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EXHIBIT 10.40
DISTRIBUTION AGREEMENT
This Distribution Agreement ("Agreement") is made and entered into on
this 23 day of January, 1998, between Leisure Time Technology (the "Company"), a
Georgia corporation, 0000-X Xxxxxxxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000, and
Sao Paulo Games Comercial LTDA (the "Distributor"), a Limited corporation, in
Brazil.
Recitals
(A) The Company develops, manufactures, assembles, produces, markets,
sells and distributes lines of gaming and amusement machines and related
software, accessory, repair and replacement parts and other products under the
name of Pot-O-Gold Multi-Game (collectively, the "POG Multi-Game Products"),
Charity Gold, Lucky Leprechaun and Champion.
(B) The Distributor is an experienced distributor of gaming devices,
video games and related products to its customers in the Country of Brazil (the
"Territory").
NOW, THEREFORE, in consideration of the foregoing recitals, the
mutuality of this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE l--Appointment; Limitations; Competing Products
(1.1) Subject to all of the terms and provisions hereof, the Company
hereby appoints the Distributor as a exclusive distributor of the POG Multi-Game
Products throughout the Territory. The Distributor agrees not to sell, lease or
otherwise distribute POG Multi-Game Products to customers located outside the
Territory and further agrees not to sell POG Multi-Game Products to customers in
the Territory for use or subsequent resale, lease or distribution outside the
Territory.
(1.2) The Distributor acknowledges that it is an independent contractor
hereunder and further acknowledges that neither the Distributor nor the Company
shall be the agent, legal representative, joint venturer or partner of the other
for any purpose whatsoever. Distributor shall hold itself out to its customers
and the general public solely as an independent contractor in exercising its
rights and performing its obligations under this Agreement.
(1.3) The Distributor shall be solely responsible for all federal,
state and local income taxes, unemployment taxes, Social Security contributions,
Worker's Compensation premiums, import duties and all similar taxes and payments
concerning the Distributor and its employees. None of its employees shall be
eligible for any of the Company's employee benefit programs, nor shall any of
them have any claim against the Company for sick leave, retirement benefits,
Social Security, Worker's Compensation, disability or unemployment benefits. The
Company shall not be liable for the payment of any of such taxes or payments to
any federal, state or municipal government or
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agency, nor shall the Company be liable for any injury or damage to any person
or property whatsoever by reason of, or in any manner growing out of, any of the
Distributor's acts or failures to act hereunder.
(1.4) The Distributor shall also be solely responsible for all expenses
and liabilities it incurs or accrues in the performance of its obligations
hereunder. Without limiting the generality of the preceding sentence, the
Distributor shall pay all sales, income, excise and other taxes payable to all
taxing authorities and jurisdictions in connection with the Distributor's sales
of any of the POG Multi-Game Products to its customers pursuant hereto and the
operation of its business.
(1.5) The Distributor agrees to indemnify, defend and hold the Company
harmless from and against any and all suits, claims, actions, demands,
liabilities, expenses and losses, including legal fees, incurred or accrued by
the Company at any time or from time to time resulting directly or indirectly
from the Distributor's breach or failure to perform or pay any of its
obligations or liabilities under Sections 1.2, 1.3 or 1.4 of this Agreement.
Upon the Company's request, the Distributor shall furnish the Company with
documentation reasonably sufficient to evidence its performance and payment of
all of its obligations and liabilities under Sections 1.2, 1.3 and 1.4 hereof.
(1.6) At all times during the term of this Agreement, the Distributor
shall use its best efforts to sell and to promote the sale of the POG Multi-Game
Products in the Territory. The Distributor shall obtain the Company's prior
approval of the truth and accuracy of all representations, claims and selling
statements concerning the POG Multi-Game Products contained in all promotional
or sales literature it develops at any time related to the POG Multi-Game
Products.
(1.7) NOT APPLICABLE. See Addendum 2
ARTICLE II--Minimum Purchases; Distributor's Discounts; Promotion
(2.1) The Distributor shall be required to purchase from the Company
the minimum purchases of the multi-game machines of the POG Multi-Game Products
(the "POG Machines") or POG Multi-Game Products set forth opposite each of the
following quarterly periods:
Period Minimum Purchases
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January 1, 1998 to 140 POG Machines or
December 31, 1998 $840,000 of POG Multi-Game
Products per quarterly period
January 1, 1999 to 250 POG Machines or
December 31, 1999 $1,400,000 of POG Multi-Game
Products per quarterly period
January 1, 2000 to 250 POG Machines or
December 31, 2000 $1,400,000 of POG Multi-Game
Products per quarterly period
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(2.2) The Distributor's failure to purchase from the Company in any
quarterly period the minimum purchases of POG Machines or POG Multi-Game
Products required for such quarterly period shall entitle the Company to
terminate this Agreement; provided, however, the amounts of actual purchases of
POG Multi-Game Products by the Distributor in any one quarterly period in excess
of required minimum purchases for such quarterly period shall be carried
forward, to the end of contract.
(2.3) The Company will sell the POG Machines to the Distributor at a
distributor's discounted price, as per Addendum 1.
(2.4) The Company will sell all other POG Multi-Game Product to the
Distributor at distributor's discounts below the Company's suggested retail
prices, the amount of which distributor's discounts shall be determined from
time to time by the Company.
(2.5) The Distributor acknowledges the Company has furnished it with a
schedule of its suggested retail prices for the POG Multi-Game Products in
effect on the date of this Agreement. The Company shall be entitled to change
its suggested retail prices for the POG Multi-Game Products as of the first day
of each January, April, July and October during the term hereof. No increase in
the Company's suggested retail prices shall be binding upon the Distributor
until the Company shall have given the Distributor at least thirty (30) days
prior written notice of such increase.
(2.6) If the Company makes available, at any time or from time to time
during the term of this Agreement, any discounts, incentives or promotions to
any of its distributors in the Territory with respect to their purchases of POG
Machines or POG Multi-Game Products from the Company, the application of which
discount, incentive or promotion would reduce the purchase price otherwise
payable by the Distributor under Section 2.3 or 2.4, the Company agrees to make
each such discount, incentive or promotion available to the Distributor on the
most favorable terms and conditions the Company makes it available to any of its
other distributors.
