EXHIBIT 10.3
AGREEMENT OF SALE
by and among
PENINSULA GAMING PARTNERS, LLC
and
OED ACQUISITION, LLC
as Purchaser
and
XXXXXXX X. XXXXXXX XX
and
XXXXXXX X. XXXXXXX, XX FAMILY L.L.C.
as Seller
Dated as of
August 30, 2002
RELATING TO THE ACQUISITION
OF A MEMBERSHIP INTEREST IN
THE OLD XXXXXXXXXX XXXXX, X.X.
AGREEMENT OF SALE
TABLE OF CONTENTS
PAGE
ARTICLE 1 THE CLOSING..............................................2
Section 1.1 Sale and Purchase..............................2
Section 1.2 Actions at the Closing.........................2
Section 1.3 Closing Consideration..........................2
Section 1.4 Allocation of Sale Price.......................4
ARTICLE 2 WARRANTIES AND REPRESENTATIONS BY THE XXXXXXX PARTIES....4
Section 2.1 Organization, Standing, Capacity and Power.....4
Section 2.2 Authority......................................4
Section 2.3 No Conflict....................................4
Section 2.4 No Consents Required...........................4
Section 2.5 Ownership of Assets............................4
Section 2.6 Legal Proceedings..............................5
Section 2.7 No Negotiations................................5
Section 2.8 No Brokers or Finders..........................5
ARTICLE 3 WARRANTIES AND REPRESENTATIONS BY PGP AND NEW OED........5
Section 3.1 Organization, Standing, Capacity and Power.....5
Section 3.2 Authority......................................5
Section 3.3 No Conflict....................................5
Section 3.4 No Consents Required...........................6
Section 3.5 Legal Proceedings..............................6
Section 3.6 No Brokers or Finders..........................6
ARTICLE 4 POST-CLOSING COVENANTS AND AGREEMENTS...................6
Section 4.1 Restructuring of New OED and Old OED...........6
Section 4.2 Required Assignment of Xxxxxxx Win Percentage,
Xxxxxxx Note, and Old OED Note.................6
Section 4.3 Permitted Assignment of Xxxxxxx Win
Percentage, Xxxxxxx Note and Old OED Note......7
Section 4.4 Post-Closing Cooperation and Best Efforts......7
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ARTICLE 5 POST-CLOSING INDEMNIFICATION.............................7
Section 5.1 Survival of Warranties, Representations,
Covenants, and Other Agreements................7
Section 5.2 Indemnification by the Xxxxxxx Parties.........7
Section 5.3 Indemnification by PGP and New OED.............8
Section 5.4 Effect of Investigation........................8
Section 5.5 Notice and Defense of Claims...................8
ARTICLE 6 MISCELLANEOUS............................................9
Section 6.1 Notices........................................9
Section 6.2 Entire Agreement...............................10
Section 6.3 Governing Law..................................10
Section 6.4 Enforcement of Agreement.......................10
Section 6.5 Jury Trial.....................................11
Section 6.6 Waiver of Conflict.............................11
Section 6.7 Expenses.......................................11
Section 6.8 Assignment and Successors and Assigns..........11
Section 6.9 Confidentiality................................11
Section 6.10 No Third-Party Beneficiaries...................12
Section 6.11 Amendments.....................................12
Section 6.12 Waivers........................................12
Section 6.13 Counterparts...................................12
ARTICLE 7 DEFINITIONS..............................................12
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AGREEMENT OF SALE
This agreement (the "Agreement"), made as of August 30, 2002, by and
among PENINSULA GAMING PARTNERS, LLC, a Delaware limited liability company
("PGP"), OED ACQUISITION, LLC, a Delaware limited liability company ("NEW OED"),
as purchaser, XXXXXXX X. XXXXXXX, XX FAMILY L.L.C., a Louisiana limited
liability company ("WETLLC"), as seller, and XXXXXXX X. XXXXXXX XX individually
("XXXXXXX" and, collectively with WETLLC, the "XXXXXXX Parties"),
WITNESSETH THAT:
WHEREAS, Xxxxxxx owns 99% of the membership interest in WETLLC and
Xxxxxx Xxx Xxxxxxx Trust for Everard Xxxxxx Xxxxx owns 1% of the membership
interest in WETLLC; and
WHEREAS, WETLLC and PGP executed an agreement dated December 11, 2001
(the "12/11/01 AGREEMENT") according to which they agreed, subject to certain
conditions, to execute four draft documents (the "GOING FORWARD DOCUMENTS")
attached as exhibits to the 12/11/01 Agreement; and
WHEREAS, The Going Forward Documents would, if they had been executed,
have created a 50-50 joint venture between PGP and WETLLC that would have owned
indirectly a 100% interest in (a) the existing Xxxxxxxxxx Xxxxx Racetrack in
Lafayette, Louisiana, and (b) a proposed new Old Xxxxxxxxxx Xxxxx Casino and
Thoroughbred Racetrack facility to be constructed on a 550-acre site on the
north side of Route 31, southeast of the intersection of Highway 190 and
Interstate 49 in the town of Opelousas, Louisiana (the "RACINO PROJECT"); and
WHEREAS, a dispute arose between the Xxxxxxx Parties and PGP as to (a)
the interpretation of the 12/11/01 Agreement, and (b) whether the 12/11/01
Agreement was abrogated by subsequent negotiations between the Xxxxxxx Parties
and PGP relating to the Racino Project; and
WHEREAS, Xxxxxxx thereafter participated in unconsummated negotiations
to sell his 100% membership interest in WETLLC to persons unaffiliated with
either the Xxxxxxx Parties or PGP; and
WHEREAS, on June 21, 2002, PGP filed a suit entitled PENINSULA GAMING
PARTNERS, L.L.C. V. XXXXXXX X. XXXXXXX, XX FAMILY, L.L.C. AND XXXXXXX X.
