EXHIBIT 10.2
September 1998 Amendment
to the July Amended and Restated
Joint Venture Agreement of QNOV
This September 1998 Amendment to the Amended and Restated Joint Venture
Agreement of QNOV (the "Amendment") is hereby entered into as of September 22,
1998 by and among Shreveport Paddlewheels, L.L.C. ("Paddlewheels"), Sodak
Louisiana, L.L.C. ("Sodak") and HWCC-Louisiana, Inc. ("HWCC"). Unless the
context otherwise requires, terms that are capitalized and not otherwise defined
shall have the meaning set forth or cross-referenced in the JV Agreement.
WHEREAS, the parties entered into the Amended and Restated Joint Venture
Agreement of QNOV dated July 31, 1998 (the "JV Agreement") in order to comply
with a deadline that had been established by the Louisiana Gaming Control Board
("LGCB"); and
WHEREAS, subsequent to the filing of the executed JV Agreement that was
delivered to the LGCB, the parties became aware of certain provisions in the JV
Agreement that needed clarification, or did not fully or completely reflect the
intention of the parties; and
WHEREAS, the parties desire to make amendments to the JV Agreement to
clarify such provisions or otherwise amend or modify such provisions in a manner
that fully reflects the intention of the parties.
NOW THEREFORE, the parties hereto do hereby amend the JV Agreement, as
follows:
A. Article III is hereby amended by adding the following new Section
3.5:
3.5 Lack of Approval of Initial Debt Financing.
The board of directors for the parent company of each of Sodak and
HWCC (each, a "Parent's Board") shall each have the right to approve
or disapprove, at their sole and absolute discretion, the terms and
conditions of any credit facility or loan with any third party lender
for the financing of the construction of the Complex (the "Project
Financing"). In the event that either party's Parent's Board fails to
approve the Project Financing, such party shall have the right,
subject to the approval of and any terms or conditions imposed by the
LGCB, to exit the Venture (an "Exiting Venturer") with no further
obligation by such Exiting Venturer to the Venture or any other
Venturer, and the Venture or any Venturer shall have no further
obligation to such Exiting Venturer.
B. The last sentence of Section 3.2(d) is hereby amended to provide
that the Residual Ownership Ratio of each Venturer (other than Paddlewheels and
any Affiliate thereof)
shall also be adjusted in accordance with the provisions of Section 3.2(d) in
the event a Venturer exits the Venture in accordance with Section 3.5 herein.
C. The penultimate paragraph of Section 13.1 is hereby amended by
adding the following clause to the end of such penultimate paragraph:
; provided that a dissolution resulting from, or in connection with,
the sale of all or substantially all of the assets of the Venture
shall not entitle Paddlewheels or any Affiliate thereof to acquire the
JV Interests of any other Venturer.
D. Section 14.3(d) is hereby amended by adding the following clause
to the end of such section:
; provided, however, that Paddlewheels or any Affiliate thereof shall
not be entitled to any distribution whatsoever pursuant to this
Section 14.3(d) if such party has been, or has a right to be, paid an
amount equal to 10% of the Net Realized Value in accordance with
Section 10.7 of this Agreement.
E. Article XVI is hereby amended by adding the following Section 16.6:
16.6 Buy/Sell Agreement.
(a) Sodak and HWCC shall each have the rights of purchase and sale
as set forth in this Section 16.6, which shall be exercised by
Sodak or HWCC by delivering to the other party a written notice
(an "Election Notice").
(b) Except as provided under Section 16.6(h) below, at any time after
the two-year anniversary date of the commencement of gambling at
the Complex, (the "Commencement Date"), Sodak or HWCC (the
"Electing Party") may submit to the other applicable party (the
"Notice Party") an Election Notice. The Election Notice, to be
valid, shall state a proposed price for all of the Electing
Party's ownership interest in the Venture. In addition, the
Election Notice shall state that if HWCC becomes obligated to
sell, and Sodak becomes obligated to purchase, all of HWCC's
ownership interest in the Venture pursuant to the terms and
conditions of this Section 16.6, then Sodak shall also be
obligated to purchase all rights and benefits (the "Operator
Rights") of HWCC-Shreveport, Inc., its successors and assigns
(the "Operator") under the Management Services Agreement dated
September 22, 1998 by and between QNOV and the Operator, as
amended (the "Management Agreement") pursuant to Section 16.6(d)
below.