ARTICLE III--Orders and Deliveries
(3.1) All of the Distributor's orders for purchases of POG Multi-Game
Products shall be made upon the Company's standard terms and in accordance with
the terms and provisions of this Agreement. The Distributor acknowledges the
Company has furnished it with a copy of the form of purchase order in effect on
the date of this Agreement. Such purchase order contains the Company's standard
terms. In no event will the use by the Distributor of its own purchase order, or
the use by the Company of any form of acknowledgment or shipping document, be
effective to vary, alter or modify the terms and provisions of the Company's
standard terms or this Agreement; nor will such use have the effect of
substituting the provisions set forth on such form for the provisions contained
in the Company's standard terms or this Agreement.
(3.2) All purchase orders placed by the Distributor shall be promptly
acknowledged in writing by the Company. By this acknowledgment, or by another
communication, the Company shall notify the Distributor of the anticipated dates
of deliveries of POG Multi-Game Products
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covered by the purchase order. The Company shall exercise due diligence to
deliver POG Multi-Game Products in the quantities and on the dates specified by
the Distributor in its purchase orders, subject to delays as identified in
Sections 3.3 and 8.1 hereof.
(3.3) The Company shall give careful consideration to the Distributor's
purchase orders for purchase of POG Multi-Game Products. All such orders shall
be subject to the Company's acceptance. All accepted orders, regardless of
whether delivery dates are specified therein, shall be subject to delays or
failures in manufacture or in delivery due to any cause or event.
(3.4) Not Applicable. See Addendum 2.
(3.5) If any purchase order for POG Multi-Game Products is requested by
the Distributor to be increased at any time after it has been acknowledged by
the Company, the Company shall be entitled to charge the Distributor an
expediting fee with respect to the increased portion of the purchase order to
compensate it for additional costs and expenses it incurs or accrues in
producing such increased portion.
(3.6) Not later than thirty (30) days after the execution of this
Agreement, the Distributor shall deliver to the Company its forecast for
purchases of POG Multi-Game Products from the Company during the first six (6)
months of the first year of the term hereof. After the first six (6) months, the
Company and the Distributor shall cooperate to develop an estimate in writing of
the Distributor's requirements for each calendar quarter of the subsequent
eighteen (18) months. Thereafter, if the term of this Agreement is extended, the
Distributor shall furnish the Company with its further estimates of requirements
for an additional calendar quarter, so that the estimate is at all times
reflecting estimated requirements of POG Multi-Game Products for six (6)
calendar quarters.
(3.7) The Company hereby warrants that for ninety (90) days following
Installation of POG Multi-Game Products, it will replace any POG Multi-Game
Products that are defective in material or workmanship.
THE WARRANTY SET FORTH HEREIN IS IN LIEU OF ANY AND ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY, FITNESS, FITNESS FOR A PARTICULAR
PURPOSE, TITLE AND NON-INFRINGEMENT, WHICH ARE EXPRESSLY DISCLAIMED BY
THE COMPANY.
THE DISTRIBUTOR'S EXCLUSIVE REMEDY FOR DAMAGES ARISING OUT OF BREACH OF
WARRANTY WILL BE LIMITED TO REPAIR OR REPLACEMENT. IN NO EVENT SHALL
THE COMPANY BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, ANY LOSS OF
BUSINESS OR OTHER LOSS RESULTING FROM USE OR MISUSE OF ANY POG
MULTI-GAME PRODUCTS.
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ARTICLE IV-Service, Maintenance, Repair and Upgrade
At all times during the term hereof, the Distributor shall, in addition
to its other duties and responsibilities under this Agreement, use its best
efforts to service, maintain, repair and upgrade and to promote the servicing,
maintenance, repair and upgrading of all of the Company's products sold, leased
or distributed by it throughout the Territory whether before or during the term
hereof. In this regard, the Distributor agrees (i) to maintain an inventory of
spare and replacement parts and (ii) to employ service, repair and maintenance
personnel, in each case, at all times adequate to perform its obligations
specified in the preceding sentence.
ARTICLE V--Representations; Covenants; Indemnification
(5.1) The Distributor hereby represents and warrants to the Company
that it has obtained and holds all licenses, permits, certificates, applications
or other documentation necessary to permit it to perform its duties hereunder
and is duly qualified to transact all business contemplated hereunder in the
Territory. The Distributor further represents and warrants that its performance
and observance of this Agreement will not violate any applicable law and will
not violate any agreement to which the Distributor is a party.
(5.2) The Distributor hereby covenants and agrees that it shall comply,
at all times, with all applicable laws and regulations of all governmental
jurisdictions and agencies governing its performance and observance of this
Agreement. Without limiting the generality of the preceding sentence,
Distributor shall be responsible for and shall pay all taxes and other amounts
payable at any time in respect of the POG Multi-Game Products and POG Machines
imposed or assessed by any governmental jurisdiction or agency and agrees to
furnish to the Company, upon request, reasonable evidence of its continuing
compliance with the provisions hereof.
(5.3) The Distributor hereby agrees to indemnify, defend and hold the
Company harmless from and against any and all suits, claims, actions, demands,
liabilities, expenses and losses, including legal fees, incurred or accrued by
the Company at any time or from time to time resulting directly or indirectly
from the distributor's performance hereunder, including, without limitation,
packaging, handling, storage or selling of the POG Machines or POG Multi-Game
Products.
ARTICLE VI--Term; Renewal; Termination
(6.1) The term of this Agreement shall commence on the date hereof and
shall expire on December 31, 2000.
(6.2) The term of this Agreement shall automatically be renewed for two
successive terms of one (1) year each unless either party shall give written
notice to the other of its decision not to renew at least 120 days prior to
December 31,2000.
