Exhibit 2.2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into on the 31st day of July, 2000, by and among PENN NATIONAL GAMING, INC., a
Pennsylvania corporation ("Purchaser"), and XXX X. XXXXXXX ("Xxxxxxx"), XXXXXX
X. XXXXXX ("Xxxxxx") and XXXXX X. XXXXXX ("Xxxxxx") (Xxxxxxx, Xxxxxx and Xxxxxx
are sometimes hereinafter referred to individually as "Seller" and collectively
as "Sellers") (the Purchaser and the Sellers are hereinafter sometimes
separately referred to as "Party" and collectively as "Parties").
WHEREAS, the Sellers own beneficially and legally 39.81% of all of the
issued and outstanding shares ("Sellers' Shares") of capital stock of Louisiana
Casino Cruises, Inc., a Louisiana corporation ("Company"), in such amounts as
are set forth opposite the Sellers' names on the attached Exhibit A; and
WHEREAS, Purchaser is willing to purchase the Seller's Shares only in
the event that the Sellers agree to the non-competition, non-solicitation and
non-disclosure covenants contained herein; and
WHEREAS, the Sellers desire to sell to Purchaser, and Purchaser desires
to purchase from Sellers, all of the Sellers' Shares for the Consideration and
upon the terms and conditions set forth herein; and
WHEREAS, Sellers acknowledge and agree that an express condition to the
closing of this Agreement is Purchaser's simultaneous acquisition of CRC
Holdings, Inc., a Florida corporation and the parent corporation of the Company
("CRC"), by and through a merger (the "Merger") of CRC with Casino Holdings,
Inc., a Delaware corporation ("Merger Sub"), pursuant to an Agreement and Plan
of Merger dated the date hereof among Purchaser, CRC Merger Sub and certain
shareholders (the "Shareholders") of CRC ("Merger Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements set forth herein, Purchaser and Sellers hereby agree as
follows:
1. Recitals. The foregoing recitals are true and correct on the date hereof,
and shall be deemed to be true and correct on the ----------------- date of
the Closing (as defined below), and are hereby incorporated in this
Agreement by this reference.
2.Purchase of Shares. Subject to the terms and conditions herein, in the event
of a closing of the Merger, Sellers agree to sell to Purchaser, and Purchaser
agrees to purchase from Sellers, simultaneously with the closing of the
Merger, all of the Sellers' Shares for the aggregate cash consideration of
$32,500,000 ("Consideration"). Each Seller shall receive a pro rata portion of
the Consideration which shall be determined by multiplying the Consideration
by the product of the number of shares owned by each respective Seller on the
Company's stock ledger divided by the aggregate number of all of the Sellers'
Shares.
3. Closing.
3.1 Closing. The closing (the "Closing") of the foregoing transaction shall take
place at the offices of Xxxxxx, Xxxxx & Bockius LLP, 5300 First Union Financial
Center, 000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxx, at 10:00 a.m. (Miami time)
on the same date and time as the closing of the Merger Agreement.
3.2 Deliveries. At the Closing, Sellers shall deliver to Purchaser (i) original
certificates representing the Sellers' Shares, (ii) stock powers duly executed
by Sellers in the form required to transfer the Sellers' Shares to Purchaser or
a subsidiary of Purchaser designated by it and (iii) resignations by all of the
Sellers currently holding positions as officers or directors of the Company.
Upon Purchaser's receipt and satisfaction with of the foregoing items, Purchaser
shall pay the Consideration either by cashier's checks or by wire transfers to
such bank accounts as Sellers shall designate in writing to Purchaser.
3.3 Termination. In the event that the Closing does not occur (i) on or before
12 months from the date of this Agreement and Purchaser has not exercised its
option to extend the time for the Closing pursuant to Section 9(a) hereof (the
"Option"), or (ii) on or before 15 months from the date of this Agreement if
Purchaser has exercised its Option, this Agreement shall automatically, without
any further action on behalf of any of the Parties, become null and void, and
shall be deemed to have been terminated; in such case, except as provided in
Section 9 hereof, no Party shall have any further liability or obligation to the
other pursuant to this Agreement either as Purchaser, Sellers or otherwise.
4. Representations and Warranties of Seller. Each Seller hereby jointly and
severally makes the following representations and warranties as of the date
hereof, and as of the Closing of this Agreement:
(a) Each Seller has the full right, power and authority to enter into this
Agreement and to perform the transactions contemplated herein. This Agreement
constitutes the legal, valid and binding obligation of each Seller, enforceable
against such Seller in accordance with its terms.