(c) An Election Notice shall constitute an irrevocable offer by the
Electing Party either to (i) sell to the Notice Party all, but
not less than all, of the Electing
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Party's ownership interest in the Venture at a price equal to
that set forth in the Election Notice (the "Electing Party JV
Interest Price") and, in the event HWCC is the Electing Party to
cause the Operator to sell to the Notice Party all, but not less
than all, of the Operator Rights, or (ii) purchase from the
Notice Party all, but not less than all, of the Notice Party's
interest in the Venture at a price equal to the Electing Party JV
Interest Price multiplied by a fraction, the numerator of which
is the Notice Party's Relative Ownership Ratio, and the
denominator of which is the Electing Party's Relative Ownership
Ratio (the "Notice Party JV Interest Price"), and, in the event
HWCC is the Notice Party, purchase from the Operator all, but not
less than all, of the Operator Rights.
(d) The price at which the Operator Rights are purchased and sold
under this Section 16.6 shall be the "Management Agreement
Value." The Management Agreement Value shall be the fair market
value of the Operator Rights as determined by mutual agreement of
the parties; provided, however, that if the parties are unable to
agree on the Management Agreement Value within twenty (20) days
after delivery of the Election Notice, then either party may
provide notice (the "Initial Appraisal Notice") to the other
party that the Management Agreement Value shall be determined
according to the terms and conditions of the remainder of this
Section 16.6(d). In the event the Electing Party and the Notice
Party are able to mutually agree upon an investment banking firm
of national standing (an "Authorized Investment Banker") within
ten (10) days following the delivery of the Initial Appraisal
Notice, then the Management Agreement Value shall be the fair
market value of the Operator Rights as determined by such
Authorized Investment Banker, the cost of which appraisal shall
be equally borne by the Electing Party and the Notice Party. In
the event the Electing Party and the Notice Party are unable to
agree upon an Authorized Investment Banker within ten (10) days
following the delivery of the Initial Appraisal Notice, then
within twenty (20) days of delivery of the Initial Appraisal
Notice each such party shall select an Authorized Investment
Banker, each of whom shall perform an appraisal of the fair
market value of the Operator Rights (each an "Initial Appraisal"
and together the "Initial Appraisals"). The cost of each Initial
Appraisal shall be borne by the party appointing the Authorized
Investment Banker conducting such appraisal. In the event that
the difference between the Initial Appraisals is more than 10% of
the higher of such Initial Appraisals, then within ten (10) days
of the date both parties have received notice of the amount of
such Initial Appraisals, either party may provide notice (the
"Final Appraisal Notice") to the other party that a third
appraisal shall be conducted, in which case each party shall
instruct their Authorized Investment Banker to work with the
other party's Authorized Investment Banker to appoint a third
Authorized Investment Banker (the "Final Investment Banker") to
conduct an appraisal of
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the fair market value of the Operator Rights (the "Final
Appraisal"). In the event of a Final Appraisal Notice, the
Management Agreement Value shall be the average of (i) the
average of the Initial Appraisals and (ii) the Final Appraisal.
The cost of the Final Appraisal shall be equally borne by the
Electing Party and the Notice Party. In the event that either (x)
the difference between the Initial Appraisals is 10% or less of
the higher of such Initial Appraisals, or (y) such difference is
greater than 10% but neither party elects to send a Final
Appraisal Notice within the required ten (10) day period, then
the Management Agreement Value shall be deemed to be the average
of the Initial Appraisals.