(6.3) In the event that any of the terms or provisions hereof are
incurably breached by the Distributor, the Company may immediately terminate
this Agreement by written notice. In the event of any other breach, including
the failure to meet the minimum requirements set forth in
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Section 2.1, the Company may, subject to Section 2.2, terminate this Agreement
by the giving of written notice to the Distributor that the Agreement will
terminate on the thirtieth (30th) day from notice unless cure is sooner
effected. For purposes of this Agreement, an "incurable" breach shall be
committed when (i) the Distributor is dissolved, liquidated, discontinued,
becomes insolvent, or when any proceeding is filed against the Distributor or
commenced by the Distributor under any bankruptcy, insolvency or debtor relief
laws; or (ii) the Distributor shall commit any act of fraud, dishonesty,
unethical conduct, moral turpitude or similar act of misconduct injurious to the
business interests of the Company.
(6.4) In the event of termination for any reason, the rights of the
Distributor to sell POG Multi-Game Products with respect to POG Multi-Game
Products already sold or delivered to the Distributor shall remain unprejudiced
and the Distributor may complete the sales of such POG Multi-Game Products. Upon
termination of this Agreement for any reason, the Company shall be required to
deliver and the Distributor shall be required to accept only the orders of POG
Multi-Game Products already ordered from the Company as the Distributor shall
then be under an obligation to sell or deliver.
ARTICLE VII--Marks
The Distributor is hereby granted a non-exclusive, non-transferable
license to use the trademarks of the Company listed on Exhibit A, as the same
may be amended, supplemented or otherwise modified from time to time (the
"Marks"). Such Marks are licensed to the Distributor by the Company for use
solely in connection with the marketing, advertising and promoting of POG
Multi-Game Products in the Territory. The Distributor shall use the Marks only
in accordance with the policies of the Company recording the use of trademarks
as established by the Company from time to time. All rights of the Distributor
to use the Marks shall cease immediately upon expiration or earlier termination
of this Agreement for any reason whatsoever. The Marks shall remain the sole and
exclusive property of the Company at all times and the Distributor agrees that
it will not challenge the Company's ownership of the Marks at any time. The
Distributor shall observe the same quality control standards as are generally
specified by the Company for observance by its other distributors and actual
practice by such other distributors and the Company shall have the right to
monitor the Distributor's compliance with such quality control standards.
ARTICLE VIII--Miscellaneous
(8.1) Neither party shall be liable for nonperformance or delay in
performance due to any act of God; act, regulation or law of any government;
war; riot; civil commotion; destruction of production facilities or materials by
fire, earthquake or storm; strike; labor disturbances; epidemic; failure of
public utilities or common carriers; or any limitation, requirement or
prohibition imposed or required by any governmental agency having jurisdiction
over the subject matter of this Agreement.
(8.2) This Agreement represents the entire agreement between the
parties concerning the subject matter hereof and supersedes all prior and
contemporaneous negotiations, discussions and
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other agreements. No delay on the part of the Company or the Distributor in
exercising any of their respective rights hereunder or failure to exercise the
same shall be deemed to operate as a waiver of such rights except in the
specific instance in which given. None of the terms or provisions of this
Agreement shall be held to have been waived by any act or knowledge of the
Company or the Distributor, their agents or employees, and the terms and
provisions of this Agreement may be changed, waived or varied only by a
statement in writing signed by all parties hereto.
(8.3) (A) Any notice, consent, authorization, communication or approval
required to be given hereunder shall be effected by: (i) depositing it in
writing in Registered or Certified Mail, or express courier with the requisite
postage affixed, addressed to the party notified, or (ii) personally delivering
it in writing to the party notified, at the address of such party herein below
set forth or at such other latest address as may hereafter be given by such
party in writing to the other for notice:
To: Leisure Time Technology, Inc.
0000-X Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
President
To:
[Distributor]
Sao Paulo Games Comercial LTDA
Rua Xxxxxxx Xxxxxxxx, 733 4o Ander Conj 4A
Bairro Itaim BIBI CEP 04534-012
Attention: Xxxxxxx Xxxxxx Xxxx
President
(B) Unless otherwise specified in this Agreement, the date of
such deposit delivery, respectively, shall be the date of such notice, consent,
authorization, communication or approval.
(8.4) While the limitations and restrictions imposed by the parties
herein are considered by the parties to be reasonable in all the circumstances,
it is recognized that restrictions of the nature in question may fail for
technical reasons unforeseen, and, accordingly, if any of such restrictions
shall be adjudged to be void, but would be valid if part of the wording thereof
were deleted or the period, if any, thereof reduced or the range of activities
or area dealt with thereby reduced in scope, said restriction shall apply with
such modifications as may be necessary to make it valid and effective, provided,
however, that this Agreement is not hereby rendered fundamentally different in
its content or effect.
(8.5) The Distributor shall not assign or transfer, partially or
entirely, any of its rights or interest or obligations under this Agreement,
including through the sale of the Distributor's business or a sale of the
majority of the stock of the Distributor, without the prior written consent of
the Company, which consent shall not be unreasonably withheld.
(8.6) This Agreement shall be governed by and interpreted in accordance
with the laws of
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the State of Georgia.
(8.7) The headings for the Articles of this Agreement are to facilitate
reference only, do not form a part of this Agreement and shall not in any way
affect the interpretation hereof.
(8.8) Upon execution of this Agreement, neither party shall give any
public notice or make any press announcement regarding this Agreement except
such notice or press announcement as has been jointly developed and agreed upon
by the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
LEISURE TIME TECHNOLOGY, INC.
-----------------------------------------
By: /s/
------------------------------- -----------------------------------------
Title:
---------------------------- -----------------------------------------
Date:
----------------------------- -----------------------------------------
Sao Paulo Gamers Comercial LTDA:
By: /s/
----------------------------------------------------------------------------
Xxxxxxxx Xxxxxx Dais, President
Dated:
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By: /s/
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Xxxx Xxxxx Xxxxxxxx Xxxx Xxxxxxxxxx, Director
Dated:
-------------------------------------------------------------------------
By: /s/
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Artur Xxxx Xxxxxxx De Xxxxxxxx Xxxx, Director
Dated:
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i cXo s
HG*ee s Addendum 1. Distribution Agreement between Sao
Paulol!Comercial, LTDA and Leisure Time Technology, Inc.
