership Agreement and all other instruments and agreements
contemplated hereby comply in all material respects with all applicable
requirements of applicable City ordinances.
6.8 FULL DISCLOSURE. No representation or warranty by Seller or
---------------
Shareholder in this Agreement or in any certificate or other document or
instrument furnished or to be furnished by Seller or Shareholder to Buyer or its
representatives pursuant hereto, contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary to
make the statements made therein not misleading.
VII. REPRESENTATIONS AND WARRANTIES OF BUYER
14
As an inducement for Seller and Shareholder to enter into this Agreement,
Buyer represents and warrants as follows:
7.1 ORGANIZATION. Buyer is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of Delaware. Buyer
has all necessary corporate power and authority to enter into, be bound by the
terms and conditions of, and perform its obligations under, this Agreement.
7.2 AUTHORIZATION; NO CONFLICT. All requisite corporate action on
--------------------------
the part of Buyer has been duly taken to authorize and approve the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Buyer and constitutes a legal, valid and binding obligation of
Buyer, and each instrument contemplated by this Agreement, when executed and
delivered by Buyer in accordance with the provisions hereof, will be a legal,
valid and binding obligation of Buyer, in each case enforceable against Buyer in
accordance with its terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
from time to time in effect which affect creditors' rights generally and by
legal and equitable limitations on the availability of equitable remedies).
Neither the execution, delivery and performance of this Agreement nor the
consummation of the transactions contemplated hereby will (i) conflict with or
result in the breach of any provision of the Certificate of Incorporation or
Bylaws of Buyer, (ii) constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, lease, agreement
or other material instrument or obligation to which Buyer is a party or by which
Buyer is bound, (iii) violate any judgment, order, injunction, decree or award
of any court, administrative agency or governmental body against, or binding
upon, Buyer, or (iv) constitute a violation by Buyer of any law or regulation of
any jurisdiction applicable to Buyer.
7.3 GOVERNMENTAL APPROVALS. Except to the extent that Buyer's
----------------------
participation is required for the approvals listed on Schedule 6.4, no approval,
authorization, consent or order or action of or filing with any court,
administrative agency or other governmental authority is required to be obtained
by Buyer for the execution and delivery by Buyer of this Agreement or the
consummation of the transactions contemplated hereby or for the operation of the
Card Club.
15
7.4 COMPLIANCE WITH LAWS. To the best of Buyer's knowledge,
--------------------
without independent investigation, this Agreement, the Lease, the Partnership
Agreement and all other instruments and agreements contemplated hereby comply in
all material respects with all applicable requirements of applicable City
ordinances.
7.5 FULL DISCLOSURE. No representation or warranty by Buyer in
---------------
this Agreement or in any certificate or other document or instrument furnished
or to be furnished by Buyer to Seller or its representatives pursuant hereto,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements made therein
not misleading.
VIII. CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject, at its election, to the
satisfaction, at or prior to the Closing Date, of the following conditions:
8.1 CARD CLUB SITE. All conditions to the closing of the
--------------
transactions contemplated by the DDA as set forth in Section 2(b) thereof shall
have been satisfied or waived by HPI. All exceptions to title and other
contingencies to be approved by Redeveloper thereunder shall be acceptable to
and approved by HPI.
8.2 CONSENTS. There shall have been obtained all requisite
--------
consents of governmental or other regulatory agencies, foreign or domestic, and
of any other third parties, required to be received by or on the part of Buyer,
Seller or Shareholder in connection with the consummation of the transactions
contemplated hereby, including but not limited to any and all consents or
approvals of the City.
8.3 REPRESENTATIONS AND WARRANTIES. Seller's and Shareholder's
------------------------------
representations and warranties contained herein 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.
8.4 COMPLIANCE. Seller and Shareholder shall have performed and
----------
complied with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by them prior to the Closing Date.