XXXXXXX, Civil Action No. 02-CV-1325 of the docket of the United States District
Court for the Western District of Louisiana, Lafayette-Opelousas Division (the
"LAWSUIT") seeking specific performance of the 12/11/01 Agreement; and
WHEREAS, on June 25, 2002, the Xxxxxxx Parties and PGP executed a
document entitled Agreement Reached at Meeting Held June 25, 2002 (the "6/25/02
AGREEMENT"), a copy of which is attached hereto as Exhibit A; and
WHEREAS, the parties desire to implement the terms of the 6/25/02
Agreement; and
WHEREAS, PGP owns indirectly 100% of the membership interest in New
OED; and
WHEREAS, PGP is prepared to cause New OED to undertake the Racino
Project; and
WHEREAS, certain capitalized terms used in this Agreement, if not
defined in these recital clauses, are defined in Article 7 of this Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE 1
THE CLOSING
Section 1.1 SALE AND PURCHASE. On the terms and subject to the
conditions set forth in this Agreement, in consideration of the Closing
Consideration, the Xxxxxxx Parties hereby bargain, sell, assign, transfer,
convey, set over, abandon, and deliver to New OED, with full warranty of title
and with full substitution and subrogation in and to all claims and actions of
warranty against all preceding vendors (a) a 50% undivided interest (the "NOTE
SHARE") owned by Xxxxxxx in the Notes Receivable, and (b) WETLLC's 50%
membership interest (the "MEMBERSHIP INTEREST") in The Old Xxxxxxxxxx Xxxxx,
X.X., a Louisiana limited liability company ("OLD OED"), to have and to hold, to
New OED and its assigns forever, and New OED accepts, receives, and receipts for
the Note Share and the Membership Interest, and PGP acknowledges that such sale
and delivery to New OED fulfills the obligation of the Xxxxxxx Parties to sell
and deliver to PGP. The sale and purchase described in this Section 1.1 is
referred to as the "Closing".
Section 1.2 ACTIONS AT THE CLOSING.
(a) At the Closing, the Xxxxxxx Parties have delivered to New OED (i)
unconditional assignments to New OED, with full recourse, of the Note Share and
the Membership Interest (which is not evidenced or represented by a membership
certificate), free and clear of all liens and encumbrances other than those set
forth in the presently existing articles of organization and operating agreement
of Old OED, and (ii) a copy of the release in the form attached hereto as
Exhibit B (the "RELEASE") executed by the Xxxxxxx Parties.
(b) New OED has delivered to the Xxxxxxx Parties (i) the Closing
Consideration, and (ii) a copy of the Release executed by PGP and New OED.
(c) Effective with the Closing (i) the Xxxxxxx Parties ratify, confirm,
approve, and consent and waive any objection under the articles of organization
and operating agreement of Old OED or otherwise to, (A) the purchase by PGP on
February 15, 2002 of a 50% membership interest in Old OED from BIM3 Investments,
and (B) the execution and delivery by Xxxxxxx X. Xxxxxx on behalf of Old OED of
the Xxxxxxx Note and the Old OED Note, and (ii) PGP and New OED waive compliance
by WETLLC with any provisions of the articles of organization and operating
agreement of Old OED that restrict the transfer by WETLLC of the Membership
Interest to New OED pursuant to the terms of this Agreement.
Section 1.3 CLOSING CONSIDERATION. The Closing Consideration consists
of:
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(a) $44,834.84 of interest accrued through June 30, 2002 on the Note
Interest, which was paid by Old OED to Xxxxxxx on July 1, 2002, the receipt of
which is hereby acknowledged by the Xxxxxxx Parties, and $96,155.84 of interest
accrued from July 1 through September 2, 2002 (including $930.51 accrued
interest as of July 1, 2002 but not previously paid), which has been paid in
cash at the Closing to Xxxxxxx by wire transfer to Bank Account No. 0000000000
at the Lafayette, Louisiana branch of Bank One (the "Xxxxxxx Account").
(b) $200,000 as reimbursement of reasonable and legitimate legal,
travel, lodging, and similar expenses actually incurred by WETLLC prior to the
date of this Agreement in pursuance of the Racino Project (the "XXXXXXX
EXPENSES"), which has been paid in cash at the Closing to WETLLC by wire
transfer to Bank Account No. 1596409860 at the Lafayette, Louisiana branch of
Bank One (the "WETLLC Account").