1.) Price: $5,300.00 per machine FOB, best port of call east coast USA. Includes
the Cash Code model Amazing Brazil plus xxxx exceptor, Azkoyen model #60k Coin
exceptor, Coin head with plunger, LCD progressive display and Asashi Seiko coin
xxxxxx. 2.) Price: $300.00 per Round top accessory, includes glass, inside
assembly and necessary mounting brackets.
m WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date
written herein.
Date: St3/o/ / fig--
Sao Paulo Games ComerciLpA:
By ~(L)~tt
Fer~iando Mw 5,~, Preslde e
Date:( / /
By: tj
Xxxx Paulo eixe Xxx Xxxx Xxxxxxxxxx, Director
Date: A 9 - >
' ~ose va ente 1 b ( )liveira Caio, Director
oZ e} 3~
b. .9 o
Date: j
AMENDED AND RESTATED
ASSET PURClIASE AGREEMENT
THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT ("Agreement") dated
as of January 31, 1997 is between LEISURE TIME CASINOS & RESORTS, INC., a
Colorado corporation ("Buyer"), and STAR OF CINCINNATI, INC., formerly known as
STAR CRUISES OF CINCINNATI, INC., an Ohio corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Buyer and Seller are parties to the Asset Purchase Agreement
dated as of January 25, 1996 (including all amendments, supplements or other
modifications thereto whether
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verbal or in writing at any time made prior to the date of this Agreement, the
"Asset Purchase Agreement"); and
WHEREAS, Buyer and Seller desire to enter into this Agreement for the
purpose of amending and restating the Asset Purchase Agreement.
NOW THEREFORE, in consideration of the foregoing recitals, the
mutuality of the terms, covenants and conditions of this Agreement and other
good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged, the parties agree to amend and restate the Asset Purchase
Agreement to read and provide as follows:
1. Purchase and Sale. Buyer agrees to purchase from Seller, and Seller
agrees to sell, transfer, convey, assign and deliver to Buyer at the Closing (as
such term is defined below), all of the following assets (the "Assets"):
1.1 The whole of the M/V "Star of Cincinnati", f/k/a "Star of Detroit",
United States Coast Guard ("USCG") Official No. 671576, together with all of her
tackle, apparel, furniture, fittings, tools, spare parts, supplies, equipment,
boats, engines, machinery, anchors, chains, electronics and all other
appurtenances and accessories thereunto appertaining and belonging (the
"Vessel").
1.2 The whole of the "Star Landing", f/k/a "Lively Xxxx", Xxxx Xx.
000000, together with all of her tackle, apparel, furniture, fittings, tools,
spare parts, supplies, equipment, boats, machinery, anchors, chains, electronics
and all other appurtenances and accessories thereunto appertaining and belonging
(the "Star Landing").
1.3 All right, title and interest of Seller in and to "Star of
Cincinnati", "Star Landing" and all other trade names and trademarks used by
Seller in its former river/oat
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excursion dining cruise business headquartered in Cincinnati, Ohio and the right
to use the name "Star" and all derivatives thereof.
1.4 All plans, logs, reports, data, notes, instruction books and other
information pertaining to the Vessel or the Star Landing.
1.5 Any other tangible and intangible assets pertaining to the Vessel
or the Star Landing, including, without limitation, all licenses, permits,
approvals, consents and certifications .
2. Purchase Price. In consideration of the sale, transfer, conveyance,
and assignment of the Assets to Buyer, Buyer shall pay to Seller at the Closing
the sum of $2,550,000 in cash (the "Purchase Price") by wire transfer of
immediately available funds.
3. No Mortgages. Liens. Rights or Encumbrances. The Assets are being
sold by Seller and being purchased by Buyer free and clear of all mortgages,
liens, rights and other encumbrances and Buyer is not assuming and shall not
otherwise be liable, directly or indirectly, for any of
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Seller's contracts, agreements, leases, debts, obligations or liabilities
whatsoever in respect of the Assets.
4. Closing.
4.1 The closing of Buyer's purchase of the Assets contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxxx, Xxxxxxxx &
Klekarnp, P.L.L., 1800 Provident Tower, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxx, commencing at 10:00 a.m. local time on a date mutually agreeable to the
parties on or before February 3, 1997 or at such later time and date as the
parties shall hereafter agree upon (the "Closing Date").
4.2 Seller shall deliver possession of (i) the Vessel to Buyer at its
current location in Panama City, Florida and (ii) the Star Landing to Buyer at
its current location in Dayton, Kentucky, each safely afloat. Possession of the
other Assets shall be delivered by Seller to Buyer at Cincinnati, Ohio or such
other location mutually agreeable to the parties, immediately after the
consummation of the Closing.
4.3 Except for Seller completing repairs to the Vessel's propellers,
starboard shaft and gears attributable to the Vessel having struck a submerged
object on or about February 3, 1996, the Vessel shall, upon Closing, be sold "AS
IS, WHERE IS" without drydocking. If all of such repairs to the Vessel shall not
have been completed before the Closing Date, the Closing will still occur and an
escrow will be established at the Closing with a portion of the Purchase Price
to cover the cost of the uncompleted repairs. The Star Landing shall, upon
Closing, be sold "AS IS, WHERE IS" without drydocking.
5. Seller's Warranties and Representations. Seller hereby represents
and warrants to Buyer (which representations and warranties shall survive the
Closing) as follows:
5.1 Corporate Status of Seller. Seller is a corporation duly organized
and validly existing in good standing under the laws of Ohio and has the
corporate power and authority to sell the Assets under this Agreement. Seller
was formerly known as Star Cruises of Cincinnati, Inc.