(b) Each of the Sellers' Shares is on the date hereof, and as of the date of the
Closing, will be free and clear of any and all pledges, liens, encumbrances or
security interests of every kind or nature (collectively, "Encumbrances"), is
freely transferable by Sellers, and is not subject to any voting trusts, proxies
or other agreements relating to the voting or transfer thereof.
(c) The authorized capital stock of the Company consists of 10,000,000 shares of
common stock, no par value, of which 984,883 shares are issued and outstanding.
The Sellers' Shares were validly issued and fully paid and are non-assessable
and owned beneficially and legally by the respective Seller. To the best of
Seller's knowledge, no person, firm or corporation has any subscription,
warrant, agreement, option or right for the purchase of any unissued shares of
the capital stock of the Company.
(d) No third-party consents are required in connection with the transfer of the
Sellers' Shares to the Purchaser hereunder, except for the Louisiana Gaming
Control Board.
(e) The execution, delivery and performance by Sellers of this Agreement do not
and will not (i) violate or conflict with the Company's Articles of
Incorporation or Bylaws or (ii) constitute a breach or default under any
contract, agreement, order or decree to which any Seller or the Company is a
party or subject, except for the right of first refusal granted to CRC.
(f) Neither the Sellers nor any of their immediate family or any corporation,
trust or other entity controlled by any of them are a party to any agreement,
understanding or arrangement with the Company which will survive after the
Closing.
(g) No Seller has any claims against or amounts owing from the Company, CRC or
any direct or indirect subsidiary of the Company or CRC.
(h) Neither the Company nor any Seller has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finder's fees in
connection with the purchase by Purchaser of the Shares.
5.Covenants of Sellers. From the date hereof and until the Closing or
termination of this Agreement in accordance with Section 3.2, except as
otherwise provided by the prior written of the Purchaser, the Sellers will not
sell, transfer, assign or pledge the Sellers' Shares or otherwise subject the
Sellers' Shares to any Encumbrances.
6. Representations and Warranties of Purchaser. Purchaser hereby represents
and warrants to Seller as follows:
(a) Purchaser is a corporation, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania.
(b) Purchaser has the full right, power and authority to enter into this
Agreement and to perform the transactions contemplated herein. This Agreement
constitutes the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms.
(c) Purchaser is acquiring the Sellers' Shares for investment only and not with
a view toward distribution within the meaning of the Securities Act of 1933.
(d) Except for the foregoing, Purchaser makes no representations or warranties
of any kind or nature.
7. Conditions Precedent to the Obligations of Purchaser. The obligations of
the Purchaser hereunder shall be subject to the fulfillment at or prior to
the Closing of each of the following conditions:
(a) The representations and warranties of the Sellers herein shall be true and
correct on the date of the Closing as though made on and as of the Closing, and
the Sellers shall have fully and completely complied with all of the terms and
conditions of this Agreement.
(b) There shall not be pending or threatened any action or proceeding by or
before any court or other governmental body which shall seek to restrain,
prohibit or invalidate the sale of the Sellers' Shares to the Purchaser.
(c) The transactions contemplated by the Merger Agreement shall have closed
simultaneously with the transactions contemplated hereunder.
8. Non-Competition, Non-Disclosure and Non-Solicitation. In consideration of
Purchaser entering into this Agreement and purchasing the Shares, each
Seller agrees to each of the following covenants:
(a) Non-Competition. From the date hereof through the third anniversary of the
date of the Closing, Seller agrees not to engage, directly or indirectly, in any
aspect of the gaming casino business, whether riverboat based, land based or
otherwise, located within 200 miles of the city limits of Baton Rouge, Louisiana
(the "Business"), whether as shareholder, partner, director, employee, agent,
consultant or otherwise; provided that Seller may continue to hold the Shares
through the Closing Date and may hold shares constituting less than 1% of the
outstanding shares of a publicly traded company in the Business.
(b) Non-Disclosure. Seller agrees to (i) hold all trade secrets, business plans
and other confidential or proprietary information of the Company in trust and
confidence for the Company and shall not use or disclose any such information to
any person under any circumstances and (ii) be liable for damages incurred by
the Company or Purchaser as a result of disclosure of any such information by
Seller (without the prior written consent of Purchaser) for any purpose at any
time after the date hereof. Notwithstanding the foregoing, Seller may disclose
any such information to the extent such disclosure is compelled by applicable
law or to the extent such information becomes publicly available other than by
unauthorized disclosure by Seller.