(c) $3,500,000, which has been paid in cash at the Closing to the
Xxxxxxx Parties by wire transfer of (i) $2,563,758 to the WETLLC Account and
(ii) $936,242 to the Xxxxxxx Account.
(d) An unsecured subordinated promissory note dated the date of this
Agreement issued by PGP in the face principal amount of $7,325,000, payable to
the order of WETLLC in the form of Exhibit C attached hereto (the "XXXXXXX
NOTE"), which has been delivered to WETLLC at the Closing, the receipt of which
is acknowledged by the Xxxxxxx Parties.
(e) An unsecured subordinated promissory note dated the date of this
Agreement issued by Old OED and PGP in the face principal amount of $4,500,000,
payable to the order of Xxxxxxx in the form of Exhibit D attached hereto (the
"OLD OED NOTE"), which has been delivered to Xxxxxxx at the Closing, the receipt
of which is acknowledged by the Xxxxxxx Parties.
(f) A contingent right of WETLLC to receive from Old OED, but only (i)
if required by the Louisiana Gaming Authorities, then as, if, and when the
Xxxxxxx Parties shall have received all necessary suitability approvals from the
Louisiana Gaming Authorities, and (ii) commencing on the date of opening the
Racino Project to the public and terminating on the tenth anniversary of that
date, one-half of one percent (0.5%) (the "XXXXXXX WIN PERCENTAGE") of the Net
Win from slots at the Racino Project, payable monthly in arrears. "NET WIN" is
defined as the excess of slot wins over slot losses before any tax imposed by
the Louisiana Gaming Authorities (A) plus or minus, as appropriate, deposits or
accruals made in respect of progressive slot machines and other similar games,
(B) net of any license or manufacturers' revenue participation fees paid on
either a fixed or percentage basis associated with any participation slot
machine games, and (C) minus complimentaries. Notwithstanding any other
provisions of this Section 1.3(f), however, no payment shall be made by Old OED
on account of the Xxxxxxx Win Percentage to any person who has not received all
necessary suitability approvals from the Louisiana Gaming Authorities that may
be required under the Louisiana Gaming Control Law.
(g) A motion to dismiss the Lawsuit with prejudice, each party to bear
its own costs, executed by counsel of record for PGP, the receipt of which is
acknowledged by the Xxxxxxx Parties.
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Section 1.4 ALLOCATION OF SALE PRICE. Of the Closing Consideration, an
amount equal to the outstanding principal balance of the Note Share shall be
paid for the Note Share out of cash received at the Closing. The balance of the
Closing Consideration shall be allocated to the Membership Interest.
ARTICLE 2
WARRANTIES AND REPRESENTATIONS
BY THE XXXXXXX PARTIES
The Xxxxxxx Parties jointly and severally warrant and represent as
follows to PGP and New OED, as an inducement to the latter to execute and
perform this Agreement:
Section 2.1 ORGANIZATION, STANDING, CAPACITY AND POWER. Xxxxxxx is a
natural person of the full age of majority. WETLLC is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Louisiana, and has all necessary capacity and power to execute,
deliver and perform this Agreement. Attached as Exhibit E is a true, correct,
and complete copy of the articles of organization, operating agreement, and
membership register of WETLLC. No certificates evidencing the ownership of
membership interests in WETLLC have ever been issued.
Section 2.2 AUTHORITY. The execution, delivery, and performance of this
Agreement by WETLLC have been duly and validly authorized by all necessary
action on the part of its member(s) and manager(s) (if any) and is a legal,
valid, and binding obligation of WETLLC enforceable in accordance with its
terms.
Section 2.3 NO CONFLICT. Neither the execution and delivery of this
Agreement nor the consummation by the Xxxxxxx Parties of the transactions
contemplated hereby will (a) conflict with or result in a breach of any
provision of the articles of organization or operating agreement of WETLLC, or
(b) constitute or result in a default under, violation of, or conflict with, any
statute, rule, regulation, order, agreement (whether written or oral, express or
implied), instrument, or fiduciary duty to which either of the Xxxxxxx Parties
is a party or is subject, or by which any of the assets of either are bound, or
create, or result in any lien on any property (including the Note Interest and
the Membership Interest) of either Xxxxxxx Party, or (c) contravene, conflict
with or result in a violation of any of the terms or requirements of, or give
any governmental body or regulatory authority the right to withdraw, suspend,
cancel, terminate, or modify any license, permit, or authorization held by
either Xxxxxxx Party or by Old OED.
Section 2.4 NO CONSENTS REQUIRED. Neither the execution and delivery of
this Agreement nor the performance by the Xxxxxxx Parties of the transactions
contemplated hereby requires the consent or authorization of any other person or
governmental body or regulatory authority or court pursuant to any statute,
regulation, rule, order, judgment, decree, agreement, instrument, license,
permit, or authorization to which either Xxxxxxx Party or Old OED is a party or
is subject.