5.2 Authorization of Transaction. The execution, delivery, and
performance of this Agreement by Seller has been duly and validly authorized by
its board of directors and the shareholders of Seller and Seller has taken all
necessary corporate action required for the authorization and approval of this
Agreement. This Agreement is binding upon and enforceable against Seller in
accordance with its terms.
5.3 Performance of Agreement. The execution and delivery of this
Agreement by Seller and the consummation of the transactions contemplated herein
will not result in the breach of any of the terms, covenants or conditions of,
or constitute a default with respect to, the Articles of Incorporation or the
ByLaws/Regulations of Seller or any contract, agreement, indenture, note,
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bond, license or other instrument or obligation to which the Seller is now a
party or by which the Seller or any of its property or assets, including the
Assets, may be bound or affected or, to Seller's knowledge, violate any law or
any rule or regulation of any administrative agency or governmental body or any
order, writ, injunction or decree of any court, administrative body or
governmental body applicable to Seller or the Assets.
5.4 Title to Assets. Seller is the true and lawful owner of all of the
Assets. On the Closing Date, title to and ownership of the Assets shall be
transferred to Buyer free and clear of all mortgages, liens, rights and other
encumbrances, including all indebtedness and other amounts owed to Comerica
Bank, Detroit, Michigan, and all maritime and tax liens, or any other debts,
obligations or liabilities, including, without limitation, the claims of
customers, vendors or governmental authorities whatsoever relating to the
Assets.
5.5 Litigation. Except for the litigation now pending in the United
States District Court for the Northern District of Florida, Panarna City
Division, entitled Comerica Bank v. M/V Star of Cincinnati, being Case No.
5:96CV212/RV, which litigation shall be settled or otherwise dismissed with
prejudice on or before the Closing, there is no existing or, to the best of
Seller's knowledge, threatened action, suit or proceeding, either legal,
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or administrative, affecting the Assets or any part thereof in any court or by
any federal, state, county or municipal department, commission, board, bureau,
agency or other governmental authority.
5.6 Violation of Laws. The Seller is not in violation of any law, rule,
regulation or court or administrative orders or processes applicable to it or
the Assets.
5.7 Solvency of Seller. The Seller is not insolvent and will not be
rendered insolvent as a result of the consummation of the transactions
contemplated by this Agreement.
5.8 Broker. At the Closing, Seller agrees to pay to Coastal Marine the
full amount of any and all fees, commissions and other amounts due and payable
to Coastal Marine as a result of the consummation of the transactions provided
for in this Agreement. Buyer shall have no liability or obligation to pay any
fees, commissions or other amounts due or payable to any broker, finder or
agent, including, without limitation, Coastal Marine, with respect to this
Agreement or the transactions contemplated hereby.
5.9 Environmental Matters. (a) Except for fuel and other petrochemical
products used or useful in the operation or maintenance of the Vessel or the
Star Landing, the Assets are, as of the date of this Agreement, and will be, as
of the Closing Date, free and clear of any and all Hazardous Materials (as such
term is defined below).
(b) Except for the flooding of the Star Landing on or about May 13,
1996 and the Release of Hazardous Materials in the environment as a result of
such flooding (the "May 1996 Release"), Seller has not caused or suffered to
occur any Release (as such term is defined below) of any Hazardous Materials
with respect to the Assets at any time prior to the date hereof.
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(c) The term "Hazardous Materials" as used in this Agreement shall mean
(i) any substance, material or waste, the generation, handling, storage,
treatment or disposal of which is regulated by any federal, state or other
governmental authority in any jurisdiction in which Seller owned, leased or
operated any of the Assets or forms the basis of liability under any federal,
state or other environmental law, rule or regulation, including any material or
substance which is either (A) defined as, (B) included in the definition,
listing or identification of, or (C) otherwise regulated as, a "solid waste,"
"hazardous waste," "hazardous material," "hazardous substance," "extremely
hazardous waste" or "restricted hazardous waste" or other similar term or phrase
under any environmental laws, or (ii) petroleum or any fraction or by-product
thereof, asbestos, polychlorinated biphenyls, or radioactive substances.
(d) The term "Release" as used in this Agreement shall mean any
release, spill, emission, leaking, pumping, pouring, emptying, discharging,
injecting, escaping, dumping, disposing, leaching or migration of Hazardous
Materials in the indoor or outdoor environment by Seller (or by a person under
Seller's direction or control), including the movement of a Hazardous Material
through or in the air, soil, surface water, ground water or property.
(e) The May 1996 Release was cleaned up by Heritage Environmental
Services, Inc. on behalf of Seller in accordance with the requirements of the
United States Coast Guard. Seller shall cause Heritage Environmental Services,
Inc. to deliver to Buyer a certificate to such effect at or prior to the
Closing. Such certificate shall be in form and substance reasonably acceptable
to Buyer.
6. Representations and Warranties of Buver. Buyer represents and
warrants to Seller (which representations and warranties shall survive the
Closing) as follows:
6.1 Corporate Status of Buver. Buyer is a corporation duly organized
and validly existing and in good standing under the laws of the State of
Colorado and has the corporate power and authority to purchase the Assets under
this Agreement.
6.2 Authorization of Transaction. The execution, delivery and
performance of this Agreement by Buyer has been duly and validly authorized by
its board of directors and Buyer has taken all necessary corporate action
required for the authorization and approval of this Agreement. This Agreement is
binding upon and enforceable against Buyer in accordance with its terms.
6.3 Performance of Agreement. The execution and delivery of this
Agreement by Buyer and the consummation of the transactions contemplated herein
will not result in the breach of any of the terms, covenants or conditions of,
or constitute a default with respect to, the Articles of Incorporation or the
Bylaws/Regulations of Buyer or any contract, agreement, indenture, note, bond,
license or other instrument or obligation to which Buyer is now a party or by
which Buyer or any of its property or assets may be bound or affected or, to
Buyer's knowledge, violate any law or any rule or regulation of any
administrative agency or governmental body or any order, writ, injunction or
decree of any court, administrative body or governmental body applicable to
Buyer.