(c) Non-Solicitation. From the date hereof through the third anniversary of the
date of the Closing, Seller agrees not, directly or indirectly, on behalf of any
corporation or other entity, to aid or endeavor to solicit, induce or recommend
any employees of the Company to leave their employment with the Company.
(d) Covenants Not Exclusive. Seller agrees that the covenants set forth in
Sections 8(a), (b) and (c) hereof are in addition to any rights Purchaser
may have in law or at equity.
(e) No Adequate Remedy at Law. Seller acknowledges and agrees that it may be
impossible to measure in money the damages which Purchaser will suffer in the
event Seller breaches any of the covenants in this Section 8. Therefore, if
Purchaser shall institute any action or proceeding to enforce the provisions
hereof, Seller hereby waives and agrees not to assert in any such action or
proceeding the claim or defense that Purchaser has an adequate remedy at law.
The foregoing shall not prejudice the right of the Purchaser to require Seller
to account for and pay over to Purchaser the compensation, profits, monies,
accruals or other benefits derived or received by Seller as a result of any
transaction constituting a breach of the covenants set forth in this Section 8.
9.Liquidated Damages. Purchaser, Sellers and Republic Security Bank are parties
to a certain Deposit Escrow Agreement of even date herewith (the "Deposit
Escrow Agreement") in the form attached hereto as Exhibit B. Within two
business days of the date hereof, Purchaser shall deliver $600,000 (the
"Deposit") to Republic Security Bank as escrow agent (the "Escrow Agent") to
be held by the Escrow Agent pursuant to the terms and conditions set forth in
the Deposit Escrow Agreement.
(a) The Deposit and the accrued interest thereon shall be applied and credited
to the Consideration and if the Closing occurs. If the Closing has not occurred
on or prior to 9 months from the date of this Agreement, Purchaser shall make a
payment of $300,000 to the Sellers (the "Non-Discretionary Payment"). If the
Closing occurs, the Non-Discretionary Payment shall be applied and credited to
the Consideration. Absent any breach by CRC or the Shareholders of any
representation, warranty or covenant contained in the Merger Agreement, or any
breach by the Sellers of any representation, warranty or covenant contained in
this Agreement, the terms of Section 9(b) below will not apply to the
Non-Discretionary Payment. If the Closing does not occur by reason of a breach
of a representation, warranty or covenant in the Merger Agreement by CRC or any
Shareholder, or by reason of any breach by the Sellers of any representation,
warranty or covenant contained in this Agreement, the Non-Discretionary Payment
shall be refunded to Purchaser. If the Closing does not occur for any other
reason (except as provided in the next paragraph of this Section 9(a)), the
Non-Discretionary Payment shall be paid to the Sellers. If the Closing has not
occurred on or prior to 12 months from the date of this Agreement, Purchaser
shall have the option, but not the obligation, to extend the time for the
Closing an additional 3 months by Purchaser making an additional payment of
$300,000 to the Escrow Agent (the "Discretionary Payment"). Such Discretionary
Payment and the accrued interest thereon shall become part of the Deposit and if
the Closing occurs shall be applied and credited to the Consideration.
The Louisiana Gaming Control Board issued a Report on
Conditional License Renewal on or about July 24, 2000 captioned "In Re:
Louisiana Casino Cruises, Inc. d/b/a Casino Rouge License No. R011700193" (the
"Report"). The Report refers to proposed conditions to renewal of LCCI's
license. Such conditions and any additional conditions subsequently imposed by
the Louisiana Gaming Control Board are referred to herein as "Conditions."
Notwithstanding the foregoing paragraph, in the event that a Closing has not
occurred on or prior to the Non-Discretionary Date and as of such date (i) LCCI
has not been issued a license renewal and Casino Rouge is not continuing to
operate in the manner operated as of the date hereof or (ii) Purchaser has not
been issued a gaming license in Louisiana, in either case as a result of a
failure to satisfy any of the Conditions, then the Non-Discretionary Payment
shall not be payable. In such event, (i) the time for Closing shall be extended
to six months after the Non-Discretionary Date without Purchaser being obligated
to make the Discretionary Payment and (ii) the Non-Discretionary Payment shall
only become payable if a Closing has not occurred 30 days after all Conditions
have been satisfied and such renewal license issued or Casino Rouge is
continuing to operate in the manner operated as of the date hereof. In the event
such Conditions have not been satisfied and such licenses issued six months
after the Non-Discretionary Date, then, notwithstanding the provisions of
Section 9(b) hereof, the Deposit plus accrued interest shall be refunded to
Purchaser and this Agreement shall terminate.