Section 2.5 OWNERSHIP OF ASSETS. Xxxxxxx owns 99% of the membership
interest and Xxxxxx Xxxx Xxxxxxx Trust for Everard Xxxxxx Xxxxx owns 1% of the
membership interest in WETLLC, Xxxxxxx owns the Note Share, and WETLLC owns the
Membership Interest in full
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ownership, in each case free and clear of all liens and encumbrances; WETLLC has
the absolute and unconditional right to transfer the Note Share and the
Membership Interest to New OED in accordance with the terms of this Agreement;
and, by virtue of the Closing, New OED has acquired full record and beneficial
ownership of the Note Share and the Membership Interest free and clear of all
liens and encumbrances and subject to no limitations as to voting or otherwise.
Section 2.6 LEGAL PROCEEDINGS. Except for the Lawsuit, there is no
suit, action, arbitration, audit, hearing, investigation, or other proceeding
(collectively "LITIGATION") pending or, to the knowledge of Xxxxxxx, threatened
against either of the Xxxxxxx Parties or Old OED that challenges or that, if
decided adversely, could have the effect of preventing or interfering with the
Closing and the consummation of this Agreement.
Section 2.7 NO NEGOTIATIONS. Neither WETLLC nor Xxxxxxx is presently
engaged in any negotiations with any person other than PGP and New OED for the
sale, transfer, or encumbrance of any part or all of either (a) Xxxxxxx'x
membership interest in WETLLC or the Note Share or (b)WETLLC's ownership
interest in the Membership Interest.
Section 2.8 NO BROKERS OR FINDERS. No agent, broker, investment banker,
investment or financial advisor, real estate agent, finder, or other
intermediary or person acting on behalf of the Xxxxxxx Parties or under their
authority is entitled to any commission or broker's or finder's fee from any
party to this Agreement or from Old OED in connection with any of the
transactions contemplated by this Agreement.
ARTICLE 3
WARRANTIES AND REPRESENTATIONS
BY PGP AND NEW OED
PGP and New OED jointly and severally warrant and represent as follows
to the Xxxxxxx Parties, as an inducement to the latter to execute and perform
this Agreement:
Section 3.1 ORGANIZATION, STANDING, CAPACITY AND POWER. PGP and New OED
are limited liability companies duly organized, validly existing and in good
standing under the laws of the State of Delaware, and have all necessary
capacity and power to execute, deliver and perform this Agreement.
Section 3.2 AUTHORITY. The execution, delivery, and performance of this
Agreement by PGP and New OED have been duly and validly authorized by all
necessary action on the part of their respective member(s) and manager(s) (if
any) and is a legal, valid, and binding obligation of PGP and New OED
enforceable in accordance with its terms.
Section 3.3 NO CONFLICT. Neither the execution and delivery of this
Agreement nor the consummation by PGP and New OED of the transactions
contemplated hereby will (a) conflict with or result in a breach of any
provision of the articles of organization or operating agreements of PGP or New
OED, or (b) constitute or result in a default under, violation of, or conflict
with, any statute, rule, regulation, order, agreement (whether written or oral,
express or implied), instrument, or fiduciary duty to which either of them is a
party or is subject, or by which any of the assets of either are bound, or
create, or result in any lien on any property of either, or (c)
5
contravene, conflict with, or result in a violation of any of the terms or
requirements of, or give any governmental body or regulatory authority the right
to withdraw, suspend, cancel, terminate, or modify any license, permit, or
authorization held by either.
Section 3.4 NO CONSENTS REQUIRED. Neither the execution and delivery of
this Agreement nor the performance by PGP and New OED of the transactions
contemplated hereby requires the consent or authorization of any other person or
governmental body or regulatory authority or court pursuant to any statute,
regulation, rule, order, judgment, decree, agreement, instrument, license,
permit, or authorization to which either is a party or is subject.
Section 3.5 LEGAL PROCEEDINGS. Except for the Lawsuit, there is no
Litigation pending or, to the knowledge of PGP or New OED, threatened against
either that challenges or that, if decided adversely, could have the effect of
preventing or interfering with the Closing and the consummation of this
Agreement.
Section 3.6 NO BROKERS OR FINDERS. No agent, broker, investment banker,
investment or financial advisor, real estate agent, finder, or other
intermediary or person acting without the acquiescence and knowledge of the
Xxxxxxx Parties is entitled to any commission or broker's or finder's fee from
any party to this Agreement or from Old OED in connection with any of the
transactions contemplated by this Agreement.
ARTICLE 4
POST-CLOSING COVENANTS
AND AGREEMENTS
Section 4.1 RESTRUCTURING OF NEW OED AND OLD OED. Simultaneously with,
or as soon as practicable after the Closing, PGP and New OED will take all
necessary action so that (a) PGP will own 100% of the membership interest in
Peninsula Gaming Company LLC ("PGC"), (b) PGC will own 100% of the membership
interest in New OED, (c) New OED will own 100% of the membership interest in Old
OED, and (d) New OED will have contributed to the capital of Old OED 100% of the
Notes Receivable, which will be cancelled.