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7. Tax Matters. Buyer shall be responsible for the payment of any and
all sales, use, transfer or delivery taxes, assessments, fees or duties of any
kind arising out of the sale, transfer or delivery of the Assets levied or
imposed by any federal, state or local government or taxing authority. If the
levy or imposition of any such tax, assessment, fee or duty shall be made upon
the Seller, Buyer shall pay such amount to Seller upon demand of the amount
thereof. Seller shall promptly notify Buyer thereof and Buyer shall have the
right to contest any such tax, assessment, charge, fee or duty.
8. Bulk Sales. Buyer and Seller agree that the bulk sales laws are
inapplicable to the transactions contemplated by this Agreement.
9. Risk of Loss. The risk of loss to any of the Assets being purchased
shall remain with Seller until Closing pursuant to Section 4.2. If any Asset
sold hereunder shall be substantially damaged or destroyed by fire, casualty or
other cause prior to the Closing, Seller shall immediately notify Buyer thereof
and furnish to Buyer a written statement of the amount of the insurance, if any,
payable on account thereof. For purposes of this Agreement, Assets shall be
deemed to be substantially damaged if the cost of replacement or repair of all
damages prior to completion of this transaction will exceed $200,000. Within 10
days after receipt of notice of any such damage or destruction, Buyer may
terminate this Agreement. If any Asset is not substantially damaged, it shall
be promptly repaired or replaced at Seller's expense prior to the Closing and
the Closing Date shall be extended, if necessary, for a reasonable period in
order to permit such repairs or replacement.
10. Conditions to Obligations of Buyer to Close. The obligation of
Buyer to consummate this Agreement shall be subject to the following conditions,
any one or more of which may be waived by Buyer:
10.1 Seller shall have delivered a Xxxx or Bills of Sale for the
Assets, in form and substance satisfactory to Buyer, free and clear from all
liens, charges and encumbrances whatsoever.
10.2 Seller shall have obtained an Abstract of Title from the United
States Coast Guard covering the Vessel. The Abstract of Title shall be dated as
of a recent date prior to the Closing Date reasonably accepted to Buyer. Seller
shall have delivered the original Abstract of Title and Certificate of
Documentation for the Vessel to Buyer.
10.3 Seller shall have delivered to Buyer or shall have caused to be
delivered to Buyer documentation in form and substance reasonably acceptable to
Buyer and its legal counsel evidencing and providing for the satisfaction,
termination, release and discharge of all mortgages, liens, claims and other
encumbrances on, to or in the Assets except for the Preferred Mortgages dated
May 28, 1992 granted by Seller to Xxxxx X. Xxxxx, Trustee, securing indebtedness
in the aggregate amount of $3,000,000 (the "Xxxxx Mortgages").
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10.4 Seller and Buyer shall have entered into an agreement (the "Xxxxx
Agreement") with Xxxxx X. Xxxxx, Trustee, whereby in consideration of Buyer's
issuance to Xxxxx X. Xxxxx, Trustee, of 150,000 unregistered shares of Buyer's
Common Stock, Xxxxx X. Xxxxx, Trustee, shall execute and deliver to Buyer
documentation in form and substance reasonably acceptable to Buyer and its legal
counsel evidencing and providing for the satisfaction, termination, release and
discharge of (a) the Xxxxx Mortgages referred to in Section 10.3 and described
in the Abstract of Title for the M/V Star of Cincinnati referred to in Section
10.2 and (b) all indebtedness secured by the Xxxxx Mortgages. The Xxxxx
Agreement shall be in form and substance reasonably acceptable to Seller and its
legal counsel and also to Buyer and its legal counsel. The transactions and
deliveries of documentation and shares of Buyer's Cornmon Stock under the Xxxxx
Agreement shall close and occur simultaneously with the closing of this
Agreement.
10.5 Prior to the Closing of this Agreement, Seller shall have assigned
to Buyer and Seller shall have caused Comerica Bank to have assigned to Buyer
all of their respective rights, as insureds, loss payees or otherwise, in and to
all insurance proceeds due or to become due with respect to claims for known or
unknown damages that are allocable to insurance policies covering the Vessel
and the Star Landing. The form and substance of each such assignment shall be
reasonably acceptable to Buyer and its legal counsel. The assignment from
Comerica Bank shall be effective immediately upon full payment to Comerica Bank
of all amounts payable to it by Seller secured by the Assets.
10.6 Seller shall have conducted searches of the necessary offices
where uniform commercial code filings are made and shall have determined that
the Assets are free and clear of all mortgages, liens, claims and other
encumbrances.
10.7 Seller shall have caused Heritage Environmental Services, Inc. to
have delivered to Buyer the certificate referred to in Section 5.9(e).
10.8 The representations and warranties made by Seller herein shall be
deemed to be repeated on the Closing Date with the same force and effect as if
made on such date and shall be true and correct in all respects as though made
on and as of the Closing Date.
10.9 Each and all of the covenants and agreements of Seller to be
performed or complied with prior to or on the Closing Date shall have been duly
performed or complied with by Seller. - 8
10.10 All necessary corporate action shall have been taken by Seller's
board of directors and shareholders to authorize the execution, delivery and
performance of this Agreement.
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10.11 The Assets shall be in as good a condition as they were on the
date of execution of this Agreement, reasonable wear and tear excepted, subject
only to the provisions of Section 4.3.
10.12 Seller shall have delivered such resolutions, certificates and
other documents reasonably requested by Buyer or Buyer's counsel.
11. Conditions to Obligations of Seller to Close. The obligation of
Seller to consummate this Agreement shall be subject to the following
conditions, any one or more which may be waived by Seller:
11.1 The representations and warranties made by Buyer herein shall be
deemed to be repeated on the Closing Date with the same force and effect as if
made on such date, and shall be true and correct in all respects as though made
on and as of the Closing Date.
11.2 All necessary corporate action shall have been taken by Buyer's
board of directors to authorize the execution, delivery and performance of this
Agreement.
11.3 Buyer shall have delivered such resolutions, certificates and
other documents reasonably requested by Seller or Seller's counsel.