8.5 SUITS, PROCEEDINGS, INVESTIGATIONS. No suit, action or other
----------------------------------
proceeding shall be pending or, to the knowledge of Seller or Buyer, threatened,
before any court or governmental agency wherein an unfavorable judgment, decree
or
16
order would prevent the carrying out of this Agreement or any of the
transactions or events contemplated hereby, or declare unlawful the transactions
or events contemplated by this Agreement or cause such transactions to be
rescinded, or would otherwise have a material adverse effect on the Purchased
Assets, the License Rights and/or the business of the Card Club.
8.6 OTHER DOCUMENTS. Seller and Shareholder shall have delivered
---------------
all such certified resolutions, certificates, documents and instruments with
respect to Seller as Buyer's counsel may reasonably request prior to the Closing
Date to carry out the intent and purpose of this Agreement and the form of all
such documents shall be satisfactory in all reasonable respects to Buyer and its
counsel.
8.7 INSTRUMENTS OF CONVEYANCE. Seller shall have executed and
-------------------------
delivered, or caused to be executed and delivered, to Buyer any necessary
instruments of conveyance for the transfer of the Purchased Assets and the grant
of the License Rights Option, and executed copies of all consents, if any, of
third parties which may be required for any assignment, transfer or recording
contemplated hereby, which instruments and consents shall be in form and
substance reasonably satisfactory to Buyer and its counsel.
IX. CONDITIONS TO OBLIGATIONS OF SELLER AND SHAREHOLDER
The obligations of Seller and Shareholder hereunder are subject, at its or
his election, to the satisfaction, at or prior to the Closing Date, of the
following conditions:
9.1 CARD CLUB SITE. All conditions to the closing of the
--------------
transactions contemplated by the DDA as set forth in Section 2(b) thereof shall
have been satisfied or waived by CEI. All exceptions to title and other
contingencies to be approved by Redeveloper thereunder shall be acceptable to
and approved by CEI.
9.2 GOVERNMENTAL CONSENTS. There shall have been obtained all
---------------------
requisite consents of governmental or other regulatory agencies, foreign or
domestic, and of any other third parties required to be received by or on the
part of Buyer, Seller or Shareholder in connection with the consummation of the
transactions contemplated hereby, including but not limited to any and all
consents or approvals of the City.
9.3 REPRESENTATIONS AND WARRANTIES. Buyer's representations and
------------------------------
warranties contained herein shall be true
17
and correct in all material respects on and as of the Closing Date as though
made on and as of the Closing Date.
9.4 COMPLIANCE. Buyer shall have performed and complied with all
----------
agreements and conditions required by this Agreement to be performed or complied
with by it prior to the Closing Date.
9.5 SUITS, PROCEEDINGS, INVESTIGATIONS. No suit, action or other
----------------------------------
proceeding shall be pending or, to the knowledge of Seller or Buyer, threatened,
before any court or governmental agency wherein an unfavorable judgment, decree
or order would prevent the carrying out of this Agreement or any of the
transactions or events contemplated hereby, or declare unlawful the transactions
or events contemplated by this Agreement or cause such transactions to be
rescinded or would otherwise have a material adverse effect on the Purchased
Assets, the License Rights, and/or the business of the Card Club.
9.6 OTHER DOCUMENTS. Buyer shall have delivered all such certified
---------------
resolutions, certificates, documents and instruments with respect to Buyer as
Seller's counsel may reasonably request prior to the Closing Date to carry out
the intent and purpose of this Agreement and the form of all such documents
shall be satisfactory in all reasonable respects to Seller and its counsel.
X. RESTRICTIONS ON ISSUANCE AND TRANSFER
10.1 CEI STOCK.
---------
10.1.1 RESTRICTION ON ADDITIONAL ISSUANCES. Each of CEI and
-----------------------------------
Shareholder covenants and agrees that during the period from the date hereof
through the term of the Lease and the Partnership Agreement, except as permitted
by Section 8.02 of the Lease, CEI will not issue any additional shares of its
capital stock or other securities or grant any options, warrants, rights, calls
or other commitments of any nature relating to shares of capital stock or other
securities of CEI without the prior written consent of HPI.