Section 4.2 REQUIRED ASSIGNMENT OF XXXXXXX WIN PERCENTAGE, XXXXXXX
NOTE, AND OLD OED NOTE. In the event that either (a) the Louisiana Gaming
Authorities decline to issue a license under the Louisiana Gaming Control Law
for the Racino Project to Old OED because of their finding that the Xxxxxxx
Parties are unsuitable, or (b) the Louisiana Gaming Authorities (i) issue a
license for the Racino Project to Old OED based in part on a finding that the
Xxxxxxx Parties are suitable, but (ii) at any time thereafter, either (A) the
Xxxxxxx Parties (or their respective heirs, successors, or assigns, as the case
may be) are found by the Louisiana Gaming Authorities not to be suitable, or (B)
the Louisiana Gaming Authorities instruct, order, or otherwise notify Old OED
that the holding of the Xxxxxxx Win Percentage, the Xxxxxxx Note, or the Old OED
Note by the Xxxxxxx Parties (or their respective heirs, successors, or assigns,
as the case may be) is prohibited or not allowed under the Louisiana Gaming
Control Law, then in the case of either clause (a) or clause (b) of this Section
4.2, the holder of the Xxxxxxx Win Percentage, the Xxxxxxx Note, or the Old OED
Note, as the case may be, shall assign the interest in question, after due
notification to and approval by the Louisiana Gaming Authorities as provided in
Section 4.3, to a person(s) who is found suitable by the Louisiana Gaming
6
Authorities, provided, however, that during the pendency of any appeal by such
holder of an adverse decision by the Louisiana Gaming Authorities as to his,
her, or its suitability, such holder shall not be required by this Section 4.2
to assign the interest in question if, but only if, the Louisiana Gaming
Authorities expressly determine that the pendency of the appeal will not
adversely affect or condition Old OED's right to continue to operate the Racino
Project under its license.
Section 4.3 PERMITTED ASSIGNMENT OF XXXXXXX WIN PERCENTAGE, XXXXXXX
NOTE AND OLD OED NOTE. Notwithstanding any other provision of this Agreement,
WETLLC shall have no right to pledge, mortgage, hypothecate, transfer, assign,
donate, exchange, or otherwise dispose of the Xxxxxxx Win Percentage, the
Xxxxxxx Note, or the Old OED Note except as specifically prescribed under the
Louisiana Gaming Control Law and the related regulations promulgated thereunder
in LAC 42:1705 and -2501 ET SEQ. after prior notification to and approval by the
Louisiana Gaming Authorities.
Section 4.4 POST-CLOSING COOPERATION AND BEST EFFORTS. From and after
the Closing, PGP and New OED agree to use their commercially reasonable best
efforts in good faith to complete the Racino Project, and the Xxxxxxx Parties
agree not to take any action that would delay or interfere with the efforts of
PGP and New OED to complete the Racino Project.
ARTICLE 5
POST-CLOSING INDEMNIFICATION
Section 5.1 SURVIVAL OF WARRANTIES, REPRESENTATIONS, COVENANTS, AND
OTHER AGREEMENTS. The warranties and representations contained in Sections 2.6
and 2.7 and the post-closing covenants and other agreements contained in
Sections 4.1 and 4.4 of this Agreement shall survive the Closing until the
expiration of the first anniversary of the date of the Closing. The provisions
of Articles 1, 3, 5, 6 and 7 and Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.8, 4.2 and
4.3 shall survive indefinitely.
Section 5.2 INDEMNIFICATION BY THE XXXXXXX PARTIES. Subject to Sections
5.1 and 5.4, the Xxxxxxx Parties shall jointly and severally indemnify, defend,
and hold harmless PGP and New OED, and any member, parent, subsidiary, or
affiliate thereof and any member, manager, employee, or agent of them (each of
the foregoing, a "BUYER INDEMNIFIED PARTY"), from and against any and all
losses, claims, demands, damages, awards, liabilities, suits, penalties,
forfeitures, costs, or expenses (including attorneys', consultants' and other
professional fees and disbursements), including those incurred in enforcing the
terms of this Agreement (collectively, "LOSSES") incurred by any Buyer
Indemnified Party arising out of or resulting from:
(a) any inaccuracy or any breach of any warranty or representation by
the Xxxxxxx Parties contained in this Agreement or the exhibits to this
Agreement or any certificate delivered to PGP or New OED hereunder, and
(b) any breach of any covenant or agreement of the Xxxxxxx Parties
contained in this Agreement or any exhibit to this Agreement.
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Section 5.3 INDEMNIFICATION BY PGP AND NEW OED. Subject to Sections 5.1
and 5.4, PGP and New OED shall jointly and severally indemnify, defend, and hold
harmless the Xxxxxxx Parties, and any member, parent, subsidiary, or affiliate
thereof, and any member, manager, employee, or agent of them and any heir or
legal representative of Xxxxxxx (each of the foregoing, a "SELLER INDEMNIFIED
PARTY") from and against any and all Losses incurred by any Seller Indemnified
Party arising out of our resulting from:
(a) any inaccuracy or any breach of any warranty or representation by
PGP or New OED contained in this Agreement or the exhibits to this Agreement or
any certificate delivered to the Xxxxxxx Parties hereunder, and
(b) any breach of any covenant or agreement of PGP or New OED contained
in this Agreement or any exhibit to this Agreement.