12. Indemnification: Setoff and Noncompetition.
12.1 Buyer shall indemnify and hold Seller, Xxxxxxx X. Xxxxx and R.
Xxxxxx Xxxx harmless from and against any cost or expense, including attorneys'
fees and expenses, arising out of or relating to:
(a) all debts, liabilities and obligations of Buyer of any nature
arising from Buyer's ownership or use of the Assets after the Closing Date; and
(b) any liability, loss, claim, damage or deficiency resulting directly
or indirectly from any misrepresentation, breach of warranty or nonfulfillment
of any term, covenant or condition on the part of Buyer under this Agreement or
from any misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished by Buyer hereunder.
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12.2 Seller shall indemnify and hold Buyer harmless from and against
any cost and expense, including attorneys' fees and expenses, arising out of or
relating to:
(a) all debts, liabilities and obligations of Seller of any nature
arising from the Assets, whether known or unknown, incurred on or prior to the
Closing Date; and
(b) any liability, loss, claim, damage or deficiency resulting directly
or indirectly from any misrepresentation, breach of warranty or nonfulfillment
of any term, covenant or condition on the part of Seller under this Agreement or
from any misrepresentation in or omission from any
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certificate or other instrument furnished or to be furnished by Buyer hereunder.
12.3 If either party shall suffer or incur any liability, loss, claim,
damage or deficiency resulting directly or indirectly from any
misrepresentation, breach of warranty or nonfulfillment of any term, covenant or
condition on the part of the other party under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by the other party, then, in each such case, such
party shall, in addition to the exercise of all of its other rights and remedies
under applicable law, be entitled, with or without notice to the other party, to
setoff against all amounts then or thereafter owed by it to the other party the
full and absolute amount of all such liabilities, losses, claims, damages or
deficiencies suffered or incurred by it.
12.4 (a) Seller agrees that, for a period of five (5) years following
the Closing Date, neither Seller or any corporation, partnership or other entity
which is affiliated with Seller nor Xxxxxxx X. Xxxxx or R. Xxxxxx Xxxx or any
corporation, partnership or other entity which is controlled by Xxxxxxx X. Xxxxx
or R. Xxxxxx Xxxx (collectively, the "Non-Compete Parties") shall engage in the
excursion dining and/or gaming cruise business in direct competition with
Buyer's operation of the Vessel in the excursion dining and/or gaming cruise
business, except for the excursion dining and/or gaming cruise business as
operated by R. Xxxxxx Xxxx in Key West, Florida on the date of this Agreement
(the foregoing covenant is hereinafter referred to as the "Non-Compete
Covenant").
(b) Buyer acknowledges and agrees that the ownership, operation and/or
management of marinas and/or marina facilities by any of the Non-Compete Parties
shall not constitute direct competition in breach of the Non-Compete Covenant
even if a vessel ("Competing Vessel") engaged in direct competition with Buyer's
operation of the Vessel in the excursion dining and/or gaming cruise business is
docked or moored at/in any marina or marina facility owned, operated or managed
by any of the Non-Compete Parties so long as none of the Non-Compete Parties
directly or indirectly owns (through equity ownership or otherwise), operates or
manages the Competing Vessel.
(c) Buyer further acknowledges and agrees that the ownership, operation
and/or management of hotels, motels, restaurants, casinos and other hospitality,
dining and gambling facilities by any of the Non-Compete Parties shall not
constitute direct competition in breach of the Non-Compete Covenant so long as
any such facility engaged in direct competition with Buyer's operation of the
Vessel in the excursion dining and/or gaming cruise business is located on land
and permanently affixed to land.
(d) In furtherance of compliance with the Non-Compete Covenant by the
NonCompete Parties, Buyer shall notify Seller in writing as to the location of
the Vessel's dockage or moorage at the time Buyer first places the Vessel in the
excursion dining and/or gaming cruise business and on each subsequent occasion,
if any, thereafter Buyer moves the Vessel to a different place of dockage or
moorage and each such notification shall be deemed to constitute notice thereof
to all of the
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Non-Compete Parties; provided, however, Buyer's failure to so notify Seller at
any time shall not relieve any of the Non-Compete Parties from their obligation
to comply with the Non-Compete Covenant if, at any time during which direct
competition in breach of the Non-Compete Covenant shall occur, the breaching
Non-Compete Party or Parties shall otherwise have actual knowledge of the
location of the dockage or moorage of the Vessel.
(e) Notwithstanding the foregoing provisions of this Section 12.4, if,
at the time Buyer first places the Vessel in business and on each subsequent
occasion, if any, thereafter Buyer moves the Vessel to a different place of
dockage or moorage, any of the Non-Compete Parties are already engaged in a
business at such location ("Pre-Existing Business") that would constitute a
breach of the Non-Compete Covenant after Buyer places the Vessel in business at
such location, the Pre-Existing Business shall not be deemed to constitute a
breach of the NonCompete Covenant and the Non-Compete Parties shall thereafter
be entitled to engage in such business at such location and shall not be limited
or restricted by the Non-Compete Covenant.
13. Termination. The transactions contemplated by this Agreement may be
terminated on or before the Closing Date as follows: (a) by mutual written
agreement of each of the parties hereto; (b) by Buyer or Seller if any
representation or warranty made herein by the other was untrue or false in any
material respect as of the date given or made, (c) by Buyer or Seller if any
condition precedent to its obligation to close has not occurred and cannot be
satisfied within a reasonable period of time. In the event this Agreement is
terminated pursuant to any of the foregoing provisions, except as set forth
below, this Agreement shall forthwith become wholly void and of no force or
effect and there shall be no liability on the part of the parties hereto. If for
any reason on the Closing Date there has been non-fulfillment of any undertaking
by or
,
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condition precedent for any party not waived in writing by the party in whose
favor such undertaking or condition runs, the party in whose favor such
undertaking or condition runs may refuse to consummate the transactions
contemplated by this Agreement without any liability or obligation on its part
whatsoever. In the event of any non-fulfillment of an undertaking by Buyer or by
Seller, the refusal by Buyer or by Seller to consummate the transactions hereby
contemplated because of non-fulfillment by the other party shall not constitute
an election of remedies by Buyer or by Seller and Buyer or Seller may pursue
whatever legal rights and remedies they may have at law or in equity by reason
of such non-fulfillment or failure by Buyer or Seller.