10.1.2 RESTRICTION ON TRANSFER BY SHAREHOLDER. Shareholder
--------------------------------------
agrees that during the period from the date hereof through the term of the Lease
and the Partnership Agreement, except as permitted by Section 8.02 of the Lease,
he will not sell, transfer, convey or otherwise hypothecate any of the Shares
owned by him without the prior written consent of HPI.
18
10.1.3 LEGEND OF CERTIFICATES. Concurrently with execution of
----------------------
this Agreement, CEI shall cause the certificates representing the Shares held by
the Shareholder to bear a legend substantially as follows:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN TRANSFER RESTRICTIONS PROVISIONS CONTAINED IN AN
AGREEMENT BETWEEN THE HOLDER AND THE ISSUER HEREOF AND HOLLYWOOD PARK,
INC., A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF
THE ISSUER. ANY TRANSFER OF SHARES IN VIOLATION OF SUCH PROVISIONS
SHALL BE NULL AND VOID AB INITIO."
---------
10.1.4 ADDITIONAL RESTRICTIONS; RIGHT OF FIRST REFUSAL.
-----------------------------------------------
Notwithstanding the foregoing, no issuance or transfer of Shares may be made
unless and until the issuee or transferee has obtained all required licenses and
approvals from the City and any other necessary or applicable licensing
authorities and has executed an agreement (i) to be bound by all provisions of
this Agreement, including a restriction on the further transfer of such shares
and (ii) granting a right of first refusal to HPI with respect to future
transfers of such Shares by such issuee or transferee in substantially the form
heretofore agreed upon by Shareholder and HPI. Any purported issuance or
transfer of Shares not permitted by this Agreement shall be void ab initio and
---------
of no effect.
10.2 HPI AND HPI INVESTORS. HPI agrees, on behalf of itself and
---------------------
each of the investors, if any, participating in HPI's Equity Contribution
pursuant to Section 5.1.1 (the "HPI Investors") that, during the period from the
date hereof through the terms of the Lease and the Partnership Agreement
(subject to the provisions of the Lease, the Partnership Agreement and
applicable law):
(a) FIRST OPPORTUNITY OFFER. Subject to the provisions of
-----------------------
Paragraphs (c) and (d) below, prior to any transfer by HPI or any of the HPI
Investors of its interest hereunder, it will first offer CEI the right to
purchase such interest (the "Transferable Interest") on the same terms and
conditions as HPI or such HPI Investor (the "Transferor") intends to sell such
interest, or on the same terms and conditions as the offer from a prospective
purchaser, as the case may be, (herein, the "First Opportunity Offer"). The
First Opportunity Offer, once made, shall constitute an irrevocable binding
offer by the Transferor to sell the Transferable Interest to CEI. CEI shall have
thirty (30) days after receipt of the First Opportunity Offer within which to
19
accept same in writing. If CEI timely accepts the First Opportunity Offer, the
Transferor shall sell the Transferable Interest to CEI in accordance with the
terms and conditions of the First Opportunity Offer; provided, however, that
such sale shall be consummated within ninety (90) days of acceptance of the
First Opportunity Offer.
(b) SALES UNDER PURCHASE PRICE FLOOR. If CEI fails to timely
--------------------------------
accept the Transferor's First Opportunity Offer, CEI shall be deemed to have
rejected same, and the Transferor shall be free to sell the Transferable
Interest to any third party on any terms (subject to applicable restrictions in
any agreement amongst HPI and the HPI Investors); provided, however, that if the
sale price to such third party is more than ten percent (10%) lower than that
stated in the First Opportunity Offer (the "Purchase Price Floor"), then prior
to entering into a binding agreement with such third party for an amount below
the Purchase Price Floor, the transferor shall afford CEI five (5) business days
notice to agree, in writing, to purchase the Transferable Interest on the terms
offered by the third party, without any qualifications.
(c) LIMITATIONS ON TRANSFER BY HPI GROUP. Notwithstanding the
------------------------------------
foregoing, in no event shall the aggregate interests transferred by HPI and the
HPI Investors (collectively, the "HPI Group") to a third party pursuant to this
Section 10.2 exceed 49% of the total interests held by the HPI Group without the
prior written consent of CEI.