Section 5.4 EFFECT OF INVESTIGATION. The rights of a party to
indemnification shall not be limited or affected by any investigation by such
party after the Closing.
Section 5.5 NOTICE AND DEFENSE OF CLAIMS.
(a) A person seeking indemnification under this Article 5 (the
"INDEMNIFIED PERSON") shall give prompt written notice to the indemnifying
person or persons, or successors thereto (the "INDEMNIFYING PERSON"), of any
matter with respect to which the Indemnified Person seeks to be indemnified (the
"INDEMNITY CLAIM"). Such notice shall state the nature of the Indemnity Claim
and, if known, the amount of the Loss. If the Indemnity Claim arises from a
claim of a third party, the Indemnified Person shall give such notice within a
reasonable time after the Indemnified Person has actual notice of such claim,
and in the event that a suit or other proceeding is commenced, within 20 days
after receipt by the Indemnified Person of written notice thereof.
Notwithstanding anything in this paragraph to the contrary, the failure of an
Indemnified Person to give timely notice of an Indemnity Claim shall not bar
such Indemnity Claim except and to the extent that the failure to give timely
notice has impaired materially the ability of the Indemnifying Person to defend
the Indemnity Claim.
(b) If the Indemnity Claim arises from the claim or demand of a third
party, the Indemnifying Person shall assume its defense, including the hiring of
counsel and the payment of all fees and expenses. The Indemnified Person shall
have the right to employ separate counsel and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the Indemnified Person unless both the Indemnified Person and the Indemnifying
Person are named as parties and the Indemnified Person shall in good faith
determine that representation by the same counsel is inappropriate. In the event
that the Indemnifying Person, within ten days after notice of any such action or
claim, fails to assume the defense thereof, the Indemnified Person shall have
the right to undertake the defense, compromise or settlement of such action,
claim or proceeding for the account of the Indemnifying Person, subject to the
right of the Indemnifying Person to assume the defense of such action, claim or
proceeding at any time prior to the settlement, compromise or final
determination thereof. Anything in this Section 5.5 to the contrary
notwithstanding, the Indemnifying Person shall not, without the Indemnified
Person's prior consent, settle or compromise any action or claim or consent to
the entry of any judgment with respect to any
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action, claim or proceeding for anything other than money damages paid by the
Indemnifying Person. The Indemnifying Person may, without the Indemnified
Person's prior consent, settle or compromise any such action, claim or
proceeding or consent to entry of any judgment with respect to any such action
or claim that requires solely the payment of money damages by the Indemnifying
Person and that includes as an unconditional term thereof the release by the
claimant or the plaintiff of the Indemnified Person from all liability in
respect of such action, claim or proceeding.
(c) If the Indemnity Claim does not arise from the claim or demand of a
third party, the Indemnifying Person shall have 30 days after receipt of written
notice of such Indemnity Claim to object to such claim by giving written notice
to the Indemnified Person specifying the reasons for such objection or
objections. If the Indemnifying Person has not so objected to the Indemnity
Claim as of the close of business on such 30th day, the total amount of the
Indemnity Claim shall thereupon become chargeable to and payable by the
Indemnifying Person in accordance with the terms and conditions of this section.
If the Indemnifying Person objects to the Indemnity Claim, the parties shall
attempt to resolve the challenge through negotiation in good faith. If the
parties are unable to settle any such dispute within ten days after notice of
the Indemnifying Person's objection is received by the Indemnified Person,
either party may institute suit on the claim in a court of law.
ARTICLE 6
MISCELLANEOUS
Section 6.1 NOTICES. All notices or other communications required or
permitted to be given under this Agreement shall be in writing in the English
language and shall be deemed to have been given on the date delivered by
messenger, overnight courier, or facsimile transmission to the parties at the
following addresses, or at such other addresses as may hereafter be provided to
the other parties by means of such notice:
(a) if to either or both of PGP or New OED, then to:
Peninsula Gaming Partners, LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx,
00xx xxxxx
Xxx Xxxxxxx, XX 00000
Attention: M. Xxxxx Xxxxxxx
Facsimile: 000-000-0000
with copies to:
Peninsula Gaming Partners, LLC
0000 Xxxxxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: 000-000-0000
9
and
Xxxxxx X. Xxxxx
Xxxxx Xxxxx Xxxx & Maw
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: 000-000-0000
and
(b) if to either or both of the Xxxxxxx Parties, then to:
Xxxxxxx X. Xxxxxxx XX
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
with a copy to:
Xxxxxxx X. Xxxxxxx Xx.