(b) In the event that the Closing does not occur for any reason, the Deposit
plus accrued interest thereon shall be refundable to Purchaser, unless the
Closing does not occur as a result of:
(i) Purchaser's failure to obtain the financing necessary to consummate the
Merger and this Agreement,
(ii) a material breach by Purchaser of any of its representations or warranties
under the Merger Agreement or this Agreement,
(iii)a material breach by Purchaser of any of its covenants under the Merger
Agreement or this Agreement, or
(iv) the failure of the Louisiana Gaming Control Board (the "Gaming Authority)
to grant to Purchaser, its Affiliates and Licensed Persons all approvals
and licenses necessary for Purchaser to consummate the Merger Agreement or
this Agreement for any reason, except that this clause (iv) will not apply
if such failure to grant such approvals and licenses is:
(A) solely as a result of the Gaming Authority's imposition of any requirement
that would have a material adverse effect on the financial condition,
operating results, business (including the ability to obtain or maintain
gaming business or registrations) or prospects of the Company following the
Closing Date, or
(B) solely as a result of the Gaming Authority's failure to take any action
with respect to Purchaser's application for such approvals and licenses
necessary to consummate the Merger Agreement and this Agreement (provided
the Purchaser is using its reasonable efforts to diligently pursue all such
approvals and licenses, has not withdrawn its application to the Gaming
Authority or taken any action which would otherwise preclude or prevent the
Gaming Authority from taking such action with respect to Purchaser's
application).
And if clause (i), (ii), (iii) or (iv) applies, the Deposit and accrued
interest thereon shall be paid to the Sellers. In all other events, the
Deposit plus accrued interest thereon shall be released by the Escrow Agent
to Purchaser immediately upon Purchaser's written demand.
(c) The Sellers agree that, if the Closing does not occur for any reason, the
sole extent of their recoverable damages are the liquidated damages provided for
in this Section 9, except in the event Purchaser closes the Merger and fails to
close this Agreement for any reason other than any breach by Sellers of a
representation, warranty or covenant contained in this Agreement. In such case,
Sellers may recover their actual damages in excess of the liquidated damages.
10. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania.
(b) This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
(c) This Agreement represents the entire agreement between the parties relating
to the subject matter hereof, superseding any and all prior or contemporaneous
oral and prior written agreements. This Agreement may not be modified or amended
nor may any right be waived except by a writing signed by all of the parties
hereto which expressly refers to this Agreement and which states that it is a
modification, amendment or waiver.
(d) The captions and headings contained herein are solely for convenience and
reference and do not constitute a part of this Agreement.
(e) This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same agreement.
(f) All notices, requests and other communications hereunder must be in writing
and will be deemed to have been duly given only if delivered personally against
written receipt or by facsimile transmission or by overnight courier prepaid, to
the parties at the following addresses or facsimile numbers:
If to the Purchaser, to:
Penn National Gaming, Inc.
Wyomissing Professional Center
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Xx., Esq.
Facsimile: 000-000-0000
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
5300 First Union Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000
If to any of the Sellers, to:
the addresses or facsimile numbers set forth opposite
such Seller's name on Exhibit A.
with a copy to:
Xxxxx X. Xxxxx, Xx., Esq.
Xxxxx Law Office Ltd.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile: 000-000-0000
Any Party hereto from time to time may change its address, facsimile number or
other information for the purpose of notices to that Party by giving notice as
provided in this Section 9(f) specifying such change to each of the other
Parties hereto.
(SIGNATURE PAGE FOLLOWS)
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
on the date first above written.
Purchaser:
PENN NATIONAL GAMING, INC.
By /s/Xxxxxx X. Xxxxxxxx
Name:Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
Sellers:
-/s/Xxx X. Xxxxxxx
Xxx X. Xxxxxxx
/s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Exhibit A
Seller Number of Shares Owned Address / Facsimile
Xxx X. Xxxxxxx 130,711 0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
Xxxxxx X. Xxxxxx 130,711 c/o Moran Law Office Ltd.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxx 00000-0000
Facsimile: 000-000-0000
Xxxxx X. Xxxxxx 130,711 0000 Xxxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Facsimile: 000-000-0000
Exhibit B
[intentionally omitted]