(d) PERMITTED TRANSFERS. Notwithstanding the foregoing, CEI
-------------------
acknowledges and agrees that (i) the restrictions on transfer by HPI contained
in this Section 10.2 shall not apply to the investment by the HPI Investors in
HPI's Equity Contribution prior to Card Club Opening and the resultant transfer
of a portion of HPI's interest hereunder to the HPI Investors pursuant to
Section 5.1.1 and (ii) each of the HPI Investors shall have the right, at any
time (subject to the provisions of the Lease, the Partnership Agreement and
applicable law) to transfer all or any portion of its interest hereunder to HPI
or, so long as HPI remains the Managing Partner or Member of the HPI Group, to
any other of the HPI Investors on any terms (subject to applicable restrictions
in any agreement amongst HPI and the HPI Investors) without any obligation to
offer such interest to CEI or to obtain its consent thereto.
XI. OTHER COVENANTS
11.1 ACTIONS WITH RESPECT TO CLOSING. Each party agrees to use his
-------------------------------
or its best efforts to bring about the
20
satisfaction of the conditions precedent to the Closing, including satisfaction
of all conditions to the closing of the transactions contemplated by the DDA and
obtaining all necessary City and other consents and approvals, and to cause the
covenants and agreements contained in this Agreement to be satisfied and
performed hereunder by each of them.
11.2 EXPENSES. Seller and Shareholder, on the one hand, and Buyer,
--------
on the other hand, shall each bear their own direct and indirect expenses
incurred in connection with the negotiation and preparation of this Agreement
and the consummation and performance of the transactions contemplated hereby;
provided however, that HPI shall bear all reasonable expenses related to the
Card Club after the date of this Agreement, as approved in advance by HPI, other
than the costs incurred by Seller and Shareholder pursuant to Section 11.3 and
Seller's overhead expenses.
11.3 ATTORNEY GENERAL CONSENT. Seller and Shareholder each agrees
------------------------
to use his or its best efforts to obtain all necessary licenses and other
consents and approvals from the California Attorney General and other gaming
authorities for the ownership and operation of the Card Club prior to the Card
Club Opening.
11.4 COOPERATION. Each party hereto agrees, both before and after
-----------
the Closing, to execute any and all further documents and writings and perform
such other reasonable actions which may be or become necessary or expedient to
effectuate and carry out the transactions contemplated hereby.
11.5 ANNOUNCEMENTS. Except as required by applicable provisions of
-------------
the federal securities laws, each party agrees not to make, nor cause to be
made, any news releases or other public announcements pertaining to the
transactions contemplated hereby without first consulting the other party and
attempting to formulate a mutually satisfactory arrangement for such disclosure.
XII. TERMINATION
12.1 TERMINATION. Anything herein or elsewhere to the contrary
-----------
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
12.1.1 By mutual consent of Seller, Shareholder and Buyer;
21
12.1.2 By Buyer, if any of the conditions set forth in Section
8 shall have become incapable of fulfillment and shall not have been waived by
Buyer;
12.1.3 By Seller or Shareholder, if any of the conditions set
forth in Section 9 shall have become incapable of fulfillment and shall not have
been waived by Seller and Shareholder;
12.1.4 By Buyer, on the one hand, or Seller or Shareholder, on
the other, if the Closing has not occurred on or before October 31, 1995, and if
the failure to consummate such transactions on or before such date did not
result from the failure by the party seeking such termination to fulfill any
condition set forth in Section 8 or 9, as the case may be, which is a condition
precedent to the obligation of the other party to this Agreement to consummate
the transactions contemplated hereby;
12.1.5 By Buyer, on the one hand, or Seller or Shareholder, on
the other hand, upon a material breach of this Agreement provided that the party
seeking such termination shall not be in material breach of this Agreement and
if such breach shall continue for a period of fifteen (15) days after written
notice thereof; provided, however, that if the nature of such breach is such
that more than fifteen (15) days are reasonably required for its cure, then such
cure is commenced within said 15-day period and is thereafter diligently
prosecuted to completion, this Agreement may not be terminated hereunder by
reason of such breach.