XxXxxxxxxx Xxxxxxxx, PLLC
Xxx Xxxxxxxx Xxxxx,
0xx xxxxx
Xxxxx Xxxxx, XX 00000
Facsimile: 000-000-0000
Section 6.2 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement (including the exhibits, documents, and instruments
referred to herein delivered at the Closing or otherwise) constitutes the entire
agreement between and among the parties with respect to the transactions
contemplated hereby and supersedes all prior negotiations, agreements,
understandings, or arrangements, oral or written (including the 6/25/02
Agreement, which is hereby merged into and abrogated by this Agreement).
Section 6.3 GOVERNING LAW. This Agreement shall be governed by and
interpreted under the law of Louisiana as in the case of a contract executed and
to be performed entirely in Louisiana.
Section 6.4 ENFORCEMENT OF AGREEMENT. The parties agree that
irreparable damage would occur in the event this Agreement is not performed in
accordance with its terms. The parties accordingly agree that any party shall be
entitled to injunctive relief without the necessity of posting any bond, which
is hereby waived, and to enforce specifically the provisions hereof in any court
of the United States or of any state having jurisdiction thereof.
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Section 6.5 JURY TRIAL. ALL PARTIES HEREBY WAIVE TRIAL BY JURY OF ANY
ACTION BROUGHT UNDER OR TO ENFORCE THIS AGREEMENT.
Section 6.6 WAIVER OF CONFLICT. The parties recognize and acknowledge
that the law firm of XxXxxxxxxx Xxxxxxxx, PLLC, has acted as legal counsel for
(a) the Xxxxxxx Parties in negotiating the terms of this Agreement, (b) PGP and
New OED in filing applications with the Louisiana Gaming Authorities for
approval of the Racino Project pursuant to the Louisiana Gaming Control Law, and
(c) all parties to this Agreement in documenting the acquisition by Old OED of
certain real estate. All parties have waived any objections and consented to
such multiple representation and, accordingly, each party waives any right to
assert the invalidity of this Agreement by reason of such multiple
representation.
Section 6.7 EXPENSES. Except as otherwise specifically provided herein,
each party agrees to bear its own expenses in connection with the negotiation
and performance of this Agreement.
Section 6.8 ASSIGNMENT AND SUCCESSORS AND ASSIGNS. Neither this
Agreement nor any rights, interests, or obligations hereunder may be assigned by
any party without the prior written consent of the other parties, except (a) by
operation of law, (b) the Xxxxxxx Note, the Old OED Note, and the Xxxxxxx Win
Percentage are assignable to the extent expressly provided in this Agreement,
(c) PGP or New OED or both may (i) assign their rights hereunder to any entity
that is under common control with the assignor(s), provided the assignor remains
liable for its obligations under the Agreement, or (ii) assign, pledge,
hypothecate, or grant security interests in their rights under this Agreement
(including the right upon foreclosure to succeed to all of the right, title and
interest of PGP and New OED hereunder) as collateral to any lender that provides
financing for the Racino Project, and (d) if and as required by the Louisiana
Gaming Authorities in order to satisfy requirements of the Louisiana Gaming
Control Law. Subject to the preceding sentence, this Agreement shall be binding
upon and inure to the benefit of, and be enforceable by the parties and their
respective heirs, executors, administrators, successors, and assigns.
Section 6.9 CONFIDENTIALITY.
(a) The existence of this Agreement and its contents, and the
transactions contemplated hereby, are intended to be confidential indefinitely
and shall not be disclosed by any party without the written consent of the other
parties, except as follows:
(i) a party may disclose the existence and contents of this
Agreement to its agents, consultants, lenders, or advisers to the
extent necessary to consummate the transactions contemplated hereby,
provided that any such disclosee shall agree to treat such information
confidentially, and
(ii) a party may disclose the existence and contents of this
Agreement (A) to the extent deemed necessary by such party to enforce
any provision or obligation of this Agreement, to defend any action
brought by one party against another party or as required, necessary or
permitted by judicial process or by any governmental agency or
authority, or (B) to the Louisiana Gaming Authorities in order to
obtain regulatory approval and all necessary and
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unconditional licenses for the Racino Project from the Louisiana Gaming
Authorities, provided that any disclosure to the Louisiana Gaming
Authorities shall be made subject to a request for confidential
treatment by such authorities, or (C) as required or advisable in order
to comply with the disclosure requirements of the federal securities
laws, in connection with the placement of the Bond Issue or PGP's
periodic reporting obligations under the Securities Exchange Act of
1934.
(b) The Xxxxxxx Parties shall keep confidential all information
relating to Old OED and its business (other than information available to the
public on the date of this Agreement) indefinitely.
(c) No public announcement or press release concerning the transactions
contemplated hereby shall be made except by PGP or New OED.
Section 6.10 NO THIRD-PARTY BENEFICIARIES. This Agreement is for the
sole benefit of the parties hereto, their subsidiaries and affiliates, and their
permitted assigns. Nothing expressed or implied herein shall give, or be
construed to give, any other person any legal or equitable rights.
Section 6.11 AMENDMENTS. This Agreement may not be amended except by a
writing signed by all parties, which may be in counterparts no one of which need
be signed by all parties.