14. Expenses. Buyer and Seller shall each bear their own legal,
accounting, appraisal, and other expenses in connection with the negotiation,
preparation and consummation of this Agreement and transactions contemplated
hereunder.
15. Covenants Pending Closing. Seller agrees to cooperate with Buyer so
as to insure a smooth and orderly transition of the transfer of the Assets to
Buyer. Seller shall insure that Buyer
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has access to the Vessel and the Star Landing, including ingress and egress
rights. Between the date of this Agreement and the Closing Date, Seller shall
not, without the prior written consent of Buyer, (a) enter into any other
agreement or incur any other obligation with respect to the Assets; or (b) sell,
abandon or otherwise dispose of or pledge, mortgage or encumber any of the
Assets.
16. Further Assurances. From time to time after the date hereof, at
Buyer's request and without further consideration, Seller shall execute and
deliver such instruments of conveyance, assignment and transfer and take such
other actions as Buyer may reasonably require to enable Seller to more
effectively transfer to Buyer and to put Buyer in possession of the Assets.
17. Survival of Representations and Warranties. The representations and
warranties set forth herein shall survive the Closing.
18. Notices. Whenever it is provided in this Agreement that any notice
or other communication shall or may be given to or served upon a party by the
other party, or whenever a party desires to give or serve upon the other party
any communication with respect to this Agreement, each such notice or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt or three days
after deposit in the United States Mail, registered or certified mail, return
receipt requested, with proper postage prepaid, (b) upon transmission, when sent
by telecopy or other similar facsimile transmission (with such telecopy or
facsimile confirmed by telecopy answerback) or by delivery of a copy by personal
delivery, (c) one (1) business day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number as follows:
If to Seller at:
With a copy to:
If to Buyer at:
With a copy to:
Star of Cincinnati, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No. (000) 000-0000
Webb, Hoskins, Xxxxxx & Strafford, P.S.C.
3010 Lexington Financial Center
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000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: R. Xxxxxx Xxxx, Esq.
Facsimile No. (000) 000-0000
Leisure Time Casinos & Resorts, Inc.
0000 Xxxxxx Xxxx
Xxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile No. (000) 000-0000
Xxxxxxx, Xxxxxxxx & Xxxxxxx, P.L.L.
1800 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile No. (000) 000-0000
19. Amendment. This Agreement may not be amended or terminated orally,
but may only be amended by an agreement in writing signed by the party against
whom enforcement of any waiver, amendment, modification, extension, discharge or
termination is sought.
20. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and, upon
Closing, will supersede and replace all prior agreements, understandings and
negotiations, oral and written, between the parties hereto with respect to the
subject matter hereof, including, without limitation, (i) the
. ,.
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Asset Purchase Agreement, (ii) the letter agreement dated January 25, 1996 from
Xxxx X. Xxxxxxx on behalf of Buyer to Xxxxxxx X. Xxxxx on behalf of Seller (the
"1/25/96 Letter Agreement"), and (iii) the agreement entitled "REVISED AGREEMENT
FOR PURCHASE OF THE STAR OF CINCINNATI AND STAR LANDING" dated December 21, 1996
between the parties (the "12/21/96 Terms Agreement").
Effective upon Closing, each of the parties hereby forever waives,
releases and discharges and agrees to hold the other party and each of its
shareholders, directors, officers, employees, agents and independent contractors
(the "Released Parties") harmless from and against any and all claims, rights,
suits or liabilities arising directly or indirectly from or by reason of the
Asset Purchase Agreement, the 1/25/96 Letter Agreement and the 12/21/96 Terms
Agreement, whether known or unknown as of the date hereof. Effective upon
Closing, each of the parties hereby covenants and agrees not to xxx any of the
Released Parties with respect to any of such matters.
Effective upon Closing, each of the parties hereby further covenants
and agrees that it shall be solely responsible for and shall bear all of its
legal, accounting, appraisal and other expenses
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paid, incurred or accrued by it under or as a result of the Asset Purchase
Agreement, the 1/25/96 Letter Agreement and the 12/21/96 Terms Agreement.
21. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one -and the same instrument.
22. Assignability, Neither this Agreement nor any of the parties'
rights hereunder shall be assignable by any party hereto without the prior
written consent of the other party hereto, except that Buyer shall be entitled
to assign its rights hereunder to any wholly-owned subsidiary of Buyer and
Seller shall be entitled to assign or transfer the Purchase Price or the Stock
Consideration to any of its shareholders ("Permitted Transfers"). If any
Permitted Transfer shall occur, the assigning or transferring party shall give
written notice thereof to the other party.
23. Governing Law. This Agreement and the performance hereunder shall
be governed by and construed in accordance with the laws of the State of Ohio.
24. Waiver. Any consent by any party, or waiver of, any breach of any
provision of this Agreement by the other, whether express or implied, shall not
constitute a consent, waiver of, or excuse for any breach of any other provision
or subsequent breach of this - 14
provision. Any waiver of any terms of this Agreement shall be in a writing
executed by the waiving party.
25. Construction. The parties acknowledge that this Agreement was
initially prepared by legal counsel for Buyer and that both parties and their
respective legal counsel have read and negotiated the language used herein. The
parties agree that because both parties participated in negotiating and drafting
this Agreement, no rule of construction shall apply to this Agreement which
construes ambiguous language in favor of or against any party by reason of the
party's role in drafting this Agreement.
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Amended and Restated Asset Purchase Agreement on the date first above written.
STAR OF CINCINNATI, INC.
B>g 4~/>9
Name: /CAfARl(pound)S ~, AESSE
Title C*ZA{RRAU
.
LEISURE TIME CASINOS & RESORTS, INC. _
( Name:;