12.2 MANNER AND EFFECT OF TERMINATION.
--------------------------------
12.2.1 Termination shall be effected by the giving of notice
to that effect by one party to the other.
12.2.2 If this Agreement is terminated pursuant to this
Article XII and the transactions contemplated hereby are not consummated, this
Agreement shall become null and void and of no further force and effect and
neither party shall be obligated to the other hereunder. Nothing contained in
this Section 12.2 shall relieve any party of liability for any breach of this
Agreement which occurred prior to the date of termination of this Agreement.
12.3 RIGHTS TO PROCEED. Notwithstanding anything contained in this
-----------------
Agreement to the contrary, if any of the conditions specified in Section 8 have
not been satisfied, HPI shall have the right to proceed with the transactions
contemplated by this Agreement without waiving any of its rights hereunder; and
if any of the conditions specified in Section 9 have not been satisfied, CEI
shall have the right to
22
proceed with the transactions contemplated by this Agreement without waiving any
of its rights hereunder.
XIII. EQUITABLE REMEDIES; ARBITRATION
13.1 EQUITABLE REMEDIES. Seller, Shareholder and Buyer acknowledge
------------------
that the remedy at law for any breach, or threatened breach, of their respective
covenants to consummate the transactions contemplated hereby will be inadequate
and, accordingly, each of Seller, Shareholder and Buyer covenants and agrees
that, with respect to any such breach or threatened breach, the non-breaching
party will, in addition to any other rights or remedies that it may have and
regardless of whether such other rights or remedies have been previously
exercised, be entitled to such equitable and injunctive relief as may be
available.
13.2 ARBITRATION.
-----------
13.2.1 Any claim (regardless of the legal theory involved)
arising out of or relating to this Agreement, including, without limitation, its
validity, interpretation, enforceability or breach, which is not settled by
agreement between the parties (the "Dispute"), shall be submitted to a two-step
dispute resolution process involving, first, mediation before a retired jurist
from the panel of Judicial Arbitration & Mediation Services, Inc. or any
successor entity ("JAMS") followed, if necessary, by final and binding
arbitration before the same or, upon request of any party, another mutually
agreed upon jurist from said panel. The mediation process is to be considered
settlement negotiation for the purpose of all State and Federal rules protecting
disclosures made during such conferences from later being discovered or used in
evidence. The entire procedure is confidential, and no stenographic or other
record shall be made except to memorialize a settlement record. All conduct,
statements, promises, offers, views and opinions, oral or written, made in the
course of the mediation by any party or their agent, employee, or attorney, are
confidential and, where appropriate, are to be considered to be work product and
privileged. Such conduct, statements, promises, offers, views and opinions shall
not be discoverable or admissible for any purpose, including, impeachment, in
any litigation or other proceeding involving the parties; provided, however,
that evidence otherwise discoverable or admissible is not excluded from
discovery or admission in evidence simply as a result of it being used in
connection with the settlement process. These alternative dispute resolution
proceedings shall be administered by and conducted in conformity with the then
obtaining Rules of Practice and Procedure for the Arbitration of Commercial
Disputes of JAMS, except as such Rules of Practice and Procedure are expressly
modified by the
23
provisions of this Paragraph. A Dispute shall be deemed to include any issue or
question regarding whether any matter submitted by a party to arbitration is
arbitrable within the scope of this Section 13.2. Each of the parties hereto
acknowledges and agrees that the use of these alternative dispute resolution
proceedings necessarily results in the waiver of the party's right to a jury
trial and of its right to appeal under standard appellate procedures; however,
nothing herein shall bar a party from seeking provisional relief from a court in
aid of these proceedings.