Section 6.12 WAIVERS. No waiver by a party of any right under this
Agreement shall be valid unless in writing signed by the waiving party. Subject
to the preceding sentence, any party may waive any right conferred on it under
this Agreement or the performance of any obligation by another party that is a
condition to the waiving party's own performance of an obligation. No waiver by
a party of any right under this Agreement shall operate as a waiver of any other
right under this Agreement.
Section 6.13 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, no one of which need be signed by all parties.
ARTICLE 7
DEFINITIONS
"6/25/02 AGREEMENT" has the meaning set forth in the seventh Whereas
clause.
"12/11/01 AGREEMENT" has the meaning set forth in the second Whereas
clause.
"AGREEMENT" means this Agreement of Sale, dated as of August 30, 2002.
"BOND ISSUE" means the sale by Old OED of its high-yield Senior Secured
Notes to provide financing for the Racino Project.
"BUYER INDEMNIFIED PARTY" has the meaning set forth in Section 5.2.
"CLOSING" has the meaning set forth in Section 1.1.
12
"CLOSING CONSIDERATION" has the meaning set forth in Section 1.3.
"EXHIBIT A" has the meaning set forth in the seventh Whereas clause.
"EXHIBIT B" has the meaning set forth in Section 1.2(a).
"EXHIBIT C" has the meaning set forth in Section 1.3(d).
"EXHIBIT D" has the meaning set forth in Section 1.3(e).
"EXHIBIT E" has the meaning set forth in Section 2.1.
"GOING FORWARD DOCUMENTS" has the meaning set forth in the second
Whereas clause.
"INDEMNIFIED PERSON" has the meaning set forth in Section 5.5(a).
"INDEMNIFYING PERSON" has the meaning set forth in Section 5.5(a).
"INDEMNITY CLAIM" has the meaning set forth in Section 5.5(a).
"LAC" means Louisiana Administrative Code.
"LAWSUIT" has the meaning set forth in the sixth Whereas clause.
"LITIGATION" has the meaning set forth in Section 2.6.
"LOSSES" has the meaning set forth in Section 5.2.
"LOUISIANA GAMING AUTHORITIES" means any agency, authority, board,
bureau, commission, department, office, or instrumentality of the State
of Louisiana, whether now or hereafter existing, or any officer or
official thereof, including, without limitation the Louisiana State
Racing Commission and the Louisiana Gaming Control Board, with
authority to regulate any gaming operation or activity (or proposed
gaming operation or activity) owned, managed or operated by PGP, New
OED, or Old OED.
"LOUISIANA GAMING CONTROL LAW" means Title 27 of the Louisiana Revised
Statutes.
"MEMBERSHIP INTEREST" has the meaning set forth in Section 1.1.
"NET WIN" has the meaning set forth in Section 1.3(f).
"NEW OED" means OED Acquisition, LLC, a Delaware limited liability
company.
"NOTE SHARE" has the meaning set forth in Section 1.1.
"NOTES RECEIVABLE" means each of the following described promissory
notes:
13
(a) note in the original principal amount of $12,293,722.60
dated August 31, 1988, executed by Racetrack at Xxxxxxxxxx Xxxxx, Inc.,
payable to the order of Louisiana Savings Association, Inc., and
(b) note in the original principal amount of $1,313,485.30
dated August 31, 1988, executed by Racetrack at Xxxxxxxxxx Xxxxx, Inc.
payable to the order of Louisiana Savings Association, Inc.
"OLD OED" means The Old Xxxxxxxxxx Xxxxx, L.C., a Louisiana limited
liability company.
"OLD OED NOTE" has the meaning set forth in Section 1.3(e).
"PENINSULA GAMING COMPANY, LLC" has the meaning set forth in Section
4.1.
"PGP" means Peninsula Gaming Partners, LLC, a Delaware limited
liability company.
"RACINO PROJECT" has the meaning set forth in the third Whereas clause.
"RELEASE" has the meaning set forth in Section 1.2(a).
"SELLER INDEMNIFIED PARTY" has the meaning set forth in Section 5.3.
"XXXXXXX" means Xxxxxxx X. Xxxxxxx XX, individually.
"XXXXXXX ACCOUNT" has the meaning set forth in Section 1.3(a).
"XXXXXXX EXPENSES" has the meaning set forth in Section 1.3(b).
"XXXXXXX NOTE" has the meaning set forth in Section 1.3(d).
"XXXXXXX PARTIES" means WETLLC and Xxxxxxx, collectively.
"XXXXXXX WIN PERCENTAGE" has the meaning set forth in Section 1.3(f).
"WETLLC" means Xxxxxxx X. Xxxxxxx, XX Family L.L.C., a Louisiana
limited liability company.
"WETLLC ACCOUNT" has the meaning set forth in Section 1.3(b).
In witness whereof, the parties have set their hands as of the day,
month, and year first above written.
PENINSULA GAMING PARTNERS LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxx
14
OED ACQUISITION, LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxx
XXXXXXX X. XXXXXXX, XX FAMILY, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx XX
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx, Individually
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