(e) The Notice Party shall have the right, within thirty (30) days
following the later of the delivery of the Election Notice or the
determination of the Management Agreement Value, to elect, in
writing, to either (i) purchase the Electing Party's ownership
interest in the Venture at the Electing Party JV Interest Price
and, in the event the Electing Party is HWCC, the Operator Rights
at the Management Agreement Value, or (ii) sell to the Electing
Party all, but not less than all, of its ownership interest in
the Venture at the Notice Party JV Interest Price and, in the
event the Notice Party is HWCC, to cause the Operator to sell to
the Electing Party all, but not less than all, of the Operator
Rights at the Management Agreement Value. In the event the Notice
Party does not elect, in writing, to purchase the Electing
Party's ownership interest in the Venture and the Operator Rights
(in the event the Electing Party is HWCC) within the
aforementioned thirty (30) day period, then the Notice Party
shall be obligated to sell to the Electing Party, and the
Electing Party shall be obligated to purchase, all but not less
than all, of the Notice Party's ownership interest in the Venture
at the Notice Party JV Interest Price and, in the event the
Notice Party is HWCC, to cause the Operator to sell to the
Electing Party all, but not less than all, of the Operator Rights
at the Management Agreement Value.
(f) The closing of the purchase and sale of the transactions
contemplated by this Section shall occur on a date and time
mutually agreed upon by the Electing Party and Notice Party,
which, in any event, shall occur no later than one hundred and
five (105) days (other than in the event of an Election Notice
submitted in accordance with Section 16.6(h), in which case such
period shall be sixty (60) days) immediately following the
earlier of the date of the Notice Party's written notice of
election as set forth in Section 16.6(e) or the expiration of the
thirty (30) day period referenced in Section 16.6(e). At the
closing, the selling and the purchasing party shall execute such
documents and instruments of conveyance as may be necessary or
appropriate to confirm the
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transactions contemplated by this Section 16.6. Each party shall
bear all of their own respective costs and expenses in connection
with the closing pursuant hereto except as expressly provided
above.
(g) Notwithstanding the terms and provisions set forth in this
Section 16.6, in no instance shall a party have the right to
submit an Election Notice in the event such party is at such time
deemed to be unsuitable by the LGCB. If at any time following the
date of an Election Notice but prior to the closing date of the
transactions contemplated by the Election Notice (the "Interim
Period"), a party is deemed to be unsuitable by the LGCB, then
the Election Notice shall be null and void unless the Notice
Party elects, in writing, within ten (10) days following the date
the Notice Party receives notice that the applicable party is
deemed unsuitable, to proceed with the procedures and
transactions contemplated by such Election Notice pursuant
hereto. Notwithstanding the foregoing, if the Notice Party is
deemed unsuitable at any time during the Interim Period, the
Notice Party shall not have the foregoing right to proceed with
the procedures and transactions contemplated by the applicable
Election Notice.
(h) Notwithstanding the terms and provisions set forth in this
Section, a party may submit an Election Notice at any time
following the termination of the Funding Notice Period (as
defined below) if (i) such other applicable party fails to
provide its pro rata portion of funds (x) necessary to complete
construction of the Complex according to a size, scope, details
and specifications mutually agreeable to each of HWCC and Sodak
or (y) required under the terms of this Agreement, and (ii) the
party submitting such Election Notice has provided its required
portion of such funds. Upon the occurrence of an event set forth
in Section 16.6(h)(i), the funding party shall notify the non-
funding party, in writing, that the non-funding party shall have
the right to cure its failure to fund by providing its pro rata
portion of funds within the twenty (20) day period following the
date of such notice (the "Funding Notice Period). In the event of
an Election Notice delivered in accordance with this Section
16.6(h), the Electing Party may elect to contribute the funds
required to be contributed by the Notice Party (the "Shortfall
Required Amount"), and such Shortfall Required Amount shall be
either deemed to be (x) a loan by the Electing Party to the
Venture, accruing interest at a variable rate of interest per
annum equal to the prime rate of interest announced from time to
time by U.S. Bank National Association, and to be repaid by the
Notice Party in the event that the Notice Party elects to
purchase in accordance with Section 16.6(e) at the same time as
the closing for the purchase of the Electing Party's interest in
the Venture or (y) if any credit or other loan agreement or
arrangement to
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which the Venture is subject prohibits such a loan, a preferred
stock or other equity security upon substantially similar terms
that complies with such credit or other loan agreement or
arrangement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above.
SHREVEPORT PADDLEWHEELS, L.L.C.
By /s/ Xxxxxx Xxxxxxx
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Its CEO
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SODAK LOUISIANA L.L.C.
By /s/ Xxxxx X. Buntrack
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Its Manager
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HWCC-LOUISIANA, INC.
By Xxxx X. Xxxxx
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Its President
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