13.2.2 Either HPI or CEI may initiate arbitration of a Dispute
by providing written notice to the other party of a demand for arbitration. The
party initiating the arbitration shall file a copy of the demand therefor with
the Los Angeles regional office of JAMS, not later than one business day
following the day on which written notice of the demand is provided to the
responding party. The Dispute shall be submitted to a single arbitrator (the
"Arbitrator") chosen by the parties from the JAMS panel of arbitrators, so long
as the person chosen meets the qualifications set forth below. If the parties do
not, for any reason, mutually select the Arbitrator from the JAMS panel within
five business days after the filing of the demand for arbitration, either party
may submit a written request to JAMS for a list of five persons qualified to
serve as the Arbitrator. A person shall be deemed qualified to serve as the
Arbitrator if such person is (a) impartial; (b) a lawyer or retired judge; and
(c) willing and able to conduct the arbitration in accordance with the
provisions of this Section 13.2. A copy of this Section 13.2 shall be included
with the request submitted to JAMS. Within three business days after the last
party actually receives the list from JAMS, the parties (or their authorized
representatives) shall meet and take turns striking names from the list, with
the party striking first chosen by a coin toss, until one name remains. The
person whose name remains on the list shall serve as the Arbitrator. If the
parties do not, for any reason, meet to strike names from the list within the
foregoing period, the Arbitrator shall be selected by JAMS within three business
days after the expiration of the foregoing period, and the selection of the
Arbitrator by JAMS shall be final and binding and shall not be subject to
challenge for any reason whatsoever. Within five business days after the
selection of the Arbitrator, the arbitration shall be conducted in Los Angeles,
California. The award, which shall be made in writing and shall set forth in
general the reasons therefor, shall be a final and binding determination of the
Dispute and judgment thereon may be entered by any court of competent
jurisdiction. Each party shall bear such party's own attorney's fees and
expenses in connection with the arbitration and shall bear one-half of the
24
Arbitrator's fees and expenses and the cost of a transcript of the arbitration
proceedings.
13.2.3 In any arbitration proceeding hereunder, the parties
hereto hereby EXPRESSLY, KNOWINGLY AND VOLUNTARILY FULLY AND FINALLY WAIVE AND
RELINQUISH any and all provisions of, and rights and benefits that may arise
under, Section 1281.9 of the Code of Civil Procedure of the State of California
(the "Statute") and hereby DISCHARGE AND EXONERATE any person(s) proposed for
nomination as neutral arbitrator(s) from any duty to comply with any of the
provisions of the statute in any such arbitration proceeding hereunder.
In connection with such waiver, relinquishment,
exoneration and discharge, the parties acknowledge that they have read and are
familiar with the provisions of the Statute and have had adequate opportunity to
consult with legal counsel with respect thereto and with respect to any other
pertinent provisions of law. All parties, with the advice of their respective
legal counsel, agree that the Statute is unnecessary and burdensome as to them
and that it is in their best interests to enter into this Agreement, so that the
arbitration process provided for by this Agreement shall proceed as if the
Statute did not exist.
However, this waiver, relinquishment, exoneration and
discharge is not intended to apply to any judicial appointment of arbitrators,
nor is it intended to discharge or exonerate any potential arbitrator from any
other duty imposed by law or equity, including without limitation, the
disclosure of any information relating to the bias or interest or potential bias
or interest of the potential arbitrator.
XIV. MISCELLANEOUS
14.1 ENTIRE AGREEMENT. This Agreement, including the Lease, the
----------------
Partnership Agreement and other agreements specifically referred to herein,
constitutes the entire agreement between the parties and supersedes all prior
agreements, representations, warranties, statements and understandings, whether
oral or written, with respect to the subject matter hereof.
14.2 NOTICES. All notices, demands, elections, or requests provided
-------
for or permitted to be given pursuant to this Agreement must be in writing. All
notices, demands, elections, and requests shall be deemed to have been duly
given on the date delivered personally or on the date of receipt if sent by
overnight delivery services, facsimile transmission, or registered or certified
U.S. Mail with return
25
receipt requested, to the following addresses, or such other addresses as may be
subsequently designated in writing and delivered to the other parties hereto:
To HPI:
Hollywood Park, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President, Gaming and
Entertainment Division
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Irell & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To CEI and Shareholder:
Compton Entertainment, Inc.
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
14.3 GOVERNING LAW; ATTORNEYS' FEES. This Agreement and the rights
------------------------------
and obligations of the parties hereunder, shall be interpreted, construed, and
enforced in accordance with the laws of the State of California without regard
to principles of law (such as "conflicts of laws") that might make the law of
some other jurisdiction applicable. In the event any legal action or
arbitration is instituted to construe or enforce this Agreement or the rights or
obligations of any party, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and expenses incurred in such legal action. Attorneys'
fees incurred in enforcing any judgment in respect of this Agreement are
recoverable as a separate item. The preceding sentence is
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intended to be severable from the other provisions of this Agreement and to
survive any judgment and, to the maximum extent permitted by law, shall not be
deemed merged into any such judgment.
14.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties and their respective successors and
assigns. Except as expressly provided in Article X hereof, neither this
Agreement nor any of the rights hereunder shall be assignable by HPI, CEI or
Shareholder without the prior written consent of the other party. No such
assignment shall relieve the parties hereto of his or its obligations hereunder.
14.5 AMENDMENTS, SUPPLEMENTS. This Agreement may be amended or
-----------------------
supplemented at any time by the mutual written consent of the parties.
14.6 WAIVERS. Either party may, by written notice to the other, (a)
-------
extend the time for the performance of any of the obligations or other actions
of the other party under this Agreement; (b) waive any inaccuracies in the
representations or warranties of the other party contained in this Agreement or
in any document delivered pursuant to this Agreement; (c) waive compliance with
any of the conditions or covenants of the other contained in this Agreement; or
(d) waive performance of any of the obligations of the other under this
Agreement. With regard to any power, remedy or right provided herein or
otherwise available to any party hereunder, (i) no waiver or extension of time
will be effective unless expressly contained in a writing signed by the waiving
party, and (ii) no alteration, modification or impairment will be implied by
reason of any previous waiver, extension of time, or delay or omission in the
exercise of rights or other indulgence.
14.7 EXHIBITS AND SCHEDULES. All exhibits annexed hereto, and all
----------------------
schedules referred to herein, are hereby incorporated in and made a part of this
Agreement as if set forth in full herein.
14.8 CAPTIONS. All section titles or captions contained in this
--------
Agreement or in any schedule or exhibit annexed hereto or referred to herein are
for convenience only, shall not be deemed a part of this Agreement and shall not
affect the meaning or interpretation of this Agreement. All references herein
to sections shall be deemed references to such parts of this Agreement, unless
the context shall otherwise require.
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14.9 SEVERABILITY. If any provision of this Agreement or the
------------
application thereof to any person or circumstances shall be held to be invalid
or unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
14.10 NO THIRD PARTY BENEFICIARIES. Nothing contained in this
----------------------------
Agreement is intended to and nothing contained herein shall be interpreted to
confer on any party not a party hereto or a successor or assign thereof the
rights of a third party beneficiary.
14.11 EXECUTION REPRESENTATIVE. Each person executing this Agreement
------------------------
on behalf of a party warrants and represents that he has full right, power, and
authority to enter into this Agreement on behalf of such party and to bind such
party to the terms and provisions thereof.
14.12 COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14.13 CONFLICT WITH AIP. In the event of any conflict between this
-----------------
Agreement and the AIP, this Agreement shall control.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
COMPTON ENTERTAINMENT, INC.
("CEI" or "Seller")
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
("Shareholder")
HOLLYWOOD PARK, INC.,
("HPI" or "Buyer")
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By: /s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President, Gaming and
Entertainment Division
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SCHEDULE 6.4
CONSENTS AND APPROVALS TO BE OBTAINED BY
----------------------------------------
SELLER AND SHAREHOLDER
----------------------
1. City approval of transfer of License Rights.
2. Approval of the City and the Community Redevelopment Agency of the City of
the transfer of the Real Property Rights.
3. Approval of the Attorney General of the State of California of the
Agreement respecting Pyramid Casino, the Lease and the Partnership
Agreement, and the rights and obligations of the parties thereunder and
under all ancillary agreements and documents.
4. Approval and licensing of CEI and Shareholder by California Attorney
General.
5. Building permits, entitlements, etc. necessary for construction of the Card
Club pursuant to the DDA and the Plans.
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